Shaking Up Sparkling Water: Aerflo’s Path From Idea to $10 Million Raise

0:00Walk into every room prepared for a no and take it on the chin. It's 99.9 % no's in the history of this company for sure. Hey everyone, welcome to Shopify Masters. I'm Shuang Esther Shan and this is your companion for starting and scaling a business. Today we are joined by the founders that are shaking up the$40 billion sparkling water industry with first of its kind portable carbonation system. John Thorpe and Buzz Wiggins are the co-founders of Airflow. They're blending smart design, sustainability, and relentless R &D to tackle a bubbling problem in the drinks world. We'll dive into their journey from idea to prototype, how they raised over$10 million before launching, and what it really takes to build hardware that's both beautiful and functional.

0:54John and Buzz, welcome to the show. Thank you for having us. Good to be here. Very excited to chat. But before we jump into all of the complexities of how Airflow's carbonation system works, John, I did want to start with you. What about the sparkling water market got you really excited? Yeah, well, I think growing up as a kid, I was kind of always a magic corner in my dad's bar cart with a soda siphon, and he would just make sparkling water, and it seemed like it was magic. So it always kind of was at the back of my mind. And Buzz and I sat down to talk about starting something, and we were just blown away.

1:30by how quickly the market was growing around us. And we just looked at like, how are people buying sparkling water right now? Clearly they're passionate about it. People describe it as a habit. And as we looked at the options that they have, single use or countertop systems, we just felt like they were both lacking. And it was a pretty exciting opportunity to come in and design something new that would, to us, deliver a better way, totally without compromise. What's interesting to note is that, Buzz, before starting Airflow, you actually didn't drink sparkling water. What about John's idea excited you and what made you want to start this company with John?

2:03Yeah, I mean, well, working with John was the first thing that got me excited. He's just really great co-founder, extremely diligent and hardworking and all of these things that you would look for. But as we really like kind of looked at this thing, there's just industry tailwinds that first got me excited about it. massive growth, you know, two different industries in both water bottles and sparkling water that we're seeing this massive spark and just like kind of excitement from consumers looking at those two and then just seeing very obvious problems where you don't have to do this crazy research to go, is there something we can actually do to solve a problem here?

2:43Is there a problem people are having? It's like, Oh, big time, right? It's the amount of waste and things that are going into this. And it's just something John and I first talked about was, Can we build a company where when you make a dollar, the world's a better place? Put all of that together. And I'm like, oh, this sounds like something to get off the couch for. Where were some of the key problems you wanted to address, the main pain points right from the early days? Yeah, absolutely. I can start by saying single use, right? It's no secret that that's not a sustainable way to move forward into the next century.

3:16We can't just keep making one-off things, pretend we're going to recycle them and throw them in the ocean. Plastic has a 5 % recycle rate in the U.S., but there's a recycling symbol on every single one, and everyone thinks like, hey, as long as it gets in that bin, it's all good. That's not the case. Aluminum has a 50 % recycle rate. It's also not good. I know that everyone thinks that it's like, hey, that's a sustainable material, easy peasy. the amount of carbon it takes to make those alone is completely awful. And then after that, you sell it to consumer after distributing it, shipping it, doing all of these things all over the world.

3:56And then you point the finger at the consumer and say, if you don't recycle that, that was bad on you. We just didn't feel like that's good corporate governance. That's the biggest one by a mile. I think cost associated with all that, right? You're paying one penny for what's inside of a can of sparkling water. you're paying a dollar plus for all the logistics and everything it takes to distribute and get that thing to you um and then i i just also think we looked at at okay there's something solving this right i can make this in my own house on the on the countertop what happens when i want one two hours into a hike what happens if i want to take some of this camping and like don't get started on single use with camping right um and litter outside so we looked at all that and we're like, man, pretty close.

4:41There's a couple of things that are doing good things. We can see what consumers want, but it's pretty obvious that if you can just find your own water source and, you know, have a little gas thing, push a button, that's going to meet a need in places where it's not being met right now. And then John, I know that for the process of going through, iterating, having all these problems that you wanted to solve, what were some of like the most significant changes and hurdles that you guys overcome as you were trying to iterate through that process? One of the first things we did was we just interviewed hundreds of people, everyone we could find who liked sparkling water on the countertop system, that thought about buying one, cared about sustainability, didn't care about it, like just tried to educate ourselves on people who like sparkling water, what are some things that pain points they have, things that they love, and so on.

5:31And so a couple of things came out of that that I think really led us into the overall all system design and then I can talk about some hurdles. But one was, you know, this, the kind of intersection of what Buzz mentioned in cost and sustainability of this feeling of like, I love this beverage, but I feel guilty when I have it. And it could be for both of those things or one of them. And we just kept hearing that we're like, we need to solve that consumer pain point. So that was a big one for us. The other one was just standard, I think, challenges, frustrations that people have with, with subscriptions, like with this thing arrives once a month, then maybe I don't need all of it.

6:07And so stockpiling happens or I'm paying too much. And we kept hearing this sort of aversion to that. And so as we heard these things, we must address those, that's really three pain points, while also delivering pure, beautiful, sparkling water to people. So those pain points really led us down a path of refillable, so not single use. That was a rule for us, which had its own series of anecdotes, but that led us to designing and developing and building out our own refill facility in New Jersey. All of the regulatory work that went alongside that. So there are a lot of very strict regulations around shipping compressed gas, and we're the only company permitted to do so with the postal service.

6:47And then a lot of development work in building a very specialized way that we call the capsule exchange, where that works without a subscription. So this way that you just drop your empties in the mail and your next order gets shipped out to you right away. So that's the trigger rather than being based on time. So we can go into a few anecdotes about the hurdles in each of those kind of pillars. But we were driven by hearing those pain points in the early days. So things like, you know, we finally thought we'd found someone to do the refilling for us. And they hung up on the very first call. And so we turned to one another and we were like, there's only one option here because it must be refillable.

7:28Let's go build our own facility. Crazy to think that this end product started in your garage when you're hacking with a bike pump. So talk us through the first prototype you created. Yeah, it was a bike pump on a swell bottle I had sitting around, glued into a cap with a little piece of tubing sticking out of it, pressure relief valve, and something that told me how much pressure was happening inside the bottle. it was absolutely miraculous to us that that worked it was um i mean quite shocking that it didn't just explode to be honest with you now knowing what we know now and i think it gave us a ton of conviction when we when we tried it out and we opened the bottle and you heard the hiss and you unscrewed it and poured it on and and we were like wow this this might be something we might be on to something here and then it was about two years after that before we were holding something in the real form factor, which I will say was a pretty frustrating process going through a couple of different manufacturers, but it was also a fantastic learning experience and taught us a ton.

8:37It was not the thing that was holding us back on the timeline of the company, so there was a little bit of time there. It was very, very, very satisfying to then finally put one of those on the right form factor on a bottle, hand it to someone else, and let them use it. I would say for both John and I, one of the biggest unlocks in the business. Yeah. So how does the product work today? Yeah, I think that's pretty interesting going from the very early prototypes and how hard they were to use to getting to something that is simple and intuitive. We really settled in on a couple of novel things.

9:12So you just press the button after you load in a capsule and fill the bottle on top. It will put CO2 in the bottle. You'll hear a valve go off, that tells you you've reached the maximum pressure the system will allow. Shaking the bottle, which can be slightly not intuitive, actually does a much better job of mixing the CO2 in when you've got higher pressure in the top of the bottle versus the water that it actually will absorb a little bit more of the CO2. And then you just do that up to three times to configure to the amount of bubbles you want. And then you get to hear that nice hiss when you open it and drink it.

9:47So pretty simple. Despite all the iterations and all of the process of actually making the bottle a viable product, it sounds like despite it being a hard task, the regulatory part was actually even harder to be the only company that the U.S. Postal Service is allowing you to ship something with CO2. And those are the essential refillable capsules. John, why don't you talk us through actually realizing this is something you needed to tackle? And how did you even convince the U.S. Postal Service to say yes to you? Yeah, we'll go back to kind of the early days. So this is our capsule. And we'd made this decision that it must be refillable.

10:32And so we did all this regulatory work. And I think very fortunately found some advisors on the regulatory side. and had developed a fairly specific and nuanced way for the valve that sits inside our capsule. It's a two-way valve so it can be refilled or expel CO2 within the regulatory landscape in the U.S. and around the world. Very tight kind of constraints on the design for something that does that. And so we had this big meeting to go over our design and review it with the Department of Transportation. And I remember at the time, we were working out of Buzz's place in the East Village, And I remember biking over for work that day and going across the bridge and thinking to myself that I hadn't been that nervous since I think like my Canadian, but grade 12 physics exam.

11:18Like I was, we were going into this meeting and very confident in, you know, the design that we'd come up with. But it was a meeting with 12 engineers at the Department of Transportation about something that, you know, without this, we don't have a business. And so it was this like single pivotal moment that unlocked our ability to go actually have this thing made that unlocked our ability to go build a facility that would fill these things. Like all of this downstream work came off of this one single meeting. And thankfully, the meeting went very well. There were actually like no comments, just kind of a thumbs up and some recommendations as we thought about different pressures and temperatures and so on.

11:55And then I remember biking back across the bridge at the end of that day, just feeling like the weight of the world is off of our shoulders. And now we have the ability to really charge forward. But you're right. It was daunting. And it was a lot of work. The Department of Transportation was the most important one. And that kind of kicked everything off. And then after that, we worked really collaboratively with the Postal Service for about three and a half years on everything from packaging to instructions on the outside of our box to labeling to designing the return label, all of this. But it took three and a half years presenting at the headquarters in Washington, D.C.

12:32to get that approval. Now that you have the design of the product complete and the U.S. Postal Service on your side, you have to go out and market and get some strangers to buy into your idea. How did you accomplish this? We were looking at that exact topic back in 2024, pretty early on, kind of trying to decide timing, think about who our customer is, all these things that are these giant questions you have before you've launched. We really felt like launching into Q4, especially in the gifting season, we've just always felt like this is going to be a phenomenal gift. Felt like that was kind of our best foot forward.

13:12definitely helps a lot to be able to play with pricing and discounting and those types of things early on because it really allows you to go make a change, watch for a week, see what happens, see how people respond, really think through different audiences, think through color schemes, kind of all of that stuff. I think a lot of people think that you find your audience with targeting. I think that we think that you find your audience with design. So we try to be really diverse, tried to really show a lot of aspirational stuff that is kind of like, I know that you're probably going to use this thing 80 % of the time at your house, but where could you use it?

13:52You can use it on a glacier. You can use it up in the mountains. You can use it at a natural spring. You can use it on the subway. And I feel like that content did really, really well for us. It's a little hard to maintain that across a website and especially through maybe your product imagery and things. But that's what worked for us really, really well early on. We did a lot of work aside from PR with creators. We did a lot of work on meta, really kind of trying to bring traffic in. And then after that, I would say a lot of word of mouth. So we were not shy about hitting up every single person that we know on planet Earth with anything over even like 1 ,000 followers to say, hey, remember that time a million years ago that I designed a logo for you?

14:40Could you put this post up for me? And we got a lot of response on that. And I think it helped immensely. Well, also going to market, it's turning on your manufacturing facility and also your logistics and your fulfillment, which you've built this 5 ,000 square foot facility. And now it's actually testing if the system works. So talk to us about managing that side when things did turn on. What were some of the learnings from having in-house manufacturing? The single biggest piece there was we were very fortunate to hire our colleague, Chris Kermitchi, who runs our facility. And so he comes from a, has a lot of background in logistics, running 3PLs and so on.

15:23And so he came in about a year before we launched and really helped to design. And he was going to run all of that. when we first were mapping out the business and knew that we'd have a facility and so on, we had been thinking, okay, well, we'll be out there once a week or at least once every two weeks and so on. But largely, Chris runs that. And so we go out when we're needed. But big kudos to him for getting that up off the ground and keeping things fairly seamless at our facility. But it was very memorable. Never forget those. There was one week when we started making our shipments and it goes in the middle of October.

15:59And it was a full blitz. I can picture all of those boxes getting ready to go out and walking out at the end of that evening and thinking, for the first time, these are going to be in people's hands after five years of working on this. And we'll never forget that feeling. While you are figuring out the product, the logistics, and manufacturing, you were also fundraising. That's how you've raised over$10 million before even launching. How did you approach finding the right investors and getting them to bite into your vision? Yeah, I mean, I would say for a lot of people, that's kind of going to be the case unless you've got, you know, six figures to float inventory.

16:42I think first and foremost, I always talk about conviction when I talk about fundraising. You shouldn't be out trying to convince somebody else if you haven't convinced yourself. I think the best way to convince yourself is to be honest with yourself and really try to poke holes and really listen to people when they do. A lot of people can get really defensive about their idea. And it's kind of like you have to unmarry yourself and you need to be paranoid that it's a bad idea. Absolutely paranoid. And you need to be seeking that answer. Why is it a bad idea? And if you can't find it, then maybe it's a good idea.

17:19Um, and, and you kind of build conviction through that where you're like, listen, I've, we've had a bunch of people poke holes. We've gone and fixed that thing where that thing wasn't actually an issue and we're able to kind of to program around it. So by the time we're going into an investor meeting, John and I are looking at each other going, we've got a winner here. We are 100 % convinced. And now it's not time to go in and get a yes for an investor. It's time to go, go and get a not no. So it's very similar, but a not no is somebody tells you, hey, we can't invest for this reason. And you go fix that thing.

17:53You go back the next day and say, hey, that's not a thing anymore. We fixed that. Can you invest now? Now they have to come up with a different reason to tell you why they can't invest. And sometimes they just don't want to and they don't feel like saying it. But sometimes they're like, oh, that's interesting. We're going to take a look at that. That's a major concern we had. And it's really good to hear that that thing has been fixed. So we spend a long time thinking through how to have a slide for absolutely everything. And I think that's John's thing in life, always have a slide. If we get a call on a question or an investor call and somebody says, what's the deal with this?

18:32And we can't right on the spot go, here's the answer. We take a note of that. We go back. We research it. We make a slide. It's in the appendix for the next time we get on an investor call. One of the things that Buzz and I started doing was forcing ourselves to write down like a short memo before every investor call about who this person is, who the fund is, what we think they care about, and what's special about our business that relates to them as an audience. And whether we were right about that 100 % of the time, probably not. But I think largely it helped us to tailor what it is we were talking about, aside from the core pieces of the business, but to really make it specific to them and to try and unlock more of a conversation than just, here's our deck and we're going to run through it and answer your questions.

19:17So that's something that I think has helped us a lot over the many fundraising calls we've had over the years. Yeah. Yeah. So not just like a debrief after the meeting, but you actually have a pre-brief, a pre-prep, if you will, before you go in. Yeah, the elements of that normally are, what does the fund care about? What can we know about them, existing portfolio companies, what they say, their vision, and so on? That's one part of it. What have they invested in? And what are some parallels that we can draw so that when you're having a conversation with someone, you can say, our model is this, and it's a bit like a portfolio company that they might be really familiar with.

19:55And then I think the third, which is really important, is actually going into a little bit on the background of that, the individual who you're speaking with. So get to know a little bit about their background, the things that they've worked on, what you can figure out that they care or passionate about. Those things are, you know, it's like interviewing for a job. And those little pieces, I think, can go a long way. It shows above anything else that, you know, trying to be thoughtful about who you're speaking with. yeah and only because buzz said that you are the go-to person for building decks and having a slide on everything i guess do you have maybe a more surprising tip or something that people don't expect that they should think about when they're building out a pitch deck so that to me just to recap on that for a second and then we'll go into maybe a couple of other tips it is when someone asks a question and it wasn't necessarily covered in your deck, not just being able to, you obviously have to be able to speak to it, but being able to show that you've actually thought about that topic is way different.

20:55And having a visual, it could be a slide in a deck. It could be an old prototype. It could be a new design for something you're working on. Like just anything that you can say, like, let's talk about that and let's dig in further. And here's work that has been done on that topic. I think that's one of the things that people love to see because then it's not just a quick reaction to a question. It shows that there's been thought there. So that to me, above anything, would probably be number one. I think the other and a good friend of ours gave us this guidance in the early days. His name is Storm Duncan, was really what you're trying to do in these fundraising meetings is to get heads nodding.

21:35And so you're taking people through a narrative of the company, but you want to do it in such a way that you kind of like build momentum. And in every slide and section of that narrative, people find themselves like nodding their heads and getting drawn in and agreeing with it. So they might not on slide six have totally agreed with that topic if you just started with slide six. But the goal of slides one through five is to tee up slide six so that their heads are nodding there and then all the way through. So I think those would be the two biggest things for me. But Buzz, jump in with anything else.

22:09No, I would agree. I was going to say the same thing. It's, you know, we would start maybe by showing you, look how massive this market is. Does everyone agree that a quarter trillion dollar market is a market worth investing in? Yes. Okay. And that's, you know, sparkling beverages and cans. Next slide. Does everyone agree that those are wasteful and we've got pretty serious problems with price, pollution, etc., and that countertop systems aren't solving all of those problems? Yes. Yes, we all agree with that, right? You're kind of getting people doing this. Does everyone agree that if there was a solution that could solve the portability problem, the price problem, the waste problem, that that would be a market mover?

22:54Yeah, that definitely would be a market mover. great presenting airflow right and then we have our huge hero slide that's all of our stuff laid out and exactly how we answer to everything we just said how we're going to capture that market how we answer each of those things right that's just one example and then we would we would kind of then get the heads nodding on like okay wow yeah that's cool and now we say we start building up price so does everyone agree that you know this price point you mentioned earlier was too expensive you know does it sound like it's being solved by this other company doing something maybe maybe not everyone agrees that the price should be this yes great news that's what it is um and it's just a way to get everyone in the room going these guys know what they're talking about yeah this is great and i think the only other thing i would say is um walk into every room prepared for a no and take it on the chin right it's 99.9 no's in the history of this company for sure I don't know that we've done a thousand meetings, but we haven't.

24:00Not far. I have not done that many meetings. We are way into the hundreds, and I would say we easily have 350 no's from investor meetings. We've gone for like a full month with no's, where we stopped. Felt like we had to get the business a little farther along, go prove out a couple of things that people weren't comfortable with, and come back and start over. And I think some people would be like, oh, I failed to fundraise. It didn't work. And it's like tighten the bootstraps and go back out and find those not-nos. Maybe even reach out to some of the same investors and say, hey, a little different than the last time you looked at it.

24:39And John will always say this, line, not a dot. A dot is one meeting in time, one place. Can I get a yes or no right now? A line is, I'm not even fundraising right now, but I'll never say no to a meeting. Here's currently what our business is up to. I'm curious if that's enticing to you. If not, what would make it enticing? Great. We'll reach out in six months when we've hit the goals that you said would make this company enticing. We follow up every single time. So now we've started to connect together two meetings, and then maybe we need something else for a third meeting. And now we've got a nice line through time that says, look at this company and look at the progress they're doing.

25:16Look at them doing what they said they were going to do. Versus, here's us right now, flashpoint in time, make a decision. And I think that's really helped us in future rounds because you're never going to raise one. And it's a no today, but it might be a yes tomorrow. And that's the way that we kind of always see it and always have. And approaching that with humility, I think, helps too. I really enjoy that perspective because I think turning that moment in time into a line is also building on trust and also relationship. I mean, if that didn't sound very needing of resilience and also dedication, I think on the flip side, now that you have raised more than$10 million, there is also so much pressure on the both of you and on the team to now scale and reach profitability.

26:10How are you both handling that pressure? Yeah, it's, I mean, especially for a company that is in, you know, stealth for five-ish years, right? There's a lot of work and time and energy, and then, oh, all of a sudden, you're live. And I think, you know, the, okay, now there's all this pressure. And I think one of the things that's helpful, not saying there's not a lot of pressure that we both feel all the time, but with that dynamic is to not just think about it as like zero to one. there are many, many chapters of this company and that we're constantly working to get better in the next chapter.

26:47So, you know, but it certainly, as we think about that, that feeling of pressure, okay, now we're live and, you know, now we must go crush. I think one of the things that we, you know, we both try to do is, well, what are the things we're going to do today that are meaningful and that are going to have an impact on this business? And how do I rank them? They don't, It might not all have an impact on the business today, but they might have a huge impact in 45 days. But also there might be three fires that most definitely need to be put out today, and I must prioritize those today. So it's trying to make sure you don't let the pressure just get in the way of progress and get so wound up and stressed that it blocks you from executing things that are going to have a meaningful impact on the business.

27:30And that's way easier said than done. I for sure struggle with it. But I think in a situation like this, it's so important to have that framework. Yeah. How about you, Buzz? How is the pressure for you? Yeah, I would say first and foremost, stay hydrated. That hasn't been an issue. That's one of our biggest perks. That was actually the thing that turned me on to sparkling water, by the way, is doing the research to understand that it's as hydrating as still water. And now I've never been more hydrated in my life. So it sounds like I'm joking. I'm really not. I drink a lot of water and it helps, helps keep me sharp.