By Bob Bloom, Global Account Director, ADM
A question I’m often asked during FoodBytes! mentoring sessions is, “What must I get right to win?” Having served as a trusted advisor to 50+ food and beverage startups over the years, I’ve found that one size fits all doesn’t work; however, there are several elements that are critical to laying the foundation for success.
No entrepreneur that I’ve worked with has been able to put all of these capabilities together on his/her own. It really does take a village, which is why you should have a board of advisors with expertise in the disciplines where you are weak. Most entrepreneurs are all about their product, which is appropriate, but a great product is only one of many ingredients for success in business.
Key ingredients to success include:
- Initial market research: Would consumers value your concept in sufficient quantity to make your business viable?
- A suitable product.
- Does the product meet potential customers’ needs?
- Are the barriers to entry sufficiently high to discourage competition from imitators if your project gains traction?
- Is there defendable intellectual property that can help protect your investment?
- Is the product cost in line with the business model allowing for sufficient margin?
- Regulatory awareness and plans to address/meet any requirements (if applicable).
- How will your potential customers know that your product exists?
- As one of the greatest and most important investments you can make, how will you be sure that your marketing expenditures are as cost effective as possible?
- Sales: Tangible products do not sell themselves. They require a strong sales function, one that is hopefully led by a manager with experience and contacts in the market or channel in which your products will be sold.
- Distribution: Unless your product is being sold directly to consumers, distributors will likely need be involved.
- Operations: Is your manufacturing process as simple and effective as possible for a new product?
- Do you have a comprehensive quality management program?
- Does your Quality team have sufficient authority to actually manage your product quality?
- Financing: Is your venture sufficiently financed to deliver a successful proof of concept?
- Human Resources: For new ventures, the best option may be to outsource. Regardless, it is important to set up HR infrastructure early.
- Does your management team have the intestinal fortitude to thrive in a high-risk environment? This is important because you will be spending most of your time with investors and potential investors if your product gains traction (sad but true).
- Is your management team properly incentivized for success?
- Be cautious about hiring friends. Being in business together will likely strain that relationship.
- Be very careful about hiring family. Maintaining strong family relationships is as important as business. It is challenging to combine the two. You will need your family’s emotional support.
- Do a SWOT analysis on yourself.
- Focus on your strengths.
- Hire your weaknesses.
Is there a most important ingredient?
Yes! Passion. If you don’t have the passion to persuade those around you about the value proposition of your new business, then no one will. However, be careful to maintain enough objectivity to not miss warning signs that the market may not share your and your team’s enthusiasm for what you are offering. Most successful startups have significant pivots from their original concept. This usually happens because someone notices an unexpected response in the market.
For startups looking to apply to pitch, NYC applications are now open.
ADM has been feeding food businesses for nearly 115 years with plant-based proteins, whole-food ingredients and product development expertise. We match your idea to the right ingredients—helping food developers and entrepreneurs get to market faster great-tasting, nutritious foods that consumers love. Learn More
About Bob Bloom
Having served in a comprehensive advisory role to food and beverage startups for nearly 20 years and helping one of those startups achieve global brand status with annual revenue in excess of $1 billion, Bob knows what it takes to help startups scale and succeed in the market. Learn More