How I Built This with Guy Raz - Advice Line with Travis Boersma of Dutch Bros
The episode provides insights into scaling businesses, featuring Travis Boersma of Dutch Bros Coffee. Travis shares his journey from starting with an espresso cart to expanding to over 900 locations. He emphasizes the importance of maintaining company culture and choosing a growth model that aligns with business values, opting for a corporate-owned model over franchising to preserve culture. The episode also includes advice for entrepreneurs like Sean Chang of Mocha Korean Fried Chicken, who is navigating delivery app challenges, and Yasmin Santos of Alter Native Bar, who is exploring non-alcoholic beverage markets. The discussions highlight the importance of adapting to market changes, leveraging unique selling propositions, and using creative marketing strategies to build brand awareness and customer loyalty.
Key Points:
- Focus on maintaining company culture when scaling; Dutch Bros chose a corporate-owned model to preserve culture.
- Adapt to market changes and choose a growth model that aligns with your business values.
- Leverage unique selling propositions to differentiate your brand, like Mocha Korean Fried Chicken's fusion cuisine.
- Use creative marketing strategies, such as word-of-mouth and social media, to build brand awareness.
- Consider product diversification and exploring new markets, as seen with Alter Native Bar's non-alcoholic beverages.
Details:
1. 🎧 Wondery Plus and Sponsorship Messages
- Wondery Plus offers early and ad-free listening for How I Built This, accessible via the Wondery app or Apple Podcasts.
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- A 20% discount is available for Vital Proteins products at www.vitalproteins.com using promo code BUILT.
2. 💼 Investing Insights and Business Solutions
2.1. Schwab Investing Themes
2.2. American Express Business Platinum Card
3. 📞 Welcome to The Advice Line
- The Advice Line aims to solve business challenges with insights from legendary founders.
- Listeners are invited to call 1-800-433-1298 with a one-minute message about their business issues.
- Participants may become guests on the show, receiving tailored advice from experienced entrepreneurs.
- Voice memos can also be sent to hibt at id.wondery.com with contact details included.
- A free newsletter with insights from top entrepreneurs is available at GuyRoz.com or on Substack.
4. ☕ Dutch Bros Journey: From Cart to Chain
- Dutch Bros has expanded to 975 locations across the United States, showcasing significant growth from its origins as a small coffee cart operation.
- The company's growth strategy emphasizes taking incremental steps, which has been a key factor in its expansion and success.
- Each new location is carefully chosen to maximize local market penetration, ensuring sustainable growth.
- Dutch Bros prioritizes community engagement and cultural fit in new markets, which enhances brand loyalty and customer retention.
- The expansion has been supported by a strong franchise model, allowing for rapid yet controlled growth into new regions.
- Dutch Bros' strategic focus on creating a unique customer experience has differentiated it from competitors, contributing to its widespread popularity.
5. 🚀 Transitioning Business Models at Dutch Bros
- Dutch Bros began as an espresso cart in a parking lot, highlighting the initial low-cost setup and entrepreneurial spirit.
- Transitioning to a brick-and-mortar store introduced complexities such as higher fixed costs and the need for a larger workforce, reflecting a significant operational scale shift.
- The adoption of a drive-thru model was a major innovation, setting Dutch Bros apart in the coffee industry and serving as a core differentiator.
- This drive-thru model evolved into the establishment of permanent brick-and-mortar locations, marking a strategic development in their business model.
- Dutch Bros' decision to move away from a franchise model likely aimed at maintaining greater control over operations, branding, and quality consistency.
- These transitions have contributed to Dutch Bros' growth, positioning them as a leading player in the coffee chain market.
6. 🔍 Scaling and Culture at Dutch Bros
- Dutch Bros operates on a corporate-owned model where shops are managed by employees promoted through the ranks, aligning with companies like Chick-fil-A and In-N-Out.
- In 2008, Dutch Bros decided to grow solely from within and stopped selling franchises, focusing on internal promotion to maintain and scale company culture.
- The decision to avoid franchising, a common model for rapid growth, emphasizes teaching and scaling company culture over business acumen alone.
- Despite the corporate-owned model requiring more capital and eventually leading to outside investment, Dutch Bros managed to grow rapidly.
- Dutch Bros resisted outside investment for about 25 years, highlighting a strategic choice rather than a necessity in their growth approach.
- The company's growth strategy prioritizes cultural alignment and employee development over traditional franchise models, indicating a unique path in the quick-service industry.
7. 🍗 Mocha Korean Fried Chicken: Overcoming Challenges
7.1. Introduction and Business Concept
7.2. Unique Cooking Methods and Business Origins
7.3. Challenges with Delivery Platforms
7.4. Current Financial Situation and Future Strategies
8. 📈 Marketing Strategies for Mocha Korean Fried Chicken
8.1. Corporate Partnerships and Product Expansion
8.2. Referral and Email Marketing Strategies
8.3. Social Media Marketing Challenges
9. ☕ Pine Ridge Coffee: Expanding Horizons
9.1. Overcoming Challenges
9.2. Business Model and Location
9.3. Origin Story and Entrepreneurial Drive
9.4. Market Expansion Challenges
9.5. Product Offerings and Brand Story
10. 🚚 Wholesale vs. Direct-to-Consumer for Pine Ridge
10.1. Long-term Business Vision
10.2. Unique Selling Proposition
10.3. Brand Expansion Strategy
10.4. Learning from Competitors
10.5. Market Focus
11. 🌿 Alter Native Bar: A New Beverage Experience
11.1. Introduction to Alter Native Bar
11.2. Product Offerings and Concept
11.3. Target Market and Clientele
11.4. Business Expansion and Strategy
12. 📊 Scaling Alter Native Bar to Mainstream
12.1. Education and Momentum
12.2. Long-Term Strategy and Product Evolution
12.3. Opportunities in Event Marketing
12.4. Embrace Discomfort and Innovation
12.5. Product Simplicity and Storytelling
12.6. Strategic Patience and Market Timing
12.7. Financial Planning and Brand Building
12.8. Continuous Improvement and Customer Connection
13. ✨ Closing Thoughts and Encouragement
- Alcohol consumption is in decline in the United States, presenting opportunities for alternative beverages like nootropics and brain-enhancing herbs.
- The advice 'adapt or die' emphasizes the importance of flexibility and resilience in business, especially in unpredictable situations like the COVID-19 pandemic.
- Travis Borsma, co-founder of Dutch Bros Coffee, highlighted the significance of staying adaptable in the face of unexpected challenges.
- Listeners are encouraged to engage with the podcast by sharing their business stories and challenges, with an opportunity to receive advice and support.