Ivan: It's 50 % storytelling and 50 % product. It reminds me of that classical musician who has a concert that's ticketed at about $200, $300 at night. And in the afternoon, he went to the MRT station to play his violin and no one stopped to look at him. Same product, different storytelling.
Arjun Thomas: All right, Ivan, thank you for taking the
Ivan: Hey, how you doing?
Arjun Thomas: time and good afternoon.
Ivan: Thanks so much for the opportunity.
Arjun Thomas: Yeah. So I normally when I do these podcasts I tend to avoid drinking anything on the show, though there isn't temptation. But given the subject, I decided to get a coffee. It's n it's it's not
Ivan: Good choice, good choice, good choice.
Arjun Thomas: it's not yours, it's on my list. I'm just about finishing my current batch, but I'm
Ivan: Yeah.
Arjun Thomas: gonna be picking up I think your house blend because that seems to suit my palate more than most. Yeah, so maybe let's just
Ivan: Yeah. Our house man is a classic.
Arjun Thomas: Sorry, the housemen is a classic, right?
Ivan: Our house man is a classic.
Arjun Thomas: Yeah, so n no I I guess there's no surprise here with the posters behind your head. I'm assuming the conversation's gonna go in the direction of coffee, a conversation I
Ivan: That's it.
Arjun Thomas: enjoy. so just tell me a little bit about about Paco before we get into your journey. Like what is Paco and why did you choose the name Paco? What's the what's the context there?
Ivan: Yeah, thanks so much, Arjun. So, PAKO. The Ko in PAKO stands for coffee and the Pa in PAKO stands for PAKO. So PAKO stands for PAKO coffee.
Arjun Thomas: Pac. Not confusing at all.
Ivan: Not confusing at all. I'm pulling your leg. we chose the name Paco in five minutes. I'm going to go to the story of like how the thinking is behind this, the creation of the brand. Paco, the name was chosen in five minutes. My background is venture building. I built startups for corporates. I've been in the whole startup venture space for the past many years. And What I know about naming a startup is that the more time you put into naming it, the worse the name kind of tends to become. Of course, there's a bit of thinking that goes into it. We just started talking about it in five minutes. yeah, parkour name camps up. Kind of sounds good. Kind of sounds like coffee place. Check here, there. Save name. All right, let's go for it. So me and my co-founder Rachel both really like the name. So what is Paco? Paco Coffee is a coffee concept brand that takes the quality of product in specialty coffee, meaning coffees with really good processing that the farmers really put a lot of care into the quality of the beans and also the fermentation. taking that and wrapping up in a fun, approachable brand that is more like a chain coffee setup. In the world of coffee, there's pretty much two worlds, right? The specialty coffee site and the chain coffee site. For chain coffee, you can think of it as like the Starbucks, the Kenangan, for coffee, Lakin, which serves good coffee with you don't really taste the differences in the beans. So typically when you go to places like this, there's only one choice of beans or two choices, darker roasts. And on the other side, specialty coffee really focuses on the quality, the craftsmanship. There's four places like this that tends to be not too many branches per brand. The poster child for specialty coffee is Percent Arabica, which has about 200 plus outlets in the world. Now, the last few years, so there's been a shift in the market. Consumers have been demanding specialty coffee more and more. It's going into the mainstream.
Arjun Thomas: Why do why do you think that that shift is happening today? What what do you think is causing that? Is it just tastes are are are getting more discerning? people want something different. what do you think is driving that change in behavior? not just to drink coffee but to go after specialty coffee because you like you said, it is the nuances in flavors, it's the ability to detect
Ivan: Yes.
Arjun Thomas: the bean type, Where it would
Ivan: Yes.
Arjun Thomas: the where it comes from, the processing approach, what's changed?
Ivan: Yes. Right. So coffee comes in waves, People have heard the first wave, second wave, third wave coffee. I want to zoom into the last 10 years from around 2018 to about 2024, where Asia saw a lot of changes and a lot of these new entrants. We see Lakin coming up. We see for a coffee in Indonesia, Kenangan. flash coffee in Singapore and surrounding regions, Zeus in Malaysia, with very similar place, really fast service, focused on takeaway, branches everywhere, and particularly app enabled means that you can order very conveniently while on your commute. This brought coffee much more into the mainstream, especially in countries that have been majority tea drinkers like China. And at the same time, specialty coffee has been growing alongside mainstream coffee. In the last few years... specialty coffee has entered cultural mainstream. There's quite a lot of what do call that coffee specialty coffee youtube channels that's popping up people are have been really getting into it the home brewer scene so espresso machines and tools meant for the people to use at home have been really growing in terms of the number of products available also which means there is latent and tapped demand for good coffee, specialty coffee. But when customers go around what they find are chain coffees selling. beans that are not as specialty. So what I'm trying to hint here is that there has been a shift in the market trend in the market patterns. There is another data point that will be interesting here, which is if you look at Lakin and Zeus here in Singapore. the advertising that they have been doing recently is they use world barista champions in the advertising to hint as to the quality of their beans.
Arjun Thomas: And what is the reality of it? So so one is the PR story of of of the
Ivan: the reality of...
Arjun Thomas: quality of beans that they that they sell. Because the one thing that's I guess both an advantage and an Achilles heel of very large chain formats is consistency, right? The idea is that if you drink coffee
Ivan: That's it.
Arjun Thomas: in anywhere in the world with that store, you expect the same thing. So there are pros with that because people go in expecting something and you get exactly that and you know it
Ivan: Yeah.
Arjun Thomas: it's a hit. but how does that contrast in In the world of barista champions and barista coffee and speciality roasters. Where the whole focus is honestly, at least my my rudimentary understanding is it's about being local, it's about region specificity, it's not about
Ivan: Yes.
Arjun Thomas: large volumes. So is does it seem like a bit of a c contrarian view, right? It's like it's like it's like holding two extremes at the same point
Ivan: Yeah. Yeah.
Arjun Thomas: in a brand that it should not naturally coexist, right?
Ivan: Yeah, and this is something I've learned after getting into FNB in the past one and a half years. So before this, I was doing more tech, spent some time in FinTech, medical device, venture building. So it turns out consumers want, they want both at different times. So when going to the office, all you want is just a nice cup of good latte. You don't want to think too much about the beans, the origins. You want something comforting. After lunch, you want something to have fun with your colleagues or maybe in the weekends, then you go for special latte coffee. So the same group of people who drink coffee have demand for both sides.
Arjun Thomas: And what proportion of the of that behavior exists in the in say for example the people that come to to Paco. and we had a long conversation about this when I when I came to your outlet, but
Ivan: Yes. Yeah.
Arjun Thomas: just curious for you to kind of maybe just rehash that conversation, which is this duality of of behavior where it's a it's a weekday, office day behavior that kind of switches to a nighttime, evening time, weekend behavior. in the context of coffee, which I find is fascinating. It doesn't it's not entirely surprising now that I think about it, but what proportion of people buy that way, or at least drink coffee that way.
Ivan: Yeah, that's a very good question. And I'm not sure I have all the data to share with you. What I see is there's been patterns of millennials, Gen Zs, who have been requesting specifically for the beans that we are launching, meaning that the demand is there. for these types of coffees. And at the same time, if you look at the Singapore CBD or malls in Singapore, all the other coffee brands are also have been working out very well. And I think this just shows how thirsty for coffee people are in general. And I think what I want to highlight here is It's less on which types of beans that people want. What I found very interesting is that people want the quality of specialty coffee but might not want so much the technical details behind it. So we've been having quite a bit of success packaging the quality of the
Arjun Thomas: Mm.
Ivan: beans in our own storyline and storytelling.
Arjun Thomas: Yeah, and that's what I always find interesting because as an outsider looking in, I sometimes find it a little difficult to kind of decouple the PR strategy and the branding from the essence of what is the bean and the coffee and the processing. Because there's a lot of flair and then we can talk about how you guys approach branding, which I think is fascinating, and the seasons that you the the the the format of seasons that you guys use to kind of launch new coffees literally every month, that I haven't heard of in a while. so so that's where my I guess my curiosity stemmed from, which is how much of this is actually people phoning after packaging PR social I guess no I would pressure is a bit of a loaded term, but at least social acceptance to to to be seen with a particular kind of coffee or a style of coffee and how much of that is actually a true appreciation for great coffee. And the way I think about it sometimes is you can sometimes tell more about true appreciation when people take the beans back home because you it it's easy it's it's it's one thing to be seen with with with a fully prepped coffee for you at a barista or a coffee shop. It's one thing entirely different to go somewhere else.
Ivan: My mental model for this, so to repeat the question, I think what you're alluding to is cough specialty coffee as a status symbol, almost like an intense hobby that some people have, like really looking for the different types of beans going around different cafes. That's what you're referring to, Yeah.
Arjun Thomas: Yeah, it's it's the novelty factor, it's the it's it's the Instagrammability, it's it's creating TikTok videos, it it it's that whole novelty fashion which I think i should not be discounted because that drives a lot of brands. the question i is more about especially when it comes to specialty coffee. I'm curious about how many how many p how many people really appreciate it. and that's a super subjective thing because you know coffee is subjective. so
Ivan: Yeah. Yeah.
Arjun Thomas: I don't know if you know if you know if you if you thought about that a lot. That that that was the origin of my I talk.
Ivan: Yeah. So coffee and food in general. It's 50 % storytelling and 50 % product. It reminds me of that classical musician who has a concert that's ticketed at about $200, $300 at night. And in the afternoon, he went to the MRT station to play his violin and no one stopped to look at him.
Arjun Thomas: Yeah.
Ivan: Same product, different storytelling. So. Our mental model for coffee, the way that we choose to tell the Pakwa story, is the reverse of what other specialty coffee places would do. We choose
Arjun Thomas: Right.
Ivan: to have the base of really good coffee and if you ask us, we will share all the details of where it comes from, what the processing was, what processing was done and why we mix it this way, how we roast it, how we make the drink. We went into a lot of depth to make sure that it literally is the best coffee possible that you can get. But the story that we choose to tell the customers are how we have Madam Paradox as the mascot, I mean, the brand for the coffee that we're selling. And it makes it, yeah.
Arjun Thomas: And and Sorry, go ahead. And makes it?
Ivan: just infinitely more shareable and enjoyable with other people. I'll put it like this, when we started earlier this year and we don't have this side of the branding yet, people who come to us are people who are already into specialty coffee and are looking for new beans, looking for exciting new regions to try. after we started with Madam Paradox and our seasonal series of other characters. people come to us with their friends even though none of them are very hardcore coffee fans. And these people also enjoy the intensity, the brightness of the beans. meaning even if you are not that deeply into specialty coffee and every... origin. You still enjoy them.
Arjun Thomas: So it's it's it's a way for you to make what could be a very I guess Technical I was technical is the wrong word, but I guess if you're talking of speciality because it's so nuanced, it is technical, right? So yeah, it is
Ivan: It is, it is, yeah, it's something like that. Yeah, something like that.
Arjun Thomas: it is technical, far more approachable, I guess, to the general population. So it's not that you have to really be a coffee aficionado to appreciate great beans. what you're doing is that you're using that as a foundation and building a communication vehicle, which is the brand, to make it more approachable to the everyday person. So it's like, you know, come enjoy speciality coffees, even though you don't know the first thing about specialty coffees, you we've got you covered in a way.
Ivan: it's like how Apple, amazing company, they made tech easy to digest to most people. They choose to call their screens a retina, because it evokes the image of a very clear monitor and we compare it to other companies, let's say Crystal Clear, Quad HD, Triple IPS. 3840 times 2160.
Arjun Thomas: Yeah, sometimes like like like with the b the the the process of selecting the name brand, th the the brand Paco, sometimes simplicity is is the better way to go. I guess. yeah. And I wanna
Ivan: Yeah, yeah, yeah, yeah, yeah, yeah, definitely.
Arjun Thomas: kind of draw draw back onto which now makes a lot of sense, which is the approach you've taken about seasons and I think dropping coffee with such regular frequency that's something that I haven't heard of.
Ivan: Yeah? Yeah?
Arjun Thomas: where you're constantly introducing new coffees literally every month. and I'm curious how much of that is the the interest to expose people to a much wider range of specialty coffee than they would have otherwise in a traditional coffee shop which probably would choose two or three and then maybe rotate it a couple of times in the year. And how much of that is by refreshing the coffee you're giving yourself the ability to deploy a lot more of these characters and make it more exciting. So every time someone comes to your store there's something new to look forward to. No, we've changed something since last month and that becomes a a draw in itself. So is that a conscious decision to kind of balance both?
Ivan: It's a conscious decision to do season for more reasons than what you have mentioned. The ones that you
Arjun Thomas: Right. Great.
Ivan: mentioned are some of those reasons. So the major thing is that in a startup, in a brand that's just launching, you want to keep iterating to find traction. We literally launched Parkour with four menu items. Black, white, hot, cold. Simplest menu ever. And really the advantage of a startup company, a small company, is that you are a lot more agile, it's a lot easier to introduce new things, you don't have to deal with the logistics of providing it to many different branches. So doing it this way helps us to gauge customer reaction as we go along. The ones that work well, we keep the ones that don't work well, we don't keep. I remember it was season 4, it was around May. There was one bean that we were providing at that time. It's called Ripple because it evokes the image of a strawberry ripple ice cream and it really tastes intensely of strawberry which is amazing. And people would come to us asking specifically for Ripple even though they have not tried it. Which means that there is word of mouth going through. Hey look you I have to go to this place, little park. And we kept that feature. So going back to the seasonal feature, every season we do a couple of experiments. The ones that work well, we keep. The ones that don't, we let go to make space for other things.
Arjun Thomas: At at what point does it become too many? So if so if you're if if the process is an A B test of sorts, which makes a lot of sense, testing out month on month what works and what doesn't, At what point do you decide there's a cap on how many beans, up the optionality that we provide, given the beans that we have on offer? Because chances are you will go through a a a large number of of drinks, coffee bean processing types. And given
Ivan: Yeah.
Arjun Thomas: that if you're looking at specialty coffee, it's not the middle of the middle of the road coffee drinkers, people like me, nine times out of ten. you're trying to target people who are experimental and want to And kind of are drawn to the ripple, for example. there's so many of those groups, right? Because it's so subjective, our our our flavor profiles are so different. how do you kind of manage not having a crowded inventory because people's palettes are so wide? You might end up with thirty, forty
Ivan: Yeah.
Arjun Thomas: different bean types because you know, small enough sections of each seem to like it lot.
Ivan: Yeah. Yes. This one will not be that obvious to customers. Every other season is a different type of effort for us. So season five is expansion on the drinks. Season six is consolidation.
Arjun Thomas: Okay.
Ivan: Season five is... And then season six is an... expansion on the beans. Season seven would be consolidation. So it's like an alternate kind of. in order to manage the amount of complexity.
Arjun Thomas: Right. And it's just a wild thought. you guys are currently at one location at the sale, right? and the objective is to open, you know, at least one more store, two more stores, three more stores. Are you are you I wouldn't say wary because that's a strong term, given that it hasn't started, but are you open to the possibility that the traction you get with the very same beans in two different stores would be very different and and how d would you manage for that in a in a in a i in a space that like yours which has the potential to have you know forty beans on order you know in two years.
Ivan: Yeah, really good question. Pakho is designed from the from zero to become a multi-location brand. So the ambition is to build tens, hundreds of stores in the next years to come. partially venture funding, partially franchise, and it's really meant to scale. And we built Pakco from the ground up to manage this complexity. We have our internal Pakco operating system. that really reduces the amount of day-to-day operational effort that the team has to go through. So that when we expand to many different locations, it's a lot easier to manage everything, even having different beans at every store.
Arjun Thomas: So you are open to the possibility that it's likely that depending on taste profiles in the region, there is a possibility that some parkour stores will have a different mix of beans than other parkour stores.
Ivan: And this is really the Uniqlo story. So Uniqlo is a tech company that happens to make clothes. They have succeeded a lot in the last decades because they allowed the ability to experiment at scale. They have a lot of variety in terms of what they offer in the different stores and when they want to experiment on a new line of products they do it at select stores and if you imagine how these companies are logistical masters and managing so many SKUs coffee frankly sounds a little bit easier
Arjun Thomas: I like I like I like that. so maybe then the question becomes, why coffee? And we know in your not so distant past you were kind of a corporate venture builder, you spent a lot of time in tech. what drew you to coffee and why a coffee shop?
Ivan: Really, I would say it's the opposite way of framing it. I knew that F &B as a special retail is a tough market, it's competitive. And in my mind, so I've done research on so many different sectors for previous companies, Striper, I built for them. and basically market maps of every different sector database of 3.5 million startups created how interesting every specific sector is within each sector, what are the interesting value propositions and startup concepts to go for. Meaning that I have a good sense of the entire startup landscape. Within this map, I know there are certain areas that if I want to go into them, I would need to have certain things really clear before I will put my time and money and effort into that. For example, I know that medical, medicine, medical device is one of those areas because it does take many years before you can even commercialize a product. FNB retail especially in Singapore is one of those areas but it's a bit lower compared to medical device. So I had...
Arjun Thomas: Yes, I mean that's that's a given, yeah. Sorry, good.
Ivan: Yeah, and I... really did double, triple take at the data and observation that I have in the coffee sector. Did significant research in it and found that there is this untapped white space that I just so happened to be in a good spot to launch something in it. And it turns out that that white space that I hypothesized has really proven itself to exist. it's for that reason, Paco has been getting very good traction in the last month.
Arjun Thomas: And the the you talked about the complexity of entering the market and while I do agree that F and B is there are different challenges, but I guess the the threshold to entry is a lot lower than either heavy
Ivan: Mmm.
Arjun Thomas: regul heavily regulated industries or deep tech industries. So so I get that analogy. in terms of the technology that you use and you know, when we met at your store a couple of weeks ago, Thanks for the coffee was very, very good by the way. We tried all three. the mistake I made was I had two espressos, which is my usual morning pick me up before I came there and I hadn't had breakfast.
Ivan: Ooooo
Arjun Thomas: So ha by the time I came home in the afternoon I was buzzing. but I did enjoy a lot of the coffees. I switched to something non caffeine related at the end of the day, to kind of
Ivan: Good.
Arjun Thomas: wind
Ivan: Good. Yeah.
Arjun Thomas: myself down, though though my tolerance for coffee is generally caffeine is quite high. and you kind of walked me through the machines which I found fascinating because generally
Ivan: Mm-hmm.
Arjun Thomas: my understanding of barista quality machines, they generally behemoths, right? They're generally large machines. Obviously
Ivan: Mmm.
Arjun Thomas: the form factor has has improved. Like you said, the the the coffee machine space has seen a lot of amazing innovation over the last decade or so both for form factors within professional settings as well as those at home. And this there's a massive variety, you know, from grinders to coffee machines. Can I walk me through how you thought about the setup? Because you know, we talked about the focus on the bean selection, and I think one of you and and and and the and the chap that I met who who kind of runs what do you call him, the mad coffee scientist? What's his what's his unofficial, official designation?
Ivan: Yeah, Russia, Russia, yeah.
Arjun Thomas: Yeah. Yeah. a fascinating I t I guess
Ivan: Alright.
Arjun Thomas: take on coffee and I wal saw him walking in with a small pouch of beans that he wanted to try out. literally like a mad scientist, wi with his with his with his coffee and beans and and fermenting concoctions at the back, which was fascinating to see. but what about the machines? I I know you kind of l narrowed landed on the decent. what were your criteria around selecting the machines that you knew would do a great job given that you're in the specialty space? So what were you gu what are you guys looking for to help extract the the the best product from the sector that you're going after which is specialty coffee.
Ivan: Yeah, at the end of the day, what we want to provide are good coffee, consistent coffee, minimal downtime. Consistency is one of the most important in here because it's bad experiences that makes people not come back to a restaurant or to a cafe. The decent is a very interesting machine. It's originally a domestic machine meant for people who are very, very deeply into coffee and want to adjust. every single parameter in DeadRinks. What I find most interesting about it is that it allowed us to track every single shot that we've made. so that if there's a customer that has having a problem with their drink, we can trace it back and figure out what went wrong there. Meaning that when we have hundreds, thousands of stores, it's going to be immensely easier to figure out which stores are having issues with their coffee extraction. So the same... metrics, same criteria for machine selection goes and extends to every other part of the entire setup. It does take, it will take quite a while to get into everything, but I'll just give several highlights. For example, the milk that we have for our flat whites and for our ice whites, the foaming. is done using hot air or cold air instead of by steam, meaning you get a very nice silky smooth hot white texture without dilution. And it does make cold foam which makes for a very nice ice white. Some other highlights. can't Lots of work done into the... What the quality. Roasting. lots more on that side. what we serve at the store is really the best possible form of extraction that we can get.
Arjun Thomas: And out of curiosity, how many people are curious about the extraction profile? Because you know, you've got the display out there. So if anyone
Ivan: Yeah.
Arjun Thomas: is curious about the the extraction for the shot that is pulled for their coffee, they can see it happening like, you know, in front of their eyes.
Ivan: Hmm.
Arjun Thomas: Do people actually pay attention? I'm curious about that. Because I mean if you're a coffee person and you know a little bit about extraction times, temperature, pressure, for obviously you know there's a massive variance between dark roast and light roasts, and with specialty roasts and lighter roasts, you have to pay a lot more attention. you can get away with a rough extraction with a darker roast, and things like grind settings. is that something anyone pays attention to or is it just like a novelty thing for people to just look at?
Ivan: OAS is the tool to bridge because Pako is about making really good coffee, really accessible and fun to everyone to make into something that you want to with other people to enjoy together. If we only have the branding, if we only have the characters, then we are just a place with branded coffee. Again, coffee and food is 50 % storytelling and 50 % product. And that's our way of communicating the product side.
Arjun Thomas: Right. And in the year and a half that you guys have been going at it, it's it's been a year and a half or less, sorry, I
Ivan: we, we actually just launched this year.
Arjun Thomas: six months, nine months.
Ivan: end of January. So it's been around six months and it's been going really extremely well. It's been super exciting. We won gold and bronze for the Global Coffee Awards. Yeah.
Arjun Thomas: Yeah, I h I I heard about that and congratulations again. Yeah.
Ivan: And also a national winner for Singapore in this competition. So not only we have the industry awards, we also have customers who have been showing a lot of interest in the coffee blends and the characters that we have been putting forth. And it's been really, really inspiring to see all the customers that have been coming back to Parkour day after day. And really, it's thanks to all of them.
Arjun Thomas: No, fair point. I mean i and and kudos to you guys because at the end of the day people only come back if they find some sort of you know, an aff affinity to the to the brand, or
Ivan: Yeah.
Arjun Thomas: the food. So it's either down to and it's and you can't you can't do just one, right? So it has to be a great product, has to be great service. And then because there's so much competition, you have to have a you know, something special about it for them to make the effort
Ivan: Yeah.
Arjun Thomas: to kind of buy your coffee as opposed to someone else. So it's it's not just about having a good product, it's about having a great product and like you said, consistency and differentiatability. so it's a lot.
Ivan: Yes. And there's a point here on startups, because people do ask why get into coffee? It's very competitive. I would rather get into a competitive space where I can differentiate than to get into an uncompetitive space, a new market where I have to create demand from scratch. It's much
Arjun Thomas: Yeah, you minimize the variables, right? You minimize the variables.
Ivan: Really, the amount of effort required to differentiate your product is much lower than the amount of effort required to educate customers on a brand new product, on a brand new problem.
Arjun Thomas: True. What's been the most difficult thing getting this up and running? What's the one thing that comes to mind?
Ivan: When we started, it was just me and my co-founder. We don't have a team yet. And renovation was a very interesting challenge.
Arjun Thomas: Yeah, I could imagine. It's a pain.
Ivan: For most things it's okay. For some things... Because... specifically the design of the counter. We have this few meters long white stone countertop that is custom built by the builder. In order to know the shape of the counter, we need to know our operations.
Arjun Thomas: Right.
Ivan: Before doing our operations, we have to simulate the location of every machine. giving gaps and holes to make sure the water can come in, come out, electricals go in, go out, make sure that there's enough clearance for people that they don't hit each other while working. And that's where I found out that there are anthropometric studies on the like circles of humans, how many arm spans, how many meters are required. if you want to work closely together and like how far the tools have to be. That took a few days of calculations. That was quite...
Arjun Thomas: Yeah. And w what what what did you find happened most easily that surprised you? Was there anything?
Ivan: things that constantly surprise me.
Arjun Thomas: No, a thing that happened so easily that it surprised you. You were expecting it it just happened. And you're pleasantly surprised at how easy that particular thing was.
Ivan: We were quite fortunate to have a lot of things fall into place, This location that we are working on, it used to be Vox. They had a coffee and matcha for many years, eight years in total, before they moved to a different place that's nearby, bigger location. the Easter of alcohol now. Stumbling on that location was amazing. We didn't look for a lot of places. also finding the Rashid, the mad coffee scientist that you mentioned earlier. Finding him had been an amazing blessing.
Arjun Thomas: Yeah, I can imagine. Because you need s someone that's so passionate about not just coffee but the format of experimentation, and who's always on I mean it's an integral part of your DNA, right, as a company.
Ivan: Yes, yeah. He's part of the reason why we went for the characters that we have right now. Yeah, yeah.
Arjun Thomas: The awards. the characters. I thought that's what the awards. W why the characters? What what is that what's that connection?
Ivan: so basically me, my co-founder and him were just chatting around the office. We're like, OK, let's name the next beans. Then we settled on very fun names. We started with Madam Paradox and that led to us. what if we put an actual character design in front of it? OK, that'll be fine. Yeah.
Arjun Thomas: And we also talked about I know in the world that we live in, how using AI has helped you basically do more than you would have
Ivan: Yeah.
Arjun Thomas: had the ability to do maybe five years ago, not even five years ago, two years ago. how do you currently use AI in what form and how has it helped you do more than you could?
Ivan: So my background, part of my background was software development. And I did mention a bit briefly on the Paco OS, the operating system. AI has been amazing in letting one software developer or one software architect to work like a team of software developers. 2026 is the year, the turnaround year where software as a service is starting to be seen as a wrapper for databases. And it's gotten so much cheaper to create your own wrapper on top of your databases that in many cases, it makes sense to make your own instead of using regular sauce and then doing integrations through sepia and water. That has been a very powerful, I think, the phrase people would use is the false multiplier.
Arjun Thomas: Yeah, I've heard I've talked to a lot of founders, especially smaller outfits where they've believed that the traditional model of finding C R solutions, ERP solutions, order management solutions, communication management solutions, you can just build it from the ground up. Because if you
Ivan: Yes.
Arjun Thomas: have a very first per principles service design, systems thinking mentality,
Ivan: Yes.
Arjun Thomas: and you know exactly what it is that you want, you're probably better off building from the ground up Again, th i
Ivan: Yes.
Arjun Thomas: the use case falls apart in an enterprise context, but if you are doing this as a small outfit, as a small startup, you can get away with with building everything from the ground up because you're right, there's no there's no reason why you would buy off the shelf and then spend the time to integrate and then whenever you have this wacky idea about doing something, you're like crap, I can't do the customizations I want.
Ivan: Yes.
Arjun Thomas: Because the business evolves, especially at the early stage, you know, you have a random idea that you had no clue of three months before, and now you are not beholden to the infrastructure you kind of put around your neck to prevent you from visualizing or realizing that that idea that you had. so I I completely get it. I completely get it.
Ivan: Exactly. This ties into what we mentioned earlier about what came easily. Doing a startup in sectors other than AI in 2026 is working out very well. But doing it in AI itself, that depends on how much unique IP you have. If you are just building an AI wrapper, then that makes it a lot more difficult. So we are fortunate to be in a space as an AI consumer.
Arjun Thomas: And Given that you guys have been around for a bit, the reason why this question comes up in my head is because
Ivan: Mmm.
Arjun Thomas: the last time we met, you showed me a picture of and for people who don't know this, but please go check out Paco Great Coffee and I'll I'll plug your location details in in into the podcast.
Ivan: Hey, thank you.
Arjun Thomas: your f storefront has no shutters, b by f by by function of where it is. And and the reason why I bring the story up is because of what
Ivan: Yeah. Yeah.
Arjun Thomas: what you showed me, where there's some some random chap walked in and he helped himself to some stuff and walked out and you were debating using the a silhouette of his image to kind of create a new brand. I thought it was hilarious.
Ivan: Yeah, that's part of us really having fun.
Arjun Thomas: Right.
Ivan: That's the culture of Pako, where we want everyone in Pako to be able to just laugh off things that are happening around the world and bring that joy to people also. It did happen. He went in at about 1 a.m. We eventually filed a police report. He took Literally one piece of BISCOFF.
Arjun Thomas: Ha ha ha.
Ivan: a single piece of this curve. We... So we just launched our new bean about a week ago. We call it Waldo the Disruptor. He's
Arjun Thomas: Yeah.
Ivan: the mid-season drop between season five and season six. Season 5.5. And it was great. It was great. We sold out in about three days and we had... to restock over the weekend to make sure we still have for that. And Waldo was loosely inspired by the guy because
Arjun Thomas: Ha ha ha ha.
Ivan: we kept joking internally like, yeah, where's that guy? He's like went in and went out. We don't know where he is. He's like Waldo as in where's Waldo?
Arjun Thomas: Where's Waldo? Yeah.
Ivan: So we just misspelled Waldo with an O. Wal-do.
Arjun Thomas: Waldo. Yeah. That's hilarious. in terms of
Ivan: Yeah.
Arjun Thomas: have you you guys have been around doing this for a short period of time, I wanna kind of t try to get you to contrast the way you built this and I consider this a venture, and venture building within the umbrella of a corporate venture builder, with you know, like Schreiber and the the other ones. What do you find different? looking at the approaches taken between the venture building world and in a way a founder led startup in the wild world. and I'm curious about the the the question because I just had a conversation the this your the second podcast recording today. the first one is also someone who comes from who who built a venture within the corporate venture builder model but then had to kind of make changes and spin out on their own. So I'm curious about your your your your experiences on the differences between the two worlds and and and and what you like, what you don't like. just random thoughts.
Ivan: So won't be able to speak for all venture builders or for all venture building companies.
Arjun Thomas: Your perceptions, yes, yes.
Ivan: Taco was not my first venture before this, about a decade ago, launcher isn't trade medical, also a startup, was in medical device. So corporate venture building. is much akin to being a strategy consultant but as a founder. it's very different from doing it in the wild. The picture is more complex in corporate venture building because In corporate venture building, you are not just building a startup. You are solving an innovation problem. You are solving a future new revenue stream problem. In order to do that, you have to figure out what the company is like, what types of assets do they have, what types of unfair advantages that a startup within that portfolio would have over someone else in the world. And also what kind of disadvantages would a startup in that corporate have? One big chunk of work that I do is figuring out what concept to build within a corporate context. That's why the market map that we talked about earlier. Figuring out what startup to do in the wild is purely about is there a white space? Can I build it? Can I make money out of it? Can I scale this? Will people fund this? It's purely commercial. In a corporate context, you have to figure out whether this links with the mothership's overall company strategy. Does it make sense 10, 20, 30 years into the future? Is it something that the mothership will continue to want to put money in instead of it being a one-off innovation experiment? That's main key difference.
Arjun Thomas: yeah, I I I I get it. It's there's a lot more strategic thinking where this is going to be ten years down the road, fifteen years around the road. and so much of it is less about the actual venture but the effect the venture has on the parent company, which I find sometimes a little amusing.
Ivan: It's actually, I place it as actually both. You kind of have to find that sweet spot where the startup itself will succeed. So it's, the criteria is doubled essentially.
Arjun Thomas: Yeah, agreed.
Ivan: me.
Arjun Thomas: and and and that tension, as it were, is always a delicate balancing act to figure out. the challenge
Ivan: Yes. Yeah.
Arjun Thomas: I've always found is that so much of it is a function of the the vision that the board sets, who the primary sponsor or stakeholder or champion is, and whether they stay at that position long enough to support
Ivan: Yes.
Arjun Thomas: the venture through the ups and downs that invariably every venture has. and if that is not the case, is there strategic guardrails put in place to ensure there's handover between sponsors and stakeholders for the continuity
Ivan: Mm.
Arjun Thomas: of this this path that the corporate venture studio has decided to take and and that's where I see a lot of I guess inconsistencies in because it is it's it's it's it's a long play, right? It's not something you can do in a year or two and then expect excellent results. It's a it's a grind that takes. A while. Founders have less of that to worry
Ivan: it is.
Arjun Thomas: about. The focus is more on the here and now. Obviously, there's a North Star that you're you're rowing towards, but the focus is still always on the here and now, right? What do I grind?
Ivan: Yes.
Arjun Thomas: Do I need and and then so you're I guess in a way, maybe it's a it's it's a biased way of looking at it, but your attention is not split. I always find as a corporate venture, if you're a founder or a person in the role, your intention is seems to always be split between managing that relationship. with the corporate and actually
Ivan: Yeah.
Arjun Thomas: executing on the business that you're building. which has its pros and cons, but
Ivan: Yeah. And really, I try to do when I work on corporate venture building projects is to not make compromises because I don't want to compromise the viability, the viability and feasibility of the startup to fit with the corporate strategy and vice versa. is they shouldn't be a trade-off. Both should work together and be maximized at the same time. That's why it's more challenging that way.
Arjun Thomas: Yeah. And I think from from everything that I've seen, the venture builders that I've talked to, experiences that I've had, the formative work is super important. it's ensuring
Ivan: Yeah.
Arjun Thomas: that you said that ensuring that you pick the right problem, pick the right opportunity, that makes the most sense for that venture corporate partnership
Ivan: is
Arjun Thomas: is is is where I think a lot of the effort needs to go, far more than you would put in a venture in the wild, because it it could just start with a idea in your head and you start executing computing tomorrow. there's far less far less strategic thinking and balancing that needs to happen as a as a forethought rather than an afterthought when it comes to covert venture build co corporate venture building. but but that's fascinating.
Ivan: on the other side, flipping it on its head. What I do in building startups is it would... I... For example, for Pako, as I mentioned before, FNB is competitive. It's very easy for people to come into the space and build something. And for that reason, the amount of evidence that was required for me to convince myself to build Pako was very high. So when it struck me because when you mentioned that if I have an idea that I can execute tomorrow, it was the reverse because I had to see the white space very clearly first.
Arjun Thomas: I mean it's a function of I guess th f having been in corporate v corporate venture building for so long. the wiring is in place to say, Hey, let me let me be reasonably sure about whether this is an opportunity and I have the the tools from my day job to be able to increase the odds of my success or so my su so I might as well use it. so I completely
Ivan: Yeah.
Arjun Thomas: get that. I get that. yeah, anything else that you want to kinda chat about, Ivan? It's been a it's been a fascinating conversation. I I know we can go on for hours and hours. We haven't got into the details of coffee. I I'm kind of holding myself
Ivan: That is so much.
Arjun Thomas: back, yeah. in terms of the you know, the technical aspects of the machines themselves, the the beans, the processing, the variety of coffee, how I intensely dislike fancy co specialty coffees.
Ivan: There is so much even color psychology like there's a lot of thought put into every single detail.
Arjun Thomas: Yeah, it it's it it's it's amazing. and yeah, I mean I I'm very very sure you guys are only gonna go places because there's lot of thought that's gone into creating a differentiated vehicle in a space like you rightly said is heavily contested which means there is a a lot of opportunity and it's a trend coffee drinkers are only going up which is a great thing. so there is a clear space to differentiate and as long as there's a lot of thought that goes into how to differentiate which clearly you guys have in spades, I don't see that being a problem. I'm looking forward to picking up my next coffee. So when I'm there for my next meeting I shall swing by and get myself a house blend.
Ivan: Yes. And yes, and I will try to figure out that there has been one challenge that is been in my mind for months and months, which is how do I make dark roast taste really, really amazing? So for Pako, we have been doing Light to Medium for all of our coffees. When I crack the code for making amazing dark rose coffee, I will let you know you will be the first person I tell.
Arjun Thomas: Brilliant. Thank you. There's there's something to do with that I've been looking at it very broadly, obviously not in the depth that you're talking about, which is lower pressures, different kinds of extraction, to maximize
Ivan: Yeah.
Arjun Thomas: the the complexity of a dark rose. the challenge with dark roast al is always you it's it's it's like a machine car wash, right? You do you grind it and you push it through with as much pressure as possible to get the extraction, but stop just short of overextracting so you kind of mellow the bitterness. but but yeah. lower temperature, lower pressure extraction, calibrating the grind setting. I don't know. Let me know when you figure that out. I'd love to.
Ivan: I'll let you know when my PhD project. I'm not taking a PhD. I've had enough studying. Thanks so much for the opportunity, Ajun. Yeah, thank you.
Arjun Thomas: Alright. well, thanks again man. It was a and thank you for taking the time. I'll let you know when I'm that side next. If you're free, we shall grab a coffee and I shall prep myself in advance not to have two espresso before I come to see you. See ya man. Wonderful. Cheers. Bye.
Ivan: Yes, yes please. Thank you. Thanks, everyone. Bye.
Arjun Thomas: All right, Ivan, thank you for taking the
Ivan: Hey, how you doing?
Arjun Thomas: time and good afternoon.
Ivan: Thanks so much for the opportunity.
Arjun Thomas: Yeah. So I normally when I do these podcasts I tend to avoid drinking anything on the show, though there isn't temptation. But given the subject, I decided to get a coffee. It's n it's it's not
Ivan: Good choice, good choice, good choice.
Arjun Thomas: it's not yours, it's on my list. I'm just about finishing my current batch, but I'm
Ivan: Yeah.
Arjun Thomas: gonna be picking up I think your house blend because that seems to suit my palate more than most. Yeah, so maybe let's just
Ivan: Yeah. Our house man is a classic.
Arjun Thomas: Sorry, the housemen is a classic, right?
Ivan: Our house man is a classic.
Arjun Thomas: Yeah, so n no I I guess there's no surprise here with the posters behind your head. I'm assuming the conversation's gonna go in the direction of coffee, a conversation I
Ivan: That's it.
Arjun Thomas: enjoy. so just tell me a little bit about about Paco before we get into your journey. Like what is Paco and why did you choose the name Paco? What's the what's the context there?
Ivan: Yeah, thanks so much, Arjun. So, PAKO. The Ko in PAKO stands for coffee and the Pa in PAKO stands for PAKO. So PAKO stands for PAKO coffee.
Arjun Thomas: Pac. Not confusing at all.
Ivan: Not confusing at all. I'm pulling your leg. we chose the name Paco in five minutes. I'm going to go to the story of like how the thinking is behind this, the creation of the brand. Paco, the name was chosen in five minutes. My background is venture building. I built startups for corporates. I've been in the whole startup venture space for the past many years. And What I know about naming a startup is that the more time you put into naming it, the worse the name kind of tends to become. Of course, there's a bit of thinking that goes into it. We just started talking about it in five minutes. yeah, parkour name camps up. Kind of sounds good. Kind of sounds like coffee place. Check here, there. Save name. All right, let's go for it. So me and my co-founder Rachel both really like the name. So what is Paco? Paco Coffee is a coffee concept brand that takes the quality of product in specialty coffee, meaning coffees with really good processing that the farmers really put a lot of care into the quality of the beans and also the fermentation. taking that and wrapping up in a fun, approachable brand that is more like a chain coffee setup. In the world of coffee, there's pretty much two worlds, right? The specialty coffee site and the chain coffee site. For chain coffee, you can think of it as like the Starbucks, the Kenangan, for coffee, Lakin, which serves good coffee with you don't really taste the differences in the beans. So typically when you go to places like this, there's only one choice of beans or two choices, darker roasts. And on the other side, specialty coffee really focuses on the quality, the craftsmanship. There's four places like this that tends to be not too many branches per brand. The poster child for specialty coffee is Percent Arabica, which has about 200 plus outlets in the world. Now, the last few years, so there's been a shift in the market. Consumers have been demanding specialty coffee more and more. It's going into the mainstream.
Arjun Thomas: Why do why do you think that that shift is happening today? What what do you think is causing that? Is it just tastes are are are getting more discerning? people want something different. what do you think is driving that change in behavior? not just to drink coffee but to go after specialty coffee because you like you said, it is the nuances in flavors, it's the ability to detect
Ivan: Yes.
Arjun Thomas: the bean type, Where it would
Ivan: Yes.
Arjun Thomas: the where it comes from, the processing approach, what's changed?
Ivan: Yes. Right. So coffee comes in waves, People have heard the first wave, second wave, third wave coffee. I want to zoom into the last 10 years from around 2018 to about 2024, where Asia saw a lot of changes and a lot of these new entrants. We see Lakin coming up. We see for a coffee in Indonesia, Kenangan. flash coffee in Singapore and surrounding regions, Zeus in Malaysia, with very similar place, really fast service, focused on takeaway, branches everywhere, and particularly app enabled means that you can order very conveniently while on your commute. This brought coffee much more into the mainstream, especially in countries that have been majority tea drinkers like China. And at the same time, specialty coffee has been growing alongside mainstream coffee. In the last few years... specialty coffee has entered cultural mainstream. There's quite a lot of what do call that coffee specialty coffee youtube channels that's popping up people are have been really getting into it the home brewer scene so espresso machines and tools meant for the people to use at home have been really growing in terms of the number of products available also which means there is latent and tapped demand for good coffee, specialty coffee. But when customers go around what they find are chain coffees selling. beans that are not as specialty. So what I'm trying to hint here is that there has been a shift in the market trend in the market patterns. There is another data point that will be interesting here, which is if you look at Lakin and Zeus here in Singapore. the advertising that they have been doing recently is they use world barista champions in the advertising to hint as to the quality of their beans.
Arjun Thomas: And what is the reality of it? So so one is the PR story of of of the
Ivan: the reality of...
Arjun Thomas: quality of beans that they that they sell. Because the one thing that's I guess both an advantage and an Achilles heel of very large chain formats is consistency, right? The idea is that if you drink coffee
Ivan: That's it.
Arjun Thomas: in anywhere in the world with that store, you expect the same thing. So there are pros with that because people go in expecting something and you get exactly that and you know it
Ivan: Yeah.
Arjun Thomas: it's a hit. but how does that contrast in In the world of barista champions and barista coffee and speciality roasters. Where the whole focus is honestly, at least my my rudimentary understanding is it's about being local, it's about region specificity, it's not about
Ivan: Yes.
Arjun Thomas: large volumes. So is does it seem like a bit of a c contrarian view, right? It's like it's like it's like holding two extremes at the same point
Ivan: Yeah. Yeah.
Arjun Thomas: in a brand that it should not naturally coexist, right?
Ivan: Yeah, and this is something I've learned after getting into FNB in the past one and a half years. So before this, I was doing more tech, spent some time in FinTech, medical device, venture building. So it turns out consumers want, they want both at different times. So when going to the office, all you want is just a nice cup of good latte. You don't want to think too much about the beans, the origins. You want something comforting. After lunch, you want something to have fun with your colleagues or maybe in the weekends, then you go for special latte coffee. So the same group of people who drink coffee have demand for both sides.
Arjun Thomas: And what proportion of the of that behavior exists in the in say for example the people that come to to Paco. and we had a long conversation about this when I when I came to your outlet, but
Ivan: Yes. Yeah.
Arjun Thomas: just curious for you to kind of maybe just rehash that conversation, which is this duality of of behavior where it's a it's a weekday, office day behavior that kind of switches to a nighttime, evening time, weekend behavior. in the context of coffee, which I find is fascinating. It doesn't it's not entirely surprising now that I think about it, but what proportion of people buy that way, or at least drink coffee that way.
Ivan: Yeah, that's a very good question. And I'm not sure I have all the data to share with you. What I see is there's been patterns of millennials, Gen Zs, who have been requesting specifically for the beans that we are launching, meaning that the demand is there. for these types of coffees. And at the same time, if you look at the Singapore CBD or malls in Singapore, all the other coffee brands are also have been working out very well. And I think this just shows how thirsty for coffee people are in general. And I think what I want to highlight here is It's less on which types of beans that people want. What I found very interesting is that people want the quality of specialty coffee but might not want so much the technical details behind it. So we've been having quite a bit of success packaging the quality of the
Arjun Thomas: Mm.
Ivan: beans in our own storyline and storytelling.
Arjun Thomas: Yeah, and that's what I always find interesting because as an outsider looking in, I sometimes find it a little difficult to kind of decouple the PR strategy and the branding from the essence of what is the bean and the coffee and the processing. Because there's a lot of flair and then we can talk about how you guys approach branding, which I think is fascinating, and the seasons that you the the the the format of seasons that you guys use to kind of launch new coffees literally every month, that I haven't heard of in a while. so so that's where my I guess my curiosity stemmed from, which is how much of this is actually people phoning after packaging PR social I guess no I would pressure is a bit of a loaded term, but at least social acceptance to to to be seen with a particular kind of coffee or a style of coffee and how much of that is actually a true appreciation for great coffee. And the way I think about it sometimes is you can sometimes tell more about true appreciation when people take the beans back home because you it it's easy it's it's it's one thing to be seen with with with a fully prepped coffee for you at a barista or a coffee shop. It's one thing entirely different to go somewhere else.
Ivan: My mental model for this, so to repeat the question, I think what you're alluding to is cough specialty coffee as a status symbol, almost like an intense hobby that some people have, like really looking for the different types of beans going around different cafes. That's what you're referring to, Yeah.
Arjun Thomas: Yeah, it's it's the novelty factor, it's the it's it's the Instagrammability, it's it's creating TikTok videos, it it it's that whole novelty fashion which I think i should not be discounted because that drives a lot of brands. the question i is more about especially when it comes to specialty coffee. I'm curious about how many how many p how many people really appreciate it. and that's a super subjective thing because you know coffee is subjective. so
Ivan: Yeah. Yeah.
Arjun Thomas: I don't know if you know if you know if you if you thought about that a lot. That that that was the origin of my I talk.
Ivan: Yeah. So coffee and food in general. It's 50 % storytelling and 50 % product. It reminds me of that classical musician who has a concert that's ticketed at about $200, $300 at night. And in the afternoon, he went to the MRT station to play his violin and no one stopped to look at him.
Arjun Thomas: Yeah.
Ivan: Same product, different storytelling. So. Our mental model for coffee, the way that we choose to tell the Pakwa story, is the reverse of what other specialty coffee places would do. We choose
Arjun Thomas: Right.
Ivan: to have the base of really good coffee and if you ask us, we will share all the details of where it comes from, what the processing was, what processing was done and why we mix it this way, how we roast it, how we make the drink. We went into a lot of depth to make sure that it literally is the best coffee possible that you can get. But the story that we choose to tell the customers are how we have Madam Paradox as the mascot, I mean, the brand for the coffee that we're selling. And it makes it, yeah.
Arjun Thomas: And and Sorry, go ahead. And makes it?
Ivan: just infinitely more shareable and enjoyable with other people. I'll put it like this, when we started earlier this year and we don't have this side of the branding yet, people who come to us are people who are already into specialty coffee and are looking for new beans, looking for exciting new regions to try. after we started with Madam Paradox and our seasonal series of other characters. people come to us with their friends even though none of them are very hardcore coffee fans. And these people also enjoy the intensity, the brightness of the beans. meaning even if you are not that deeply into specialty coffee and every... origin. You still enjoy them.
Arjun Thomas: So it's it's it's a way for you to make what could be a very I guess Technical I was technical is the wrong word, but I guess if you're talking of speciality because it's so nuanced, it is technical, right? So yeah, it is
Ivan: It is, it is, yeah, it's something like that. Yeah, something like that.
Arjun Thomas: it is technical, far more approachable, I guess, to the general population. So it's not that you have to really be a coffee aficionado to appreciate great beans. what you're doing is that you're using that as a foundation and building a communication vehicle, which is the brand, to make it more approachable to the everyday person. So it's like, you know, come enjoy speciality coffees, even though you don't know the first thing about specialty coffees, you we've got you covered in a way.
Ivan: it's like how Apple, amazing company, they made tech easy to digest to most people. They choose to call their screens a retina, because it evokes the image of a very clear monitor and we compare it to other companies, let's say Crystal Clear, Quad HD, Triple IPS. 3840 times 2160.
Arjun Thomas: Yeah, sometimes like like like with the b the the the process of selecting the name brand, th the the brand Paco, sometimes simplicity is is the better way to go. I guess. yeah. And I wanna
Ivan: Yeah, yeah, yeah, yeah, yeah, yeah, definitely.
Arjun Thomas: kind of draw draw back onto which now makes a lot of sense, which is the approach you've taken about seasons and I think dropping coffee with such regular frequency that's something that I haven't heard of.
Ivan: Yeah? Yeah?
Arjun Thomas: where you're constantly introducing new coffees literally every month. and I'm curious how much of that is the the interest to expose people to a much wider range of specialty coffee than they would have otherwise in a traditional coffee shop which probably would choose two or three and then maybe rotate it a couple of times in the year. And how much of that is by refreshing the coffee you're giving yourself the ability to deploy a lot more of these characters and make it more exciting. So every time someone comes to your store there's something new to look forward to. No, we've changed something since last month and that becomes a a draw in itself. So is that a conscious decision to kind of balance both?
Ivan: It's a conscious decision to do season for more reasons than what you have mentioned. The ones that you
Arjun Thomas: Right. Great.
Ivan: mentioned are some of those reasons. So the major thing is that in a startup, in a brand that's just launching, you want to keep iterating to find traction. We literally launched Parkour with four menu items. Black, white, hot, cold. Simplest menu ever. And really the advantage of a startup company, a small company, is that you are a lot more agile, it's a lot easier to introduce new things, you don't have to deal with the logistics of providing it to many different branches. So doing it this way helps us to gauge customer reaction as we go along. The ones that work well, we keep the ones that don't work well, we don't keep. I remember it was season 4, it was around May. There was one bean that we were providing at that time. It's called Ripple because it evokes the image of a strawberry ripple ice cream and it really tastes intensely of strawberry which is amazing. And people would come to us asking specifically for Ripple even though they have not tried it. Which means that there is word of mouth going through. Hey look you I have to go to this place, little park. And we kept that feature. So going back to the seasonal feature, every season we do a couple of experiments. The ones that work well, we keep. The ones that don't, we let go to make space for other things.
Arjun Thomas: At at what point does it become too many? So if so if you're if if the process is an A B test of sorts, which makes a lot of sense, testing out month on month what works and what doesn't, At what point do you decide there's a cap on how many beans, up the optionality that we provide, given the beans that we have on offer? Because chances are you will go through a a a large number of of drinks, coffee bean processing types. And given
Ivan: Yeah.
Arjun Thomas: that if you're looking at specialty coffee, it's not the middle of the middle of the road coffee drinkers, people like me, nine times out of ten. you're trying to target people who are experimental and want to And kind of are drawn to the ripple, for example. there's so many of those groups, right? Because it's so subjective, our our our flavor profiles are so different. how do you kind of manage not having a crowded inventory because people's palettes are so wide? You might end up with thirty, forty
Ivan: Yeah.
Arjun Thomas: different bean types because you know, small enough sections of each seem to like it lot.
Ivan: Yeah. Yes. This one will not be that obvious to customers. Every other season is a different type of effort for us. So season five is expansion on the drinks. Season six is consolidation.
Arjun Thomas: Okay.
Ivan: Season five is... And then season six is an... expansion on the beans. Season seven would be consolidation. So it's like an alternate kind of. in order to manage the amount of complexity.
Arjun Thomas: Right. And it's just a wild thought. you guys are currently at one location at the sale, right? and the objective is to open, you know, at least one more store, two more stores, three more stores. Are you are you I wouldn't say wary because that's a strong term, given that it hasn't started, but are you open to the possibility that the traction you get with the very same beans in two different stores would be very different and and how d would you manage for that in a in a in a i in a space that like yours which has the potential to have you know forty beans on order you know in two years.
Ivan: Yeah, really good question. Pakho is designed from the from zero to become a multi-location brand. So the ambition is to build tens, hundreds of stores in the next years to come. partially venture funding, partially franchise, and it's really meant to scale. And we built Pakco from the ground up to manage this complexity. We have our internal Pakco operating system. that really reduces the amount of day-to-day operational effort that the team has to go through. So that when we expand to many different locations, it's a lot easier to manage everything, even having different beans at every store.
Arjun Thomas: So you are open to the possibility that it's likely that depending on taste profiles in the region, there is a possibility that some parkour stores will have a different mix of beans than other parkour stores.
Ivan: And this is really the Uniqlo story. So Uniqlo is a tech company that happens to make clothes. They have succeeded a lot in the last decades because they allowed the ability to experiment at scale. They have a lot of variety in terms of what they offer in the different stores and when they want to experiment on a new line of products they do it at select stores and if you imagine how these companies are logistical masters and managing so many SKUs coffee frankly sounds a little bit easier
Arjun Thomas: I like I like I like that. so maybe then the question becomes, why coffee? And we know in your not so distant past you were kind of a corporate venture builder, you spent a lot of time in tech. what drew you to coffee and why a coffee shop?
Ivan: Really, I would say it's the opposite way of framing it. I knew that F &B as a special retail is a tough market, it's competitive. And in my mind, so I've done research on so many different sectors for previous companies, Striper, I built for them. and basically market maps of every different sector database of 3.5 million startups created how interesting every specific sector is within each sector, what are the interesting value propositions and startup concepts to go for. Meaning that I have a good sense of the entire startup landscape. Within this map, I know there are certain areas that if I want to go into them, I would need to have certain things really clear before I will put my time and money and effort into that. For example, I know that medical, medicine, medical device is one of those areas because it does take many years before you can even commercialize a product. FNB retail especially in Singapore is one of those areas but it's a bit lower compared to medical device. So I had...
Arjun Thomas: Yes, I mean that's that's a given, yeah. Sorry, good.
Ivan: Yeah, and I... really did double, triple take at the data and observation that I have in the coffee sector. Did significant research in it and found that there is this untapped white space that I just so happened to be in a good spot to launch something in it. And it turns out that that white space that I hypothesized has really proven itself to exist. it's for that reason, Paco has been getting very good traction in the last month.
Arjun Thomas: And the the you talked about the complexity of entering the market and while I do agree that F and B is there are different challenges, but I guess the the threshold to entry is a lot lower than either heavy
Ivan: Mmm.
Arjun Thomas: regul heavily regulated industries or deep tech industries. So so I get that analogy. in terms of the technology that you use and you know, when we met at your store a couple of weeks ago, Thanks for the coffee was very, very good by the way. We tried all three. the mistake I made was I had two espressos, which is my usual morning pick me up before I came there and I hadn't had breakfast.
Ivan: Ooooo
Arjun Thomas: So ha by the time I came home in the afternoon I was buzzing. but I did enjoy a lot of the coffees. I switched to something non caffeine related at the end of the day, to kind of
Ivan: Good.
Arjun Thomas: wind
Ivan: Good. Yeah.
Arjun Thomas: myself down, though though my tolerance for coffee is generally caffeine is quite high. and you kind of walked me through the machines which I found fascinating because generally
Ivan: Mm-hmm.
Arjun Thomas: my understanding of barista quality machines, they generally behemoths, right? They're generally large machines. Obviously
Ivan: Mmm.
Arjun Thomas: the form factor has has improved. Like you said, the the the coffee machine space has seen a lot of amazing innovation over the last decade or so both for form factors within professional settings as well as those at home. And this there's a massive variety, you know, from grinders to coffee machines. Can I walk me through how you thought about the setup? Because you know, we talked about the focus on the bean selection, and I think one of you and and and and the and the chap that I met who who kind of runs what do you call him, the mad coffee scientist? What's his what's his unofficial, official designation?
Ivan: Yeah, Russia, Russia, yeah.
Arjun Thomas: Yeah. Yeah. a fascinating I t I guess
Ivan: Alright.
Arjun Thomas: take on coffee and I wal saw him walking in with a small pouch of beans that he wanted to try out. literally like a mad scientist, wi with his with his with his coffee and beans and and fermenting concoctions at the back, which was fascinating to see. but what about the machines? I I know you kind of l narrowed landed on the decent. what were your criteria around selecting the machines that you knew would do a great job given that you're in the specialty space? So what were you gu what are you guys looking for to help extract the the the best product from the sector that you're going after which is specialty coffee.
Ivan: Yeah, at the end of the day, what we want to provide are good coffee, consistent coffee, minimal downtime. Consistency is one of the most important in here because it's bad experiences that makes people not come back to a restaurant or to a cafe. The decent is a very interesting machine. It's originally a domestic machine meant for people who are very, very deeply into coffee and want to adjust. every single parameter in DeadRinks. What I find most interesting about it is that it allowed us to track every single shot that we've made. so that if there's a customer that has having a problem with their drink, we can trace it back and figure out what went wrong there. Meaning that when we have hundreds, thousands of stores, it's going to be immensely easier to figure out which stores are having issues with their coffee extraction. So the same... metrics, same criteria for machine selection goes and extends to every other part of the entire setup. It does take, it will take quite a while to get into everything, but I'll just give several highlights. For example, the milk that we have for our flat whites and for our ice whites, the foaming. is done using hot air or cold air instead of by steam, meaning you get a very nice silky smooth hot white texture without dilution. And it does make cold foam which makes for a very nice ice white. Some other highlights. can't Lots of work done into the... What the quality. Roasting. lots more on that side. what we serve at the store is really the best possible form of extraction that we can get.
Arjun Thomas: And out of curiosity, how many people are curious about the extraction profile? Because you know, you've got the display out there. So if anyone
Ivan: Yeah.
Arjun Thomas: is curious about the the extraction for the shot that is pulled for their coffee, they can see it happening like, you know, in front of their eyes.
Ivan: Hmm.
Arjun Thomas: Do people actually pay attention? I'm curious about that. Because I mean if you're a coffee person and you know a little bit about extraction times, temperature, pressure, for obviously you know there's a massive variance between dark roast and light roasts, and with specialty roasts and lighter roasts, you have to pay a lot more attention. you can get away with a rough extraction with a darker roast, and things like grind settings. is that something anyone pays attention to or is it just like a novelty thing for people to just look at?
Ivan: OAS is the tool to bridge because Pako is about making really good coffee, really accessible and fun to everyone to make into something that you want to with other people to enjoy together. If we only have the branding, if we only have the characters, then we are just a place with branded coffee. Again, coffee and food is 50 % storytelling and 50 % product. And that's our way of communicating the product side.
Arjun Thomas: Right. And in the year and a half that you guys have been going at it, it's it's been a year and a half or less, sorry, I
Ivan: we, we actually just launched this year.
Arjun Thomas: six months, nine months.
Ivan: end of January. So it's been around six months and it's been going really extremely well. It's been super exciting. We won gold and bronze for the Global Coffee Awards. Yeah.
Arjun Thomas: Yeah, I h I I heard about that and congratulations again. Yeah.
Ivan: And also a national winner for Singapore in this competition. So not only we have the industry awards, we also have customers who have been showing a lot of interest in the coffee blends and the characters that we have been putting forth. And it's been really, really inspiring to see all the customers that have been coming back to Parkour day after day. And really, it's thanks to all of them.
Arjun Thomas: No, fair point. I mean i and and kudos to you guys because at the end of the day people only come back if they find some sort of you know, an aff affinity to the to the brand, or
Ivan: Yeah.
Arjun Thomas: the food. So it's either down to and it's and you can't you can't do just one, right? So it has to be a great product, has to be great service. And then because there's so much competition, you have to have a you know, something special about it for them to make the effort
Ivan: Yeah.
Arjun Thomas: to kind of buy your coffee as opposed to someone else. So it's it's not just about having a good product, it's about having a great product and like you said, consistency and differentiatability. so it's a lot.
Ivan: Yes. And there's a point here on startups, because people do ask why get into coffee? It's very competitive. I would rather get into a competitive space where I can differentiate than to get into an uncompetitive space, a new market where I have to create demand from scratch. It's much
Arjun Thomas: Yeah, you minimize the variables, right? You minimize the variables.
Ivan: Really, the amount of effort required to differentiate your product is much lower than the amount of effort required to educate customers on a brand new product, on a brand new problem.
Arjun Thomas: True. What's been the most difficult thing getting this up and running? What's the one thing that comes to mind?
Ivan: When we started, it was just me and my co-founder. We don't have a team yet. And renovation was a very interesting challenge.
Arjun Thomas: Yeah, I could imagine. It's a pain.
Ivan: For most things it's okay. For some things... Because... specifically the design of the counter. We have this few meters long white stone countertop that is custom built by the builder. In order to know the shape of the counter, we need to know our operations.
Arjun Thomas: Right.
Ivan: Before doing our operations, we have to simulate the location of every machine. giving gaps and holes to make sure the water can come in, come out, electricals go in, go out, make sure that there's enough clearance for people that they don't hit each other while working. And that's where I found out that there are anthropometric studies on the like circles of humans, how many arm spans, how many meters are required. if you want to work closely together and like how far the tools have to be. That took a few days of calculations. That was quite...
Arjun Thomas: Yeah. And w what what what did you find happened most easily that surprised you? Was there anything?
Ivan: things that constantly surprise me.
Arjun Thomas: No, a thing that happened so easily that it surprised you. You were expecting it it just happened. And you're pleasantly surprised at how easy that particular thing was.
Ivan: We were quite fortunate to have a lot of things fall into place, This location that we are working on, it used to be Vox. They had a coffee and matcha for many years, eight years in total, before they moved to a different place that's nearby, bigger location. the Easter of alcohol now. Stumbling on that location was amazing. We didn't look for a lot of places. also finding the Rashid, the mad coffee scientist that you mentioned earlier. Finding him had been an amazing blessing.
Arjun Thomas: Yeah, I can imagine. Because you need s someone that's so passionate about not just coffee but the format of experimentation, and who's always on I mean it's an integral part of your DNA, right, as a company.
Ivan: Yes, yeah. He's part of the reason why we went for the characters that we have right now. Yeah, yeah.
Arjun Thomas: The awards. the characters. I thought that's what the awards. W why the characters? What what is that what's that connection?
Ivan: so basically me, my co-founder and him were just chatting around the office. We're like, OK, let's name the next beans. Then we settled on very fun names. We started with Madam Paradox and that led to us. what if we put an actual character design in front of it? OK, that'll be fine. Yeah.
Arjun Thomas: And we also talked about I know in the world that we live in, how using AI has helped you basically do more than you would have
Ivan: Yeah.
Arjun Thomas: had the ability to do maybe five years ago, not even five years ago, two years ago. how do you currently use AI in what form and how has it helped you do more than you could?
Ivan: So my background, part of my background was software development. And I did mention a bit briefly on the Paco OS, the operating system. AI has been amazing in letting one software developer or one software architect to work like a team of software developers. 2026 is the year, the turnaround year where software as a service is starting to be seen as a wrapper for databases. And it's gotten so much cheaper to create your own wrapper on top of your databases that in many cases, it makes sense to make your own instead of using regular sauce and then doing integrations through sepia and water. That has been a very powerful, I think, the phrase people would use is the false multiplier.
Arjun Thomas: Yeah, I've heard I've talked to a lot of founders, especially smaller outfits where they've believed that the traditional model of finding C R solutions, ERP solutions, order management solutions, communication management solutions, you can just build it from the ground up. Because if you
Ivan: Yes.
Arjun Thomas: have a very first per principles service design, systems thinking mentality,
Ivan: Yes.
Arjun Thomas: and you know exactly what it is that you want, you're probably better off building from the ground up Again, th i
Ivan: Yes.
Arjun Thomas: the use case falls apart in an enterprise context, but if you are doing this as a small outfit, as a small startup, you can get away with with building everything from the ground up because you're right, there's no there's no reason why you would buy off the shelf and then spend the time to integrate and then whenever you have this wacky idea about doing something, you're like crap, I can't do the customizations I want.
Ivan: Yes.
Arjun Thomas: Because the business evolves, especially at the early stage, you know, you have a random idea that you had no clue of three months before, and now you are not beholden to the infrastructure you kind of put around your neck to prevent you from visualizing or realizing that that idea that you had. so I I completely get it. I completely get it.
Ivan: Exactly. This ties into what we mentioned earlier about what came easily. Doing a startup in sectors other than AI in 2026 is working out very well. But doing it in AI itself, that depends on how much unique IP you have. If you are just building an AI wrapper, then that makes it a lot more difficult. So we are fortunate to be in a space as an AI consumer.
Arjun Thomas: And Given that you guys have been around for a bit, the reason why this question comes up in my head is because
Ivan: Mmm.
Arjun Thomas: the last time we met, you showed me a picture of and for people who don't know this, but please go check out Paco Great Coffee and I'll I'll plug your location details in in into the podcast.
Ivan: Hey, thank you.
Arjun Thomas: your f storefront has no shutters, b by f by by function of where it is. And and the reason why I bring the story up is because of what
Ivan: Yeah. Yeah.
Arjun Thomas: what you showed me, where there's some some random chap walked in and he helped himself to some stuff and walked out and you were debating using the a silhouette of his image to kind of create a new brand. I thought it was hilarious.
Ivan: Yeah, that's part of us really having fun.
Arjun Thomas: Right.
Ivan: That's the culture of Pako, where we want everyone in Pako to be able to just laugh off things that are happening around the world and bring that joy to people also. It did happen. He went in at about 1 a.m. We eventually filed a police report. He took Literally one piece of BISCOFF.
Arjun Thomas: Ha ha ha.
Ivan: a single piece of this curve. We... So we just launched our new bean about a week ago. We call it Waldo the Disruptor. He's
Arjun Thomas: Yeah.
Ivan: the mid-season drop between season five and season six. Season 5.5. And it was great. It was great. We sold out in about three days and we had... to restock over the weekend to make sure we still have for that. And Waldo was loosely inspired by the guy because
Arjun Thomas: Ha ha ha ha.
Ivan: we kept joking internally like, yeah, where's that guy? He's like went in and went out. We don't know where he is. He's like Waldo as in where's Waldo?
Arjun Thomas: Where's Waldo? Yeah.
Ivan: So we just misspelled Waldo with an O. Wal-do.
Arjun Thomas: Waldo. Yeah. That's hilarious. in terms of
Ivan: Yeah.
Arjun Thomas: have you you guys have been around doing this for a short period of time, I wanna kind of t try to get you to contrast the way you built this and I consider this a venture, and venture building within the umbrella of a corporate venture builder, with you know, like Schreiber and the the other ones. What do you find different? looking at the approaches taken between the venture building world and in a way a founder led startup in the wild world. and I'm curious about the the the question because I just had a conversation the this your the second podcast recording today. the first one is also someone who comes from who who built a venture within the corporate venture builder model but then had to kind of make changes and spin out on their own. So I'm curious about your your your your experiences on the differences between the two worlds and and and and what you like, what you don't like. just random thoughts.
Ivan: So won't be able to speak for all venture builders or for all venture building companies.
Arjun Thomas: Your perceptions, yes, yes.
Ivan: Taco was not my first venture before this, about a decade ago, launcher isn't trade medical, also a startup, was in medical device. So corporate venture building. is much akin to being a strategy consultant but as a founder. it's very different from doing it in the wild. The picture is more complex in corporate venture building because In corporate venture building, you are not just building a startup. You are solving an innovation problem. You are solving a future new revenue stream problem. In order to do that, you have to figure out what the company is like, what types of assets do they have, what types of unfair advantages that a startup within that portfolio would have over someone else in the world. And also what kind of disadvantages would a startup in that corporate have? One big chunk of work that I do is figuring out what concept to build within a corporate context. That's why the market map that we talked about earlier. Figuring out what startup to do in the wild is purely about is there a white space? Can I build it? Can I make money out of it? Can I scale this? Will people fund this? It's purely commercial. In a corporate context, you have to figure out whether this links with the mothership's overall company strategy. Does it make sense 10, 20, 30 years into the future? Is it something that the mothership will continue to want to put money in instead of it being a one-off innovation experiment? That's main key difference.
Arjun Thomas: yeah, I I I I get it. It's there's a lot more strategic thinking where this is going to be ten years down the road, fifteen years around the road. and so much of it is less about the actual venture but the effect the venture has on the parent company, which I find sometimes a little amusing.
Ivan: It's actually, I place it as actually both. You kind of have to find that sweet spot where the startup itself will succeed. So it's, the criteria is doubled essentially.
Arjun Thomas: Yeah, agreed.
Ivan: me.
Arjun Thomas: and and and that tension, as it were, is always a delicate balancing act to figure out. the challenge
Ivan: Yes. Yeah.
Arjun Thomas: I've always found is that so much of it is a function of the the vision that the board sets, who the primary sponsor or stakeholder or champion is, and whether they stay at that position long enough to support
Ivan: Yes.
Arjun Thomas: the venture through the ups and downs that invariably every venture has. and if that is not the case, is there strategic guardrails put in place to ensure there's handover between sponsors and stakeholders for the continuity
Ivan: Mm.
Arjun Thomas: of this this path that the corporate venture studio has decided to take and and that's where I see a lot of I guess inconsistencies in because it is it's it's it's it's a long play, right? It's not something you can do in a year or two and then expect excellent results. It's a it's a grind that takes. A while. Founders have less of that to worry
Ivan: it is.
Arjun Thomas: about. The focus is more on the here and now. Obviously, there's a North Star that you're you're rowing towards, but the focus is still always on the here and now, right? What do I grind?
Ivan: Yes.
Arjun Thomas: Do I need and and then so you're I guess in a way, maybe it's a it's it's a biased way of looking at it, but your attention is not split. I always find as a corporate venture, if you're a founder or a person in the role, your intention is seems to always be split between managing that relationship. with the corporate and actually
Ivan: Yeah.
Arjun Thomas: executing on the business that you're building. which has its pros and cons, but
Ivan: Yeah. And really, I try to do when I work on corporate venture building projects is to not make compromises because I don't want to compromise the viability, the viability and feasibility of the startup to fit with the corporate strategy and vice versa. is they shouldn't be a trade-off. Both should work together and be maximized at the same time. That's why it's more challenging that way.
Arjun Thomas: Yeah. And I think from from everything that I've seen, the venture builders that I've talked to, experiences that I've had, the formative work is super important. it's ensuring
Ivan: Yeah.
Arjun Thomas: that you said that ensuring that you pick the right problem, pick the right opportunity, that makes the most sense for that venture corporate partnership
Ivan: is
Arjun Thomas: is is is where I think a lot of the effort needs to go, far more than you would put in a venture in the wild, because it it could just start with a idea in your head and you start executing computing tomorrow. there's far less far less strategic thinking and balancing that needs to happen as a as a forethought rather than an afterthought when it comes to covert venture build co corporate venture building. but but that's fascinating.
Ivan: on the other side, flipping it on its head. What I do in building startups is it would... I... For example, for Pako, as I mentioned before, FNB is competitive. It's very easy for people to come into the space and build something. And for that reason, the amount of evidence that was required for me to convince myself to build Pako was very high. So when it struck me because when you mentioned that if I have an idea that I can execute tomorrow, it was the reverse because I had to see the white space very clearly first.
Arjun Thomas: I mean it's a function of I guess th f having been in corporate v corporate venture building for so long. the wiring is in place to say, Hey, let me let me be reasonably sure about whether this is an opportunity and I have the the tools from my day job to be able to increase the odds of my success or so my su so I might as well use it. so I completely
Ivan: Yeah.
Arjun Thomas: get that. I get that. yeah, anything else that you want to kinda chat about, Ivan? It's been a it's been a fascinating conversation. I I know we can go on for hours and hours. We haven't got into the details of coffee. I I'm kind of holding myself
Ivan: That is so much.
Arjun Thomas: back, yeah. in terms of the you know, the technical aspects of the machines themselves, the the beans, the processing, the variety of coffee, how I intensely dislike fancy co specialty coffees.
Ivan: There is so much even color psychology like there's a lot of thought put into every single detail.
Arjun Thomas: Yeah, it it's it it's it's amazing. and yeah, I mean I I'm very very sure you guys are only gonna go places because there's lot of thought that's gone into creating a differentiated vehicle in a space like you rightly said is heavily contested which means there is a a lot of opportunity and it's a trend coffee drinkers are only going up which is a great thing. so there is a clear space to differentiate and as long as there's a lot of thought that goes into how to differentiate which clearly you guys have in spades, I don't see that being a problem. I'm looking forward to picking up my next coffee. So when I'm there for my next meeting I shall swing by and get myself a house blend.
Ivan: Yes. And yes, and I will try to figure out that there has been one challenge that is been in my mind for months and months, which is how do I make dark roast taste really, really amazing? So for Pako, we have been doing Light to Medium for all of our coffees. When I crack the code for making amazing dark rose coffee, I will let you know you will be the first person I tell.
Arjun Thomas: Brilliant. Thank you. There's there's something to do with that I've been looking at it very broadly, obviously not in the depth that you're talking about, which is lower pressures, different kinds of extraction, to maximize
Ivan: Yeah.
Arjun Thomas: the the complexity of a dark rose. the challenge with dark roast al is always you it's it's it's like a machine car wash, right? You do you grind it and you push it through with as much pressure as possible to get the extraction, but stop just short of overextracting so you kind of mellow the bitterness. but but yeah. lower temperature, lower pressure extraction, calibrating the grind setting. I don't know. Let me know when you figure that out. I'd love to.
Ivan: I'll let you know when my PhD project. I'm not taking a PhD. I've had enough studying. Thanks so much for the opportunity, Ajun. Yeah, thank you.
Arjun Thomas: Alright. well, thanks again man. It was a and thank you for taking the time. I'll let you know when I'm that side next. If you're free, we shall grab a coffee and I shall prep myself in advance not to have two espresso before I come to see you. See ya man. Wonderful. Cheers. Bye.
Ivan: Yes, yes please. Thank you. Thanks, everyone. Bye.
