44 karma · joined April 12, 2017
Craftwork (https://craftwork.com) is building a tech-enabled home services startup, and we just raised a $3.5M seed round led by Lachy Groom.
We're actively hiring for a Computer Vision Engineer and a Full Stack Engineer - learn more at https://angel.co/company/craftwork-homes
1) we don't think this is a winner take all market 2) but if it were, the strongest network will win
At this stage, it's about building the largest network as quickly as possible.
Also, Starbucks is on pace to process over 15% of their annual revenue through their mobile app this year, it's by far the most popular payments app in the U.S. and shows no signs of slowing down.
To clarify, this is measuring the U.S.-only, the global market is obviously much larger. I know it may seem high, but it's a lot easier to put into perspective that the average American over 18 years old drinks 2 cups of coffee per day.
In terms of competition, because coffee is just now warming up to the concept of pick-up, and the majority of the order-ahead market is delivery-focused, we are at an advantage for optimizing that pick up experience and gaining traction from there. We partner with shops that offer every mobile ordering service, we partner with others that only want one - it'll certainly be something we keep an eye on as we grow.
We'll definitely look into this, I appreciate the suggestion!
In terms of scale, we're asked about fragmentation a lot. Chains like Starbucks and Dunkin' will never use Cloosiv, but there's no reason to believe that as our network grows, that we can't support large regional chains (Joe Muggs, Dollop) and even national chains (Caribou, La Colombe, etc.).
For now, we're hyper-focused on building out that network, by adding any interested shop as quickly as possible. That may appear fragmented across the country, but as we increase our speed we'll be able hit a critical mass quickly.
It's only a matter of time until they attempt to carve into another aspect of food ordering, but we're confident that if we stay focused on supporting our target market (coffee) and building the best possible product for that industry, it won't be a concern.
We've made several attempts to work with them, but it hasn't panned out. Feel free to give them a nudge, and you should try out the app at any of the other shops in the area, it's our most dense region in terms of locations.
In terms of biz-dev I'm happy to share, because it's been the definition of doing something that doesn't scale, but it's worked to this point. When we were getting started, our team + family and friends split up the task of pinning independent coffee shops on Google Maps, by using keyword searches like "local coffee," "espresso," etc. From there, we'd profile these locations by documenting their phone number and then searching the web for an e-mail address and (preferably) an owners name.
Once we had those email address, we'd setup sales campaigns to anywhere we had an e-mail address to - we still do this today.
In terms of our approach at scale, we're hyper-focused on partnerships and reputation. 1) partnering with company's like Square, Odeko and a number of roasters has allowed us to find customers in existing channels, avoiding the need to deploy a massive sales team (that requires egregious funding) to knock on doors 2) reputation is everything in coffee, and the more customers we add, the more referrals we get from existing locations.
Because we support a single vertical, having a few customers that love our product and are willing to voice that praise has gone a long way - our goal is to continue facilitating that level of enthusiasm, in order to grow.
If you're interested, look into Luckin' Coffee too - their rise to power is remarkable.
Another option that will roll out soon will be issuing a card that can be used in digital wallets like Apple/Google Pay. One of the best ways the delivery apps (DoorDash, Postmates, etc.) gained traction was not having to ask permission to list places like Starbucks on their app. They could get traction at a location and use it win sales with big brands. By releasing a card payment option, we'll be able to effectively do the same thing.
In terms of why it didn't work out, I think there are two factors to consider:
1) it wasn't their flagship product 2) they had a capped market of support. In essence, they could only build a network of locations within their existing ecosystem, and despite that being large, it wouldn't be big enough to win the space.
I think a 3rd party is most likely to succeed here, because we can facilitate integrations with all of the POS providers, and build a really big network that way.
We were able to solve the varying menus relatively quickly, because after building hundreds of them we realized how similar they were - just random variations of names, sizes, prices, etc. We built out a core menu with built-in descriptions for common items, and we just modify those based on what shops want.
In terms of incumbents, to be honest we haven't spent much time worrying about this. If they build something to compete, so be it. The only thing in our control is how we build the product and network at this point, so we're staying focused on that!
Sorry about the mixup, I had mistakenly changed the link the app was redirecting to, but it should be fixed now. Regardless, you can submit referrals here (https://www.cloosiv.com/invite-a-brand)
Also familiar with CUPS, subscription plans were/are such a gamble for shops, but I can see why it was tempting to try. I think they're still operating in some capacity, but they definitely have a limited consumer presence.
As we scale, it'll be important for us to integrate directly into software like Square (which we're currently working on, we're partnered with them), so shops can just install the Cloosiv app from their terminal and have orders and reporting flow through the existing software in place.
I also like your example about the hand crafted experience, and I agree - in a lot of ways that's desired from the customers that seek out local shops.
That said, we've interviewed hundreds of people (customers, random strangers, etc.), and it's clear that they'd go to their local shop more often if this were an option. It doesn't mean that they'll use Cloosiv for every visit, but if we can be there when they don't have a lot of time, that's a win for the coffee shop and the customer.
As we add payment options like ACH, PayPal, etc. we'll have more wiggle room to adjust the fee based on the final payment method, and establishing a running total like you suggest could increase that variability even more.