Tapping the water market
Swedish software entrepreneur Magnus Jern loves Barcelona so much he even got used to drinking badly-tasting Barcelona tap water during his 10 years in the city.
“I got used to it, I just gave up and I drank it,” he remembers. When his wife moved in with him in 2014, her message was loud and clear: “Magnus, you can’t drink this. It is bad for you – it’s terrible, it tastes bad.”
As a solution, they started to buy bottles of water, which soon started to pile up at their home. As a next step, Jern tried the best filter product on the market. It leaked. Even after the plumber visited.
“I thought: if this is the best thing on the market, there’s an opportunity here,” Jern told CoFounder in an interview at Tapp’s shared office on a side street in the Poble Nou neighbourhood of Barcelona.
During 2015, Jern ordered every existing filter from around the world and tested them out. Nothing stood out when looking at taste, design, quality of the product and price. So in late 2015, Tapp Water was born, and in January 2017 its first product went on sale.
“Instead of spending a year on R&D, we contacted existing manufacturers and said let’s do an MVP with a product that already exists,” Jern said.
“It was not the product that we wanted to provide in the end, but it was good enough – that was the key thing.”
Tapp 1 – a glass-sized round device which can be attached to any tap – sells for roughly 40 euros, but the twist is in a subscription-offering of the filters. They are replaced every 3 months, creating constant cashflow for the young startup.
Jern says the customer feedback has been very good and the company is already in the black. “Since the end of last year, we have been working on Generation 2, which is completely our own product with patents, a new design and even better quality,” he said. To launch the new product, Tapp raised about 300,000 euros last summer.
In the industry, there were legacy companies that had been selling the same products for years. Tapp plans to roll out new product versions annually. “We are learning so much from the feedback we get. For us it is an iterative process. I think that will be one of our advantages, as we are constantly listening to our customers and improving the product on that basis,” Jern said.
Jern founded the mobile development firm Golden Gekko back in 2005 and sold it to Digital Management Inc in 2012 for an undisclosed sum. The mobile know-how comes in handy when developing hardware-centric Tapp Water. “Because of my background, I know how to do very simple things to start out. It would be easy to invest 50,000-100,000 in an app. We did ours for 1,000 euros because we just wrapped up a responsive website. It isn’t great, but it is good enough,” he explained. “A very important aspect of all of this is getting all the pieces together,” Jern said, stressing that optimising mobile conversion was particularly important, as 75 percent of Tapp’s website traffic comes from mobile devices.
Replaceable cartridges also create an opportunity to offer different filters for different markets, as water quality differs a lot from city to city. In some places there are arsenic problems, in other places it’s calcium, it’s hard water. “Our first generation system has really been focused on taste. It takes away the chlorine, limescale and so on, which is the biggest issue here,” Jern said in his Barcelona office. “Over time we will start really focusing on regional versions which will just be a change of cartridge, not necessarily the whole product.”
Jern’s mission is clearly to cut the waste of plastic bottles, one bottle at a time.
“This is the most exciting thing I’ve done in 10 years. It’s real.”
“I’ve worked on enough startups that I don’t necessarily need the money – but I feel really passionate about reducing plastic waste. That’s the main reason why we’re doing it. The nice thing is that if we can reduce waste, we’re also creating a really nice business target; our target is 1 billion bottles by 2020. If we achieve that then it will be a 100-million-dollar business with good profit margins. The two go hand-in-hand and hopefully, we can do a lot of fun stuff along the way,” Jern envisioned.
“The next target will be 10 billion bottles. This year I think about 250 billion bottles will have been produced, so we have a long way to go.”
Photo by Izzy Gerosa/Unsplash