Almost anything worth achieving is not easy but worth it. Successes in business and life come with many difficulties, set backs, and frustration, but if you can weather the journey, it will be worth it.
Contact us or schedule a consultation to help make the journey a little easier.
Your Startup Guru, an established name in startup consulting, is delighted to announce its 10-year anniversary.
Founded in 2013, Your Startup Guru was founded with the mission to make entrepreneurship available to anyone. Initially offering just business plans and pitch decks , Your Startup Guru rapidly increased its service offerings to include online marketing, bookkeeping, fundraising, and almost anything a new company would need to launch and grow. In the past, entrepreneurs would have to shop around for many different service providers to get the one-stop guidance Your Startup Guru provides.
In its ten years, Your Startup Guru has serviced thousands of clients throughout the United States and advised on over $100M in operations. The company has received recognition from The County of Los Angeles, Inc. Magazine, Alignable, and more. Its clients have gone on to present at SXSW, receive series A funding from venture capital firms, appear on national television commercials, expand their franchises, and more. The financial benefit is important, but more importantly, our work has helped our clients on a human level; clients have gone on to purchase homes, hire employees, retire comfortably, and change blighted communities.
“We are beyond thrilled that we have reached a milestone. It could not have happened without the commitment of our fantastic team and without the collaboration of our hardworking clients,” said Joon Hong, Managing Director of Your Startup Guru.
Read the press release here.
Direction is more important than speed. It is important to remember that when hustling and scrambling to launch a business. Take the time to get your bearings, triple check your list, and make slow and steady progress in the right direction. Valuing speed over direction can lead you hundreds of miles in the wrong direction.
The right direction comes in many forms: Which customer base to target first? What to spend money on while launching and on a tight budget? How big of a loan do we need? Knowing which steps to take early on can make a giant difference later on.
Contact us today to help point you in the right direction.
Very loosely based on actual events but Flamin’ Hot can teach us a few things about entrepreneurship.
Flamin’ Hot is a fictionalized dramatization of how the wildly popular Flamin’ Hot line of products was created. A more detailed account of the creation of Flamin’ Hot Cheetos and related products can be found in this LA Times article. Although it is very loosely based on actual events, the film can teach us a few things about entrepreneurship.
Richard Montañez, the supposed creator was a natural entrepreneur since childhood. In the film, he was bullied by his classmates about his burrito lunch. He persuaded them to try it and got them to buy burritos from him. Richard then sold burritos to the entire school. Richard also showed interest in machinery early on which helped him understand the chip manufacturing process.
Not everyone is born with the traits and proclivities to create something new, but if you are, it’s a big advantage.
Selling drugs got Richard in trouble with the law which limited his career options. So he pleaded his way into a janitorial job. Richard swallowed his pride and did the work.
Our perceptions about our self, how we think others perceive us, where we think we should be in life, pride, shame, etc. are all factors that can sometimes limit us. Overcoming this is probably more important than being a natural entrepreneur.
Richard learned his job as a janitor but also learned how the chips were made. He also asked questions about chip manufacturing to people that were not in his department; thus crossing over departmental “cliques” — sanitation doesn’t mingle with engineers, etc. This allowed him to learn more about chip manufacturing than almost anyone. His willingness to overcome shame/embarrassment, in this case overcome corporate culture, also allowed him to access knowledge that others were unwilling/uninterested in learning.
Additionally, Richard’s Mexican-American background gave him exposure to spicy food and awareness about the large Latin-American population. In 1980, 6.5% of the US Population was Hispanic; by 1990, it grew to 8.8% as the total US population grew 22 million in that time. He saw how his friends and family would add spicy seasoning to their foods. Richard also saw, when he was on a delivery run with a coworker, that mainstream snacks were the only option in neighborhoods like his. A large and rapidly growing market did not have a spicy option.
This is all part of industry and market research.
In reality, Fred Lindsay, a Frito-Lay salesman that worked the Chicago and Great Lakes region noticed spicy products from regional competitors out-selling Frito-Lay.
Learn everything you can about your business, other people’s businesses, your customers, their customers. Knowledge is power.
It is important to note that Flamin’ Hot Cheetos (according to the movie) did not happen over the course of a couple of years. Richard was working at the plant for over 8 years when the idea came to him. Also, in the movie, Richard’s wife Judy, developed the recipe in what seems like less than a year.
In reality, Lynne Greenfeld and a team of product developers at Frito-Lay was assigned in 1989 to create a snack designed to compete with spicy snacks sold in the inner-city mini marts of the Midwest. Greenfeld would go on a field marketing tour throughout the Midwest and bring back 50 different bags of snacks that were all new to her. Eventually, she and her team honed in on a flavor combination and chubby devil branding that we know today. This process took around a year.
With the recipe in hand, Richard needed to acquire chips to coat the newly developed spicy slurry with. At the Frito-Lay factory, brown chips were thrown out because they only wanted the lighter colored chips. Richard took the discarded chips to create his first batch.
Finding inexpensive solutions is a crucial task in entrepreneurship.
A pivotal moment in the movie happened when Richard looked up the contact info of Roger Enrico, CEO and Chairman of PepsiCo Inc., the corporate owner of Frito-Lay, to pitch the idea to him.
In the movie, Richard stumbles when asked about market share and product yield. This is where our services come in. Our industry leading pitch decks come with industry and market overviews, projected sales, and much more. Companies from a wide range of industries have used our pitch decks to raise funds from banks, SBA, and angel investors.
Even after convincing Enrico to launch the Flamin’ Hot line, it was not all smooth sailing. In the movie, Frito-Lay did not launch an advertising campaign as most companies do for most products and services. As a result, the products were not selling.
To raise awareness for the product, Richard resorted to guerrilla marketing. He rallied his friends, family, and coworkers to start giving away unsold bags for free to anyone in the neighborhood. This strategy, more specifically, is called product sampling, and is commonly used by companies to raise awareness and increase the chances of initial purchases.
In reality, the Flamin’ Hot line of products had the full force of Frito-Lay’s marketing department. Unfortunately for most entrepreneurs, they do not have a large corporation driving awareness for their newly launched product.
Contact us today for help with your new product development.
Gaia & Loki is a vegan restaurant that needed a three year financial projection for their business. Your Startup Guru worked with Gaia & Loki, through a partnership with the Institute for Entrepreneurial Leadership, to create an accurate and functional financial projection that will help them grow.
Gaia & Loki is a fantastic vegan restaurant in the heart of Jersey City, NJ. With a commitment of peace and purpose at every step, they source locally grown, organic ingredients whenever possible. Their chef has built a network of local food suppliers and small businesses that are equally as passionate about sustainable, ethical foods.
Contact us today for help with your financial projections.
Mesob Ethiopian Restaurant needed a three year financial projection for their business. Your Startup Guru worked with Mesob Ethiopian Restaurant, through a partnership with the Institute for Entrepreneurial Leadership, to create an accurate and functional financial projection that will help them grow.
Mesob Ethiopian Restaurant of Montclair, NJ is a favorite for both vegans & meat lovers with its authentic Ethiopian food. All their foods are prepared with imported Ethiopian spices blended daily. Their produce is always fresh and our sauces are prepared as ordered. The friendly staff and warm decor makes Mesob the perfect place to relax with family and friends.
Contact us today for help with your financial projections.
Not all jobs suck but if you hate yours, consider trying something else.
Contact us to help you become your own boss.
Fifth Season, among other vertical farms, chose to use robotics to cut on labor costs. Unfortunately, in addition the capital expenditures for automated systems, they ironically had to pay high labor costs for teams of robotics and software engineers.
AppHarvest, raised over $640 million, but reported net losses of $83 million through the first nine months of 2022, including a summer quarter that yielded a paltry $524,000 in net sales. The company’s total revenue for the first three quarters of last year was $10 million, but most of that was used on up to $7 million in severance payments when it fired two executives.
While on the topic of management; startups with little experience trying to figure out how to efficiently grow food with new processes is a challenge. A lawsuit filed by AppHarvest investors argued that the startup had failed to disclose problems and misrepresented its ability to succeed; the company said that its challenges were reasonable for “a young company with an inexperienced management team undertaking a massive farming endeavor for the first time.” At AeroFarms, only the VP of Sales had farming vegetable farming experience.
Traditional greenhouses in Mexico and Canada already grow a large percentage of the tomatoes eaten in the United States. In the Netherlands, greenhouses grow nearly a million tons of tomatoes a year, along with other crops, making the country a major food exporter despite its tiny size.
Dutch agriculture company, Agro Care, was one of the first tomato growers to supplement natural light with artificial light and has grown into one of the largest tomato producers in Europe, producing nearly 200 million pounds a year. Agro Care has greenhouses in Tunisia, Morocco and France. Because of their intensive electricity needs, they started their own small energy company. The CO2 generated is piped into the greenhouses where the plants turn it into oxygen.
With Dutch greenhouses, the overhead to run the farm is a lot lower because there’s no corporate offices. There’s an outsourced technical support staff team and outsourced IT team. The manager of the entire facility is also the head grower, who is also the person who pays payroll.
“There are many reasons why they’re doing it, but one of the reasons is because they know that Silicon Valley investors won’t invest in a farm, but they’ll invest in a tech company,” says Henry Gordon-Smith, founder of urban farming consultancy, Agritecture.
Relying too much on technology required greater capital investment for the vertical farms. The founders, being mainly from tech backgrounds reached out to the investors that they knew: Silicon Valley VCs. This resulted in financial partners that expected to tech company returns from commodity products. One founder vented in exasperation that many investors don’t really understand this space, and that they’re often drawn to the sexiest, most revolutionary technology, rather than more incremental improvements and business models that are already proven, like lower-tech greenhouses.
AeroFarms, launched in 2004, estimated in their May 2021 investor presentation, just $4 million in 2021 EBITDA-adjusted revenue—and $39 million in losses, and continued net losses until 2025. This means interest and depreciation expenses are incredibly high. Depreciation is from the massive amount of hardware and sophisticated robotics, and interest from high rates typical of VC investors.
“There are many reasons why they’re doing it, but one of the reasons is because they know that Silicon Valley investors won’t invest in a farm, but they’ll invest in a tech company,” says Henry Gordon-Smith, founder of urban farming consultancy, Agritecture.
USDA Farm Loan Programs give low interest loans at below 5% while venture capital interest rates (also) can be as high at 25% in addition to up to 50% of equity given up.
“I thought investors understood that this was a long game,” says Chris Cerveny, a horticulturist who was head of grow science at Fifth Season. “Now all of a sudden they want a return on their investment.”
It wasn’t all mismanagement that is hurting these vertical farms. There are several factors that are unavoidable and outside the control of vertical farms.
Building: Vertical farms rely on buildings whereas traditional farms do not. As such, vertical farms are expensive to build. Fifth Season, for example, reportedly spent $27 million on its Braddock farm, which could produce around 4 million salads a year. Therefore, owners have depreciation before operations even begin.
LED Lights and Solar Arrays: LED lights are expensive. Vertical farms often start growing leafy greens first because they require less light than some other crops, but buying the lights, and paying the electric bill, is still a significant expense. Even a small, 10,000-square-foot farm might have a lighting bill over $100,000 or even $200,000 a year. Running air conditioners and other equipment adds to the energy used.
Adding renewable energy outside can help—and reduce the carbon footprint that goes along with that energy use—but putting a few solar panels on the roof can’t cover the total amount of electricity needed. In a typical cold climate, a vertical farm would need about five acres of solar panels to grow one acre of lettuce. A hypothetical skyscraper filled with lettuce would require solar panels covering an area the size of Manhattan.
COVID: Many farms faced delays by pandemic supply chain issues, so they weren’t able to grow and sell as much as expected. Raw materials, packaging, growing trays, etc. are all inputs that were not always reliably available that disrupted operations for these farms.
Read the entire article from Fast Company.
Industry & market research and strategy analysis such as this is included in our business plans and pitch decks. Contact us today to find the best strategy for your business.
It takes great strength to attempt something, fail at it, and then try again. Failure is strength. Do not let fear limit your potential.
Contact us today to realize how strong you can be.
The WOCCON Summit is an invitation-only conference that brings together entrepreneurs, allies, and thought leaders to explore ways to help women of color advance on the grow-scale-exit trajectory. The Summit will share stories about the unique entrepreneurial journey of women of color, facilitate honest conversations about allyship, and propose solutions that can lead to systemic change.
While a growing number of Black and Latinx women-led startups crossing the $1MM threshold, the majority of Black and Latinx women-led startups raise significantly less than the average funded startup. For those who have not raised over $1MM, the median seed round raised by Black women founders is $125,000 and the median seed round raised by Latinx women founders is $200,000. As of 2020, the national median seed round funding for a startup is $2.5M. Source: ProjectDiane2020
Your Startup Guru is thrilled to attend the WOCCON Summit and committed to creating a more inclusive entrepreneurial ecosystem. Capital constraint remains a defining problem for the majority of Women of Color entrepreneurs. As our post, What Angel Investors Prefer discusses, there are considerable pre-money valuation and round size discrepancies when it comes to the various demographics of entrepreneurs. This highlights a disturbing flaw in the angel investment community.
