My biggest mistake: Daniel Lubetzky, founder of Kind Snacks

If you’re on to a good thing — making sales and raking in revenue — you should double down, right?

Not always.

For Daniel Lubetzky, founder of US healthy snack brand Kind, focusing on growth meant neglecting quality. And that meant losing customers, fast.

Here’s what happened, and how Lubetzky made sure not to make the same mistake twice. With his company, which recently launched in Australia, now valued at US$5 billion, it’s a lesson he applied well.

The mistake

As an enthusiastic 25-year-old entrepreneur, Lubetzky admits he may have been “a little over-eager and a little too greedy”.

That meant he wasn’t as “obsessive” over quality as he perhaps should have been. Through his business PeaceWorks, he launched a range of snack products under the brand Moshe & Ali, starting out with a sun-dried tomato spread, an olive spread and a basil pesto.

Those three flavours went down well. So, he decided to get more products on the shelves.

Lubetzky expanded the range from three products to seven. Seven to 16.

“Then we lost our footing,” he recalls.

The team was just trying to get as many products out the door as possible, and was letting the quality standards slip. The young entrepreneur was pushing too hard to expand too quickly.

“I paid the price.”

The context

Before the Kind brand existed Lubetzsky was running the enterprise through his first company, PeaceWorks.

PeaceWorks was designed to promote peace through business ventures, inviting small businesses from neighbouring countries or regions in conflict to work together to manufacture and export goods.

Moshe & Ali was just one product line the business was selling, but it embodied the same values of what Kind would come to, later.

Ultimately, it also offered an insight into the customers he would try to target.

The impact

Even though the quality of the product only slipped on the later releases, it affected sales of the entire line.

Essentially, Lubetzky had lost the trust of the consumers. 

If someone tried the 14th flavour and was disappointed, “they stopped buying our entire line”, he says.

That included people trying the products for the first or second time as well as long-standing, loyal customers.

At one point, this arm of the business was making close to $1 million in annual revenues. But the push to expand too quickly cut that figure in half.

After working incredibly hard to build up that early success, seeing it regress due to a lack of commitment to quality was painful, Lubetzky recalls.

“That was a steering lesson.”

The fix

When Lubetzky came to launch Kind Snacks in 2004, this lesson was still fresh in his mind. He was determined not to make the same mistake again.

In fact, he still keeps a jar of Moshe & Ali’s biggest flop, a sweet and spicy Asian-style teriyaki pepper spread, in his office today to remind him.

Kind snack bars. Source: supplied.

As he should have the first time, Lubetzky obsessed over the quality of every product that found its way onto supermarket shelves.

And, as early products saw promising results, his sales representatives started to ask about expanding the range.

He was firm in his answer.

“No. Let’s slow down. Let’s do it right.”

In this industry, consumers are easily won and easily lost, the entrepreneur notes. Selling in the short-term is easy — remaining viable in the long-term is not.

“Let’s be long-term oriented, not short-term oriented.”

The lesson

The lesson here goes beyond focusing on the quality of your products.

For Lubetzky, it comes down to honouring your customer, living up to their expectations, and sticking to the promises you’ve made to them.

“The most important tenet that I follow now is that a brand is a promise and a great brand is a promise well kept,” he explains.

That also means having a firm understanding of what it is you stand for, and delivering only products that meet with those values.

For Kind, that’s providing nutrient-rich products with ingredients that the average consumer recognises and can pronounce.

When there’s a particular flavour, product or opportunity gaining traction, if it doesn’t meet with those values, “we skip it”, Lubetzky adds.

“We don’t need to win everywhere. We just need to be the best at what we do.”