Jen Faigel | Crain's Boston

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Jen Faigel

Background:  

Boston-based CommonWealth Kitchen provides shared kitchens and business assistance to aspiring chef entrepreneurs, with the mission to help them build their companies, create jobs and improve access to healthy food.

The Mistake:

A lot of colleges and hospitals are interested in local food, so we saw an opportunity for a strategic partnership with Northeastern University providing tomato sauce for their dining service. We thought it would be great since it’s a big institution and it would be a strategic partner because it’s located here in the city of Boston. I naively thought this was going to be easy.

We brought in Sysco to be the distributor and we agreed on a price even though it didn’t fully cover our cost of production. After all, this was our first partnership and the thinking was, you sell one and you get in the door. Then, we made the product and Northeastern, through their third party dining service, said they didn’t want it. We didn’t have a contract in place since we thought in our numerous conversations with them that they would commit to buy it, but ultimately they said they didn’t commit to buy this particular thing. Rather, they wanted the tomato sauce to be available from Sysco, then be able to buy from them when they actually wanted it. Then, Sysco said if they don’t want to commit to it, then we don’t want to stock it.

There was a domino effect of unraveling. This all happened because we weren’t precise enough. We didn’t have a contract in place and instead did it on the basis of relationships that felt like we were all going in the right direction and we were willing to work in understanding that this would be an imperfect start to launching a product. And it just fell apart. We ended up being able to sell the tomato sauce for about half of what we thought we were going to.

Fail bad, cry quickly, prototype, learn, evaluate and do it again.

The Lesson:

We essentially ended up making tomato sauce out of tomatoes like you would lemonade out of lemons — and we learned. We realized that we needed to have better defined specifications up front, have contracts in place, and have strategic partners who are not looking at is this as simply a transaction, but as a partnership. We didn’t just walk away from institutional partnerships, but rather we saw the value in working with the dining halls and learned from our early mistakes. The biggest takeaway for us has been somewhat cliché: Fail bad, cry quickly, prototype, learn, evaluate and do it again.

Since then, we have done multiple projects with other area universities, including Harvard University and MIT. These have all gone well really because of what we learned the first time. That has been enormously powerful for us.

Follow Jen Faigel on Twitter at @FaigelJen.

Photo courtesy of Jen Faigel