Saturday, 1 November 2014

Pact Coffee Visit: musing on startups and social business

So back in February I reviewed Pact coffee’s subscription service, and was pleasantly surprised in March when I got a phone call from Stephen Rapoport the founder, thanking me for the review and asking whether I wanted to come down, try some coffee and have a chat.  I managed to do this in April, and am now finally getting round to writing it up.  The visit was really interesting, a mix of a start-up working hard and fast, overlapping a lot with my day job in the way they were presenting themselves online: socially and using data, and a lot about the coffee.  I got a lot of time, from both Pete Sivak head of their community and Stephen and was able to ask a lot of questions, which I was pleased to take up.  So this entry isn't really a review or an exposition of Pact as a coffee service, but really just a collection of things from that day which I thought were interesting, and from a company I thought was getting a lot of things right in a difficult space.

So to start mainly on coffee: one of the questions I asked was, who Stephen saw as Pact's competition.  Answer: the Supermarkets.  He was really clear, they aren't going to be able to compete against ultra gourmet coffee internet suppliers – there are some very specialist people out there in supply and very particular people on the demand side.  However they think they can convince the public that getting freshly roasted coffee this way makes such a big difference that they can convert a lot of people away from supermarkets to buy by subscription.   I’m currently just back from the States, and I’m always surprised how many of the supermarkets have grinders next to the beans.  I think that’s the risk I’d be worried about if I were Pact; one of the big supermarkets deciding to give some of that shelf space, currently taken up by bags and bags of very similar (ground-ages-ago) brand coffee, to recently roasted specialty wholebean, and offering to grind there and then.  

It was a nice place when we went in, lots of people busy, lots of coffee on the side, and a friendly welcome.  The side bar packed up with coffee equipment, and Pact and other people's coffee being tried out.  Stephen had a long espresso in a handle free cup, Pete and I some pour-over whilst having a chat.

So on talking about roasting and grinding: Pact’s roasting approach is a balance, and one which I got to ask some good questions on.  Pact were actively thinking about their roasting schedule, (currently weekly with a commitment to less than 7 days old) trying to balance hitting:  the largest number of orders for the key weekend fresh cup;  allowing people the flexibility to change their order up to the last minute (something which I use a lot); maintaining reliability of delivery, and roasting more often to have more recently roasted coffee.  So that’s it pretty much right there, they aren't staking their reputation on something like Twodaycoffee with ultrafresh very small batches, and that’s what my review pretty much found,but they are trying to deliver convenience and fresh coffee, and being open about how they are going about it.

There is too much bad coffee out there, and I think Pact does a good job bridging that gap.  Frankly having gone on through the year trying coffee services, Pact works out a little bit more expensive; you’re paying £6.95 including delivery for each standard bag, and that’s a flat rate over the different types (with a premium for specials which come along every so often).  If you look online, you can probably find the same sort of coffee, roasted more regularly, from specialists from around £5 plus £1.40 shipping, and maybe if  you shop around less than that.  But in Pact you get a slick mobile enabled service and good delivery (reliably in my experience to date) so it’s not a big difference.  Pact are trying to do something different and reach a wider audience regularly, I did hear some people at my work joke that they couldn't move through our office without finding one of their £1 first free bag cards.  They are pressing hard but I think it’s a good way to see if more freshly roasted coffee is going to be better for you, and if it convinces anyone to leave the supermarket ground, and try out a bag, I’m all for it.

It was really nice to head over with Stephen and Pete to see the coffee packing, and actual bags of coffee leaving via a room full of very busy people, grinding, and measuring, and matching up with orders.  The original grinder from when Stephen was running the company as YourGrind from his kitchen (not being used now) was there 

and some new kit in the form of a large measuring machine that was in constant use.  I was really surprised to find that over 60% of the shipped bags that day (and pretty typically) were ground.  This really surprised me, but kind of fitted as we talked through - most people are converting from buying supermarket ground, and just going fresh is enough of step up along with the convenience.  If you are signing up for Pact, or any other freshly roasted internet service, you’re going to notice a difference, but I’d really encourage you to go whole bean and grind your own – you’ll notice a difference again.  Just a simple decent ceramic burr hand grinder if you’re prepared for some arm work will make another jump in your coffee.  It’s also a nice thing to do and makes a great smell leading up to your coffee.

One of the reasons for the visit, had been some coffeegeek forum questions about the Pact roasting method, and who did it.  I did ask some of those questions and got great answers, but actually got a lot more side tracked by other interesting things to talk about: what startups feel like, what’s important to get right, and the strategy which Pact were following.  Actually Pact had already done a better article than I can document here, in responding to the forum.  So if you'd like to know Stephen’s forumresponse back in Feb, then the roasting article on the blog shortly after my visit , and more recently following up on roast depth for more customer feedback.  So if you want to know how they are roasting it’s pretty easy to find out, and they are very approachable, with a lot of good events, including the India Biba coffee tasting and others like coffee cocktails recently if you'd like to go and talk more.

One of things that you have to get right if you want to create a socially led brand, is to be transparent, consistent and authentic.  If you get there, then you have to also listen – social is not just an outbound broadcast channel.  People will be telling you what you are doing right and wrong, if only you are listening.  I think that Pact shows a number of really good examples of that, and my visit really struck me as one of those:  something had come up, people asked questions in forums and socially,  they invited people down to see it in person and meant it, and replied through all the same channels.

One of the things Stephen said he’d really like to have was a coffee shop attached to the office, maybe through a big glass wall, but a way in which when trying out something they could just go and ask what real customers thought quickly and honestly.   It would cut out the abstraction, enable being able to talk to people actually buying and enjoying your product then and there, and ask them what they thought about something new.  I love that immediacy of working with startups, when we had visited the grinding room, one of the recent developer joiners (with the baseball cap), was just testing out the barcode scanner integration that he had been up late the last night writing.   Here was the first working demonstration: he checked with a package that it was working in the background whilst we were talking, saw Stephen and showed the Founder scanning the next packed package off of the desks.  Stephen checked it appeared on screen over the shoulder of the person who normally had to tick off each order manually, and that was it.  It was signed off for use, and that person previously entering that the order had been packed didn't need to do that any more and could move onto the next problem.  That’s agility, and the sort you only get when you’re hands on, being totally over what’s going on in your business and you trust the people working for you.  All credit to the developer (apologies I didn't catch his name) for the on the spot test, and the fantastic corrugated cardboard stand for the smartphone running the integration you can see in the picture.

Trust, customer feedback and agility came up a couple of times.  Pact were running a big survey of all their customers at the time, well designed enough, and I’d filled it out, but I've always found those very hard ways to get meaningful data you can act on, unless you are asking very carefully crafted questions.  Also often if you do that careful crafting, what often comes out is that you learn something telling you that there was a different carefully crafted question you should have been asking.  However the data guy was finishing processing the results, and they had some initial outcomes and been able to run it quickly,  but it was that immediacy of feedback that a coffee shop would afford, and listening through social that Stephen already found gave most of the answers they needed.  Stephen talked about the challenges of where they were at as a start up and, what really rang true for me from working with other startups, was him saying that the biggest challenge for him and Pact right now "was not working out what to do, it was working out what not to do"; they could improve and work on any number of things: but what was critical? what was going to move the company forward? and what did customers actually want?  Stephen was clear that they weren't like Facebook (move fast and break things) - they couldn't afford to break too many things and they couldn't afford not to move fast - so being able to go through that feedback loop quickly was extremely important.  So longer term, having an in house roaster would be great, but was that the most important thing right now? or was it scaling with automation to meet the volume of daily shipments (as I’d seen being worked on), or was it looking at the roasting frequency? – back to that question of what did people want? even fresher coffee, or was reliability of delivery and flexibility of the subscription more important?  That’s the fundamental challenge that faces start ups all the time; we know everything we want to do, but what are we going to next?

There were three things on the walls at Pact I loved, and I’d recommend for any business, but particularly at this sort of stage.
                Get shit done (quite possibly my favourite coffee based photo of the year)
                The customer before everything
                Data helps us win (didn't grab a photo)

There is something incredibly powerful about having everyone in a room, having a brand that has formed around some key people, and some key ideas, and then getting up and writing them up on the walls.  All credit due.

Especially with a social, Omni-channel approach, you have a real challenge as a company grows, rapidly like Pact is, maintaining the ‘rightness’ of the people you’re bringing in and continuing to give them the same freedom and autonomy that you had at the start; you need them to wield in order to move as fast as you have to.  So I’d been really impressed at all my touch points with Pact – it all felt right and the same tone, from the forum response, to the tweet responses, to the blog, to ordering on web and mobile, to email, to Stephen’s phonecall, to the visit.  That’s a lot of channels to deal with and a lot of touch points to get right.  There is no way you can afford in something the size of this to be using something like Hootsuite (good though it may be) to be vetting each of your employees tweets before it goes out.  You've got to have faith that you've brought the right people in, that they are doing the right thing, allow them space to do it, and if you or they make a mistake, put your hand up and fix it.  Pact were on top of this well, a good example here with the V60 offer for new customers in August, it had really annoyed some existing customers: but the Founder takes time to write, writes personally, includes the actual social info, says it wasn't good enough, says what they are going to do.  Listening, reacting:  it again feels right and consistent with the rest of things I saw on the wall, and through my other interactions.

I asked specifically about how they were handling the social side, and finding the right people needed to maintain that as they grew.   Stephen thought it was an interesting challenge as they continued to get bigger, but at the moment most employees tended already to be a Pact customer and had taken up one of the additional interaction opportunities with them: they had done a bit more than just buy coffee and that was a good start point.  Then they needed to talk to three of key people founding/running the business, and if those three people agreed then the fit was reliably right enough. 

As a complementary example when talking about the most common problem that people might complain about (which was unsurprising typically an occasional delivery being wrong or not hitting the right day) most people in the office had at one time or another delivered coffee to people by hand on their way home.  That’s a great thing to have happening at your office, and talking through it, it turned out was a really nice thing to do both for the person getting the coffee, and the employee as well, because normally the person receiving it were delighted.  OK so that only works in London (or wherever you are based), but I think it’s a great litmus test of whether you are maintaining the right attitude on your floor: if people are doing that for you, they are probably going to be actively promoting you well through their other personal channels.

Of those social channels, I just don’t think we can underestimate the ‘real’.  Social, Virtual, Immersive, Web, Mobile, Video, Audio.... are all good and customers are very happy to use them when they are quicker, cheaper and easier to reach you and your products.  But it’s too easy to send out spam through all of those, or just make them much harder than old fashioned ways where as they should be easier for you and your customer.  If you can’t back up what you are putting out into the socialsphere, with high value, real people, real places, actual doing interesting things, the public will just edit it out of their introspective feed.  It’s clear to the savvy audience we have now, what is lip service, what is synthesized, and contrastingly what actually feels like a place you might want to interact with in person even if you never actually do it in the real. Having a base and real face to face opportunities is crucial to maintaining your authenticity.  One of my colleagues went down for a cocktail evening at the office, and I had a great chat to him about what that felt like, why I hadn't gone (I’d got an invite), who he’d talked to and what he thought.  That conversation is going to have generated far more powerful advocates than just another how-to-brew-coffee youtube video.

So often you can tell a company’s health (startup or otherwise) from the feel on the floor, and oddly with startups you often find in the most uninviting of the most of inviting and friendly of companies. So what was visiting the biscuit factory like?

It's in a part of town that's a bit intimidating: people going to the cocktail evening where a bit worried, luckily it was summer and so light evenings.  
But on the other hand this was the free tote: 

one of the staff had designed and was given out to some other customers before last Christmas, and I think I received the last one, as we talked about Hario putting origami in their packages, and other companies putting gummy bears in and what it meant or felt like to the customer.  Best of all, getting lost looking for Pact initially, I found this view round the corner from the office (still inside the biscuit factory).  It pretty much describes to me the London start up scene, from re-purposed industrial startup space, looking up to spiraling shards.  Pretty inspirational view.

So a long write up, and a bit disjointed, mostly just full of things which I thought were interesting, but an important part of catching up with the subscription reviews, and looking forward to restarting some of those.

But oddly I didn't expect to still be a Pact customer at this point, my plan was to signup, do the review, and leave.  But actually I still am.  Generally I’m swamped in coffee, I get given it for free fairly often, I’m trying out a number of places and coffees at most times anyway,  why do I need a fortnightly subscription?  Well in turns out that a fortnightly subscription is really not what’s it’s turned out to be.  I got in a good groove with one of Pact’s Brazil mix espresso blends, when I got bad coffee or ran out elsewhere, the app took moments from the phone in my pocket to hit deliver and good coffee came through my door, reliably and when expected.  I’ve only actually had 6 bags since this visit, and that’s because the delivery reschedule function works so well and doesn’t stop you saying "next bag in six weeks" or whenever.  So I’ve never ended up with coffee I didn’t want: the email warnings on dispatch are good.   I’ve just delayed those orders out, or hit "NOW" when I needed it.   So to date, whilst it's not the absolutely best coffee I’ve found, I’ve found very good coffee I like, a really good service and company I feel very happy with, particularly good delivery format, and it’s the only one so far I can reliably order the next bag from one handed with my phone whilst waiting for extraction.  It turns out that that’s a winner.

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