When you land a deal with a client as large as Starbucks, the opportunity can be both a blessing and a curse. While you'll want to devote time and resources to nurturing that relationship, you can't let the size of one customer keep you from neglecting other areas of your business.
That's according to Kara Goldin, founder and CEO of flavored-water company Hint Water. Goldin learned this lesson the hard way in 2012, when Starbucks suddenly decided to stop carrying Hint products. Goldin shared that story and others from her recent memoir, Undaunted: Overcoming Doubts and Doubters, on Thursday in a private Inc. Masters forum Q&A, where she also answered questions from entrepreneurs about overcoming business obstacles.
Because Starbucks accounted for 40 percent of Hint's business, the loss felt like being "punched in the gut," Goldin says. Since then, she's advised entrepreneurs to create options for themselves by developing multiple revenue streams. It's simply too dangerous to have so much of your business's fortunes tied up with one company, she says, especially when that company can sever ties without warning.
There was a silver lining to the Starbucks ordeal, however: An Amazon buyer, who had tried Hint's products in Starbucks, got in touch about adding Hint to Amazon's grocery business. The success of those online sales eventually prompted Hint to start selling water on its own website. Now, direct-to-consumer sales make up 55 percent of Hint's business, according to Goldin.
Hint's diversification strategy is still paying off. Before the pandemic, 15 percent of the company's business came from supplying water to the offices of big firms like Google. In March of 2020, office closures caused that revenue stream to dry up. Anticipating that it might not come back, the company focused on direct-to-consumer sales to make up the difference. It worked: Hint's direct-to-consumer business has tripled since March.
Goldin says that keeping your options open will help you deal with any challenge, whether it's a vendor relationship or a pandemic. She also tries to never let tasks or problems pile up to the point that she gets overwhelmed, she says, adding that she keeps her to-do lists short.
"I take on just a couple of things every single day, so that I don't beat myself up about not being able to accomplish everything."