The #1 Mistake Killing Your Startup (ft. Sahand Dilmaghani)

This episode of Chew on This features Sahand Dilmaghani, CEO and founder of Terra Kaffe, a high-end espresso machine company. Sahand discusses his journey from investment banking and electric vehicles to creating a luxury coffee product, highlighting the challenges and successes of building a hardware business. He emphasizes the importance of strong customer relationships, community building, and data-driven marketing strategies in overcoming the unique obstacles of a high-ticket item in a crowded market. The conversation covers product development, marketing channel selection (direct-to-consumer, Amazon, retail), customer acquisition costs, community building on Facebook, and fundraising. Sahand shares valuable lessons learned, including the importance of staying close to the customer and avoiding perfectionism. ☕ Building a High-End Hardware Brand: Sahand details the complexities of designing, sourcing, manufacturing, and marketing a premium-priced espresso machine, emphasizing the iterative design process and the importance of early market validation. 📈 Data-Driven Marketing & Customer Relationships: Sahand showcases a unique approach to marketing a high-ticket item, relying heavily on strong customer relationships, word-of-mouth marketing (30% of sales attributed to it!), and a vibrant online community to drive sales and brand loyalty. This approach allows for direct feedback, informing product development and marketing strategies. 🗣️ Community Building as a Marketing Tool: The power of a strong, engaged customer community is emphasized. Sahand shares how he uses his personal cell phone number to connect with customers and leverage their enthusiasm for word-of-mouth marketing, creating an “unfair advantage.” 💰 Fundraising and Financial Discipline: Sahand discusses his approach to fundraising, emphasizing the importance of having a clear vision, setting realistic milestones, and being judicious in capital allocation. 🤔 Lessons Learned: Sahand shares a key learning - avoiding letting perfectionism hinder progress and emphasizing the importance of getting the product “done” and then iterating based on feedback. 0:00 - Intro ​1:10 - Sahand's background in hardware creation ​2:05 - Transition from finance to a startup ​3:08 - Personal experience with consumer preferences in the coffee market ​4:20 - Building a technology moat in a visceral purchase category ​6:02 - The complexity of hardware development ​8:09 - Validation of product-market fit through consumer engagement ​11:09 - Launching the first version of the product ​12:14 - Testing new channels ​15:12 - Challenges marketing against established legacy brands ​17:00 - Evolution of marketing strategies over the past 5 years ​18:20 - Community-oriented approaches drive significant interest ​19:18 - Engaging with the community to understand consumer needs ​20:27 - Customers as brand evangelists ​22:13 - Importance of customer feedback through surveys ​24:11 - Identifying growth opportunities to overcome market challenges ​25:04 - Building social media communities to enhance customer engagement ​27:02 - Amplifying marketing efforts through word-of-mouth ​28:04 - Importance of fiscal discipline ​34:57 - Understanding the audience is key 35:08 - Final chew Sponsored by: 📨 Sendlane - Tired of paying for hosting unnecessary contacts on your email list? Thats why we switched to Sendlane where we are only charged for the number of contacts we send to. You will unlock huge savings by signing up with them. 🔗 https://sendlane.com/chewonthis Follow us, subscribe to our newsletter, and to see our exclusive merch check out https://chewonthis.io/ Ron Shah - https://twitter.com/obviceo Ash Melwani - https://twitter.com/ashvinmelwani Chew On This - https://twitter.com/chewonthisdtc