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Apr 29, 2017 · 26m · top-founders

644: Tech CEO Takes on Coffee, $325k Raised, $17k in GMV in Jan 2017 Helping 750 Buyers Find Their Coffee with Crema.co CEO Tyler Tate

Tyler Tate · 12m spoken Nathan Latka · 9m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In episode 644 of The Top, host Nathan Latka interviews Crema.co CEO Tyler Tate on transitioning from enterprise B2B software to direct-to-consumer e-commerce. Tate breaks down his coffee marketplace's $325,000 fundraising journey, per-order unit economics, and paid Facebook acquisition funnels driving $17,000 in monthly GMV.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 43.9% of the talking time here. How this is scored →

Nathan as informed peer 3.8 Guest teaching 1.4 Guest disagreement 1.0 Nathan pushing back 2.2
05100:0010:0020:001:35–5:30 · Nathan as informed peer 5/10 Tyler Tate on Transitioning from Enterprise Software to Coffee Nathan probes Tyler's career shift from enterprise software to coffee and digs into his personal financing. Nathan displays knowledge of startup equity, option exercise pricing, and secondary share sales.5:30–10:58 · Nathan as informed peer 6/10 Crema's Marketplace Economics, Funding, and Storytelling Model Tyler explains Crema's take rate of nine dollars on an eighteen-dollar coffee bag. Nathan uses an active vendor on Crema's site to verify the exact marketplace split and shipping coverage.10:58–17:58 · Nathan as informed peer 6/10 Marketplace Metrics, GMV, and Facebook Ad Acquisition Funnel Nathan breaks down GMV, unique buyer counts, and Facebook customer acquisition funnels. Tyler clarifies the monthly purchase frequency and explains how sampler packs optimized their paid conversion.18:04–20:11 · Nathan as informed peer 0/10 Mid-Roll Sponsor Break: Klipfolio and FreshBooks Solutions Solo host ad reads for Klipfolio and FreshBooks.20:13–22:48 · Nathan as informed peer 2/10 Famous Five Questions: Books, Influences, Tools, and Networking Nathan runs through the standard Famous Five questions covering blogs, Dollar Shave Club, Trello, and networking.1:35–5:30 · Guest teaching 1/10 Tyler Tate on Transitioning from Enterprise Software to Coffee Nathan probes Tyler's career shift from enterprise software to coffee and digs into his personal financing. Nathan displays knowledge of startup equity, option exercise pricing, and secondary share sales.5:30–10:58 · Guest teaching 2/10 Crema's Marketplace Economics, Funding, and Storytelling Model Tyler explains Crema's take rate of nine dollars on an eighteen-dollar coffee bag. Nathan uses an active vendor on Crema's site to verify the exact marketplace split and shipping coverage.10:58–17:58 · Guest teaching 3/10 Marketplace Metrics, GMV, and Facebook Ad Acquisition Funnel Nathan breaks down GMV, unique buyer counts, and Facebook customer acquisition funnels. Tyler clarifies the monthly purchase frequency and explains how sampler packs optimized their paid conversion.18:04–20:11 · Guest teaching 0/10 Mid-Roll Sponsor Break: Klipfolio and FreshBooks Solutions Solo host ad reads for Klipfolio and FreshBooks.20:13–22:48 · Guest teaching 1/10 Famous Five Questions: Books, Influences, Tools, and Networking Nathan runs through the standard Famous Five questions covering blogs, Dollar Shave Club, Trello, and networking.1:35–5:30 · Guest disagreement 1/10 Tyler Tate on Transitioning from Enterprise Software to Coffee Nathan probes Tyler's career shift from enterprise software to coffee and digs into his personal financing. Nathan displays knowledge of startup equity, option exercise pricing, and secondary share sales.5:30–10:58 · Guest disagreement 1/10 Crema's Marketplace Economics, Funding, and Storytelling Model Tyler explains Crema's take rate of nine dollars on an eighteen-dollar coffee bag. Nathan uses an active vendor on Crema's site to verify the exact marketplace split and shipping coverage.10:58–17:58 · Guest disagreement 2/10 Marketplace Metrics, GMV, and Facebook Ad Acquisition Funnel Nathan breaks down GMV, unique buyer counts, and Facebook customer acquisition funnels. Tyler clarifies the monthly purchase frequency and explains how sampler packs optimized their paid conversion.18:04–20:11 · Guest disagreement 0/10 Mid-Roll Sponsor Break: Klipfolio and FreshBooks Solutions Solo host ad reads for Klipfolio and FreshBooks.20:13–22:48 · Guest disagreement 1/10 Famous Five Questions: Books, Influences, Tools, and Networking Nathan runs through the standard Famous Five questions covering blogs, Dollar Shave Club, Trello, and networking.1:35–5:30 · Nathan pushing back 3/10 Tyler Tate on Transitioning from Enterprise Software to Coffee Nathan probes Tyler's career shift from enterprise software to coffee and digs into his personal financing. Nathan displays knowledge of startup equity, option exercise pricing, and secondary share sales.5:30–10:58 · Nathan pushing back 3/10 Crema's Marketplace Economics, Funding, and Storytelling Model Tyler explains Crema's take rate of nine dollars on an eighteen-dollar coffee bag. Nathan uses an active vendor on Crema's site to verify the exact marketplace split and shipping coverage.10:58–17:58 · Nathan pushing back 4/10 Marketplace Metrics, GMV, and Facebook Ad Acquisition Funnel Nathan breaks down GMV, unique buyer counts, and Facebook customer acquisition funnels. Tyler clarifies the monthly purchase frequency and explains how sampler packs optimized their paid conversion.18:04–20:11 · Nathan pushing back 0/10 Mid-Roll Sponsor Break: Klipfolio and FreshBooks Solutions Solo host ad reads for Klipfolio and FreshBooks.20:13–22:48 · Nathan pushing back 1/10 Famous Five Questions: Books, Influences, Tools, and Networking Nathan runs through the standard Famous Five questions covering blogs, Dollar Shave Club, Trello, and networking.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 81.8% · guest 18.2%0:00 · Nathan 81.8% · guest 18.2%3:00 · Nathan 26.2% · guest 73.8%3:00 · Nathan 26.2% · guest 73.8%6:00 · Nathan 31.4% · guest 68.6%6:00 · Nathan 31.4% · guest 68.6%9:00 · Nathan 22.8% · guest 77.2%9:00 · Nathan 22.8% · guest 77.2%12:00 · Nathan 34.7% · guest 65.3%12:00 · Nathan 34.7% · guest 65.3%15:00 · Nathan 10.7% · guest 89.3%15:00 · Nathan 10.7% · guest 89.3%18:00 · Nathan 78.8% · guest 21.2%18:00 · Nathan 78.8% · guest 21.2%21:00 · Nathan 50.6% · guest 49.4%21:00 · Nathan 50.6% · guest 49.4%24:00 · Nathan 100% · guest 0%24:00 · Nathan 100% · guest 0%
Sharpest disagreement ▶ 13:36 Tyler rejects Nathan's cart size assumption

Tyler explicitly counters Nathan's calculation that average order value is double the monthly spend, explaining that beans ship individually across multiple monthly orders.

 Hardest push from Nathan ▶ 14:22 Nathan presses on unique buyer accounting

Nathan challenges Tyler on whether the 750 buyer metric counts repeat transactions or distinct individuals within the month.

 Biggest teaching moment ▶ 13:17 Tyler educates Nathan on monthly purchase frequency

Tyler points out a missing variable in Nathan's GMV math, explaining that customers average 1.7 orders per month.

 Nathan holds their own ▶ 8:27 Nathan applies live marketplace economics using Tinker Coffee

Nathan brings up a real roaster profile from Crema's catalog to test the flat platform fee structure and unit economics.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Tyler Tate on Transitioning from Enterprise Software to Coffee 5113 Nathan probes Tyler's career shift from enterprise software to coffee and digs into his personal financing. Nathan displays knowledge of startup equity, option exercise pricing, and secondary share sales.
Crema's Marketplace Economics, Funding, and Storytelling Model 6213 Tyler explains Crema's take rate of nine dollars on an eighteen-dollar coffee bag. Nathan uses an active vendor on Crema's site to verify the exact marketplace split and shipping coverage.
Marketplace Metrics, GMV, and Facebook Ad Acquisition Funnel 6324 Nathan breaks down GMV, unique buyer counts, and Facebook customer acquisition funnels. Tyler clarifies the monthly purchase frequency and explains how sampler packs optimized their paid conversion.
Mid-Roll Sponsor Break: Klipfolio and FreshBooks Solutions 0000 Solo host ad reads for Klipfolio and FreshBooks.
Famous Five Questions: Books, Influences, Tools, and Networking 2111 Nathan runs through the standard Famous Five questions covering blogs, Dollar Shave Club, Trello, and networking.

Statements from this episode (8)

Disclosure
Tate Self-Funded His Crema.co Salary For Over Two Years
“So now what I have self-funded is my own salary for actually a little north of two years. I was coming from mostly the proceeds from the previous startups that I'd been involved with.”
Tyler Tate Apr 29, 2017 ▶ 4:41
Disclosure
Crema.co has raised $325,000 total, including $150,000 from 500 Startups
“Well, so to date, we've raised 325,150 of that came from 500 startups, which we're participating in now.”
Tyler Tate Apr 29, 2017 ▶ 6:25
Disclosure
500 Startups invested $150,000 for 6% equity in Crema.co
“And so it's now, yeah, a 150 K for six percent. And so, yeah, we took that standard deal.”
Tyler Tate Apr 29, 2017 ▶ 6:54
Disclosure
Crema.co takes a $9 platform fee per order covering shipping and fees
“And then from our nine dollar platform fee, we then absorb all those costs of postage, credit card processing, box, things like that.”
Tyler Tate Apr 29, 2017 ▶ 8:15
Assertion Not checkable as stated
Crema.co Generated $17k GMV From 750 Customers in January 2017
“So last month we had around 750 customers spent around 17,000 dollars on our platform.”
Tyler Tate Apr 29, 2017 ▶ 11:21
Prediction Not checkable as stated
Crema.co Targeted 10x Growth Following 28% MoM Increases
“The last couple of months we've been growing 28% month over month. And we're targeting something like 10 X growth over the next year.”
Tyler Tate Apr 29, 2017 ▶ 11:42
Assertion Not checkable as stated
Crema.co Customers Average 1.7 Purchases Per Month
“That is consistently around 1.7 purchases per month per customer.”
Tyler Tate Apr 29, 2017 ▶ 13:28
Assertion Not checkable as stated
Crema.co Spends $20 to $25 to Acquire a First-Time Subscriber
“It costs us around five dollars to get someone to create an account on Crema. And then it's costing between 20 and 25 dollars to convert them to a first time subscriber.”
Tyler Tate Apr 29, 2017 ▶ 16:02
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