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The Ample Hills saga
Mar. 31st, 2021 11:54 amI’m an accountant with an MBA which means one of my favorite genres of non-fiction is business failures. I’ve read about the massive frauds (Smartest Guys in the Room), about the hubristic risk taking (When Genius Failed), about Silicon Valley start-up culture turned malignant (Billion Dollar Loser). It’s not often, though, that you run into the story of a business that failed not because of any grand Greek tragic flaw, but because of a basic failure at operational discipline.
Enter Ample Hills.
To those not in the New York area, Ample Hills is a Brooklyn-based high-end ice cream chain that has garnered a lot of press attention since its inception, with fans like Oprah and Steven Spielberg. New York has a very specific food culture, one that leads to people lining up around the block for the new hotness, whether that be cronuts or Ample Hills Ooey Gooey Butter Cake ice cream. From the start, they had great product and a nose for marketing. And no interest in the finances.
Ample Hills filed for bankruptcy in March 2020, and with the pandemic, any hope of the original owners refinancing and continuing to own their business evaporated. In the end, a Portland manufacturing company bought it for $1 million, and kicked the original owners out.
My obsession started with this Medium article, which shows how people with no discipline can be a special nightmare to work with.
But then I found out—there’s a podcast. The owners have a podcast. Friends, this podcast is a gem. In it, the owners are the heroes of their own narrative, of course, and so reveal a lot of things that are absolutely flabbergasting to an outsider with a background in business, though the owners seem to think every decision they’ve made is completely reasonable. Things like:
- They do not believe in keeping schedules. They are co-CEOs of a multi-million dollar business and did not have calendars that let people know when/if they could get a hold of them.
- They built a new factory in Brooklyn without doing any financial modeling. They didn’t know until it was built and they’d spent tens of millions trying to get the production line to work that even if the roll out had gone smoothly, they would have had to have more than twice as many stores in order for the factory to ever be profitable.
- Their finance department was so under resourced, they only knew their financial position six to eight months after the fact. Let me repeat that. They only knew how much cash they had in the bank six to eight months previously. When they suddenly couldn’t make payroll, it was a total shock.
- When they signed the $300 million business loan to build the factory, they signed a personal guarantee attaching their own personal wealth to the loan. That is ABSOLUTELY ABSURD for a business loan. 90% of the legal structure of companies in US law is to protect the owners from personal liability for business losses. And they just zipped right past that (which tells me the bank fucking knew how not a good bet this was). Which means after they went through bankruptcy for the business, they went through personal bankruptcy.
- They spend most of the last episode talking about how they are trying to start another ice cream business, but they have no capital after the personal bankruptcy. And I'm sorry--who would invest with them? They lost hundreds of millions of dollars of their investors' money the last go round, and a lot of those people were friends and family. Hire them? Yes, absolutely. They're great at creating buzz. But give them money to run their own business? No.
The best episode of the whole thing is the Q&A where, after a bunch of people writing in with various versions of how could you run your business so badly, two people wrote in to ask advice in starting their own ice cream business. Folks. Do not ask Brian and Jackie Cuscana how to run a successful ice cream business. They obviously don’t know.
After diving into this obsession, though, I realized that the only Ample Hills store outside of NYC is in fact four blocks from me. The new owner is still operating the stores, and to a customer, everything seems pretty much the same. So I’ve made it my spur through this terrible pandemic/busy season winter to get myself to go for a walk by getting a single scoop on the way home. (I am lactose intolerant, and a single scoop is pushing what I can cope with, even with Lactaid.)
I decided to try all the flavors, so I present you a ranking (as a caveat, they rotate the flavors, so this is what was available at my local shop):
( The best to the worst )
Enter Ample Hills.
To those not in the New York area, Ample Hills is a Brooklyn-based high-end ice cream chain that has garnered a lot of press attention since its inception, with fans like Oprah and Steven Spielberg. New York has a very specific food culture, one that leads to people lining up around the block for the new hotness, whether that be cronuts or Ample Hills Ooey Gooey Butter Cake ice cream. From the start, they had great product and a nose for marketing. And no interest in the finances.
Ample Hills filed for bankruptcy in March 2020, and with the pandemic, any hope of the original owners refinancing and continuing to own their business evaporated. In the end, a Portland manufacturing company bought it for $1 million, and kicked the original owners out.
My obsession started with this Medium article, which shows how people with no discipline can be a special nightmare to work with.
But then I found out—there’s a podcast. The owners have a podcast. Friends, this podcast is a gem. In it, the owners are the heroes of their own narrative, of course, and so reveal a lot of things that are absolutely flabbergasting to an outsider with a background in business, though the owners seem to think every decision they’ve made is completely reasonable. Things like:
- They do not believe in keeping schedules. They are co-CEOs of a multi-million dollar business and did not have calendars that let people know when/if they could get a hold of them.
- They built a new factory in Brooklyn without doing any financial modeling. They didn’t know until it was built and they’d spent tens of millions trying to get the production line to work that even if the roll out had gone smoothly, they would have had to have more than twice as many stores in order for the factory to ever be profitable.
- Their finance department was so under resourced, they only knew their financial position six to eight months after the fact. Let me repeat that. They only knew how much cash they had in the bank six to eight months previously. When they suddenly couldn’t make payroll, it was a total shock.
- When they signed the $300 million business loan to build the factory, they signed a personal guarantee attaching their own personal wealth to the loan. That is ABSOLUTELY ABSURD for a business loan. 90% of the legal structure of companies in US law is to protect the owners from personal liability for business losses. And they just zipped right past that (which tells me the bank fucking knew how not a good bet this was). Which means after they went through bankruptcy for the business, they went through personal bankruptcy.
- They spend most of the last episode talking about how they are trying to start another ice cream business, but they have no capital after the personal bankruptcy. And I'm sorry--who would invest with them? They lost hundreds of millions of dollars of their investors' money the last go round, and a lot of those people were friends and family. Hire them? Yes, absolutely. They're great at creating buzz. But give them money to run their own business? No.
The best episode of the whole thing is the Q&A where, after a bunch of people writing in with various versions of how could you run your business so badly, two people wrote in to ask advice in starting their own ice cream business. Folks. Do not ask Brian and Jackie Cuscana how to run a successful ice cream business. They obviously don’t know.
After diving into this obsession, though, I realized that the only Ample Hills store outside of NYC is in fact four blocks from me. The new owner is still operating the stores, and to a customer, everything seems pretty much the same. So I’ve made it my spur through this terrible pandemic/busy season winter to get myself to go for a walk by getting a single scoop on the way home. (I am lactose intolerant, and a single scoop is pushing what I can cope with, even with Lactaid.)
I decided to try all the flavors, so I present you a ranking (as a caveat, they rotate the flavors, so this is what was available at my local shop):
( The best to the worst )
