Follow along as we discover how startup founders transformed their idea 'seeds' and built them into successful businesses from the ground up.
In this series, we're joined by a range of extraordinary founders to retrace their steps from the thought that first sparked the idea for their business, through to commercialisation and running a startup. Each startup had a different blueprint for building their business, with fascinating stories to read about their wins, setbacks and plans to shape the future of food - and if you're an aspiring entrepreneur, you might find some helpful info about how to grow your business and leverage your ideas.
Food Futures: Hey Shaun, how did you come up with the idea for BuggyBix? What was the question or problem that you were trying to solve?
Shaun: We started BuggyBix in 2018. I was chatting with my wife about different pet feeding trends and how increased pet ownership was increasing pressure on the food system. I was questioning how we could provide nutritious, affordable pet food at a minimal environmental cost. It didn't make sense to me that despite increasing global food pressures, the growing 'fur baby' phenomenon was exacerbating this issue. I couldn’t help but think that there must be another way to feed the world’s pet population without compromising on nutritional quality. Edible insects popped into my head and so the BuggyBix journey started.
Food Futures: How did you come across edible insects initially?
Shaun: I had absolutely no clue about them at the time - I'd heard of them in passing, but it was very much a 'hey, that may work and let's look into it' approach. In 2018, the Australian edible insect market was very nascent. There was a handful of growers but no one had any significant scale, standardised quality assurance practices nor production volumes of which to speak.
Retracing the steps of BuggyBix
Food Futures: If you had to plot the timeline of having the idea for BuggyBix to launch what would that look like? And were there any programs that you participated in or actions that you took which were useful over time?
Shaun: In 2018, we had the idea and started to do some initial market research.
After that, we:
Developed a prototype to test the product and see if pets would eat insect-based pet food. This started out in our own kitchen.
Created the first MVP and found a willing partner to act as a distribution point (we did this through a local vet and gave out free samples).
We concurrently started developing our brand and marketing. It was important to build the brand, create our online ecommerce store and create legitimacy. This was high on my agenda because we were talking about something that people didn't necessarily understand.
After testing the market and receiving positive feedback, we commenced a research phase and partnered with Western Sydney University & AgriFutures Australia. This was targeted at investigating the nutritional qualities of insects with a commercial angle of developing an everyday pet food line. We registered a patent during this process and have also just kicked off a second phase of research.
With our initial research finalised we commenced scaling our production by engaging manufacturing partners. In parallel, we focused on sales so that we'd be able to hit the ground running and start fulfilling orders.
To increase our exposure, we participated in the 2021/22 Food Futures Grow2Asia program, and the Hatch Quarter MENA Bridge Program. Both have focused on helping us become export ready and develop distribution arrangements in both South East Asia and the MENA region.
Food Futures: And roughly how long did this take?
Shaun: We started our journey in May 2018, so about four and a half years. The reality is that the insect industry has only been able to supply consistently and at volume for the past 12 months. Upon reflection it has certainly not been a fast process.
The beginning: gaining ground and scaling up
Food Futures: Once you'd had the idea for BuggyBix, was there anything that you did to validate your idea like market research? Where did you start out?
Shaun: As my background is not in food science, I knew I needed to upskill myself and importantly understand whether insects were going to be a suitable input for pets. Looking internationally, there were a few of pet food companies who had launched in the insect space. Domestically, it was important to understand what insects were available locally and whether we could translate the idea into the Australian market. Fortunately, we had access to the insects (at the time it was black soldier fly larvae and mealworms) which defined the parameters for our MVP.
Having completed the desktop research, we started speaking to pet owners to understand their views on insect-based pet food and whether they would consider purchasing. After positive feedback, we engaged a market research firm to complete independent online and in-person interviews. Naturally, we received a mix of opinions. Of the cohort, 25% said that they wouldn't offer it to their pets as they would not eat insects themselves! Fortunately, we had a high percentage of promoters with over 35% positively engaging with the value proposition, environmental benefits, sustainable approach and nutritional outcomes for their pets. And then there were the fence sitters who were skewed towards the promoters, but wanted more information before committing to purchase the product.
When you're talking about something which people don't know much about or understand, it's quite challenging to validate an idea. So, it was also about taking a (calculated) leap of faith as you are never going to have complete certainty when creating something new.
Food Futures: Was there a big education piece that you had to do from there?
Shaun: It's a funny one because you can give people reams of information, even condense it into one page, but having a physical product to show makes all the difference. For instance, we attended an event a couple of years ago where we had our products on display for people to look at, touch, smell and even taste! Once they realised the products were just like other pet foods, we found that their biases towards insects started to evaporate. Whilst you need the 'on paper' research to share with people, I have found the educational piece works best when having a conversation in person and giving people the opportunity to experience the product.
At the same time, it was important that any claims were grounded in science. To help complete our nutritional research and development, we partnered with a leading university and AgriFutures Australia. This not only helped inform the best inputs for our formulations, but also assures our customers that we have developed a quality product for their pet that is backed by science.
Food Futures: How did you then go to the next stage of scaling?
Shaun: This continues to be one of our biggest challenges. As I mentioned, the market is still developing. At present it is defined by AgriFutures as an emerging industry because it is sub $1 million revenue. The challenge for us is not actually a sales problem, the demand is most certainly there. It’s been a matter of capacity and supply chain as it is only recently that there has been sufficient insect production to justify our manufacturing trials. In the context of pet food, if you want to do a dry pet food range like a kibble, generally speaking you need to do a minimum ten tonne run. If you're talking tonnage and an emerging industry, they don't necessarily reconcile. Fortunately, now we've got some larger players in the market who are able to provide the required volumes which is a significant win for the growing insect industry.
Something I learned early on was the tension between selling product at volume whilst meeting (at least in part) your original product aspiration. As we started to scale, our production was tempered by the commercial realities and constraints associated with manufacturing.
Our ongoing success is reliant on a robust supply chain so that if our products start flying off the shelves (pun intended), we are able to fulfil.
Food Futures: How long would you say that this scaling process took?
Shaun: If we didn't have COVID-19 in the middle of everything, it probably would have been a lot quicker. We commenced our R&D phase in 2020 and since then we've been through multiple COVID-19 lockdowns, we've had four floods, a bushfire, a mouse plague, you name it. For us, we've found that as you transition and start to scale up, your problems also start to scale up. As an example, we had five tonnes of insects that were compromised because of the floods. That's not something that you can write in a business plan or ask your fellow entrepreneurs whether they would expect it to happen. With any of this stuff, you have to be cognisant that things are going to go wrong and it's not going to be smooth sailing. The rewards however are there if you've got the grit to see it through. When you're a small business, you've got to be resilient enough to say 'well, that didn't work - let's go to plan W' or whatever you're up to.
Team-building, the market & mentorship
Food Futures: How did you go about building a team through this? What does the structure of your team look like and how did you fill any capability gaps that you might have had?
Shaun: At this stage, my team is primarily contractors and consultants. As a small business, it’s about efficiency and being smart with expenses. I have access to all capabilities from marketing, to legal, to manufacturing and supply chain - each can be switched on and off based on the tasks at hand, this in turn helps to reduce costs. I have learnt that you can get a lot done without having resources in-house and can pivot easily as and when the expertise is required.
Food Futures: And how did you develop an understanding of who your customers would be as you were growing the business?
Shaun: Based on our research, we have quite a broad customer base which is fortunate. Our e-commerce channel, which we're currently re-engineering with our new products, provides an objective data set of our customers. As this has grown, we have started to understand our customer personas and who is purchasing the products - you get a good idea of demographic, geographic areas, type of pet etc. For me, market research goes so far but once you start 'pedalling the bike', you realise that your actual customers do not always reflect your market research.
As we scale, our largest customers are now distributors - they're not necessarily the pet owner. Of course, pet owners are our end user and we have to make sure that our products align with their interests and expectations. Given this, I need to make sure that we are meeting the needs of everyone.
Food Futures: During this journey, did you have any likeminded entrepreneurs to work alongside or was there anyone else working in this space?
Shaun: There was no one working in my space! We were the first company to do what we're doing – albeit there's a few more now. I had some industry support because I joined the board of the Insect Protein Association of Australia in 2018. This was a great way to meet likeminded people in the industry.
Food Futures: What has been your biggest learning curve along the way?
Shaun: It's a really interesting question because if you had asked me if I would do this four years ago, having known what I know today, I think I would say yes - however it's a very 'eyes wide open' yes. In terms of a learning curve, it's the experience that is the most important. For me it has always been about resolve, problem solving, having the grit to get through the bad days and understanding that it's not going to happen overnight. There's a point in time where you start to see your successes and all the hard work pay off.
It is important trust yourself, and to also realise that it is going to take a lot of grit and effort. You're going to have a lot of heartaches, but you'll have wins and that will keep you going. If you've got the persistence and the patience to see the pay-off, then you're going to amplify your chances of success.
Food Futures: What do you think the importance of startups and entrepreneurship is in your industry?
Shaun: At the moment it's really important - I cross the border of the emerging insect industry and the well-established pet food industry. If we reflect on insects, all businesses in the industry are driven by entrepreneurial people, they're all startups and people having a go. By contrast, if you look at the pet food industry, they are well aware of what we are doing, but are watching from the sidelines. For the pet food industry to grow and thrive, entrepreneurship is important because innovation on a large corporate stage is very difficult to implement.
Whilst we are only little, we are doing something quite different. If we successfully build the category, the larger players may also enter it themselves or just acquire those new businesses. Sitting at the intersection, we have a great opportunity to challenge the established market and help an emerging industry move forward.
Food Futures: If you had to mentor another entrepreneur who is just starting out, what advice would you give them?
Shaun: Things don't happen overnight. The journey will be full of twists and turns. If you have the grit to push through the tough times you will succeed.