I was recently asked to give a talk on longevity at a food startup conference. Initially this seemed a bit ridiculous for Rude Health - we’ve only existed for 11 years. But then I realised that in the past few months I’ve come across at least five startup food businesses that have failed after about two years. What does it take to get past that point?
The first couple of years are fun. They are about bringing a dream to life. It’s not easy but it’s exciting and every step makes a difference. Each new listing in a single shop is a breakthrough. The money doesn’t matter (much) at the start.
Then there’s a shift. It’s impossible to maintain the frantic pace indefinitely. After the initial delight at growing there’s the realisation that adding one stockist at a time isn’t fast enough to create a viable business. Which in turn, means that scaling up production becomes a necessity, and paying yourself becomes a priority.
The two most obvious hurdles are scaling up production and building a team. Sometimes the reason nobody is filling the space you were hoping to fill is that nobody can make your product - and building your own factory may not be an option. We spent two years finding someone to make our granola. As for building a team, our leap was to take on an accountant, which meant acknowledging what the business needed that we couldn’t do, and then paying that person more than we paid ourselves. It paid off: he’s still here, and he’s one of our directors.
Then there’s support and advice. Our two-year crunch came in 2008, so we combined our own scaling up and management challenges with coping with a recession. Nick had the unshakeable belief needed to hold on to the vision when it seemed more like an unrealistic dream, and we had friends with business and life experience to offer wise advice and support.
One friend even offered to buy the business for a knockdown price. This offer would have given us the security of knowing our home wasn’t at risk. But it was a dismally low value we didn’t want to take, and the best possible incentive for Nick to pull out all the stops to make Rude Health survive and thrive without needing to take the offer. It was more than a generous offer, a brilliant bit of psychology, and one of the reasons Rude Health is still a family-owned company.
Camilla Barnard is co-founder and brand director of Rude Health