Spilling the money beans

Updated: 2015-03-05 07:29

By Deng Yanzi in Hong Kong(HK Edition)

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Editor's note: Coffee aficionados got a rare treat when two young innovator brothers put their entrepreneurial talent to the test and came up, through a successful crowdfunding exercise, with a smart coffee maker that can even tell users' preferences.

Benson and Nelson Chiu have recently won a "war".

In a crowdfunding campaign they described as a "global public relations (PR) war", the brothers managed to raise $850,000 for their smart coffee machine Arist on Kickstarter, making their company Nbition Hong Kong's biggest crowd-funding success, and Arist the most funded coffee machine worldwide.

Spilling the money beans

Their sought-after idea is a smart coffee maker that works professionally as a personal barista. Controlled by a smartphone application, the Arist machine attempts to simplify the coffee brewing procedure with ready-to-use recipes installed in the app, and also allows fine-tuning specifications such as water temperature for personalized taste.

The machine is also smart in the sense it's able to learn users' preferences. Based on data on a user's brewing and drinking behavior, the machine makes personalized recommendations such for coffee bean and recipe selection.

Apart from being a fancy gadget, making good coffee still matters to Arist. Benson Chiu, a coffee enthusiast himself, makes sure that his coffee maker processes different coffee beans in different ways, in order to bring out the best flavor and aroma of each variety.

The smart coffee maker exhilarates both the coffee and the technology communities worldwide, drawing overwhelming attention to both cheers and doubts since it launched the crowdfunding campaign last October. Benson Chiu, 29, co-founder of Nbition and a former engineer, admitted that PR was a challenge for his company.

Spilling the money beans

The Arist PR team worked on a three-shift basis during the campaign to keep track of the comment section 24/7, and to ensure prompt responses to the backers, who are the donors from the Kickstarter community.

The team hit a roadblock when Scanomat, a Denmark app-controlled coffee maker, sued Arist for intellectual property infringement, resulting in a two-day suspension of Arist's campaign on Kickstarter.

By taking legal action against the allegations, Arist resumed their campaign, but was subsequently faced with refunds from some panicky backers. Nelson Chiu made a bold decision to raise the price of the coffee machine by $50 from the original $299, in order to restrain further dumping by existing contributors.

It worked and Arist managed to weather the crisis. "Only experienced businesspeople like my brother dare to make such a move," Benson Chiu said in tribute to his elder brother's entrepreneurial experience.

Nelson and Benson Chiu are comfortable with the dynamics of a sibling partnership. Disagreements on company decisions seldom arose as they have their own areas of forte and a clear division of roles in the company - Benson has a say in technical issues as chief technology officer, while Nelson deals with the business part as chief financial officer.

Nelson Chiu set foot in the business world at the age of 19 when he took over the family printing business in Canada, where the Chiu family moved to in 1996. The younger brother, on the other hand, took on roles as a software and hardware engineer in IBM and Microsoft after graduation from the University of Toronto.

When Benson Chiu worked for Microsoft, coffee from the pantry tasted far from pleasant for the coffee lover. He then started modifying coffee machines as a hobby for better results, but grew serious about making it an official business for which his elder brother showed his backing.

The thirst to realize their own business ideas nudged them into quitting their established careers for entrepreneurship. They began developing the machine Arist in 2013, moved back to Hong Kong and set up their company Nbition Development Ltd in the same year.

Nbition is currently an incubatee at Hong Kong Science and Technology Park, from which they receive funds and in-kind support for research and development as well as the company's operations.

Spilling the money beans

The company also received funds from the Microfinance Scheme set up by Hong Kong government, and strongly backed by Financial Secretary Tsang Chun-wah, who mentioned the Chiu brothers' project in his 2015-2016 Budget speech last week. Benson Chiu said stronger government support for startups in Hong Kong is one of the reasons why they returned to the city.

By January, Arist had received more than 22,000 pre-orders that are scheduled for delivery this summer. The US is currently the major source of customers for Arist, but the Chiu brothers see the Chinese mainland as their next principal market.

Coffee culture on the mainland took off late but has flourished in the past decade, growing at an annual rate of 25 percent in terms of coffee consumption, which is eight to 10 times the average global rate, according to a research by the Hong Kong Trade Development Council last year.

The market for coffee machines on the mainland, on the other hand, is still at its nascent stage. The coffee maker market achieved a growth of 30 percent in sales in 2013, but the turnover was hardly a fraction of that of the Japanese market, Du Wei, manager of domestic coffee maker Wanshida, told the industry magazine China Appliance.

The Chiu brothers are confident about the prospects of the Chinese mainland market, as they notice the shift in coffee consumption, thanks to stronger purchasing power among mainland consumers. They are set to seize the initiative in the market while it's still in its infancy.

The mainland market has a higher level of acceptance toward products that have already made a name overseas, Nelson Chiu said. In that sense, Arist's international crowdfunding success has its significance beyond financing.

iris@chinadailyhk.com

(HK Edition 03/05/2015 page9)