The first compostable coffee capsules are ready

From the comfort of the corporate world to the maelstrom of entrepreneurship. Sebastián Merino accumulated an executive career of 20 years, most of it in multinationals, specializing in the development of new businesses. In his last stop, he was Philip Morris’ Marketing Manager for the Andean Pact. He studied Administration and Marketing at the Universidad San Francisco de Quito (USFQ) and then did an MBA focused on International Marketing. He accumulated a lot of experience, but he got tired. The entrepreneurship bug had gotten into him, so he took advantage of the pandemic to develop his idea. This is how the Lat-Zero Coffee company was born, with its Color Café brand, the first compostable coffee capsules in the country. With an investment of US$200,000, you face the challenge. This is how he lives it and this is how he tells us.

Difficult decision to leave the comfort zone.

I always wanted to do something of my own. In 2010, I had my first attempt at entrepreneurship, with two projects. The one was never born. In part, it was lucky that it didn’t happen because it wouldn’t have gone well for me. It was an agribusiness focused on artichokes, with added value. God knows how he does things. Companies that did something similar went bankrupt within a year, because production costs skyrocketed. Then I got into another venture, financial advisory, which was not mine, but I always wanted to learn that part of finance, how to raise capital, what options you have, it was interesting because I learned a lot. I helped the partners in the commercial part. They moved on and I returned to the corporate world.

What did the corporate world teach you?

From where I am standing right now, I see a lot of things. It allowed me to start new businesses countless times, with the ease of having a structure behind it that greatly facilitates doing things, by having much larger wallets supporting the projects. It gave me that learning of creating things, creating businesses from scratch, watching them grow and develop, in much shorter times. Because when you do it alone, everything goes much slower. It also gave me what many entrepreneurs lack, structuring things better, from a legal, financial, etc. point of view; That helps manage uncertainty when you undertake it yourself.

Is there a difference in how failure is handled?

There is a huge difference. In the corporate world, if there is a mistake you can pivot the project, go the other way and react very quickly, because there are the funds. When you are alone, if you make a big mistake, it hits you hard in the pocket and that can postpone the project indefinitely or kill it. All this helped me see that, even if you fail, the world does not end, but rather it is a matter of rethinking and insisting. I have learned a lot to talk to consumers. I was Marketing Manager at Philip Morris, but I don’t smoke, I’ve never tried a cigarette. So that helped me understand what the consumer wants. Now every time I’m going to do something, it’s natural for me to talk to five, six, ten consumers before deciding, to know if where I’m going is right or not. The mistakes you make lead you to be more open to what the consumer tells you.

Are you afraid of starting a business?

You are always afraid to undertake. There are many things that scare you. One, fail, because you are risking your capital, including that of your family and people who trust you. But you also have, and it has happened to me especially in this venture, that you are creating something new, something that no one has ever done in the country, so no one can help me know if I am right where I am going, so you become a little vulnerable, because you’re putting a lot of yourself into a product. And at the end of the day, it may not work. That vulnerability hits you as a person, in the ego?, when the consumer tells you no, that you have to improve. That’s why I talk to many people who have started and continue on the path. There are people who tell you all the bad things about starting a business, but there are also many who go a little out of their way to help, advise, advise, even work. In my case, my family has made a huge effort, because obviously I am not earning anything yet.

How do you silence the voices in your head that tell you that you are crazy for doing this?

You don’t have to put those voices completely out of your head. There is a lot of uncertainty, you have to be persistent, there are headaches that you have to face with bureaucracy, tons of processes that you have to go through that take months, in short. Therefore, if there are things that you should listen to, you should not turn off your ears. But you have to focus on telling your project, talking to entrepreneurs, clients, seeing how people react. You have to be positive and you have to test with the consumer. You take the positive things, you use the negative things to correct and you keep pushing, you keep moving forward.

And on the other side, how can we avoid going into excessive euphoria?

That’s much easier, because there is always someone who lands you, there is always a consumer who puts you down. There are days when everything works well, you are super euphoric, and suddenly a day comes when you hit the planet. That happens every holy week. There is always something, some procedure that didn’t go through or a person that looks bad on you. I come from the corporate world and when I asked for a quote everyone was dying to serve me and now I am at a point where I am the last in line, only when they have nothing to do do they answer me. There is always someone who takes you down, there are a lot of blows, but you have to keep going.

And at home, at home, how do you handle uncertainty?

I am married, I have a son. Before the pandemic I was already working remotely. The pandemic hit, I was locked up at home for a year and a half, so, in part, that pandemic helped me germinate the project. It’s not difficult for me to be at home. And the family has totally supported me, my parents, my wife. The family has not been a pressure.

Is it worth undertaking all these flats?

Ask me in a year (laughs). I wouldn’t have done it if I didn’t think it could be done. In Ecuador there is a lot to do, there is a lot of added value to take advantage of. We are very good, we have a lot of wealth, but there is a lot of value to add. Because to many things that we export, someone else adds value and ends up selling them at three times the price in other countries. We could do that here.

How did the idea come about?

My wife and I like coffee. Two years before the pandemic, I had brought him a coffee machine from a trip to give him for Valentine’s Day. We like capsules, but during the pandemic there was nowhere to buy them. There we saw the opportunity. However, we always think that, if capsules were not so polluting, we would consume much more. For us the capsules were something nice, but for special moments or when we had guests, because we didn’t want to contaminate. The capsules are made of aluminum and, although they are recyclable, a recycling process is needed that does not exist here. I left Philip Morris on April 15, 2021. My idea was to take a three-month sabbatical. I went crazy after two weeks. I created Lat-Zero Coffee on June 17, 2021. The first part was doing the entire pre-feasibility process of the business, looking for suppliers for the machines in various parts of the world and for the compostable capsules. This year we started marketing imported machines, two months ago. And the compostables come from Europe, and we have been selling them for a month. They are the first compostable Ecuadorian specialty coffee capsules.

Why Brown Color?

I was looking for a brand that was close to the consumer. Sometimes, big brands are distant for the consumer. I want one that is an experience, that when you open the packaging you find a color palette with the capsules. Let it be part of life, everyday life. Now we want to stabilize the brand and look for options to export compostables in the first half of 2023. There are many innovations in coffee and we are going to see how to bring them. (YO)

https://www.forbes.com.ec/movimiento-inspirador/listas-primeras-capsulas-compostables-cafe-especialidad-ecuador-n17574