Samuel Adams’ founder carried a briefcase full of beer to business meetings before launching his $3 billion empire

Fortune

Jim Koch is a sixth-generation brewmaster who quit a six-figure consulting job to launch a business.

Transcript

00:00When I started Samuel Adams, I used a family recipe.

00:04It came from my great-great-grandfather's brewery

00:07in St. Louis in the 1860s, 70s, and 80s.

00:12My dad had actually brewed that beer

00:15when he was a brewmaster in Minster, Ohio,

00:19and the brewery was declining.

00:21It was trying to compete with much, much bigger companies,

00:24so my dad made something that nobody else was making.

00:28The owner of the brewery told my dad,

00:31Charlie, this is not what people want today.

00:34This has got way too much flavor.

00:36What people want today is water with foam on the top of it,

00:40so dump this and go back and make me water with foam on it.

00:45I'm Jim Cook.

00:46I'm 75 years old.

00:48I'm the brewer and founder of Samuel Adams,

00:51and these are my secrets to success.

00:53I grew up in Southern Ohio,

00:55and my mother was an elementary school teacher,

00:58and my father was a brewmaster,

01:01so I'm actually the sixth-oldest son in a row to be a brewer.

01:07My first job was, when I was 12 years old,

01:09it was actually delivering newspapers.

01:11I went to Harvard.

01:13I was a government major.

01:15After college, I entered the JD-MBA program

01:19at Harvard, Harvard Business School,

01:21and Harvard Law School,

01:23and I did the first two years of that program,

01:26and I realized, I'm not sure I wanna do this.

01:29I'm not sure I wanna be a corporate lawyer

01:31or go to a big company, so I dropped out,

01:34and I spent three and a half years

01:37working at Outward Bound, running wilderness courses,

01:41and after three and a half years,

01:42I decided, all right, I'm ready to go back.

01:44Completed the course and went from there

01:47to Boston Consulting Group.

01:49After seven years at Boston Consulting Group,

01:52I realized that I probably didn't wanna do that

01:56for the rest of my life, and then I realized,

01:58well, the rest of my life starts tomorrow,

02:01so I went in and I gave my notice.

02:03I thought, what I really wanna do

02:05is what my family has always done, which is make beer,

02:09and so I told my dad I was gonna leave this pretty good job

02:13to start a small brewery.

02:15He looked at me and he said,

02:16Jim, you've done some stupid things in your life.

02:19This is about the stupidest.

02:22The whole idea of small-scale brewing

02:24and trying to make a living was unheard of.

02:27I explained to him, look, Dad,

02:29I'm not gonna compete with these big brewers.

02:31They will kill me.

02:32I get that.

02:33I'm gonna start something totally different.

02:36I'm gonna make really high-quality beer

02:39like nobody is making in this country,

02:40and he understood that.

02:42He understood what great beer was.

02:44After I had a recipe, I needed a name.

02:48I wanted a name that would be assertively American.

02:52I wanted to be very proud

02:55about brewing great beer here in the United States.

02:59Nobody knew who Sam Adams was until he became a beer,

03:03but historically, Samuel Adams

03:06was the original revolutionary.

03:09He antagonized the British.

03:12He was a propagandist.

03:13He stirred Boston up against the British troops.

03:16He was a revolutionary,

03:18and I wanted to create beer independence for America

03:22in the same way that Samuel Adams

03:25and the rest of the patriots and founding fathers

03:28created political independence.

03:30Honestly, starting Samuel Adams was easier than it seems.

03:36I didn't have much money.

03:37I raised $140,000 from friends and family.

03:42I didn't need a whole bunch of people

03:44and I had $100,000 of my own money.

03:47It wasn't bootstraps.

03:48We didn't have bootstraps.

03:50It might've been a shoestrings

03:53because when I started, there were only two people.

03:56We didn't have an office.

03:57We didn't have computers.

03:59My dad gave me some good advice when I started Sam Adams,

04:03and he told me, Jim, when you start a company,

04:06it's kind of lonely,

04:08and it's really much better if you have a partner,

04:13and it's very much better

04:15if that partner is different from you.

04:18I kind of looked around Boston Consulting Group,

04:20which had extraordinarily talented people in the 70s.

04:24People like Mitt Romney was there.

04:26Benjamin Yet-Yahoo was there, but they were all like me.

04:29They were all over-educated white guys

04:32who lived in the suburbs.

04:33Then I realized, wait a minute.

04:35I think I know the person

04:37that I want to go on this journey with.

04:41Her name was Rhonda, and Rhonda was my secretary.

04:46She was great at balancing people, management,

04:51accomplishing tasks, follow-up,

04:55all the things that I wasn't particularly good at,

04:58and Rhonda bartended at night,

05:00so bars were kind of her natural habitat,

05:03and that kind of gave us a full set of skills.

05:07My first hire was my best hire.

05:10It became very clear to me

05:11that there were only two things

05:13that we needed to do extraordinarily well.

05:16One was we need to make a great beer.

05:18That was proved when we got chosen

05:21as the best beer in America,

05:23an honor that we went on to win four years running.

05:27So that was very cool.

05:29This little company, two people,

05:31was making the best beer in America in Boston.

05:35We had to work our asses off to sell it.

05:38I just put cold beer in my briefcase

05:41with those blue cool packs.

05:44I could get seven beers, two blue cool packs,

05:47and a sleeve of cups, and I went from bar to bar

05:51and tried to get bartenders, bar managers, owners

05:57to taste my beer and to put it into their bar.

06:02I never thought Samuel Adams would be this successful.

06:06My original business plan was

06:08that we would eventually grow over five years

06:13all the way up to a million two in sales.

06:17We would be eight people,

06:20and after five years, we would plateau.

06:23And it's 40 years later,

06:25and we're not a million two in sales.

06:28We're over two billion, and we're not eight people.

06:31We're 2,800 people,

06:33and we're still continuing to innovate,

06:37bring out new products, and grow.

06:40So I believe my job as a business person

06:43first is to try to pay back, pay forward,

06:47share the wealth, however you wanna say it,

06:49because at the end of the day,

06:50if you're the only person who benefits from your success,

06:54you're not gonna have much of it.

06:56In 2007, we got our management team together,

07:00and we went to a community center in our neighborhood,

07:03and we painted the community center.

07:06And it was one of those feel-good things.

07:09And I remember walking back to my car

07:12and not feeling good about it.

07:14And I was wondering, why am I not feeling good?

07:19We just did this really nice thing,

07:22but I don't feel good about it.

07:23And I realized I don't feel good about it

07:25because I'm a business.

07:28I'm a business person.

07:30What I do is create value.

07:32And I just spent about $2,000 worth of management time,

07:38and we did about $500 worth of crappy painting.

07:42So I did not create value.

07:45So we came up with the Brewing the American Dream program

07:49out of my experiences starting Samuel Adams.

07:53Because when I started,

07:55there were two things that I didn't have access to

07:58that would have been really nice.

08:01First was loan money.

08:03I raised equity, but nobody would loan us any money.

08:06I went to four different banks,

08:08and finally one of them just said,

08:10Jim, nobody's gonna lend you money.

08:11We're a bank.

08:12We don't like taking risks.

08:14And your company is ridiculous.

08:18We're never gonna get our money back.

08:20And the second, which was much more important,

08:22was coaching and counseling and advice.

08:26When I started Sam Adams,

08:29I should have known about business, right?

08:30What I realized is, yes, I knew about strategy

08:34and things like that, but in a small business,

08:38you're the CEO, but it doesn't stand

08:42for chief executive officer

08:43because there's really nobody to go out there and execute.

08:46You're the chief everything officer.

08:48You have to do all these things

08:50that are really important to the success of the business

08:54that you've never done before.

08:56And when we started the Brewing the American Dream program,

08:59I realized I don't really know about microfinance.

09:03How do you manage that whole process?

09:05So we partnered with the Accion Opportunity Fund

09:11to help us do that.

09:13And since then, we've made $110 million in loans

09:18to 4,300 companies.

09:22We've provided coaching and counseling to many, many more,

09:27maybe 15,000, 20,000 companies.

09:30And those companies have saved

09:32or created almost 12,000 jobs in their communities.

09:38If I could have a beer with any CEO, living or dead,

09:43it has to be Steve Jobs.

09:45He created a revolution.

09:48A big one.

09:49I just made beer.

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