10 Things I Wish I Knew Before Starting a Food Company
Food startups are becoming the new tech startups. Venture capitalists are pouring in millions, newspaper articles about the hottest food startups abound and everyone with even the slightest proficiency in the kitchen dreams of making it big. As my own food startup has grown from a passion project into my full-time job, I’ve had many emerging food entrepreneurs approach me asking for advice. I don’t have all the answers. But I do know the things that I wish someone had told me before I started a food company.
1. It’s going to take a long time. Read TechCrunch too much and you’ll come to believe that your company will take less than a year to build and will sell for billions of dollars in less than five. The amount of time it takes from idea-stage to fully finished product is always longer than the length of time most founders cite since their company “launched” or “hit shelves.” Food products are especially challenging as the “minimum viable product” (MVP)methodology of tech startups doesn’t apply as easily to a physical product that someone is going to put in their mouth. The health department is not going to give lax sanitary standards a pass because it’s your “MVP.”
2. Iterate as much as you can while you’re small. Kuli Kuli started out in farmer’s markets, iterating on our bar recipe at each market and quickly surveying everyone who came by our booth. Now that we’re in nearly 100 stores across Northern California and the Pacific Northwest it’s become harder for us to iterate as easily. We still conduct consumer testing and are trying to be as responsive as we can, but it’s a whole different ballgame when you’re manufacturing in your kitchen as opposed to a factory.
3. Believe in your idea more than you believe in gravity. Here’s the funny thing about food: people have very different and equally strong opinions about it. Particularly if you’re trying to do something different and totally new, there are going to be people who hate your product. There will be people who try it and spit it out, just as there will be people who will love it and buy entire cases after just one sample. On a similar note, there will be potential investors and advisors who believe that your business has no chance of succeeding. The trick is to find the customers, investors, advisors and most importantly, team members, who believe in your idea almost as much as you do.
4. Find co-founders who are like siblings. I’ve often heard people say that you should take choosing the right business partners as seriously as choosing the right life partner. Like it or not, you’re likely to spend more time with the former than you do with the latter. You should look for people who are smarter and better than you at key aspects of the business. But expertise alone isn’t enough. You should feel comfortable trusting these people with your life.
5. Expect to eat ramen (or your own product) for probably the first two years. Food products margins are tight and so until you can hit a high volume of sales, you probably won’t be making any money. Expect to live cheaply and eat a lot of ramen – or better yet, your own product– for the first two years. Most venture capitalists won’t look at a food startup with less than a million in sales so unless you have a lot of wealthy family and friends don’t expect investors to provide you with a cushy salary.
6. Find the biggest retailers and make them love you. The others will follow. We made the mistake of approaching food distributors first and trying to get them to carry our product into stores. We quickly learned that distributors don’t want to talk to you until they have some guarantee that retailers actually want your product. Then when we got picked up by Whole Foods and Krogers we had distributors approaching us, eager to carry our product.
7. Focus on the three things that matter most. Ignore everything else. In any startup there is a lot of noise. Everyone has advice for you or ideas of people you should connect with. Figure out the three things that you need to do to make your business succeed. If new opportunities or meetings fall outside of those three things, consider cutting them. Your time is your most precious resource.
8. Do demos like it’s your job (because it is). One of our advisors, the founder of Numi Tea, told me that I should expect to spend every weekend for the next two years demoing my product. Passing out samples at grocery stores or events can be exhausting but it is absolutely the best way to get a new product in front of customers. Expect to spend a lot of time on the road, demoing, meeting with buyers and talking to customers until you have enough money to pay someone to do that for you.
9. Don’t forget to have a life.
Many of the people I know who shut down their food business did so because they were burned out. Startups are all-consuming and food startups, with the travel and time required to get them off the ground, can be particularly so. Even though I work more hours than I care to count, I still make a point to exercise and see the people I love. These are the people who will keep you going when things get hard and be there to celebrate the victories.
10. Remember why you’re doing it. I never thought I would start a food business. But after learning about an amazing superfood, Moringa oleifera, in the Peace Corps I realized that starting a food business could help me create the type of world I want to live it. I keep a picture of the village I lived in above my desk as a reminder of why I got into this business in the first place. Figure out why you’re passionate enough to start a food business and find a way to remind yourself of that passion on a regular basis.