Leon McIntosh | Crain's Tampa Bay

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Leon McIntosh

Background:  

Tampa Coffee Club was founded in 2015 by Leon McIntosh and his wife, Roseanne, as a way to capitalize on and help promote the Tampa Bay area’s burgeoning craft coffee roasting scene. McIntosh, a serial entrepreneur, is also the founder of Swyft Interactive, a Tampa-based software development-and-design company.

The Mistake:

We adopted a minimal-viable-product approach, at first, because we were a little bit naive.

We got into the coffee industry because we enjoyed it and it was fun. We went from talking about the idea to shipping the first product in less than 60 days. But we should have gone into it with eyes wide open and done all of our research first.

There’s a big thing in tech right now: They say, “Just ship it.” The mantra is all about minimal viable product. People interpret that to mean, “Just get something out there into the market and see what happens.” I don’t want to say we did that, but in some regards, we did, We didn’t consider all the factors. And that hurt us.

Early on, we were selling monthly subscriptions for $23.99. We were more expensive than some others because we didn’t calculate how shipping costs would affect a monthly subscription service. We had a different box and offered a different amount of product. We gave customers a full pound of coffee: three bags from three different roasters in each box. Whereas our big competitors, they’d give you five bags, but they were one-ounce bags and you could get only a cup or two of coffee out of them – not even enough for a full pot. And their prices were significantly higher than ours.

We adopted a minimal-viable-product approach, at first, because we were a little bit naive. But about a year in, we realized, wow, this is killing us. Our cost, depending on what coffees we use, is usually $8-$14 per box. But if we were using a really expensive coffee and shipping to California, and the shipping cost is, say, $13, we might lose money on that order.

Also, what we didn’t predict in the beginning is that people would latch onto the coffee club as a source of gifts, which has become a huge market for us. When people are shopping for gifts, they’re usually opting to ship out of state because they want to give a taste of Tampa to people who aren’t from Tampa. So when we were considering shipping costs, we thought it would really be limited to Florida customers. 

You can’t just blindly do something because it sounds fun or you think it’s cool.

The Lesson:

We had to redo our whole business model to make it viable. You have to know all the details, because the devil is in the details, right?

You can’t just blindly do something because it sounds fun or you think it’s cool. We had to change our product, ultimately. It wasn’t just like, “Hey our website needs some tweaks.” Yeah, we did change our website to make it easier to use. But that was just more of an update. Making that shipping cost mistake changed our entire process.

It was all because of one detail we didn’t consider. Knowing those details going in instead of just blindly throwing something out there and getting feedback from the market would have helped us a lot, early on. It would have helped us convert more of those early customers into regular subscribers. Now we’re having to go back and convince people that we’ve changed.

Follow Tampa Coffee Club on Twitter at @TampaCoffeeClub.

Photo courtesy of Leon McIntosh

Do you have a good story you’d like to share, or know someone we should feature? Email nryan@crain.com.

And be sure to sign up for your local newsletter from Crain's Tampa Bay.