Shibani Baluja: “Test, Learn, Repeat”

Test, Learn, Repeat. One of the benefits of a start-up is the ability to be creative, move fast, and nimbly evolve. As the adage goes, perfection is the enemy of progress, so we push ourselves to continually test and learn in all facets of the business. We seek out people who we see are doing […]

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Test, Learn, Repeat. One of the benefits of a start-up is the ability to be creative, move fast, and nimbly evolve. As the adage goes, perfection is the enemy of progress, so we push ourselves to continually test and learn in all facets of the business. We seek out people who we see are doing things well and try to learn from them. And, of course, are always willing to have a conversation with others wanting to learn from us. We accept that we are not experts, but if we are learning, then we keep improving and are able to drive those learnings back into the business in a healthy way. This learning mindset is freeing in that it allows us to let go of the ideas that do not work and simply move on.

As a part of our series called “5 Things You Need To Create a Successful Food Line or Specialty Food”, I had the pleasure of interviewing Shibani Baluja, founder & CEO of lil’gourmets, a unique kids food company that offers the first and only fresh organic veggie meal.

Prior to launching lil’gourmets, Shibani spent more than 10 years at Kraft Foods, most recently as a Director in the Mergers & Acquisitions group. During her time at Kraft she led a number of transactions, partnerships, and internal strategic projects. During the same time, Shibani also struggled with infertility which led her to eliminate all processed foods from her diet. She eventually got pregnant and when it came time to start feeding her baby, she realized the available prepared baby food options were as over-processed as the foods she eliminated from her diet. She was struck by the irony and ended up cooking all her son Jayden’s meals, and did so with a complexity of ingredients and flavor generally not thought of for babies.

After seeing the benefits of her feeding choices and subsequent medical research, she realized that through the early introduction of diverse, flavorful, veggie-forward foods, we can shape a lifetime of healthy eating habits and a love of diverse, culturally-rich foods. So she decided to launch lil gourmets, a unique kid-focused brand that provides fresh, organic, nourishing, globally-inspired, chef-crafted veggie meals that bring the taste of six (and growing!) global flavors to our youngest eaters in the U.S.

Shibani holds her BA in Economics and MBA in Finance & Strategy from the University of Michigan. She lives in Chicago with her husband, Mike, and children, Jayden and Mira.

Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more. Can you tell us a bit about your “childhood backstory”?

I am a first generation Indian-American. My parents moved from India to the United States in the 60’s and landed in Detroit in the 70’s. They worked really hard to chase the American dream, both in their day jobs and then eventually in starting a restaurant that they worked at in the evenings. They always stressed the importance of education and hard work to be able to have more opportunities than what were available to them. Much of my childhood was spent on schoolwork and at the restaurant; I worked every job there from dishwashing to eventually managing the front of house, while in college.

I did not grow up in a diverse area. I was one of three Indian kids in my school and maybe one of ten people of color. So while growing up, I was never that comfortable in my own skin and didn’t hide that I was Indian, but didn’t really offer it up either. All that changed when I got to college and saw a whole community who looked more like me and had similar childhood experiences as me. It wasn’t until then that I learned to be proud to be Indian and began to better embrace my Indian background and the rich culture that accompanies that.

Can you share with us the story of the “ah ha” moment that led to the creation of the food brand you are leading?

My long struggle with infertility led me to eliminate all processed foods from my diet. When I finally had my son and the time came to introduce him to solids, I wanted to make sure his first foods were also wholesome and nutritious. However, I was stunned by the lack of fresh and healthy baby food options on the market. The only ready-to-eat options were over-processed, too bland or too high in sugar so my only option was to cook his meals.

I cooked for him the way I cooked for myself, with a variety of vegetables, beans, meats, and spices to create recipes that sounded delicious to me. As he became a toddler, I saw how the flavorful foods I cooked for him had impacted his palate. He ate a wider variety of foods than other kids his age and it made me curious. I began to research first foods and found medical research was showing there is a high correlation between our first foods and our future eating habits. Despite this incredible research, the options on the market seemed to be setting our kids up to have a strong preference of sweet and salty foods. Everything I experienced and all of my research led me to believe that we could do better, and that the baby food category was ripe for disruption and I had an idea that could be the disruptor. So, I left my corporate job and launched lil’gourmets.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

When I decided to launch lil’gourmets, I said to my husband “Give me 6 months to figure out if I have an idea that has legs.” I am now over 4 years in! I naively thought this journey was going to be a lot easier and quicker than it has been. It took nearly three years to get the product launched and then a year or so in our test market to get to the offerings we have today. We are just now gaining retail distribution, with partners like Target and Meijer, to have an opportunity to prove out our concept within a broader market.

I learned that having an incredible amount of passion, a truly supportive family, a very strong and complementary partner, a great sense of purpose, belief in ourselves, our team, and our products were truly needed to endure the challenges that we have faced in this journey. Knowing that we have a product that could do so much good helps me and my partner, Becky, especially on the hardest of days.

What are the most common mistakes you have seen people make when they start a food line? What can be done to avoid those errors?

I’ve seen some common mistakes made, but I’ve also made a number of mistakes myself!

During my time at Kraft, I structured a handful of partnerships and joint ventures. And in doing so, we would spend about 50% of our time thinking about what happens if and when the partnership goes bad. When you’re starting your business, you need to be aware that things are going to go wrong. Partners’ priorities may shift, their capabilities may end up not being a fit, their passion or belief in the product may lessen. So, defining what will happen if your partner, including suppliers, wants to walk away will likely save friendships, legal costs, and frustration. Similarly, on the legal side, another mistake is to not protect and define ownership of your intellectual property. You must protect your trademarks, patents, and recipes, confidential data and ensure the company owns all of them. And ensure that your agreements with consultants, suppliers, or anyone else helping you, dictates that anything they develop for you is completely owned by you. In other words, have a good attorney review your agreements!

I also see people, including myself, not thinking through all the interdependencies of what you are launching. When I first started, I spent so much time on the actual product: my recipes, my ingredient suppliers, and finding manufacturers, but I ignored the packaging as I thought it would be relatively easy to figure out. As it turned out, many packages would not work with my product. So, I created a package and then had to invest more capital because my manufacturer couldn’t fill and seal my new beautiful custom cup. My packaging issues added over a year to my timeline to launch.

So that brings me to the last mistake I’ll mention here and that is striving for perfection in your first prototype. I had people tell me just get something to shelf and you will learn way more there than you will in your research and analysis. And they were right. Despite spending nearly 3 years to get to launch, we pretty immediately saw things we should change, as soon as we put the package on shelf!

Let’s imagine that someone reading this interview has an idea for a product that they would like to produce. What are the first few steps that you would recommend that they take?

First you need to make sure there is a consumer demand for the product. A successful product will solve a problem, address an unmet need or disrupt an existing category. The food industry is competitive, so you want to make sure your product is unique and not another me-too product that’s going to get lost in a sea of similar brands. Talk to your potential consumers and customers and really listen to their feedback. Once you determine there’s a place for the product, you should do an in-depth competitive analysis. Identify the competitors, understand their positioning and pricing strategy, and ensure you are differentiated from them.

If you feel good about consumer demand and that you are filling whitespace, you should build a business plan or a roadmap to think through your high-level strategy, what needs to happen to get to launch, timeline, how you will fund launch, where will you sell your product, and a plethora of other things to consider. Your business plan will change as you learn more and it can feel overwhelming when you’re at the starting line but giving yourself a framework and deadlines to meet will help you stay on course.

And then the work begins of finding suppliers, manufacturers, and distributors, building prototypes, getting consumer feedback and incorporating it, branding, building a website, etc. and finding time to enjoy what you are building!

Many people have good ideas all the time. But some people seem to struggle in taking a good idea and translating it into an actual business. How would you encourage someone to overcome this hurdle?

Thinking of an idea is not particularly hard, but figuring out how to commercialize that idea can be. And then creating a sustainable business is even harder. There were a handful of times that I thought about walking away, before we launched, as obstacles that I never would have anticipated seemed to continuously present themselves. Before embarking on this journey, you should ensure you have a passion, belief, support, and resources to stick this through if and when it takes much longer than you planned.

If you are going to take the plunge, business plans do help organize. It doesn’t need to be perfect and it will change, but it can help you think through workstreams to get to launch, approximately how much time and money you’ll need, who your initial customers will be and how you will get to them, and so on. And find a good network of both entrepreneurs who are at a similar stage and can empathize and share learnings with, and mentors/advisors who can help you think through your high level strategy and provide mental support when needed. I had a good friend always reminding me that “If launching a business was easy, everyone would do it.”

There are many invention development consultants. Would you recommend that a person with a new idea hire such a consultant, or should they try to strike out on their own?

Yes, I think they can be very helpful. I worked with two research & development consultants that had a wealth of knowledge from launching hundreds of products at Kraft. I was able to tap into their learnings and get their help in thinking about what steps we needed to take on the development side and assessing the suppliers and manufacturers we were vetting. This whole process was foreign to me, so they were instrumental in figuring out how to bring my vision to life. And then as we wanted to expand the portfolio, we were lucky to meet a chef who is also an experienced product developer. She developed our new recipes with more creativity and on a faster timeline than I would have been able to.

There are also entire firms that can lead the end to end development process for you. If you are trying to launch your product, but not dedicated to it full-time, they can be especially helpful. But the benefit of you being involved in the details is to be able to more quickly find solutions to issues that may arise after you have moved on from the consultants, as well as, you likely having stronger relationships with your suppliers and other partners, which is valuable.

What are your thoughts about bootstrapping vs looking for venture capital? What is the best way to decide if you should do either one?

I think there are pros and cons to both and many considerations. Some things I would think about are:

  1. Are you looking to build a big national business or a local one? If your ambition is to go really big, then you may want outside capital, not just for the dollars but for the expertise that some investors can bring you. If it’s a local or lifestyle business, then you may want to hold onto more of your equity.
  2. Do you want to start making it yourself and scale if you find success? Or build a scalable business from Day 1? If you want to be able to scale from the beginning, you will need more capital to get to launch.
  3. How soon do you think you can become cash flow positive? If it takes twice as long, can you sustain it? The longer it takes, or the more money it takes, for your business to become cash flow positive, the more likely it is you will want to raise.
  4. Do you need to go for venture capital immediately? Or can you raise a bit of capital from friends and family who know you and believe in you so you can get to proof of concept first? The time to raise and the legal costs to do so will probably both be reduced if you can reach out to your network first.

When I decided to launch lil’gourmets, I wanted to be able to bring the product to the market, before I raised capital. I wanted some proof of concept before taking friends and family dollars. Once I had a product that we could sell in and we could see that there were many parents like us who were looking for a solution that lil’gourmets provides, we decided to raise capital. We knew that we wanted to be able to support growth and needed outside dollars to do that.

Can you share thoughts from your experience about how to file a patent, how to source good raw ingredients, how to source a good manufacturer, and how to find a retailer or distributor?

When you decide to launch a product, you should entrench yourself in a start-up network for your industry. There are a lot of resources and people willing to share experiences so begin networking with your relevant industry group and attending events. From there, you will likely meet people who can help you get started with names or recommendations of potential partners and a wealth of learnings. Finding one good partner can uncover resources in so many areas, as many things are interconnected. For example, ingredient or packaging suppliers may be able to identify manufacturers who can help with your product, because they work with their other customers, and then the manufacturers may be able to put you in touch with distributors because they are picking up from them.

When you meet with all these potential partners, I would encourage you to be armed with a list of questions because you never know what you may uncover that impacts other decisions. After learning some key pieces of information a little later than I would have liked, I started asking everyone, “Tell me what else I should be asking or thinking about.” And it was an effective way for them to stop and think, “Have I missed telling you anything that will impact your decisions.” It also gives you a good feel for their expertise and how much they may be willing to help you. A lot of this is networking, trusting your gut, asking the right questions, and then taking a chance!

Here is the main question of our discussion. What are your “5 Things You Need To Create a Successful Food Line or Specialty Food” and why? (Please share a story or example for each.)

  1. Deeply know your consumer. Fortunately, we know our consumers well because we are the consumers! lil’gourmets was born because I was stunned by the lack of fresh, vegetable-focused, flavorful food options available for our children. And after my initial research, I found that over half of parents had left the baby food category because they, too, were just like me, and dissatisfied with the food on the market.

After confirming that your product meets an unmet need, I’d recommend spending as much time as possible talking to your target consumer. After we launched our test market in Chicago, my partner Becky & I personally spoke to thousands of parents at events, festivals, trade shows, demos, in our retail stores, and even playgrounds. And we really listened, to learn as many insights as possible. These conversations were invaluable from the start, and we implemented real-time changes many times over during this time period in order to reflect what we were learning.

2. Differentiate, differentiate, differentiate. At one point, there were over 500 brands of bottled water. It’s hard to imagine each one of them having a true point of differentiation with the same basic ingredient: water. The point is, every single category across food is exploding with new brands and offerings. Grocery stores are all looking for the next big hit brand, the next disruptive category and new food alternatives are innovating at a pace unlike before. Both in the retail setting, as well as in the eCommerce world online, the space available is only becoming more crowded. Your product must have a reason for existing. What is the reason both a retailer and a consumer should choose you over what is currently meeting that need? Make sure you have a clear and compelling argument to earn your place.

3. Test, Learn, Repeat. One of the benefits of a start-up is the ability to be creative, move fast, and nimbly evolve. As the adage goes, perfection is the enemy of progress, so we push ourselves to continually test and learn in all facets of the business. We seek out people who we see are doing things well and try to learn from them. And, of course, are always willing to have a conversation with others wanting to learn from us. We accept that we are not experts, but if we are learning, then we keep improving and are able to drive those learnings back into the business in a healthy way. This learning mindset is freeing in that it allows us to let go of the ideas that do not work and simply move on.

4. Diversify your sales channels. When I first launched, the expense of a perishable product combined with the low percentage of consumers buying perishable groceries online led me to prioritize retail as my primary focus for sales growth. That said, I took the time to set-up a fulfillment house so that I could build an eCommerce site to begin to nurture my consumer base, create proof of concept, and enable direct selling while I worked on landing those critical buyer meetings. That diversification of channels has turned out to be a huge enabler and opportunity for lil’gourmets, particularly during COVID-19, where we could still service our consumers with direct and safe deliveries to their home. And now, one year after our test market launch, we are rolling out in 11 states in retail locations with incredible retailers, like Target and Meijer, and are now able to experience the benefits of retail, where even still, the vast majority of product discovery occurs.

5. Build Enduring Partnerships. As a full-time team of two, time is our scarcest resource. From the beginning, I worked very hard to build real relationships with my partners (not just my incredible business partner, Becky Graham, but our suppliers and vendors who we view as valued partners) because a good partner has so many benefits. By engaging with them in a way that helped them understand the vision for my business, I know that my partners believe in us and what we hope to achieve with lil’gourmets. They work with us on things that are normally deemed non-negotiable, they help us think through challenges, they make invaluable introductions, and they overall help in ways that would otherwise leave us fumbling for answers. I recognize that the quality and durability of our partnerships is what will drive this business, so I strive everyday to be the best partner I can be in return.

Can you share your ideas about how to create a product that people really love and are ‘crazy about’?

I believe that beloved brands build highly emotional relationships with their consumers. People may have initially tried the product because of a rational choice or even a sale. But if a brand reaches the point where consumers use emotion and passion to describe them …words like ‘love,’ ‘obsessed,’ ‘life-saver,’ these brands are no longer fulfilling just a need. Instead, they have carved out such an emotional connection to that consumer, that they could not imagine their life without it (and could certainly never replace it with an alternative!).

In the marketing world, these brands are often referred to as ‘sticky,’ and I believe that when you really break down the core of their success in the simplest of terms, these products have been near perfect in the execution of their idea: from concept, to developing a brand voice and personality, to telling an authentic story, to fulfilling a true need, and doing all of this in a way that authentically connects with their consumer…that’s what allows them to truly build that highly personal and emotional bond with their consumer. It’s all much easier said than done, but something we strive to do every day!

Ok. We are nearly done. Here are our final questions. How have you used your success to make the world a better place?

We are passionate about reducing hunger as well as increasing access to fresh and nutritious food, particularly amongst children in our local communities. We have been long supporters of the Greater Chicago Food Depository in their mission to provide healthy meals to those in need and more recently have partnered with additional organizations focused on ensuring our children are not hungry and under-served families are assisted. To do our part, we commit to donating 5% of our annual profits to support this and related causes. We also commit to continue to grow our veggie meal food donations each year. Over the last two years, we have donated nearly 20,000 lil’gourmets veggie meals to the Greater Chicago Food Depository and other local organizations. And through bi-annual drives we’re also able to donate a portion of our online sales to support non-profits that align with our values.

Additionally, as a founding member of the Shaping Early Palates initiative with the Partnership for a Healthier America, we are working on a national scale to educate parents about healthy eating habits for their children. This partnership was formed to raise awareness of the benefits of more veggie-forward options for young eaters and to create more affordable and healthy options for parents to help raise lifelong veggie lovers.

You are an inspiration to a great many people. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.

Our mission at lil’gourmets is two-fold. The first is to develop a love of vegetables. By changing our perception of veggies from something we have to eat to something we LOVE to eat, we can change the trajectory of health in the U.S. Now more than ever, we are seeing the impacts that underlying conditions can have on us, as well as the benefits of healthy eating. Medical research shows that early and repeated exposure to a variety of vegetables in infancy results in a lifetime of healthier eating habits. We need to provide families with more veggie-forward options and spread awareness of the lifetime of benefits they can provide our youngest eaters.

The second piece of the movement we’d like to inspire is around cultivating curiosity. Children are born naturally curious creatures and as parents we nurture almost all facets of that curiosity outside of food, where we have generally accepted sweet, over-processed foods as the norm. But at lil’gourmets, we imagine a world where we not only nurture our kids’ curiosity of food, but also use this opportunity to introduce them to flavors from around the world. We imagine a world where kids become curious about Morocco, because they love their Moroccan Butternut Squash…and one where they request the complex flavor of a vegetable curry more often than mac & cheese!

We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US, with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.

I would love to have lunch with Michelle Obama. She is truly an inspiration and a role model to so many, including me. Her accomplishments are extraordinary, her warmth and authenticity make her seem approachable, and the strength and grace she regularly displays is admirable. I’d love to hear how she navigates it all, any advice or learnings she’d want to share, and what is on the horizon for her.

Also, the Let’s Move! initiative she started while she was the First Lady focused on fighting childhood obesity and encouraging youth to live a healthier lifestyle, and this compliments lil’gourmets’ vision. So, I would definitely use my time with her to pick her brain on other ways to educate and expand our efforts to improve healthy eating habits among youth. At the same time, Michelle is so authentic and full of life that I’m sure our lunch would be full of laughs.

Thank you for these fantastic insights. We greatly appreciate the time you spent on this.

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