23 May LTFF Blog: How to Launch a Food Startup
By Adele Beasley, Director of Food Innovation
Launching a food startup? Here’s how to get started.
Food business is not for the faint of heart. For aspiring food business owners, just getting off the ground can be tricky. Right from the start, entrepreneurs face a long checklist of hurdles and fees to consider that (more often than not) are unrelated to their master recipe and creative idea. Food businesses require a commercial grade facility and equipment, high minimum order pricing, product and liability insurance, food production licenses and more.
After working with over 100 businesses at our food incubator Kitchen 66, we’ve seen that the most successful businesses find ways to test their concept before they invest in their grand plan. By taking the time to test, you can actually get your product in the hands of customers before you commit to the list of long-term costs and commitments. How could you commit to building a sandwich shop if no one has tried your sandwiches yet? (no, your mom does not count in this case) By testing your concept first, you can work smarter not harder. Here are examples of tactics that you can start practicing right away to test your idea before launch:
1) “The Smoke Test”: Borrowed from computer programming, Smoke Testing is a tool to validate the demand for a product and reveal simple concept flaws before a product is officially released. A bakery at Kitchen 66 uses smoke tests on instagram to test new flavor ideas. By posting pictures of new cookie flavors before actually making the cookies, the business is able to gauge customer interest before investing time and money. If enough customers like and comment on their post, they know that that new cookie will be a big hit in the store.
2) “The Sell and Scramble”: The Sell and Scramble encourages entrepreneurs to gain commitment (in the best case, financial commitment) from their customer before fully developing their product. By gaining customer commitment in advance, a company can avoid wasting time and resources on a product that people wind up not being willing to pay for. A fresh dog food business at Kitchen 66 presells their product online. Once a customer orders, they prepare the product fresh and deliver direct to the customer’s door. By pre-selling, the business is able to perfect their product and grow sales while avoiding heavy upfront costs and waste.
3) “The Pop-Up”: Also referred to as a MVP, or minimum viable product, a Pop-Up is a simplified version of your goal concept. At the Kitchen 66 Cafe, entrepreneurs looking to open restaurants and food trucks open their concepts for a day or even a week at a time. By opening a short-term and simplified version of their concept, entrepreneurs can receive immediate customer feedback, refine their menus, and tweak their strategy before committing to a location or business model.
Getting your product in the hands of even one customer can make a world of difference. By conducting small tests, you can learn quickly and cheaply and begin launching your food business right away.
Interested to learn more about testing? Check out The Lean Startupby Eric Ries
Ready to launch your food business? Apply to join the Kitchen 66 Launch Program(Fall 2018 dates coming soon)