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Weekly Thoughts: BTSB – The Slab of Success: Mary Allen Lindemann of Coffee By Design

The Slab of Success: Mary Allen Lindemann of Coffee By Design

Below are some excerpts from our conversation with Mary Allen Lindemann, co-founder and community builder of Coffee By Design (“CBD” if you are a local), a Maine-based community coffee house and wholesale roastery that will roast over 550,000 pounds of coffee this year.  Approaching their 25th anniversary, CBD has been through three waves of coffeehouse competition and has learned how to start, grow, and sustain a successful organization along the way.

Mary Allen is steadfast in her company’s commitment to steady, sustainable, and responsible growth – to the point where she says “No” more than “Yes” and is comfortable no longer being the first in an effort to be the best.  She engages in a level of honest introspection only an entrepreneur of her tenure could accomplish and has sustained an enthusiasm for her business that is emblematic of a mission-driven founder.

You can listen to the full episode by clicking the audio image below, on our website, or on iTunes (more podcast players coming soon!).  Know someone who would be great on the Big Time Small Business podcast?  E-mail in at podcast@chenmarkcapital.com.

What it takes to win

There was a business reporter in the coffee house one day and he was interviewing other businesses – not us – but I happened to be working behind the counter [and] would make comments about our business and what it took to really open it and stay in business at that time.  I happened to mention that we slept on the shelving in the basement of our coffee house because of the number of hours we were working, and we only had one employee.  I was sharing this with the business reporter [and] the next day he called and said, “I think you are my story.”

The paper comes out and the headline is, “The Slab of Success.”  [It was] about sleeping on the shelving and that it was like living in a morgue, but it really reinforced what it takes to create a business, and what are you willing to sacrifice?  I don’t even like the word sacrifice.  To what lengths will you go to make sure your business launches, and many years later, stay in business?

You earn the right to take risk

[Our] Diamond Street [location] is a really good example of when [to] take risks.  When have you earned the right to take big risks?  At that point, we had already moved the roastery once from India Street to Washington Avenue and swore we would never do it again – [we would] never need to do it again.  Then we realized we were maxed out in the space.  Alan (CBD’s Co-founder) and I both had to really do a lot of soul searching [whether] we still had things we wanted to do with the business.  Did we still have areas we wanted to grow?  Were there things we still wanted to learn?

What we discovered is we would’ve been okay at Washington Avenue, [but] we wouldn’t have been able to grow the wholesale company.  Our wholesale business is the largest part of the business, and it would’ve been fine, but it would’ve been stagnant.

We were shown the building on Diamond Street which is a 44,000 square foot building.  Washington Avenue was 5,000 square feet.  We felt it was too big of a jump for us.  A few months later – the building had been under contract with someone else and the deal fell through – we revisited it and said, “At the rate that we are growing, and with the ideas we have, let’s go for it.”  I remember saying to Alan, “This is where, as entrepreneurs, go back to where [we] were in the early days when [we] had nothing to lose.” [Back then] you could take risks, and now you’re so afraid that the choices you make will impact so many people.  We needed to get back to that mindset of having nothing to lose – that we believe in the vision.

There are those moments as a business that you need to understand that you’re going to make mistakes.  You need to do your homework.  You need to make sure that you minimize those mistakes [so] they aren’t mistakes of an impact that would put [you] out of business.  Diamond Street was probably the first time when we were nervous that if we made a bad judgment call, it could have that potential.

Be best, not first

[Competition] can, in many cases, move faster than we can. Cold brew is a really good example of that. We’ve had cold brew for years and had the vision of doing growlers and canning and all of that.  I have to say, I’m very appreciative that we did not launch when we had planned.  That particular category in our industry was growing so quickly that people were really not doing the homework they needed to.  Fortunately, as we were exploring our options, I went to a coffee conference and decided to do the executive level courses and there was a whole segment on health issues in cold brew if it’s not bottled properly.

People were putting the product out saying “Good for 90 days.”  Well, they hadn’t done lab testing and didn’t realize [that] at day 10, mold was forming if it wasn’t packaged properly.  We were definitely dating our kegs differently after that.  It was 10 days [and] pull.  We stopped offering decaf.  Decaf is a slower mover, and we felt we really couldn’t maintain integrity of the product, and yet couldn’t afford the loss of having to dispose of a keg after a week.

I’m glad that we couldn’t move quickly, but there were others out in the market way faster than we were [in] building that niche.  It’s frustrating for Alan, me, and our staff.  We used to always be the lead on all these things in our industry.  Suddenly so-and-so has already gone ahead and done it, and [we have] to be okay about that.  We used to take pride in being the first.  Now, we realize we may not be the first, but when we do it, we’ll have done our homework, and we’ll launch it, and launch it well.

The power of “No”

It’s funny because as entrepreneurs, we want to say yes, [but] “No” is really a powerful word.  You can’t be all things to all people.  Several years ago, we had the opportunity to go into the Boston market.  It would’ve doubled us in a year, and we said no.  It was way too fast.  There’s no way we could have the infrastructure.  We’d just moved into Washington Avenue.  We would have maxed out within the year.

The first time we said no was really hard.  We really wanted to take a [wholesale] account on, and we knew that we did not have the structure in place to take it on.  It would’ve been a stretch, and we knew it would impact our current customers.  We thought, “We can’t risk losing current customers, and we don’t want to take on a new account that we can’t serve well.”

We had one account that we had to say no to three times.  Every time they approached us, the timing was bad.  When they finally came on board, the feedback we got was, “We always wanted to be with you because you weren’t afraid to say no [if] you knew you could not serve me well.  I knew when you finally took me on board, I would be served well.”

Sometimes a ‘no’ doesn’t mean no forever.  It means let’s figure this out, and let’s make sure when we do it that we maintain [the] integrity of the brand.  It took all these years to be in a position of saying, “This is what it would take to scale up, and now we’re ready. We’ve got everything in place, but let’s still be thoughtful in who we’re bringing in and how we serve them.”

Don’t forget to dream

I think the biggest mistake [you can make] as an entrepreneur is you feel you don’t have the right to dream anymore.  To me, that’s the death of a business.  We are all guilty [of it].  There are those moments when you just think everyone in the company is arguing with each other, [wondering] how that happened today.

You have to really sit yourself down and say, “Look how much there is ahead.”  If anyone had told me that I would be in Burundi in a parade that they’re doing in the honor of my business as a surprise, I just … You can’t dream this stuff [up].  So, I can only imagine what’s ahead.

Have a great week,

Your Chenmark Capital Team

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