Six Smart Startup Recovery Strategies

Nick Greer was so excited by the consumer reception for Built Bars after he launched the line of nutrition bars in 2018 that he made a big blunder in 2019: Built introduced a bar variety called Built Burner that quickly turned into a big flop in the marketplace.

Greer, cofounder and CEO of Built Brands, says his mistake in introducing Burner was to assume his brand—which he had just begun building on the notion of whole food ingredients and interesting flavors—could appeal to its fledgling consumer base with an entirely different proposition: weight loss.

“We were appealing to fans of Weight Watchers who liked their ‘points,’ and we didn’t communicate with them correctly,” Greer recalls. “We shouldn’t have assumed they’d all be stoked by the idea of eating two Built Bars a day to burn fat. They’re used to being skeptical about that.”

"We realized we had to go out and be much more intentional and wise—and be very in tune and in touch with our customer base."

Since then, Built has continued to introduce new bar varieties with “clean ingredients” and balanced nutritional profiles, Greer says, on its way to 110 flavor varieties and more than $100 million in annual sales in just four years.

Greer says he learned a valuable lesson from the Burner rollout. “We ended up being grateful for that opportunity because we realized we had to go out and be much more intentional and wise—and be very in tune and in touch with our customer base,” he says.

So it goes in entrepreneurial pursuits in the food and beverage business. Startups may have revolutionized the industry over the past few decades, but do-overs and pivots are part of the story for many. Here’s a look at six strategies for getting back on track after a setback or market misstep.

1. Look for a better vehicle

Ingenuity Brands introduced Brainiac Kids, a line of whole milk yogurts a few years ago, and the products gained initial traction in retailers such as H-E-B and then with Whole Foods and Target in early 2020.

Then the pandemic hit, quickly upending further rollout of Brainiac yogurts. “Everything got flipped on its head, with supply chains becoming fully reoriented by the pandemic, even with grocers,” says cofounder and co-CEO Mark Brooks. “We were losing money every month.”

"It was better to invest in shelf stable."

But instead of folding Brainiac, Ingenuity pivoted to a strategy of developing and marketing shelf-stable products, beginning with applesauce packaged in pouches. That fit with what consumers were looking for, avoided supply chain snarls, and still hewed to the brand’s positioning in brain health. Ingenuity has gone on to add Brain Butter peanut butter blends, Brain Bars, and vitamins. And Brainiac has muscled into a number of national and major regional retail chains. “It was better,” Brooks says, “to invest in shelf stable.”

2. Return to your original vision

Tochi Snacks cofounder and CEO Dina Shi says the company’s original product rollout was salted egg potato chips, which used a favorite flavor of Asians to appeal to American consumers in a new way.

“But then the pandemic hit,” she recalls, and most of the company’s retail outlets in New York City closed, “so we had to go back to the drawing board about how to move forward.”

Shi pivoted, turning to fish skin chips, which she calls “the pork rinds of Asia,” and infusing them with salted egg, black sesame, and other Asian flavors. The product was barely a niche in America, she says, and she had to dig in to find salmon skin suppliers in northern Europe and a processor in Asia.

"We had to go back to the drawing board about how to move forward."

Shi says she chose potato chips as Tochi’s initial product only because it was a form that Americans were used to snacking on, but her core and stronger idea was to find ways to get traditional Asian flavor profiles into the U.S. market. Her challenge coming out of the COVID-19 pandemic was to find an optimal way to convey her essential proposition, and salmon chips allowed her to do that. Now Tochi Salmon Chips are retailed via Amazon and elsewhere online and in a growing number of Asian specialty stores scattered across the United States.

3. Pivot strategically

Entrepreneurs need to act like robotic vacuum cleaners: Once they inevitably bump into resistance, they must back up a bit and redirect. They don’t need to abandon a central premise that they’re convinced will work.

This can be a difficult exercise, says Brett Brohl, managing partner of Bread and Butter Ventures. “If you’re a founder, you believe in the thing you’re building and your approach, and it’s hard to change that belief,” he says. “But you need intellectual honesty.”

In the case of MyForest Foods, which ferments and grows fungi that it teases into meat replacements, the idea of perfecting the technology and fielding the product was on target. But the initial idea of providing MyForest fungi only as a B2B supplier wasn’t succeeding as the team hoped.

Enter Kristine Sanschagrin, a former Cargill executive who joined My Forest as chief commercial officer in 2021. “We had a great product; we just needed to figure out the right approach to bringing it to market,” she says. Soon, MyForest established its own brand as MyBacon, was registering trademarks, and has begun distributing its products in dozens of retailers and restaurants.

4. Remember: Cash first

As head of a food-focused venture capital firm, Brohl encounters many entrepreneurs, and the mistakes they make often boil down to one thing: They don’t comprehend the necessity of having enough cash to work with, nor the dangers of running out of it.

“The ones that fail and die wait until they’ve only got a month or two left of [cash] runway,” Brohl says. “You really need to think out 12, 15, 18 months and notice if you’re not getting traction with an idea that you are halfway into your cash. And rather than continue to head down the same path, you need to make changes while the changes actually still give you a chance.”

5. Treat social media with kid gloves

Social media marketing has helped many entrepreneurs make a splash and grow their brands initially, even exponentially, allowing them to work around the tremendous expense involved in traditional marketing.

But what Instagram and Twitter deliver easily, they can take away just as easily. Built, for instance, fielded a video on social media a couple of years ago—“expensively shot,” as Greer recalls—that featured actors throwing melted chocolate and other bar ingredients at one another and reveling in the exercise.

The trouble was, for as compelling as many online viewers found the ad, many others were turned off by the imagery, including some who even alleged that it resembled “tar and feathering.”

“Within a week, we decided to pull that campaign completely,” Greer says. “But I still look back and wonder if we made the right decision. Maybe we just should have been more proactive in defending what we believe about the experience people get when they taste our bars.”

6. Normalize mistakes

One way to deal with setbacks is to understand that they’re going to occur and that, at least in small-scale ways, they’re going to happen frequently.

"We make mistakes all the time, and if we just admit … our fallibility and we work collaboratively together, we can overcome them."

“We make mistakes all the time, and if we just admit … our fallibility and we work collaboratively together, we can overcome them,” says Ari Weinzweig, cofounder of Zingerman’s Community of Businesses, a restaurant and CPG company in Michigan, who’s also an advisor to entrepreneurs.

The notion of acknowledging mistakes and asking forgiveness—or at least understanding—for them seems antithetical in some ways to the conventional wisdom about entrepreneurs as single-minded and strong-willed in pursuit of their dreams despite all the doubters and haters.

But Weinzweig says the best approach is to “normalize” mistakes, and then practice recovering. “And that,” he says, “starts with an apology.”