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Headshots of the speaker panel for Agile Strategy: Your Future is Optional

Agile Strategy: Your Future is Optional

  • 05 June 2020
  • Digital Growth Agile Strategy

How can keeping the customer at the heart of the business drive continuous strategic, operational and product innovation to satisfy changing consumer needs?

Join Lisa Barnett in this fireside chat. Lisa is the Co-Founder & President of Little Spoon, the fastest growing direct-to-consumer children’s food and nutrition company reinventing the modern parent’s experience of keeping their child healthy. She has been recognized as one of the ‘Women Changing the Food Industry’ by Well + Good, by Marie Claire as a ‘Power Woman of 2019', and by Forbes as 30 Under 30 in Venture Capital. Prior to Little Spoon, Lisa spent nearly a decade as an investor in and operator at some of the world’s top consumer brands including Estee Lauder Companies, Calvin Klein, Target and a number of other Fortune 500 Companies. As an investor, she was focused on investing in brand-driven startups aimed at transforming the everyday life of consumers in the wellness, health and CPG space.

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Speakers

Dan Stolarski - Senior Managing Director, Head of Kin + Carta Advise Americas
Lisa Barnett - Co-Founder, President and Chief Marketing Officer at Little Spoon

(10:34)

Lisa:

One key thing with our model has been developing an extremely nimble supply chain from the beginning, so for context, at Little Spoon we source everything raw. We produce, we process all the food, we package it, and then we ship it out to partners who then can assemble the boxes and get delivered to the customer's door. 

When we were setting up this process, we made a distinct decision in the very beginning to actually have two types of facilities. One we call our incubation facility, which is where we do all of our R&D for products, new skews, new recipes, things like that. We launched the products out of this small facility; it has no production minimums, we have a lot of control, it's done in an un-scalable way. If you produce, it takes a lot more capital per skew to produce, but we're able to do it in whatever quantity that we want, we're able to make tweaks, etc. 

What that enables us to do from agility perspective, is test a product live. Once we know the product is great and safe, and we're pretty sure it's 95% of the way there, and we just want to validate our customers love it, we launch the product out of this smaller facility to see how it goes. We get our customer's feedback, etc, etc. And then once we're sure it's a product that's going to stay, we move it on to a second facility which operates at a very large commercial scale, where unit production minimums are very large, but we're sure that we can sell through it. That has enabled us to be really open to hearing what our consumers say to us and actually making changes. Obviously if you jump right to large scale production and you hear maybe 15% of your customers feel really strongly that this product is just not good for them, for whatever reason. Is 15% a lot? How do you quantify that? Is that going to make them not want to purchase Little Spoon? These are the debates you have at a leadership level because if you don't, you could argue any way. But, if you don't have to sink your cost into producing a million units of something, you're not sure it's going to do well, then why wouldn't you change it if you can? 

We're enabling ourselves to be able to be responsive to this feedback really early on, so we could really nail it once we scale that up. That’s definitely what we attribute to being successful and growing so quickly; we take the ideas, we take the feedback from our customers and we implement it really quickly. 

In weeks time, we're able to adapt to a change, assuming it's not a complete revamp of a product. So that's a huge part of it, and then I'd say the other part is our organizational structure. That enables us to be really agile and responsive to consumer feedback, to changing needs, to changing landscape. Our customer care team, for example, is very well integrated into our consumer insights team, which is really well integrated into marketing and product teams. And so we're able to actually provide the feedback loops in real time at the right stages of product development, of campaign development, of product launches. That way we can adapt and change really quickly in response, if you know, something we thought was going to go really well, doesn't, or something goes well unexpectedly, and we want to double down on it quickly so that we can capitalize on the opportunity.

(14:56)

Lisa:

My co-founders and myself, we are doing this because we genuinely believe we can change the experience of parenting. We can genuinely create affordable, easy, convenient, and high quality solutions for families. That goal, that mission, these parents, our customers, are at are our center of gravity in every decision that we make. That's reflected in the KPIs that we've set for Little Spoon. 

Our top KPI: the customer has to be happy. We start with their pain points and problems, not what's best for the business, or what can be most profitable. Our job as entrepreneurs is now that we've validated there's a problem, how do we get really clever around creating a great business opportunity around it? Our customer is our center of gravity. That is the value. So our organization is set up to respond to the customer, because we want to keep them there. 

When we started to build Little Spoon as a team, having this in mind, we thought, where are these overlaps on different teams that maybe wouldn't normally work together, or in contact together so frequently, where we feel like that will be the secret sauce for us to be responsive to this customer. And then how can we create systems around those overlaps, so that we can stay well aligned and intertwined? 

Our care team is an amazing group of all women at this point. All parents. They all start as Little Spoon customers, and then we hired them to be our frontline and our soul of the company. If you go to littlespoon.com and text, chat or call into Little Spoon, you’re going to get a response from a Little Spoon customer who we hired, who is a parent. Many of them are new parents. They have a really good pulse on our community, on our customer, and they are really about building the Little Spoon community and brand. And so we actually organizationally put our customer care team under marketing and brand. It's not under operations, it's not seen as a call center. It's seen as a value driver. It's seen as building the brand, and that has a fundamental impact on how we operate, how we invest in the team, how we built it. And it is one of the single sources of our rapid growth. I mean, in our first year of Little Spoon, we spent in the tens of thousands of dollars on marketing, and that's it. Because it was really all driven by these local nodes, it's a distributed network of part time moms all around the country who really were just talking, nurturing and being a part of that community. We create feedback loops with these care teams; I'm syncing with my care team, I'm the CMO. And I'm syncing with the care team multiple times a week, listening to insights, creating different feedback forms and ways to flag when there are issues or insights that start to bubble up as a pattern. And then we're able to respond to that from a marketing and product perspective. 

Similarly, for our Research and Development process, we're really big on surveying and feedback. Our product teams first rule, when we're developing a new product, is to bring in a few of our nodes on our customer care team. It's not the food scientists - they're not the ones who are going to understand what the problem is that we're trying to solve. That is a process step that we've all agreed to, that it starts with our customer care team. It doesn't start with us in a lab trying to think about ‘what do we want to do?’, what do we think in our heads is the best, which is a really easy fallacy to fall into. When I was in venture, I would see so many founders, myself included, thinking about these problems every day that you're working on and trying to solve. It's easy to think you know the most about it because you're spending the majority of your time thinking about it. But even if you're your target consumer, you're still not your consumer, and there's a big difference. You really need to listen and ask those questions and create those feedback loops. This has enabled us to be really agile because again, consumer preferences are changing. The world is changing before our eyes. I think everyone, if they didn't believe it before, believes it now.

(21:11)

Lisa:

We are gearing up to launch new product lines, for various ages of kids. We start out by first conducting a big white boarding session: what is every hypothesis we have about where there are gaps in the market, where Little Spoon could play a role. We lay all those out, and when we start, we ask a little council of our customers who are super passionate; like Little Spoon loyalists. Who we pressure test those hypotheses with first, before we write any survey, before we do anything, to really understand how far off we are, and how we can tweak those hypotheses. I don't really care what my long tail customers want; those aren't going to be my promoters. If you believe in promoter scores, which I do, those aren't going to be the people that are building value in my business. The people who are building value in my business are these passionate loyalists. Those are the people who, for every one customer you acquire, you're getting 10 more back from them. So I want to build solutions around them, 'cause they’re the people who are going to be buying, talking, advocating, being, doing my job for me. 

We have a small group of customers who are part of this council, and we're in the process actually formalizing that for the very first time, treating them like a whole other customer stakeholder group, which is really exciting. We start with them, and then we develop a set of surveys based on the refined hypothesis that we have. And go out and survey our customers; we survey target customers based on audience panels, things like that, and we then take that feedback and go off and create our MVP. And then we go out and test the physical product there, right, live. 

We've always had an early access group of people that we enable to purchase our product, provide really valuable feedback, and build it into our launch timelines. We know that if these three things were wrong in our product, they have six-month implications. And we're okay with that, we align with our board on ‘this is what we think’, ‘this is how we're going to pressure test it’. And if we're wrong, it's going to have a six-month implication on our launch, but that's okay. Having that plan upfront enables you to be open to the feedback, as opposed to just wanting to be right, and you have confirmation bias. It's really hard when you've put so many resources and time into doing something. So that is something I'm literally doing right now with a new product line that we're launching. And we're probably 80% of the way there, and we have made so many changes to our product. Everything from the packaging to the recipes, to the way we're messaging it as a result of all of this feedback that we're having.

(20:21)

Lisa:

Fundamentally that allows us to get into the facility. I'll give you an example: a new product line that we're coming out with has whole broccoli in it. We didn't cut the broccoli the right size. For those of you who have kids, one of the most annoying parts about feeding a child is that you have to chop things up into specific sizes for them. It takes a lot of time, it's very tedious. So getting that right is actually really important to us, because we don't want you to get a meal from us and then have to do more work for it. We want it to be ready, done the way your child needs it, the way you want it. Initially we cut it the wrong size, it was still too big. Lots of people in our test group were complaining about it. We now are able to go into our facility and literally rewrite the procedures and implement those changes the next time we're running them - literally the next day. In a larger commercial facility that will take much longer to do, because unless you own that larger commercial facility, you have to go through the right procedures. You have to go through the production facility manager, they have to educate and train the staff, and then they'll probably get it wrong a few times over before it happens. Whereas we're able to make these tweaks and perfect it, so that once we get to the larger scale facility, it's unlikely we're going to have any changes to the process, which obviously keeps it really tight and ensures that we're getting the quality and the exact, we see every meal exactly how we want it made.

(26:35)

Lisa:

I believe that being open to change is really something that comes from all of you. It's a top down thing that really does affect how comfortable people are with change, with challenging the status quo. I think the first step in leadership needs to be open and communicate those values. So at Little Spoon, every new employee is told that every day should feel like an experiment. It works really well for us, that's not necessarily the right value for every company, but there's probably some version of that sentiment that can really empower your people to be open to feedback, to be open to being flexible. We all know if you're not responsive to the consumer landscape, you're going to fall behind, you're going to be disrupted. 

Telling your team every day should feel like an experiment, just fail fast, learn fast and move on. If you can communicate that to your team, and really embody that yourself, owning up to failures. For example, in response to customer feedback, we actually launched a huge platform called, "Is this normal?" which is a community, it's an advice column, it's a platform for new parents to kind of be themselves, and to get their questions answered. The first iteration of that was a complete failure. It was the right idea with the wrong execution. And instead of me saying "Oh no, we're close, you just have to tweak this." It was like, "No, we totally thought about that in the wrong way. And what do we do about it? What should we do? Where were our assumptions wrong?" Owning up to those big and small mistakes also makes people feel really comfortable that you're going to be in a problem-solving mindset, if they do take a chance and it doesn't work out.

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