3 Startup Tips to Get Your Idea Off the Ground
Harvard MBAs are not known for walking away from a big pile of money. But that's what Nicole Ledoux did after Rob Dalton -- her then-boyfriend (and now husband) -- nearly died on their fourth date. Today, the two are married and running a startup they founded from the ashes of Dalton's near-death experience.
As Dalton, an evening MBA student at Babson College and a coxswain on the Northeastern crew who works at a high tech company, explained in a September 25 interview, "My wife, Nicole Ledoux, grew up on an 88-acre farm. Nicole and I were married this past July, and on September 22, we moved from one major life event to another with the launch of our company, 88 acres (88-acres.com) -- named after the amount of land in Ledoux's family farm -- that creates healthy snack foods free of the top eight food allergens, that are crafted with simple ingredients and designed for all to enjoy."
The love story and the near death experience are tied together. As Ledoux explained, "I grew up on a farm that grew produce. I left the farm for UMass Amherst, went to Boston and London then earned an MBA from Harvard Business School in 2008 and started a career in finance - [until February 2012, I was an interest rate options trader at State Street Bank.] Three years ago, I met Rob."
1. Be passionate about the mission.
To get a start-up off the ground, you must be willing to work about 80 hours a week with little pay. Doing that is impossible without deeply felt passion that the work is vital to your well-being and that of the world that you aspire to change.
88 acres’ ignition gives new meaning to the idea of start-up passion.
"He was the first person I had met with food allergies and on our fourth date, he almost died," said Ledoux. "He ordered a meal and the restaurant said it had no nuts. The meal had nuts and his reaction was almost immediate. We were in Boston and I drove him to Beth Israel hospital at 80 miles an hour. They gave him prednisone and epinephrine."
Dalton chimed in, saying, "Two good things came out of it. First, Nicole met my parents. Second, Nicole and I had our first experience with food allergy reactions. It made us question what were the food options that were safe and that we would enjoy. The next morning I woke up in her place and heard banging and cabinets slamming. Nicole was pouring out walnuts, pistachios and almonds -- ridding them from the house."
Not only was Ledoux passionate about Dalton, she walked away from a lucrative finance career to start a company that would make his life better.
2. Make sure people will actually buy what you sell.
Passion is a good place to start - but a business cannot survive without paying customers. 88 acres found an unmet need and used prototyping to find paying customers - and did research to discover that there was a sizeable potential market for its product.
Ledoux -- who is 88 acres' CEO -- described her thinking about getting the company off the ground. As she said, "I started researching what I could feed him that would keep us safe. I found that there was a lack of safe foods and that the ones that were safe were made with quality as an afterthought.”
"We were training for a half Iron Man, and Nicole started tinkering with peanut-free, tree-nut-free granola bars. We passed them out to friends and they passed them out to people they knew. And we built a brand following, and realized we were on to something," Dalton said.
And there is a big market opportunity for their product. According to Dalton, "Fifteen million people have food allergies in the U.S., and millions more suffer from food sensitivities. Our products are free of the eight allergens that account for 90 percent of allergic reactions."
3. To prove the business model, raise cash without selling equity.
When you are trying to see whether you can turn your passion into a business, avoid selling equity at all costs. Raise cash through other means - such as using your savings, borrowing against your home or credit card, winning business plan competitions, or participating in crowd funding sites in which you exchange a promise to deliver your product in exchange for cash.
88 acres used some of these strategies.
According to Dalton, “Among others, we won a Babson business plan competition that gave us $20,000 in cash and last summer, we got feedback from celebrity chefs -; using the feedback to make hundreds of bars. And we have been methodical about our strategy -; developing a business plan and talking with entrepreneurs who have experience in the consumer packaged goods industry."
On September 22, 88 acres launched a Kickstarter campaign, which is an online method of raising funds for a startup that gives "investors" a chance to support the company while in return for its product and other goodies like T-shirts. As Dalton explained on September 25, "We just reached our $20,000 goal."
Meanwhile, 88 acres is operating out of Boston accelerator, MassChallenge.
Your start-up may not be able to match the passion underlying 88 acres - but what it has done so far provides three valuable lessons.
Strategy consultant, startup investor, teacher, corporate speaker, pundit, and author of 11 books, Peter Cohan has invested in six startups, three of which were sold for a total of $2 billion. Before founding Peter S. Cohan & Associates in 1994, he worked with HBS strategy guru Michael E. Porter.