Learning the Hard Way: Things I Learned From Failure
Before Bonaverde, there was Kaffee Toro, the first incarnation of our vision to build the world’s first roast-grind-brew coffee machine. It failed. Crashed and burned, in fact, leaving only bankruptcy and unmet potential in its ashes. To be blunt, the experience was shit.
I wouldn’t trade it for anything.
Well, yes, maybe a theoretical world where I knew everything I know now then. (And, of course, the opportunity to avoid any chaos I caused for others along the way). That, however, is impossible. Kaffee Toro, for all the destruction and devastation it brought into my life, was a crash course in start-up building. Without the lessons I learned from that first attempt, Bonaverde wouldn’t exist. For that, I will always be eternally grateful.
However, to save you a bit of trouble, here’s a run down of the syllabus for the section of the course entitled “Investors and Funding 101.”
Lesson 1: Too many baristas spoil the coffee.
I started Kaffee Toro with €50,000 of my own funds, thinking it would be best to bootstrap until I had something substantial to show investors. By the time we raised our first funding, we had a pitch deck, prototypes, team, ideas, website, name and a little IP. We still only raised €80,000 at an €800,000 valuation. It was a start, but not enough to truly fuel the company. So we did more rounds, bringing in another million in VC funding.
We also acquired 15 more investors. Fifteen people at the table. Fifteen opinions. Fifteen agendas. To add madness to mayhem, every investor had joined the project at a different time. Start-ups evolve. They pivot. To do otherwise is an exercise in futility and foolishness (but we’ll talk about that in a second). Still, fifteen people, sitting around the table, all with a different vision of the company, all arguing for a different concept, resulted in a completely unproductive situation. My puzzle became to get all of these people, all of whom I was accountable to as investors, on the same page.
We stagnated. Fifteen equal forces pushing against each other will go in no direction at all. I spent endless energy trying to defy this basic law of physics. Kaffee Toro stood still. Knowing we needed to move, I asked for €50,000 to run a Kickstarter campaign. With half the group in different books, never mind the same page, the money never materialized.
At some point, moving backwards becomes better than not moving at all. I filed for bankruptcy the same month as my wedding. We wouldn’t celebrate properly for another year and a half. In the meantime, I raised money from my incredibly encouraging friends and family, and started from scratch, this time knowing better than to let too many baristas behind my espresso bar.
Lesson 2: No coffee plant thrives without the support it needs to grow.
As W. Edwards Deming put it, “It is not necessary to change. Survival is not mandatory.” To employ a common witticism at the risk of sounding cliché, start-ups are like sharks. If they stop moving they die.
When you plant a seed, it doesn’t grow up into a bigger seed. All the brilliance of the blooms to come is contained in that little capsule, but it needs to be given the room to grow into its true potential, evolving from an unassuming seed into the awe-inspiring natural beauty of a flower. All of this evolution requires support: regular watering, fertile soil, and plenty of sunlight. Otherwise all you have is a seed petrifying, unrealized, buried under the earth.
As Kaffee Toro struggled to sprout, left bereft of sun and water by investors sinking heels into the soil, refusing to change, I came to a startling realization. There was a major flaw in the original concept. A green coffee market didn’t exist. There is a second lesson within this lesson: You can’t push things into market when there is no market. You have to create that market. You must create a pull to market.
For that you need some credibility and demonstrable demand. You also need valuable partners. And those you get when they believe there is a market.
We had a plan to build the credibility, the market and the demand. What we didn’t have were the supportive partners. Kaffee Toro sat on the heating plate until it was too stale to drink. So we dumped out the pot and started fresh. New partners saw the potential and came onboard, invested their labor and created the project.
The result was Bonaverde. Our team is small and cohesive, united in vision and working to evolve that vision together. Learning from past mistakes, we’ve tended it with care and given it plenty of room to grow and change. Entirely crowdfunded, we’re accountable to no one but the Coffee Changers, which in my mind is as it should be. After all, as those who use and believe in Bonaverde, our crowdfunding backers have the most authentic investment in our project. Their genuine support has been invaluable.
The best lesson, however, has been this:
Through it all, despite every frustration and difficulty and the culminating disaster that defined Kaffee Toro in the end, the idea never lost its luster. I remain as passionate now about this project as I was when I first started developing it so many years ago. I believe it’s time to change the world of coffee.
After all we’ve been through, I know now that belief is absolutely unshakeable.
