Crowdfund your homebrew
While for some it might just be a cheaper solution, others see homebrewing as striving for independence with the creative potential of crafting unique types of beer. Hungarian Brewie took up this lifestyle and turned it into a DIY business with the help of Indiegogo. We talked to CEO Marcell Pal (25) about turning beer into money.
The journey of Hungarian Brewie starts with taking the time for a good glass of beer. When Marcell was studying in Denmark he learned about concept of homebrewing during his summer break in 2013. His friend – and now cofounder – Andrew Winter (25) had just brewed one of his first ales and proudly presented his efforts to Marcell. “I tasted his beer and it was actually quite good,” Marcell recalls. “And on top of it, it is also quite cheap. He brewed it for about 24 cents per bottle!”
Bringing the pub into the living room
Brew your favourite beer right in your own kitchen; Photo credit: Brewie
But sitting in the sun enjoying the homebrew was only one side of the process: “I learned that you need a lot of equipment, need to be around during the whole process that takes about 6 hours – measure the temperature, balance ingredients and so on – which followed by 2-3 hours of cleaning. It’s a complicated process,” explains Marcell.
Fascinated with the process but frustrated with the downsides, the first attempt to build a device that does the brewing for you was made out of purely egoistic reasons.“We wanted to build the first fully automatic brewing machine so we don’t have to spend so much money on beer,” Marcell explains pragmatically. But with an academic background in business and marketing, and initial startup experiences working with young ventures in Berlin, the step to founding an own business was not far. Before rushing head over heels though, Marcell conducted a survey with experienced homebrewers and people new to the topic. “The response rate was huge! Normally, you get one or two sentences of comments in surveys – in this case people were writing a whole page. So we realised that there is a great interest in this topic!”
From teen inventors to a startup business
[O]ne day we decided to build the tallest waterpipe in the word – which in the end turned out to be 2,8 meters high.
In October 2013, the idea was developed further, selected to take part in the Venture Cup competition in Denmark soon after, and eventually received the second place in the technology category. Despite not winning the competition, the cofounders Marcell, Andrew and Greg went home with many contacts and feedback in their pockets and decided to found a company.
“Andrew and I are actually childhood friends and we also met Greg Schlotter (25) at a party during high school days,” Marcell explains. If you look at the creative schooldays of the team, you could have guessed already then that the team would end up in an innovative business sector. “There was a big waterpipe trend in Hungary when we were about age 16. So one day we decided to build the tallest waterpipe in the word – which in the end turned out to be 2,8 meters high. We brought it to an event where everyone could see and try it,“ Marcell recalls. Moreover, Andrew and Greg did similar crazy things. Once, they started to build a vacuum fridge but didn’t complete the project when they found out there was already a patent for that. “We are very much into hardware – things that haven’t been made yet or things that exist but could be better. As for the future I could imagine having another hardware child.”
Today, the team consist of six employees and works from a flat office in Budapest. Although their work has become a full time job, they reject the idea of fixed hours and classical work routines. “Flexibility is very important for us,” says Marcell and adds that there are just two musts for the team: the planning meetings on Monday, and the Friday after-work beers where they sit down as friends to discuss anything but work.
Validating the product
With Brewie, newbies as well as experts can craft beer on their own. You simply start with choosing your favourite ingredients and defining the water intake with the integrated touch display. You can either run it automatically or control each step of the process. Since the device is constantly connected to wifi, you can even monitor the brewing process while at work or on the road. But the path from a dazed idea at a summer BBQ to the ready product led Brewie through several challenges and competitions.
Be it at events such as Startup Sauna Budapest, where they won first place, or at Next Berlin, where they were among the best eight startups, the feedback had been encouraging and showed them that they should keep going. So, in December they dared to take one big step further by launching a crowdfunding campaign on Indiegogo.
It takes about three to five months preparation to start a crowdfunding campaign and it is time consuming and risky. But in the end, it’s definitely worth it.
“Our main reason for crowdfunding was actually to find out more about our target market. It is a great tool to see what kind of people would buy your product, in which country they live, what they do, what kind of income they have and so on.” According to the first results, an average brewie customer is between 20 and 50 years old, male and is either a newcomer to homebrewing or has already tried it out once or twice. “We now know that our most important market is in Western Europe, USA, Australia and New Zealand, but we also got queries from countries like Panama – which we never would have reached without starting a crowdfunding campaign.”
Because of the high costs of their product (the special Earlybird Package was sold for 999 dollars) Indiegogo was the most obvious choice as a platform for Marcell. “Kickstarter might have a higher daily traffic, but the support you get from Indiegogo is not comparable to that. They simply have a better customer service and really care about their projects.” But the fact that you get guidance and support does not compensate for your own efforts in such a campaign. “It takes about three to five months preparation to start a crowdfunding campaign and its time consuming and risky. But in the end, it’s definitely worthit and what you get is not only money but also valuable feedback and validation – and the latter comes for free.”
August 2013: Idea was born
September 2013: Name came up
October 2013: Entered development phase
January 2014: VentureCup Denmark (2nd place)
March 2014: Central European Startup Competition (1st place)
April 2014: Startup Sauna Budapest (1st place)
May 2014: Next Berlin (best 8 startups)
December 2014: Launch of crowdfunding campaign
February 2015: Raised 223,878 dollars on Indiegogo
Having finished their crowdfunding campaign on 31 January, they have managed to raise 223,878 dollars which is more than double the amount theytargeted. “I believe crowdfunding is one of the best financing techniques for a startup at the early stage. I strongly encourage everyone to use crowdfunding to get funding, validation and increase the value of the company with the early sales. All in all a crowdfunding campaign that contains the pre-campaign, campaign and post-campaign periods can easily take up a year or even more of your time. If you are prepared for that, then definitely go for it!“ So, their next big challenge is finishing the production in time and starting to ship the first batch to their backers by September. Right after that they will hit the commercial market. “For a faster growth I would also consider an investment round in the next year. But I’m definitely not thinking of selling the company yet.”
Moreover, in March 2015 they will exhibit their invention at the music, film and interactive festival SXSW in Texas, which “will be a great chance to meet some future customers and reach out to future business partners as there is a huge homebrewing culture in Austin,” Marcell is certain. “We aim to reach a point where the company can stand on its own and we can deal with other things. And hopefully that will happen in two or three years.” We wish them good luck and salute!