#2 Building in the Open
A knife sharpening business designed to assist in reducing school lunch debt.
Good morning! Happy Tuesday. We’re going to try these newsletters on Tuesdays.
Thanks for your feedback on the last newsletter. One of you, Nate, mentioned that I have a chance to write about building a company in the open. In the past I’ve remodeled houses and built startups only to have wished that I’d been sharing more of it along the way.
So what’s stopped me in the past? It’s a cocktail mix of time, confidence and fear. Do I have the time to write, the confidence to write and write “well” and can I get over the fear of being stolen from or you thinking poorly of me (usually for bad grammar or something silly)?
This time, my turning point to write in the open is also an observation of what is uniquely mine. My story, my passion and my hustle are not easily stolen. I manage those, not you or anyone else. So, I’ll share those here and see how it goes.
As an aside… what things are uniquely yours? What are the things no one can take from you? How do you currently share those things?
Bit #1
So, school lunch. Why?
When I was building Kipsu (constantly away from family and on airplanes and in hotels), and it started to become clear Kipsu was going to be successful, I made a few promises to myself about what I’d do when I had a bit of a runway and some resources. It was a way for me to set some distant goals in order to keep my head down doing the hard work and staying focused. It hurt to work that hard and sacrifice that much but it’d be worth it - I’d tell myself. One of the promises I made was that I wanted to make a positive impact on the school lunch debt problem because as I reflected on it not having enough for lunch had a negative and profound impact on me when I was growing up.
There are approximately 56M primary and secondary students in America and 4.9 billion lunches served each year - or 29.6M lunches served each day. This is according to pre-pando, 2019 data. Approximately 29.9M students bring their own lunch. That’s bigger than I thought it’d be. Roughly 7.7M “hot” lunches are paid in full by student families each day. Another 20.1M lunches are paid in full by the USDA daily, at an average cost of $3.66 (operating a kitchen for that price per lunch is a different issue - much less making “healthy” or desirable options). And those that remain are the 1.9M students on the “reduced” lunch program where each meal costs the student’s family 40 cents and the rest is covered by the USDA. I was one of those kids.
(Note, during the pandemic many of the figures have been adjusted and extended through 2022. It remains an open question what will happen after June of 2022.)
In 2019, families of 4 earning between $34,450 and $49.025 were eligible for reduced lunch meals if they fill out the forms and got in the program. Statistics and anecdotes suggest many don’t fill out the forms. I remember having to turn those forms in each year and feeling a particular kind of “oddness” I did not have words to describe as an elementary student. I think I avoided it all together in High School. There was a stigma that even this kid could feel and I hated turning those forms in - hated it!
And here enters the debt issue. What is a school to do with kids that can’t pay for lunch and don’t get fully reimbursed for their meal from funding sources? The kids are there to go to school, free school, but learning is really hard with a rumbling and hungry stomach. Do you give ‘em a lunch so that you can accomplish the goal of learning? Do you make it of lower quality to save cash? Do you signal with stickers and pins what food is for what “kinds” of kids? And, how do you cover the balance sheet reality where the income is smaller than the operating costs? Do you use a collection agency? Do you raise money on a fund me thing? Do you ask the PTO to get involved - a charity? Do you use education funds to cover the spread?
So, school lunch debt, paying for it is a daily problem for hundreds of thousands of families and their communities.
As of May 2021, national school lunch meal debt was $262M a year. Average meal debt per child is $170.13 a year and fluctuates from state to state. 75.1% of surveyed schools had unpaid student meal debt. 43% of schools districts are reporting a increase in students who can’t afford meals. On average, districts recover only 31% of meal debt.
There is more research to do on the impacts of healthy lunch on learning performance. Further, there is more research and understanding to acquire about how finances run in different districts and how the lunch room is treated. I’ll leave that off for another time.
Bit #2
So, knife sharpening.
As I’ve been brainstorming businesses to build across the last months and I keep coming back to sharpening knives. It has a connection to food, there is a joy in the results of sharp knives and fresh food. It also has a connection to growing up working with my hands and lots of people are in need. Lots.
There are ~122M households in America. Each of them has a set of knives in it. ~$170M was spent on new knives in the US in 2020, growing at 8.6% along with the popularity of reality TV cooking shows and trends in healthy eating. If each new knife set cost $379 then ~450k households got a new set of knives last year. Chefs and knife people suggest sharpening kitchen knives 1-4 times a year. That leaves 121.5M households that have dull knives in their house right now.
The sharpening market is roughly ~$70M or 2.3M households, growing at 6.5%, sharpening once a year - $30 a time. That brings the total addressable market down to 119.2M households with dull knives (purchased or sharpened over a year ago) in America, right now.
Bit #3
So, why not sharpen?
Because it sucks. The process sucks for the user. People know their knives are dull. They say so almost immediately when you ask them about it. They even tell you with an exhausted and defeated look on their faces. And then they they kick themselves for not having sharp knives. And then they apologize for having whatever knives they have. There must be something wrong, maybe many things wrong, with the current process.
Every time you use a dull knife you’re reminded they are dull. Yet, that is the wrong time to decide to fix the problem, clearly. That’s when you’re working on something else, like dinner. And we’re all prone to act like that frog in hot water. We just deal with dull and keep adding more pressure to every cut. We’re reducing our joy in the process and slowly making cutting more dangerous. Roughly 1200 people go to the emergency room every day in America for a kitchen knife injury.
Barriers to knife sharpening: One, you have to remember to do it. Two, you have to know a place. Three, you have to go twice - for pick up and drop off. Four, you have to go during business hours - 9-5. Five, you have to wait - either for an hour and come back to the store or in many cases for a week at a time to get your knives back. And for the big one… when you’re knives are not in your kitchen you can’t cut things and you might as well not have a kitchen. So, we largely put up with dull and don’t sharpen our knives. It’s just easier to know there is a problem and keep putting it off.
An Alternative Solution
Sharpen your knives on the internet - on subscription.
Modernism has brought us subscription delivery of diapers, baby wipes, printer ink, boxes of pre-planned and prepared dinner, and anything with a “subscribe and save” button on Amazon. Yet, the thing that dulls, just a little bit, each time we use them, our knives, are somehow not on subscription. We’re going to change that.
There are a few transactional solutions where existing sharpeners ask that you print a pdf, write your credit card number by hand and mail your knives to them for sharpening in whatever package you can best design from your house. There are a few solutions where companies are highlighting the sweaty, grimmy shop where the sharpening happens or the people sharpening. But there is no solution doing sharpening on the internet via subscription at scale much less focused on the results for the users, sharpness. The segment largely skews male right now. There are no solutions where the primary audience and experience is obviously designed and built for ladies with kids at home who use their kitchen and knives constantly and largely command the household + the budget.
We’re building Vivront.com - It means “We Live” in French.
We’re growing it right in front of your eyes. The first step was just messing with shipping options - more work to do there in boxes, packing, tips, 4 way printing and wrangling the labels and expectations at each step. But, we’re shipping today.
The second step was to add a website - more work to do there with clarity, landing pages, etc. We have a “Facebook made” ad campaign that can get clicks for 70 cents but the targeting is off, the CTA is off, the ad is off, etc. There is more work to do there. But the page is up and orders are being made today.
The third step was to build a shop - and we’re just in the process. We need sharpening competence and have joined and completed an online course. We need some sharpening community and knowledge access and have joined a guild. We also need to be able to reliably sharpen 25-50 sets of knives a day on our first goal and that’s just not going to fly in a retail markup arrangement. So, version one of the shop is coming together. The first knife left sharp from the shop last night.
How can you help?
Do you happen to know someone we can talk with who works in school lunch or in administration at schools? A simple call could do. We’d love to better understand the dynamics on the ground, not just from national figures on google crawled websites.
Who do you know at your PTO and would you be willing to make an introduction? We’d like to work with PTOs to raise money for their schools lunch debt. A one to one arrangement is where we’re going to start. A lunch paid for every sharpening done.
Interested in getting your knives sharpened via the internet? Use code “sharpapple” before the end of Sept to save $10. Shipping and insurance included. Vivront.com
Change
I sat in on a semi private pitch day that Launch Accelerator is currently working on. It was wonderful to hear pitches again. It’s been years.
My son and I are planning a fly fishing trip this weekend and we’ll hit our local shop before hand. Mend. Got any tips for Southern MN fishing spots with an 8 year old?
I’m looking for expertise in Shopify - specifically in shipping options and labels and tracking. Oh, and their crazy retargeting I see from other brands on platform. Know someone who might be able to point me in the right directions?
I’m using hashtags more on Instagram and the bots… the bots show up and like and even comment more now.
If we get lucky, William Sonoma will use the following photo and link back to us. They asked to use it. Figures crossed. :)
Until next week
May you find moments to breathe and notice your feet firmly on the ground. See you next week. -Joseph