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What you’ll hear in this episode:

• What SKU is
• How SKU helps CPG startups
• SKU success stories

Venture Captial firms and accelerators for tech start-ups are not unheard of, but for food? For consumer packaged goods? That was unheard of until the SKU Accelerator was founded in Austin in 2011. SKU helps emerging CPG brands by providing a 14-week program that gives them exclusive insider access to industry leaders, key retailers, and the tools necessary to accelerate smarter, faster growth.

SKU has accepted a whole bunch of different types of CPG brands ranging from sparkling water to gourmet popcorn and even pet food! And it’s not limited to just food brands, SKU alumni include beauty, eco-friendly cleaning and CBD products. By surrounding these CPG startups with a powerful ecosystem of experts, mentors and tools, they are able to gain the skills necessary to scale. And now, in 2020, the SKU accelerator has expanded to Dallas, Minneapolis, and New York City in addition to their hometown Austin.

In this third installment of Packing Taste, host Axel Brave sits down with Kristen Ross. She’s the managing director of the SKU accelerator. If you like what you hear in this episode, if you like what you hear, leave us a review and share it with a friend!

 

Guest: Kirstin Ross, SKU

Host: Axel Brave

 

Transcript:
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welcome to the packing taste podcast I’m your host axle brave this week we’re talking about all things funding investing and growth with Kirsten Ross of skew Austin skew is V. consumer products excelerated they educate and equip companies with market validated products for growth and to world-class brands more than likely you have used to consume the product that has gone through skew especially if you’re in Texas let’s hear more from here soon about her role and what advice she has for upcoming entrepreneurs and applicants
thank you for coming to Houston thank you so much for having me yeah so before we dive into what exactly skew is I wanted to get some information background from you are you from Boston are you in transplant who’s really from Austin I mean I guess nobody nowadays rarity yeah I’ve been here for seven years I think twenty eight buildings have gone up downtown so I mean I say from Austin now you’re from us now I’m from us originally I’m from Minneapolis and when you came here what how long you said twenty seven years now I seven years ago seven years ago twenty sells like and seven years yeah and I moved here six years ago I think but Austin is changing super fast which we like and you were doing brokerage stuff yeah I was an insurance broker before okay and now you’re the new managing director and acting director for SKU okay awesome well let’s dive in if you can tell us a little bit about why you wanted to start working with C. P. G. companies which if you guys don’t know by now consumer packaged goods or foods as I like to say but what what a what kind of sparked your interest towards that community I consider myself a very good consumer I I love to eat I grew up you know with target in my backyard and General Mills so I always had an eye towards the retail shrine and the food industry I’m and when I came here to Austin I was very much in thralls with the entrepreneurial seem in the C. P. G. space as well as you know technology and all the other wonderful areas that were entrepreneurial but I am CPG is great you can go find it in whole foods put it in your pantry you know you know the founder and you can really support them to get behind them
yes for some for some reason I think that like start up C. P. G. scene it’s a lot cooler little bit Hipper than the tech scene I feel like we’ve seen the tech scene just explode exploded explodes now you have this whole CPG it coming in and I don’t know people around food it is a lot like I gotta have your sense of that than people around technology yeah does that make sense absolutely okay typically you see somebody who’s just so passionate about their idea and you can actually understand what their idea is not when you go down the path capital factory which I love sometimes I’m like oh official intelligence might be a little just going to go eat at nice nutrition and yeah okay will so let’s talk a little bit about skew what it is what you guys do I don’t know if you take the lead here yeah S. Q. is on our and seventh track and so it has had a really good successful run on it originally started as incubation station and the brain child of sherry wrestler who’s an attorney here in town and she it was seeing these accelerators and incubators in the tech scene and was just questioning why that didn’t exist in the consumer products good and she reached out to a a claim Christopher or Joe Ross Dan Graham and a few others and said Hey what if we put together a consumer products accelerator and I mean correct me if I’m wrong but I believe it was a first CBG accelerator in the country so I mean it was a very forward thinking when it came together and what they do is they bring company as through a pretty and type program of twelve to fourteen weeks where there’s classroom dance mat dive deep into Brandon vision to you know the legal to the operations to you know capital raise and is it is it like a once a week thing you know I so weak once a week and then there is a mentor team assigned to every company that goes through the program and they really bring home what has been taught in class and you know you some practical applications get these companies through some of the hurdles that face time you know any CBG company as they grow and so over the years you know it’s an a rated the mentors have you know I think it’s art off at twenty five mentors and now we have about sixty five mentors at our current for this track and how it works is you know companies apply in there the long lengthy application process where we bring him in for live interviews and then there’s a negotiation because there’s a logistical aspect of it you now and we’re trying to get a good mix within our class within each cohort so this year we have seven companies going through the program one is a traditional food company two are water company is we have a dog food company and then to a hardware company is hard good companies so it’s a different mix than on previous tracks that have been a little bit more food focused yeah that’s what I was gonna mention you guys typically pick up CBG food focused brands when I saw the list this year was like a su vida for dog food and then the hardware company and then the grilling company it’s like okay this is this is like a very broad profile but they’re all market ready products made established or emerging brands are they are most of them in retail at this point they although one has sales and think there’s a lot direct to consumer and some through retail okay and they could be selling traditional retell or online
okay so I guess one numb because we have a what what I’m what I’m having the show is there’s so many emerging brands here in Texas and I think like everyone’s kind of trying to seek help and everyone’s been super helpful with me so I kind of wanted to highlight that but when should I guess CBG brands are emerging brand start seeking help because when we’re starting companies were locked up in the kitchen nonstop testing testing testing making sure this is like ready to be released for the people when do you think it’s a good time for a brand to start seeking outside help from mentorship investment is at an early stage thing like what on your like based on your opinion when do you think yeah well like anything the more people you ask more guidance you received the better you can position yourself am and CBG is a little unique because there are so many different hurdles I mean there is the actual product development aspect of it there’s a branding and positioning and there is you know weighing the different avenues to get to your consumer is that gonna be the farmer’s market is it going to be at that you know on both cheeks local stores is it going to be going into a whole foods channel is it going to be on Amazon and they all have their own nuances to it and so seeking the guidance of somebody who has walks you know before them through the is problems and weighing the options I mean it’s great just understand which direction you’re going in unit matters from a margins perspective they learn also manner and just see even understanding the buying structure of whole foods is very different than the bind gesture of a safe way verses going and just dropping off samples to a local store that will you know put it on the shelves of media at least sell I mean there’s different and thoughts behind each of it and you can position your product and you know build your financial models to support the different ways of reaching a consumer
yeah I think I know for me for example from day one I’ve always I’m always asking questions trying to like talk to the masters in my field kinda get advice but I feel like a lot of founders and entrepreneurs might have like this ego issue of like will I’d I got this set I know I know my product better than anybody I don’t need advice but I think we were both saying that like it’s from early on it’s good to start seeking advice and get some help it’s great that you know your product but to your consumer products you’ve created and I mean like we have our work in in the sauce rightly where we’re in there but it sometimes some insight from the outside can be a lot more helpful yeah and in certain degrees but we can get more into that a little bit later I do want to I want to talk about the mentors you guys have because you know it’s it is a twelve week program you guys meet once a week and then everyone gets a sign like a mentor group right so what kind of mentors do you guys have so for example we said that you guys have a new suit feed for dogs how can your mentors help them these mentors have had experience before can you talk a little bit more about the mentors yeah absolutely sell our mentors have a variety of skills that you’ll find some that are very industry focused you know do you have somebody who’s great at frozen food and they understand all of the different traditional like grocery and retail channels were frozen food now that person I was going to be a great that for my see the dog food company grocery pot because they are actually selling frozen dog food and places like whole foods and how deadly expanding how you turn a skew over for the inventory over in the frozen food section is very different and something that shelf stable yet totally different like they he I don’t I think they have to do a quick velocity like their stuff melts for example I don’t have to worry about that I can leave myself in a warehouse ranges thirty different degrees but they can’t exactly so a mentor your set like you have a specified mentor for them that has seen difficulties like that before I was like that yeah and then we also exactly so we have a mentor that’s really dedicated the present but we also will have a mentor that’s great with just finance says and they just built in scales companies now that somebody that we I also want to put on a team they man might not have any expertise in the frozen dog food company and but they understand numbers yeah and they understand the scalability so they can look at somebody’s financial models and say Hey here’s some areas of improvement here you know shipping and you know they’re they’re playing around with the Marita Ann’s and understand how much they need to raise and at what time and from what sort of investors so it’s not necessarily everything has to be industry related but having and and nice mix of somebody that has expertise in industry you know all of my seven companies have that a weak area right that I stacked a couple of mentors on their team to to offset that week area whether it’s you know they just needed to perfect their branding and story telling our market positioning art one great vegan and cosmetic company needs more product development expertise and have a great mentor in the cosmetics industry who does a ton of product development so I put her on the let me team so it’s really just finding you know what needs to happen for support perspective and and companies and how big are these like mentor groups is it like five per brand does it mean very you can do one mentor hop to another one and be helpful because because they’re not competing against each other now there’s everywhere all on the same side here right because it’s all it’s Danielle and nobody nobody vlei is that game and not it’s it it’s you know it’s definitely a collaborative and city and that’s what our mentors early sign I’m just asking for so every company will have five or six mentors on their team and but they’ll also have access across the mentor network so there are some mentors that are designed to team just because they have time capacity you know issues so you know only arrests ache from the child of his new mentor I brought on this year and he’s great he’s brilliant when it comes to marketing and branding and being yeah I mean this is awesome but he doesn’t have the time right now and to be dedicated mentor for a team all of that that companies will have access to him you know to pick his brain to use him in whatever way that they need to and to state whether tearing his story are just kind of keep bouncing ideas off of him yeah so we have a balance of mentor is the ones who are actually cited for a team and on the line who are just part of the network
so one of the things I’m really interested about because I live in Houston and I have to come all the way to Austin to get like the C. P. G. five and most of my mentors are here obviously the exploding scene is here but what I’ve notices all these events are always packed likes the skew events like cocktails hours are my favorite of course but the skew events are awesome I go to bar codes but make all these other like accelerators and an incubator groups they’re always filled so my question I was sitting down in one of the events the other day and I’m like how do people how are people absorbing this advice because I think a lot of us go to these things seeking some sort of answers or some sort of like to hit us in the face and that never seems to be the case it’s a little bit more fluid than that but how to is there a way like start up Sir brands like mine should be managing the mentorship we get like shit like let’s say you assign five mentors for a brand it’s not just about listening to everything they say right you got to take everything with a grain of salt you could get five different opinions from your five yes yes which which I have gotten before from two different mentors from the same old company told me to do two completely separate things so it’s like will your VP of marketing told me to that do this but you were the owner why are you guys saying different things and I remember kind of panicking and being like who’s right here so I mean can we say that ultimately like it’s always gonna be up to the founder or whoever CIOS decision to manage that advice you get kind of take it and reacts to write like what what’s your take on that well I think some people are naturally better at receiving advice and and Klay during an ounce out you’ll on its own yeah that is and those are usually the ones who have a strong – vision of what they want the company to be and they can receive the advice and place it you know is it in alignment with what I think this company should be or is it something that I hear and I can respond to and just choose to discard um I don’t think there is always the right answer for any of this I mean there’s never going to be the right answer you can have a company doing the exact same thing one uses Amazon as their distribution option and getting to the customers and one can go through a bunch of high end boutique retailers and you know they couldn’t be more different but they could both have great success so I don’t think there’s always an answer yeah but what you can’t pass up in by is that great advice that people who have actually done successfully can give you yeah definitely I think so that kind of leads on some
the next thing I want to talk about is the expectation of applicants have or emerging brands have verses what really happens in skewed so a great example is like what we were saying earlier is founders CEOs start ups we go to these events and we’re like oh we’re going to get all the knowledge there these mentors are gonna be on my team this is this a lot of us and give me a million dollars yeah gonna Love Me the money’s gonna flow my way I have all the right answers these guys have succeeded before this is gonna be a piece of cake and you go in there or at least I do I go in there and I’m like why don’t I feel like this void filled after he listening to you know so and so from so and so company talk for two hours so what’s what’s the reality in skew verses this expectation like I remember when I first talked about skew with some of the mentors on like are you guys handle money you guys have all the right answers you you’ll like take my hand and shake the buyer from whole foods for me but it’s not really that right it’s not that and I mean that’s the quick fix that that’s that enlightenment that said aha moment I’ll get you know every time you meet somebody I’m and that’s not what SKU it is What SKU really is is the tools and the network to get you where you want to go and it is going to be leveraging that network so the I think an expectation that I’ve heard from people is that they assume they will go through this program and they went their forget for you now you know they would have an easier time fundraising and they get the capital that they were seeking well yeah we can introduce you to all sorts of venture capital firms private equity confirms angels in the super angels and and that’s not necessarily going to mean that you are going to get funded from these individuals good company will get funded yeah but it takes becoming a good company I’m not just going to the program yeah of becoming operationally batter and every area and leveraging then mentor network to its fullest capability that saying okay so I have sixty five maybe even a hundred you look at some of the past mentors individuals and I’m going down with a spreadsheet and checking them off like I’m gonna sit down have coffee with this person reach out make sure I follow up every other month with a good little update of the success that I’ve had it’s a managing those relationships that will get you the funding that you need it’s not necessarily just going through the motions of the program and its C. mia at the completion of it that you’re going to get the check thank you here’s a million dollars in here’s a million dollars and by leveraging you mean like knowing how to use this advice in this network like your you have opened up the gates for these brands and they’re coming in and there’s these awesome mentors school network all these really good resources and it could be a little overwhelming but knowing how to like it’s up to us are up to the applicants to know how to manage that stuff to then get that investment they want because like you said you can introduce a brand probably to fifty different investors here in Austin but that doesn’t mean anyone going to hand you a check I mean that would be awesome but the very unlikely yeah yeah and it I’m Joe says a pasteurized why would you seek outside capital if you could decrease your margins by ten percent keep your cap table clean and all yourself you make your company more efficient and better run put off that raise and so you can do it more meaningful a on your terms not somebody else’s tears and honestly you’re going to be in a better position because of that yeah and I mean sometimes you need capital grow all oftentimes it do yeah I’m in this world but just understanding the different levers that you have to play around with is important for these businesses and I think even that sort of insight is something that successful entrepreneurs who had exits can and give to the team’s commit their skill yeah and it’s also leveraging the network and not obvious way is maybe feel so great our first class you’re doing an ice breaker warm it can make a warming up and before class started and one of our teams bill me as this fantastic sugar cane water and they’re trying to get us expo west which is actually happening right right now yeah right now we’re we’re not we’re not and they were having a hard time getting the product out there and one of the mentors is like half and a mentor for years and I don’t do anything exciting I just have a freight company and then we looked at him and I would just like we are having challenge getting our product out to expose less he’s like no big deal and literally in an hour he’s connecting them with somebody on his team to get their product moved from Austin out to California and what they’ve been working days to get fixed and resolve it happened within minutes was it just begins those are the moments and this is why skew work bringing these fantastic mentor is and who can have real solutions and real guidance for these companies that have in on the companies are having real start it company challenges and having them meet in the middle for it like a good success like
that is just fantastic yeah a little a little shout out expo west for for you listeners all all the start ups out there expo west is in Anaheim California it’s one of the biggest all natural food shows of the year so you guys to do some research and look it up it’s it’s I think it’s bigger than the fancy food show at least the one I went to in California so to kind of like excite some of our listeners do you guys end up investing in the skew companies sometimes because like I said I think my understanding it early on a year ago was like we’ll give you a thousand for twelve percent and then when I started asking around for that it was known that mentors were like no no I don’t know what it is but it’s not that yeah I got it and and I’ll just just those or doing this track in a you know it’s been different over the previous track might be different next year but for this track how it is structured as we take five point of equity from each of the company’s going to the program and that equity goes into a pool and that the mentors get to share and so the mentors are incentivized to put there and you know they’re in rolodex basically available to these teams and that bill this seems I’ve said hopefully have some successful exits because they they’ll actually get to reap the rewards that you know any sort of distribution that happens from an equity perspective and and I don’t think anyone visas of a a son that they’re going to get rich on but it’s a nice little care and if we yeah I mean that everybody gets I mean investors who have been in the industry before and know about the stuff that sounds like the best kind of master right yeah yeah I mean like Jeff your grandfather offers you twenty thousand dollars a start up that’s cool but if an expert who’s been in the industry for twenty years offers you twenty thousand dollars I think that it’s worth a little bit more yeah but the so these five points aren’t worth a certain amount you guys decide that between the investors and and the company is in by no means a valuation of the company yeah so we do have twenty thousand dollars at the completion of the program into the companies but don’t take that twenty thousand and the five points of equity and try to say that there’s a certain valuation that we’re putting on these companies that’s not it I mean they’re two separate items that five percent I would almost view as more just five percent access to a bunch of C. E. O. that you’re not going to have to have a to consultants at ranting experts in the freight guy that’s going to make sure they try to get that axle last on time so you can do a big splash I mean that’s what those five points are really are for and and frequently accompanies our have an eye toward some sort of a race and and they have now you know a network as investors that are all accredited investors that they can be basically showcasing their hard work their dedication and their product improvement to so when you actually have the raise you have a set amount of individuals that you can go to that scene you kind of grow up and threw it through the program and I mean will we often do site cars and you know certain investors will get behind certain company yeah yeah
that sounds really awesome to be connected with those types of investors can you talk a little bit about previous success stories from skew of because you guys have quite a few he has lied to you yeah I mean it worst I’m part of like all of the companies I at it was doing some research just from a numbers perspective on like this excessive C. P. G. company itself for a product like thirty thousand products are launched every year and like seventy five percent fail so I mean it is like let’s not feel comfort I but of all of our thirty seven and companies that have gone to skew from like track one to six and ninety seven percent are still in business yeah so that speaks volumes and a couple of them have sold couple missile so you know when you have the third a third a third a third are just kind of hanging on a third or do and you know pretty get a nice little lifestyle businesses and like a third you’re just like oh my goodness and you just want to be their biggest cheerleader and associate today with the biggest yeah yeah one of the biggest races that have been in Austin last year we went through skew and inflate their name is must be ninety when they went through scaly to help them with the re branding lanes yet there was must be ninety yeah well and you know and then they did some re branding work and you know I mean I’m not gonna try to say skew wage Interpol and what they were doing but I hello I really little little yeah the founders of the Alan run a car just fantastic and like the whole family is great and the date I mean they are smart individuals in the leverage that network they found a couple of his angels through the network you know their branding and their product is fantastic in of itself but they got guidance in a lot of people in turning it into you know what has been such a huge success yeah we had at that bar come through its Acadian Taylor actually started out as thunder bird and they ended up iterating tense through this you process and you know the number to still existing in one form fashion they broke off into at back and which is what well they’re the lice in bars or something like that right line and take their chicken and Turkey no doubt that there that the needs protein bar yeah and and see if the they do tortillas yeah sorry these names are just like so familiar yeah yeah yeah give a little and and and see we bath is another strong city I mean bye bye and and we’ve had a lot and if if you guys haven’t heard about these companies you can Google them and like see at the I think two weeks ago got ninety million like capital infusion or something an epic bar sold to so and so for a general general now a hundred million so for you guys out there just like definitely keep go and excuse owns like but they’re doing something to these brands yeah you gotta take credit where credit is due I mean it’s really the mentors at the animal yeah yeah great program with some really solid mentor it’s working with all those people I think
so where would you think CPG is heading where it worked like exhaustion or just in general in Austin and in general yeah well in Austin there’s a lot of really exciting things that are happening and naturally boulder is a fantastic organization and that has a lot of clout within the C. P. G. especially in the food and community and we are establishing an actually Austin that will be launching next month so that is really exciting and to really support all sorts of founders and people who want to do collaborative things within that space within this ecosystem and and we also there’s a few funds that are being developed to kind of neat that need of you know kind of exhausted the angel network here but you’re not quite big enough for a traditional VC fund to really come in and you know write a bigger check you don’t need a five million dollar check you don’t need to twenty five thousand dollar check anymore there’s a whole lot of space in between so we’re seeing few funds bubble up to really serve and that need in the community a lot more money being thrown around a city yeah a lot more money and we also are having a lot of conversations with banks and who haven’t traditionally banked CBG companies trying to figure out ways to actually do some some traditional banking yeah because I think I spoke to a bank a couple times and they just looked at me like you’re crazy when I can give you any money food see PGA what is a you know they’re trying to figure out because it’s Jeff Heller here in Austin and I mean like I think sustainability approaches to our food industry that’s just totally emerging so more people want to put some money in there because CPG is exploding people are starting to like look at what they’re eating be more concerned with the brands are supporting and one not so yeah I I guess the the CPG community is exploding all over the country
so quickly before we go any personal advice for food start ups from the managing director be innovative and just hate your product and get it in front of customers and really really listen to the feedback you’re getting yeah keep gone just keep going some okay and great advice the if we can plug so you guys are doing track seven now track seven now so do we have dates for track eight track eight will be twenty twenty okay and here in Austin or in conversations about expanding yeah I’m outside of the Austin so more to come on that please come to Houston well used to the department I am and applicants and we’ll start taking applications this summer so right before the end of our current track will open it up for applicants and we’re also going to invite anybody who wants to apply for track aids and to come to our showcase state to see kind of what that community that ski brings together as yeah and you don’t you don’t have to be in Texas you don’t have to be in Texas I’ve got a farmer from Oklahoma with the CVT water driving down every week I’ve got somebody flying in from Paula also somebody driving in from Houston and service have a Brazilian and the gentleman who has is fantastic cleaning home cleaning supplies of any and also a Brazilian butt living in Palo alto and do these are these products are ready market tested these are market validated there is that when I come in and that is just doing pre orders right now but they have the products you know manufacturing all lined up there just yeah they need to flip on the search and pick out yeah so if you have a market validated products you can apply on skews website you can just Google skew a T. accidents you AT acts we don’t have the apply button ready right now not yet that you can click on contact us in its info at U. S. dot I. ass and that will and get an email over to us and we are keeping and nice big a log of companies that we’re getting out to make sure that we tell them exactly when the link to apply is up and again summer twenty nineteen is when you guys are gonna application yes and then so lastly quickly I like asking only guess this but if you can advise people on how to how do you manage what you want to do what you should do and what you have to do because those are all different things to me I guess when I want to do something and I’m doing it with the right intentions they all come on line ride I’ll check out there el Tor manner G. into anything that I really need to do because I want to do it yeah okay so you can merge all of them and try to merge them yeah yeah well awesome here’s an item I’m glad you came on the show I hope for us some people come and apply on skew and we can just keep making Texas boom as the upcoming CPG state I hope so it’s headed that way thank you so much actually appreciate it
thank you thanks again Kirsten I appreciate you taking the time to speak with me and to share more about skew we’ll put a link in the show notes to learn more about their programs and how to get involved the packing tasty includes me axle brother to serve right across it an audio engineer Jake Wallace thank you everyone that found the media for your support don’t forget to hit that subscribe button so you never miss an episode and maybe leave us a review on iTunes to help other folks find the show thanks for listening