Three weeks ago, just about when the pandemic was starting to hit the United States, an app called Cloosiv launched a new interface to allow coffee lovers to find local coffee shops and order curbside.
The founders woke up to a storm. Business has been rising 750% a week since. As of Wednesday, 600 coffee shops around the country had signed up, 40,000 people have been ordering coffee and, in a sign either of the good-heartedness or aggressive need for caffeine among coffee drinkers, the average ticket size has doubled.
The Charlotte, N.C.-based app, which is in 46 states, focuses on smaller cities and suburban areas. Customers search for local shops, can order online, buy from custom retail pages, and donate to the shops.
“All of these small business owners are desperate to stay alive,” said Tim Griffin, Cloosiv founder. “I’m so happy that there’s something we can do to help. But I don’t know that it’s enough. For now, it’s keeping their doors open.”
They are shops like Wyatt’s, in downtown Gainesville, Fla. Revenue is down by more than half since the social distancing went into place, and about 50% of the what’s coming in now is coming in via the Cloosiv app, says owner Gabe Chavez. It might allow him to stay afloat for three months or so.
Staying afloat is a big deal. He’s laid off 10 people that he wants to bring back to the shop, which be bought last year. “I am from Ecuador,” he said. “My family and I moved here in 2000. Growing up there’s always this idea and this vision, known as the American Dream. Own a house, own a business.”
Cloosiv’s story is something we’re seeing play out in smaller ecosystems across the United States, as local tech companies become key tools to help traditional small businesses in their communities. These two parts of the American business world, Silicon Valley and the far-flung tech ecosystems it inspires, and Main Street America, rarely meet as equals. But now, they’re finding themselves in the same center square of a new country created by the pandemic.
Cloosiv has waived the 5-employee company’s 7.1% portion of the normal 10% fee on each order.
The Right Place At The Right Time
Griffin, who grew up in Western Massachusetts, went to UMass Amherst, and moved to Charlotte after a stint in management consulting, is an unlikely entrepreneur.
He started Cloosiv as a payment facilitator for businesses in 2018, after winning a competition at the consulting firm where he worked, North Highland.
Cloosiv quickly narrowed to a focus on helping local coffee shops take online payments. In winter 2018, the team landed an interview at Y Combinator, the famous Silicon Valley accelerator. But Griffin and his co-founder, Dallas-based developer James Burkhardt, didn’t speak the language of Silicon Valley.
“We bombed it,” Griffin said.
So, they reapplied. “Honestly, I’m just an engine,” he said. “If I believe in something I’m going to keep pursuing.”
They reapplied again.
Griffin was driving for Lyft and Uber by then, trying to keep the company alive. Burkhardt was back to taking gigs on Upwork.
Finally, the fifth time, they got in. A friend had introduced the team to the entrepreneur and investor Sam Altman, who put in a good word.
In the summer 2019, he and Burkhardt found themselves in the Y Combinator program sitting next to a team of three people from Stanford with degrees in artificial intelligence. “Talk about imposter syndrome,” said Griffin.
Imposters or not, the program allowed them to raise $1 million in funding, with VentureSouq as the first funder. Cloosiv has just signed a deal with Square, which charges a 2.9% processing fee, part of the 10% that gets charged to the coffee shops. There are other focused apps in the field, including Montreal-based Ritual and Joe Coffee App, based in Seattle.
Griffin’s perseverance mirrors what coffee shops will need to do to survive. “Silicon Valley feels like another world,” Griffin said, though he appreciates the singular characteristic of it: willingness to help. “The larger network they have, the more opportunity they have to be included,” he said. “I often credit Sam … I would credit the survival of Cloosiv to his willingness to help.”
Chavez, meanwhile, is finding some doors open, and some closed as he struggles to survive. He heard from his landlord, that she will delay at least one month’s rent, prorating over future time, but the former owner of the business isn’t giving him any relief on the monthly loan payment.
He started selling coffee in 64-ounce mason jars, which, astonishingly, have been selling.
Gainesville’s city government has been supportive, quickly changing regulations so he could deliver coffee at the curb; and people can still walk up and place their orders at the door.
His wife’s events company folded, so she is out of work, too.
“I’ve been working 15, 16-hour days,” he says.
He’s been heartened by about $350 worth of donations gathered so far. He distributes donations to the laid-off staff. They include those from a regular customer.
“He would come in at 7:25, and order a tea, open up a book and read,” Chavez said.
For the past few weeks, he’s been donating $20 a day. “It’s just a reminder that people care.”
This story and others on New Builders Dispatch are made possible by a sponsorship from the Ewing Marion Kauffman Foundation. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit www.kauffman.org and connect with www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.