OTO: Beverages without disposing bottles
Title: Co-founder / CEO
Timeframe: March 2012 - March 2015 (3 Years)
Task: Designing a product and starting a company
Location: Delft, The Netherlands / Boston, Massachusetts
Activities: Product development; Branding; Team leadership; Stakeholder management; Business design; Finance; Pitches
Oto is a company I co-founded during graduate school in 2012 with the mission to find a more sustainable alternative to bottled beverages. The cause was sparked after discovering over 70% of beverage containers are disposed in landfills in the U.S. Using my master’s thesis to work on this project, I partnered with two friends to develop a more sustainable solution that would add convenience and joy to users, while also reducing cost per-drink. Leveraging the mass consumer adoption of reusable bottles and pod based beverage systems like Nespresso, we ultimately developed a beverage pod-integrated reusable bottle that would allow users to easily and conveniently make their own healthy drinks on the go. Our ultimate challenge was to develop an engaging product experience that would get people to adopt the behavior of making their own drinks, as opposed to purchasing one bottled drink at a time.
I worked on this project over the course of 3 years through a mix of part-time and full-time work. As the CEO of the company I was involved in running all aspects of the company from product development, networking to financing. From June 2014 - Jan 2015 we were part of the MassChallenge accelerator in Boston where I had the opportunity to pitch investors and get established within the startup community.
Purpose & Mission
The Problem
Recycling is a failed solution - 70% of beverage containers end up in landfills resulting in environmental damage
People are not motivated to make their own drinks because there are no compelling solutions
Logic says that if people make their own drinks that would eliminate the need to purchase bottled beverages. We wanted to find out why this was not happening. After interviewing several people, we discovered that self-made drink solutions like water enhancers and powders lack a compelling product experience. People found them inconvenient, of poor quality, and artificially formulated; furthermore there were no established brands people found appealing devaluing the reputation of the category. From these insights it was clear that in order to engage people to make their own drinks, the product and brand experience had to be significantly repackaged, differentiated, and elevated.
THE SOLUTION
Engaging people to make their drinks through a fun and desirable product experience can replace bottled drinks
Get involved in building an infrastructure to make clean and delicious drinking water more accessible
Tap into established categories such as reusable bottles and beverage pods people can easily segue into
Through better design we realized if we could make the experience of "making your own drink" better than consuming bottled beverages, then it would solve the problem all together. To build on this there were already a few consumer movements we could leverage - those concerning reusable bottles and beverage pod systems. Reusable bottles had made people accustom to carrying around and filling their own bottles, and beverage pods had familiarized people with making their drink through a pleasurable experience. These trends would ultimately drive our solution.
Research &
Discovery
DEFINING OUR USER
Reusable bottle users
Health & fitness focused
We decided to target reusable bottle users because they were already accustom to carrying their own bottles - thus a lower barrier to adopting our solution. Within this group we decided to focus on people who were more active in fitness/wellness because their hydration needs were higher and they were more likely to purchase beverages and use their bottles.
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Research Questions Click to enlarge
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User Research & CONCEPT VALIDATION
Interviews, focus groups, observational studies and immersion to discover user needs & behaviors
Showcase high level concept to gauge interest and receive feedback
Identified three user groups - chose to focus on "Yoga Practitioner" because most receptive to sustainable cause
Concerns over BPS in bottles, cleaning and residual flavors & odors from different drinks
Positive consumer response among reusable bottle uses with 35/100 people wanting to buy it immediately
Do not trust the quality of big brands - prefer challenger brands with a story and purpose
To get deeper insight into this group we conducted a 2-month study between New York City, Boston and Delft (the Netherlands) interviewing various health and fitness conscious people, instructors, yoga enthusiasts and health-related influencers. We also took part in fitness bootcamps and yoga activities observing how people behaved and gaining first hand experience about their needs and beverage and supplement products they consumed. Following these activities using affinity mapping we synthesized our findings into three personas, around which we chose the “Yoga Practitioner” as our primary design target - reason being they were the most influential and were receptive to our environmental mission as a company.
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ANALYZING THE COMPETITION
Crowded market dominated by big brands
Opportunity to compete in wellness niches
After gaining insight from our users, we wanted to gather additional intelligence about the beverage brands they liked - essentially who we could ultimately compete against. We looked at a variety of different drinks in the functional, sports, organic and tea space; turned them each into profiles; and mapped them in a matrix to identify white spaces and where we could position ourselves. We also looked at other reusable bottle brands to determine what design elements users liked and/or didn’t like to fuel our design and aesthetic efforts.
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MENTOR Brand insights
Learning what we can from brands that have successfully captivated our same audience
Being honest, engaging & connecting with customers, being simple and fun, and thinking holistically are things they do that make them successful
To construct a brand that resonated with our target users, we researched brands our users admired. Although most these brands came from separate categories, we wanted to study how they managed and presented themselves so that we could replicated a similar experience and relationship with our users. We culminated these insights into mentor brand profiles.
Strategy
Product POSITIONING
Position Oto as a separate category to avoid direct competition with beverage brands
Target a gap in the market
Market insights made it clear that competing in the beverage market would be difficult due to the plethora of products that already exist. To differentiate and "cut through the noise" we saw an opportunity to establish a new category by targeting a gap between reusable bottles, beverage makers and bottled drinks. For this reason we saw value investing in a significantly different product to what exists, as opposed to becoming another "me too" brand and product.
Design Guidelines
Organizing user needs, business needs, and critical brand success factors into a design framework
The ingredients for our design
Mood boards to prompt design ideas and feel
To help guide our product and brand development efforts, we constructed a set of design principles based on the values of our users, there needs, and takeaways we acquired from researching mentor brands. These principles helped direct the way we ultimately designed our brand, product and organizational model.
Mood Boards & Design Prompts
Product
Design
PATENT SEARCH
Technical inspiration and figuring out what has already been done
No major hurdles or IP blocks
To make sure we were not infringing on any designs, we engaged in a patent search around beverage and/or pod dispensing bottles. Although we found some designs related around baby bottles and industrial containers, their designs were different enough to no cause any infringements. We worked with a patent attorney through this process.
Mechanical Brainstorm
Hypothesize how the product could work
Identify design challenges and things we would need to prototype
Potential for many ways to make it work
We kicked off our design with a mechanical brainstorm to envision ways the product could work. This ultimately helped us figure out design challenges and things we would need to prototype. We figured out multiple solutions that could theoretically work using liquid, powder and tablet based beverage concentrates. We would have to figure out what to use via prototyping and consulting professionals in the space.
PROTOTYPING & TESTING
Goal: figure out what technical approaches work best, and what aesthetic factors connect with users
Clay, foam and 3D printed mockups
Beverage prototypes - liquid, powder and tablets
We engaged in multiple rounds of prototyping, which included experimenting with different dispensing mechanisms and design aesthetics. One of the biggest challenges we had to overcome was deciding over a tablet, liquid or powder based water enhancing vehicle. After consulting food scientists and experimenting different approaches we first tried and tested a tablet approach because it was cost effective and environmentally friendly. After prototyping and testing the products we uncovered complications with the dispensing mechanism; furthermore beverage quality was not good ultimately leading to abandoning the design. Learning from this experience we rebuilt the product from the bottom up ultimately choosing a powder based delivery mechanism because they could delivery the widest variety of drinks and possessed the highest potential for ingredient quality and shelf-life (a factor that was important for our users).
Design Evolution
Brand & Product Strategy
A premium Experience
Leverage Japan's heritage and quality of using powders for culinary and tea/beverage purposes
Become the "Nespresso" of Japanese teas and cold brews
Inspired by the success of the Nespresso brand and how they came to own the espresso pod category, we wanted to offer our users a similar premium product experience centered around Japanese culture which already has a rich heritage of using powder based products in teas, beverages and confectionaries (e.g. matcha, yuzu and sakura powders). Furthermore we thought Japanese design had a rich connection with our brand values emphasizing nature and simplicity, while also differentiating us from other brands in the market. We developed the brand to a high concept level using mood boards and associative imagery.
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PACKAGING & RETAIL
Japanese culture inspired packaging
Custom choosing pod assortments via an online shopping experience
Again looking toward Japanese culture and packaging we wanted to explore the idea of using chocolate box like sets for packaging and delivering pods - something Nespresso also does. Through this approach we also saw the opportunity to retail online by giving users the freedom to pick and choose pod assortments they would want delivered to them.
Business
Design
BUSINESS MODEL Canvas
Identifying stakeholders and business needs
We used the business model canvas to identify all the components of the business and stakeholders we would need to launch and operate the company. Our strategy was to operate as a virtual company taking charge of design, product innovation and marketing in-house, while relying on strategic partners for production and order fulfillment. This would help us lower startup costs.
The BUSINESS MODEL
Primary razor blades approach / + multi-revenue streams
Our business would be based on three revenue stream - (1) based on bulk sales to commercial clients like food services and offices, (2) sales to retailers; and (3) direst sales to consumers. Our revenue would primarily be based on the sale of pods - replicating proven business models like razor blades and print cartridges.
Launch Strategy
B2B Partnerships > Online Retail > Premium & Organic Retailers
Realizing that costs to enter retail are high, our primary target in a launch would be progressive universities and corporations. With their sustainability initiatives these institutions would not only be more receptive to our solution, but they would offer a targeted route to reaching our audience. Supporting this with online retail would allow us to build up sales numbers and gain exposure - ultimately making it easier to segue into broader retail channels.
Operations plan
Managing the business & marketing product
Manufacturing pods, beverages and bottles
Because our business would involve the sale of multiple product SKUs, we had to take into account products coming from different sources and being assembled at a single location. Pods would be particularly challenging because they not only required the manufacture of pod shells and beverage powders, but we would also need a co-packer to fill them. Our plan was to rely on suppliers to take charge of these activities and supervise the operations process, rather than invest in our own facilities.
Outcomes
& Experience
MassChallenge Accelerator
Fundraising
Investor pitches & networking
From June 2014 - February 2015 I was part of MassChallenge - a Boston based accelerator - working on acquiring financing to fund and complete product development and testing so that we could go to market. This involved networking, multiple investor pitches, and developing financial plans.
