Food for thought (part 2 of 2)

March 12, 2014, 12:01 a.m.

Read part one of our coverage here.

Industry Advice

Contrary to other areas of entrepreneurship, having first-mover advantage is not actually that important. Gosselin explained that a company with more capital and experience with the distribution channels could easily replicate a promising startup product before the new company even has a chance to become successful. Instead, all three panelists emphasized the importance of developing a unique and genuine brand.

“There needs to be something differentiating, remarkable, or new, but also there needs to be something fundamentally true about it,” Hu said.

Gosselin spoke about the importance of finding the target market and identifying a need, whether or not the consumer has expressed it yet.

“To be the first to market I don’t think necessarily gives you a huge advantage,” Gosseln said. “To me it’s more about creating a brand that resonates with someone.”

In terms of creating something entirely new versus making a slight change to an already existing product, Hu believes that both can be equally successful. But with Sprogs Fresh, she wanted to look at the bigger picture.

“Generally speaking, if you want quick success, you’re better off doing an incremental change on something fundamental,” Hu said. “But for me, life is short. You should do something you’re passionate about.”

Furthermore, Manara explained that branding may not always produce the expected results with customers.

“‘Healthy’ is a word that we’ve been using a lot and that doesn’t always resonate with the end consumer in the way we thought it would; it’s a turnoff,” Manara said. “It’s a question of how do you brand this in a way that’s differentiated enough and resonates with the core values of the company but is appealing to a broader category of users.”

Another idea that the founders constantly reiterated was the need for compromise.

“There’s a lot of compromises and sacrifices that we’ve had to make,” Gosselin said. “It’s tough to say if there will ever be a way for us to profitably do everything we want to do.”

Instead, they advised entrepreneurs to pick one value as a compass and to make decision around that core idea. For Kincao, Manara chose nutrition. For Sprogs Fresh, Hu chose freshness.

“I can’t afford to be 100 percent organic. I can’t afford to be 100 percent non-GMO. There is no compostable, recyclable, food-safe FDA approved packaging that survives in a refrigerated environment,” Hu said. “But I promise to myself and I promise to my people that this thing that you eat will always be fresh. And it is fresh.”

Despite tradeoffs, Hu believes that with a genuine brand centered around a core value, customers will recognize the company’s authenticity.

How to get funding

The founders talked about their financial experiences in starting a company. In general, they agreed that either angel investors or “bootstrapping” the startup with their own money is the way to go.According to the panelists, venture capitalist funding not only is difficult to obtain, but also puts immense pressures on businesses to grow rapidly.

“I’m very down on venture-funded food startups for the most part,” Hu said. “Show that you’re really onto something before you think about it, both for your personal happiness but also if you want to create a long terms sustainable business. You will make better decisions if you’re broke.”

Other options for funding includes friends and family, as well as sites like CircleUp and Kickstarter. Kiessig explained that Kickstarter provides companies with the working capital to finance the initial production runs and frictional costs of getting started through customers who only want the product itself in return.

Gosselin explained that companies should not disregard the option of moving away from outside investment all together. With the exception of a small amount of personal capital, Pure Provisions worked with both a manufacturer and a distributor to negotiate favorable terms that enabled them to be cash flow positive almost immediately.

“We don’t need financing to grow. There’s a limit to how far we can go with that, but our goal is to get to a certain point until that runs out and then see where we are,” Gosselin said. “I don’t like to have to answer to people. To be honest, you spend so much of your time putting out fires [that] I can’t imagine how I would do that while answering to investors at the same time.”

Hu also disagreed with the idea that a company’s worth should be determined by the amount of funding it has received.

“There’s a culture in the Valley where raising funding becomes a milestone of success,” Hu said. “Everyone talks about how much they raise and who’s funding who for how much, and I think what’s getting lost in that is ‘What’s the funding for? What’s the endgame? What are you going to do with this business? What value are you creating in the world?’”

This post was originally published on before it was acquired by The Stanford Daily in summer 2014.


Kylie Jue '17 was the Editor-in-Chief for Vol. 250. She first became involved with The Daily as a high school intern and now is a CS+English major at Stanford. A senior from Cupertino, California, she has also worked a CS 106 section leader. To contact Kylie, email her at kyliej ‘at’

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