Startup mentor John Stapleton believes corporate leaders should move away from D&I literature and learn more from the “lived examples” of female entrepreneurs
Has Mondelez boosted health snacks portfolio with grenade?
John Stapleton, a food business entrepreneur who built up and sold UK brands New Covent Garden Soup Co. and Little Dish, says: “The deal makes all the sense in the world. Grenade is in the sports nutrition category for sure, but it’s actually not that healthy compared to other, admittedly smaller, brands, which are reasonably healthy. Therefore, I think Grenade can join the Cadbury/Mondelez stable without appearing that much out of place. The target audience is different – younger and more edgy – so that will work well.”
It starts with Action : How to face uncertainity and develop courage with John Stapleton
John has created and grown a few successful consumer-led businesses over the last 35 years, both in the UK and the USA. He has learned hugely from both successes and failures and talks passionately and honestly about both. Having exited his third business, John now actively manages an Investor/Non-Executive Director portfolio, delivering value-added business growth advice, guidance and mentoring to businesses in early-stage and scale-up phase. Timestamps 06:24 - What were the childhood experiences that shaped you to be the person you are now? 11:42 - From your principles, what one stands out for you? 19:17 - For young entrepreneurs, what advice would you have for them? 31:16 - How can someone work on developing self-confidence to execute what they want. 33:50 - How do you get to the point that you have the courage of your convictions and have self belief when everyone is telling you is wrong 36:54 - What does your next best version of yourself look like? 41:38 - What action would you like the listeners to take?
How to turn uncertainty into a competitive advantage | GS1 UK
A global pandemic stalking the Earth and the potential of a no-deal Brexit hanging over the UK like the sword of Damocles upgraded into a bunch of laser-sighted chainsaws – times have never been so uncertain for British business.
Brave Hustler Series: Starting a Business During Uncertain Times: Covid19
How to turn uncertainty into a competitive advantage | Julian Roberts Podcast
Today I am interviewing John Stapleton who is a Entrepreneur, Speaker, Investor, Advisor and Mentor.
We drew upon John's 30+ years experience of being an entrepreneur to explore how we can turn the challenges we may face into our advantage. John knows we are in unprecedented times, and appreciates the magnitude we are all facing however he call us to use the uncertainty and adversity and to look for the opportunities, by having setbacks and challenges it cause you to be resourceful and creative than ever before.
Warburtons invests in The Artful Baker as Batch Ventures gets off the ground
Warburtons has backed biscuit producer The Artful Baker in the maiden investment as part of its Batch Ventures bakery innovation fund.
Predicting the Unpredictable: Operating in the UK in 2021
Covid-19 and Brexit are the backdrop for what looks set to be a challenging year for this operating in the UK. Andy Coyne reports.
DIAL Global Virtual Lounge alongside Marcus Saxton, John Stapleton & Richard Bandell
The panellists' respective experiences of the COVID-19 crisis and its impact on the different businesses/sectors that they are involved in
Advice on the best course of action for business leaders for managing the impact of the COVID-19 pandemic
The ever-growing case for Diversity and Inclusion within businesses, and the opportunity that COVID-19 has given us to advance it still further
What the future holds for businesses from an inclusive branding perspective
Schoolboy Errors to Avoid When Approaching Investors
Mistakes which often result in an “I’m out” from potential Investors
So you’ve got a great idea, a great product, a great proposition. You now want to create a great business. You have ambition and you want to grow. To do this effectively, you recognise you need investment. The problem is, being “business ready” is not the same as “investment ready”. You don’t want to let all that potential go to waste by making a few avoidable mistakes when approaching Investors or making your pitch. Here are the top 6 cardinal sins I’ve experienced over the years of early stage food and drink pitches. Avoid these and you’ll be well on the way to an “I’m in”.
1. The brand over-delivers and the product doesn’t
Those familiar with consumer-facing branding will know that a brand needs to capture the attention and imagination of the consumer and convince them to buy the product. Ultimately, the brand promises to the consumer that the product will fulfil their expectations – even better, exceed their expectations. The ideal situation is a brand which resonates with the consumer; it promises a solution to their problem and the product knocks their socks off. That will result in a repeat purchase (the whole point of building brand awareness in the first place). All too often it doesn’t. It falls flat.
In food and drink it’s amazing how many Entrepreneurs believe that a green message, an alluring brand purpose or a catchy founder back-story will sell the product. If the product doesn’t also taste good, the one initial sale which has been so expensive to capture will also be the last. Increasing rate of sale will be elusive no matter how much resource is pumped into brand awareness.
2. The Entrepreneur won’t listen
Some founders simply cannot handle advice. They claim to want the value-added ‘smart money’ that angels bring, but in truth they believe they have it all figured out and are not interested in what their investors have to say. There’s a way to weed out such people early on: ask them to justify some of their fundamental business assumptions during their pitch. Founders who don’t listen tend to get defensive and their answers either demonstrate this, or they suggest they think you’re not ‘getting it’.
BTW, I don’t think I have all the answers – in fact, there’s no way I should. The founder should know much more about their business than I will. In fact, I like push-back. But it’s got to be push back which is justified in either reality or insight, ideally in both. A well thought-through counter will get my support, rather than simply not listening.
3. The proposition is not scalable
Many times, an Entrepreneur doesn’t understand the commercial reality of setting up and growing a business. It turns out what they really want is to build a lifestyle business in which they plan to draw a decent salary and maybe pass it on to their kids. There’s nothing wrong with that, but it doesn’t constitute a proactive growth plan and it certainly doesn’t warrant much external investment.
And even when they do want to adopt a growth strategy, the initial motivation to develop the product and bring it to market is born out of frustration that the product did not exist before they created it, but the founder fails to seek out real consumer insight. They end up designing a product which is relevant only to themselves and by definition, only appeals to a narrow target group. And so you can’t scale – certainly not quickly and often not at all. For angels, the return on investment will be far too low – certainly in relation to the risk inherent with investing early on.
Finally, when everyone really is aligned on aggressive growth, founders sometimes fail to recognise that they can’t produce their product at margins that are attractive enough to ultimately allow the business to fund brand building from working capital, after the invested funds run out. This is another frustrating example of a business that won’t scale, no matter how hard you try. It’s frustrating because it can take you quite some time to figure this out!
4. The target market is not defined
Many founders believe they know exactly what their target customer wants, but haven’t ever actually asked them! This is similar to the Entrepreneur who designs the product around their own personal needs. Fine to start with, but you need to ask the target audience what they think of the product – do they like it, why do they like it, what would they change about it and ultimately, would they actually pay for it? This means, of course, you need to have defined your target audience in the first place. Don’t think you can sell to everybody. If you attempt to sell to everybody, you’ll end up selling to nobody.
5. The valuation is crazy
If I hear another pitch that claims to be the “next Fever Tree”, I’ll scream. There aren’t many things which are guaranteed in business but one is, you will very likely NOT be the next Fever Tree. They are so much the outlier that any comparisons are meaningless. Entrepreneurs who use this point of reference to justify crazy valuations aren’t doing themselves any favours. It’s unreasonable to expect Investors to invest at extremely high multiples or worse still, at high valuations when the business is still pre-revenue.
There exists, bizarrely, a slight contradiction here as we’re seeing a number of what I would regard as “crazy valuations” taking place recently in early stage food and drink rounds. There are a number of reasons for this, but speaking of guarantees, probably the only thing you can guarantee will follow an over-inflated valuation is a down-round at the next hurdle – and that serves no-one’s needs. If a business is at very early stage and therefore the risk is still quite high, the potential Investor should be viewed as more of a partner – and the equity the founder is prepared to surrender should reflect that.
6. Not knowing what you plan to spend the money on
Knowing what your “marketing playbook” looks like is an extremely valuable asset. This is usually developed by trying a few things and figuring out what works best and what doesn’t work at all. So much money can be wasted by not first figuring out the list of “dos and don’ts” for your brand and your category.
Therefore, you need to know how you would spend the money you are seeking. And there’s no shame in not knowing – but there's huge shame in not finding out. Typically, an Entrepreneur needs to invest in team and stock. But the really exciting investment will be in brand building. The more money being allocated to this, the more opportunity there will be to deliver a strong return on the overall investment. But this is only the case when it has been figured out what actually works. Otherwise, you’re asking the Investor to place a bet on your roulette wheel. Founders need to figure out a way to de-risk that gamble and that is called developing your “marketing playbook”.
Ultimately, how can you avoid these schoolboy/schoolgirl errors? Well, find someone who has industry experience who can help you through the various stages of “getting Investor ready” is a good start. This can be a mentor or even a (more experienced) co-founder who comes on board very early on. Then try to find “smart money”- someone like an Angel Investor with relevant industry experience who can also bring value-added input to complement their investment. Finally, try to get professional help and support to ensure you spend the investment wisely.
One excellent way to achieve this can be to join an accelerator. Not all accelerators are the same, however. Best to find one who speaks your language and understands the pressures of growing your own business. Find one run by Entrepreneurs, who have been through the same journey as you, and will have you and your business best interests at heart. At Mission Ventures, our programmes are run by Entrepreneurs for Entrepreneurs. With over 80 years of industry experience and more than £50m of exit values from brands we’ve launched ourselves, we believe we can help. Check out our programme opportunities and get in touch to learn more, and to hear about upcoming accelerator programmes.
Lastly, Good luck!
John Stapleton, Director and Co-Founder of Mission Ventures.
Guest blog: Julia Kessler, Nix & Kix
At Nix & Kix, our mission is to remove the stigma and boredom that surrounds soft drinks.
For too long, soft drinks have been an ugly sister to alcohol, to functional drinks and to fresh juices. There’s been a lack of imagination, a lack of experimentation and a lack of passion. That’s the problem Nix & Kix is here to solve.
We’re here to give soft drinks a new name. And some added kick!
Our Story
Back in 2004, Kerstin and I had a chance encounter when we sat next to each other on a plane. Striking up a friendship we quickly bonded with our entrepreneurial spirit.
After finishing university and working a few years, we went travelling and exploring different cuisines and cultures. Chillies got our attention as they are a part of everyday diet in many parts of the world due to their flavour and health benefits.
In 2014 we set up a lab at the back of a small shop in Shoreditch to experiment with different flavour combinations with the goal to change the mindset around soft drinks for the better. We wanted to create drinks with exceptional flavour, great refreshment and a host of chilli-driven benefits that can actually make your day.
Working with Investor and Director, John Stapleton
Kerstin and I first met entrepreneur, event speaker and investor, John Stapleton at the Speciality and Fine Food Fair where we immediately clicked. John was excited by our mission and it went from there.
Over the last few years we’ve learnt so many valuable lessons from John which he acquired throughout his career. It’s clear John learned hugely from both successes and failures and he talks passionately and openly y about both, whether in an event forum or when interviewed. John has helped us with his experience building his own FMCG businesses. John now helps other early-stage businesses grow, either as an advisor or an investor.
John’s keynote topics include:
Embrace Adversity and Learn from Failure
Have the Courage of your Convictions
Our Top Tips
Our top tips for fellow entrepreneurs and start-ups which John emphasises on a regular basis, is that authenticity in business is key. Understand what attracts the consumer to your product proposition and make sure you have clear KPIs for your business. Ultimately, the most effective way to be successful in business is to allow yourself to be yourself.
To find out more about Nix and Kix and our story, check out our website here.
Warburtons partners with Mission Ventures to support next generation of baking businesses
Brand accelerator Mission Ventures has launched a joint venture with leading bakery brand Warburtons to support businesses producing innovative bakery-led products.
The JV – called Batch Ventures – is designed to support SMEs and startups that either exist in spaces Warburtons is already present, or in complementary ones where the baker might want to expand, Mission Ventures director and co-founder John Stapleton told The Grocer.
Warburtons forms venture to back baking start-ups
UK’s Mission Ventures and Warburtons launch Batch Ventures to support bakery businesses
Batch Ventures combines equity funding with hands-on advice from the business accelerator and the UK bakery giant.
How to Sell Your Food & Beverage Brand and Maximise Value | John Stapleton
Firstly, you will need some investment
If you have an ambition to build a national/international FMCG brand and exit in approx 5 years, you need to invest ahead of the curve to land-grab distribution and drive brand awareness. (BTW, everyone starts off thinking 5 years and often end up selling (if ever) about 10 years in. I did… twice!)
You will certainly need more cash to effect this investment than your business is likely to throw off - especially in the early years. Therefore, you will need to raise funds. Definitely bootstrap initially, right up to when you've got your product tested, target consumer properly understood and your marketing playbook figured out. Then raise funds to accelerate growth with your exit firmly in sight.
Your growth trajectory can be significantly accelerated by "smart money" in the form of value-added input and contact leveraging. An industry-relevant accelerator is one good way to achieve this, but beware, try and find one which is driven by entrepreneurs, they will know your mind and be able to relate to your challenges better. Symbiosis between shareholder (or accelerator) and entrepreneur can be an effective way to drive growth and result in a mutually beneficial exit. One important point; make sure you achieve alignment with your (main) shareholders re your exit plan.
Once you have a plan, how do you maximise exit value?
Get help – engage with one of the specialised corporate advisers in the Food & Beverage space. You wouldn’t try to sell your own house yourself so don’t sell an even more valuable asset – your company – without professional help.
Build your business in the context of what a likely suitor will want to see (whether a trade sale or to private equity).
It’s all about growth
The standard rule of thumb is that a business needs to have reached revenues of £8.0M - £10.0M to be interesting to a potential trade buyer. However, this is only a rule of thumb and there are good examples (especially over the last 2-3 years) where Big Food has looked with interest at businesses below £10.0M. However, to attract interest, at any revenue, you need high growth.
What sort of growth?
Revenue growth is the most important of all. Above 50% YOY is a golden benchmark (and as a result, the exit multiple is more likely to be > 2.0 x Revenue)
But gross profit should really be > 30% (or this is clearly demonstrable in short order). Average rate of sale needs to be increasing too and ideally in the top quartile of your category. This can be tricky if you are growing distribution and adding lots of new (potentially less-optimal) stores. (Note: Low rate of sale (RoS) and revenue growth based on distribution alone is a red flag.)
What about innovation?
Strong new product development (NPD) which moves quickly into RoS growth (and doesn’t cannibalise from existing SKUs) is good. NPD that fails is worse than not doing any, as it can undermine confidence and may result in retailer buyers questioning every new product you subsequently release. So, be selective and be as sure as possible it is going to work. A trade buyer will likely be more interested if you are doing a specific range very well and are smashing it out of the park, vs doing 5 things reasonably well and they are all growing at an average pace.
Do I expand overseas?
Almost always, it is better to choose one overseas territory and execute well in this market rather than spreading broadly over a few separate (and, worse, strategically disconnected) markets. Success in one market demonstrates an understanding of that market and development of a “marketing playbook” to successfully drive trial, brand awareness and grow RoS.
Being meaningful in one international market (e.g. £1.0M) is better than being irrelevant (e.g. £100K revenue p.a.) in 10. The later only demonstrates that you can flog stuff to distributors. The former demonstrates that your brand actually has the capability to engage both consumers and retailers. A trade buyer will only give you credit for (and therefore include in the price) international reach if you are present in a meaningful way.
Multiple of revenue or of EBITDA?
Basically, just focus on revenue. If you really want to sell in 5 years, a successful growth strategy is all about revenue growth. However, the business also needs to have a healthy gross margin (see above).
If you sell the business in Year 5+ no buyer will care what your EBITDA was in years 1 to 3. You won’t get any credit for making £250K EBITDA in Yr 2 of your existence. And you don’t need to. However, you will receive lots of credit (and it will be reflected in the price) for having higher revenue at exit. Therefore invest (wisely) in initiatives which will deliver revenue growth.
Second-guessing what a suitor might want…
Some trade buyers will prefer A, some will prefer B. Don’t however, chose A over B based on what a potential suitor might prefer. Choose it because it is right for the business. Ideally, whatever you do, if you can do it better, cheaper or in a more innovative way to the competition, that will provide a USP/ competitive edge. When the time is right, the suitors will ultimately take care of themselves.
COVID-19: Business readiness in tough times & preparing for coming out the other side (webinar)
Being prepared is the first step to securing your business' future once a crisis hits. Failing to have a plan in place could be the difference between job cuts - even the business' demise - and a long-term, bright future.
As co-founder of New Covent Garden Soup Co and Little Dish and a seasoned investor, John Stapleton is an experienced entrepreneur who places a great deal of importance on both planning for a crisis and on developing a competitive advantage for life after the crisis blows over.
CHAIR VIEW: In conversation with John Stapleton
Portfolio private equity Chair John Stapleton brings a lifetime of knowledge and experience to his new role. He talks to Rachel Bridge at Drax about food, investments and communication
https://www.draxexecutive.com/blog/features/2019/07/03/chair-view-in-conversation-with-john-stapleton/
Coronavirus and SMEs: a survival plan
Food business entrepreneur John Stapleton, who built up and sold brands New Covent Garden Soup Co. and Little Dish, believes there are a number of steps SMEs can take to help them survive coronavirus.
Business Leader Magazine Roundtable brings together Leaders to discuss Covid-19 impact
The business world may have changed forever because of COVID-19. But how are different sectors reacting and what do leaders think the future will look like?
To answer these searching questions, Business Leader brought together a high-calibre panel of business leaders.
The aim of the debate was to look at how business leaders are responding to the challenges presented by COVID-19.
The panel:
Dr Oliver Prill – Tide Bank
Paul Beach – Arbuthnot Latham
Asma Bashir – Centuro Global
Johnny Palmer – SXS Events
Paresh Modi – Vodafone
Andrea Reynolds – Swoop Funding
Gary Fletcher – Gallagher
Jackie Fast – entrepreneur and investor
John Stapleton – entrepreneur and investor
Pat Lynes – Sullivan and Stanley