Offering advice and anecdotes from his business experiences, Gary Hirshberg, chairman and former president and CEO of Stonyfield Farm—and a natural products business guru—offered seven lessons for entrepreneurs who attended the ExpoWest Business School in Anaheim, CA, on March 9.
 
1) Your product (or service) needs to be better than anything else that’s out there.
 
If your product is the same as, or inferior to, existing products, “you’re not going to get to the starting line,” said Mr. Hirshberg. “If you don’t have superiority of some sort, then don’t launch.” In food, taste is a good place to start, he added.
 
When a company launches a product that’s better than anything else currently out there, typically the market gets flooded with clones, or “me-too” products. “Take the time to get it right. Do not skimp on any aspect, even if it’s a higher cost of goods. You will never be able to overcome an inferior (product).”
 
2) If you don’t ask, you don’t get.
 
“If you don’t stand up for yourself, then who’s going to?” said Mr. Hirshberg, adding, “The key to entrepreneurship is having the hutzpah, the ego, when everyone else tells you it’s not going to work. You have to grab every opportunity.”
 
He told a story about when Stonyfield was strapped for cash in the very early days and couldn’t pay a fruit supplier. By visiting the company, requesting an advance and proposing to make a future commitment to the supplier, he was able to secure a contract. Today, Stonyfield has bought millions of dollars worth of fruit from the vendor, which has continued to be a loyal partner and friend. But if he hadn’t asked initially, he might have lost the business.
 
3) You must believe in yourself.
 
Often times when dealing with people who have competing interests, it’s vital to stand up for yourself. The mission of investors is often to whittle down your valuation to get a better deal. So be confident and believe in the business you’re building.
 
4) Know your cash needs.
 
“It’s not about whether you’re making money or not, it’s whether you have cash,” said Mr. Hirshberg. “You can lose money for a long time if you have cash. We went 9 years until we made a nickel, from April 1983 to 1992.”
 
Entrepreneurs are “pathological optimists,” he added. When entrepreneurs put their business plan together they always exaggerate revenues and underestimate expenses. “Double your expenses and halve your revenue. Be brutally conservative and don’t fool yourself. You’re the only one who can protect against that.”
 
He continued to caution against getting into cash-trouble. When people are desperate they do stupid things and make bad deals that are often hard to recover from, he said.
 
5) Over-communicate … with customers, employees and vendors.
 
Being a smug know-it-all and not sharing information is useless and self-defeating, said Mr. Hirshberg. “People will be forgiving if they know where you are and what you’re thinking.”
 
Prior to e-mail, Mr. Hirshberg would send regular letters to shareholders and hold annual meetings to keep them informed and to ensure everyone was still on board.
 
Openly communicating with employees is also important. “If you’re stressing, your employees know. Communicate and tell them what’s going on.”
 
6) You must take care of yourself (and those you love).
 
“You must get sleep, eat well and exercise. That’s the only way the business makes it. If you’re sick or sad, the business is going to be sick and sad and unwell,” he said.
 
Starting out, Mr. Hirshberg could never afford vacations with his family, but they still went away, running up the credit card bill and sometimes taking a year to pay it off. But that time away was invaluable.
 
“The best ideas you get are when your brain is free from the stresses of the moment,” he said.
 
7) Don’t forget the power of your mission … ideally your social and environmental mission.
 
“At the end of the day, when you’ve managed your cash, when you’ve managed your stress, been clear with your vendors, when you’ve made a superior product … your ability to stand for something bigger than your business will be the difference between success and failure.”
 
“It’s going to be what gets you up every morning, it’s going to be what keeps your employees loyal,” he added.
 
“We were the first food company in America to measure and markedly reduce—as part of our business plan—our carbon footprint on an annual basis, per pound and in absolute terms.”
 
The company contributes to numerous causes and has a long legacy of what Mr. Hirshberg called “win-win-win commerce.” The history of consumer products is starkly different, he noted. Usually it’s about someone losing at the expense of someone gaining.
 
“But if you take this lesson to heart—the idea that business can be the most powerful force for good that we have, if properly harnessed—you’ll realize that you will have a deep well of satisfaction, and you might just save the world.”
 
“Your mission, whatever it is, is going to be a crucial part of what will make you successful,” he added.
 
Through the Just Label It campaign, Mr. Hirshberg has been championing the labeling of genetically engineered foods in the U.S.
 
However, the Senate is scheduled to vote on a bill on March 16 that would block mandatory labeling. The bill could come down to one or two votes, according to Mr. Hirshberg. The House passed a similar version, dubbed the DARK Act, already.
 
“This bill would not only block mandatory labeling, it would require USDA to fund a propaganda campaign to promote the benefits of GMOs.”
 
Absent legislative intervention, Vermont is scheduled to enact a state GMO labeling law in July. “If there was ever a time in history to pick up a phone and talk to a senator, this is that moment,” said Mr. Hirshberg.