Serial food entrepreneur John Stapleton, [pictured above], co-founder of New Covent Garden Soup and toddler food brand Little Dish, angel investor, venture capital influencer, startup mentor and the founder of a new entrepreneurial education hub, the Stapleton Academy, gives Business Advice readers tips on what investors are looking for in food entrepreneurs.
Based on his experiences with New Covent Garden Soup, he outlines four main areas that investors will look at before committing funds, and they start and end with the customer.
1. A customer focus
If you’re developing a product for any customer base, particularly if it is a consumer goods business, you have to know who the customer is. Identify who the customer is and what problem you are solving for them. I call this the CUTE model, which stands for: Customer, Universe, Team, and Economics. In all cases, “customer” is where you absolutely need to start. Everything flows from your justifiable customer insight.
2. Standing out
At New Covent Garden Soup, we were trying to say: “Look, we’re making fresh soup.” People typically responded: “Ah, you’re going to compete with canned soup”. To which we would say: “Well, not really. If you repeatedly buy canned soup, you’re clearly happy with the quality of canned soup, and that’s ok.” Our fresh soup cost £1.10 back then, while a can of soup cost approximately 33p. So we weren’t actually ever proposing to compete head-on with those who bought canned soup.
3. An awareness of customer need
At the time, you couldn’t buy fresh soup in a shop. There were two locations where you could find it, but both had disadvantages. You could buy it in a restaurant, but that was relatively expensive, or you could make it yourself, which is not very convenient. So we wanted to make it more convenient and reasonably priced so consumers could buy it from a retail outlet. So that was basically our target market. That defined the customer need – fresh tasting and natural, convenient and reasonably priced.
4. Being specific about the target market
Like all entrepreneurs, we had to figure out who we were selling to. Sometimes I find that entrepreneurs think they’ve already got it all figured out. They try to raise funds for their venture and may be confronted by a smart investor who asks them who their target market is. It would have been easy in our case to simply say “everybody… everybody eats soup”! But if you try to sell to everybody, you end up selling to nobody. You have to be specific.
And this is especially the case when what you’re selling doesn’t exist yet. The risk is: “Is anybody going to understand this? Never mind, do they want to buy it?” So, be specific about who your customer is. Who are you going to sell this product to? What problem are you going to solve for them? What difference are you going to make to their lives? Whose life are you going to change?
Serial food entrepreneur John Stapleton, [pictured above], co-founder of New Covent Garden Soup and toddler food brand Little Dish, angel investor, venture capital influencer, startup mentor and the founder of a new entrepreneurial education hub, the Stapleton Academy, gives Business Advice readers tips on what investors are looking for in food entrepreneurs.
Based on his experiences with New Covent Garden Soup, he outlines four main areas that investors will look at before committing funds, and they start and end with the customer.
