Jessica Quon and Sabrina Valle faced a dilemma common for most entrepreneurs: They knew how to grow their business, but didn’t have the resources to do it.
That all changed when a man with a net worth of $3.3 billion walked into their lives.
Quon (BSBA ’08) and Valle (BSBA ’07) secured a $300,000 purchase order from billionaire Tilman Fertitta on CNBC’s new reality show “Billion Dollar Buyer,” giving their Brooklyn-based venture, The Jam Stand, a much-needed boost.
The Warrington alumnae’s appearance on “Billion Dollar Buyer” couldn’t have come at a better time. In 2015, the Jam Stand, which produces unique batches of jam including Drunken Monkey and Peachy Sriracha, experienced its first year of non-growth since it opened in 2011. The company’s revenue has more than quintupled—$70,000 in 2011 to $400,000 in 2014—but 2015 brought another year of $400,000 in sales along with questions about how to enhance the business.
“We knew major changes needed to happen,” said Quon, 30.
Enter Fertitta, who made his fortune in hotels, restaurants and casinos. He’s the Chairman, President and Chief Executive Officer of Landry’s Inc., which operates well-known brands such as Morton’s Steakhouse and Golden Nugget Hotels. Fertitta’s experience in dining and hospitality made him an ideal executive for Quon and Valle to work with.
But the opportunity came with some risk. Quon and Valle admitted they were concerned about appearing on a reality show. Sometimes during filming, that trepidation turned into dread.
“There were some periods where we were thinking, ‘This was a terrible decision,’” Quon said. “You never know how you’re going to be portrayed. It was a nerve-wracking experience, but worth it.”
Two major and intertwined obstacles kept The Jam Stand from truly thriving. First, was its packaging, notably its smallest container (1.5 ounces). According to Fertitta, the average hotel room uses 0.5 ounces of jam at breakfast— meaning that two-thirds of every purchase of the 1.5-ounce container from a hotel chain would go to waste. Without the smaller, more economical packaging, the second obstacle arises: The Jam Stand is unlikely to have its products sold in any of the 50,000-plus lodging establishments in the U.S., and miss out on nearly 5 million guests tasting their jams every year.
“We’ve known about this problem,” said Valle, 30, “but we’ve never really had the opportunity to execute it in terms of production.”
With Fertitta’s help, Quon and Valle found an industrial packaging company to produce the half-ounce containers, setting the stage for the episode’s climax in the boardroom. There, Fertitta agreed to purchase $90,000 of the company’s breakfast-themed jams, and $210,000 of a red onion-red-wine jam to be served at his Morton’s Steakhouses.
Convincing Fertitta to purchase the red onion-red wine jam was a coup for Quon and Valle because, as Fertitta himself admits during the episode, the jam is a “giveaway” because customers aren’t paying for it.
“We spent days preparing for every scenario that could come up, and that was one of them,” Valle said. “We know it’s a free product for his customers, but it also adds value to their experience.”
Quon and Valle said they had tempered expectations for their boardroom bid, and probably would have been satisfied with the $90,000 purchase of the breakfast jams.
“We were definitely shocked,” Quon said.
A key detail to remember is that Fertitta’s $300,000 purchase is just that—a purchase—and not an investment in the company like is often done on Shark Tank or West Texas Investors Club. Quon and Valle still hold full equity in The Jam Stand, and, if their products perform well, can go back to Fertitta for another major purchase.
Quon and Valle had talked about going into business together for years, but the timing was never right. Both were carving out successful marketing careers in New York—Quon in the nonprofit sector and Valle in fashion—and making the entrepreneurial leap was a scary proposition. They’re grateful that fear subsided.
“To look back at the string of events over the past five years to get to this point is amazing,” Quon said. “I think we got into something really cool.”