|Round K CEO Byeon Ock-hyeon|
“When it comes to startups, like myself, we can’t appeal to investors, or customers for that matter, without creating added value,” Byeon said in a recent interview with The Investor.
The CEO said Round K, founded in June 2015, creates such “added-value” by allowing customers to have a chance to taste not only unique brewed coffee, but also a traditional Korean cafe ambience. For this effect, the shop is decorated with a motif based on dabang -- the Korean term for old-fashioned coffee shops in the ’60s and ’70s.
Once customers step into his 400 square meter coffee shop, located on the lower east side of Manhattan, they immediately encounter a kitchen filled with modern stainless coffee utensils and unique traditional Asian decorations, including gongs and calligraphy, making the customer feel like the past has met the present.
Beyond a curtain that divides the kitchen from the rest of the space is the dining area with small-sized wooden tables and cube-like sofas modeled after those he encountered at coffee shops in Japan. They’re tiny, but irresistibly comfy, according to Byeon. “Once customers try them out, they don’t want to leave, and end up working on their laptops or reading for at least a couple of hours,” he says.
The support beams, which connect the upper part of the sidewalls, were inspired by traditional Korean houses, called hanok. The wooden tables and structural beams were sophisticatedly charred to offer an antique feeling. “I tried to incorporate a design that can’t be found anywhere else, even in Korea Town,” Byeon said.
Some of the most popular coffee brews at his outlet include the egg cappuccino topped with whipped cream, cocoa powder, and a yolk and the matte black latte made with cocoa powder, almond milk, espresso and ground coconut ash, which is said to detox the body.
As for non-coffee menus, the breakfast menu called “Mrs. Lee’s Breakfast,” which is served with egg, kimchi, bacon and roast croissant, and “My Korean Girlfriend,” which comes with kimchi butter, avocado and toasted whole grain bread, are the most popular.
The CEO said he and his employees develop coffee and breakfast menus together, often based on customer feedback. For example, My Korean Girlfriend -- which aims to serve a light morning meal for 20-something women -- was listed on the menu after one of the Round K employees loved the breakfast Byeon cooked so much that he even brought it for his mother.
“For me, there is no better way to promote the coffee house than to meet and communicate with customers in person, just like friends,” he said.
The café, which used to help Byeon take home a mere US$50 daily, now generates a steady income, he said, noting that he wants to take a step further.
“I plan to launch a place where people can not only taste coffee but also experience different Asian cultures,” the CEO said.
He said he cannot specify details of the project since negotiations to receive funding from Wall Street investors are currently underway.
Touching upon trends in the New York coffee roasting industry, Byeon said the relatively new coffee houses, such as Blue Bottle Coffee and Stumptown Coffee Roasters, have not created what can be called as a turning point in the segment for decades, which has been largely led by conventional coffee giant Starbucks.
“I hope Round K will be able to set new standards in the coffee industry,” he said.
Following are excerpts of the interview with Byeon.
The Investor: What did you do with your first funding?
Byeon: I received my first funding, worth around US$100,000, from a man who is now my father-in-law, While doing a business in Manhattan, people usually start with capital that is three times what is actually needed to run operations. You will lose a third of your capital during the first six months and need to spend another one-third on marketing and public relations. The rest is used to do core business activities, like sales or manufacturing. Since I had a really tight budget, just a third of what was needed, in the beginning, all I could do was something very unique, such as opening and closing the café for 24 hours once in a while as a marketing scheme. And I tried to incorporate a design that can’t be found anywhere else, even in Korea Town. I visited dabangs in different cities of Korea, including Jinhae and Jeonju, and cafes in a town near Fukuoka, Japan, to get some inspiration for interior and furniture design.
TI: What was your initial marketing strategy?
Byeon: First, I tried to befriend customers. Some of them were tenants in the building of my cafe, and these people brought other friends living in a different part of the city even after they moved out.
As for media relations, instead of sending off a press release to reporters, I would invite them over for a cup of coffee or brunch and let them know of our events.
TI: Tell us about your future funding plans.
Byeon: The first investment was made by an individual, but our future projects will be by Wall Street investors. I cannot specify the details, nor who my partners will be, since the funding negotiations are still underway. One partner is working at Wall Street and another is in Florida. I believe my next project will be launched in April or May, at the earliest. The project will target the Asian market, and the entire US market. It will not be limited to New York.
TI: What is the most important factor in running a successful startup?
Byeon: I previously thought the idea and actual product should be new and special, but now I think a startup should have a solid business plan to create added value. Investors often look into whether a company can create added value. It is risky for a startup to assume that they can be successful only with a “special idea.” When it comes to startups, like myself, we can’t appeal to investors, or customers for that matter, without creating added value.
By Kim Young-won (firstname.lastname@example.org)
This story was sponsored by the Samsung Press Foundation. - Ed.