Crema

Tyler Tate spent years building enterprise software. At Twig Kit, his company sold expensive search software to large organizations, and he learned a lot from it. He also learned something about himself: he would rather do something marketing-driven than sales-driven, and something consumer-oriented rather than enterprise. That realization pointed him toward a B2C business, and in early 2015 he started working on Crema, a marketplace for coffee.

Crema lets coffee drinkers buy roasted-to-order beans from specialty roasters such as Ritual in San Francisco and Tobias Estate in New York. The model is simple. On an $18 bag, Crema takes a $9 platform fee and the roaster receives the remaining $9. Crema absorbs postage, credit card processing, and packaging out of that fee, so the price shown is the price the customer pays.

The company leaned heavily on storytelling. Each coffee comes with a picture of the grower or farm and a few paragraphs about the origin, co-produced with the roaster and polished by an in-house storytelling team. Tyler funded the early build largely himself, saying he had put "around $15,000" into Crema, and he drew on proceeds from his previous startups to cover his living costs for a little over two years.

The first wave came from a Kickstarter campaign in spring 2015, which brought a couple hundred people onto the platform, along with word of mouth. Crema raised about $25,000 on Kickstarter and later closed angel money, and in October it joined the 500 Startups accelerator. Content marketing and SEO were being seeded, but the real acceleration came from paid acquisition. Facebook newsfeed ads became the main engine.

The breakthrough was a sampler pack offered to new customers: four coffees from four different specialty roasters spanning light to dark roasts. Tyler said this offer resonated with the Facebook audience in a way the earlier "pick a coffee to try first" approach did not. On roughly $5,000 of monthly ad spend, Crema was paying about $5 per account creation and $20 to $25 per first-time subscriber, which Tyler called a good ratio.

Paid acquisition worked because the unit economics held up at small scale: about 1,000 signups and about 200 paying customers from $5,000 in spend. A three-to-four question preference survey with coffee recommendations performed about the same as the simpler approach, so it did not move the needle. Crema also noted that its growth metrics moved together: GMV, revenue, and new subscribers.

As of January 2017, Crema had about 15 roasters and around 60 coffees on the platform, with the menu rotating monthly. The company reported about $17,000 in GMV from roughly 750 buyers in the prior month, with customers buying about 1.7 times per month and an average of roughly $22 to $23 per customer per month. Tyler said the company had grown 28% month over month in recent months and was targeting 10x growth over the following year. The team was two full-time founders plus four part-time contributors.