Comment by zloof | Hacker News Reader

Comment by zloof | Hacker News Reader

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+1 for RussianCow's comment.

Our target customer is the average person who goes to Philz, Blue Bottle, Stumptown as well as Starbucks. These people aren't really buying instant coffee - they spend $2-10 on coffee per day. Some of them buy 2 x $5 latte drinks at a cafe. 100% of these people drink their coffee for the taste (although they have different taste preferences). The average person who goes to Blue Bottle daily actually doesn't know much about the beans, where it's sourced, etc. This is a big misconception that we uncovered last May. These people are Blue Bottle loyalists who love the brand, but they really just want a good cup of coffee that makes them feel good. They don't care what country it came from and they don't really know what light roast vs dark roast is.

This is actually a HUGE market of people. The middle is much larger than the fringes.

Btw, I've said this in other places on the thread - we completely love people who are super into coffee and I still think we make a good product for those really into it, but I just want to highlight the large number of people in the middle who we often forget to talk about.

Is it really a HUGE market?

Here's some trends noted from the 2016 NCDT, which they do admit have only appeared within the past few years: "Behaviors that are slowly growing include lighter coffee consumption (slightly fewer drinkers and slightly lighter cups per drinker per day), drinking espresso-based coffee and drinking coffee out-of-home. Behaviors that are slowly declining include drinking traditional coffee and drinking coffee at home. Note that most of these shifts are occurring over the last few years."

Some other figures based on satisfaction of brewing methods found later in the report include:

86% very satisfied/satisfied with their drip coffee maker in 2016

94% with espresso

90% with single-cup

89% with instant

88% with coffee vending

It seems to me like there is a growing trend of more conspicuous consumption, as well as already high satisfaction across the board with people's status quo brewing methods.

It also seems to me like you're trying to make an instant coffee that carries with it the sort of branding that Philz, Blue Bottle, Stumptown, Starbucks, etc. have with physical locations which have the ability to foster certain groups of people, as well as convey aesthetic or ethical sensibilities through branding within the stores. It seems to me that this kind of branding is somewhat reliant on physical locations. I just don't buy into the assumption you make that you can target the same consumer that these places can.

Like, come on, the title of the NYT review on your coffee is: "Instant Coffee You’ll Actually Want to Drink", if that is any indication as to the mismatched conceptions people already have about instant coffee. It seems like you're climbing an uphill battle, considering the fact a cup of any other regular coffee costs about 7 cents, you're trying to sell instant coffee, but 36 times more expensive, based on branding and convincing people

You hit the nail on the head and this is what excites me the most about what we're doing! We are trying to carry a brand - and more importantly a set of values, intentions, feelings of positivity - without physical locations. We believe that we can use technology as a platform to do that. This is something that a coffee shop would never do. (Except maybe Starbucks since they have a strong tech focused team.) This (to me) will be our innovation in 2-3 years time.

Cafes, restaurants, and bars all make you FEEL something. If they do it well, you feel included, you feel part of a community, you feel like you belong. The average e-commerce experience doesn't do that at all - and yet we have so much information and data at our disposal to make the experience so much better.

However, we are a startup - that means (a) we aren't there yet, (b) we may not succeed - it's a risk - that's why we do what we do. We need support from the community to help us get there. But your comment captures exactly what we are trying to go out and do.

Regarding the market size - just some rule of thumb numbers - specialty coffee in the US is a $21B market. Instant coffee world-wide is a $30B market. Keurig got bought for $14B. I'm not a "we're taking over the world!" startup guy, but these are big numbers. A lot of people drink coffee in the US and the world. I've looked at a lot of different food segments and this one is big.

My anecdote:

I think I'm in your market, too. Basically, enough people around me like good coffee that I'm spoiled. I'm not a big coffee drinker and not terribly picky, but I do have a taste for the good stuff.

I'm probably in the target market too - I've never really gotten into coffee because it tasted like crap. Except, occasionally I get a coffee and it's actually not bitter for once, and I'm like "oh that's actually kind of nice". But frankly, I'm not willing to go out of my way to pay $3.50+ for it. That really adds up over time.

If it were cheaper, I'd be all over it. Like, $1.50/cup, say. I mean, it still adds up over time, but by an order of magnitude less. Plus, it doesn't add up in terms of sugar like soda does. https://xkcd.com/1793/

...so, maybe I'm not in the target market just yet. Hopefully you'll get a decent economy of scale going. ^_^

The cool thing with instant coffee is that the whole concept is something that just works much better at scale - sourcing, roasting, brewing etc. We have solid plans to bring the cost down while improving the quality as we scale. At some point we'll build our own mega factory.

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