Starting a food business is difficult by any standards; starting a food business with no prior experience in the industry could be called downright crazy. But don't tell that to Aihui Ong. She's the founder and CEO of Love with Food, a San Francisco-based food subscription service that delivers all-natural and organic snacks to customers' doorsteps each month.
Ong, who had no previous experience in the food industry except for being a self-professed foodie, started her company in her living room in 2011. Three years later, she has a staff of 15 and has raised more than $2 million in funding.
The key to her success, among other things, has been knowing whom to ask for help.
"I'm very picky about whom I look to for support," Ong told Business News Daily. "If you haven't walked in my shoes, I don't seek your advice." She also has some other advice for entrepreneurs looking to jump into a new business, with or without experience.
Find your passion
Prior to starting her company, Ong worked for a decade as a financial software engineer earning a six-figure salary but found herself restless and dissatisfied with her career. While helping a friend sell her gourmet stir-fry sauces at farmer's markets, Ong began to learn about the food industry. She saw firsthand how difficult it was for small and specialty food companies to secure distribution and get on supermarket shelves.
Finding ways to connect food producers with customers became her driving force and planted the seed for what would become Love with Food. "A lot of tenacity is what got the company off the ground," said Ong, who taught herself Ruby on Rails, a programming language she used to code her website. "I found out what skills I needed to make this work and made sure I had them." [Entrepreneurial IQ: 10 Questions to Test Your Business Smarts]
Do the research
A study from the Startup Genome Report, which analyzed data from 3,200 tech startups, found that the gender and age of founders, previous entrepreneurial experience and company location have little impact on a startup's chances of failure or success. The study also found that the majority of Internet startups fail because of premature scaling, which involves growing a company too quickly and spending money beyond the basics without leaving wiggle room to readjust or reimagine the business if necessary. On the other hand, companies that scale properly attract more customers and capital, hire more employees in the long run and grow 20 times faster.
Ong avoided premature scaling by taking the time to immerse herself in her market prior to launching her business. Since she did not have a background in the food industry, Ong spent months attending industry events, such as the Fancy Food Show, in order to connect with food companies. She traveled from booth to booth, asking questions, and found that most people were responsive and willing to entertain her inquiries.
"I was shameless, but I'd rather go to bed knowing I got rejected than failing to have asked a question," Ong said. "Entrepreneurs love to help each other out. They know how hard the journey is."
Ong also interviewed food producers and vendors at dozens of farmer's markets. She noticed that they gave away samples, but often people just took them and left without providing feedback on the product. "I recognized that vendors needed concrete customer data to see what was working and what wasn't," Ong said. "I built features into my website to address their needs."
Listen to the customer
Ong first established a Facebook page, where she posted recipes and promoted interesting products and unique snacks. Eventually, the page grew to have a following of 60,000 fans. She then launched a website, where customers bought food products through a daily-deal email list. But she realized that this model was not working.
"I reached out to customers and found out that when it came to food, people needed a more experiential interaction in order to make a decisive purchasing decision," she said. "Shopping for food online is not like shopping for shoes. People won't buy food online if they're unsure if they will like it."
As a result of customer feedback, Ong recreated her website as a subscription snack service where customers receive monthly food samples. They then can return to the site to buy additional products. The site also became a marketing and research tool for food companies. Customers are invited to earn points for free goodies by reviewing the products in their monthly boxes.
"Collecting data and customer insight this way is so much more effective for small food companies than traditional focus groups," Ong noted. Brands can then purchase this information and use it to tweak a product's taste, texture, packaging or a range of other features.
Ong's ability to modify a core aspect of her original business model — known as pivoting — was necessary in taking her business to the next level. In fact, the Startup Genome Report found that startups that pivot once or twice raise 2.5 times more money, have 3.6 times better user growth and are 53 percent less likely to scale prematurely than startups that don't pivot or pivot more than two times.
Even before starting Love with Food, Ong attended events presented by tech leaders, such as Women 2.0, an organization that provides content, community and conferences for women innovators in technology. "I volunteered at the conferences, since I couldn't afford to attend them," Ong said. "I offered my expertise while filling up my Rolodex with contacts." By following up with these contacts, Ong developed a whole community of reliable sources to reach out to when she needed help with engineering, fundraising and marketing.
Ong also fosters relationships with founders of other startups. "Silicon Valley has so many founders that it's typical to see the same people at many events. It's a really welcoming ecosystem for a newbie like me," she said. For example, Ong participated in the Entrepreneurs Roundtable, which, at the time of her membership, was an invitation-only gathering of a select number of startup founders. This sort of professional organization provides members an opportunity to confidentially discuss issues unique to company founders.
Seek out investors
Learning to articulate your business and deal with rejection are fundamental skills for an entrepreneur, Ong said. "I pitched to 75 investors at one point, and the majority said 'no,'" she told Business News Daily. "But a few said 'yes,' and that's all it took to keep me going." She was invited to join 500 StartUps, an early-stage seed fund and incubator program, but only after asking several friends who had already received funding from the program to introduce her to the founders. "It's all about how much you hustle," Ong said.
Ong also connected with potential funders on AngelList, an online community that brings together startup founders and potential investors. She also asked friends who have founded other companies to introduce her to their investors.
Ong admitted that being a solo founder is a hurdle that often gives potential partners and investors a moment of pause. In fact, Ong noted that of the 300 companies funded by 500 StartUps, only seven have solo founders. "I quench their doubts with my passion and track record," said Ong, who, at the end of her 500 StartUps program, presented her company to a group of investors on Demo Day and was able to raise $650,000 in her first round of funding.
Accept failure and celebrate success
By growing her own business, Ong has realized that it's imperative to be tenacious and capable of dealing with rejection. She credits her training as a young athlete for her ability to stay competitive and focused without feeling entitled. "As a swimmer and runner in school, I trained hard every day, but it didn't mean that I would win the gold medal," Ong said. "I learned to accept failure and move beyond it, and I carry this knowledge into my business."
But Ong is also learning that an entrepreneur must know how to celebrate wins, too. "I often don't know how to celebrate success because I get up every day ready to fight fires," Ong said. But recently, while assembling furniture that she purchased for her company's new 2,500-square-foot office, Ong recalled how she started her business two-and-a-half years ago as a one-woman show in her living room. "And now," she said, "here I am building a place with a culture I want, and it gives me a moment of joy.”
Originally published on Business News Daily.