Inspiring brands for change: Frank About Tea
This is the transcript of a talk given by Valerie Hirschhauser & David Kellerman, the founders of Frank About Tea, at the third Brand the Change live event in Amsterdam.
Watch the full event here ⬇
Valerie: For those that have not heard about us yet, in a nutshell, Frank about Tea sells high quality, direct-trade tea online to offices and cafes. We source our teas straight from the producers in Kenya and Sri Lanka at the moment.
We produce and pack the tea at the source because that way we can move a lot of the value to the producing countries instead of having it remain here in the West. Starting this year we are investing one percent of our revenue in climate change solutions in the tea-growing areas because we are already seeing a lot of production issues there.
This is the part where I say Frank about Tea was founded from this really deep passion for tea, but that would be a lie. It has not. I’ll share on that later, but first the agenda.
So how do two random people end up in tea?, you might be wondering, so we’ll share a bit on that. How will tea change the world? Or not? David will share on getting free publicity and how we managed to spread the word, followed by some tips on why relationship building is much more valuable than traditional sales and what we mean by that. This will be followed by all the challenges we face and the failures, which really suck, but the lessons you learn from them are really awesome, so I’m going to share a few of those and some closing reflections.
So how did we meet?
Valerie Hirschhauser & David Kellerman, the founders of Frank about tea
Personally I was interested in the founder stories behind companies and always wondered “How did those people end up there?” you might not be interested in it but I’ll share it anyway. So David and I vaguely knew each other from university. We both completed our bachelor’s in the quaint little city of Maastricht in the south of Holland. Years later we found ourselves on a mutual friend’s rooftop in Amsterdam and I had I had just returned from Ghana where I was working with cocoa farmers and David, at the time, was working for a start-up on plant-based alternatives and he was really happy to listen to my rants about the food sector and all the shocking things I had seen. We started talking about some business ideas mostly revolving around the food-sector because that’s what we’re passionate about and one day stumbled upon the idea of tea. We found out that tea is the most consumed beverage in the world, next to water. So how could it be that the most consumed beverage was getting no attention while coffee and chocolate are in the spotlight?
How we got into tea
Since we knew nothing about tea or the tea sector. We thought that the best way to way to find out is just to go there. So we jumped on a motorcycle in the tea-growing areas of East Africa, going from Rwanda, to Uganda to Kenya talking to pretty much anyone involved in tea. From the Minister of Agriculture to the tea pluckers plucking the leaves and the factory owners. At the time, we were writing some blogs for One World and one day we received an email out of the blue (we were not a company, we were just sharing our thoughts) for a request of 3,000 gift boxes of tea. So we became a company after that request. We went back to the Netherlands, after that request, and I got my little cousins and their friends involved (child labor!) and we paid them to pack 3,000 pouches in my uncle’s garage.
Journeying the tea-growing areas of East Africa on a motorcycle.
“Frank about Tea was not founded from a passion for tea because it was founded from a passion for change.”
Then after an accelerator program in Chile, South America, pretty random I know, Frank about Tea settled at the Impact Hub in Amsterdam. Our idea at the time, which is now two and a half years ago I think, was to have fresh tea, straight from the plantation into your letterbox. As I was saying, Frank about Tea was not founded from a passion for tea because it was founded from a passion for change. Hence the name Frank (honest) about Tea.
You might be wondering how on earth tea is going to change the world. Well, funny enough for us tea is the vehicle, not the goal. And for us change like in any sector starts with having respect for the products we consume on a daily basis. So that can be your cup of tea in the morning, it can be your burger on your plate. It’s about looking at those products differently and looking at them from a place of respect. And how do you get respect? It comes from knowing where your products come from and knowing who made them.
Respect for us also goes hand in hand with quality. So that’s why it’s super important for us that we improve the quality of tea that is being drunk in the West, so that we will see people have a different perception of it. Once you have respect for those products you start to make different choices. When you try it the next time you go grocery shopping, it really changes your mindset on what you put into your shopping basket. But not just as a consumer are you going to start making conscious choices on how to spend your money, but also as a company. When we start respecting the product, and not just tea, but products involved in our businesses and the planet we live on, as a company you’re going to start making different choices.
Building the brand
“It’s great to have a brand for change, but if no one hears about it, you’re a long way from fulfilling your mission ”
David: Our mission at Frank about Tea is pretty much threefold. On one hand we want to help people consume more consciously, and also try to inspire other companies to work with purpose. Thirdly, we really want to unravel all the myth about green fairy tales and 100% sustainability and just be frank about what we do well, but especially be frank about what we don’t do well yet.
It’s great to have a brand for change, but if no one hears about it, you’re a long way from fulfilling your mission because we live by the fact that people understand what we’re about and the work we’re trying to spread.
So there we were, we stepped out of the plane in Amsterdam, just getting back from Chile, and we had no idea how to build a company, we had no idea how to build an e-commerce company, but we knew that we needed to push our brand. So one of the options we explored was free press.
Tips on free press
We tried to attract newspaper articles, blogs, magazines et cetera and it didn’t work in the beginning. At one point, we got our first mentions and in the end, we generated roughly 250,000 Euros in free press, through publication in international media amongst Forbes, RTL and the Dutch version of the Financial Times. But how did we get there?
Well like any of us, the press has its needs and lives by the fact that it needs to provide value to its customers, its readers, and just like us, it has its constraints meaning it’s constrained by its most precious resource, which is time. So if you’re able to hit the sweet spot of saving it (time) while providing value, there’s roughly no reason for him not to publish you. How it worked for us was threefold. We positioned ourselves as mission-first. That was the most important thing. That’s the part that distinguishes you from any other company. Companies can sell the same product but they will never be able to sell the same story. So we positioned ourselves as this new kid on the block trying to ramble the gates of big tea and it made us ambitious in the eyes of journalists.
Secondly, we saw ourselves as being different, primarily because we tried to create a new business model tied to the consumer in the tea sector and thirdly we tried to be noteworthy so we tried to have an event that is valuable to the journalists. It could be lunch at a company, a new series of events or an alliance with a sustainable partner.
The next step, next to saving time and providing value, is how to find the right journalist. If you first take a step back and you position yourself in the shoes of the journalist, what he is trying to do, is increase either his reader base or get more engagement from his current user or reader base. So if your content is actively helping that, he is willing to place your piece. We started out with the question, “Why would anyone write about us? You need to be big or famous or have a really serious stake in any market to be part of any news article”. But that’s not the case. Journalists and media have their needs too in a sense. But then again, you’re not always able to read the mind of a journalist. So what we did is use the following formula: Quantity x Quality is likelihood. Quantity meaning the number of articles a journalist reads or writes about a certain topic, like-minded companies, competitors or keywords associated with your space, times quality and in-depthness with which he writes those articles makes up the likelihood of a journalist writing about you as a company. The last thing is time. If you’re able to save a journalist time, in our case we were trying to insert your press release in-line. Never add it as an attachment because that means he has to open it and a journalist opens roughly 20 to 30 press releases every day. So saving a journalist time as well as adding a URL with a link to a Google or Dropbox drive with relevant photo material really helped us because we found out we were being published in RTL and in The Telegraph without even knowing it. So they saw a press release, they took a photo and they published it in the newspaper. We actually got referred to it by family and friends.
For us it was easier than we thought to get published in those media and we found that having been published in those media made it easy to get republished.
The moment we got nominated for the Forbes 30 under 30 list, we could recycle this entire strategy by contacting our old media relations and telling them what had happened and it landed us a seat at the table of RTL Late Night and new publication in seven media outlets. PR is never a good measure of success. I learned there are better measures to grow your brand and generate more revenue and customers and spread your word, but then again it is still a very valuable medium to solidify relationships with your existing and new customers because it creates credibility and it also attracts new employees and new investors and in a sense stimulates your brand and provides a certain amount of legitimacy.
B2C or B2B?
We started as a B2C company, as a subscription company, and that’s what we like to do. We like to sell the story to customers and spread the brand but in the beginning, our biggest order came from companies. As a startup you’re in a constant cash flow crisis. We found out by first growing our revenue base, that the best step was to dive into the same bath with companies. It has had a benefit. In a company, you can target between to four to five thousand customers (users or drinkers) in one go. So for us that worked really well and primarily what came into play for us is we’re not really into the sales game. We believe that selling a product service, your company needs to come from a purpose and yet people need to have an inner need for the product or service you’re selling.
We believe in building very concrete and very strong relationships. We found out in the building of those relationships that any person we spoke to, has a need, other than being a customer, an employee, a company or an organization. For example, I remember being part of a community called Buy Social, which is a platform in which companies or facility managers or procurement managers who take up new foods and new drinks in their catering were. And we were still at that point in time when we had the impression that we needed to sell ourselves with commercials, we need to be commercial. A social private company is not strong for those corporate entities. We found out that they have a really definitive need at the same time as well. So the guy told us “We have to meet our CSR goals.” We believe in the brand for change, that’s important, we want to sell the story to our customers as well. But in a sense, it’s threefold, we help them meet their CSR goals and while we really don’t like to snap into the greenwashing game, it gives us a platform to spread our brand within the conditions we maintain and within our principles. We’re happy and satisfied in that sense.
Boxes of Frank about tea, which are helping companies meet their CSR goals
Secondly, we don’t try to position ourselves as a tea supplier, we’d rather position ourselves as a partner. We want to spread the word, they want to have good tea with a good story so we see ourselves more as a partner for impact in trying to help them address their needs but as well helping to make their catering and procurement more sustainable and go beyond the organic and fair trade charade. As a gimmick to address CSR needs and goals of companies, we thought why not make an impact calculator? So we went on to the side of our tea supplier which is a carbon-neutral tea plant. Of course, we fly out and fly our tea in, we have paper we use, we bring tea to those venues and so we use carbon dioxide, we use garbage and we use paper. But because we have a carbon-neutral plant and the type of material we use is less harmful, we are in a sense, less harmful to the environment than a majority of tea brands around us. This means that we again help them address these needs, so we send those calculations, not in the expectation anyone would like it but was one of the primary reasons for two or three of our largest customers to work with us because it became really concrete the impact they could generate not only on the branding side but also on the concrete impact through what they help us do. So for us, building relationships is important in that sense.
What we have learned:
1. Keeping it real
We named our first lesson keeping it real. Keeping it real and putting your mission first really pays off. As a founder you have to make hundreds of little decisions in a week, some bigger than others. What do you base those decisions on?
We started off as a loose tea company then we were getting requests from companies to have the tea in their offices, so loose tea became less of an option (too inconvenient because you need two seconds to fill your bag) so we started to look into options for producing teabags.
I don’t want to get too much into this really nasty teabag production industry but let me just say that producers everywhere are using us to use nylon tea bags, which are considered the luxurious option for tea bags. You might know nylon as plastic, so it’s not something you necessarily want mixing with your tea if you ask me. So according to traditional business principles, we should have opted for the nylon option because it’s what’s mostly available, it would have given a premium feel to our brand and we would have been able to compete with other companies on price.
However, since our mission is to inspire consumers to consume more consciously, it just didn’t allow us to go with the nylon option. So we had to go on a very long frustrating search for a biodegradable alternative, which cost us a lot of time and a lot of money.
Eventually, we did find one producer, who is now our partner in Sri Lanka, willing to work with biodegradable materials. The result was much more expensive and a very limited expiration date due to its organic components. Unusual for most tea on shelves for many years, ours definitely can’t be, so that’s an issue, so our advisors were not very happy with that situation, advising us strongly against it. So against better judgment, we just went for the biodegradable option anyway. The good thing is that keeping it real in that sense paid off.
Including your mission in your decision-making process, where business economics would have told us to go the nylon option, as a social enterprise you have to take into account more than traditional business economics. So the lesson for us was that you can’t make decisions purely on price, logistics and other factors. We have to take our mission into account, otherwise what’s the point of starting a mission-aligned brand in the first place.
2. Fail fast
We did a lot and we didn’t do a lot as well. One moment I remember was November 2016. We had no e-commerce knowledge, no technical knowledge, and no tea knowledge so we were starting very unprepared on our journey and we had to interview a lot of developers.
If you don’t speak code it’s a bit like trying to speak Chinese to a Chinese, but you don’t really speak it yourself. We started with one party, we got another one and with the third party we though we succeeded. They developed a platform and we didn’t sleep for four nights in three weeks because we had three or four different launch dates, which we didn’t meet.
As an entrepreneur, you have a certain reality distortion where you think the stuff you’re doing is probably the best thing that’s happened up until that point in time, while no one around you thinks the same. And you kind of need that, because breaking through all the noise for yourself, all the insecurities you have and the lack of knowledge is necessary.
So failing fast is in a sense trying to get successful as quickly as possible by doing all the stuff that doesn’t really work to really understand what you need to do that works. We’re still in the process, we’re still not there yet so we’re definitely a startup that is still in its beginning phase.
We have product-market fit in certain areas of the company but not everywhere, so we want to be a big tea company, but we understand tea is still not yet being sold through the internet. We have to find a fit and fail fast to succeed fast with the B2B side of companies, iterating testing and talking with your customers who then give feedback on how they feel about your brand. For us that gave insight into the company we were actually running, which is completely different from how we started.
Question from the audience: What did you learn from the payment system problem that worked against your business model as a subscription model?
Never go for the cheapest. It’s a cash-flow thing. We couldn’t spend a lot of money on developers but in building a tech company, get someone on board who has some technology skills. That’s a primary lesson.
You can anticipate any feedback of customers or any change could happen to your product or service or business model but you’re never smarter than your customer. We don’t have the same collective knowledge of everyone knowing this rule so for us we found it better to launch a half-baked prototype or product, get quick feedback and then iterate based on the feedback you get and build a better product.
Ideally, when building a description model in Chile, we thought of this customer journey, we had books and twelve boxes and this whole experience they would get and it took us a month in developing the whole mindset mantra design and we didn’t sell even one of those boxes. It became simple to pouch tea with some information in editing because that’s what people want because our customers are similarly minded.
They don’t want to have all the extra frills, they just want a really good product with a sound and vision behind it. We actually had a fancy filter in there and everyone thought it was a condom. So if we didn’t test that with other people, we would have gotten that feedback a lot earlier before sending out all our beta boxes. It’s good to go beyond the tube especially because you’re so into your business you often don’t see more.
Question: You didn’t have product-market for some stuff and you did on some other stuff how did you get to know the other stuff, what are they and how did you get there?
[laughter from the audience]
Simply, people came to us and requested our product and we, therefore, felt like we had a fit and that we were addressing a certain need for that group.
On the B2C side and on the online side we are still finding how we are able to communicate our brand as well as how to best sell our product because we need to build a company. What it led to is we built a lot of pilots. So I checked out my LinkedIn accounts and friends and some people within my network and asked them if they wanted to do a pilot test. They got free tea for two weeks, they didn’t have to pay for it but if they liked it we could continue the business relationship if not we would come to get the survey, no strings attached. At the end of two weeks, we did a survey and they gave us feedback on our design, experience, and flavors of tea and based on what we got there, we began to re-iterate on the flavors, how we looked, who we approached and the pricing. And at one point in time, we had the right pricing with the correct design and the right flavors.
So for example for international companies we needed to have a really basic tea because they mostly drink black tea and green tea, earl gray and mint herbals. If you go to a female-ish startup kind of company it’s mostly herbal, so it’s trying to find different needs to which your product would suit. And to go beyond that we found bigger corporates like PWC and like for multiple bankers they have a sincere need in addressing their CSR goals.
So having a product that fits and a brand that fits allows us to help them address their impact goals. PWC is really interesting because they calculate their sustainable impact, so it’s not simply “We are going to take you up and that’s it”. They’re really going to crunch numbers. “How much CO2 are you going to save us? Are we better off investing in electrical cars? Or is the amount of money invested in you guys give us a better impact measure?”
And that also taught us, because for two and a half years we thought we were competing against other tea brands, we are not only competing against other tea brands, we are competing against sustainable lifestyle choices in general. Both on the B2C side and on the B2B side, where we have had companies go to their marketing budget instead of their procurement budgets to take us on because we’re offering them a story to tell and that gives them a better story than they could pay for.
So they take money out of the marketing budget to pay the slightly higher price than we charge, which was for us an interesting discovery. We are competing for the marketing budget in most cases than for the procurement budget in most cases, which is not something we anticipated. Going back to how to have control over market fit, on one hand, is what has been mentioned and on the other is a gut feeling and seeing the reactions of people.
A few months ago during our second meeting with PWC, we walked in with the new setup for the kitchens with a new design for the corporates with a sort of corporate feel while trying to keep it frank. I walked in feeling really clumsy and the head of the facility came up and he said “give me that I’m bringing that right to my car. It’s really beautiful.” So I thought we had a market fit there and often it’s the little things as well because we didn’t have that in the previous designs.
So I changed some of the customers’ lines to fit the new corporate line but they liked the old one, which was a prototype we had accidentally used for two years prior and then it was already out there so we just kept spreading the word. Now they wanted the old design back because the product was not made for them. These were young creative agencies that didn’t have an interest in the serious corporate feel we were trying to give them. So that was an interesting lesson that a poor market fit for some clients is not the same case for others within the same segment, so that makes it really difficult as well.
3. Be imperfect
Being imperfect or in other words being vulnerable not only as founders but also as a company. For example, our website says boldly, “We are not a perfect company” and we don’t pretend to be either. In the past few years we have occasionally fallen into the trap of over-promising on sustainability or really wanting that one sale and claiming to be the perfect sustainable tea solution.
We definitely are the better alternative, but we’re not perfect. We are far from it but the problem is that consumers really like to put you in boxes because it’s a lot easier and it’s tempting as accompany to fall into that trap: Fairtrade Certified, Sustainable, and Organic. I think we all assume that certifications alone make you stable. If that was easy, it would be great instead of trying to check the boxes.
What we learn is that it pays off more to be honest about what doesn’t work well yet at your company. As an example, as we had mentioned, our tea from Kenya is still flown in by plane at this moment. That doesn’t make us a perfectly sustainable solution, but it’s something we at this moment in time, given the capacity can change. To just be honest and to have the balls to be vulnerable about things that don’t go well. Yes, we have definitely lost a few clients because of that, when we told them that we are not Fair Trade Organic Certified for a reason but we have gained a lot more by our honesty. At the end that’s what matters.
Setting up your company is a really challenging journey. Don’t focus too much on what you’re doing, but focus on why you’re doing it. It’s a long journey and your “Why” is the only thing that’s going to get you out of bed every single day for many years to come. There is no boss and there are no paychecks. It’s just going to be you and your intrinsic motivation every single morning and your “Why” is the only thing that will manage to do that. That’s the only reason we are still here as well.
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