Matthias and Marc are a perfect example of entrepreneurial minds who never stop discovering new opportunities in everything – even if it looks like a failure at first glance. Their unusual story started in 2015 when Matthias quit his job as a banker and Marc moved to Frankfurt. Two friends passionate about IT were working day and night prototyping a new app they were planning to bring to market.
The first prototype was ready; friends and family were invited to provide initial feedback and to test the features. As is quite common in the start-up community, pizza was served on this tremulous occasion. It must have been quite disappointing for the founders to find out that their friends liked their pizza much more than the app! Other entrepreneurs might quit, but not them. Marc and Matthias saw a new opportunity coming…
Only a few weeks later, first pizzas produced from flax seed were sold at a weekend market in Frankfurt. The success was overwhelming. The stock was sold out within less than six hours, proof that the concept was a great success. Lizza, Linseed-pizza, was born. Two months later, our founders buy a truck and go on tour in the Rhein-Main region. Lizza filled the niche for a great-tasting meal you can eat and not have regrets about. It is convenient, healthy, and last but not least – tasty!
I reached out to the founders to ask a couple of questions:
1. Was it a hard decision for you to quit your initial IT plans?
Honestly, no! We love good food and are convinced that a balanced and health-conscious diet can be delicious. We soon realized that we had our fingers on the pulse of time with linseed pizza. Linseed pizza is a product that we searched as a tasty alternative to fattening wheat-based food. Using unique organic raw materials such as golden seeds and chia seeds, our dough has a mix of fiber and protein, a fraction of the carbohydrates and half the calories of ordinary pizza dough. In addition, Lizza is gluten-free, vegan, rich in omega-3 fatty acids, and made from 100% organic raw materials.
2. What were the main challenges when you started without any industry knowledge?
After a serious knee injury during his studies, Matthias had to give up sports and decided to radically change his diet. He had experimented for a long time with low carb dishes and came across a recipe for a flaxseed pizza dough. We then further refined the recipe and often cooked pizza for friends. Nevertheless, we had to acquire a lot of new knowledge about low carb and raw materials. We exchanged ideas with dough technologists, food chemists, nutrition experts, and machine manufacturers. We spent a lot of time and money, but it was definitely worth it.
Another challenge was the production and manufacturing process. The issue of financing and liquidity management was and remains a challenge as well. Young companies often don’t get a loan from a bank and find it difficult to raise cash.
3. Let’s talk about the financial side of your business. How did you finance your company?
The first steps of Lizza in March, 2015, were privately financed with approximately 20,000 EUR. The purchase of the Lizza Food Truck in July 2015 was made possible by a personal loan from Marc’s mentor in the amount of EUR 75,000. With the founding of Lizza GmbH at the beginning of 2016 and the development of its own dough production, another 60,000 euros were invested by a third shareholder. In the “Höhle der Löwen” (German edition of “Lion’s Den”) we were able to win Frank Thelen and Carsten Maschmeyer as additional shareholders for 100,000 EUR each. In total, more than 375,000 EUR flowed into our company. The first financial year, 2016, has already been profitable. We were able to finance our further growth from our own cash flows and additional debt capital. Recently, we launched a crowd investing campaign in collaboration with GLS Bank and the GLS Crowd. We plan to raise 1.7 million from the crowd to pre-finance merchandise, develop a ready-made frozen pizza, and purchase a new packaging machine.
If you want to participate in the Lizza crowdfunding campaign, here is the link: https://bit.ly/2yR8Niy.
4. How many employees do you have now? How did it feel to become not only a founder but also a manager?
Currently, we are a team of about 40 people. We always have to pinch ourselves in the arm because the last two or three years have been an incredible journey. At first, it was only Matthias and me. Now we are incredibly proud to have such a great team on our side, with whom we grow together and implement great projects. It is a perfect feeling!
5. Please describe your best and worst days during the entire Lizza journey.
The best day: Watching the live broadcast of our pitch “Die Höhle der Löwen” on TV, together with dozens of friends, suppliers, customers, and the entire Lizza team, seeing the number of visitors and orders spiking in real-time, and gaining incredible feedback and publicity.
The worst day: Another Monday morning in 2016, after an intense Food Festival weekend. We’re feeling exhausted, tired, and doing calculations. It turned out we lost money (again) because of a miscalculation of personnel costs, bad weather, and comparably high cost of sales. We felt devastated, in need for a change of our business model.
6. What are your plans for the future? Is any international expansion planned?
We work diligently on other innovative products that fit into a health-conscious diet and are delicious. In addition, we are becoming more professional in sales and strengthening distribution in the food retail sector — currently, we are listed in more than 6,000 stores in Germany and Austria, including REWE, Edeka, Real, Kaufland, HIT, and more. In addition, in April we moved from a 600 m2 into a new 2,500 m2 production facility to meet high demand and drive international expansion. It remains exciting.
Entrepreneurship is a long and a challenging journey, but perhaps one of the most exciting and satisfying things one can do in life. Lizza’s founders add, “Mistakes happen inevitably. It is important not to make the same mistake twice and to establish a culture of learning from any mistakes.”
Here is a secret success recipe from Marc and Matthias:
1. Love what you do. Only then can you survive the pitfalls of a business journey.
2. Fail early to succeed later. Early and inexpensive testing gives you quick feedback on your original idea.
3. Talk to the Pros – Get advice from the experts. Invest time and money in the courting of respected experts and try to win them over emotionally to you and your idea.
I wish Lizza, Marc, and Matthias all the best, and hope to order Lizza on my next trip to San Francisco!