Many of you in the entrepreneur and startup world are fans of the television show Shark Tank, where a panel of famous investors listen to small business owners as they put on the pitch of a lifetime hoping to make a deal with a “shark” without sacrificing too much equity in their company.
Recently, we watched as MistoBox, a subscription-based coffee company run by two hardworking University of Arizona alumni, took a dive in the Shark Tank to see if they could reel in the right investor to steer their company toward success. GrowSouthwest met with Samantha Meis and Connor Riley, founders of MistoBox to get the latest brew on their startup!
GrowSW: How did you start your company, MistoBox?
Samantha: We were both in a business class and our task was to come up with innovative business idea. We were familiar with each other and we were both hard workers in a summer program so we decided to be in the same group again.
GrowSW: How did you come up with selling coffee through a “coffee of the month” subscription?
Connor: Yeah, we basically did a ton of research and identified this business model where there was a monthly subscription and there’s also the online store where you can buy full-sized products of what we sent out in the monthly subscription. So we identified this business model. It was successful in multiple industries and we wanted to see what industry could we apply this business model to and we nailed down all the characteristics that we thought would make it successful. Coffee was the best fit for all those characteristics.
GrowSW: Why was coffee the best fit after all the research?
Connor: The company we kind of based this off of does a similar thing with cosmetics, Birchbox. So we were looking for something that was non-perishable, something that is consumable, something that if people use it- they use it every day, something that people get excited about, easily shippable and samplable, it’s in a market where there are a ton of different vendors, and aside from cosmetics, coffee was a perfect fit.
GrowSW: Were you guys coffee drinkers at the time?
GrowSW: So you came up for the concept for your idea as seniors in college and the obvious question is; it was a class project, what kind of grade did you get?
Samantha: We definitely got an A. There were multiple competitions throughout the year and we always did really well. To be honest, we did fail a mid-year review once, we had to come back and we came back real strong and we ended up winning a bunch of competitions. I think the teachers were just trying to test us!
“To be honest, we did fail a mid-year review once..”
GrowSW: Hahaha. So, how did you go from the school project as seniors to a growing business?
Connor: Second semester is when we really started getting serious. We did a Kickstarter program in April and raised just over $9,000. Kickstarter allowed us to raise money to get started, but it also gave us a base of 60 or 70 customers to start with. So once we did the Kickstarter in April, we had enough money to purchase a website template, Sam did some design work and we got our website up and running.
Samantha: We did have some interested investors and a lot of really good feedback from our mentors. And pretty much everyone we talked to said this could be something big. And so we knew it was something we really wanted to pursue.
GrowSW: What did you learn from Kickstarter?
Samantha: It is a full-time job! We learned so much during and even afterward, I keep learning new things and now if we were to have a Kickstarter, we would definitely kick butt!
GrowSW: What did you do differently on Kickstarter that worked? What kind of lessons that you learned and walk me through that experience.
Samantha: We just played our networks. I’d say about 50 percent of the donations were from people we didn’t know, 50 percent we did know by way of family and friends to help us out. We promoted it on social media and going forward, I now understand how big of a part the PR piece is, and to get it on a national scale you have to have relationships. We were reaching out to small coffee blogs. We were missing things, like if TechBlogger thinks your Kickstarter is cool, they will blog about you and we missed that entire piece.
Connor: Things that were successful- the video is crucial. And the gift or price point at which you set the rewards and donation points is crucial.
Samantha: You have to think about how many people you think you can get to back your project and if you don’t hit your goal, you’re done. We set our goal at $9,000. You can always go over your goal, but you can never go under. If you don’t reach your goal it’s pointless, so set it at like 70 percent of what you think you can get.
GrowSW: How did you get your first customers?
Samantha: Kickstarter. Having those first 70 customers was huge and we were able to send them our test samples and get their honest feedback. We hadn’t even thought about how important those customers from Kickstarter really were until after the fact.
GrowSW: When did you start the company?
Samantha: May 2012, we recently celebrated our 1-year anniversary.
GrowSW: That’s great! Happy 1 year! So, can you tell us how did you get on the Shark Tank TV Show?
Samantha: The short answer is that we applied and went through a few selection rounds, we had to make a video and the show aired recently where we made a deal with one of the sharks. We can’t really reveal very much. It’s too early to talk about the specifics, but we’ve been busy!
GrowSW: What was it like being on Shark Tank?
Connor: It was really thrilling, exciting and stressful. You get one shot and there’s a lot of pressure.
Samantha: We had been practicing our pitch thousands and thousands of times, but it was still scary because you can’t mess up. The possible reactions of the sharks can be really brutal. We weren’t really worried about the Q&A part because we had been groomed by the Entrepreneurship Program at the U of A. We had watched every single episode of Shark Tank ever and knew every question that could possibly come at us and we had reasonable answers prepared. But walking down the hallway on the show, I felt like I was floating, my body was just numb and after the show I had no emotion left in my body.
“Walking down the hallway on the show, I felt like I was floating..”
GrowSW: Which investor did you hope to work with?
Samantha: We did a lot of research and we definitely wanted to work with Mark Cuban. He has experience with subscription models.
GrowSW: What do you think Cuban can bring to the table?
Samantha: His networks, more money if needed, he has experience with e-commerce and subscription models. For us, there was way more upside to taking his offer.
GrowSW: From Kickstarter to now, how has business since the Shark Tank episode aired?
Samantha: We’re pretty sleep deprived.
Connor: It’s been a lot of work.
Samantha: We were finally able to hire our first employees- it’ really exciting! One full-time, one part-time, two interns. It has been seriously such a joy to start building our company and having employees. It’s more fun than I had anticipated. It’s cool to build a company culture.
“We seriously love what we do and it’s cool to share that.”
GrowSW: How many hours do you think a typical week is?
Connor: It varies, I would say low is 40 and high is 100 hours.
Samantha: I’d say on average I work probably 65 hours. Real entrepreneurs understand how much work and sweat and sleep deprivation it takes, but it’s all worth it. People who don’t get that are just “wantrepreneurs.”
GrowSW: We like that!
Samantha: Those people, “wantrepreneurs,” just get under my skin! Haha Even my friends don’t understand. Entrepreneurship is so glamorized, it’s unrealistic, and it’s not glamorous at all!
GrowSW: People look at Silicon Valley and the baseball percentage of success stories as how things work. There’s a lot of work that goes into succeeding or failing.
GrowSW: So, what is a typical day like?
Samantha: There is no such thing! Connor and I are the marketing department, the accounting department, the customer service department, the design and branding departments…
Connor: Operations department, whatever need is most important that day.
Samantha: We have a weekly Monday meeting and we try to outline the week the best we can, but things come up. That’s what makes it so much fun!
GrowSW: What advice can you give someone just starting their own business?
Samantha: This is the time to do it. Just go for it. It’s so much more valuable than grad school. Running a startup is going to be applicable for any other company we start later in life.
GrowSW: What is the entrepreneur environment like in Arizona?
Connor: I don’t really have anything to compare it to. It’s definitely getting better. It’s ready. It’s on the cusp of being good. I think Phoenix is the perfect place, it’s definitely close.
“I think Phoenix is the perfect place, it’s on the cusp of being good.”
Samantha: I think it’s growing. There’s an energy that’s kind of missing here. A huge part is interaction and getting together.
GrowSW: What do you guys do to relax?
Samantha: I play golf and tennis, work out, read books, meditate and run. Exercise is such a huge part. It’s undervalued.
Connor: I like to fish and work out.
GrowSW: What books do you suggest?
Samantha: ”Lean Startup“ is a must read. “Startup Communities,” “Getting More Done Faster,” and “The Power of Less” is great or learning to make life a lot less stressful.
GrowSW: Where’s your favorite place to fish?
Connor: I once caught a 9-foot bull shark in Acapulco, Mexico.
GrowSW: So you’ve been able to land sharks in and out of water!
GrowSW: Good luck to you both and the future of MistoBox! Make sure to keep GrowSouthwest.com updated on your company.