5 Rules for Launching a Food Startup From 5 New York City Founders

All of our one-day Food Startup Bootcamps include an intimate panel with experienced local food entrepreneurs. We were very lucky to hear from five NYC food startup founders this week. The panel included Gabi Lewis, cofounder and co-CEO of Exo Protein; Josh Cook, CEO and cofounder of Nextdoorganics; Brian Ballan, Founder of A&B American Style Condiments; Danielle Gould, founder of Food+Tech Connect and Sean Dixon, cofounder of Village Fishmonger

The panelists shared their diverse startup stories, lessons learned along the way, insights into the rapidly shifting food industry and what they learned from their customers.

1. “Don’t try to innovate on every level.” — Gabi Lewis, cofounder and co-CEO of Exo Protein Bars.

Lewis’ startup, Exo Protein, uses cricket flour to create high-protein fitness bars. Exo’s use of an extremely innovative ingredient in their product—crickets—led Lewis and his cofounder on an eight-month search for a copacker. Finding a perfect match between a food product and a co-manufacturing facility is notoriously difficult regardless of what type of ingredients are involved. But add crickets into the mix and finding a match became exponentially more complicated for Exo. Crickets are closely related to shellfish which means anyone with a shellfish allergy may also suffer from a cricket allergy. The last thing a typical protein bar copacker wants is to be forced to label all of their bars as, “Produced in a facility that also manufacturers shellfish.”

After an eight-month search, Lewis and his cofounder finally found a copacker willing to work with their innovative protein. Exo’s customers (and investors) were thrilled when the cricket bars finally hit shelves. But as Lewis explained, the complexities involved with incorporating an innovative ingredient into their product forced the startup to shelve plans for innovating in other areas like package design, manufacturing process and distribution strategies. As Exo continues to grow, Lewis hopes to begin experimenting with some of these other innovations, but at the beginning, one innovation is enough for a resource-starved startup.

2. “Don’t be too Brooklyn.” — Sean Dixon, cofounder of Village Fishmonger

Sean and his cofounders launched Village Fishmonger after a particularly disappointing dinner party. The team had hoped to cook mussels but more than half of the shellfish they brought home from their local fish market were dead upon arrival and unfit for consumption. Dixon, a trained marine biologist, and his team knew there was quality seafood and shellfish right off the coast of New York. But the complicated supply chain and lack of quality control among traditional sources of fish meant New Yorkers lacked access to the delicious and sustainable fish swimming right off their shores.

Dixon and his cofounders launched Village Fishmonger, a CSF or community supported fishery, to bring local, traceable and sustainable fish and shellfish straight to New York City doorsteps. Their customers were overjoyed with the freshness and transparency of Village Fishmonger’s offerings. But Dixon and his team quickly realized that not all of their customers were as comfortable receiving Hake and Porgy in their fish shares as they were receiving better-known fish like Snapper or Swordfish.

Dixon’s advice to other sustainable food entrepreneurs hoping to encourage the consumption of lesser-known species, ”Just don’t be too Brooklyn about it.” Or, don’t assume your customers know as much as you do about your product and don’t make it inaccessible. Village Fishmonger combats this problem by providing ample information and cooking instructions about their products to customers. They also host NYC’s Sustainable Seafood Week to encourage the cooking and eating of more obscure species of fish, a practice that can be much more sustainable than sticking to only familiar species.

3. “The food tech investment scene does not equal the food product investment scene.” — Brian Ballan, A&B American Style Condiments

During the day, bootcamp participants took a look at statistics from the explosive food and tech investment space. According to Food+Tech Connect, investors pumped over $3.9 billion into food tech startups in just the first two quarters of 2014 alone. But Ballan cautioned first-time food product entrepreneurs to remember that just because investors are getting more comfortable with food tech plays does not mean they are equally excited about investing in pure play food companies.

Ballan encourages artisanal food entrepreneurs that are seeking funding to study successful food companies that have raised money outside of the food and tech bubble. He recommends Mission in a Bottle, the story of the Honest Tea company, by Seth Goldman and Gary Nalebuff for understanding the ins and outs of growing a good food product company.

4. “Create more value than you take.” — Danielle Gould, founder of Food+Tech Connect

In 2009, Danielle Gould had an aha moment when she realized tech could change the future of food. She launched the Food+Tech Connect website as a side project but was immediately flooded with traffic. Instead of setting up a paywall or throwing ads up on her site, Gould instead focused on creating quality content about the food and tech industry for free. What started as a few hundred interested subscribers quickly turned into thousands and tens of thousands of followers thanks to the expert content Gould created.

Startups hoping to build companies that rely on technology to disrupt our conventional food system can learn from Gould’s approach, “Create more value than you take.” The online world of food is littered with low quality content. Create something free that people really need and you’ll be surprised at how loyal they are when the time comes to offer them your product.

5. “Always listen to your customers.” — Josh Cook, CEO and cofounder of Nextdoorganics.

Nextdoorganics is a successful Brooklyn-based CSA and storefront, but it started out as a small stall at the Bushwick Farmers’ market. Cook credits the growth of Nextdoorganics to his team’s ability to listen carefully to their customers. Nextdoorganics started by asking farmers’ market customers what they wanted out of a CSA but were not currently getting. Their answer? Flexibility.

Cook and his team grew their offerings to incorporate flexibility into their CSA model and they now have 17 different CSA pick-up locations around Brooklyn and Manhattan in addition to their Bed Stuy storefront. Entrepreneurs utilizing the CSA model may need to listen to their customers even more than food product businesses. When customers sign up for a CSA they are entering into a delicate relationship built on trust. Weekly offerings change based on seasonality and it’s up to the company to keep an ear to the ground to balance customer preferences with availability. 

Want to hear from experienced food entrepreneurs in your city at one of our panels? Sign up for a Food Startup Bootcamp near you.

Meet this Saturday's Los Angeles-based panelists.