This review first ran in the July 4 edition of The Hamilton Spectator.
Quench Your Own Thirst: Business Lessons Learned Over a Beer or Two
By Jim Koch
If you want to make a small fortune brewing beer, start with a large fortune.
That’s the advice Jim Koch got from a fellow brewer. Yet Koch bucked the trend with his Boston Beer Company.
With a second mortgage, loans from friends and relatives and a century-old family recipe, Koch launched his company in 1984.
“We started at invisible, grew to infinitesimal, got to miniscule, and moved to tiny,” says Koch in his book Quench Your Own Thirst. “In 2015, we can proudly say we finally made it to small.”
Boston Beer’s revenues hit nearly $1 billion last year, with more than 1,000 people on the payroll. Boston Beer is now the second largest craft brewer in the United States.
While his publicly traded company is now an industry leader, Koch continues to follow the same simple business idea that was at the core of his business 32 years ago. “Make great beer. Give it to people fresh. Find customers.”
The search for customers started with a list of 100 bars in Boston. Koch and his first hire – a 20-something administrative assistant from his former consulting firm – went from bar to bar selling cases of Sam Adams. Koch spent his days on sales calls and hosted “Meet the Brewer” nights in bars.
“We would add and subtract bars and restaurants from the list. A couple of places ended up going out of business before we could call on them. But eventually, we wound up getting Samuel Adams into every single surviving bar on that original list. Every single one.
“Did we have to do this? Why did it matter that we get to every one of them? Why not 90 per cent or 95 per cent? Why 100 per cent? There was something about making a commitment and following it through to the very end. I knew it would just feel right when we got there even if we had plenty of good, logical reasons to stop before we had Samuel Adams in all 100 establishments.”
Koch tells entrepreneurs to invest their time and money in sales rather than marketing when starting out. It took a decade before Boston Beer Company hired its first marketing person. “Marketing doesn’t sell products. Selling coupled with the delivery of real value sells products. You shouldn’t worry so much about the image or hype that exists around a product or service. You should focus on the product, and on selling it.”
A student at the Harvard Business School once made that mistake of telling Koch that sales is a low function task and that marketing is more important.
“The difference between marketing and sales is the difference between masturbation and sex,” Koch told the student. “One you can do all by yourself in a dark room and fool yourself into thinking you’re accomplishing something. The other requires real human skills and all the fury and muck and mire of real human-to-human contact.”
Koch also refused to “play company”. He didn’t spend money on anything that didn’t help him make and sell beer. “Many enterprises, both start-ups and established firms, distract themselves with all the trappings of being in business – like offices, support systems and other clutter. If something didn’t help me do what was best for the beer, it wasn’t a priority. End of story.”
Koch covers the successes, setbacks and sacrifices made in building the Boston Beer Company. He says being an entrepreneur has brought freedom, personal growth, connectedness with others and the opportunity to do something that matters.
“Done right, business is a noble pursuit well worth our energy and passion. In business, you have to create value for other people before you can capture any value for yourself. You quickly learn that the more others share in your success, the more success you’ll have. I’ve had the chance to give the world something simple that matters to me: a better glass of beer.”
So if you’re looking to be your own boss and start your own company, pick up Koch’s book, pour yourself a glass of Sam Adams and get a master class in how to quench your own thirst.
Jay Robb serves as director of communications for Mohawk College and has reviewed business books for the Hamilton Spectator since 1999.