Good luck with your pod business. It is a tough market because the "group head sniffers" (you know them - the get their head in under the group head to look for grinds) won't touch them. They (i.e., we) prefer grinding our own not just because it makes a better cup but because it is harder. No training wheels. Not pros. Not pro-sumers.
The market for pods, then, is consumers and commercial applications where espresso is a hump (see Young Frankenstein). Commercial applications where espresso is not core - they are probably going to be more conservative and go with Illy. That is your competition. Better work out your selling points now. The trick is with selling to businesses where espresso is a hump, volume is going to be relatively low. You're going to need to sell into a lot of them for you to be able to pay your mortgage.
For the consumers with espresso machines, you're also going to be selling against Illy but with a different diameter pod in many cases. If you are going to hit Illy pods on taste, that is not a hard target. But you're going to need more than your own word. Testimonials from someone better known than your uncle Ken (unless the family name is Davids) are going to be important. Local restauranteur perhaps.
Knowing your market and how they use your product is going to be critical for your success. it is not your product from your perspective. It is how buyers and users look at it from their perspective. It is a little homework, but it will be well worth it.
Best of luck. Let us know how you break into the market. I'd be eager to hear what works for you.
