In May of 2022, I quit my job as a Team Lead of the TikTok Growth Accelerator to pursue my new CPG healthy snack startup, Nebula Snacks. The business, originally incepted in April of 2020 while locked indoors during quarantine, has come a long way, but is still very much in its infancy and has struggled along the way to reach each stage.
In the spirit of transparency and reflection, I am sharing some thoughts and recommendations for those interested in boot-strapping a food or beverage startup today.
It had been a while, but recently I reviewed one of the most iconic races in history, The Tortoise and the Hare.
Humor me with a quick overview of this children's fable.
The hare blasts off at the beginning of the race, out of sight for the tortoise, who went at his own pace. Believing he has everything in order and is set for success, the hare takes a breather and naps alongside the track.
Meanwhile the tortoise continues at his steady pace, passing the hare and crosses the finish line.
“Slow and steady wins the race.”
Quite a simple moral, but one that is quite relevant when starting a business. Oftentimes the excitement and allure of hyper growth incentivizes hare-like qualities when it’s the tortoise who is truly set for success.
With a background in big tech, that preaches the internal values of “Move Fast” (Meta) and “Aim for the Highest” (TikTok), we sprinted out the gate with an infrastructure that resembled the later stage businesses we were familiar with, which in retrospect, may not have been the right move.
I’ll share two specific areas where, in hindsight, we should have slowed down.
As our research and development was wrapping up, the immediate goal was to locate a facility to move forward with a production run. In our minds, that was the route forward.
We had the recipe and now we needed the product.
Having spent nearly a year in research and development, and another 6 months reaching out to different co-manufacturers in search of the lowest minimum order. At last, we found a diamond in the rough, quoting 1/10th the MOQ of every other co-manufacturer we spoke to, and it was a dream come true. All set to proceed.
However, in our haste, we didn’t realize there was another option.
Making it ourselves in a commercial kitchen.
Starting even smaller.
A few reasons why this would be advantageous to starting an F&B brand today.
1. Cost: Simply, the cost to rent out a commercial kitchen and produce the product is far cheaper than any co-manufacturing run you’ll come across.
2. Expertise: Immersing yourself in the creation will only inspire more passion and knowledge about the space that you are entering.
3. Content: We live in a world where the consumer wishes to be ingrained in your entrepreneurial journey and if done right, filming the entire time would allow the opportunity to truly start with a community behind you.
When we initially launched, Nebula was a side hustle and my Co-Founder and I weren’t confident that our schedules would allow the time to fulfill orders manually. To get ahead of the potential customer delays and provide a seamless experience, a logistics partner was necessary, right?
So, we partnered with a third-party logistics organization, which had a seamless Shopify integration, a built-in shipment tracker, and email updates.
All set for a wonderful customer experience.
However, just a month after we began shipping with the 3PL, rates were raised on storage, pick & pack and wholesale shipments. We were unfortunately at the mercy of the 3PL and had to stomach the price change.
A short three months later, we were running out of the chocolate we had brought to Austin for sampling, marketing, etc.
ABPP - “Always be Packing Product”
An acronym I’ve coined as a lesson from the countless times I missed an opportunity to sample Nebula chocolate to those in and outside of my social circle.
While we brought a certain amount of product from our production run to Austin, it ran out.
Paying to ship your product to yourself is not something I’d advise, nor will I ever do again.
I’ll name a few advantages to self-fulfilling orders at the get-go:
1. Flexibility: Shipping partners, pricing, timing - you own the entire experience.
2. Personalization: Thank you notes, inserts, swag, etc. Something small that allows you to connect directly with your consumer when they first open the box is a far better experience and opportunity to win over a loyal consumer than just simply finding what they ordered.
3. Content: It reigns supreme. In-line with showing the product being made in the commercial kitchen - this is also the opportunity to show the behind the scenes of your start-up and upload content of individual boxes or mass packing days with your customer base!
This is a subsequent lesson from #1 but deserves its own specific call-out.
You only launch once.
Every NASA rocket launch is a spectacle, with years of planning, calculations, and a countdown before blastoff.
Unfortunately, we rushed the launch in favor of seasonality.
After 18 months working on the recipe and finally securing a co-manufacturer to make the chocolate - we entered November 2021. We ran Lead Generation campaigns over the course of the year, collecting emails of those interested in sugar free chocolate, but placed too much confidence in that list as we sprinted to be ready by Black Friday.
Our email list conversion rate was not as strong as we had anticipated and while we received a tremendous wave of support from friends and family at launch from our respective social media announcements, it didn’t last forever.
Back to the drawing board.
A missed opportunity.
Launch is not for friends and family.
It’s for the millions of prospective consumers out there who may be interested in your product.
I will note that there is no silver bullet here either, but here are few considerations:
1. From the moment you begin working on your business - SHARE the story on social. Film everything and be candid and transparent. In terms of the platforms I would recommend at the moment: TikTok, IG Reels and LinkedIn seem to be most prominent in terms of Organic reach and influence - however, other platforms may better fit your product/brands needs including Reddit, Twitch or Pinterest.
2. Start collecting leads and SMS as soon as possible. A small investment in a CRM platform and directing traffic to your site will pay off. However, simply collecting the leads is not enough. In hindsight, a weekly newsletter updating our interested party on our progress to launch likely would have increased that conversion rate.
3. Show up locally with your product. Wherever you are starting your business, get outside, product in hand and tell people about it. Give out samples or provide demos to those in your city - you’ll either gain consumers or insight early on for you to make changes before moving too quickly.
The base takeaway here is to make an ABSOLUTE FUSS about what you’re up to.
In my years working in digital marketing in-house and platform side at Facebook and TikTok, I marketed and supported hundreds of accelerating and disruptive businesses across a variety of different verticals.
As a new founder, I was eager to put my skills to use.
But the landscape had changed.
In 2015, brands were able to turn on a Facebook purchase optimized conversion campaign and see immediate returns. It was a world where you could reasonably spend $50-100/day and see a positive Return on Ad Spend (ROAS) with low CPM’s.
Today that isn’t the case.
We’ve tested Meta, TikTok, Google and Amazon - all with minimal success and small pockets of conversion volume but an inability to scale efficiently with a limited budget. Ultimately, a paid first marketing strategy has too high a barrier for long-term efficiency when boot-strapping.
As a result, I shifted to Influencers as our primary channel. However, I was quickly met by the new wave of the creator economy.
A new world where free products are not a form of payment. Creators no longer associate a cost or deem product valuable as they’ve now evolved into ‘professional creators’, of which there are two primary categories: Macro & Micro. We’re not going to talk about celebrities.
Macro-Influencers come with the ability to reach an engaged audience with a sponsored post and drive an outcome for your business, however the lower end of this spectrum starts with price tags of $1k and upwards of $20k.
You can risk it for the biscuit, but these are high risk/high reward situations for a boot-strapped start-up.
Micro-Influencers range and can boast a following of 100k+, but behind the curtain have an engagement rate of <2%. Others have <2k followers and proactively reach out to brands asking if they need content made.
I receive daily requests from micro-influencers asking if we need User Generated Content (UGC) content for marketing purposes and toting price tags of $100-500 with social handles of <2k followers.
A personal opinion, but UGC should only come from a paying customer - otherwise it’s not ‘User’ content.
The sweet spot is those in the middle of the “Micro-Influencer” group, who have a large and engaged following, excited to see new videos and recommendations from their creator.
These are diamonds in the rough and a majority come with a price tag, often not affordable, but may be worth the investment. That being said, do your homework.
If you are going to pay an influencer, ensure they align with your brand and clearly outline your ask and video concept without taking away creative liberties. They know their audience best, but you want to ensure your message is communicated.
Even then, traction isn’t guaranteed and the primary use of that video may end up being a paid creative asset (assuming you obtained permission in your creator agreement.)
And then you’re back to paid media.
So what are my options now?
Looking back, here are a few considerations:
1. Invest your time in organic social. I’ve stated it a few times thus far, but content is king in today's world and if you dedicate the time, passion and energy, your time will come.
2. Use your product as marketing as much as possible. It’s the most valuable asset, but also the most valuable tool to drive purchase intent! Give out samples wherever you may be, and when possible, film it!
3. Create or locate your community! Don’t spread yourself too thin attempting to get in front of everyone. Rather, stick to the profile of your core consumer and find ways to boost that community. Fares, Expo’s, Facebook Groups, local events and maybe even a sporting league. If you’re having trouble finding one, start your own or go find something you enjoy doing and sign up for classes, a league, events, etc..
4. Be in public. Not only is it good for your mental health to get outside, touch the grass and get some natural vitamin A, but the opportunity to talk to people whether you’re in a coffee shop, at the park or just simply going on a walk, IRL human connection will always trump emailing cold leads or growing LinkedIn/Twitter in your home office.
Now I’m just 3 months into being full-time on Nebula Snacks and we are taking a few steps back so that we can move forward.
#1. We are parting ways with our 3PL, moving the chocolate back to Austin and will be self-fulfilling orders moving forward.
This is a painful expense as our 3PL is fighting tooth and nail to prevent us from leaving and charging every last bit of the process.
As a result, our chocolate is now on pre-order and we will be resuming shipping this Fall when we have product on hand and the country has cooled down a bit.
#2. We are moving away from full-size chocolate bars. Customers have noted that they generally don’t eat an entire bar in one sitting and to meet their consumption needs and occasions, we are working on smaller molds for a more bite-sized chocolate treat.
Additionally, we are expanding our SKU’s to include two new flavors to be able to offer a true variety pack and more flexibility to our diverse mix of chocolate lovers. (Give me a shout if you have requests!)
But this won’t start until our current inventory is fully sold.
#3: Marketing is changing to transparency, authenticity and product first. With a primary focus on organic content across TikTok and Instagram we are pulling back ~95% of all paid marketing channels, with exception to a few small campaigns to promote site traffic.
In tandem, I am focused on partnering with as many communities or events that match our mission and/or our target demographic.
Lastly, I am looking for giveaway opportunities with other brands that align with our brand mission and values and are open to including a sweet treat to their customers for free.
Bottom line, it’s important to reflect and have the confidence to pivot. And while I’ve already had a number of hard lessons learned - I’m 100% positive there will be more to come.
© 2023 Triple Whale Inc. – 7th Floor, Jaffa St 224, Jerusalem, Israel