Poursteady CEO Stephan von Muehlen on IoT and the ‘the cult of specialty coffee’

Like many startuppers working around the clock, Poursteady CEO Stephan von Muehlen has long held a strong appreciation for coffee.

But it wasn’t until he helped launch his current company, whose machines automate the preparation of pour-over coffee, that he became fully immersed in what he calls “the cult of specialty coffee.” In other words, well beyond Starbucks, the artisanal scene that the Wall Street Journal has likened to the farm-to-table restaurant movement.

On several fronts, the U.S. is late to the trend: the pour-over brewing technique, popularized by Bay Area-based Blue Bottle Coffee (which now has several locations in Brooklyn), was brought here from Japan. And of course, Europe has long been known for taking its coffee seriously.

These days, Poursteady is seeking to court coffee aficionados in South Korea for its machines, which cost between $12,500 and $15,000 each. The country will be the first site of the company’s international expansion, which is one of its main goals for 2017. Poursteady has sold some 50 machines, and the four-person company remains bootstrapped and profitable, von Muehlen told Technical.ly, though raising outside capital might be a possibility in the future.

We recently caught up with von Muehlen, whose progress in 2016 we recently recapped, and he gamely discussed Poursteady’s bid for the global market, the promise of the internet of things, and the evolution of coffee culture in the U.S. Here’s what he had to say.

This interview has been edited for length and clarity.

How did you get into coffee, anyway?

I went to graduate design in school at Stanford, then I came back to New York City. I worked for a small design firm, then Honeybee Robotics, in aerospace. Then I started EnergyHub. Initially, we made home automation systems for using less electricity. Then we pivoted to become a software company that intermediated between the thermostat and the utility company.

[Poursteady] CTO [Stuart Heys], he and an electrical engineer, they were working together on some projects for NASA in the Bay Area. He’s a typical engineer who is a coffee fan. They went to Blue Bottle, where he saw a barista trying to make three pour-overs at once. Like a roboticist, he thought, “This is an automation problem.”

Fast forward a couple of years later, and we’re demoing [the first Poursteady machine] at Maker Faire 2013. I’m friends with Stuart, and I offered to helped out because it was a good chance to hang out with friends and get into Maker Faire for free. That weekend, we served over 800 cups of coffee, and we won a bunch of blue ribbons.

The next step was to take it from more of a science fair project to a product and a company. We redesigned it so it would be manufacturable and look right in a coffeeshop setting. We launched at the 2015 Specialty Coffee Expo in Seattle, where we took home a prize [for Best New Coffee or Tea Preparation & Serving (Commercial)], and we’ve been selling ever since.

We were able to play remote detective over the phone and go through the settings on the boiler. In 10 minutes, it was back up and running. That is the promise of the internet of things.

I’ve always loved coffee. I’m kind of addicted to it. But not until Poursteady was I initiated into the cult of specialty coffee. It’s an interesting world. It has the most growth within a growing industry. And everyone in the coffee industry is really great to work with. Specialty coffee conferences are a whole lot more fun than robotics or energy conferences — nothing against the other guys.

When you first launched, did you encounter skepticism about the machine? Eater, for instance, drew parallels between Poursteady and Clover, whose machines failed to take off despite being acquired by Starbucks.

We certainly inherited a few concerns from coffeeshops that were early adopters of other systems. The Clover story is an interesting one. The idea of a single cup freshly brewed for you was a big opportunity, and people got excited about it. They sold 300 systems before they got acquired, but the support for those disappeared once Clover was inside Starbucks.

But last year, Clovers started to reappear in Starbucks Reserve stores. It’s an interesting trend to see for us. All of these machines are popping up. There’s Steampunk [Editor’s note: the company behind it is Alpha Dominche], which moved to Brooklyn from Salt Lake City, which has a similar way of making coffee: one at a time, freshly brewed. There’s Modbar, Marco and Curtis, which has come out with a countertop single-cup system.

They’re all related in a way, and they all work pretty well right now. But the initial impression some machines made was that they were unreliable and difficult to use. That’s something we were very aware of early on. It’s in our DNA: we’re more design, aerospace, and robotics folks than coffee folks. We’ve done a lot of real-world testing before scaling up. We’ve had machines in the world, some for over a year, which have served tens of thousands of cups of coffee.

We’ve done some things a little differently than other folks. We can make many cups of coffee very fast, which other machines don’t necessarily do. In a busy coffee shop, with the one-at-a-time thing, it’s hard to keep customers and baristas happy. With the Clover early on, it was hard to clean and not necessarily a pleasure for the folks operating it. That throws a wrench in the works. We want to make sure our machine is intuitive, and I think we’ve done a good job of that.

Why South Korea as the focus for international expansion?

I certainly didn’t have a particular understanding of what the coffee culture in South Korea. We were getting lots of emails from people in Korea, but I didn’t have much context for them. What I saw firsthand was that they’re much more interested in brewed coffee over espresso. There’s a huge specialty coffee market. In Seoul, I saw one tiny alleyway in a restaurant and nightlife district, and there were five specialty-coffee shops next door to each other. It’s like if Irving Farm, Joe Coffee, Supercrown and Cafe Grumpy were on top of each other. Some estimates say there’s as much coffee sold in South Korea as in all of North America. There’s a real fanaticism about it in youth culture: there’s some crossover between K-pop and coffeeshops. We’re excited to be there.

Poursteady has a machine in Whole Foods’ Philadelphia flagship store and in Amazon’s headquarters. Are you actively seeking to branch out from coffeeshops?

Our machines are primarily in coffeeshops, but we have also a few machines in big tech offices. I’d like to sell more into corporate campuses. I think it’d be a perfect application of our technology. At Amazon, we have an arrangement on campus with a really good coffee roaster. That roaster brought [our machine] in to Amazon. We have a machine on Uber’s campus in Pittsburgh. It’s funny, the little pockets we’ve found our way in. I’d love to say we were on the campuses of Facebook, Google and Twitter in New York. I think they’d be the perfect place for them.

Are you working on any updates to the machine itself?

Now we have a full-time director of software, Ian Grossberg, so we’re systematically going through the software. The first version worked great, but we’re making it so that there’s more security behind it. We added some functionality to the app, rewriting the code, making it more database-driven than scripted. We can pull analytics and do automated alerts if we spot irregularities.

All that stuff becomes more important when there are more systems in the field. We’ve maintained the systems so far by treating every machine independently. But as we start to work with field systems, we may group them by distributor, or by customers with multiple machines. Say, if someone has a recipe, they can publish it to all the machines in the field at once. Right now, you have to program the machines independently. Once [a recipe is] synced with our server, it doesn’t have to be online consistently.

When there is an issue, we make sure the machine is connected and work with the person on the ground to troubleshoot what’s going on. Yesterday, for instance, one of our machines went out. It had been installed for the first time the day before and was up and running. The next morning, we get a phone call: “We went home last night, and today, it’s not pumping water.” We make sure it’s online, then take a look. We could see that something changed at 8:09 in the morning. So the owner talked to one of the baristas, who it turns out tried to change the temperature settings. So we were able to play remote detective over the phone and go through the settings on the boiler. In 10 minutes, it was back up and running. That is the promise of the internet of things.

What role do you think Poursteady has to play in the “farm-to-table coffee” trend being talked up these days?

There have been recent stories in the Wall Street Journal about changes at Starbucks and Peet’s. Coffee chains are buying into the specialty market. They’re selling coffee regionally now. It’s no longer just a certain blend; you’re getting peaberry from Costa Rica. It’s taken a few decades to get there. I’m happy about being in this market, and I’m optimistic about the future. We have a solution that lends the consistency necessary for retail experiences to match the specialty coffee aesthetic and quality that exists in small coffeeshops. We’re trying to create a tool that addresses all those concerns at same time.