Back in 2016, Matt Czarnecki, then a sophomore at Yale University, found himself exhausted after studying for an exam one night. He needed a caffeine boost and his only option was a coffee shop, where he reluctantly handed over $6 for a coffee and some granola.
He asked himself: Why isn't there a simpler, healthier, cheaper alternative?
Czarnecki tossed some ideas around with his classmates Bennett Byerley and André Monteiro and, that semester, the students started experimenting with caffeinated energy bar recipes in their dorm kitchen.
The project took a lot of trial and error. Some of the original bars, which they made using a food processor and simple ingredients like oats, agave and peanut butter, "were pretty awful," Byerley tells CNBC Make It. "None of us had really any hands-on experience making food products. Matt had the best understanding of ingredients from his scientific background."
After 10 months and 127 failed recipes, by late 2016, they had a product that left them satisfied.
The co-founders decided to call the energy bites Verb bars. "We wanted a name that would convey energy to people," says Byerley.
Until August 2016, the undergrads refined their recipe and made bars from their dorm kitchen, but they needed more space. They contacted a local bakery half a mile from campus and struck a deal with the owners, Byerley says: "We would go in after our day ended and after the bakery closed, around 7 or 8 o'clock, and then we would stay and work until 2 or 3 in the morning."
Shortly after moving into the bakery, they started selling the bars to students around campus for $2 each. "We were testing price points all the time, so it changed a bunch," says Byerley. Today, they sell for less: $18 for a 12-pack, or $1.50 each.
Friends and friends of friends would text in their orders, "and we would go back to our dorm rooms and run a box of Verb bars to wherever they were on campus. We delivered them at all hours of the day, whenever we could."
They made between 150 and 200 bars per night in the bakery. Byerley estimates that, at the time, they sold 1,000 per month.
As with the recipe, it took some experimenting to get the packaging right. Byerley, Czarnecki and Monteiro sold the very first Verb bars in small Ziploc bags. From there, the co-founders used plastic sleeves and a heat sealer, "but after sealing them off, we would have to go back and cut through the package a little bit," Byerley recalls. "Otherwise, they were really hard to tear open."
At the time, "none of us really had any savings to dip into," says Byerley. So, to buy ingredients and packaging, the students relied on fellowship money. They received $1,000 from the the Yale Entrepreneurial Institute (now Tsai Center for Innovation and Technology at Yale) in the spring of 2016, which covered their first round of ingredients.
It wasn't much, says Byerley, "just enough to make bars for the first time."
They also earned money by winning pitch competitions for entrepreneurs held on Yale's campus and around New Haven.
Now they enjoy access to more resources: As of October 2018, Verb has secured $1.4 million in seed funding from venture capital firms Global Founders Capital, Vast Ventures and Great Oaks, as well as from angel investors. The co-founders used the funding to do a total overhaul of the brand and business, Byerley says: "We made new packaging, a new website, our text-to-buy system, new marketing materials and two new flavors."
The product they offer today is a 90-calorie bar that comes in three flavors and has as much caffeine as a shot of espresso.
For the caffeine source, "we picked organic green tea, because that will give you a longer-lasting, jitter-free energy boost," says Byerley. "We made the products 90 calories because we wanted something that doesn't sit heavily in the stomach and that people could feel good about consuming at any point in the day."
Customers can order Verb bars online and have the option of signing up for Verb Flex, which works like a subscription service with all transactions done via text. Before your subscription starts, Verb sends you three bars — one of each flavor — for free, as long as you cover the $3.95 shipping cost.
A week after your sampler pack arrives, you get a text from Verb confirming your first shipment of bars, a 12-pack of the maple blueberry flavor, which is the top seller. You can keep the order, change it or cancel it altogether, all over text.
The idea was to create a convenient subscription service that also offers flexibility to the customers, says Byerley: "With a lot of e-commerce subscriptions, you feel almost trapped. It's very difficult to cancel, you sometimes will have too much product or not enough and it's very difficult to pause or push off a month if you're going to be traveling. … What we'll do is send you a text reminder each month before we charge, so you'll never be charged without approving the order."
Monteiro, a computer science major, built the text-to-buy infrastructure from scratch. Other start-ups are experimenting with selling products via text message, like the beverage company Dirty Lemon, but Byerley says theirs stands out because he and his co-founders reply themselves: "Not many other companies in the marketplace are talking to their customers over text, let alone actually having humans on the other end of it.
"A lot of companies use chat bots or robots and we insist on having an authentic human interaction with our customers."
Czarnecki, 22, and Monteiro, 22, graduated in 2018 and are working on Verb full-time. Byerley, 21, is finishing up his last year at Yale and plans to work full-time alongside his co-founders after graduating in 2019.
Verb declined to comment on profitability. "We're growing really rapidly, and we're very excited by the way our products have been loved by our customers," says Byerley, adding that "we are able to provide salaries for ourselves, but we're definitely running a lean start-up in this respect."
A key to their success, says Byerley, has been their willingness to accept feedback, including the negative kind: "I think that a lot of young people who want to start their own non-profit, ventures, whatever it might be, will hear negative feedback for the first time and they might give up or they'll feel as though their idea is fundamentally flawed, and in a lot of ways that's not true."
Negative feedback "should just be encouragement to persist and go forward," he adds. "Generally speaking, if people think your idea is a fabulous idea without any reservations, then you should be a little bit suspicious. The best ideas in the world are always met with a little hesitation because people are like, 'I'm not sure if this will actually work.' If people knew it would work, it would already exist."
Like this story? Subscribe to CNBC Make It on YouTube!