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29 May

Posted at 20:30h in Dave Knox

Many companies want to believe that innovation is a process that you can map out in a nice clean path. But Katlin Smith, Founder and CEO of Simple Mills, knows that more often, innovation comes about by mistake. I sat down with Katlin to talk about her journey building Simple Mills, how the company is leading the clean food movement, and why some of their best innovations have come by hiring people who share a passion for changing the food that we eat.

Dave Knox: Simple Mills was really an early entrant into the clean food space in 2013. What has changed over that time?

Katlin Smith: Well let us start with what Simple Mills does. We make baking mixes, crackers, and cookies out of very simple nutrient dense ingredients and do it in a way that delivers a really delicious product. If you think about a cheddar cracker or a cookie, instead of using a bunch of wheat, we things like almonds, sunflower seeds, or coconut sugar. We focus on the things that we want to be eating more of.  We operate in these center store categories of the grocery store. What we’ve found is that we are serving this need for retailers because as more and more consumers switch to cleaner eating and recognize the connection between what they eat and how they feel, those center store categories have been in decline. People have been leaving the center of the store to shop in the perimeter, shop the produce, and get much more nutrient density in their diet. So, what we have really been doing is bringing consumers back to those aisles and providing solutions in those categories. The other thing that we have really seen in the past seven years since we launched, is that there are more solutions for people to eat well in the grocery store. And that gets me really excited because it means that overall people are eating better.

Knox: Those center aisles have traditionally been dominated by big food conglomerates that have very strong retail relationships. What allowed you to get past the traditional gatekeepers in retail and open their eye to the value of new brands and new offerings?

Smith: There are a few different things. One of them is that the problem itself is that people recognize that the food that they were eating was having a negative impact on their bodies, which really had a negative impact on that trust relationship that these large brands have with their consumers. So, they said, Okay, these products are healthy for you. They’re better for you. And then as people realized, oh my gosh, these same foods are the ones that are not making me feel great, that are having a negative impact on my health. It really destroyed that trust that was built between those companies and the consumer. And so that really primed the market for entrants like Simple Mills to come in and talk to consumers in a way that is much more honest and authentic.

The second is we built our team out of people who are passionate about this, who really understand this connection, and want to help change our food industry. And as a result, the insights that we have as a team are different than if we are just paying some large agency or research firm to figure things out for us. We already know the answer because we are the ones personally experiencing it. And this enabled us to accelerate innovation and solve problems in a way that is much more helpful to help them eat better. And that also translates into really people who are passionate and have a fierce commitment to our mission, which does help us move faster and break through boundaries and walls and do things that might seemingly be impossible.

Knox:  How has innovation being at the heart of your culture helped you achieve this?

Smith: Culture is one of the very first places where it starts. It is about the people and the culture that you create within the four walls. By hiring people who were passionate about making this change in food, it enables us solve the problems quicker and to understand them with greater depth because we have those insights internalized. We do not have to learn them.

But it is also about continuously reinforcing this throughout the way you work as a company. For instance, for some time we tried to work with external food scientists. They would come back to us and say, “what you’ve asked for is not possible…you have to compromise on one of these things.” We decided to fill out innovation and R&D internally were the kind who think, “who says it is impossible. Let us figure it out.” Many of our greatest products came from our people moving without perfect information and leaning into that intuition.

But even with that, another tenant that we have is not compromising. If there is a product that we cannot launch without compromise, we are not going to launch it. There have been times in our history where the concept itself was a great one, but we had trouble meeting all our requirements. In those cases, we just said that we are not launching it instead of taking a shortcut that would compromise our values.

The strategy is usually the easiest part, it is the execution of that, that is really difficult. It is about not compromising on those tenants and making sure that the product does taste great. Figuring out how you satisfy all those things at one time is really the magic.

Knox: By hiring people who had a passion for the mission of clean food, has that led to any product ideas from their own kitchens?

Smith: All the time. Companies like to create this innovation process and say, “okay, you move from step A to step B, to step C, to step D and then magic at the end of the day, you have this product that consumers like.” But I don’t think that real innovation and creativity happens that way. It’s just sometimes a mistake. Take our new Veggie Pita crackers where vegetables are the number one ingredient. Those were inspired by the fact that our team was at home, trying to figure out how to fit more vegetables into their diet and asking where they can “hide” the vegetables in a pasta sauce or a smoothie. We asked the question, “how do you hide some vegetables in a cracker?” Then another one is our almond flour crackers. That one happened because I just took one of our baking mixes home one day and turned it into crackers for fun really. It wasn’t that we were trying to create a new product. It was just playing. And as a result, we developed our almond flour crackers. That play component is really important to innovation.

Knox: What advice do you give to entrepreneurs that are facing the journey that you started seven years ago?

Smith: Continue to learn and to be open to learning. When I first started out, I felt like I had to have all the answers, which is really just silly and naive. But that’s part of the reason why you have people around you to help you out. The more you can be honest about the things that you do not know, the better solutions you can create, the more you can learn, the faster you can learn.

Also as you build your team, there are always learning opportunities for leadership. Clearly communicate with the team, help them understand the path ahead, and understand the direction that things are going. There can be a lot of ambiguity and the ambiguity can create a lot of uncertainty as well as an inability to move for people.  As a leader, you have the opportunity to clear things up.

Finally, learn to be flexible. That is a muscle that we are continuously flexing and making stronger as an organization. It teaches people that you do not have to have a hundred percent of the information to figure things out and to come to a solution. Things that are going to change in business.  You have to quickly pivot and change. When people can do that, they feel a lot more powerful and that they can handle anything. It’s not the businesses that have never encountered difficult times or the people who have never encountered difficult times that are the strongest. It’s the opposite. It’s the ones who have encountered those things that grow stronger.

*This article first appeared in Forbes on May 20, 2020

Dave Knox has been recognized throughout the industry as an innovator who bridges the world between brand marketing, digital and entrepreneurship. Invite him to speak at your next virtual or LIVE event!

11 May

Posted at 00:18h in Dave Knox, entrepreneurship, innovation, marketing

John Tabis, CEO of The Bouqs Co, believes that the consumer brands that are going to win are the ones that are where customers want them to be. That is why he thinks of Bouqs as much more than just an e-commerce company, with plans to be in retail and anywhere else a customer might want them to be. I sat down with John to talk more about the journey of Bouqs, his viewpoint on business models, and how launching a brand has changed in the last decade.

Dave Knox: Let’s start with the origin story of Bouqs. How did the company come to be?

John Tabis: This whole thing started with my good friend, Juan Pablo Montufar, at the University of Notre Dame. Born and raised in Ecuador, his family was in the floral business. Even as a teenager, he had a passion for floral and he had always planned to move back to Ecuador and run a flower farm at some point in his life. He and I started talking about the pain that he was having as a farmer in the industry and I identified a lot of pain points on the consumer side. I learned about his business and where he was struggling, and I thought more and more about the category and the lack of a true large aspirational brand in the space. We put our heads together and said, “Hey, let’s try to build a solution here that actually fixes it for the farmer and for the customer”. And that’s how we got started.

Knox: When you think about the business today, are you an e- commerce company, a technology company, a consumer brand, or a mixture of the three?

Tabis: I think people perceive us as an e-commerce company. The real foundation of the company is the technology and the data, because what we’re really doing is we’re taking a perishable supply chain and streamlining it. In floral, there are five or six layers typically between the farm and the consumer. We have shrunken that down to one layer, which is the Bouqs supply chain logistics system. That technology platform and the data are really the basis of the business.

But that is only part of it because what it enables is a just in time, real time supply chain and logistics network that moves those flowers around the country and eventually around the world in a way that’s just much more efficient than anyone else, at scale. I think of us as a supply chain logistics company as well. If I was gave us percentages, I’d say we’re 50% a data and technology company, 25% a supply chain logistics company and 25% an e- commerce company But long term, ultimately what we will be is just a really big floral brand, and all the rest is as a means to that end.

Knox: Diving into that supply chain side, the flower industry, in the very seasonal with peaks around the big holidays of Valentine’s Day and Mother’s Day, etc. What unique opportunity did you guys see when you thought about approaching the industry different to avoid those peaks and valleys around?

Tabis: The way we think about it is the relationship with our customers shouldn’t be once or twice a year. If that’s the case, then we’re not doing a great job because there’s many other reasons to buy flowers. What we want to be is a brand that is there for people year round. But the reality is if you can’t handle a really big spike at a Mother’s Day or Valentine’s Day, then you can’t be there for your customers when they really need you as well. It’s building a brand and a relationship with a customer where they say, “Hey, I want to use them year round. I want to make them a partner,” and we’ve actually made that sort of the linchpin of what we do. We have invested pretty heavily in the past six months in our subscription service and we introduced it to every customer as 30% off plus free delivery if you sign up. We give them flexibility to skip it and send it to one person one month, themselves the next month, or somebody else the next month. They can use it in that way to really be a tool to help them just gift in a better and more efficient way. And that’s great for the customer and that’s great for us.

Our ultimate goal for the company though is not to be a gifting floral e-commerce company. Flowers play this massive important part in our lives. We are born and our parents get flowers, we achieve something and we get flowers, we go to prom, we either get or give flowers, we get engaged, flowers, we get married, flowers, we have babies of our own, we get flowers and we die and there are flowers there. This product is really genuinely a part of our lives the entire way. And as a brand today, we play in some of those places, but we don’t play in all of them. And we really want to be that brand that people think about across any of their needs, whether they’re getting married, whether they have a business and they need flowers for the front waiting room, or within the office. But ultimately we want to be that brand that people think about and go to for all of those occasions. We want this supply chain and logistics platform that we’ve built, which is super powerful, to serve customers in a much broader way.

Knox: What impact has the current environment had on Bouqs?

Tabis: We’re seeing a surge in interest in the category. And I think that’s for a few reasons. First, people were very used to traveling places to visit people. Those are just not options anymore. So people are looking for a way to be there without being there, and sending a gift is often what people think about. Second is that people just want to be connected. And in times of crisis where we are all struggling – personally, professionally, economically, or other ways – people want to be connected and kindness always comes out. We always say internally, “kindness always.” But I feel like in this time, at the end of the day people revert to kindness.

We’ve seen a pretty nice increase in our business at a time where a lot of businesses are struggling, which I talk about with my team is a very strange place to be. We’re thrilled to be there for our customers and that people want to send kindness and they want to use flowers to do it. That’s an amazing thing. But it’s also really weird to have a business doing as well or better at a time when so many businesses are struggling. It’s a weird cognitive dissonance. As a company we are just trying to do our best to help people feel connected and to honor one another and to honor their personal connections at a time when it’s harder to do that than ever.

Knox: In the early days, you pitched on Shark Tank. How do you think the landscape has changed since then when it comes to launching consumer brands?

Tabis: It’s certainly a very different world. When we came out with this business, Shopify didn’t exist. The amount of investment, development, and building of tools for launching consumer brands has proliferated so much since we launched. There are dramatically more brands, not just in our category but across all categories because the barrier to entry has just gotten smaller and smaller. When we launched Bouqs we had to hire a developer, build all the tech from scratch. Today you can get somebody who can sort of point and click with a mouse for a mobile app through a company or go through Shopify or a myriad of other number of tools. It just makes it easier.

The barriers to getting something up and running are lower but the barriers to scale remain there, and they’re significant. This is what I say to anyone who wants to start a consumer brand. If you can’t get to a million dollars revenue, you have no right to be in the game whatsoever. Getting to a million bucks a year should be super easy if you have any kind of chops. But going from a million to a hundred million is a heck of a challenge, because of all the things that come with it. How do you acquire customers at scale? How do you service customers at scale? How do you handle technology and order routing and customer service and data management. All these things are really hard and there aren’t off the shelf easy tools for that. That does not exist. You have to build, you have to raise money or be able to create enough revenue to build those things yourself. And it’s why you don’t see a lot of companies that grow to 100, 500, 1000 employees in consumer, because the game is just really hard. But for those that can get there, the world is our oyster because there’s no one else that’s gotten there. So there’s a lot of opportunity if you can get through what I call like the teenage years for any given company.

Knox: On that note of scale, how do you think about the choice of staying true to the business model of e-commerce or moving omnichannel with physical retail?

Tabis: The consumer brands that are going to win are the ones that are where customers want them to be. If they only want them to be online, then being a direct consumer only brand makes sense. But a lot of customers don’t only shop online, they don’t only exist online.  You have to know what the customer wants and you have to serve those needs. I think a lot of brands came into this game saying, the future is only online because this next generation is only going to want to shop online, and that just isn’t true. Millennials and post-Millennials, they go to stores and they shop. They like the social nature of shopping. They like touching and feeling things. So you’ve seen a bunch of different approaches to it. You’ve seen own stores, you’ve seen Bonobos launch guide shops, which are sort of smaller footprint stores. You’ve seen Harry go into Target, you’ve seen expansion of digital brands and third party retailers. You’ve seen brands go into Amazon, and ultimately have to find out where your customers are and what they want. In our business, we talked announced our own plans for going into retail and its not just because we just think it’s what’s next. It’s because when you look at what the customer is looking for and the services they want, like consultative services for a wedding, customers have demands for these things and we want to be able to be there for our customers every time they need flowers. So that means we have to be in those places. Now we announced that and then a global pandemic hit that sort of essentially killed all retail, because we all have to stay home. So the timing of that may shift, but that’s certainly what we see as the future is. If you have customer needs that can be better satisfied by being in all those places, you should be.  As Amazon went from being digital only to now having stores and Walmart sort of went the other way, you’re going to see that same trend happen at businesses big and small, and those that don’t get to where their customers need them to be just aren’t going to win.

*This article first appeared in Forbes on May 8, 2020

Dave Knox has been recognized throughout the industry as an innovator who bridges the world between brand marketing, digital and entrepreneurship. Invite him to speak at your next virtual or LIVE event!

 

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