Three years ago, Meghan Asha started a dinner series called FounderMade to bring together consumers brands and the entrepreneurs building them. As FounderMade West kicks off October 16 in Santa Monica, I sat down with Meghan to talk about her journey, what she has learned working with a new generation of consumer brands, and the biggest trends she sees coming in the world of consumer.
Dave Knox: Why do you think consumer brands are becoming so popular as new space for aspiring entrepreneurs?
Meghan Asha: There’s just so many interesting consumer trends that are happening. Because of where we are at with transparency in wanting to know what’s behind the brand, being able to actually give more of a voice to a consumer product and wanting to know the ingredients. Even the way we are consuming content, media, and products has really shifted because of what we’re doing with Instagram and digital. It’s ripe for many new consumer brands to come up in the market.
The consumer brands that are hitting their stride and doing really, really well are those with a very authentic mission behind them. And they’re taking market share from these bigger CPG companies, changing the market, and often getting acquired by the bigger companies.
Knox: CBD is going to be one of your focus segments for this October’s FounderMade. What do you think is really separating the more refined, trusted and successful brands from frankly, maybe the gold rush of others trying to flood the market of a hot trend?
Asha: I think it’s education. I think that consumers have so much information at our fingertips and we can sniff out a fraud and we can sniff out what is confusing. And so there are incredible, incredible CBD products out there on the market, and then there are the ones that remain to be seen. And I think there’s a lot of education that needs to happen with it. The best ones that I know in the industry are really making a point of educating their customer first.
They know that it’s confusing. They know that this whole CBD trend to super, super confusing to the consumer and everyone is on a bandwagon. You differentiate yourself from actually educating the population and creating almost an education platform around it.
Knox: So based on your experience at FounderMade, what do you think the common driving factors are among entrepreneurs with high-growth brands?
Asha: I think they are focused on number one, product and just having a really, really clear differentiating story behind their brand. So an example would be, RXBAR, they were very, very simple with what they were providing, right? It was very clear packaging, clear mission. They didn’t do 15 different things. They didn’t go into 50 different SKUs of powders and different things. They literally just stuck with the one thing that they were good at and just launched those different flavors.
When you’re launching a brand, do one thing really, really well.
In terms of when you’re launching a brand, do one thing really, really well. And then just drill down and then focus on sales and distribution and do it as well as you possibly can once you have the product type. Sometimes I feel consumer founders, they do too many things at once. And if you can just drill down on that one thing that you’re going to be known for, that will stand the test of time. And then you can build other things off of it.
But first stick to what your key differentiated product is because there’s so many products in the market. We have retailers come to us all the time asking what the new products are going to be this year. The ones that stick out are the ones that have a very clear thesis, are clear on what they’re giving to their customer, on what their mission is, who their customer is and how they’re serving them.
Knox: How does your venture capital background influence the advice that you share with founders of CPG brands in these crowded markets?
Asha: I’ve been on both sides of the table. I’ve raised money for my tech company and I’ve helped others raise money. I give the advice to founders of first find product market fit with what you’re doing, and then raise the capital.
Because even with FounderMade, this wasn’t supposed to be a business. I was juggling two jobs and did this because it was something that made my nine-year-old self very happy. And I would do this for free, and I just loved helping other people build. And we had term sheets, we had some investors that came to the show. They looked at what we were doing and they were like, “You guys sold out a trade show, and this is going to be huge. And this is your first show and you have standing room only. And this is crazy.” They gave me term sheets for the trade show, and wanted to do a big investment. And I said no, because I didn’t even know what it was. I hadn’t even figured out what product market fit was at the time.
But I think that you get distracted a lot of times if you take capital on, all of a sudden you get distracted with pleasing your investors versus pleasing your customers. The thing that I learned from bootstrapping FounderMade is because we didn’t have the resources when we started, it was actually better for us. We found our product market fit faster by listening to what our customers wanted.
After we surveyed all of our exhibitors at our shows, and they would come back to us and they’d say, “You know what, actually we just want retail distribution, find me Whole Foods. I’ve been trying to get to the east coast buyer for years and they just won’t take my call.” And so that helped us get to our product market fit by focusing on the customer.
And I know that if I had investors, I would have been thinking about the business a little bit differently, especially in the early stages. And of course there are times where you should take investors but sometimes you don’t need it. There are many ways to do it. There is no wrong answer. It’s all part of the entrepreneurial journey as a consumer, as a consumer founder and an entrepreneur.
Knox: What consumer brand trends do you think entrepreneurs and big companies should be aware of heading into 2020?
Asha: Look out for men’s grooming. We have some really awesome men’s grooming companies like Caldera + Lab, and Rugged & Dapper. Another trend is biohacking with brands like Awakened Alchemy or Upgrade Labs. And then there are the influencer founded types of brands as well, which are super, super interesting and huge, huge growth and marketing opportunity.
And then there’s ingredients like, there’s the Manuka honey trend, Moringa, and the Aronia Berry. And there is a ton happening in kids and wellness and functional beverages. There are trends galore happening in the consumer space.
Knox: Many big companies are becoming involved with the innovation ecosystem through incubators, accelerators, corporate venture capital, and even merger and acquisitions. What advice do you give to the entrepreneurs as they engage with these larger brands?
Asha: It’s super interesting because we love obviously working with the M&A people at the bigger companies, as well as their incubator and VC arms. The conversation that I have with a lot of consumer entrepreneurs is, “Well, we don’t want to talk to X Big Company just yet. We’re worried that they’re going to know or find out our secret sauce and then copy us.” But I think it’s actually great for them to early on establish relationships with venture funds and with the heads of M&A at these bigger firms, because it is a relationship business. And it’s great to be on their radar and it’s great to understand what winning looks like to them, and what they’re looking for.
I’ve seen this actually happen with a few of our friends and entrepreneurs where they ended up taking a ton of these different meetings for years and just have these friendly conversations. They check in, they talk about each other’s businesses. Some of the bigger acquirers try to copy them, but at the end of the day they ended up getting acquired because they had had those relationships. They were on forefront, and they were keeping these people updated on where they were at with the business.
It ended up becoming an actual real relationship where it was fruitful for both sides. So I think, there’s no harm in taking meetings, and there’s no harm in understanding what other firms, other VC firms, and what these bigger companies are doing. And it’s good for the entrepreneur on their end to information gather, just like the bigger acquirers as well.