Meet The Inventors: David Downing of ChipMonk, On How To Go From Idea To Store Shelf

Do some initial research to see where in the market your idea product would fit. Is it totally new, a better version of something else, or a copycat even? Validate as best you can that you could enter the market without needing a ton of capital upfront. Create a low-cost prototype that can actually be sold. Sell it, validate the demand for it, and then continuously improve upon it over time based on customer feedback.

As a part of our series called “Meet The Inventors”, I had the pleasure of interviewing David Downing.

David is co-founder & CEO of ChipMonk, a specialty baking business based in Houston that creates low carb, gluten free desserts. ChipMonk’s mission is to help people indulge mindfully, making better nutritional choices by cutting sugar out of their diets without sacrificing sweets. Prior to starting his business in 2019 with co-founder Jose Hernandez, David spent many years working in management consulting and in the commercial aviation industry across various disciplines including audit, financial planning, project management, and competitive research. Most recently, David was head of financial analysis and performance improvement for Work America Capital, a venture capital firm dedicated to investing in Houstonians and Houston-based businesses with high potential.

David holds an undergraduate degree from Rice University and a Master’s in Accounting from the University of Texas at Austin. He is incredibly passionate about startups and enjoys meeting and learning from other entrepreneurs.

Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a bit about your “childhood backstory”?

I grew up in Nashville, Tennessee as the son of two British immigrants. My father was an accomplished anesthesiologist and my mom was a natural sales leader. They always made me feel loved and, most importantly, invested in my education from a really early stage. Through them, I learned how important it was to think for myself and to take pride and ownership in anything I do. My family always recounts that from my first days as a baby I was naturally anxious. On the ride home from the hospital after I was born, my parents said I had giant wide eyes and stared at them as if asking, “what the heck do these two know?” Growing up, I was always the child that freaked out about being late for the airplane or missing an appointment. My anxiousness has stuck with me throughout life, and I’ve learned that it can be both a strength and a weakness depending on how and where it is applied.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

My dad has this quote on his desk: “Be Kind; Everyone You Meet is Fighting a Hard Battle.” It always sticks in my mind because sometimes I get so wrapped up in my own anxieties and worries that I forget that literally everybody else is going through similar hardships, whether it’s financial, emotional, or health-related. I think when you approach people as just that, people, the conversations you can have and the relationships you can build are so much more meaningful. I try to stop myself from being quick to anger or judgment because at the end of the day, most people are doing their best given the challenges they’re facing.

Is there a particular book, podcast, or film that made a significant impact on you? Can you share a story or explain why it resonated with you so much?

One of my favorite books of all time is Dune by Frank Herbert. A sci-fi classic that is packed with questions and thoughts on politics, religion, ecology, technology, and human emotion. Over 60 years from its writing many of its words still carry value today. A key takeaway of the book for me is to be more thoughtful. Often there’s a layer behind what we normally see in the day-to-day that we don’t really think about. I also think there’s a lot of interesting themes in the book relevant for a startup and how incredibly delicate and fragile something in its early life can be. Two relevant quotes I think about frequently as an entrepreneur:

• “The young reed dies so easily. Beginnings are times of such great peril.”
• “The willow submits to the wind and prospers until one day it is many willows — a wall against the wind. This is the willow’s purpose.”

Ok super. Let’s now shift to the main part of our discussion. What was the catalyst that inspired you to invent your product? Can you share the story of your “ah ha” moment with us?

In 2019, I was rooming with Jose Hernandez in a 2-bedroom apartment in Houston. He and I both worked in the world of startups and would constantly talk about wanting to do something on our own. We’d usually come up with great ideas that would quickly turn out to be duds after a few minutes of Google research. The interesting thing about Jose, is that he was diagnosed with type 2 diabetes 4 years ago, but, despite his doctor trying to prescribe metformin, he managed to get his blood sugar back in check via a strict low carb, high fat diet. Unfortunately, sweets were a constant issue for Jose because he loved to eat desserts, but he was well aware of what they could do to his blood sugar and energy levels. One weekend, out of a bout of depression caused by yet another failed business idea, Jose decided to bake his own desserts, but he wanted to use better-for-you ingredients like almond flour and monk fruit sweetener. Somehow, he ended up making a chocolate chip cookie that tasted just as good as the real thing. He gave me some to taste and then it just clicked for both of us. One in three people in the United States are dealing with diabetes or pre-diabetes, yet, to get a healthier cookie, Jose had to make his own. It seemed like a big opportunity to fill a market gap. We took his cookies to our co-working office, setup a little table, and managed to sell some on the spot. Once we saw that people were willing to actually buy our cookies from us, we jumped in to build the business.

There is no shortage of good ideas out there. Many people have good ideas all the time. But people seem to struggle in taking a good idea and translating it into an actual business. How did you overcome this challenge? I think a lot of potential entrepreneurs with good ideas get stuck in analysis paralysis. Essentially, they spend too much time thinking about what might go wrong and they simply don’t take action. We overcame this by immediately trying to sell our product without spending weeks and months refining things like branding, flavor, and packaging. At the end of the day, we just wanted to prove that someone would be willing to pay real money for our cookies, and, if we could make that happen, we could build everything else from there. A big part of this is believing in continuous improvement. You can start with a prototype, but use it to prove demand and then improve from there using customer feedback.

Often when people think of a new idea, they dismiss it saying someone else must have thought of it before. How would you recommend that someone go about researching whether or not their idea has already been created? Google is your friend. Do a quick search to see if you can find the product or service that you came up with. Is it readily available? If so, how is the user experience? What is the price? Does it differentiate much from what you had in mind, or is your idea a better version? These questions will help you determine whether your idea is viable.

I do want to say that just because someone else is doing it doesn’t mean you shouldn’t. How many donuts shops does your town have? How many nail salons and plumbers? Tons of them! Yet I bet many of them are very successful. The market place is huge, and there’s plenty of space for all businesses to be successful. You just have to make sure you’re providing a product or service that people want and that you’re doing it in a way that is memorable.

Did you have a role model or a person who inspired you to persevere despite the hardships involved in taking the risk of selling a new product?

My wife Michelle is my rock. Without her, there would be no way I could handle the ups-and-downs of startup life. She reminds me that I’m more than just my company, and her love makes me feel fulfilled and valued on days where I’d rather just hide in bed. She also pushes me to be better, because I want to make her proud.

For the benefit of our readers, can you share the story, and outline the steps that you went through, from when you thought of the idea, until it finally landed on the store shelves? In particular we’d love to hear about how to file a patent, how to source a good manufacturer, and how to find a retailer to distribute it.

For a small food company like ChipMonk, a key early on is to find a commercial kitchen to actually produce your product in a way where it can legally be distributed via wholesale. When we first started the company, we were operating under Texas cottage industry laws which let us bake in our apartment kitchen and sell at farmer’s markets. We knew that if we wanted to launch online and sell to retailers, we had to find a commercial kitchen space. It’s not easy and can be very expensive, so we made a list of every place we could think of that might have a certified kitchen (churches, schools, caterers, restaurants, veteran halls, firefighter stations, etc.), and we called and emailed them all. Eventually, we found a caterer that specializes in school lunches that let us use their space during the evenings and weekends for a flat monthly fee. This gave us the space and capacity to grow. From there, we researched how to create compliant and compelling packaging and sourced suppliers via online research. We hired a local food scientist (a faculty member at the University of Houston) to help us finalize our recipes and build a repeatable process for baking in large quantities. We then built a team of contractors who we could rely on to help us bake and package. With all the operational processes in place, we launched our product online and started making lists of potential wholesale accounts (grocery stores, coffee shops, nutrition stores, meal prep caterers). We cold-called them, told them about our product, sent in samples, and followed up until we got them to make their first order. From there, it’s about supporting your wholesale accounts to make sure customers trial the product in hopes of them ultimately become repeat purchasers. We have started out locally in Houston but plan to expand regionally and nationally over the long-term.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

When we ordered our first bulk batch of custom printed cookie bags (120,000 bags!), we received them and realized that our cookies didn’t actually fit into them. A total disaster. Turns out the type of bag we selected had less space than we thought due to the seals along the sides. Jose and I freaked out for a while, but eventually determined that we could make our cookies fluffier and less wide by tweaking the ingredient ratios. After some experiments in the kitchen, we figured out how to modify the cookies so that they weighed the same but still fit into the bags. The whole episode just taught us how important it is to really think things through before making a large operational or financial decision like that. In retrospect, we should have requested samples of those bags to make sure the cookies fit in the first place.

The early stages must have been challenging. Are you able to identify a “tipping point” after making your invention, when you started to see success? Did you start doing anything different? Are there takeaways or lessons that others can learn from that?

The tipping point for us was when we got some major coverage in the Houston Chronicle and on a specialty YouTube channel called Keto Connect. Thousands of people were exposed to our brand and connected with Jose’s personal experience with type 2 diabetes. The exposure drove a spike in our web traffic and sales and created a permanent base of repeat Customers. This gave us the momentum and signal needed to really go for it. We raised capital to build out our own bakery and make a broader marketing push online and in local wholesale. The lessons we learned was that organic, genuine media coverage was vital to the growth of our business, and we made it a point to invest time and money into public relations.

What are your “5 Things I Wish Someone Told Me Before I Invented My Product” and why? (Please share a story or example for each.)

1. Early on, identify your personal drawbacks (e.g., I’m good at accounting but really don’t enjoy sales) and either find a partner or build a team who balances out your weaknesses with their own strengths.
2. Know that you are in this for the long haul. If you’re not willing to spend years on this project (and probably lots of financial and emotional pain), you may want to reconsider. Entrepreneurship isn’t for everyone, and that’s okay.
3. Get someone who is not your mother or your spouse to buy what you’re hoping to sell as early as you can. You need to prove out that there is real market demand for your product before you invest a ton of money developing it.
4. Media and influencers can be a great tool for growth early on. Identify outlets or individuals who speak to your target audience. Offer to send them free products or samples. Tell them your personal story. Even one shout out or article about you or your product can be a game changer in the early days.
5. Branding and packaging design are no joke. Really think about where your product will be purchased then design packaging that will grab someone’s attention and get them to pick up the product. You can always start with something small (PowerPoint anyone?) and refine as you go along. The key is to listen to your customers. Find out what is important to them and make sure you communicate those attributes in your packaging and brand messaging.

Let’s imagine that a reader reading this interview has an idea for a product that they would like to invent. What are the first few steps that you would recommend that they take?

Do some initial research to see where in the market your idea product would fit. Is it totally new, a better version of something else, or a copycat even? Validate as best you can that you could enter the market without needing a ton of capital upfront. Create a low-cost prototype that can actually be sold. Sell it, validate the demand for it, and then continuously improve upon it over time based on customer feedback. As soon as you make that first sell and decide that you want to give things a try, I recommend you create a separate business bank account and track all the business expenses separately from your own personal activities. Invest a small amount of your own money as seed capital and get into the habit of tracking your sales and expenses so you know whether you can actually make a profit.

There are many invention development consultants. Would you recommend that a person with a new idea hire such a consultant, or should they try to strike out on their own?

Unless your invention is something super proprietary and crazy unique, I really wouldn’t suggest working with an invention development consultant. You don’t need them early on. Your goal should be to find that first customer and build from there. You don’t need to spend $20,000+ on what is really just an idea at that stage.

What are your thoughts about bootstrapping vs looking for venture capital? What is the best way to decide if you should do either one?

I highly recommend bootstrapping at the beginning. Once you’ve shown enough traction to prove that there is a big demand for your product, then you can use venture capital as a tool to accelerate growth. You absolutely do not need venture capital in the first year or two because you should be focused on getting that first sale using a MVP (minimum viable product) or prototype. Trust me, the legal fees alone from raising capital are not worth it until you’re talking about millions of dollars in sales potential vs. thousands.

Ok. We are nearly done. Here are our final questions. How have you used your success to make the world a better place?

I try to use my business as a platform for growth and development for myself and for all of my teammates. Anyone we hire is given opportunity to learn beyond their immediate role in a way that will set them up for greater success whether it’s at ChipMonk or anywhere else. We value critical thinking and a growth mindset, and, unfortunately, I don’t think a lot of companies give those opportunities to their team members. Outside of that, I like to believe that our products themselves help make the world a better place because they offer a better-for-you dessert alternative to those striving to reduce the sugar and processed carbohydrates in their diets. Every gram of sugar we can cut out from peoples’ diet is a step towards reducing metabolic diseases across the world.

You are an inspiration to a great many people. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.

I really believe the root of a lot of society’s ills lies in education, or the lack thereof, for our country’s youth. Every child should have access to high quality education that gives them the outlets needed to develop a growth mindset and critical thinking. Basically, everyone should have a chance to learn how to learn. If we all had the same educational opportunities, I think so much more could be achieved in nearly every aspect of society. I’ll probably get flak for this, but I think this extends to college education as well. I’d advocate our nation buying fewer aircraft carriers and nuclear missiles and investing that money into our education system.

We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US, with whom you would love to have a private breakfast or lunch, and why?

He or she might just see this if we tag them. I think I’d be most excited to spend some time with Tony Robbins. He just seems so intense, and his talks and presentations always prompt me to challenge my way of thinking and living. I don’t even know what I’d say to him. I’d just want to listen or maybe get a workout in together if I could keep up!

Thank you for these fantastic insights. We greatly appreciate the time you spent on this.