Originally posted by MET student Zain on 19/01/2018
Under 2 minutes, he sold the idea and made billion of $$$ – Very impressive!
He clearly,
- Defined the idea that would promote your business sales
- Provided a solution that is effective
- Identified the market (everyone)
- Compared his idea and solution with the competition out there
- Presented the financial gains
- Stated where he stands and what are the milestones.
At over 60 seconds and fairly detailed, this is somewhere between an elevator pitch and a venture pitch as defined in this course at the time of writing. I would consider investing in this company as he does clearly paint a picture of the value proposition of the product and explains critical details of the business plan. Most importantly, he describes how the business is already in demand and outlines an aggressive strategy for growth.
This pitch is fast paced, exciting, and just detailed enough to leave investors wanting to know more. I think that is the ideal mix, delivering a pitch which hits on the most important details (showing investors that you have really worked through the hard questions) while remaining high-level enough that they get a birds eye view of the overall company and strategy.
This elevator pitch would lead perfectly into more detailed venture pitch conversations where deals can be made.
I would seriously consider investing in this company.
The CEO appears confident and clearly demonstrates the opportunity in the market. He clearly explains how everyone from the advertisers to the coffee shops benefit. Everyone drinks coffee and what cafe would not want the $15,000 in savings each year by switching to free cups? The fact that 80% of potential customers sign exclusivity agreements indicate that his product is very likely to be accepted by future cafes.
One question I did have was about competitions in the marketplace. Are there another companies with similar business models that could potentially compete in the same area?
I would love to hear more about this company through a venture pitch and a business plan to determine what value I would be able to add to this already successful business venture.
Josh Light first identifies his market as anyone who buys a drink from a coffee shop. His company, Cup Ad, gives cups for free to coffee stores with the condition that they distribute their cups exclusively and allow another brand to advertise on the cup. The brand pays Cup Ad for this marketing space. The customer is exposed for two thousand two hundred and twenty seconds on average and interacts six times with someone while they drink their coffee. He claims the company makes sixteen cents a coffee cup at 13 cents with 8 million cups a month being sold to over 25,000 coffee stands in the U.S. Based on these calculations, they will make over a million dollars a profit every single month. I find the pitch convincing because he focuses on the scalability and profitability of this venture to a potential investor as opposed to the product (he never talks about the quality of the cup or the quality of the brand).
One critique I may raise is the idea that it takes the average person thirty-seven minutes to finish a cup of coffee. I wonder what his source he credits for the “thirty-seven minutes” mark. How important is the “time” factor for his venture as opposed to the quality of the advertising platform? How many people multitask while they put their coffee cup down by their computer? Perhaps they only glance once at the coffee cup at the til? How does this kind of advertising compare to an add on the computer screen that is always within sight? Instead of emphasizing simply the time factor, could he have emphasized the potential turnover of someone looking up a brand and using it as a conversation starter in a cafe? Could he have researched how many people drink coffee alone and with a mobile phone or laptop at their fingertips, so looking up a brand on the coffee cup is a likely outcome of how a coffee consumer may pass the time? As an investor, I’m curious to learn if the potential to look up a brand or talk about a brand may be more of a selling point than simply the time a person drinks a cup of coffee.
I would not invest in this venture. On the surface, this pitch hits all the points. It doesn’t necessarily fill a gap in the market but advertising on space which is under utilized allows this product to be value added for the coffee distributor at no extra cost, so why would the distributer not want to buy in. The entrepreneur also differentiates themselves from the standard coffee cups with store branding as specifically he is going after the coffee market that does not have the “economies of scale.” His enthusiasm is affective for the pitch and breaking it down to the real time numbers make the idea seem like a no brainer. SO with all these positive points to his pitch I will say why I would not invest. Now, I am not sure at what date this video was originally made, but the market has changed so much with regards to single use items. Specifically, it makes me pause to see that this is happening in a state like California which is so progressive with its environmental initiatives. I think the market for this is reducing although not as drastically as would be beneficial for the environment. Many municipalities have made single use items punitive and so for this reason alone I do not see the value in investing.