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Foodessentials Inc – Looking back at starting-up

January 3, 2013 • Arch Grant News

In trying to paraphrase Plato, Einstein coined the phrase “Necessity is the mother of all invention”. If he had one entrepreneurial bone in his body he would have added – “and Hope is the father of all start-ups”. Unfortunately ‘Hope’ is also the reason so many start-ups fail because they are pursuing the wrong Invention to serve a perceived Necessity or even vice versa.

FoodEssentialsWe chose our ‘necessity’ when we realised back in 2004, that in order to use food labels to select foods with suitable ingredient and nutritional content that matched a health profile – you needed:-

  • A Magnifying Glass
  • A Calculator
  • An accompanying dietician

For the 21st Century this had to be unacceptable. Surely commercial success would await anyone who came up with a modern solution. Why not us – so we formed a company to provide this solution and somehow use modern technology to revolutionise grocery shopping by putting all the contents of food labels in a digital format that would be instantaneously available to one and all at the click of a button. Not that we anticipated the advent of the ‘Smartphone’ – we were just too excited about the idea itself, to worry about ‘delivery’ models. Our Business Model, for want of a better term, simply revolved around the notion that if we succeeded in our goal, then somehow the world will beat a path to our door and on the way tell us how, why and how much they were willing to pay us.

Our first hurdle was the fact that in Australia, food label databases were practically non-existent. So the first goal of the family start-up was of course, to generate a digital database of all the food labels that would cover the whole Australian Market. This turned out to be about 12,000 food labels in total (To keep this in perspective, we are talking about a country with a total population of only 26 Million or so). In so doing, we basically re-invented the wheel…the hard way. We spent a lot of our ingenuity and a good part of our available capital working out various methods to manually collect, collate, read, digitise, analyse and interpret these 12,000 food labels – only when we had accomplished this did we wake up to some home truths:-

  • We have just discovered an expensive and unsustainable way to build a food label database
  • We had no way to monetise this ‘expensive service’ to any market
  • Food Label databases already exist in other world markets especially in the USA and all are either free or commercially available

The silver lining in all this was the fact that in the process of manually collecting these 12,000 food labels, we actually learned quite a lot about ingredients, nutrients and food labels in general. Knowledge that we quickly realised could be to our benefit with the existing food label databases in the USA. So with only some vague ideas and plenty of advice as to how we can monetise our food label database knowledge in the much larger USA market, we established Foodessentials Inc in 2008 in Chicago….where one of our founding partners happened to live at the time.

With persistence, luck, and a good deal of naiveté, Foodessentials one day, found itself (albeit reluctantly) as the lead partner in a successful tender called by the FDA for a system to analyse food label databases. The rest as they say is history, after 8 years of going nowhere but learning a lot, Foodessentials now became a small business with some actual income. This foundation success gave us the confidence to participate in the Arch Grant International Startup Business Competition, a non-profit which provides grants, or ‘free money’ to startup businesses. This, in turn, has led us to even more success. Foodessentials is now on the verge of becoming a substantial real business with a genuine and realistic ‘blue sky’ future.

Moral of this blog for start-ups ……..expecting to have a realistic Business Model with a proven blue sky before you commit to a start-up is like putting the horse before the cart, which makes sense if all you want to end up with is a cart driven by a horse. But if you hope to achieve all that you can dream, then trust your instincts, stick to your great idea (just make sure it is flexible) and make sure you never ever lose that indefatigable confidence and hope that the next pivot will finally match your invention to a real necessity.

Anton Xavier_Food Essentials
Eduardo Xavier
Investor/Founder of Foodessentials
(Pictured: Anton Xavier, CEO and Co-Founder)