November 5, 2016
“After figuring out the “better or cheaper” principle, I recognized an important corollary: The size of your business is defined by the number of customers who care about getting either the higher quality or the lower cost, as well as by how much these customers purchase.”
November 5, 2016
“I INCORPORATED BOSTON BEER Company on July 2, 1984. My first important task, one that only took a few weeks, was to secure funding. I calculated that I needed $250,000 to start the company.”
November 5, 2016
“I signed a one-year lease for $80 a month for warehouse space in the old Haffenreffer Brewery, which had been the last operating brewery in the city of Boston. Since the brewery’s closure in the mid-1960s, the building had fallen into disrepair and had been largely abandoned. ”
November 5, 2016
“I had a warehouse, but with only $250,000 to work with, I knew I wouldn’t be able to build my own brewery. My dad came up with a great solution: “Jim,” he said, “there are plenty of good breweries out there with excellent quality control that aren’t working to their full capacity. Why don’t you rent time in one of them and brew your beer there? That will give you a foothold until you have the capital to build a brewery of your own.”
November 5, 2016
“Contract brewing would make my start-up leaner, and it would also be better for the beer, since a quality established brewery would have a much better brewhouse, cellars, and laboratory that I could use. In addition, our recipe is complex, and my father and I knew we needed a traditional brewery with modern quality control to maintain consistency from brew to brew.”
November 5, 2016
“Through a BCG contact, I arranged a meeting with Arthur F. F. Snyder, a vice president at U.S. Trust Company. Art was your classic, crusty old Yankee banker right down to the suspenders. ”
November 5, 2016
“Before I could get very far, he stopped me and said, “Jim, I have some bad news. You can go to as many banks as you want, but nobody is going to lend you any money.”
November 5, 2016
“Because we’re a bank, and we don’t get paid to take risks. ”
November 5, 2016
“With banks out of the picture, I went to see whether a friend of mine at a venture capital firm would help. He looked at the business plan and proclaimed he wasn’t interested. When I asked why, he said, “Well, we need to invest in businesses that have at least a reasonable possibility of returning ten times what we put in it. We make ten investments a year, knowing we’ll lose our shirts on five of them. Four of them might break even or make double our money. We need one that will allow us to make a healthy return—say, ten times our money. ”
November 5, 2016
“I had known from the outset I wanted a partner, since my father had always told me how good it was to have someone with whom to share the highs and lows. I also felt that a partner could contribute some of the skills I didn’t have and perhaps have a personality that complemented mine.”
November 5, 2016
“ Then it hit me: The resumés accumulating on my assistant Rhonda’s desk weren’t the solution. Rhonda was the solution!”
November 5, 2016
“Rhonda Kallman’s presence at BCG was a great testament to the way BCG cherished talent. Serving as admin assistant to not one, not two, but seven people, she was smart as a whip, a fast learner, and a good listener. She didn’t have a bachelor’s degree, but that didn’t matter; I had plenty of degrees. Rhonda had something I did not, something they don’t teach at Harvard Business School: Rhonda liked bars and she liked people. She was a very determined person—“force of nature” comes to mind. She understood people and what motivated them. She understood bartenders and servers. Plus, she was single and in her early twenties. Bars were her natural habitat.”
November 5, 2016
“Confident and self-possessed, she knew how to handle the hyper-achieving, high-anxiety, Type-A business consultants at BCG. With her sharp sense of humor, she had a knack for making people feel comfortable so that they did what she needed them to do, often without even realizing it.”
November 5, 2016
“Her skills aside, I knew it would be fun to go to battle with her on my team. I first broached the notion of a partnership to her during the spring of 1984, just before I incorporated the company. I had not yet worked out many of the specifics of our operations, so I suppose my offer came across to her as vague or overly idealistic or stupid. She didn’t definitively say no, but she made it clear that she was not interested; she valued the stability of her job with BCG and the fun of bartending on the side. She also had serious doubts about whether my idea of a richer, full-bodied, craft-brewed beer would fly. “Jim,” she said, “nobody drinks your kind of beer. They drink light beer. There’s no room for little guys in the beer industry. I doubt we’d even serve it in the bar where I work.”
November 5, 2016
“We like to think of America as a pure meritocracy, a place where the best talent always wins out. Yet in many cases, the best candidate doesn’t get hired; the candidate with the best education or the best resumé does. Many companies, beholden to what is essentially an education-based caste system, would never consider Rhonda, who had an associate’s degree in secretarial science, for the same job as a Stanford M.B.A. ”
November 5, 2016
“PERSUADING RHONDA TO JOIN Boston Beer was my first sales call and, to this day, probably my most important one. Her value to the business became clear immediately, when we sat down together in a bar to sketch out our initial sales efforts.”
November 5, 2016
“Among bars and restaurants, we would target places that sold significant quantities of imported beer and were the best at what they did. ”
November 5, 2016
“ We wanted to be in a premium place like the Ritz-Carlton, but also in the best neighborhood pubs in Boston and the best dive bars—essentially, all the places that offered Bostonians the most authentic, high-quality drinking experiences.”
November 5, 2016
“A START-UP ENTREPRENEUR has to juggle a lot of balls. You’re not really a chief executive officer, because there’s nobody but yourself to execute. The CEO title takes on a new meaning. You’re the chief everything officer. In my case, starting a beer company required I handle a dizzying array of tasks.”
November 5, 2016
“My previous efforts at home brewing hadn’t produced anything memorable except my first wife’s dismay. Now that I had the recipe from my father, I got serious and started experimenting in our kitchen. ”
November 5, 2016
“ Not every batch was successful. On one occasion, the beer exploded in our basement. When you home brew, the final step is to fill the bottles with fermented but flat beer, prime them with a precise amount of sugars, cap them, and let the carbonation build up as the yeast eats all the sugar. I was making an all-malt beer, so I was using maltose instead of sugar, and I miscalculated how much I needed. In a few days, the bottles started exploding: Pop! Pop! Pop! Pop! They sounded like muffled grenades. Oh, man, I thought. I went carefully downstairs and saw that only a few of the bottles had exploded.”
November 9, 2016
“A lot of start-up stories talk about the lone genius founder toiling away in solitude until he has perfected his product and then emerging to dazzle the world. Those stories don’t ring true to me, and they weren’t my story. I wanted to make uncompromisingly great beer, and I knew it would be a better beer if I had the help of the best brewmaster in the world.”
November 9, 2016
“Given all that Joe had accomplished, I felt he was the ideal person to help me re-create my unique beer. When starting a business, there is probably one thing in a hundred where you need to be the best in the world. The other ninety-nine things, you can be pretty good at. For that one thing, though, it’s vital that you get the very best person in the world to mentor you and help you achieve perfection. You know Yoda from The Empire Strikes Back? You need a Yoda.”
November 9, 2016
“There’s a story about a ship whose boilers were not working right, and nobody knew how to fix them. They found a world-famous expert who came in, banged on a pipe with a hammer, and made the boiler come back to life. “That’ll be $10,000,” the expert said.
The ship’s captain was beside himself. “Ten grand? For banging on a pipe? That’s an outrage! Send me a bill that justifies the expense.”
So the expert sent a bill. He charged $1 for hitting the pipe, and $9,999 for knowing which pipe to hit.
Joe was like that. He knew which pipe to hit, and in exchange for that kind of knowledge and expertise, I paid him as much as I could muster ($7,500 for his services for all of 1984) and gave him 2 percent of the company. He more than earned his keep.”
Notes From: Jim Koch. “Quench Your Own Thirst.” iBooks.
Check out this book on the iBooks Store: https://itun.es/dk/it2x-.l
