Gabi Lewis: Co-Founder of Magic Spoon

Episode 430

In this outstanding episode, Gabi Lewis, Co-Founder of Magic Spoon, sits down with Kara Goldin to discuss his journey as a serial entrepreneur. From founding the EXO protein snack made from crickets to disrupting the $40billion a year cereal industry. Listen in as Gabi shares his journey into the competitive world of cereal and how Magic Spoon continues to stay ahead of the competition. Plus we hear more about his take on the impact that influencer marketing can have on a new brand and why product-fit is an absolute essential for any founder to zone in on. This is a not-to-be-missed episode in entrepreneurship that you don’t want to miss. On this episode of #TheKaraGoldinShow.

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Kara Goldin 0:00
I am unwilling to give up that I will start over from scratch as many times as it takes to get where I want to be I want to be, you just want to make sure you will get knocked down. But just make sure you don’t get knocked down knocked out. So your only choice should be go focus on what you can control control control. Hi, everyone and welcome to the Kara Goldin show. Join me each week for inspiring conversations with some of the world’s greatest leaders. We’ll talk with founders, entrepreneurs, CEOs, and really some of the most interesting people of our time. Can’t wait to get started. Let’s go. Let’s go. Hi, everyone, it’s Kara Goldin from the Kara Goldin show. And I’m so excited to have my next guest. Here we have Gabi Lewis, who is the co founder of an incredible, fun, fun brand called Magic Spoon. And if you have not heard of it, or hopefully you’ve tasted it, but you must must must listen to this next episode. So it’s an incredible cereal that has gone from zero to hundreds of millions and only a few years. And I look forward to discussing the journey from founding not only this company, but his previous company, as Gabi is also a serial entrepreneur. And now he’s disrupting the $40 billion a year serial industry and continuing to stay ahead of the competition and hearing more from Gabi about his take on influencer marketing and why product fit is an absolute essential for any founder is right up my alley. So very, very excited to have you here, Gabi.

Gabi Lewis 1:46
Thanks for having me. It’s great to be here.

Kara Goldin 1:48
Absolutely. So tell us all what Magic Spoon is in your words. And also what prompted you to start it?

Gabi Lewis 1:56
Of course. So Magic Spoon is a reimagination of your favorite childhood breakfast cereal with more protein less carbs, zero sugar. So imagine Froot Loops, Lucky Charms, any sugary touted cereal, but actually good for you. And we created it from a couple of reasons. From a personal user perspective, I grew up loving cereal. And when I got to college age or so I stopped eating it realized it was full of sugar perhaps not the healthiest option for daily consumption. And I drifted away to these pseudo healthy options like Greek yogurt, or smoothies or protein shakes. But they’re all pretty devoid of fun. And a couple of years ago, I started thinking, Why is nobody reimagined breakfast cereal with better ingredients better macronutrients, in the same way that we’ve seen everything reimagined from sodas and waters to ice creams to candy. And nobody could give me a good reason why nobody had done that to cereals. This huge category. It looks the same a few years ago as it did a few decades ago. And in the absence of any good reasons why nobody done it before we went on a journey to see if it was possible to recreate all those sugary junky cereals into something that was fun, delicious, legitimately good for you. And looks and tastes just like all those cereals remember from your childhood?

Kara Goldin 3:15
So interesting. So when you say you went on a journey to figure this out? How did you identify the need for a low carb high protein cereal in the market?

Gabi Lewis 3:27
I think a little bit of it is intuition. And so we were speaking to dozens of other founders, industry people, it was a combination of understanding that this is an evolution that’s happened in so many aisles of the grocery store. Right. So like I said, if you look at ice cream a decade ago, it was all high carb high sugar, then you had sort of some slightly more organic, slightly healthy brands, upgrade the ingredients, whether it’s like Janie’s or ample hills with more like organic local cream, then you have the halo tops come along and they flip the macronutrients in their head and they do more protein, less calories, less sugar, you saw the same thing in candy with like smart sweets and those sorts of products. And so we saw this evolution happen in every aisle. And many of those categories are actually smaller than the cereal category. Yet people were still able to build businesses worth hundreds of millions, or in some cases, billions in those smaller categories, carving out two to 5% of the category for this better quality, higher protein, lower carb sugar version of something. And that just hadn’t happened in cereal. So we saw this entire aisle, and an evolution that was happening in every other aisle except for this one. And it just seemed like an obvious gap for us. And we started floating this idea to people in the industry, or just friends who were sort of natural potential consumers. There was this light bulb moment in everyone’s mind where they were just like, Huh, that’s very weird that people have done this for every other category and they haven’t done it for cereal. I think the only reasons we got not to do it were from people who had these kinds of backwards food industry perspectives on why it wouldn’t work. So they might say to us? Well, it’s a good idea in theory, but you’ll never get shelf space because Kellogg’s and mills on the entire shelf space. Or they’d say to us, well, it’s a good idea in theory, but no one’s ever gonna pay more than $3 of cereal because they’ve been trained their entire life, that cereal is this cheap box of like sugar. And to get them to shift their mindset is just too much of an educational hurdle. We didn’t think those reasons were particularly good. On the price we’d seen endless other categories go in at two or three times the price of the incumbent, whether it’s, you know, again, ice cream, or even personal care, right, like higher quality deodorants, three times the price of everyday deodorant. And we’ve seen those businesses work at scale in mainstream grocery. So the price concern didn’t really seem like a valid reason not to do it for us. And then the sort of big company not giving you shelf space concern. From our last business, we’d seen that if you generate enough hype enough bars, build a brand, the retailer’s can come to you. And so we weren’t too worried about being boxed out of retailers, if everything else fell into place. So I think it was that reasoning combined with a little bit of classic entrepreneurial overconfidence, that just led us to jump in and build the brand and develop the product.

Kara Goldin 6:16
So what were you doing before Magic Spoon,

Gabi Lewis 6:20
we had a prior business called EXO protein. And we were developing cricket protein as a sustainable food source with a line of cricket based protein bars, formulated by a three Michelin starred chef. And we ran that business for about five years. So that spent six months figuring out what to do next in our lives, and then started Magic Spoon.

Kara Goldin 6:41
And what did you learn from that business? You were, if not starting a new category? Definitely one of the only ones right, a ton of education around it. But I I’m so curious to hear your take on, you know, what was it about that company that really taught you and that experience have taught you really helped you to kind of scale Magic Spoon to where it is today?

Gabi Lewis 7:09
Yeah, we jumped into the idea really, without fully analyzing the market, the supply chain and the potential demand. That was an idea that we came up with in college. And it made sense to us on an intellectual level, right. So the basic idea is that protein for many insects, but crickets, specifically, as weird and wacky as it sounds, it’s very sustainable. So per pound of protein, you need very little water or very little space land. So it’s a very environmentally friendly protein source. And it’s also very good for you. So in addition to being a very good protein source, crickets are higher in iron than beef, they’re higher in omega threes than salmon. So it’s good for you. It’s good for the world. The only hurdle, which is a big hurdle is the psychological hurdle of getting people at least here in the US to not think eating bugs is weird. So we thought it was this really amazing idea that really just boiled down to a marketing challenge of how do you convince people that this, not only is not weird, but it’s potentially cooler, aspirational. And that was why we partnered with this three Michelin star chef. And we sort of put the cricket protein into cricket bars to have those be sort of like introductory vehicle to get people comfortable with the idea. And then we like we learned a lot, right? We did it for five years. And I think the biggest learning stepping back is just how much product market fit matters, which sounds obvious and a truism. But I think as a, you know, then 22 year old entrepreneur, we had this idea very sort of perpetuated by the Silicon Valley, sort of founder mythology that any founder who’s like good enough can take an idea and just through brute force and will and smarts make it work. And we were just pushing a boulder up a hill with idea there were obvious demand challenges, right to get a large group of Americans to consume crickets happily, was a marketing challenge and hard to generate enough demand. I would say on that side of the business, selling the first million dollars of cricket bars was easier than anybody could have thought when we did a fashion anybody could have thought. We went after the sort of small niche communities that are willing to do things for their health, the environment. So selling at farmer’s markets, CrossFit gyms, you know, places like that did very well. Crossing over to go from one to 10 was really, really hard. On the supply side. Yeah, there was no supply chain for crickets. So we had to build the supply chain from scratch basically, as she lived in Thailand for six months setting up a supply chain there for human grade crickets and figuring out how you optimize the feed. You know, when is the right time to harvest them for maximum protein content? Just a really complicated business. We’re building supply from scratch building demand from scratch. And we were first time founders 2122 years old. So I think for the second time around, we wanted to, firstly keep it really simple, right? We didn’t want to have such a crazy idea that involved so much education that involved building our own supply chain that involved like an international supply chain, we wanted a simple business that’s easy to explain, easy to sell already has like demand waiting for it right there. And that demand is sort of the second key lesson, which is really validate that we’re creating something that people actually want already. And we don’t have to create that demand, you know, we saw the last time around how expensive it is to build demand from scratch. And even, you know, a well financed startup, if you’re raising 10s of millions, you can’t really educate people in a new category, you need many companies doing that many 10s if not hundreds of millions, and we didn’t want to have to pay for that education. And then of the benefit is spread across multiple companies. We wanted to identify something that made sense. Just go all in there.

Kara Goldin 11:01
Yeah, definitely. I mean, we absolutely had a not the same challenge. But a similar challenge when we were starting hint, which was, you know, we were the one of the only ones the first and one of the only ones doing an unsweetened flavored water for many years. And what I tell people all the time is, you know, you think like, when you’ve got competition that shows up and they have a lot more money in the bank, you’re, you know, dead on arrival, right? And it ends up actually that that’s a good thing. Because when you’re going in alone and trying to educate people about the need for something, it’s, you know, whether you’re starting a cricket, food business, or you’re starting an unsweetened flavored water competition is not a bad thing. Because they, you know, this, the spread of the education around why the consumer needs this is super important to be able to have competition out there. So but I bet you, you learned a ton, for sure. And you got it sold, which was great. But also probably saw what scale can really be as compared to, you know, creating an entirely new category and kind of going on your own. So to speak with with xo. So so. So what were some of the biggest challenges you faced when launching Magic Spoon, then? I mean, you came off of this, you know, wild ride where you’re sourcing and Thailand and I, what were kind of the the key things that were the hardest when you were starting Magic Spoon.

Gabi Lewis 12:44
I think the luxury of having sold crickets for five years prior is that Magic Spoon seemed easy by comparison. Certainly not easy. But by comparison, it was easy. So developing the product upfront for Magic Spoon was one of the hardest parts. So one of the reasons why this hadn’t really been done before is it it’s just technically difficult from a food science perspective, to get as much protein as we want to get into a piece of scenario without it becoming hard and the texture being awful. So we had these nutritional guardrails were trying to meet right, we wanted to be able to be grain free, gluten free, you know, upwards of 1213 grams of protein per serving. We wanted to be able to claim keto because when we launched Magic Spoon, it was like the height of the Keto trend. So that meant keeping net carbs per serving below four or five grams. And to make a cereal that also tasted close enough to put lips Lucky Charms, whatever, whilst fitting within all those guardrails that took us at least six months and that two cars all across the country to dozens of different co packers and food scientists and you know, various folks that were helping us with ingredients and things like that, that was probably the hardest part and the single thing that took the longest, you know, Fast forward four years into it. The things that are hard is day to day I think for me all revolve around people, right? I think now like we get more leverage. Now the thing I have like really, really good people. And nothing drags us down more than having like a single person who’s not an A Flash Player, right? So day to day like everything around people and hiring and team and culture. That’s like the hardest thing for us at this point, but also the most fun thing and you know, the thing that gives us the most energy when we get it right. And that’s like why we’re here every day. Obviously it’s for the people as well. So it’s definitely evolved over time from sort of product towards people.

Kara Goldin 14:40
So you obviously love innovation and introducing new flavors as well. I’m so curious. How do you decide when to launch a new product? You guys recently started going into retail so you’re not you I should mention you started as direct to consumer And you were all direct to consumer, now you’re in a lot more locations. But is it kind of dictated by how much promotion you’re going to get in stores? Or do people want exclusive flavors? I mean, how do you decide that I get asked that question a lot as a fellow founder, and as somebody who started a company that, you know, has a lot of different flavors, like, what makes you sort of make that decision to do a new, a new limited edition drop?

Gabi Lewis 15:31
Yeah, so we launch new flavors online, every six weeks or so, typically two at a time. So we’re developing a new flavor every three to four weeks online. And that’s one of the keys to making our direct to consumer business work is the repeat revenue and subscription model we get from people opting into new flavors every few weeks. And that was most of our business for the first three years that for the first three years, were purely direct to consumer, launching new flavors every month or two. And we develop them and sort of choose them from a few different angles, you know, we’ve got a couple of food scientists in house, they’re always tinkering and coming up with new ideas. We also have the luxury of being able to talk to, you know, millions of online customers of ours. And so we asked them what they want to see both like free forum talking to them, and sending out surveys, you know, every month or two and getting lots of good information from them, both in terms of what flavor do you want us to make next? But then also in terms of getting feedback from limited edition flavors we dropped? And figuring out how do we tweak them improve them over time? Do we bring them back or not? Do we retire core flavors and swap them out for a different core flavor. So that’s sort of the DTC side. And then that note flows into how we approach retail, where we launched retail about a year ago. So a year ago, we launched into retail for the first time with target, and we are nationwide in Target, Walmart, Kroger, Albertsons, and sprouts. And they all have basically four to six core flavors of ours, that had been vetted over the course like three years online, and we know everything about these flavors. And so we’ve had probably 30 to 40 online flavors over the years. And for all of them, we know the nuances of you know, which of these flavors are people most likely to click on? If they see an ad of the packaging? Which is a proxy for like the see the box on a shelf? Once they get it? What are they most likely to rate it the first time they eat it? You know, fast forward three months? What are they most likely to repeat on a regular cadence and how often which flavors are incremental consumption versus which they just like buy instead of another flavor. And so all of that data fed through to how we chose our initial flavors for retail, and it’s de risked our retail expansion enormously because we don’t have any duds at retail. Right? Many brands obviously need to swap the flavor out after a few months, they didn’t realize one wouldn’t work. And we’ve been able to avoid that, which is really nice.

Kara Goldin 18:00
Yeah, it’s so interesting that you mentioned that we started, we obviously, were sort of the opposite. We were in stores first and then went into direct to consumer early a lot earlier than a lot of other beverage companies that were out there. But it was fascinating. There were flavors that we had developed that we had actually taken to stores. And they were like, well, how well is it selling? And we were like, well, we created it for you exclusively. And they were like, oh, we’ll wait, we’ll pass. And the one of the best phone calls I ever got was from a retailer. And they said we have a number of consumers who are reaching or with written into us and said why don’t you carry the flavor? Actually, it was the cherry flavor. And it was an online exclusive, not because we wouldn’t sell it to stores. But because they had said no. And so and it was like immediately took off online. And so the best phone calls were from the retailers actually, that we had already heard know, from saying to us, you know, we would like to buy it. And you know that we’ve seen so many people online that are buying it and there’s so much hype around it, etc. So we started creating those, you know, exclusive flavors Limited Edition flavors early on as well at hint for that reason, because we thought like if we could actually have data to back it up to say this is what’s going to happen. And if for example, a person was a Blackberry consumer, then we still know with, you know, great insight into what other flavors they’re going to like. So predictability was definitely able to be seen pretty fast. So, so interesting. So I’d love to hear any great stories from you and your journey with Magic Spoon that had significant impact on you, personally for the brand, whether it’s good or challenging anything that’s come along where you’re just like, listening to a consumer or, you know, maybe production didn’t go so well and ended up. You thought it was going to be great. And then it didn’t. I don’t know, anything. That’s a lot of information that just sort of like ruined your day or made your day incredible.

Gabi Lewis 20:28
Yeah, well, I think, I think what one quick story that sort of demonstrates how chaotic a startup can be, but also, how amazing it isn’t everyone comes together. In our first year, we were doing our first ever Limited Edition flavor. And it was pumpkin Chai. And this was actually one of the first arguments my co founder and I had where I’m not from America, and I don’t get the whole pumpkin thing. And he was like, insisting to me like pumpkin sales. And I was like, we cannot launch a pumpkin flavor. Like we’re not Starbucks, like nobody wants that in this scenario. But I was overruled. So we’re developing this pumpkin Chai flavor. My co founder is usually like the product guy, he had a family thing. And so he wasn’t able to attend production. So I got sent to the first ever production run of pumpkin Chai, along with a couple of like junior employees. And somebody accidentally ordered the wrong Chai flavoring. And it came with like whole rose petals. So we basically had like, hundreds of pounds of this Chai flavoring, with just 1000s and 1000s of rose petals in there, which sort of looks like dirt. Like we couldn’t put those in this area like people wouldn’t think it was meant to be there. So we stayed the entire night overnight with gloves on handpicking, rose petals out of these just like giant boxes of seasoning for hours and hours and hours to make pumpkin Chai or reality. And it was alumni. And we were pretty frustrated during it. But we came out of it with a great sense of accomplishment. And yeah, little things like that sort of are, you know, frustrating in the moment. But that’s like why you do a start up. And it’s fun to come together and work through it.

Kara Goldin 22:13
I love those stories, too. Because I tell people that you know, the next day, right? Maybe you’re you see somebody and they’ve got a traditional job, right? Where they’re going into an office there, whatever it is, and you can’t even explain it to them. Like, oh, you know what I did last night, I was picking rose petals, I was on a production line, and you know, in the middle of New Jersey, or wherever and like, so you just don’t even bother, right like you. It’s just not even I mean, I have so many stories like that, where you just cannot make it up. Like we were just being you know, my husband and co founder, we would laugh about it, because you just couldn’t tell anybody about the story. And so it’s one of the things that I talk about in my book is that there’s so many stories where you know, you, you think this is, you know, going to kill the business, this is going to, you know, we’re done at this point. This took a lot of time, how are we going to get out of this situation, but so many of my friends that were not working in the industry, and were not entrepreneurs or founders, they were, you know, they just couldn’t believe some of the stories. And it’s, I can only imagine that you felt that way with that story for sure. That’s a good one. So I’ve heard you talk about investors and investors, I think are another thing that I always hear from founders, you know, trying to raise money. I’ve heard you share about how a bad investor can really ruin everything. And I totally agree. Any words of wisdom on people looking for investors, because like, I feel like there’s also this, especially in today’s economy, where you just want to get the deal done, right? You’re like, ah, it’ll be fine. But like, when things go wrong, you kind of know, like, you think back on those moments, and you’re just like, I should have never done it that way. Or I’m sure you you know exactly what I’m talking about. Like there’s certain there’s there’s just this vibe and this gut. And I think it’s it’s it’s something that any founder who has been through that situation will feel so I’d love to hear your perspective on it.

Gabi Lewis 24:39
Very important to consider who you’re raising money from. I think whether it’s important to pay attention to your gut or not, is I don’t know how trustworthy everyone got is I think it’s very hard to tell if somebody’s going to behave when things get tricky, right. So all investors are lovely when businesses are going well. And some percentage of investors behave differently when a business goes through a hard time. And so I think the most important diligence to do if you’re raising money for an investor, is knowing that inevitably, you’ll have a bumpy patch, every business basically has some bumpy patch in a 10 year journey, find companies that have worked with that investor, who have gone through notably bumpy patches and learn about how the investors behave during those periods. Right. You know, 95% of investors know that that’s how businesses are, they’re incredibly supportive, maybe they’ll even invest more, if a company needs it, make introductions, some very small percentage of investors, you know, maybe take it personally, maybe they think the company doing badly is a reflection on them as an investor and, and it’s Messier, and they give the people a harder time, right. And the last thing any founder wants when they’re going through a bumpy patch, is having an investor and making them feel even worse about it, right, rather than helping them through it together. So and that’s a really important part of diligence to do. And related to that just getting to know the investor over an extended period of time, right? When you’re if the only relationship you have with an investor is pitching them in a conference room, and them telling you how great their fund is, and you’re telling them how great you are as a founder, that’s not really a relationship, and neither of you really know the other one. And so if you take that, and then get into bed with each other for the next like, 10 years, that’s not much of a foundation. And so I always like to get to know investors well, before we’re even contemplating a fundraise, over coffees, meals, whatever it might be meeting up at conferences, and get to know them for a period of at least several months, if not years, before you consider doing business together. Obviously, that’s a luxury that, you know, many founders don’t have. But if you can do that, that really helps. And then in terms of the actual deals and negotiations, I think a lot of founders pay attention to the wrong things. And my perspective is valuation dilution, they don’t really matter that much of the matter, far less than most founders think. So if you’re, if you’re raising venture capital, you’re already getting into a bit of a binary game here, right? Like, if you’re raising venture capital, and you’re raising millions of dollars, you’re not trying to build a business to a couple million in sales, like you’re an Abbe a lifestyle business, right, you’re going for a very big outcome. And so if you’re going for a very big outcome, and let’s say you’re going for, you know, 100 million in sales in four years or something, if that’s what you’re going for them, whether as a founder, you will, and 10%, or 80%, like, you’re going to be wonderful, like, it doesn’t really matter in that in that scenario. And so, I pay far more attention to like, the little terms. So things like, can you control your own destiny, you know, if you want to sell the business, does the investor have a block on that, and they can actually be, they can make it such that you cannot sell even if you want to, you know, does the investor have blocks on, you know, spend over a certain amount on a certain kind of thing, you know, all those kinds of controls that, I think to first time founders seem like, Oh, those are little minor points that will never really matter. Like those things can matter. And when they do matter, they become existential. And so I always optimize for those little points far more than, you know, trying to get a huge valuation that might make you feel good. But at the end of the day, a if you’re successful, it’s not going to matter, because you’re still going to be great financially, and like be an overinflated valuation can oftentimes set you up for trouble and subsequent financing round and create a situation where you’re just not aligned with the investors. And so I think that’s like a big hiccup for lots of founders, where they just focus on on the wrong side of the deal, for reasons that make sense at first, but ultimately, maybe you don’t.

Kara Goldin 28:40
Yeah, I 100% agree. And the last thing you want to do, I’ve never been through this, thankfully. But I’ve I’ve have many friends who have is go through down rounds, and all those things that you know, you were really psyched that you became a unicorn, and then you weren’t right. And I have many friends and who have been through that, especially during COVID. And it was ugly, and it’s deflating and all of those things. So 100% agree with that. So you started as a DTC brand buying lots of ads, you were looking at cost of customer acquisition. I’m curious if if it was different than how you would look at it today. Like, you know, given sort of where we’re at today and starting a company, would you still look at it the same way, algorithms changed significantly since you guys started as well and more people getting into DTC so ads became a lot more expensive, but do you still think about things the same way would you start a brand today DTC first or do you think you would do both retail and DTC knowing what you know today?

Gabi Lewis 29:56
I think it depends on the product and the category Syrio is uniquely be suitable for DTC because it’s relatively light, relatively compact, it’s consumed habitually, you know, people are having it every single day, it’s well suited for a subscription model. So that that’s all still true. And so I think for our particular business, it would likely still make sense to launch DTC. And that just provided us with so much leverage to then go to resell on our terms with the retailers, we wanted to go to it. So for us, probably yes, even though it’d be a bit more expensive to do the same business DTC today versus four years ago for most of their beverage brands. I don’t think so. You know, I think as I said the economics were serial business are uniquely favorable. For most DTC business or most food and beverage businesses, it’s hard to get the cart size where you need it to be to be able to profitably acquire a customer and then hard to get the habitual consumption as well you need for the lifetime revenue to make money on that customer. So I think to some extent, the grass is always greener you speak to so many food or beverage founders who are mostly doing retail and even now we need to see is more expensive, they’re like, dying to do more DTC because they just, you know, came out of an annoying retail meeting that was hard and they think like, Okay, if I can just control my own destiny on DTC it’ll be so much easier and, and likewise, every period DTC founder is noted saying, How do I become omni channel? How do I get to get out from under just like Facebook, you know, controlling my business? So I think it’s, it’s all hard. I think, if I were to start, you know, different business tomorrow, I’d probably start to omni channel from day one, or at the very least go from DTC to retail much faster. I wouldn’t wait like the three years that we waited with Magic Spoon.

Kara Goldin 31:37
Yeah, so interesting. So what’s the most challenging aspect of building this company today? I mean, you talked about people. But has that changed over time as well? Because of COVID. I’m so curious, like, are you guys mostly virtual? I would imagine that you that you had an office in the beginning? Do you guys have that today? Or? I mean, yes. What what is sort of biggest piece of this that I think is is keeps you up at night that you sort of have a solve for but maybe you just need to shift something. And in some way, whether it’s people or I’ve had people too, who have said, you know, that they’ve gone through shifting their supply chain from international to the US, like, that’s just been, you know, really, really tough. And maybe they shouldn’t have done it all together, you know, all at once. Anyway, I’m so fascinated, like, what are the hard things?

Gabi Lewis 32:39
Yeah, I think our business today is, we’re in this sort of transition year, where a year ago, we were entirely online, and next year, will actually be majority retail this year, right now is when it’s all transitioning. So, you know, our, our DTC business is strong and growing. But nothing like our retail business, right? The retail business has gone from zero to, you know, Walmart, Target Kroger everywhere in a year, and it’s going to continue like that, you know, we’re adding on new channels next year. And so with that, there’s changes in every part of our business, right? Our, our logistics needs to change entirely from being one that’s, you know, even just our logistics team, right? They’re, they’re experts in how do we ship a box of this configuration to an individual consumer, as efficiently, cheaply, quickly as possible. And their whole days are oriented around that. And now we’re asking them to actually shift a little bit shift entirely. We’re now thinking about how do we get you know, trucks or products to various retailer warehouses, you know, as efficiently as possible and work with them on delivering on time and in fuel. And, you know, the logistics team six months ago, didn’t even know what that meant. And, you know, now they’re fluent at it. And so, shifting every part of our business, where there’s team or supply chain from DTC they were like world class at to what’s now sort of like an entirely different business, there’s gonna be majority retail in a year, and figuring out what isn’t evolution, like what is you know, our influencer marketing team, they can just slightly evolve their influencer marketing strategies for, you know, driving people to click on magic to be a little bit more omni channel focused, you know, they can do tactics that drive velocity on shelf at Walmart, by Sandy influencers, those doors. So that’s like something that our existing team can pick up. But then there’s other things that are just totally different that we need new people for. And then there’s probably some things that we may not need as much anymore as well, right? If we’re being honest, and so it’s thinking through, like, how does the whole business evolve as like, fluidly and like as positively as possible from DTC a year ago to like majority retail a year from now? And so that that transition Is, is is exciting, and it’s new and like I’m learning a ton of the team’s learning a ton. But that’s what keeps me up at night is like, how do we perfectly make that transition happen?

Kara Goldin 35:11
Yeah, and effectively to sow because it’s, it’s really unless you own your own trucks, which is probably not what you will be doing or should be doing. It’s really, really tough because there’s a lot of options. And it’s a little bit of a black box. So it’s a, it’s definitely definitely tough. So, last question, what advice would you give to aspiring entrepreneurs? Like, What’s the best advice that you would give people thinking about starting a food related business and knowing what you know, today?

Gabi Lewis 35:50
Yeah, I think this sounds like very simple advice. But I think it’s often overlooked, I think, start the simplest business you can possibly start. I think so many founders try and do so much. And they try to innovate too far. And they think that for an idea to be good, it has to be totally revolutionary and world changing, but it doesn’t. And when you look at, especially in our industry, in food and beverage, most of the success stories over the past decade, they’re not that revolutionary, right? They’re marginal improvements, incremental improvements, from a branding perspective, product perspective, like, you know, our x bar success, largely just like beautiful packaging innovation, which I think if somebody was sitting in a coffee shop, and they’re like, I’ve got a new idea, it’s packaging that list the ingredients in this certain way, you wouldn’t have thought that was enough of an idea to start a business around. But once you bring it all together like that innovation is enough, like you don’t need something totally radical. And so I think trying not to do too much, but instead just doing like just enough and meeting the customer a little bit closer to where they are. I think that’s, you know, really important advice and advice that I wish I was given 10 years ago when I thought that for a startup to be interesting, I had to convince people to eat cricket protein. And and then with that, you know, once you launch it, again, focusing on doing a small number of things really well. So to get from zero to a million, you don’t need to be really good at influencer marketing, podcast, Facebook ads getting into retail, like, you can just pick one or two. And that’s enough for that first stage. I think it’s very easy to get distracted by the sexy things, whether it’s like, you know, a new founder I’m talking to they’re trying to figure out their threads strategy, which like, you just you don’t need it. You don’t spend a second thinking about that yet, until like you’ve done everything else. Like that’s like the final thing like, even tick tock like, unless you’re, you know, nobody is spending very much money that I talked to in our industry on Tiktok ads. And so trying to figure out a tick tock ad strategy, when you’re only spending $300 a day on Facebook ads, just like doesn’t make sense first scale, like the big things that have real potential for scale, and then move on to the other things that are distracting in the short term.

Kara Goldin 38:07
I totally agree. Well, thank you so much. GAVI really was lovely to have you on and everybody needs to go to Target or Walmart and get some Magic Spoon or go on to the website, of course. And we’ll have all the info in the show notes as well. But Gabi Lewis, so nice to have you on today. And thanks for spending the time with us and sharing with us as well.

Gabi Lewis 38:34
Thank you for having me.

Kara Goldin 38:35
Thanks again for listening to the Kara Goldin show. If you would, please give us a review. And feel free to share this podcast with others who would benefit and of course, feel free to subscribe so you don’t miss a single episode of our podcast. Just a reminder that I can be found on all platforms at Kara Goldin. And if you want to hear more about my journey, I hope you will have a listen or pick up a copy of my book on daunted which I share my journey, including founding and building hint. We are here every Monday, Wednesday and Friday. And thanks everyone for listening. Have a great rest of the week, and 2023 and good bye for now. Before we sign off, I want to talk to you about fear. People like to talk about fearless leaders. But achieving big goals isn’t about fearlessness. Successful leaders recognize their fears and decide to deal with them head on in order to move forward. This is where my new book undaunted comes in. This book is designed for anyone who wants to succeed in the face of fear, overcome doubts and live a little undaunted. Order your copy today at undaunted, the and learn how to look your doubts and doubters in the eye and achieve your dreams. For a limited time. You’ll also receive a free case of hint water. Do you have a question for me or want to nominate an innovator to spotlight? Send me a tweet at Kara Goldin and let me know. And if you liked what you heard, please leave me a review on Apple podcasts. You can also follow along with me on Facebook, Instagram, Twitter and LinkedIn at Kara Goldin. Thanks for listening