Ask just about any founder the number one resource they feel they need to get started. The answer you will most likely hear? Seed money.
These days, it has basically become a requirement for startups to get funding with venture capital. There’s an emphasis on scaling as quickly as possible, because growth is believed to reflect future success and an eventual high dollar payout.
But does this method actually produce the desired results? Michael Levine of Global Food Solutions, a New York-based company that provides high quality, locally sourced food products to schools across the US, says he’s succeeded by following a different strategy.
The 24-year-old CEO and chef now makes over $15 million in revenue annually, and hasn’t given stake of his business to investors. He says he isn’t willing to force business growth, and instead focuses on staying flexible and present.
I caught up with Levine about his commitment to honoring the process of his startup’s development on this week’s podcast episode, “Why You Can’t Rush Growth w/ Food Company Founder Michael Levine Who Generates $15 Million In Revenue Annually.”
It all started with a muffin. The artificially flavored, high-fructose corn syrup filled bakery item troubled Levine and inspired him to create a healthier version. He swapped oil for applesauce, switched to whole grains, and sweetened it with yogurt. At this point, he had no intention of impacting anyone else (like the three million students he does today) — he was simply focused on creating a quality muffin.
When Levine launched the muffin, he focused on finding existing large scale networks of distribution, which let him to the NYC public school system. After sending a few emails to key decision makers branding himself as a recent college graduate looking to sell his product he was able to secure a meeting. Soon after he began receiving offers soliciting over one million muffins a month.
Levine’s healthy initiative coincided with the launch of Michelle Obama’s “Let’s Move!” program in 2010, aimed towards fighting childhood obesity, which put the school food service industry in desperate need of nutritious food products.
Although the monthly output of one million muffins would have yielded tremendous profits, Levine felt it was a stretch. He opted instead to grow the business at a pace he could manage, one step at a time–sourcing local bakeries for production and having his clients pick up the product instead of offering delivery.
Levine was clear that he didn’t want to focus his efforts on playing in the ‘venture capital bubble’. As he saw it, “I struggled to comprehend this philosophy that it’s okay for a startup to not make money for long periods of time. I wanted to create a revenue generating model from the start instead of taking venture capital money, hiring a bunch of people, and growing the company overnight.” Levine goes on to say, “Let it grow at the rate it is supposed to without forcing that growth.”
That choice proved to be incredibly valuable. In allowing the business to unfold naturally, without pressure from funders, Levine was able to focus on quality and production, which set his company apart from others in the industry. Ultimately, this led to over $15 million in annual revenue.
Want to take a similar approach when starting your company? Consider the following steps to know when to back off and let your business run its course for a more natural growth process.
It doesn’t have to be perfect to be profitable. When you let go of the need to be perfect, you open yourself up to release more products that will probably satisfy the market need just as well. “Some of the best baseball players in history bat 300 (out of 1000) and they’re getting paid 100 million dollars. So every ideation you have, it’s not going to be perfect, nor should it be,” Levine says.
Don’t rush into growth. Growing should feel natural — think of how an organism grows at a steady rate to sustain itself every step of the way. If the lungs were to grow too fast, the tissue might tear and the entire breathing process would be destroyed. Allow your company to acquire the necessary resources in every department first, and you will find that when you are ready to upsize, the right opportunities will present themselves at the right time.
Your first idea isn’t always your best. Give yourself room to go through the creative process. Levine shares, “I think a lot of people get stuck in the mindset that they’ve had this great idea and they’ve put the whole thing together and they plan to execute that, but a lot of times you can’t execute what happens on paper because there’s a lot of dynamics that are gonna change when you bring a project from inception to reality.” Be patient and let experimentation happen as often as it needs to.
Failure is part of the process. Making mistakes is part of the natural progression of the creative process — it alerts you to what isn’t working so you can build a better product. The more you fail, the better the result you’ll end up with. Try to disidentify with the emotional aspect of failure and use it as a platform to improve. Levine says, “I view failure more as just you’re turning the car to the left and now you’re not going straight anymore.”
This article was originally published on Forbes
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