Tech CEO Takes on Coffee, $325k Raised, $17k in GMV in Jan 2017 Helping 750 Buyers Find Their Coffee with CEO Tyler Tate

Tyler Tate

In Episode #644, Nathan interviews Tyler Tate. He’s the CEO of, the coffee marketplace. Previously, he co-founded TwigKit, which is an enterprise search software and was the first design lead at Nutshell, which is a SaaS CRM platform. In each case, he used product strategy and design thinking to play its part in envisioning, designing and building products from the ground up. He’s also co-authored the book called Designing the Search Experience which Morgan Kaufmann published in 2013. He’s spoken at numerous conferences. While at TwigKit, he consulted for organizations such as The Financial Times, Thomson-Reuters, Qualcomm, Vodafone, ITV, Rolls-Royce, BASF and Gemalto, helping them design search-driven applications. He’s originally from Alabama, went to University of Kentucky, and spent 7 years in UK. He’s also lived in Seattle and currently resides in the San Francisco Bay area.

Famous Five:

  • Favorite Book? – Tyler prefers reading blogs at the moment
  • What CEO do you follow? – Michael Dubin
  • Favorite online tool? — Trello
  • Do you get 8 hours of sleep?— 7
  • If you could let your 20-year old self, know one thing, what would it be? – Tyler wished he realized earlier how important a network is

Time Stamped Show Notes:

  • 01:35 – Nathan introduces Tyler to the show
  • 02:41 – In TwigKit, Tyler was selling an expensive software product to large companies
  • 03:00 – Tyler learned that he’d rather do something that is more marketing-driven than sales-driven—something that is more consumer-driven than enterprise
  • 03:14 – Tyler’s realization in switching to a coffee company from a SaaS business
  • 03:28 – At Nutshell, Tyler was the first design hire
    • 03:33 – Nutshell has 3 founders and a CTO
    • 03:53 – Tyler, together with the whole team, was able to build something from the ground up
    • 04:01 – Tyler had some equity in the business
  • 04:38 – Tyler had put in $15K to Crema
  • 05:05 – Tyler sold his equities back to TwigKit and Nutshell
  • 06:03 – Tyler started working with Crema early 2015
    • 06:08 – Tyler did a Kickstarter campaign and made $25K
    • 06:19 – Tyler closed and had an Angel round
    • 06:25 – A total of $325K was raised and $150K came from 500 startups
    • 06:48 – 500 startups had a deal of $150K for 6% which is a standard deal
  • 07:21 – Crema is a marketplace for coffee drinkers to subscribe to roast-to-order beans
    • 07:35 – Crema has a platform fee on every order
    • 07:43 – When you buy $18 worth of coffee, Crema takes a $9 platform fee and the other $9 goes to the roaster
    • 07:58 – The price that you pay is almost similar to retail price and the roaster price is above their typical wholesale price
    • 08:15 – The total price includes shipping and other fees
    • 09:00 – $9 is a flat fee no matter the order size
    • 09:46 – Crema’s concept is a single-origin emphasis
    • 10:12 – Crema does the co-production for the roasters
    • 10:24 – Crema has a storytelling team that write journalistic write-ups for their website
  • 10:43 – Team size
  • 11:06 – Crema currently has 15 roasters
    • 11:11 – With a total of 60 types of coffee beans
  • 11:27 – Crema had 750 customers in January 2017
    • 11:30 – Generated $17K on the platform
  • 11:44 – Crema’s growth is 28% month over month
    • 11:48 – “We’re targeting something like 10x growth”
    • 12:07 – Crema’s growth metric is based on GMV and revenue
  • 13:55 – Average cart value is $17 for a typical purchase
  • 14:08 – Each box of coffee is shipped individually
  • 14:43 – A customer spends an average of $23 a month on the website
  • 15:05 – Crema started in Kickstarter in October
    • 15:13 – Crema has been generating organic traffic since then
  • 15:48 – Crema has spent $5K for Facebook paid ads
    • 16:06 – CAC is around $20-25 to convert website visitors to subscribers
  • 17:02 – Crema ran surveys about people’s coffee drinking preferences
  • 17:29 – Crema had sample packs for new customers allowing them to try 4 different types of coffee
  • 20:15 – The Famous Five

3 Key Points:

  1. Shifting from B2B to B2C is a breeze when you really know who you want to target.
  2. Great storytelling can engage consumers and connect them to the product.
  3. Do not hesitate to meet people, move around, and build a network for yourself.

Resources Mentioned:

  • The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
  • Organifi – The juice was Nathan’s life saver during his trip in Southeast Asia
  • Klipfolio – Track your business performance across all departments for FREE
  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
  • Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
  • Freshbooks – Nathan doesn’t waste time so he uses Freshbooks to send out invoices and collect his money. Get your free month NOW
  • Show Notes provided by Mallard Creatives