Getting There: A Book of Mentors (2015)
BREWER AND FOUNDER OF THE BOSTON BEER COMPANY
Even though every eldest son in my family since the 1840s has been a brewmaster, no one could have predicted that I was destined to become one as well. Not with the way the industry had evolved, not with the little guys getting squeezed out by the big mass-produced brands. In the last six months of my father’s brewing career, he made a total of $500.
He had four kids and was hardly getting by. Wanting more for me, my father did everything he could to discourage me from honoring my legacy and following in his footsteps. He urged me to get good grades so I could open new doors. I fulfilled his dream by not only getting into Harvard’s undergraduate program but also, later, an elite program there that allowed me to complete both law and business school simultaneously.
I mostly enjoyed college, but I found grad school ungratifying. It was during my second year, when the pressure was on to find a summer job, that I had an epiphany. None of the conventional career paths excited me. I thought, I’m twenty-four years old and have never done anything but go to school. I now have to make incredibly important choices, but I don’t have a basis of experience to make them. I felt as if I were on an airplane headed somewhere I didn’t like and had to parachute. So I headed to Colorado where I found my calling as an Outward Bound instructor. It was a great fit. Already heavily into mountaineering, I spent three and a half years living and climbing everywhere from crags outside Seattle to volcanoes in Mexico.
Eventually, there came a day when I was ready to return and complete my law and business programs at Harvard. Upon graduation, I landed a high-paying job at the Boston Consulting Group. But while that seemed like success to most people, I eventually found myself asking, “Is this really what I want to be doing when I’m fifty?”
After about five years at BCG, I had my second epiphany. The idea came to me one weekend while I was helping my dad clean out his attic. We found an old trunk containing some beer recipes scrawled on scraps of yellowing paper. Looking at them with nostalgia, he told me, “Today’s beer is basically water that can hold a head.” I agreed. If you didn’t want to drink the mass-produced American stuff, the only other choices at the time were imports that were often either stale or skunky. I remember thinking, Americans pay good money for inferior beer. Why can’t I make a good beer for Americans right here in America?
Everybody, especially my father, thought it was a dumb idea. At the time, there were no “microbrewery” success stories out there and nobody was making a living from it. In other words, it was in no way, shape, or form a promising industry.
I had learned some great life lessons from mountaineering that helped me move forward. One of them relates to how climbers differentiate between objective and subjective risks. An objective risk is something that can kill you. A subjective risk is something that just frightens you. The two are often extremely different, but, unfortunately, things that frighten you are often not the real dangers, and the real dangers are often things that don’t frighten you. As a result, our instincts don’t always work effectively.
For example, my Outward Bound students were always scared of the rappelling portion of the trip. And I understand why—they had to stand at the edge of a 150-foot cliff and walk off it backward with only this little rope in their hands. I constantly had to talk them into it. But while that seems like a very risky thing to do, it’s not. Those ropes will hold a car. Nobody ever gets killed doing that. On the other hand, walking up a not-so-steep glacier with nice, bright sun on a beautiful May morning, that’s dangerous. Because it’s May, the snow is melting. Underneath are all these layers put down during the winter. On some of them it snowed and then there was a little rain and then it iced and then, perhaps, some soft snow fell on top of that. That’s a very unstable combination. It avalanches. Avalanches don’t often happen on the steep, scary-looking slopes. The snow doesn’t accumulate enough on those steep inclines. It’s the gentler slopes that can kill you.
While I was still pondering my beer idea, I had a conversation with one of my mentors—a senior guy at General Electric. I mentioned the risk involved and he said something very insightful: “Jim, I would sooner hire you for a senior position at General Electric with two years of failed entrepreneurship on your résumé than with two more years at BCG.” He didn’t think that trying something entrepreneurial was an objective risk because I’d always be able to rejoin the work force if it didn’t work out. It seemed like a risky thing to do because it looked very likely to fail, but the real risk was not doing it. The objective risk was wasting years of my life stuck in something that appeared attractive but that I really didn’t enjoy. A lot of entrepreneurship and innovation seems perilous, but it’s not. And a lot of things that seem safe and comfortable are, in fact, profoundly risky. That’s subjective versus objective risk.
So I took the leap and set out to raise money for a brewery. Although I tried my hardest, I couldn’t get bank loans or venture money, but what was most interesting to me was that none of the most senior people at BCG wanted to invest. None of the allegedly “smartest business minds out there” thought my idea had an upside. They were probably right, at least at the time. But I got friends, relatives, and a client or two to put their money with me.
I learned another obvious lesson from mountaineering: You never climb a mountain to get to the middle; you climb it to get to the top. So I set our company’s goal as becoming the largest and most respected high-end beer in the United States. That was the summit for us. At the time, the company was made up of two people (me and my former BCG assistant, Rhonda), so it was an insane goal. But I couldn’t see any other reason to climb the mountain.
It wasn’t exactly smooth sailing. I figured that once the beer was made I could hire somebody else to sell it for me (by law, beer has to go from a brewer to a wholesaler to a retailer to a consumer), but I couldn’t even get a wholesaler to represent me! There were five in Boston at the time and they all turned me down. “Your beer is too expensive, nobody knows you, and people won’t drink expensive American beer, no matter how good it is. They want imported beer.” That’s what I heard across the board. I solved the problem by getting my own wholesaler’s license, leasing a truck, and cold-calling the bars myself. It’s funny looking back on it now. Not knowing any better, I lined my fancy leather briefcase with ice packs, filled it with beer, and hit the bars in my best suit.
People tend to think way too linearly about career paths, but career wanderings often have great outcomes too. There’s a whole lot less urgency than you think. It’s okay to drop out, breathe, and try other stuff. I could not have designed a better life’s work. I get up every morning excited. I am completely fulfilled and have not gotten the least bit bored or tired, which is unusual. But the path didn’t appear to me until I was thirty-four, and my wanderings are what prepared me for it.
I have an old message from a guy framed and hung on my office wall. It says: “I’ll call back on Monday.” It was a Friday when he called and left that message with my secretary. On Sunday night, the guy died of a heart attack. He was only thirty-four. Monday never came. Monday doesn’t always come. Whether “Monday” is ten years from now or tomorrow, you may not have the chance to do the things you say you will sometime down the road. Think about the things you want to do with your life and try to get them done. Particularly when you are young. There are a lot of things that if you don’t do them in your twenties you’ll never do. Make sure you get the important experiences out of the way early, because once you start a career, get married, and have a family, you probably won’t have a large chunk of time off for the next thirty years.
A lot of businesses become successful because they have a superior product and a founder who is passionate about it. But frequently, as the company grows and the founder’s job expands, the quality of the product is forgotten. Never take your eyes off of your product! If anything, as your company makes more money, use those resources to improve your product. I still personally taste and approve every single batch of beer that we send out. And a glass of Sam Adams Boston Lager today is noticeably better than it was when we started because I can now afford to invest in things like better ingredients and more sophisticated equipment.
The Boston Beer Company has a simple hiring standard—never hire someone unless they will raise the average. Before we employ anyone, we ask, “Is this person better than the average of the current people we have working in this position?” If the answer is no, we don’t make the hire. When you bring someone on board who is below your company’s average, you degrade the quality of your company. If you always hire people who raise your average, your company gets increasingly better. We sometimes spend an insanely long time searching for someone to fill a spot. I think our record is eighteen months (for a sales position in Arizona), but it’s now fifteen years later and the woman we hired is still with us. The payoff was definitely worth it.