TRUTH AND DISCIPLINE

Staying True to the Brand and to Yourself

At KIND, we are laser-focused on maintaining our brand promise. I learned to obsess about the quality of our products and the consistency of our brand the hard way, through an earlier failure. Lack of brand discipline almost killed the Moshe & Ali’s food line PeaceWorks first launched. The source of my failure was one of the most common and destructive mistakes fledgling entrepreneurs make: expansion at all costs and with no clear strategy.

In addition to the Moshe & Ali’s sundried tomato spread, I also created and sold basil pesto and green olive spreads that were produced through cooperation among neighbors striving to coexist in the Middle East. The quality of our products was very high: The New York Times wrote they were “delicious…and lack the saltiness of other spreads.” The products earned a devoted following among retailers who sold our goods and consumers who enjoyed eating them.

Based on our initial (if modest) success, we quickly expanded into seven flavors, including black olive, cilantro pesto, and garlic dill. All were based on Mediterranean flavors and maintained high quality, ensuring brand consistency, and performed reasonably well also.

“This is so easy,” I thought. “Let’s keep going.” Food-industry experts had told me I should try to grab as much shelf space as possible. The simplistic mantra was “more products get you more shelf space; more shelf space gets you more attention; more attention gets you more sales.” That is all basically true as far as initial trial sales go. This is partly why you see so many varieties of a toothpaste brand, or a pain-relieving medicine or a pasta sauce, on store shelves. But the missing qualifier is that to ensure repeat sales your new products need to stay true to the core brand promise, and each product has to stand on its own merits. Each product must solve a different need or desire so as not to cannibalize the sales of the original. New items should not disappoint consumers whose trust you have earned and who expect you to deliver the same quality and experience. This qualifier may sound obvious, but it is often overlooked.

In my quest to swiftly expand our line, we rapidly added new flavors, topping out at sixteen varieties within a couple years. Even though we were only in a few hundred stores and were generating sales well under $1 million, I thought we’d grow revenues simply through increased offerings—no matter what they were! To remind me of my arrogance and betrayal of my consumers, I still keep in my office today a jar of our most bizarre entrant: a sweet-and-spicy Asian teriyaki pepper spread. This product bombed, and it should have been obvious to me that it would. Why would I think that a Mediterranean brand made in the Middle East by Arabs and Israelis would have any credibility to sell an esoteric Asian flavor? This variety had nothing to do with our brand, and it raised eyebrows among our loyal consumer base.

Worst of all, the quality of our new spreads was far lower than the originals. The teriyaki pepper spread was gelatinous and, while the xanthan gum it employed to bind the sauce was technically all natural, in my heart I knew it did not nearly approach the premium quality of our first products. Our sundried tomato spread was addictive and special (PeaceWorks still sells it under the MEDITALIA brand and it continues to be one of the best products I have ever tasted). This other product was, at best, tolerable.

In my rush to grow our product line, I had obviously lost sight of what my brand represented. At that point in my career, I did not understand the importance of keeping a brand’s promise. In my gut I knew these added products did not belong in our lineup, but I was greedy, unsophisticated, and unfocused. I rationalized things by thinking, “What is the big deal if some people don’t like this variety? They just won’t buy that product again and will go back to the originals. What’s the harm?”

What I didn’t think about was that consumers had trusted the brand, and I had a responsibility to maintain that trust. When people tried the teriyaki pepper spread, at best it turned them off, at worst it offended and upset them. Though they may not have articulated it in so many words, they felt the brand had lost its way and their dislike of that one product reduced their trust in the overall brand. It shouldn’t have come as any surprise (but it did then) that that one big misstep cost us loyal customers; many of them stopped buying all of our products—even the ones they had previously liked.

Over the coming months and years we experienced a steep decline in sales, which I attributed to the inconsistent quality of our products. The way I had screwed up and betrayed loyal consumers was seared into my mind. My lesson was to never again sacrifice quality to gain shelf space, never to take consumers for granted, and always to obsess about quality control and staying true to the brand. Anything we launched in the future had to be at least as good as the products we already had on the market.

WHY A CONSUMER PRODUCT SHOULD NEVER DISAPPOINT—AND HOW TO ENSURE THAT IT DOESN’T

Even if you think you know what your brand stands for, and even if you feel your product will meet expectations, consumers may or may not share your perspective. How do you test or guarantee that? There isn’t one single consumer—there are millions, and each of us has different tastes and preferences.

Case in point: the curious case of Netflix. I am a longtime Netflix customer. My wife and I love their “queue”—the list of DVDs of blockbuster films you want to receive, and the order you want to receive them in, one by one. Getting one DVD at a time saves me from the paralysis and time wasted trying to make the “perfect” choice out of all the options available on cable or online. We organize our queue every so often, and then watch what we get in the mail. That’s all we have until we return it and Netflix sends our next choice. Instant streaming is the future, but that future has not arrived. Very few major new releases are available on instant streaming.

Reed Hastings, CEO and founder of Netflix, also consumes his product but his public comments and his strategic moves with Netflix suggest that he experiences it quite differently from some of us. In the summer of 2012, Netflix made a policy change. They divided the streaming and DVD business, giving customers a financial incentive to opt for streaming only. They increased the pricing structure for the DVD service, and deeply angered many loyal fans in the process. In the wake of the changes and consumer reaction, Netflix executives expressed surprise that anyone would want to hang on to the DVD service and not just migrate to instant streaming. Netflix stock suffered, customer satisfaction suffered, and eventually Netflix was forced to reverse part of its new policy.

From their statements, it seems Netflix decision-makers didn’t seem to understand that the type of stuff they may have watched—documentaries, independent and foreign films—which were readily available instantly, was totally different from what many of their consumers looked for: new releases of top movies, which were only available on DVD. Netflix obsesses about consumer satisfaction. And Hastings deeply understands his product. Even in this scenario, they had a blind spot into what the Netflix experience was like for a significant portion of their consumers whose individual preferences may be hard to decipher.

All brands are susceptible to such danger. Even a founder-led brand (like Netflix) can lose a connection with how others interpret their brand. How do you prevent that from happening?

While many marketers favor focus groups—gathering consumers in a room to react to brand initiatives—I find them mostly ineffective. I’m skeptical of the concept because the focus group consumers you round up tend to tell you what they think you want to hear. Focus groups tend to be administered by third parties and I believe that having someone else interact with your consumers and gather the insights for you is like playing telephone—something is always lost in translation from one person to the next. You miss so many layers of subtlety—facial expressions you could only absorb directly, or contextual answers you may need to elicit. Most focus group marketers bias consumers by asking leading questions, even inadvertently. Then there is Henry Ford’s quip on why he never asked consumers for advice about his cars: “If I had asked people what they wanted, they would have said faster horses.” Consumers may not know how to solve for a need they may not even realize they have. And sometimes you need others to validate a good idea before consumers embrace it.

In the early years, we could not afford professional focus group consulting firms anyway. So we’d walk up and down our office building, knocking on every door and offering other companies’ employees free pizza on their lunch break in exchange for one hour of their time. I noticed how easily influenced the group was by others, how difficult it was to remain unbiased and fresh in that context, and how wasteful the whole experience was.

Instead, I started walking into public places—a coffee shop, a supermarket, or the post office—and intercepting one person at a time, asking conflicting open-ended questions to avoid biasing consumers.

To this day, when I meet someone I don’t know who comments on our brand, including sharing that they love KIND, I try to learn from them. I ask, “Why do you love KIND?” I do this not for the compliments but rather to really understand their vantage point. And in the rare instances when someone has the guts to tell me they don’t like our products or are dissatisfied with a particular aspect of the brand, I try to also learn from them and get a deep sense of where they are coming from. Of course you can’t be (and don’t want to be) everything to everyone, but you want to understand what those gaps are. So when we are launching something new, I still try to go down to the post office or supermarket with some samples, share them, and as hard as it is to do, I try to really listen to the feedback.

Another way to learn about your most loyal consumers’ preferences is by forming a kind of focus group in real time. We have an e-commerce membership program called KIND Advantage. You need to buy very high volumes of KIND to be part of it. Those that do, receive unexpected shipments of new prototypes or new finished products from time to time, along with a request for their feedback. Part of what makes this group particularly valuable is that they are putting their money where their mouth is. We are able to learn from actual purchasing behavior of this defined group of loyal consumers. People may be inclined to want to please you by saying they “like” something new you present to them. But they won’t be so nice if they have to pay for it. Consulting our most loyal consumers has an important ancillary benefit: They sense they are a part of our decision-making process and that we appreciate them as leading members of our community.

When launching new products, we also pay extra money to create mock-up packages that look finished and contain actual product, and then we place them on store shelves to see if people will pick them up. Inside the product we include a note encouraging them to visit our website and provide us with feedback.

Placing a product on store shelves helps you spot issues with package design that may not have arisen in an office environment. Also, it is invaluable to observe whether a product elicits interest in an actual retail environment. But even that model has its limitations because you may not immediately know if, once sampled, your product will generate loyalty and reorders.

You will only fool or disappoint consumers once. But there are tens of millions of consumers to be confused. So if you launch an inferior product and see initial sales, you may be thinking, “Great, this is a hit.” But if your quality standards or brand promise is inconsistent with your original great product, every time you sell that new product to unsuspecting consumers, you may be losing their repeat business. Inconsistency in a brand is like introducing a virus into your brand system; you may have no idea that it is slowly spreading through your brand body, disappointing one consumer after another. If their disappointment is high enough, they may well abandon your brand altogether. That is why tracking repeat sales is so important, even if so hard.

The practice of “A/B testing” has become very popular among tech and digital companies. The idea is to launch your app or other tech product very swiftly, and test and retest it constantly, changing it and reinventing it based on user feedback. That can work in the tech world, where consumers are getting Facebook, for example, for free and will tolerate this rejigging. But it is different at a consumer products company.

PUSH VS. PULL

My experiences with my brash growth in the Mediterranean spreads space as well as my much more organic growth at KIND have taught me how important it is to focus on growing in a sustainable way. In the consumer product arena, the wise mantra is “the pull is more important than the push”: As important as it is to “push” a store or buyer to stock your product in the first place, getting consumers to pull your products off the shelf is the far more important transaction. The push for shelf space can be made based on personality or friendship or your salesmanship, but if you get on the shelves and the product doesn’t move, you burn your relationship with the buyer and eventually your product will get pulled in another way: discontinued.

I attribute much of KIND’s success to our obsession with quality and our commitment to ensure we are true to our brand—that we understand what we stand for, and deliver on that experience every time we connect with our community. The threshold for launching a product at KIND is thus extremely high: A new product must exceed expectations—it can never bank on the goodwill we earned from consumers; it has to add to that goodwill; it has to always be true to what our brand stands for, always deliver a surprised “Wow, this is better than I could have imagined.” A great product idea that does not fit with what our brand stands for should be pursued by another brand—not by KIND. And an idea that is consistent with our brand concept but is not executed in a way that will deliver on the taste and healthful properties that our consumers rightfully expect will not be launched by KIND, no matter how neat the idea may seem in theory.

TRYING TO BE EVERYTHING TO EVERYONE MAKES YOU NOTHING TO NO ONE

When starting PeaceWorks, I didn’t understand that different sales channels serve different purposes, that quality trumps quantity, and that there is a life cycle to a product and its distribution. I didn’t quite get that each and every single place where I sold had to be a resounding success and stand on its own in order to build sustainably large sales. Fundamentally, I didn’t know that all products and services should have a properly tailored distribution migration strategy: launching your products in channels where consumers are more likely to be adventurous first adopters (say, health and specialty food stores in the case of an innovative natural product); and slowly expanding into larger environments as you build brand awareness and a loyal following through product trial, word of mouth, promotions, and traditional and social media coverage. Instead, I felt I needed to sell to every store I passed, from neighborhood convenience stores to Bloomingdale’s and Macy’s. I had this mindset that every store had to become my customer. I was so proud of my determination. But grit without focus and strategy can lead you to waste your time, effort, and money.

On one sales call back when I was getting started, I remember visiting a small convenience store on Eighty-Fourth and Broadway, begging the owner to try my spreads. Mr. Kim kept trying to explain his reluctance: “These products are not right for my shop. People come in here to buy essentials like bread or milk.” I kept insisting, “But this sundried tomato spread is beyond delicious.” I opened the jar, dipped a piece of baguette into the sundried tomato spread, and almost forced it into his mouth. He could not get rid of me. He kept walking around the aisles, stacking ketchup into the shelves. I shadowed him everywhere he went, even to the basement, explaining how special this product was. After two hours, I finally got him to order just one case—$28.20 worth of product. He did it just so I would go away. I was so proud of myself. “Daniel,” I said to myself as I walked out with my chest up high, “you’re going to win because you don’t give up.”

But every time I visited that convenience store, even a decade later, I counted every one of those dozen jars of sundried tomato spread still sitting on that shelf, accumulating dust, hurting my brand, and unfairly occupying that poor man’s valuable retail real estate. I was embarrassed. I should have invested those two hours in my relationships with specialty stores, where my products were well-received and had at least a decent chance of selling.

I made a related mistake with what I thought were creative marketing programs that I designed to boost PeaceWorks sales. Because I was actually too successful at getting retailers to like me, I ended up selling some retailers too much product. I didn’t factor in that if the product does not move off the store shelves swiftly, you are not doing anyone any favors—not yourself and not the retailer.

In one egregious example, I set up a preferred vendor program to reward stores that placed large orders. Any retailer purchasing sixty-four cases of my Mediterranean spreads—an $1,800 order at the time—also received a wire display rack that cost me about $200, two in-store product demos, and our commitment to mention them in any articles written about us. I did not realize I was doing my customers a terrible disservice. Sixty-four cases was just too much of this specialty product and took too long to move off their shelves, creating uneven inventory management (the sundried tomato spread and basil pesto sold quickly, but the rest of the flavors barely moved). It also hurt my own business. I would create a wave of new sales with these programs, and incur the not insignificant costs of the racks and the time for the demonstrations; then months would go by with no reorders. My customers had too many jars of my spreads on their shelves, and they resented me for it. Fortunately, they knew I had good intentions. But they wouldn’t order my bestsellers till they got rid of the dogs.

We carried our lack of focus to the extreme in the early years. Because I was so passionate about our model to promote coexistence through business, I rushed from our flagship efforts in the Middle East into efforts in conflict regions across several continents. I thought we could replicate the model with neighboring conflict-torn populations. In Indonesia, we manufactured Bali Spice, which sold sauces and noodles made through cooperation among Muslim, Christian, and Buddhist women, as well as coconut milk made by Sinhalese and Tamil workers in Sri Lanka. From my native Mexico, we had Azteca Trading Company, which sourced raw materials from the war-torn state of Chiapas to make a line of chipotle-based sauces in Texas. The number of mistakes I made with each of the above lines would require another few books. I didn’t have the patience to focus on building one big success first.

PeaceWorks was (and still is) a good concept. But all this was too much for our five-person operation. It was insanely dumb, but, like many entrepreneurs who believe they can do it all, I didn’t see that at the time. We couldn’t pay attention to all those brands. When you’re building a business, you want to focus and deliver excellence at what you do. This simply cannot be done when you are launching multiple ventures, dozens of new products, and selling everywhere and anywhere at the same time.

CELEBRATE FAILURE BY LEARNING FROM IT

All my mistakes from those days in the wilderness are responsible for KIND’s success today. Trying to forget or hide your mistakes is a huge error. Rather, hold them near and dear to your heart. Wear them proudly. Big failures hold better lessons than any success—as long as you are in tune with yourself and are open to learning from them. I can trace every one of my accomplishments to earlier failures that I learned from.

I know that when you are experiencing failure, it’s pretty damn painful. It is easy in retrospect to wax poetic about it. But in the moment, you don’t think you will survive, let alone have the time to reflect on how valuable those lessons will be for you in the future. That said, this is the most important time to constructively criticize yourself and reflect on what you did wrong, as well as how you can do things differently in the future.

Even when you are succeeding, it is important that you be attuned to your mistakes and actively look for those failures. When things are going well, fast growth can hide a lot of weaknesses and deficiencies. There are companies that seem like juggernauts of excellence because they happen to be part of a fast-growing market. But when that market’s growth slows, or when they get hit by a challenge, their weak culture or lack of internal strength may bring them down. It is easy to lead and seem like a superstar when your company and your brand are taking you places. What is really worth admiring, though, is when you hit a wall and your team’s character is tested.

To build a culture of constant introspection and renewal, we at KIND encourage our team to engage in “start-up think”—to review all practices every year, and to reinvent systems or practices on an ongoing basis if necessary. Question every decision anew, think critically. If you are failing, you are forced to do this. Let those failures invigorate you with the knowledge that, once you know what you did wrong, you can now start doing it right. You are half of the way there. If you are not failing, are you aiming high enough? At KIND we embrace the “fail fast, succeed faster” approach and welcome risk-taking and experimentation (with the qualification that we do not roll out products unless we are confident they will outperform in their category). And if you are succeeding, do not let success get to your head. Force yourself to question assumptions—to use the AND way of thinking to see if you can improve on any and every facet of what you do. Let errors inform you and keep you grounded and keep reminding you that you are neither invincible nor a genius, and that you can always do better.

WHY FOCUS MATTERS

Business is like the game of Risk. If you expand your armies too quickly and try to conquer land after land, you disperse your forces and leave your borders vulnerable. Enemies can then invade and defeat you. Your zeal to build an empire can lead to your demise. Similarly, when you’re launching new products, you first need to make sure you defend your original leading items—to establish your core and continue to win on that central offering. You want each new move to be strong: Your products need to stand on their own and prevail at every store where they compete. Otherwise, if you fail with new products, you’ll also dilute your assets and expose yourself in the key areas where you had an opportunity to succeed. You’ll be deploying resources and attention that are desperately needed to maintain and grow your market share in your core.

You can expand eventually, but you need to do so only once your flagship line is well cemented—or a competitor will come in and take away your market share. When you do expand, make sure you’re not changing the value proposition, which can confuse and scare away your existing customers. And confirm that you have enough resources to push hard. It’s a matter of playing offense and defense. Being passionate without a strategy won’t help your business.

A few years after KIND’s launch, a friend showed me compelling data that the fruit and nut bars I had created were tiny, as a category, compared to the slab bar segment, which at the time overwhelmingly dominated the space. He recommended we launch a range of slab bars. I actually considered it briefly, because we were still trying to decide the principles that would bind our product lines.

In evaluating this idea, I had to think about what KIND was going to stand for. Your brand gets defined by what you choose not to do as much as by what you choose to do. We could have gone in the direction of making a slab bar that contained fruit and nuts, and the common thread with our existing products would have been the use of fruits and nuts to make bars of a variety of types. The choice we made for our second line would be of extreme importance because consumers would connect the dots between the original and the new product line to infer the brand’s common denominator. It was a very important decision.

After struggling with the question, making a slab bar didn’t feel KIND to me, and we passed. It was a huge market and “opportunity” that we were “giving up.” But KIND had been born out of the recognition that slab bars did not satisfy me and millions of other consumers. I wanted to be able to recognize the food I was putting into my mouth, to avoid processing our ingredients beyond recognition. I listened to my brand. And it told me, in my heart and in my gut, “That is not where you are meant to go.”

Analyzing data is an important tool in strategy—more so for sales and category management, but it is also deeply embedded in new product development strategy. It is a dangerous tool, though. Data can tell you about others’ trendlines—how other products are performing. But data lacks heart and soul. You need to look inside for that, and listen to your gut to understand if the “trend” fits with your brand and your unique value proposition. Data also doesn’t predict tomorrow. More often than not, new product developers try to catch on to other brands’ waves, only to learn that by the time they try to get on, the wave has dissipated and surfers are trying to catch a new one. If you decide what products to launch based on data only, you will most likely miss the big-picture opportunities. To really lead, you need to combine the left brain with the right brain—the scientific analysis with the artful sense of how to create magic within your brand.

Regardless of where we end up with new product-line innovation, defending our core products was and will forever be a crucial part of our strategy. That’s why we continue to invest in KIND Fruit & Nut bars even as we’ve expanded into other areas. We continue to innovate with new flavors, to ensure consistency, to constantly strive to improve even on what we consider to be perfection, and to obsess about quality. Failure to do so would risk losing all the customers we’ve worked so hard to attract.

DOING IT RIGHT

Entrepreneurs who market consumer products crave a wide distribution network—being in as many stores as possible. But the productivity of each store matters far more, particularly in the early years when you have scarce resources to promote your product (or service).

When we launched KIND, we knew we had to start by investing our scarce resources at leading health food chains like Whole Foods. A Whole Foods store has a lot of traffic, and shoppers there are more likely to be adventurous and try new brands. We can sell hundreds of KIND bars in one single day at one Whole Foods store. In contrast, a convenience store or a pharmacy might sell a couple KIND bars a day on average.

If we were going to invest resources into letting people try KIND bars, say by having a team member cut up and hand out samples, our return on investment at the premium natural and specialty retailers was much higher. We learned it was almost impossible to overinvest in demos and sampling at these kinds of stores.

In contrast to our early efforts at PeaceWorks, when we were undisciplined and trying to be everywhere when we were not ready, now we were sharply focused on natural and gourmet stores. In addition to the national Whole Foods chain, specialty chains like Gelson’s in the Los Angeles area, Mother’s Market & Kitchen in Orange County, Draeger’s and Andronico’s in the Bay Area, Treasure Island Foods in Chicago, Fairway Market in New York City, Kings in New Jersey, PCC in Seattle, Central Market in Texas, and Sprouts Farmers Market and other upscale grocers across the nation were formidable partners. To this day, we find that we still have not hit the ceiling with these pioneering accounts. After years of assertive sampling, plenty of Whole Foods consumers have yet to try a KIND bar. We continue to do demos there and our sales continue to increase at our core accounts.

Paying attention to store productivity and investing most in the stores that perform best is as important for electronics, widgets, and diapers as it is for food products. You need to identify your core retail account or partner, where the sales per store will be significant, and which is the most natural fit for your product. It’s important to figure out which store sells to your true consumer—the most frequent, most loyal buyer of your goods. You need to honor those accounts with a lot of TLC and support. My rule of thumb is that you’re never doing enough. You can always service those accounts better, rather than trying to establish new links elsewhere. Your inclination as an entrepreneur may be always to pursue more stores, but odds are you have not done enough with your core partners. Remember to exhaust those existing opportunities because you’re far more likely to get a return on your investment by doing so.

Once you’re doing this well, define a migration strategy for sales. Look at the concentric circles of opportunity moving outward from your core customers—like ripples in a lake. In our case, KIND then progressed to upscale supermarkets like Lunds, Byerly’s, Harris Teeter, and The Food Emporium.

The next step was regional grocery powerhouses like H-E-B, Wegmans, Fred Meyer, and King Soopers. We also started to get into the higher-end stores within national and semi-national chains like Kroger, Safeway, Publix, and Stop & Shop—targeting pockets of consumers willing to discover healthful new products. Each of these successes was exhilarating, but—crucially—we were also careful to pause to support each new partnership and opportunity before reaching for the next one. We made sure to prove ourselves and our products at each level of the testing process. We understood that if we were too aggressive and asked to get into all of a retailer’s nationwide stores at once, we might not have enough sales per store to warrant the continuation of the relationship or have the chance to grow within that chain. We needed to focus on building a strong consumer base in tandem with the expansion of our distribution footprint.

I remember when Cecil Bogy, the buyer at Kroger, gave us a shot with two hundred Kroger stores. I challenged my team member Rami Leshem to go for more. But cooler heads prevailed; Rami and Cecil knew better than to dilute our focus and that we first needed to succeed at those stores. At that time, we were not ready to support a national launch. But by performing well at the best stores, we slowly expanded to more and more stores and eventually gained national distribution across their 2,600 stores.

Once we were in supermarkets around the country, and once loyal consumers were seeking us out and complaining that they couldn’t find us, we moved into alternative channels of distribution: sporting goods stores, drugstores, coffee shops; convenience stores; airport, train-station, and travel retail stores like Hudson News; office-supply chains like Staples and other non-grocery retailers that would put us in the checkout aisle.

PATIENCE IS A VIRTUE

Only when you’re operationally mature do you pursue clubs like Costco, BJ’s, and Sam’s, and retail giants like Target and Walmart. You don’t want to be on those shelves too early and not be able to carry your weight in terms of generating the “pull” for your products from a critical mass of current and prospective consumers. Beyond the sales turns and performance against which you will be benchmarked, you also need to have well-developed internal systems to properly manage and service those accounts. Large retailers require data and tools and logistical sophistication that a small company may not have. You owe it to yourself and these larger accounts to be disciplined and engage with them only when you are ready to deliver logistical excellence. Our philosophy is that, wherever we go, we want to be that retailer’s favorite supplier. That may mean sometimes you need to develop consumer loyalty and operational muscle before being ready to partner with a new account.

Lately, as the wellness category has become so coveted by retailers, even large players that historically preferred to wait to introduce proven products into their stores have considered investing in pioneering brands earlier. If a large retailer expresses interest in launching your products, this can represent a huge opportunity. But it is a high-stakes gamble because low awareness about your brand or new products will make it harder for you to generate the turnover that a large retailer needs to justify keeping your products on its shelves. If you lack the brand awareness, you need to make sure you have the market resources, distinctiveness, and retailer commitment to promote and sample the product and ensure sell-through. You also need to ensure you can manufacture and deliver in a timely basis. If you don’t know your limitations and you press forward, the early entry can backfire: It can lead to the discontinuation of your products and to excess manufacturing capacity. And it can set your sales plans back by a few years, as retailers may hesitate to give you another shot after a bad experience.

The peril of not being ready to appear in major stores is a problem KIND knows all about. Around 2007, one Walmart buyer gave us a chance. She was a KIND consumer herself and really believed in our brand. She wanted us to succeed. Walmart is a prize account for consumer brands, but it’s a challenging customer for a fledgling start-up to have, because it has world-class service standards and expectations from its vendors.

We debuted in one thousand Walmart stores. At the time, there was no defined nutritional bar aisle, so we found ourselves on a shelf next to candy bars like Snickers (which are made of very different ingredients and retail for a fraction of the price of a bar made from whole nuts and fruits). The larger challenge was that Walmart consumers did not have sufficient awareness of our product. And we also did not have enough knowledge, as a company, about how to handle an account as big as Walmart. Our product tended to go missing from shelves, because we couldn’t control the distribution correctly. We sold through a large distributor and had no idea how to monitor our placement. Our products too often got lost in the supply chain. The test failed within a year and KIND products were discontinued. It was quite a disappointing setback.

When I hired our president, John Leahy, in early 2010, I wanted to try Walmart again.

“We’re not ready,” John said. “We’ll go after them when we’re ready.”

We spent the rest of that year and the next working on our internal systems, our distribution, and our tracking. We hired team members who had experience working with Walmart and who understood how their supplier ecosystem worked. In early 2012, we began making presentations to the company. By that point, KIND had enough brand clout; we were a very different company than we had been five years before. By April 2012, we gained distribution at Walmart.

We now sell four-packs, multipacks, individual KIND bars, and KIND Healthy Grains Clusters at Walmart, all at attractive prices for consumers. The arrangement has gone so well that John and our Walmart team were even invited to Bentonville for a day of meetings and tours, an unusual honor for a company that usually allots half-hour meetings even to important vendors. Because of our success with Walmart, we received a call from their sister company, Sam’s Club, which became a customer as well. Eventually, we got to work with Walmart’s senior management and develop a major strategic relationship.

John, who has been selling to the country’s largest retailers for the last three decades, notes that know-how is what matters here. “Regardless of category or product type, you have to have the infrastructure to support these major accounts and you have to have the internal knowledge of their systems and their brand,” he says.

Whatever beachhead you conquer, you have to be able to deliver more productive returns to the retailer, on a same-store basis, than competing brands. Then the retailers start helping you expand. You need to be disciplined and respectful—to your brand and to the retailers—and keep walking past the stores that are not right for you, or not ripe for a relationship. Learn to wait.

Often you’re anxious and excited to expand your business, and you don’t want to slow down. It’s hard to be patient when you want everyone to buy your product. One rule of thumb KIND lives by is to do only that which we can do with absolute excellence, without cutting any corners. And a trick I use to conquer my own fear of closing off opportunities is to say to myself, “I am not saying ‘no.’ I am just saying, ‘not now, not yet.’ ” If there was a store I wanted to target, but knew my company wasn’t ready, I wrote it on a list of what was to come. I learned to be disciplined enough not to drop everything and go for it immediately.

We entrepreneurs tend to sense—falsely—that everything we do will succeed. It is this sense of invincibility that prompts us to take risks others may not, so it is an essential strength to have this naïve bravado to some degree. But it can also destroy us if not managed.

Michael Porter, a professor at Harvard Business School, said, “The essence of strategy is choosing what not to do.” For entrepreneurs, at a minimum, they can tell themselves that strategy means choosing what to leave for tomorrow. Create a list of priorities for your creative ideas, marketing campaigns, or anything else you hope to do. You don’t have to cross off any ideas; you just have to put them into the right order. Eventually, you may get to do them—if you do everything else on the list first.

FOCUS PAYS OFF, BUT NOT WITHOUT PAYING YOUR DUES

Because of our early focus and discipline in the mid-2000s, KIND was starting to generate buzz, both at trade shows and in our media coverage. Something special was clearly going on. People sensed that something magical was happening with us.

In 2007, at the main trade show of our industry, the Natural Products Expo West, the excitement around our booth was hard to contain. We could only afford a small booth back then—ten feet by twenty feet—for both KIND and PeaceWorks products, which at the time we were selling under one roof. To amplify our reach, we were living our brand’s social mission by doing kind acts for others at the trade show, including surprising people by giving free massages, and offering people rides to their cars in the convention center’s parking lot.

On the show floor, KIND was talked about as the hot product in the space. In 2007 and 2008, we received awards for the best new product at the trade show. Applications to work with us started to pour in from people with industry experience.

We were excited. KIND was a fun place to work, and we were all having a great time building something vibrant. But it wasn’t easy. Ironically, it was during this period when we were experiencing 100 percent growth (even if from a small base), that our cash challenges were the greatest.

Entrepreneurs often don’t realize that faster growth can strap your cash. If you’re growing very slowly, your cash needs might not be as difficult to meet, as long as you are profitable. But when you’re doubling your sales, you need to increase your working capital to manufacture more inventory, to increase your allowance for accounts receivable (to collect cash that you are owed for sales you made on credit terms), to hire more people—and of course to invest in promoting your brand. Profitable companies can go out of business if they don’t manage their cash properly.

This is how we ended up with a chronic cash flow problem. Focus pays off in the long term, but in the short term you still have to keep plugging along. We fought hard for every dollar we had. In addition to skipping my own salary on many occasions, I had to make sure we didn’t pay too early for anything we owed. We paid right on time, and we ensured our customers paid us on time. The KIND operations team would get on the phone to remind our customers that they needed to send in that check for the product we had sold them. We managed our inventory tightly, because we couldn’t afford to be out of stock, but we also couldn’t afford to have too much product, as we barely had enough cash to finance our most essential inventory. We had a tiny marketing and sampling budget.

Most of the impetus for our growth came from the product and the packaging itself, and from eye-arresting in-store marketing tools like signage and displays. Out of necessity, we tracked every wire rack we gave to stores because we could not afford for our customers to throw them out; we needed to refill those racks. Once customers sold through product, we had to swiftly replenish them before competitors put their products on our displays. Our small office was like a war room. A large map of the country hung on the wall, with pins tracking all our wire racks across the nation. Different color pins signaled when we had last visited or called those stores. Every asset was essential.

We had no alternative but to lean hard on our entrepreneurial spirit and to be disciplined about our finances. It was a long time before we were able to breathe freely at KIND without worrying about every penny that came in. I consider it lucky that our focus and single-mindedness allowed us to get to that point at all. And even luckier that such circumstances engraved resourcefulness into our culture and character.

BEING TRUE TO MYSELF

Around this period, I met Michelle Lieberman, the woman who would become my wife. I had been living a bachelor life for many years, married to the company, singularly focused on the mission of KIND and on my efforts for peace in the Middle East.

We met at a friend’s karaoke party in the Lower East Side in New York City in December of 2006. When I walked into the bar, the first thing I saw was a guy dressed as Elvis singing karaoke. I teased Michelle that she looked enchanting in contrast. Fortunately, I did not sing any songs that night, or I don’t think she would have agreed to go out with me. She was a doctor and spoke Spanish: I thought we hit it off right away. Michelle took more convincing.

After we started dating, we went through a period she playfully and patiently dubbed the War Years, partly because of my preoccupation and sadness about the Hezbollah-Israel War, but also because I was at war with myself. I had gotten used to obsessing only about my professional pursuits, and I was not used to letting anyone in.

I needed to become more open to developing profound relationships. Part of that involved recognizing that I probably had a fear of commitment and a fear of letting people into my life. That was both because I was intimately involved with my job, and because I didn’t want to get hurt.

At the time, I was also working hard to mobilize a million Palestinians and Israelis to demand continued negotiations to resolve the conflict. In October 2007, a seminal event we worked really hard on had to be canceled at the last minute; I was devastated by the setback. My uncle Jorge Americus flew into Israel to stand by my side, as did Michelle, in a sweet surprise. Their love and unquestioning loyalty not only helped me overcome my despair, but also made me realize how blessed I was to have my family’s support and Michelle’s loving partnership. A few weeks later, I proposed.

THE BUSINESSPERSON AS ACTIONIST

Above all, focus means getting stuff done. A lot of people have great ideas but don’t act on them. For me, the definition of an entrepreneur is someone who can combine innovation and ingenuity with the ability to execute that new idea.

Some people think that the central dichotomy in life is whether you’re positive or negative about the issues that interest or concern you. There’s a lot of attention paid to this question of whether it’s better to have an optimistic or pessimistic lens. I think the better question to ask is whether you are going to do something about it or just let life pass you by. Are you an actionist?

Action, no less than creativity, is essential for an entrepreneur. While others may ask whether the glass is half full or half empty, an entrepreneur just fills up the glass. Determination is fundamental.

Entrepreneurship is hard work, and most people who start a venture understand that they will be working around the clock and doing anything that needs doing. Being an entrepreneur is also about figuring out what needs to be done, what problems need to be solved, and then finding solutions.

In many ways, attitude is destiny. If you determine that you’re going to do something and have a positive attitude, you can find fulfillment in the pursuit itself. Trying is half the win already. If you don’t try, you’ve lost from the outset. One thing that my dad taught me is that change is not a spectator sport. You have to actively participate in shaping the world you want to live in. This sense of responsibility has influenced all of my business ventures.

The same is true with the blocking and tackling of sales. There were retail accounts that took me years to get, but I would not relent; I would not stop until those outlets were carrying KIND bars. There are still goals today that I won’t give up on. John Leahy, our president, has the same approach. Every year, he frames and hangs in his office a printout with the logos of the most challenging accounts that he is determined to conquer and win over. He doesn’t decorate his office with his successes, which are many. He reminds himself, and our team, of what remains to be done. That focus allows us to pursue those goals that are truly important.

I saw Starbucks as an opportunity for KIND from day one. I called the switchboard and tried to find someone to send samples to, with no real traction. I then met a Starbucks director at a regional meeting of the World Economic Forum in Jordan. He became a friend and introduced me to the marketing team at Starbucks. Unfortunately, they were not responsive.

In 2008, I was introduced to the vice president in charge of Food for Starbucks. Starbucks had just conceived a campaign called Real Food, Simply Delicious to freshen up its food offerings. I sensed that the vice president was seriously interested in us, and I invested team members’ time and money in compelling presentations to her, in late 2008 and early 2009.

We had very few resources and a skeleton team. My team argued that I was taking away resources from immediate marketing needs to go on a wild goose chase. They were arguably right. I had been trying for the Moby Dick accounts for quite a while. I always explained to my team that we needed to combine pragmatic, realistic goals with those big, audacious objectives that are hard to achieve but that would be very impactful if we did manage to achieve them. Eventually things started clicking. I was invited to fly to Seattle and had a positive meeting with the vice president and her team. I felt like that boy who has a crush on the prettiest girl in the class and, all of a sudden, she winks at him, and now he is waiting by the phone, hoping she will call him back.

WHERE TO FOCUS NEXT: BIG DECISIONS

My Starbucks crush coincided with a period that was pivotal for KIND in two ways.

First, we had started to ask ourselves: How are we going to innovate without destroying the brand? It had been several years since we pioneered fruit and nut bars in the United States. I felt the time had come for us to take our next step. And I realized that a brand’s second act in many ways is the most important move in defining the values and principles that it will represent.

We had to decide what would be the common thread that defined KIND: Was it the use of dried fruit and nuts? Was it healthy snacking? All-natural foods? Were we a bar company? Or was it about products with nutritionally rich ingredients you could see and pronounce? We knew what a KIND Fruit & Nut bar was, but we had yet to clearly define the KIND brand. We needed to ask ourselves these serious questions. And we needed to come up with answers before expanding mindlessly in directions that we might regret.

Second, and of more immediate concern, our cash flow challenges were deepening. Even though the company was growing and profitable, I still often couldn’t pay my own salary. I was getting married, children were just around the corner, and I was asking myself how I was going to provide for my family. I couldn’t continue skipping my salary for months at a time. That forced me into a strategic discussion with myself. Should I sell a stake in the company to investors? Should I sell the company? Or hold on tight?

While I was debating my course of action, one of the largest food and beverage companies in the world knocked on our door.