👉🏼🎙 Is this thing on? We’re back from sabbatical! In our first post-hiatus episode, Shaun heads to Denver to visit his sister, who left a catering job at a big restaurant chain to run a coffee shop out of a Volkswagen Bus that she bought on impulse off Craigslist. Erika Hildner shares what she’s learned as a first-time business owner about risk-taking, customer service, and using common sense.
Entrepreneurs are told to go big or go home. Stop obsessing over scale, and perfect the basics instead.
Last year, I met a first-time entrepreneur who was opening a tea shop. We’ll call him John.
At the time, he had a pop-up shop in my neighborhood. I really liked him, his vision, and the quality and presentation of his tea, so we kept in touch. When he decided to go from pop-up to permanent shop, he asked for my advice.
While we were talking about this permanent shop, which he still hadn’t opened, his attention would often drift to his next shop. And the one after that. And after that. And then building an app to make online ordering easy. And then, becoming the next Starbucks.
Whoa. Hold on, man, I told him. I get it, scaling the business seems sexy. But, I said, that is the entirely wrong thing to think about now. I wouldn’t spend even a second on it. You have a serious challenge in front of you: opening your first real store and getting your first customer (that isn’t a friend or family) in the door.
In getting just one store right, everything is against you. You have to design and build out the physical structure. You have to hire good people to run the shop when you aren’t there. You have to train those people. You have to get the menu right. You have to get the pricing right. You have to get the presentation right. You have to get customer service right. You have to get customers in the door. And then you need to get them to come back.
So much to get right in the here and now. Not down the road, but today.
I’ve noticed that John isn’t alone in his desire to go big. Something’s changed in what’s expected of the entrepreneur. Ten years ago, people were excited to just start a business, to create their own thing so they didn’t have to go work for someone else. They wanted to make a good living, buy a house, and be able to pay for their kids’ college.
But now, entrepreneurship seems like a sport. And the score depends on scale. How big can you get? How fast can you get big? How much power can you amass in the shortest possible time?
There are lots of forces pushing this scale-it-up, go-big-or-go-home mirage. Business schools are guilty of pumping pipe dreams into students’ heads: If you follow this framework, you can become the next Howard Schultz or Mark Zuckerberg or Elon Musk. Media worship of super-fast-growing companies — many of which are actually terrible, money-losing companies — fuels the fire. Reality TV and social media make it look like everyone can afford a $5,000-a-month studio apartment in San Francisco.
This narrative is out of whack. Your teenager may enjoy doing school plays, but you’d be irresponsible to urge her to move to Hollywood and try to become a movie star overnight.
If she is serious about acting, you might encourage her to audition for local roles (or head to a slightly larger city where there’s more opportunity), and build a reel and a reputation, which, hopefully, over time, would allow her to replace tips from waiting tables with paychecks from acting jobs.
Yet many entrepreneurs believe they can rush right to the top. Skip the fundamental work, and just scale, baby! One store is for losers; if you want to make it, you need 100 stores. This kind of thinking is poisonous. It sets entrepreneurs up to fail from day one. It’s like telling aspiring basketball players that all they need to practice are flashy dunks. Free throws? Dribbling with your left hand? Passing? Playing defense? Ha! Whatever! We know how that advice would turn out.
So, back to John. His ambition is good. And it’s good that he has a vision. But he would be much better off focusing all that energy on store number one, pouring everything into making it a destination people can’t ignore. Only then, once there is a line out the door, is it time to think about doing it again. One door at a time.
This article also appears in the July/August issue of Inc. Magazine.
Whatever happened to Web 3.0? What was it? Did it ever happen? I’ve seen multiple attempts at definitions. Things about artificial intelligence. The semantic web. Social networks.
One thing I remember about Web 2.0 was that 37signals (the original company behind Basecamp) was labeled as a company who was very “Web 2.0”.
I’m not sure that was true.
Are those grapes? No, coffee beans. Coffee beans aren’t actually the chocolatey looking things we usually see until they are roasted. And even as recently as 1850, folks were buying those green beans and had to roast and grind them by hand at home.
Along came William H. Bovee in 1850 who figured there had to be an opportunity here. He came up with an idea to roast the beans, grind them himself and sell the product in cans to consumers — making coffee much more convenient.
He also hired a carpenter, named James, who took a lot of interest in the coffee business. James eventually became William’s partner and later bought the entire company for himself. Williams company, originally “Pioneer Steam Coffee and Spice Mills” was then renamed after James’ own last name: J.A. Folger & Co. What we now call just “Folgers”.
William and James ushered in what many coffee historians refer to as the “First Wave” of coffee.
The First Wave of coffee was mass production. Bringing convenience to consumers. Making sure everyone who wanted coffee could get it. Maybe not the best or freshest quality, but an easy source of caffeine nonetheless.
Then came a Second Wave. It started with three friends from college, Jerry Baldwin, Zev Siegl and Gordon Bowker, who opened up a store to sell their own roasted beans and coffee. They scoffed at the idea of selling fancy lattes that were being sold in Italy. But one of their employees couldn’t resist the urge to transform the company to sell the fancier beverages. So that employee, Howard Schultz, bought their small chain called Starbucks and transformed it into the mega-success it is today.
Starbucks is the exemplar of the Second Wave. The Second Wave was coffee becoming a first class citizen of retail. You went out to have coffee. It was no longer just something stuck onto breakfast or dessert. The customization options were infinite.
The Third Wave of coffee is where we are today. Shops like Intelligentsia and Stumptown realized coffee still had another level of appreciation. Not about: “What country was this coffee from?” but: “Which farmer grew these beans?”
Intelligentsia connects the consumer to the minute details and people making your beverage.
The Third Wave is about coffee becoming… artisanal.
Once you see these waves with coffee, you start to see these waves everywhere. Beer is now in its third wave with all of the microbreweries. There are reality TV shows about bakery artisans. Everything at the grocery store seems to have gone from: laborious to convenient to mass produced to “locally farmed and sourced.”
Was Web 1.0, 2.0 the same thing?
Craigslist is the perfect example of Web 1.0. Here were “things that you used to have to do laboriously by placing ads in newspapers, or hanging up flyers in your neighborhood” now online. It looked (and still looks) terrible. Had plenty of issues and navigation problems. But quality didn’t matter. It was online and you’re never going back. It was ground beans in a can.
A key component of Web 2.0 was usability. Convenience wasn’t enough anymore. Things had to work well and be easy to use. It was about the “end user’s experience.” Reminds me of a Starbucks cafe.
37signals launched Basecamp back in 2004. Many lobbed them into experts at Web 2.0. Afterall, they spent so much time on design and making sure their products were dead simple to understand and use.
But when Basecamp launched I found myself not just interested in the product, but the makers. They opened up their process, their philosophies, even their morning routines and which pens they used.
You got to connect with them on a level that seemed unheard of for people making software. And it created an audience around them that loved to use and spread their products.
I think 37signals/Basecamp wasn’t another example of Web 2.0, but like Intelligentsia, they ushered in a third wave. Jason, David, and the 37signals crew created artisanal software.
What’s funny to me is that even though they were doing this since the early oughts (I just had to find a reason to use the word ought), I feel like few others have understood how powerful this was and utilized it for themselves.
Today’s typical company blog is glorified “press releases” no one gives a shit about (features launched, new hires, self-congrats on raising money or business acquisitions). Or the blog is “content marketing”, where hired freelancers spin out countless articles with hopes Google will bless them.
Now, don’t get me wrong: company news isn’t a bad thing, SEO and helpful articles on how to use your product isn’t a bad thing. But they pale in comparison to trying to connect as humans with the people who come across your work.
And it’s been a huge inspiration in how I run things over here at Highrise. Newsletters I write share something about our life and kind. My welcome email to new customers mention our current weekend plans. And my vlog opens up our process in taking over and rejuvenating Highrise and the crazy life of raising a toddler balanced in. I’ve enjoyed the results: huge open/click rates to things I send, email replies about customers own lives, and support for all the decisions we have to make and figure out.
So if you are in a spot where you’re building a business or trying to grow attention to what you’re doing, take a minute to consider… Are you still trying to mass produce something that’s already been mass produced? Or are you focusing on ‘user experience’ as your main goal, when no one else disagrees anymore that ‘user experience’ is important?
Or is it time for you to try connecting? Is it time for the Third Wave?
P.S. If you enjoyed this article, please help spread it by clicking that ❤ below. And if you are interested in more, you should follow my YouTube channel, where I share more about how history, psychology, and science can help us come up with better ideas and start businesses. And if you need a simple system to track leads and follow-ups you should give Highrise a look.
Interviewing for a new job is stressful as hell. It’s basically like taking an exam, except the results might well determine whether you make rent next month. So it doesn’t really matter how much the interviewer assures you that we’re just having a “friendly, no-pressure chat”.
First of all, any “chat” that determines the future livelihood of someone is never going to be “no pressure”. And pretending that it is just makes it even higher pressure! Not only does someone need to appear calm, collected, and capable, now they also have to be cool as a cat, because, hey, this is just a no pressure chat, right? Ugh.
Second of all, that’s the minor point. The major point is that you’re a fucking barbarian schmuck if you place this theater inside a public coffee shop for all the other patrons to spectate. I mean, what the fuck.
Who on earth would want to have an audience overhearing their nervous stumbles, awkward excursions, and embarrassing answers to “tell me about a time where you failed…”. Nobody, that’s who wants an audience for that. NOBODY.
So please stop doing that. Not just for the sake of the poor applicants who have to configure a friendly face in spite of their anxiety, but also for everyone else at the coffee shop who’d like to enjoy their mocha without being forced to overhear this cruel practice. Stop. It.