Starting a business at age 50 – which product should startups choose to start a business?

Survive first (early years)

When starting a business, we must first think about survival in the first few years, then think about development. Trees that develop roots in the soil in the first 5-7 years usually grow very slowly, after 5 years they will only grow about 1 meter (even with fast-growing trees like pine trees). After this time, if the roots have developed deep and wide enough, the tree will grow quickly, it can increase 1 meter each year, otherwise the tree will be stunted and live from day to day.

Startups are the same, the beginning is very important, if you choose the wrong product to develop, it may never grow and will be like a stunted tree struggling to survive day by day.

Don't confront the "shark" directly.

Choose a product that is popular? Has a big market? It is true that a hot product with a big market sounds easy to succeed, but there are also big predators and you are their prey. Don't see what other people are doing well in business and imitate them. Stay away from the products that sharks are selling.

I made the same mistake before, luckily I thought about it again, and lost several hundred million (which was a lot for me at that time). If I had been conservative and not stopped in time, I would have closed my startup a long time ago.

That year we launched a line of instant pho cups (bowls), instant porridge, and instant vermicelli. Although the pho and porridge were made from fragrant rice and the seasonings were made from natural ingredients, consumers still thought that instant food was cheap (partly because they didn’t have the money to do media). After testing the samples, supermarkets immediately put them in the store because the quality was better than their competitors at that time in the market (including very big competitors).

However, they only accept a price 20% higher than other competitors, while Dh Foods' production materials are completely natural, extracted from fragrant rice, semi-manual production process... leading to the selling price having to be double that of competitors to make a profit.

At that time, I thought, let's accept selling at competitive prices to gain market share and then increase the price later, and sales did increase rapidly, but the more we sold, the more we lost, and increasing prices with supermarkets is not easy (anyone who has done business with supermarkets understands that). After 2 years, when we had endured enough losses, I discussed with my colleagues: Let's stop production and stop selling products, so the whole team sadly stopped.

Don't choose products that are too niche.

We have also made this mistake many times, sometimes because we like a product too much, sometimes because we don't have enough experience to analyze the market, so we pursue a product that has too few buyers.

Below I will give you an example of instant mashed potato products. During an exhibition, several European companies gave out samples of their Instant Mashed Potato products which were very delicious and everyone who tried them liked them.

This product is not unfamiliar to me because when I lived in Poland, I often ate it. So I came up with the “unique” idea of producing instant mashed potato cups/bowls with cheese, bacon and seaweed flavors. It sounds great and quite creative.

Some companies import instant mashed potato powder, the processing partner mixes it with spices and toppings, then packs it into cups. Everyone likes it when they try it, and supermarkets immediately stock it. The whole team is excitedly waiting for the day they make a fortune.

However, when we did the sampling, we sold it, but after that, the products just stood still on the shelves. Only occasionally did a store suddenly sell out, and when asked, it was because a customer who had studied abroad in Europe came in and cleared out the shelves. And after a while, we decided to stop producing instant cups (at the same time as the pho, vermicelli, porridge cups...)

The processing partner also objected because it was still selling well. But what's even funnier is that a series of big names in the instant noodle industry also launched instant mashed potato cups/bowls (probably because their bosses all studied abroad in Eastern Europe), only AceCook did not launch this product.

Those companies also launched big advertising campaigns, big tasting campaigns but still did not sell much. Then gradually the products were discontinued. Currently, it seems that there are no more instant mashed potato cups/bowls on the market? Once in a while, at a high school reunion, a friend who studied in the Soviet Union came back and said: You do not produce instant mashed potato cups/bowls, so I cannot buy them anywhere. He said that he went to the supermarket several times to clean out the shelves of Dh Foods instant mashed potato products.

You see, even large corporations fail with products that are too new to consumers, let alone small startups like us. The lesson is to stay away from products that are too new to Vietnamese consumers. Someone may be successful with a product, but the probability of failure is very high.

So which product should you choose?

You are just starting out, with very little capital, so be careful and save. In my opinion, it is best to choose products that are already well-known locally, well-known online, but do not have a leading brand, are not produced systematically, or are on an industrial scale.

What products do you choose that you don't have to explain to every consumer: What is this? How to eat it? And it's better to choose products that you have a strong point in, such as local products where you grew up, where you can easily find a manufacturing partner.

Find a reputable local partner who values credibility and quality. They do the processing, while you focus on product packaging, find distribution channels nationwide, and develop marketing.

Initially, you should use digital technology platforms and social networks because they are cheap and easy to reach young consumers. Don't rush, but calculate the cost carefully. Don't be stingy with packaging, make your product beautiful and convenient.

For the staff, it is also necessary to build up gradually, choose young people with the same thoughts, the same aspirations and more importantly, be persistent, hard-working, and not greedy at first. If you have a good product, do not have a strong competitive brand, you make beautiful, convenient packaging, build a good distribution system, then your chances of success are very high. Supermarkets or agents will be more willing to distribute your products. When consumers see your product, they will feel easy to recognize (because they know the product's function) and at the same time, they will be curious and interested (because the packaging is beautiful and convenient).

Take it slow, don't rush things. Even me, sometimes I rush and make mistakes (although now I know how to fix things faster than before).

If you do it right, I think your chances of surviving in the market will be very high. How the company develops and grows in the future depends on many other factors. One of those factors is taking advantage of media opportunities, for example, participating in the Shark Tank Vietnam Program... but I will probably share about this topic next week.

I wish you success in establishing roots in this difficult and increasingly difficult market.