CNBC make it 2024-04-08 02:00:54


62-year-old started her business with $1,000—now it brings in over $25M/year: ‘I just had to do this’

Deryl McKissack’s career is a culmination of effort from five generations.

The 62-year-old is the president and CEO of McKissack & McKissack, the Washington, D.C.-based construction management and design firm behind some of today’s most recognizable buildings — from building the Smithsonian African American Museum of History and Culture to repairing the Abraham Lincoln and Thomas Jefferson memorials.

The firm’s legacy dates back to her great-great grandfather Moses, a skilled brick maker who originally came to the U.S. as a slave in 1790. His skills were passed down and cultivated from generation to generation, prompting two of his grandsons to create a construction company in Tennessee, also called McKissack & McKissack.

That company remains in the family, now based in New York and run by McKissack’s twin sister Cheryl. “My father always took us [to] job sites, took us to the office. We talked about it around the table,” says McKissack. “It was always a very integral part of our family.”

Motivated by a desire to strike out on her own, and to see more Black women CEOs in the construction industry, McKissack withdrew $1,000 from her savings account and launched her company in 1990. Today, it brings in between $25 million and $30 million per year, according to documents reviewed by CNBC Make It, and manages $15 billion in projects with offices in Chicago, Dallas, Los Angeles and Baltimore.

“I remember in college, there were probably three women in my class, and my twin sister was one of them. So it’s very rare that women are in this industry, but we’re excelling,” McKissack says.

‘I had this burning passion … that I just had to do this’

McKissack left an engineering job with a six-figure salary to launch her company, and quickly learned that even with a Howard University civil engineering degree and relevant work experience, attracting clients was difficult.

Lugging an old projector around, she presented slides of work she’d done for family members to help “sell my wares.” She placed a job ad in the Washington Post, and hired an employee.

“It was touch and go because I didn’t have a bank that believed in me,” says McKissack. “It took me five years to get my first $10,000 line of credit. I probably went to 11 banks that told me ‘no’ … [but] I had this burning passion on the inside that I just had to do this, and it was going to work out for me.”

She used her networking skills to land her company’s first project: doing interior work at her alma mater. She and her lone employee did all the work themselves, with McKissack putting in 80 hours of labor per week, she says.

One successful job led to another, and McKissack built a portfolio of work to show prospective clients. She applied for jobs as a federal contractor, getting her foot in the door to work on construction projects at the White House and U.S. Treasury building. Larger federal projects followed.

McKissack only paid herself $7,200 her first year in business, she says. Her second, $18,000. She finally paid herself a $100,000 salary after roughly ten years, she adds, prioritizing paying her employees over herself along the way.

“I’m extremely proud of where we are and the projects that we’ve done … the impact that we’ve had in people’s lives,” says McKissack.

‘I haven’t made it until more Black [people] have made it’

The global construction industry is projected to be worth $13.9 trillion by 2037, according to a 2023 report from market research firm Oxford Economics. Yet women still make up only 1.4% of construction CEOs worldwide, and Black women account for a fraction of that.

Despite the identical company names, McKissack and her sister do run separate businesses — but they’ve collaborated on several projects, and often “trade notes” with each other, she says.

“We lean on each other in challenging times. And it’s great to have an identical twin that is doing the same thing that I’m doing in a bigger city like New York,” she says. “The challenges that she faces are different from mine, but they’re similar. So it’s good to have someone to talk to.”

A healthy support system is rare for most Black and women construction executives, largely because so few of them exist, McKissack says. Last year, she founded AEC Unites, a nonprofit that provides professional opportunities for Black talent in the architecture, engineering and construction industry.

“I haven’t made it until more Blacks and more women have made it,” she says, adding: “Once more people that look like me are in the industry and they’re dominating in parts of this industry, then I can sit back and say, ‘We’ve made it.’”

One of them, she hopes, will be her daughter — a bioengineering student at New York University who could become the sixth generation of McKissacks in the construction industry.

“I tell her all the time that all roads lead to McKissack,” she says. “And I don’t care how she gets there.”

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Where to get your free solar eclipse glasses: Warby Parker, the public library and more

Some astronomy aficionados are paying top dollar to catch the upcoming total solar eclipse, but there are plenty of options to take in the rare astrological phenomenon for free.

If you find yourself in the path of totality, you’ll want to make sure that you’re using eye protection before turning your gaze upward. Experts warn against looking at the obscured sun for “even a split second,” emphasizing that the solar radiation can burn the inside of your eyes and potentially cause irreversible damage.

The eclipse will take place the afternoon of Monday, April 8, with parts of states like Texas, Ohio and New York falling into the path of totality.

Normal sunglasses aren’t strong enough to protect your eyes from harm. Instead, you’ll need special protection designed specifically for observing an eclipse.

Luckily, both government organizations and private businesses are distributing eyewear that meets the requirements set by the American Astronomical Society.

Here’s where to get your free glasses before Monday’s eclipse.

Your local public library

Libraries across the nation are distributing glasses for free. To see which libraries near you have glasses available, check out this interactive map from Star Net.

Warby Parker

The eyewear brand has gone all out for the eclipse, creating an entire page on its website dedicated to the event. Warby Parker is distributing glasses free of charge at all of its retail locations. You can find the closest store to you at this link.

New York State

With a good chunk of the Empire State falling in the path of totality, New York is distributing free glasses at locations including New York State Welcome Centers and Thruway Rest Stops.

Sonic and Smoothie King

Chain restaurants Sonic and Smoothie King are offering free eclipse glasses with a purchase.

Make your own

If there’s nowhere near you to get free glasses, it’s simple enough to make your own. Follow these instructions from NASA to create your own viewing tool with materials that you can find around the house.

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10 U.S. states where Americans earn the lowest incomes—only 2 aren’t in the South

Throughout the U.S., workers earn a median annual wage of about $48,080, according to the latest available data from the Bureau of Labor Statistics.

But in the three states where workers earn the least, the median annual wage sits below $40,000 a year. And notably, all but two of the 10 lowest-earning states are in the South.

Check out the map below to see the median wage in every U.S. state.

Mississippi has the lowest-earning population in the U.S. with a median annual wage of just $37,500, according to the BLS. 

That’s due, in part, to the fact that Mississippi has one of the least-educated populations in the country, with just 1 in 4 adults in the state holding a bachelor’s degree or higher, according to St. Louis Fed data.

More education typically correlates with higher earnings, which helps explain why Massachusetts — the most-educated state, with nearly 47% of its population holding a bachelor’s degree or higher — is also the highest-paid, according to the St. Louis Fed.

A well-educated workforce can help attract businesses to the area and boost economic activity. That’s part of the reason Mississippi ranks among some of the worst states for business, according to CNBC.

These are the 10 states with the lowest median annual wages.

Though the local incomes are low compared with the rest of the country, the cost of living is relatively cheap in most of these states, according to the Missouri Economic Research and Information Center state-by-state cost of living index, based on Council for Community and Economic Research survey data. Oklahoma ranks as the state with the cheapest cost of living, according to MERIC, with Mississippi coming in at No. 2.

Though most of the states with the lowest wages are among the cheapest to live in, New Mexico and South Carolina are somewhat outliers by this metric. New Mexico ranks as the 20th lowest in terms of cost of living, and South Carolina falls right around the middle of all states, according to MERIC’s analysis. 

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43-year-old started a side hustle in college—now it brings in $200M/yr: It took ‘everything that I had’

Two decades ago, Seth Berkowitz was a college student with a late-night craving for a “warm, delicious treat.”

Today, he’s the CEO of Insomnia Cookies, the company he co-founded as a college junior and grew into a chain with more than 260 locations by satisfying that very craving for customers around the world. Insomnia was most recently reportedly valued at less than $500 million, following a 2018 majority-stake acquisition by Krispy Kreme.

It brought in over $200 million in revenue last year, according to the company. “I just thought a warm cookie worked,” Berkowitz, 43, tells CNBC Make It. “It was a craving that I was looking for, and it was clear that it was something that resonated with others.”

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Berkowitz started Insomnia at the University of Pennsylvania in 2002, baking cookies in his college house and personally delivering them around campus in the early hours of the morning. In one semester, he made roughly $10,000 in profit, he says.

By the time he graduated in 2004, Berkowitz signed a lease to open Insomnia’s first brick-and-mortar location, near another college campus in Syracuse, New York. Stores in Champaign, Illinois and College Park, Maryland soon followed.

Now, with Krispy Kreme looking to sell Insomnia, Berkowitz says he’s “grateful for the journey.”

“That warm, delicious moment is really working for us,” he says. “So, the goal is to just keep going.”

School by day, cookies by night

In the days before Grubhub and Uber Eats, college students had limited options for after-hours food delivery — and Berkowitz got tired of eating the same Papa John’s pizza “every night,” he says.

The economics and history major estimates he spent roughly $150 on ingredients to start baking cookies in the “really small kitchen” he shared with eight friends in college housing. Taking orders on his cellphone, Berkowitz drove deliveries around campus as late as 4 a.m. some nights.

Running a late-night business while attending classes during the day was predictably difficult. “I was going to give myself a semester or two to see if Insomnia Cookies was going to be a success or not,” says Berkowitz.

His marketing efforts — putting flyers in dorms, handing out free cookies — didn’t gain much traction, until a campus newspaper wrote an article about Insomnia. The business went from averaging three cookie orders per night to as many as 80, Berkowitz says.

“They put me on the front page,” he says. “It was me, and this backwards baseball cap, and a hand mixer.”

Looking to expand, he brought in a partner — co-founder Jared Barnett — and hired a handful of employees to grow Insomnia’s operations. He reinvested all of the business’ profits, building a website for online ordering and renting a commissary kitchen off-campus to increase cookie production.

They took the concept to other cities, starting in Syracuse. But from there, Insomnia’s path to national success was anything but smooth, says Berkowitz.

The difference between a side hustle and a startup

Managing the growth and expansion of an aspiring national business was much harder than running a college side hustle, Berkowitz quickly learned.

As Insomnia’s sole employee, he made money. Paying employees and renting space eliminated those profit margins. “Professionalizing a business [is] expensive … It was a much different setup and it required investing ahead of growth,” Berkowitz says.

The first-time entrepreneur spent years experimenting with different business models to reach profitability again, staying funded through angel investors. He tried ghost kitchens, licensed frozen yogurt shops and even launched vending trucks.

Barnett left the company during that period, selling his equity stake to Berkowitz. “At that time, my vision for the company was no longer aligned with Seth’s, and we agreed to part ways,” Barnett says.

Insomnia topped $1 million in annual revenue for the first time in 2008, according to Berkowitz, but it still wasn’t profitable. The following year, the CEO made a drastic cost-cutting decision, downsizing Insomnia’s corporate team to two people: himself and a finance associate.

Once again, he took on much of the work of running Insomnia himself — driving from New York to Philadelphia to fix a vending truck’s broken generator, personally delivering cookie dough to the Syracuse store every week, visiting college towns across the country to scout new potential locations.

“2009 and 2010 [were] some of the hardest years ever at Insomnia Cookies,” says Berkowitz, adding: “There wasn’t anyone else to do it. So, if I was going to grow the business … it was going to take everything that I [had].”

‘Insomnia Cookies is a perseverance story’

After nearly a decade of experimentation, Berkowitz returned to a brick-and-mortar model. A “really huge sign” in the window would create buzz, he theorized, and quick deliveries would encourage repeat customers.

Coupled with a mobile ordering app, the strategy worked. In 2012, Insomnia funded a new location with its own internal cash flow for the first time ever, says Berkowitz — its 22nd store, in Kent, Ohio.

“That was a huge milestone,” he says. “It created a situation where we were self-sufficient. We controlled our destiny.”

Over the next six years, Insomnia opened 125 new stores, Berkowitz says. Then, the Krispy Kreme acquisition ushered Insomnia through the Covid era, creating some co-founder drama along the way: Barnett sued Insomnia over the sale, claiming he was due a share of the proceeds.

In January, Berkowitz reportedly agreed to pay Barnett $3.5 million to settle the case. Both men declined to comment on the lawsuit.

Last year, Krispy Kreme announced plans to explore a sale of Insomnia, creating uncertainty over the future of the business. Berkowitz says he’s still focused on growing the brand, which recently announced plans to open dozens of new locations across the U.S. in 2024.

“When I talk about the brand and our journey, [I often say] that Insomnia Cookies is a perseverance story, right?” says Berkowitz. “Like, there’s so many reasons why we shouldn’t be here. And they very much outweigh the fact that we are.”

Correction: This story has been updated to reflect that Insomnia Cookies was most recently reportedly valued at less than $500 million, following a 2018 majority-stake acquisition by Krispy Kreme.

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Mark Cuban doesn’t want money to change him: ‘I try to be the same person I was when I was poor’

When it comes to luxury spending, billionaire Mark Cuban draws the line at yachts, butlers and house cleaning services.

“I just try to be the same person, I mean, as I was when I was poor, middle and rich,” Cuban, 65, told “The Really Good Podcast” on Thursday. “The whole idea of like, get a yacht … it’s just not what I would do.”

Cuban, a serial entrepreneur and startup investor, has a net worth of $5.1 billion, according to Forbes. He’s not opposed to big-ticket purchases: He spent $13 million on a 24,000-square-foot Dallas mansion and $40 million for a private Gulfstream V business jet in 1999, shortly after becoming a billionaire. The following year, he bought the NBA’s Dallas Mavericks for $285 million.

Rather, Cuban’s decision to not pay for certain services is less about frugality and more about his desire for a private life. His family usually does their own chores, like washing clothes and cooking meals, he noted.

“I like the privacy,” Cuban said. “I’ve been around people who hire somebody to do everything for them, and that’s just, like, no privacy.”

Similarly, Cuban didn’t feel the need to make new friends upon entering a new tax bracket, he said: “Most of my friends are guys that I moved to Dallas with or friends in Indiana from school. We still tell the same stupid ass stories and do the same stupid s—, and you know, that’s good.”

In January, Cuban told CBS’s “Sunday Morning” that he’d worked hard to keep his wealth from changing his personality, and that he’d be just as happy with 1% of his net worth. Later in the interview, a group of Cuban’s childhood friends confirmed it.

“Little more full of it, but not that much more full of it,” Jerry Katz, one of those friends, said. “But still the same guy.”

That isn’t the case for most people: Typically, the wealthier you feel, the worse you behave, according to Paul Piff, an associate professor of psychological science at the University of California, Irvine.

“As a person’s levels of wealth increase, their feelings of compassion and empathy go down, and their feelings of entitlement, of deservingness and their ideology of self-interest increases,” Piff said in a 2013 TED Talk.

When that happens, small reality checks can help you get back on track, Piff added: “Small nudges in certain directions can restore levels of egalitarianism and empathy.”

Cuban now owns three houses, and refers to a couple of his private jets as his “best toys,” he said on the podcast. Buying a private jet “was my all-time goal, because the asset I value the most is time, and that bought me time,” he told Money in 2017.

Still, Cuban wants to remain the same person he was when he was “broke,” he said on the podcast.

“When I was broke, I had a blast,” said Cuban. “I loved my life … I was still having fun.”

Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank,” which features Mark Cuban as a panelist.

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