#86. Dripkit makes artisan drip coffee that’s accessible both at home and on the go. We talk with co-founder Kara Cohen about how her company is filling the void between instant coffee and retail coffee without sacrificing quality for convenience. The Loose Threads Podcast features in-depth discussions with leaders across the rapidly changing consumer economy.

Check out the full transcript below.

Richie: [00:00:07] Welcome to the 86th episode of the Loose Threads Podcast, a show about the rapidly changing consumer economy. This episode is brought to you by Loose Threads Membership, which gives you actionable analysis and insights that drive growth, and Loose Threads Espresso, your energizing and high-pressure filter for consumer news—in context. We also have a newsletter that features the latest analysis of the consumer economy from Loose Threads. Check it all out at LooseThreads.com.

Richie: [00:00:34] Joining me today is Kara Cohen, a co-founder of Dripkit, a company making artisan drip coffee accessible at home and on the go. Kara and her co-founder Ilana started the company after realizing the void between instant coffee and retail coffee with the desire to overcome the traditional sacrifices of quality for convenience.

Kara: [00:00:52] We really put a lot of effort into creating this three-prong design of: it looks beautiful, it’s extremely intuitive and it creates the best cup of coffee you’ll ever make.

Richie: [00:01:05] What’s followed is a meticulously engineered product that allows anyone to brew the perfect cup of coffee wherever they are. Here’s my talk with Kara Cohen.

Richie: [00:01:18] Why don’t we start. Just talk a bit about your background then we can work our way up to this business existing.

Kara: [00:01:23] So I studied analytic philosophy in college. I had really no idea what I wanted to do. I think I was attracted to philosophy because it was a lot of creative problem-solving and strategy. When I graduated—I actually remember something really funny is I told a guy in a coffee shop [who asked] me what my major was and I said, “Philosophy” and he said, “Good luck working in retail for the rest of your life.” Which is kind of true depending on how you look at it. So [I] graduated, immediately got a job at a temp agency where they sent me on all sorts of different jobs. So I worked at a warehouse packing boxes, which I never thought would be relevant to my career but totally is now.

Kara: [00:02:15] I was putting tags on handbags and then I ended up at a branding agency and I fell in love with the creative business of branding. I really liked solving problems for businesses. So as soon as I got involved in branding, I followed that path doing branding, advertising, experiential marketing. I think it’s all blending together these days but, essentially, solving problems for brands. I worked with a lot of entertainment clients. So launching new TV shows, which was really exciting and building experiential marketing campaigns around that. I worked in fashion doing image refreshes and I also did beverage—alcoholic beverage marketing. I worked a lot with Diageo. We launched a new product for them. I learned a ton about interacting with the consumer and getting the consumer’s attention, especially when they are actively trying to not listen to you. But I felt limited because I could come up with the ideas and I could make the plans but I couldn’t make them happen. So whether or not anything happened wasn’t up to me. It was up to the client or the creative director and so I ended up going freelance to have a little bit more autonomy and that’s kind of how Dripkit happened.

Richie: [00:03:46] So what is the first incarnation or the original inkling of the thought for the business and how did it come about?

Kara: [00:03:54] At the risk of making a coffee pun, it was brewing for a little while. Ilana, my co-founder, and I were both really frustrated with the fact that a fresh cup of coffee was such a production to make. She was actually living in a yurt in Israel studying permaculture farming and I was at home and my now fiance brought home a box of instant coffee from England. I asked him, “Why are you bringing instant coffee back from England?” And he said that it was better than the pod coffee in his office and that he didn’t have time to go to the coffee shop and wait in line for 15 minutes so he’s bringing his own coffee. And to me that was the light bulb moment and talking to Ilana later and us just getting really fired up about the idea of, “How can we solve this problem?” So it wasn’t so much, “Okay, we have the idea for the product,” as it was, “Okay, we should try to find a way to solve this problem. This is a problem that should be solved.”

Richie: [00:05:02] I’ll preface everything I’m about to say with I don’t drink coffee. So this will be an interesting discussion.

Kara: [00:05:06] If when we have investor meetings and the investor says they don’t drink coffee, we just know that it’s not gonna happen.

Richie: [00:05:12] It’s not gonna go.

Kara: [00:05:13] I feel like that shouldn’t be the case but…

Richie: [00:05:16] I think that’s, for better or worse, how a lot of it goes.

Kara: [00:05:19] Yeah.

Richie: [00:05:19] You need a hot water and lemon kit which is literally just hot water and lemon, so there’s no need.

Kara: [00:05:23] Well, if you’re a tea drinker you have tea bags and we really wanted to create that for coffee. You carry your favourite tea with you, which is something Ilana, my co-founder, does and was part of the inspiration for the product.

Richie: [00:05:35] Right. So I guess to—at that moment—look at the landscape of coffee options so to speak. Let’s call the Starbucks the mass market, premium coffee option, whatever you want to call it.

Kara: [00:05:46] We call it “second-wave coffee.”

Richie: [00:05:47] Okay, second-wave coffee. And then is third-wave the La Colombes of the world?

Kara: [00:05:51] Yes.

Richie: [00:05:51] And then there’s the instant Keurig and Nespresso and all that stuff.

Kara: [00:05:57] Yes.

Richie: [00:05:58] Talk about where the hole was because it would seem on the surface that the instant thing is there and there are different levels of that, the get-it-on-the-street thing is there, but articulate the hole a little more of what was there.

Kara: [00:06:10] So there’s quality or craft or specialty coffee, depending on how you want to say it, and then there’s convenient and instant coffee. The gap is in the overlap, which was creating a quality, convenient, portable coffee. Our coffee drinking habits have changed a lot over the last 20 years and specialty coffee now accounts for over 55% of the dollars spent on coffee in the U.S. and so high-end coffee has become mass market, but there are no mass market products for high-end coffee. You can go to the coffee shop and you can ask for a pour-over and you can have the whole production of weighing the coffee, grinding it, heating the water up, doing the pour, getting all the ratios correct because coffee is chemistry and pay $5 or you can brew yourself a Mr. Coffee. So what we are doing is bridging that gap.

Kara: [00:07:18] It is a movement that is happening in the coffee world, one that we didn’t necessarily see when we first started, but of course we are seeing now. I think that ideas come in waves and [in] the moment for something to happen, multiple different people will start to see that opportunity and it’ll manifest in different ways. So, to me, I see that as fourth-wave coffee. Fourth-wave coffee is marrying the convenience and the ready-to-hand aspect of a Starbucks with the taste and the brand equity and cachet of, say, a La Colombe or a Blue Bottle.

Richie: [00:08:01] Inherently from the convenience perspective before the business existed, what are the tradeoffs in there that people were just dealing with to get a cup of coffee versus the more second or third-wave options?

Kara: [00:08:13] So I think the biggest trade off that people have been making and that I was making and my co-founder [was] making at the time was deciding how much effort we were willing to go to get a cup of coffee that we liked. So coffee has a dual purpose. It gives you energy and focus depending on how you react to it and it also tastes good if you like the taste. And more increasingly, coffee is becoming like wine, which also has a dual purpose. So the tradeoff is deciding: Do I care more about the taste or do I care more about the energy? And so when you drink the pod coffee in the office or you grab a bodega coffee or an instant, you are choosing the energy over the taste and the experience. Ilana and I both love designing experiences and the experience of coffee is—though you may not know—the experience of coffee is really ritualistic and you’re losing that romance and experience aspect as well as the taste aspect.

Richie: [00:09:27] Right. So the ideas remain for a while. When did you start to really think about this? What year was it?

Kara: [00:09:34] Very end of 2016. We did a proof of concept. There is a product that exists in Japan that has the same function. Originally, when the idea had formed, it had been more of, “Oh, okay, we can’t possibly be the first people to have ever thought of this in the world. It has to exist.” So a few hours later on Google we found this Japanese product and it looks very different from our product. [We] ordered 10,000 of those because that was the minimum and some packets that said “Dripkit” on them, filled them with coffee, put up a website and just sent out an email to our friends and family and just gauged interest. We had already asked people, “Would you buy this?” and they all said, “Yes.” But I think that there is a difference between people saying they would buy things and people actually buying things. So we got it out there and friends were buying and then friends of friends were buying and then complete strangers started buying.

Kara: [00:10:44] We weren’t really doing any advertising, which is funny because I come from an advertising background. But I think that it helps to test the natural momentum of a product. This product—it’s a consumable. It’s at a relatively low price point. It needs to have word-of-mouth power especially because it’s completely new. So we tested the word-of-mouth power of the product and it passed that test for us. People were really enthusiastic but what they said was, “I really like the concept but it’s too hard to use,” or, “it’s confusing,” or, “the cup of coffee it makes is too small.” It wasn’t intuitive, the product that existed on the market. That was the light bulb moment for us of, “This is why this hasn’t happened in the U.S. yet.” There are some small companies that are doing it but Americans—and I’m gonna make a broad generalization here, this does not apply to everybody—Americans like things to be easy, fast, intuitive and beautiful.

Richie: [00:11:48] And cheap.

Kara: [00:11:49] And cheap. Yes. This product was slow, required more thought to put it together and it wasn’t fit for the American market. It was great for the Japanese market. Japanese consumers have very different expectations than American consumers. We saw [that] while this has been hugely popular in Japan, there’s definitely a market in the U.S. for this, especially when we look at the way millennials are drinking coffee, which is that they’re spending $1,300 a year on coffee [on] average—not in New York, just in general. I think that [as] a generation, a lot of us graduated college during a recession. We don’t really have the same job security and benefits that our parents had. The idea of the small luxury is really important to us. So it’s less about the sports car and the big house or the fancy handbag and it’s more about that perfect latte every day. So, to us, there seemed an obvious space there.

Richie: [00:12:58] So you do the proof of concept. When you have that result or those results and the feedback, you’re into early 2017?

Kara: [00:13:05] So in early 2017, we started product development.

Richie: [00:13:08] Okay. So proof of concept is over. What did you expect before going in?

Kara: [00:13:12] I think that we expected that the two of us could figure out a product that worked on our own because we had a vision in our mind of how this thing could fold up and sit on top of a cup and it didn’t seem complicated to us. It seemed really simple. We both have some design background, some product development background but there is a difference between creating things that have existed before and creating something that has not existed before. We did a lot of sketching ourselves. We brought in my brother who studied packaging at Cal Poly, which was really helpful. He helped us get to something that was structurally sound, but it didn’t look good and we knew that if we wanted to create a product like this it had to look good. It had to be Instagrammable. We really put a lot of effort into creating this three-prong design of: It looks beautiful, it’s extremely intuitive and it creates the best cup of coffee you’ll ever make.

Kara: [00:14:25] So we ended up working with coffee roasters, baristas, designers, architects. Kind of brought in everyone [whom] we could get to a certain point and then we ended up also bringing in an industrial design firm, Prime Studio. They’re in New York. They designed Harry’s razors and the Goby toothbrush and they were amazing. At this point, we were still completely bootstrapped and so we sent [them] a cold email saying, “Hey, we’re working on this product. We don’t have any money but maybe you wanna help us figure it out?” And we just lucked out that the owner of the agency just happened to be really interested in the project.

Richie: [00:15:15] That’s great. Do you know how many iterations you went through before you had something you were ready to put out there?

Kara: [00:15:21] 500 prototypes, I think. Some of them are just very slightly—

Richie: [00:15:26] Sure. And when did you know you had the one? At least to launch with?

Kara: [00:15:30] We got to the point where the design and the material hit all the marks that we wanted them to hit or, at least, that we could realistically hit with the resources that we had. So it felt intuitive. We’d give it to people, make sure that they could figure out how to use it without us explaining it to them. We tested the brewing ability of the product so a lot of it was designing the filter and the filter material and the way it hangs. There are so many nuances in the way that a filter is created that make the coffee taste good so we did a lot of taste tests. We tested it with a tool called a refractometer which is used in coffee to test coffee extraction and we got basically a perfect score which meant that our coffee was on par if not better than what you would get at almost any coffee shop. Once we hit the mark of all the things that we needed the product to be we just hit “go” and started to manufacture it or figure out how to manufacture it.

Richie: [00:16:34] And when is design ready timewise?

Kara: [00:16:36] About April.

Richie: [00:16:37] Okay.

Kara: [00:16:37] About a four-month process.

Richie: [00:16:39] That’s not that—I mean, I’m sure a lot was packed in there, but timewise it’s not crazy.

Kara: [00:16:42] Yeah, no. Honestly, we were moving very fast but we were working full time on it. Ilana and I both were freelancing at the time and so we just started to take on fewer and fewer jobs and live more and more frugally because we were more passionate about what we were doing with Dripkit than our freelance work.

Richie: [00:17:06] And so, at this point, had you figured out the branding or does that come later?

Kara: [00:17:10] Both. So the name was one of the first things we had. I had done a lot of naming in the past and I wanted something that was easy to remember. Apparently names with the “kuh” sound are easier for people to remember. That’s something that I heard in an interview with Sara Blakely of Spanx and I was like, “Oh, cool we have that too.”

Richie: [00:17:35] Interesting.

Kara: [00:17:35] I wanted it to be ownable so I wanted it to be like Kleenex. We wanted the product to be a category creator. The product is a category creator in the U.S. and so we wanted a name that went with that.

Kara: [00:17:47] Now, the design we didn’t really have until right before launch. So, while we were in the process of manufacturing or figuring out how to manufacture, which was definitely a process—

Richie: [00:18:01] Yeah, talk about that.

Kara: [00:18:03] Neither of us knew a lot about manufacturing and we, in our mind, were going to manufacture in the U.S. and we were going to find a factory that was going to make this for us. Once we started the process, we realized that in the U.S., the only manufacturing that exists is for very specific types of products that are harder to manufacture overseas or are high-price point products.

Richie: [00:18:39] Right.

Kara: [00:18:40] So we were not able to manufacture in the U.S. Eventually, we thought, “Okay, well, when we get big enough, we can do our own manufacturing and it can be in the U.S.” So we started looking in Asia and we got a lot of “nos.” I think that pitching manufacturers is almost as hard as pitching investors—if not harder—if you’re pitching them something new. They want to do something they’ve already done before. Eventually we did find a sourcing company that helped us find a factory. It still isn’t the right factory for us. We are transitioning to another one. Now we have way more knowledge and relationships in the space. But it got us through launch.

Richie: [00:19:28] And so you had the name. You start the manufacturing process and then when does the branding come back into play? Because it’s very distinct and clean and I’m sure you’re very happy with it, but how did that come about?

Kara: [00:19:39] Yeah. So, while we were working on manufacturing, we started working on the brand and the brand is extremely important to us. As you mentioned, we did spend a lot of time and energy on brand and we still are and we always will be. I don’t think our brand is finished ever. I think it’s an evolving, amorphous thing. But what we started do is we started to pool our resources of all the creatives that we knew. Our unfair advantage is that we worked at advertising and branding agencies. So even though we may not have had the money to hire the best creatives, they were our friends.

Kara: [00:20:21] So we ended up hiring designers [who] had worked on some other really major brands and we sat down and really went through all the marks that we wanted to hit with the visual design. We didn’t want it to skew feminine or masculine. Coffee has been traditionally skewed more masculine. Dark, rich colors, that craft—

Richie: [00:20:49] Microbrewery-like.

Kara: [00:20:51] Yeah. The coffee aesthetic—and it’s changing. So we wanted something that felt approachable, high-end, not masculine, not feminine, fun but not cutesy. We really wanted it to be appealing to a large variety of people because our customer is more a lifestyle than a person. Our customers all have different interests and different aesthetics. Some of them are photographers, some of them are bankers, a lot of them are doctors. We wanted to create something that hit the marks of design that we thought were beautiful but without sacrificing a relatability. I think we’ll always be working on that and tweaking it.

Richie: [00:21:44] Can you just describe it verbally?

Kara: [00:21:47] Yeah. So our aesthetic is colorful. We use blue, a really interesting terracotta brown, which is coffee without feeling too dark, and a yellow color that we really like and we play with that color. We’ll play with shapes, geometric shapes a lot and those shapes actually are abstracted shapes from our product although I’m not sure any of our customers know that we do [that]. And then we also work with tiling. So we like to think of sitting in a cafe, the tile of an Italian cafe. We do some tiling with those shapes and play around. Thinking of things very architecturally because our product is kind of an architectural product. It’s like a mini coffeehouse.

Richie: [00:22:36] Absolutely.

Kara: [00:22:36] If that makes any sense. Our Creative Director was very excited when we had an article in a design publication that referred to us as the David Hockney of coffee.

Richie: [00:22:48] Nice. Okay so, you basically have everything ready to launch. When does it actually launch timewise?

Kara: [00:22:55] We thought we were going to launch in September, but we did not end up launching until mid-February of this year.

Richie: [00:23:02] Gotcha.

Richie: [00:23:02] So we are very new.

Richie: [00:23:04] Very cool. And so you had a little bit of data before, but what are your expectations going into the launch? Do you have a number? Do you have a goal? How do you frame what you want out of that in your head and how quickly you want to see those results?

Kara: [00:23:17] We had numbers because we were raising money and so we needed to have numbers and I think we went to the best of our ability of what we thought was going to happen but, to be honest, we had no idea. Our main hopes going through the launch was that people would order and then we’d see them reorder again within a short amount of time. We knew that if we didn’t have huge exposure right away and we didn’t have a ton of orders right away, that, we could remedy, right? But if a bunch of people ordered and then they didn’t order again—

Richie: [00:23:52] Right.

Kara: [00:23:52] We had a fundamental problem with our product. So we were watching the reorder rate really carefully. We offered both a subscription and a regular purchase. We did that because, one, we don’t like feeling locked in to a subscription. I think that was a personal thing and I think a lot of choices founders make can be personal. But I think we both always want the option to order something when it makes sense for us because our lives are constantly shifting and there isn’t a sense of routine too.

Kara: [00:24:26] And, two, I think there is a bit of subscription fatigue right now in the market. I think that it was really popular to do subscription because it’s a model that makes sense from a financial perspective. Academically and intellectually, it makes sense. But if it’s not something that customers want, then it will never make sense. So we just thought, “Okay, let’s have both and see what happens.” And we saw that we did get some subscribers, but the majority of our orders have been through the individual ordering process. But what was really exciting was seeing [someone order a] 10-pack two weeks later, a 20 pack three weeks later—a 20-pack subscription. That, to me, is the best feeling in the world. When we earn someone’s subscription over time or just people who keep reordering and reordering. I think our best customer who’s spent maybe $600 in the last six months on coffee with us doesn’t have a subscription. And we’ll be working to build in other ways to create one-click ordering through email or through text and I’m really excited about developing ways for people to get it really easily whenever they want it. It’s an exciting opportunity for me especially in the time of Amazon Prime.

Richie: [00:25:49] Sure, absolutely. But it sounds like the fundamentals started to show up pretty quickly after.

Kara: [00:25:54] Yes. One of the biggest problems that we’ve had as a company is saying “no” to opportunities. Immediately, right off the bat, people were coming to us. So we had large retailers that wanted to sell our product. We had large hotel chains that wanted to put our product in their hotel. We had our favorite coffee roasters reaching out to us and wanting to work with us and loving our product. It was so flattering to be able to hear from some of the top roasters, hotel chains and retailers in the country and it was so hard to say “no” because we wanted to have a clear vision and we wanted to stick to that vision and we also wanted to make sure that we weren’t trying to boil the ocean. A lot of those deals that we’re coming in, we could have done and they would have upped our revenue numbers and they would have given us clout, but they would have really hindered our business model and hindered our long-term plans. And so I think that’s been a really big one for us, is balancing the excitement of opportunities with the frustration of refraining ourselves from taking some of those opportunities.

Richie: [00:27:16] Yeah. Do you see the Starbucks and the La Colombes and the roasters of the world as competition? Do you see them as potential partners? How do you think about what role they play? Because the very boring version of this is you would design the thing, you’d put a patent on it and then you’d just license it to everyone and just sit back and put your legs up. It sounds like that was never of interest to do with the actual design, but actually to have the whole experience and everything under one roof. So how do you think about all those people reaching out and so forth in terms of where they—if at all—they fit into the longer-term piece? Or are you trying to take their customers away and plan to do so?

Kara: [00:27:49] So, yes. The easy thing to do would have been to get the patent, raise enough money to bring the cogs down significantly after we brought on four or five clients’ beta that were making 500,000 unit orders.

Richie: [00:28:08] Right. To be like a wholesale manufacturer in some form?

Kara: [00:28:11] We could have totally done that and there were definitely potential investors [who] thought that we were stupid for not doing it. But I’m really glad we didn’t. One, there’s absolutely no defensibility in that. None. Patent—great. We’ve applied for one. Hopefully it’ll help us. But there’s ways to get around patents. I think the one thing that’s defensible in the current market is brand and Ilana and I are experts on brand. So it seemed crazy for us to not build a brand. The ethos behind our company is marrying quality and convenience and using design to do that, focusing on design to marry quality and convenience. That ethos can be used across coffee in a variety of ways and it can be used in a retail setting and it can be used online. It can be used in the hospitality industry.

Kara: [00:29:06] So we see ways to expand that ethos through our initial product which is something that lifestyle coffee brands have always done. Starbucks started by bringing espresso to the United States. Blue Bottle brought pour over from Japan. La Colombe’s rise to fame was through their draft latte and having that keystone product, building a community around that product and then expanding based off that community and that initial ethos has kind of been a path in this world and I think it’s a path that makes sense and it works. And, obviously, you do it [differently] every time, depending on when you’re doing and how you’re doing it. We saw a larger opportunity beyond that.

Richie: [00:29:48] Definitely. Do you think you’ll get to a point where you open a physical space or have a physical presence or is that the antithesis of what you’re doing?

Kara: [00:29:54] Absolutely. Coffee is incredibly localized and that’s one of the main reasons why you have a couple big brands like Starbucks and many, many, many small coffee brands because it’s community, it’s locality, it’s physicality. Do I think that you can create a very successful coffee company online? Absolutely. Especially if it’s a marketplace. But very successful and iconic I think are different. I think we do want to create spaces eventually and I think that there are ways that we can reinvent the coffee shop that I’m really excited about.

Richie: [00:30:35] What was the focus for the rest of the year that brings us up to the present in terms of how do you think about where you want to end 2018?

Kara: [00:30:43] So the goal for 2018 for Dripkit is really to build awareness through building our community. So we’re very, very focused on tweaking our delivery methods, what the experience of receiving Dripkit is, and reordering, building our customer service out. One of the core tenants of our brand is exceptional customer service and that’s something that is very hard. We talk to people on the phone all the time and build relationships and build that community and just see that steady growth up and through the end of the year. And then towards the end of the year and then through the next year, it’s going to be about: We got the product, got the delivery method, got the initial community. Now we hit gas—pedal to the metal—and really focus on really fast growth.

Richie: [00:31:40] So how do you currently and then maybe in the future envision working with the sourcers and the roasters? Do they have a presence in terms of whose coffee and origin comes through? How does that all work and how do you envision that evolving if at all?

Kara: [00:31:55] We are very focused on our coffee offerings. I think that we can offer something that a lot of the roasters can’t and that is a more layman’s approach to coffee tasting. We try to find that balance between a technically amazing cup of coffee and a coffee drinker’s cup of coffee and find that middle ground. We’re really excited about that. Our head of coffee, Gabe Boscana, he was at Intelligentsia, Sightglass, Ritual, a lot of the really great West Coast coffee roasters. He also roasts his own coffee and is one of the best roasters in the world in my very biased opinion, but also in other people’s opinions. He helps us develop our coffee program. So I think we can offer something unique and I think it is part of that ethos; the quality and the accessibility. There are some amazing coffees out there that are not quite as accessible. And so we are partnering with roasters to be able to also offer some of those coffees.

Kara: [00:33:03] The coffee industry is so wonderfully—especially the third-wave craft—collaborative and they share and they’ve been so warm and open to us. I think the fact that we’re coming in and we want to do coffee justice, we want to bring it to their level, we thought that they maybe would be resistant towards our way of doing things because it’s not the way that they did it, but it’s been completely the opposite. We hear from roasters everyday who want to work with us and we wish we could work with all of them and maybe one day we will. Maybe we won’t. But we definitely always want to be part of the industry and we always want to be giving towards that industry. We’re not looking to disrupt the industry in the sense that we want to put small roasters out of business.

Richie: [00:33:50] Or create chaos.

Kara: [00:33:52] Ever. We love the coffee shops. We love those roasters. We just want to enhance it and create a new category.

Richie: [00:33:58] How did you think about pricing for the product in terms of where you wanted to land, but maybe also had to land? I’m guessing you didn’t have as much flexibility as maybe a lot of other companies do with different products and different pricing schemes.

Kara: [00:34:11] Pricing of the product was complicated. Especially since Ilana, my co-founder, and I are very aligned on almost everything on the business. I think this was one thing that we have slightly different perspectives on, which is great. I think it’s important to have different perspectives on things and it’s not hostile at all. We want the product to feel like a treat. So it’s never going to be 50 cents, never going to be 99 cents. It is something that’s meant to feel kind of luxurious and fun and like making your own coffee, the experience of brewing it and the taste. I think that even if we did have the best cup of coffee in the world and we sold it for 80 cents, people’s mentalities would shift and they wouldn’t think of the taste as good. So there’s that.

Kara: [00:35:01] But we also do want to have […] as an accessible price point as possible. And I think one of the most amazing things about coffee is that it’s one of the only luxuries that almost anyone can afford. Many people can put together $4 for a special treat and I think that doesn’t apply in a lot of other areas in food and beverage or just in general consumer economy. And so we always want anyone to be able to buy our product and we always want it to be a lower price point than going to your local coffee shop.

Richie: [00:35:39] In order for this to have large mass market adoption, does something have to change? Or is it more just time?

Kara: [00:35:48] We have to change it.

Richie: [00:35:50] What is “it”? That’s my question. What has to change macro in the market for this to have wide adoption? Or is it literally just riding the existing wave of trends that are already prevalent?

Kara: [00:36:00] So I don’t think anything needs to change in the market for this to be mass market product. I think the market is primed for this but I do think that it takes time. It’s a completely new behavior. And so, though the market is ready, we need to work with training wheels, essentially, to familiarize them with the product and that’s what we’re doing now. That’s one of the main reasons why it’s important for us to have control over the customer process. We want to be able to answer questions. We want to be able to send you an email with a video showing you how to do it and explain to you how it works. If you put it on a shelf, it would be a huge missed opportunity I think. So I guess, to answer your question, it’s both. The market is ready but also we need to grow the garden of it.

Richie: [00:36:55] Yeah. Is there something you’ve done from a marketing perspective that you’ve been really proud of or has been really successful or along those lines to start to move that envelope?

Kara: [00:37:04] Yeah. So I think from a marketing perspective, we’ve really had a lot of fun with Instagram and sending out products to people to try and to do Stories. A lot of really fun Instagram Stories. So it’s been less about the posts and the followers and more about just getting several Stories a day and more and more of people using the product. I think right now we’re working on figuring out how to harness that because it’s really, really powerful. People creating organic content and using the product on Instagram has been really big and we’ve tried to show them how to do that.

Kara: [00:37:43] Another marketing effort that we’ve just had a lot of success with is just press. I think we are lucky in the sense that we have a very press-friendly product. It’s a story that people are interested in and magazines want to feature it. We were in O Magazine which was a big boost for us because Oprah will sell anything. I think the press has been really helpful for us in terms of just more exposure and, like I said, starting that seed of familiarity.

Richie: [00:38:15] What’s been the cheapest and most expensive lesson you’ve learned building the business?

Kara: [00:38:19] The cheapest lesson was, one day, before we were launching, we gave a Dripkit to someone and they opened it completely upside down and they said, “Why are you packing these upside down?” We said, “No, we’re not.” Opened one, picked it up, it was right side up. Ilana and I are both left-handed. So we were packing all the Dripkits for left-handed people. It has a handle on it and when you pull out the handle, depending on if you pull it out from the left side or the right side, it’ll either be upside down or right side up. Really hard to explain that over audio, but if you look at the product, it’s easy to see. So when we had that realization, luckily for us, the reason why it was the cheapest mistake was that we could just pack it the other way. It was really hard for us to do, to go against our own left-handed people.

Richie: [00:39:19] Same.

Kara: [00:39:21] Really hard. But the reality was, we have to go with the larger group of people [who are] right-handed. So we now pack them the other way and we know that left-handed people are mentally superior so they can figure it out.

Richie: [00:39:37] Nice.

Kara: [00:39:37] The most expensive mistake. This isn’t actually the most expensive mistake, but we were doing some fundraising in Silicon Valley and we had one meeting in San Jose and one in San Francisco and I think we had put two hours in between, thinking that was ample time. Anyone who lives in the Bay area would know now that that is not enough time. So we were almost late to our VC meeting and we pulled up the car and it said “No Parking after 4pm.” It was 3pm. We were like, “It’s fine. If the meeting goes over, we’ll pay an $80 parking ticket. Let’s just make sure that we’re not a minute late to this meeting.” Of course, we get to the meeting, we sit there, we wait for 15 minutes, we meet with the investor, it goes over and we come back and our car has been towed.

Richie: [00:40:32] That’s not that bad. I’ve heard much larger numbers.

Kara: [00:40:33] Yes, yeah, I know. That’s why I’m saying it wasn’t the most expensive mistake but it’s the mistake I kick myself most for.

Richie: [00:40:36] So as my, I think, almost last question: Jonathan Gold recently passed away which was very, very sad, but there was this amazing anecdote. I think it was in an old New Yorker profile of him where he went around LA one day trying to find the best coffee and had 27 shots of espresso in the span of, I think, twelve hours and was having, I believe as described by friends, almost a manic breakdown by the end because it was just insane. What is the most caffeinated you’ve ever been building this company and was it anywhere near what he experienced?

Kara: [00:41:10] Nowhere near that. Although some of the greatest minds were giant coffee drinkers. I think it was Voltaire [who] drank like 30 cups of coffee a day or something.

Richie: [00:41:18] That’s crazy.

Kara: [00:41:19] I can’t remember the exact facts. I think the most caffeinated I’ve ever been was when we’ve done cuppings. A cupping is where you taste coffee and, when you taste it, you roast it at a very light roast. A common misconception about coffee is that a light roast is not as strong as a dark roast. Caffeine-wise, it’s much stronger. The longer you roast the coffee, the less caffeine and natural coffee flavour you get. So if you are drinking espresso, that’s why it has less caffeine than a cup of coffee because it’s extremely dark roasted. So when we’re tasting coffees, we’re chasing them at a very light roast and we are tasting them up to 12 or 20 times, each coffee. So it’s very nuanced.

Kara: [00:42:10] I used to be the kind of person [who] would chuckle at the idea of being like, “Oh, there [are] notes of birchwood and a lemony, pomegranate mouth feel,” or something. But now I’m like, “Okay, I get that now.” I’ve passed the hurdle. So when you do a cupping, your tasting coffee many, many times. I think that occasionally I’ll forget that we’re doing a cupping and I’ll get myself a big cold brew in the morning and start doing a cupping and then by the end, it’s like you are tired, but also your brain is going crazy. I don’t know how to explain the feeling, but it’s definitely, I think, similar to what you described.

Richie: [00:42:57] To what he was experiencing. Awesome. Well, thanks for talking.

Kara: [00:42:58] Thank you.

Richie: [00:43:02] Thanks for listening to the Loose Threads Podcast. You can read full transcripts of the podcast and join the newsletter at LooseThreads.com. Feel free to also leave review on iTunes. We always appreciate it. And thanks to George Drake, Jr. for editing this episode. We have a great roster of upcoming guests including Eliza Blank of The Sill, Rachel Silver of Love Stories TV, and Ellie Burrows of MNDFL. Thanks for listening and talk to you soon.