#54 Is Selling in Walmart a Good Thing?

There’s a third wave in coffee a-brewin’ … and at least one investor thinks it’s a wave worth riding … 

Charles: It is a lifestyle thing. Once you become a pourover person … it’s what you want to drink.  And if you’re a coffee person, this is where coffee is going 100% 

And going with it is today’s startup — Copper Cow Coffee. 

In fact, founder Debbie Wei Mullin has already bootstrapped her way into stores across the country. And while that’s great, if she wants venture backing, she’ll have to prove she’s ready to take on the world’s biggest marketplace: the internet.

Let’s see how she does...

I’m Josh Muccio and from Gimlet Media, this is The Pitch.

Our investors today: 

Alexandra: Alexandra Stanton.

Alexandra is CEO of Empire Global Ventures and on the side, she likes to make strategic bets on startups she thinks will strike gold.

Phil: Phil Nadel.

As a serial entrepreneur Phil built companies that sold for hundreds of millions of dollars. Now he manages one of the largest syndicates on AngelList.

Charles: Charles Hudson

Charles started Precursor Ventures where he’s invested $20 million in over 100 startups to date. 

Sheel: Sheel Mohnot

Sheel has sold 3 startups for over $50 million dollars. Now he’s an angel investor and he’s invested in several companies worth billions today.

Alright, on with the pitch. 

Debbie:  When do I start?

Phil: How about now?

Debbie: Okay. Hi, I'm Debbie. I'm CEO of Copper Cow Coffee, where we reimagine Asian beverages for your home, office, and adventure  So my mother is from Vietnam. She emigrated here in ’75 as a refugee. And even though I was born and raised in California, I actually ate Vietnamese food exclusively in my house.  I actually remember being in college and bringing all my friends home to my mom's house for brunch and people being totally blown away by all of the flavors, especially Vietnamese coffee. And I thought that people would love Vietnamese coffee if it was just presented to them with really, really great ingredients and innovative packaging that fit their lifestyle 

So Debbie started Copper Cow Coffee in 2016... an easy-to-make Vietnamese coffee for people on the go.  

And she got a great response. Within a year, her coffee and Thai Iced Tea products were in more than 3,000 stores across the country, including Walmart. 

Debbie: But I think that retail success is just the beginning  because I think the future of Copper Cow is actually really in selling online as well as into offices. Since launching online earlier this year, we've been growing 20% month over month, completely organically. And then we've also launched an office coffee program this summer, and we're already in over 40 offices. So I'm here today to raise $2 million  so that we can have Copper Cow Coffee be a household name. 

Phil: Great. Tell us a little bit about the product. You said you made it super convenient?

Debbie: Yeah.

Phil: So tell us.

Debbie: So actually, why don't I make you guys some coffee.

Alexandra: Absolutely.

Debbie: If you guys are ready for it? Awesome. 

Alexandra: It's very attractive, the packaging.

Debbie: Thank you.

Alexandra: Well done. 

Debbie tears open a matte black-and-white packet. 

She pulls out what looks like a white teabag with a perforated top and paper tabs on each side. Inside the little bag is a single serving’s worth of ground coffee.

Debbie: So the way it comes is a portable pour over so it’s just in this handy little packet  You open it up and it just fits over your cup. You tear off the top. And…  

Extending those tabs, she suspends the open coffee pouch over the mug. And starts pouring hot water over the coffee, which filters into the cup. Tada! It’s pour over … And it comes with a little packet of sweetened, condensed milk.

Phil: So is pour over, and again, forgive me, because I'm not a coffee drinker, is that unavailable otherwise? Are you the only one doing pour over for in home use?

Debbie: There's a couple other companies who are selling a similar format. This format actually comes… If anybody want to try it black first? Okay. Here you go.

Charles: Thank you.

Debbie: It's a little super strength right now.

Alexandra: I’ll do it with the condensed... M-hm. 

Debbie:  So Vietnamese coffee is kind of known for its strength. The varietal is very caffeinated. This is probably one and a half to two cups of coffee of caffeine.

Alexandra: So if I’m someone who drinks half a pot of pure espresso in the morning, am I good?

Debbie: Yeah, this would be awesome for you. Yes 

Phil: What is your background? 

Debbie: So my background is, I went to Berkeley and MIT and I used to work at the World Bank in supply chain management and project finance. So the...

Phil: This is your first rodeo in terms of starting a company? First time founder?

Debbie: Well, actually, I first started about five years ago with a cooking line for you to make Vietnamese food at home. So I did that on the side while I was still at the World Bank. And I got into lots of stores, got into several regions of Whole Foods, Dean and Deluca, a lot of really great stores. But when I would call them and be like, how do I get it to move more? They'd be like, well, it moves great for the category.

[laughter]

Debbie: And I began to learn that only 10% of Americans cook. You know, and I need to meet my consumer where they're at. And I'm not going to convince 90% of Americans to cook by an oil and vinegar line. But I, Vietnamese coffee was always top of mind as a product. Because I had so much, I thought, proof of concept of people really loving an elevated Vietnamese food concept. 

Sheel: And so, and you guys are Vietnamese, so there’s obviously the condensed milk part of it. What percent of your customers are using it just for the coffee versus the Vietnamese coffee? Like the condensed milk add on?

Debbie: Right. So about 60% of Americans drink their coffee with cream and sugar. And we find about 80% of our customers drink it with the condensed milk.

Sheel: Okay 

Charles:  what's the price point per serving...

Debbie: So it really ranges. So in retail it's pretty high. It's about $2 a cup. And that includes, but that includes the creamer 

Sheel: Okay. So $2 retail. Can you take us through just the numbers quickly? Like what does it cost you? What do you sell it to the retailer for generally speaking? 

Debbie: So we have been selling with a consistent 45% margin for wholesale. Because 80% of our business is still retail because of all the retailers that we're in. Historically it's been a higher margin for ecom, though we're going to kind of reconfigure ecom to be a subscription model where you get months supplies of coffee.

Sheel: Makes sense. And what are hearing from the retailers? How do they feel about how sales are going for this category? Are they reordering? Are you at that point yet with Walmart?

Debbie: Yeah. Well, Walmart is selling really well. We're doing about two turns per store per SKU per week. So that's really strong for the price point. And it being a brand new product.

Alexandra: In the coffee, not the tea?

Debbie: Both.

Alexandra: Equally?

Debbie: The tea is selling a little bit higher in Walmart.

Alexandra: Interesting 

Debbie: Umm  

Alexandra:  do you have a sense within offices  who is drinking your coffee repeatedly? right? Is it the junior account executives who are 28? Is it the C suite?  Who is it? 

Debbie:  So what we find is that people over the age of 35 are not very flexible about trying new coffee drinks. So  it’s primarily millennials. Yes. Especially people, the highest conversion is definitely people who have experience with specialty coffee as well as we do have some really diehard umm like fans who know about Vietnamese coffee. But Vietnamese coffee is still a pretty unknown commodity. So... 

Phil: Yeah, I was going to say like a narrow... I’m not a coffee drinker, but this sounds like a narrow niche that you’re addressing. So how do you get people to try it for the first time if they’re not familiar with Vietnamese coffee?

Debbie: Well, one thing is definitely just beautiful branding  umm I think it’s, even though Vietnamese coffee, if we say just Vietnamese coffee, I think that does sound a little niche. But the idea of it being like a specialty Asian beverage brand  It’s definitely, umm I think, something that people want to try. 

Charles: Do you have a sense in the offices, are people using this as a replacement for K Cup? Or just sort of normal filter coffee? Or is this sort of more like a special treat? How does it play out in the office environment?

Debbie:  So for our smaller office clients,  it's a K Cup replacement  what some of our other office clients, like Lyft headquarters carries us, they buy about $3000 of Copper Cow a month,  and they have 15 types of coffee, and we're just one of the many exotic coffees that they provide.

Phil: And so what are you doing in terms of revenue so far? 

Debbie: So  last year we did 200,000, and this year we're looking to do 800,000.

Phil: Okay 

Phil: So Debbie, you're raising $2 million, you said, right?

Debbie: Yes.

Phil: And what are the terms. 

Debbie: It's a 5.5 pre money valuation.

Phil: And how much of the 2 million has been committed so far?

Debbie: Um, 1.725 

Charles:  I just have to disclose I'm an investor in DripKit.

Debbie: I know.

Charles: So I just want to be clear in case there's anything you don't want to share or anything like that. I just want to put that out there. So I'm going to have to be out, but I am a big believer in the category.

Phil: You got a free cup of coffee first, though.

[laughter]

Charles: It's very good. It is very good coffee. And I just wanted to put that out there before she goes into the competition, that's all.

Alexandra: Very thoughtful of you. Very thoughtful.

Phil: Does DripKit, I don’t know about DripKit, do they do pour over coffee?

Charles: They do. They do. But they don’t do Vietnamese. They do more traditional, it’s more of a traditional single use pour over coffee , I have like three of them in my bag. I travel with them. This is totally a thing. And if you’re a coffee person, this is where coffee is going 100% 

Since he’s already invested in the competition, Charles is out. But he’s noting that Debbie is a part of this trendy Third Wave of Coffee.

Third Wave Coffee companies obsess over every bean, from where its grown to how it's processed. Then they help you PERFECT the brew at home. And that’s what Debbie is doing with Vietnamese coffee and Vietnamese coffee growers. So even though Charles can’t invest in Copper Cow, his endorsement of the overall trend actually could be good news for Debbie … if she can prove her product is unique. 

Phil:  what’s your differentiation from Dripkit?

Debbie: Well, first of it’s definitely the blend. Vietnamese coffee has a very different profile than... They’re definitely highlighting a lot of these really light roast single origin coffees, which honestly are a little unforgiving if you mess up the brew. Our Vietnamese coffee, we’re the first people to be introducing third wave Vietnamese coffee. Historically, this is something that’s actually pretty new. Vietnam’s the second largest coffee producer in the world, but just in the past five years have started to have high end beans. So it’s really awesome to introduce that, it’s really smooth,  it’s definitely a really, it’s kind of a wonderful foolproof brew. 

Charles: Can I ask you a slightly different question?

Debbie: Sure.

Charles: Which is, I feel like I'm a big coffee person. I feel like part of what helped the third wave mainstream coffee people is they were a unit. There were four, five, six roasters who were all pioneering together. And I think if you want to add up Blue Bottle, Intelligentsia, all those folks, they collectively lifted each other's boats.

Debbie: Totally. I completely agree.

Charles: And is that happening in Vietnamese coffee? Or are you sort of the pioneer? 

Debbie: No, it's totally happening. In Asia, in general, third wave coffee is really, really exploding  Particularly in Vietnam  

Charles: But I mean in the United States, because I feel Blue Bottle, Intelligentsia, Sightglass, those folks, Ritual, they all helped, they didn't collaborate, but because you have four or five really strong brands pioneering high quality coffee, it raised everybody's expectations for what the product should be. And it feels to me like from what you're saying you're on the front wave of the third wave for Vietnamese coffee. 

Debbie: I would say that I'm the only person who's really bringing high end Vietnamese coffee to the US. Because it’s such a new thing. And it's such a new market and there really isn't an awesome super fun millennial focused accessible coffee company.

Charles: Yeah 

Phil:  So that’s one of my concerns about this. Is that I still view it as being a real niche. And I wonder, when you say it’s on trend, what informs that decision? Why do you think that it’s on trend?

Debbie: Umm I definitely think it’s the 3000 retailers. How quickly we’ve been able to get into stores. I mean, it’s not, it’s really not common to be in Walmart and your, to be, we got into Walmart 12 months into business.

Phil: I agree with you. So what is it about the product that Walmart and these other retailers are attracted to? 

Debbie: It’s pour over, definitely. And just that high end coffee in retail space is trending. And a lot of  really, these great companies that you’re talking about, Blue Bottle, Intelligentsia, La Colombe, you know, they’re really fixated on either a ready to drink beverage, which is heavy and not shippable, or they’re talking about coffee beans.  And so this, so both pour over, as well as it being an elevated Asian brand  Asian concepts are really, really hitting well with Asian Americans, which is one of the fastest growing consumption areas in the US  

Phil: What percentage of your current revenue, let's say for 2018, is from online and what's, what percentage from office and what percentage from retail?

Debbie: 80% from retail. 10% from online and 10% from offices.

Sheel: What do you want that to be next year?

Debbie: I would love it be more of a third, third, third 

What the investors just heard is that this business is almost entirely reliant on brick and mortar channels like Walmart. 

But for someone like Phil to invest, Debbie will need to convince them that she’s got a solid plan for how to grow her business via the internet. Which represents a much bigger opportunity.

Phil:  What about online? So what's your current customer acquisition cost and what channels are you using?

Debbie: That's the thing, is it's been all organic to date. So we haven't really, and that's one of the things that we're really going to figure out with this funding  Because when we launched the product line, we did at the fancy food show with a lot of my contacts that I had in the retail space, and we've just been falling ourselves trying to like meet that demand, when really we would like to focus on direct to consumer, on online  And so... 

Phil: How are they finding you currently? When you say it's organic, so how are they...?

Debbie: They find it in stores and they buy it online.

Phil: I see. Okay. That makes sense.  

Phil:  So who are you going to hire or bring on to help with that since you don’t have a lot of background in online direct marketing.

Debbie: So immediately we want to hire a digital growth marketer, someone who can really execute a lot of the Facebook ads,  Google ads, things like that. But right now I’m doing lots of ‘dating’ for a more senior head of brand person, or head of ecom. Someone who is experienced building an ecom brand  umm Probably from fashion or cosmetics, based in LA 

Alexandra: Charles, what has been your experience, obviously leaving out any competitive details, in terms of the arc of a brand like this? And what Debbie may run into.

Charles: I think the best trend that Debbie has going for her  is that I think once you become a pour over person, it’s kind of the only kind of coffee you want to drink.

Phil: Why is that?

Charles: It’s a lifestyle. Like, once you’ve had... I don’t know. I drink a lot of pour over coffee.

Phil: Just because it’s easier?

Charles: No, it’s better. It’s actually not easier. I make pour over at home, I have pearl scale, I’ve got a whole set up.  It’s better. It’s cleaner. You get a better, not to get too coffee nerd, you get a better expression of the bean.

Debbie: Totally.

Charles: It’s just a better coffee experience than French press. And drinking drip brew is yeah.  I used to carry a filter and an electric kettle in my suitcase and it was a lot of space.

Alexandra: Yeah, seriously? 

Charles: No, no, I'm not even kidding you. I used to carry this with me.  and like Phil, this will give you a point of reference, a good cup of pour over coffee in New York or San Francisco is going to run you 4 or $5 in a coffee shop.

Phil: Okay.

Debbie: Or more.

Charles: Or more  So if you're a pour over person, the idea of being able to have pour over in your office or on the go with you, it's a lifestyle  And once you become a pour over person, it's what you want to drink 

Debbie:  And this is something that takes 60 seconds to make and offers really, really great flavor  And so this is what I think is really beautiful about a lot of the great ecom companies that I'm trying to aspire to, is that they really maximize kind of price point as well as luxury. And I feel like Copper Cow does that.  We're not the most expensive coffee on the market. We're really, really great coffee that's really easy to make that empowers anybody to make their own coffee without having to think about - do I already own a French press? Do I own a Chemex? Do I own a drip coffee maker? 

Phil: But how difficult would it be for Starbucks to offer more pour over options? And make it more of a mainstream part of their product mix?  

Debbie:  I would say that the typical consumer that we're going after, is somebody who wants something better than Starbucks. This is much better than Starbucks coffee. It's much higher grade. You'll be able to taste the difference between a Starbucks or our pour over.

Phil: Well, let me get a third party opinion. Charles, you're a coffee snob. You just tasted it.

Charles: I avoid Starbucks 

Phil: But I want to hear what you think of the quality of...

Charles: I think this is excellent. And I think that this is a very, and I drink, I like Vietnamese coffee, I think this is a very good expression of Vietnamese coffee 

Alexandra: So on some levels, Debbie, to succeed over some of these other brands, is not just have to get the other small emerging brands, but she has to persuade on some levels Starbucks drinkers to switch.

Charles: I disagree. I mean, Blue Bottle was a $700 million outcome with maybe 30 or 40 retail locations at the time that they sold. But a very loyal, high LTV.

Sheel: They built a brand. The acquisition was not about how many stores they had. It was about the brand that they built. 

Alexandra: Mhmmm

Debbie: If you’re familiar with coffee company acquisitions, they’re always quite large.

Charles: The multiples are fantastic.

Debbie: Coffee companies that you haven’t even ever heard of are selling for 300 million. 

[silence]

[laughter]

Phil: There's a lot to like here. You know. Everyone's looking at me. There's a lot to like here.  I think... Judging by what Charles is saying about the coffee market, and Debbie what you're telling us about being on trend in terms of Asian, you know the Asian market, but also the ease of use of the pour over coffee and the strength and the quality of the product,  and the differentiation in terms of the creamer. There's a lot to like here. I think you've made tremendous early progress with third party retail, which is really impressive. And your revenues for an early company are reasonable, especially relative to the valuation you're looking for.

Debbie: Yes, yes.

Phil:  So I guess for me  So and then I keep coming back to the fact that I see it as somewhat of a niche product, in terms of either high end, very high end  Vietnamese coffee.  I don't know how mainstream it'll be 

Debbie:  it's definitely a high end coffee. Like I said,  But we're going to, with the subscription model and for offices, we're cheaper than Nespresso. So we're somewhere halfway between a K Cup and a Nespresso pod. So when we talk about market size, I do think that there's a huge market for this price point.

Phil: Yeah. I guess, you know, I wish... I find myself wishing that you had more traction online.

Alexandra: Me too.

Phil: Or at least that you had the team in place with that experience to build the online presence  I just would love to see more traction in that area. Ah... So I’m having trouble with it. I’m having trouble. I’m conflicted.

Debbie: Let me ease your troubles. Tell me.

[laughter]

Phil: I’ve shared with you... Well, this is your chance. Give me, give me your best shot at why I should invest.

Debbie’s best shot … when we come back.

[break]

Welcome back. Before the break, Phil was struggling over the decision whether to invest in Copper Cow Coffee. His big hangup is that founder Debbie Mullin hasn’t made much of a dent online. And even though her coffee is doing pretty well in brick and mortar stores, VCs get way more excited about direct to consumer, online sales. In stores, you don’t know how any one customer will act. Like if they’d buy again, and how often. But online, you do. And that's the kind of thing investors like Phil want to know.

Phil:  Well, this is your chance. Give me, give me your best shot at why I should invest. I’ve told you what my concerns are, I’ve told you what I like about it. I think the valuation is reasonable. It sounds like you have good institutional support. So there are a lot of pros. But I’m concerned about some…

Debbie: And I think that’s something that’s come up with investors a lot. And I think that the rebuttal for that is a couple of things. One is that my background, I’m like in analytics all day. I went to Berkeley, I went to MIT, I was an analyst at the World Bank. Honestly  I think my skill set is going to be growing online in an iterative analytical strategy. And even though I haven’t done it before, I know that I’m going to be able to find the right partners to do it and really conquer this space. So I mean, I know that it’s not something that I have necessarily a background in, but I also didn’t have background in food and have like done really well since quitting my job two years ago.

Phil: What did you... What did you learn from that food experience? What was the primary takeaway?

Debbie: The primary takeaway was  that I can’t just bootstrap this into national distribution. This is something that really requires specific partners. And the other thing was just that there is such appetite for this type of brand. And there’s nobody else doing something that kind of has this type of... It’s something that’s familiar, it definitely pays homage with the flavor to the things that I grew up loving as an Asian American, but it’s totally elevated and modernized for the American consumer so that everybody can get on board with it 

Phil:  You know, like you Debbie, I’m a numbers person. I’m an analytics junkie. So I like to see customer acquisition cost, I like to see lifetime value, I like to see all the numbers from the online sales channel. We’re just not there yet. So I think I’d rather... I’m passing for now. But I’d like to look at this in the next round.

Debbie: Great 

Phil: Great. Great. I hope so. Thank you.

Phil’s out. Here’s Sheel.

Sheel: So I, first of all, I love you. I can’t believe, I’m... I think the fact that you’ve built this and got it in 3000 stores basically all by yourself is incredible. And I think you should get a ton of credit for that.  My fiancée, by the way, is addicted to your product. She, every single day, and like when we go on trips, she takes it with her. So I think you have an audience that loves the product  So I think that’s awesome. I’m not a coffee drinker  For me, it’s just a category I don’t know well enough to make an investment  I wish you the best. But for me personally to invest in this round, I’m passing 

Sheel’s out. Debbie only has one shot left: Alexandra.

Alexandra: I have watched Glossier with...

Debbie: One of my faves.

Alexandra: Exactly. Right. They’ve built that channel. But those audiences and how they tested early were everything.  I think I'm a little stuck around the marketing piece of it, as well. Because you do, I agree with you, the Lyfts and the Walmarts of the world are very attractive and great for a year old company to get someone's attention saying okay, there's some retail stickiness here. And they're sticking with you. But that online piece is going to be everything.  But I’m passing for now. But I’m a huge, as Sheel said, I’m a huge fan of yours. I think you’re a badass.

Phil: In a good way.

Alexandra: That is a good term.

Sheel: I do think that you guys, seriously, like she built this to a million dollars in revenue all on her own, and you're like, oh, I need to see more proof? 

Phil: Proof online.

Sheel: Proof online. Yeah, like...

Phil: Third party retail is not a business.

Sheel: I've hired growth markets. She could hire a growth marketer. I don't think that she needs that skill set as a cofounder. Like, and this is a seed deal. I don't know what you're expecting.

Phil: That's a good argument. Right? But if you're an investor who likes to invest in direct to consumer companies, this is not yet it.

Sheel: That's fair.

Alexandra: Correct. 

Phil: She's moving in the direction of the kind of company I want to invest in, but...

Sheel: But it's not there yet.

Phil: Not there at this time. It's early.

Alexandra: But you’re tremendous. And congrats.

[crosstalk]

Debbie: Thank you. Thank you guys for the opportunity.

Phil: Congratulations. You’ve done a great job.

Alexandra: Thank you.

Charles: You've built a great product.

Alexandra: Yeah, we’ll stay in touch.

Debbie: Awesome. Thank you guys.

[thank yous]

Phil: Seriously for me that was a tough one. Because there's a lot there to like. There really is. And I just needed that online piece.

Sheel: Yeah, I think that's fair.

Charles: And D2C, Dripkit is almost exclusively D2C. You just learn so much more about who your buyer is, why they buy. All the questions you had, who's your buyer? How often do they buy? We didn't talk about repurchase rates. This is all stuff that...

Phil: She doesn't know that stuff.

Charles: And you can't know with retail.

Sheel: Yeah. That's true.

Alexandra: You can’t know  

Charles: And look to me sometimes  sometimes anti-patterns work. She's doing the opposite of what my instincts say to do, which are like target people who are already familiar with the category, who like Vietnamese coffee but don't want to go through the hassle of making it. And sometimes the anti-patterns work.

Sheel: My first instinct when I heard of this company maybe, it's almost been, maybe eight, nine months ago, was like yeah. This is such a niche. But over the past several months, I've started to see it in offices everywhere in San Francisco. And I see people loving it. And so I think, I don't know coffee, so I thought it was a super niche product. But it is mainstream 

Phil: I'm curious, would you, if you didn't have a conflict, would you have invested Charles?

Charles: No. Because I would have preferred to see her start, just say like you have to build this brand ground up with consumer love and attention.

Phil: D2C.

Charles: D2C.

Phil: Yes. I'm with you.

Charles: We're not going to get distracted by the opportunity to distribute in retail because it's not going to give us the connection with the customer that we want.

Sheel: But I think there probably is something to it. Like, I've seen people who literally saw it at retail and then ordered it online.

Charles: Yeah. That's right 

Phil:  So here we are talking about the brand, and the importance of building a brand especially in D2C. Do you think that as a young company that her early decision to distribute through a thousand Walmarts is a mistake in terms of brand?

Charles: Yes.

Phil: I do too. Right. Because...

Alexandra: It's hard to turn that...

Phil: Walmart is mainstream America. That's not the brand you want to build for this. I think you want to go after that high end coffee drinker, and Walmart's not the right channel.

Alexandra: She probably thought that was a way to get investors.

Phil: Well, it’s also great distribution, get the word out. Get immediate sales. No doubt. But I do think that from a brand, building a brand perspective...

Sheel: It feels off.

Alexandra:  Look, she had an earlier food company and she learned a lot. Phil’s question to her was a good one, what she learned. Right? And she’s going to learn here because she has basically no online experience, no marketing experience, and no one inside on marketing. And she’ll learn and make some mistakes. The Glossier example is a very good one for her, and I did have some questions as to why from jump there wasn’t someone, perhaps not a cofounder if that’s a little hard to imagine, but someone a little more advisory by her side. She could have said, you know, I’ve got this person, we meet twice a week, we take a look, we’re planning stuff. There’s a lot of ways to answer that question, and she didn’t.  You can't say I'm shifting to D2C, but I've got no one inside and no one over the course of the first year, and no one advising me.

Phil: I don't even have an agency. 

Alexandra:  I'm just telling you, it wasn't enough there. 

Charles: I'm surprised Phil stayed in that long. This was like, I thought that this was the total anti-Phil deal. No metrics, no numbers. And I was...

[crosstalk]

Charles: I could tell you were hanging in there. I was really actually surprised.

Alexandra: There is almost a million in revenue. There are 3000 stores. There were some numbers.

Phil: There were some good indicators there. But not exactly what I’m looking for.

Charles: I was surprised. I thought Phil would have been out 20 minutes in.

Debbie left the room without investment. And it all came down to the fact that investors wanted to see her product online, not be so dependent on retail stores. So I wanted to get her take on that retail vs. online debate. 

Debbie:  for my path, I know that being an entrepreneur is equal parts you know, doing what you really believe um, is gonna be what’s great long-term for your brand, but then also taking advantage of the opportunities that come to you  and I just thought it was such an incredible opportunity um, that was just gonna pay money right then. And you know, every, every few months we’d say, okay, let’s just fulfill this really great retailer, and then let’s switch over to uh, focusing on e-comm. But every few months we would get into another thousand stores, and so, um, it just kind of really delayed that process  but when Walmart calls you up  it’s, it’s a really hard thing to turn down. You know  even if it did divert our focus for a few months

But here’s the crazy thing, immediately after Debbie left the studios at Gimlet, she headed straight to another pitch meeting, this one with one of the partners at Social Starts, Mike Edelhart.

Mike:  When Debbie sat down with me, the first thing I did-- And she brought some samples. And I picked the samples up and looked at her and said ‘Really? Vietnamese Coffee? You think a Vietnamese coffee company is venture-backable? Why?’  Debbie looked me in the eye, with a very forthright posture and said, ‘Whoever said I was in the Vietnamese coffee business?’ I said,  what business are you in then?’ 

Debbie explained the third wave coffee trend and how Copper Cow is the first company to put a third wave twist on Vietnamese coffee. 

Mike: And I began to feel like I was sitting across from a human being who was capable of doing exactly that. 

And he rather liked Debbie’s approach of making Copper Cow available in as many places as possible. Here’s Debbie, explaining why that’s important...

Debbie:  You know, people want an omnichannel experience. They want to be able to buy it online, they want to be able to buy it at the corner store, they want to be able to buy it on Amazon. And we want to be able to, be able to have people find us where they can. 

Mike: often the companies don’t really get what the market wants from them until they’re engaged with the market, and then the smart entrepreneurs get taught by the market. And they listen.

Just 2 days after hearing Debbie’s pitch, Mike’s fund invested. And just like that Debbie’s $2mm round of fundraising was finished. 

With money in the bank, Debbie was riding high. She still has hopes that the investors on our show, will come around eventually. Despite things being a tough sell in the room.

Debbie: you know, this process is full of rejection,  I once had uh, an investor say to me, oh well this isn’t gonna be the next Facebook. You know, and, of course it’s not gonna be the next Facebook! I’m not pitching Facebook. You know, when someone doesn’t even respect your business, and doesn’t even try to understand why this is excited, and kinda throws away the whole premise of what you’re doing, those are the really hard pitches. This was a really fun pitch  I would not be surprised, um, if they came in in the later round. I guarantee you that there are gonna be a lot of people who said no on this round, who are gonna say yes on the next round 

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