Podcast

Learn from Fast Growing 7-8 Figure Online Retailers and eCommerce Experts

EPISODE 32 66 mins

LoveWithFood, a Rapid Growth Organic Snack Subscription Ecommerce Business w/Aihui Ong



About the guests

Aihui Ong

Kunle Campbell

Aihui Ong 爱慧 (pronounced as I-WE Ong) is the founder and CEO of a subscription ecommerce snack business most of our U.S listeners will have heard off: Love With Food.
For as low as $10/month, Love with Food provides organic or all-natural snack boxes on a monthly subscription basis.



I talk with Aihui Ong, the Founder of ‘Love With Food,’ a rapidly growing subscription eCommerce business based in Silicon Valley, the largest food space of its kind operating on two fronts. On the one hand a ‘discovery channel platform’, selling subscriptions to all-natural snack boxes to thousands of customers across the U.S. And on the other hand a platform for food companies, providing targeted marketing and market research. We talk about her education and background after coming to the US from Singapore as a software engineer and being ‘the only woman in a room full of men’. Her innovative business continues to snowball and impress, as it has from the beginning when she shocked and intrigued her first investors into funding her solo startup.

Key Points

1. A New Marketing and Market Research Platform for Food Companies:

  • From a customer standpoint, the business is a discovery platform for healthy alternatives, especially targeting the health-conscious crowd
  • For food companies, it changes the game from giving out food samples at random at shopping centers to delivering samples right to the doors of target audiences.
  • Two criteria for product: 1).Must be all-natural and health-conscious and 2.) Either brand-new on the market or without nationwide distribution (something they have not seen before).

2. Raising Capital

  • In the last few years, revenue has gone from $250K to $1.7million to $3.2million and is set to target $6million
  • Initially intending to bootstrap the company, doing everything by myself. Less than 100 customers, but about 60,000 fans on Facebook (back then you could literally do anything you want), coded on Ruby on Rails.
  • Opportunity came to pitch to 500 Startup for investment came up. They were shocked, how can one person to all this by yourself and how on earth did an engineer manage to get 60,000 fans on Facebook? In spite of being in the food industry, they saw opportunity and were curious to fund me to see what else I could do.
  • I see being a woman, and standing out, as a plus, but I am familiar and comfortable with that kind of environment.

3. Core Value Proposition and Validating it to Investors

  • In the industry today, CPG companies are trying to market to the millennials and they don’t know how. Because it’s not about the traditional way of marketing anymore.
  • So our value proposition in the very beginning has always been: Love With Food will be the largest direct-to-consumer channel for CPG companies to market to a very targeted group of audience.
  • I gave myself a goal right, every month we need to have at least 20 to 30 bloggers to write about Love With Food. I would send them a snack box in exchange for a review and they kick-started the company.
  • Used AngelList as a platform for opening the doors to a lot of investors. Got the business trending on AngelList by getting friends and investors to all comment and share on AngelList but all within 12 hrs of each other, the timing was a crucial component. It helped increase visibility for investors.
  • I’m actually looking for more investment right now. We have gone to a point where in the food space we are the largest marketing platform and discovery platform. I’m going to raise money to be even bigger.

4. Marketing and Customer Acquisition

  • I wanted to make sure that our largest stake operations were able to scale as we scaled. Making sure the foundation was right, and understanding our customers, who our customers are, before we spent marketing dollars.
  • In 2013 we realized who our target audience was and that’s when we started spending money, to acquire that group of target audience, starting with Facebook ads.
  • The food subscription space passed a noisy phase and now you start to see companies either shutting down or consolidating. We have acquired three companies in the last three years.
  • Internally we produce sneak peeks video to tease our customers or to get them excited about what’s coming their way. Our customers love that and the new customers love it too.
  • The user-generated unboxing content that is on YouTube is the best word-of-mouth out there. Our customers talking about good stuff to their audience on YouTube, this is the best form of advertising.
  • Once we get people to upgrade to three months we pretty much know that they will stay for a long time because people get addicted to it. To minimize churn, we do two things:
    1. In terms of retention, the first box we sell at 40% off so that at least if they’re not happy with it they don’t feel like it’s not worth it.
    2. We send offers to say, ‘Hey, you’re a month-to-month customer, why don’t you upgrade to three-months. Here’s a coupon code to apply to get more discount.’
  • Social Mission: it was very important for me to start a business with a social mission. I was doing research on poverty and hunger around children and I realized that it’s also a huge problem in the US. We donate a portion of the proceeds to a food bank.

5. The Team and Hiring

  • It’s very important for me to hire people for a start-up who:
    1. Believe in making a difference by working here: believing in the mission and being passionate about the company is definitely a must. Because they are going to be the face of the company.
    2. Are ready for chaos, eg. No we don’t have a policy, but we’ll figure things out along the way.
  • Hiring decision: it’s a learning process but at the end, I truly believe going with your gut is the best way to go

6. Parting Advice

  • Tools and Management:
    • Weekly meetings with every team for update and setting plans
    • Use Trello to keep track of To-Do tasks and plans
    • An internal tool similar to iDoneThis for performance review
  • Set-back offering the biggest feedback: Made the wrong hire early on and learning how it affects not just me but the entire team.
  • Startup CEO by Matt Blumberg – it’s like a playbook of what you need to learn and what you need to do as a CEO.
  • As Lee Kuan Yew said on leadership: In the midst of making the tough decisions for the greater good, you might seem like the bad guy.

Key Takeaways

(00:59) Introducing Aihui Ong

(10:21) A New Marketing and Market Research Platform

(15:05) Raising Capital

(24:24) Core Value Proposition and Validating it

(35:25) Marketing and Customer Acquisition

(53:07) The Team and Hiring

(56:07) Parting Advice

Tweetables and Quotes

So we’re basically combining the old-school way of sampling and focus group, and just make it better and better and better and at a larger scale.

The new consumers want a more direct relationship with the brand, they want to be able to make their own decision, whether they want to trust the brand or not.

I mean there’s one of them actually just said I didn’t go to Stanford, I couldn’t raise money, and I’m like, really?

How can one person do all this by yourself and how on earth did an engineer manage to get 60,000 fans on Facebook?

So 2012 was focused a lot on making sure the foundation was right, and understanding our customers, who our customers are, before we spent marketing dollars.

Once we get people to upgrade to three months we pretty much know that they will stay for a long time because people get addicted to it.

Transcript

On this episode of the 2X eCommerce Podcast Show I am going to be talking to the Founder of ‘Love With Food’. They’re a fast-growth subscription eCommerce business based in Silicon Valley that sells subscriptions to organic snack boxes to thousands of customers across the U.S, while at the same time is a market research platform for organic food brands.
Do stay tuned!

[Intro clip] Welcome to the 2X eCommerce podcast show where we interview founders of fast growing seven and eight figure eCommerce businesses and eCommerce experts. They’ll tell their stories, share how they 2X’d their businesses and inspire you to take action in your own online retail business today. And now, here he is, the man in the mix, Kunle Campbell.

Kunle: Aihui Ong is the Founder and CEO of a subscription e-commerce snack business most of our US the listeners will have heard of. It’s called ‘Love With Food.’ For as low as $10 a month, Love With Food provides organic or all-natural snack boxes on a monthly subscription basis. These boxes tend to be packed with hard-to-find snacks that are typically not in your grocery stores. So it’s more like a discovery engine that helps health-conscious customers find new healthy snacks. Think about it like a Birchbox for organic snacks. Love With Food is a fast-growth e-commerce business and the sort of venture I love to talk about on 2X eCommerce. They 6Xed revenue in the first year of business and then 2Xed revenue in the second year of business. And now in the third year of business they’re set to 2X revenue again, we’lltalk about revenue later. Without further ado I will like to welcome to the show Aihui Ong. A pleasure to have you on the show, welcome to the show. Could you take a minute or two to tell our listeners a bit about yourself?

Aihui: Well first of all, thank you for having me on the show Kunle. It’s a pleasure to share my story. My background is I’m a financial software engineer for probably about 10 years. I was originally born in and raised in Singapore and I was working there as a financial software engineer. And a job opportunity came up in the US and I took it, you know I always wanted to explore life in a different country to see what’s the difference. As you know Singapore is really tiny. And I took the opportunity, I took the leap of faith and decided to take the opportunity in the US. That was 16 years ago and that’s how I came to this country. And I stayed on as a financial software engineer for you know the next eight years. I decided that counting others people’s money it is really not my passion in life. [laughs] When you combine finance and computer science together, it’s not very fun. So I decided to take a break in my career. I went backpacking for a year, I went to 20 different countries, and then when I decide to come back to the US I didn’t know what I wanted to do. And I decided to help a friend at farmers market to sell food for her since I was jobless, bumming around, not doing anything. And that’s when I realized that the food industry in the US… it’s very antiquated. A lot of food companies are having a hard time looking for shelf space or getting into main-chain grocery stores. So if a company can get into a store, they basically have very limited choices in terms of reaching out to consumers directly. So I saw that’s problem, and I love to eat and for me there is a big discovery issue for me, who loves to eat. And I feel like with having my technology background I should be able to use my technology skills to build something to help solve this big problem in the food industry. That’s why I started Love With Food.

Kunle: Okay. Could we track back. That’s a fascinating story: 16 years moving to the US, working as a software engineer for eight years, and then backpacking and then discovering the passion for food; finding that gap. Okay, from what I gather you’re in California at the moment if that’s correct?

Aihui: Yes.

Kunle: So have you been in California all your life in the US or have you moved?

Aihui: No, I moved around because when I first came to the US I took a job as with Accenture so I was basically a consultant. And you know having a consultant’s lifestyle you actually will travel to where the client is. So because I had no family here I was willing to live close to the client. So I’ve lived in Washington DC, I have lived in Los Angeles, Orange County, Las Vegas, Detroit and now I’m in Silicon Valley. So I’ve lived in many, many different places over the last 16 years that I’ve been in the US and now I finally can call Silicon Valley my home.

Kunle: Fantastic. So prior to being an entrepreneur how long had you lived in Silicon Valley?

Aihui: Probably eight years.

Kunle: And did the entrepreneurial spirit of Silicon Valley come on to you? Did the energy and the culture, the entrepreneurial culture around you, did that influence you to become an entrepreneur?

Aihui: I would say a little. You know it played apart it’s hard not to be influenced by the Silicon Valley entrepreneurial spirit Kool-Aid here. But I would say the majority of my decision is probably looking for a change in my career. I was really happy being a consultant for the first decade of my career. And for me change is important, I don’t have the personality to do the same thing again and again for 40 – 50 years of my career. And I just felt like what I was doing, it pays the bill, the salary was very comfortable but I just didn’t feel it was fulfilling enough for me or making a difference in the world. That’s why I took the leap of faith to explore the entrepreneurial journey.

Kunle: Brilliant, brilliant. I also checked in your LinkedIn profile, you attended Warwick University, Warwick Business School in Coventry. What was your experience like there?

Aihui: This goes back to when I was consulting which… I was traveling a lot. I basically would leave my home Monday morning, take a flight to where the client is, worked there till either Thursday or Friday and then I’ll fly home. So I spent a lot of time on the plane and in hotels. I’m the kind of person who loves to learn, I can’t just do nothing when I’m on the plane or in the hotel. And at that time, that was 2003, when I started exploring other things I wanted to learn, more business savvy or… I’m a computer science engineer by training and when it comes to business-wise I might not be as savvy or might not know the industry as well. So I started to look around like, “Oh, well maybe I should do MBA while I’m traveling.” It so happens that distance learning is something very popular in the UK, at that time it wasn’t popular here in the US. And then I applied to Warwick, I got up accepted, and it was basically a distance learning program which was really good, it fit my schedule. The expectation is I had to be in Warwick twice a year which is good because you know, I could take a break from work, have a chance to go back to college life.

Kunle: Absolutely.

Aihui: So the distance learning part was about three years and I made a lot of great friends from all over the world, it fit my schedule perfectly.

Kunle: Yeah, I ask you because of two things. One, I’m a Warwick University alumni, I studied e-business management in Warwick Manufacturing Group back in 2004. That’s what actually started my journey into digital marketing. And my sister actually did the exact thing, she’ actually doing a distance learning Warick Business School MBA so it’s just interesting to know you’re a fellow Warwick University alumni. Good stuff. I saw a brief stint with regards to EdgiLabs. Could you tell us just a little bit about EdgiLabs, please?

Aihui: That is just a consultant firm that I started after I came back from backpacking. I didn’t know what I wanted to do so I decided just to do consulting while a figure out what I really want to do. So EdgiLabs was basically a tech consulting gate company that I was able to apply my past technology and consulting skills to help at other companies. It was great, I met different people and it was also an option whether I wanted to do consulting or not. So it’s a great segue from being a full-time consultant to being a part-time consultant. And then from there I decided I wanted to stop consulting and launch a startup.

Kunle: So consultant to entrepreneur. With Love With Food founded in 2011, I came across your CrunchBase profile and it’s…. Love With Food on CrunchBase is described as ‘a marketing and market research platform for CPG food brands’. Could you expand upon this, please, because from a customer standpoint it looks more like a subscription box business.

Aihui: Yes. From a customer standpoint Love With Food is a discovery platform to discover healthy alternatives especially targeting the health-conscious crowd. But for food companies our value proposition is: instead of giving out samples away at let’s say Tesco, there is a much smarter way to give out samples to a very targeted group of audience. So we are reinventing the whole sampling game in the CPG space. And food companies love it, because you know when you’re walking let’s say you’re walking in Tesco and people give you a sample, how do they know that you’re the right target audience? They don’t, right? So using our subscription service we’re able to help food companies deliver their samples right into the doors of a very targeted group of foodies. And two, we’re also collecting consumer insights for these food companies because after our customers taste the product they’ll come back to our website to give feedback, and then we actually compile the data and give it back to the food company. So we’re basically combining the old-school way of sampling and focus group, and just make it better and better and better and at a larger scale.

Kunle: Very, very good point. I have two questions. One has got to do with the kind of data you send back to CPG. What are the data points should a brand expect to get from Love With Food?

Aihui: What you see, if you’re not a member, what you see is just reviews of the product. But if you’re a member you’ll see a more comprehensive survey. Questions are actually provided by the food companies. We will work with them to come up with the questions, the qualitative and quantitative questions, that will be right to achieve their goals of what they want to find out. And the set of questions are only shown to people who have received the product. So that we know the data we’re collecting are actually real, because someone actually tasted the product. And food companies use these decisions to better understand what consumers like, what consumers dislike, and they use the data to either improve upon their product or improve on the marketing message.

Kunle: Fantastic. And do you pay brands for the samples or do they give to Love With Food for free?

Aihui: For free.

Kunle: Wow.

Aihui: Most of the time it’s for free.

Kunle: Wow. That’s amazing. [laughs] So your supply chain is pretty much free. Wow that’s…

Aihui: No, I mean we still pay for shipping and the labor. Shipping in the US is expensive.

Kunle: [laughs] Amazing. Okay, that is fantastic, that’s great stuff. And what kind of brands are you working with? Are you seeing the hugest interest, the amount of interest coming in, they’re approaching you, and working at the same time with your customers?

Aihui: First of all, every product that we select has to be all-natural. It has to be free of ‘junk’ and what we consider junk would be artificial coloring, artificial flavoring, trans-fat, MSG, hydrogenated fats. So we do read the ingredients very carefully to make sure that it fits our criteria. So that’s one. And two, because we’re in the business of delivering surprise and delight every month, the product has to be either brand-new on the market or a product that has not had nationwide distribution. For example, you know, we want to send you things that you haven’t seen before. There’s no point if we send you a little pack of Nutella, that’s very common right? And the consumers like, why am I paying for this, I can just walk down the street to get it myself.

Kunle: Exactly.

Aihui: The companies that we work with have to one, meet curation criteria in terms of health-conscious criteria. And two, it has to be a product that most consumers have not seen before.

Kunle: Fantastic. Good stuff, good stuff. Okay, let’s go into raising capital. But before we talk about raising capital, what was revenue? You were founded in 2011: what was revenue in 2012 like, your first year of business?

Aihui: Well, first year we’re trying to figure things out. First year of the business was about 250,000.

Kunle:. And then in 2013 what was the second?

Aihui: 2013 it was about 1.7 million.

Kunle: All right. Six times if my math’s right. And then 2014?

Aihui: That’s about 3.2 million.

Kunle: Okay, 2X. And 2015, what do you expect it to?

Aihui: This year we’re targeted to make about 6 million.

Kunle: Fantastic. So it’s doubling again. Fascinating business. Okay, so Love With Food on CrunchBase, you’ve raised 2.1 million pounds. Not bad at all for the kind of revenue you’re doing at the moment, in three Rounds from 11 investors. I actually learned that you pitched to 75 investors.

Aihui: Yes.

Kunle: Could you please, how did you manage to speak to 75 investors, and was it not tiring?

Aihui: Oh yes. Fundraising is a game between myself and myself. [laughs] It’s a competition between me and my perseverance, that’s what I tell people. The first round of funding came from 500 startups. I was not actively seeking an investor because my decision was to bootstrap the company. I’m a solo founder and I know, I’m not sure what it’s like in the UK but in the US it’s known that if you are a solo founder the chances of you being funded is very slim. Which I can totally understand because it’s a really hard journey for an entrepreneur to do it alone all by herself and given that I have no track record it’s normal for investors to question whether I can do it all by myself. So, but the opportunity to pitch to 500 came up and…

Kunle: They’re an accelerator program, for those of our listeners that don’t know.

Aihui: Yeah, 500’s an accelerated program and that was back in late 2011. A friend of mine introduced me to the partners of 500. And at that time I was working on Love With Food at home in my pajamas. [laughs] I was dealing with coding the website in Ruby on Rails, I was talking to food companies, I was building our social media following, I was doing customer support phone calls…

Kunle: Let’s track back a little, little bit please. Okay, so in 2011, before you’d already built the website, how many customers had you had?

Aihui: Very few, maybe less than 50. At that time I just launched. Maybe about, I would say less than 100 customers. At that time you know, I was just doing it, just testing the waters to see how far I can go by myself

Kunle: Validating your idea.

Aihui: Yes. And the thing with Silicon Valley is they don’t fund ideas anymore. Because it is so easy to launch a company now with all this new technology, right, it’s so easy to build a simple landing page without knowing a line of code. So I needed to build something to show 500 Startups. So when the opportunity came, I pitched to them and at that time I already got about 60,000 fans on Facebook by myself.

Kunle: [laughs] Organically or did you pay for it?

Aihui: Mostly organically, but I also paid. But at that time, you have to remember: 2011, Facebook was like the wild West, you can do anything you want. [laughs]

Kunle: [aughs] And how many Facebook fans are you up to now?

Aihui: About 250,000.

Kunle: Not bad.

Aihui: Yeah. And I pitched to them, I’m like okay, we got a food company with customers, we have all these consumers as customers, we have so many followings on Facebook. And they asked me how big is your team. And like, it’s just me, just me. I’m doing all this by myself. And they were shocked. They were like, how can one person to all this by yourself and how on earth did an engineer manage to get 60,000 fans on Facebook? [laughs] And my response was, you know, if you fund me, I’ll teach you how. And that’s how I got my first funding

Kunle: How did you get 60,000 fans on Facebook? [laughs]

Aihui: You know, at that time as I said, you can literally do anything on Facebook. You know.

Kunle: [laughs] True, true, true. Okay and without getting into detail, I have two questions with regards to 500 Startups. One has got to do with, are they not biased to tech companies? You know, correct me if I’m wrong. So what was your experience with pitching to them initially in e-commerce and a food business and what was they’re initial reaction. Was there a bit of rejection or anxiety initially? And did you manage to convince them that this has high growth potential or were they sold to the idea from the first pitch?

Aihui: I think what I appreciate about 500 is it can see the goal in the midst of noise. The food industry at that time, you have to remember in 2011 food industry is very un-sexy; a lot of investors are staying away from the food industry. So it was hard, I have to say it was hard. But that’s why I appreciate 500 where they could see opportunities where a lot of people might miss. One: they understand that everyone eats. Food is a big industry; if you do it right it is a huge opportunity. At the same time having said that you know, a lot of people remember what happened, the white van, a couple of food startups started and fell. There hasn’t been a winner in the food space. That’s why a lot of investors are hesitant to invest in the food space. But 500 didn’t let the historical data affect the decision in investing in Love With Food. They saw opportunity and I think they were really curious, like how can a solo founder do so much? Just like, if we fund you, we’re curious what else you can do. I’m very grateful to their first investment because it just snowballed into what Love With Food is today.

Kunle: And you know being female in Silicon Valley, what were your challenges initially? What did you have to face? Is Silicon Valley quite embracive to female entrepreneurs? Most of our listeners would like to know, especially our female listeners.

Aihui: You will stand out. I’m not going to deny that. Because for me, I am really used to it you know. I went to computer science school which is more guys than females. When I did my MBA at Warwick I had to share a house with 12 other men, I was the only girl. [laughs]

Kunle: [laughs] Right.

Aihui: So I’m really used to being one of the roses among the thorns, or the thorn among the roses.

Kunle: First way around. [laughs]

Aihui: Yeah, so I’m used to it. Some females might not be used to that kind of environment and they feel uncomfortable, but for me I’m comfortable in that setting because that is what I am familiar with. Even when I took a corporate job as a consultant, when I manage an entire team it will be full of men. And a woman managing a team of men, that’s unusual but I’m comfortable doing that. So I would say because you stand out to look at it as an advantage and not a disadvantage. Because you stand out investors are really curious like, wow, in a room full of men you are the only woman. I should talk to you, you know because you have the confidence to be different. And I basically have used that as one of the plus points of being a female founder.

Kunle: It’s a strength, really, it’s a strength. I also noticed on your website that you’re a member of some female… you actually did volunteer with some female entrepreneurial groups in Silicon Valley. Great blog by the way, I’ve been reading your blog which is really, really nice.

Aihui: Oh, thank you.

Kunle: I’ll share it in the share notes when this is published. Okay, so. What was your core value proposition in your pitch deck to investors?

Aihui: My core value right in the very beginning is Love With Food is a marketing platform for CPG companies. That has always been my pitch. In the last 3½ years of running the business that has always been my end goal. And how we do this is build a great discovery platform for consumers. And that’s the value proposition. I mean if you look at the industry today, CPG companies are trying to market to the millennials and they don’t know how. And it’s not about the traditional way of marketing where I’ll put a coupon in the Sunday papers or you know I’ll put a coupon in mobile app somewhere, or TV commercial, right? The new generation of consumers don’t resonate with the traditional way of marketing or advertising. The new consumers want a more direct relationship with the brand, they want to be able to make their own decision whether they want to trust the brand or not, you know, based on the conversation, it’s not based on how many times I’ve seen your ad on TV. And I see this as an opportunity, as Love With Food is a great way to reinvent the relationship between the consumer and the food company or any CPG companies. So our value proposition in the very beginning has always been: Love With Food will be the largest direct-to-consumer channel for CPG companies to market to a very targeted group of audience.

Kunle: I resonate. I really, really resonate with what you said because first of all it’s disruptive. It changes the entire game of sampling, first. And then the second thing is the fact that you have a niche kind of consumer who likes certain kinds of food, health-conscious food, voting with their money to try things out and give feedback. As in, what else do the companies want, the CPG brands want? They want those kinds of qualified customers for feedback to improve and iterate or pivot. So, yes their journey that actually starts with Love With Food, a brand they trust and then they pivot or they start to explore new brands through Love With Food so it’s an excellent platform all way around. Do you by any chance have a copy of your pitch deck that got your investments, that you can share with the listeners?

Aihui: Oh sorry, I can’t share that, no. [laughs]

Kunle: No worries no worries, I was just trying my luck there. Can you explain how you managed to validate the idea? So I remember you said earlier on that you… obviously you’re working on your own, got 60,000 likes, coded on Ruby on Rails, how did you manage to validate? How did you the get those first 200 or first 100 customers who convinced you that you were onto something?

Aihui: I think the greatest validation is someone who’s willing to take out a credit card and enter it into your system so that they telling you, hey charge me here’s my card. I think that’s the best validation. I would cold email a bunch of bloggers and explain to them, hey I’m the founder of Love With Food. This is what I’m doing. Can I send you a box for your review if you like it? Bloggers love that, they feel like yeah they are the ones that are telling their readers what’s the newest and latest companies out there. And at that time I had no marketing dollars, I was willing to send them a free box and that was it. And I gave myself a goal right, every month we need to have at least 20 to 30 bloggers to write about Love With Food. At that time I wasn’t picky about how big or how small their readership was, as long as someone was willing to write and link back to Love With Food, I’m already more than happy. Because you know, a link back is always good SEO juice. Bloggers are the ones that actually kick started the company.

Kunle: Have you come across this website called MySubscriptionAddiction.com

Aihui: Yes.

Kunle: I tried to get them on the show. It’s run by lady, Liz is her name. Huge website for people into sort of subscription boxes and who are fascinated with what new subscription boxes are coming out there. Did that help in your journey with Love With Food?

Aihui: Yeah, and she’s a fan of Love With Food for a very long time. We sometimes work with her directly to create special promotions just for her. For example, you know like there’s a special Christmas promotion, and it’s just exclusive for her and it works as well for both of us.

Kunle: Okay, fantastic. I’ve read on your blog and I stumbled on a statement you made about your education, i.e. not being an MIT/Stanford grad and its impact on Angel and VC space. Can you please expand on that, please?

Aihui: I believe investors have a set of checklists they want to see in an entrepreneur, especially if an entrepreneur has no track record of running past startups before. But having said that, not everyone is like that but I would say some people will feel more comfortable if they know that the entrepreneur has gone to a good school in the US. Because they know okay let’s say you’ve gone to MIT, okay that means you’re smart, you know if you’re go to Stanford that means you’re smart or you have a good network of people helping you, right. And I’m none of those. I went to the national University of Singapore. So I basically, I have no alumni network here. But that doesn’t mean I don’t know a lot of startup founders. This is Silicon Valley, you can build a network just by going to events. I would say some investors probably look at your education background to give back comfort feeling that yeah, you have gone to a school that I’m familiar with hence you are smart or you’re at least some form of being able to accomplish something academically.

Kunle: Just that proof. In the UK, in other spaces like in law, the best law firms, the best city firms working in the city… they’ll first select the Oxbridge, you know, the Cambridge and Oxford University, come and get them first, the real redbrick universities. And then every other thing, every other kind of university is more supplementary really. So I do understand and see that point of view in Silicon Valley

Aihui: Yeah. But not every investor’s like that. I mean there’s one of them actually just said I didn’t go to Stanford, I couldn’t raise money, and I’m like, really? It hurts, I felt discriminated. But I went about raising money from other investors who believe in me and my vision, my passion that trumps my educational background.

Kunle: Okay. In terms of the networking, did you ever get on stage at some time at some point, not necessarily pitching Love With Food but just getting on stage and expressing your ideas for exposure, or were you just one-on-one with people and just meeting people through people?

Aihui: It was more of meeting people to people. I used this platform called AngelList. AngelList was really powerful. I met a lot of new investors online and I started talking. If they’re not here in Silicon Valley we’ll talk on the phone and continue to give updates and AngelList actually opened up doors for me in terms of getting investors, yeah.

Kunle: Okay, so you recommended it as a platform for aspiring entrepreneurs?

Aihui: Yes.

Kunle: Because I read another blog post, I’ve been hanging out on your blog for way too long, and you said Love With Food was trending on AngelList and it really was a game changer for you. So what advice do you have for our listeners who want to build up their AngelList profile? How did you get it trending?

Aihui: [laughs] I basically got all my friends to follow Love With Food on AngelList. That’s one. And then at that time there were already a couple of investors who were willing to invest and I got them to write really good comments or something nice about Love With Food in the Love With Food profile and got them to share Love With Food with their network of people on AngelList. And then it started trending after that. The timing needs to be right too. You know it’s like, I would tell my friends, can you please do it right now in the next 12 hours? Then I’d tell the investors, can you write the comment and share it with your followers in the next 12 hours. Everything has to happen in 12 hours to create that critical mass. And that’s basically how I’d done it.

Kunle: Fantastic. I’m actually on AngelList now. Its angel.co/companies/trending. So I reckon an investor or a potential Angel or VC will come on here to just the trending and see okay, what looks interesting to me on a daily basis and if anything stands out they take it further. Is that the case or is that the benefit of trending on AngelList, or do they tend to browse and dig a bit deeper?

Aihui: I’m not sure how investors actually use the trending part but definitely when we were trending I got a lot more investors following Love With Food. And the moment they follow Love With Food, I would follow up with a private message and say, hey do you want to chat more and find out more about Love With Food? So I guess you know the trending part is a way to filter out the noise, right. And giving the top 20 list to investors and say, hey here are the companies that you might want to start with. Because they have thousands of companies on AngelList right now

Kunle: Okay. True, true, true. So are you looking for further investment or are you happy with where you are now with the seed investment?

Aihui: No, I’m actually looking for more investment right now. We have gone to a point where in the food space we are the largest right now. We’re the largest marketing platform and discovery platform. I’m going to raise money to be even bigger.

Kunle: Are you planning on coming to Europe at some point?

Aihui: Yes of course.

Kunle: Fantastic. Good stuff. And my next question is going to be around marketing, customer acquisition. How did you acquire your first thousand customers?

Aihui: How did I acquire? So, we didn’t spend marketing dollars till about a year and a half later. Probably sometime in 2013. So 2012 was a year that, you know it was like, I want to make sure that we get right. I wanted to make sure that our largest stake operations were able to scale as we scaled. So 2012 was focused a lot on making sure the foundation was right, and understanding our customers, who our customers are, before we spent marketing dollars. So 2013 we realized who our target audience was and that’s where we started spending money, to acquire that group of target audience. So we started with Facebook ads.

Kunle: And how well did Facebook ads work for you?

Aihui: It worked really well. Yeah.

Kunle: And does it still work for you or have you reached critical mass?

Aihui: Facebook still works but it’s just more expensive now. I think the secret is out. It’s not the same as 2012 or 2013. It definitely is a platform that works but it has gotten way more expensive than two years ago.

Kunle: Okay. And what about press? Because I saw you in the Wall Street Journal last year, there’s an article in June last year, just over a year ago. And did that help, does consumer press help with you?

Aihui: Yes. I mean all kinds of press helps, whether its tech related or consumer. You know, it gives new customers validation that, oh this is a real company, it’s not some fly-by-night company that was just set up to just collect my credit card and don’t deliver.

Kunle: Not deliver, exactly. That trust, that credibility is there. Okay so. With regards to customers today, how many customers or subscribers do you have?

Aihui: That is a number I cannot share. [laughs]

Kunle: Okay well, we can reverse engineer and if it’s about $10 a month [laughs] …Just take a zero out of your revenue and we have sort of an idea. Okay and then the other thing is I’m on the website now, I can see a ‘Home Box’ and I can see an ‘Office Box’. Is the Office Box a segue into the B2B segment?

Aihui: The Office Box is actually a big request from companies. Our customer’s like, hey you’re sending all this healthy or fun stuff to my home, why don’t you send it to office too? And our sweet spot is sending snacks, right. Whether it’s a small box or big box. And it’s a natural growth for us to target office managers and making sure that office managers will offer the best snacks to the team. And we launched it about two months ago, so that is a new revenue channel for us.

Kunle: What’s been the uptake like?

Aihui: It’s been great you know, within the first month we were able to sign at least 15 to 20 corporate customers.

Kunle: Do you need a B2B team to reach out to the companies or do is it inbound?

Aihui: A lot of it is inbound but I do have a sales team that handles that.

Kunle: Okay. That’s huge, because I was speaking to a hamper business. What they found is their consumer parts… One, they decided to focus more on business, the consumer parts total was like 30% of their business and you know business-to-business is 70%, so they’ve so much potential there. Are customers able to purchase foods individually direct from LoveWithFood.com or must they… so let’s say I’ve sampled a product and I like say, a pack of plantain chips, just off the top of my head. I wanted to buy a few more of a particular product. Can I go back to Love With Foods and then actually buy or does it stop at the box and the feedback I give?

Aihui: No. After you get the feedback you are able to come back to our site to buy more of what you love. So for example, you love the bag of chips so much, it’s offered in our e-commerce store and you can basically purchase that at a great discount with free shipping.

Kunle: Awesome. So there’s that direct e-commerce, normal e-commerce, and side-by-side subscription. What’s been the impact of coverage on TechCrunch and Mashable, those two tech platforms? Did TechCrunch help propel the business in any way?

Aihui: I would say tech news creates validation around the tech industry. Investors will be able to resonate with that more than a regular home consumer. I mean, our home demographic consumers are moms in the Midwest who have two kids, they don’t read Tech Crunch. And but Tech crunch are read by investors, so in terms of the forefront of helping the company raise money, so that creates validation for the company.

Kunle: Makes sense, makes a lot of sense. Okay, other question I have is to do with differentiation. Obviously there would be loads of copycats eventually. When something’s validated to work and with revenue such as Love With Food. The question I have is, how do you differentiate from other subscription businesses out there? And is it a challenge to keep your position as a market leading food subscription business in the all-natural space?

Aihui: Right. So there were a lot of competitors in 2012 and 2013. I would say the subscription space went through the same pattern as the daily deal space, you know when create Groupon started, LivingSocial started, there were other niches that followed on. There were like, a daily deal for anything under the sky.

Kunle: [laughs] True.

Aihui: And there was the same thing with subscription box. There was like a box for anything under the sky. And that was very… it made the space really noisy in 2012 and 2013. The space is going through the same thing. It goes through a very noisy phase and then you start to see companies either shutting down or consolidating. And that is happening right now in the subscription space. We have acquired three companies in the last three years. Because one, you know the founders just don’t want to continue their business because running a subscription business is not easy. People think that putting stuff in the box is easy. It is not easy. And two, the execution is also not easy you know. Constantly, every month, you have to constantly surprise and delight your customers. Every month, month over month. It’s not easy task either. So over time you see some companies shutdown, or they say they want to be merged with or be sold to another company. Because some companies reach a point when they can’t grow anymore. So the subscription space is definitely going through that right now, the consolidation phase. I would say this year is actually much, much less noisy than two years ago.

Kunle: The cream’s rising to the top really, when you look at it, in the industry. There’s another subscription box company I’ve followed called Nature Box. It appears they are similar to Graze.com in the UK, Graze.com comes from the UK. In the sense that they managed manufacturer or they package, it’s their packaged goods rather than for brands, am I correct or?

Aihui: That is correct.

Kunle: Okay, okay. So there is space for both brands to thrive really. Some people want that variety and others would want from a particular brand, I suppose.

Aihui: Yeah. So for companies like NatureBox and Graze, they are building a food brand, right. They are competing with Nestlé and General Mills of the world.

Kunle: Hmmm, you’re research.

Aihui: But for us, we are a consumer insights and marketing platform for food companies. So we’re definitely playing in a different field, very different grain. My goal is not to build a food brand. My goal is to build a great discovery platform for consumers and a great marketing platform for CPG companies.

Kunle: Spot on. Got it, got it. Clever. Very, very good. How has boxing and the un-boxing experience impacted on the growth of Love With Food? I read another fascinating blog post about your ‘car test’ where you put a box in your car and then you did leave it for hours and if nothing melts then it’s passed the test and you can ship it to consumers and the rest assured that nothing will melt. Like, you don’t ship chocolate over the summer. There’s so much stuff there with the boxing and testing. What I’m trying to get to his the un-boxing experience. Does it help with customer acquisition?

Aihui: So internally we produce sneak peeks video to tease our customers or to get them excited about what’s coming their way. Our customers love that and the new customers love it too, at least with the tasting box which is the smallest box. It has eight different items and we’ll show three of them. So it gets people excited. The user-generated unboxing content that is on YouTube, it’s very, very helpful. It’s the best word-of-mouth out there. I mean because initially when I started to see traffic to our site from YouTube, I was really amazed. I was like, what’s happening on YouTube? I had no idea that our customers were actually doing unboxing experience on YouTube and if you go on YouTube and such Love With Food there are over 70,000 videos about us. And honest to God, this is like the best word-of-mouth out there. I mean our customers talking about good stuff to their audience on YouTube, this is the best form of advertising.

Kunle: Absolutely, nothing like word-of-mouth. What would you say stimulates… So you said you create this tease video when you launch a new subscription box, to shoot their own videos. But would you say the packaging… I also read a blog post about how you changed or actually watched a YouTube video where you said you changed the box 3 times. And you found a design of the box that actually really worked well. I think it was one with the red on the inside, as well as the outside. What do you think… what elements are driving people to want to shoot a video and tell everyone about Love With Food?

Aihui: I think it makes them look cool. It makes our consumer look cool, like, hey this is what I got in the mail, it’s got great surprise, one thing. People always described Love With Food as Christmas every month. It’s like…

Kunle: Did you coin that or did?

Aihui: No, no. The customers coined it, we didn’t coin it. Wow, Christmas every month. You know, the box is red, it stands out. It does have a happy color like red, you know, the feeling of, ‘I don’t know what I’m getting, it’s a gift,’ because it looks like a gift box, right. For them to do unboxing, one, it shows how happy they are with the service. And two, I think it’s a way for them to show to their audience like, ‘This is the latest and greatest food out there that I’m the first to discover and I want to share it with you.’ But of course the people who are watching it are like, ‘Oh I want to be cool like you too so I’m going to sign up.’ [laughs]

Kunle: And which has been more successful, YouTube or Facebook, as word-of-mouth referral marketing channel?

Aihui: Word-of-mouth, I would say YouTube.

Kunle: Wow. Video speaks volumes. Video do speak volumes. Okay, now that we’ve talked about referral marketing and word-of-mouth, what about retention? How do you retain customers, how do you ensure you minimize churn? Because you’re pretty much like SaaS company when you think about it, on the consumer side you need to keep the figures of the subscriptions up and reduce churn. How do you sustain customers and retain that relationship and get them to keep spending on a monthly basis?

Aihui: We do a couple of things. The most dangerous for us is probably the customer in the first three months because you know they… usually our customers get hooked after the second the third month. Because the first month we might not meet your expectations but that does not mean we won’t meet expectations the second month. So in terms of retention, you know, the first box we sell at 40% off so that at least if they’re not happy with it they don’t feel like it’s not worth it. So when people sign up for first box it’s only $5.99 which is only equivalent to a couple of Starbucks latte right? So that’s pretty much almost nothing. So that’s one. And then we do provide special offers to people that upgrade to three months plan. Because if you upgrade to three months, you will save more, instead of paying month-to-month. And we do send them offers to say, ‘Hey, you’re a month-to-month customer, why don’t you upgrade to three-months. Here’s a coupon code to apply to get more discount.’

Kunle: Which is about $30 right?

Aihui: Three months is less than $30. I think right now it’s about $25 or $26. And you know with that, getting people to sign up for three months plan, it helps with retention too.

Kunle: They go on to three months and then what happens?

Aihui: Once we get people to upgrade to three months we pretty much know that they will stay for a long time because people get addicted to it.

Kunle: And then there’s a social mission to feed America’s hungriest kids. It donates one meal for every box it sends. Could you just expand a bit more about the social mission please?

Aihui: Yes. So when I started the business it was very important for me to start a business with a social mission, regardless of what business I start. I just felt like after backpacking all over the world I’ve seen also a lot of poverty, which to me is not acceptable, you know. Children not getting enough food and clean water is definitely not acceptable in this day and age. And when I started Love With Food I was doing research on poverty and hunger around children and I realized that it’s also a huge problem in the US which is just being camouflaged. In the US, you know because the US is the US – First World nation, the most powerful nation in the world. But hunger has a different face here as opposed to hunger in a Third World country. Given that I live here in the US I just feel that it’s only right to donate to local communities to help children in the US and no kid should ever go to bed hungry. That’s why when I started Love With Food, the mission of Love With Food is to help consumers fall in love with food and at the same time shower your love with food, because every box you get you know that you’re donating at least a meal a the food bank in the US. And how we do it is we don’t donate food, we donate a portion of the proceeds to a food bank.

Kunle: And have you met the kids who are positively impacted by your contribution?

Aihui: We donate to food banks and also feeding America. We leave it up to them to distribute the funds, so we don’t have direct connection to the families that we’re helping. But we, as a company, will volunteer at the local food bank once a quarter, so its great team the building and it feels good.

Kunle: What does your team look like?

Aihui: Right now there are about 15 people on the team. They are very passionate about what Love With Food stands for and they are excited to work in a startup. It’s very important for me to hire people who believe in, one, working in a startup because you’re making a difference. If you don’t believe in wanting to make a difference then it’s okay to join a bigger company where your contribution might not make a big impact, and that’s fine. People who join startups need to have the hunger to make a difference, or the desire. And that they are ready for chaos. Because I’ve worked in the corporate world and now I have a startup. By far, a startup is very chaotic, you know. When we started, ‘Is there HR policy?’ ‘No, we’ll figure it out along the way.’ [laughs]

Kunle: [laughs] You figure stuff out, it’s just that agility, really.

Aihui: Yeah and you figure things out along the way and the people you hire have to have the mentality that it’s okay not to have set rules, we will figure it out along the way with you. If you come to a startup and expect that, oh I’m expecting a great HR policy or expense reimbursement policy, then no, we’re not the right place. All these things are being set up as we grow as a company. So the people I hire need to be flexible. [laughs]

Kunle: How do you hire people? Do you have a set list of procedures or is it gut instinct?

Aihui: That’s a very good question. I would say at the end of the day, you know after 3½ years I have made good hiring decisions and I also have made very bad ones. And it’s a learning process but at the end, I truly believe going with your gut is the best way to go.

Kunle: Because the business, from what I’ve gathered, is very customer-centric. I guess there’s a lot of focus on the customer experience. I’ve just tried to see how that would relate to hires you know. So do you think about customer experience, how every new hire is going to impact on customer experience and you know be the face of the company, while you’re hiring?

Aihui: Anyone that we hire needs to be passionate about Love With Food. They need to live and breathe Love With Food, right. So whether you go to an event that’s representing Love With Food, like a food festival, or to a job event as an engineer to hire other engineers, you need to be able to be proud of your being part of the team. So I would say, one, you know believing in the mission and being passionate about the company is definitely a must. Because you are the face of the company. I might be the Founder but I’m not the only face of the company.

Kunle: Okay, what are your three indispensable tools for managing Love With Food?

Aihui: I’m not sure if it’s a tool but one is, I will have weekly meetings with every team to get an update; to set plans. That helps a lot to make sure that I always know what’s going on and if a particular department needs help you know, I’ll step in to help. The weekly meetings help a lot. We use Trello to keep track of all the To-Do and tasks and plans, like for the holiday right now we’re actually planning for Christmas. Trello keeps everyone on the company in check to understand what are the To-Do and their responsibility for the next couple of months. And internally we have built something. It’s like a diary where you can record down what you’ve done for today and it’s a great way to you know, if you have accomplished something, it is a great way to write it down and share with everyone. And for me as the founder, it’s a great way for me to see, to make sure things are being done, and no one stepping on each other’s toes. And it’s a great way to look back you know, for not just me, for the team members themselves to look back like, in the last quarter what have I accomplished? It gets so fast that you do a lot, and you don’t remember what you have done. It’s a great way to look back every day, day by day, in the last quarter what have you accomplished and you are proud of?

Kunle: I really like the diary thing, I really like that. That’s quite interesting, that could be a SaaS app. [laughs]

Aihui: There is one, it’s called I Done This dot com

Kunle: I Done This. Okay, I’ll check that out

Aihui: Yeah and we basically build our own internally and it’s great, when I do performance review it’s a great way to look back at what someone has accomplished.

Kunle: And to date, what has been your best mistake?

Aihui: [laughs]

Kunle: By that I mean a setback that’s given you biggest feedback.

Aihui: The best mistake. I think making the wrong hire. Early on. Making the wrong hire and understanding why a made the wrong hire and how the wrong hire actually will affect culture, not just myself you know, how it will affect the whole entire team. And it makes me reevaluate how I hire people moving forward. Because you know, people joining the team, it affects everyone not just me. You know in the startup world, the rule is hire slow, but you need to fire fast. And as a founder I have to make a lot of tough decisions you know when it doesn’t work out I have to let someone go. But letting someone go is not easy.

Kunle: It’s emotional.

Aihui: And how does that impact the rest of the team? It’s even worse you know. So I think the worst mistake is probably hiring. It makes me wiser [laughs]

Kunle: Absolutely. And yeah, you’re dealing with emotions, feelings, and people, at the end of the day. I fully understand where you’re coming from there. Okay, next question is, if you could choose a single book or resource that has made the highest impact on you in building your business and growth, which one would it be?

Aihui: I would say ‘Startup CEO.’

Kunle: Startup CEO. Okay. I haven’t heard that.

Aihui: Yeah, I actually read that book twice.

Kunle: Wow, okay. At what periods of your journey did you read it? Was it prior to 2011 when you…?

Aihui: No, I think I read it when my team grew from 5 to 10 within a very short amount of time. And you know managing a team of five people versus managing a team of 15 – it’s a very different ballgame. And, one, I am very fortunate that our investors have been entrepreneurs before. I’m very close to one of my investors, he’s basically like my CEO coach. [laughs]

Kunle: Nice.

Aihui: Because he’s been there, he’s done that, and some of the anxiety that I feel or frustration I feel and… you know it’s always good to have someone tell you it is normal, what you’re going through, don’t freak out. But at the same time, having someone to talk to is important. And, two, reading that book Startup CEO, it’s like a playbook of what you need to learn and what you need to do as a CEO. Because that says, ‘You’re only a first-time CEO once.’ So it’s a great, I would say it’s a great tactical book for first-time CEOs because you’ll feel lost most of the time. [laughs] So it’s a good playbook to have.

Kunle: I’m on the Amazon page and I will link to it. It’s by Matt Blumberg.

Aihui: Yes.

Kunle: Okay. Good stuff. Good stuff. On a final note, I read your blog post about Lee Kuan Yew, quite touching by the way. You talked about books you’d read about him. I just find him fascinating as a character you know, building Singapore from a Third World economy to a First World economy in 40 years is just fascinating. You did say you’d read books about him which inspired you, but you didn’t quite mention them. So what books were those?

Aihui: All the books that he’s written, I’ve read it. And you know I wanted to see his perspective from his point of view. You know being an entrepreneur I can probably relate to a lot of other entrepreneurs and also to Lee Kuan Yew. Like the challenges, I’m sure he has way more challenges than a startup founder. You know he’s leading a country, but to put myself in his shoes, like he was a leader of the country, the challenges that he faced, the tough decisions that he had to make. And one thing he said in one of the books I read is you know, you’re the leader. It’s not about you winning the popularity contest. It’s about you making the right decision in the long run for the greater good, right. But in the midst of it you might seem like the bad guy. And I’m pretty sure every CEO out there would relate to that. [laughs]

Kunle: Absolutely. Tough decisions, tough decisions.

Aihui: Very tough decisions and I’m amazed at his vision and I only hope and wish that I have that kind of insight and vision for me and the company. Because for him, to see how he wants Singapore to be in 40 or 50 years… When he took over Singapore, Singapore was a Third World country. We didn’t even have clean water. And to have that very far-fetched vision, it takes a lot of confidence, it takes a lot of imagination.

Kunle: Absolutely. Formula One is actually carried out in Singapore, in Singapore city. That can’t even happen in London, right? So think about it, think about the progress in terms of development in Singapore.
Well that’s been the fascinating talk, I really, really have enjoyed it. Finally could you let our audience know how best to reach out to you if they wanted to?

Aihui: Oh great. Well first, my name is Aihui, you can reach out to me at my email aong at LoveWithFood dot com.

Kunle: Are you on social media, on twitter or?

Aihui: Yes, I’m on Twitter, so it’s twitter.com/Aihui

Kunle: Oh, you’ve got ‘Aihui’, wow

Aihui: [laugh] Yeah, on Facebook is the same too. Facebook.com/Aihui

Kunle: Wow, you’re an early adopter. Okay. It’s been an absolute pleasure having you on the show, Aihui. Thank you so much.

Aihui: Well, thank you so much Kunle. Thanks for the opportunity.

Kunle: Cheers.

[End clip] Thanks for listening to this episode of 2X eCommerce. To help you get more actionable insights and eCommerce growth hacks that will help you 2X your online retail business, hop over to 2xeCommerce.com

It’s a blog dedicated to eCommerce and multichannel marketing run by the show’s host, Kunle Campbell. 2XeCommerce.com is packed full of articles and guides to help increase traffic to your store, increase repeat purchases and average order value.

Thanks for listening. Visit 2XeCommerce.com

[Theme music, fade out]

About the host:

Kunle Campbell

An ecommerce advisor to ambitious, agile online retailers and funded ecommerce startups seeking exponentially sales growth through scalable customer acquisition, retention, conversion optimisation, product/market fit optimisation and customer referrals.

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