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MBA Entrepreneur Smells The Coffee With Luxury Brand Start-Up

Business school entrepreneur looks to challenge coffee giant Nestlé with an ethical take on Nespresso coffee capsules.

By  Seb Murray

Tue Mar 31 2015

Colin Pyle, CEO and co-founder of CRU Kafe, wants to grow the organic coffee company into a global, luxury brand that represents both quality and fair-trade. But to do so he will need to take on the likes of Nespresso, the coffee-maker of Nestlé, the world’s largest food company by sales, and a host of smaller players.

Nespresso lost a court case in 2013 to protect its coffee capsule design, opening the floodgates to competitors like CRU Kafe.

The MBA graduate is certainly giving coffee his best shot. Founded in 2013, the coffee venture is in the black, having raised nearly £500,000 in funding, including an online campaign on Kickstarter, the crowdfunding platform.

An alum of Hult International Business School, he believes CRU Kafe can thrive in the saturated coffee market with an ethical vision. It only selects organic and fair-trade, specialty-grade coffee, for example, from suppliers such as Ethiopian and Peruvian cooperatives. Also, its coffee capsules are recyclable, soon to be biodegradable.

If that sounds like a mammoth task, Colin is used to challenges. He has completed two epic bike adventures – 18,000 and 12,000km trails – across China and India, writing books and producing TV series for both.

Coffee is a daily grind but he has known the start-up life before. He founded in 2006 ToroFX, a Canadian currency broker and foreign exchange services provider, which he sold for $4.9 million. Two years ago he co-founded Lingos, an online and mobile service that helps people learn languages.

He also runs Silicon Real, a Silicon Valley-focused series of podcasts that has featured executives from Google, London Stock Exchange and Hailo, the taxi-hailing app.

He finished at Hult in 2012 and believes an MBA has opened new doors to his start-up. But there will be few coffee breaks on the road ahead.

How did the idea for CRU Kafe come about and how was the company founded, and with whom?

My business partner Bodil Blain was watching her friend put coffee into a used Nespresso capsule because she hated what Nespresso offered and knew there had to be a better way. She approached a mutual friend of ours and he suggested she meet up with both John Quilter, my other business partner, and I.

We quickly realized that we had a uniquely diverse team, along with a great idea, in a growing market with phenomenal access to media, money and talent. We were very lucky to have found each other, and are on a path to create a wonderful, global business. 

Who is your competition and what makes CRU Kafe unique?

This is a very competitive space but also the second-largest market in the world after crude oil.

We’re doing things very differently. We only use organic and fair-trade, specialty graded coffee. We put that delicious coffee into our recyclable capsule. This is moving to a biodegradable capsule in the next few months.

We continue to innovate and build our brand into one that people recognize with quality, ethics, and one that is forward-thinking environmentally. If we can continue to do these correctly going forward, then we will succeed.

I’m a big believer that in a big market, [you should] just do what you do best and don’t look back. You’ll always have competition and that is healthy – but if you allow that to alter what you want to achieve, it can take you off course. 

What success did you have, and what lessons have you taken from, ToroFX?

I started ToroFX from scratch with my business partner and C$50,000. We quickly grew that business and sold it 18 months later for C$4.9 million.

I then worked for Equity Foreign Exchange Services for two years as part of the “earn out”. This four-year experience was incredible and taught me about different stages of business, and managing and growing teams.

It was a four-year crash course in business start-us and the world of finance. 

People question the value of an MBA for entrepreneurs. How beneficial has an MBA been for you and your start-up ventures?

I think a lot of people who say that are often in a rush, or know exactly what they want. I had already successful sold a business and didn’t really know what my next move was going to be.

I wanted to relocate and decided: what better way to spend a year than networking in a new city while going to school with incredibly intelligent people from all over the world?

An MBA opened a door in my brain, and has since opened several doors around the world for me while I have been running my coffee business CRU Kafe. You get what you put into an MBA; I put in a lot and the rewards keep coming. 

What do you love about the Middle Kingdom and Indian Ride challenges you have completed?

When I resigned from Equity Foreign Exchange Services I was 28 years old and had never camped or gone on a long motorcycle adventure. Taking on these two amazingly challenging adventures with my brother has changed who I am at the core. Undertaking such a challenge gives you a newfound perspective on what you can actually achieve.

Walking away from these two experiences – with a Guinness World Record, two TV series, two books which I co-authored, and a production company that my brother and I own that manages these assets – [I realized] they have changed my life and I have also learned a lot about running a production company and managing digital assets.  

Who has been the most interesting guest you've featured on Silicon Real and why?

Because of my background in finance and specifically FX I really enjoyed interviewing Taavet Hinrikus who is a co-founder of Transferwise, which is now a billion-dollar business, backed by the likes of Richard Branson and Andreessen Horowitz. He also happens to be the first employee of Skype.

He had so much to say about building great businesses and advice for young entrepreneurs. Transferwise will be remembered as one of the most disruptive fintech companies ever. 

What funding has CRU Kafe received and do you anticipate any further rounds of funding?

We did a small Kickstarter campaign in December 2013 for £15,000 – of which Hult chipped in to help. We did a small angel round in January 2014 for just under £150,000. Then in July we raised from one individual just under £135,000 and in November we raised a further £180,000.

As an entrepreneur you’re always raising money, especially with a physical product, as a lot of your cash is tied up in working capital.

I’m currently making the rounds with angels and venture firms, looking to raise between £500,000 and £1 million. We’ve got big plans for 2015.

What are your goals for the company and what are the main challenges you face in achieving them?

I want to grow CRU into a global luxury brand that stands for something.  Currently we’re making amazing organic coffee in biodegradable Nespresso-compatible capsules, but soon we’ll move into beans and grounds, then who knows what else.

When you create a trusted brand that delivers on quality and ethics without any compromise, then you have customers for life.