The Exchanges

Q Hmm, so, so, so how did that, like, that decision lead to, to you thinking about beer?

A That's a good question, and you know, I, I, I knew I didn't want to work in the corporate world, so I thought, I'm gonna start my own business. I don't know what it's gonna be, um, but my dad had given me, actually, a copy of Inc. Magazine, and there was an article in there about Anchor Steam, this small brewery in California. San Francisco. It was owned by a great guy named Fritz Maytag, and Fritz had a viable small Brewery. It was an outlier, and when I was a consultant, what always fascinated me were the outliers, because that's where the real learning was. Like, there was obviously the potential to find a market for a really high quality beer, and I started to think about it, and I developed a different business model for what is now called craft brewing.

AI assessment note: “my dad had given me, actually, a copy of Inc. Magazine, and there was an article”

Q Hmm, so, so, so how did that, like, that decision lead to, to you thinking about beer?

A That's a good question, and you know, I, I knew I didn't want to work in the corporate world, so I thought, I'm gonna start my own business. I don't know what it's gonna be, um, but my dad had given me, actually, a copy of Inc. Magazine, and there was an article in there about Anchor Steam, this small brewery in California. It was owned by a great guy named Fritz Maytag, and Fritz had a viable small Brewery. It was an outlier, and when I was a consultant, what always fascinated me were the outliers, because that's where the real learning was. Like, there was obviously the potential to find a market for a really high quality beer, and I started to think about it, and I developed a different business model for what is now called craft brewing.

AI assessment note: “there was an article in there about Anchor Steam, this small brewery in California.”

Q for a moment, because this is going to come up in our conversation today, right? I mean, you, you were essentially creating a new kind of beer in the US. This is a flavor profile that most beer drinkers weren't used to. They were used to drinking Coors and Budweiser. Um, how did you get ordinary beer drinkers in the mid eighties? You know, the guys at the corner bar,

A Well, you know, I have to say I didn't try to do that. Um, and I think that'll come up with a lot of the folks we're going to be speaking to today. You know, when you're at the leading edge Of a product that is very unfamiliar to people, even a category that is unfamiliar, you don't want to go where all the volume is in the mainstream. You know, you want to just find a handful of people who will get what you're trying to do. And so, 99% of the beer drinkers out there, I wasn't trying to reach them. I was really trying to reach The one percent that was interested in flavor, that drank beer for the taste, that knew a little bit about the ingredients, um, way more than trying to convert, you know, a Bud Light drinker to Sam Adams. That was, was a shock to their palate, to their system. You know, I, it might have even harmed them, uh, to have, have that much flavor in their mouth at one time.

AI assessment note: “I have to say I didn't try to do that.”

Q And you can turn that into several other products?

A I can turn that into An unlimited number of products. One of the first things that we developed that was over 20 years ago was hard tea, and it was very appealing to me because tea has, you know, like beer and hops and so forth, tea has a couple of thousand years of tradition. It's got big flavor variations between different teas. You've got black teas, green tea, red tea, white tea, and You know, it's a, a flavor I know that people are familiar with, but I can introduce it to them in a new way, and so we came out with a hard tea called Bodine's, chucked that one up, that was another failure, um, but, uh, I, it didn't do that well, and then there was a band that sued us, so that was a fiasco.

AI assessment note: “I can turn that into An unlimited number of products.”

Q So did that mean you were profitable from, from the, from the start?

A Yes, we were profitable from the first full month, because going back to what I was talking about earlier, you know, It was the ultimate lean startup. Like I said, we had no office. We didn't even have a telephone. We did all our business from pay phones. You know, I knew where all the good pay phones in Boston were, the ones that were warm in the winter, the ones where you actually had a little shelf where you could put stuff on. Um, so I was very clear when I started. It was just very clear to me. There were Only two things that we needed to do really well. We needed to make great beer consistently, and we needed to work our butts off to sell it.

AI assessment note: “Yes, we were profitable from the first full month”

Q So did that mean you were profitable from, from the, from the start?

A Yes, we were profitable from the first full month, because going back to what I was talking about earlier, you know, It was the ultimate lean startup. Like I said, we had no office. We didn't even have a telephone. We did all our business from pay phones. You know, I knew where all the good pay phones in Boston were, the ones that were warm in the winter, the ones where you actually had a little shelf where you could put stuff on. Um, so I was very clear when I started. It was just very clear to me. There were Only two things that we needed to do really well. We needed to make great beer consistently, and we needed to work our butts off to sell it.

AI assessment note: “Yes, we were profitable from the first full month”

Q label, even in the name, even in, in, in looking at Sam Adams on that, everybody listening can picture what that label looks like, and it tells them a story that even if it's not the exact story you thought of, It's enough of a story that we can all gather around it, right? And so, how do you think about, about storytelling with a product or with a brand?

A You know, to me, it has to start with a founder, and I know you're a little skittish about that, Kim, um, but to me, a brand has to come from somewhere, and generally, that somewhere is the heart, And the passion of a human being. I mean, with my beer, you know, Samuel Adams, the historical figure, the patriot, had a passion for American independence, and I wanted, with my beer, to create beer independence for the United States. I didn't want to be dependent on You know, import a beer from other countries. So you got to start with your own passion. And what, what did the tropics mean to you? Because essentially, you know, you started with a business where you were going to take people to the tropics. Well, that didn't work, but now you're continuing that mission because you're bringing the tropics to people.

AI assessment note: “to me, a brand has to come from somewhere, and generally, that somewhere is the heart”

Q Um, okay, Jim, I just want to pause for a second and ask you, because I can kind of understand your dad's point, right? I mean, you had this great job, and then you just left it.

A Yes, and I left it because staying there was very risky. Leaving it was not risky. And it's the difference in life between things that are scary and things that are dangerous. And there are plenty of things that are scary but aren't dangerous. And there are things that are dangerous, but not scary. Yeah. And those are the things that get you. Um, I can give you a climbing analogy from outward bound. Like, one of the things we taught people to do was rappel off a cliff, and they're really, it's a very scary thing to do, but you're also held by a belay rope, and that rope will hold a car. So walking off the cliff backwards is scary, but But not dangerous.

AI assessment note: “I left it because staying there was very risky. Leaving it was not risky.”

Q advice you gave to the callers. When you think about, when you were in their position, you know, it's a different business and different, you know, category, but the same kind of place, right, where you're on your own, and you're trying to convince people to pay attention to what you're making. What do you wish you, you, you knew? What advice would you, now would you've given to your

A Um, that's a really good question, and I, I can't specifically answer it, but I'll give you a perspective on it. You know, I, I started Boston Beer Company from nothing. It was in my kitchen, but I did have a business plan, and my business plan was that in five years, I would grow all the way up to being a million dollars in sales, Uh, that was about 5000 barrels of beer. Eight people, and, you know, I was this management consultant. I was traveling all the time. I never got to see my kids. You know, I was on the road. Kind of sucked. So I thought, I'll have this little business in Boston, and I won't have to travel. It won't be that stressful. We'll never get that big, because at the time, the idea of, uh, starting a brewery in your kitchen, and it Growing it to anything of any size was completely ludicrous, and I look back on that, like, 35 years later. Boy, was I wrong. Uh, it wasn't 5000 barrels. It was actually eight million, and it wasn't, you know, eight people. It was 3000, and it wasn't one million. It was, like, two billion. So I was totally off, but I realized from this vantage point, I can't tell whether I would have been just as happy or happier had I had the intended outcome instead of the unexpected outcome. So what I might sort of tell myself is, you know, you're Launching into this big, wide ocean, and there's no telling, you know, where you're gonna go, but it…

AI assessment note: “So what I might sort of tell myself is, you know, you're Launching into”