If you are like me, you love listening to successful people tell their stories – for their confidence, ingenuity, fears, failures, heroism, goofiness, and ultimately success. We see a little of ourselves in them and experience the art of good story-telling. So, listen to this NPR podcast called How I Built This – where they interview Jim Koch – founder of Boston Beer Company. He was promoting his new book, Quench your Thirst: Business Lessons Learned over a Beer or Two (affiliate link). How and why he dropped out of Boston Consulting Group to start a beer company with 1 partner (his BCG administrative assistant), no office, and no phone. How he hustled his first sale. How he ran the ultimate lean startup. It’s a worthy listen (October 31, 2016 podcast).
“When I told him [my dad], I was kind of hoping that he was going to put his arm around me and cause this 150 year-old tradition was going to be carried on. No, he looked at me and said, “Jim, you have done some really stupid things in your life, but this is the stupidest.” – Jim Koch, founder of Boston Beer Company
However random his adventure sounds, do remember that he did have a few things going for him:
1) He came from a family of brewers. Jim is the 6th generation brew master. His dad actually gave up the profession because it was a “miserable way to make a living.” Breweries were continually shutting down; there were 1,000 breweries in the US when Jim’s father started, but there were only 50 or so when Samuel Adams was first brewed. This sounds very similar to the Chobani story – son taking on the father’s old-world business in a new form.
2) Pedigree. (min 4:30) Harvard undergrad, MBA/JD. Not too shabby.
3) Boston Consulting Group. Spent 6 years at BCG – was there even when Bruce Henderson – founder – was still alive. Koch said it was a good job – lots of perks etc – for a while.
Difference between “Scary” and “Dangerous”. (min 7:20) When asked why he gave up the great BCG job, he tells a super-wise way to think about different situations.
- Scary – gives us fear, but might be safe (e.g., repelling down a wall with a belay)
- Dangerous – may or may not seem safe (e.g., snowy mountain field in March)
Oddly, he felt staying at BCG felt safe, but was actually quite dangerous – felt he might settle into the corporate life and not dream bigger. For those not in management consulting – note, this is perfectly fine. Let’s remember that less than 10% of people stay at management consulting firms long-term. On BCGs’s website here, they note that
Once a BCGer,Always a BCGer. – BCG website
Lean Startup (min 13). For the first few years, he did not have an office or telephone. He did not have a brewery; he used the excess capacity of other plants to pilot and bottle beer. Brilliant. He was profitable from month #1 in large part by asking himself:
Am I spending money that ‘makes the beer better, or am I just spending money on things because that’s what you’re supposed to spend it on? – Koch
Hustle creates luck. (min 18). No success getting a distributor, so goes door-to-door giving bar owners samples wearing his consulting suit. Starts everyone morning packing 6-7 beers in his briefcase with ice drypacks. Faces 95% rejection rate. Dude, gotta hand it to Koch – from flying first class to cold-calling. Ouch.
The best marketing is a great product. Six weeks after Samuel Adams came out, it was voted #1 beer in the country. Of course, he cannot handle demand – upsets new customers, but so goes the ramp of a start up. Reminds me a lot of Sara Blakely’s SPANX hosiery getting chosen by Oprah (09/12/2016 podcast).
Throughout the interview Koch talks about outliers – how to compete differently. At the time, American beer was all watery and light and the European imports were inferior to the ones you got in Germany and Belgium. He knew beer and was convinced he had a “better” product. “When you are right about something important, push it.“
Buying the IPO with beer coupons. (27 min) Koch realizes that investment banks set up IPOs for their institutional investors (not exactly “the public”) so he puts coupons on beer packaging to let individuals buy 33 shares of the stock at $15 per share. I-bankers hate it, but allowed it, and Boston Brewing Company had 130K people sending in their personal checks and raised $65 million in stock issuance, $495 dollars at a time.
Takeaway #1: Scary vs. dangerous. So important to know the difference. If there are scary things – they could very well be worth doing. Tim Ferriss often talks about inoculating yourself to fear by continually stretching your comfort zone. ASK: What is the worst that can happen? Embarrassment? Inconvenience? Self-confidence? In contrast, what habits, routines, or thoughts do I hold on to that are actually dangerous to my relationships, long-term goals, or even happiness?
Takeaway #2: What story are we telling ourselves? Listening to UBER successful people reminiscing on their past makes me reflect on what story I plan to tell others in 30 years. When I am on TED or NPR or writing a book, “What is the story I am going to be telling about myself?” ASK: What is the story will I be telling my kids? What is my “founding” story? Seth Godin wisely tells us to drop our own personal narratives that are not working here. Tell the story you want to be a part of. Be present. Be here now.
Takeaway #3: Podcast radio is not only informative and entertaining – it is the essence of story-telling. No visuals. No skipping around. Linear story-telling. Good for the mind. Teaches us how to listen and also how to tell stories. Enjoy.
My podcast stream includes: Planet Money, Freakonomics, Dave Ramsey, Andy Stanley Leadership Podcast, HBR, EconTalk, This American Life, Bigger Pockets, James Altucher, Tim Ferris, LewisHowes, TED Radio Hour, Teach Better, and Startup.
What podcasts are you listening to?