“I realized that you can’t ask consumers to do you a favor,” says Ben Pugh. “You have to give them better service than your competitors.”
Pugh is co-founder of Farmdrop, a company that delivers a range of locally produced, organic food to its customers. The mission of the company – which was established in 2012 – is to “fix the food chain” and offer sustainably sourced products. “The idea was that we would create an online farmers market,” adds Pugh.
But here’s the thing. There is momentum in this space. Over the past few years, I’ve interviewed startup companies from as far afield as Romania and Denmark who are offering similar services in their own markets and there is, undoubtedly, demand from a subset of consumers who are seeking fresh meat and vegetables while also seeking to make choices that are good for the planet.
But viewed through another prism, these are also home grocery delivery businesses and, as such, they are in direct competition with the big beasts of the food industry. Here in the U.K., you don’t need to venture out very far from your doorstep before seeing a delivery vehicles operated by supermarkets such as Tesco or Waitrose. For a small company like Farmdrop, the challenge is reach beyond its own early adopters and compete on service with the giants of the industry.
Hence, Pugh’s moment of realization that in addition to simply offering to deliver planet-friendly food the company must be able to meet consumer expectations. “You need to add a ton of services for people who want best in class convenience,” he says.
So Farmdrop is in the midst of transition. Over the past year, the company has been layering on service, a process guided in no small part by CFO, Eleanor Herrin. And now the the business has arrived at a watershed moment. Pugh is standing back and Herrin is taking over as CEO.
This is a huge moment for any startup or early-stage company. Often it’s the point at which things become a little more corporate. And typically it marks the time when a founder acknowledges that new skills, or at least fresh eyes are needed to move a business forward. But it’s also a uncertain moment – a fork on the road that can lead towards stellar growth or, alternatively a loss of vision and direction. So when I spoke to Pugh and Herrin, I was keen to ask them about the opportunities and challenges associated with “passing the baton.”
A Question Of Timing
First of all, timing. As both parties are keen to stress, this has not been an overnight decision. Having joined in 2019, Herrin has been instrumental in planning new service layers such as one hour designated delivery slots, and a new range of convenience foods. This has resulted in higher sales and a £20 increase in average order values. From Pugh’s perspective, this transitional period provided evidence that Herrin was the right person for the CEO job.
But what about culture? Herrin comes from a corporate background. With an MBA under her belt she worked for 17 years at Amazon before deciding she wanted to run her own business. However, a conversation with Pugh resulted in a meeting of minds. “He had built a business that I would have wanted to run,” she recalls.
Getting To Know You
And in that respect, the vision of the business seems likely to remain intact. But any changes in the top table need to be addressed carefully – not least in terms of the perceptions of staff and supplier perceptions. Or to put it another way, Herrin has had to start getting to know people.
“Ben is a tough act to follow,” she says. “And for the first year, I wasn’t in the building a lot, so people don’t know me as well as Ben did. And we have different leadership styles.”
So in addition to applying her experience to the task of moving the business forward, Herrin sees it as important to build relationships within the company and among stakeholders. Meanwhile, there will be changes and new faces coming in.
Finding A Role
Founders face their own challenges, of course. Not least in terms of finding a role for themselves while giving the new CEO space to breathe. Pugh’s role hasn’t been absolutely defined yet – at least in terms of, say, taking a chair or non-executive director position. “At the moment, I’m focusing on supporting, Eleanor,” he says.
So what lies ahead? Herrin says she has plans to expand the ready meal range and the geographical reach of the companies deliveries over the next year.
This is very much where the rubber meets the road. Farmdrop’s revenues in its last set of accounts (up to June 2018) came in at around £3.9 million and the company points to 75% growth in 2019. The opportunity and challenge for the new CEO is to continue that upward gear shift while, crucially staying true to the founder’s mission. It’s a challenge faced by many companies.