Beer School E-Book

Steve Hindy

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 481

Veröffentlichungsjahr: 2011

Beschreibung

BEER SCHOOL

Beer School

Bottling Success at the Brooklyn Brewery

What do you get when you cross a journalist and a banker?

A brewery, of course.

“A great city should have great beer. New York finally has, thanks to Brooklyn. Steve Hindy and Tom Potter provided it. Beer School explains how they did it: their mistakes as well as their triumphs. Steve writes with a journalist’s skepticism—as though he has forgotten that he is reporting on himself. Tom is even less forgiving—he’s a banker, after all. The inside story reads at times like a cautionary tale, but it is an account of a great and welcome achievement.”

—Michael Jackson, The Beer Hunter

“An accessible and insightful case study with terrific insight for aspiring entrepreneurs. And if that’s not enough, it is all about beer!”

—Professor Murray Low, Executive Director, Lang Center for Entrepreneurship, Columbia Business School

“Great lessons on what every first-time entrepreneur will experience. Being down the block from the Brooklyn Brewery, I had firsthand witness to their positive impact on our community. I give Steve and Tom’s book an A++!”

—Norm Brodsky, Senior Contributing Editor, Inc. magazine

“Beer School is a useful and entertaining book. In essence, this is the story of starting a beer business from scratch in New York City. The product is one readers can relate to, and the market is as tough as they get. What a fun challenge! The book can help not only those entrepreneurs who are starting a business but also those trying to grow one once it is established. Steve and Tom write with enthusiasm and insight about building their business. It is clear that they learned a lot along the way. Readers can learn from these lessons too.”

—Michael Preston, Adjunct Professor, Lang Center for Entrepreneurship, Columbia Business School, and coauthor, The Road to Success: How to Manage Growth

“Although we (thankfully!) never had to deal with the Mob, being held up at gunpoint, or having our beer and equipment ripped off, we definitely identified with the challenges faced in those early days of cobbling a brewery together. The revealing story Steve and Tom tell about two partners entering a business out of passion, in an industry they knew little about, being seriously undercapitalized, with an overly naive business plan, and their ultimate success, is an inspiring tale.”

—Ken Grossman, founder, Sierra Nevada Brewing Co.

Leseprobe

Table of Contents

Title Page

Copyright Page

Dedication

Foreword

Preface

Acknowledgments

CHAPTER 1 - Steve Tells How Choosing a Partner Is Like a Second Marriage

THE LIFE OF A FOREIGN CORRESPONDENT

MY LIFE AS AN ENTREPRENEUR

THE ART OF HOMEBREW

RETURNING HOME

FRIENDS BEFORE PARTNERS

FINDING THE HISTORY

AN IDEA BECOMES A REALITY

LESSON ONE EVEN A DOG CAN SHAKE HANDS

CHAPTER 2 - Steve Discusses the Importance of Building a Solid Team

THE ENTREPRENEUR′S LOT

IN THE BEGINNING, EVERYONE PITCHES IN

LESSON TWO IS IT A BUSINESS OR A FAMILY BUSINESS?

CHAPTER 3 - Tom Talks About Creating the Business Plan: A Money-Raising Tool ...

WHAT KIND OF BUSINESS IS THIS PLAN FOR?

PROWLING THE CONFERENCE

VISITING THE COMPETITION

THE GREAT AMERICAN BUSINESS PLAN (CIRCA 1987)

PRIMER FOR PLAN WRITERS

IS IT TIME TO QUIT YOUR DAY JOB?

MONEY: WHERE, HOW, AND HOW MUCH

LESSON THREE THE BUSINESS PLAN WON’T BE GRADED ON A CURVE

CHAPTER 4 - Tom Asks, “What’s the True Mission of the Business?”

FACING A QUIET CRISIS

DISTRIBUTION: GREAT DETOUR OR GREAT OPPORTUNITY?

DISTRIBUTING FOR OURSELVES

DISTRIBUTING FOR OTHERS: STICKING OUR TOE IN THE WATER

1991, THE LONGEST YEAR OF MY LIFE

THE DILEMMA OF THE BIG SUPPLIER

AMBASSADORS OF BETTER BEER

LESSON FOUR BEING FLEXIBLE IF THE MISSION STATEMENT BECOMES ″MISSION IMPOSSIBLE″

CHAPTER 5 - Steve Discusses the Keys to Successfully Motivating Employees

IT STARTS WITH THE PRODUCT

SOME PEOPLE GET IT, AND SOME DON′T

ENTERING BEER SCHOOL

LESSON FIVE FEELING GOOD IS NO SUBSTITUTE FOR PRUDENT CONTROLS

CHAPTER 6 - Tom Tells the Story of Their Dot-Com Revolution: Fishing for ...

RAISING MONEY IS A FULL-TIME JOB

THERE′S EQUITY, AND THEN THERE′S VENTURE CAPITAL

FOUR SOURCES OF FINANCING FOR START-UPS

WHEN VENTURE FINANCING IS—OR IS NOT—APPROPRIATE FOR YOU

THE BREWERY BUBBLE OF 1995-1996

SELLING BROOKLYN BEER BEYOND NEW YORK

THE DANGEROUS LURE OF FINANCING

ENTER: TOTALBEER.COM!

LESSON SIX CHASING MONEY IS NOT A BUSINESS STRATEGY

CHAPTER 7 - Steve Talks about Building a Brewery in Brooklyn

LEARNING FROM THE PAST

THE DRIVE TO BUILD

LESSON SEVEN SOMETIMES YOU STAND ALONE

CHAPTER 8 - Steve Discusses Publicity: The Press Wants You!

THE AMERICAN DREAM

PEOPLE WANT WHAT THEY KNOW

GUERRILLA MARKETING

PUBLICITY AND GROWTH

A PLACE TO CALL OUR OWN

A COMMUNITY-MINDED BUSINESS

LESSON EIGHT A NEWS RELEASE CAN GO A LONG WAY

CHAPTER 9 - Steve Reveals How the Revolution Kills Its Leaders First

THE PIONEER (WITH THE ARROWS IN HIS BACK)

THE ONE-MAN BAND

HIGH ANXIETY AND A FORCED LESSON

PROMISES, PROMISES

SO WHAT DO I DO BESIDES MANAGE?

LESSON NINE HIRING AND FIRING

CHAPTER 10 - Tom Talks about Cashing Out and Reinventing The Business, Again

WE CASH OUT ... EVENTUALLY

TIES THAT BIND: OUR CONTRACT WITH S.K.I.

ALCOHOL FRANCHISE LAWS

FINDING THE RIGHT BUYER

ANTICIPATING THE SALE AND GETTING IN FRONT OF RUMORS

FACING REALITY, TOGETHER

CLOSING THE DEAL

LESSON TEN ONLY YOU WILL KNOW WHEN IT’S TIME TO SELL

CHAPTER 11 - Tom Wants to Know If You Have What It Takes

ARE YOU AN ENTREPRENEUR?

MISTER INSIDE AND MISTER OUTSIDE

HAVE YOU EVER ACHIEVED ANYTHING?

HAVE YOU EVER MANAGED ANYONE?

ARE YOU DRIVEN BY THE IDEA OR THE EMOTION?

DOWN A ROAD LESS TRAVELED

IS THIS THE IDEA? IS THIS THE TIME?

LESSON ELEVEN THERE ARE NO ENTRANCE EXAMS FOR ENTREPRENEURS

Timeline

Index

Copyright © 2005 by Steve Hindy and Tom Potter. All rights reserved

Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada

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Library of Congress Cataloging-in-Publication Data

Hindy, Steve, 1949-

Beer school : bottling success at the Brooklyn Brewery / by Steve Hindy and Tom Potter.

p. cm.

ISBN-13: 978-0-471-73512-0 (cloth) ISBN-10: 0-471-73512-4 (cloth)

1. Brooklyn Brewery—History. 2. Brewing industry—New York (State)—New York—History. 3. Beer industry—New York (State)—New York—History. 4. Brooklyn (New York, N.Y.)—History. I. Potter, Tom, 1955- II. Title.

HD9397.U54B744 2005

338.7’66342’0974723—dc22

2005012268

This book is dedicated to our wives, Gail and Ellen, and to our children, Bill, Sam, and Lily. Without your love and support there would have been no book to write and no business to write about.

Foreword

A warning: Three things are bound to happen as you read this book. First, periodically, you will become thirsty. Prepare your refrigerator. Second, you will want to visit the Brooklyn Brewery for a tour. Prepare your itinerary. And finally, if you have ever considered starting your own business, you will be inspired—and scared. Prepare yourself.

As someone who began a start-up company in 1981 with three men and a coffeepot, Steve Hindy’s and Tom Potter’s story rings true as an honest accounting of the sheer determination—and good luck—required to nurture a business from conception to maturity—and the inevitable mistakes that are made along the way. But their success story is about more than the birth of a brewery; it’s about the rebirth of a borough. In so many ways, the Brooklyn Brewery symbolizes—and helped to create—the renaissance that has taken hold in Brooklyn.

When Steve and Tom leased an old ironworks building in Williamsburg in 1994, the once thriving industrial district had long lost its vitality. For decades, manufacturing jobs had been moving out of Williamsburg and overseas, leaving behind abandoned warehouses and crumbling buildings. To many, Brooklyn seemed to be dying. But Tom and Steve believed in Brooklyn’s history—its rich tradition of brewing and its wealth of cultural icons and institutions: Walt Whitman, Jackie Robinson, and all the Dodger greats, Coney Island and the Cyclone, the Brooklyn Bridge—to name a few. They understood that Brooklyn is more than an address; it’s a spirit, an attitude, an identity. And they bet—correctly—that hometown pride would lead New Yorkers to embrace Brooklyn beer as their own.

In the more than 10 years since the brewery opened, Brooklyn beer has become a popular and successful brand, and Williamsburg has grown into one of New York City’s hottest residential neighborhoods. Steve and Tom helped make Williamsburg hip—sponsoring block parties and music festivals and opening the brewery to tours and Friday night happy hours. But as the area changed from a decaying industrial center to a vibrant residential neighborhood, its antiquated zoning regulations prevented the development of new housing and sealed off the waterfront from residents.

As the city began the process of rezoning the area, community input was solicited. Steve and Tom helped residents participate in the discussion by hosting a public meeting at the brewery attended by city officials. In May 2005, with strong support from the community, the city completed the largest waterfront rezoning in its history, which will result in new housing along a waterfront esplanade. In addition, the plan creates a special industrial park to ensure that manufacturing companies—like the Brooklyn Brewery—can continue to succeed and grow in the area.

More than opening their doors to community events, Steve and Tom have taken an active role in Brooklyn’s civic life, sponsoring fund-raisers for Prospect Park and exhibits at the Brooklyn Historical Society. New Yorkers, especially myself, are particularly grateful for their support of the Jackie Robinson and Pee Wee Reese monument commissioned for KeySpan Park, home of the Brooklyn Cyclones. Steve and Tom are helping to bring the monument to life by generously donating $1 from every case and $5 from every keg that they sell of Brooklyn Pennant Ale ’55.

Beer School is the story of the incredible challenges—most of them unanticipated—that entrepreneurs experience and the hard road that is traveled from planning to profit. But Steve and Tom have done more than build a profitable business; they have played an integral part in revitalizing Williamsburg and fostering Brooklyn’s renaissance. In doing so, their public-spirited brewery has become part of Brooklyn’s identity. I tip my hat, and lift my glass, to them both.

Michael R. Bloomberg New York City June 2005

Preface

STEVE AND TOM INTRODUCE THE BROOKLYN BREWERY

The Brooklyn Brewery is among the top 40 breweries in the United States, selling nearly 45,000 barrels of beer in 2004. With 17 years in business, the company has risen above many multinational giants to become the number six draft beer in New York City and a virtual institution in Brooklyn, a borough of more than 2 million inhabitants. How did we, Steve Hindy (a journalist) and Tom Potter (a banker), with no experience in the beer business, turn a hobby into a multi-million-dollar business and develop both a beer brand and a distribution company in the most competitive beer market in the United States?

It wasn’t easy. We started, textbook style, with a wellresearched business plan and $500,000 raised from family, friends, and an ever widening network of people who invested in the Brooklyn Brewery. We soon learned that starting a business was an all-consuming enterprise that tested us, our relationship as partners, and our relationships with our families and our community. As partners, we were essentially married. Our only child was the Brooklyn Brewery, and we faced many challenges in raising that child, the same way parents wrangle over how to raise their offspring. More often than not, we agreed on how to proceed, and we were thankful for such a strong partnership that could withstand the burdens and anxieties of building a company. When we didn’t agree, the very foundation of the company was threatened. Employees took sides. It got nasty.

We learned that when we could not find a conventional way to get something done, we had to make our own way of doing things. Sometimes we succeeded, and sometimes we failed miserably. We learned the value of maintaining a focus on the main purpose of the company.

We learned that we were attempting to become part of an industry that was dominated by large multinational corporations with tremendous resources at their disposal—companies that greatly value a presence in New York City because it is the center of the world’s financial institutions.

We learned that start-up companies have some important advantages over large companies. The media and many other businesses are always rooting for David over Goliath. Exploiting these advantages is essential to success.

We learned that our investors’ initial concerns about the Mafia in New York were not unwarranted, and that no company is too small to find itself a target of such threats. We learned that protecting your business and its employees sometimes means that you might have to look down the barrel of a gun. It is your business, and there is no one else to turn to.

We learned that entrepreneurs have to articulate a dream, inspire their followers to believe in that dream, and work tirelessly for its realization. But we also learned that entrepreneurs have to let go of control of the dream and allow their followers to take ownership.

We learned that the conventional wisdom of “getting in on the ground floor” of a successful business does not always mean that you are going to enjoy the fruits of that business. We learned that banks and venture capitalists are not always the preferred way for an entrepreneur to finance an enterprise.

We learned that selling a successful business is a perilous undertaking, even when there are competing buyers.

Along the way, we have had others turn to us for guidance, and we’ve been regularly questioned about how we built our business. As our seventeen year partnership comes to a successful end, we thought it was time to write a book and share the lessons we learned with others who dream of starting a business. We also graded our performance in key areas of our business. Our cumulative average was a B. That’s not bad when you consider that 80 percent of new business ventures get an F.

We hope you will find our story helpful as you set about bottling your own success.

Steve Hindy and Tom Potter Brooklyn, New York July 2005

Acknowledgments

It’s fun to write a first-person account about the founding of a successful business. “If you want a flattering history, you’ve got to write it yourself” is our motto. But we’ve tried to be honest about our failures as well as our successes, and share both the lows and the highs in our relationship as partners.

We also hope that we’ve adequately shared the credit for the Brooklyn Brewery’s success. It was never just the Tom and Steve show. The early support of dozens of visionary investors got us off the ground. Mentoring from Milton Glaser, Charlie Hamm, and Bernard Fultz helped keep us on track. Early support from family, friends, and colleagues and substantial, and timely, financial support from Jay Hall and David Ottaway allowed us to pursue our ambitions. And perhaps most important, the business has thrived on the imagination, hard work, and dedication of its employees and managers since 1987.

We’re fortunate to have had a chance to work with you all, and we’ll always be grateful for your amazing contributions.

CHAPTER 1

Steve Tells How Choosing a Partner Is Like a Second Marriage

My head was thumping and I was drenched in sweat when I was jolted awake on a fresh sunny morning in May 1984 by the blasts of two mortar shells in the parking lot outside my second-floor room at the Alexander Hotel in East Beirut. Lebanese hotel workers were inspecting the damage to the cars in the lot—shattered windows and punctured tires. None had caught fire. No one was hurt. The mortar shells were a Beirut wake-up call from the Palestinians and Lebanese leftists on the other side of the nearby Green Line that divided the city. Nothing like a mortar blast to make you forget you have a hangover. Mawfi mushkila— no problem—the uniformed deskman would tell me when I trudged downstairs for breakfast with David Ottaway of the Washington Post (who would later play a major role in the Brooklyn Brewery). Well, no problem, unless your car was hit. I walked outside and picked up a piece of shrapnel from the parking lot—a fitting souvenir of my five-year assignment in the Middle East for the Associated Press.

I keep that shrapnel fragment in my office at the Brooklyn Brewery as a reminder of my last day in Beirut.

THE LIFE OF A FOREIGN CORRESPONDENT

My wife, Ellen Foote, had declared a month earlier that she had had enough of being the wife of a foreign correspondent in the Middle East. She had spent two years with me in Beirut, giving birth to our son, Sam, in May of 1980, and three years in Cairo, where she delivered our daughter, Lily. Ellen had endured many dangers in Lebanon. There had been machine gun fire through the thick wooden door of our 140-year-old home in Beirut. Rockets had landed right beside the house, and often flew over the house and into the sea. Once, when I was away covering the Iranian revolution, guerrillas fired rocketpropelled grenades at the American embassy, just across the street from us. A month before the birth of Sam, I was abducted while traveling with a United Nations patrol in south Lebanon. Two Irish U.N. peacekeepers with me were tortured and killed in what turned out to be a vendetta. A third was tortured and released, and I carried him to safety. In my five years, I also covered the hostage crisis in Iran, the Iran-Iraq War, the Israeli invasion of Lebanon, and the massacres in the Beirut refugee camps. Ottaway and I were sitting in the grandstand behind Egyptian president Anwar Sadat when he was assassinated at a military parade in 1981. It was not a career for the faint of heart, and Ellen endured this life like a real trouper. But she firmly declared “no” when AP offered me my next posting in Manila, Philippines, where President Ferdinand Marcos was facing growing popular opposition.