Entrepreneurship Development

Case Study – 2

Balanced Snacking

 Introduction:

The Balanced Snacking case follows the entrepreneurial journeys of

Gautam Gupta and Ken Chen. Gupta and Chen met as Babson
undergraduates.

The goal of the Balanced Snacking project is to deliver healthy

(balanced) snacks to consumers on a subscription basis through an
online marketplace.

At the time of the case, Gupta and Chen had developed the idea to the
point of conducting marketplace experiments to determine demand.
They had come from very different backgrounds, but their combined
skills complemented each other as they progressed through this trial
and error stage.

The case focuses on what types of experiments and testing they might
pursue to prove their business idea.

 Q/A:

Q.1. How did entrepreneur’s find business idea? Explain your answer
with relevance of above case

A.1. Armed with years of investor experience and industry

knowledge, Gupta was ready to pursue his own venture. However, he
wasn’t sure what kind of business to start. Simultaneously, Chen was
planning to sell W Media and thinking of his next move. They
connected and started brainstorming new business ideas to pursue
together. Both of them wanted to love what they were going to work
on, with that mindset at the core of their brainstorming, they started
exploring shared interests.

They were passionate about food, with Chen’s experience in the

restaurant industry and Gupta’s analytical approach to a balanced diet,
food was where they wanted to work. With a shared mission, they
proceeded to do as much market research as possible.

Their research showed interesting statistics about the industry. The

U.S. snack food industry brought in revenue of $37.6 billion in 2015
and was projected to continue growing by 3.6% annually. Gupta and
Chen were intrigued. They continued to investigate the industry, now
focusing on competitors and what they were doing in the market.

Chen noted, “People pay a premium for branded packaged goods."

They decided to analyze packaged food competitors. They found this
market more attractive; products were highly differentiated from
brand to brand, there was an abundance of choice, and margins were
higher. They recognized the opportunity to create exciting businesses
in the snacking segment.

As they walked through the Santa Monica farmers’ market, strolling

by vendor stands, Gupta noticed some flavored almonds and was
intrigued. Gupta was thinking of how new and unique flavors could
be incorporated into snacks like almonds, and Chen was wondering
how farmers’ market quality could be brought to the masses.
They went to local grocery stores and observed what consumers did
when purchasing snack foods. They noticed customers checking
labels to determine allergy or dietary constraints. This finding led
them to a theory that if they could create a way for people to tell them
their allergy and dietary restrictions, they could offer products tailored
to accommodate individual customers. They noticed that although
businesses were moving online, for example with books or
electronics, online food was still underdeveloped.
Q.2. Why were Gupta and Chen well-suited to find and exploit
this concept? Is it wise to start a business with close friend?

A.2. Gupta’s entrepreneurial aspirations were largely influenced by

his family. Both of his grandfathers had started companies in the steel
industry of India. His mother worked for Silicon Valley Bank, which
actively supported early-stage entrepreneurial companies. His father
worked in the technology industry. Family conversations were always
about business and opportunities.

Chen grew up in an entrepreneurial family, although the family was

entrepreneurial by necessity rather than by choice. The family had
immigrated to America when Chen was young. All Chen’s relatives
were in the restaurant business at the time, so by association Chen’s
family was in the restaurant business. Chen’s family soon started its
own restaurant where Chen worked while he was growing up. Chen,
like Gupta, found extracurricular activities more fulfilling than his
studies. He was elected student council president and enjoyed playing
basketball in high school.

Chen had grown up working in a family restaurant where he

developed a love for working with food. Gupta had struggled with
food early in life, given that he was not very active and had poor
dietary habits. He developed a weight problem that plagued him until
his senior year of high school. Six months before Gupta started
attending Babson College, he drastically changed his eating habits
and worked hard to bring his weight down. He successfully lost 70
pounds by the time he started college through food management
versus crash dieting and extreme exercising. His habits transitioned
from unhealthy snacking to a more balanced diet. With Chen’s
experience in the restaurant industry and Gupta’s analytical approach
to a balanced diet, food was where they wanted to work.
It can be fruitful to start a business with a friend, if some important
points are taken into consideration. Communication is the most
important aspect while starting a business with a friend. It is
important to exchange information, which will help in identifying
problems and overcoming them. Also, clearly define your job titles
and responsibilities at the outset of your venture. It’ll ensure that your
organization runs smoothly, and it minimizes the risk of confusion.
Laying out a strategic map for the next 1 to 5 years of your business’s
life is crucial for any kind of venture. And last but not the least, never
mix personal matters with business matters.