The Build #1: Coffee

Turning his hobby into a viable business taught Ben Levin some lessons about staying ahead of trends, competitors, and regulators. It’s the story behind fatCoffee, on Episode 1 of The Build.

Transcript

[00:00:00] Announcer: From 2820 radio in Philadelphia, it’s The Build. Conversations with entrepreneurs and innovators about their dreams, their triumphs, and their challenges.
[00:00:13] Joe Taylor, Jr.: Coffee. More than half of Americans drink at least one cup of it every day. And it’s a 40 billion per year industry in the United States alone. On this episode of The Build, I’m talking to user experience researcher and food entrepreneur at Ben Levin.
He thinks a thousand year old variation on the drink can improve a coffee lover’s day while helping them stay in shape. However, turning his hobby into a viable business, taught Ben some lessons about staying ahead of trends, competitors, and regulators. It’s the story behind fat Coffee coming up next on The Build.
[00:00:51] Announcer: The Build is made possible with support from 2820 Press, providing business consulting and content strategy services to customer obsessed companies. Nationwide more information at 2820press.com.
[00:01:10] Joe Taylor, Jr.: It’s The Build, I’m Joe Taylor Jr. Joined today by Ben Levin, chief ninja at Ninja Goat Nutritional. Welcome.
[00:01:18] Ben Levin: Thank you.
[00:01:19] Joe Taylor, Jr.: Tell us about the name of the company. Where did that come from?
[00:01:21] Ben Levin: 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.
And 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.
[00:01:48] Joe Taylor, Jr.: So, so basically luck of the draw.
[00:01:51] Ben Levin: Yeah. More or less. I mean, I think I was just broadly casting for something that would stand out. Because I think that we spent a lot of time trying to get noticed before we can actually have the conversation we want to have.
So that, that came up as something that I could latch onto and the primary product that you’re working on right now, it’s called fatCoffee. It is a blend of a bunch of different, very healthy, good for you fats, which is a bit of a surprise to people. You often hear those two words together in one sentence, healthy fats, but, 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 a very, it’s actually a very old kind of beverage concoction.
[00:02:42] Joe Taylor, Jr.: How old, how far does this go back?
[00:02:44] Ben Levin: At least a thousand years in Ethiopia. If you’re talking about coffee putting a, usually, a goat butter in coffee is something that dates back there.
And then in Tibet you have a butter tea, which is usually a rancid yak butter is put into tea. So I try to stay to the left, I guess, of rancid. But that is probably at least 1500 to 2000 years old as a recipe.
[00:03:07] Joe Taylor, Jr.: So 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?
[00:03:19] Ben Levin: So I think I 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. And contrary to what I think conventional wisdom would say or has said, it’s not actually a fattening drink.
[00:03:56] Joe Taylor, Jr.: So you are not a culinary professional by training necessarily. You came into this line of how?
[00:04:06] Ben Levin: So I came into this because I’ve, over the past couple of years transitioned into what I think generically is known as, sort of, 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.
And 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 and 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. And, at the time it didn’t seem too appetizing. But the second time around, I guess it did. My wife sent me an email and she said, people are doing this. What do you think this means? We were following a paleo diet for about six months at that point. And I said, I don’t know, let’s try it. How bad could it be? And it was amazing.
And I was making it every day. And for anybody who’s not familiar with the process, you basically take a tablespoon or two of butter, maybe another tablespoon of coconut oil, like I said, is not a low-calorie drink. And you put it in a blender with coffee and you mix it up for, like, 45 seconds. And what comes out is this incredibly creamy, foamy latte. Like, what also comes out is a really oily blender that you’ve got scrub clean and a bunch of utensils that you’ve been using to scoop coconut oil out of a jar and makes a terrible mess for a cup of coffee.
It seemed kind of ridiculous. So I started looking for a way to just make it easier on myself. And 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. And 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.
[00:06:16] Joe Taylor, Jr.: It makes for some interesting TSA agent reactions.
[00:06:19] Ben Levin: Yeah. They don’t play that. They don’t really wanna see you getting on a plane with a jar of oil, or what just looks like a greasy substance. So I was looking for a way to make it travel a little bit better. And to make this something that I could make, like, in a hotel room or, you know, in a restaurant or at Starbucks on my way into the office when I was out of town. And I just started doing a lot of research into what it was about butter coffee that wouldn’t travel.
The first problem is that, like, butter melts. Right? And butter goes rancid. You have to keep it cold or you have to keep it sealed in. And I started looking around and I finally fell in on this idea of using ghee. And 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, and 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. So that’s, kind of, how I got into this idea of preparing something that was gonna be shelf stable, but not by adding a bunch of preservatives and weird chemicals to it just by taking foods that would naturally kind of preserve themselves. And from there, it was really just a very short step into figuring out a packaging solution that made it portable and usable in, sort of, single dose formulations.
[00:07:44] Joe Taylor, Jr.: So 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?
[00:08:10] Ben Levin: So it’s funny because I came up with a solution and it involved packaging one or two ounce portions in these, there’s sort of mylar-y packets that you seal with, like, a heat sealer.
And I was sort of looking at this process and I’m like, well, if I wanna make 10,000 of these packets, I can do it economically. But if I wanna make five, I can’t. You can’t really use like a home food sealer for something like this. So I thought, well, what if I make 10,000? Yeah, I kind of find anybody else who wants this. There’s gotta be somebody else who wants to make butter coffee without the mess, or while being able to travel. And that’s where it started. I thought, well, I don’t know, find somebody else who wants this and maybe we can sort of like go in hand in hand on the cost of product. And 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.
[00:09:19] Joe Taylor, Jr.: And professionally, what field have you been involved in the majority of your career?
[00:09:25] Ben Levin: So I’ve mostly been in the user experience, user centered design field. So 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.
And so 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. And 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.
[00:10:14] Joe Taylor, Jr.: Different consequences compared to an inconvenient app design.
[00:10:19] Ben Levin: Yeah.
[00:10:19] Joe Taylor, Jr.: If the food product does not perform as expected, the stakes are higher. Right?
[00:10:26] Ben Levin: Yeah, definitely. And, I mean, I’ve got experience say working for like pharmaceutical companies and what it’s like to work in a highly regulated industry where you there’s rules. You have to follow about what you can say and how you can say it. And there’s research protocols that you have to follow in order to bring a product to market. And I was surprised, but maybe not unpleasantly, about how much of that translates into the food industry. I mean, you figure you want the food that’s going on your plate to have passed through some kind of rigorous process, or for there to be consequences, if it doesn’t. This was me a chance for me to get, to see all that from the other side.
[00:11:08] Joe Taylor, Jr.: Where does the product get actually manufactured?
[00:11:11] Ben Levin: At this point, there is a shared commercial kitchen out in Westchester at a place called the Artisan Exchange, which is really interesting place to me. It’s like a co-working space, but for food developers. So you can rent kitchen space. You can rent small parcels of production place 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.
[00:11:38] Joe Taylor, Jr.: And right now, where can somebody buy the product?
[00:11:42] Ben Levin: So 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’ll be a couple of snack machines run by a snack, like a local, where you’ll be able to find single packs. You just wanna taste it. And 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, like, carry out.
[00:12:09] Joe Taylor, Jr.: Tell me about the process of engaging distribution partners. You’re going to coffee shop owners and telling them what?
[00:12:18] Ben Levin: You know, 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 fatCoffee. And we were talking about it. I said, here, I’ve got some sample packs, why don’t you take it and try it. And she walks away and five 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. And I wasn’t really ready to go down that road yet because of the production scale that I was at the time. But we’d started chatting and he said, you know, 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. And they’re like, no, no, that’s my butter and coconut oil.
And I said, well, this is perfect. You could sell this here. They wouldn’t have to walk around and, you know, worry about that. Plus, you could mix it here if you wanted to. So 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. Part of the big selling point is that I’m using butter that is from a hundred percent grass fed cows. And right now, if you want butter that is grass fed you can go to the grocery store and buy Kerry Gold, 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. So either 20% of that pat of butter in the metal foil is not grass fed butter or. Two out of 10 months of the year it’s not grass fed at all. It’s a little bit hard to tell.
So 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.
[00:14:13] Joe Taylor, Jr.: How do you even begin to locate a ghee producer?
[00:14:16] Ben Levin: I ran into a great woman at another co-working space at indie hall who is specifically consultant for food startups. And she does this thing – her name is Rebecca Frier – and she does this thing where she’ll sit down with you for two hours with a whiteboard and write down the 500 things you didn’t think of before you start your business. And I highly recommend that experience because it’s better to find those things out before you’re in the kitchen than after.
[00:14:46] Joe Taylor, Jr.: What was the biggest revelation from that experience? What was the biggest thing you didn’t realize or you didn’t think of?
[00:14:51] Ben Levin: The number of complications that were involved in getting basically regulatory approval to sell the product. If you are baking brownies for sale at, like, a church bake sale- go ahead, bake ’em in your kitchen. Bring them to the bake sale. Bake ’em – 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 the product commercially under any kind of brand or any kind of, you know, 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, you know, the agency in whatever county you’re in that happens to monitor whether or not you’re putting on your hair net correctly. And 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. So that was really helpful. It was really helpful to know that cuz 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.
And one of the things that Rebecca gave me was this couple of leads for wholesale ingredient suppliers. She said, I know these people, they’re out Lancaster. These two women, they make ghee – you might wanna 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, you know, 20-30 gallons of ghee in 10 ounce jars.
[00:16:23] Joe Taylor, Jr.: It brought your margins down considerably probably. Yeah.
[00:16:26] Ben Levin: Yeah, yeah. It’s, you know, 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 in, you know, at retail. That’s not terribly insightful, but it was interesting to me to see like where the break points are, you know. 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, cuz that’s what’s built into the wholesale markup. Go to the ingredient producer, the farm, and you might be paying 10% of the retail price for the core base ingredient. So learning all about that and learning about what the production process was gonna be like, that was really interesting to me. And that was a cool challenge to try to solve.
[00:17:17] Joe Taylor, Jr.: Tell me about solving the challenge for pricing the product. I know you’ve got a pretty interesting sampling program on the fatCoffee website.
[00:17:24] Ben Levin: Yeah. So, I was just talking about that with someone this morning. I had this great idea that what I was gonna do was box things up and sell them in multiples of about 30. Say, like gonna have a cup a day for a month, and that would be great. And you could buy one box, you could buy four. 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 one here, one there. And I realized that the price point for that was really steep. It didn’t really encourage any kind of trial. And 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. Cuz I wanna 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. So the first thing I did when I saw that happening, that sort of none, 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 and it was like three. So I built this thing called it’s just a taste. It’s three pack it’s in an envelope. There’s none of the extra specials that come with a full box, like instructions or, you know, any other kinds of materials you’re, sort of, on your own. And I figured out a way to basically sell that a little bit above cost.
Once you factor in everything that goes into, like down to the piece of tape that has to go on the envelope to seal it. So that was a real breakthrough for me because now there’s almost, it’s seven bucks for three 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, like, three 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. And that really opened things up. So I’m seeing, you know, now multiple orders per day. Whereas before it was – this was without any real advertising. I’m getting like an order every three, four days or a week. And that’s been a big breakthrough for me from an overall pricing standpoint. You know, it’s really, I think every entrepreneur kind of 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. Cuz 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.
[00:20:04] Joe Taylor, Jr.: So nobody’s really anchored a price in this product vertical.
[00:20:08] Ben Levin: Yeah.
[00:20:08] Joe Taylor, Jr.: The best thing that you can do is try to make a comparison to what someone might order at a coffee shop.
[00:20:15] Ben Levin: Yeah. Or what does it cost you to make this at home?
[00:20:17] Joe Taylor, Jr.: Mm-hmm.
[00:20:17] Ben Levin: You know, and then talk about like 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 you find on a grocery store shelf. So there are other ways of sort of getting at that value proposition for people.
[00:20:32] Joe Taylor, Jr.: Describe for me the process of, you get this product idea, you’ve been accustomed to doing work for clients. Now you are your own client. What’s that like?
[00:20:43] Ben Levin: Now I have no one to blame when somebody doesn’t listen to me, you know, which I think is an experience that people have when they’re working in an agency environment or even within for a client where they’re, you know, either working for their own company where you have these ideas and you’re really sure they’re gonna 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. And 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. And that to me is really satisfying because I get that accountability in a way that I never got before.
[00:21:26] Joe Taylor, Jr.: 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 are running everything top to bottom, how do you get that stuff outta your head into a place where you can take action on it?
[00:21:49] Ben Levin: Well, we’re talking about, like, literally how do I get it out of my head? I mean, I have tools like Basecamp and checklists and things that I follow in terms of, if I’m making a batch to make sure I’m not like forgetting to add an ingredient into the batch. But I think the other perspective, or 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.
And 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.
And 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 out for ways of reaching an audience. And they said, you know, you can advertise on Reddit and you should try that cuz it’s cheap and it’s easy. And it’s self-service, and it’s really quick.
And I was a little bit skeptical at first, but I found interest groups, subreddits 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, I get them out there and then it hits me the really cool thing about advertising on Reddit is. Ads have comment streams, just like everything else I’m having within four hours, I’m having a conversation with my potential customers.
Hey, you shouldn’t be advertising this year because we like X, Y, and Z, and not a, B and C, but the people over there, like A, B and C. So 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 a thousand 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. So that was a real eye opener for me.
[00:23:58] Joe Taylor, Jr.: How do you validate or tell the difference between what is good feedback and not so good feedback?
[00:24:05] Ben Levin: Revenue. I mean, there’s nothing else for a startup that matters, as far as I’m concerned, than revenue. If you can’t, you know, the whole idea with lean startup 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 the product that’s worth trying to sell. So am I at the point now where I have good statistically reliable data for go this channel or go that channel? 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 six months. For me, the real difference here is that I get to spend the next six months experimenting and getting real time feedback, as opposed to sitting in a room planning what I’m gonna do and trying to convince other people that it’s the right thing.
[00:25:10] Joe Taylor, Jr.: Are you operating this business in parallel to other work that you’re doing?
[00:25:15] Ben Levin: Yeah, it’s the 26th and 27th hour of my day.
[00:25:19] Joe Taylor, Jr.: So tell me more about the experience of juggling all that.
[00:25:25] Ben Levin: I thought about this the other night when I realized that, I mean, I have some hobbies, but basically my hobby is building businesses. So I can kind of justify the fact that, you know, 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 is interesting. It’s an interesting challenge because I’m now 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. A normal, everyday consulting life on the UX side of things. So I have to figure out how to balance that in terms of making sure that, like, I am not stopping when 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, you know, it’s a challenge nonetheless.
[00:26:22] Joe Taylor, Jr.: Is your wife involved in the business as well?
[00:26:25] Ben Levin: Mostly as a consultant.
[00:26:26] Joe Taylor, Jr.: Okay. product feedback.
[00:26:28] Ben Levin: Yeah. Product feedback. And, you know, I think being that person who’s able to ,sort of, level set my expectations and challenge any assumptions I’m making. It’s not an unfair question to ask, is this just a fad? Is this something that’s gonna stick? And 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, like, what’s the next evolution in the product. What’s the next evolution in the company’s product lines that fits the same market.
[00:27:04] Joe Taylor, Jr.: So let’s say that this isn’t a fad and it sticks Ninja Goat Nutritional grows and grows. What’s your vision for the company? Where would you like to see it in say five years?
[00:27:16] Ben Levin: 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. 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. And I 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 anytime. It doesn’t actually bring to mind this idea of a plate full of vegetables and fruit and, you know, that sort of lush burden 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. We make – there’s great evidence, there’s great research about this – we make terrible decisions about our dining choices when we’re stressed and hunger, and a lack of satiety. These kinds of things will make us make just really bad decisions. And one of the great things about fatCoffee is you mix up a serving of this and you drink it and you’ve got probably a good three or four hours to make your decision, cuz you’ll be nice and full. And you’ll be able to, sort of, think about what is it that I want to taste? What is it that I want to experience? So it’s a lever on getting a hold of what your diet is like and what your lifestyle is like as it’s tied. 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 gonna have a lot of benefits, even though it might feel counterintuitive to them.
So I think that my first inclination, when I started this business, was to not have that conversation. Like I just wanted to talk to the people who were already convinced that this was a good idea and. putting butter in your coffee or butter in your tea was a good idea. And that this was just a better, more convenient, higher quality way to do it. But 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 the last 40 – 50 years. Fat is bad. Finally, the studies are starting to get notice that no fat good fat is good, bad fats are bad. Chemically manufactured fats have negative consequences, things that come off of an animal that have been grazing on grass, it’s actually really good for you.
So 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. So I’m conscious about that. You know where that line is, but 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. And if you boiled off the water that was in that butter, you’d have ghee. And so 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.
[00:31:23] Joe Taylor, Jr.: What’s the hardest decision you’ve had to make in running this business so far?
[00:31:28] Ben Levin: Trying to decide, and I’ve been bouncing back and forth a lot between this, whether or not I am trying to build awareness by, 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. You know, 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 dieticians or people who’ve got another product to sell. So I have to be conscious about, like, how credible a voice am? I mean, I’ll be absolutely upfront and honest with people. I have something to sell you and I’m not really shy about saying. But so does everybody, I mean, everybody has a perspective to push. So it’s, that’s been hard for me because I don’t have time for everything. And I have to, sort of, think about, like, what’s gonna actually move the dial today versus what may help move the dial six months or a year from now.
[00:33:13] Joe Taylor, Jr.: What do you feel that you get out of building a community, as opposed to just looking at the revenue number?
[00:33:22] Ben Levin: Feedback? Because I know exactly what the next four variations of fatCoffee are gonna be. I’ll tell you there’s gonna be a version that has absolutely no dairy in. So that’s gonna be interesting to sell butter coffee that has no dairy. There’s gonna be a version that just has no goat milk in it, so that if you have any kind of, you know, allergy or sensitivity to goat milk. There’s gonna 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 gonna be. I have some ideas, but I’m not exactly sure what will fit with what I’m offering. And I know from a long term perspective, that that’s really important.
[00:34:16] Joe Taylor, Jr.: So far, you’ve been bootstrapping building things out because you have a high degree of familiarity with building websites, communicating with customers. Do you continue to bootstrap or do you seek investment capital? How do you get the capital you need to grow? Does it all come from customer revenue?
[00:34:36] Ben Levin: 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 so interesting to me to see, really in cold hard numbers, how producing a thousand of a thing is one kind of challenge. And then you pass over the threshold to producing 10,000 of a thing. And then it’s a hundred or 500,000 of a thing. And with a food product in particular, you’re talking about. If you want economies of scale, your two leverage points are the cost of your ingredients and cost of your production process. My production process right now is me. So, and my cost is zero, except for the lost opportunity of other things that I could be doing. But unfortunately, or fortunately, like the next step is a more or less fully automated production process. That’s got a really big capital investment tied to it. And I’m really hesitant to take on financing because ,for me, I’ve been in a position before where that is – you.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 gonna be a decision that you don’t get to make, or there’s somebody else’s interest that you need to think about in terms of making that decision and 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 bootstrap it and basically just say, look, when I hit a hundred monthly customers, now I know I can make the next leap to be able to do production to support 500 or a thousand monthly customers. But unfortunately there are those hurdles where there’s no real easy way to get around it, except by growing slow and storing up capital and then making a big investment.
[00:36:35] Joe Taylor, Jr.: 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?
[00:36:47] Ben Levin: I’m trying to remember if it was exciting or disappointing, and 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 buildup to when I was actually able to start selling my product, Again, because I knew that I was gonna take that long to get all the net clearances that I needed and time in the kitchen and PR product produced. And I got to that point where I was ready to turn the switch on. And I had like 15 hundreds, 1600 people in the Facebook group who were following along. And that I was reaching, you know, pretty consistently. And I was prepping to say, orders are gonna open up on this date. And you’re the first people who are gonna be able to order, and it’s really gonna be exciting and you’re gonna be able to do it and go, and I opened up the doors and there was like three orders. And I was like, Hmm, I did not sell out my first batch in the first eight hours. What does this mean? Is this good sign or is this a bad sign? And 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. And at the same time, it was like, this is not the impact I thought I was gonna see on day one. So 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 mean, I’ve bought the ingredients I’ve got, I’ve got literally buckets full of coconut oil. There’s nothing else I’m gonna do with it. So let’s make this stuff and see what happens.
[00:38:14] Joe Taylor, Jr.: You mentioned lean startup earlier. It’s not like you could necessarily pivot with the coconut oil, but what did you change in that, you know, week or two right after that first experience?
[00:38:25] Ben Levin: You know, I’m glad you brought that back up. Cuz I wanted to talk about lean’s startup and this idea that, you know, it is so important to get a product out to market. And 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 set. Now you could go to the, 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 the Facebook group and come to the website and sign up for a beta taste. You know, newsletter, which is what I called it. And all those things were true, but they did not necessarily translate one to one for sales.
So, you know, in terms of like, how do I pivot or how did I pivot mostly it was around my expectations. It was around this idea that I am not gonna sell out the first batch before I’ve made it again. Production scale requires you to make, you know, 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 was 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. So 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.
[00:39:59] Joe Taylor, Jr.: So where will we see you next?
[00:40:03] Ben Levin: This week in terms of fatCoffee. This week, where you’ll see me is in fingers crossed – this week, if not it’ll be next week – three different snack, like, a local machines in one here at Benjamin’sD esk, one at Impact Hub and another at indie 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, you know, we’ll see what that’s like over time. I think there are a couple of situations where you will see fatCoffee in other product groupings with other manufacturers sold through like a subscription kit.
[00:41:11] Joe Taylor, Jr.: And last question, a food entrepreneur at the very early stage comes to you right now and asks for advice. What’s the one thing you tell them to do next?
[00:41:24] Ben Levin: Look at your schedule and look at how long you think everything’s gonna take and multiply it by four. Nothing happens as fast as you think it’s gonna happen. And there’s nothing about producing a product that goes as smoothly as you think it’s gonna go. No matter how many road bumps you think you’re gonna hit, there’s always one more.
[00:41:44] Joe Taylor, Jr.: Ben Levin creator of fatCoffee. Thanks for stopping by The Build.
[00:41:47] Ben Levin: Thanks so much for having me. It’s been a pleasure.
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