3 Things Every New Company Must Do
Being action oriented, taking feedback and staying (extremely) scrappy, until your customers LOVE your product.
I am new to the ‘food space,’ but have been around startups for 20+ years now. While I certainly have a lot to learn still about building a business from scratch, one thing that I have seen to be true and it continues to be true for aspiring food companies is that your customers have to LOVE what you are making. I was once told by a mentor that “water runs downhill.” There are certain laws of physics that you just can’t avoid. If you don’t remove the friction (lackluster adoption) and don’t actually create some suction (customer demand for your product), it will be a long slog trying to get water to run uphill (scale your business).
In my (short) time as a food investor, I have met with a number of food companies that have a unique product, just like yours. They ask me if I like it. Bring me samples. Talk to me about flavors. Share the benefits. Show me their marketing plan. Have a really cool excel document on their sales projections. And they ask me if I LIKE their product. My thought is always, “I don’t care if I like their product, I care if they have a group of followers that LOVE their product. A group that will change their shopping behavior (go to a part of the store they normally don’t go to) or change stores just to buy their product, or order repeatedly online,…
Seth Godin talks about building a Tribe, a group of 1000 loyal customers/followers. I am not sure about the 1000 number and if that is the right amount, but the point is to be relentlessly focused on making your product so good that you have a loyal fan/ customer base. OK, so how do you do this? How do you be an entrepreneur that can build this loyal tribe of customers/followers, who then turn into a “free” marketing machine, they become vocal social media supporters, they spread the word online and off, the tell their friends, they ask stores about you, and they keep you in check and make sure your product quality is what it should be.
So, how do you do that? So, from seeing so many companies succeed and fail, I think there are three keys to this early stage in a company. Being action oriented, seeking/ taking feedback and staying (extremely) scrappy.
Being action oriented. In my experience, the entrepreneurs that are the most successful, are the ones out there in the field. They are making things happen. They are making mistakes, learning from those mistakes and figuring out the market. They are active, calling customers, meeting with suppliers, visiting farms, testing hypothesis’, making prototypes, inspecting co-packers, whatever is important for their business to be successful. they are not just doing desktop research. They are out in the real world. No, they are not being willy nilly with their time, they are being deliberate. But at the same time, they are not sitting at home around their computer or kitchen imagining what the world is like and what the world wants. They are doing what is needed to be successful.
Seeking/ taking feedback. Yogi Berra said “You can observe a lot by just watching.” Get your product out in front of as many customers as you can. Friends are an ok first audiance, but your actual customers are much better. Ask them non-leading questions, open ended questions, ask them to be candid in their feedback. You don’t want them to sugar coat it (I hate sugar coating almost as much as I hate sugar). If they like your product, you should be suspicious and unsatisfied (until they LOVE it). If they don’t like it or something about it, that is a learning opportunity. It’s nothing personal. We are all entitled to like and dislike whatever we want. You should be taking all of this in. Watching, learning, listening, iterating, product after product until they LOVE it. Same with mentors and others who have built businesses or might have more experience in a particular aspect of your business. Maybe they know more about pricing or branding or margins or distribution, those should be learning opportunities. HOWEVER, the idea is to listen, hear/ see what they are saying, but that doesn’t mean you have to do everything they say. This is where your skills as an entrepreneur, your objective self can make a decision about that feedback. What is really relevant? No one has ever built/ made the exact same product as you, at this point in time, with your resources/ assets. So you have to find the nuggets, the pieces of magic that will help you be successful.
Staying (extremely) scrappy. In my opinion, most of the times I see a company fail is because the company ran out of money. Duh. A legendary entrepreneur named Chris Gladwin once said to me, “you have to be in business, to be in business.” Entrepreneurs spend money on things they don’t need. Most are wasteful. They get new office space (instead of working from home or finding free space somewhere) or buy new equipment (before they are ready to scale) or work on their branding (before their product is LOVED) or hire someone (before they are actually needed). I think that scrappiness starts with the entrepreneur’s personal life. How do you live at home, or get a smaller, cheaper apartment, used car or bike, second hand clothes, coffee at home, instead of $4.00 a cup,… The less money you need, the longer the money you do have will last. The less money your business needs, the longer your money will last. You can extend your runway, keep more of the equity in your business, increase your chances of success and frankly build a more sustainable business. Didn’t Bob Marley even say “Don’t worry. Be scrappy?”
I could go on and on about being action oriented, seeking/ taking feedback and staying (extremely) scrappy. I have seen entrepreneurs with those mindsets be more successful than any other. Building a business is hard and building a successful business is even harder. Oh and last point to leave you with, no one cares if YOU like your product, they only care if THEY LOVE your product.