Almost two weeks ago (sorry for the delay in the post—it has been a crazy few weeks!) I attended the inaugural Event for the Lean Food Startup NYC Meet-Up. Held inside the Union Theological Seminary Refractory on Broadway and W 121st St, over 100 people attended this very first Meetup focused on ‘launching a food business on a lean budget’ and unveiling the Columbia-Union Kitchen Incubator, which plans to open later this year. Formatted as a panel Q&A discussion, the conversation was packed with excellent advice, inspiring stories, and interesting questions. The Panel, which included Kyle Buckley, Co-Founder of Grady’s Cold Brew (a New Orleans Style Coffee Concentrate that is hand brewed in Brooklyn), Dhruv Singh, Managing Partner of Savory (New York’s very first Delivery only restaurant chain), and Michael Schwarz, Founder of BAO Food & Drink and Organic Food (a fermented food and beverage company offering an organic incubator space in Queens). The Panel was moderated by Alex Ginsberg (@yumspring), founder of YumSpring and the guy who dreamed up the Lean Food Start Up NYC Meetup, which co-sponsored this event with the Columbia Food Lab and the Columbia-Union Kitchen Incubator. How could I not be excited about this event? Workshops focused around Starting a Food Business Right here in Harlem? Sign me up!
The event kicked off with a few opening remarks from Alex, who then turned the floor over to the Food/Restaurant Warriors that lived to tell of their packaging, tasting, and transportation war stories. The panelists, whose experience ranged from successful food business newbie to a 20 year industry veteran, took time out of their super busy and often sleepless schedules to talk to all of us starry eyed food dreamers about how unglamorous, expensive, rewarding, and exciting starting a food business in New York really is. In the more than an hour long discussion I managed to jot down around 30 pearls of wisdom while I was busy marveling at the courage, conviction, and dedication that each of these culinary entrepreneurs had displayed battling through their mistrials and celebrating their successes.
Interested in starting a food business? Here are the top 15 take-away tips from the panel that will help you navigate this insane startup business.
#1–Delusion is a Necessity. You must have uncompromising and unwavering belief in your product, your idea, and your mission. But, this delusion must be anchored by the slightest bit of reality, where you also have to realize that you are not going to have any idea what you are doing for most of the time.
#2—You must be intensely and extremely stubborn (coupled with the aforementioned ‘delusion’, they work very well together). Every time someone tells you’re wrong, tells you that your product stupid or that your packaging is ugly, and that you’re never going to succeed, you have to dig your heals in even more and stay committed.
#3–However much money you have for StartUp and Operating costs, chop that amount in half and use it as your actual budget. Don’t worry, the reserved half will get used too (on costs you never anticipated) but you’ll be under much less financial stress if you budget conservatively.
#4–Have a very honest conversation with yourself about how much money you have, what your costs will be, and when you need to start being profitable. Remove all of the delusion from this step. Really figure out if, with the tools and capital you have, your plan will turn into a winning equation. If you aren’t absolutely certain, take inventory of where you feel you could improve, and do that before you sink a ton of cash into discovering your hunch about it not working out was right.
#5–Plan for a ton of costs that you never anticipated because they are ‘unknown unknowns’ and they will materialize when you least expect them.
#6–Question and Negotiate EVERY expense. Go through each and every line item on your debit sheet and if you don’t know why you are spending that amount on a particular item, try to get it for cheaper. The worst that can happen is that you’ll be paying exactly what you are right now.
#7—Everyone is NOT your Target Market. Know who your market is and get to know them on a personal level. Stop pretending that your product is so amazing that every consumer in the world will want it, because they won’t.
#8—When designing your business model, keep scalability, agility, and adaptability in mind.
#9—If you are selling a packaged food item (specifically to a grocery chain, or a gourmet specialty store), make sure any and all of your potential clients taste your product in front of you. If you leave it up to them to taste it, they never will, and you won’t get a new customer.
#11—Plan for profit margins of no less than 50% because it is very likely that margin will shrink.
#12—The best way to learn about the industry is to get yourself a mentor. Seek out a successful business that is like yours (but does not directly compete with you) and make friends with them.
#13—Don’t think that Kickstarter (or similar types of crowd fundraisers) will get you all of the cash you need. You will need alternate funding sources. Successful crowd fundraisers require an extremely developed and vast social networks with high visibility. If you don’t have a social network like that, don’t expect for Kickstarter to be the answer to your prayers.
#14—You will need an internet presence, but chances are, you aren’t a food industry professional that is also an expert web developer. Whether you decide on a site that will be dynamic or static, outsource what you can of it. You don’t need to learn how to be a web developer while building your business. It’ll save you a lot of time, effort, and frustration if you outsource the project to someone who can do it painlessly.
#15—By throwing your hat in the ‘entrepreneur’ ring, you are signing up to have an adventure. Bound to encounter a few of your lowest lows and your highest highs, remember to have fun the whole time, because it’s an adventure of your own creation.
For more information about the Lean Food StartUp MeetUp in New York, join the MeetUp group and sign up for their email alerts.