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Ep. 23 Interview with Mark Crowell, Founder of Culinex РPart One

JUNE 01, 2020

Dr. James: 00:19 So everybody on this episode, I have Mark Crowell, founder and CEO of CuliNex. CuliNex was founded in 2005 and has become in 15 years, a nationally recognized consultancy, focusing on clean label product development. From their 20,000 square foot innovation center in Seattle, Mark oversees an experienced team of culinologists that assist food manufacturers and ingredient suppliers with achieving their growth goals through new product development. But I would have to say his biggest claim to fame, he spent seven years of Director of Food Product Development at glorious Starbucks Incorporated, downtown here. Mark, thank you so much for joining me on Startup Confidential.

Mark Crowell: 01:07 My pleasure.

Dr. James: 01:07 I bring guests on like you Mark because I’m trying to help accelerate the professionalization process of founders who are basically completely, totally, utterly new to consumer packaged goods. Mark, can you list off the three to five most important things people new to the industry have to understand early on about commercialization, so they do not screw this up.

Mark Crowell: 01:29 Well, first commercialization is only one of the steps in the product development process. If we’re talking specifically about scaling something up, there are a couple of steps or phases in the product development process that are very important to get right. And if you don’t get those parts right, you can’t get commercialization done. So maybe we’ll take a step back. We’ll look at the three phases of the product development process itself.

Dr. James: 02:00 Right.

Mark Crowell: 02:01 And then we’ll talk about commercialization and we’ll zero in on what’s important. Really the first thing in the product development process is the product design itself. What is it that I want to make? Who do I want to make it for? Why are they going to buy it? Those are all questions that are going to lead to hopefully answers that are going to drive the product design. The product design really is that get ready phase that’s going to define what you’re going to do next, which is the second phase of the product development process.

Mark Crowell: 02:34 So that’s the foundation, product design and then product development is the second phase. It’s really the heart of the process because they are you’re prototyping, the products. Now a lot of founders will come to us and they’ll already have prototype with product. They’ll say, “I’ve been making this thing, I’ve been playing around with this thing and here’s what we got. We’ve got the prototyping, it’s all done.” In reality, they don’t. They have a kitchen recipe. It’s not a formula. It’s not something ready to be commercialized. So the prototyping process is really a heart of that middle phase, that product development. And in prototyping, you’re using industrial ingredients not grocery store ingredients to create the product.

Dr. James: 03:19 Thank you.

Mark Crowell: 03:20 That’s a big difference. You often hear the term, prototype and then you’ll hear the term, protocept. Sometimes the difference between the two is, protocept is a product made with grocery store ingredients but a prototype is a product made on the bench with industrial ingredients. And that prototype is much closer to being ready for commercialization than a protocept.

Dr. James: 03:44 Can I add a third? Can I make one up? We’ll call it [inaudible 00:03:49].

Mark Crowell: 03:47 Sure.

Dr. James: 03:48 We’ll call it protocrazy. And that’s when I use ingredients from the farmer’s market. And the third phase is commercialization?

Mark Crowell: 03:57 That’s right. The third phase is commercialization, sometimes referred to as scale up. And that’s where you’re going in a commercial production facility and you’re taking that two pound batch of whatever it is that you’ve been making. And now you’re going to make a thousand pounds or 10,000 pounds in a batch.

Dr. James: 04:16 Wow.

Mark Crowell: 04:17 And what I tell people right off the bat is, this process, that product development process is probably 10 X more complicated than you think it is. It’s probably going to be twice as expensive and take three times as long. So just be prepared.

Dr. James: 04:35 I do meet people who want to rush through that process because they want to start selling. I get it. I think we’re going to learn why that could be a mistake, especially if you have something particularly fussy.

Mark Crowell: 04:46 What exactly are you trying to accomplish?

Dr. James: 04:48 There you go.

Mark Crowell: 04:49 And founders will come in and they’ll say, “I’ve got a beginning formula or I’ve got a beginning recipe or I’ve got an idea of what I want this thing to be like.” And so, it’s good to really get a handle on what’s the goal of the whole process. You know sure, it’s to make a lot of food but more specifically you want something that, at the end of the process, is going to taste as good as the thing you made in your kitchen or the thing that you envision that you want to create. That’s not the only goal that you have for the product development process, though.

Mark Crowell: 05:27 You want to make sure the products are safe. You want to make sure they meet all regulatory and labeling requirements. And you want to make sure that everything that you do in the process is documented. It does you no good to create a product, if it’s not consistent from batch to batch. So documentation is very important. Now you as a founder, are not going to be the food safety expert. You’re not going to be the regulatory and labeling expert. And you’re certainly not going to be the documentarian. However, you’re going to need those people on your team. You’re going to need to pick suppliers and partners and subject matter experts.

Dr. James: 06:05 I think that itself is something that people overlook.

Mark Crowell: 06:08 I got a call last year from a founder who said, “We have a successful company, we’re doing $30 million a year.” And I said, “Congratulations, that’s great. That’s a huge milestone.” We’re distributed nationally, we’re 6,000 doors or whatever it was. And I said, “It’s great, it’s great.” I said, “What’s the problem?” He said, “We tried to leave our longtime co-man. It turns out, I didn’t even know this.” He said, “It turns out, we don’t have the formula. We don’t know what it is. I need you to reverse engineer it.” And I said, “You’re not the first person that’s called me,” and has said, “When we were small and we were just getting started and this co-man took us in and he helped us develop the product. And we ran with it for six years and then we had a falling out and I wanted to take it somewhere else. And I found out I actually don’t have the formula. I don’t know how he makes the damn thing.” I said, “That’s your IP. You don’t own your IP.”

Dr. James: 07:11 I would pile on there, that I can tell you from the outside that there’s plenty of co-manufacturers out there. They make value added brand products. A lot of people don’t understand this. Most of the bigger plants obviously are making a lot of store label product. But a whole bunch of them actually have little branded lines. They’re not marquee brands usually, right? They’re not BarkThins, which was developed by a co man owner, essentially. So boundaries need to understand what Mark’s saying here, which is that they actually have a strategic business to rip you off, take your idea. And to simply exploit you as a source of creativity that they don’t have internally. This has happened, it’s happening, it will happen. So you want to make sure that obviously you have good legal advice but that you approach the process professionally as if you’re protecting IP from the very beginning. I think that’s really important. We want to start with product design phase?

Mark Crowell: 08:01 So even before we get to product design, question is, what are the critical principles behind product development, whoever you’re working with for the development of your product. There is a clearly delineated project plan that spells out who, what, where, when and why of your project. The second principle I say to pay attention to is, it’s meticulous. It is a process of a million details and every detail is an opportunity for something to go wrong. So when we talk about the documentary and we talk about Government Regulatory Requirements, we talk about food safety, people’s health, legal liability. And we talk about something tasting as good in the plant at 10,000 pounds, as it tasted when you made a little two pound batch. All of those things are made up of a million details. It’s a process that requires meticulousness in its execution. We have a lot of OCD people in the science procession.There’s a reason for that.

Dr. James: 09:09 Yeah. Well, I don’t see those guys showing up in Hell’s Kitchen episodes, do you?

Mark Crowell: 09:16 No. As a former restaurant owner, I can say, you’ve got the artist and then you’ve got the scientist and they do not live in the same world.

Dr. James: 09:25 Now, that’s why marketing and R & D rarely have happy meetings at big companies. So we’ve heard about plan meticulousness.

Mark Crowell: 09:32 Yeah. So another couple of principles, get the right team. It takes a village. Everyone has an expertise. You need a co man to manufacture your product, they’ve got to be really expert at manufacturing. Doesn’t mean they’re going to be an expert at R & D. It means they know how to make stuff. It doesn’t mean they know how to create stuff.

Dr. James: 09:56 Okay.

Mark Crowell: 09:57 You’re going to need a packaging expert. You’re going to need food safety. You’re going to need food scientists. You’re going to need culinary people. So there are a lot of different people that you need to have on the team.

Dr. James: 10:09 And did you have a fourth principle after team?

Mark Crowell: 10:11 It’s more complex than you think it is. It’s more expensive than you think it is and it’s going to take longer.

a commodo consequat.