When embarking on a new journey, startups face several challenges that can stump even the most ambitious and prepared entrepreneurs. Jacob Mogensen, Head of Incubation in the Food & Bio Cluster, shares some of the most common mistakes early-stage startups make. These learnings, experienced in the food and bio industry, can be applied across industries when building a future-proof business.
Validating the product
“The most common mistake that startups tend to do is to work too much in a closed environment, focusing on what can be done, what can be developed, and what can we do differently than others before.
They spend all this time and money working on a product, and when they show the customer and say, “I’ve made this in black,” the customer will reply that they want it in blue. They don’t validate their hypotheses, or ideas and thoughts.”
Navigating the laws
“Particularly in our industry, there are so many laws and regulations that you need to be aware of – in terms of what can be sold, how you can be registered, where it can be produced, and how it can be marketed.
You don’t want to be in a situation where you’ve developed a new product for 6 months, you go to a company where you want to sell it, and they tell you that you can’t – because it’s not food, or it’s novel food, or it’s packed the wrong way.”
Keeping budgets on track
“In Denmark, we call it, “to have order in your pencil house.” You have to have the right plan and the right budget for the right plan.
Even if a startup says that they have a business model and plan, we try to take 10 steps back and really evaluate the business. Then we can create budgets for ordinary operations, investments, and liquidity to make sure it makes sense.”
Scaling production and GTM strategy
“It’s a problem that many food startups face. When you are a new food startup, you can maybe produce 2.000 of a new soda or snack per week in your production facilities. But when you go to the Salling group or Coop, then they’ll need 40.000 by Friday.
This doesn’t match with the resources that startups have or the way that they like to go to the market. So they need to create this go-to-market strategy in a way that the startups can handle it and the market can receive it well.”
The Beyond Beta incubator programming is aimed around navigating these common pitfalls – offering guidance around understanding the law, opening doors to important partners, and providing tailored plans for startups in their early journey.