Funding — You can absolutely get a start up company off the ground and showing early success without outside funding, but in a world that moves so fast if you want to scale quickly you will need to raise millions of dollars. This will help you pay for a great team, fine tune the product, build a cohesive brand, and market your product.
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 Steven Izen, Founder and CEO of Lokai and Elements. Lokai began with a simple idea — help people find balance through life’s highs and lows. The brand was born from Steven’s personal experience with loss and has grown into an international sensation that has helped millions of people find balance through the message of staying humble and hopeful. Lokai has also donated over 8.5 Million dollars to charity.
Balance is also a daily journey, and sometimes you need a little help to find your center. With that in mind, Steven set out to create Elements — a line of functional wellness drinks and supplements made with clinically effective levels of adaptogens to help people Uplift or Unwind throughout their day.
Steven currently serves on the National Board of the Make-A-Wish Foundation.
Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a bit about your “childhood backstory”?
From an early age I knew I wanted to be an entrepreneur. I started my first company in high school, hand-making and selling wooden pens to local boutiques and shops. I was inspired to start my second company, Lokai in college after my grandfather was diagnosed with Alzheimer’s. I designed a bracelet to help remind myself and others to find balance — staying humble through life’s highs and hopeful in the lows.
Can you share with us the story of the “ah ha” moment that led to the creation of the food brand you are leading?
I created Elements after learning about adaptogens and their unique ability to help the body regulate stress and balance itself. Until recently, adaptogens were relatively niche and mainly found in unpalatable powder or pill form. I wanted to create an easy, accessible way for people to take adaptogens daily: a canned drink with refreshing tea taste and functions you feel.
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?
I don’t know if I would call it funny, but the biggest mistake I made when first starting Elements was underestimating the importance of logistics and operations in a beverage company. When I quickly learned how vital this was I hired a COO who has extensive experience in the field.
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?
Too often, I see new products in established categories that lack differentiation and innovation. It’s hard to convince consumers to try a new product without a compelling reason.
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?
I would recommend finding someone to make you samples if you can’t make them yourself. Once you have samples, get as much feedback from friends and family as possible. This will help you to understand who your core demographic is, identify improvements you need to make and fine tune your product story and messaging. Most importantly, you’ll learn if people actually like the product or have a need for it.
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?
When I was 19 starting my first company, Lokai, my dad gave me the best advice I have ever received. He told me “Everyone has great ideas, now you have to go execute.” It’s up to you to make it happen, no one is going to do it for you.
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?
I think every case is different. Some products necessitate specialists to help bring them to life where other companies are born out of products you can develop and test in your own kitchen.
What are your thoughts about bootstrapping vs looking for venture capital? What is the best way to decide if you should do either one?
Everyone’s personal financial situation is different. I recommend getting your company as far along as you can alone before bringing on outside capital. This will give you a higher valuation which will allow you to keep a larger percentage of your company’s equity.
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?
Start with Google. The internet is a powerful tool for budding entrepreneurs. I was able to find an overseas factory and begin producing Lokai samples entirely online from my college dorm. You can pretty much learn anything or get in touch with whoever you need if you are persistent enough.
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.)
- Team — One of the biggest learnings for me over the past 7 years of being a CEO is understanding your team is everything. You can’t win alone and putting the right team together who work well as a team, each specialize in their job/responsibility, and your ability to trust them to execute is the most important part of building a successful company in any industry.
- Product — As I stated previously, you need to have an innovative product in a market that is large enough to allow you to grow and become a sizeable company. If you create a product in a niche product category you are limiting your potential upside.
- Operations — No matter how much demand there is for your product if you can’t scale production efficiently and be able to distribute it to retailers you will never be able to actually grow the business. Having the right team in place that can help you scale operations is critical to your success.
- Frictionless Velocity — Anyone can pour marketing dollars into getting customers to buy your product but a key metric I look for is how well the product sells off retail shelves with no marketing spend. Do people see the product on shelf for the first time and say “I need to try this”?
- Funding — You can absolutely get a start up company off the ground and showing early success without outside funding, but in a world that moves so fast if you want to scale quickly you will need to raise millions of dollars. This will help you pay for a great team, fine tune the product, build a cohesive brand, and market your product.
Can you share your ideas about how to create a product that people really love and are ‘crazy about’?
I believe you have to start by looking at where the consumer prefereneces and industry are headed and filling that need is a great place to start. It takes a few years to get a company off the ground so if you are creating a product consumers like today they will already be on to something else in 5 years which is when you need to be thriving. As an example we decided to create an Adaptogenic beverage 3 years ago when no one was familiar with the word. Today, I would say over 50% of people have now heard of adaptogens and their benefits which is right in line with our growth plan.
Ok. We are nearly done. Here are our final questions. How have you used your success to make the world a better place?
I believe making the world a better place is part of our responsibility as entrepreneurs. Not only should we strive to make products that improve people’s lives, it is imperative that we do so through sustainable practices and by giving back as much as possible. These are core values of the companies I have started. I’m very proud of the fact Lokai has been able to donate over 8.5 million dollars to different non-profit organizations and Elements helps people live healthier and more balanced daily.
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.
Protecting our planet. I see global warming as the greatest threat humans have ever faced and we need as many people as possible thinking about ways to reduce and reverse carbon emissions.
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.
Jeff Bezos — He’s changed the way people live and I would love to understand how he plans to help save the planet and how I can help!
Thank you for these fantastic insights. We greatly appreciate the time you spent on this.