We are best known for our work in the natural food and beverage industry thanks to our history with Odwalla but actually we do a lot more. Mythmaker has created brands and helped position everything from ethanol companies to cloud computing services. We just finished creating the identity and website for Garrahan Off-Road Training. Check it out.
Back in 2011 I collaborated with Brian Lovejoy and Corey Comstock on this illuminating list for a presentation at Expo West. Brian is a brilliant product formulator and founder of Drinks That Work and Dr. Kiefer. Corey is a General Partner at Sherbrooke Capital, and former CEO of Oregon Chai. Both have had their share of success and failure. Here’s some of their hard won wisdom.
1. Unrealistic forecasting, especially cash flow projections. Your forecast WILL BE wrong. Know that your customers will pay late and pay short. Your suppliers will want to be paid now. Your costs will be higher than expected. Your sales might be lower than expected. If you plan with this in mind you may not run out of cash.
2. Lack of a 1-3-5 year “business / strategy plan” and the annual updating thereof. Many entrepreneurs become so enthusiastic about the business day to day they forget that a measured / methodical approach to the long term strategies increases the viability of the company and in turn creates a stable foundation
3. Not building the right team, internally: Unwillingness to hire expert team members that are smarter, more proficient, and higher skilled than the entrepreneur.
4. Not building the right team, externally: Unwillingness to hire expert external support advisors such as attorneys, accountants, tax advisors, IP council, marketing and PR professionals, etc.
5. Not knowing when to say no: There is a tendency to want to please every account, especially the big ones. If each account doesn’t make you money or if the sales and promotional costs “required” to maintain that account are too costly, be willing to walk away…for now.
6. Undercapitalization: Undercapitalizing the business and misjudging the amount of capital it will take to sustain a brand and company until consumer / customer adoption is achieved.
7. Falling in love with your own ideas: Know when your ideas on product, packaging or marketing are not working and be willing to move on.
8. Not knowing your market: Know your competition, the market and all of the differences between your product and other similar items. Never be surprised about what else is out there.
9. Being too opportunistic: When starting a new enterprise, entrepreneurs find opportunity everywhere – just because an opportunity may exist, if it doesn’t tie in to the business plan and mission – ignore it.
10. Trying to have your product sold everywhere – “boiling the ocean”. With any product or brand having ubiquity is hard to maintain without large capital budgets. With that said, most acquirers would rather see strong performance in specific markets with “white space” available for them than mediocre performance in a broader market.
What’s in a name? Everything when it comes to a product. A good name is a balancing act of several needs. It has to communicate to a specific audience through its tone or “personality.” Ideally, it should suggest what the product does and indicate its benefit or a “big idea.” Professional namers are a unique breed. Their craft is a blend of art and science; in effect they are strategic poets. Expert namers define a rigid set of objectives before they brainstorm, then use their creativity and language skills to deeply explore any and all ideas, usually generating thousands of names. Seasoned namers are savvy about what works, what doesn’t, and what’s already been done. Without structure and expertise, a company can waste considerable time and money noodling ideas that will never fly. Or worse yet. Click here to see just how bad it can be. (Naming contests are a great way to get stuck with time bombs.) As brands evolve and product lines grow, it’s important to stay ahead of the pack with innovative, powerful names that go beyond clever. A facilitated naming process can help identify and clarify fuzzy positioning and undefined goals.
The other day, I was doing some grocery shopping with my eleven- year -old son. I reached for some pre-packaged strawberries and he stopped me. “Too much plastic. Get those,” he said, pointing to the bulk berries. Trying not to look too shocked, I headed for the bulk berries. After a little investigation I learned that this new vigilance came from his school, which now has an on-going packaging awareness program. It includes guest speakers, contests to see whose lunch box has the least left over garbage, and anti-plastic posters in the science lab.
Old habits may be hard to break but a new generation is growing up with a whole new understanding when it comes to choice in the market place—and environmental awareness is starting to play a significant role. Just look at bottled water sales, which are significantly down for the first time in five years. This is partly due to the economy, but also to an aggressive anti-plastic environmental campaign. Some health foods stores have even stopped selling bottled water. In response, Coke recently launched a new PET plastic bottle made with 30% recycled waste material.
When it comes to sustainable packaging, there are basically two strategies. One, use less material, and two, use recyclable or biodegradable material. From what we’re seeing out there, one shouldn’t assume that eco-friendly means a compromise in aesthetics and functionality. Pangea soaps and Straus Creamery, for example a have distinguished their brands from the pack by pioneering ecologically smart, really cool-looking alternative packaging.
But as I said before, old habits are hard to break. Recently a client was exploring an on-the-go snack idea. The company’s consumer research showed that people wanted less packaging. The marketing department’s answer was to shrink the paper tray that carried six plastic cups. When I showed the concept mockups around the office, the general response was, “Looks like a lot of plastic.” In this case, “less” is not enough. I encouraged the client to find an alternative to the plastic. The response was, “But, people also said they want to see the product, so we have to use plastic.” Actually, they don’t have to use plastic. How about PLA (biodegradable ”plastic” usually made from corn or even better, molded paper with a PLA lid or window? That is a 100% biodegradable container. Would it add to the cost? Maybe, but factor in the added value of building a brand awareness strategy around the company’s environmental efforts. Or, forget the PR value. Factor in my eleven year old son. It won’t be long before he’s doing his own shopping.
Two years ago I attended an “Entrepreneurs Forum” hosted by Sherbrook Capital at the Expo West Natural Food Convention. It featured a panel made up of people from different VC groups charged with identifying promising young companies in which to invest. I asked the panel this question: “How much value do you place on cause related marketing strategies or values based marketing positions when it comes to assessing product potential?” There were seven panelists and they all agreed on the answer. “None. Product appeal and margin potential are the big drivers.”
Now this would not have surprised me if I were at, say, the National Association of Food Manufacturers convention, but this is Expo West – ground zero for the natural product industry. A community that owes much of its success to the LOHAS consumers… those erstwhile hippies (us) and their children (ours) who shop with principles of health and environmental sustainability in mind. “How times change,” I thought.
Fast forward to this year’s Expo West. Another Forum. This one for entrepreneurs looking to learn how to raise capital for their fledgling businesses. What was the basic message this time? There is real value in principled positioning. Consumers are actively looking for companies that connect with a larger purpose. VCs want principled visionaries who understand business. “It’s an emerging and hot trend.” How times change.