Bottomless: A Novel Approach to Coffee Subscription

As an avid coffee consumer, the concept behind Bottomless immediately sparked my interest. This startup, supported by Y Combinator, proactively ships coffee to its users, anticipating when they are nearing depletion. The aim is to ensure a continuous supply of what many affectionately call the 'Magic Juice of Life'.

Interestingly, shortly after subscribing to their service, I received notification of the company’s successful Series A funding round. This prompted a conversation with Liana Herrera, co-founder of Bottomless, to delve deeper into the startup’s operations.

Understanding the Bottomless Model

Bottomless isn't simply a coffee delivery service; it’s a multifaceted venture. It functions as a coffee-sourcing platform, a subscription and e-commerce business, and incorporates a hardware component into its overall strategy.

Before discussing the details of their Series A funding, a more thorough understanding of Bottomless’s core functionality and operational mechanics is warranted.

The company’s approach centers around eliminating the inconvenience of running out of coffee. It achieves this through a combination of predictive algorithms and automated replenishment.

Key aspects of the Bottomless system include:

• Proactive coffee shipments based on consumption patterns.
• A curated selection of coffee sourced from various roasters.
• Integration of technology to monitor and manage inventory.

This innovative model aims to provide a seamless and convenient coffee experience for its subscribers.

The Genesis of Bottomless

The concept for Bottomless originated from the personal frustrations of its founders regarding the accurate ordering of Soylent, and a perceived gap in the market for a more streamlined subscription service for regularly consumed products. Herrera identified this need and subsequently developed the idea behind Bottomless.

Currently, the system functions by allowing users to specify their coffee preferences, including desired caffeine levels and price points. The company then provides customers with a specialized digital scale that connects to their home Wi-Fi network.

As coffee is consumed from shipments provided by Bottomless, users place the bag on the scale between uses. This allows the scale to monitor the remaining quantity and automatically reorder coffee before it is depleted.

Users can adjust the scale’s sensitivity to prioritize either preventing stockouts or maintaining a more relaxed reordering schedule. I can attest to the system’s effectiveness, as my third delivery of decaffeinated coffee has recently arrived.

From a business standpoint, the Bottomless approach presents several advantages. I do not readily recall the specific price I selected for my coffee, nor am I currently aware of the exact amount I am paying. However, the convenience of receiving different coffee varieties as needed is undeniably appealing.

Successfully implementing this system, however, is a complex undertaking. Initially, Bottomless independently manufactured its coffee-weighing scales. Herrera emphasized to TechCrunch that the common Silicon Valley adage regarding the difficulty of hardware development is, in fact, an understatement.

The extensive soldering required, as she described, underscores the challenges involved. Despite these hurdles, the company experienced approximately a 10-fold increase in growth following its participation in the Y Combinator accelerator program in 2019.

This customer acquisition enabled Bottomless to begin sourcing hardware in bulk from China in early 2020. However, the initial production run of several thousand units was disrupted by COVID-19-related supply chain shutdowns in China.

Fortunately, the Chinese economy reopened as the pandemic intensified in the United States, allowing production to resume. Bottomless reportedly grew by another 5-7x in 2020. A CNN article from October 2020 indicated a customer base of around 750 in late 2019, expanding to approximately 6,000 by the time of publication.

Herrera aims to significantly increase this number, targeting another 10x growth this year, with a minimum expectation of 5x expansion. This growth is supported by a network of coffee companies that handle the roasting and distribution of beans to Bottomless customers.

This ensures a continuous supply of coffee, preventing any potential disruptions. The startup has stated that over 500 roasters are currently on their waiting list, suggesting ample capacity for future customer acquisition.

Despite its progress, the company acknowledges areas for improvement. For instance, the initial Wi-Fi setup for my scale proved somewhat challenging. Herrera noted that a new scale is scheduled for release within the next three months, potentially simplifying the setup process for new users.

Based on Herrera’s estimates of 6,000 customers each ordering three to four bags of coffee monthly as of last October, the company had already achieved a comfortable seven-figure Gross Merchandise Volume (GMV) run-rate prior to 2021.

For coffee roasters facing challenges with customer retention during the pandemic, and for consumers increasingly embracing e-commerce, the Bottomless model offers a potentially sustainable long-term solution. This potential has attracted investment from several key stakeholders.

Bottomless Funding and Growth

In January 2021, Bottomless successfully secured $4.5 million in Series A funding. While this represents a comparatively modest Series A in the current investment landscape, founder Herrera emphasized the company’s consistently resourceful and cost-conscious approach.

Patrick OShaughnessy spearheaded the investment round.

TechCrunch inquired whether the $4.5 million constituted a substantial sum for the startup, given the limited publicly available information regarding its prior fundraising activities. Herrera clarified that Bottomless had previously operated effectively with only $2 million in capital.

Therefore, the Series A funding more than doubles the total amount of capital the company has raised to date, representing a significant financial boost.

Herrera outlined her hiring priorities, focusing on individuals possessing intellectual agility, an informal work style, and a pragmatic, resourceful mindset – qualities she describes as “hack-y.”

Essentially, the funds will be used to expand the team with skilled personnel.

The company’s progress with this new funding will be closely monitored. Notably, I anticipate contributing to the improvement of Bottomless’s key performance indicators as a customer in the coming months.