Saturday, April 17, 2010
Ron Koss & Arnie Koss: The Earth's Best Story - Author interview
Successful twin brother partners, and entrepreneurs Ron Koss and Arnie Koss, were kind enough to take the time to answer a few questions about their insightful and inspirational story of their unlikely business venture The Earth's Best Story: A Bittersweet Tale of Twin Brothers Who Sparked an Organic Revolution. The authors share their entrepreneurial journey from its inception, through its troubled times, and toward its ultimate success with humor and honesty.
Thanks to Ron Koss and Arnie Koss for their interesting and informative answers. They are greatly appreciated.
What was the background to writing this book The Earth's Best Story: A Bittersweet Tale of Twin Brothers Who Sparked an Organic Revolution?
Ron and Arnie Koss: Twenty years ago this past March 30, 2010, I was essentially forced out of the company that I started with my identical twin brother Arnie. It was a dramatic and traumatic time. Somehow I knew or believed that amidst the overwhelming emotion and tumult lay a powerful, personal, and valuable cautionary entrepreneurial tale that might benefit others.
I started to write. My effort was very sporadic; sometimes disappearing for years as other life events commanded my attention. But while my writing accumulated to hundreds of pages, I realized that I alone could not tell the entire story of the founding of Earth's Best Baby Foods. I needed Arnie's side of the story and the many experiences along the way that were unique to his role in our shared venture.
Once Arnie began writing and his pages began stacking up, we got together and agreed to tell The Earth's Best Story in our two voices. Three more years of dedicated cowriting and editing has yielded this "bittersweet tale of twin brothers who sparked an organic revolution." ― Ron
Ron Koss (photo left)
What led to the creation of idea of an organic baby food company?
Ron and Arnie Koss: In 1973 Arnie and I were traveling throughout California. We were fresh out of college at the time, both having dropped out. As East Coasters, the West Coast was a marvel to us. But amidst the massive redwoods and the dramatic coastal highway that we loved exploring was a vast agricultural reality overrun by aerial pesticide spraying and tractor spray rigs. It was sickening and disheartening to us.
Rachel Carson's book,Silent Spring (published in 1962), had deeply affected us. We didn't want the spring to be silent and Arnie and I left California wondering what we could possibly do to counter this malevolent and misguided pesticide paradigm.
Our answer, envisioned in an inspiring moment in 1976, was the founding of Earth's Best Baby Foods. Arnie and I began developing it in 1984 and three years later in 1987 we produced the first jars in our own 11,000 sq. ft manufacturing facility. ― Ron
How did you arrive at the company name Earth's Best?
Ron and Arnie Koss: The name "Earth's Best" was presented to us by a Burlington graphic designer working on our first label concepts. Ron and I instantly bonded with the name because it succinctly stated what our ambition was—to create the "earth's best" baby food. It could not have been simpler or more accurate.
However, like so many things we did not anticipate, many of our potential early supporters and investors strongly objected to the name "Earth's Best." It "sounds like a dirt company" was a common theme of the dissenters. "It's hard to pronounce" was another. The pressure was on to find another name, but Ron and I knew we were starting the Earth's Best baby food company and held our ground.
Today, it seems so obvious that Earth's Best is a great name, but 25 years ago we had to battle for it. ― Arnie
What were some of the challenges you faced in the initial start-up phase?
Ron and Arnie Koss: From day one, Ron and I faced start-up challenges that came from every conceivable direction, like giant crushing waves, one after the next, after the next. Most notably, we were grossly undercapitalized within a matter of seconds. Why? Multiple equipment breakdowns and failures unexpectedly depleted our meager cash reserves. Quality control issues delayed our production for almost two months and skewered our cash flow projections. Unexpected organic ingredient shortages forced us to transport tons of apples from California to Vermont blowing again what we thought was our clever and conservative budget. Distributors and retailers pocketed introductory discounts that resulted in disastrously high retail price points.
You get the picture. There was not a moment of grace or ease. The Earth's Best start-up was an intense survival moment, "to be or not to be." Ron and I had no choice but to try to adapt to our volatile start-up environment like highly evolved chameleons. ― Arnie
How did you finance your company from the idea stage to beginning production as a company?
Ron and Arnie Koss: Our starting point was pooling together several thousand dollars of savings. Arnie and I had no access to family or friend money. But when you're smitten by an idea you're passionate about and are unwilling or unable to comprehend the obstacles or challenges ahead, you simply start by taking one step forward at a time. And you keep your overhead low…very low. We rented a space for $25 a month. Our starting point was one desk using a piece of used plywood and two saw-horses. We found two broken chairs, and one electric typewriter without a working "q."
Arnie and I networked and reconnected with a very successful local businessman we had once rented a space from. This person became our first investor. And as our business plan took shape and evolved over 2 1/2 years, we found approximately $300,000 in seed capital from angel investors to do the research and development necessary to start an organic baby food company.
This momentum led to a private placement memorandum and the raising of $500,000 of equity and $400,000 in debt, which brought us finally into production. At the time in 1987, Earth's Best was the largest start-up ever in Vermont. ― Ron
How and why did you choose your company's Vermont location?
Ron and Arnie Koss: You could say Middlebury, Vermont, chose us. You could also say Arnie and I were nuts to locate Earth's Best in Vermont rather than California, where organic foods production was most established. But we loved Vermont. It was our new, long-sought-after home, after being uprooted from our childhood home in Ellenville, New York, by our parents' sudden move to South Florida.
This was the dynamic in play for us as we ventured forward in 1984 trying to bring our Earth's Best dream to life. Arnie and I arguably resisted practicality by avoiding California, but we truly believed Vermont and the East Coast could be another center of organic foods production. Our naturally ingrained entrepreneurial optimism was magnified by our attachment to Vermont as "home," and the net of that alchemy caused us to wildly misjudge the timing of the arrival of East Coast organic agriculture. Soon we would be transporting most of our raw ingredients from California to Vermont and paying a "steep" price, in every sense of the word, to do so. ― Ron
Arnie Koss (photo left)
What lessons did you learn about marketing your product?
Ron and Arnie Koss: Many entrepreneurs believe that their product is the latest and greatest and that the marketplace will embrace them like they were the "second coming." Ron and I are examples of this predisposed entrepreneurial optimism and were convinced that all parties in the wholesale-retail distribution chain would be on our side, cheering us on ― wrong assumption!
What we learned was that no matter how good or worthy any given product is (and assuming you're not a big player with big bucks), dependence on the benevolence of others to secure shelf space and favorable distributor and retail pricing is not a given. And it's probably unlikely, so don't plan on it.
To succeed, Ron and I needed an aggressive regional and national public relations campaign that was complemented by various sales and marketing strategies that included product discounting; targeted direct mail outreach to consumers and health care professionals; and the unimaginable--guaranteeing the sale to retailers so they would pull our products through the distribution channel. ― Arnie
Did you experience some setbacks and disappointments along the way?
Ron and Arnie Koss: That's a funny question, akin to asking a sailor if they saw any water while sailing across the ocean. Yes, there were many setbacks and profound disappointments in all phases of the start-up and then later on, in the day-to-day business operations. What stands out in this regard are two biggies.
First was the difficulty in getting the natural food distribution chain (distributors and retailers) to pass on to the consumer the deep discounts we were offering to stimulate trial. In the best of circumstances, we knew many consumers were going to be hit with sticker shot when comparing our ideal retail price point of $.79 per jar to Gerber's three jars for a buck. To our great dismay, promotional discounts were often pocketed somewhere along the distribution channel and Earth's Best price points to the consumer ranged from $.99 to $1.19. This was extremely damaging to our initial sales movement and cash flow, and of course was unanticipated.
Second was the egregious way Ron and I were related to by many of venture capitalist who joined the company as investors. Instead of choosing the high road where candid and collaborative behavior was the norm, they too often opted for subterfuge, deceit, and avoidance. The results were hurtful to Ron and me, but more importantly put Earth's Best in peril. The high road, as in genuine and committed relatedness, is always an option and should never be sacrificed for expediency or personal gain. ― Arnie
Earth's Best - Logo (shown left)
What advice would you give to new entrepreneurs starting a new business venture today?
Ron and Arnie Koss: Think as grand as you like, but start as compact as possible; minimize overhead; dedicate yourself to quality, networking, and communication. Be curious, get perspective, and don't put your head down and simply try to bull your way forward.
In order to succeed, you have be or become a good adapter. You have to evolve yourself and your business as reality displaces projections and assumptions that are often erroneous. Come to terms with what you tend to avoid as soon as possible. You will need more money than you think you need. Yes, even you who think your diligence has covered every base and anticipated every contingency. Money, despite its obvious necessity, is often avoided in some fashion and the consequences are never pretty.
You don't have to be "everything" or "everyone" to your business. Few, if any, can handle production and/or products, sales and marketing, and finance with the expertise required and the joy necessary for a sustainable outcome. But you do have to understand everything that is needed and be aware of your strengths and your weaknesses and respond deliberately and accordingly.
Finally, identify what you stand for and what you mission is… and stick to it. ― Ron
What do you see for the future of organic products and environmentally based companies?
Ron and Arnie Koss: Organic and environmental products have today rooted themselves throughout the consumer marketplace, but they still represent a small percentage of overall sales and market share. High price points are putting downward pressure if not a lid on the growth of these socially responsible consumer product niches.
The future opportunity and challenge for organic products and environmentally based companies lies in reaching not just those who are upwardly mobile or with access to dollars, but also those who do not have those advantages. ― Ron
What is next for Ron and Arnie Koss?
Ron and Arnie Koss: Thanks to centuries of entrepreneurial dabbling by generations of Kosses, our DNA insists that we continue to look for ways to be independent, innovate, and make a difference.
In the near term, we will be busy trying to get the word out about our book, The Earth's Best Story. We know there are many fledgling entrepreneurial initiatives out there contemplating how to manifest their big idea. Ron and I believe our story will benefit anyone perched on the precipice of doing and contemplating what lies ahead, and that especially includes students.
For some time now, we have been developing intellectual property in the form of patents and trade secrets that focuses on using frozen dessert (ice cream) as a nutrient delivery system. There are many consumer populations that will benefit from such a product and we are actively in pursuit of finding the best way to transport this idea from fantasy to reality.
Of course, there is more but that's for another day. ― Arnie
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My book review of The Earth's Best Story: A Bittersweet Tale of Twin Brothers Who Sparked an Organic Revolution by Ron Koss and Arnie Koss.
Ron Koss is a natural foods product innovator and executive vice president of Nutricopia Inc. Arnie Koss is managing partner at aio Food Group, a Hawaii-based development company. Cofounders of Earth's Best Baby Foods, they are coauthors of The Earth's Best Story: A Bittersweet Tale of Twin Brothers Who Sparked an Organic Revolution (Chelsea Green Publishing, 2010).
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