Pod Insights How I Built This with Guy Raz Advice Line with Travis Boersma of Dutch Bros About this episode Dutch Bros co-founder and former CEO Travis Boersma joins Guy on the Advice Line, where they answer questions from three early-stage founders. Plus, Travis reflects on the baby steps that scaled his initial espresso cart into a 900+ location national business.
First we meet Sean in Atlanta, who’s trying to reach new customers for his Korean fried chicken as delivery apps cut into margins. Then Trenton in Central Pennsylvania, who’s considering whether to grow his coffee roastery through DTC or wholesale. And Yasmin in Austin, who wants to bring her social tonics to the mainstream as an alternative to alcohol.
Thank you to the founders of Mukja Korean Fried Chicken, Pine Ridge Coffee, and Altar Native Bar for being a part of our show.
If you’d like to be featured on a future Advice Line episode, leave us a one-minute message that tells us about your business and a specific question you’d like answered. Send a voice memo to [email protected] mailto:[email protected] or call 1-800-433-1298.
And be sure to listen to Dutch Bros’ founding story https://art19.com/shows/831bd173-0992-41b7-b1eb-112db904d947/episodes/4e1063d2-d587-431f-846d-7a0f255c9f09/embed as told by Travis on the show in 2023.
This episode was produced by Sam Paulson with music by Ramtin Arablouei and Sam Paulson. It was edited by John Isabella. Our audio engineer was Cena Loffredo.
You can follow HIBT on X https://x.com/HowIBuiltThis & Instagram https://www.instagram.com/howibuiltthis/ and sign up for Guy’s free newsletter at guyraz.com http://guyraz.com/ or on Substack.
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Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
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5:18 Guy Raz? Hello and welcome to The Advice Line on How I Built This Lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. And each week, I'm joined by a legendary founder, a former guest on the show, who will help me try to help you. And so if you are building something and you need advice, go ahead and give us a call, and you might just be the next guest on the show. Our number is 1-800-433-1298. Send us a one-minute message with your name, a bit about your business, and the issues or questions that you'd like help with. Or you can send us a voice memo at [email protected] . And make sure to tell us how to reach you. Also, don't forget to sign up for my newsletter.
6:03 Guy Raz? It's filled with insights and ideas from the world's greatest entrepreneurs. You can sign up for free at guyraz.com or on Substack, and we'll put all this info in the podcast description. All right, let's go.
6:15 Speaker 01 Joining me this week is Travis Boersma. He's the co-founder of one of the country's most popular coffee chains, Dutch Bros. Travis, great to have you back on the show.
6:24 Speaker 02 Great to be back, man.
6:26 Speaker 01 So Travis, you were a guest on How I Built This back in 2023. And by the way, if you guys haven't heard that story, type in Dutch Bros and H I B T in Google to find it. And of course, we'll put a link in the episode description. It is such an awesome story. And I think we even sang together in that episode, right? Is that right? Some Cat Stevens?
6:46 Speaker 02 I think we did, yeah.
6:47 Speaker 01 We did. Well, I left my happy home.
6:51 Speaker 02 To see what I could find out.
6:53 Speaker 01 And anyway, all the crazy ups and downs. And of course, today, Dutch Bros is a massive business. 900s to over, I think, over 900 locations across the US, right?
7:07 Speaker 02 Yeah, we're at 975.
7:09 Speaker 01 It's so amazing. Congrats on that. Anyway, Travis, one of the things that I think will probably come up in the calls today is this idea of taking baby steps. You know, like you and your brother Dane started out with an espresso cart. I mean, literally a push cart in a parking lot. And, you know, some people might have a food truck. And then they want to transition to a brick and mortar, right? And that's a different beast because now you're talking about rent and you're talking about, you know, hiring a team. And it's just, it's a different level of stress. How did you guys kind of deal with that transition? When you went from the espresso cart to an actual store? Was that, in retrospect, one of the hardest things that you think you did?
7:53 Speaker 02 I don't think so. I mean, it's kind of like learning how to walk. You got to start crawling and then you start balancing out. And then eventually you make steps and you fall down. You pick yourself up. That's what it is with any kind of business. We went from push cart to an enclosed mobile unit that you could still move to different locations if you wanted to. But where we found our niche was the drive-through model. And, you know, we were one of the pioneers, I think, of drive-through coffee. And so that was something that was a real differentiator for us. And it ended up evolving into a brick and mortar kind of building. And that's really served us.
8:35 Speaker 01 You guys decided at one point in the business to move away from a franchise model to a model where shops are actually corporate-owned, they're run by Dutch Bros employees who've been promoted up through the ranks, so similar to like a Chick-fil-A or In-N-Out. It's not something that a lot of brands do, quick-service restaurants do. Why do you think that model works better for you?
9:03 Speaker 02 Well, I think the thing that was always most important to me was scaling the culture and doing the right thing for the people. And so, you know, all of the people that we have in our organization, they're the ones who make it what it is. They're the ones who provide the experience. They're the ones who have the fire in the belly, the operational know-how, the ability to cultivate culture and lead people. And, you know, we made a decision back in 2008 to only grow from within and not sell franchises any longer to anybody else because while some people had great business acumen, teaching the culture and scaling the culture, that's just different in nature.
9:45 Speaker 01 It's interesting because if you want to grow fast, the franchise model is a good way to do it. I mean, you look at Five Guys, you look at Dave's Hot Chicken, we've told both those stories on the show. And that's worked for them. At the end of the day, like their growth has been explosive. You guys have still managed to grow and grow quickly with that corporate-owned model, which requires more money. Eventually, you had to take on outside investment. I think you resisted that for about 25 years.
10:11 Speaker 02 Well, we never had to do anything. We chose to. And that's the beauty in business. You know, I don't think there's a wrong way in the way that you grow. I think that there's just ways that are better for some than others. And for us, with our model, the company-owned model made the most sense to scale and grow, protect and cultivate the culture.
10:33 Speaker 01 Yeah, for sure. Travis, why don't we bring our first caller and find out how we can help them? Sounds great. All right, caller, hello. Welcome to the advice line. You're on with me and Travis Boersma. Please tell us your name, where you're calling from, and just a little bit about your business.
10:49 Speaker 03 Hey, guy. Hey, Travis. Thanks for having me on. My name is Sean Chang. I'm calling from Atlanta, Georgia. I'm the co-founder of Mochi Korean Fried Chicken. It's a fast, casual Korean-American restaurant. We use southern classics like fried chicken, mac and cheese, slaw, mixed with Korean flavors and techniques to be an approachable way for people to try Korean food.
11:08 Speaker 01 Love it. Well, thanks for calling in, Sean. So, Mochi Korean Fried Chicken, and I say this only because I've been to Korea, but I think Korean fried chicken, like traditionally, is just like lightly, like light coating of cornstarch or potato starch and fried, right? But this is not. This is actually southern fried chicken, so like flour and dredge and stuff?
11:30 Speaker 03 Exactly. So, on our menu, we showcase two different ways. The first one is southern fried chicken, but with kind of Korean flavors infused in that batter as well, as well as the specialized double frying method. Southern fried chicken, traditionally, it's low and slow for a long time. But Korean, it's high heat, you're cooking it initially once, almost flash fry, letting it cool down to have all that moisture on the excess side of uplift from the inside, and then refrying to order so that it gets that final crisp on that outside.
12:00 Speaker 01 Awesome. So, tell me about the business. How'd you start it? How'd you get into this?
12:04 Speaker 03 Yeah, it actually starts kind of sad. I was at my first year at Georgia, University of Georgia, in 2016. My second semester, I was in a motor vehicle accident on my way home that left me paralyzed from the waist down. And in that moment, I remember thinking, oh, man, what is life going to be like? The doctor told me I had about a 99% chance that I would never walk again. And so, being the realist that I am, I said, okay, am I gonna spend my entire life trying at 1% to walk again or continue my life despite this injury? And actually, during my time at Georgia, I was cooking for people at my freshman dorm on the weekend.
12:44 Speaker 03 And cooking was something that I was passionate about that I've been exposed to since I was little. That brought a bunch of people in and said, wow, I've never had Korean food before, but I I love this. And with that, I said, okay, I want to change my degree from this med school path that I was taking at Georgia to hospitality at Georgia State University.
13:05 Speaker 01 Dude, I love that. That's amazing. Are you, do you, um, do you use a wheelchair?
13:09 Speaker 03 Yeah, I do. I'm paralyzed from the waist down and I've got a permanent wheelchair that I use for my daily mobility.
13:15 Speaker 01 So ha- ha- so you've had to adjust sort of how you cook, right? Low- lower down countertops and things like that?
13:21 Speaker 03 Exactly.
13:22 Speaker 01 You could do everything.
13:23 Speaker 03 Exactly.
13:24 Speaker 01 Right? Yeah. What a phenomenal story. Okay, so you decided to kind of shift, entirely shift and now and and you've got a a brick and mortar shop. It's like you go in and order food there?
13:35 Speaker 03 Exactly. We have a brick and mortar in the heart of Atlanta.
13:38 Speaker 01 All right. So tell us what what question you brought for us today and see if we can help.
13:41 Speaker 03 Sure. So with margins becoming thinner and thinner in the restaurant industry, we find our original strategy of delivery becoming highly unsustainable with delivery apps like Uber, Indordash, taking margins specifically in the city up to 50%.
13:55 Speaker 01 50%?
13:56 Speaker 03 Yeah. So it it's 30% on their end and 20% more to be on the marketplace.
14:02 Speaker 01 You got to pay to be on the marketplace. Right. You get for a good position on the app.
14:06 Speaker 03 Exactly.
14:06 Speaker 01 Wow. So you're basically subsidizing your food to the customer.
14:10 Speaker 03 Yeah, exactly. And that's why it's, it wasn't always like that, but recently it's become more and more aggressive to where, you know, where they're slightly bumping it up a little bit higher by a couple of percentage, but you have all these other thousands of restaurants in a major city that you're competing against. So you have to cough up more of that margin in order to be on that front page. So with that being said, we know that we have to lean off these platforms to more of a traditional setting, whether it's dine in, takeout, or catering. In today's market, common wisdom says, uh, marketing is key. However, we're a bit lost on how to navigate that effectively. What is y'all's advice on genuine and effective customer acquisition?
14:52 Speaker 01 This is a tough one, Travis, because you guys. I'm sure Dutch Bros uses DoorDash and Uber or Beatz because you're a huge business. And by and large, they work, they can work, but for a small business can be really tough. Right. Um, so any, any questions for Sean first before we tackle his?
15:09 Speaker 02 Well, first of all, man, I am ready to try some Korean fried chicken.
15:12 Speaker 01 Me too.
15:13 Speaker 02 It sounds great. I'm like, holy smokes, dude, I'm ready. So really cool concept. Love the niche. And you know, we, to be honest with you, we refrained from DoorDash. All these years and, and mobile order has been a big deal for us and order ahead. And that's what we've incorporated just this last year, we were late to the game, but kind of intentional with it.
15:38 Speaker 01 You know, your own, your own app. So people can go directly through your app to do it rather than through a third party.
15:43 Speaker 02 That's, that's right. You know, and, and there's no doubt. I mean, what happens in a situation like we're, we're in with restaurants is the strong will survive and a lot of, a lot of people will be washed out. So if you can figure out a way to stay alive and keep on keeping on and find that niche. Sean, are you, are you profitable right now? And if so, is your margin healthy?
16:05 Speaker 03 So, uh, we were profitable for the past two years. This year has been one of the most challenging. We've seen our chicken cost, um, just exponentially explode. I'm talking more than double for all across the board, some even triple. And you know, with the reduction of sales to some degree, we're not bleeding out. We're just breaking even. So we went from 10% to just maybe two, two to 3% this year, which we're still thankful for. So we are definitely just in hustle mode of trying to figure out different avenues. And recently, we just, this past month, we launched our corporate catering partnerships where we said, hey,
16:47 Speaker 03 it might be just easier to go to these major, you know, multimillion dollar companies that are already having a budget to feed their employees and just lock them in on a month to month basis, taking out the middleman services. So like tomorrow, we're supplying for a beauty supply store for 70 employees.
17:03 Speaker 01 Nice.
17:03 Speaker 03 They love the food so much. At first they were unsure because they were like fried chicken, 20 minute delivery. It might not be delicious. And I said, here, on my dollar, on my time, let me feed upper management and have you guys try our food. And they locked us in for a $1,400 contract like that and said, hey, we want you every month.
17:20 Speaker 01 That's awesome.
17:20 Speaker 02 Great job. I, I think, you know, that if, if you're going out and doing some catering and doing some fun, cool events like that, that's a great way to market your, your product and, and word of mouth with where you're at in the beginning is, is something that we took huge advantage of. And of course, when I did it, it's gosh, 30 plus years ago, we didn't have the channels like YouTube and, and Instagram and Tik Tok and, but, but I think you can do some creative things in those spaces. And if you can get some people that are ambassadors to your brand to help you with that, that's a great way to go about it. It costs you very, very little, if anything at all.
17:59 Speaker 01 Hmm. Sean, I've got a radical idea for you. Okay. I love that you're leaning into the catering and you should keep doing that. Okay. But I keep, I keep going back to an episode we did with Dave's Hot Chicken. The way they got that brand to take off, because they started in a parking lot in East Hollywood. Okay. Literally with buns and burners and, you know, like Costco fold up table. They invited, they sent an email, cold email to a guy who wrote for Eater LA. And they said, hey, we love your stuff. You want to try the best chicken sandwich? Come. He came, he wrote an article two days later and that was it. It was, you could, it was two, three hour waits. It was like a viral kind of thing. And I think there's an opportunity for you to try something interesting.
18:42 Speaker 01 And it might not be through the Korean fried chicken. It might be, but that might not be the way in. There is, there's an opportunity here. And I want you to think about this. Okay. To introduce one or two new items to your menu that no one's doing, because there are other people that are doing Korean fried chicken. You know what no one's doing? No one's doing Korean street snacks. Like, I remember when I was, I was in Seoul, I had this snack. It was like a, a fried donut filled with nuts and sugar, like melting sugar. I think it's called like hot dog.
19:17 Speaker 02 Yeah.
19:17 Speaker 01 Do you know what I'm talking about?
19:18 Speaker 02 That is absolutely one of my favorite desserts.
19:20 Speaker 01 It's amazing. It's like a fried funnel cake filled with sweet syrupy sugar and pecans. There's another one. It's like shaped like a, like a waffle fish stuffed with like cold, delicious custard.
19:36 Speaker 01 Why don't you consider doing something like that and seeing if you can get some hype around that?
19:41 Speaker 03 Yeah, that's definitely a wonderful idea. I think our challenge is because we retrofitted a space that was a second gen restaurant space, we're having trouble with the ability on our line to add new products right now. That is the hardest issue. That's why even with our catering, we have the storage space on back to do salads and things like that that people are asking for. But a dessert program, it's funny that you bring this up because people have been asking for it all the time.
20:07 Speaker 01 You just need a flat griddle.
20:08 Speaker 03 Yeah.
20:09 Speaker 01 You just need a flat griddle. I mean, literally, these are street vendors with like, you know, four by four area, right?
20:16 Speaker 03 Exactly.
20:17 Speaker 01 Making this stuff. Yeah, one of the, one of the things that I keep thinking about is, you know, customer acquisition, obviously, very challenging, especially harder now. It's more expensive. Social media is not as effective as it was four, five, 10 years ago.
20:33 Speaker 01 But there is a model, and I've used this example in seminars. There's an episode we did on We. We is a, happens to be, it started as an Asian food delivery service. Now it's like all kinds of ethnic foods. I'm sure it's available in Atlanta. Larry Liu is the founder and what they did to get, to get more customers was if you ordered from We, right, online, they would send you a link with a code and you could send that to a friend. And if the friend used the code to order, they would get 15% off their, their order and you would get cash back, like $5 or something, something significant.
21:18 Speaker 01 It cost We a lot of money. It put them in the red for three months. But it, but their customer acquisition as a result of that was so enormous that they became profitable in six months and they, I think they've been profitable ever since. I'm not saying that's easy to do and obviously you're a small business. And they were too at the time. They were really small. But if there's a way to, where your customers come in and you hand them a card or something and you say, look, give this to somebody and if they use this code, you know, and you sign up for our loyalty club, we'll give you a discount next time you come in or we'll give you some cash back or something. Try, just experiment with things like that because it's the, it's a word of mouth that is the most valuable form of marketing.
22:04 Speaker 03 Yeah, I definitely agree about the power of word of mouth. We are using some aspects of that in our email marketing where we just laid out the math very simple. I said, hey, there's, for example, 3,500 of you guys. If you guys just shared to people that who've never tried Korean fried chicken or Korean flavors, man, that's 7,000 new customers or people exposed to Korean flavors right off the bat.
22:26 Speaker 01 Super cool. Sean Chang, Mukja Korean Fried Chicken Atlanta. Congrats on what you've built, man. We're cheering you on.
22:32 Speaker 02 Okay, keep it up, dude. Keep up the great work and the drive and in your attitude, man goes miles.
22:38 Speaker 03 Thank you. I appreciate it so much. It was a blast to actually just talk with you all today.
22:44 Speaker 01 Wow, love it. I love it.
22:46 Speaker 02 Pretty cool.
22:46 Speaker 01 It's just so cool. I mean, I don't want to give away your story too much. A lot of people listen to it, but I mean, you've been through some really rough times with your business, things that most people just wouldn't be able to withstand.
23:00 Speaker 02 I'll tell you, I'll tell you what, though, man. That's where all the growth lives. The problems and the challenges and the, and the stuff that you think is like nightmarish, that's where so much growth and opportunity live.
23:14 Guy Raz? All right, we're going to take a quick break, but we'll be right back with another caller and another round of advice. Stay with us. I'm Guy Raz and you're listening to the Advice Line right here on How I Built This Lab.
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27:09 Speaker 01 Welcome back to the Advice Line on How I Built This Lab. I'm Guy Raz, and my guest today is Dutch Bros Coffee co-founder Travis Boersma. Travis, why don't we take another call? Sounds great. Hello, welcome to the Advice Line. Please introduce yourself, your name, where you're calling from, and just a little bit about your business.
27:27 Speaker 04 Hi, my name is Trenton Yoder. I am calling from Belleville, Pennsylvania. My wife and I are the founders of Pine Ridge Coffee. We are a coffee roaster and cafe, and our goal is to bring people together around a quality cup of coffee.
27:42 Speaker 01 Amazing, okay. Well, you've got the right person here for you, Trenton. First of all, a couple of questions. Where is Belleville, Pennsylvania?
27:51 Speaker 04 It is pretty much right in the middle. So the closest, I guess, major area to us would be State College, so the home of Penn State University. But it's about three hours to Pittsburgh and about three hours to Philadelphia.
28:04 Speaker 01 Awesome, okay, cool. And it's a coffee roastery. Is it a shop? Is it a store that you have?
28:10 Speaker 04 Yeah, so we have one brick and mortar location, and then we have a mobile unit as well.
28:15 Speaker 01 A truck?
28:16 Speaker 04 Yes.
28:17 Speaker 01 And does a truck constantly like drive around? Or does it do events or what?
28:21 Speaker 04 We do a mix of events, and then we also have some like regular spots in some other areas that we set up in as well.
28:28 Speaker 01 Nice, okay. So tell me a little bit about how you got into this business.
28:32 Speaker 04 Yeah, so I just kind of always enjoyed coffee. I have a lot of memories of just, you know, spending time with friends or family with coffee. There's a picture. I was probably four or five years old fishing with my dad and my sister, and I had a little thermos cup full of coffee. And so, you know, as I went through college, I got more and more interested in, you know, the process of roasting coffee. And I've always had a really entrepreneurial bug. You know, I've always wanted to have my own business. So in, yeah, October of 2022, it's kind of when we began this journey.
29:07 Speaker 01 And what were you doing before?
29:09 Speaker 04 I was a financial controller for a roofing contractor. So that was like a good opportunity just to kind of learn the workings of a business.
29:18 Speaker 01 Nice. Okay, cool. And tell me what's your question for us today?
29:22 Speaker 04 Yeah, so my question is, we seem to have a really strong following locally within our immediate area. We have struggled to get that same success outside of the area. Moving forward, we're hoping to grow the roasting side of our business. So my question is, would you go direct to consumer or pursue other wholesale partners? You know, other coffee shops or distributors and seeking out like grocery stores?
29:50 Speaker 01 All right, last unpack there. Let's bring Travis in. Travis, we can either answer this question or you might have some more questions.
29:57 Speaker 02 Well, I mean, it's such an amazing business. I've had great joy in being in this industry. And how many varietals are you guys roasting?
30:07 Speaker 04 So right now, we have about eight different coffees that we're roasting. So that's probably three or four single origins and three or four blends.
30:16 Speaker 02 Awesome. You know, when you have your blends and your varietals and you've got your roaster and you think your packaging and the shelf life and your consumers, your story, I think, is so critical to
30:28 Speaker 04 Yes.
30:29 Speaker 02 your success, you know, and what's the purpose or the why behind what you're doing? So if you're looking at, you know, a roastery and being a wholesaler versus retailer, I think that's dynamically different. Do you have one way or the other that you're looking at more so?
30:45 Speaker 04 Yeah, I think, you know, if we're looking, say, five years from now, if we have our one brick and mortar and then we have a big direct to consumer business, that's something that that gets me more excited. The dream is that, you know, we have a national footprint as far as where we're going, especially with our online sales.
31:06 Speaker 01 What? I mean, look, let's be honest here. We've had coffee brands on the show. There's a lot of coffee in it's like microbrewed beer. There's a lot of small breweries all over the United States, a lot of small coffee roasters across the US. Doesn't mean there aren't opportunities, there are huge opportunities. But the question is, how do you differentiate yourself? Right? Tell me, if you were going to Los Angeles or San Francisco where I live and you were like, you gotta try Pine Ridge Coffee. I would say, well, I'm in San Francisco. I've got four barrels and ritual. Why yours? What's your answer?
31:39 Speaker 04 Yeah, I mean, we've just found a way with our roasting process. It's small batch roasted. It allows us to really keep an eye on quality. It doesn't give you a bitter aftertaste, even like our darker roast. It finishes really smooth. And it's just about, you know, we really care about the quality of our coffee.
31:57 Speaker 01 Travis, your thoughts?
32:00 Speaker 02 You know, I would really dig deep. Like, how can you paint a picture for somebody that really looks at and says, oh, here we go. Here's something really exclusive, unique, fun, cool. I want to give it a try.
32:13 Speaker 01 I totally, I totally agree with that, Travis. I mean, I'm looking at your website and you gotta convey that. I mean, I don't think you need to spend tons of money and you know, bells and whistles on your site. But you have to make it clear about, about all the things you just said. Let me make an analogy with wine. You can get the best grapes, the best harvest that season and give it to a really mediocre winemaker and you'll get mediocre wine. You can get really mediocre grapes and give it to the best winemaker and get great wine. And what you're telling me is you're a great winemaker. You know how to roast coffee beans. You believe you're in the top 10, 5, 1%. So that's a story you need to tell because that is, that's interesting.
32:56 Speaker 01 That says to me, all right, this guy's like the roasting king. I gotta try his coffee.
33:01 Speaker 04 Yeah, so do you have any feedback on like how we could convey that better through our website or through our social media channels?
33:09 Speaker 01 Yeah, I mean Travis, I'm thinking about how when Dutch Bros began, people would come from Oregon and then Pacific Northwest and they'd go to other parts of the country and be like, "Oh, you gotta try this thing called Dutch Bros," right? You had these ambassadors, like that's the kind of momentum, right? That really can help explode a brand. And I feel like you've got an opportunity to do that at Penn State because it's a massive university, culturally significant. I would try and lean in there and see if you can build a critical mass that really helps you grow this brand.
33:43 Speaker 02 Yeah, I think that's well put, yeah. And the other thing that I would add to that is success leaves clues. There are so many things you can take away from a Chick-fil-A, a Costco, a Starbucks for that matter, a Dutch Bros. And you know, when you kind of look at all these different business models and you admire different ones, what do you admire about them? And can you cross-pollinate ideas that maybe they do really well and incorporate them into what you do? You know, that's some of the things that I think we've done over the years that has been so beneficial.
34:21 Speaker 01 Yeah. We did an episode on La Colombe Coffee many years ago, and Travis, you know La Colombe, right? It's an obviously competitor in some ways, but not really. But the guys who started that brand, it was a roastery in Philadelphia, and the way they got it, got attention was they started serving it at fine dining restaurants in Philadelphia, and then they went to New York City. And so you'd have customers go to these like, super fancy restaurants, and they'd say, "What's this coffee?" And they'd say, "It's called La Colombe." And that's really how they built it out. And so going back to what Travis, what you were talking about earlier with baby steps, to me, there's an opportunity to take some of those baby steps here. Because you believe you've got something special, but just seeing Pine Ridge Coffee isn't enough.
35:06 Speaker 01 And I think you gotta focus on really building out the brand through other retailers.
35:12 Speaker 04 Yeah, the more people that you can put your product in front of, the better. So yeah, I definitely really appreciate the advice there, trying to kind of really hone in in the State College area and see what we can do as far as gaining some momentum in that market.
35:27 Speaker 01 Yeah. Trent Yoder, Pine Ridge Coffee, good luck, man.
35:30 Speaker 02 Good luck, Trent.
35:31 Speaker 04 Thank you, I appreciate your time today, guys. Thank you very much.
35:34 Speaker 01 Thank you. It's so interesting with coffee, right? Because when you started in 92, it was still like espresso drinks were still like, that's when people still said "espresso," right?
35:44 Speaker 02 Yeah.
35:44 Speaker 01 Can I have an espresso?
35:46 Speaker 02 Oh, my gosh. I mean, there was a, it was a massive learning curve. We're educating people on what espresso coffees were.
35:53 Speaker 01 Yeah. And people will be like, "A latte, ooh, fancy."
35:56 Speaker 02 Yeah, people, we'd have people come up and they'd say, "Um, I'll take a, um, cappuccino." And they'd look at them like, "And do you want that real frothy and foamy?" And they'd look at me like, "Uh..." And I'm like, "How about I make you a vanilla mocha and you check it out and see if you like it? If you don't, I'll make you that cup."
36:15 Speaker 01 I love it.
36:16 Speaker 02 Yeah.
36:17 Speaker 01 All right, we're going to take another quick break, but we'll be right back with another caller. Stay with us. I'm Guy Raz and you're listening to the Advice Line right here on How I Built This Lab.
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37:44 Speaker 01 Welcome back to the Advice Line on How I Built This Lab. I'm Guy Raz and today I'm taking your calls with Dutch Bros Travis Borsma. Travis, let's get back into it and take another call.
37:54 Speaker 02 Sounds great.
37:55 Speaker 01 Hello, welcome to the Advice Line. You're on with Travis Borsma of Dutch Bros. Hello, please introduce yourself. Tell us your name, where you're calling from, and just a little bit about your business.
38:06 Speaker 07 Hi Guy, hey Travis. My name is Yasmin Santos. I am the sole founder of Alter Native Bar. It's a non-alcoholic elixir bar serving functional beverages that enhance mood and mind. We're currently operating as a cater bar, offering a white glove turnkey solution for events in Austin, San Francisco, and Miami.
38:24 Speaker 01 Awesome. Yasmin, thanks for calling in. So it's alter, like an altar, like at a church, alter, native, bar.
38:31 Speaker 07 That's right.
38:32 Speaker 01 All right. So let me just see if I understand this. It's like, it's a bar service, so you guys get, would be hired for like a corporate event, but you don't sell alcohol, you sell alternative, non-alcoholic beverages?
38:44 Speaker 07 That's right, yeah. We use botanicals and nootropics that do facilitate a state change as an alternative to alcohol.
38:51 Speaker 01 All right. So basically, these are mood, mind-enhancing beverages. This is not like, non-alcoholic beer. These are like, what is this, not ashwagandha?
39:04 Speaker 02 It's not LSD.
39:05 Speaker 01 It's not LSD.
39:06 Speaker 02 It's not magic mushrooms or THC.
39:10 Speaker 01 It's that thing that everybody goes to Mexico to do.
39:12 Speaker 02 Ayahuasca.
39:13 Speaker 01 Yeah. It's like, it's not that, but you're, basically it's legal stuff that has a kind of a buzz effect?
39:20 Speaker 07 Hundred percent legal, very, I like to say they're benevolent botanicals. They are potent, but they're not as powerful, I guess, as your typical substances like alcohol and cannabis.
39:36 Speaker 01 All right. And so tell me how, how this idea came about to, to start this business.
39:41 Speaker 07 So I was the caretaker for my mother. She had early onset dementia. And we got to a point where she was bedridden. And even though she wasn't verbal, we could tell there was a, you know, a lot of pain and discomfort. So I started exploring non-pharmaceutical solutions for that and came across a few. And then I was like, wait a second. Um, I don't drink. I have some pains. I, and especially like socially, I still have social anxiety and inhibition like anybody else. What if there are plants that could resolve this for me? And I came across, uh, Kava and a few other plants and started experimenting, doing some kitchen witching. And came across more and more plants that, that really serve our bodies.
40:26 Speaker 01 So basically, right, because a lot of people use a little bit of alcohol at a party as a, as a social lubricant to kind of loosen them up. And you're saying you, you have this challenge, which I get because I do too. I hate going to parties. But you don't drink alcohol, but this using these herbs kind of helped you a little bit.
40:47 Speaker 07 Totally. I'm, I'm using them right now.
40:50 Speaker 01 Wow.
40:51 Speaker 02 Well, and Kava is, and I've actually had some experience with Kava in Fiji where we sat down and they do the whole ritual. And it's like over the course of hours and, and it's amazing. I mean, and you have this feeling of like, I, it's almost like a euphoric kind of out, outer body experience and it's very light, but it's incredible and it's energetic.
41:11 Speaker 01 And all right. So you're based in Austin and you're doing, right now you're offering like events, like a catered event, but like a corporate event or a wedding where there's this alternative bar. And who are the kinds of clients? Who, who, who are the people who are, who are hiring you?
41:27 Speaker 07 The first event we booked was for a, it's called Young Women's Alliance. They are an organization of professional women here in Austin. I would say more mindful, health-conscious people. And, and also, you know, corporate wellness programs that want to be inclusive of sober, sober curious.
41:47 Speaker 01 Yeah.
41:47 Speaker 07 Everybody, yeah.
41:49 Speaker 01 Got it. Okay. And before I forget, what's your question for us?
41:53 Speaker 07 I would love any advice you have for someone like me who's looking to scale this business into the mainstream. And what are some companies that I can use as a model?
42:04 Speaker 01 Cool. Travis Porzema, I'm gonna start with you. The man from Dutch Bros brought it from a coffee cart to 970 locations.
42:12 Speaker 02 Well, I guess the first question I've got is, do you want to take it to the masses? Or do you want to stay in a niche market?
42:19 Speaker 07 I want to go to the mainstream.
42:21 Speaker 02 Hmm, okay. So does that mean like products on shelves and grocery and things like that?
42:28 Speaker 07 I would love to see that, as well as either the Caterbar concept or brick and mortar in cities across the US. I want to bring the plants to the people. We've expanded into CPG. We just did our first run of an adaptogenic blend.
42:43 Speaker 01 What is it? Like, like a tincture, like a?
42:45 Speaker 07 Yes, you got it. It's a tincture. We've got a blend of rhodiola and scisandra and it supports energy, endurance, and ease.
42:54 Speaker 01 Where are you selling it?
42:55 Speaker 07 Uh, we'll do e-commerce, of course. Going to do Shopify. And then I'd love to get some on shelves in Austin and San Francisco and grow from there.
43:05 Speaker 02 I think, you know, another business, maybe, is it along the same lines as maybe taking kombucha to the masses? Where, you know, you could use that as a model, maybe, of some of the product that you have. But that's, it sounds similar to me as far as like exposing a product that has health properties to it that are good for you, that you really want to educate people on. And that's one of the ways. With Dutch Bros, you know, espresso coffee in 92, people didn't know what espresso was. A lot of people didn't know. And so we had to educate people on it a lot, but it got its own momentum. And certainly Starbucks helped everybody with that. But I think, you know, if you're looking for a model out there, my inclination would go to a kombucha company, maybe.
43:51 Speaker 01 Yeah. The other thing that comes to mind, Travis, is Guayaki.
43:56 Speaker 02 Guayaki, yerba mate.
43:57 Speaker 01 Guayaki, yerba mate, which was on our show a couple of years ago. And that was a long journey. It's like 20 years before they started making money because, and by the way, that brand, right? They started out selling loose tea, yerba mate to people and, and they would go to concerts and festivals and they started this in the 90s. And people would try it and it was bitter and they didn't like it and they didn't understand it. And it was a slow, methodical process. They spent 20 years driving around in a bus from festival to festival. The game changer for them at the end of the day was making bottled tea, right? And then now they make cans and eventually adding sugar and other flavors.
44:41 Speaker 01 But to me, a tincture is interesting. The bar business is interesting, but that's hard to scale. The bar business could be an opportunity to introduce a product or the product to an influential crowd. You're in Austin, obviously South by Southwest happens there every year, one of the most important cultural events in the world. You know, I think there's a good chance that someone's going to hire you to run a bar at South by Southwest. What about ready to drink beverages? You know, what about cans or bottles of your drink?
45:17 Speaker 07 You know, I have considered that. I'm a longtime listener of your show and for whatever reason, I can't remember what episode it was, but I am very intimidated by the beverage space.
45:28 Speaker 01 That's fine. Travis, okay to be intimidated.
45:33 Speaker 02 Yeah, you know, I think, I mean, one of the things is to get comfortable with being uncomfortable.
45:39 Speaker 01 Yes.
45:40 Speaker 02 And, you know, I sat down with those guys from Guaki 25 years ago. They came to our coffee house and we passed a bombilla around with a gourd and the loose leaf. And I mean, it was, it was this, it was awesome, man. I mean, we, it was like, I felt like I was breaking the law, but it was totally cool. I think when you can provide those experiences and you can go spread your product and you see the joy that you have with it. I mean, you're so proud of it. And that's, that's so amazing because when you can share that with people, that creates momentum, focused intensity over time.
46:14 Speaker 02 Multiplied by faith, or God, or whatever you want to put in that, you know, your creator, then it creates momentum. And I think that, you know, if you keep on doing what you're doing and you just let it evolve and you let it, have fun with it, enjoy it, you know, try not to rush it, but just be methodical about it.
46:34 Speaker 01 I also, I love the idea, Yasmin, that you say that you're intimidated by this, which is, which means that probably it might be the right direction to go into and pursue. Right? Because, think about it for a moment. The beverage industry and the ready to drink is, it's very, it's a packed industry. Right? But so is liquor, so is coffee. There's always an opportunity. There's always a wormhole. There's always a niche you can find. And what you're talking about is tiny. I mean, very few people are doing these no tropics drinks. It's a little weird and different. It's like Liquid Death. Wait, what? This is water? It's not malt liquor? You know, people picked it up because it was so weird.
47:16 Speaker 01 Right? And it now, you know, it raised at a $1.4 billion valuation or something. So I think that it's worth thinking about a simple, ready to use, ready to drink, easy to translate and explain product. The tincture is cool, but it requires people to like, okay, you put this in water and how much? And it's a very small crowd of people who'd be willing to play around with that. A can that you open up, simple.
47:46 Speaker 02 And the other thing is, like, the way you told your story to us, I think that there's so much value in your storytelling. You know, what can it do for you? What are the health properties with it? Why is this so amazing? And who are the people that are consuming it? And can you, you know, ride the wave with their momentum? And on how they live this healthy, extraordinary lifestyle?
48:10 Speaker 07 You know, you've both alluded to my approach to this business. I surf and what I've noticed is that, so waves come in sets, right? It could be three, five, 12. And I've noticed that the first waves of the set usually aren't the best ones, at least in my experience. And so the approach that I take to surfing is I wait for my wave. Like, I might be a little bit further back in the lineup and may take a few waves to get warmed up and an easy paddle back. Like, and I'm waiting for that rogue wave that I'm perfectly positioned to take, that I don't have to compete for, and I have a clear line of sight. And maybe the RTG is that wave.
48:52 Speaker 01 Hmm, it might be. And I think as you start to, you know, think about this idea and maybe build out a plan, you'll have more clarity. Do you need to raise some money? Do you need to start asking people for money? You know, there are, there are plenty of people who started beverage drinks with very little money, you know, five or 10 grand and just do a test run. There's, you know, obviously a lot of co-packers out there who, who can, you know, who can work with. So I think that it's really worth at least putting some thought into building out the brand because with the bartending platform, especially if you're going to places like Miami and San Francisco, Austin, really sort of important places to showcase products,
49:36 Speaker 01 having something that people can pick up could be really cool.
49:40 Speaker 07 My heart agrees.
49:42 Speaker 01 Yeah.
49:43 Speaker 02 Well, I'll tell you what, you know, your energy with this is incredible. And I would just encourage you to keep going and, and asking yourself how you can perform better and what you could do to make it even more appealing and, and who are the people that you want to have involved in it? We use this little ultimate success formula. It's know your specific outcome. Take massive action toward it, ask yourself if the action you're taking is working and change until it does. And it's like, you can use that in everyday life with anything, but that's something that has served us in evolving and growing and getting to this place where we have this giant vault, secret menu, if you will, that creates all these
50:26 Speaker 02 custom concoctions that people really want. And I think when you identify what they want, you're able to deliver it to them in a way that is meaningful and has a story behind it that they can be proud of, you're going to see a ton of momentum happen.
50:41 Speaker 07 Amazing. Okay.
50:43 Speaker 01 Yasmin Santos, Alternative Bar. Congrats and good luck. Can't wait to see you build.
50:48 Speaker 07 Thank you so much to you both.
50:49 Speaker 01 All right. Thanks. Man, that Kava experience sounds like something, man.
50:56 Speaker 02 It was really cool. You know, in Fiji, I don't know of other parts of the world, but I mean, that's something that they do collectively together for hours on end. And over the course of time, then you can get to this place of kind of this euphoric, out-of-bodery kind of experience. And it's not hallucinogenic at all. It's just like, you know, this floating state change, very similar to guac key in a way.
51:18 Speaker 01 Yeah, it's cool. There's a lot of interest around these nootropics and, you know, brain-enhancing herbs. And the reality is, you know, alcohol consumption is in decline in the United States, for better or worse. I mean, I think that younger people aren't drinking as much wine or spirits. And so there may be an opportunity.
51:39 Speaker 02 Yeah, yeah.
51:41 Speaker 01 Travis, before I let you go, I want to ask you a question that I've been asking every return guest on the show. If you could go back, you know, and tell yourself and a younger version of you and Dane, you know, just give them some advice about what to expect or, you know, or some encouragement when you guys were starting out and it was tough going. What would you say to yourself?
52:07 Speaker 02 You know what? I think the first thing that I'd probably say is adapt or die.
52:12 Speaker 02 Because the world is changing around us. It's all sorts of different ways, shapes, sizes, forms. And, you know, with COVID, it's an example of something that you just can't anticipate that hits you. And if you don't adapt, you're dead.
52:31 Guy Raz? Amazing. I love it. That's Dutch Bros Coffee co-founder Travis Boersma. Travis, thanks so much, man.
52:38 Speaker 02 Thank you, Guy. Always cool, man.
52:40 Guy Raz? Awesome having you. By the way, if you guys haven't heard Travis's original, How I Built This episode, again, one of the best episodes, so good. Go back and check it out. You'll find a link to it in the podcast description. And here is one of my favorite moments from that interview.
52:57 Speaker 02 We opened our first day downtown Grants Pass next to the post office. And Dane was like, I don't know if I could do it, man. He's kind of hiding out in the back.
53:07 Guy Raz? What do you mean he couldn't do it? Why?
53:09 Speaker 02 He just, I think all of a sudden, it just kind of all like, oh, my God, this is real. We're doing it.
53:15 Guy Raz? Yeah.
53:16 Speaker 02 And I'm like, hang on, dude. I'm gonna go make you a little eight ounce mocha.
53:22 Guy Raz? Yeah.
53:22 Speaker 02 And I'm gonna put some tunes on.
53:24 Guy Raz? Yeah.
53:24 Speaker 02 And so I put on some Led Zeppelin, Going to California. And I got him a coffee. And I said, hey, man, it's on.
53:37 Guy Raz? Hey, thanks so much for listening to the show this week. And by the way, please make sure to check out my newsletter. You can sign up for it for free at guyraz.com or on Substack. And of course, if you're working on a business and you'd like to be on this show, send us a one minute message that tells us a little bit about your business and the questions or issues you are currently facing, because we would love to try and help you solve them. You can send us a voice memo at [email protected] or call us at 1-800-433-1298. You can leave a message there and make sure to tell us how to reach you. And by the way, we'll put all of this in the podcast description. This episode was produced by Sam Paulson with music composed by Rantin Arablui and Sam Paulson.
54:22 Guy Raz? It was edited by John Isabella and our audio engineer was Sina LaFredo. Our production team at How I Built This also includes Alex Chung, Carla Estevez, Chris Messina, Elaine Coats, J.C. Howard, Katherine Seifer, Carrie Thompson, and Neva Grant. I'm Guy Raz, and you've been listening to The Advice Line on How I Built This Lab.
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