We Get By With a Little Help From Our Friends
Good mentors are essential to every startup. They provide guidance and wisdom when the path is rough, and support all of your successes. Jan Pajerski, Co-Founder and CEO of Grainful knows this very well, and offered us his insights on mentorship in our Incubator Q&A.
How did you find your most valuable mentors? How do you keep them engaged? And how do you add value for them?
The growth of a company from inception through to national player can be divided into a number of phases and having the right mentors at the right stage in a company’s evolution is critical to successfully navigating this journey. We’ve strived to build relationships where there is mutual respect, an understanding that our mentors’ contribution will change as the business evolves, and that our interests are aligned, i.e., they have skin in the game—to paraphrase Mark Cuban, you should think long and hard about taking advice from someone who doesn’t have to live with the consequences. Different mentors played critical roles in each major decision we made as a business.
Describe a pivotal turning point for your business: a decision, outcome, piece of advice, breakthrough etc.
Our journey started in Ithaca when a few locals came together to found the company. Jeannine and I have been on the front lines running the business; however, we’ve been fortunate to have great mentors from the start—they are part of the founding team and bring experience in grocery retail, food distribution and college food service.
Our vision was to give consumers convenient, healthy, and above all, great tasting food options. Admittedly this is general and our mentors pushed us to get product ideas out quickly to get feedback from the most important people on the planet—paying consumers. Through this iterative approach, we started making and selling frozen, steel cut oat breakfast cups made with locally sourced fruit juices. The product grew a loyal following; however, our mentors pushed us on whether our products were differentiated from what existed in the market and whether the consumer base that cared was large enough to grow a national brand. Demos, consumer feedback, and analysis—along with a dose of angst and sleepless nights—led us to determine that oats for breakfast wasn’t it.
Enter the first major turning point for our business—taking the amazing benefits of oats beyond breakfast to lunch and dinner by treating oats as what they are: a grain similar to rice that can be cooked like rice and treated the same way culinarily.
This pivot enabled us to differentiate from competitors and catch the attention of retailers as we expanded beyond Ithaca. The refinement process continues as our mentors are now pushing us on whether we are limiting our brand by focusing exclusively on oats. The angst is building and sleepless nights will ensue, but we’ll make the right decision given the great people around us.
What was your process for finding a co-packer? How did you know you found the right one? What did you look for or what kind of questions did you ask?
Just when we were starting to think that we had this food startup up thing figured out, we got a bombshell from our co-packer—they were closing and the production run scheduled at the end of the month wasn’t going to happen. Code red. After a deep breath, I got on the phone with our mentors, angel investors in our business, and explained the situation thinking that s#*! was going to hit the fan. It didn’t. The response was very calm and composed and we crafted a plan.
It turns out the inflated projections of early stage entrepreneurs are a benefit when your co-packer goes out of business. Our existing inventory gave us about two months before we would start shorting orders. Not a lot of time, but enough to get the job done. A mentor, with the requisite skill set and experience, jumped into action on the co-packer search. Through his efforts we found a partner that came through for us and we overcame an obstacle that could have been a fatal blow.
As we’ve gained manufacturing experience, built relationships within the industry and gained access to the mentors at CFI, we have a deeper understanding of our process and can ask the right questions to continually improve the quality of our finished products. The set of mentors currently providing insight is different than those that helped us find a co-packer in a pinch.
From a general standpoint, when searching for a co-packer, arm yourself with as much specific knowledge related to making products in your category as possible. The devil is in the details and if you understand the details, you’ll be able to determine whether a potential co-packer can meet your needs—irrespective of what they say they can do.
What was your process of fundraising? What was your strategy for finding investors and standing out? What’s your advice on pitching to investors?
There are many people better equipped to provide advice on the process, strategy, standing out, etc., so I’d like to just touch on how our mentors played a crucial role in the fundraising process. It’s common to hear that the many early investors don’t just bet on the horse, but they bet on the jockey—do they believe that the team can execute? If the team doesn’t have a track record, it’s often difficult to get the funding ball rolling and we’ve been fortunate to have mentors that not only believed in us, but put their faith in us by investing. Their commitment enabled us to tap into a broader network of people, which culminated in a successful financing.
We’ve put a lot of blood, sweat and tears into the business, but we wouldn’t be where we are without having mentors providing guidance at crucial stages. As the business grows our need for guidance will evolve and we’re always looking for people that can help. If you’re interested, let me know.
To learn more about Grainful, visit their website at http://grainful.com/