If a novelist wanted to invent the perfect background for an entrepreneurial character, she could do no better than stints at Harvard Business School and Outward Bound. In business school, you learn to succeed by mastering the skills to do everything right. In Outward Bound, you learn to survive by improvising heroically when everything goes wrong.
At the beginning of Jim Koch's new book about his adventures building the Boston Beer Company, our hero bails on a Harvard MBA to spend three years leading grueling, off-the-grid excursions for the famous outdoor education program. It is experiences like rushing to save nine people whose kayaks have flipped over in the rapids that inform Quench Your Own Thirst: Business Lessons Learned Over a Beer or Two. The verities of entrepreneurship (create value, embrace failure, manage growth) are well known, and so business memoirs live or die on the strength of their stories. Like Boston Beer's flagship Samuel Adams Boston Lager in early taste tests, Koch's stories are hard to beat.
Koch often gets credited for pioneering the craft beer movement. In Quench, he quickly sets the record straight. Those laurels belong to Fritz Maytag, who resurrected the 19th-century brewer Anchor Steam in 1965 (and whose story Koch first read in 1983 in Inc. magazine). But Boston Beer was the preeminent popularizer of craft beer, which is produced in small batches and noted for its quality and complex flavor. In the 1980s, discerning drinkers divided beer into two categories: imports and crap. Samuel Adams made the compelling case for a superior American option.
With so many internet entrepreneurs publishing books, Koch reminds readers how much fun it was to start a business back in the '80s, when doing so seemed "eccentric, and a little peculiar." Here, the cool glow of technology is barely present. Quench is a sensory tale of flop sweat and hot mash.
Happy Germans, angry Catholics
You could say of Koch that suds were in his stars. A fifth-generation brewer, he started Boston Beer in 1984 with a family recipe for an "all-malt" brew from the 1860s. Recreating the drink required sourcing hard-to-find ingredients and mastering long-abandoned processes with names like "dry hopping" and "decoction mashing." The goal was a lager that would taste like the best American beer tasted before large manufacturers dumbed (and watered) it down.
Conditioned by Outward Bound to carry only what is necessary, Koch resisted the temptation to find an office and start setting up systems, a practice he dismisses as "playing company." Instead, he and his co-founder, Rhonda Kallman, hit the streets: educating, listening, and selling, selling, selling, selling. They started with a list--concocted by Kallman off the top of her head--of 100 Boston-area bars and restaurants they thought could move their product. Except for a few places that went out of business, they ultimately placed Samuel Adams in every single one.
(Koch is old-school on the importance of selling. It takes him longer to come to terms with marketing. At one point in the book, he likens the difference between the two to the difference between sex and masturbation. "One you can do all by yourself in a dark room and fool yourself into thinking you're accomplishing something," he writes. "The other requires real human skills and all the fury and muck and mire of real human-to-human contact.")
The Boston Beer saga is full of triumphs: among them, Samuel Adams's full-throated reception in Germany; a reputation-minting first-place finish at the Great American Beer Festival; and a successful IPO that invited individual customers to buy shares. But while entrepreneurs read business memoirs for inspiration and wisdom, they also--let's face it--enjoy a good horror story beside which their own problems pale. In this, Quench does not disappoint.
Some of Boston Beer's debacles played out in private. For example, four years into the business, Koch took his first outside money to build an $8 million brewery, which he was then forced to abandon--eating almost the whole $3 million cost of equipment--when bids came back at $15 million. Readers may recall other episodes, such as the company's association with a stunt pulled by a pair of radio shock jocks in which a couple copulated in New York City's St. Patrick's Cathedral. Offended Catholic bar owners and beer drinkers deserted the brand in droves.
At times, the reputation wars between Boston Beer and its competitors approached Game of Thrones proportions. Anheuser-Busch conducted a scorched-earth campaign against the business that resulted in Koch being interrogated about deceptive practices on Dateline. He says he feared that his bare-knuckled competitor might hire someone to beat him up.
The blow that most wounded Koch, though, was Kallman's departure. In an early chapter, Koch describes with glee his decision to recruit as co-founder his assistant at Boston Consulting Group, where he worked after Outward Bound. Kallman was a woman in her 20s without a college degree who "liked bars and liked people." Their unlikely partnership is a warm current that thrums throughout the book.
But in 1998, Koch named someone else CEO. Kallman quit, hurting morale and leaving Koch forlorn and berating himself. "Jim, you only had two people to manage and you screwed it up," Kallman told Koch when the two finally reconciled. (Last year, Kallman launched Boston Harbor Distillery, a maker of craft whiskey, including several products distilled from limited-edition Samuel Adams beers.)
For love of lager
The title Quench Your Own Thirst is, of course, a challenge to build a business you love. And Koch intends to show you how, weaving business lessons seamlessly into the narrative. For example, he gives much of the credit for the beer itself to Joe Owades, a renowned brewmaster who oversaw the art and alchemy that eventually produced Samuel Adams. Koch advises readers that for every startup there is one thing at which it must be brilliant. For that thing, says Koch, "it's vital that you get the very best person in the world to mentor you and help you achieve perfection." Owades, says Koch, was the company's Yoda.
Koch's ideas about growth may sound strange to those who lull themselves to sleep by counting unicorns. After 30 years, revenue at Boston Beer is just shy of $1 billion, and the company owns 1 percent of the U.S. beer market. "We started at invisible, grew to infinitesimal, got to miniscule, and moved to tiny," writes Koch. "In 2015, we can proudly say, 'We finally made it to small.'"
A fluid and colorful writer, Koch captures the entrepreneurial experience with anecdotes and metaphors that will leave those in the trenches nodding in recognition. Here's how he describes fast growth: "Imagine in the basement of your house there are these savage, insane, ravenous beasts, and they'll run upstairs and devour you unless you throw them 50 pounds of raw meat every day. Every day every month, every year, I had to somehow come up with those 50 pounds of meat, representing pieces of my life."
But Koch reserves poetry for the beer. Quench includes many passages about brewing, which non-aficionados may be tempted to skip, like the cetology chapters in Moby Dick. But then you would miss phrases like "the thick muffled sound of the liquid cascading into the glass," and this description of a lager's color: "amber, with overtones of golds and reds, almost like looking into a candle flame."
Like all great entrepreneurs, Jim Koch is a fighter and a lover. His passion for business and for brew is hard to resist.
You can read an excerpt of the book here.