Coffee: A Conversation with Ben Levin, Ninja Goat Nutritionals
The Build: Episode 1, original airdate: 6/1/2015
Joe Taylor Jr.: It’s The Build. I’m Joe Taylor Jr. joined today by Ben Levin, chief ninja at Ninja Goat Nutritionals. Welcome.
Ben Levin: Thank you.
Tell us about the name of the company. Where’d that come from?
That’s a good question. It just sort of occurred to me. I was looking for a way to differentiate what I was doing. I had a brand around a product that I wanted to build, but I knew I needed something that laid on top of that because there’s more than one product in the works over the next couple of years. I think I just loaded up GoDaddy and started typing in words to see what domains were available and eventually that’s what I hit on.
Basically luck of the draw.
Yeah, more or less. I think I was just broadly casting for something that would stand out because I think that we spend a lot of time trying to get noticed before we can actually have the conversation we want to have. That came up as something that I could latch onto.
The primary product that you’re working on right now?
It’s called Fat Coffee. It is a blend of a bunch of different very healthy, good for you fats, which is a bit of a surprise to people who often hear those 2 words together in one sentence, healthy fats. It is primarily grass-fed butter and coconut oil and a few other things and it is mixed into coffee or tea and it makes what is generically known as butter coffee. People know other brand names like Bulletproof Coffee is one, but it’s actually a very old kind of beverage concoction.
How old? How far does this go back?
At least 1000 years in Ethiopia if you’re talking about coffee, putting usually a goat butter in coffee is something that dates back there. Then in Tibet you have a butter tea, which is usually a rancid yak butter is put into tea. I try to stay to the left, I guess, of rancid. That’s probably at least 1500 to 2000 years old as a recipe.
How does it take something 1500 years to go from being a known traditional beverage into something that Americans are discovering for the first time.
I think I’d probably have to credit Dave Asprey as somebody who has popularized his particular recipe, Bulletproof Coffee, which takes coconut oil mostly and something called MCT oil, which is basically a coconut oil derivative, and mixes it into coffee, and really pushing to get the word out for this idea that you can load up a beverage with fat instead of sugar and the result is something that is energizing without having a crash. Contrary to what I think conventional wisdom would say, or has said, it’s not actually a fattening drink.
You’re not a culinary professional by training, necessarily. You came into this line of work how?
I came into this because I’ve, over the past couple of years, transitioned into what I think generically is known as a whole foods kind of diet, not the store, but a diet that is focused more on food as it is when it comes, let’s say off the vine or off the pasture as opposed to something that’s been extensively processed. Part of that is eating a lot of protein from animals that have lived as they’re intended to live, on a pasture for the most part. Part of that has been just getting away from processed foods and sugars and the things that are a lot more closely aligned with our modern disease state as it is, mostly in the American diet. Through exploring that I came to be exposed again, actually, to this idea of a butter tea or a butter coffee. It was a concept I was familiar with from reading Seven Years in Tibet a long time ago when I was in high school. At the time it didn’t seem too appetizing, but the second time around I guess it did. My wife sent me an email. She said, “People are doing this. What do you think this means?” We were following a paleo-diet for about 6 months at that point and I said, “I don’t know. Let’s try it. How bad could it be?” It was amazing.
I was making it every day and for anybody who’s not familiar with the process, you basically take a tablespoon or 2 of butter, maybe another tablespoon of coconut oil. Like I said, it’s not a low-calorie drink. You put it in a blender with coffee and you mix it up for like 45 seconds. What comes out is this incredibly creamy, foamy latte-like mixture. What also comes out is a really oily blender that you’ve got to scrub clean and a bunch of utensils that you’ve been using to scoop coconut oil out of a jar and it makes a terrible mess. For a cup of coffee it seems kind of ridiculous, so I started looking for a way to just make it easier on myself. Then the other aspect of this that I had to deal with was I had recently, within the past year and a half, started traveling more for business. I don’t know if anybody’s tried to get onto a train or a plane with a blender and a stick of butter and coconut oil, but you get some funny looks.
It makes for some interesting TSA agent reactions.
Yeah, they don’t play that. They don’t really want to see you getting on a plane with a jar of oil or what just looks like a greasy substance. I was looking for a way to make it travel a little bit better and to make this something that I could make in a hotel room or in a restaurant or at Starbucks on my way into the office when I was out of town. I just started doing a lot of research into what it was about butter coffee that wouldn’t travel. The first problem is that butter melts and butter goes rancid. You have to keep it cold or you have to keep it sealed in. I started looking around and I finally fell in on this idea of using ghee. Ghee is a very traditional preparation of butter.
You take butter, you boil it until all the water boils off and all of the milk solids drop out to the bottom and when you pour it off, what you’re left with is pure butter fat. That won’t spoil. You can put ghee in a jar, put it on a shelf in the sun for a year and it will be fine, as long as you don’t get any water into it. That’s kind of how I got into this idea of preparing something that was going to be shelf-stable but not by adding a bunch of preservatives and weird chemicals to it, just by taking foods that would naturally preserve themselves. From there it was really just a very short step into figuring out a packaging solution that made it portable and usable in single-dose formulations.
You’re going through the process of solving all of these problems, answering all these questions for your specific use case as a business traveler that wants a relatively easy way to enjoy this beverage on the road. At what point does it become the germ of an idea that you think I could maybe sell this to other people?
It’s funny because I came up with a solution and it involved packaging 1 or 2 ounce portions in these … They’re sort of Mylar-y packets that you seal with a heat sealer. I was looking at this process and I’m like, “Well, if I want to make 10,000 of these packets, I can do it economically, but if I want to make 5, I can’t.” You can’t really use a home food sealer for something like this. I thought, “Well, what if I make 10,000? Can I find anybody else who wants this? There’s got to be somebody else who wants to make butter coffee without the mess or while being able to travel.”
That’s where it started. I thought, “I don’t know. I can find somebody else who wants this and maybe we can go in hand in hand on the cost of production.” From there it just sort of snowballed. I got into more and more of what the production process would be like and it got really interesting to me. It’s a very different field from where I come from professionally, and it had a lot of interesting challenges that I wanted to latch onto and try to solve.
Professionally what field have you been involved in in the majority of your career?
I’ve mostly been in the user experience, user centered design field. I would do a lot of exploratory research for clients, trying to figure out what kind of products should they build, what kind of website? How should the app work? I was involved a lot in the interaction design and information architecture development of websites and apps for big brands over the years, while working for different agencies. I had a lot of exposure to what it was like to try to figure out how to build a product that an audience would want to engage with. This was interesting to me because it was the same kind of process, but it was with a physical product that you would put into your body, and that’s different from an app that runs on a mobile phone. There’s a whole different set of considerations you have to think about.
Different consequences compared to an inconvenient app design.
If the food product does not perform as expected, the stakes are higher, right?
Yeah, definitely. I’ve got experience, say working for pharmaceutical companies and what it’s like to work in a highly regulated industry where there’s rules you have to follow about what you can say and how you can say it. There’s research protocols that you have to follow in order to bring a product to market. I was surprised, but maybe not unpleasantly, about how much of that translates into the food industry. You figure you want the food that’s going onto your plate to have passed through some kind of rigorous process or for there to be consequences if it doesn’t. This was a chance for me to get to see all that from the other side.
Where does the product get actually manufactured at this point?
There is a shared commercial kitchen out in Westchester at a place called The Artisan Exchange, which is a really interesting place to me. It’s like a co-working space but for food developers. You can rent kitchen space, you can rent small parcels of production space if you’re big enough at that point to have your own dedicated space, much like any co-working space where you can fly in for the day and sit at a desk or you can have a permanent place.
Right now where can somebody buy the product?
You can buy it online at ninjagoatnutrition.com. That is probably the easiest place to get to it. If you are in the Philadelphia area, probably starting this week or next, there will be a couple of snack machines run by Snack Like a Local, where you’ll be able to find single packs if you just want to taste it. Hopefully in the very near future there will be a few coffee shops that will be either selling it or making the beverage prepared for carry-out.
Tell me about the process of engaging distribution partners. You’re going to coffee shop owners and telling them what?
That part of it is very informal at this point. I was literally in a coffee shop that I’m in twice a year and a friend walked in and she was really excited about Fat Coffee and we were talking about it. I said, “Here, I’ve got some sample packs. Why don’t you take it and try it?” She walks away and 5 minutes later comes back and she’s like, “I just gave them to the owner of the coffee shop. He wants to talk about it.” I wasn’t really ready to go down that road yet because of the production scale that I was at at the time, but we started chatting. He said, “You’d be surprised at how often people come in and hand me a mug to fill up with coffee and I say, ‘Do you want me to clean that out for you? It looks kind of gunky.’ They’re like, ‘No, no. That’s my butter and coconut oil.’”
I said, “Well, this is perfect. You could sell this here. They wouldn’t have to walk around and worry about that, plus you could mix it here if you wanted to.” That’s how it started and then out of the blue, just through the website and doing some retail sales online, I’m getting contacted by people who’ve got cafes who know about butter coffee as a concept and want to be able to offer it, but don’t want the hassle of having to source the ingredients that go in because part of the big selling point is that I’m using butter that is from 100% grass-fed cows.
Right now if you want butter that is grass-fed, you can go to the grocery store and buy Kerrygold, but it’s a little bit of a mixed bag. It’s grass-fed, most of the time. Some of the time it isn’t. Either 20% of that pat of butter in the metal foil is not grass-fed butter or 2 out of 10 months of the year, it’s not grass-fed at all. It’s a little bit hard to tell. I source locally from a farm in Lancaster and work with a ghee producer out in Lancaster to create something that is completely clean in terms of being grass-fed.
How do you even begin to locate a ghee producer?
I ran into a great woman at another co-working space at Indy Hall, who is specifically a consultant for food start-ups. She does this thing, her name is Rebecca Frimmer, and she does this thing where she’ll sit down with you for 2 hours with a whiteboard, and write down the 500 things you didn’t think of before you start your business. Highly recommend that experience because it’s better to find those things out before you’re in the kitchen than after.
What was the biggest revelation from that experience? What was the biggest thing you didn’t realize you didn’t think of?
The number of complications that were involved in getting basically regulatory approval to sell the product. If you’re baking brownies for sale at a church bake sale, go ahead, bake them in your kitchen, bring them to the bake sale, bake them. If somebody gets sick, no harm no foul. They can’t sue you. If you are making anything with any kind of scale and selling a product commercially under any kind of brand or any kind of more professional setting, you are immediately involved with county, state and federal food regulatory agencies, whether it’s the FDA or the Board of Health or the agency in whatever county you’re in that happens to monitor whether or not you’re putting on your hair net correctly.
I didn’t know any of this stuff and probably wouldn’t have found out until somebody tapped me on the shoulder and said, “All that inventory, you can’t sell it.” It was really helpful. It was really helpful to know that because it’s a little bit daunting at first, but the thing about a checklist is you can go down it and you can start checking those things off. One of the things that Rebecca gave me was this, a couple of leads for wholesale ingredient suppliers. She said, “I know these people. They’re out in Lancaster, these 2 women. They make ghee. You might want to talk to them.” Which was great because at the time my plan for sourcing ingredients was to go to Whole Foods and buy it off the shelf. That’s not super economical if you’re buying 20–30 gallons of ghee in 10 ounce jars.
It brought your margins down considerably.
Yeah. I think that probably people will recognize this intuitively, but obviously it’s cheaper to buy things in bulk than it is to buy them at retail. That’s not terribly insightful, but it was interesting to me to see where the break points are. Buy a case of something at Whole Foods and they’ll give you a 10% discount. Go to the manufacturer and offer to buy 120 cases and you’re paying probably 40 to 50% of the retail price because that’s what built into the whole sale mark-up. Go to the ingredient producer, the farm, and you might be paying 10% of the retail price for the core base ingredient. Learning all about that and learning about what the production process was going to be like, that was really interesting to me and that was a cool challenge to try to solve.
Tell me about solving the challenge for pricing the product. I know you’ve got a pretty interesting sampling program on the Fat Coffee website.
Yeah. I was just talking about that with someone this morning. I had this great idea that what I was going to do was box things up and sell them in multiples of about 30, say have a cup a day for a month, and that would be great. You could buy 1 box, you could buy 4, and I put this all out on the website and I was pushing to my Facebook group and I was letting them know about that. Not many people were buying, 1 here and 1 there. I realized that the price point for that was really steep. It didn’t really encourage any kind of trial. I didn’t really think about that very clearly ahead of time. I was really thinking in terms of what’s the efficient way of packing and boxing and shipping things because I want to be able to ship things free or cheap for people so they don’t have to think about that.
I was thinking about a different part of the purchasing process and how to smooth that out so that people didn’t really have to think too hard about it. The first thing I did when I saw that happening, that that adoption wasn’t growing very rapidly, the first thing I did was say, “Well, what’s the minimum quantity I can drop in an envelope and send to somebody?” It was like 3. I built this thing called It’s Just a Taste. It’s 3 packets in an envelope. There’s none of the extra specials that come with a full box like instructions or any other kinds of materials. You’re sort of on your own.
I figured out a way to basically sell that a little bit above cost, once you factor in everything that goes into … Down to the piece of tape that has to go on the envelope to seal it. That was a real breakthrough for me because now there’s almost … It’s 7 bucks for 3 servings and it’s almost a no-brainer. It’s less than $10, it’s an easy online purchase. The way my checkout works is it’s 3 clicks and the thing is in the mail to you and you get it in a couple of days and it’s a chance to try things. That really opened things up. I’m seeing now multiple orders per day whereas before it was, this was without any real advertising, I’m getting an order every 3–4 days or a week.
That’s been a big breakthrough for me. From an overall pricing standpoint, I think every entrepreneur recognizes this, the first shot is a shot in the dark, particularly with a product that has no, there’s no competitor to this. There are people who are attacking the same market at different kind of tangents, but there’s no other product that is basically a single serving of these ingredients. I’m being really specific, because there kind of is a competitor but it’s a different product, at a price point that you can use as a starting off point.
Nobody’s really anchored a price in this product vertical, the best thing that you can do is try to make a comparison to what someone might order at a coffee shop?
Yeah, or what does it cost you to make this at home, and then talk about the convenience and the purity of the ingredients as things that you can’t necessarily guarantee as a person who’s just making a beverage with stuff that you find on a grocery store shelf. There are other ways of getting at that value proposition for people.
Describe for me the process of you get this product idea, you’ve been accustomed to doing work for clients, now you’re your own client. What’s that like?
Now I have no one to blame when somebody doesn’t listen to me, which I think is an experience that people have when they’re working in an agency environment, or even within for a client, either working for their own company where you have these ideas and you’re really sure they’re going to work and your first and sometimes biggest job is convincing other people that you’re right enough that it’s worth trying. I have an idea, I go and try it. If it doesn’t work, I have no one to blame but myself and I have a choice. I can blame myself for the idea or I can blame myself for the execution or I can blame myself for not trying hard enough. That, to me, is really satisfying, because I get that accountability in a way that I never got before.
How do you externalize some of the feedback loops that we’re accustomed to in the agency environment? We would normally have meetings with clients, there would be review meetings and stand-up calls and conferences and checklists. When you’re running everything top to bottom, how do you get that stuff out of your head into a place where you can take action on it?
Well, if we’re talking about literally how do I get it out of my head, I have tools like Basecamp and Checklist and things that I follow in terms of if I’m making a batch to make sure I’m not forgetting to add an ingredient into the batch. I think the other perspective, the other angle that you’re talking about is how do you get to the point where you are able to bounce an idea off of somebody and get honest feedback as you’re going to market? This is where this all really meshed with my professional training, which was I was always the one in the room saying to the client, “I think that’s a really interesting perspective and that’s a great idea. Let’s go talk to your customers. Let’s go talk to your users.”
Well, I don’t have anybody in the way now. I can go talk to my customers directly. This actually gets to a point that I was thinking of when I walked in here, which is somebody gave me an idea a couple of weeks ago. I was casting them out for ways of reaching an audience and they said, “You know, you can advertise on Reddit and you should try that because it’s cheap and it’s easy and it’s self-service and it’s really quick.” I was a little bit skeptical at first, but I found interest groups, sub-Reddits that were really focused on the core market that I was trying to reach, and so I start building some of these ads and I get them out there. Then it hits me.
The really cool thing about advertising on Reddit is ads have comment streams, just like everything else. Within 4 hours, I’m having a conversation with my potential customers. “Hey, you shouldn’t be advertising this here because we like X, Y and Z and not A, B and C, but the people over there like A, B, and C.” That to me is like a feedback loop that you just can’t get anywhere else, particularly if you’re talking about advertising and trying to reach out to an audience. To be able to speak directly to that audience and hear back. I’m very comfortable from being in the UX field with qualitative feedback that’s not necessarily statistically reliable. I don’t need a survey with 1000 or 2000 people to tell me, “Go this direction or that direction.” I’m willing to just try different things and get bounced along and get good feedback and bad feedback and figure out what’s working over time. That was a real eye-opener for me.
How do you validate or tell the difference between what is good feedback and not so good feedback?
Revenue. I mean, there’s nothing else for a start-up that matters as far as I’m concerned than revenue. The whole idea with lean start-up and this idea that the purpose of a business is to figure out how to build a business. Well, revenue is validation of your business model. If people are willing to pay for the product, then you have a product that’s worth trying to sell. Am I at the point now where I have good, statistically reliable data for go this channel or go that channel? No. I know that if I spend a little bit of money here, I start to see traffic to the website and subscriptions to the newsletter and purchases of the product or trials of the product start to flow, but I don’t know if that’s a fluke. I need to see what happens over the next 6 months. For me, the real difference here is that I get to spend the next 6 months experimenting and getting real-time feedback, as opposed to sitting in a room planning what I’m going to do and trying to convince other people that it’s the right thing.
Are you operating this business in parallel to other work that you’re doing?
Yeah. It’s the 26th and 27th hour of my day.
Tell me more about the experience of juggling all that.
I thought about this the other night when I realized that, I mean, I have some hobbies, but basically my hobby is building businesses. I can kind of justify the fact that it’s what I want to do late at night after everybody else has gone to bed or get up a couple hours earlier in the morning when the house is still quiet. It’s an interesting challenge because I’m not at the point where there’s orders every day. That means there’s fulfillment to do every day. At the moment that still means there’s a trip to the post office every day. That’s not necessarily something that’s part of my normal everyday consulting life on the UX side of things. I have to figure out how to balance that in terms of making sure that I am not stopping what I’m in the middle of because it’s time to go print a shipping label and box something up and send it out. It’s a good challenge to have, but it’s a challenge nonetheless.
Is your wife involved in the business as well?
Mostly as a consultant.
Okay. Product feedback?
Yeah, product feedback and I think being that person who’s able to level-set my expectations and challenge any assumptions I’m making. It’s not an unfair question to ask is this a fad? Is this something that’s going to stick? I don’t know. Maybe. Maybe it is, maybe it isn’t. I guess we’ll see over the next couple of years, but it keeps me thinking about what’s the next evolution in the product? What’s the next evolution in the company’s product lines that fits the same market?
Let’s say that this isn’t a fad and it sticks. Ninja Goat Nutritionals grows and grows. What’s your vision for the company? Where would you like to see it in say 5 years?
You know, you can walk into any coffee shop today and there is a row of probably 10 or 15 if not 20 bottles of coffee flavoring syrup and it is nothing but high-fructose corn syrup and artificial flavors. I’d like to see all of those replaced because as a mission what I’m out to do is get people to eat in a way that is a lot closer to the source of their food. It’s this weird kind of juxtaposition that I am selling a prepared, packaged product that is in a sealed thing that can sit on a shelf and be made any time. It doesn’t actually bring to mind this idea of a plate full of vegetables and fruit and that sort of lush, verdant vision people have when they think about a natural diet, but I think that’s something that I have in my mind as a goal for how I want people to be able to use the product.
It’s important to say it’s not a meal replacement. It is a way of supplementing how you’re eating so that you can have a lot more consciousness about what you’re eating. There’s great evidence, there’s great research about this, we make terrible decisions about our dining choices when we’re stressed. Hunger and a lack of satiety, these kinds of things will make us make just really bad decisions. One of the great things about Fat Coffee is you mix up a serving of this and you drink it and you’ve got probably a good 3 or 4 hours to make your decision because you’ll be nice and full and you’ll be able to think about what is it that I want to taste? What is it that I want to experience? It’s a lever on getting a hold of what your diet is like and what your lifestyle is like as it’s tied to that.
How do you educate potential customers who maybe aren’t in the paleo world or aren’t familiar with this concept that this is a product that’s going to have a lot of benefits, even though it might feel counter-intuitive to them?
I think that my first inclination when I started this business was to not have that conversation. I just wanted to talk to the people who were already convinced that this was a good idea and that putting butter in your coffee or butter in your tea was a good idea and that this was just a better and more convenient, higher quality way to do it. You’re absolutely right, you very quickly get to the point where there’s a very small number of people who are both convinced that this is a good thing to do and interested in the convenience or the quality factor and not doing it themselves. Because if you’re really interested in high quality food that you’re putting into your body, you’re probably interested in putting the time and effort into that. You’re not looking to really cut a lot of corners.
If you’re traveling, maybe. If you’ve got a big family and things are really busy, yeah, you’re looking for something that’s convenient, so I have to have that conversation about why putting butter and fat in your coffee or your tea is a good idea, because we’ve had it drummed into us for last 40 or 50 years fat is bad. Finally the studies are starting to get noticed that no, good fat is good. Bad fats are bad. Chemically manufactured fats have negative consequences. Things that come off of an animal that has been grazing on grass is actually really good for you.
I have to have that conversation and I have to sort of present that evidence to people and, this gets back to the whole regulatory thing, be careful about how I present that evidence because I need to be able to say, “Here’s what the science says about grass-fed animals and eating meat and fat from grass-fed animals.” That’s not the same thing as me saying, “Here are claims about what my product will do.” I’m conscious about that, where that line is. I think sometimes the easiest approach is to say to people, “Look, do you put cream in your coffee? Because if you do, that milk, if you shake that milk up a little bit longer, you’d have butter. If you boiled off the water that was in that butter, you’d have ghee. We’re on the same scale here, I’m just a little bit further up the scale in terms of richness, and give it a try. You’ll really like it.”
What’s the hardest decision you’ve had to make in running this business so far?
Trying to decide, and I’ve been bouncing back and forth a lot between this, whether or not I am trying to build awareness in a traditional way, no matter what medium you’re advertising in, the traditional approach of trying to build awareness by interrupting people and saying, “Hey, me. Over here. Look at this.” It’s the same, whether it was in print in a newspaper or on television or on Reddit ads. It’s all interruptive as opposed to this idea of building a community and trying to just communicate with people about a larger subject area.
Both are really … Neither one is the right or wrong decision, right? Because if you’re approaching things from an advertising perspective and trying to build awareness, obviously that’s crowded. I’m not competing with all the people who are making butter coffee. I’m competing with everybody who’s selling anything. Everybody’s got a limited amount of attention that they can spend looking at things in the course of the day. If I’m taking the other approach and trying to build a community and talk about primal or paleo or ketogenic dieting and eating, there’s a lot of people talking about that from a lot of different angles, whether it’s coaches or dietitians or people who have got another product to sell.
I have to be conscious about how credible a voice am I? I’ll be absolutely up-front and honest with people. I have something to sell you and I’m not really shy about saying that. So does everybody. Everybody has a perspective to push. That’s been hard for me because I don’t have time for everything and I have to think about what’s going to actually move the dial today versus what may help move the dial 6 months or a year from now.
What do you feel that you get out of building a community as opposed to just looking at the revenue number?
Feedback, because I know exactly what the next 4 variations of Fat Coffee are going to be. I’ll tell you. There’s going to be a version that has absolutely no dairy in it, so that’s going to be interesting to sell butter coffee that has no dairy. There’s going to be a version that just has no goat milk in it, so if you’re trying to be on a … If you have any kind of allergy or sensitivity to goat milk, there’s going to be flavors. That’s all easy stuff because there’s identifiable markets and there’s, I’m fairly certain, a willingness within the market to try variety of an existing product once you’ve tried it, but I don’t know what the next product is going to be. I have some ideas, but I’m not exactly sure what will fit with what I’m offering. I know from a long-term perspective that that’s really important.
So far you’ve been boot-strapping, building things out because you have a high degree of familiarity with building websites, communicating with customers. Do you continue to boot-strap or do you seek investment capital? How do you get the capital you need to grow? Does it all come from customer revenue?
There is a path where it can. I think I was talking earlier about knowing where those break points are and it’s interesting, it was interesting to me to see really in cold hard numbers how producing 1000 of a thing is one kind of challenge. Then you pass over the threshold to producing 10,000 of a thing and then it’s 100 or 500,000 of a thing. With a food product in particular, you’re talking about if you want economies of scale, your 2 leverage points are the cost of your ingredients and cost of your production process. My production process right now is me and my cost is 0 except for the lost opportunity of other things that I could be doing.
Unfortunately or fortunately the next step is a more or less fully automated production process that’s got a really big capital investment tied to it. I’m really hesitant to take on financing, because for me, I’ve been in a position before where that is … You give up so much when you bring on investment capital and you don’t necessarily know what it is you’re giving up for that capital. You just know that it’s something. Somewhere down the line there’s going to be a decision that you don’t get to make or there’s somebody else’s interests that you need to think about in terms of making that decision. That could be a good thing or it could be a bad thing, but you just don’t know.
It introduces as much uncertainty in the long-term planning of a business as it removes, so I would like to be able to boot-strap it and basically just say, “Look, when I hit 100 monthly customers, now I know I can make the next leap to be able to do production to support 500 or 1000 monthly customers.” Unfortunately there are those hurdles where there’s no easy way to get around it except by growing slow and storing up capital, and then making a big investment.
Take me back to the moment when you got the very first order from somebody you didn’t know. Describe that. What’s that like?
I’m trying to remember if it was exciting or disappointing. I know that’s a weird thing to say, but I had this expectation, as ridiculous as it now seems, that if I spent 6, 8, 12 weeks in the build-up to when I was actually able to start selling my product, again because I knew that it was going to take that long to get all the net clearances that I needed and time in the kitchen and product produced. I got to that point where I was ready to turn the switch on and I had 1500, 1600 people in the Facebook group who were following along that I was reaching pretty consistently. I was prepping to say, “Orders are going to open up on this date and you’re the first people that are going to be able to order and it’s really going to be exciting. You’re going to be able to do it and go.”
I opened up the doors and there was like 3 orders. I was like, “Hmm, I did not sell out my first batch in the first 8 hours. What does this mean? Is this a good sign or is this a bad sign?” I had that sense of excitement of, “Oh, somebody’s willing to try this. Somebody’s willing to actually hand over their money and give this a shot.” At the same time it was like, “This is not the impact I thought I was going to see on Day One.” I was a little ambivalent at that point and I guess maybe I was stubborn enough to think, “Well, I’ll just plow ahead and see what happens. I’ve bought the ingredients. I’ve got literally buckets full of coconut oil and there’s nothing else I’m going to do with it, so let’s make this stuff and see what happens.”
You mentioned lean start-up earlier. It’s not like you could necessarily pivot with the coconut oil, but what did you change in that week or 2 right after that first experience?
I’m glad you brought that back up because I wanted to talk about lean start-up and this idea that it is so important to get a product out to market even if it’s a beta product, even if it’s rough, even if it’s your first pass. Get it out there and see what the market thinks. You can’t do that with food. You can’t throw something together in your kitchen and … Now again, you could go to the bake sale and sell it at the bake sale, but that doesn’t necessarily give you the kind of feedback that you want. You can do what I did, which is build interest and see if there’s interest and see if people are willing to join a Facebook group and come to the website and sign up for a beta taste newsletter, which is what I called it.
All those things were true, but they did not necessarily translate one-to-one for sales. In terms of how do I pivot or how did I pivot, mostly it was around my expectations. It was around this idea that I am not going to sell out the first batch before I’ve made it. Again, production scale requires you to buy ingredients in a certain bulk and make a certain number of servings, and if you don’t sell them all, you don’t sell them all. What’s really great? It’s a shelf-stable product. I don’t have to refrigerate it, I don’t have to worry about it spoiling for a couple of, probably couple of years at this point. I have that room where there’s essentially sunk cost into the manufacturing process and into the product and I have time to experiment with what it takes to actually move the product.
Where will we see you next?
This week in terms of Fat Coffee, this week where you’ll see me is in, fingers crossed this week, if not it’ll be next week, 3 different Snack Like a Local machines in that one here in Benjamin’s Desk, one at Impact Hub and another at Indy Hall. We’ll see how that goes, if people are interested in trying the product that way. You will probably see Fat Coffee in a couple of coffee shops this summer if folks take to that idea, and then we’ll see. We’ll see what happens next. I don’t have huge plans for a wholesale channel because at the moment doing that requires me to really leap in terms of production scale to drive my production costs down where I can actually afford to wholesale the product. That may be because I picked a retail price point that was too low, but we’ll see what that’s like over time. I think there are a couple of situations where you will see Fat Coffee in other product groupings with other manufacturers sold through a subscription kit.
Last question. Food entrepreneur at the very early stage comes to you right now and asks for advice. What’s the one thing you’d tell them to do next?
Look at your schedule and look at how long you think everything’s going to take and multiply it by 4. Nothing happens as fast as you think it’s going to happen and there’s nothing about producing a product that goes as smoothly as you think it’s going to go. No matter how many road bumps you think you’re going to hit, there’s always one more.
Ben Levin, creator of Fat Coffee, thanks for stopping by The Build.
Thanks so much for having me. It’s been a pleasure.
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