Disruption In Food

The term disruption gets a lot of airtime in the innovation community. People use it to mean anything from: ‘the government doesn’t like this’ to ‘an industry is dying’ to ‘this changes the way I think about problem solving.’ All of those points relate to disruption, but are all examples of its symptoms, not the cause.

Clayton Christensen, a professor at Harvard Business School, coined the term ‘disruptive innovation’ in a landmark essay that preceded the Innovator’s Dilemma. On Christensen’s original view, disruptive technology is quite simply technology that reflects what a small, emergent, or otherwise underconsidered group wants, but not what everybody wants. When Apple created the personal computer, only a small group of people wanted it; Twitter’s 140 character text messaging service felt the same way. In describing why big companies often struggle to create disruptive technology, Christensen made a classic realization: they listen to their customers too well, and thereby lack the ability to imagine a radically better future.

Peter Thiel describes a successful technology innovation as the overlap of a Venn diagram between: “seems like a bad idea” and “is a good idea.” Most good ideas seem like good ideas, so everybody is going after them. And most bad ideas just suck. As we’ve evaluated certain industries, looking for investments that can be category-defining, I have to remind myself of this Venn diagram. It’s very hard — impossible, maybe — to hit the sweet spot all the time, or even intentionally. But sometimes you’re struck with a realization of the sweet spot, and our investment in Hampton Creek Foods is an example of that. Their first product, Beyond Eggs, is a series of plant- and bean-based assays that bio-mimic the qualities of processed eggs in food. So, vegan mayo, vegan cookie dough, vegan ice cream, and so forth. In their view, the processed egg industry is wildly inefficient (help yourself to some information about egg production in the US).

Consumers are starting to align their spending choices with their values, and businesses need innovative ways to build authentic brand loyalty with their customer base. And so why not invent, from scratch, new natural composites which emulsify and organically bond like eggs, are price-competitive with anything out there, and have a perfectly sustainable supply chain? Their office in the SOMA district of San Francisco is a lab. There is protein science, culinary art, biology, packaging and design all in one room the size of a basketball court. When you walk in you see a team poring over cultures, a team baking cookies, a team trying out mayonnaise recipes, and you can’t help but smile. If there is a case of classic disruption, this is it.

And the farming industry is ripe for it, if you’ll allow the pun: consumers tend to eat thoughtlessly, processes are expensive and inefficient, but often subsidized by price-insensitive governments, and the environmental impact of cows alone compares with the entire road transportation industry. At Collaborative Fund, companies that solve the biggest, most important problems get us excited, particularly when their brand reflects a shift in consumer values that we agree with, even if the mainstream doesn’t yet. Hampton Creek Foods represents a great example of that: taking on the food industry one protein-isolate at a time.