OWNER'S MANUAL

The Zero-Compromises Product Strategy

When Daniel Lubetsky founded Kind Healthy Snacks, he knew he wanted healthy, tasty, convenient, and profitable products. Here's how he made it happen.
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Even for entrepreneurs with plenty of resources, tradeoffs are usually a way of life: What’s great for the bottom line isn’t good for the environment. Aim for ultrahealthful and you’ll rarely get delicious, too. At some point, you must make compromises--this or that, because rarely can you do both. Daniel Lubetzky founded Kind Healthy Snacks using a different approach: He replaced the word or with the word and.

Like many an entrepreneur, Daniel Lubetzky saw a problem and decided to fix it. Most snack and energy bars, he thought, looked (and tasted) like heavily processed slabs of unrecognizable ingredients. It didn’t have to be that way.

Instead of letting assumptions steer him into making compromises (“or” decisions), he set out to accomplish a number of “and” goals with his products: healthful, tasty, convenient, profitable, and purpose driven. Following Lubetzky’s “and” philosophy, sales of Kind’s fruit and nut bars have gone from $1 million in 2004 to more than $125 million in 2012. He says the bars’ tag line (“Do the kind thing”) has inspired customers to log more than 340,000 acts of unexpected “kindness” on the company’s website. Lubetzky calls it a product line without compromises.

Well, good for him, you say. It doesn’t work so conveniently for entrepreneurs in the real world, right? Well, sticking to his principles wasn’t so easy for Lubetzky in the beginning, either.

Or rather than and is an easy trap to fall into because of the way the brain relies on mental shortcuts to make quick decisions--what psychologists call heuristics. Sometimes the assumptions built into those shortcuts are valid, and sometimes they’re not. (When they’re not, they can create opportunities for entrepreneurs.)

When Lubetzky decided to create low-sugar bars, he assumed he would have to make compromises--either use sugar alcohols, which can cause digestive discomfort, or artificial sweeteners.

“Our goal had always been to make all-natural foods with ingredients you can see and pronounce,” Lubetzky says, “and I realized months into the project that we simply weren’t doing the right thing.”

So Kind experimented with spices such as ginger, cinnamon, and chili, and finally found its low-sugar flavor combinations. “It took us an extra year,” he says, “but it was definitely worth it: Dark Chocolate Nuts & Sea Salt bar is the fastest-turning SKU in the category.” That bar has only 5 grams of sugar.

A year ago, Lubetzky’s team had a different challenge: how to make chewy and crunchy granola bars, a seemingly contradictory goal. They solved the problem with better and more expensive packaging to seal in the precise texture.

Every founder at some point believes he or she faces an impossible balancing act--a choice between quality and profit, or business goals and social impact. But if you focus on the long-term impact of a decision, you may find it doesn’t have to be an either/or choice. “When a social objective and a business objective are built into your business model,” Lubetzky says, “those goals don’t conflict; they strengthen each other.”

Here are Lubetzky’s rules for no-compromise products:

1. Bake your goals into your business model. Even if some of your aims are in tension, a goal you don’t set is a goal you cannot achieve.

2. Identify every assumption. The innovation process starts with recognizing the usual thinking and methodologies so that you can then find ways to challenge them.

3. Ask the right questions. Repeatedly asking, “Why?” and “Why not?” is the antidote to incorrect assumptions, especially if an assumption that was once valid is no longer today.

4. Focus on the future. Shortcuts are tempting when you manage for short-term results. Instead, let long-term goals guide you.

View compromise as the last resort. “Or” decisions are the easy way out. Challenge your employees to find a way--they will be better for it. 

IMAGE: Poon Watchara-Amphaiwan
From the Dec. 2013/Jan. 2014 issue of Inc. magazine

JEFF HADEN | Columnist

Jeff Haden learned much of what he knows about business and technology as he worked his way up in the manufacturing industry. Everything else he picks up from ghostwriting books for some of the smartest leaders he knows in business.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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