By Will Novosedlik
“Chocolate Gone Crazy” is the title of a diss track created by Montreal-based functional bar maker Mid-Day Squares (MDS) in response to a cease-and-desist letter from Hershey that claimed the upstart’s Chocolate Peanut Butta bar’s packaging looked too much like Reese’s.
The lawyer’s letter likely had more to do with the fact that MDS had previously turned down a bid Hershey made to acquire the start-up. They decided, instead, to work towards an IPO. And rather than simply comply with Hershey’s demands (which they did by changing the package’s colour), MDS produced an MTV-style music video to mock the cocoa monster’s threat of legal action.
That video not only captures the joyously belligerent spirit of this four-year-old brand, but stands as an object lesson in 21st century brand-building. MDS is a brand that’s powered by a heady mix of authenticity, transparency and unbridled entrepreneurial energy.
“When we started, I showed my two partners a slide that had the TV ratings for Shark Tank, the ratings for Keeping up with the Kardashians, and stats on Elon Musk’s growing social media presence,” says co-founder and CEO Jake Karls, who started the company alongside his sister Lezlie Karls and her husband Nick Saltarelli. “And what I noticed from Shark Tank was that people wanted to know more about entrepreneurship. Who are these entrepreneurs? What’s their story? Then you look at the Kardashians and you have this heavy dose of drama and chaos. And then you look at Musk, who’s a loud, outspoken founder.
“And I said, ‘We are going to make a reality show on entrepreneurship. We’re going to be authentic and loud and transparent and show what’s actually happening on the shop floor: the good, the bad and the ugly of how we’re building our business. And we’re going to create fans, not customers.”
And so began a social media reality show that’s all about building Mid-Day Squares from the ground up.
To watch the videos posted on MDS’ Instagram page is a powerful learning experience for brand makers. There’s one video where each of the three founders talk about their mental health challenges with total honesty and courage. There’s one where they’re distraught because they have to give up ownership of a puppy when they realize that the demands of pet care and running their business force them to make a heartbreaking decision. Then there’s a compilation of the highs and lows of 2021. The emotional intensity is overwhelming. These guys are masters of millennial storytelling.
From the start, MDS has nailed personalization. To introduce people to the product, the founders did a lot of sampling. But rather than offer the samples for free, they charged people 25 cents, which they would pay for online with their credit cards. Then they went back to each person who trialed the product with a polaroid of the three founders accompanied by a personalized message to start building that relationship. To top it off, the samples were hand-delivered because they couldn’t afford shipping. And they filmed all of that, too.
The founders have certainly tapped into the zeitgeist. There’s a revealing clip of a meeting called by Lezlie Karls, in which she reveals to her team that she has had an epiphany. She says, “We’re trying to crack the DaVinci code. Telling the story seems simple but it’s not. So here’s the breakthrough: I no longer want us to be telling long stories. Going forward, we are living in the moment. What makes this company powerful is the authenticity, the transparency of how it’s unfolding in the moment.”
We asked Jake Karls what his sister meant by “cracking the Da Vinci code.” “She meant cracking the idea of how we really get to the consumer on a deeper emotional level – and keep them coming back for more. It’s very hard to break the attention barrier in today’s world. You have thousands of brands putting out content. And it’s even harder to sustain it.”
That instinct for how brands work today is what has made MDS the darling of business schools. The founders have been invited into the classrooms of places like Concordia, McGill, Western, Ryerson and New York University to share their entrepreneurial story. Investors like the story too. MDS has just landed a third round of funding worth US$10 million in a deal that has a US$35 million pre-money valuation.
In its early days the brand was 100% DTC, but it now sells 65% of its products in-store and 35% online. It has built a retail presence at more than 2,400 stores. About 1,700 of those are in Canada at places like Sobeys, Metro, Longos and Whole Foods, while in select regions of the United States it can be found in 700 Whole Foods, as well as in Sprouts locations nationwide. Its most recent round of financing will help expand distribution into the U.K., Latin America and Asia.
