Business for Punks
If we will disbelieve everything, because we cannot certainly know all things, we shall do much what as wisely as he who would not use his legs, but sit still and perish, because he had no wings to fly. — John Locke
At Brew Dog our business is built on the punk mentality. At its core punk is about learning the skills to do things on your own terms. At Brew Dog we reject the status quo, we are passionate, we don’t give a damn and we always do something which is true to ourselves. Our approach has been anti-authoritarian and non-conformist from the word go. — James Watt, Business for Punks
Brew Dog have been fundamental to the development of the craft beer scene in the UK. It’s not an exaggeration to say that Brew Dog have changed the shape of British Beer. — Peter Brown
Chaos is inherent in all compounded things. Strive on with diligence. — Buddha
The odds are stacked against, heavily stacked against, the success of a new business. 80% have failed after 18 months, even then it is not plain sailing, the chance of becoming a sustainable business is only 1 in 20.
I have recently been witness to one of these failures, a bread shop serving light meals, tea and coffee and cakes. They did so many things wrong it was a car crash in slow motion. The food was served on the first floor up narrow stairs, but with no idea what was up there or on the menu, how many are going to climb the stairs? With the businesses on its last legs a few months before they closed they did stick a few tables and chairs downstairs by the window, but too little too late, still no menu, still no specials listed outside. The tea served was teapigs, rubbish tea, poor quality catering supply coffee sourced locally, no skilled baristas. To display in the shop front serving teapigs may as well run up a flag saying we serve bad tea. I never tried the bread but I was told by those who tried, it was expensive and of poor quality.
Five years ago may have got away with serving poor quality coffee, not today, and especially not when open opposite one of the top coffee shops in town with two more nearby. They were told their tea and coffee was rubbish but refused to listen they knew best.
And not the only failing tea and coffee shop in Lincoln or up for sale.
Brew Dog in 2003 was two men and a dog in shed, £30,000 and ambitions to brew quality craft beer as an alternative to the disgusting beer from corporate chemical factories served in failing pubs. The rest is history. Year on year growth, profitable growth. As I write the company employing over 1500 people, three breweries, the beer found across the world, the company valued at over a billion pounds.
Business for Punks is how they did it, advice for would be punks.
Find a niche in the market. No. Create a new pond and be the biggest fish in the pond, then grow the pond.
Touch phones did not exist until Steve Jobs launched the iPhone.
If opening a coffee shop, be passionate about coffee, buy in only the best specialty coffee not cheap catering supply coffee because it is cheap, have quality tea, loose leaf tea. Find someone who can bake mouth watering cakes. And to state the blindingly obvious, employ skilled baristas.
Do what you believe in, be true to yourself, follow your dreams, could be straight from The Alchemist, maybe it is.
What you are doing is what you are passionate about, what you love, you want to share that passion with others. Martin and I did not just start a brewery — we set out on a mission to make other people as passionate about great beer as we are.
Go on a course for would-be entrepreneurs and you will be instructed to draw up a bullshit business plan. Why? To bullshit someone in a bullshit job in a bank or other financial institution to hand you some money.
If you have an awesome product why do you need a sales team, even less a marketing department? The money spent on a sales team is money that should have been spent on your awesome product.
That awesome product is what people will want, they will tell others.
When a specialty coffee shop opens, the owner and baristas are passionate about what they do. Customer who love their coffee will tell their friends, bring their friends, bring ideas from other coffee shops, maybe if very lucky bring in guest coffee to try.
Do not produce cheap widgets with low margins and low cost as the selling point. Someone somewhere will undercut with a lower price. Then in a race to the bottom. Produce a quality product with a high margin, then have the money to reinvest. If attempts are made to lower your price, do not give in.
Two suppliers of catering supply coffee competing on price are in a race to the bottom. There are no winners, only losers. Coffee shops that buy their cheap coffee do not care what they serve their customers, they cannot compete with the corporate chains and eventually go out of business.
High Street chains compete with on-line by cutting service. We know how this ends, they go into liquidation.
A specialty coffee shop does not attempt to compete with corporate chains. They focus on what they are good at, serving high quality coffee. Word of mouth.
Roast quality coffee. Specialty coffee shops will curate as guest coffee. Customers will recommend to other coffee shops. These are your fans, they are advocates for your awesome product.
If you are successful at what you do, trolls will crawl out and attack you. These are pathetic people never successful at anything, who hate the success of others. Ignore them.
Dogged determination, a belief in what you are doing is essential. For the first six months Brew Dog was losing money. They needed to sell 70 cases of beer to break even, they were not even selling ten.
Cash is king, without cash flow you are finished.
Jamie Oliver in the middle of an interview, the interview was curtailed, he had two hours to inject cash into Jamie’s Italian before the chain collapsed.
Profit is good, but cash is king. Without cash, no money to pay staff or creditors.
Banks lend to those who have money. Have more than one bank.
Look to alternative financing, crowdfunding.
Crowdfunding give some goodies, an album, signed album, tickets to a concert. Brew Dog take this a step further with Equity for Punks, yes, get the goodies, but also get a stake in Brew Dog. Those who had faith at the beginning, have seen their shares increase in value by 500% within the first five years.
Brew Dog also have a share trading platform.
The people who have invested, share the same passion for craft beer, spread the word.
As I write, Equity for Punks V.
Look to suppliers for a soft loan. If you are a growing business, it is in their interest you grow as both grow together.
Be aware of opportunity costs. Invest £50,000 in a bottling line may appear a good deal, helps the business to grow, to satisfy demand, but what are not investing in?
That great sale may not be so great if do not get paid, even worse if they go bust.
Demand payment up front, demand payment on time. Late payment eats into cash. Cash is king.
Do everything yourself, you have no money to spend on frivolous activities.
Consultants will bleed you dry.
Focus groups are for losers. If you do not know your businesses, your customers, why are you in businesses?
Ladder pricing is an interesting concept. The product you wish to sell, give it a mid-price, not the highest, not the lowest. If the highest, it looks too expensive. If mid-price, lower price for people who want something cheaper and looking for a bargain, higher price for those who wish to pay a little extra, and the mid-price gives the impression getting a good deal. The actual price has not changed, only the relative pricing structure.
Marketing is for losers.
Marketing jobsworth know nothing about social media.
Word of your awesome product spreads by word of social media, that is word of mouth in a digital age.
Brew Dog at the beginning was selling more to Tokyo than Abderdeen.
Brew Dog did not court overseas distributors, they came to Brew Dog.
People hate advertising. Turn down the sound of the TV, go for a break, freebie magazines with zilch worthwhile content go straight in the bin.
Social media is personal space, when advertising intrudes, people hit back.
Vodafone have you paid your tax, Nespresso we like coffee we would not drink your crap.
And yet they do not learn.
Do not grow the fish, grow the pond.
90% of the beer market is, or was, crap beer from the corporate conglomerates.
The same sadly could be said of coffee, not only the chains serving crap undrinkable coffee, indie coffee shops serving rubbish corporate brand catering supply coffee.
In a coffee shop, baristas talk to interested customers, why direct trade better than fair trade, low roast better than dark roast, cappuccino not served scalding hot else bitter nor in oversize cups, and no do not dunk on top chocolate or add syrup, it is done to hide the bad taste of cheap coffee. Once the taste of good coffee has been acquired, the customer will ask of other specialty coffee shops in the locality. When visiting a new town, will seek out specialty coffee shops.
The pool is growing, making room for more fish.
Culture matters, everyone knows what they are doing, this is then reflected to the outside world.
Contrast with companies that keep employees in the dark, in soul destroying jobs, on minimum wage, zero hours.
Those that perform well in a job interview, may not be best suited, all they have demonstrated is they will perform well in a job that requires to perform well at interviews, for which job applicants are trained like monkeys jumping through hoops.
Be creative, do not look to the industry as will be a follower not a leader.
If Apple had looked to Nokia, they would have designed a better Nokia, instead they designed something different. Where is Nokia today? Nokia?
Ideas can come from anywhere.
All board members may only spend fifty percent of their time on current issue, the rest of their time on how to grow the business.
Layers of middle management, not wanted. People who have been on businesses courses not wanted, who have learnt how to draw up bullshit business plans, to devise structures for the company, to then distort the company to fit these structures.
Networking is for fools and posers and wannabes.
Take risks. Only by taking risks can move forward. Mistakes will be made. Learn from mistakes. The only person who never makes mistakes is the person who never takes risks.
Brew Dog shipped beer overseas in kegs. The kegs failed to be returned. They leant there was a demand for Brew Dog overseas. How to solve the keg problem? How to meet the growing demand? They used KeyKegs, kegs that could be recycled. Except it has introduced a far bigger problem, KeyKegs are plastic, one way trip disposable plastic kegs. A disaster for the environment.
Be proactive not reactive. When problems arise, and they will, deal with them, knock them on the head, else will grow into larger problems.
