Who they are: Dandelion Chocolate
Where in the world: San Francisco, California
What they do: Dandelion Chocolate is a bean-to-bar chocolate factory in San Francisco’s Mission District. Sourcing the best ingredients and tuning each step of their small-batch process, Dandelion Chocolate’s aim is to celebrate the variety and nuances of this astounding natural product. Coming from a tech background in Silicon Valley, co-founder and CEO Todd Masonis says his chocolate company grew from a homegrown hobby: “We got pretty lucky with the timing where there was this new chocolate movement starting, like what happened in specialty coffee.”
Why did you start Dandelion Chocolate?
Todd Masonis came from the busy, days-nights-and-weekends world of a successful internet startup. After his company sold in the late 2000s, Todd took the opportunity for some overdue time off and turned his attention to another interest: chocolate.
“Basically, the company started because we were just trying to do something awesome, learn, and see if it was possible to make chocolate at home. We never sat down and said, “We’re going to do a chocolate company.” We tried making chocolate in the garage. We were having fun and before we knew it, we were winning awards and people liked our chocolate. We were doing the right thing at the right time and it took off. We decided to keep running with it, keep making good chocolate, and keep scaling up. It grew organically.”
This is your second successful company – have you embraced the Silicon Valley-mentality of trying to become as big as possible or are content with staying smaller?
“I don’t think our goal is to be Hershey’s or Cadbury. But I do think being in Silicon Valley, where there is a culture of startup companies and growing them, you get a lot of support from people who started business, or investors, or people who just generally are positive and want to help out. It definitely puts you in a direction where you keep growing.
A couple of years ago, we had a choice. We could be a cool indie chocolate factory, get one store, only make what we make, and our chocolate bars would cost you $300 a bar because we have so much demand and so little chocolate. We looked around and said, there’s so much bad chocolate out there. There’s so much industrial chocolate. There’s so much chocolate made from bad beans and bad labor practices with bad flavor and tons of ingredients.
We felt we could continue to grow the company and continue to make good chocolate or actually even improve the taste of our chocolate while we scale. We wanted to get our chocolate into more hands and more mouths. This was the right thing to do and we were very happy that we had such a good reception. I think we could have grown much, much faster, but we always try not to compromise what we’re doing, so we kind of always put the brakes on it. Even with the demand, if all we do is grow and become industrial chocolate then we really haven’t accomplished anything. So, we’re just trying to keep it going and keep improving our chocolate.”
What skills did you bring into the business that have helped you succeed?
“I didn’t come from a chef or food background. But being in Silicon Valley, there is a culture of people who like to start companies, that think about best practices and how you create things from scratch, how to build a brand, how to build a team, how to grow a team, and also how to think about problems that haven’t been solved before. How do you approach a problem with no knowledge and come up with systems and processes you can optimize?
That Silicon Valley computer science kind of methodology really does apply even though it’s a completely different domain. With a software company, you’re kind of limited by the speed at which you can type, but in the physical world, you’re limited by actual atoms and processes and machines and materials. You’re also limited by regulations. You have to deal with permits and getting permission to build things and do things and health permits. That’s definitely been a learning opportunity, but I do think that so many of the things that we learned in previous jobs help.”
What were some things you didn’t expect when you started Dandelion?
“You have to deal with a lot of random things you could never anticipate. I was actually talking with a friend about this the other day. One time, someone on the street had ripped open a down comforter. There were feathers everywhere, and they started to come into our cafe, and we wanted to make sure they didn’t make it into the factory. The whole team had to jump on board and we started getting texts from friends like, “Hey, there’s this feather storm coming into the factory.”
There’s no way as a business owner we could think of all the potential problems that could happen. I feel the same way that I felt in software: People who really overdesign at the beginning and try to solve problems that they don’t have are usually going to build a lot of complexity into parts of the company that really aren’t that important. The problems you’re going to have are completely not the ones you think you’re going to have. You need a mindset of being super nimble, taking every day at a time, being really adaptable and just dealing with things as they come. One foot in front of the other. “We know where we’re going, but every day we’re going to have to deal with the field conditions.” It’s a good strategy to keep things moving.”
You’ve got a book, “Bean-to-Bar Chocolate,” — what’s the story there? Why did you reveal so many trade secrets?
“We basically wrote the book that we wish had been written when we started. We’ve gotten so much benefit out of being part of our small industry and supporting our friends. We’re all part of this new industry that’s building the market together. We got some advice from people who went through this in the beer industry. They told us the people who had been super secretive basically went out of business because they were very smart, but they weren’t smarter than the collective wisdom of all the other companies. Companies that were open and collaborative succeeded and helped define the industry. We want to be in that camp.”
How much do you worry about the bigger brands in your industry?
“We’ve actually talked to a lot of the bigger chocolate companies, and I think they’re all in this classic Silicon Valley disruption stage. I’m sure they look at craft chocolate and they say, “Wow. There’s nothing here. The market’s so small. There’s only a few small companies and they’re really, really tiny.” But I think it could change really fast. This is a space that hasn’t been disrupted in over 150 years, where there’s been such a rush to low cost commodity chocolate. At some point, if you take a different approach and optimize around it, eventually there’ll be a moment where a lot of the big companies will get disrupted and they probably won’t see it coming. It’ll be really interesting to see how that plays out over the next decade or so.”
What’s working well for you in terms of marketing? Where are your customers coming from?
While Todd says they do some limited, targeted advertising, around holidays or special events, Dandelion Chocolate’s most successful marketing revolves around foot traffic, word-of-mouth, and general public relations. The company’s story — and chocolate samples — represent their best way to reach new customers.
“We really try as hard as possible to get our message out there and tell people what we’re doing. The other thing we do is have our own stores. For every single person who walks in, we try to explain what’s going on and why it’s different and why it’s important. I almost think of it more like a grassroots political campaign where you’re knocking on doors. In this case, you’re getting out samples, and it turns out if you do that for years and years, people learn about why we’re different.
When we first opened our doors, I would stand at the front and explain all the samples and what we’re doing. Within a year or so, we would see our customers bring in their friends, and then they would explain what was happening. They’d do the whole spiel. It’s really interesting to see how if you feed it, you can build this larger movement, and start to multiply those returns.”
What other brands do you like in the chocolate space?
“There are so many people doing really interesting things. We’re more like the minimalists, so we just do cocoa beans and sugar, highlighting the beans. But you’ve got people doing raw chocolate, inclusions, all different crazy roasts. Just a little north of us is a company called Dick Taylor. They make really good chocolate. There’s one in LA called LetterPress. There’s one in New York called Fruition. Australia has Ratio in Melbourne, I know they do a good job. There’s Hogarth, and I think they’re in New Zealand. There’s a new crop of craft chocolate makers that are popping up, and it’s become a global movement. A lot of them are really interesting to check out.”