thank you so much. that's so nice. hi, there. thanks for coming. it's nice of you to come.
the great lakes coffee roasting company, and thanks for thatnice introduction. we have 22 shops now. so san francisco, l.a., newyork, tokyo, half a dozen in most.
sorry-- if i stand here,i can see my slides, i can see my notes, ihave my remote control behind the podium-- makes mea little more comfortable. so before we start,i thought it would be helpful to give you alittle idea of what i thought we should go over today. i think we shouldtalk a little bit about how blue bottle coffeestarted, but not too much. a little bit aboutwhat i did before that.
not too much. i want to tour--we'll have a lightning round of slides touringall of our shops, and so that might be fun. maybe-- i know that theword "case studies"-- i'm familiar with that word. we might have a couple of those. i know that people talkabout those two words a lot. and talk about constraintson our growth--
a few things like that. talk about the product,which is so important. maybe the most important thing. the people who make it. there will be a few slides. i'm getting betterat powerpoint, but i'm not that great at it. i was thinking on theride down about john cage. merce cunningham.
has anybody studied john cage? merce cunningham? very good. john cage is a composer. merce cunninghamis a choreographer. and they wouldwork on pieces that were to be performedtogether, but they would never put them together untilthe actual performance. they'd work on them separately.
the music and the dancing wouldbe constructed separately, and then they'd justput them together. i thought it would besuch an interesting way of thinking about powerpoint. i would love to seea presentation where the slides were totally divorcedfrom the content of the speech, and you, theaudience, would have to kind of projectyour own meaning into these divergent things.
so it might be alittle bit like that. so here we go. yeah. so, using the word"slides"-- i usually use the word "slides" torefer to playground equipment. so that's kind of wherei stand with that. so that's a coffee roaster. it's a probat coffee roaster. it's illustratedby michelle ott,
who used to be our productionartist at blue bottle coffee. i started blue bottle in 2003. and before that, i wasa clarinet player-- i was a classical musician. and that didn't prepareme very well for business. or did it? and so that's whatwe'll talk about now. so as a classicalmusician, as a clarinetist, i basically, from age 12 toage 34, all day, every day,
thought about my art. so i thought about gettingbetter at the clarinet. you know, i made a living. i was decent at it. i kind of got the jobsthat i didn't want to get, and didn't get thejobs i really wanted. but it's hard to make a living. and i did someinteresting music. i had a dream of howi wanted to sound,
but it was very hardto achieve that dream. it was this dysmorphic, sort ofa sonic equivalent of anorexia nervosa. i could never reallyappreciate the work i'd done, or how i'd done it. and the longer that i played,sort of the more lost i became. i had this yearningto make beautiful art, and nothing ever seemedto be beautiful enough. it was a hard way to live.
but i had a nerdy little hobby. i would roast coffeeon a perforated baking sheet in my oven. and it was a very, sort of,crude way of roasting coffee. but i loved it so much. it's-- it, you know, obviouslyfilled the kitchen with smoke, and made my ex-wife, who wasa opera singer at the time, very angry with me. but i got this idea ofcoffee being a fresh food.
i was a farmersmarket shopper, and i didn't see coffee being treatedin the same very personal way, very fresh way, that these greatfarmers that i would patronize treated their products. and i thought that was odd. at the time i wasdoing this-- it was in the mid-'90s,i'm afraid to say. it was a long time ago. you literally couldn't find acoffee produced commercially
that had a roast date on it. the major coffeeroasters weren't talking aboutfreshness in the way that i really believedwas important with coffee. because i would drink thecoffee i roasted at home. they want it tasteda certain way-- day two, day three-- it had anarc-- it would peak a few days later, and then decline. and that was so exciting for me.
that was very compelling for me. and i couldn't understandwhy the coffee that i liked so much that iroasted at home, i couldn't have that experienceof drinking it somewhere else. and so, you know, this ideaof being so miserable at what you're doing that you haveto find a change-- you have to change something-- that'swhere the idea of stopping playing the clarinetafter so many years and going into coffee-- chasingthis nerdy little dream that
became more and morecrystallized in my mind. because the farmersmarket is a great way of under-- if you don'treally know business, it's a great way ofunderstanding commerce at a very basic level. you can-- i mean,what do you do? you show up once a week. you give somebodymoney for something. they give you this thing.
you know, the producer goesback to where they produce it, they farm it, they make it. and they repeatit the next week. they bring it back. you bring back some more money. you know, it's like, you don'tneed to go to business school to, kind of, understandhow that works. so that's what i did. in 2003 i signed a lease-- 186square feet in the temescal
district, on 51st and telegraphbehind the restaurant dona tomas-- a former potting shed. and i got a little roasterthat roasted about 7 pounds-- 3 kilograms. and i started doing it. and i didn't realize untili started that really, i should have had more money. two credit cards-- twomusician's credit cards-- weren't technically enough.
you know, there are a lot ofthings i should have known. but i'm glad i didn't. it's good not to knowthings sometimes. but what did i do-- i'm goingto skip-- oof-- this one, 2002. so that's how many square feet. that's how many kilogramsat once i could roast. and that's where i did it. that little potting shed. and you know, what iloved about coffee is,
i had this-- such attachmentand dedication to the profound as a musician. as a musician we're constantlybeing shown the work of the west's great geniuses. that we are exposed to theprofound our whole careers. and that's a lot of pressure. you know? the profound is alot of pressure. and what i realized, that freedme in my life in coffee was,
it didn't have to be profound. it just had to bereally, really good. and really, really good israre in the coffee business. it was at that time, andit's still quite rare now, even though it's a littleless rare than it used to be. but this being freed fromthe shackles of perfection was very liberating for me. and i realized thatthere were certain habits i had as a musicianthat actually were
very helpful for me in coffee. people think that what musiciansdo is, they put on their tuxedo and they go on stage and theyplay their concert and go home. but actually, most of thetime what musicians do is, they sit in aroom by themselves, with their instrument, doingthe same thing over and over and over again,all day, every day, for many, many years in a row. and the task of amusician is to be
slightly better atthe end of the day than you were at the beginning. this notion ofrepeating to perfect. repeating-- repeating,repeating-- to perfect. that was the standardthat a musician had. other internalizedstandards were, you know, i had the ability toimagine sensory outcomes. as a musician, you'reconstantly thinking about this sensoryexperience that you
want to provide to somebody. to your audience. and as a musician, you'rethinking about service-- being in serviceto the composer. being in serviceto your audience. so those attributesof being in service, imagining sensory outcomes,of repeating to perfect, actually are veryhelpful to me, even now. i mean, what do you do whenyou roast a batch of coffee
at 17 minutes? so you can be boredif you're roasting all day for 13 to 17minutes per batch, or you can be fascinated. or you can try to make everysingle batch slightly better than the one before. you can imaginea sensory outcome by cupping the coffeeat the roaster. you can imagine sensoryoutcomes in terms
of presenting them to guests. you can be in serviceof the coffee growers. you can be inservice to the people that come into your cafes. that are serving our coffee. so all of those attributesactually kind of came in handy. surprisingly so. the one thing that i lovedabout the farmers market is, you go to see farmer littleat the ferry plaza saturday
market, and he has the bestpotatoes, and he's got a 10 by 10 easy up, and he hashis potatoes under them. you go to see farmer olsonwhen it's clementine season, and he's got thebest clementines. he's got a 10 by 10 easy up,and he sells them under them. hamada farms, it's the same. there's not a lotof marketing budget if you're at the farmers market. there's not a lot ofbranding that goes on.
what are they focused on--wholly, and primarily-- and that is their product. their product isabsolutely primary. and that was agreat lesson for me. that's how i feltabout our coffee. that's how i still feelabout our coffee-- is, that experience of drinking ourcoffee is absolutely primary. there's nothing moreimportant than giving people that experience.
everything else,you know-- sure, we have to think abouthow the logo looks, and what color the walls shouldbe, and that kind of thing. but everything is aboutremoving obstacles. everything in termsof design, branding-- that word-- everything isabout removing obstacles to that primary experience ofgiving people this product. so on that soberingnote, i thought we'd take a littletour of our cafes.
have a little break. a little louder, please. oh, sorry. ok. yes, i will. i'm not a mumbler. i'm more of a ponderer, i think. but i'll try my best. so this is a kiosk-- we'lltalk about that more.
it's-- oh, it's in a garage inhayes valley in san francisco. a little kiosk. that's our shop in mint plaza. we'll talk about that more. in san francisco. also open on apiece-mealing alleyway. that's the ferry building. it's a busy place. that's our roastery in oakland.
that's our shop on 18th andflorida in san francisco. that's websterstreet-- w. c. morse building, upper broadway--oakland's first truck showroom. that is the most beautifulcourtyard on university avenue. that's our palo alto shop. i love that courtyard. parenthetically, thatstyle of architecture sprung from the 1915pan-pacific exhibition. it's very interesting history,if you see the spanish style
buildings around town. that's market square. sansome, in thefinancial district. the old standard oil hq. and that's san francisco. then we opened in new york. we'll have more totalk about new york. that's our roastery. that's in chelsea.
rockefeller center. the high line. hell's kitchen. cobble hill. bryant park. and that's in los angeles. that's the roastery there. arts district. abbot kinney.
beverly grove. echo park. soon to open in culver city. and that's tokyo. kiyosumi shirakawa,where the roastery is. aoyama. and soon to open in shinjuku. so that's whatwe've done so far. it's taken 13 yearsto get that many.
this time next year,we'll have, maybe instead of 22, we'll have 35. that's a fast lightning round. the existing models wheni was starting coffee-- there were basicallytwo of them. this is the peet's locationin walnut and vine. all the signs and symbolswere around buying beans more than drinks. very, very darkly roastedcoffee, scooped out of bins.
you know, it was very muchabout dark roasted coffee. not so much theflavors of the origin, but the flavors of the roast. there's an art to that, andi'm not disparaging that model. i just wasn'tinterested in that. i was interesting inmore origin tastes, and i was interested in morelayers and differentiation of the tastes of the coffee. the other existing model wassort of this italian-based--
that's cafe trieste--italian-based cafe that was kind of messy. when i was starting incoffee, there were-- and there are still many,many cafes like this-- that are just sort of messy. they have, like, a-- they'remore places to rent space. they have couches, andmessy bulletin boards, and distractionsfrom the coffee, rather than focusingon the coffee.
they've got muffinswrapped in plastic. they've got allkinds of-- they've got 20 differentfonts on display. you know, that'sdefinitely a model. but i feel like whati was interested in was the productfirst, and what my task at blue bottle-- andour team's task at blue bottle-- is, is to focus on removingthose distractions. to give people thisprimary experience
of tasting this deliciousthing in the best way we can possibly present it. so when i opened, wedid the farmers market, and that got very busy,and it was very fun, very stripped down, you know, noelectricity, no running water. so definitely art was aboutconstraints in that way. and so case study numberone, i guess you could say, was our kiosk in hayes valley. in 2005-- january 23, 2005--we opened in hayes valley.
and at the time, that alleywaywas a dead-end alleyway that smelled like pee. it was not the mosthospitable place to be, but i knew-- the friend ofmine owned that building, and i didn't have enoughmoney to open a cafe. and he said, "wolfe, why don'twe do something in my garage?" and i said, "sure." and that's what we did. and it was very odd.
it's still a little bit oddnow, but it was a very odd place to open a cafe. but i think about the beginner'sluck that that represented. had i had moremoney, i would have felt the pressure to open amore traditional-seeming cafe. but this way, because thearchitecture was so different-- the way that it subverted theexpectations of the guests in an interestingway-- i think it made them more receptive tohaving a radically different
approach to making coffee. we ground everythingto order, and prepared all the brewed coffee to order. we didn't have it in urns. we had a six drink menu. no sizes. no flavors. every milk drink wassteamed to order, with latte art on the top.
it was very, very different. had i done marketresearch, i would have asked peoplequestions like, "oh, do you want to buy a coffee that'sroasted lighter than the coffee you say you like? do you want to pay alittle bit more for coffee? do you want to wait a littlebit longer for coffee? do you want to have fewerchoices among drinks, or sizes, or flavors?"
and, you know, i would've heardno, no, no, no, no, and no. but fortunately, i didn't evenknow what market research was. so we just did what we thoughtwas the most delicious thing we could possibly do. and it worked. it was not so busy at first,but it totally worked. we had the first pid-poweredmachine in california. pid stands for proportionalintegrated derivative. it's a way of regulatingboiler temperatures
to a very, very fine tolerance. and so we were focused onaccuracy and consistency. right now it's much more commonto have those machines out now, but at the time it was a littlebit of a frankenstein machine. this guy i knew from thefarmers market-- like, he was a scientist orsomething-- installed it. so the fact thatthe surroundings changed people'sexpectations for-- and made them more receptiveto the coffee
we were getting,the products that we wanted to put in their hands--that was a great lesson for me. people now talkabout, like, "oh, the coffee market's sosaturated-- saturated market." and they were talkingabout it then, too. i love that it's kind ofa liquid metaphor, too. saturated market. but, you know, saturatedthen, it's saturated now, but it's also-- what elseis it saturated with?
it's saturated with interest. it's saturated with passion. it's saturated with peopletrying to do great work. it's saturated with customers. you know, saturatedwith attention. and also saturated with a lotof models that aren't really executing super well. so i don't know if there'sa generalization that's safe to draw, buti've always, you know,
haven't been toobothered about this idea. here's a story. i was there. long ago, i would roast coffeeand i would bring it over to the kiosk. and i dropped offcoffee one afternoon, and i was kind of hanging outin the back, and a couple came. and it wasn't very busy. there wasn't a line.
and there's a manand woman, and they were standing--and the guy, like, looked at the woman he was with. and there's-- youknow, there's a pause. and he said, "ilike this place." he was lookingaround, and his person he was there, like, lookedat him, and was, like, "why?" and he thought for a minute,and he said, "i don't know." and that's so memorable to me.
like, so did thatcreation of the ineffable. he couldn't puthis finger on it. he couldn't say whyhe wanted to be there, why he liked to be there. that was a verypowerful lesson for me. there are so manybusinesses now that, like, to try to beat you overthe head with their message, their brand story. but i think if weleave enough space,
people can feel like they canrelax and not be-- they're not being lectured at. they can think about it. they can pause. they don't have to be toldwhat to think and how to feel. i like that. so case study number one. in 2008-- well, to back up, ihad a friend, i have a friend, his name is jay gummi.
he works in japanesecoffee industry for a big company called ucc. i met him at farmersmarket long ago. and he started telling me--filling my head with the way that people make coffeein japan, and the style and the cultureof certain places that make coffee in japan. there's a very oldfashioned fusty, dowdy type of coffeehouse called the kissaten,
and he was talkingto me about that. and in 2008, ifinally went there. and i went to thisplace-- i went to a bunch of old-fashionedplaces-- the kissaten. and i was totally blown awaywith just how they did it. you know, the perfection--it wasn't my taste, exactly, but theperfection with which they were able to executetheir vision, and the very personalvision that they
had in these kissatens,was remarkably inspiring. it was stunning. and the connectionswith my former life. you know, they had absolutelymastered repetition to perfection. they had absolutely masteredimagining a sensory outcome and duplicating it. it was coherent. it was just thisrarefied excellence.
there's this wordcalled kodawari, that's a beautifulword, that sort of means the imprint of the founder,the maestro-- whatever you want to call him--permeates the space. and this idea of kodawari wasvery strong in these places, and very inspiring to me. anybody studyingjean-paul sartre? you're studying? you're setting a good example.
he's a philosopher. i think it's outof his book nausea. he has a line, "everythinghas been figured out, except how to live." which i think is very inspiring. but the kissaten,being at the kissaten, gave me a little glimpseof maybe how to live. it felt like servingcoffee was a moral act. it felt like a deep-seatedsense of responsibility
to the product, and the guest. and the service felt thesame as i felt, like, in service to a composerfelt. in service to this vision that they had. so i felt at homein these places. it was very strange to be 6,000miles away and to feel at home. i'll tell you one storyabout hato, this place. other places do it, too. you see that wall of cupsbehind the gentlemen there.
if you sit at the bar and youorder something, first thing he does after heunderstands the order, he'll look at the wall of cups. he'll look. he'll be, like, "hm. hm." and it took me a few timesgoing there to figure out, like, what was he doing? there's 150 cups.
just grab a cup, man. but he was figuring out, like,in that moment, for my order, for this guest, what isthe best possible cup to use in this context? what is the cup that ineed to have my coffee in, but don't realize it yet? what is the cup that's goingto enhance my experience? and that pause-- i'vealways loved that pause. it's not very efficient.
it is not very efficient. but it's really indelible. it's really, really indelible. and this dedicationto experience is something that we talkabout a lot at blue bottle. before we talk moreabout experience, i'd like to talk to youabout this idea of-- excuse me-- three words. i was pressed to come up with amission statement around 2008,
and i was resistant. and i had a deadline. i had to go tothis meeting, i had to unveil thismission statement-- and i couldn't do it. i was practicing myexcuses, actually, on the way to this meeting. it was, like, well, i was reallybusy, or i had to do this, or this broke, or this failed.
and then i realized that if wejust got really, really good at three things,three words-- if we could remember threewords-- that would take us a really, really long way. and the three words thati came up with in 2008 are-- oh, they're syncing up--deliciousness, hospitality, and sustainability. there's other wordsthat we use now, too, at blue bottle coffee,but those are the heart.
those are the ones. anybody that works forus, we say that one time, and they remember it forever. they're important lessons. it's not always in that order,but usually in that order. so i like the three words. we talk a lot about--oh, and then-- and then, being so inspired by japanesecoffee gear, japanese modes of preparation, i found a greatlease in mint plaza in 2008,
and in a beautiful building in ahorrible, horrible block that's since come up. this gorgeous building. and that was theplace where i was able to really explorea lot of my ideas about these japanesecoffee techniques. i didn't want tomake it kissaten, but i wanted to make somethingthat was our expression of it. that was our homageto these ideas
about serving japanese coffeeas perfectly as possible. so that's mint plaza. hopefully some ofyou will drop by. so we talk a lot aboutexperience at blue bottle, and the more i dothis, the more i realize that thistaste of this coffee is negated-- it'smeaningless-- if people don't have a good timewhen they're doing it. that part of our product isthe experience that people have
while they are drinkingit, or before, or after. so thinking very deeplyabout removing obstacles, about having a great experience,making it clear, making it legible. i think experienceof the totality of sensory and emotional data,both unconscious and conscious that we absorb-- youknow, it's the taste of the drink, thesound the stereo makes. it's the anxiety of seeinga word you've never--
that you might not know howto pronounce-- on a menu. playlists. you know, what obstacles havewe removed from people's paths so we don't have to havethem think about it? we don't have totrouble them with it. those-- is it-- is theresincere human interaction? sincere, warm, helpfulhuman interaction, at every place beforepeople actually need it? those are the typesof experiences
we think about that arepart of our product. and that's the thingthat, as we grow, we have to be very,very assiduous in making sure we're not justmaintaining certain standards, but they're improving. there's this word "maintain"--i used to get asked it a lot. fortunately, i haven'tbeen asked it in a while. how are you going to maintainyour standards as you grow? and there is no "maintain."
you can't, like, holdon to this thing. you have to improve as you grow,in order for this whole thing to make sense. we have to havethis idea that we're getting better and better,and we're adding more things. we're being on a wider stage,but we're improving as we go. because otherwise, that'sa horrible way to live. right? thinking about, like,oh, remember how great
our coffee was in 2014? oh, yeah, that was really great. nobody wants to live like that. and i choose notto live like that. so everything we do at bluebottle is with the assumption that we can improve theexperience and the coffee that people have,as we add cafes. as we add employees. as we add guests.
as we add coffee growers. and then there's moments. moments, i feel like, aresubunits of experience. moments accrete toform these experiences. it sounds kind of weird. it's a future memoryon display when we're thinking about cafe design. i think about, like, littlemoments that people might have. and there's thisphilosopher, henri bergson.
show of hands? you're my new bestfriend, jennifer. that wrote a book calledmind and matter that talks about memory in that way. we don't have to gointo that, necessarily. but it was veryinteresting for me to see how that is connected. that you can plan,you can premeditate a beautiful experiencefor someone,
and they can have thatexperience without actually participating in it. if you see a littlenook-- you're in line, you see a little nook,you see a cozy place, you see somebody eatingan affogato or something delicious, you canhave that moment of having a memory of thatexperience in the future, and that creates a desire. and so this ideafrom henri bergson
has been very interesting--important to me when we're talking about cafe design. to let people see andplan for something beautiful in theirfuture, as well as have something inthe present moment. and there's things that we wantto get out of people's way. you know, i'm goingto have that slide. you know, that's whatwe're trying to weed away from people's experience.
you know, that is a sadface emoticon right there. you know, you've got, like,an empty sugar container. you've got drips. you've got a dirty glasson the condiment counter. and those are the things--even if you don't notice it, even if you don't takesugar in your coffee-- you're going to project thatmoment into your future, too. it's, like, oh--maybe not consciously. maybe only subconsciously.
but you're going to see that,and you're going to see a lack. it's, like, "oh, if theycan't keep their sugar filled, what else can't they do?" if i'm noticingthat, what else is lacking that i'm not noticing? so i stress a little bitabout moments like that. we have our successes and ourfailures, and nobody's perfect, but it's momentslike these that i'm working very hard withmy team at blue bottle
to try to weed out. so that's the future. you know, we're workingon different ways of experiencing our coffee. ways of removingbarriers to enjoying this experience of our coffee. this is a shop we'reopening in berkeley, on shattuck and university. a very busy corner.
and what we'reexperimenting with is this notion of gathering. a counter as a barrier. so how do you removethose barriers? how do you let people interactas they choose with a barista? sometimes people just wantto say the word "coffee" and have somebody makesomething delicious. other times, people wantto enjoy the process. people want to have a momentof seeing somebody else enjoy
the process, andprojecting themselves into that future, thatpossible future for them. so the more we thinkabout experiences, the more i feel like theact of designing a cafe is to strip away-- to removeeverything extraneous. to remove barriers from theseexperiences and moments. and you can do it yourself. a gentlemen i work with, avery inspiring gentleman i work with-- hisname's arion, and he's
our head of store design. when i met him, he gave mea little graph like this. it's called anemotional journey map. it's quite common. it blew my mind, but it's quitecommon in the design field. this was a little-- i didn'twrite down the cafe, right? oh, good, ok. this is a cafe up in sonomacounty that i went to. and all it is is sort of--it's a subjective emotional map
of how i'm feelingat certain points. and if you do thisenough times-- i have, like, a littlenote-taker on my phone, and i do this everyso often, still. you know, it was abummer of a time. i didn't get my toast. i started out so great, therewere cute dogs in front-- you know. but you do this enoughtimes and you realize,
everybody does this whenthey walk into a place. that you do this every timeyou, like, catch the bus, or you wait for anappointment, you know. there's this emotionaljourney, this turbulence. maybe it's on a small scale. you know, at the end of theday, me not getting my toast wasn't that shattering for me. but it was very illuminatingfor me to do this, and i encourage youto do this yourself
if you're interestedin any form of retail, any form ofexperiential pursuits, i encourage you to do thisand just see where you are. it was very interesting for me. you can do it in a largescale, like this, when you go have some retail experience. and then when we were gettingour new serviceware made, there's actuallya little journey that i projected into thefuture of guests' experience
when we were having it made. the emotional journeythat i was thinking of was three steps withthis new serviceware. you'll see it in paloalto, if you see it. so the first is, if you see theserviceware from a distance, it just looks likewhite cups, you know. no big deal. white cups. you get closer, and yourealize that they're not
perfect circles. there's an organicshape to them. they're a littlebit more huggable. they're a little bit more-- youcan be-- show more affection to them, i guess. they encourage that, ithink-- those organic shapes. what you don't know isthat these cups were made for us by acompany called kinto, and the proportion of thecups was exactly to our order.
so each cup, to the milliliter,is exactly the volume that we have asked them to make. and so the experienceyou don't understand when you're interactingwith those cups is that the proportions areexactly as we want them. and then the finalstep is, obviously the cup goes on a saucer, andthen you're drinking your cup and you don't see thelogo anywhere else. you don't see bluebottle-- look over here!
we're not grabbingpeople's attention. but we're allowing themto notice, and hopefully be charmed by, this moment ofseeing the logo under the cup, where it belongs. coffee should be primary. the logo should be underneath. and so even for somethingas simple as thinking about serviceware, youcan think about so much emotional turbulence, so muchjourneying, so many stories.
i'm wondering ifyou think it's very exhausting to live with me? actually, yes. yes. it is. so that's the end ofthat experiential part. we walked away from 20%of our revenues last year. ooh, that got your attention. we used to do coffee wholesalefor many coffee companies--
especially very goodones-- that can be 70%, 80% of their revenue. it was never huge for us. it was 20%. but 20% is not nothing. and i remember this moment--i was in los angeles. i'd stopped at a very goodcoffee place in silver lake, owned and operated bya very good roastery. had a nice time.
walking back to the car,like, two blocks away, and i see a gelateria. and they say, you know, "proudlyserving this coffee roaster's coffee." and they misspelled thename of the coffee roaster. and, like, their sign was rightacross the street and down. and to me, that reallysummed up the perils of trusting somebody elseto care about your product. nobody loves yourcoffee more than you do.
that's just the way it is. and so with wholesale, i wasfeeling more and more out of control about the experiencethat we were giving people. people start with thebest of intentions. nobody signs up with a coffeeroaster with the intention, oh, we're going to serveyour coffee horribly. you know. nobody has thatintention, but that's how it works out, becauseif you stop caring just
for a little, little bit,then all hell breaks loose sometimes. and you get stuff like this. we confiscated that froma wholesale account. and people justfreelance your logo, and anyway, it seems to bemuch more shocking to me than to you. but trust me, itwas a horrible sign that we did not wantout in the world.
so we made a decision,a tough decision to walk away fromwholesale-- walk away from 20% of ourrevenue in the service of our future guests. in the service of thegrowers of our coffee. in the service ofthe people who are producing our coffee at ourroasteries-- in our four roasteries. so we don't do that anymore.
and it's been great. it's allowed me to focus. that made my lifea little happier. it's been great for everybodywho works at blue bottle to just focus in. it's been a real pointof pride with people who have been around the coffeeindustry for a long time, and know the perils of coffeeroasting for wholesale. it's been a real point ofpride that we don't do that.
has anybody ever read themyth of sisyphus, by camus? hands are shootingup left and right. and that's kind oflike-- that's kind of what it's like inwholesale-- coffee wholesale. you know, the boulderalways crashes down. and, you know, you trainpeople, you hope for the best, but at the end of the day, theboulder always crashes down. camus' point was thatsisyphus was basically a very happy man because heknew what the task ahead was.
but for me, it'slike, i could never-- i could never really get there. so let's see. i don't want to talk forever. so we had a coupleacquisitions, we've had a couple funding rounds. just to go over those closely. so the history of that. in 2008, there was asmall minority investment,
and i worked with a verysmart, insightful gentleman named john eastburn thatworked for colbert ventures. that was a little bitof my graduate school, i guess you could say. i was introducedto colbert ventures by a nonprofit-- anoakland nonprofit that i have a lotof affection for, called inner city advisers. they match up growing businesseswith pro bono business advice.
literally, when i met with innercity advisors the first time, i did not knowwhat p&l stood for. profit and loss. and then there was alarger round in 2012. that's where i met my businesspartner, bryan meehan, who's now the executive chairof blue bottle coffee. also, a stanford graduate--business school graduate-- david bowman, who isnow the cfo and coo-- he's got a lot ofletters, david does.
and so that hasreally helped us. helped me kind of step backfrom the financial part, from the fund raisingpart, from the "stuff i won't do" part,and concentrate on things likespending a lot of time on serviceware, spending alot of time on store design, spending a lot of timeon how the coffee tastes. really focusing. because the one thing is, itake this very personally,
as you might have noticed,because it's personal. i started it in 186 square feet,and i basically did everything. i designed a lot of the shops. i still have a lot of inputin the design of the shops. i remember-- my son usedto-- my son dasheill is 12-- and he used to come with me. he used to tag along. and, you know, just,like, little things. like, those arethe approved plans
from our roastery in 2009. there's this healthinspector in alameda county-- i won't say his name,although i am tempted to-- and it was just sogrueling, it was so brutal. i had to call in everyfavor, everything i could do to get those plans passed. so when we got those planspassed and we could-- had permission tobuild our roastery, it was an amazing moment.
and so my family hasshared in those moments from the very beginning. and even though wehave 22 now-- we might have 35 thistime next year-- it feels no less personal. and so on that note, i wantto talk about constraints on our growth. there's a composernamed brian eno. he has a great line.
"any constraint ispart of the skeleton that you build thecomposition on, including your own incompetence." and that really struckme when i read that. i think he's very smart,and a good writer. and the first 10years of blue bottle, the formative firstdecade, you could say, we're really built aroundmy own incompetence. my failings around notbeing capable of making
certain compromises, not beingtoo devoted to efficiency, the quirks of mytaste, the insistence on finding an underliningnarrative around everything we were doing. about having a deeply personallevel of control over, hopefully, what is a charminglydidactic tone of voice-- all of theseeccentricities and missteps kind of became sortof our founding path. and they filled our shops.
they made usinteresting to guests. and so the question, you know,we're facing, i'm facing, and those of us at blue bottlewho are working on growth are facing, is, like, howdo you scale incompetence? how do you scale inefficiency? that's a real challenge for me. as we add smart, accomplished,pedigreed, experienced people to our growing business,there's a temptation to do the things that smart,accomplished, pedigreed,
experienced people do them. which is to say, not theway i'm used to doing them. and so that's my quandary. how do i make a casefor the illogical? how do i advocate? how do i be an advocate forthe incompetence that got me here talking to you atstanford university, without fatally hamperingthe financial or operational success of our business?
charting a pathforward that improves the experience ofour future guests, but still keeps thisidea that everything is not perfect in terms of thefunctioning of the business. that it should not be perfect. that perfect is-- thatsheen of perfection-- is one step awayfrom premeditation. which is one stepaway from staleness. and so, yeah, our guestsare counting on us
to be better andbetter every year. and how do we do it? that's the question. i'm not sure. i do know thatdoors open for us. they have for the last 13 years,and probably for the next 13, i happily suspect. but i have gotten used tosolutions presenting themselves at just the right time.
doors open at justthe right time. there's an author i love. his name is marcel proust. he wrote a novel,a very long novel, called in search of lost time. jennifer-- hands up? you know that? anybody else? hm.
anyway, in thesecond volume there's a great passage that really gaveme hope when i came across it. it's-- speakingof doors opening-- it's-- the passage goes, "butsometimes illumination comes to the rescue at the verymoment when all seems lost. we have knocked on every doorand they open on nothing, until, at last, westumble unconsciously against the onlyone through which we can enter the kingdom we havesought in vain for 100 years.
and it opens." and that imagereally stuck with me. and, so hopefully, withall of our team's help, and a little bit of helpfrom mr. marcel proust, we will continue to figureout how to scale incompetence in an interesting way. thank you. all right. there's questions and answers.
yes-- first hand shoots up. how about you? so first of all, ireally like your coffee. [inaudible] so i was wondering, you know,the first time [inaudible] coffee i wanted to goback to your website and write a review about thecoffee, on the website-- rate the coffee, sothat others can see how i felt about the coffee,and then read somebody else's
comment about it. hey, i like twinkle, you know,i liked three africans, right? so when i went toyour website, there was no way, because youreally emphasize on product and [inaudible], right? right. there was no wayfor me to, like, actually figure out howto direct [inaudible] that your website,that how can somebody
else talk about that threeafricans, or twinkle, or, you know, betablanco [inaudible] right? so what's the plan? how do you incorporatethat kind of experience? because that woulddirectly feed you what people are thinkingabout the coffee. are they going to yelp andwriting about it, right? oh, yelp. don't get me started.
you have any plansof doing that? could you repeat the-- yeah, yeah. it's a veryinteresting question. so we have a gentleman who'svery interested and passionate about our coffee, whichi think is really lovely. and he was saying, why don't wehave a mechanism on our website whereby he can write a reviewof that coffee, or others can? or he can read thereviews written by others.
[inaudible] rate your coffee. oh, rate them. multiple ways [inaudible]. what's the plan? mm-- what do you think? no. i'm deeply, deeplyinterested that you have a great experiencewith your coffee. if you do not, and youemail support and you
say, "ah, this twinklething, i hated it." they're going toapologize, and they're going to get somecoffee to you that they think you're going to like. and that, to me, is critical,the-- this exchange. the cacophony ofonline reviewing? that seems like something thati don't really understand, or-- frankly, i woulddie a little bit if, like, i saw, like, thesestreams of reviews that we
couldn't control, or edit. obviously i want tomake everybody happy. but i want people totalk to us about it. so that's just my culturalissue with that idea of online reviews. it's not disparagingyour need for that, and, you know, thatis a miss, that we can't provide that for you. but i don't think, in termsof engineering resources,
that that would be the topof our list, to do that. sorry. try a couple more. yep. yes-- anybody else? i just want-- i don't wantto, like, have all the fronts. but i will. ok-- you. so you were talkingabout how you don't
do wholesale coffee anymore. no, we don't. or yes, i was. this way i can, like,walk over to our y2e2 and i can make a little, like,[inaudible] coffee [inaudible]. so since thesurrounding experience is such an integral partof your coffee philosophy, how do you reconcileyourself to have already made coffees,or, like, venues that
might not be like blue bottle? oh, yeah. so the question is, we havethese very cute little cartons of our new orleans-styleiced coffee that are in many, many wholefoods and other places, and cafeterias, and we're soonto release a black coffee. so for me, thecritical distinction is, we're not trustinganybody to make that coffee. we're not asking anybody, hereare the rules for preparing it.
you have to stick to the rules. what we're doingis, we're saying, this is a productwe totally believe that's just as delicious aswhat we get in our shops. and why shouldn'tyou go to whole foods and buy it, so you can havean awesome trip to the beach? you know, it's a way ofscaling exactly our intentions. obviously we have to trustthat the checker at whole foods is going to be niceto you-- you know,
there are things thatare out of our control. but the primaryparticipation in the product is, in fact, 100%under our control, provided they get itto you during the date that they shouldget it, and they don't leave it in thehot sun-- you know, like, all those basic things that wecan trust whole foods to take advantage of. so in my mind, it's avery critical distinction
between trusting somebody elseto make something for a guest under our flag, ora product that we have absolute control over. last question? or is-- one more. you've been very persistent. very few companieshave the attention to detail in terms ofthe product that you do.
and i was wonderingwhat you think might inspire more companiesto try and have that same pride in their product that you do? i feel like everybody-- could you just repeat that-- oh, sorry, sorry,sorry, thank you. so you very nicelymentioning that he thought we had a lot of attentionto detail, and that-- and if i'm understandyour question correctly,
why do you think othersdon't have as much? i don't think anybodyadmits, like, ah, i don't care about the details. and in point of fact, thatslide that i showed to you shows you that we are notin control of everything i would like tobe in control of, in terms of that dirty cupand the sugar being out. although we try our best. so i think everybody tries hardto have attention over details.
everybody says it's important. but do you invest in it? do you have processesin place to execute it?
i think that's thecritical difference, is the investmentand the energy. i don't think it'sabout the intention. thank you very much, james.
