Cupcake Kings Go Global, With a Little Help From Joel

Anyone can lend money; I am able to lend genius. So when I started making small loans to Third World entrepreneurs through the nonprofit website kiva.org I felt as though I wasn't doing enough. That's why a few weeks after I sent $25 to a baker in Nicaragua, I decided I needed to stop being a silent partner and start calling him all the time with my ideas.

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Unfortunately, Freddy Antonio Castillo Luna doesn't have e-mail or a phone in his bakery-home outside Managua. So I had to get a Kiva volunteer to go there with a cell phone and translate. My first suggestion was to change the name of the place from the Little Mango Bakery to the far more compelling Joel and Freddy's Extreme Cupcakery. I thought the bakery should switch its focus from empanadas and breadsticks to extreme cupcakes, for which we would charge $4 apiece. I would have my loan repaid in five cupcakes, assuming generous tipping.

Freddy, who proved to be a far smarter businessman than I had expected, was way into the new plan. "It's always a good idea to come up with new products," he said. He thought, however, that we should bring the price down to 16 córdobas, which is about 80¢. But Freddy assured me that in his neighborhood, that price would still make our cupcakes obnoxious luxury items. He also suggested that we tweak the name of the shop to Freddy and Joel's Extreme Cupcakery, since Freddy claims he's better known than I am in Managua, which I pretended to believe. When we started to talk about cupcake flavors, Freddy suggested vanilla, chocolate, strawberry, pineapple and banana. From my experiences in cupcake-eating, I told him he might want to start off with red velvet and chai. "Those flavors would be new to Nicaragua," he said, "and therefore there'd be a great demand for them." I could not have imagined finding a business partner who thinks so much like me.

Then Freddy suggested that we sell our cupcakes to the local supermarkets. "I'm happy to be thinking big," he said. His plan involved transporting them on his bicycle, which I feared might smear some of the pretty designs I was planning for the buttercream frosting. But Freddy said he couldn't afford a car yet. He also needed cement to cover his dirt floor and major roof repairs. I decided I was more the flavor-idea guy.

Before I got off the phone, I asked the translator to quietly try one of Freddy's pastries to make sure I didn't have to bring in a new head chef. "It's delicious," she said. "It's like a crunchy flattened glazed doughnut." I asked if it could possibly be as good as a fresh chai cupcake. "For pastries that don't have icing, this might be a topper," she said.

I realized that Freddy y Joel's Muy Cupcakery should co-brand and partner with a large baking conglomerate, since co-brand and partner with are terms I've heard my friends in Silicon Valley use. So I contacted Candace Nelson, who co-owns Sprinkles Cupcakes, a chain that Oprah Winfrey says is one of her favorites. When I mentioned the opportunity to take her five-store chain global, she became very interested. "Once we're up to the top 20 cities in America, we'd think about going to Mexico," she said. "We'd love some market research. It's possible that Nicaraguans will try cupcakes and say, 'What is this crap?'" This scared me until I realized that everyone likes cupcakes. Cupcakes are way better than democracy.

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