We've gotten quite a few questions about our new Hole retail concept, so I decided it's worth giving it a special write-up here via the Updates function.

What is a Hole?  And why is it so revolutionary?

We are reinventing the local "dive-bar", with hyper-local, hyper-fresh, craft beer and technology driven service & savings.  We will be launching Hole #1 in the San Francisco Bay Area over the next few months after this raise closes.

"The Hole" is the first of it's kind, but is in fact simply the logical culmination of three surging forces defining daily life today: 

• Great, locally produced beer
• "My" Dive Bar & Meet-Up Spot
• Technology

You've probably been to a microbrewery by now.  You may have even spent some time in a small taproom in front of their tanks.  It's the freshest beer you can find, and if it's authentic, the whole company and taproom was all strapped together on a shoestring budget.  Higher quality, and local production, are the biggest trends in food right now here in the states, and throughout much of the Developed and Developing world.  The Craft Beer market is capitalizing on that.

Our concept starts there.  But we make it a notch better with our first leveraging of some modern brewing ingenuity. The technology for making great beer with a piece of equipment no larger than a refrigerator has arrived, and it's a QA Managers dream come true -- programmable to minute details, monitorable via the great majestic "Cloud", and phenomenally time and space efficient.  Literally, you put in your ingredients, program the process and timing to approximate what your brewer normally does, and press a button. Four to five hours later your batch is ready to go to fermentation. It's a huge saver:

• Cuts out a half-dozen labor hours
• Eliminates human error and waste
• Batch sizes are smaller, which given space constraints, freshness demands, and the goal for any one Hole to be self-sufficient and no more, is a big plus
• It can be monitored remotely
• A unit costs $5k-$8k, rather than the $500k+ our current system costs.

So we've got the "Great, locally produced beer" market force well covered.

Now we improve it, bringing in the Divebar element -- but a nice Dive, all about urban grit and practicality; driven by minimalism and an almost hyperbolicly small footprint.  "Dive" doesn't equal 'nasty' anymore. It means 'cool'. It means 'real'. It means not posh. It also means 'mine' -- a place of no presumption which becomes a customer's 'third place', to use the Starbucks term.

• Simple, basic setup with minimal complexity means it's as QUICK and INEXPENSIVE a buildout as you could dare dream of
• Labor efficient.  We can run this with only 2 people on site (keep reading down to the Tech section to understand how).  Compare that to the 12-20 a brewpub needs
• Low, low rent, opening up opportunity in even the most prime and pricey areas like Union Square San Francisco, Central Shanghai, or Orchard Rd., Singapore

Sounds great so far, but nothing new yet, right?  

• So here's where we add in the technology and things get cool and revolutionary:
• Hi-Tech On-Site brewing: We've already covered this one.  
• Order by App: No long lines, botched orders, and inaudible scream-conversations with the bartender.  It's just open menu, select beer(s), confirm order.
• Pay by App:  No more waiting 15 minutes for your change, only to getting back half what is owed to you.  Apple Pay, Google Wallet, Paypal, and Credit Card are your currency at the Hole. A payment machine will be there to accept cash though for Old School patrons
• Know your Beers: The menu is always current, with a wealth of information (flavor profile, alcohol content, color, bitterness, etc.) at your fingertips. Recommendations will be available as well (see below)
• Track Your Beers: Sign in when you order and keep record of what you drink.  Rate the beers for yourself and take notes if desired. Share your portfolio with friends, and get recommendations based on what you like.
• Drink Safer: Alcohol and driving DO NOT MIX.  Plus it's good to know where you stand at all times.  That is why we will have a BAC estimator built in to the App.  Customers can turn it off if they prefer, but they get 10 cents off each beer when its on.  They will have had to enter age, sex, and weight into their profile.
• Loyalty Program: No need to swipe any card.  Order with your account and you get your Pints (P(o)ints, but better!).  Rewards for your patronage, across same-Hole visits and across different Holes. Also load up your account by buying an E-Growler and save 10%.
• New Brew Alerts: Get instant notification of a new beer going on tap.  We will run through a slew of hyper-limited releases so you'll want to stay on top of it.  As they say in England, "The early Bird gets the Pint". *
• Low Price:  Hit the Hole early for "Happy Hour" pricing, and beat the demand-rush and scarcity premiums that will come as a keg nears empty.
• Asian Street Fusion Foods: Some locations will be required to have food.  The menu will be all Asian street foods - Indian, Chinese, Middle-Eastern, etc. -- cooked on a hyperbolically compact (of course) grill in a hyperbolically compact kitchen area.  For cost and operational reasons all efforts will be taken to avoid needing to have kitchen facilities at any hole.
• Silent Audio: The many TVs inside a Hole will often broadcast live concerts, play music, or show the hard to find (i.e. Cricket, Field Hockey, Kabaddi) and major sporting events.  Listen to them (or not) silently on earphones/headphones through your Hole app or on-site silent concert technology.

So that's inside an individual Hole:  

• Incredibly cheap & quick startup.
• Exceptionally low Rent, Labor, and Cost of Goods Sold
• Fresh beer.  Great Prices.
• Customer engaging beer info, alerts, and recommendations.
• Hassle-free (and shrinkage-proof) ordering and payment.
• Profit.  Profit. Profit.  Great ROI.

But the real magic happens as we roll the chain out. Here's the vision:
     1. We start with say one Hole in Berkeley CA, right near the University, or San Francisco (let's say near Union Square).  
     2. It does well, gets packed, and shortly we open a second, and then a third, clustering within the same several square miles to encourage cross-pollination, spread the word, and make the loyalty program more fun and rewarding.  
     3. Then it jumps across the bay, with Holes #4 and 5 popping up in the other city.  
     4. And did we mention that we're not footing the bill for opening these.  These new stores are franchised. The franchisee gives us money to leverage our brand, knowledge, concept, and app.  They pay an upfront franchising fee and an ongoing royalty.
     5. "But Wait There's More":  Don't forget that next step is where we go international.  Bengaluru, Mumbai, Chennai. Hyderabad. Maybe Shanghai, Beijing, and Guangzhou after that.  Maybe Tokyo, Sydney, Yokohama, Brisbane, Singapore. You name the densely populated, dynamic market, cosmopolitan city center, and you can envision a Hole there.  Some of these we own, and with increasing regularity, some of these are franchised.

Anyway, you can see where we are going with this.  Given the app in place, the beer recipes and processes, and a growing brand built on SF Bay roots and appealing to cosmopolitan younger Millennial, the Hole concept is remarkably portable and (here's the key) franchiseable.  We've got sales revenue, franchise startup revenue, and royalties flowing in.

PLUS along the way we are passively accumulating the RICHEST data set imaginable for a channel that the Mega-Brewers pay millions and millions for insight into.   

PLUS PLUS, we may buy some of our Hole locations when our coffers permit.  In doing so we start to accumulate a Real Estate portfolio that could someday grow to rival Starbucks -- which of course with $6 Billion in Fixed Assets and Long-Term Investments is a real-estate company as much as a coffee company.

Why are we building Holes in the US?

Building the first prototypes here in the States allows us to proceed full steam ahead with our global plans, but at the same time, delays exposing ourselves to currency and international-trade risk during this period of unprecedented global market confusion.  We can charge overseas the minute timing, opportunity, and risk align.
We will also have deeper coffers by the time we charge overseas, meaning a more concentrated and quicker rollout -- and we know speed is essential in markets where IP protection can be a concern.

That's enough info for one update, but if you have any questions, please don't hesitate to ask on our fundraising page.  

Thank you and Cheers,  

-Ian