How do you grow a DTC brand without a big brand awareness budget? Terra Kaffe founder Sahand Dilmaghani pre-sold 10,000 espresso machines from a single page with no reviews, and word of mouth has been the top reason customers buy every month for five years.
On the DTC Podcast, Sahand tells Eric Dyck how he left investment banking to bootstrap a super automatic espresso machine, what he cut to get it shipped with $2.5 million already spent, and why Terra Kaffe now puts its money into community and performance marketing instead of brand awareness. Terra Kaffe has 70,000 machines in homes today.
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WHAT YOU WILL SOLVE
You sell a high-ticket product and cannot seed it to a thousand creators a month. Sahand built word of mouth by calling customers himself, and it now drives well over a third of Terra Kaffe's orders.
Your brand awareness budget is too small to register. Why $15K to $20K a month will never make you a household name, and when to hold that money for one campaign big enough to count.
Your best video flopped on Meta. A $30K shoot that never converted on Instagram or Facebook became one of Terra Kaffe's strongest performers on CTV.
Your investors want proof of demand before the product is finished. One pre-order page, a teaser campaign, an email to the subscriber list and a booth at a New York coffee festival produced 10,000 orders.
Your product is over budget and behind schedule. The features Terra Kaffe cut in a do-or-die meeting to ship in six months, and which ones came back later as a fast follow.
Your outside partner has spent double to go half the distance. How Sahand replaced his engineering firm mid-build while it still held most of the product knowledge.
You cannot afford tooling or a production deposit. The trade he made with his manufacturer on the first machine's design rights, and what it cost him later.
ABOUT SAHAND
Sahand Dilmaghani is the founder and CEO of Terra Kaffe, the Brooklyn-based maker of super automatic espresso machines, including the TK-02 and the Demi. Before Terra Kaffe he worked in investment banking and at an electric vehicle startup. https://www.terrakaffe.com
Instagram: https://www.instagram.com/terrakaffe
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00:49 From Wall Street banker to "barista"
02:25 Carrying a 30 pound espresso machine on the subway
04:40 The only espresso brand anyone could name
05:22 The Larry David campaign idea
06:13 Building complex hardware during COVID
08:52 $2.5 million in, with no guarantee it ships
09:09 Funding one milestone at a time
10:42 The meeting where the features got cut
13:36 Replacing the engineering firm mid-build
16:33 Giving the manufacturer the V1 design rights
20:44 Answering the dropship accusations
21:32 The investor test: does anyone want this
23:22 10,000 pre-orders from one page
25:11 The Terra Kaffe manifesto
26:16 What a super automatic machine does
29:39 Why people bought before they could try it
32:33 70,000 machines in homes
33:25 Word of mouth, every month for five years
36:28 Brand spend versus performance marketing
38:23 The three problems every operator hits
40:39 Why a small brand awareness budget is a trap
41:15 Coming for Nespresso
42:37 CTV and the $30K shoot that flopped on Meta
46:34 Survival by a thousand band-aids
47:34 Raising $2.6 million in 13 days
48:03 You are going to get punched in the face
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