Philipp Stauffer of the Wharton Club of Northern California hosted an incredibly intimate evening with Jacob Jaber, the CEO of Philz Coffee, at the new Philz Palo Alto location (picture above is of Jacob at that store).
Jacob talked about his and his father's success expanding Philz from a single grocery store in the Mission district of San Francisco into the 10 store Philz Coffee experience most San Franciscans know and love today. Jacob said his goal is to have 14 stores by year's end, 40 stores within a few years, and to be "all over the world" after that, all while maintaining the One Cup at a Time culture that distinguishes Philz from other coffee shops like Starbucks & Peets.
And here's the thing -- it seems possible that he could pull it off.
The thing that kept going through my mind as he gave his talk to the Wharton Club was that back in the 1970's, Starbucks was also just a single coffee shop, and that the values that Jacob holds dear -- providing an incredible customer experience and brewing the best cup of coffee -- must have once been important to the founders of Starbucks too. And yet as any company expands, it almost always loses the character traits that make it special when it's small and intimate. Starbucks has traits that make it great today, but "intimate" isn't one of them.
I've already seen danger signs of this happening with Philz, and Jacob mentioned them in his talk below. For example, Philz coffee is offered on Virgin America flights, but it "doesn't taste as good" according to Jacob -- and he's right. The Virgin coffee experience doesn't come close to the experience at a Philz location. To mitigate, Jacob only put the Philz logo on the Virgin seat-back ordering screen. Jacob's point was that although it may not be the same experience as having a cup of coffee in a Philz store, it's still "way better" than any other coffee you can get on an airplane. Brand dilution or clever brand extension? I'm not sure, but what I do know is that he didn't push the branding as far as he could have because he recognized the danger of the former happening.
The careful and deliberate thought that Jacob has put into expanding the Philz brand intrigued me. His perspective is that Philz isn't in the coffee business, but rather it's in the people business. He sees his job as making sure the retail reps behind the counter -- the ones interacting with customers -- are having a great day, so they can impart their happiness on customers. And he really seems to believe it -- a big sign in the Palo Alto store states that the Philz mission is to "Better People's Day". He spends a lot of his time figuring out how to inculcate the Philz culture in the company as it grows. He's not afraid to ask a lot of questions. His focus on maintaining a tight company culture as Philz expands past 200 employees made me think of the company manifesto we created at Socialize -- 30 points that guide our company as it grows. We both believe in the value of strong company cultures.
Jacob says the most important management technique he's learned consists of two words: "You Decide." He uses these words to empower employees to make decisions and relieve him from having to micro manage the company as it grows. And what's funny is that after the event was over, as I sat on a couch at Philz writing this blog post up (with everyone else long gone), I overheard Jacob interacting with an employee. There were trays of untouched sandwiches left over from the event, and an employee asked Jacob what to do with it. And no joke, I heard him tell the employe "you decide," and that he'd like to get what was left to a homeless shelter if nobody else wanted it that evening. Not 10 minutes later a customer sat down near me and completely unprompted, I heard that employee offer the customer a free sandwich from the tray of food, and the customer was incredibly grateful. Imagine it from the customer's perspective -- you come in for a cup of coffee, and suddenly you're offered a free sandwich. And it stemmed from Jacob's "you decide" mantra.
It's all About the Product
Another thing that really stood out was how having an amazing product has driven much of the success of Philz and makes Jacob's job way easier. This may sound obvious, but there's something really special about a cup of Philz coffee. If you live in San Francisco or you've ever had one, you'll know what I'm talking about. It really is amazing coffee, and the way it's made -- by servers who really care -- completes the experience (brewed at "somewhere between" 190 to 200 degrees, Jacob says -- and his favorite blend is Tesora). Here are some examples of how actually brewing an amazing cup of coffee has impacted Jacob's job as a CEO:
Watch the video and leave a comment -- tell me if you think Jacob can pull off an expansion of Philz while maintaining the philosophy and culture that makes Philz unique. I'm not sure what makes Philz special will translate to a global brand, but I'm also not ready to count Jacob out after meeting him, and I'd love to know what you think.
Video of Jacob Jarvis spilling the beans on Philz's success:
More killer panos of the Wharton alums at the event:
PS -- for a blog on brewing the perfect cup of coffee at home, read my post on Burr Grinder coffee adventures.
Two years ago visiting my son in San Francisco he introduced me to his new find- Philz. I had a cup of my son's recommendation for me- Ether. It was the best coffee I had ever tasted bar none. I visited Philz two more times in the two days I was there and brought pounds home with me. Since then I have done mail-order periodically when I feel I deserve a treat. Last weekend I visited SF again and Philz of course. I love the experience - great store, great staff. I brought some home with me. I noticed when I had my cup of Jacobs at the store it wasn't as good as I remembered. I thought it was perhaps just a weak brew and decided what I made at home would be better. Not the case. The coffee is good but it's doesn't have the richness it used to - also before when I had a pound on my counter I could smell it as soon as I walked in the door but not this. My coffee brewing is down to a science - I weigh my beans, do a programmed grind - I boil my water to 200 degrees, use my special organic cream. All those constants have stayed the same as my last order. This batch I have to put about 2/3 more beans to make my cup enjoyable but it isn't that same exciting flavor. I'm worried that the company has changed it's bean vendor as it's expanding?
This weekend, Telsa held an exclusive Model X preview for reservation holders. As the CEO of a mobile startup, I have mad respect for Elon Musk, the founder of Tesla. Here's a guy who, after starting and selling PayPal, started not one, but two companies with prescient timing: Tesla and SpaceX. As gas heads towards $5/gallon (with the imminent threat of shooting up higher) and the US retires its Space Shuttle program, Elon's two startups are positioned perfectly. For more background on Tesla, take a look at the blog post I wrote after touring the Tesla Factory.
Critics are raving over the Model X. As someone who's passionate about cars & motorcycles and hopeful for the future of electric vehicles that perform as well or better than their fossil fuel burning brethern, I was originally a reservation holder for the Model S. When I saw the Model X, I immediately swapped my reservation out. Now I'm #486 on the list for a Model X. You can get a reservation of your own here -- it's a $5k refundable deposit. Your only risk, really, is that Tesla doesn't stay viable as a company, but as someone in the tech industry, I really believe in Elon, his vision, and his ability to execute. I'm willing to take that risk.
Yes, that's right. I was in the bathroom and this giant eight-legged monster decides to say hello. First instinct for me was that it was gonna get a broom to the face. I feel bad. I like animals. I just don't like when the crawly ones decide to sneak up on you late at night, when you're at your most vulnerable.
My blog today, I'm planning on sharing one of my favourite short stories that I've written. Hopefully it makes sense to you when you read it. I'd love to know what you think. I'm not a writer by trade, I just love doing it.
The Business Man (A Short Story):
The weight of the world is visible on the lines of his forehead. His life is a rush. Deadlines, schedules and peak-hour traffic. His shined leather shoes carry him quickly across town; his eyes focused on the watch on his wrist, rather than where he is going. He trips on the sidewalk and quickly tries to recover his speedy composure. The ruffles of paper and clicking of keys flood his head whilst in the office, with no time to think about the family he's left at home. Wife and daughter frequently wait for Daddy to come home for dinner, however he just has to finish his work for the night. Overtime; hours overtime...