Insomnia Cookies: Secret Ingredients are not the Secret

3 min readDec 21, 2020

Posted by Eric Lomax

Bakeries make elaborate cakes, exotic pies, artisanal bread, and specialty cupcakes, right? They promise grandma’s secret recipe, gorgeous decorations, and calligraphic icing worthy of historical documents. If these are your expectation, then Insomnia Cookies is not a bakery, but it is in a market of its own. It is a successful quick-serve restaurant that makes really good cookies, delivers them, and stays open until 3:00 AM.

Insomnia Cookies is a distinctive company because it built a business to serve a narrow and clearly defined customer. Seth Berkowitz, the company’s founder and former University of Penn student, realized that students had limited after-hours snack options. Cravings that arose during late night studies or after the bars closed could only be satisfied by 24-hour convenience stores, vending machines, and cold refrigerator pizza. There was a void for something tasty and unique which Insomnia Cookies filled. So, franchises and food trucks reside near college campuses and the bars that students frequent. They remain open long past alternatives and deliver to customers who are too busy, distant, lazy, or inebriated to pick orders up directly. It is not a complicated strategy, but it is a different one.

Start with your own clan

No one knows a customer’s needs better than someone who has experienced the same challenges. Parents who raised kids that learn differently realize their school system’s limitations. Teach others how to avoid the obstacles. Left-handed musicians who struggled to play right-handed instruments inherently understand the challenges other lefty musicians face. Create solutions. College students who return from bars after hours have limited food options. Start your Insomnia Cookies.

Limit the offering

Some entrepreneurs might be inclined to convert a full-service bakery into a late-night one but that would not be adequate. Berkowitz presumably wanted to grow through franchising and franchisees desire low entry and recurring costs. Offering additional items might require more equipment, larger facilities, and more staff training. Each would increase the expenses. Pies and iced cakes can be cumbersome, so they are not ideal street food and do not transport easily. Alternatively, offering a limited menu requires less equipment, space, ingredients, and training. The staff only bakes a few items, which minimizes training and the equipment needed to produce them. Cookies are well suited as street food because they don’t require utensils or two-hands to eat. And they transport without leaking or sticking to the container. A limited menu makes sense for multiple reasons.

Use attributes from other markets

Pizza is a staple component of the college diet, so shops are ubiquitous neighbors of every college campus. They deliver to customers who can’t or won’t visit on foot. Since many students become nocturnal during their college years, Insomnia Cookies aligns operating hours with local bars to fit students’ lifestyles.

The Recipe

Distinctive businesses often develop to fulfill the needs of a specific group. These businesses offer something familiar that traditional ones provide, cookies. They incorporate attributes from outside of the traditional market: late hours, close proximity to campus, and delivery services. And they exclude capabilities that traditional businesses offer: an extensive menu and customized decorations.

If selling cookies can be distinctive, anything can be. The distinction is not the recipe or ingredients. It is the way the company addresses customers’ needs. It’s what the company offers and what it does not. The secrets are that Insomnia Cookies targets one customer and is willing to be different.




Starting a niche? Don’t find one. Create your own!