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FOOD BUSINESS VS. SOFTWARE UNDER THE CENTS PRINCIPLE
I am currently running a small food startup selling healthy cookies (see my progress thread here: NOTABLE! - EXECUTION - Starting a healthy snack business, first sales!)
I recently stumbled upon Tom Bilyeus framework: The Leverage AI Launch Toolkit. For those who don't know him he's the founder of quest nutrition (selling protein snacks) which was later sold for 1$ Billion. The Leverage AI Launch toolkit helps evaluate business ideas from many different angles with very precise AI prompts and then create a MVT (Minimum Viable Test), or what @MJ DeMarco describes as a soft proof in his books. (For those who are interested in the framework let me know)
This framework of evaluating business ideas led me rethink my business idea and food entrepreneurship generally under a CENTS perspective. So I prompted ChatGPT to give me an evaluation of my current business under the CENTS framework compared to other Ideas I have in mind( SaaS/AI) and here is what I got:
Maybe the AI is biased towards software and AI Businesses... but under a strict CENTS perspective food seems to be the less favorable option compared to Software.
Prices and Margins are controlled by retail, if you work with a co-packer (which you most likely will to scale unless you have a lot of capital) you are dependent on him, so CONTROL is also violated to a certain degree.
ENTRY: I think food is appealing for many (myself included) because its tangible and and the entry is low considering the development of a product. (Entry into the market is a whole different story...)
Considering NEED: Many products offer similar value skews so yes there is NEED for e.g more healthy products but you are (most likely) not solving a huge pain point with a new food product in relativity to what is already on the market. Also the TIME and SCALE commandments seem to be much harder to attain with a food StartUp compared to Software.
I recently read MJ's thread on AI:
and was wondering whether food is really the horse I should bet on looking at what will be feasible with AI in the coming months, years. And asked myself whether I want to be the guy who was trying to sell cookies while others got rich using AI and solving REAL problems with it.
Surely enough there are exceptions and big exits in the food industry (like Poppy in the US recently or YFoods here in Europe) or Tom Bilyeus Quest Nutrition mentioned at the beginning or the Popcorn Dude mentioned here in the thread.
However, if you follow enough food startups/companies on LinkedIn reality for 99.5% is different than what you read in the big headlines.
What do you think about my argumentation? Am I wrong? Did I miss something? Do I just see the negative aspects of food entrepreneurship because I am currently pursuing it but the grass isn't greener on the other side?
Looking forward to your answers
I am currently running a small food startup selling healthy cookies (see my progress thread here: NOTABLE! - EXECUTION - Starting a healthy snack business, first sales!)
I recently stumbled upon Tom Bilyeus framework: The Leverage AI Launch Toolkit. For those who don't know him he's the founder of quest nutrition (selling protein snacks) which was later sold for 1$ Billion. The Leverage AI Launch toolkit helps evaluate business ideas from many different angles with very precise AI prompts and then create a MVT (Minimum Viable Test), or what @MJ DeMarco describes as a soft proof in his books. (For those who are interested in the framework let me know)
This framework of evaluating business ideas led me rethink my business idea and food entrepreneurship generally under a CENTS perspective. So I prompted ChatGPT to give me an evaluation of my current business under the CENTS framework compared to other Ideas I have in mind( SaaS/AI) and here is what I got:
Maybe the AI is biased towards software and AI Businesses... but under a strict CENTS perspective food seems to be the less favorable option compared to Software.
Prices and Margins are controlled by retail, if you work with a co-packer (which you most likely will to scale unless you have a lot of capital) you are dependent on him, so CONTROL is also violated to a certain degree.
ENTRY: I think food is appealing for many (myself included) because its tangible and and the entry is low considering the development of a product. (Entry into the market is a whole different story...)
Considering NEED: Many products offer similar value skews so yes there is NEED for e.g more healthy products but you are (most likely) not solving a huge pain point with a new food product in relativity to what is already on the market. Also the TIME and SCALE commandments seem to be much harder to attain with a food StartUp compared to Software.
I recently read MJ's thread on AI:
and was wondering whether food is really the horse I should bet on looking at what will be feasible with AI in the coming months, years. And asked myself whether I want to be the guy who was trying to sell cookies while others got rich using AI and solving REAL problems with it.
Surely enough there are exceptions and big exits in the food industry (like Poppy in the US recently or YFoods here in Europe) or Tom Bilyeus Quest Nutrition mentioned at the beginning or the Popcorn Dude mentioned here in the thread.
However, if you follow enough food startups/companies on LinkedIn reality for 99.5% is different than what you read in the big headlines.
What do you think about my argumentation? Am I wrong? Did I miss something? Do I just see the negative aspects of food entrepreneurship because I am currently pursuing it but the grass isn't greener on the other side?
Looking forward to your answers
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