One of my biggest challenges since the public launch was to hire a Full-Time team member to head our Supply Chain and Operations, one who is self-motivated, committed to the company, and does not need supervision. As a Startup, there are so many elements of the business that we have to work on, all of which are equally important. For us, the main business elements to focus on were Marketing, Supply Chain & Operations, and Product Development. As a sole Full-Time employee, I couldn’t have done a great job managing all three.
1. Tell us about your company and your journey.
My company, Roasted Bean Box, is an e-commerce coffee company that offers personalized coffee discovery directly to consumers in metropolitan cities. Our proprietary model leverages data on consumers’ taste preferences and only delivers locally roasted coffees that match our customers’ taste preferences, beginning from the third month.
The journey started back in May 2020, when my co-founder, Catherine and I had the idea to start the world’s first data science-driven coffee company to offer a highly personalized home-coffee drinking experience, unseen in this industry. We launched the company to the public (Montreal) in October 2020. Since our company launch, we have fulfilled nearly 600 orders and have over 100 monthly active subscriptions. The monthly growth rate has been phenomenal and we are now preparing to raise our first seed investment round to acquire more customers and to expand to Toronto by the beginning of 2022.
2. How did you come up with the idea and go about executing it?
My co-founder, Catherine and I are both coffee lovers, and we also fit in within the category of 70% of millennials in the US and Canada who consider coffee a gourmet beverage. Coffee is also the most popular beverage amongst adults in Canada (more than water) with adults on average consuming 2.8 cups of coffee every day. One thing to note about coffee is that coffees from different regions and harvests produce unique taste flavors and aromas; there is no such thing as the best or the worst coffee.
Catherine and I noticed that coffee preferences being subjective, there was no effective way for coffee lovers to drink and discover coffees at home that are personalized to their palates. They either end up drinking the same coffee or changing coffee companies. With my previous experience working in the Artificial Intelligence (AI) industry, I knew mass personalization was possible by developing a data-driven algorithm.
As an Engineer and Business-minded person, I saw this huge market potential in the Canadian coffee industry with our mass personalization model. It was a big risk to commit full-time to the company but I had a strong belief in my hypothesis that our business model is serving a gap in the coffee industry to provide a better customer experience.
So I began further research into this industry’s landscape and conducted surveys within my network in Montreal to understand consumer behavior (coffee purchasing and drinking habits). From May until public launch in October, we spent countless amounts of time and energy in market research, developing our technology, branding strategy, and e-commerce platform, and refining our business execution strategy.
3. What has been your biggest challenge that you faced and how did you overcome that?
One of my biggest challenges since the public launch was to hire a Full-Time team member to head our Supply Chain and Operations, one who is self-motivated, committed to the company, and does not need supervision. As a Startup, there are so many elements of the business that we have to work on, all of which are equally important. For us, the main business elements to focus on were Marketing, Supply Chain & Operations, and Product Development. As a sole Full-Time employee, I couldn’t have done a great job managing all three.
I overcame this hurdle by partnering with a friend, Eric, who had over 15 years of Operations Management experience and is passionate about the coffee industry. Eric had been very keen on our business model, even before I approached him to be part of our team. To gain further motivation, I asked Eric to invest a small amount in the company so that he gets equity in the company and that way as the company grows, he grows too. Eric joined in as our Chief of Operations in January 2021 and has taken a large burden off my shoulders.
4. What do you think are the most important qualities of a successful entrepreneur?
In my opinion, it starts with being mentally strong - the way you think, act and feel. You have to think big, act brave and confident, and feel positive and good about your actions. Being mentally strong helps entrepreneurs overcome the continuous and immense challenges that the business faces, especially in the first few phases of the startup.
One important thing to note that this mental strength does not come naturally. To be a successful entrepreneur, you have to learn to be patient and persistent, realizing that failure is part of success. In an entrepreneurial context, success from failure means being ready to pivot from the original business model or product (or even killing the project and moving on to something else).
5. What are some of the most important factors for running a successful business?
Planning or Strategy Development, in my view, is the foremost important factor. The founders should be able to communicate (to themselves and to team members) about their goal of reaching from Point A to Point B, and how they will achieve it. It helps to develop small milestones between the goals to ensure the company is on the right track, as well as to keep the motivation level high (since seeing results quicker will bring in more energy).
If you see the statistics, most companies fail in the first year. So if the company can thrive in the first year or first couple of years, its chances of being a successful business is greatly increased, and this can be achieved by good Planning.
The next most important factor, again in my view, is resource allocation - time and money, both of which are scarce during the startup phase. There are many different moving parts of running a business, and the founders should be able to prioritize which tasks require the most attention that would take the company to the next level. Each of the tasks should be managed by an experienced individual (allocating time), or company if the decision is to outsource (allocating money).
6. What are the tips for first-time and aspiring entrepreneurs?
First, be passionate about your idea or project. The passion really shows when speaking to a potential customer or investor etc.
Second, spend time on building an execution plan with different scenarios (definitely include worst-case scenarios) before jumping into launching the company. One of my previous startups failed because I didn’t have a good execution strategy, and therefore my execution was all over the place.
Third, be humble and know your professional limits: admit which business functions you are good at and which one you are not. A successful entrepreneur is definitely a generalist, however, for the benefit of your company, do not assume you can do everything and seek others who can help you in your venture.
Finally, try to read case studies about other companies. By reading, you will get an inside look at how companies managed or didn’t manage the business situation. At one point or another, you could be faced with a similar situation, but you would have learned from their mistake or successes. Learning from other people’s experiences is the best education.
7. How can one overcome a hurdle of lack of funds when starting up?
Raising funds from investors (whether from friends and family, angels, bank loans), particularly when you are just starting up is extremely, extremely challenging - but not impossible. In my previous job, I worked alongside many Venture Capitalists and Angel Investors and I can summarize the three key questions investors ask themselves when considering investing in a startup:
1. Why should I believe?
2. Why should I care?
3. Why should I join?
The first question is really about validating the business model, and this can be done through use cases, growth rate over time, customer testimonials, and so on. For the second question, a founder should be able to do a realistic market size and how their solution is solving a problem customers are actively seeking answers to. The last question is all about financials: how will the investors’ funds be used, what is the return on investment, when will you reach profitably - all to show that the investor should expect a high return or get back his money with interest.
Rahul Choudhary - Co-founder and CEO of Roasted Bean Box
Interviewed By: Nishad Kinhikar
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