How to start up: The KoRo founders on growth, Pareto, and gut feeling
7 Business Tips from KoRo21. Juli 2022
9 minutes reading time
KoRo Tip 1: Focus, don’t specialize
Every business model is different. There is not just one master plan for the right approach. At KoRo, we have learned some valuable lessons in our four years of operating that we would like to share with you. We’ll jump right in with the most important experience and put a big exclamation mark behind it for e-food founders – Concentrate on proof-of-concept and put the focus on your product or service. Outsource services and anything else not directly related to your product directly to outside companies. One of the best examples of this is to question whether it makes more sense to have your own warehouse or an outside warehouse to store and ship your products. Of course you can deal with logistics processes, but in the end, you run the risk of acquiring specialist know-how in logistics instead of in the actual product segment.
Our tip: As a founder, focus on the idea and then on marketing the product. You can outsource all other business processes or automate them with software. At KoRo, we have built on the strength of Xentral as an ERP system and a fulfillment service provider since the beginning. With this, we created time for ourselves to boost company growth and scale our product range – because that’s our job as founders.
KoRo Tip 2: Be bold, be authentic
Honestly, it’s not all about the marketing channel. Rather, you should ask yourself the question: “What does my customer want to see and hear?”
Here we advise you not to focus too early on target groups, their subdivision, and analysis. If you are just starting, you need to get to know your customers. So don’t limit yourself, don’t only work on assumptions, and avoid being too technical in your approach. Agencies also like to try to impose an over-engineered communication strategy on founders. We advise against this. Customers buy authenticity. Think carefully about what the USP of your idea or product is and how you can communicate this message authentically to the customer – across all communication channels. Trust yourself and be bold in your communication, be creative in your choice of medium. As a food company, we rely on multiple channels. Influencer relations, YouTube, Instagram, and podcasts – among others.
KoRo Tip 3: Know who the customer is
What’s the best way to get to know your customers? By knowing what’s on their mind. You’ll find out by taking a hard look at your customer service inbox. Work with your support team to figure out what questions your customers are asking, what’s on their minds, what topics they can’t find answers to, and – of course – what they love about your products.
Our tip: Customer service is essential and should therefore be run by the founders or managing directors themselves. For example, based on the evaluation of our customer inquiries, we have created FAQ areas that are very much appreciated by our customers today.
The ultimate guide on E-commerce inventory management - Food business edition
Are you always able to deliver - even across all channels? This is crucial for your growth, because your customers often do not forgive delays. The good news: Xentral gives you the necessary overview and bundles all warehouse and article data in one place.
- Important terms & definitions
- How to manage e-commerce stocks
- How to build your tech stack
- Extra tips from warehouse logistics experts
KoRo Tip 4: Gut feeling is more valuable than any expert advice
Our Motto: Contracts are there to be fought over. That’s why at KoRo we rely first and foremost on common sense, gut feeling, and only in the second instance, on the experience of our lawyer. An important point here: Be confident! Also when talking to potential investors and partners. You are the inventor and the one driving your idea.
We at KoRo also had to deal with some bad decisions on our journey. One of the most defining moments was when we almost lost everything because we bet on the wrong investors. These lows hurt, but also let you grow and gain important experience.
KoRo Tip 5: Bad news – as soon as your product is up and running, imitators will follow
Competition is sometimes hard for founders. As soon as the product sells well and has reached a certain level of awareness, there will be imitators. What can you do against copycats? Almost nothing! Particularly in the food retail sector, there is no real protection like there is for technical innovations with patents or utility models. Based on our own experience and conversations with other founders, we can predict that after two years in the market at the latest, the first imitators will come along, who will nullify any trademark protection or similar with a minimally modified recipe. Don’t worry too much about the competition. Instead, pay attention to how you can strengthen and expand your brand. You have to understand what you are doing and do it really well to differentiate yourself from the competition.
KoRo Tip 6: The A&O in food retailing
The secret ingredient in food retailing is: price to performance. The German food market is price-oriented. This is also our core strategy. We try to keep the selling price as low as possible. How we do this is simple: cost-effective and lean processes, as well as a strong focus on purchasing.
For us, lean processes mean automating all activities, such as transferring accounting data to DATEV directly from Xentral. In purchasing, we are just super cheeky and always, always, always try to buy even cheaper.
KoRo Tip 7: Pareto principle as growth accelerator
Regardless of what stage of growth or development you are in, there is always a new challenge waiting around the corner. To overcome them, we rely on the classic Pareto principle, also known as the Pareto effect or 80-to-20 rule. The rule states: 80% of the results can be achieved with 20% of the total effort.
What do we mean by this? Let’s take, for example, the desire to list your products at Rewe. When you call Rewe, you usually get the contact information of the appropriate buyer for your product category – just like 1,000 other start-ups and companies. Then you are supposed to mail the information – just like everyone else. A fancy presentation may help with the listing but the probability for feedback is very low. Therefore we advise: Go to fairs and events, use personal contacts. Do you know someone who knows someone who knows someone? If yes, getting your foot in the door may just be two phone calls away, instead of hours of preparation and going the official route. Having many touchpoints with people from the industry can speed up the process enormously.