Premium Pricing for DTC Hardware: Lessons From Terra Kaffe

<p>Sahand Dilmaghani is the founder and CEO of Terra Kaffe.</p><p>Equipped with a global perspective, Sahand earned his MBA in France, worked as Head of Finance &amp; Corporate Development at Unu (an electric scooter startup in Berlin), and is fluent in Mandarin, Farsi, German, and English.</p><p>His entrepreneurship started young and never wavered and his enterprising attitude has inspired a wide range of diverse ideas. Throughout it all, he's been obsessed with high-quality coffee, believing that finding it should be simple and sustainable.</p><p>In founding Terra Kaffe, he was inspired to blend the best of European coffee culture and the pioneering spirit of the US start-up scene. A son of two architects, it was only a matter of time before he found his way back to design.</p><b><strong>In This Conversation We Discuss:</strong></b><ul><li>[00:00] Intro</li><li>[01:24] What Terra Kaffe makes</li><li>[01:50] Where the idea came from</li><li>[03:30] From first idea to first prototype</li><li>[04:35] Hurdles in getting to production</li><li>[05:50] Trading tooling ownership for US rights</li><li>[07:25] Bootstrapping vs. having capital in the bank</li><li>[09:15] Treat spending like an investment committee</li><li>[10:10] Intelligems</li><li>[11:40] Cutting the first purchase order in half</li><li>[12:35] Using a deposit-and-balance pre-order model</li><li>[14:10] Klaviyo</li><li>[16:05] Finding pre-launch customers without crowdfunding</li><li>[17:15] Running street demos across New York City</li><li>[18:00] Turning customer conversations into ad copy</li><li>[18:20] Starting paid ads at $25 a day</li><li>[19:10] Why a $150 price increase made sense</li><li>[19:40] How raising the price cut CAC to $28</li><li>[21:08] Why underpricing made customers suspicious</li><li>[23:40] Showing up premium with no team</li><li>[24:25] Flowium</li><li>[25:30] The rollercoaster of the growth phase</li><li>[26:20] Launching the 02 in a cash crunch</li><li>[27:35] Launching the Demi at a lower price point</li><li>[28:20] Offering rentals alongside purchases</li><li>[29:30] Who renting a machine works best for</li><li>[30:20] Rental economics vs. Nespresso pods</li><li>[31:25] Where to find and visit Terra Kaffe</li></ul><b><strong>Resources:</strong></b><ul><li>Subscribe to <a href="https://www.youtube.com/c/HonestEcommerce?sub_confirmation=1" rel="noopener noreferrer nofollow">Honest Ecommerce</a> on Youtube</li><li>The world’s best super automatic espresso machines <a hr