What scaling looks like when you’re trying to change the world
Dennis Woodside, President of Impossible Foods and former COO of Dropbox, spoke with Pear consumer + fin-tech partner, Ajay Kamat, on May 14th about his experiences scaling these two disruptive companies.
This is a recap! Watch the full talk at pear.vc/speakers.
It might seem like a jump to go from a tech company like Dropbox to a tangible consumer product like Impossible Foods, but Dennis Woodside, current President of Impossible Foods and former COO of Dropbox, sees some parallels.
“Pat’s view is that animal-based protein is an antiquated technology that’s going to be replaced entirely by plant-based technology. It’s a technology platform change. It’s going from PC to mobile — if you’re not on mobile, you’re not going to have a business. So, that’s a big, bold statement.”
Not only is animal-based protein antiquated in the Impossible Foods team’s view, but it’s also incredibly harmful. Dennis believes Impossible Foods is one of those companies that can really change the world.
“You’re talking about big industries, a $1.4 trillion global meat industry. In the US, we consume something like 20 billion pounds of ground beef a year.”
Now that Dennis is onto his second category disrupting company, we thought it’d be a good idea to chat with him about disruptive companies and the challenges of scaling them.
What Disruptive Founders Do Differently Getting Beyond Product Market Fit Growing Pains for Impossible Foods The Evergreen Challenge of Recruiting
“You really need to have a vision for how big this could be,” says Dennis, on disruptive founders.
But it’s not enough to have a grand vision. After all, any of us can delusionally dream.
“It’s about understanding how big the market really is and being honest with yourself about how that market is shaping out,” says Dennis.
Disruptive founders dig under the hood of their visions to begin understanding what they have to believe in order for their vision to be possible. They search for evidence for these beliefs. And then it’s their job to figure out how to make the vision happen.
“When you’re talking to entrepreneurs who have that kind of a vision, often they thought it through 10 steps beyond what a logical person would have thought through, and really have understood where that 10 million or 30 million dollar company could be in 10 years,” says Dennis.
These founders are laser-focused on their vision almost to the exclusion of everything else, because they’re trying to achieve something that on its face is very very difficult to do: a massive behavior change, like shifting our fundamental eating habits.
Dennis joined Impossible Foods because the company had clearly found product market fit in a growing and very fervent consumer base, much like Dropbox when he first joined.
To become a big company, however, Dennis knew Dropbox would have to find a market for their business product. In that sense, the early stages of scaling a product-market fit product can look very much like the early stages of getting a product off the ground.
“There is inherently a trial and error where you’re trying to see how far you can push the product. You realize you have to invest a lot in the product in order to go after a certain segment, and you have to decide — you can do that or you’re not gonna do that.”
This phase is all about finding the sweet spot between sales, marketing, and product motions. Most of the early work is in building the basics, like bringing in the right leadership and iterating to get to the next market fit.
During this time, the fundamental trajectory of the business is still very hard to project. Because of the large amount of uncertainty, it’s best to set milestones within your control about what you will accomplish, rather than precise targets.
At Dropbox, and at Impossible Foods, for example, one of the main focuses was on new product launches.
“Getting a product into the market is way more important than making the product perfect,” says Dennis.
The team set concrete launch dates for the next versions of the Dropbox business plan and the next set of features and went from one paid plan to two.
Later, when the business was moving along, another example of a milestone was to get to positive cash flow within 18 months. Other milestones were set for their infrastructure projects (moving off AWS to internal servers) and for hiring.
At Impossible Foods these days, Dennis is tackling a very different industry. Unlike his time at Dropbox, where the team had to constantly be inventing the next new product, product is no longer a big challenge.
“There’s a bunch of stuff we can apply the same technology to. We don’t have to invent a new class of product,” says Dennis.
However, scaling production is a completely different ballgame.
“If you’re building a physical product, you have to build capacity for that product. That takes time, that takes tens of millions, if not hundreds of millions of dollars, if you invest in a plant. So, you have to plan over a longer time horizon. You have to take risks ahead of knowing what the demand is there. We’ve had to build multiple manufacturing facilities with only our prediction of what the demand will look like and how soon will that demand ramp up.”
To make matters more tricky, good data is much more challenging to acquire in the food industry in comparison to the software industry.
“We get good data in the grocery segment, but in the restaurant segment, we sell to a distributor who sells to another distributor who sells to the restaurant. So, the signal back is really attenuated, and a big challenge for us is: how do we create a signal? How do we create a direct connection with consumers and with the restaurant operators, so that we have a better sense as to what’s going on and what the competition in the landscape is like?”
One challenge that has stayed the same? Recruiting.
“Talent is always something that you’re looking for and trying to build in the company,” Dennis notes. “People who worked well in the world that they were in a year ago, if the company’s almost tripling in size, well, it’s very possible that they are totally at their limit a year later. You need to either help them get through that or find other people from the outside who’ve seen that next level of growth and can come in and help the company grow.”
Dennis’s advice is to bet on people who haven’t necessarily held the job they are applying for, but have seen enough to know what greatness looks like. It’s critical that they are willing to roll their sleeves up and build and tackle the problem themselves.
“I tend to look for people who have challenged themselves and who have been in companies that we respect and I respect,” says Dennis.
It’s also important to think about the balance of the whole team. Impossible Foods, for example, has an interesting combination of food, biotech, and pure tech people.
Most importantly, recognize that you will make mistakes because hiring is an imperfect science. When he was at Google, one of Dennis’s first jobs was to hire a lot of country managers. He hired 15 managers in 18 months, and had to fire three of them within a year. Only three of them ended up becoming superstars.
“Hiring isn’t perfect. You have to accept that, and once you realize this person’s wrong — often they’re wrong because of cultural reasons, not because of skill or will— then you just need to move really quickly and move them out.”
For those thinking about switching industries, Dennis assures us he’s having fun.
“I’ve always thought of myself as a generalist, rather than a specific industry type of person. It’s not that hard to learn new industries if you have an open mind and spend the time trying to understand things.”
In fact, Dennis is currently listening to Anthony Bourdain’s Kitchen Confidential on audiobook.
“Being in the food industry, with restaurants as a big part of our business, I thought it was helpful just to get to understand a little bit about what happens in a kitchen,” he says.