SFN219: Starting From Nothing - with Raj Jana, Founder of JavaPresse

SFN219: Starting From Nothing - with Raj Jana, Founder of JavaPresse

I write this article as I sit in my half empty apartment, 2 weeks away from quitting my full-time job and moving into an apartment with my girlfriend that I’ve been in a long distance relationship with for the past 4 years.

Hard work pays off.

I was a part of the November 2014 Foundation Class and a lot has happened since I founded JavaPresse Coffee Company, a bootstrapped e-commerce brand that is on a mission to create meaningful products and experiences that coffee drinkers can use to make their daily happiness a priority.

Since our launch in 2015, we've helped over 60,000 unique customers drink better tasting coffee, and are experiencing an 800% growth over our sales in 2016 this year. Our company has been featured in Inc Magazine, USA Today, and various other news outlets for the impact and growth we've achieved to date. We are also in an official partnership with the Make-A-Wish Foundation - Central and South Texas, donating a portion of profits each quarter to delivering incredible experiences to seriously children and their families all over the country.

In this case study, I will be going over how we grew this brand from $0 to 6-figures/month in revenue in 12 months from launch while I worked a full-time 9-to-5 job, and the challenges we faced along the way.

My goal from this post isn’t to give you a step-by-step blueprint for success, because that doesn’t exist. By showcasing my thought processes and actions in hindsight on how I approached business, challenges faced and how we overcame them, and the mindsets that I had implement for things to work, I hope this case study will serve as inspiration with helpful lessons that you can you can actively apply no matter what phase of entrepreneurship you’re in.

This case study will be divided into 6 distinct sections:

  1. Picking a Market
  2. Mastering the Customer Experience
  3. Focusing on Sales
  4. Feedback Loops
  5. Operations and Scaling
  6. Lessons Learned

Picking a market

When I first started JavaPresse, I never intended for it to become the fully immersive lifestyle movement that it’s grown into today.

We started out as a Private Label business selling physical products on Amazon.com.

A private label business is where we take existing designs and concepts that are popular on the marketplace and brand them under an umbrella company.

So when we started out, I approached the business not as a coffee lover, but as someone who was looking to serve niches with products that have a high ROI.

I studied over 100 different markets, product lines, and niches before deciding on the one I wanted to work in, and here’s how I went about choosing to serve the coffee industry.

Amazon Potential

Amazon is the one of the most dominant and fastest growing e-commerce platforms in the world, and the fastest way to launch a new brand that has no existing internet footprint.

So the first place I looked for product ideas and market potential was on that platform.

I pulled up a spreadsheet and just went through every single category in the Amazon Best Seller List and put them through a specific set of criteria before moving to the next phase.

amzn-bst-sllr

Here’s the criteria I judged for individual products on Amazon:

1. Price Point – What was the average price point of a specific product? Was it high enough to warrant my effort but low enough to serve a mass market?

2. Competitors – How many people were selling similar products? How many reviews did those competitors have? What is the ‘Best Seller Rank’ for these competitors? I wanted product niches that had a TON of competitors and plenty of reviews/buying activity. No competition and fewer reviews would signify a lack of buyer interest.

3. Pain Points – Once a product passed the first two filters, I studied the hell out of the good and bad reviews. What did customers like? What did they dislike? What features were being requested? Was there an opportunity for me to serve a specific product niche inside of a larger market?

4. Profit Margin – Using websites like Alibaba, I then found rough cost estimates for products with similar designs to the ones that were selling on Amazon to ensure I could make money in the current market environment.

Going through this process gave me a list of potential product ideas, which then served as a blueprint for the next phase of market research.

Niche Potential

Once I had a list of individual product ideas, I noticed that there were a ton of coffee related products clearing the criteria I stated above. From there, I began an exhaustive search to understand the coffee industry to find the angle I could use to build a company around.

Here’s a checklist I followed in this phase of market research for the “group” of coffee related products that ended up on my list.

1. How excited do people get about the products or experiences inside of this niche? Is there a market for customer acquisition on Facebook, Google, and other e-commerce platforms for these products?

To understand this question fully, I used a couple of great tools that I’ll highlight here.

a. Audience Insights on Facebook – Facebook gives you a tool that allows you to assess consumer behavior on Facebook. One place that I focused my attention in this phase of market research used to be a tool called Audience Insights, which includes a ton of information. Including one big metric called Relevance Score.

Relevance Score is a metric inside of Facebook that measures how relevant the posts a specific page puts out are to their target audience.

If relevance was high for a certain page, that means that the consumers who like or engage with that page are more likely to click on or comment or share posts, advertisements, and content that page puts out.

In other words, if all of my competitors and fan pages in this niche have high relevancies, then I could create a brand on Facebook and my customers and fans are likely to be super engaging too.

This intuitively made sense to me, especially for something like coffee. People (including myself) are obsessed with their coffee.

Coffeeonlyonecup

Facebook activity was extremely important to me because if they are active on on the platform, they are likely to be active online shoppers too. More so, having high relevancies allows for lower advertising costs which would prove extremely useful in the long run.

b. Google Trends and Google Keyword Planner – Google provides excellent free tools that allow to see roughly how many people are searching for certain keywords online, and the frequency of those searches over time.

By using Google Keyword planner, I was able to understand how many people were searching for the coffee related products I identified on Google, which enabled me to assess the potential for growth outside of the Amazon platform. Low searches on google signified that this niche was too heavily dependent on Amazon, and that was a red flag in my book.

Google trends is another free tool that allows you to see the frequency of searches over time. If a product or niche was only being searched during certain seasons, that was a red flag. If keywords were being searched for less and less over the years, that meant that the product niche was dying.

specialtycoffeegraph

(Specialty coffee has been increasing as a search term for the past 4 years)

I only wanted to invest in products and niches that were slam dunks.

c. Kickstarter – Kickstarter is an incredible crowdfunding platform that startups use to get their companies and products off the ground. It was also a goldmine of information.

I searched for product launches related to coffee and assessed how successful they were. Were the same products getting funded over and over again? How much money were they raising? What were commonalities? Understanding how well products on Kickstarter were doing in the niche gave me insight into how receptive consumers were to new and unknown brands.

Which was going to be me.

2. Something I learned from one of my e-mentors, Russell Brunson, was to create a top 100 list in my niche and understand the way everyone in the industry does business, which traffic channels work, and what the current ecosystem of the industry looks like. I studied blogs, magazines, trade shows, brands, retail stores, and bought every single product from dominant competitors within the market to understand the psychology behind their customer experiences.

I did this because I wanted to understand:

a. What topics did the industry find important? What causes did they support? What made someone famous in the space? What colors did the best brands use and why?

b. Where did my target audience shop? What design elements did they find important? What types of products were most important to them? What questions were they asking when shopping for products I wanted to sell?

c. Were my competitors using every single marketing opportunity that existed? How did they brand themselves to customers? Were they on YouTube? How large were their Facebook pages? Were they actively using email marketing and Facebook retargeting? How friendly was their customer service?

If industry players (or better yet... my competitors) weren’t using proven marketing strategies in their branding or serving their customers to the highest capacity, that was a green light in my book. It gave me a starting point to build my advantages from.

3. Is there enough opportunity to maximize lifetime value of a customer? In other words, can I continue successfully launching new products to the same customers? Are there enough product opportunities in the niche for me to do so?

The final step in the process was then to do an extensive search of potential product ideas, innovations, branding opportunities, subscription offerings, traffic channels, in-person experiences, and information products that I could offer the same customer.

I did a lot of this phase in writing because something about consuming all of this knowledge about the industry and then putting those findings on paper made everything connect for me. It was a very iterative process.

whiteboard

This process helped me paint the big picture of the market and the opportunities inside of it. Although I was focused on launching a Private Label Physical Product Business, I wanted to have options for horizontal and vertical growth down the line after we achieved a certain level of success.

If I couldn’t see a future beyond private labeling, then it was a red flag for me.

So after going through this exhaustive process, I decided to build a company that served the coffee industry. There were enough opportunities from consumer demand to a lack of competitor marketing efforts that gave me the confidence to invest my time, money, and efforts into building a business that could thrive if I worked hard.

I want to reiterate: Nothing has been designed or sourced yet. This is just the process I went through to make sure the market I picked would be a slam dunk.

Mastering The Customer Experience

After I decided on the niche I wanted to serve and the first product I wanted to launch, I started designing the product and customer experience.

Product Design

When we first launched our (now patent pending) burr coffee grinder, I decided to private label a generic product design at first that was well received by the existing market.

grinder

The Foundation community has long touted the concept of a Minimum Viable Product (or MVP). By launching a MVP instead of our own unique design, it allowed me to spend the limited money I had to invest on marketing and sales instead of product development. Plus, I could compare quotes from multiple factories instead of just one which allowed us to get pricing down as low as possible.

In other words, it minimized the risk I was taking from the get-go.

So for this part of the customer experience, I only had to focus on two metrics:

1. Product Functionality – Since I was using a design that was well received in market, I could skip this part for now. But I began a practice I’ll touch on later in this post that allowed me to improve dramatically here as well.

2. Product Quality - I invested a lot of time finding the right suppliers and getting QC in place to ensure the highest quality possible. If we lacked in this department, nothing else would matter.

Experience and Branding Design

The benefits of doing such exhaustive market research from the get go was that I could paint a nice picture of the psychological makeup of my ideal customers. I could understand what they liked, what they didn’t like, and everything about what they appreciated in an online shopping experience.

ladypouringcoffee

This was immensely helpful in crafting an amazing experience for our customers. These were the 4 areas I focused on relentlessly to perfect for our customers:

1. Unboxing Experience – Everything from how the product looks on arrival to the language used to communicate on inserts.

2. Post Purchase Emails – Mastering how we communicated as a brand when customers bought our products.

3. Over-The-Top Customer Service – Every single time a customer reaches out to us, leaves a review (positive or negative), or engages with our brand is an opportunity to create a lifelong fan.

4. Easy-To-Understand Product Support – As a user, I don’t want to have to ask how to use something. So with that in mind, we focused on creating an overload of instructions and videos that were extremely easy to follow.

By choosing to focus solely on these 6 areas - 2 from Product Design and 4 from Customer Experience - we could control the customer experience from start to finish in a way that allowed us to track and improve over time.

Focusing on Sales

When we first launched JavaPresse on Amazon, I focused 100% of my time and energy in learning Amazon Sponsored Ads, Improving the Product Experience, and Ranking inside of the algorithm so that we could gain exposure to customers who were looking for the products we sold.

sponsoredads

Sales were #1 priority over anything else, and remains that way to this day. So believe me when I say this: I invested thousands of dollars on the best training and mentors to give me an edge over the competition.

I mentioned this earlier, but I was working a full-time job when I first launched the company. I can’t stress how helpful this was for me. I was willing to spend money on the best mentors who could teach me how to sell effectively online and take more risks with a steady income coming in. It empowered me to act without the fear of failure or survival, which is an incredibly underrated benefit when launching a new company.

So if you think you need to quit your job to succeed in business, I’m living proof that it’s in your best interest to do both. It may delay some gratification to a later date, but building an inventory heavy business is stressful enough without the worries of survival sitting on your doorstep.

Feedback Loops

Once we began to pick up sales, customers began giving a ton of feedback for improvement in the form of emails and reviews. I personally responded to every single email, and started tracking the comments, feature requests, and improvements we could implement to improve the 6 metrics we were tracking from our efforts to “Master The Customer Experience.”

feedbackloop

By listening to our audience and giving them features, improvements, experiences, and content they wanted, we built a better product and brand that customers actually enjoyed engaging with. There was no guess work involved in this. No engineering or product design experience.

We just listened to what our customers wanted and gave them exactly that.

rajemail

This led to a compounding effect, where customers felt more connected to what we were selling and started buying more from us/referring us to friends and family. This, in turn, made us more popular within Amazon eco-system and helped us grow rapidly on the platform.

We made our business customer focused and created a system that resulted in a win-win for everyone involved.

1. We didn’t have to spend money blindly on product developments that would have cost hundreds of thousands of dollars that may or may not be well received.

2. Customers appreciated being part of the process and shared their appreciation with more sales and feedback, which just made the Feedback Loop better and better over time.

Scaling and Growth

Using our feedback loops and obsession with the customer experience, things started to pick up quickly. Within 6 months of launch, we were doing $40k/month in sales with demand going higher and higher.

In order to grow to even larger heights, I focused on 3 specific areas:

1. Never Running Out of Stock

2. Implementing Systems and Staff

I’m going to touch on each below.

Never Running Out of Stock

The biggest mistake anyone selling physical products can ever make is running out of stock. Not only does running out of stock prevent sales from new customers, but it halts the feedback loop that will allow your business to compound.

Let me explain.

When a customer engages with you in some way and you respond quickly with the intent to provide the best possible experience possible, you ensure them happiness and an opportunity for them to rave about your products to friends and family. This, in turn, leads to more sales every single day.

But if you run out of stock, you lose the ability to capitalize on word of mouth sales which are generally the hottest types of purchases. Hot purchases refer to people who simply land on your product page and purchase. That specific action increases your conversion rate, which in turn helps you in Amazon’s algorithm.

So by running out stock, you halt the feedback loop and are required to re-build all the momentum you lose. This can be costly and a pain in the ass.

colbert

So with this in mind, I did everything I could to never run out of stock and set up as many cash outlets as possible. Here are a few things I did to accomplish this:

1. I borrowed money from my 401k from the day job to fund large inventory orders at <3% interest rates.

2. I set up multiple lines of credit at local banks. Having a steady paycheck allowed me to set up lines of credit at <10% interest rates without much opposition.

3. I negotiated better payment and inventory storage terms with my suppliers that aided cash flow.

This was probably one of the biggest factors in growing as fast as we did.

Implementing Systems

With the day-job, it was tough for me to continue focusing on day-to-day tasks if we wanted to grow. Things like customer service and managing the feedback loop were so important, but so were product development and sales.

This point in the business forced me to bring on operations staff to build systems and manage the day-to-day processes that made our business competitive.

Data tracking

Creating fulfillment orders

Monitoring feedback loops

Customer service

Content creation

Etc etc

By focusing my time to create exact procedures, instructions, checklists, and videos for staff to execute on, I was able to delegate day-to-day tasks to an incredible team that allowed me to focus on the areas in business that led to exponential growth.

Asana

It also forced me to become comfortable with the idea of trusting people to accomplish tasks in and for the business. This expanded my mindset, and we now have a team of 13 employees and contractors that all do what they do best, while I do what I do best.

Lessons Learned

To anyone looking for practical lessons from my journey, here are six I will leave you with:

Pick the Right Niche – By choosing a niche with high potential and various outlets for success, it allowed us to be malleable in a competitive marketplace and launch different product lines while simultaneously killing others that weren’t doing well. This level of flexibility allowed us to grow through the challenges that come up in evolving market landscapes and stay ahead of the competition.

Launch an MVP and Then Improve – Investing your time and money to acquire your first customers is the highest leverage activity you can do as a business owner. Not only will this fund growth for your business with minimal risk, but it will allow you to collect valuable feedback that will allow you to make your product more attractive to people who know nothing about your brand. And as I explained earlier in this post, it also makes your product more valuable to your existing customer base.

Listen to your audience – You don’t know what your audience needs when starting out. But they do, so listen to them. Split-test marketing efforts, ask for feedback, and welcome negative reviews from day 1. This will compound into something very valuable down the line: An understanding of buyer psychology and an opportunity to create raving fans for your brand.

Find the right mentors – You’re the biggest horse you can bet on, and the right mentors are an absolute investment. They shaved years off of my learning curve and allowed me to grow from the mistakes they made and lessons they learned when building their own empires. Mentors come in the form of books, podcasts, coaches, courses, and conferences and are worth their weight in gold if you listen to and take action on their advice.

Delayed gratification – I delayed closing the gap on a long-distance relationship with the girl I loved and stayed in my full-time job because I knew having a steady income would allow me to invest all of my profit back into my company. Don’t be swayed by the roller coaster of emotions that come with the journey of entrepreneurship. Stay patient and don’t get distracted along the way. Your time will come.

Join a like-minded community – You don’t have to do this alone. Entrepreneurship is hard, especially when you don’t readily have the support or mindset to endure the ups and downs. So invest in a community that will be there to help you push through struggles and break down fears when they come up. The Foundation served as that for me, and I’ll always be grateful for the friendships I’ve built over the years with amazing people in this community who are creating amazing things for themselves.

Wrap Up

And there you have it.

JavaPresse has given me more joy now than ever before. We’ve built amazing partnerships, give back to incredible causes, and continue making people smile at a level I would have never imagined at first.

And we’re just getting started.

If this stuff feels overwhelming, don’t feel that way. That wasn’t the intent of this article.

My intent with this case study was to show you the one of many ways to achieve success online.

You will have your own journey, and I urge you to own it. Make mistakes, have fun, and share lessons along the way.

Have fun with every little step.

As I mentioned earlier, I’m here to help however I can. If you have any questions about the concepts above or want to dive deeper into anything, feel free to shoot me an email at chiefbrewer@javapresse.com.

Cheers to living the lives we love.

-Raj Jana