Founders: Don't build everywhere. build somewhere.
I’ve heard the same sentence from founders for years. "We have to launch in LA or NY. " The assumption is understandable. If your brand succeeds on the coasts, the rest of the country will follow. But I think that's one of the biggest strategic mistakes many emerging CPG brands can make.
I understand why founders think this way. Twenty years ago, as Kombucha, Chia and plant-based everything exploded, there was a good argument for it. But today’s environment is different.
Social media spreads nationally in days, not years. Consumers in Omaha discover the same TikTok food trends as consumers in Manhattan. And Hy-Vee is just as likely as Erewhon to launch a product successfully. The point is the coasts are no longer the only gatekeepers of innovation.
Building distribution across New York or California can deliver incredible success. But it often means navigating dozens of independent retailers, multiple distributors, several broker organizations, higher labor costs, complicated logistics and fragmented execution. Instead of spending money selling your product, you're spending money managing complexity. That's a huge difference.
Early-Stage Brands Don't Need National Credibility. They Need Proof.Volume doesn’t equal success in a brand’s young lifecycle. As a founder, you need not chase 2,000 scattered stores across 15 states. You need:• High Velocity• Repeat Purchase• Great Merchandising• Efficient and Effective Execution• Measurable Sales
You need retailer success stories: the ones that generate interest from the next set of retailers. Those are the assets investors buy.
Dominate in Your Anchor MarketDon’t ask: "Where should we launch?" Ask: "Where can we dominate?" There are few better examples for that than HEB. Build meaningful velocity in H-E-B and you've created one of the best proving grounds in the country. Houston, Austin, San Antonio count more than 12-million people in their metro areas and most of them shop in 150 HEB stores. Massive and diverse population in a relatively compact area. Passionate shoppers, a manageable area to market and merchandise in and meaningful data to generate a great story. Dominate South Texas and take your learnings to Florida (Publix), Michigan (Meijer) and the Carolinas (Harris Teeter). Investors Don’t Invest in Distribution. They Invest in Evidence. I’ve spent many hours trying to get investors interested in brands I’ve been working on. Sure, they love the social media buzz. They love the potential. But more than anything they love evidence that what you’re making is, actually selling:• 20+ units/store/week• Retail Expansion Requests• Category Growth They also care about profitability: • Strong margins• Clean supply chain• EBITDA improvement Your story is stronger when you dominate one region than when you’re an average performer in four regions. A Baseball Analogy That Applies.As a founder, you may think success means hitting singles in every region of the country. But great CPG brands win by hitting doubles and triples over and over in the same ballpark until everyone notices. This is important to consider when a national retailer like Walmart or Costco call. If you can’t support these retailers with the right investment, it’s not worth selling to them (yet). In fact, it can be devastating to your business. To put it in perspective with another baseball analogy, you’re not ready for the MLB until you succeed in the minors. So, concentrate on building your skills until you know you can hit the 100 mph fastball! The Bigger LessonFounders often confuse visibility with traction. They’re not the same thing. Visibility impresses your friends and the trade magazines. Traction impresses retailers and investors. It’s about having a smart and thought-through go-to-market strategy.We like to apply the “3P Test.” Before expanding your retail footprint, ask whether it helps you create:ProofCan you generate meaningful sales data? PartnershipCan you build a strong relationship with a few anchor retailers? ProfitabilityCan you support these retailers without spreading your team and financial resources too thin? The profitability lens is particularly important when you realize the cost of doing business in multiple regions and classes of trade and with multiple distributors. Your supply chain gets complicated and your resources get drained even more quickly. If the answer is no to any of those three, you may not be ready for expansion, regardless of how exciting the geography or retail opportunity sounds. Final Thought:The goal isn't to be everywhere. The goal is to become undeniable somewhere. That could be Sprouts or Whole Foods to solidify your premium and natural credentials. That could be in the Upper Midwest anchored by Hy-Vee or the Northeast anchored by Wegman’s. Or maybe you can put all your eggs into Target, with a supreme focus to succeed there before ever thinking about expansion. Once one or two retailers prove your product sells, the next conversation becomes dramatically easier. Retail success compounds… …But scattershot distribution rarely does. In one of my companies, we tried juggling it all with less than 10 full-time people: Costco, CVS, Target, Walmart, Sam’s, a few big regional grocery chains and Amazon. We somehow found a way to manage the businesses effectively, but we could never fully support them. So, we did well in some places and not in others. We frequently scrambled and in the end, we had a difficult time defending why we lost accounts, even when we had positive momentum in others. Looking back, we weren’t short on ambition. We were short on focus. Experience doesn't eliminate risk, but it helps you avoid expensive mistakes. That's exactly why we created Second Seat Partners -- to be a co-pilot to founders as you make the decisions that determine whether a brand simply launches or actually scales.
You need retailer success stories: the ones that generate interest from the next set of retailers. Those are the assets investors buy.
Dominate in Your Anchor MarketDon’t ask: "Where should we launch?" Ask: "Where can we dominate?" There are few better examples for that than HEB. Build meaningful velocity in H-E-B and you've created one of the best proving grounds in the country. Houston, Austin, San Antonio count more than 12-million people in their metro areas and most of them shop in 150 HEB stores. Massive and diverse population in a relatively compact area. Passionate shoppers, a manageable area to market and merchandise in and meaningful data to generate a great story. Dominate South Texas and take your learnings to Florida (Publix), Michigan (Meijer) and the Carolinas (Harris Teeter). Investors Don’t Invest in Distribution. They Invest in Evidence. I’ve spent many hours trying to get investors interested in brands I’ve been working on. Sure, they love the social media buzz. They love the potential. But more than anything they love evidence that what you’re making is, actually selling:• 20+ units/store/week• Retail Expansion Requests• Category Growth They also care about profitability: • Strong margins• Clean supply chain• EBITDA improvement Your story is stronger when you dominate one region than when you’re an average performer in four regions. A Baseball Analogy That Applies.As a founder, you may think success means hitting singles in every region of the country. But great CPG brands win by hitting doubles and triples over and over in the same ballpark until everyone notices. This is important to consider when a national retailer like Walmart or Costco call. If you can’t support these retailers with the right investment, it’s not worth selling to them (yet). In fact, it can be devastating to your business. To put it in perspective with another baseball analogy, you’re not ready for the MLB until you succeed in the minors. So, concentrate on building your skills until you know you can hit the 100 mph fastball! The Bigger LessonFounders often confuse visibility with traction. They’re not the same thing. Visibility impresses your friends and the trade magazines. Traction impresses retailers and investors. It’s about having a smart and thought-through go-to-market strategy.We like to apply the “3P Test.” Before expanding your retail footprint, ask whether it helps you create:ProofCan you generate meaningful sales data? PartnershipCan you build a strong relationship with a few anchor retailers? ProfitabilityCan you support these retailers without spreading your team and financial resources too thin? The profitability lens is particularly important when you realize the cost of doing business in multiple regions and classes of trade and with multiple distributors. Your supply chain gets complicated and your resources get drained even more quickly. If the answer is no to any of those three, you may not be ready for expansion, regardless of how exciting the geography or retail opportunity sounds. Final Thought:The goal isn't to be everywhere. The goal is to become undeniable somewhere. That could be Sprouts or Whole Foods to solidify your premium and natural credentials. That could be in the Upper Midwest anchored by Hy-Vee or the Northeast anchored by Wegman’s. Or maybe you can put all your eggs into Target, with a supreme focus to succeed there before ever thinking about expansion. Once one or two retailers prove your product sells, the next conversation becomes dramatically easier. Retail success compounds… …But scattershot distribution rarely does. In one of my companies, we tried juggling it all with less than 10 full-time people: Costco, CVS, Target, Walmart, Sam’s, a few big regional grocery chains and Amazon. We somehow found a way to manage the businesses effectively, but we could never fully support them. So, we did well in some places and not in others. We frequently scrambled and in the end, we had a difficult time defending why we lost accounts, even when we had positive momentum in others. Looking back, we weren’t short on ambition. We were short on focus. Experience doesn't eliminate risk, but it helps you avoid expensive mistakes. That's exactly why we created Second Seat Partners -- to be a co-pilot to founders as you make the decisions that determine whether a brand simply launches or actually scales.