Great content @ WeWork Labs CPG event for Startup Founders!
Got a chance to meet up with Caleb Gandara, Dovi Vogel and the amazing team at WeWork Labs for their CPG expert event earlier this week. I have a lot of CPG startup clients and I learned a ton.
Here are some bullet points, fun facts and anecdotes from the evening (all startup founders can learn from them):
Work to turn a profit as fast as possible. The days when you can acquire customers at a loss are gone. Investors want to see your CAC have a positive impact on bottom line.
Time frame for an exit is getting earlier. If there is a fit, opportunities for exits can come with companies doing as little at $1M a year in revenue. Another reason to focus on the fundamentals as early as possible.
Brand is no longer a powerful differentiator. The time when you could build a sustainable business where the only differentiator is your brand is closing fast, if not gone already. Your product itself should add value and delight your customer. Personal touches with customers matter.
Get smarter on your social media buying strategy. Social advertising costs have risen, but the top 200+ advertisers on Facebook have seen their average CAC go down. If you hustle and speak to your customers through proper segmentation, creating unique advertising assets, A/B testing etc., there is still plenty of opportunity.
Keep tight inventory turns. Turning over your cash 4 times a year at 30% margins is more profitable than turning it over twice at 50%. Plus, you are a lot less leveraged if any unexpected challenges hit.
Amazon isn’t sexy but it’s a great distribution channel. Amazon’s massive market share creates a powerful channel for driving revenue, and there are ways to amplify impact on that channel. Definitely give Amazon a look if you are not there already.
Know the challenges of selling in big box retail. Most, if not all, will have an option to send back any excess inventory after a certain amount of time (usually 120 days), leaving you stuck with inventory you can’t sell and hampering cash flow.
Retailers are working with small companies to address challenges to selling in stores. For example, Facebook has been running with multiple retailers that purchase inventory directly so small sellers don’t have to worry about taking back excess product. Keep your eyes and ears out for retail pilot programs, there could be a huge opportunity there. Kohl's does this program too!
If you have any questions about this event or want to get in touch for your #Startup email me!