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How a Coffee Lid Turned into a Million-Dollar Idea

How a Coffee Lid Turned into a Million-Dollar Idea
Image credit: Yanko Design

In the spring of 2011 Joshua Resnikoff was working on his Ph.D. in biomedical engineering from Tufts University in Medford, Mass., while his wife made and sold kimchi, the Korean spicy pickled cabbage. Because of her business, Resnikoff notes, "We had a ton of Mason jars around, and I used to use them to drink coffee in the morning."

The jars, made of glass, are nonreactive, nontoxic and easy to clean--but not necessarily easy to drink out of. "We were in the car one day, and I spilled coffee all over myself," Resnikoff recalls. "My wife said, ‘Someone should make a lid for those.' So I went online and tried to find something, but nothing like it existed." Resnikoff told his friend Aaron Parone, a medical design engineer, about the idea, and Parone said it was so simple, he could make one by the next day. But, he added, "It'd be stupid. Nobody would buy it."

In October of 2011 Resnikoff decided to drop out of his Ph.D. program and earn a master's degree instead, a move that left him with extra time to fill. "I needed a project," he says, so he got together with Parone and started working on the lid. They weren't planning to launch a commercial venture--"We built it because I wanted one," Resnikoff says. Nevertheless, they put a lot of effort into designing and researching the product. "By our nature, we wanted to do it right. We had a good time nerding out about it."

With an initial design in hand, they turned to a rapid-prototyping shop to run off a couple of samples. They went through two iterations of the design before settling on a version they liked, tweaking the diameter of the breathing hole and making other small changes. Finally the Cuppow (pronounced ka-pow!) was a reality.

Now that the partners had invested a few hundred dollars (and a lot of time) for the prototypes, they were ready to have a genuine conversation about launching a business. "‘How much are we willing to lose?' was where we started," Resnikoff says with a laugh. But after crunching the numbers, they realized that if they made 500 and sold them for $8 apiece, they could make a few hundred dollars. So they each put up $1,600 for the first production run in December 2011.

Drawing lines
Before ordering the first production run of the Cuppow, a drinking lid for Mason jars, Joshua Resnikoff sat down with his business partner to hash out their company's values, listing what they would and wouldn't do, how they would operate and how they planned to grow.

"Get your values down on paper," Resnikoff advises. "It might not seem like a big deal, but if your product catches on everyone will try and squeeze you. In the heat of the moment, being able to turn to a hard copy of your business's values will help you make the right decision."

Next the partners approached their friends at Fringe, a multidisciplinary workspace in Somerville, Mass., that's home to a variety of small businesses with different skill sets. One person designed the Cuppow website, while another made a promotional video; they were compensated with product, pizza and beer until enough money was made to pay them back for their time.

When the Cuppow went on sale in January 2012, all 500 units were snatched up within 72 hours. And the story didn't end there. "We had set up a PayPal account," Resnikoff says, "and PayPal kept taking orders without our knowledge." In five days orders for 3,000 more Cuppows had poured in. "I had to write e-mails to all those people to let them know what was happening."

The partners took all the money that came in from the first batch of Cuppows and made another production run--and another. Five months later they were able to pay for high-volume tooling and do high-volume production (25,000 units at a time). Last year they sold more than 140,000 of their to-go lids for Mason jars. At an average of $8 a pop, that works out to more than a million bucks.

Despite the rapid success, Resnikoff admits they could have sold even more Cuppows. "We've never taken on debt, which meant we were growing slower than demand," he says. "But it let us keep control, and because neither of us are relying on it as a source of income we get to be insanely ethical about it. We got to push back on companies that tried to bully us to accept a lower wholesale price. Our promise to all our wholesalers is that we offer the exact same pricing to everybody."

And while they'll sell to wholesalers, "ideally we sell direct to retailers. We want to be a functional unit of local independent businesses," Resnikoff says. "We keep the price as low as possible to support brick-and-mortar retail."

This year the duo is expanding the Cuppow line. They also hired their first employee, a necessity since both men still have their day jobs--Resnikoff as a biomedical engineer and Parone as an independent contractor. "We both worked really hard to get where we are in our careers," Resnikoff says, "and neither of us wanted to throw that away. We probably can't go on splitting our time forever. But for now, we're making it work."

 

Lay a foundation for profits

An overnight success takes months of planning and hard work

June

T minus 8 months
Identify the product and evaluate the market gap.
Investigate the marketplace and the competition to see if someone else has already developed your idea or something similar. Evaluate how your product differs and whether it's better than what the competition is offering.

August

T minus 6 months
Recruit help.

Find experts who can bring your ideato fruition and make it easy to manufacture and scale. This is also the time to acquire trademarks, file patents and establish URLs for your business. Draw up a business plan with a focus on where you'll sell the product (e.g., retail, wholesale, online only).

October

T minus 4 months
Start prototyping.

Use a rapid-pro-totyping house to produce models of your final product so that you can get it in your hands.
There will always be something that feels different than it looks on a computer model.

November

T minus 3 months
Set up the back end.

Build your website, set up your e-commerce site (if necessary) and finalize your brand's look, feel and story. Having all of this in place when you launch will support a cohesive brand identity that will impress--and assure--customers.

January

T minus 1 month
Do what you're good at.

Don't try to be the CEO, the salesperson, the accountant and the fulfillment department. Hire contractors or services to take care of what falls outside your expertise. Make an effort to reach out to influential blogs to score reviews. Cuppow's founders discovered that bloggers were happy to run reviews and giveaways in exchange for a few free samples.

Logan Kugler is a 22 year-old entrepreneur and technology writer based in Silicon Valley. He's written for more than 60 major publications including Entrepreneur Magazine, Forbes, Fast Company, Men's Journal, Autoweek, Computerworld, PC World, and PC Magazine and he's been hired by Fortune 500 companies including IBM, CDW, BMW, and Oracle. He started his first business when he was 10 and turned a five-figure profit within the first year. He's currently working on getting humanity into space.

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This article was originally published in the June 2013 print edition of Entrepreneur's StartUps with the headline: Sweet Swig of Success.

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