Silicon Valley Makes Its Next Stop the Kitchen; A number of food start-ups see a big, slow-moving market begging to be invaded by someone with new ideas and a new way of building a business

OCTOBER 20, 2013, 11:00 AM

Disruptions: Silicon Valley’s Next Stop: The Kitchen


SAN FRANCISCO — Megan Miller knows that cockroaches are packed with protein and she says they can be made into a surprisingly tasty treat. But if that is a bit too avant-garde to believe, do you think you might like crickets if they were “ground up into a powder so you can’t see wings or legs?” Ms. Miller believes you would. She is the co-founder of Chirp Farms, a start-up firm here that is dedicated to making food like the company’s flagship Chirp bars, which are $2.50 morsels made of crickets. They are expected to arrive in stores next year. While making food from insects might sound fascinating — or icky — the approach she is taking, treating Chirp Farms like a technology start-up rather than a food outfit, is what really makes the company interesting.“My background is digital product development,” Ms. Miller said in an interview. “I’m using the same kinds of thinking that I used in technology start-ups while I build this food business, too.” In addition to starting Chirp Farms, she is the director of research and development for Bonnier, a publishing company.

While a growing number of start-ups like Chirp Farms have received money from big venture capital firms, exactly how these companies plan to compete with the entrenched giants of the food industry has not been clear.

Nonetheless, they are undeterred. They see a big, slow-moving market just begging to be invaded by someone with new ideas and a new way of building a business.

“What is happening right now is that Silicon Valley is starting to see opportunities for disruption in other areas besides traditional technology,” Ms. Miller said.

If this sounds familiar, it is. Just as tech took on music, first with Napster and later with services like iTunes and Spotify; just as Amazon took on books and eventually the entire world of retailing; and just as Craigslist took on traditional classified advertising, these food start-ups think it is not so far-fetched to go after the food industry.

“The food system is bizarre and ineffectual and completely lacking in innovation,” said Josh Tetrick, founder and chief executive of Hampton Creek Foods, which makes imitation egg products using plants.

Creating a successful food company requires a lot more than just a good idea. There are government rules and regulations and competition from entrenched conglomerates with vast distribution systems.

These obstacles will not be easily overcome. But these start-ups are trying to do that by behaving like the most successful tech outfits that have gone from ideas to multibillion dollar businesses.

Some have programmers writing code to test out snacks and determine the types of ingredients that can go together. Some approach management in the same way start-ups run their operations, using a process called Agile methodology, in which project managers work in very small teams with programmers and have software development practices like Scrum that are intended to move and build products very quickly.

Essentially, they are organizing the development of food products in much the same way that tech start-ups organize code.

“You have to think in terms of scaling, like software, and that’s what Silicon Valley brings to the food start-ups, where we know how to create something small, then iterate rapidly, and finally scale it,” Ms. Miller said.

The interior of the San Francisco offices of Hampton Creek looks like a cross between Walter White’s meth lab in “Breaking Bad,” a nightclub and a standard-issue start-up. Plants that might soon be turned into substitute egg products sit along the windowsill. Thirty young (and hip) programmers, marketers and scientists zip about to loud music blaring from speakers.

Employees at the company do not talk about food as food, but rather as if they were programming an app to be sold in the iTunes store.

“While a chicken egg will never change, our idea is that we can have a product where we push updates into the system, just like Apple updates its iOS operating system.” Mr. Tetrick said. “So our mayo is version 1.0, and the next version will be 2.0, which will be less expensive and last twice as long.”

Grocery stores are starting to pay attention. Hampton Creek announced last week that it had set up a partnership with Whole Foods that would bring Just Mayo, the company’s plant-based mayonnaise, to retail shelves across the country.

Thomas Manuel, the chief executive of Nu-Tek Food Science, which makes a lower-sodium salt product, has worked in the food and agriculture industry for 43 years. He knows the difficulties of entering the business and questions if some of these food start-ups will eventually be snapped up by the giants they are trying to change or simply copied out of existence.

“Unlike other industries in technology, where people can carry patents and protect their ideas, the majority of the food industry doesn’t have that,” Mr. Manuel said. “So if you come along with a great idea and it starts to become really successful, then someone else can just come along and copy it.”

But there might be room for both entrenched corporations and start-ups in the future of the food industry.

A report issued by the United Nations this year warned that by 2050, the world’s population is expected to reach nine billion people and that there are not enough resources on the planet to feed them. The report suggested insects as a solution.

Can Silicon Valley ingenuity make eating insects appetizing to Western palates?

“As the population grows, there is not going to be enough protein for people. There is no way we can produce meat at the scale,” Ms. Miller said. “What we’re trying to do is popularize a protein that hasn’t made it into Western culture yet, and that’s going to be very disruptive.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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