Kaloud Founder Reza Bavar Interview
On Innovation and Entrepreneurship

 

The following is an interview from author Medkov Stanislav. You can find the full original text on the website Hookah Battle (Hookah Battle can be viewed in English, Russian, or German).

Can you please tell your story of how and when you get into the hookah industry?

I fell in love with it and saw it as an amazing tool to connect people.  Over the years I thought about ways to make it better and eventually the Kaloud Lotus was born out of that desire in 2012.

 

I know some people from the hookah industry who have done a successful business, but don’t smoke hookah. How regularly do you smoke hookah per week? What are your favorite tobacco brands and flavors?

It depends on the week, but I’m enjoying a Krysalis Calix right now as I type.

On average I enjoy Hookah about three times per week, unless I’m testing products, in which case it might be three times a day.

 

I remember a time (2012) when George from Hookafina tobacco (I’ve been his Russian distributor) told me that some unique product appeared on the US market. It was Kaloud. To be honest, I’ve been sceptical. If you remember there was some device from the US called “Hookah Flip”, and Ive been not impressed of it.

So I didn’t believe in any kind of hookah innovations. After several years, (I think in 2015-2016) I figured out that your product gained some popularity on the Russian market. After a while people start talk that your product has made a revolution in the industry. And I totally agree with that. Can you please tell how you came up with the idea of Kaloud Lotus? What was the story?

I wanted to figure out a way to make using Hookah less harmful.  I realized that people normally were applying too much heat and using too much charcoal and so I wanted to cook the tobacco instead of burning it.  Unfortunately, now people add in four or five pieces of charcoal, which may be convenient for them, but they are causing long term damage to their bodies.  This is why we included a lid with the Lotuses… to trap heat and minimize charcoal use.  Now, after more than a decade of meticulous labor, we now have scientific proof via a laboratory in Germany of the effectiveness of what we create. You can see our lab results here.

 

I know how it’s difficult to create some new idea with a totally new product. Need to invest into press-form -> test it -> identify problems -> invest into new press-from -> repeat X times.  Can you tell how much have you invested into the full development of this product (first Kaloud Lotus)?

The first Kaloud Lotus was several hundred thousands of dollars when tooling and prototypes and design and development were all calculated.

 

Who’ve been the first people from hookah community who supported your product? When you realized that you became famous?

The first were Smoke or Pass (Shaunn) and Dragonfly Mike.  They were very supportive from the beginning and without their YouTube reviews I don’t think Kaloud would have ever succeeded.  I still haven’t realized that I’m famous.  Hahaha.

 

When did you start selling your product abroad? Who’ve been the first distributor and which country?

We started selling abroad in 2013.  The first countries were France (El-Badia) and Germany.  We also sold some in Russia to individual users.

 

What is Kaloud company now? Have you ever calculated how many Kaloud Lotus you sold in pcs for all history? How many representatives in a different countries you have at the moment?

Kaloud is a company devoted to the Mission of Transforming the World one puff at a time.  We do this by creating beautiful products that function incredibly well when used properly and also act to reduce the harmful effects of using Shisha.

We did almost one year of testing at a lab in Germany and have found that the Krysalis Eltheria with the Lotus and our Ayara filters reduces almost all of the harmful compounds in Hookah Smoke to nearly zero.  We are still a very small company and we have suffered due to counterfeiters and people who copy our products.  Despite all this, we will do our best to help our Tribe have the best possible Hookah exprience.

 

Do you have any kind of awards for your product? In 2016 John Calliano awarded you for the “Contribution to the development of the hookah industry”.

The Krysalis Eltheria was recently awarded two design awards, which we are all very proud of.  As far as I know, we are the first company in the Hookah industry to win a design award.  I am grateful to the committee that awarded us and also to John Caliano for recognizing the contributions Kaloud makes.

Many manufacturers in Russia who’ve been awarded with this statuette put information about it on their product package to emphasize community recognition. I didnt find any information about this award on your website. Why?

To be honest, we didn’t know about the award until our distributor told us about it.  With that said, we try our best to be humble and focus on what we do best — create. 😉

 

What is the mission of Kaloud?

To Transform the World one Puff at a time.  When people use Hookah they connect and when they connect in a deep way they can know each other, share their humanity, and, hopefully respect one another.  This is how the world will become better: one person at a time.

 

When did you first encounter a counterfeit for your product? How it was?

In 2013 and it was very painful.  I sacrificed a lot to create Kaloud and was almost homeless.  To see people steal what I created is very hard, but, as I mention above, we are doing our best to create and continue to enhance the experience our Tribe has.

 

Where is your manufacturing located now? In which country? Why in this country?

We manufacture in China, the Netherlands, Italy, and Czech republic.

 

Which actions you do to prevent counterfeiting?

We do everything we can, including online searches.  Mostly we hope that the community will reject the counterfeiters and the copiers in support of the authentic innovators.

 

Which similar heat management devices on the global market you admit as non-counterfeiting your product? Badcha, Apple On Top, Provost?

We review products we consider infringing and contact them to negotiate license agreements if possible.  If a product is not infringing we take no action.

 

There are some famous Russian manufacturers: Zeppelin, NaGrani – what do you think about them?

I hope their owners have good intentions when it comes to the products they are selling to the Hookah users around the world.

What do you think about French product – Quasar Raas?

I like Quasar, they have always been respectful of our Intellectual Property and they are creative in their own way.

 

Do you practice royalty collection from other manufacturers?

Yes.

 

The most famous manufacturer on the Russian market is “Kalaud Alpha”, in 2019 been published the interview with a company owner,

direct translation of the video name
“How to make money in the hookah industry?! Million dollar secret”
Key points from this video:
– Yes they have made a full copy of Kaloud Lotus
– In the best month they sold several million pieces of their product
– Other manufacturers do a copy on their product
– Kaloud Lotus II – have a nice design, but bad functional 

What do you think about it?

I don’t know who he is, but in general, I think if a person is focused only on themselves they are likely afraid of something–maybe everything.  In these situations, people are living in a kind of delusional state where they don’t really understand what they are doing and, by extension, the Karma they are accumulating.  I think it is unfortunate that many people do these things because they are likely only interested in the short term perceived benefit of their unfortunate actions and not at all on the benefit they can bring to others.  In this way society sometimes celebrates and supports a kind of canabalistic behavior that is actually counter to its long term interests.  We get the World we deserve, so maybe people should start considering what kind of World they truly want and behaving in ways that will bring that into being.

 

Not long ago we have punlished an interview “Hookah in China” with the onwer of hookah shop in China where we talked a lot about counterfeiting. I have asked a question:
” Is there a way for a hookah manufacturer to fight against its product being counterfeited in China? For example, to patent all their models in China, or something else.”
and got a reply:
” It seems to me no, no matter how you protect your brand from the legal side, the Chinese will make it the same by 100% or 99, without finishing it to the end, so to speak, for example, from the 3 available drawings on the diffuser, they will make two and will not add the original logo”

Do you agree with this point?

No, this is a misrepresentation of what is actually permissible under the Law in China and in almost every other country on the planet.  Counterfeiters and people making illegal copies operate like parasites and we do the best we can to fight them off.

 

How do you like the idea to create an “association of hookah manufacturers against counterfeiting”?  Assotiation hire lawyers who check the web and local communities everyday to find counterfeiting and do legal actions against counterfeiting manufacturers.

It might be helpful, but ultimately, the people promoting and using the products have to decide what they really want.  We’ve asked event organizers like Hookah Battle to restrict the use of counterfeits and copies, but this is only one element.

Every choice has some kind of consequence, regardless of whether we can perceive the causal links or not.  I would much rather see people realizing and then deciding that support of creation and creators is more valuable than the slight savings associated with buying products that are cheaper, but that are being sold by people who have no interest in the greater good.

 

Compared to many other products from the hookah industry, your products are pretty expensive. Average hookah costs 100-300 euro, for you hookah retail price starts from 564 euro. 

Packaging looks like I can find this item in a jewelry store.

Do you agree with the point that Kaloud is a luxury segment product and not a mass-market product?

Most of the Hookahs you’re referring to are just a Stem or maybe a Stem and Base.  The price you’re referencing includes our Aeolis Hose, Aeolis Hose Tips, our Samsaris Bowl, One of our Kaloud Lotuses, and maybe the Vestara Tongs.  We do not consider ourselves luxury, we consider ourselves affordable quality.  As for our packaging, we think people who purchase our products deserve the best from the packaing to the products to the experience, which is what we deliver.

 

Let’s go back to the Lotus product. You mentioned that you’ve invested several hundred thousands of dollars into development of this product and I understand that you put into the final cost of the product this part of development expenses. Which is fair for sure.

But some people think that you put a really high margin into your product, taking into account the price difference between fake and original Lotus (more than 10 times). Yes, fake products are poor quality, violate the rights of patent owners and are dangerous for health, but anyway – 10 times difference in the price is pretty much.

Usually you can buy in China fake Wookah, or Aeon and the price difference will be like X2 or X3 but never 10. What do you think about such words?

First off, our prices are not 10x our costs and I also feel that the “race to the bottom” mentality in terms of pricing in our industry is not really benefitting anyone.  In fact, some of the cheap products use toxic chemicals and people are literally poisoning themselves over time.  Why?  To save a small sum?  This may ot prove wise in time.

With that said, I think most people who make this kind of statement don’t appreciate what it takes to run a company.  I don’t pocket the cash, I reinvest it in creating new products and services, which creates jobs, which fuels the economy everyone benefits from.  The mentality of low profits is really only relevant to companies selling products that are commodotized.  Our products are unique creations which we spend years in some cases engineering and preparing for introduction into the marketplace and so they are not commodoties

Don’t you think that you could have more economical success, if you will launch some cheap version of Lotus without packaging for hookah lounges?
Some stats: in Russia we have around 8000-12000 hookah lounges or restaurants with hookah service. Each lounge can buy 20-30 Kaloud Lotus, and they don’t need any packaging since it’s not for personal use.

90% of lounges are ready to use any kind of HMD instead of foil, which gives us the number of potential market value: 90% X 10 000 X 25 =  225 000 pcs. On the website of the official distributor in Russia the price for Lotus starts from 5100 rub.(58,3 euro). So if some lounge would like to buy 25 Lotus it will cost 1457 euro, for such a budget it’s possible to buy 17-18 pcs of popular on the market Alpha Hookah Beat.

I’m sorry to say that, but I don’t know a lot of lounges from Russia who use the original Lotus.

First off, we do sell lounge packs to lounges.  With that said, I understand your position, but consider that many of these lounges are spending hundreds of Euros per unit on high-end hookahs and accessories.  They then charge their customers some amount per use of their products and perhaps also make money on food and drinks.  Like any other investment, they should recoup their money and then transition into profit in a short period of time.  For most lounges they directly benefit from what we create but they do not understand the ethics of supporting the company that has facilitated their growth as well as the increased efficiency they benefit from as a direct result of using our technology.  For the vast majority of lounges the difference between using a cheap copy and an original Kaloud Lotus is minimal when taken in the broader context of the time it will take them to recoup their investment.

 

Have you ever been to Brazil? Many people know about Lotus and different kinds of HMD, but 95% of the market uses the traditional foil. People are not even interested in any kind of cheap fake Lotus. Why do you think this type of product didn’t gain any popularity in this country?

I have never been to Brazil so I can’t really speculate.  Hopefully someday.

You have a deep brand philosophy, and I believe that many people from Russia and other countries can support and share it. But I’m afraid it is not enough to just share it in this interview and on your website.
80% of people who buy a fake product don’t even realise that they do something wrong. Moreover most of them think that if the product has a different name or design it doesn’t counterfeit any patents.

In my opinion you should promote your mission and philosophy to the masses.
Hire social media managers in countries where you have a distributor (by the way we have a nice IT service for that),
support lounges who use an original product (for ex. give them a “illuminated sign” of Kaloud authorized, moreover I think we can make a special badge for such lounges in our Where2smoke project),
support young hookah innovators (via sponsoring Hookah IN project or other similar projects),
participate at hookah expos.
It doesn’t mean that you will defeat the counterfeiting, but it will definitely gather around you an international community who share your mission and philosophy. What do you think about my words? Do you have any plans regarding it?

I really appreciate and admire the Russian Hookah culture.  We would love to grow our brand in Russia and connect with our Tribe there, I am open to all ideas really.  Thank you for the suggestions.