Top 4 Lessons from Seasoned Entrepreneurs

Alright, first episode! Woohoo!

We made it!

I think that that's a mistake that so many entrepreneurs make.

Some people want the idea to be perfect before they take it to market, and the reality is it's not going to be and it never will be.

If you're not embarrassed about your first prototype, you started too late.

Running a business is risky, but when you use these two things, it feels much less risky. And honestly, as entrepreneurs, this is my favorite part.

In this podcast, we share how we grew a 7-figure food business out of our 2-bedroom apartment in Chicago, all during the height of a global pandemic, and bring in expert entrepreneurs to share their stories and wealth of knowledge in business strategy and innovation. I'm Annie Slobodsky.

And I'm Morgan Lerner. And let's bite into business, shall we? In today's solo episode, we are sharing our our top 4 lessons we've learned as seasoned entrepreneurs from getting started and testing our product in the market way back when to building a data-driven and sustainable business where we are today. So if you are already liking the sound of this podcast, we're brand new, we want you to grow with us, so don't forget to subscribe. It's huge and means a lot to us, especially at this stage. So in this specific episode, we had so much fun. We've been reflecting on the past 5 years, which has been a crazy wild ride, and we have wrapped up our top 4 lessons we've learned specifically for starting your own business. So if you have an idea, if you've been wanting to start something but you aren't sure where to start, this is the perfect episode for you. And we got you, we've organized it in chronological order. So diving right in, our first lesson is to just take action. So this is when you're at that point like I mentioned, when you've decided, you know, your idea, you're passionate about it, this is something you wanna try, you've been wanting to try it. Just do it. Don't mull around and try to make the idea perfect, because this statistic is kind of crazy, but 6% of ideas actually become commercial successes. So sitting in that stage too long just isn't worth your time. Just go out and do it. And there's a lot of first steps you can take. Annie and I started with, you know what, our LLC.

Starting our website was a good one. I think that To Morgan's point, so many people sit and they overthink. I mean, I am sure you can think of that one friend who's like, I got this great idea, and he tells you it like, you know, every few weeks. When you're finally excited about something, you gotta just jump right in and start, right? Because you're gonna get stuck in that ideation phase. And the truth of the matter is that when you start your business, you are going to be making adjustments, big or small. The entire time. Otherwise you're gonna go out of business.

Yeah, and I actually think, um, this is something that just kind of came to me, you kind of have to put your pride aside. I think some people want the idea to be perfect before they take it to market, and the reality is it's not going to be and it never will be. You consistently refine it and work on it, so you can't expect that from the get-go. You just kind of have to get it out there and know that it'll refine itself and get better over time.

That is such a good point. I don't know who said this, but I feel like it's like every entrepreneur's go-to. The phrase is, you know, if you're not embarrassed about your first prototype, you started too late. And it's so true. I mean, our first product was large banana bread loaves in cellophane with stickers that we hand cut. Oh, and cut—

even our first mix was in a mason jar. Mason jar with a label on it. That was like a year ago before, you a few months before we were in Nordstrom Racks, honestly. So it's just kind of, it's hilarious thinking back to that, but that's a perfect example. We were just like, we don't even know if this is an idea that has legs, but we're excited about it. So let's see what people think. Oh, people love it. Oh, let's scale it.

Exactly. Even the way we started this company.

Yes.

We bonded at a club on campus.

Oh yeah.

With our love for banana bread, our familial ties to banana bread. And we were on a drive one day and Morgan and I were just like, let's do it. Let's start a banana bread company. We came up with the name in that car ride home. We reached out to the law school at University of Michigan to help them— to help us get our LLC started. We just went, we just started, and then we figured it out from there. So many people are like, oh, how did you start your business? We just did. We took it one step at a time.

And today it looks so vastly different, but at the same time, we learned so much every step of the way, from just like taking it and running with it. And honestly, we were too excited to like not just take all the actions. So I don't know how people wait, but I wouldn't regret anything we did because we just learned so much along the way and it's so much better now.

I couldn't agree more. And I'm going to lead us to our second topic, which is market research first. So market research is a vast vastly important for your business. Yeah, this means talking to people, not just people that you think could be your customer or your audience, but a diverse set of people who are going to give you their opinions. And if you can't have access to a diverse set of people, get creative. Maybe send a survey out to lots of different people, or take a mental note. Know that you're not necessarily talking to all these people because you may not have access to everybody that you want to talk to, and know that the feedback that you're getting may be skewed, right?

Exactly. And I think the diversity piece is key here. For example, you know, if you're at a farmer's market and you're testing your product, that's great. You're getting a lot of feedback, you're getting a lot of people, but it may not be as diverse of a set. So do that in combination with multiple other things so you get the strongest, you know, data from your— not even customers yet, but from people before you get going. So I think that's kind of a key piece here. And we did a lot of forms of it. I mean, we did talk to friends and family. But then we did those blind taste tests, we took it to different groups, we just like tested it for 3 years actually on campus, now that I'm thinking about it.

We did. And I know, you know, some of you may be thinking, okay, why am I gonna waste my time talking to Joe Schmo about my product or service? Like, what does he know? Well, guess what? You may have this product or this idea and you think you know what great about it, but you happen to do this other thing, and that's what people are really gravitating towards. So not only is talking to people going to help you really understand your unique value proposition, but it also may help you find your niche, right?

It's also super fun because I think it surprises me at least every time we do market research. You know, you may have a hypothesis about what customers want, and just from that research, you can be surprised. For example, we had one of our flavors, Crackly, which used to be a pre-made banana bread, which is how we got started. And so we transitioned it over to mixes. And so we had one vegan flavor and it sold really well. So we kind of had a hypothesis, maybe we go all vegan, it's cheaper, it's better for the environment, X, Y, Z. And we wanted to test that. So the very first thing we did was set up blind taste tests around U of M campus. We literally just gave banana bread to the most random people and people started liking the vegan flavor the most. It was pretty clear actually when we did that. So we transitioned over fully to being a vegan line and that also gave us a bigger differentiator and value prop in this space in comparison to our competitors. So we are the only allergen-friendly in terms of being vegan, gluten-free, and nut-free banana bread mix in the market.

And it's so funny, like, one, doing blind taste tests, people had no idea they were eating a vegan product. You know, we didn't prompt them. We didn't say, oh, you know, which one do you like better, the vegan one or the non-vegan one? And when we told people the product that they chose was vegan over the non-vegan one, they were totally shocked. And, you know, to Morgan's point, we didn't set out to become a vegan banana bread company. We set out to become a healthy banana bread company, and the attributes of vegan and gluten-free came along the ride when a particular SKU was selling better. You know, we were like, oh, people like that base better. And then it was like, oh my God, we can be a vegan brand. And boom, that was our niche.

And that added so much value to our products. And it's, you know, important to note too, you know, Annie and I, like you said, we didn't set out to do it. You and I aren't dietarily restricted as such. So it wasn't something that came from us, it was something that came from people, from our market, from these blind taste tests. And it added a ton of value and differentiation for us today.

And had we not gone out and talked to real people and cared about every single person's opinion that we talked to, we wouldn't have these differentiating factors that largely contribute to our overall success, which is— right, it's just wild to think about, right? These random people who are eating our bread helped shape the entire mission of our company.

Right. But I will also say it wasn't just from that blind taste test. It was also, you know, we did the research to say, whoa, none of our competitors have these checkmarks too. So we did that, you know, market testing with our customers. And then coupled with the research, we were like, wow, this is a big value add for us and makes us really different.

1,000%. I think that was a key point as to why we were so excited that people gravitated towards the vegan option. We were secretly hoping that would happen because we knew that that was something that would differentiate us from our competitors. We wanted something that was accessible to all, and this was a way to get us there.

Exactly. But the piece, you know, it goes beyond just the market research and the competitive research. We also have started to build data from the beginning. I wish we did it more from the beginning, but the data piece is really important to bring this all to life and make it a lot stronger and strategic. So our third lesson is building your own data from the beginning with as many metrics as possible, and eventually it'll become really big and become even more powerful for making decisions.

I think that that's a mistake that so many entrepreneurs make. You know, people can think, oh, but I only get a handful of orders a day, or I only get orders from friends and family. The data from the beginning is day one. Track literally everything, because at some point you're tracking enough where that pool is going to be big enough to be meaningful. Obviously, in the beginning, nobody has enough data for it not to be skewed, right?

But at the beginning too, you're just trying to improve and get better. And I honestly think data is the key for improving in any area. In customer service, for example, we are tracking that month to month just to improve and make sure our issues are going down. It's— it helps us in every area of the business, right?

And then you can use this data if you're seeing trends in the number to go back to do some market research to really make strategic decisions, right? You know, we have a really good example of this in our business. You know, we have lots of different flavors of banana bread mixes, and one of our core SKUs, one of our first flavors that we ever did, was this crackly banana bread. And for some reason, it just wasn't selling as well. And, you know, we do the numbers every month, we track how many mixes of each flavor sell, and we were noticing that our crackly was selling, you know, half or a third as well as our original or chocolate chip. And we were like, what is going on here? So we saw the data and then we did market research. We sent a text message to every single one of our customers, thousands of people who had bought crackly, and said, hey, how do you like this flavor compared to the other ones? And we got the feedback that they really didn't like it as much. And so we're discontinuing it.

RIP crackly. You know, it's a travesty, but the data speaks for itself. I also think a lot of times we'll have hypotheses that either come from market research or the sales data, and the both of them together lead us to make our decisions and get our answers. So that was a perfect example. The sales data spoke. We had a hypothesis about this flavor customers wouldn't— didn't like as much. Then we did the market research and that proved our point, and now we're discontinuing it. And I think we use that approach of coupling these two in our product development as well. So we have the sales data to show our customers like really indulgent flavors, and then we've done the market research and the competitive research to say these flavors sell well in similar markets to similar people and give us further inspiration there. So it's really the coupling of the two that, you know, play into product development and other areas to really grow a strong business.

You can so pigeonhole yourself, and I mean, Morgan Lerner and I almost made that mistake when we saw the sales data for this crackly SKU, we were like, oh, it's because people don't know what crackly means. We thought for sure it was because the flavor was confusing because yeah, it is. What is crackly?

Crackly.

But then when we actually asked people, they were like, it's too spicy and I don't like the texture. So if we had just gone with our gut and we had rebranded that flavor, it would have still flopped even if we called it Crunch Bar because people didn't like it the way it tastes.

Right. We needed both of those things and both of the research to give us an informed decision. And also we learned, you know, customers are spice adverse. So we use a little bit of spice in our products that are more fall or more whatever, you know, carrot cake. So we learned from that process and we wouldn't have if we just leaned on the sales data or ran with the hypothesis.

And I would even say, taking it one step further, that it doesn't go just one way or the other, like you can't even rely on solely market research, right, for something because people think they want something and they tell you they want something and then they don't. So that is the key. That is the key.

And you know, our market research, we call customers, for example, and do interviews. That's a small subset. Our sales data is thousands and thousands of numbers. So ultimately it's a stronger data set, and then we couple it with the research to get really strong informed decisions. So, you know, running a business is risky, but when you use these two things, it feels much less risky. You're like, I know that this is the answer.

Those two aspects are obviously key, but the cherry, the cherry on top of your whole business and what's really going to set you apart— and our final topic, and by far our favorite—

drum roll—

is it's finding your white space. So what do we mean by that? We define white space as what makes you innovative and what differentiates you in order to have a competitive advantage, right?

And I think the key part here, because we talked about differentiation and value proposition, that's kind of your core offering, you know, what is your business and how is differentiated. I think of white space as how that comes to life. So it's what you do with your branding, with your products, that is just different from your competitors, and that's how you express your unique brand personality and your unique offering. So it's— it takes it a step further. And I think one thing we've done that I'm really proud of is made that systematic. So it's part of our business model that we come out with monthly innovative flavors that bring our product to life, get customers engaged and excited, and bring them back each month for these flavors.

And I would also tell you that when you're talking about what differentiates us and you're, you're pointing at topics like our branding, our persona, our voice, etc., etc., that is how you build community. That is how you build engagement. And those two things are what builds a brand. If you don't have people that are loyal to what you're doing, you have nothing. You have single-time purchasers, and that is not a sustainable business. When you have that white space, when you have that innovation, and when you have that community, that's where you're really able to flourish. That's when you're able to lean into something and say, this is what we do, we're the best at this, and we're going to keep working and changing and making improvements and doing things that nobody else is doing because we hear you, we hear your needs.

And honestly, as entrepreneurs, this is my favorite part. This is how are we different, how are we being just go nanas. And I think that's what attracts people to us, is we are different. And honestly, my favorite is our brainstorming sessions when we come out with these monthly flavors because we straight up ask, okay, how is this white space? So, you know, we're coming out with blueberry crumble. How is it white space? It's inspired by Willy Wonka, and we have golden tickets going in 5 different orders. And that is so fun, and people are so excited about this because it's different and it's fun. So that's also how I think of it. It's one of our favorite parts, but you kind of have to consistently remind yourself, you know, how is this white space?

Absolutely. I mean, a really great data point for us here is that organizations that maintain their innovation and focus through the 2009 financial crisis emerged stronger, outperforming the market average by more than 30% and continuing to deliver accelerated growth over the subsequent 3 to 5 years, according to McKinsey.

It's crazy.

And that's so crazy to think about. But in the same point, it's not because, right, if you're not innovating and you're not evolving with the market and you're not staying unique or interesting, you're gonna be stale, right?

Exactly. It's pretty much the key to long-term success. I think that data point really sells that.

Hones it in.

Hones it in, right? 30% is huge. And I mean, we were, for lack of a better word, you know, a COVID-19 business. We pivoted, we've innovated, and that's helped us grow throughout this, you know, crazy crisis and change in environment and all of those things. So it's key in a crisis, it's key in a normal setting. Because you always want to be surprising and delighting your customers and being different and standing out. So I think that's super key.

And that is definitely key. And I know this can seem a little vague, you know, what does that mean to innovate? What does that mean to be different? How we do it is by unbundling banana bread. You know, we've dropped hints and talked about our individual flavors, but what really makes our company interesting is we are a banana bread company. We have dozens of different flavors of banana bread mixes and even came out with instant banana bread. And the fact that we focused on this absurdly specific food item and then innovated around that is our white space. And in our, in our model, we do these drops of different flavors of banana bread, and that model is white space. Having a food company that drops products, you know, we're not that common. There are obviously other food companies that do that, but It's unique. And so that is our white space. And we continue to innovate around these flavors and then weave in, as Morgan mentioned, like the golden tickets, other interesting things to our launches to keep it interesting so people aren't like, oh, another go nanas flavor this month, right?

And I think an important thing to note here is not everything you'll do is white space. There are a lot of things we use industry standards for best practices. But I think having that mindset to challenge some of those things and to find your interesting and different ways is key. Because a lot of times, you know, we try out something because it is best practice or industry standard, and for XYZ reasons, we decide not to and do our own thing instead. And that helps us in, in the end. So you kind of always have to have that lens when you're doing something because that'll just lead you down a path of uniqueness and competitive advantage where no one is doing exactly what you're doing, and it just builds over time.

Well said, Morgan. Thanks, Annie. Well, that was so fun. I have loved recording our first episode, and I can't wait for the many, many more. So just to wrap it up for those of you— I know that was a lot to digest, so I'm going to give you just a quick summary. If your product is perfect, you have started too late. Dive in when you're excited about it and when you're passionate about it, and ultimately make sure there is a need for your product or your service or idea through market research. And then when you have decided that there is a need and you've started, you need to set yourself up for success by building data from the get-go and systemically innovating so you stay relevant.

Mic drop.

Boom. I'm not going to actually drop my mic though, that'd be a terrible sound for you all to listen to.

Bad way to end the episode one. So thank you guys for tuning in. And for our sweet tooth friends out there, if you're like, what is this banana bread? I need to try it. I'm so glad I discovered this podcast. You can find us on the gram at @eatgonanas. You'll get all the fun updates, behind the scenes, new flavor updates, all that jazz. And you can also find us online at eatgonanas.com. That's E-A-T-G-O-N-A-N-A-S dot com. And if you want to try our banana bread for free, we're just starting out, and so we are building our reviews. You can help us grow. It means so much. So if on Apple Podcasts, rate and review, or for Spotify or something that doesn't use reviews, share your favorite part of the podcast on Facebook and Instagram and tag us. We will see you, we will enter you into this, and we'll be picking winners to give away free banana bread every month. So you'll be contacted, we'll be on the lookout, and they just make our day if, if anything else. And the link to subscribe to our emails on the podcast itself so you never miss a bite of business will be in our show notes as well. So check those out. There's a lot of good links. Links there, and see you guys next time. Bye! And that is all for this episode of Bite Into Business. I hope you all have a wonderful rest of your day, and we will catch you guys in 2 weeks to talk about starting your side hustle. So these are all the juicy details of really getting started beyond what we talked about today.

Mark your calendars, it's gonna be a good one.

Woo!