Some time ago, a hungry young boy in NYC decided that he was tired of the stale bread the local baker made. So he set out to find a better bakery. He went a few blocks south and tried another baker’s bread. It was a bit more fresh, but it was overcooked. He kept walking. The next baker’s bread was flat—it hadn’t risen properly. He kept walking. The next baker’s bread, well, he didn’t know what was wrong with it. He wasn’t even sure it could be properly called bread. He kept walking. After tasting many breads and after walking a long way without any satisfaction, he ended up in the park.
In the park he saw an old man feeding the birds some bread. He had never seen so many birds one place— he was actually a bit frightened to see what seemed like thousands of birds flocking around the old man and the bread he was feeding them. The boy approached the old man and asked him about the bread he was feeding the birds. The old man offered him a piece. Never had he tasted such scrumptious bread. It was moist, and so, so sweet. The boy asked the old man where he could get such amazing bread as this. The old man replied, “there is no bakery anymore that offered this kind of bread, but if you want to learn how to make it yourself, I will teach you. By the way, I call this bread, ‘cake’.”
“Cake,” the boy replied. “I would like to learn to make this, cake, as you call it.”
So the boy learned from the old man how to make cake. Not just the same cake that was used for bird food, but also many different kinds of cakes. Chocolate cakes, lemon cakes, light chiffon cakes, buttery pound cakes, crumbly coffeecakes, layered cakes, sheet cakes. While all of the cakes were different, they were all delicious to his taste buds. Through making a variety of cakes, he learned the underlying science and art of how great cakes are made.
After years of training, the old man told the boy that he was ready to start a bakery of his own. So the boy started his own bakery in the city, making the cakes to the best of his ability. No one had ever heard the word ‘cake’ before, so the boy advertised his cakes as bread.
On opening day, there was a long line of people eager to try the new bakery, although the other bakers nearby were less than thrilled at the new competition. But they didn’t worry too much—they surmised that since this boy didn’t go to any of the baking schools they went to, it was unlikely that his bread would be very good. And the bakers were right, from a certain point of view—most of the customers found the boy’s bread repulsive. It was unlike any bread that they were used to.
A few customers looked past the newness of the bread and realized that this was something they’d been waiting their whole lives for. It wasn’t bread—it was something better. The boy explained the concept of cake to these few customers and they were hooked. These few customers spread word of this cake all around the five boroughs, and the bakery got a bit of a following. People started taking subway trips just to sample this boy’s cake.
City regulators heard of the boy’s “bread” and found that it did not meet the legal definition of bread—bread wasn’t supposed to be this sweet, nor was it supposed to come in this many varieties. On top of it all, the boy didn’t have the necessary permits to operate a bakery. So the regulators had the police come to the bakery to shut the whole operation down.
Undaunted, the boy decided to leave the city behind, and open a mail order bakery. He decided it would be a cake-of-the-month club, where he would come up with a brand new recipe each month to share with his few loyal customers. By leaving the city, and by advertising on a global scale, the boy found that he was able to reach even more customers than ever before.
Once, when a cake was mailed to the wrong address and returned back to the boy, he tasted the cake. It tasted great, but not as good as the fresh-baked cakes. The boy realized that the cakes were at their absolute best when eaten fresh out of the oven. So, in addition to his mail order business, the boy decided he would make a series of VHS tapes where he would teach people to bake the cakes themselves.
Most people weren’t interested in watching the videocassettes, but a few did. However, of those that watched the videos, none successfully baked a cake of their own. But all the customers continued enjoying the cakes up until the time that the boy, now a grown man, died unexpectedly.
By this time the mail order business had grown into a respectable enterprise, and someone had to take on the job of keeping the business going. The man had hoped to leave the bakery to his sons eventually, but they were too young to have been taught how to bake cakes. The man’s nephews kindly took upon themselves the burden of maintaining and expanding the business.
In an effort to reach more customers, the nephews sold stock in an IPO to raise money to expand the business. Through standardization of manufacturing procedures, wise financial planning, and, some seemingly minor changes to the recipe, the company experienced a period of exponential growth. Customers were fed, and the business was very successful. While the nephews had plenty of business acumen, when they tried to make new recipes some very bitter cakes were produced. After a massive and expensive product recall, they went back to the old recipes that were successful in the past, and they replicated them reasonably well. The business resumed its trajectory of expansion and success.
It is generally the case that Wall Street expects exponential growth in perpetuity, even though it is a mathematical impossibility. But that doesn’t stop companies from trying. And Little Joey’s Snack Cakes, as it came to be branded (with a picture of cute little Joey as it’s mascot), was no different in trying to maintain growth levels. They did this by making concessions in both the ingredients used and in the manufacturing process itself.
Eventually, the business lost its distinctive advantage in the market, and began to lose customers. Some thought that if this was the best of what the cake world had to offer, then cake wasn’t really worth the high price. Other customers wondered if perhaps there could be a better cake out there.
By this time, VHS tapes had gone out of fashion, but some internet pirates put the old VHS tapes up on youtube, and some loyal customers watched the videos of Little Joey making his classic cakes. The customers never tried the baking techniques, but they could tell just from the grainy videos that Joey’s cakes were nothing like the cakes they had been eating their whole lives.
Eventually one old, loyal customer tried to bake a cake using the techniques he saw in the videos. He couldn’t say for sure if his cakes were as good as the boy used to make, but they were delicious, far more so than the current offerings of the Little Joey’s Snack Cake Company. The old customer started making cakes for a few friends, but soon received a cease and desist letter from LJSCC, that he was infringing on LJSCC’s intellectual property by using the techniques from Joey’s VHS tapes, although the tapes hadn’t been sold since Joey’s death. Nevertheless, LJSCC prevailed in court, and the old loyal customer was forced to relocate to China, where intellectual property laws were not so rigorously enforced. LJSCC also successfully sued others who distributed pirated copies of the VHS tapes, and some of them also moved to China.
Meanwhile, the old customer continued to send cakes to friends. He tried to emulate Joey’s operation with a cake-of-the-month until one day, the old man tasted a cake that was returned to him. It tasted great, but not as good as the fresh-baked cakes. The old man realized that the cakes were at their absolute best when eaten fresh out of the oven. He released a free series of youtube videos teaching others how to bake cakes.
Most people weren’t interested in watching the youtube videos, but a few did. However, of those that watched the videos, none successfully baked a cake of their own. So the old man found a boy, who was not one of the internet pirates who had to move to China, and told him that it would be up to him to come up with the recipe for the next month. The boy, daunted as one might expect, agreed to the task. He worked tirelessly and eventually came up with a new recipe for the month’s cake. The boy sent it out to a few of the old man’s loyal customers. Many customers liked the new recipe. It wasn’t as good as the old man’s cakes, but it was delicious. A few of those who sampled the cake were upset that the cake wasn’t as good as the old man’s cake. The boy knew his cake wasn’t as good, and so he commissioned a focus group to improve the cake before sending it out to wider distribution.
Some said “My family is gluten-free—we will not accept a cake made with wheat flour.” Others objected that a boy, who wasn’t even one of the original internet pirates, was chosen for the job. Some others were upset that they weren’t the ones chosen to bake the cake of the month. "Surely there are better, wiser people more suited for this job,” they said. And certainly there were.
Eventually the customers decided together that the recipe would only include ingredients that all the customers could agree on. That way, everyone would be satisfied with the month’s cake. But the customers couldn’t agree on what kind of cake should be made. Some wanted an angel food cake, which contains only egg whites, and no egg yolks or butter. Others wanted a pound cake, which contains butter and egg yolks, and only minimal egg whites. A third group said that a sugar-free carrot cake would be the optimal compromise, since it contained an equal ratio of egg yolks to egg whites. The first two groups could at least agree that either an angel food cake or a pound cake would be preferable to a sugar-free carrot cake. They considered a layer cake, with pound cake on the bottom and angel food cake on top, with cream-cheese frosting between the layers, but that was quickly rejected.
Next the group decided to make a cake using only the ingredients common to all recipes, so everyone could feel like their preferences were met. But the only ingredients that everyone could agree on were flour and egg whites, resulting in a strange flatbread that could hardly be called a cake.
The group settled on a plan that the month’s cake would be a cupcake-sized sampler of the old man’s previous recipes for angel food cake, pound cake, and carrot cake. Everyone agreed that this would satisfy everybody. And everyone was somewhat satisfied. The customers agreed that this process would be used in the future whenever the old man wanted someone else to come up with a cake of the month.
And the customers continued to enjoy the old man’s cakes-of-the-month, hoping that the old man wouldn’t die unexpectedly.