When Richard Koh got retrenched, he still had a lot of energy so he tried his hand at the coffee business.
Richard Koh never thought he would start a business. He imagined working for a company and someday, retiring. But life is unpredictable. In June 2016, he got retrenched from his post as a regional business manager at Hewlett-Packard Asia Pacific, a company that he had been with for 10 years.
At the age of 54, he found looking for a job difficult. Explained Richard: “Before my retrenchment I was holding a senior position overseeing the Asia-Pacific region. To find a similar role with the same remuneration and scope of work was difficult especially for a person my age. I tried some consultancy projects for industries which I was familiar with but the project work was not sustainable and it was not a long-term area of work.” He also knew he wanted to try something new, adding: “I felt still young and had a lot of energy.”
But as the saying goes – as one door closes, another one opens up. At the time, he was looking into cold brew. “Cold brew coffee in 2016 was still very new in Singapore. Only a handful of specialty cafés in Singapore sold cold brew coffee. Even Starbucks Singapore did not carry cold brew coffee but Starbucks in the US was predicting that cold brew coffee would be the next big thing in the coming years.
“From our research into cold brew coffee, my wife and I discovered that cold brew coffee is more alkaline and less acidic which is healthier than hot brewed coffee. We saw an opportunity in the Singapore market to introduce cold brew coffee to the masses instead of just the café goers,” said the grandfather of two. Cold brew is made by steeping the coffee grounds in room temperature water for many hours. As a result, the coffee becomes naturally sweet.
He was also toying whether he should still find a job that gave him more stable income, or just go wholeheartedly into his own business. His wife, Ong Bee Yan, told him that there was no two ways about it and it was important to be focused. He decided to take a leap of faith and start a business.
First, he did market research and tried cold brew coffee in the different regions including Malaysia and Thailand. “Cold brew is unique in every country and you need to do taste tasting when you come up with a product,” said Richard. In 2016 and after four months of recipe development, he started 1degreeC with Bee Yan. The C in their brand stands for coffee and cold, while the 1degree stands for it being a made-in-Singapore product as Singapore’s location is about 1 degree north of the equator.
1degreeC uses Arabica and Robusta coffee beans from Colombia and Southeast Asia sourced from a local roaster. Then they create their own blend for their cold brew coffee products. Not only are they selling their products online to consumers and cafés, Richard and Bee Yan also sell their products through collaborating with others by bundling their cold brew coffee with others’ products. For instance, they bundle biscotti from online store bake&bake with their coffee and customers could then save on having just one delivery charge. They also work with Group Buys where they offer discounts on group purchases of their beverages. Other channels of partnerships include office pantries, co-working spaces and more. Richard added: “It is now a lot easier to do a business than in the past as you can do it online which we have done.”
It wasn’t easy … with good things, it never is. “It was a real challenge. Working in a big corporation, you have access to resources specialising in specific tasks. Running your own small business means you are dependent on yourself and your own knowledge and capability to grow and sustain your business. I have to be hands-on and be a multitasker from administration, sales and marketing, operations and logistics. This is one mindset change that I had to adapt and learn. I have to be willing to learn new things and acknowledge my limitations. Also, with little resources, you need to be innovative,” said Richard.
Adding to their mounting challenges is their business’ target audience being the millennials. Richard shared that doing Facebook and Instagram was something totally new to both him and his wife. But, he found his son’s good friend, Kevin, who made them understand their customers better. “Don’t be afraid to ask for help and to learn from younger people who are more knowledgeable and more experienced in certain areas such as social media marketing,” said Richard who shared that besides Kevin, he found a lot of help that they didn’t know initially including doing their corporate video. He also added that he and Bee Yan took some SkillsFuture courses including a coffee barista course and a Photoshop and design course to add to their knowledge.
Nonetheless, the couple who have been married for over 20 years continue to plod along. Whatever challenges they face, they face them together and come out stronger together. “When you spend many hours working together for a common goal, you will surely get to know your spouse better. There are definitely more disagreements and arguments but we will need to make compromises and be willing to agree to disagree. We decided early in the startup of 1degreeC that if the business was to affect our marriage, we would give up the business as our marriage is more important than the business,” said Richard.
“I have learned that people who are old can still learn. Every failure, you learn something and you get stronger.” He also wished that he had roped in other investors and venture/equity partners earlier as they might have been willing to invest in the business so that the couple could have used the capital to hire more young people with different skill sets to further accelerate their growth. The couple’s own initial investment has since been recouped after one year, and the company remains profitable.
Today, 1degreeC has diversified, selling more than just cold brew coffee but also cold brew tea. Its coffee varieties include black, white, almond milk, masala, oak milk and coconut milk, while their cold teas have concoctions like blue pea, basil and mint, and beetroot and cardamon. Prices range from S$5 to S$7. All of their brews come in glass bottles, which can be returned to them for a refund of S$0.20. In line with their philosophy of sustainability and recycling, they are also looking at repurposing their coffee grounds and herbs waste into soap on a longer term basis.
Asked what advice Richard has for ‘seniorpreneurs’, he shared this: “One observation which I like to share is the difference between young and senior entrepreneurs – ‘fearless vs fearful’. Young entrepreneurs are more aggressive in their marketing approach as they know they are still young and are able to start all over again if the business fails. Whereas senior entrepreneurs are more fearful of losing their hard-earned capital and are more apprehensive of seeing their business fail. We are more cautious and calculative in our marketing plans and approach.
“My advice to seniors is to limit their risk by setting aside a budget. If after sinking that sum into the business, to be willing to walk away if the business is not viable. Do not spend more of your precious nest egg to support a business which is not sustainable.”
(** PHOTO CREDITS: Mothership)