When it comes to running a business in a way that helps people, Hamdi Ulukaya, the founder of Chobani, actually backs up his talk with action. Last year, Ulukaya made headlines when he handed 10% of his company over to his workers. He hasn’t stopped there. He’s also created the Chobani Food Incubator, which selects early-stage food companies to partner with to help them grow.
“We believe nutritious food shouldn’t just be for the select few who can afford it, so the whole motivation is to help bring better food to more people,” says incubator director Jackie Miller. “We look for companies that align with our values, then we invest in them and give them access to mentorship and resources.” On top of practical advice, Chobani gives the young companies $25,000 without taking an ownership stake in return.
Sure, not every entrepreneur out there plans to go into the food industry, but Miller’s advice for startups is helpful for anyone who wants to meld a business idea with achieving social progress. So we spoke with her about how to approach a business plan at the beginning, balancing profit with social impact and the qualities that make for a successful startup founder.
What’s the biggest piece of advice you give to entrepreneurs who want to start a pro-social business?
First, you have to think: What is the problem in the world you want to solve? Why does the world need your product? Not so much “It tastes good and I got good feedback on it,” but if you want to create a truly impactful socially driven business, start by thinking about and talking to the people the problem effects, then you start to understand what the solution looks like. Don’t assume you have the solution ready to go. If you’re motivated by how will my product make the world a better place, then you start to understand the challenges. What are all the things that affect this problem, and how do I intervene?
If you’ve identified the problem and think you have a product that helps solve it, what’s next?
Once you have that, get out there and start talking face-to-face with customers. If you’re a consumer-focused company from the get-go, that’s really beneficial. Taking into account that early feedback from them will help you iterate. Also, those first stores that carry you are taking a chance on you, but you’ll also learn from them and help you sell into new accounts. Sales is the lifeblood of any early stage growth company.
How do you balance a social mission with still being profitable?
What’s fascinating to me in the social enterprise landscape right now is how important it is more and more to consumers. It’s becoming baked into the idea stage onward. It’s a promising and exciting trend. For instance, Chobani’s whole M.O. is the idea that there is something powerful and socially impactful in improving people’s lives with better food. There’s a social enterprise model where if you do more and grow, you’re doing more social impact. We’re always working with purpose-driven companies where it’s not just an afterthought, where the point of their company is to make an impact.
While it’s powerful to do something like donate a percentage of your proceeds, what’s more exciting to me than that model is something that’s baked into what you do. Take a company like Misfit Juicery — they use misfit fruits and vegetables and scraps and turn them into cold-pressed juice. Their whole mission is to fight waste. They sell more juice, they fight more waste. It’s something whose growth goes hand in hand with their social impact. Or a company like Banza — they make chickpea pasta. It’s taking a staple food and making it healthier, so if they grow, they bring a healthier staple food to more people. That’s the trend that’s really exciting to me, to see companies that are problem-oriented. They’re really motivated by a problem they see in the world, and they build a company and products to serve as a solution.
You’ve worked a lot with startup founders. Are there qualities you find make some more effective than others?
We’re looking for founders and co-founders with a solid balance of skill sets. It’s important for them to know what they don’t know and be good at finding mentors and advisers and building a team of like-minded people who complement their skill sets.
Finding a good mentor can be difficult. Any tips on connecting with one?
If you’re in the food business, start by going to events and trade shows and ask a lot of questions and start networking. Entrepreneurs who are successful are good at finding people who know more than you and picking their brains. Find others who know more than you and pick their brain.
How can you ensure that you have the right investor to partner with who won’t derail the company’s social mission?
You have to really know who you’re getting to grow with by communicating early and often. You need to have conversations up front to make sure you’re on the same page. Then you need to check in regularly with them about one-year goals and five-year goals.- by Jeremy Repanich - Good Money