Erica Rankin, is the founder and CEO of Bro Dough. A better-for-you edible cookie dough that has 50% less sugar, plant-based ingredients, and 5 x the amount of protein. Erica shares her screw ups and how she mangaged to find sucess to transition from self manufacturing her product from her home to working with her first co-packer.
Scaling Screw-ups: I’m Back-Tracking
You have a product. It’s awesome (not only do you believe it, but other people do too). You have product-market fit, and you’re outgrowing your current operations. Perhaps you’re making brownies in your kitchen, or renting a commercial kitchen to make vegan cheese. You can’t keep up, and you aren’t entirely sure how to take things to the next level. Well… you’re likely going to need to partner with a manufacturer (or you could go down the route of self-manufacturing, but we’re not going to be focusing on that for now). And despite what you may think, this is a process that takes time. Here’s what I learned when I made the jump myself. Let these lessons prevent you from making the same mistakes.
Start looking before you’re ready
Why? Because you need time – lots of it. On average, it takes approximately 6 months to get set up with a contract-manufacturer (also called a co-man). Sometimes it can be quicker, sometimes it can take longer. It depends on a variety of things, like:
- How niche your product is (is it something that is really complex to make, and can many manufacturers make it?)
- If you have the margin for it (can you afford to pay a manufacturer a ‘tolling fee’ on top of the cost of goods)?
- Your current formula and shelf life (can it be scaled easily, and does shelf life need to be increased)?
- Your packaging (is it compatible with their equipment, or will it have to be done by hand? Note: this will increase cost)
- How much capital you have access to (can you afford to front the cash for production runs and product development/r&d)?
- Minimum order quantities (do you have the distribution to move through what is produced?)
Sell the dream
When you start approaching manufacturers, you may hear a lot of no’s. Don’t get discouraged. As a start-up, our production runs are peanut-sized compared to what these co-mans produce normally. We’re just a drop in their bucket, if that. They prefer to bring on larger clients who can bring them a lot of business. They’ve often been burned by start-ups before, and it’s more of a burden to take on companies our size. So… what do you do? You sell the dream. Look at them as an investor; they’ve technically investing in YOU and YOUR VISION. Make them feel like it’s an opportunity they can’t miss out on, and show them how you can grow together, as a team. This is paramount to securing a great manufacturer. Heck, even create a pitch deck specifically for manufacturing prospects.
Nail the product – Even if it takes longer than you’d hope
This is where things can get expensive, and tricky. Often times, when you scale a food product, the product will change. For example; my cookie dough had a shelf life of ~2 months refrigerated. We wanted to increase this for retail. Food science is complicated, and when you’re not using preservatives, it’s even more complex. During this process, the product changed drastically. It was still a good product; it was just different from what my original customers knew as Bro Dough. We were several months into r&d, and I was spending more capital than initially planned on this stage of the business. I was eager to launch into the market, and settled on a formula after spending almost a year taking things from self-manufacturing, to a manufacturer. With the product being out in the market for several months, I was able to get feedback directly from customers at tradeshows, demos, pop-ups, and even by messaging them through social media. And what I learned was exactly what I knew from the beginning; many of them missed the old formula.
Rushing = two steps forward, two steps backward
I haven’t spoken much on this subject, as we’re finalizing the new formula (and I’m finally accepting the mistake I made), but it’s so important. There are so many products out there, consumers have more options now than ever. If you have a mediocre product, you aren’t going to last. You need to listen to your customers and give them what they want. Don’t scale and launch with something substantially different than what your customers are used to. Your original product has been proven, not the new one. Test, test, test. And even if your manufacturer can’t make the exact same product, get customers to try the new one; take surveys, get tons of feedback before launching it. If you try to speed up this process, it will hurt you in the long-run and you’ll likely end up back at this stage – and it’ll be an even bigger headache, and bigger cost.
Trying to please everyone = pleasing no one
This is another lesson I’m going to tie into my scaling oopsie-daisy. When we reformulated, we created a product that a lot of people liked. Key word; liked. With the prior formula, a smaller group of people LOVED it. You would think the former would be better; but not so fast. Would you rather have 5 people buy your product once every few months, or have 2 people buy it every week? Narrow and deep, always.
Moral of the story
Go with your gut. You know your product, you know your customers, and you know what works for your business. There are going to be people that don’t like it, and some will even try to get you to make changes. I’m not saying to completely ignore constructive criticism. I’m saying to trust your gut and GO SLOW. And as tough as it might be for some of us, when giving out samples or having people try your product for the first time, ask what they love about it, and what they don’t. The businesses that thrive and stay alive are constantly improving, they’re never stagnant. Oh yeah – and enjoy the journey! It can be overwhelming, but the knowledge you’ll absorb from it is priceless.