My Favourite Failure: Validated in my ivory tower but we didn’t have product market fit - Better Nature Tempeh Founder

0:00This might sound like the plot of a spy novel, but UK startups are increasingly at risk of state actors trying to steal their assets. Take one Scottish renewable manufacturer that was harnessing wave power. They were visited by a 60 strong delegation led by a senior Chinese official. A couple of months after that some of their laptops were stolen. Guess what happened next? Yup, pictures emerged showing a Chinese firm making a product that was virtually identical. This is why we're working with the National Protective Security Authority and the National Cyber Security Centre, the UK's security experts.

0:36They got in touch with us because they see such a growing threat facing UK startups. How are they responding? With the launch of a new campaign, Secure Innovation. It's not just your cybersecurity that matters, but your physical security too. If you want to get a better handle on your security, check out npsa.gov.uk forward slash innovation and download their free quick start guide. There's a link in the show notes. Day by day, it felt absolutely off. I felt scared. I felt like a failure. I felt absolutely nervous about, OK, what if another potential investor would come to us and scrutinise this idea?

1:23What if another doubtful comment come up in one of our channels? That's Dr. Driando Ahnan-Winano, the CTO at Better Nature Tempe. But he's the first CTO of his kind I've ever heard of. He is a Chief Tempe Officer. So, what on earth is Tempe? Well, that was one of the problems that Dr. Driando faced when he first launched the business in 2018. They did something completely different back then to what they do now. It didn't get off the ground. This is how he failed, and what he learned from it.

2:04Dr. Driando grew up in Indonesia, where tempeh is a staple. Tempeh is this all-natural source of protein that Indonesians have been eating for the past 400 years, made using fermented soybean. Although you can change the substrates to be anything, like chickpea, mung beans, fava beans, anything, any renaughts or legumes and beans. and because I grew up eating tempeh since I was a baby. So tempeh was my weaning food. It was my first solid food that my mom fed me with, and fried tempeh was my favorite snack during childhood, and now tempeh is my favorite source of protein served with white rice with the spicy chili paste.

2:54It's been eaten as a staple source of protein amongst millions of Indonesians. And I think my emotional bond comes from the fact that tempeh was first documented in the 1600s in the village where my grandpa is actually from. So in Western countries, I would say probably tempeh is well known amongst primarily vegan, vegetarian, flexitarian consumers. So what we're trying to do is to make tempeh a mainstream food ingredient because there's no reason why tempeh shouldn't be mainstream food ingredient. His original vision was to build a machine so businesses like restaurants and people at home could make tempeh, a bit like a bread machine.

3:42That would be stage one. And stage two would be taking it to what he describes as a Nespresso machine level, basically 3D printing food. He got some early validation. The fairy tale story started with that competition at the University of Cambridge. So it was at the time when I was this underdog food scientist facing this different vaccine scientist. Unfortunately, it was not pandemic yet. Otherwise, I believe I would have not won. But then this idea, this one food biotechnology idea actually won first place against all odds, against this mRNA vaccine ideas. and that got me really believing to this idea because we got the validation and we got some money prize from the competition.

4:28It was just about, I would say, 2 ,500 pounds, but then it was still something and it could only be used to incorporate the business. So we did incorporate the business. And from that, we just went from strength to strength. We attended a different competition, different conference. I think we won this FI Food Expo and then this Toulouse White Bike Technology Competition. We were one of the finalists at this Texelvania conference. So there was a lot of validation that we got from conferences and from awards. And at the same time, we raised this pre-seed funding. um yeah compared to now it didn't now it doesn't seem like a lot of money like we got i think about 300 000 pounds which was still significant to double down on this idea and we focused on solely on protecting this idea scientifically technological wise as well so we filed a pattern we and in drafting the patterns it was quite like time consuming as well we had to work with lawyers with um equipment designers with my technology expert as well and so we worked on it for about six months and with this validation that we kept getting it felt like we were flying we We were living the dream and it was my first time as well creating a company.

6:07So it was this unreal experience. Now I'm really living the life of the biographies that I read. So I love to read biographies of Steve Jobs and Elon Musk and many, many other entrepreneurs. So then, gosh, I can't believe we were presenting in San Francisco and Silicon Valley. We were speaking with these big investors in the valley as well and jumping from one conference to another conference, receiving even more validation throughout the time. So that's how I would picture the highest point with that idea back then. And speaking with people that we thought we would never speak to, that we only saw in media, it was also validating back then.

7:03But the validation was too surface level. They just weren't making enough meaningful progress. It became very, very difficult to push things forward with the prototype. So back then we had this prototype. It was working, but not perfectly working. and in order to continue iterating the improvement, like we needed more funding. But then to me, I felt like I was running in a hamster wheel that yes, we got the prototype improving, but there was no significant leap in terms of receiving positive feedback in trials and then pushing to thinking about how we can mass produce it. Okay, and speaking about mass producing it in terms of demand validation, which would turn into, I think, one of the greatest lessons would be product market fit, that I had no idea that it was something absolutely critical.

7:59Probably because of my background with a PhD in food science, I was living in this ivory tower of scientific, I would say scientific, I wouldn't say hallucinations, but scientific biases that what I see most important would be this technological person of an invention. And slowly we started getting feedback, right? One potential investor would come to us, but how would you market it? What's the market size? Like who would actually purchase it? Who would actually want to wait for like 18 hours until they can eat, right? Why wouldn't people just buy these from the supermarket? And then, and there was ego, like playing in that stage, right?

8:49And there was this thing called about the sunk cost fallacy and loss aversion as well. And psychologically, I thought like, oh no, we got a good validation as well. And we spent quite a lot of money. And there's this ego about being the scientist as well. Like, oh yeah, I mean, it's such a cool invention. We got a pattern. And I don't know, like we need to keep working on it. And back then, I think in the startup world, like some people say a lot about, oh, you know, you just need to fake it till you make it. And I think that's something very toxic and dangerous. So I wouldn't say that we faked it, but we put this hyper-optimistic mindset to keep us going.

9:32Okay, yes, the prototyping trial, this one might be a failure, but then we will nail it the next time. We would tell potential effects, yeah, we will absolutely nail it next time. But then we kept failing. And back then, I think I felt this imposter syndrome as well, that I was scared that the definition of imposter syndrome is that we can feel scared that at some point people would actually find out that things are not going as well as how we would tell people this beautiful nourishment story. So I felt that I started to feel that, okay, what if this doesn't work? What if I fail as a CTO? What if I'm not meant to be in this entrepreneurship world?

10:25What if I don't actually deserve to be with this team that have been working really hard to find this product market fit, market demand ways to market this product. There was a big problem with their concept. Their machine was going to cut down the time to make Tempe, but how many companies or people in the UK would really care about that? Plus, the prototypes just weren't coming together. They were desperate to find something that worked. They tried importing from Indonesia. And then they started to focus on a bit of feedback they'd consistently heard from investors. Instead of speeding up tempeh making, why not make tasty tempeh and sell it to consumers?

11:08They pivoted hard to this B2C brand-led model, completely changing the vision, products and team. It worked. It didn't happen overnight, but it worked. Dr. Triando learned a few things from his failure. First, he realized the company wouldn't have any impact if he didn't make any profit. Lesson number two is that identify your loss aversion bias. So loss aversion means that losing something would feel twice painful as gaining something. So when I started to feel that we would lose that first business idea, it felt absolutely painful. It felt like, oh gosh, this years of working, this countless time of believing in the idea, this emotional moment that we went through together, the shiny stuff, the shiny conferences and award ceremonies of the startup life that we went through.

12:15Like, it would go away. So it felt absolutely painful. but then we must realize that it's actually a cognitive bias because if we focus on what we will gain that would not necessarily be less great than what we had experienced so that would be the second one the third one somewhat related is the sunk cost fallacy so sunk cost fallacy is that okay just because we have spent this much time, money, and emotional investment into this project, that does not mean we should never leave the project. This being afraid to leave a project because of how much we have invested in it and making the shift from both, like shifting away from this loss of urgent bias and sunk of fallacy, it costs a tremendous mental strength but the lesson i learned is that we can get better at making tough decisions for example recently i had to make this high level business-wide evaluation of our intellectual property really these different patterns that we used to believe in now i had to just make cold decision like okay this is not converting this doesn't show commercialization future, we must drop it.

13:44Regardless of how much time, energy and other investments that we have put into it. And in that regard, our common sense really helps. I think one of the principles that I always stick to is that do things that make sense. Why? Because it makes sense.

14:13Makes sense. I think the point he's getting at is to try to stick with the best, most logical next step. When you're in the fire up against it, that's sometimes all you can do to put one foot in front of the other. They continued to have doubts because success wasn't immediate, but they sense checked what they were doing, literally. And now, Better Nature Tempeh is doing really nicely.

14:43That was Dr. Driando's favorite failure. Thanks for listening to this episode. I've been your host, Dan Murray-Surter. If you like this episode, please subscribe or follow us and leave a review. We love to hear what you think. See you next time.