The Seeds of an Idea
Armed with years of investor experience and industry knowledge, Gupta was ready to pursue his own venture. However, he wasn’t sure what kind of business to start. Simultaneously, Chen was planning to sell W Media and thinking of his next move. They connected and started brainstorming new business ideas to pursue together. Gupta was still working at General Catalyst but trying to nail down the right business idea, and Chen was available to pursue something new. Gupta recalled, “We met up and started laying out the criteria for our new business idea. We wanted to work on something we were passionate about, but most of all we wanted to love what we were working on.”
With that mindset at the core of their brainstorming, they started exploring shared interests. They were passionate about food, but their love of food stemmed from different origins. Chen had grown up working in a family restaurant where he developed a love for working with food. Gupta had struggled with food early in life, given that he was not very active and had poor dietary habits. He developed a weight problem that plagued him until his senior year of high school. Six months before Gupta started attending Babson College, he drastically changed his eating habits and worked hard to bring his weight down. He successfully lost 70 pounds by the time he started college through food management versus crash dieting and extreme exercising. His habits transitioned from unhealthy snacking to a more balanced diet. With Chen’s experience in the restaurant industry and Gupta’s analytical approach to a balanced diet, food was where they wanted to work. Where in this large opportunity space should they launch a new business?
With a shared mission, they proceeded to do as much market research as possible. They formed a new question, “What is not being done in the food industry?”
Their secondary research showed interesting statistics about the industry. The U.S. snack food industry brought in revenue of $37.6 billion in 2015 and was projected to continue growing by 3.6% annually.1 A study conducted by the University of North Carolina analyzing snacking trends between 1977 and 2006 showed that children were snacking as many as three times a day while adults were snacking only two times. However for both groups, this was one more snack per day than in 1977.2 With the steady growth in leisurely snacking, obesity rates in the United States had grown as well. In 2012, 34.7% of the U.S. population was obese.3 Snacking seemed to be a lucrative industry, but it was also a main cause of obesity and associated diseases. Class action lawsuits against the snack and fast food industries started to rise. The lawsuit Pelman vs McDonald’s Corporation targeted the fast food giant McDonald’s. However, the court ruled that eating McDonald’s fast food and snacks was the choice of the individual, not the responsibility of the company.4 This precedent held for other cases brought against large fast and snack food
1 http://clients1.ibisworld.com/reports/us/industry/default.aspx?entid=271, Snack Food Production in the US, August 2016. 2 Crowley, C. The Snack Food Nation: A culture of near-constant eating contributes to the obesity epidemic. March 26, 2012. Retrieved from: http://www.timesunion.com/living/article/The-snack-food-nation-3430561.php. 3 Obesity Rates & Trends Overview: Obesity Rates Still High. September 22, 2016. Retrieved from: http://stateofobesity.org/obesity-rates-trends-overview/. 4 Wilensky, S., and O’Dell, K. Where’s the Beef?-The Challenges of Obesity Lawsuits. Bloomberg, July 18, 2013. Retrieved from: http://www.bna.com/wheres-the-beef-the-challenges-of-obesity-lawsuits/.
For the exclusive use of H. Akdemir, 2018.
This document is authorized for use only by Hasan Akdemir in New Venture Fall 2018 taught by GEORGE CHRISTOPHER NAPOLITANO, SUNY – New Paltz from Aug 2018 to Jan 2019.
Balanced Snacking BAB242 / SEPTEMBER 2016