Korean startup founder Jung-O-Lee founded The Color Group Co., Ltd in 2015 as a business for distributing beauty/fashion products, expanded to movies, dramas, and cultural contents. In 2018, Lee innovated and introduced N2 Falls, which is now actively making the ‘world’s first portable nitrogen coffee.
N2 Falls makes Cold-brew coffee infused with nitrogen gas readily anytime, even at home. N2 Falls already sees tremendous demand, especially from coffee lovers who miss sipping coffees in cafes shut because of the pandemic. Lee says that what fascinates people most with their N2Falls products is its taste and performance of mixing the nitro-coffee with gas pressure eruption. The Color Group won the ‘Food’ category for ‘N2 Falls’, an ampule cold brew coffee at ‘VIP ASIA Awards 2019.
Jung-O-Lee had a chit-chat with KoreaTechDesk.com about N2 Falls, product demand, and fundraising barriers to Korean startups.
1. Please tell me about your background and what motivated you to get started with your company?
I helped prospective Korean firms like an accelerator, exhibition, promotion, and other consulting for their brand and goods. While I worked in the area, someone related to the Nitro Cold brew coffee, which I now work for, asked me marketing for the products. Still, I became involved in all parts of the product – product development, design, branding, naming, etc. Then I have resumed the business as a leader, making the brand of N2FALLS.
2. What is your current main product, and can you share any previous? Product pivot story to the current product?
Our main product is Nitro Cold Brew Coffee, with ampules inside, the first developed goods worldwide. It should be our pivot story because our next products will be extended into coffee and other drinks such as several kinds of berries, herb tea, Korean ginseng, and so on.
3. What is the market opportunity for your product?
The market size of Cold Brew coffee is nowadays growing faster in comparison to hot brew coffee. To enjoy cold brew coffee, consumers have to mostly use coffee shops existing, especially for Nitro cold brew. However, we can serve them high-quality Nitro cold brew coffee, which means they enjoy it home even without any home coffee machine because it’s portable. Along with the demand, it must be an excellent opportunity for the business and us
4. What’s your business model, and how have you grown your revenue? What strategy worked best?
The business model can be mainly technology development and manufacturing so far. We first expose our products to industrial exhibitions as the first goods globally, attracting great public attention. We have also sold it at only leading department stores and some largest hotels across Korea to make our brand keep showing high quality. These activities have been effective and efficient so far. We recently are planning to sell through the internet because of Covid-19. Furthermore, we are trying to advance into other markets across the world.
5. Please tell me more about your founding team.
I have an excellent team for the business with a product developer who designs the goods and a famous barista, the world barista competition winner for the next additional product development through partnership. We also have an expert in the imager area and an SNS influencer, and a finance specialist. They gather for global business; they are also fascinated by our N2FALLS coffee in aspects of taste and the performance of mixing with an eruption of gas pressure when the coffee is made. I can say they all are big dreamers but making the dreams realized each.
6. How much money have you raised in total so far? When was the recent funding round?
The founder won one of the biggest VC (venture capital) investment competitions as the award. He has, however, operated the business with his fund, which means Self-reliance. As you can see, we are trying to be funded for global trade, the next step.
7. What are the biggest challenges and obstacles that you have faced in the process of fundraising? If you had to start over, what would you do differently?
The way of fund rising in Korea seems to be a loan rather than an investment. The investors consider only the past three years’ sales amount and require mortgage and credit rating. There are also high barriers to loans, with the investors failing to focus on the business’s future value. Thus, I am trying to look for someone who can recognize our actual values for the future.
As we have been ready to officially launch N2Falls coffee for the next stage for two years to reach customers’ demand, we have to manufacture the coffee in large quantities to achieve maximum sales. We also need to be more focused on marketing and advertisement for more sales and overseas export. Unfortunately, we cannot follow the demand directly to us because of our manufacturing scale’s limitations. We should have built more factories in advance. That means if we had to start over, we would prepare more equipment and factories. We didn’t expect the demand to grow so fast.
8. What are your milestones for the next round? And what are your goals for the future?
As I mentioned before, we have to officially launch our N2Falls coffee in Korea and export by establishing more factories. We also have our specific technology of Coffee Extracts and sampling. Through those, we can make collaborate with large global corporations. As long as customers in the world require different drinks, we also develop other drinks to change drinking beverages.
9. How have you attracted users, and with what strategy have you grown your company from the start to now?
It has been easy to attract users for our brand because of the ampules’ performance of the N2Falls coffee. It brings customers curiosity and novelty. Our coffee quality also keeps customers, and the customers easily fall into the coffee’s taste, automatically becoming steady customers. The results of the survey have shown 95% of positive opinions. We catch all the beverage business factors, an attractive point for the first facing with customers, and the taste as an essential point, also convenience with portable.
10.What do most startups get wrong about marketing in general?
While we are focused on making our brand position higher, mostly typical startups tend to make their products cheaper to advance the mass market. Since we have the technology and effort to make our products a sole brand and deliver the products to consumers in the best condition, consumers will continue to buy to maintain the values. The brand’s value must meet the hidden needs of consumers with the product. To make a startup a unicorn that approaches one billion dollars asset, the startup must create new trends and new culture related to demand that consumers even do not recognize, as Airbnb did. We also would like to change the culture of the drink.
11.How do you plan to expand globally?
There must be differences in each country in terms of taste and preference. We are planning to find out the characters to make ours perfectly localized initially. We will try to establish a strong partnership with local companies to figure out its people’s preferences using local ingredients. That also will bring us variety into our product line to make other opportunities to introduce cross-sales among different countries.
12.How do you handle this COVID-19 outbreak situation for your company’s survival in the future?
In Korea, sales via the internet have increased three or five times bigger due to COVID-19. For enjoying Nitro Cold brew coffee, customers have to buy it in a unique coffee shop outside. If customers try to make Nitro Cold brew coffee at home, it is more expensive, complicated, or even impossible to enjoy the coffee there. N2FALLS Nitrogen Cold Brew, the world’s first portable ampoule, has the advantage of being convenient to consume anytime, anywhere customers want. We are also planning to develop more product line drinks such as berries, herb tea, healthy beverages, etc.
13. What’s the best advice you’ve ever received? And what advice do you have for someone interested in doing similar things like yours or in a similar direction?
What the best advice I have got is to complete the perfect quality and technology for customers. That’s the reason we were able to focus on Nitrogen technology and ampule. I want to say sharpening your axe to cut a tree is the most important, as Abraham Lincoln said.
14. What are the top-three books or movies (TV series) that changed your life and why?
My most impressive book is Alchemist, written by Paulo Coelho. Among the book, walking in a grand palace, two drops of oil in a spoon shouldn’t let spill. People should keep their eyes fixed on the spoon; they cannot appreciate the fancy place. Oil means my precious people, such as family, friends, and neighbors: the palace means my business.
15. How do you keep yourself motivated every day?
As I mentioned about the last question, I am just asked, I care about other people around me, especially those in need. Metaphorically, it’s also for like bring up sprouts. That’s the reason I run the business.
Also Read about food business in koreatechdesk.com,
- Korean company Imex Corporation Ltd. comes up with time-saving Cold Brew Coffee machine
- Three Korean startups that are putting the planet first
- Food company Myungdo bringing in the world’s finest confectionaries to Korea