The Teadough Story
Over the past few months, many have noted my posts about teadough – the Edinburgh-based doughnut company I joined at 3 Day Startup – on Facebook, Twitter and LinkedIn. So this week, as we celebrate the launch of our new product, the Original Doughnut Kit, I thought I’d share our story, of how I joined the brother and sister team and, together, took an idea for an iPad Recipe app and turned it into the first make-your-own doughnut kit, just in time for Christmas.
3 Day Startup: It All Started with an App The last thing you would expect of a weekend which started out with sketches for an iPad app is a make-your-own doughnut kit. However, as we learnt at 3 Day Startup, pivoting to meet the needs of consumers is key if you are to win over potential consumers and make your mark.
After pitching our ideas for businesses and products (you can find my idea for a Student Finance Platform here) to seventy students and staff from around the University, I joined the teadough team who’s idea was to share their passion for doughnuts, inspired by their great(x9)-grandmother who invented the doughnut in 1803, with the world through a simple iPad application. The application was to offer recipes, inspired by the original British doughnut, for enthusiasts to make at home.
As the weekend progressed, however, we discovered that our target market, including many iPhone and iPad users, had no interest in another recipe app, many noting that BBC Good Food was their preferred source for recipes (market research is key, and the opening of Edinburgh’s Apple Store during that weekend helped in gaining easy access to our target market). So, we posed the question: how could we share our doughnuts with the world?
The answer: the Original Doughnut Kit. All-in-one baking kits are increasingly popular in the UK and abroad, with simple biscuit and muffin ingredient jars selling for upwards of £15 and more complicated kits, such as make-your-own cheese and fudge, selling for £30 and above. We noted, however, that doughnuts had not been developed into such a product, in part due to the common use of a deep-fat fryer. So, within twenty-four hours, our team of just three (we started the weekend with six) developed the first prototype of what is now a finished product, just in time for a first pitch in front of investors and business experts at which we secured our first three orders (all online through our new website, also assembled in a weekend) but, more importantly, received some great feedback for developing the product further.
Taking it Further It was very clear, after our first pitch at 3 Day Startup, that we had developed a popular idea but not a finished product which many would buy. Feedback received from our first pitch pointed out a number of flaws in the prototype; £15 was not seen as affordable despite many similar products retailing for more, the use of Kilner Jars for storing ingredients was increasing costs, both in terms of units produced and delivery, the original box – printed and hand-folded from a library printout – was by no means suitable and we needed to decide on the exact flavour of the doughnuts as well as the inclusion of fresh ingredients like butter and eggs.
As any entrepreneur will tell you, however, this is all part of the research and development involved in launching a new product. Richard Branson sums up some of our thinking, saying “Don’t think what’s the cheapest way to do it or what’s the fastest way to do it…think ‘what’s the most amazing way to do it.”
After 3 Day Startup, our focus turned to putting a professional finish on our product, addressing the feedback of our first pitching panel, the demands of our potential customers (many of whom were students with a sweet tooth but a low budget) while ensuring that we didn’t compromise on our wish-lists for the kit.
As October and November passed by, the Original Doughnut Kit changed quite substantially: we replaced our hefty, white box with a streamlined, sustainable brown Vegware box with built-in handle, Kilner jars were replaced with cheaper equivalents and finally heat-sealed plastic bags, the metal cupcake tray was replaced with a set of larger and taller silicon cases. The recipe changed a number of times too, in part due to a trip to Costco which threw a number of new ingredient options our way (like Caramel sauce – not adopted due to its sweetness) and denied us the chance to include others.
The first two prototypes, produced in November, were tested internally with Hannah testing one set at a Power of Youth event and me the other, over a weekend with my grandparents. Again, the prototype testing revealed some flaws in our product’s design although many of these now focused on the recipe itself. Oven times varied dramatically, doughnuts were dry, the recipe wasn’t clear. These were all resolved, one by one, as the Christmas rush – something we were keen to capitalise on – approached.
The company also took advantage of a number of other opportunities presented to us during the period. Hannah and Arthur attended a doughnut course with the Edinburgh School of Food & Wine, an opportunity to explore the recipe further and discuss the implications of providing dry ingredients to customers. Arthur was offered the chance to discuss our product with food nutritional experts, something of a legal requirement (I, for one, am still trying to identify which ones apply to us).
Pitching to Investors Today, there seems to be a great deal of debate as to whether startup capital is useful or not. Tim Berry writes on Entrepreneur.com that “Service businesses tend to need a lot less capital than product businesses” but I would argue that, for teadough’s Original Doughnut Kit, we needed no startup capital at all.
The reason for this was our initial distribution network – eCommerce. As consumers purchased the kit online, we had access to the funds to produce each kit, before we started to produce them, promising consumers a turnaround of just a few days. The only benefit for us of using startup capital is that of economies of scale; startup capital would allow teadough to buy ingredients in bulk, reducing the cost of each unit produced, and increasing profits per unit.
Regardless of this fact, we believe that pitching is a great way to collect feedback on a product or service (as we discovered at 3 Day Startup), a chance to network with similar-minded business owners and investors and, at least at the University of Edinburgh, the opportunity to win some additional funding (free startup capital).
We first pitched the Original Doughnut Kit at the Santander Pitching Competition finals in late November, offering a number of tempting, free sample doughnuts, to show off the product to both the judges and the assembled audience. While we didn’t win the competition (interestingly, it was won by two other 3 Day Startup attendees), it offered more feedback on our product. Again, the price of the product was called into question (this time we’d pitched it at £12.99) and there seemed to be general confusion as to why we were called teadough given a lack of tea.
Since then, Arthur has continued on the pitching front, presenting the company and product to panels at FOUNDER.org and Angels Den at the Scottish Business Exhibition.
The Final Product: The Original Doughnut Kit December arrived and so does the final part of my teadough story so far. As the semester wound to an end, we redesigned our packaging designs to reflect the new Vegware boxes, recipe cards were redeveloped to suit and the first batches of ingredients were produced. Teabags were acquired too, adding a nice, sophisticated touch to the product while also saving us from any brand inconsistency in the future.
Preorders launched on our website and, much to my delight, we sold at a rate of knots online. Hannah and Arthur also took the product to the University’s Christmas market where it went down a treat. And we’ve been lucky enough to enlist the services of Campfire, an Edinburgh-based video production company run by a friend of Hannah and Arthur’s, who produced a great ad for us (you can view it here), playing on the company’s history and our new product.
So here we are, two and a half months after teadough first arrived at 3 Day Startup with an idea to create an iPad recipe app and I know I speak for all of us when I say that this isn’t the outcome we expected on that first Friday evening. Its been quite a journey to develop the Original Doughnut Kit and we’re nowhere near finished yet.