Making MAKA
Making MAKA
E5: Fake it until you make it? (Prototyping)
Brian & Russ talk about how they created product prototypes and how the prototypes were used to pitch initial retailers, investors, and customers.
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Making MAKA is a recap of the leadership team's personal journey & experiences, your entrepreneurial journey will and should be different, so please take this podcast for what it is, war stories, not specific recommendations or guidance.
Brian Hill 0:02
with customers, it's actually important to have these early.
Russell Hirshon 0:06
It makes it real, right, you're holding something that's tangible, and you're able to visualize it, as you mentioned online.
Brian Hill 0:14
Yeah, they can't crack it open, but they can at least hold it.
Brian Hill 0:21
Hello, everyone, you're listening to making Maka, a podcast about a startup beverage journey into launching and scaling a CPG brand. I'm Brian Hill.
Russell Hirshon 0:30
And I'm Russell Hirshon,
Brian Hill 0:32
and we are your hosts. In this episode, we will be talking about prototypes, creating them, and how to utilize them to make high impact presentations to prospective investors and retailers.
Brian Hill 0:49
There's nothing better than having final product in hand, let's just start with that. Most of us at at the stage that we're talking about can't afford to do that though. When you talk about the cost of initial production run, it's pretty staggering, actually, you have minimum order quantities that you have to deal with. That's minimum order of cans you produce, in our case, minimum order of supplies that you need to bring in. So there's a lot that you need to think through, especially from a cost side, when it comes to weighing out when to do a production run. Because of those costs, we ended up going down a path where we created what I'm calling prototypes. There's another term out there, that's a prototype run, that's if you're talking with a co manufacturer, and they actually create final product in a can. It's very expensive to do that, when you're talking five to 10 times the cost per can to do a prototype run than it is to do a minimum order quantity run.
Russell Hirshon 1:54
I love the way you say we didn't have them, it was actually you, you you're the one that made the prototypes, which is always a fun part of me being able to tell the story is how, how you navigated these waters. And upon knowing that you needed prototypes upon needing, knowing that you needed to raise funds that you started from scratch,
Brian Hill 2:21
at the time, I was flying solo, and self funding, so they're very limited, what I could accomplish. And when I when I was talking about the prototype run, quickly realized now I can't do it, sourcing ingredients, getting the supplies, lining up packaging you have to get UPCS. That's a whole nother thing. And there's a lot more that goes into it than what I just listed there. Additionally, I wanted this to be organic certified, it's a process to get organic certified, there's a cost to doing that. You also need to go through label review, and all these other things just so you've you're protecting yourself. So it was very clear to me that since all that went into a first production run, it wasn't going to be a viable Avenue. One other factor like we don't necessarily have the issue because we have a longer shelf life than then some products. If you have a short shelf life, it's not viable to do a first production run until you know that you either have distribution or retailer on the hook. Your product could go bad before you even get it in front of someone. So for all these reasons, creating my own prototype, as I'm going to call it throughout the rest of this episode is the avenue, I had to go down.
Russell Hirshon 3:35
In the times that I was at your house, there's always multiple levels of creation going on. Things happening in the kitchen, things happening in the basement things happening in the living room. It was quite a sight to see.
Brian Hill 3:48
I'll say now sorry, Brittany, thank you for letting me do that. But it was necessary because I remember vividly when I tried to pitch someone without at least prototype can in hand. I was going in with my plastic sample bottles. And these are like little stubby 12 ounce clear bottles. So the first issue was my product didn't present well, because we grass is obviously heavier than the liquid it's sitting in so it would settle to the bottom. So it looks like this little green not not a little bit of pretty thick green layer at the bottom. The fruit juices have separated out. Definitely not appealing.
Russell Hirshon 4:34
A tough sell.
Brian Hill 4:35
Yeah. Yeah, the looks weren't great. And when someone comes in, and that's the first thing they see, it's hard to envision what the end product is going to look like. Even if you give them a rendering on a computer or you print something off. So that's when I realized they needed something physical to hold while they were sampling so they could envision Okay, this is what it's going to look like I get it, I'm going to kind of pretend this clear little bottle isn't over here. extremely cost effective way to advance the conversation was by having that that prototype in hand.
Russell Hirshon 5:14
So Brian, how did you create on a small budget and limited resources?
Brian Hill 5:20
Yeah, at this time, I essentially had no budget, so I had to get real scrappy. So what I did is I went into the local grocery store. And I found similar products that had the desired packaging I want in our case 12 ounce sleek in so like the the taller cans, and a grabbed a bunch of them probably 24. enough to fill a couple cases. And I ended up spray painting the CANS white because that that's our base color for our brand. Also, I didn't want the other brand to show through when I'm talking with with prospective investors or retailers. So spray painted it white, I spent some time on Adobe Photoshop, creating labels, custom sized, I measured the circumference of the can figured out exactly what size I needed, designed those up. And I use a service sticker mule, they create amazing professional looking stickers that actually look like labels. So I ordered a few of those, and ended up wrapping each and every can with the four distinct flavors that we have. So I had full sets of each. Just one thing to note, like, you just want to make sure that when you're doing this, make sure that it looks as final as possible. So get your FDA regulation documents about labeling, make sure you read through that and follow it because you don't want to go into the prototype, that investor goes, Hey, I know you can't produce that can because nutrition labels wrong or, or you don't have a UPC, so just make sure you have all that on the label when you do this,
Russell Hirshon 7:09
what I find is you just explain that as if it was a simple process, and I don't mean just the labeling part. But you you went to the store, you got your can choose hand painted, spray painted each one that had the dry, you had to design your labels, you had to make sure they fit precisely. And then you had to apply them. What was the How long did that actually take for you to go from like, Okay, I need to start and then and then having a finished can,
Brian Hill 7:36
it took a couple of weeks to get them to a point where I felt good about them. Another thing that I did that I think took it to another level was I was talking with secondary packaging suppliers. So secondary packaging is like if you buy a 12 pack its the cardboard box that's holding it together. Or if you go to Costco and you see cans sitting in a tray, that's then shrink wrap. That's called secondary packaging. So I was talking with some suppliers already knowing like, Hey, I was going to create 12 packs, I was talking with a secondary packager. And they provided samples of the 12 packs they produce. So these are cardboard boxes that they're either white, or we use craft. And they come with no branding on them at all. These are just sample cases. So then what you can do is you can create either stickers or use rubber stamps, stencils, whatever you want to do, apply your own branding to the box. Now you look like you have what is a market ready product, even though all of it is is a prototype. This is extremely cost effective approach to creating something that looks market ready.
Russell Hirshon 8:48
And I would find I would add the stencil approach that you used was incredibly time consuming, but amazingly artistic and dead on brand for for something that you're you're creating in your home as something that's as organic as it is.
Brian Hill 9:07
Well, thank you. Yeah, it took, I was purposely putting a lot of thought and effort into it because I wanted to make sure that I looked as real as possible to whoever I was talking with, which is very important. You got to be buttoned up,
Russell Hirshon 9:22
buttoned up. So So now you've got your first iteration of a prototype. What's the what's the process after you've you've done your first version of
Brian Hill 9:32
them, you're not done here. I wouldn't go start setting up your meetings yet with retailers or investors. It's important that you iterate. You want to make sure that the messaging on the can the messaging on the box. I keep saying can whatever your product is. If yours is a food product or a snack product, it's all synonymous here. But you want to make sure you're taking that that prototype packaging and putting it in front of as many people as possible, ideally end consumers because you want them to pick it up off the shelf. Also, if you can talk with some retailers because they have to receive the product, you don't want to put your product in packaging, that they can't easily break open and put the product on the shelf, they just, they don't want the hassle, they won't buy your product again. So think through these things, put it in front of as many people as possible. When it came to end consumer, one of the things that I would consistently do, and thank you for letting me do this was come into your bar, and sit and talk with customers of yours that that I didn't know and just show them what I was working on at the time when it came to can design or, or, or samples and just get unfiltered feedback. There's nothing better than than a drunk person when it comes to unfiltered. They'll tell you exactly what they're thinking. So it's great. It's just iterate, iterate, iterate, but then at the same time we talked about this in previous episodes, always keep MVP in your mind minimum viable product. So you don't want to get stuck here. Like in the minutia, you want to make sure that once it's in a good spot, and the majority of people are saying yes, this, this is inviting this, it looks interesting, the packaging is resonating, move forward, you can always iterate later on, you just make sure you don't get stuck here. And then just do that a few times. So just I would say rinse and repeat, just do it a few times until you're you feel like you're in a good spot.
Russell Hirshon 11:30
I always felt that it always tasted viable, and it just keeps getting better. And the one thing is I'm very taste sensitive. If something doesn't taste good, I just I'll never drink it or buy it again. But your I would say your beverage started off tasting good. And that's it. That's what a great place to begin at. And then to move forward to even a more tasty flavor format.
Brian Hill 12:02
Yeah, and that goes back to like doing your homework before you even get a formula involved. Before you try to get your process authority letter, you just want to make sure that everything is really buttoned up before you keep advancing. Same thing with packaging, spend the time. And that's what I was doing here as well, you'll probably see this theme throughout our future podcasts is test, iterate, if you need to go down a different path. Don't over iterate, like don't turn your product into something that it isn't because of what consumers are telling you like you started your idea for a particular reason, you might want to continue guiding it down the path you originally chose, unless there's a very strong reason not to.
Russell Hirshon 12:51
And you landed at a place where you had a formulation that you were extremely happy with. You had canned labels that you're extremely happy with it at the information conveying exactly how you want to convey it. And so you've got that your formulation and your labels and your packaging. And that was on to the next step
Brian Hill 13:09
An important step here that you should definitely consider doing involve in FDA attorney at this stage. Even though you don't have what you think is going to be a final product yet. You need to involve them. There's too many FDA regulations that are out there that you probably don't know, like, you don't know, if you're making a claim that might be false, or you have a statement that's misleading, you get in a lot of trouble down the line. There's some major beverage brands that that have just realized that might have cost $300 million. So you just want to make sure that you're not making misleading statements and do it now. So if you decide to get an FDA attorney involved, there's a couple of things that they'll do the last for an engagement letter, and then scope of representation. Don't worry about confidentiality, like that's gonna be baked into these letters. The FDA attorney is not trying to steal your drink, I can promise you. So focus on the scope of representation. In this case, you're looking for compliance with FDA regulation. It changed changes all the time. But the big change was a couple years ago, they actually changed how nutrition labels are supposed to look what they're supposed to say. It's minutia, but it's important because you get in trouble if you don't comply.
Russell Hirshon 14:31
It's going to be extremely expensive. This process is part of the process.
Brian Hill 14:36
You can find FDA attorneys that work with startup brands, and they will be a little more affordable. And I say a little more. They're still expensive. You're gonna have a retainer that you're going to have to pay for and then an hourly fee, like it's not unusual for the retainer to be, I would say 1500 to 5000 depending on what your ask of them is, and you get so many hours from that retainer. And then if you exceed it, hourly rates, and those can range from, let's say 250 On the low end, all the way up to $1,000. If you're talking like with the, the top attorneys, so budget, a few $1,000 for this effort.
Brian Hill 15:23
Now a quick word from our sponsor.
Brian Hill 15:25
Yep, it's us again. Our mission here at MAKA is wheatgrass for all one can at a time, your first game is on us go to livingmaka.com/making Select your flavor of choice and check out with the code making2022 Enjoy your free can.
Russell Hirshon 15:43
So you didn't have final canned product. But you did have prototypes? How did how did you and MAKA utilize those prototypes moving forward?
Brian Hill 15:56
There's many ways to use these. And I was using them primarily for building up pre sales with customers raising initial capital and obtaining retailer commitments. on the customer side, you can use the prototypes for imagery on on a landing page, if you decide to go down the crowdfunding route. Ideally, you want to have a can in hand, whatever your product is, in our case, it can enhance that for these crowdfunding efforts, because they want to know that. Or at least you want to instill confidence that your project is actually going to launch vast majority of crowdfunding doesn't doesn't launch also doesn't get funded. So if you can definitely use the prototypes to help you with those efforts. It's also important because when you're talking with friends, families, associates, if they can see it, and hold it ideally desire it, because you have some great looking packaging. It will incentivize them to go to your landing page where you can capture contact information for future targeting. So with customers, it's actually important to have these early.
Russell Hirshon 17:08
It makes it real, right, you're holding something that's tangible, and you're able to visualize it, as you mentioned online.
Brian Hill 17:16
Yeah, they can't crack it open, but they can at least hold it.
Russell Hirshon 17:21
And, you know, and it starts becoming more and more real once they you know, if you see something in any format, it's all of a sudden they might think it exists. They'll ask you what can I order it now? Or, or whatever steps that you've put in place for them to engage with? From a fundraising perspective? What were the steps that you took with that?
Brian Hill 17:44
I would highly advise not to go into a fundraising pitch with just prototypes, bring samples as well. Ideally, you talk this over with your formulator ahead of time, and they have the ability to create one off samples for you. If not go back and get that you will want these samples.
Russell Hirshon 18:07
When you're doing these pitches, are they in person? Or were they were they zoom? Or was it a combination of both
Brian Hill 18:13
combination of both? Because this was heading into the pandemic. So some were in person, some were virtual only some were a combination of each and you can make it work either way. You might not send them your prototypes unless you have a bunch of them, which probably a good thing to do if you can, but at the investors, they absolutely expect to try your product. So don't send just prototypes, send prototypes and samples. The way I was doing it was it let's say this is an in person meeting, I was taking out the prototype cans and putting them on the table so they could look at them, see them while we're talking. Leave your samples in the bag, don't take them out yet. Then you go into your pitch, talk about your product, get them all excited. At some point, they can say okay, this sounds awesome. I really want to try it. That's when you take the samples out that I alluded to earlier, ours were not attractive. They were in, they were hidden away for for a reason. So put, put each sample bottle next to the associated prototype can and then let them hold the can while they're tasting it. And this is a highly effective way to create an engaging conversation without having canned finished product. They love it. I can tell you it worked for me very well. And it helped with the initial production funding that we needed. It's important though, because if you have this prototype and they're sampling it the next question be ready for this is what is the production minimum quantities that you need to hit? So they're essentially trying to figure out how much funding are you needing, whatever you think it is double it, however long you think it's going to take double the time, just be ready for that conversation because it will come up during when you're presenting your prototypes.
Russell Hirshon 20:14
So prototypes and samples alone typically won't get investment. As a brand owner, you must be, you've got to have to be buttoned up. It doesn't mean you don't need to be an expert in everything. And I would say, Brian, you always you always came to me when you were extremely buttoned up. And that was impressive, because you'd be in front of investors, potential investors, you'd have the products there, the cans were compelling, the beverages were compelling. And you did know the ins and outs, they, you know, they would come up with questions on on production, and you did have an idea of how much you were producing.
Brian Hill 20:53
You nailed it on the head, you have to be buttoned up, you have to know the ins and outs of being in CPG. So consumer packaged goods, you need to know it a little bit of everything. Like you don't have to be an expert in everything, that's impossible. And ideally, what you're going to do is eventually build a team that's an expert in particular fields around you. But you, you definitely have to know the ins and outs of how CPG works, you have to be able to speak to how you're going to get to profitability. If you can't do that, the investor is not going to be interested, it doesn't matter how great your prototype looks, it doesn't matter how great your product tastes, you must also be able to show there's a path to profitability, and and you're the person that can get it there.
Russell Hirshon 21:38
Well done. That's what I would say to that. Yeah. And so the next thing is prospecting retailers going into stores. And I believe you had commitments before the cans in production were out, what was your methodology for going into retailers
Brian Hill 21:55
very similar methodology as, as investors, bring your prototype cans bring your samples, you must have samples. So particularly with the retailer, put the prototype cans out, give your spiel, keep it short and sweet, because category managers don't have a whole lot of time. And then of course, the main attraction for them is trying it. There's a there's a lot of particularly in the natural food channel, there's a lot of retailers that will commit early, if they like your product, what you're selling, the attributes, the certifications, all that that other stuff, very similar methodology. What they're really going to focus on, though, is production timelines, the viability of you actually bringing this to market because they have to clear a space on the shelf. And then continuity and sourcing, because the last thing you want to do is be the brand that they put on shelf, and then you're constantly out of stock, because you can't actually hit your production and deliver on time. Those are the things that they're going to be digging in. prototypes, start the conversation, they don't end the conversation, you got to be able to speak to all the other aspects.
Russell Hirshon 23:01
And that's something you've enabled me to do, you would you know, we knew the MSRP we knew their margins at that store. We could tell them and speak to the attributes of the beverage, the specifics of the ingredients. And then of course, you would make the sell sheets. So it was a compelling presentation when we go in there. And I think it made us look much further down the line than just an individual as yourself who would, who would conceive the beverage, it looked like someone who really knew what they were doing. So I'm always grateful for the fact that you have done so much diligence.
Brian Hill 23:39
Yeah, in my one word of advice for retailers, in particular, the real about your production timeline. If you don't know what it is figure it out before you go in, and then give yourself a buffer. If they're gonna make a commitment to you, they have to clear a shelf, they have to clear space. If you if you can't hit the timeline that you're essentially promising, it's gonna cause a lot of headaches, Don't be the person that has them go through all that effort just to never deliver. So just be very real about your production timeline. And then as you were talking about, you have to know and we're gonna have a deeper discussion on another episode about this you have to know your costs, your margin requirements, the retailer margin requirements, your MSRP you don't want to be the brand that goes in early just because you're excited about getting a retailer say yes, you propose a certain MSRP only to find out after you've deducted trade spend warehousing all the other stuff that your margin negative, again, another episode for that. But these are all things you need to know before you go in with your prototype.
Russell Hirshon 24:46
And then I'll just say one last thing you know, big shout out to those natural and organic stores that are run by very passionate individuals who care about not only what they stock what they share their customers their They're known in the communities. But and Brian you mentioned this, that that was an opportunity, they really are focused on local, and they really do give a helping hand to the local entrepreneurs. So we're still very good friends with so many of the stores in the natural organic segment that gave us our first start
Brian Hill 25:25
incredibly thankful for them for sticking their necks out and putting our product on the shelf because it helped exponentially, grow our business. So always take care of those who, who took the effort to go out of their way to help you. And there's several natural retailers around here that we are extremely grateful for.
Russell Hirshon 25:49
You know, every single person along the process from the very beginning to end what we just talked about the production facility, they want to see that you're buttoned up. And that's I would say time and time again, you know, every time you put something forth, it really did look tight. It really, really was buttoned up.
Brian Hill 26:11
And I recommend that every brand out there or a future brand do the same, because it will help you.
Brian Hill 26:19
In our next episode, we will be talking about production avenues such as self production, communal kitchens, and CO manufactures the pros and cons of each approach and why MAKA settled on CO manufacturing.
Brian Hill 26:35
That brings us to the end of this episode of making MAKA. If you have any questions, comments or ideas about our episodes, please send an email to Hello at makingmaka.com If you like what you hear I'm making MAKA. Please share the podcast with friends and family and review us on your preferred listening platform. On behalf of MAKA, thank you for joining us on this journey.
