Northzone’s Pär-Jörgen Pärson and Noquo Foods’ Sorosh Tavakoli and Anja Leissner discuss the transition between exiting a successful tech startup and founding a new company that aims to disrupt some of our most beloved foods, starting with cheese.
Pär-Jörgen Pärson: Sorosh, you and I first met years back at a panel in 2010, when you had just raised your seed round with Videoplaza. The reason we looked into it was that you were so incredibly structured and methodical when it came to approaching the subject of media and broadcasting — having studied it — and proposing a commercial application. This approach was rare in space, if not unique. It feels like you’re doing the same with Noquo Foods.
Sorosh Tavakoli: I love that you are telling me I’m structured, because it’s not how I see myself. I think the first time you start a company, it feels like you have such little understanding of what is yet to come, or what your end game or potential outcomes are. When we met, Videoplaza had product-market fit and we were growing and developing with the market, so the idea was really to take the company to the next level.
When you look back now, having exited Videoplaza [for approximately $75 million], what are the things you bring along into Noquo Foods?
Sorosh: From my perspective, to build a company, you have three tracks: the product, the people who build the product, and the sales, which is always the well-rewarded one. I’ve always believed that HR is radically underestimated and so I’ve always put hiring first. In many people’s minds, it’s positioned as an overhead admin function. Building a team is very sophisticated and complex, and requires a lot of skill, time, and knowledge. Usually, this is ignored and distributed to people who have no training in it, juniors, or people that have no interest in it.
When we hired a VP of Talent for Videoplaza, we stopped making the wrong hires. This was one of the best things that ever happened to the business. The quality of the team went up dramatically over the two years that followed us hiring Hanna in that role. This time around, at Noquo Foods, we hired a part-time recruiter.
How did the idea of selling the company come about? How did you come to terms with it? And did it turn out the way you wanted it to?
Sorosh: I think many people don’t have a full perspective on this until they’re in it: for us, the market evolved into a place where you could either start consolidating or be consolidated. It was pretty clear that our motto could not stand on its own feet, and we were not in a position to go raise lots of money to start consolidating. Our competitors were starting to get acquired.
We were lucky that Telstra was fully committed to pulling through on its strategy, and we were the only piece of the puzzle missing. It wasn’t actually ever that emotional for me. To tie back to your previous question on how to keep your psyche up in tough times, you have to sometimes separate yourself from the business in order to protect yourself. The process of selling a company requires significant patience and poker playing, and it was eventually very dramatic — as it probably often is. It felt like a good plan for the customers, for the team, and for the shareholders.
And you stayed on for a while. So when did this idea for Noquo Foods start to enter your mind?
Sorosh: I knew straight away I wanted to do another adventure, something big. I quickly decided I wanted climate impact built into the business model. The climate crisis is a priority over every other problem we have. Then I started reading up, and eventually started a blog: I looked at how to capture carbon from the atmosphere, and how to grow large-scale microalgae, which is a very sustainable green protein, to feed the world… I then discovered a different plant called duckweed, and eventually decided to go into this protein shift, to help make diets more plant-based in general. That was about a two-year journey for me.
I was also always aware that starting a new venture would be pretty driven by finding a co-founder. I wanted something technically complex, not just in terms of business innovation. I wanted a real innovation leap that required R&D.
And you found each other. How did you know that you were the right partners?
Sorosh: I got a feeling for that pretty quickly. I’ve met a lot of scientists; I threw out a lot of big words and big visions and ideas, and she just said: “yes, let’s do that,” “yes, I agree.” I’m used to scientists being quite sceptical. She was fearless and very ambitious. She may not have had the experience, but she had all the classic key entrepreneurial traits I was looking for.
Anja Leissner: I was obsessed with plant-based proteins and reproducing the casein structure from dairy products, and worked on both for years before meeting with Sorosh. I had been researching plant-based cheese in a different project and saw its potential, but couldn’t really take it further there. One day, I read one of Sorosh’s articles online (in Swedish) and he was looking for someone to help him. The first time we called each other, we spoke for one hour and we were so excited. At the end of the call Sorosh was saying “It’s you and me, Anja.” I had never imagined myself being an entrepreneur, so I needed some time. I realise now that we really complement each other and we share the same vision.
What do you do differently from all the other initiatives around vegan cheese?
Sorosh: Right now, I feel that almost everything that’s out there is a first generation product: it’s always started by vegans, replicating or copying food that already exists. None of them seems to be serious about actually creating a better product. You eat cheese because it’s delicious. But if it’s not delicious, and it’s not nutritious, why would you eat it? It’s like eating disgusting candy — you wouldn’t eat that.
Well, have you ever had candy in the US?
[Sorosh and Anja laugh]
Anja: What I’m really excited about is that we create products and a categorisation that will be radically differentiated from everything that’s out there. We are starting with cheese because there’s so much culture and craftsmanship behind it. Casein has a very complex structure; we know how it behaves and we are learning how to mimic it. Melted cheese is the Holy Grail we are aiming for. Our first iteration — feta-like cheese — is our “low-hanging cheese” to get the production up and running and establish ourselves as a new cheese. It is not made from milk, but it qualifies as another cheese on the plate and there’s no ifs or buts about it.
Sorosh, as a software entrepreneur going into a physical world in a product category that has lots of tradition attached to it, do you bring a different methodology or perspective to the market?
Sorosh: I definitely think so. In general, I believe it’s not a space that is very active. It’s had high barriers to entry, and few new players. Many people in the food industry are hobbyists. They make a recipe they think is better than what is out there; their families love it; they create a business out of it.
For our part, we’re taking a very professional and ambitious approach. We all understand that we need to change our diet, and that the products available are just not good enough. We want to make the most ambitious attempt at fixing this. To do that, we need to build a world-class team. We need to have sky-high ambitions and the right kind of patience, too. Frankly, having an R&D team is one of the biggest things I think we’re doing differently.
Anja, what about coming from a more scientific background? What’s new to you in this entrepreneurial journey?
Anja: The accountability towards stakeholders is totally different and I really enjoy the structure of the business environment. I’m lucky to have found with Sorosh a business partner, a friend, and a sparring partner. I’m a geek, a nerd, call it whatever you want, but building plant-based food that tastes delicious is an obsession of mine. I always keep in mind the health aspect of what we’re building, we need to develop products that are nutritious. We don’t want people to come back to animal products because plant-based is not nutritious enough.
You’ve raised $3.6 million with Northzone and others. Do you think, given the markets, it will be hard for you to live up to high expectations now? I understand that you’re not only targeting cheese for the long haul?
Sorosh: It’s unclear. In a way, we raised enough money to survive one crisis and two big mistakes. The one crisis is happening, and we haven’t made the big mistakes yet. I think we’ve bought ourselves some time, if anything, as well as avoiding the headache of going out fundraising first thing after having closed our first round.
The problem is not the raising, it’s the spending. We’re six months in and I think we’ve barely spent money on the $3.6 million we raised. I think everybody — the investors, all the shareholders — is aware that this is a journey that’s not fully defined, but full of juicy alternatives along the way that we’ll have to explore.
Finally, what do you want to get out of your investors apart from the money?
Sorosh: The mental support in being a good partner; challenging us in the right way so we know we are doing our best; help in ensuring we are high-quality; and sense-checking big decisions. I think honesty goes a long way, and I don’t like playing games like negotiation games or other kinds of tricks.
Everybody thinks the board is always lighting fires, telling you to go faster and faster, but our board is actually holding us back and telling us to slow down. We’re now in the process of rebranding with an agency, and your input has been “Hey guys, go and differentiate. Don’t coward, don’t chicken out.” I appreciate that from you, PJ. And that is very important in helping us be bold, think bigger, and dare to get there. I think that often, investors put unnecessary stress and pressure. I feel it’s best to have a setting where your mojo is enhanced and catalysed.
Thank you, Sorosh and Anja for sharing your entrepreneurial journey. Enjoy the summer break! (And you too, dear reader!)