Today I’m joined by Debbie Mullin, the founder of Copper Cow Coffee.
Equal parts Vietnam and equal parts California, Copper Cow Coffee is the brainchild of Vietnamese American Debbie Mullin, who blended her love for Vietnamese coffee and culture with her background in sustainability.
It brings an authentic, yet modernized, pour-over barista quality coffee experience to homes across the nation. Dedicated to the environment, Copper Cow Coffee is quality-obsessed, eco-friendly, and proud to be part of the 2% (and growing) of women-owned companies with venture funding.
How to approach your acquisition costs
Advice for Raising VC dollars and whether you should or not
Why your network as a founder is highly important and something very exciting we’re launching to empower our female startup club listeners
Please note, this transcript has been copy pasted without the lovely touch of a human editor. Please expect some typos!
Yeah, I am the Ceo and founder of copper cow coffee were a specialty Vietnamese coffee company. We're kind of the first people to be bringing high end coffee beans from Vietnam to the U.
00:03:32 S. Last month was our four year anniversary from shipping products. So we're still in the early days but we've been able to grow a lot every year and kind of whether a lot of storms and yeah very excited to be here and talk about the story. I think I read something online that you tripled your revenue every year since you started, which is awesome. It's awesome. It's painful. It's it's all all the things, yeah, all the things. So copper cow coffee, where does it start? What's the background to your entrepreneurial kind of ah ha moment. So it's kind of a two parter when I think about kind of how the product came to be. It's more a story from, even when I was just a kid about when I be Vietnamese american, I grew up in California but pretty much only eight Vietnamese food at home, especially with my family. And when I got old enough to realize that other people were unfamiliar with the cuisine that I had. I remember saying like oh my gosh, We're sitting on a gold mine, we could be rich if we could just you know show everybody this amazing food, more people need to know about this.
00:04:41 Exactly. And um I think I kind of outgrew that dream for a little, while especially when I went to Vietnam for the first time with my family and when I was about 16 years old and really kind of had a much deeper understanding for the context of why my mom left and the lack of economic opportunity that she had there and just knew that that was something that I wanted to be part of and work on for my career. So I actually first had a more traditional career in international development and sustainability. So I worked at the World Bank and I managed projects that were based on supply chain support, helping people connect to economic opportunities to bring them out of poverty and well, it sounded on paper like exactly what I wanted to set out to do it. You know, being part of a really big organization that was really bureaucratic was just not something that was a good personality fit for me. You know, when you talk about that, aha moment, I'd say it was kind of more of a slow boil of just, you know, you keep going to the next thing and you think it's going to be solved your problems, you're going to have that authority or that creativity or kind of what you really need for my personality type and just wasn't getting it out of that career track.
00:05:50 So when I began to think about what I wanted to do, becoming an entrepreneur became really attractive. The idea of being able to work really fast, be super creative, have a lot of authority and what I did was kind of, the first step was beginning to think like that would be something that could be a good fit for my personality and I had a lot of different bad business ideas, like what I remember at one point because I was working a lot in transportation development in Asia and I thought oh I'm going to create an app where it would tell you how to get from Point A to point B but it would tell you via bicycle, walking, bus or driving, you know, obviously I was not the best, so yeah, but google came out with that like four months later, like you also have to do something that you're the best fitted for, right? I was like city mapper is here and that is great, know exactly, and that's the thing is that it's just not like kind of realizing like what's the best thing for you to do, what do you want to do day to day, what do you like, what do you want to do today today?
00:06:52 What are you strategically good at two, like what really pulls on, what's uniquely you I think is something that was a bit of a journey and so that's kind of a lot of bumping around with different ideas, but this was one that, you know, how do I make Vietnamese food more accessible to people and I came out with a few products before coming up with the coffee and that was when things kind of really took off was when I came up with the coffee concept and so when you started originally with the other Vietnamese, they were condiments or pantry kind of products, I think I read online exactly, it was for you to cook Vietnamese food at home and that was a big lesson for me in market size because that's the thing is that you have to think about, you know, it could be a great product, can be the product that solves someone's major pain point, but if it's only solving it for a very few number of people, it's really hard to Be able to quit your job over, right? So it wasn't until I've kind of moved out of cooking. So I didn't realize things like only 10% of Americans cook, you know, let alone do something as adventurous as trying to learn how to cook Vietnamese food at home.
00:07:57 And so just realizing how, because you know, being a child of an immigrant, you know, we asian americans cook a lot more than the typical american. So just beginning to realize like what's a product that's not just for me, it's a product for a potential customer base is something that is a very important exercise to do as you grow and create a business. Yeah, and I think especially based on what your goals are like if your goal is to have, you know, potentially a household name brand or something that is everywhere and it's huge and it's life changing. Well yeah, you need to be like aware of the market size to make sure there's that demand there, wow, that's really interesting, totally. So what was the thing that actually led you to coffee? Like was it a bunch of research looking at different industries like within the food space or like how did you get to coffee? Well, I had always thought of doing something with the Vietnamese coffee concept. I was really excited. I joke that Vietnamese coffee is the gateway coffee. Even if you don't like coffee, if you try Vietnamese coffee, the way that it's prepared with condensed milk and how these really delicious like mocha and nutty undertone those things.
00:09:05 Yeah, I thought it would be, you know, I'm like it's going to be such a wonderful thing to elevate and mainstream into America. And so I think that what got really exciting about it was beginning to learn about the actual Vietnamese coffee market and both in terms of the supply as well as the demand in the U. S. Just realizing how big the coffee market is in the U. S. For specialty coffee, that specialty coffee has become mass. You know, it's over 60% of the coffee market is specialty coffee here. And then additionally for me to realize that Vietnam is actually the second largest coffee producer in the world and that was something that I was unaware of, I knew that Vietnam had an incredible coffee culture. But I didn't know that that was because they were exporting like the world's coffee and how, because of where Vietnam is in its development, you know, it's been one of the fastest growing economies for the last 10 years. You're seeing the maturity of their coffee industry evolved as well. And so realizing that there was all this amazing specialty coffee that was coming to market that was largely left out of the coffee market in the US and just seeing the opportunity to both address a really large market and to really have a strategic timing with the supply and to create those kinds of opportunities for farmers and processors of coffee to have better wages, better coffee, coffee per pound rates for people to support sustainable organic farming, all those things really kind of all came together really naturally at the timing.
00:10:33 Mm But it's also not just about the actual coffee because the way that you serve the coffee, it looks different as well, right? Like the way that you have this little contraption and you poured of it. Is that like a classic way that it's served in Vietnam? Or is that something that you came up with for this brand? It's actually something that I introduced for the brand. The technology itself is something that's popular in Japan and when I was in Vietnam, I was exposed to it for the first time, it wasn't really prevalent in Vietnam at the time? I just knew that, you know, there's a lot of issues with creating what you call it, ready to drink like a shelf stable bottled product and you know, it's really heavy, it's filled with water, it's really expensive to ship and distribute whether it's to a consumer or to a grocery store. It's really hard to transport and it's got a pretty big environmental footprint that way. And so what's the way that you can take the liquid out? And so that was kind of the premise of that, especially because then you can keep it completely all natural, you're bringing a fresh cup of coffee, you're adding cream or to it.
00:11:39 A lot of people asked like how do you define Vietnamese coffee? Because you know there's cafes in the L. A. Neighborhood that will say they serve Vietnamese coffee and it just means that they're serving it with condensed milk, which is something that's traditionally done with the Vietnamese coffee, but we define it more as the bean origin, you know, because I think that there is something really unique to the taste profile to the varietals of the region to the soil that gives the region these really dark Nettie mocha undertones that lends itself really well to a dark roast coffee which again paired with condensed milk is absolutely phenomenal as well, but you know, I drink it black everyday sounds delicious, yum yum. So what were the key steps to getting the brand started? If you had to kind of drill it down to the blueprint, what did you need to do? Very good question. Um The biggest thing is to come up with how, because this is a CPG company, consumer packaged goods company, So coming up with a brand, a logo, a company name, and then how is it going to be packaged and how do you create those prototypes or that first run of it I think is kind of the first step because that was the way that I approached it.
00:12:51 If I don't have something to sell, you know, it's just getting that first product made, whether that's something that you make yourself by hand, you know, it's just something that you can begin to get it out into the market to see whether your product has legs and really packaging is a huge part of that. So being able to have a basic brand standard, just logo, it's actually like very little for what you need in a way, and then the first prototype of the product and then, you know, you can just go and start selling it whether that's online or at a farmer's market to just begin to get consumer feedback I think is something that's really, really, really important so that, you know that like your packaging is right that you're serving sizes correct. You know, there's a lot of these things that you want to do before you start to really invest in like large manufacturing things or trying to sell it into major accounts or really get a lot of customers, you just kind of want to begin to get feedback. So I think that's the first step is like how do you get something that's just like a minimal viable product where you can sell it to a few customers, you can begin to see what the feedback is from people and what was the feedback that you were getting when you were starting to show these early prototypes and early products to customers?
00:14:00 Great question. There are actually many things that changed really rapidly in the first few months of the company. So I came up with the prototype, you know, just very bare bones and I remember on the front of the box that said, you know, premium Vietnamese coffee, it was like a paragraph of everything that it was like premium Vietnamese coffee, single serve service, sweetened condensed milk, you know, just add hot water. It just had so many things in the front and what's nice is that I was able to do trade shows and farmers markets and just begin to kind of get people's responses to what if they saw all those things. But were the things that they were going to say back to me, you know, like if they were to say like, oh, so this is what is this? Or you know, and to see which things really confuse them versus things that got them excited. So you're able to kind of begin to narrow down in on what you want to have on the package. That was one thing that was really obvious. Another thing was that we did a smaller sort of condensed milk at first and that was because people in L. A. Maybe are a little bit more calorie conscious. So when we were doing kind of like really really small focus groups, we were like, okay, like let's just see, we'll serve it with 20 g vs.
00:15:02 30 g vs 40 g and just see how people respond. And we kind of levelled it based off of people in L. A. Once we started to sell it, people were like, this is not enough sweeten. This look like the typical american legs, Lots of milk and sugar. And so being able to augment that was really important. And then finally the last thing was seeing like we used to just be like this. If you look at our packaging, we have holes in the packaging. We have cut out. So you can see the packets inside, you can touch them, you can feel them, you can really understand that. It's inside the box will be two different types of packets inside. There's cutouts used to not be there and I used to just stand in stores and watch people pick it up and just be so confused. They're like what's a box of coffee, like, I don't understand. So, being able to have lots of pictures on the box cutouts, you can see the packets, you know, these things that you can really see someone's understanding within a few seconds of picking it up, rather than having so many questions, you know? And so having these iterative customer feedback things on the packaging was really helpful. Yeah, that's so interesting, and I was reading you, I think it was actually in relation to your fundraising round, you said that what you would do is go through these pictures and basically figure out what the risks were so that you could redo the pitch and eliminate all of those risks, and essentially what you did was the same, but with your customers by watching them figuring out where their pain points were, and then going back and being like, okay, we need to change this.
00:16:25 So the risks are gone, and they don't have these questions in their mind. Yeah, I think that that's something that really works for me, is my styles entrepreneurs, just like, get it out there, whether it's your product, whether you're raising money, you know, just start talking to people and getting feedback. So you can iterate on, under plan. Iterate on the way that you communicate and iterate on the way that you're proposing something is all really, really important for you to get feedback in real time. I see that happened so many with entrepreneurs is that, and I understand it's like a really vulnerable thing to begin to show somebody your business or show someone your product and have someone tell you that it's not for them because 100% chance, there's gonna be people who tell you that they don't want to invest in your company or they don't want to buy your product, you know, and so being able to get enough responses so you can begin to see a trend line is something that's really important, but I just think is like really, really invaluable. Yeah, totally. I always love to talk about the capital needed in the very beginning to get started, how much you needed to start the brand, how did you finance it?
00:17:27 And what your thoughts were in terms of, did you know, you were going to boot strap it until a certain point and then fundraise or you kind of stumbled across the model of fundraising because you realized, hey, I can't go any further. Um, it's more of the ladder and I think that for me, I just really passionate about making these products and I understood how a CPG business would evolve in order to become like very profitable one day, but I think I really didn't understand at all how much capital is needed to be able to grow it to the point where my dream is totally to build a household brand and so the amount of capital that's needed to do that in terms of distribution, in terms of even just in the early days being able to not be a one woman team, you know, to be able to higher quality people to support your business, all these things are much more capital intensive than you think. And so when I first started, I remember just thinking that I would every month sell a little bit more and every month make more and then hire people and then one day would be a household name.
00:18:29 And that became really clear and I think that's something that's really good as I put some boundaries around, like I made a business thinking account and would like put trenches of money into it so that I like had a very clear like it's really good, I think to have that idea of how much money have I invested in the business, it's not going to be mixed in with all of your personal expenses. And so I remember being like in the very beginning saying, Okay, I'm just gonna put $10,000 towards this and just see How it feels, you know, and being like, I'm okay with walking away having lost $10,000 just to like see how this is and then Things felt pretty good. So I'm like, I'm going to put into their 20,000 and then until basically I was at a point where I'm like I can see a path where I need actually a lot more capital than just the savings that I have from working at the World Bank. And so when I first went out to raise friends and family money and you know, I think that that was again, I think I wasn't totally clear that I was going to have to raise venture funding. I think I still thought that this was going to be like the one round of funding. It wasn't until we got kind of past that route that I began to see, oh my gosh, if you really want to become a household name, you need like some serious capital.
00:19:37 And that's when I started to really go down the venture route and prepare my company for that. I don't know, does that answer your question? Yeah, definitely answers the question. How long in until you realized, hey, I need to raise VC or institutional funding to be able to, I guess it was to fund the inventory like orders or purchase orders to the wholesalers, right? That was like the big kind of orders that you needed to fulfill and you needed to then pay for them up front and all that kind of thing. So what happened was it was more that the opportunity for growth was so great that I was like, I need so much more money to take advantage of everything. I was having to turn down things. I was having to not work towards a really important strategy because of the lack of capital was what happened. So we launched the brand january 2017 at the fancy food show. We just, I had 20 units that I was able to showcase. I couldn't let anybody walk away within each time someone was like, I'm gonna take this home with me. I was like, you can't take that home with you. Actually. I really ended the show with five people kept stealing them from the booth, but it was really just like bare bones.
00:20:44 And we got into 1000 stores like that week, What? Oh my God. And I had raised $400,000 which I thought was like tons of money, You know, I thought it was like more money than I could have, like dreamt of like dealing with. And we were really excited about those 1000 stores. So we're saying, okay, let's use this money, we're gonna fulfill those 1000 stores. But I really was very passionate about how this format was perfect for e com, you know? So I'm like, this is just kind of, we know we've got a good product, we've got this opportunity for 1000 stories, let's fulfill the stores. And it's one of these things were like, you pay the people to make it, They make it, you send it to the stores and then 60 days later they pay you. So I was like, and then six months from now, once with all that happens we'll launch our e commerce platform and we have all this cash. What happened was is six months later we got into another 1000 stores so this cash flow basically, you know you're operating that like you know $100,000 a month with like no money in your checking account and you're just trying to kind of keep things afloat and you're not able to move forward, we're turning down accounts because we don't have enough inventory.
00:21:46 I can't launch anything on e commerce because we can't even afford like anybody to even manage that. I think it becomes this thing where you feel like there's all this opportunity and you're barely even making it by when you're like I could actually be growing like two or three times this rate if I had some capital. Um and so that was kind of the decision because I think that if we had just grown slowly and profitably, you know that that would make sense. But what happened instead was that we were getting all this demand and it was just really hard to not just want to invest that back into the business right away or taken on a new account that's really excited to carry you. So it was kind of more that like if I had more capital I could grow so much faster and smarter and more strategically and get to know my customer more quickly, all these things. It's really a speed thing that made me realize it was VC money, not friends and family money that I needed. Right? Because essentially you would have been able to expand your distribution super, super fast. You would have been able to keep up with demand of people wanting to buy direct from you and obviously that's more profitable and say yes to anything whereas you are having to pick and choose and go slower.
00:22:56 Yeah, I mean until we were able to get VC funding, we were 90% wholesale and 10% Aecom and that Aecom was just purely organic. You know, we had a very bare bone site and so being able to really advertise to be able to afford advertising and you know, you need to hire stuff like I can't be one person and be, you know, supporting 2000 stores and running e commerce like it's actually just not possible and if you don't have any cash to pay people, You know, I mean I was still doing like six people's jobs, I just couldn't do 10 people's jobs at the time. Right, right. Got it. Something that I'm wondering about when you raise VC money and you know, I'm asking because we're working on our own e commerce venture in the future and finally enough happens to be in the food and beverage space as well when you raise that money, how do you work out what you're willing to spend to acquire that customer and how long should it take until you're actually recouping that acquisition cost from your lifetime value of the customer. Um I think that has a lot to do with the comfort of you as the leader, the comfort of your investors because you know I've seen lots of different models out there, you know, and I've seen people it work out in different ways, you know, some people are willing to earn back that acquisition cost over years.
00:24:10 Some people want to make that acquisition cost back on that first purchase. You know, we've always worked from a model of being able to pay for that acquisition on the first purchase. But I think that that's not necessarily the right thing for everybody, especially you know as we move more into subscription, we are considering expanding beyond that because if you're getting subscribers and they're going to be buying coffee every month, I mean why not pay more for them? So I think it really depends on. And also but that's also because we have venture backings, we have cash to be able to strategically do that and just know that like six months from now will have made the money back. For instance. You know, I think that if you're talking about like what our Vcs um what is their appetite for it I think is maybe an easier question to answer because I think it's very personal. But what I find is that typically people want to see a 3 to 1 L. T. V. Two CAC ratio. So you define what your LTV, is that the lifetime value of your customer, whether that's six months or 12 months. I think the most you really should say is 18-24 months.
00:25:12 I think a year is pretty standard though. And then that should be that LTV number should be profit. So that should be like not the amount of cost for you to make your product, not the amount that it cost for you to ship the product or get it to leave the warehouse. It should all really be like that profit that you made and then the advertising cost should be one third of that. If that makes sense. Got it. You got it, wow, that's so interesting. Thank you so much for sharing. Mhm Sure. Hey it's doing here. I'm just popping in to bring you a quick message in every episode of the FSC show. You'll hear women who were just like you trying to figure it all out and hustled to grow their business. And I would know a lot of you might be sitting there asking yourself, but how do I actually scale my revenue and get to that next level from where I am now. You also know that so many of the entrepreneurs I speak to have mentioned facebook and instagram ads as a crucial part of their marketing myths from today onwards.
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00:28:09 But I think that what was really hard was in the early days, like we had a very low velocity meaning that like we weren't sell