Atlas Coffee Club

How Michael Shewmake Transformed a Coffee Club Subscription Business To $22M ARR

December 28th, 2024

Founded By

Michael Shewmake

Monthly Revenue

$1.83M

Starting Costs

$5K

Founders

Employees

26 (est.)

Monthly Traffic

191K

Profitable

Yes

Year Started

2015

Customer

B2C

Revenue Per Visitor

$9.58

Founded By
Michael Shewmake: Monthly Revenue
$1.83M: Starting Costs
$5K: Founders
1

Employees
26 (est.): Monthly Traffic
191K: Profitable
Yes: Year Started
2015

Customer
B2C: Revenue Per Visitor
$9.58

Who is Michael Shewmake?

Michael Shewmake, founder of Atlas Coffee Club, is an entrepreneur who started with $5,000 and a background in data science to create a thriving subscription business. Initially a corporate employee at Liberty Mutual, he was inspired by a unique coffee experience in Malibu, California.

What problem does Atlas Coffee Club solve?

Atlas Coffee Club solves the problem of bland and monotonous coffee experiences by delivering unique, globally-sourced beans that offer a fresh taste and cultural journey with each delivery. This approach delights adventurous coffee lovers who crave variety and discovery beyond what's available at local grocery stores, making it a subscription service worth the investment.

Atlas Coffee Club Homepage

How did Michael come up with the idea for Atlas Coffee Club?

During a trip to a coffee shop in Malibu, Michael Shewmake stumbled upon a cup of coffee that changed his perception of the beverage, despite previously not being a coffee enthusiast. Intrigued by the barista's explanation of the coffee's origin and production methods, he realized that many people, like him, were unaware of the diverse world of coffee sourcing and brewing techniques. This revelation inspired him to found Atlas Coffee Club with the idea of offering consumers a global coffee experience.

Shewmake faced the challenge of turning his newfound interest into a viable business, using only $5,000 and starting from his parents' basement. His initial steps involved collecting information about coffee's diverse origins and taste profiles, which led him to envision a narrative-rich subscription model that delivered coffee from different countries each month. His idea was further refined as he explored different ways to create memorable experiences for his customers through educational materials and storytelling.

In navigating the early stages, Shewmake engaged a friend as a business partner to help brainstorm and validate the concept, ensuring it resonated with potential customers. By researching and understanding market trends, consulting friends and family for feedback, and testing the idea with a minimal upfront investment, he overcame the initial hurdles and set the foundation for a business model that emphasized the narrative and educational aspects of coffee consumption.

How did Michael Shewmake build the initial version of Atlas Coffee Club?

Atlas Coffee Club's initial product development was an iterative process starting from a modest $5,000 investment. The founders began by securing a coffee supplier through spot market purchases, allowing rapid procurement within about 10 days. They crafted the first version of their product with a strong emphasis on storytelling, integrating personalized elements like postcards and tasting cards to enhance the customer experience. Early prototypes faced logistical challenges, such as shipment delays due to external factors like port disruptions. Although the technical aspects of sourcing and logistics were manageable with standard procedures, the real challenge was creating a compelling brand that transported customers to the coffee's various countries of origin, transforming each delivery into an immersive experience.

What were the initial startup costs for Atlas Coffee Club?

Initial Investment: The founder started the business with an initial investment of $5,000.

What was the growth strategy for Atlas Coffee Club and how did they scale?

Facebook and Google Ads

Atlas Coffee Club effectively utilized paid advertising on platforms like Facebook and Google. By identifying key search terms like "Coffee of the Month Club" or "Coffee Subscription," they reached potential customers actively looking for subscription services. They focused on ensuring their cost per acquisition was low relative to the lifetime value of a customer, aiming for an LTV to CAC ratio greater than five. This strategy enabled them to attract customers profitably, maintaining profitability in a competitive market.

Why it worked: The targeted approach helped them reach audiences with a high propensity to purchase, allowing them to optimize their spending and ensure high returns from their advertising investment. By keeping their acquisition costs in check, they were able to sustainably grow their customer base.

PR and SEO

Atlas Coffee Club also leveraged press coverage and search engine optimization to increase brand visibility. They became skilled at pitching to the press, earning backlinks and media attention. These efforts improved their organic search rankings, helping them to attract visitors searching for the coffee subscription experience they offered each month.

Why it worked: PR provided widespread exposure, while SEO bolstered their online presence, reducing reliance on paid channels. This dual approach decreased customer acquisition costs in the long run, enhancing sustainability. Backlinks from press stories improved search rankings, creating a flow of organic traffic that continually supplied new potential customers.

Subscription Experience

To retain customers and encourage ongoing subscriptions, Atlas Coffee Club created a rich, immersive experience around their coffee deliveries. Each shipment included a postcard and a tasting card that educated customers about the coffee's origin and flavor profile, turning the act of receiving and consuming their coffee into a monthly event.

Atlas Coffee Club Subscription

Why it worked: This approach transformed the product into an experience, fostering customer engagement and loyalty. By building anticipation each month, they reduced churn and strengthened their community of subscribers who feel they're part of an exclusive global coffee journey.

Product Diversification

Atlas Coffee Club expanded their market reach by launching the Atlas Tea Club, which provided a similar globally-inspired tasting experience but with tea. This new offering allowed them to cater to a broader audience and cross-sell to their existing customer base.

Why it worked: Diversifying into tea not only enhanced customer retention but also attracted new customers from a different segment, thereby increasing overall revenue. It demonstrated the brand’s breadth and ability to offer varied experiences, appealing to enthusiasts of both coffee and tea.

What's the pricing strategy for Atlas Coffee Club?

Atlas Coffee Club utilizes a subscription model offering globally sourced coffee for around $14 per bag monthly, emphasizing unique experiences with tasting notes and country-specific stories.

What were the biggest lessons learned from building Atlas Coffee Club?

Create Magical Experiences: Atlas Coffee Club turned ordinary subscriptions into unique experiences by including postcards, tasting cards, and origin stories, making each delivery an educational adventure.
Smart Financial Management: They maintained a bootstrapped approach with a focus on ensuring their Customer Acquisition Cost (CAC) was a fraction of their Lifetime Value (LTV), which allowed them to invest confidently in advertising and growth.
Adaptability is Key: Navigating challenges like the pandemic, they showed resilience by adapting their strategies, such as shifting to contract buying and being flexible with product offerings.
Effective Scaling Through SOPs: The importance of refining and relying on Standard Operating Procedures (SOPs) for efficiency and scalability was crucial to their growth strategy.
Strategic Team Building: Recognizing the need for skilled managers and fostering a team that could execute repeatable processes effectively contributed to their sustained success.

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