Why Mid-Sized Markets Create Better Opportunities: Derek Sorrells’ Multi-Concept Strategy

Anthony Codispoti (00:00)
Welcome to another edition of the Inspired Stories podcast where leaders share their experiences so we can learn from their successes and be inspired by how they’ve overcome adversity. My name is Anthony Cotus-Bode and today’s guest is Derek Sorelles.

Derek is the founder and managing partner of Scion Capital Partners, president of Sweet and Saucy and founding co-owner of the Arcade, founder of Papa’s Ice Cream and Treats, and also founder of Just a Sip, a beverage provider in Wichita, Kansas that offers a variety of drink options for events and fundraising. They focus on bringing people together through great flavors and community-driven initiatives and operate multiple locations and aim to make every gathering memorable.

Derek’s track record as an entrepreneur includes launching successful startups and guiding them through strategic growth and exits. He is a Guinness World Record holder and recognized for his innovative business concepts and positive impact on local communities. With venture-spanning food, entertainment, and capital investments, Derek consistently champions new ideas that resonate with customers. Now, before we get into all that good stuff, today’s episode is brought to you by my company.

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Results vary for each company and some organizations may not be eligible. To find out if your company qualifies, contact us today at addbackbenefits.com. All right, back to our guest today, founder and managing partner of so many different businesses that we’ll get to touch on today, Derek Sorrels. Thanks for making the time to share your story today.

Derek Sorrells (02:02)
Absolutely, thanks for having me.

Anthony Codispoti (02:04)
So Derek, you’ve got a pretty interesting background, highly technical to start with, computer information systems, data intelligence. You were a professor, PhD. When I look at your past, just on paper anyways, it doesn’t suggest to me that you were on the path to found an investment firm. Walk me through how this happened.

Derek Sorrells (02:27)
Well, being a child of the 80s when the Apple II and other computers really became popular and became mainstream, I was very interested in those. And that’s what really led me down the road of computers. But one of the things I learned coming from a lower middle class family is if I wanted one of those computers, I had to be able to earn it myself. My parents didn’t have the money to pay for those computers.

So I started working and as I started working, I quickly realized that working for someone else over the long run wasn’t going to be the best way to earn the maximum amount of money to buy the things that I wanted to do. So it actually started with wanting to be able to literally buy stuff for lack of a better word.

Anthony Codispoti (03:13)
Okay, and so tell us how many businesses you’re involved with today. We hit on several in the intro, I don’t know if we got all of them.

Derek Sorrells (03:19)
So there’s eight.

Yeah, we missed a couple of them. Sometimes I forget myself. There’s eight total. ⁓ We have the Soda Shop Just a Sip, Papa’s Ice Cream and Treats, Sweet and Saucy, which is an odd store that carries candy and hot sauces and ⁓ novelty socks, which none of that goes together, but it works really well. We also have a brick store, one might call a Lego store, a bar, a very small neighborhood bar.

Anthony Codispoti (03:23)
Okay.

Derek Sorrells (03:49)
And then of course, the arcade, which is a classic 80s and 90s video arcade.

Anthony Codispoti (03:54)
And so are these all ideas that you’ve cooked up? Are these investing in some other people’s ideas, a mix of the two?

Derek Sorrells (04:01)
Everything we currently have is something that I dreamed up or dreamt up and for a variety of reasons. When I used to travel for a Fortune 500 IT company, I would travel into these different cities, Omaha, Austin, ⁓ Salt Lake City, and I would see businesses and think Wichita needs something like that. And many times I would do the due diligence and would decide to not move forward.

And there were several times where I did and decided, let’s try this and let’s see if we can make a go of it. And I think the amount of time and the due diligence is what’s really important before you open a business like that. But we’re currently at eight with a total of 10 doors. And it’s a little crazy every day trying to keep all the balls in the air.

Anthony Codispoti (04:50)
Is there ever a thought of, let’s focus on just one of these concepts and replicate that? Because I’m guessing that it would be a lot easier if you had 10 just as sips rather than, you know, onesie twosies of several different concepts.

Derek Sorrells (05:08)
Yeah, there’s always that thought in mind. So for just a sip, we have three locations here in Wichita. And same with our papas. We have three of those as well. It really kind of depends. Wichita is an interesting size city. There’s about 600,000 people in the metro area. ⁓ So given our size, we’re at a ⁓ very interesting point where there’s a west side of Wichita and an east side of Wichita. So for large companies, they may have one restaurant on the west side, one on the east side.

So the limit for growth, ⁓ unless you’re like a Starbucks or a Seven Brews, the soda shops are probably the only stores where we could have multiple around the city and still do well. Some of the other things, such as the Lego store, an East and a West is about all you’re going to get out of those. ⁓ And then when you look at things like our neighborhood bar, ⁓ it is extremely successful because of its location and because of the neighborhood around it.

And so ⁓ that would be hard to duplicate and still be successful and still have the look and feel that it does have today.

Anthony Codispoti (06:15)
So part of what you wanna do is keep everything there in Wichita.

Derek Sorrells (06:20)
Pretty much, know, there’s the thought of franchising is always out there. And when you have to look at who’s already in your space. So who’s franchising in your space? So if we look at our ice cream, for example, there are many different companies that are ice cream franchising, whether they’re large like Baskin Robbins, whether they’re a little bit smaller like the yard, there’s many of those people that are out there and you have to look at is what you are doing a differentiator enough.

that’s going to allow you to franchise and take that to the next level. Is that something that you’re currently doing that’s going to interest somebody over who’s currently in the market? And sometimes that’s yes, ⁓ but there’s still a heavy lift to get to that franchising, ⁓ the point of being able to franchise. And sometimes it’s let’s take what we have, let’s run with it, let’s do it better than anybody else can do in the space that we have and let’s create.

know, start raving fans from what we have here.

Anthony Codispoti (07:19)
Hmm. So why do you think Wichita is this place that didn’t have a lot of these concepts that you were seeing around the country? I mean, it’s not as it’s not a huge city, but it’s also not, you know, a tiny little village either.

Derek Sorrells (07:34)
Yeah, it’s interesting. know, Wichita, as I mentioned, has about 600,000 people. We don’t have an Apple store. We don’t have a cheesecake factory. We’re in that, what I would call, right before you get into the sweet spot where you pass three quarters of a million or a million people. So because of that, there are many franchises that, you know, we’re one of the last places that a franchisee is going to typically look. They’re going to look at an Oklahoma city, a Tulsa, a Kansas city, before they look at a Wichita.

And for an entrepreneur that opens up the possibility of being able to take what you love or what you think will work and do it on your own here without the constructs and requirements of a franchise company. And that’s exactly what I did. So before I would open up a store, I would literally go to similar franchises in multiple states and just see what they’re doing. You know, independent ice cream stores, franchised ice cream stores.

what works and what doesn’t, what are the customers buying? What are they excited about? ⁓ and so, you know, Freddy’s ice cream or Freddy’s burgers and custard was founded, you know, just two miles from where I live here. And if you would have asked me in 2003, if you, to open a hamburger stand, if it was going to be successful in Wichita, Kansas, I would say no. And Freddy’s is very successful. So I look at things like you don’t have to do it different than somebody else.

because there’s already plenty of burger chains, you have to do it better. And I think that’s what we do is we do it better than a franchise and better than a chain. And that’s why we have repeat customers and that’s why we’ve been so successful.

Anthony Codispoti (09:14)
So I’m trying to put you into a box right now, Derek, which sometimes is a dangerous thing to do. But I talked to a number of restaurateurs who enjoy the process of opening up different concepts because it allows them to be creative in their craft. want a seafood restaurant and I want to do it in a certain way. And I want a Mexican themed restaurant and I want to do it in a certain way. And I’ve got all these different ideas.

For you, is the driving motivation to have multiple concepts, like is the fuel sort of this drive to express your creativity or is it strictly more from a business sense like, ⁓ this area doesn’t have an ice cream shop and I think we can do one very well and very efficiently and so let’s get a good piece of land and do it.

Derek Sorrells (10:10)
I think it’s a little bit of both. definitely ⁓ get my endorphins from the idea, starting the new business, doing the research and the launch. ⁓ I’m not as much of an operations person as, which I think is the typical entrepreneur. I would prefer to do the startup. I would prefer to do that initial growth. And then I prefer to let it go. ⁓ We’re not at a point where we can do that with many of these businesses yet. So we continue to… ⁓

We continue to run them and that’s perfectly fine and we’re successful in doing that. But the startup phase is definitely, I think, what’s the most exciting. ⁓ All of these businesses I’ve learned over time are very, very different. Now, you might think, well, of course they’re very different, but from a different point of view, like ⁓ my candy store, Sweet and Saucy, has one person that works there. It’s one shift and it’s all day. So.

It’s very simple to do where the arcade may have eight or nine people working at the same time in a variety of different positions from kitchen to bartender to management and things like that. So it very quickly evolves into something that is an operations, what an operations person is very focused on. ⁓ I’m more interested in that initial thought and creating something that may not have existed before or even if it has existed.

doing it in a way that other people haven’t done to make it better, to make the customer say, wow.

Anthony Codispoti (11:40)
How do you think about scaling so many different concepts?

Derek Sorrells (11:47)
Yeah, I think it was. I think it was Andrew Smith from Savory Fund who said in a session I was in one time and in Salt Lake City, he said, you know, going from 2 to 3 actually feels like going from 2 to 20. And at the time I did not have three, so I kind of scoffed at that and I 100 % agree. It’s almost like going from 2 to 50. If you don’t have your process, your people in your processes set correctly, it becomes unwieldy.

very very quickly because you have multiple stores and different things are being done in different ways and the customer is not getting a consistent experience and that’s what it’s really about is ensuring that the customer’s experience is the same. If you go into a McDonald’s in New York City and go into McDonald’s in San Francisco and order a cheeseburger and fries it’s going to be the same at every one and that’s what the customer wants is a consistent experience. So

I think that’s the biggest challenge on scaling is ensuring that the customer service and the customer experience is the same across the board.

Anthony Codispoti (12:52)
Yeah. And I’ve heard from a number of other restaurant owners and founders that a big mistake a lot of folks make is thinking, well, I’ve got one location open and we’re not quite profitable yet. But if I open up a second one, then I’ll have economies of scale and be able to order things at a better price. It says a really common trap a lot of people fall into. What are your thoughts on?

Derek Sorrells (13:14)
absolutely fell into that trap myself. We have three Just-A-Sip stores and two of them, ⁓ one of the problems is if you want a soda shop or you want to do a soda shop, just like a coffee shop, ⁓ one of the things that’s really important is a drive-through. Everybody wants a drive-through. Well, when we decided to open the first Just-A-Sip, there were no drive-throughs in Wichita. Not a single drive-through anywhere. It was 18 months before a drive-through became available.

And then another one came available in 20 days. So we opened two stores within 45 days of each other. ⁓ And the absolute insanity of that is ⁓ off the chart. Both stores were open. Both stores looked amazing. The customers loved everything. But it immediately became an issue of, ⁓ we believe this is going to be profitable because of all the research that we’ve done.

And we did a significant amount of research. But until you actually put that into play in your market with your customers, you never really know if it’s going to be successful. And that’s exactly what happened. We thought we were going to be able to scale. And the first couple of years were quite a challenge.

Anthony Codispoti (14:30)
What was the biggest challenge that surprised you?

Derek Sorrells (14:35)
You know, I would say I was lucky in many of my businesses where ⁓ I was able to open the door and be cashflow positive literally within 90 days. You know, there is the saying, the harder I work, the luckier I get. And I certainly was working hard. Certainly was working hard. But I hate to use the word ego because I really don’t think that…

I always thought it was me that was making it happen, but it was my team and we were making it happen. And so when we opened the door of the first soda shop and we gave free drinks away for two days, we gave 5,000 drinks away in two days. ⁓ And this is out of a building that has no inside. This was all drive-through. The drive-through line was 50 minutes long. ⁓ that was giving, mean, literally people were making drinks all day long and just handing them out the door. ⁓

My feet really recognized my age at that point. But we thought, well, it’s not going to be that way every day. It’s not even going to be a quarter of that every day. We fully recognized that. But it drops absolutely significantly more than we thought it was going to. So then it became, OK, now we need to really focus on marketing and going after the market that we know is interested in the product that we’re selling. And that was a little bit of a mountain to climb.

Anthony Codispoti (15:56)
How did you overcome it? What was the biggest growth lever you were able to pull for just a sip?

Derek Sorrells (16:02)
You know, I think the biggest challenge, and this is a problem for a lot of owners, ⁓ is that you’re the wrong person to do everything. You think you know best, and you may know best, but you’re probably the wrong one to do it. ⁓ And so I hired a marketing company, a female marketing company. Soda is very, Soda shops are very female focused, very female focused. And that’s not on purpose, it just is. ⁓

Over 80 % of your customers are female. Over 80 % of my employees are female. None of that’s on purpose. It’s who applies and it’s who comes. you you have to, you don’t ignore, you don’t ignore them, the men, but you have to focus on the females when you’re focusing on your social media, because those are your customers. It’s the moms that are picking up their kids after school and bringing them by for a drink afterwards. It’s, you know, wanting something different than you’re just going to get at a Sonic or a McDonald’s.

And those tend to be the people that drive. So your marketing needs to do that. So we hired a female marketing company and they’re driving the marketing and are doing an amazing job.

Anthony Codispoti (17:10)
You guys do some on-site event services and some fundraising initiatives with Justice SIP. Can you talk more about this kind of multifaceted approach?

Derek Sorrells (17:20)
Yeah, the one thing we did with ⁓ both our Justice SIP and also our Papa’s Ice Cream and Treats is we started doing things on site. So with Papa’s, for example, we do an on-site Sunday bar because there’s lots of events, whether it’s after prom, whether it’s a Christmas party or a holiday party for a company, or whether it’s just a birthday party or at a wedding. We do a lot of weddings and that can be an ice cream bar or it can be a soda bar. So, you know, there are many people that have started to ⁓

⁓ to back off alcohol. They’re not having alcohol at their weddings. ⁓ And even those that are having alcohol, many times we are there as well and we’re a great collaboration with ⁓ those bars that are there at the wedding. So this allows people, whether they’re kids, whether they’re not drinking, whether they just want something different and they love our product, we set up a ⁓ full bar with all of our syrups, our ice, all of our drinks, or a Sunday bar which has 10 toppings.

And it allows people to do something that’s different that they might not have done in traditional catering. There’s many businesses that’ll have food in the afternoon for employees or something like that, or do a dinner around the holidays. This is something that we can do in the afternoon, especially during the summer. We do hot chocolate, our flavored hot chocolate bar in the wintertime. It’s something that businesses can do that’s different. ⁓ And they’re always looking at doing things that are different for employees.

And this is something that really stands out.

Anthony Codispoti (18:51)
Derek, across all the different concepts that you have open, what was the first one that you…

Derek Sorrells (18:56)
So the first one currently open is ⁓ the arcade. had at one point, excuse me, had 48 full-size arcade games in my basement. I was a collector in my personal basement. It was a really nice basement, by the way. ⁓ I bought one and ⁓ there’s that old Lays potato chip ad that said you can’t have just one Lays. And it kind of started out that way with the arcade machines. I’m a child of the 80s.

Anthony Codispoti (19:07)
in your personal basement. Okay.

Derek Sorrells (19:25)
I bought one and then it became two and then it became 48. And the problem was, I love the nostalgia. I love the way it felt when I played them. It took me back to being in high school and middle school, but I didn’t turn them on, but maybe all of them, maybe twice a year, I’d have friends over and have a party and turn them all on, but nobody really ever got to play them. I am a gentleman that I know very well, ⁓ Michael Jensen.

is my co-owner at the arcade and I mentioned to him what I was thinking about doing. He can fix absolutely anything. So I run the business side of everything. He fixes all the machines and it’s ⁓ a perfect business ⁓ partnership where we can do what is best for us and the customers absolutely love it.

Anthony Codispoti (20:15)
And so this was kind of taking a hobby and turning it into a business. Is that sort of the thought?

Derek Sorrells (20:20)
It really was. It was taking what we both had because he had 30 games himself. And we took them all and we put them into a building with no food and no alcohol. And when I signed the lease, was a few days before ⁓ Thanksgiving, I signed the lease and I was standing in the building and I had a spreadsheet, a simple spreadsheet that I had done.

I realized that I needed 50 people a day to walk through this door to pay rent, just to pay rent. And I thought, does anybody really care about that? And it was, it’s when it hit me that, you know, your hobby is not anybody else’s interest and going from a hobbyist to being a business owner can be extremely dangerous because you’re going from what you want to what the customer wants. And it is a hundred percent about the customer wants. So we signed that lease.

⁓ We opened December 15th of 2017. It was 34 degrees in Wichita, Kansas. There was a line outside for three hours to get in. We were at maximum capacity in 24 minutes. ⁓ It was crazy. It was absolutely crazy. Facebook, just Facebook. Again, there was no classic video arcade. At that time, we only had 63 machines. ⁓ We have ⁓ well over 150 now.

Anthony Codispoti (21:28)
What kind of marketing did you do? How did you generate that much interest? Okay.

Derek Sorrells (21:44)
But we only had 63 machines at that time and all the machines were on free play. He just paid us 12 bucks and you could play all you wanted. so it was something that wasn’t available in Wichita. It was inexpensive. mean, this was 2017. It was inexpensive and people loved it and they loved to bring their kids in. And one of the best things to hear is when, you know, a dad or a mom, they’re walking out with their kids and they say, this is what it was like when I was a kid.

Because you don’t have a headset on and you’re not playing somebody around the world, which is cool, but you’re playing somebody that’s literally right next to you. You can elbow them as you’re playing and you can have a good time and you can talk crap, literally right there. It brings that camaraderie together. It’s a different kind of screen time than what kids are getting today.

Anthony Codispoti (22:36)
So what’s your overall thoughts for listeners who are thinking, well, I’ve got a hobby. I’ve got something I’m interested in. I’d like to turn that into a business.

Derek Sorrells (22:44)
Couple of things, if there are businesses like that already exist, I would highly recommend that you try to get a part-time job there. Work it. I see way too many people that I know that have opened a coffee shop, for example, and they’ll say to me, Derek, I haven’t paid myself in two years. That was literally a conversation I had last week. When you leave a job, when you leave corporate America, it’s very difficult to replace that income.

I had the arcade and the candy store and I was still working Fortune 500 IT. I built both of those businesses so I could be an absentee owner. I always wanted to be an operator. I’m sorry. I always wanted to be an owner, not an operator. I didn’t want to work in the businesses. I wanted to work on the businesses, which is very different. There are many people that, that say, you know, yeah, I want to run a coffee shop because I love going to a coffee shop. I love being there. love how it feels.

That’s a real dangerous ⁓ way of thinking about starting a business. The goal of a business should be to make money. That doesn’t mean you can’t take care of your employees. It doesn’t mean you can’t give back to the community. But the number one goal in a business is to make money. And if you leave your corporate job with those corporate benefits and you start something that is likely to not make money for a year, two years, maybe three years, potentially you may break even.

But again, that doesn’t necessarily pay your salary. It can be a challenge and it can be dangerous. make sure you do your due diligence, which two things, if you can get a job in a coffee shop or some of those kinds of businesses, do so. Secondly, ⁓ sit and watch. What are other people doing? What are making them successful? And that may be in your market or it may be in a different market as well.

Anthony Codispoti (24:37)
Now, prior to opening the arcade, ⁓ you didn’t have any experience owning a physical location like this, a retail operation. you have? Okay.

Derek Sorrells (24:46)
I’ve had several others too. So in

2003 to 2005, I had an eBay resale store. Again, it was not a franchise. There were several franchises that were out there, but we took in items from people off the street. We photographed them. We sold them on eBay. We shipped them out. We got the payment and we gave a portion of that to ⁓ the end user. eBay was kind of new at that point, not super new, but kind of new.

And we sold a ton of product for people. That was here in Wichita, Kansas. I sold that business, oddly enough on eBay, to somebody else who bought that and took that on. And then prior to that, from 97 to 2000, I was an authorized wireless agent for Southwestern Bell Wireless, and I sold cell phones, as we called them back then, wireless phones now. ⁓

back in the late 90s. that entrepreneurial spirit has always been there. And both of those were doors. So those were retail doors. The entrepreneurial spirit’s always been there. I just took a step back after the eBay store to go into corporate America, to do a little teaching, the collegiate level. But that spirit was always there.

Anthony Codispoti (26:06)
How do you think about when to scale a business versus when to exit?

Derek Sorrells (26:13)
You know, I think that can be a challenge. of it is about you, and part of it is when you’re, ⁓ for lack of a better word, If you’re not interested in it anymore, I think it’s absolutely always time to get out, and you always need to have an exit strategy of some kind. ⁓ The other thing is, is there an easy ability to scale? Because there’s two ways to do that. Obviously, you can franchise. The other thing is you can grow it organically. ⁓

Wichita, for example, if we were to grow from here, there would be a couple of other spots in Wichita we could likely go for the soda shops. And then we would need to look outside of Wichita. Wichita is two and a half hours from Kansas City, two and a half hours from Oklahoma City. They’re a long way away. There are some smaller cities in between, but the next closest city probably would be Salina for us that we would look at. It’s an hour and a half north. So for us, it’s where are you going to go? Do you have?

the geographical area to expand in and does that make sense? And then do you have the wherewithal to do that? So I think you have to look both inside and outside to make the decision that makes best sense.

Anthony Codispoti (27:25)
So what is your roadmap look like? Do you want to go outside of Wichita? I hear some resistance to that and you seem like an idea, an idea guy. You can cook up lots of different concepts. Do you just want to kind of stay in the Wichita greater metro area?

Derek Sorrells (27:41)
Yeah, I think so. We have a great team here in Wichita. And I think the benefit of being here is that we have control of everything here. ⁓ our director of operations knows what’s going on at all of the businesses. And it gives us the ability to stop in and work with a business for an hour or so and then move on to the next one. ⁓ So we’ve done extremely well here. Wichita is our home. Having traveled all over the world ⁓ when I was ⁓ teaching salespeople how to sell,

I’ve been able to see everywhere and go everywhere, but Wichita has a special place in my heart and it’s a great place to grow businesses. It’s a great place to raise a family and I still believe Wichita, the best things are here to come for it. So we’re continuing to look at opportunities that are here and we think the best opportunity for growth for us is here in Wichita.

Anthony Codispoti (28:35)
Is it new concepts? mean, you’ve already expressed kind of the size of the city only allows for so many kind of replication of existing concepts. So do you have some new ones kind of cooking?

Derek Sorrells (28:47)
⁓ There’s always something on the stove. It just depends on how much heat’s under it. There’s things that I think are not necessarily ⁓ worth bringing out at this point, because we’re not at… For example, we have a ballpark here in town. have the Wichita Wind Search. There’s building that’s going on next to that, but it’s a relatively slow process. was stalled by COVID.

⁓ you know, we, we believe there’s a few concepts that would work well in the, in the retail area that they’re building there, but they’re specific to that particular retail area. The other thing is looking at your concepts and is there room for horizontal growth? ⁓ or I’m sorry, vertical growth. So instead of looking at the soda shops, as you mentioned, we do catering and we do, ⁓ are we do onsite, but we also do catering as well.

So how do we take what we’re doing now with the physical space that we currently have and the employees that we have? And how do we grow that deeper instead of just wider? So instead of more businesses, how do we add on catering? How do we get people to ⁓ come and pick up some of our amazing pretzel bites or some of our cinnamon rolls and take those to their office? And it’s in a large tray. That way, we’re not having to ⁓ do onsite, which requires more people when you do a catering. They stop by, they pick it up, and they take it with them.

So they pay less money for it, they still get the product, they still have an amazing experience. So we’re looking at all of our businesses and seeing where we can go deeper instead of necessarily wider.

Anthony Codispoti (30:18)
Give us another example of going deeper on one of your businesses.

Derek Sorrells (30:22)
So,

sure. So our candy store, for example. ⁓ Well, let me jump back to the Soda Shop for a second. So one of the ways that we’ve been really successful with our Soda Shop and our ice cream store is we’ve started with DoorDash many years ago, but we added on Uber Eats and Grubhub. ⁓ And being able to add on two additional ⁓ ways that you can sell it, two additional channels really, is increased revenue.

So we started looking at our candy store and there’s over 5,000 items in that candy store. ⁓ There’s 400 different hot sauces, barbecue sauces and salsas, 400 different glass bottles of soda, over 1,500 different pairs of novelty socks. The number of skews is just kind of mind boggling. So putting all of those on a door dash or something like that just really isn’t gonna work. But we do have a product there that sells extremely well and it’s our chocolate and our chocolate truffles.

So one of the things that we’re doing is we’re creating a DoorDash, it’ll launch next month, we’re creating a DoorDash that we’re calling a chocolate shop. So it doesn’t even have to have the same name. Again, it has to attract attention on DoorDash and it’s gonna focus on being able to sell our chocolates and our artisan chocolates and our artisan truffles and sell those not only to people that are just on DoorDash, but people that are looking for gift baskets and things like that.

that might be on DoorDash as we come into those holiday seasons. So it’s taking the products that we already have, utilizing a channel that’s out there and available that we don’t have to build out, and being able to turn that into additional revenue and do it in a simple, easy way.

Anthony Codispoti (32:05)
You mentioned that it’s not really practical to put all 5,000 of your SKUs onto a platform like DoorDash. I’m not super familiar with the platform. What’s the challenge there? I think of it sort of like any shopping cart platform where you’ve got a database or even a flat file, a spreadsheet of different SKUs and their information and links to the images. You just upload it into the system, but clearly there’s a roadblock there.

Derek Sorrells (32:32)
it’s it always seems that simple. That’s the way it always looks. ⁓ You know, spending spending 20 years in corporate IT, we always used to always joke with the engineers that just create a checkbox. That’s all you have to do is turn it on or off is just a checkbox, right? And they used to laugh at us. Everything is more complicated than it looks. ⁓ There’s many systems that tie into DoorDash, whether your POS system is toast or whether you’re using square or whether you’re using Aloha. Many of them tie into DoorDash and they tie in.

relatively easily. That’s where the easiness stops. ⁓ There’s the issue of our photo’s gonna be approved by DoorDash because every photo has to be approved ⁓ to show up correctly. And if you have a pair of socks, for example, ⁓ if you can’t see what the socks look like, you’re absolutely not going to buy them, even if it says football socks, because ⁓ I have five different football socks.

But what’s the footballs look like on it? Does it say number one football team or things like that? it becomes, and then managing stock. There’s always, and with a large number of products like that, there’s always gonna be stock that was entered in correctly. So it shows that you have it in stock and you actually don’t have it in stock.

⁓ You have theft issues. So you’re always going to have issues where what’s showing in DoorDash is available is not actually what is available because it’s matching with what the POS says. So what we decided to do was, what’s one of the most popular things that people buy? It’s chocolate. We have 18 different colors of &Ms. We have all different kinds of actual chocolate bars that we know we have. And then we have our chocolate truffles. And we knew that we could take those.

keep a pretty good idea on the amount of them that we had in stock and that we could easily control on DoorDash to again have an amazing customer experience because at the end of the day, if the customer feels good about what they buy on DoorDash, they’re gonna leave a positive review, which is very important to show up in DoorDash’s algorithm. The more positive reviews you have, the higher you’re gonna show in their algorithm. And then you’re also gonna have likely repeat buyers, which is also what we wanna have as well.

Anthony Codispoti (34:44)
How did you guys navigate COVID?

Derek Sorrells (34:47)
You know, a pandemic ⁓ was right on my radar, slightly under alien invasion. ⁓ So it was interesting. At that time, we ⁓ only had two stores, ⁓ kind of three. So the arcade was open at its original location. The candy store had been open. It opened in June of 19, so it had been open for about nine months, sweet and saucy. ⁓

It was a little bit of a challenge, you know, for a couple of different reasons. You know, the arcade is a gathering place. You know, in a candy store, you can go in, buy product, walk out and leave. But the arcade is a place where you go and spend hours. So it’s a gathering place and no one wanted to do that. First of all, you couldn’t for a while. And then at the candy store,

we shut down on our own, we technically could have been open because we have a food license, a retail food license. So we were considered like a grocery store. So what we decided to do at the arcade was we decided to start having private parties that were very, ⁓ very inexpensive. How do we drive revenue? So we had smaller private parties. for $250,

You could have up to 30 people in there. And we just suggested these all be your family members that you’re already around all the time anyway. That way we’re not trying to spread everything because two things, A, we don’t want to make people sick and ⁓ what people think and what reality is as many times two different things. So if you’re suddenly posting on Facebook that you’re allowing all these people to get together, ⁓ that can turn against you and social media very quickly. So we wanted to make sure that

what people were seeing and what people were thinking of us was not negative as well because perception is reality to a lot of people. So that worked out overall pretty well for us. What was a little more challenging is that our first PAPAs, I signed the lease on the building January 31st of 2020 and I took possession of the building on April 1st. And the world changed a lot in that 60 days.

So we went from getting ready to ⁓ open an ice cream store, a brand new ice cream store in an amazing location ⁓ in about six weeks to ⁓ a pandemic where that first year was extremely challenging just to ⁓ keep the doors open. everybody got through it because everybody wanted to get outside. So when it was over, it was a little different than what I would consider a normal economic situation where ⁓

People don’t have as much money to spend. People wanted to spend.

Anthony Codispoti (37:41)
And so when did you, was it sort of like a light switch where things were suddenly back on again? And when was that?

Derek Sorrells (37:48)
I think that really didn’t happen until probably mid 21. It was slower, but people certainly came in and we certainly sold quite a bit more. think our Christmas that year was very, very good. The Christmas shopping season was very, good in 2020, even though we were looking at Delta, the Delta variant was coming out. ⁓ That’s one of the other things I did. ran the largest, there was Director of Operations for the

largest COVID only testing lab in the United States during that time too. ⁓ Yeah. Let me finish that other thought first. So I think it was mid 21 when everything really, really kind of picked up. People felt more comfortable. They were less concerned about COVID. They weren’t not concerned about it, but they were less concerned about it. And it became something where they had the opportunity to finally get out and spend a little more money. And I think that’s when it really hit.

Anthony Codispoti (38:22)
How did that come about?

Okay.

Derek Sorrells (38:46)
It really wasn’t for a couple more years. I think we really started seeing the effects of inflation in March of 23 is when we really started seeing that hit the customers. ⁓ So in August of 2020, I left corporate America. ⁓ I left my Fortune 500 IT job. ⁓ And I was asked ⁓ by one of the vice presidents at Wichita State University to join them to operationalize a COVID lab that they were spinning up in a warehouse.

on the Spirit Aerospace Campus, the former Boeing campus in South Wichita. And they were concerned that, you know, they had most of the equipment, but they were getting ready to fully operationalize this. And the issue was, you know, they were having trouble getting reagents, they were having trouble getting tubes. And so we had an amazing woman that was ⁓ the technical director of the lab, but they needed someone to be, to operationalize it and make sure that it was running okay.

And at our height, were doing anywhere between 18 to 20,000 COVID tests a day for locations all across the state of Kansas, into Oklahoma, into Missouri. ⁓ And ⁓ these were schools, businesses that were doing testing every single day. And they would overnight the test to us. We would enter them and run them and have results for them online within 24 hours.

Anthony Codispoti (40:07)
Why were you approached specifically?

Derek Sorrells (40:09)
I was approached, the VP, I know her very well. I’ve worked with her in the past. ⁓ She knew of my skill set as far as being able to run businesses because at that point I had multiple. ⁓ She didn’t have time to do it and she needed someone who could come in and make sure that everything was taken care of. My background is absolutely not in the biosciences, but it is in ensuring businesses run and run efficiently. And that’s why she brought me in to do that.

Anthony Codispoti (40:35)
All right, what is the Guinness World Record that you hold?

Derek Sorrells (40:40)
Yeah, that’s that’s I think that’s the best thing I have on LinkedIn. ⁓ Certainly starts the most conversations anyway. So there was at the time and my certificate I have it’s right over here on my on my desk. ⁓ It’s the most amount of people playing pinball at the same time. So it’s not it’s not it’s not a one a one off award. That is three hundred and thirty one. There was a facility in Banning, California, the Museum of Pinball, which has now gone.

And Guinness was there and we all started the games at the same time, 331.

Anthony Codispoti (41:16)
That’s outstanding. All right. I’m going to take a total left turn here. I want to hear about a big, hairy, serious challenge that you’ve overcome in your life, Derek, personal or professional. How’d you get through it? What did you learn?

Derek Sorrells (41:29)
You know, I think the biggest challenge, it definitely would be personal. ⁓ know, relationships are hard. And I think the biggest challenge is ⁓ navigating those. And when you navigate those, have to remember, and this is hard for employees too, because, you know, a lot of times employees think that everything is perfect ⁓ and that you drive a nice car. I have a BMW convertible.

⁓ What most people don’t most of my employees don’t realize this is that it’s 22 years old It’s older than most of them. They just see this nice car. It’s an old old car ⁓ And they think the same in your personal relationships. They don’t even think about it Well, you’re obviously happy you’re successful and you’re driving this beautiful car. You have no problems at all I think the biggest challenge was, you know personal I’m divorced. I have two beautiful daughters

But I am divorced and that was, think one of the biggest challenges is, you know, navigating personal relationships because they’re not, they don’t work like business. ⁓ People are very different in the way they act and they interact and having to maintain that wall between home and work, it’s very difficult sometimes to not take your home, your work home. And sometimes it’s very difficult not to take your home into work. So.

you know, being able to navigate that and being able to successfully do it in a way that you don’t alienate your employees, that you’re still able to be successful and make ⁓ important decisions that are affecting you and them was a challenge. it took a while, but we all came through it okay. And ⁓ I think everyone is actually on to be on the better side for it.

Anthony Codispoti (43:20)
As you look back at that really challenging time, what advice would you give to folks to maybe try to avoid some of the same pitfalls that you experienced?

Derek Sorrells (43:32)
You know, I think it’s always good to have somebody ⁓ to talk to. So whether that’s a therapist, whether that’s a best friend who’s not involved in the business itself, ⁓ you can sometimes want to talk to ⁓ coworkers. And sometimes that’s okay, depending on the level of your relationship. But you do have to remember that it is a business relationship. So I would say that, you know, have someone to talk to that allows you to have…

to be able to burn that off, that frustration that you have with your partner or whomever it might be that you’re having a challenge with, have a way to burn that off that isn’t burning it off at work. Because we have a propensity to want to get upset. We don’t want to, but it happens. We get upset with the littlest things employed as something that’s small and we blow up about it. And that’s the wrong thing to do. So if we have the ability to burn that energy off in a different way with a friend or a therapist,

it allows us to run the business, I think, in a much better way.

Anthony Codispoti (44:32)
I like how you put that burn the energy off, right? Sometimes it’s just like you need to get something off your chest, off your mind. Like it’s just sort of burning a hole in your brain as you’re trying to hold it in and just running over and over and over again. And you just get stuck on it. And so having whether it’s a therapist, a friend, you know, a coworker, it’s sort of the appropriate level that you can give voice to have them hear you have them, you know, give some feedback or response I think is

some of the best medicine that exists.

Derek Sorrells (45:02)
Yeah, absolutely. It can be a challenge and this isn’t just when you’re going through a bad time. This can be when you’re going through good times because you know in any relationship there’s hills. They’re not all mountains you have to overcome and the hills, there are to be many more hills than there are mountains. So if there’s someone that you can talk to about that, ⁓ know, it allows you to, when you’re focused on the business, it allows you to focus on the business and not bring that personal relationship issue into ⁓

You know what’s going on with the business so you’re making decisions that are smart about the business because you’re not being drug into the drudgery of your personal relationship that’s that’s holding you down.

Anthony Codispoti (45:44)
Derek, what’s your superpower?

Derek Sorrells (45:51)
I think sometimes it’s being able to see things that others don’t. ⁓ I have a really high attention to detail when it comes to, I think, knowing what the customer really wants. I pay a lot of attention. When I talk about, before I will open a business, I do research on what other similar businesses do. ⁓ Before I opened my ice cream store, I went to seven states and

22 different ice cream stores, and I would sit and watch ⁓ who was walking in, who was walking out, what they were buying, what time of day it was. ⁓ I think one of the things you have to do is you have to pay attention to what your customers want. And I think Steve Jobs famously said, quoting Henry Ford, guess, if I would have asked them what they wanted, they would have said a faster horse.

And so you have to sometimes figure out what the customer really wants. And sometimes it’s not what you’re selling, it’s what somebody else is selling in a totally different business. And you take that idea and you morph it into what will work in your business. Because you may look at something and somebody’s doing something in a pancake store, a breakfast place, and you’re not making pancakes and you’re not making breakfast. But that idea of what they’re doing would work perfectly with ice cream.

So it’s taking those ideas, I think it’s morphing and taking great ideas and making them work for you in your particular situation. I think that’s kind of a superpower in a way.

Anthony Codispoti (47:30)
that pancake to ice cream example, was that a real one? Did you find something in a pancake operation that you were like, ⁓ we can borrow that idea.

Derek Sorrells (47:38)
Yeah, so what we were doing was, I was at a restaurant, some friends of mine own it, and they sell cinnamon rolls, and we were trying to figure out what we could do that would work at the soda shops. Did we really want to add cinnamon rolls? Which we did add cinnamon rolls. But is that something that we really wanted to do? Did it make sense for how we wanted to do things? So we thought, well, what are we currently doing? And we came up with, ⁓ we have pretzel bites right now, so we added cinnamon pretzel bites, cinnamon sugar pretzel bites.

And then we also do ⁓ ice cream. So we came up with a cinnamon roll shake. ⁓ And on that cinnamon roll shake, it’s an extreme shake. So our extreme shakes are about 12 inches tall. So our extreme shake has cinnamon and the vanilla. So it tastes like cinnamon vanilla ice cream. And then on top of the shake, we put a full size cinnamon roll.

Full size, full size cinnamon roll sits on top of the shake and then the straw goes right through the cinnamon roll. Then of course you have to have whipped cream on the top. So we took something that was breakfast related and we said we can make this into a shake because extreme shakes are one of the things that we do really well at Papa’s Ice Cream and Treats. So we wanted to take that to the next level because people love cinnamon rolls and they think of it as a breakfast food, but how do we make that into?

Anthony Codispoti (48:36)
Holy cow.

Derek Sorrells (49:01)
something that could be a dessert as well that isn’t always thought of as a dessert. So sometimes it’s just a little bit of a pivot.

Anthony Codispoti (49:08)
You use the term extreme shakes. Do you have more shakes that have food sitting on top of the shake with the straw going through?

Derek Sorrells (49:16)
Oh,

absolutely. have a cheesecake shake or a caramel cheesecake craze, which has a full slice of cheesecake on it. So it’s a shake, 16 ounce shake, full slice of cheesecake on it. Of course drizzle caramel whipped cream. We have our cake shake, which has a full slice of cake on it, a full big slice of cake sitting on top of it as well. And that’s a cake batter flavored shake with sprinkles.

And then we have a cookie shake, which is made with Oreos that has a giant Oreo on top of it, as well as a giant moon pie on top of it. ⁓ Yeah, they’re pretty ridiculous.

Anthony Codispoti (49:59)
So how is the cake or the pie or whatever that’s on top, how is it being supported by the shake?

Derek Sorrells (50:05)
So what we did was, and this is all part of the process. So we initially started with what you would call a normal plastic cup that you would get at a convenience store. Well, we figured out the mouth is too big. So it’s too wide. So we moved to a mason jars with handles. So the hole in the mason jar is much smaller, which allows you to have a product that goes across it and touch on multiple edges. So the piece of cake actually covers almost the entire hole. And that way it’s fully supported.

Anthony Codispoti (50:33)
So it’s actually sitting

on the ledge of the mason jar. Okay, the lip.

Derek Sorrells (50:36)
Yes, yes, which you wouldn’t

be able to do with the traditional 16 ounce cup because the hole is too big. So you learn it’s almost like building as well. You have to figure out how are we going to be able to do this and how are we going to be able to serve it to the customer? And then you have to figure out how do I make this to go? Because a lot of people want it to go or for DoorDash. So you have to figure that out too. So what we do is we deconstruct it. So you get the shake, you get everything you need to build it.

Anthony Codispoti (50:56)
How do you do that?

Derek Sorrells (51:06)
And then we include a card in the package that says if you were to come into our store, because if you buy it online, it shows the picture of it built. So there’s a card that comes with all of these that say, if you come into our store, it’ll be fully constructed, but we’ve given you everything you need to construct the Shake at Home and enjoy it just like you would be in the store. That way they understand why it’s deconstructed and that they have everything to reconstruct it. Because we do use about some eight inch. ⁓

⁓ like dowel rods to hold some of these things up. So we include those as well. And there’s a picture of the shake. So if they really want to remake it at home with their kids, they absolutely can do that.

Anthony Codispoti (51:48)
How do you see most people consume these? Are they eating the cake first and then getting to the shake or a little bit of both back and forth?

Derek Sorrells (51:55)
It depends. So all of these come on a plastic plate because they’re very messy. And it really kind of depends on, there’s sometimes that it’s one person eating it. We see a lot of couples that will come in and get one because they are, they are massive. What they’ll usually do is they’ll take the cake off. They’ll put it on the side of the plate. They’ll take the, then they’ll move the mug over and then they’ll do a little bit of both. So you get a little bit of ice cream, a little bit of cake.

It’s the best way to eat it. then the edges of the mugs are frosted and then, you know, and have sprinkles all around the edges of the mugs. So it’s not just the mug. There’s frosting around that with sprinkles or crushed Oreo, if it’s the Oreo shake. And on our website, you could see all of our shakes and they’re absolutely amazing and absolutely extreme.

Anthony Codispoti (52:44)
one of your concepts that we haven’t given much voice to today that would be worthwhile?

Derek Sorrells (52:50)
You know, think the local bar is a fun one, Flight 1868. 1868 is the year Wichita was founded. Not incorporated, but founded. And it’s an aviation-themed bar. Wichita is the air capital city. We have Boeing, we have Spirit, Airbus, Bombardier, Cessna, they’re all here. And my mother also is a former flight attendant for Western Airlines. So…

we decided to do something with a little bit of an aviation feel. So the bar has all kinds of aviation memorabilia in it. It also has first-class seats from American Airlines. So you can sit in a first-class seat if you’ve never sat in one. ⁓ And you can enjoy and sit and kind of relax. And we’ve got monitors up that show the flights coming in and out of Dwight D’Azonow or National Airport here in Wichita. So you can see the flights coming in, the airlines, the flight times and things like that.

So it’s kind of a unique take on a neighborhood bar. It’s a lot of fun.

Anthony Codispoti (53:53)
Is it strictly a bar? there bar food? Is there a menu there as well?

Derek Sorrells (53:58)
It’s a very small place. has 14 seats inside and a very small kitchen, but we do have appetizers. so we do chips and salsa and queso and salsa and chacutery boards. We do have a patio out front too, which is pretty much doubles our capacity. So it takes us up to about 28. And it’s perfect for this time of year because we have fire pits out there and people on Fridays and Saturday nights will sit out there by the fire pits and listen to live music that we have pretty often.

Anthony Codispoti (54:01)
Okay. Very cozy.

Nice. Derek, I’ve just got one more question for you, but before I ask it, I want to do a few things. Anybody who’s looking to get in touch with Derek Sorrell’s S-O-R-R-E-L-L-S, you can find him on LinkedIn and we’ll include a link to that in our show notes. As a reminder, if you want to get more employees access to benefits that won’t hurt them financially and carries a financial upside for the company, reach out to me at addbackbenefits.com.

And finally, if you take just a moment to leave us a comment or review on your favorite podcast app, we will be forever grateful to you. So last question for you, Derek, you and I reconnect one year from today and you’re very excited. You’re celebrating something big. What’s that big thing that you hope to be celebrating one year from

Derek Sorrells (55:15)
a massive upturn in the US economy would be pretty great. The economy is little challenging right now. I think as Tony Robbins once said, ⁓ when it is winter, you have to be ready for spring. And so that’s what we’re doing. We’re doubling down on some of the things that we’re doing because we know when things turn around, we want to be ready. I think the thing that we’re most excited about

honestly is our on-site and our catering at Just a Sip and at Papa’s. We’ve seen it really explode. And as we look over the next year with weddings in the spring and in the summer, we’re really excited about where that’s going to go. And we’re also making some positive changes at the arcade, too. It’s kind of a unique business. It’s not a restaurant. It’s got food and it has a bar, but it’s not a restaurant.

and it’s an entertainment venue. So we’re looking at making some pretty big changes there as far as ⁓ growing beyond where we are now. So I think those would be the two places that I would, that I’d really focus on, but we’re really excited about the future and we’re always bullish on America and the American people ⁓ and the city. We just have a great group of people here in Wichita.

Anthony Codispoti (56:33)
Derek, do you want to get more specific about the changes that are coming to the arcade?

Derek Sorrells (56:38)
Not yet, not yet. Don’t want everyone to know just yet, but we are making some changes. I think they’re going to be exciting for everyone. We aren’t going to change what we are. We’ve always been an entertainment venue ⁓ that has alcohol. We’re not a bar with video games, and we’re going to stay that way. We’ve always been an arcade that happens to have alcohol. We are family-friendly, and that has always been what we have been, and that certainly is not going to change.

Anthony Codispoti (57:02)
You know, it’s interesting to hear about how you want to double down what you’re doing. Sort of we’re in the winter now, so to speak, you know, waiting for spring to come back around. The economy gets a boost. I also hear some operators talking about, hey, in the time being, we want to create more options that are for the cost conscious person. Is there any thought about that? Or is it, Hey, we’re on the right track. We’re going to keep doing what we’re doing.

Derek Sorrells (57:30)
No, we’ve absolutely already done that. know, one of our slower nights at the arcade, which is Tuesday, we’ve created a family night that night and entry is half price. So normally it’s $12 for adults, $10 for kids. We’ve cut that in half. So if you want to come in on a Tuesday, you can play all the games, 105 classic eighties and nineties video games, six bucks for adults, $5 for kids. It’s a crazy, crazy deal. And then we’ve also added on,

pizzas. So our pizzas are half price on those days. And so that allows you to save a little bit of money as well. we recognize there are those that are cost conscious. There’s a lot of people that are hurting right now. A lot of businesses that are hurting right now, too. So we want to encourage everyone to still be able to have a good time and still be able to get out, even though you may not be able to spend as have as much disposable income as you did two, three years ago. ⁓

All of those people are still ⁓ people. They’re all still customers, and we want to still be able to show them an amazing time.

Anthony Codispoti (58:35)
Derek Sorrell, I want to be the first to thank you for sharing both your time and your story with us today. I really appreciate it.

Derek Sorrells (58:41)
Really appreciate you having me.

Anthony Codispoti (58:43)
Folks, that’s a wrap on another episode of the Inspired Stories podcast. Thanks for learning with us today.