A recurring Shark on ABC's Shark Tank, Kind Snacks founder Daniel Lubetzky recently announced his investment in egg-white based chips Quevos, founded by childhood friends and partner entrepreneurs Nick Hamburger and Zack Schreier. Lubetzky beat out a compelling offer from Shark Kevin O' Leary to walk away with the deal.
While Lubetzky has now grown Kind into a multi-billion-dollar health and wellness brand, his own foray into the food business began when he was 25, just a few years older than Quevos's founders. I recently connected with Lubetzky's investment office, Equilibra, which shared a few pieces of advice Lubetzky has for entrepreneurs just beginning their journey.
1. Don't build just to sell (your business)
Lubetzky recalls that the younger you are, the harder it is to envision the future, but urges entrepreneurs at all stages of their journeys to prioritize building long-term enterprise value.
He shares that when Nick and Zack came on Shark Tank, they had a clear rationale for wanting to sell their business in a few years. While acknowledging that every entrepreneur must be true to their own journey, Lubetzky promotes the merits of working without an aggressive exit timeline in mind.
He counsels that intentions to sell quickly often force brands into becoming short-term-profit-oriented; they may not make decisions that support their customers' long-term relationship with their brand and product.
He warns that short-term orientation can have the negative consequence of pushing entrepreneurs to allow the ends to justify the means, so that it may be more tempting to cut corners or lower standards just to meet short-term profit targets. For example, while creating a cheaper product could boost sales in the short-term, it may also erode consumer trust and loyalty in the long-term, Lubetzky advises.
2. Beware of fads
Part of creating for the long-term means differentiating between tapping into a trend versus building on a fad. While fads may present a meaningful communications wave to ride, Lubetzky notes that they should not influence the direction of your entire brand.
Lubetzky contrasts the coconut water, vitamin water, and keto crazes, which he sees as fads that are ephemeral and create a shaky foundation on which to build a brand, with more sustainable trends like "plant-based foods" and "real food with real ingredients" that have underlying, evergreen truths.
Lubetzky emphasizes the importance not just of value proposition endurance but also authenticity. He reflects that jumping on the bandwagon of a fad is one form of being unoriginal--and the marketplace typically does not reward more of the same.
3. Innovate with restraint
While Lubetzky tells us that new product innovation has always been one of his favorite parts of his role over the years, he confesses that he often has to remind himself to exercise restraint. This was a lesson he learned the hard way through his first company, PeaceWorks, which he says expanded its product offering too quickly. According to Equilibra, Lubetzky says of this experience, "We were doing well with our core line and then we got overeager. We spread ourselves too thin, too fast, and the quality of our newer products suffered as a result. We had to quickly rein it back in to earn back our consumers' trust."
Lubetzky says that launching new products can feel like an obvious path to scale but cautions that new items should only be pursued if they are as good as or better than the existing items in your portfolio or than the leading items in the category. He says that while it's important to abandon yourself to the creative process, creativity should always be followed by critique. Equilibra shared this piece of advice from Lubetzky: "When you are about to release a new product, poke every hole in it before you determine whether to take it to market."
Whether embarking on a new entrepreneurial venture or continuing to build an existing dream into reality, Daniel Lubetzky's lessons to his younger self give today's founders a new set of guideposts to consider.