This Coffee Startup Wants To Use Data To Find You The Perfect Cup Of Joe

craft coffee

Courtesy of Craft Coffee

Craft Coffee subscribers get three types of coffee a month.

The tech world is known for having a bit of a coffee addiction.

Square CEO Jack Dorsey, for example, is a longtime investor in San Francisco-based roasters Sightglass Coffee. And, of course, there's Blue Bottle Coffee, which in January raised $25.7 million in funding from such big names as Instagram CEO Kevin Systrom, Twitter cofounder Evan Williams, and Silicon Valley investors Chris Sacca and Joanne Wilson.

But not everyone knows how to navigate the complicated world of artisanal coffee.Advertisement

That's where Craft Coffee comes in. By analyzing each subscriber's taste and price preferences, the coffee subscription service moves users away from big coffee brand names and towards independent American roasters, including Sightglass and Blue Bottle. Subscribers receive three different roasts each month on Craft Coffee's plan, which can be adjusted to fit each household's needs.

"Coffee is so personal and subjective, but it's a lot like wine in that people are intimidated," Craft Coffee founder Mike Horn said to Business Insider. "They might not understand the label, or the jargon or flavors might sound too fancy. People want a lot of guidance when they're picking their coffee, and they want a convenient experience."

The company, which is currently based in Brooklyn, spent 10 weeks in Silicon Valley this summer, building their product in a San Jose rental house as a part of Y Combinator's Summer 2014 class. Craft Coffee is the only coffee company to be backed by Y Combinator in the accelerator's nine-year history.

craft coffee

Courtesy of Craft Coffee

The company conducted an analysis of thousands of coffees.

"We're taking an old industry, using tech and algorithms to understand taste - but taste is so subjective," Horn said. "We went to Y Combinator and said, 'We have a real tech problem with a real tech solution,' and YC agreed." Their solution is what they call the Coffee DNA Project. After analyzing thousands of coffees - all from independent roasters - they were able to identify certain traits and flavor profiles that were consistent among them. Advertisement

When someone signs up for a subscription with Craft Coffee, all they're asked is what coffee they currently drink. The service's recommendation algorithm then tries to find a coffee from an independent roaster that has a similar taste quality and price point.

As users rate more and more coffees over their months with Craft Coffee, the service will be better able to understand each person's preferences.

"The solution is personal. It collects information from you and knows you better over time," Horn said. "It could potentially say something like, 'Hey, you really like Ethiopian coffees, and you didn't even know.'"Advertisement

The product has resonated with startups, who can sign up to have bags of coffee delivered to their offices each month. Uber's New York offices, Shout, and Lua are among those who have signed up so far. Reddit cofounder Alexis Ohanian is also an avid supporter.

craft coffee

Courtesy of Craft Coffee

This is what a monthly delivery from Craft Coffee looks like.

But Horn is even more excited about how well Craft Coffee is catching on with the general public, who can customize how often they want beans delivered based on how much coffee they drink a month. Advertisement

He says that more than 130 million Americans spend $4 billion a year on coffee they make at home, hardly any of which is sold online. That's not even including Keurig and other single-cup brewers.

"Every single day we have sales to people who live in maybe a dozen different states, where the customer tells us they typically drink Starbucks or other grocery store coffees," Horn said. "Every time we have a sale like that, we know we're onto something."