This is the story of the Theranos of marshmallows
March 12, 2024 2:30 AM Subscribe
Maybe you've heard of Smashmallow; maybe you even bought some. In the couple of years before the pandemic, they were everywhere. Now? Pfft. The problem wasn't the marshmallows — they were, by all accounts, delicious. The problem was scale. Smashmallows were designed to look like an artisanal, boutique product, but that wasn't enough for Sebastiani: He wanted to manufacture billions of them, to build a company that would bestride Candyland like a squishy colossus. That meant he had to grow fast and figure out the engineering on the fly — the classic entrepreneurial strategy of Silicon Valley. When it works, you get Tesla; when it doesn't, you get Theranos. from Silicon Valley tried to mass produce fancy marshmallows. It got messy, fast. [Business Insider]
Love this.
I talk to a lot of extremely talented, extremely specialized engineers.
A significant fraction of them want to start a company in some domain they've never worked in.
I'll try to make them read this.
posted by constraint at 3:15 AM on March 12 [7 favorites]
I talk to a lot of extremely talented, extremely specialized engineers.
A significant fraction of them want to start a company in some domain they've never worked in.
I'll try to make them read this.
posted by constraint at 3:15 AM on March 12 [7 favorites]
When it works, you get Tesla"
Objection; arguing facts that are not in evidence.
posted by Ipsifendus at 4:05 AM on March 12 [43 favorites]
Objection; arguing facts that are not in evidence.
posted by Ipsifendus at 4:05 AM on March 12 [43 favorites]
Oh, sorry rich dude. Real shame your hobby businesses aren't large enough, sorry, I mean *profitable* enough to make you happy.
They could have been in every Target in America with the original method. It would have meant a lower profit margin and a large workforce, with less money to skim off the top. But several regional plants with a few hundred marshmallowiers each could have accomplished that goal.
Fuck this guy and fuck this whole line of thinking about business and growth. This is why the planet is dying.
posted by jellywerker at 4:18 AM on March 12 [55 favorites]
They could have been in every Target in America with the original method. It would have meant a lower profit margin and a large workforce, with less money to skim off the top. But several regional plants with a few hundred marshmallowiers each could have accomplished that goal.
Fuck this guy and fuck this whole line of thinking about business and growth. This is why the planet is dying.
posted by jellywerker at 4:18 AM on March 12 [55 favorites]
Aerosolized dust isn't just an inconvenience. If a single particle catches fire, it can set all the particles nearby on fire as well, creating a rapidly expanding, three-dimensional zone of combustion. This is what's known, in technical terms, as an "explosion."this is my kind of cheek
posted by glonous keming at 4:28 AM on March 12 [27 favorites]
a company that would bestride Candyland like a squishy colossus.
"I tried to think of the most harmless thing. Something I loved from my childhood, something that could never, ever possibly destroy us."
posted by Halloween Jack at 4:30 AM on March 12 [72 favorites]
"I tried to think of the most harmless thing. Something I loved from my childhood, something that could never, ever possibly destroy us."
posted by Halloween Jack at 4:30 AM on March 12 [72 favorites]
Ya, fuck this jackoff. His very first step in growing the company is to fire all the people who made him a success in the first place. He's already a hundred millionaire. This is a game to him for bragging rights and he played without regard to those who made him successful. I really hope at least some of the employees banded.togethwr to make their own version and are successful doing so.
posted by Mitheral at 4:39 AM on March 12 [15 favorites]
posted by Mitheral at 4:39 AM on March 12 [15 favorites]
His very first step in growing the company is to fire all the people who made him a success in the first place
Yeah, how fucked up is, "We don't have the new production line up, so let's shutdown the production line that's already working"?
posted by mikelieman at 5:00 AM on March 12 [5 favorites]
Yeah, how fucked up is, "We don't have the new production line up, so let's shutdown the production line that's already working"?
posted by mikelieman at 5:00 AM on March 12 [5 favorites]
Until I read the article, I legit thought this was about those stuffed animals called Squishmallows.
posted by Kitteh at 5:22 AM on March 12 [22 favorites]
posted by Kitteh at 5:22 AM on March 12 [22 favorites]
"I tried to think of the most harmless thing. Something I loved from my childhood, something that could never, ever possibly destroy us."
The Theranos analogy is a bit of a stretch, but here's a true fact: Elizabeth Holmes' notable stare was a result of eye transplants extracted from the defeated remnants of the Stay-Puft marshmallow man.
posted by They sucked his brains out! at 5:23 AM on March 12 [7 favorites]
The Theranos analogy is a bit of a stretch, but here's a true fact: Elizabeth Holmes' notable stare was a result of eye transplants extracted from the defeated remnants of the Stay-Puft marshmallow man.
posted by They sucked his brains out! at 5:23 AM on March 12 [7 favorites]
That's the part that bugs me. The business was working and profitable. Automation was only desired for increased profits, because if you have a small business that is profitable and you have far more demand than you can meet, you can duplicate the business unit. This "failure" is 100% on the CEO and his greed.
I also hope some of those employees took their experience and started nice marshmallow companies with healthier growth strategies and goals.
posted by jellywerker at 5:26 AM on March 12 [10 favorites]
I also hope some of those employees took their experience and started nice marshmallow companies with healthier growth strategies and goals.
posted by jellywerker at 5:26 AM on March 12 [10 favorites]
At least Theranos was secretly using conventional tests to meet their contracted obligations. This guy fired the employees who were making the marshmallows by hand as soon as the untested machinery was delivered and then he didn't have a backup plan when the machines didn't work as expected. I think that makes him dumber than Theranos.
posted by RonButNotStupid at 5:52 AM on March 12 [3 favorites]
posted by RonButNotStupid at 5:52 AM on March 12 [3 favorites]
Automation was only desired for increased profits
Marx: the machine does not free the labourer from work, but deprives the work of all interest. Every kind of capitalist production, in so far as it is not only a labour-process, but also a process of creating surplus-value, has this in common, that it is not the workman that employs the instruments of labour, but the instruments of labour that employ the workman.
posted by CheeseDigestsAll at 6:01 AM on March 12 [16 favorites]
Marx: the machine does not free the labourer from work, but deprives the work of all interest. Every kind of capitalist production, in so far as it is not only a labour-process, but also a process of creating surplus-value, has this in common, that it is not the workman that employs the instruments of labour, but the instruments of labour that employ the workman.
posted by CheeseDigestsAll at 6:01 AM on March 12 [16 favorites]
The framing of this article is bullshit clickbait and bad journalism.
Smashmallow wasn't comparable to Theranos. The founder didn't lie to investors, commit massive fraud, and pretend he had something that didn't exist. This guy didn't even have anything to do with Silicon Valley! He ran a series of successful wine and food companies that had nothing to do with technology! Ugh.
Smashmallow had a genuinely successful product, wanted to scale via automation, did a bunch of hard work to try and make it happen, and failed due to a number of mistakes and mishaps because it was a hard problem. Exactly the way most businesses fail.
If anything, the Dutch equipment manufacturer is the one who did a Theranos here, by producing a fake sample that they claimed was generated via machine but was in fact handmade. And courts vindicated Smashmallow and awarded them millions of dollars because of that fraud.
This could have been a much better article about how hard it is to scale an artisanal food company, and questioning whether doing so is really necessary (e.g. firing his employees who handmade the marshmallows, as others have pointed out above, is pretty shitty).
posted by xthlc at 6:56 AM on March 12 [27 favorites]
Smashmallow wasn't comparable to Theranos. The founder didn't lie to investors, commit massive fraud, and pretend he had something that didn't exist. This guy didn't even have anything to do with Silicon Valley! He ran a series of successful wine and food companies that had nothing to do with technology! Ugh.
Smashmallow had a genuinely successful product, wanted to scale via automation, did a bunch of hard work to try and make it happen, and failed due to a number of mistakes and mishaps because it was a hard problem. Exactly the way most businesses fail.
If anything, the Dutch equipment manufacturer is the one who did a Theranos here, by producing a fake sample that they claimed was generated via machine but was in fact handmade. And courts vindicated Smashmallow and awarded them millions of dollars because of that fraud.
This could have been a much better article about how hard it is to scale an artisanal food company, and questioning whether doing so is really necessary (e.g. firing his employees who handmade the marshmallows, as others have pointed out above, is pretty shitty).
posted by xthlc at 6:56 AM on March 12 [27 favorites]
…like a squishy colossus.
“Something that never, ever possibly destroy us.”
Did he never see “Ghostbusters”?
posted by kinnakeet at 7:38 AM on March 12 [1 favorite]
“Something that never, ever possibly destroy us.”
Did he never see “Ghostbusters”?
posted by kinnakeet at 7:38 AM on March 12 [1 favorite]
Great article! It reminded me of my all-time favorite in the delicious-food-plus-hubris genre: The Shocking Meltdown of Ample Hills.
Disclaimer: the Ample Hills article was written by a friend of mine. I therefore wouldn't post it as an FPP but I hope it's OK to share in this context.
posted by yankeefog at 8:57 AM on March 12 [2 favorites]
Disclaimer: the Ample Hills article was written by a friend of mine. I therefore wouldn't post it as an FPP but I hope it's OK to share in this context.
posted by yankeefog at 8:57 AM on March 12 [2 favorites]
Xthlc, I think that is an overly kind reading.
It is a hard problem, but the failure was in leadership. The equipment manufacturer did do some defrauding here, maybe maliciously, maybe not, but the timeline of destroying the working business before having the automated line up and running makes no sense. Potentially there was more at play here than we are privy to.
They didn't fail because they got caught on a hard problem. They failed because they cut loose the parts that were working and committed 100% to an untested method with the hopes of making even more money, while overselling their capabilities to potential customers. That is not how most businesses fail, from my understanding.
Smashmallow would still be around if they built out their capacity slower and focused on developing the necessary equipment in tandem with the hand made process. They didn't *need* to be everywhere all at once. God forbid they *only* grow 100% year over year for their first 5 years.
posted by jellywerker at 9:22 AM on March 12 [4 favorites]
It is a hard problem, but the failure was in leadership. The equipment manufacturer did do some defrauding here, maybe maliciously, maybe not, but the timeline of destroying the working business before having the automated line up and running makes no sense. Potentially there was more at play here than we are privy to.
They didn't fail because they got caught on a hard problem. They failed because they cut loose the parts that were working and committed 100% to an untested method with the hopes of making even more money, while overselling their capabilities to potential customers. That is not how most businesses fail, from my understanding.
Smashmallow would still be around if they built out their capacity slower and focused on developing the necessary equipment in tandem with the hand made process. They didn't *need* to be everywhere all at once. God forbid they *only* grow 100% year over year for their first 5 years.
posted by jellywerker at 9:22 AM on March 12 [4 favorites]
Aww, Ample Hills. The Star Revue did a good writeup of their weird, scammy post-bankruptcy afterlife. The Gowanus shop finally posted a for-rent sign if you want to harness the ectoplasmic energy and spin up your own ice cream empire.
They had a bicycle linked up to one of those hand-cranked ice cream makers, and during birthday parties all the kids would take turns on the bike to make a special flavor selected by the birthday kid. It was awesome.
posted by phooky at 9:35 AM on March 12 [3 favorites]
They had a bicycle linked up to one of those hand-cranked ice cream makers, and during birthday parties all the kids would take turns on the bike to make a special flavor selected by the birthday kid. It was awesome.
posted by phooky at 9:35 AM on March 12 [3 favorites]
Ya, fuck this jackoff. His very first step in growing the company is to fire all the people who made him a success in the first place.
God forbid they *only* grow 100% year over year for their first 5 years.
Agreed, fuck'em. The only thing he could see was the bottom line, not the people he'd need to get anywhere with. He's a sociopath. Fire the original workers, and then expect the replacement cogs to work in a factory that could have potentially exploded, because he'd never have shut it down voluntarily. Make your workers breathe cinnamon, because they don't need air. I'm sure the managers were whipping the lineworkers trying to get production up making their lives miserable. I hope his product fail still gives him nightmares.
posted by BlueHorse at 9:40 AM on March 12 [2 favorites]
So these are like fancy peeps?
posted by ryanrs at 9:52 AM on March 12 [4 favorites]
posted by ryanrs at 9:52 AM on March 12 [4 favorites]
There's something so ironic about this.
I assume at this point William Gibson just sighs and says, "Guys..." and goes back to his coffee.
posted by praemunire at 9:53 AM on March 12 [5 favorites]
I assume at this point William Gibson just sighs and says, "Guys..." and goes back to his coffee.
posted by praemunire at 9:53 AM on March 12 [5 favorites]
They didn't fail because they got caught on a hard problem. They failed because they cut loose the parts that were working and committed 100% to an untested method with the hopes of making even more money, while overselling their capabilities to potential customers. That is not how most businesses fail, from my understanding.
I'm not sure this can be really determined from the info given. The existing work force was going to be let go as part of the plan. They were contractors who deal in that exact business model. The drive to automate was imperative, since it seems anyone in the field would be able to compete easily as long as the goods were all "handmade". It still could be,l functional, if the capital hadn't been eaten up in equipment that would ultimately be inadequate, and maybe worse, the timing ended up all wrong. The plan to fire everyone was there from the get go. Either because the automation worked as intended, or in this case, didn't work.
So these are like fancy peeps?
I'm guessing so. I never knew fancy marshmallows were a thing. As far as I'm concerned, there are crappy marshmallows, and crappier marshmallows. I did get a kick out of the notion of wholesome marshmallows.
posted by 2N2222 at 11:51 AM on March 12 [2 favorites]
I'm not sure this can be really determined from the info given. The existing work force was going to be let go as part of the plan. They were contractors who deal in that exact business model. The drive to automate was imperative, since it seems anyone in the field would be able to compete easily as long as the goods were all "handmade". It still could be,l functional, if the capital hadn't been eaten up in equipment that would ultimately be inadequate, and maybe worse, the timing ended up all wrong. The plan to fire everyone was there from the get go. Either because the automation worked as intended, or in this case, didn't work.
So these are like fancy peeps?
I'm guessing so. I never knew fancy marshmallows were a thing. As far as I'm concerned, there are crappy marshmallows, and crappier marshmallows. I did get a kick out of the notion of wholesome marshmallows.
posted by 2N2222 at 11:51 AM on March 12 [2 favorites]
Yeah, I remember seeing them in my grocery store, though I never tried them. As I recall, the ones I saw were cubes, which I guess were made by the machine? What shape were the original artisinal Smashmallows?
(ok, I will go read the article now)
posted by ryanrs at 12:32 PM on March 12 [1 favorite]
(ok, I will go read the article now)
posted by ryanrs at 12:32 PM on March 12 [1 favorite]
oh, the cubes were the artisanal shape, lol
posted by ryanrs at 12:43 PM on March 12 [2 favorites]
posted by ryanrs at 12:43 PM on March 12 [2 favorites]
Dude was born rich, but had some sort of self worth complex so he went out and founded a beef jerky company that he then sold off for $250 million dollars. Problem solved, Self worth validated, all is happy with his world, why didn't he just fuck off and do rich guy shit for the rest of his life? I will never for the life of me understand why these people just can't stop working. I would be fucking heli skiing and eating at awesome restaurants and sailing and getting 2 hour deep tissue massages and learning to draw. I know a couple of insanely wealthy people (like hundreds of millions if not more) and they all have fucking regular ass upper middle class managerial class email jobs. WHHHHHHHYYYYY? I have NEVER been so bored that doing a job sounds like fun to me (and I spent a LOT of time in some EXTREMELY boring places).
posted by youthenrage at 1:01 PM on March 12 [9 favorites]
posted by youthenrage at 1:01 PM on March 12 [9 favorites]
So these are like fancy peeps?
Not really. Peeps are very processed.
I really liked them, and bought them a lot, because they were little sugarbombs with delicious flavours and a really good mouthfeel and no weird chemical taste. I have a friend who also makes marshmallows at home and they were a lot like hers.
posted by joannemerriam at 2:54 PM on March 12 [1 favorite]
Not really. Peeps are very processed.
I really liked them, and bought them a lot, because they were little sugarbombs with delicious flavours and a really good mouthfeel and no weird chemical taste. I have a friend who also makes marshmallows at home and they were a lot like hers.
posted by joannemerriam at 2:54 PM on March 12 [1 favorite]
I saw this headline, and it took me three reads to stop reading "Theranos" as "Thanos". Figured maybe someone snapped their fingers and the marshmallows disappeared.
posted by jferg at 7:33 AM on March 13 [2 favorites]
posted by jferg at 7:33 AM on March 13 [2 favorites]
The correct way to have peeps is to purchase them , open the package and leave them on the shelf somewhere. They dry out and become like taffy foam after awhile. They must be aged like bourbon.
This whole "I want to have them in every Wallmart" mentality is what sucks, there is nothing wrong with not being able to buy them everywhere you look.
posted by boilermonster at 10:31 AM on March 13 [5 favorites]
This whole "I want to have them in every Wallmart" mentality is what sucks, there is nothing wrong with not being able to buy them everywhere you look.
posted by boilermonster at 10:31 AM on March 13 [5 favorites]
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There's something so ironic about this.
posted by Zumbador at 3:12 AM on March 12 [13 favorites]