It wasn’t just the financial tustle that should've have put Peter and Brent off, though. Nestle were fighting the courts for their patent to be upheld but after a lengthy battle they lost in 2013, opening up the market and allowing businesses like CafePod to sell Nespresso compatible coffee capsules.
And so it begun. Peter and Brent haven’t looked back since, securing listings with supermarket giants Waitrose and more recently Tesco, where their products will be sold in 650 stores across the UK.
But they’re not quite finished. Actually they’ve only just started. With global domination on both of their minds, we visited their new home in Putney to find out more about the CafePod journey.
Peter: What was happening at the time was the coffee capsules market was opening up so other people could now supply coffee to people who had Nespresso machines and didn’t want to use one type of coffee. We looked at it and decided it was worth putting some effort into and we spent many a long night writing a business plan and scratching our heads.
We went out and raised a bit of money off the back of that from friends and family, although we’re not quite sure if they knew what we were talking about. But they supported us and we kind of went on not knowing too much.
Peter: The reason it had opened up is because the patent had expired. Nespresso has been around since 1986 and patents only ever have a lifetime of 20 years and you can’t reapply for the same patents. Effectively they had come to the end of their life and that's why the market was opening up.
Nespresso, owned by Nestle, were trying to defend their territory and there were some legal cases in Europe and the UK. But they all came out in favour of the people Nespresso were going against so that’s why the markets have continued to open up and grow. Ultimately it’s about consumer choice.
Brent: I suppose dealing with the whole buying process because at the back end of the retail process you’ve got all the buyers who look after the different categories. It’s important to understand how the different buyers work and we didn’t have the skill set to do that.
We had to bring someone on board who knew what they were doing and provide us with some guidance. Philip Banfield is now our commercial director and he was pivotal in getting us into these distribution channels. They talk in different languages, honestly, and you need to understand what to say and what not to say.
Brent: Yes! If you don’t have the skill set then definitely get someone on board who knows what they’re doing. Unfortunately there are only so many hours so you can only do so much in a day. The best thing to do is learn off other people’s abilities and that’s why I think Peter and I are such a great founding team. I feel we’re very complementary and that’s what we’ve built our team around.
Peter: It’s important to have someone who has an interest in your business though. It’s a lonely game and you can’t do it all by yourself. You need the support whether it’s mentors, your supply base or other businesses to talk to and share problems.
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Peter: We made thousands of mistakes - on a daily basis. You learn to take it more in your stride. At the beginning everything feels like a do or die decision, and a lot of the time at the beginning it is. You’ll never know if it’s the right decision until a week, six months or even a year down the line. But even with the best of everything you can still make a mistake but you just have to roll with it and react.
Brent: I think if you’re not making mistakes then you’re not trying. We have a philosophy here where we don’t want people to be afraid of making mistakes. We tell our team to go out make mistakes, as long as you learn from them. It may not be the right decision but you’ll move on.
Peter: There’s online social network and there’s real social network. There’s the hype of online social networks where in my personal opinion aren't as valuable. There’s a lot of hype about it but in reality does it help sell your product? People can use Twitter and Facebook and not sell anything.
In terms of real life networking it’s massively valuable. Getting out there, talking to people, going to the O2 Smarta 100 events you guys do, asking questions and trying to be as helpful as you want people to be for you.
Brent: The amount of time you have to spend on it to actually get the value is disproportionate to what you could spend on something else. You need to engage people and it has to be two way conversation.
At the end of the day, we’re small businesses and your life as a startup is limited. Every day you survive it improves your chances of surviving longer. I think you should be focused on the important things.
Brent: We have most of the UK market secured, there’s a few more retailers we want to get into but we’re going for a massive push internationally at the moment. We’ve just had listings secured in Ireland, UAE, Morocco, Cyprus, it looks like we’ll be in Australia, we’re speaking to guys in Spain, Germany and France.
Peter: At the moment we’re only just scratching the surface. People see us and think “wow you’re in Tesco” and yes it is one of the biggest supermarkets in the world but for us that’s only the first step of the journey. There’s still thousands of steps to take.
You can buy their products from the likes of Waitrose, Tesco and Selfridges, while they're also launching a co-branding campaign in September. Watch this space!