Industry Insights: Mike Lombardo, Founder of Topos TeaNovember 15, 2019 - by Taylor Getler
This interview is part 2 of Branding Times’ “Startup Spotlight” feature. Click here to read part 1.
Topos Tea was founded in 2017 by two Rowan University students, Mike Lombardo and Kayvon Jahanbakhsh. Since its humble beginnings as a college startup, the company has gone on to receive significant support from Whole Foods. Mike was kind enough to sit down with us and share his experience, wisdom, and advice for other entrepreneurs in the food and beverage space.
Bottled tea is a pretty crowded category. What sets Topos apart from its competitors?
Topos is tea elevated with gut-friendly ingredients. We use herbal ingredients that result in a caffeine-free, soothing product. It also helps that we use a brewing method unique to tea, which yields a consistently fresher flavor than traditional bottled teas. All of this combined creates a sippable tea tonic, perfect for any time of day!
What has been your biggest challenge in founding and developing Topos?
I would say it’s mostly not having the experience or professional background. Neither of us ever had a formal internship, so we made Topos our internship. We just jumped right into it while still in college. There’s a steep learning curve and you have to work quickly, so we do everything we can to learn from industry veterans.
How did you first raise capital to start the company? And once you got that investment, how did you determine your priorities for allocating the funds?
Initially, Kayvon and I invested our own money into the company. It was a small amount, but as college students, it was a significant portion of our bank accounts. We knew we needed some more capital as well as some more validation, so we entered Rowan’s Idea Challenge in the fall of 2017. We lost, and it was back to the drawing board. As the concept developed and we refined our pitch, we were fortunate enough to win first place in Rowan University’s 2018 New Venture Competition the following spring.
That was a big moment for us because it further validated the concept and provided some funding through a $4,000 grant. It also got our foot in the door for Rowan’s startup accelerator program, which provided additional grant opportunities. By the end of the summer of 2018, we had raised another $20,000 in loans from family and friends. In the midst of all of this, we hadn’t even made our first bottles, so it was a lot of faith from people who saw our passion for the concept. Throughout 2019, we took on more loans from advisors, family, and friends, and received additional grants. Now, we’re looking to raise our seed round (*cough cough* feel free to email firstname.lastname@example.org if you know any investors!) with the proof-of-concept that we’ve been able to show over the last ten months in Whole Foods.
We planned very carefully for how we would allocate our funds. In total it was $45,000, which isn’t a lot to work with. We were often informed that it would take “north of half a million dollars” to launch successfully. Instead, a lot of things that a beverage startup would typically outsource were made to work in-house. We knew we couldn’t afford to cut corners on product quality and integrity – it’s wholly against our company values since inception – so we found other ways to save. We devoted a significant amount of time and energy to uncovering and utilizing the resources that are provided at Rowan. For example, we worked with the art department’s senior design class on our initial packaging during the fall 2017 semester. At the end of the semester we chose a winner and still continue to work with her to this day. She had the opportunity to build her design portfolio and we had the opportunity to develop our initial bottle designs and brand assets at a relatively low cost.
How do you make decisions as a team? Do you have a specific process that you’ve found to be helpful?
It depends on the weight of the decision, but we’re communicating all the time so we’re usually on the same page about everything. Usually marketing and operations will fall on me, whereas Kayvon handles most of the finance and account management, specifically with the Whole Foods account. However, because CPGs are largely about branding, we’re constantly working together on how we can better the Topos brand.
When there’s a lot of coordination involved, we’ll sit down and discuss exactly who will take what tasks, and we keep track of everything in Asana. We typically start by looking ahead at the end goal and then working backwards to build a timeline in Asana that we can follow to ensure we’re still on track. The platform allows for a lot of visibility so we manage everything out of it. We use OKRs (Objectives and Key Results) as a way to set goals and benchmark progress, taught to us by one of our early mentors through Rowan’s accelerator program, Phil Michaels of Tembo Education.
How did you first get in touch with buyers?
It really depends on the situation. One store was a connection through the law firm we work with, for example. You never know who might know someone and be able to help you out. With Whole Foods, we made a few phone calls and sent a few emails and got really really lucky. We were able to set up a meeting with the buyer and team leader for one of the local stores. We provided some samples and showed them a slide deck. They took a liking to what we were doing and put us in touch with the right people. Their word carried some weight and helped us get our foot in the door with the local program coordinators.
What is something about both of you that has helped keep Topos successful and growing? What traits do you think are important for the founder of a CPG startup to have?
We were fortunate enough to be friends for several years before launching Topos and had worked together at several jobs, from lifeguarding to working for event production companies. I think that helped a lot – especially when we were just getting the company started – because we knew how to work together. We’ve also always been on the same page about the mission and vision of the company, so it’s not hard to see eye-to-eye. That said, we’ll frequently challenge each other’s viewpoints if we have different beliefs about how to solve an issue. That dichotomy can be a powerful tool when it comes to creative problem solving.
Both clear communication and the ability to work with people are absolutely crucial values to possess. It takes a lot of people to take a concept or idea and make it a reality. You have to be someone that people enjoy working with, and you also need to be able to articulate your vision in a way that people are willing to jump on board and help you out. As an early stage startup, you can’t always afford to pay consultants and other experts their market value. However, you’d be surprised how much people are willing to lend a hand when they see passion from the founders.
When you first started, did you have a target market in mind? Has this changed at all as you’ve developed your company?
We actually missed the mark a few times, but that’s all part of the process. Early on, we had an idea of who our market might’ve been, but some quick testing proved otherwise. For example, before having launched any product and when Topos was still just a school project, we thought our audience was healthy, athletic individuals looking for a clean and great-tasting tea. We set up a sampling in the vendor area of a triathlon and quickly found that serious athletes consume supplements, meal replacements, protein bars, and pretty much anything that is linked to a “fueling the body” benefit. We never claimed to provide such a functional benefit, so we got passed over by many many athletes that day. It was a big eye opener, and we quickly learned that it takes time to really find your audience. Now, we’re looking into the ingredient-conscious consumer and observing how they respond to the functional benefits our herbal tea can offer.
What advice do you have for business owners trying to get into retailers like Whole Foods?
Whether they choose to pick up your product or they reject it, listen to the feedback the buyers provide. I can’t tell you how many times I’ve seen other startups in this space wondering why they can’t get into an account and then they say “Well the buyer told me that XYZ needs to change before we can be considered, but I don’t see the problem with it.”
The buyers know their customers very well, so if they provide feedback, remember that they’re making recommendations that they believe will help your products better appeal to their customers. Don’t go changing everything about your product or company based on one person’s feedback, but if you see a common trend, it’s usually time to at least have a few whiteboarding sessions. We’ve done this a few times, and it’s really helped us zero in on our value proposition.
Where do you see Topos going in the next five years?
We would love to be able to move into a shelf-stable product that has the same simple and clean ingredients and comparable flavor to our current line of fresh-tasting, cold-pressured teas. Part of our mission is to make digestive health accessible through high-quality tea tonics. A shelf-stable product would allow wider distribution and thus more reach to accomplish our mission. We hope to be on a national level by that point as well. We’re working hard on expanding to a regional presence over the next year to really get things started, so stay tuned as we announce more locations!
If you’d like to read our past interviews with food industry executives and design leaders, you can find them all here.