While at Acton, our students delve into the business problems presented in the hundreds of real-life business cases. But we like to check in with our alumni after they’ve left the classroom and are wielding their entrepreneurial chops. It’s “Acton in the Wild”!

In June 2011, we visited with Eleanor Burkett (’10) and Michael McDermott (’10) at the launch of their mobile food service business YES! Taco. And then we shared their video story on our blog. We recently touched bask with Michael and Eleanor about the continuing growth of that business and the new opportunities that is has revealed along their entrepreneurial journey.

Dossier

Company: YES! Taco

Acton Alumni:  Michael McDermott (’10) CEO and Co-Founder; Eleanor Burkett (’10) COO and Co-Founder

Founded: June 2011

Headquarters: Fort Worth, Texas

About: YES! Taco was founded to “deliver big flavor using the most versatile deliciousness delivery system known to man, the taco.” Complimented by tortillas, salsas, frozen banana pudding and queso they dish out deliciousness through a food truck known as Dolly, who roves the streets of Fort Worth, Texas. Now in their second year, their business has expanded to include a second truck serving seasonal gourmet Asian shaved ices and an expert retrofitting service to help other food truck businesses.

Growth in an Exploding Market

In June 2011, when Eleanor and Michael McDermott launched YES! Taco, there were only four gourmet food trucks operating in Dallas / Fort Worth. Today, there are more than 70. In 18 months, they’ve been proven correct in their assertion that the Metroplex would be the next area to see food trucks take hold.

“Finding ourselves in the middle of an exploding market, we formulated a growth strategy based on the lessons we learned at Acton and from a year of operations,” said Michael. “And we found that the right strategy for us was not the seemingly intuitive idea that we should add a second truck to serve more of our popular tacos.”

In fact, this operational experience presented new and unexpected business opportunities that Eleanor and Michael had not considered when they first conceived and launched their business in 2011.

Horizontal Expansion

Another Truck and the Seasonally Simple Lulu’s Icebox

As they began considering their expansion plans, they nixed the idea of simply expanding into a second YES! Taco truck. Although they’d developed a reputation for made-from-scratch food and the established name of an early market entrant, they also considered the impacts of seasonality and operational complexity. Combined, these factors prompted them to introduce a new product and brand to complement YES! Taco. Thus, Lulu’s Icebox was born, offering gourment Asian style shaved ice to a sweltering Texas city.

“LuLu’s Icebox rose primarily from the lessons of the summer of 2011, which was the hottest in Fort Worth’s history,” said Michael. “That’s something that we did not predict.” As temperatures rose, revenue from YES! Taco dipped. Once autumn arrived, revenues normalized. “We conceded that disruptively hot Texas summers would persist, so we decided to embrace that seasonality problem as an opportunity.”

“Lulu’s primary offering, a Lulu Ice, is no snow cone,” explained Eleanor. “Our team makes and freezes ice blocks from scratch, using a secret recipe that sweetens and slightly flavors the ice. Then, using a special machine from Japan, those blocks are shaved into a powdery ice, very much like snow. We top it with seasonal fresh fruit and gourmet sorbet and add a drizzle of sweetened condensed milk. It delivers cold, sweet relief… without the stickiness and sometimes syrupy sweetness you find with snow cones.”

“They’re delicious,” added Michael.

Although the dessert is made of fresh, high quality ingredients, the operational complexity is far lower with LuLu than in other gourmet operations, including YES! Taco. This simplicity endeared the concept to COO Eleanor. And simplicity has proven a wise way to grow. Operating costs are lower and qualified labor is more plentiful, which both bode well for future expansion.

Vertical Expansion

From Building Tacos to Building Taco Trucks

While planning this expansion and the launch of a new food truck, the group helped create a burgeoning food truck retrofitter in Dallas in order to lower their costs. The newly formed Mac and Sons Retrofitters was created in partnership with McDermott Associates, Inc. a manufacturing operation owned by Michael’s family.

“After using their mechanical capabilities to repair Dolly, the YES! Taco truck, a few times, we approached McDermott Associates with a proposition,” explained Michael. “Combine our knowledge of food truck operations with your manufacturing capabilities to build LuLu’s Icebox.”

“We were really intrigued by the growth in the food truck market and the absence of an established retrofitter in Dallas-Fort Worth area,” he continued. “With the buy-in of McDermott Associates, Mac and Sons Retrofitters was born. We ran it through the paces to create the Lulu’s Icebox trudk. Eleanor and I developed the truck concept, layout and equipment. We also ensured that everything complied with food safety regulations. Then the mechanical experts at McDermott Associates sourced materials from their suppliers and applied their manufacturing know-how and facilities to complete our build out.”

Next Steps

While YES! Taco continues to delight diners around Fort Worth, Eleanor and Michael are busy working on the future of their expanded businesses and scope. LuLu’s Icebox passed inspection in Tarrant County and Fort Worth, where it is currently operating. And plans are underway for Lulu’s Icebox to be permitted and operating in Dallas in Spring 2013.

Both Michael and Eleanor are also serving as design and operational advisors for Mac and Son Retrofitters, which is currently in talks with its first potential third party customers.

At Acton, we know that lessons learned on the job often lead to the biggest opportunities. We’re impressed with the way that Michael and Eleanor have built upon their own successes, while also focusing their attention on improving their operations and cash flow. And we’re all looking forward to our next visit to Forth Worth, and more fresh delicious tacos and shaved Asian ices!

Tags: Acton Alumni, Acton in the Wild, Class of 2010

Posted in Acton in the Wild, Alumni, Blog