The F Word with Eric Marshall, Marshall Brewing Company

What started as a small home-brewing project in a spare bedroom is now one of Tulsa’s favorite beer companies. But with obstacles like antiquated alcohol laws, skepticism about craft breweries, and manufacturing mishaps (i.e. bottles exploding on shelves), Marshall Brewing was far from an overnight success. Listen as founder Eric Marshall talks about connecting with the right people to fight negative stigmas and blaze the trail for microbrewers in Oklahoma.

[TRANSCRIPTION]

Eric:    We had a little small issue there for a little while where we actually had some bottles blowing up on shelves.

Lauren:    This week on The F Word ... 

Eric:    There's a contingent of people that really don't get what we do and think that we're just out trying to get people drunk and put them on the streets. 

Lauren:    Eric Marshall, founder of Marshall Brewing.

Eric:    We knew full well in Oklahoma that if you make beer, you're kind of a bad guy, right?

Lauren:    Microbreweries are popping up around the US like crazy. In Tulsa, it seems like there's a new one opening almost every month and it's fantastic. But there was a time when the concept of a microbrewery was so foreign. And today's guest really blazed the trail for the industry. Eric Marshall is the founder of Marshall Brewing; Tulsa's first, full strength craft microbrewery. Of course, his beer is now found in tons of restaurants and liquor stores, but that required a lot of social and legislative work. After all, we're talking about alcohol in Oklahoma. Eric, thanks for coming in to share your story.

Eric:    Yeah, thanks for having me. I'm excited to be here. 

Lauren:    So, this whole thing started with a trip to Germany. Tell us how that experience sparked the beginning of Marshall Brewing.

Eric:    Yeah. I think you can kind of look at it in several different ways, but I started ... I've got an older brother who's about six or seven years older than me and he was kind of starting to introduce me to some more of the craft beers and stuff like that. At the same time, my first job in college, or my job all through college, was working at a local liquor store. So, I was kind of exposed to some of the better beers, I guess, if you would say. And then my junior year of college, I went and studied over in Germany and really had the opportunity, obviously, to drink good, fresh, local beer. But it was really the first time I ever got to tour a brewery and really just experience how a brewery can be a huge part of the culture, a huge part of the community. And that was just really fascinating to me. So, I went into TU as an electrical engineering major and found out real quick that I wasn't an electrical engineer. But I loved the German language and one of the ... The actual head of the international business in German program was in one of my German classes, so he was in a continuing ed, wanting to learn a little German, because he had been over there to teach a few classes at the university that TU had a sister city with. Or a sister exchange with. And he really kind of persuaded me to look at international business and German, and that was what gave me the opportunity to then go study over there. I didn't start college by thinking, "Oh, man, I'm going to start a brewery." But having the opportunity to go to Germany and really experience that cultural perspective, I really just fell in love with it. So, when I came back for my senior year, my brother was finishing up law school at OU and we had done a little bit of home brewing prior to ... He did a little more than I did, but I helped him here and there. At the same time, my dad converted my old bedroom at our house into a home pub.

Lauren:    That's awesome. 

Eric:    Yeah. So, we convinced him if he invested some money in a nice home brew system, that he could serve his own beer at his pub, which he thought was cool. 

Lauren:    Dad of the year.

Eric:    Right? So, that kind of got my interest really peaked and I got really into brewing and then just kind of saw a need and an opportunity here in Tulsa. Really the only other production brewery at that point was our friends, Choc in Krebs. So, we saw an opportunity and it was also an excuse for me to get to go back to Germany, which I was certainly looking for that, 'cause I had a great time. So, I did that. After I graduated, went back to Germany and studied and apprenticed over there, and then came back and worked for a brewery in Pennsylvania for a little over a year. Kind of getting experience in the American craft industry. At that point, just decided it was time to come home. Kind of some different pushing from certain areas in terms of, "Hey, the timing's right to do this" and moved back and started to get things going here. 

Lauren:    So that was in 2007, 2008, right?

Eric:    Yep. So, beginning of 2007 and yeah, so it took about a year and a half, roughly, to get things going and tons of challenges and obstacles and hopes as you can imagine. Like you kind of said in the intro there, making beer in Oklahoma was a little difficult at the time. So, yeah. It took a little longer, I think, than we had anticipated, but at the same time, it's probably par for the course.

Lauren:    And it was a complete culture change at the time. People weren't crazy about craft beer, especially in Oklahoma, like they are today. Can you talk about some of the challenges getting started, not only with the logistics, but also creating this culture change of convincing people, no, this is better than your PBR.

Eric:    Sure. Yeah, no. I think a lot of it started ... You had some places that were kind of early pioneers, I guess, in focusing on craft beer. Jeff Castleberry, who opened Caz's. Caz's has been going for a long time. I think it's the classic, sort of, Brady District dive bar, been around a long time. But he was one of the first to really have several taps and other than just your domestic stuff.  Then when Elliot Nelson opened McNellie's, I think that's when people kind of changed their minds or got their eyes opened to where they walked into a bar and there's 60 taps on the wall and there's a couple hundred bottles in the cooler. Things that kind of ... I always like to joke and say that things start on the coast and work their way to Oklahoma. Which, I can say that, because I was born and raised here. But it's very true in a lot of senses and so the craft industry was really mature in a lot of those markets and kind of working their way to Oklahoma. So, we embrace the opportunity to really have the ability or to be on the forefront of education in the craft beer and what a local brewery can do, and so on. But we also had to pay attention, too, to what the market would bear. We're coming into a state, again, where the majority of the people are drinking your macro lagers and stuff like that. So, in terms of flavor intensity and things like that, we really kind of had to be a little bit mindful. And a lot of that was sort of helped in the selection of our beers that we started off making. But, you know, there was also the challenge of the three-two versus six point beer, which I ... Six point is the common term, obviously, for strong beer; so in excess of three-two. So, we had to fight that misconception that we were only making three-two beer for the longest time and ... 

Lauren:    How did you fight that?

Eric:    Again, it's just sort of the education piece. Getting out into as many accounts as possible and try to talk to people, doing as many festivals, charity events, things of that nature. Really being out in the community, out in the market, telling people that, "Hey, this is traditional craft beer. It's not ..." Everybody liked to use the term "watered down," which I hate. I hate that term because as we've grown in the company and started to look at new opportunities over the last several years, you can really make some great three-two beer. But I think at that time, there was just that, "I don't want that three-two beer. I don't want that swill." So, it was kind of fighting that misconception. I think there was also people ... Home brewing culture has gotten more and more significant over the years and I think a lot of people had the misconception that it was like, "Hey, these are a bunch of guys with a bunch of five gallon buckets, fermenting in a big warehouse" or something. So, I think a big piece for us was to bring that sort of point of sale or point of purchase person, being the bartenders, the wait staff, the people who are pushing the product, the folks from the liquor stores; bring them into the brewery and give them the experience of what we had. Another challenge that rose there was technically, we couldn't offer samples or anything like that, so that kind of started a whole legislative initiative, that I'm sure we'll touch on a little bit later. So those were kind of some of the early challenges from the standpoint of getting people to understand what we do. And it wasn't just that level, it was also the wholesale tier. There were certainly some challenges there, but over that process, we've really developed some very significant relationships, which is going to be helpful as we move forward into the new system, as the laws change, because the distribution system is going down to more of a three tiered system. So we've got great relationships that we've developed over time that's really going to be beneficial moving forward.

Lauren:    Speaking of relationships, you mentioned Elliot Nelson earlier; the owner of McNellie's Group. And he's really served as a big mentor to you. He helped you get your product in front of a lot of people. Tell us more about that mentorship relationship. How'd it'd start? What'd it looked like? How has it shaped you, having that really experienced mentor in your life?

Eric:    Yeah. Elliot is a great friend and you'll never hear my say anything bad about that guy because he's just been awesome. I think the greatest thing about Elliot is he really, truly, deeply cares about Tulsa and wants positive things for Tulsa. He's obviously had a lot of success starting with McNellie's and then developing other concepts. And then we've had the good fortune to kind of work together on the Elgin Park project downtown. 

Lauren:    Which we love.

Eric:    Well, thank you, thank you. I actually met Elliot ... I think it was ... I think he opened McNellie's right around the time ... I think it might have be the day I took my last final of college and we were in the ... My parents and I went to McNellie's for dinner for the first time and he was kind of making the rounds, talking to folks and we just struck up a conversation and my dad always liked to kind of brag and be like, "Hey, this is what my son's getting ready to go do." Which, like any good day should, right? But it annoys you as a kid. It's like, "Dad, stop."

Lauren:    Yeah. There's that embarrassment. 

Eric:    Starting to learn some of that with my own kids. But that's just how it works, right?

Lauren:    It's a cycle. A vicious cycle. 

Eric:    But anyway, I kind of struck with Elliot, and he was real excited about the possibility of somebody wanting to start a brewery, but also going and taking the time to learn and do things properly. So, we had a great conversation at that point and then I went back to the fraternity house, grabbed a couple of my buddies who were all finished and said, "All right. Let's go grab some beers. Let's go down to this place; it's awesome." And we went back and Elliot came over and we really, again, struck up a conversation and talked a considerable amount more and we just really developed a solid friendship. So, that was very helpful, just having that initial point of contact. Who do I go to if I'm having some issues, from somebody that had done it before. Also, once it came time to, all right, now we're distributing product or we're getting to the point where we're ready to start selling beer, how do we get it from point A to point B? I knew some folks through my time spent working in a liquor store and was able to kind of develop a few relationships there, but he was really key in saying, "Hey this is who you need to talk to here, this is who you need to talk to there" and so on. But then also, from the level of the retail, he was like, "Yeah, I've got several places that will put your product on, but volume's the name of the game and you're going to have to get your product out there and get people interested in it." So, here's the 20 or 30 different bars in the state that are really focusing on variety and craft beer and so on and these are the people you need to talk to. 

Lauren:    That's amazing support. 

Eric:    Absolutely.

Lauren:    What would you tell someone who's like, "I want a mentor like that. I want someone to walk through my experience with me like that?" Is it just a matter of just initiating and ... 

Eric:    Yeah, I think there's a lot of that. I think that you'll find, especially in Tulsa, it's very small business friendly; there's a lot of entrepreneurs. A lot people that want to see good things for Tulsa similar to Elliot that ... Yeah, there's that initiation, there's asking questions. I think when you get into some of this, I think a lot of people sort of have maybe just a fear that somebody is going to laugh at you or say, "Ha ha, yeah, I'm not going to tell you my secrets or anything like that." But I think you'll find a lot of people very willing to share with you what they've done, issues they've had, things that they've done right and so on. I think there's two sides of it. You don't want to just go to somebody and say, "Hey, I really love what you're doing and I want to do it, too. Tell me how to do it." You really have to have your plan, you have to have an idea of what you want to do, but be open to what other people have to say and be open to criticism or thinking about things a little differently. Because I think when you start ... I think I was, what, 25, 26 when I was getting this going, so I was young and dumb and there's a lot of things that it was like ... Not to say that 25, 26 year olds are young and dumb, but I was.

Lauren:    No, we get it. We get it. 

Eric:    There's just this level of things maybe that weren't completely real in my head, that looking back now, is like, "Wow. That's a little crazy. I just signed my life away," type of thing. But I think that it kind of goes back to the old saying of ... One of my friends used this a lot, or a teacher or something that was, "Proper prior planning prevents pathetic performances." Kind of a tongue twister. It's just the idea of going out and gathering as much knowledge as possible because you're never going to do everything right. That's why I think it's important to gather as much information, kind of have some sort of plan as to what you want to do, do some of the basic research in terms of what kind of licensing I need and so on. Then go seek some of those people out to pick their brain, to ask them question to say, "Hey, this is what I figured out. This is what licensing I think that we need. Is there any other thing I'm not thinking of?" And then also just in terms of, "Hey, what are some challenges you've had that you'd be willing to share?" And so on. And I think you find that there's a lot of people very receptive to that. Too, I'm involved with a round table group; a CEO round table group through the chamber, which has been super valuable. Just kind of the idea that, hey, non-competing business, but we all have the same problems. We have similar issues and helping each other kind of navigate that stuff and it's been a huge thing for me, too, just to be able to go in and say, "Ugh. Man, I feel like such an idiot, I'm having this problem." To hear other people say, "Oh, yeah. That's very common. We've had that issue." Or, "Man, I'm going through the same thing right now. How can we figure some of this stuff out?" Is huge. 

Lauren:    Entrepreneurship can be so isolating, so that is huge ...

Eric:    Yeah, absolutely.

Lauren:    ... to have people who can just empathize at the most simple level. 

Eric:    Yeah, and I'm very fortunate, too, that I've got a family member that has ... My mom started her own business and so when I was in kindergarten or first grade, she started making hair bows and headbands out of a room in our house, expanded to the garage, then to a store, and now she's one of the largest children's clothing stores in the Midwest. So, I have someone in my own family that understood me and understood the challenges. So, I was able to kind of grow up around it and see some of these things. There was definitely a benefit there.

Lauren:    You were talking a little bit earlier about making mistakes and our show is called The F Word; we love talking about overcoming failure. Can you tell us about a moment when you messed up; made a really poor business decision and how you came back from that?

Eric:    I guess one of the biggest failures I guess would be sort of underestimating some of that stuff. Underestimating some of the challenges that were there.

Lauren:    Like what?

Eric:    I think in knowing ... We knew full well in Oklahoma that if you make beer, you're kind of a bad guy, right? I think that stigma is changing a little bit. But just in terms of how long things would take, some of the challenges you have dealing with certain agencies with navigating the city, state and federal stuff. We started at a time where there were about 1,500 craft brewers in the US and now there's about 6,500. So, we've had an immense growth in this industry since we started. So, from top to bottom, just navigating some of those issues. And fortunately I've got a brother who's a great lawyer and has been very key in all of that stuff and in fact, some of the initial licensing obstacles we had with the federal government ... Once we kind of got through some of that stuff, the federal government was actually calling him for advice ... 

Lauren:    No way.

Eric:    ... on how to handle stuff, which is kind of crazy. You know, navigating some of the things with the Health Department that were underestimated. And the health department's really been great to deal with, but early on they didn't really know how to treat breweries; they didn't understand kind of what we do in the grand scheme of things and we were being treated the same as any other food manufacturer, which from the consumer protection side of things, that's great. But there are some things; the acidity level of beer, there's things that can't live in beer that will harm people and so some of the things that were kind of regs were a little bit ... we felt were a little bit excessive and so we kind of had to do ... Kind of back to the education standpoint, we had to do a lot of educating. Part of that was I continued to fight for about six or seven years to loosen up one of the regulations in terms of washable ceilings above the production area. That's been able to help other breweries. So, obviously, with us sort of blazing the trail on that front ... I wanted to make sure it was easier for people to start and didn't have to start through some of those hoops that we had to jump through. I guess that's another failure, is underestimating how much political involvement I would have to have from the get go, or from starting up. 

Lauren:    Should have got your poli sci degree. 

Eric:    Yeah, right? Yeah, you wouldn't have met anybody that hated politics and all of that stuff, more so disinterested in all that stuff more than me at the time. So now, going into that realm and trying to understand how sausage really is made in terms of all of that stuff. So, one of the big challenges that we had early on was thinking that, "Hey, yeah, we're set up. We can offer people samples" and so on. Well, that wasn't the case. So, our ABLE agent, who ... ABLE's the legislative entity, and so he was very helpful in terms of ... Or encouraging, I guess, in terms of "This is kind of how we see things. This is how you need to move forward on stuff." So, I think there was a little bit of naivete in thinking that, "Oh, this is going to be really easy. We should be able to offer somebody samples." And "Yeah, I know we can't sell beer out of our place, but we should be able to educate people and give somebody a sample." Well, that started basically a three year process of trying to get the laws changed to where, again, I thought it was "Oh yeah, we'll just put something in, have our local rep run it. We'll be able to sample here in a couple months." Well, that didn't happen. 

Lauren:    Not so much.

Eric:    Three years later and a lot of kissing up and all that stuff. You can kind of learn that process and see that, oh man, there's a contingent of people that really don't get what we do and think that we're out just trying to get people drunk and put them on the streets, which is absolutely not the intent of, I would argue to say, any brewery, but any craft brewer out there. We're very much a quality or quantity type of industry. This is an art, a craft. And kind of the failure to realize that we need to focus on some of this stuff was pretty big on that front. So then kind of learning that process and moving forward was pretty key. Some of the other sort of failures and poor decisions ... As a small growing company, you're going to make mistakes, you're going to have hiccups, you're going to trip and we had a pretty significant one in terms of quality control, I guess. And that was quality control from top to bottom. We had one particular beer that the yeast drain always has a little bit of any issue and may do a little bit of secondary fermentation in the bottles, causing some foaminess. But we also had a problem with our glass supplier, and sort of having bottles that were out of spec and weak glass to where we had a little small issue there for a little while where we actually had some bottles blowing up on shelves. 

Lauren:    Oh my gosh.

Eric:    Which you want to talk about scary. People getting injured and so on. Fortunately, we didn't have anything like that. There was a lot of nervous, sleepless nights in terms of trying to deal with some of that stuff and figure out how to move forward. Fortunately, it was a pretty isolated incident and we were able to kind of educate some of our customers, meaning the retail, the points of sale, sort of as to what we do. But then early on, having to buy back product to get it out of the market hurts. That hurts the cash flow, hurts everything as you're trying to get going. 

Lauren:    You're making upwards of 20, 25 different beers a year now. How do you stay fresh? How do you keep yourself from getting in a rut?

Eric:    There was a statistic that said that we were at the rate of 1.8 breweries per day, opening in the United States. And so, there's been several that have opened here recently in Tulsa; several very close to us, which a lot of people are usually like, "Oh, well what do you think about all that competition?" Which, yeah, people are right next door, people are right in our area. But we definitely see it as an opportunity. As long as people are making good beer and bringing people to the area and gives us the opportunity to really work together in terms of continuing to build and create the culture, kind of like we talked about earlier, which was very difficult early on.  So, kind of taking that mentality and translating that to what you're saying in terms of staying fresh and staying ... And now we're at a different point, where we call it the shiny new object syndrome, where somebody comes and there's 10 new brands. "Oh, we've got to have what's new. We've got to have what's there. We've got to have what's exciting." So, there's definitely a level of not having to reinvent the wheel, but have some new, exciting stuff here and there. I think also, the ability to operate a taproom. People want to come to us and have that experience and maybe see what some of the other stuff that we get to make, some different things that we play with. It also gives us a positive testing ground to play with some new stuff and see what people have to say. But we also have to remember that our brand was built on certain products that have carried the torch. Yes, you have to evolve over time, but there's also products that keep the lights on that you've got to produce and do right. On the other front, it's ... There's so much stuff. It's a great time to be a beer drinker because again, being an art, there's so many people out there doing so much different, unique things, that sometimes you find yourself trying to keep up with everybody, which is I think not the way to do it. To an extent, you have to continue to do some of that stuff, but at the same time, we always like to say, we do kind of tend to focus on a lot more of traditional styles instead of some of the styles that are very up and coming; some of the sours and stuff. Which I love those beers; I'm not saying anything negative on that. And we may make some at some point, I don't know.

Lauren:    You're just keeping your focus.

Eric:    We keep our focus. The tradition ... I've always been in the mindset of those traditional styles have been around so long and there's a reason for that. They're good, people like to drink them, they're standards. But people do like to venture out and experience some different stuff. Now, also, on the other side ... Sorry, I get a little talky.

Lauren:    No, you're good.

Eric:    On the other side, too, we're starting to find ourselves nine, 10 years in the game having to look over everything, too, and refresh. We've had the same packaging for nine years. We've got to do a little refresh there, so we've been working on some of that. Things, as the business goes along and sort of the life cycle of products and packaging and so on, to kind of refresh, reinvigorate, sort of refocus on some things. We're kind of finding ourself in that position right now as well. 

Lauren:    Let's talk about the future. There are big liquor law changes coming soon to Oklahoma. Will we start seeing Marshall beers in Reasor's and Walmart and all that?

Eric:    We certainly hope so. That's kind of scary for us. We're going from potential of about 400 outlets, right now with liquor stores across the state, to upwards of 4 thousand, with convenience grocery, liquor and all that. 

Lauren:    Yeah. How are you going to meet that demand?

Eric:    Yeah. See, that's scary. We're built to where we've got capacity; we've got overhead now. And expansion in terms of capacity is relatively ... We're set up to where we can expand pretty easily. But it's just kind of looking into a crystal ball. How well is our product going to sell in the grocery and convenience channel, is kind of what we're like, "Okay. What's this going to mean?" But again, it's a leap of faith. The whole system is changing. When it goes into effect next October, we'll be 10 years in the game and ... 10 and a half years in the game and learning a whole new system. I am honest in saying, when we started this business, I never had ambitions of being a massive national brand. We've always wanted to be a small regional brewery, really focusing on our home market. Kind of the idea of we want to see enough beer that it is a business, so you have to sell beer to make money. But keep it to the level to where it's manageable from making a quality product and keeping your shelf life sort of as ... Not having to worry about as much because your product is moving as quick as possible. So, getting fresh beer out there, making sure we're taking care of the people that make the product because those guys love and care about what they do and you don't make a lot of money being a brewer, but you love what you do and you're working with beer and that's a lot cooler than a lot of other things, right?

Lauren:    Our last question that we always end with; how would you encourage entrepreneurs who are busting butt to make these dreams and goals a reality right now?

Eric:    I think a huge key is your passion. This consumes a lot of your life and you don't have to love it all the time because there's times you definitely get frustrated and don't. But you really need to be passionate about the product, especially if you're getting into a craft industry or something like that, because it's really going to show in the final product. One thing I think that's very important and it's very simple, is just do the right thing. That's very important. I'm going to use a little bit of a rough language, but don't be an asshole. That, I think is very key. You're the face of what you're doing. People are receptive to people that love and care and are happy that you're doing business with them and so on. So, I think that kind of gets back to the do the right thing. I know that's very simple and that may not be the most groundbreaking piece of advice, but that goes a long way. 

Lauren:    Absolutely. Well, thank you for your insight, thanks for sharing your story with us. We appreciate you.

Eric:    My pleasure. Thanks for the opportunity.

Lauren:    Next week on The F Word ... 

Robin:    Many times we would tell a customer, "Yes, we can do that," and I had no idea what I was doing. 

Lauren:    Robin Siegfried explains how he and his brother built NORDAM, one of Tulsa's most notable companies, from the ground up. Before the time of strict airport regulations or the internet. 

Dustin:    The F Word is brought to you by 36 Degrees North, Tulsa's base camp for entrepreneurs. To learn more about our work space, community and resources, visit 36n.co. The F Word season one is recorded at KOSU Studio, hosted by Lauren King and produced by Julie Combs. 

 

The F Word with Tim Smallwood, Tropical Smoothie Cafe

Everyone told him it wouldn’t work. Another smoothie shop just wouldn’t succeed in Tulsa- especially on the north side. It would be a horrible business decision. But Tim Smallwood wasn’t convinced. Listen as the Tulsa firefighter talks about risking 300 thousand dollars on a side-hustle, convincing his wife to quit her job, wasting money on expensive advertisements, and going over two years without paying himself -all because he had a gut feeling that the Tropical Smoothie Cafe franchise was going to be the next big thing.

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Tim:    We were all in panic mode. How do we keep this thing afloat? I refuse to lose. I hate losing.

Lauren:    This week on "The F Word".

Tim:    It was scary there for a while. I didn't take a salary for two and a half years.

Lauren:    Tim Smallwood, Oklahoma's first Tropical Smoothie Cafe franchisee.

Tim:    I went to a national convention. You probably thought I was running for mayor. I talked to everybody I could find. "Hey, what you got going? How do you do this? If I do this ..." I mean, I'm asking questions.

Lauren:    Tropical Smoothie Cafe is a national franchise that sells amazing sandwiches, smoothies, wraps, breakfast, and more. Tim Smallwood was the first one to bring one to Tulsa. He launched his first location at Tulsa Hills in 2011 and had added two locations since in both midtown and North Tulsa. Tim, I'm sure establishing this brand in Tulsa has been a fun and, probably, crazy ride. Thanks for coming in to share your story and the roadblocks you've overcome to get to where you are today.

Tim:    Thanks for having me.

Lauren:    You actually discovered Tropical Smoothie on a family trip to Fayetteville, Arkansas. Tell us a little bit about the very beginning.

Tim:    Yes. I coached my oldest son's AU basketball team. He's an adult now. He's 24. I was coaching his AU team and my wife and I were smoothie ... We love smoothies. We would do Smoothie King once a week. You spend $16 for the little 16 ounce smoothies, but that's all we had here in Tulsa. In Fayetteville, basketball tournament, didn't really want to eat dinner yet, it's kind of early, so I said, "Let's get a smoothie." There was no Smoothie Kings, no Jamba Juices, and this popped up. We went to try it and it was like, "You gotta be kidding me. It can't be this cheap and this good. Okay, it's not real." That was my first thought, "It's not real fruits. Can't be real fruit." Sure enough, it is real fruit. They had food that the other smoothie locations didn't have. It was just something that I thought would go really well in Tulsa. There was 10 kids on the ball team. I told them, I said, "Let's go eat at Tropical Smoothie Cafe." They were like, "What?" Said, "Hey, I'm going to pay for everybody's meal, but everyone has to get something different." You get 10 kids, I think they were like 15 then, to say they liked every single thing and they wanted to go back the next day. I said, "That's going to work here. If that many kids ..." Usually, there's going to be someone, "I don't really like this." Every smoothie they had, every food item they had, they loved it. I just felt like if that many kids liked it, those odds that it was going to work in Tulsa's going to be really good.

Lauren:    Something people may not know, you're also a Tulsa fire fighter. Were you already thinking about starting a business on the side or did this just kind of come out of nowhere?

Tim:    I always had interest in business. I'm a business major with an accounting background. I was an auditor for Williams Company and American Airlines before I became a fireman. I know my mom thought I was nuts when I told her I was going to be a fireman. I always the business background. My dad was an entrepreneur. He owned the garage and worked at American Airlines. I think I got that bug from him.
Lauren:    That's usually how it works, I feel like-

Tim:    But believe it or not, I didn't want to open Tropical Smoothie. I was trying to get ... I knew the guy that owned the Wingstops here in Tulsa and the guy that owned like six Subways. I told both those guys about it. I said, "I'm telling you, I would come once a week for sure, maybe twice a week. It's good." It was such a new franchise that they both were kind of afraid for it. I said, "You know what? Let's just give it a shot."

Lauren:    How did you actually get the ball rolling?

Tim:    Just reached out. The manager at that particular location thought I was probably crazy. I know my wife did. I said, "Hey, can I see what you guys are doing? What are you guys actually doing?" I started asking questions there. We were at the Fayetteville area tournament for two days, so I actually went back. I talked to the owner. He said, "Come on back. I want to show you all this." They were really actually pushing the brand. It was still pretty new. There's like over a thousand stores now. I think I was number 221 or something like that.

Lauren:    Oh, wow.

Tim:    So it's really grown. I was able to get in on the grass floor, the bottom floor. I just went out. I started asking questions. I said, "Hey, you know what? This is something I could do." I knew I needed help, so I had to convince my wife, who'd ran a law firm for years, and years, and years, to retire early so she can help me and take this on while I was still working as a fire fighter.

Lauren:    What was your biggest fear as you signed the dotted line?

Tim:    Losing the $300,000 plus and having to work another 10 years to pay that debt off. It was the monetary deal. If it doesn't work, what's going to happen? If I don't get the right location, what's going to happen? Besides the money end, that was it. That was the biggest scare. I mean, you know, and entrepreneurs will tell you, "If it didn't work, it didn't work. I can bankrupt and move on." Well, I've never done that. I'm from ... My dad ... I'm one of 12. There's seven boys. We all worked. I'm from a working family where we actually work. You know what I mean? We just get after it. He taught all of us, "This is how you do it and this is how you make it," so we work. I knew I was going to work hard at it, and I was going to give it everything I had, and if it didn't work, it wasn't meant to happen. That's the kind of philosophy I had. I'm going to give everything I've got to make it work and if it doesn't work, then it just wasn't meant to happen.

Lauren:    So you start the first one in 2011.

Tim:    In 2011, we started the first one. First day, great. Second day, great. It was nice the whole summer. But what corporate failed to tell me, being a new franchise in a new market, that you're probably going to have a drop off. Well, they said we'd have a little drop off because of weather. It was massive. I mean, it was like half, more than half. I'm like panicking big time. It's like sales are really, really bad. I did the marketing. Our market ... This is what I can tell everyone. When you start something new, you're going to make mistakes. I made a ton of mistakes.

Lauren:    Like what?

Tim:    Spending $30,000 for a billboard for a year. No one knew what Tropical Smoothie was. I'm thinking, "A billboard. Everyone's going to see us. They're going to come into Tulsa Hills and see us." Waste of money. Doing a lot of different advertising things that were a waste of money. Having too much staff early, thinking, "Okay, gonna have all these people here and we're going to do it this way." You just don't need that many people. It's better to have less people and have them really trained, that way they won't be running into each other. Just a lot of little things that you just don't know until you do it. As far as monetarily, made a lot of mistakes. Labor, made a lot of mistakes. It's just a learning process.

Lauren:    You've obviously got your feet under you now. You've grown and learned.

Tim:    We've grown. We've learned. Opened up two more locations, so we had to do something right. Even have another guy to come to the market whose brought another four locations, and soon to be a fifth location, in a suburb right outside of Tulsa, in Bixby, so it's a growing brand. It really is growing. We finally hit the Texas market and it's just taking off big time. I think we got in on the ground floor. Our value is really gone up as franchise owners, which is a great deal.

Lauren:    I love that. Let's talk about those other two locations. You opened one in Tulsa Hills and then you went to Pine and Peoria.

Tim:    Right.

Lauren:    Seems like a totally different customer base.

Tim:    Totally different, but originally, that was going to be my first location.

Lauren:    Really?

Tim:    I consider ... I know a lot of people say North Tulsa's kind of like a food desert. There's nothing there and definitely nothing healthy. I mean, there's a Subway, but you can only eat so much Subway. Tropical Smoothie's a little bit ... Not putting Subway down, because they market better than anybody out there, even more than McDonald's. We have a different quality of product. Our sandwiches are made with Dietz & Watson meats. Go to Reasor's and price the Dietz & Watson meats. It's not the cheapest product out there. And we're still able to give it at a decent cost with everything, comparable to the Subways, or the Quizno's, or other food establishments like that. We use just a higher end quality product. I think that's what makes us a little different.

Lauren:    Did people push back at all to the idea of building up north?

Tim:    Oh, yes.

Lauren:    I know a lot of entrepreneurs would be like, "Oh, I don't know about that." You have such heart for North Tulsa. I know that.

Tim:    I'm a North Tulsa kid.

Lauren:    Really? Okay.

Tim:    I grew up deep north. They used to call it "Early Turley" back in the '70s and 80's. 56th Street North. I've seen the demographics change. I was one of four black families in a neighborhood and by the time I got to high school, there was almost all black families. So I've seen the cultural change. I remember when there was everything up north, from eateries to movie theaters, bowling alleys. There was ... You name it. If there was anything in South Tulsa, it was in North Tulsa, as well, back in the 70's. Shopping centers. It was all there. I kind of was ... I'm a little old enough now that I can see everything that happened before and realize it can happen again, or it should happen again. I had to go against the grain, especially when I went north. I had family members, friends, "Are you nuts? You're going to put a ... That area's not going to support a healthy food option. It's just not going to happen. If it's not chicken, or barbecue, or a liquor store, it's not going to work." Day one, that store's been great. It's just great for the city. I know the mayor sees that. Tax dollars are tax dollars, no matter where they come from. You can only grow so far south before you run into things being Broken Arrow and the Jinx area. North Tulsa's kind of like the undeveloped area right now. And West Tulsa. West Tulsa's needs a little bit more development as well.

Lauren:    So what would you say to other entrepreneurs who might have hesitation about going up north?

Tim:    I would say, "Money is green and it spends no matter where." I would say, "Do your research and look at the amount of money that leaves that community." I think it was estimated over $60 million a few years ago that leaves the North Tulsa community. I think most people don't realize how big North Tulsa is, when you go East to West and North. When you have that kind of dollars leaving an area, and I know Owasso's getting a lot of it through shopping because there's nothing up north for a lot of people. A lot of people still go to South Tulsa. It's a lot of opportunity that hasn't been tapped. If you go to North Tulsa now, believe it or not, the demographic's changing again. Just drive through North Tulsa and look who's ... It's just a big ... The demographics is changing. Especially where I live. I still live north. I moved south when I was younger. I moved back north, built a house in the Gilgrease Hills / Pine and Cincinnati area, well, MLK now, area. Those demographics is really changing.

Lauren:    And like you said, untapped opportunity. That's an entrepreneur's playground, man.

Tim:    It should be. When we were there, opened up out north in 20 early 13. Was it '12? I forget. Taco Bell, they're out in north now. They came in, and sat down, and talked with me. They sat, and watched the traffic, was like, "Okay, maybe it is going to work." It's kind of hard to judge off of McDonald's. McDonald's is going to be prosperous wherever they are. Kind of like Chik-Fil-A. Chik-Fil-A, McDonald's, Starbucks, no matter where they go, they're going to do well.

Lauren:    You're going to get customers.

Tim:    You're going to get a lot of customers. I guess they wanted to see how we were doing. It's working. For us, it's working. That north location has been profitable from day one. I didn't have the same challenges I had out in Tulsa Hills. Tulsa Hills was like a year and a half before I started seeing any type of, "Okay, this is going to work." Seemed like when I opened up that north location, Tulsa Hills kind of kicked in. It was scary there for a while. I didn't take salary for two and a half years.

Lauren:    No way.

Tim:    Yeah, and my wife's salary really wasn't a salary from what she was used to making, so we sacrificed. We worked. Put in a lot of hours. You had mentioned earlier most people talk about the glitz and glamour. It's work. You have to ... Unless someone's just lucky and got all the answers, and I haven't seen anybody like that yet, you're going to work. You're going to put the time in. I still wash the dishes. I take out trash. I make smoothies. I make food when I'm there. I'm not there a lot anymore, but I make sure I stop in. If I can't do it daily, every other day I'm at one of the locations just so they can see me. I let those employees know that, "If I'm doing it, I expect you to do it." We've been blessed, blessed. I have really good employees. I've had some that's been around five years, four years. But we pay a little bit better than most food establishments, too.

Lauren:    I like that you inspire your employees by action rather than just telling them what to do.

Tim:    That and I try to make it a family atmosphere. We have our company Christmas parties. We do barbecues. We celebrate anniversaries, birthdays. I'm smart enough to know ... I hope I'm smart enough to know, because I've got a good wife, I'm smart enough to know that we can't do this alone and you've got to have good people to work for you. There was a gentleman named Bartmann, Bill Bartmann. Owned a company called Commercial Financial Services. My wife was a supervisor for him, years ago, and watched how he did with his company and the way he treated his employees. I said if I ever owned a company, I'm going to kind of emulate him on rewarding them. If you're good, I'm going to reward you. It works. It's been successful for us.

Lauren:    Let's go back to what it's like running a franchise. What has surprised you most in this whole process about being a franchisee?

Tim:    The biggest surprise has been, I guess, the public. I never would expect some of the things that I've seen from people in a food establishment. I guess I'm just naïve on how certain people act sometimes. Then I praised about how good a work force we have and then, workforce. We have some employees, even though we try to do the best job we can in choosing people, that people just don't want to work. But dealing with the public has been the biggest surprise.

Lauren:    So it's not even dealing with corporate that's been difficult?

Tim:    No. Even though it's an upstart, Tropical Smoothie is kind of still pretty new. You kind of expect certain things from corporate. I think the biggest deal was public. What you'll find, most franchises, if they're worth anything, they're going to have a pretty good plan for you, so it's up to you just to find your location and put the time and effort in. I didn't really have any issues with corporate, per se.

Lauren:    You felt pretty supported, it sounds like.

Tim:    Yeah.

Lauren:    You've been serving the Tulsa Fire Department for over 20 years now.

Tim:    Yes.

Lauren:    And Tropical Smoothie, you've had under your belt for about seven years.

Tim:    Mm-hmm

Lauren:    How have you found balance between the two, so that you're not neglecting something important with one or the other?

Tim:    I am a fire fighter. That is my career. Tropical Smoothie is my hobby. Plus, my wife is phenomenal. I have a really smart, educated, hold your feet to the fire type of wife. If I get lax, she's always on it. She pretty much runs the day to day operation. She is HR. I always tease everybody, she's the CEO, I'm the CFO. I'm the one to write the checks, but she's running the shop right now. Nicole does a really good job. But you know, running the law firm for years, she had the experience already, so it was just a easy transition. Well, I shouldn't say easy. It's never easy. It was not easy. I don't want to get ... But for her, to be able to step into a thing she's done, it's been great to have a partner. Working with my wife has been challenging, because sometimes you bring Tropical Smoothie home, but we try our best not to.

Lauren:    How do you turn off the business side you can tend to your marriage and not always be tending to your business?

Tim:    The first year, it was all about Tropical Smoothie, because we were all in panic mode. How do we keep this thing afloat? I refuse to lose. I hate losing and I refuse to lose. But after that first year it's, man, the most important thing to me is her. I've got kids, but they're adult men now. They adults, 24 and 21, so-

Lauren:    They can take care of themselves now.

Tim:    That's my thought. When they were in high school, "Okay, you guys are pretty much grown. You know what you need to do. You've been raised right." My wife is my priority and I'm pretty sure I'm hers. Got my fingers crossed. No, I'm pretty sure I'm hers. I've just got to make sure ... If she's happy, and I tell her this all the time, "If you're happy, the whole household goes great." Seriously, even my boys knew that if mom was happy, everything seemed to be just easy keel. I got lucky. I got a good girl.

Lauren:    Are there any practical steps that you take to shutting work off so that you can focus on home life?

Tim:    I just do it now. We've done this long enough that it's not a big, "Oh, what's going to happen next?" Man, if I'm not at the shops, I'm not at work. If no one doesn't call me, I'm not thinking Tropical Smoothie if no one's calling me. We've got people to handle that. Like I said, I've got a really good staff.

Lauren:    I guess that's the importance of hiring well.

Tim:    That is. I would tell anybody that's doing business, the number one goal is to have good people. If you're got good people, it's easy. We've had times when we didn't have it. When you open up that many stores, it's 55, 60 employees. It gets difficult sometimes. If you don't have good staff, it shows, because you're in the cafe. Now you're actually there, because you're helping out, making sure ... We don't rely on just management or other employees to train all the time. We actually get in there and train ourselves. Now, when both my boys were working in the shops quite a bit, it was easy, but one doesn't live here anyone, one works for the airline industry. He kind of helps out when he can. It's just me and Nicole and we depend on our staff to take care of business now. To be able to shut off, when you leave the shop, it's our time. We try to ... We go a bunch. We're older, don't have kids at home, so we travel. That's her deal. She likes to travel. She likes to go to concerts. Once a month, we go somewhere.

Lauren:    Oh, that's so fun.

Tim:    Even if it's just a weekend deal or a two day deal, we're out. If somehow we miss a month, then it's going to be a bigger month the next time. We're going to do something a little bit better. We just try to enjoy life while we're here. I think that changes as you get a little older. You start thinking, "Okay, one of my classmates didn't make it, he just passed. Okay." You start thinking a little bit different than you did when you were in your 30's and 40's. 

Lauren:    Let's talk for a second ... You own three of the Tropical Smoothie in Tulsa.

Tim:    Yes.

Lauren:    But there are ... I think online I saw seven locations?

Tim:    There's seven now.

Lauren:    For people who-

Tim:    Soon to be eight.

Lauren:    Soon to be eight. That's exciting. For people who are maybe looking into franchises or are franchisees, what's the importance of networking with the other owners in town? Do you have a relationship with the other owners or do you see them as competition? What's that dynamic like?

Tim:    No. I think they might have saw me as competition at first maybe, until they talked to me, realized I'm all about growing the brand. I got that from Chris, the regional developer. As long as we're not like these Cherry Berries, the yogurt places, how they just oversaturated themselves, then they start falling out, as long as we ... And corporate will make sure this happens, that we stay a decent distance away from each other, then we should all be supporting each other, and I believe we do now. It's been ... You kind of get that idea, when they first come to the market, but I know him well. The guy that's building all the other ones is a pretty big shot within the corporate world of Tropical Smoothie. He has the Arkansas market. He bought the whole market of North Texas.

Lauren:    Oh, wow.

Tim:    Exactly. From east to west, that's massive, massive. You've got the Dallas, the Fort Worth, the Planos, the Lewisville ... You've got all these communities there.

Lauren:    Like a million suburbs there.

Tim:    Yeah. So he's growing, big time. No competition. It's if we grow the brand, we're all going to be successful. That's the good thing, but us being Tropical Smoothie, it's the family concept.

Lauren:    Do you have plans for any new locations for yourself? 

Tim:    We are deciding. Bartlesville and Owasso will probably be next. It may not be me, but there's a strong possibility it's going to be me. Or we may get out of the business.

Lauren:    Really?

Tim:    Like I said, at our age ... I'm in my early 50's. I'm not in love with something that I would never let it go, because there's always some kind of transitioning. I would say you always should have an exit plan or an idea of what your exit plan should be, because I'm not going to do this forever. Like I said, we still may grow. I have two more years left in the fire department, here in Tulsa, so after that, who knows what's going to happen. I'm only married to one thing and that's my wife. Anything else is out there for debate. And a lot of it, I'm basing it on what she wants to do, as well. Because I know I'm going to need her to run five, because if we do it, it's going to be two real quick.

Lauren:    Oh, really? Okay.

Tim:    Like in 2018 quick.

Lauren:    Oh. All right. Little sneak peek here.

Tim:    And if we decide to sell a few years, then we'll just let all of them go, maybe, except one.

Lauren:    Which one would you keep?

Tim:    I would probably keep the north store if I could, but that's probably going to be a store that everyone wants if I sell. I've had offers. For the last three years, I've had offers. I've turned them down, said, "No, no." I'm glad I did, because that value has gone up tremendously. It's just kind of play it by ear, because there's other things we want to do and try to get involved in. When I retire, I'm going to retire. I'm not going to be a guy just sits around. I like working. I know that sounds crazy, but I like ... It's just been bred in us. You feel accomplished, or at least I do, when you work. My wife has that same kind of drive. Laying around the house all day long is kind of a slump thing to do more than one day.

Lauren:    I feel you on that. I think most entrepreneurs feel you on that. An itch to keep moving forward.

Tim:    To keep growing. To keep challenging yourself to find new challenges. What's out there that I can do next that someone says I can't do?

Lauren:    This is our last question, that we ask everyone who comes in. How would you encourage an entrepreneur who's in a tough season? You said that first year, you're really gritting your teeth, pushing forward to build something great. How would you encourage other entrepreneurs who are trying really hard to build something great?

Tim:    If it's a franchise that's not doing well, find someone in your family that's doing well with that same brand and ask them what they're doing. We reached out to everybody. I went to a national convention. You probably thought I was running for mayor. I talked to everybody I could find. "Hey, what you got going? How do you do this? If I do this ..." I mean, I'm asking questions. Or, if it's not a franchise, find out what you're doing wrong. From what I've seen, from a few local businesses that may struggle to have gone out, they're not running it like a franchise. What's my food cost? What's my labor going to be? How do I streamline this? I can't go buy this car. I can't go buy that house. How much am I going to have to live on? It's just, look at ... Take a step back and evaluate what you're doing and say, "Okay, if this was someone else, would I recommend this person do what I'm doing?" That's what I see from a lot of entrepreneurs, they kind of go out and spend on themselves and they probably should wait. Wait and save your money. Save it, invest it back in your company. Taking two and a half years of not taking a pay salary ... And, by the way, when I did take a salary, I was only paying myself $10,000 a year that first year.

Lauren:    Not a livable wage.

Tim:    Not a livable wage, but I said, "Okay, I've got to get something back." I pay myself more now, but I've been at it seven years now. But that's what I would do. Just take a step back. And reach out. There's different groups out there, like Tulsa Economic Development Corps, SCORE, different organizations that you can actually call and say, "Hey, I'm having a problem. Can I get someone to come out and do an evaluation and find out what exactly am I doing wrong?" But hopefully, they did a business plan before they got in the business and tried to figure out, "Okay, this is what I must do." I tell a lot of young folk, because I do this sometimes ... I mean, I've gone to businesses, schools, and talked economics or entrepreneurship. Don't get in business just to say you're in business. That's huge. A lot of people love the idea of saying, "Hey, I own a hat shop." Okay, but is that going to be profitable for you? Are you going to be able to sustain it? Those are some of the things you need to look into. Opened up Tropical Smoothie, it was a year and two months process for me, or for us, for Nicole and I. We went over, and over, and over ... Even had a SCORE person tell me, "It won't work."

Lauren:    Really?

Tim:    Yeah. Now, he wasn't in the food business ever, but he just knew how tough the food business was and, "It's not going to work. Tim, I'm telling you, it's not going to work." I said, "But it's working in these markets. It's in Arkansas. It's big in Arkansas and we're bigger than Arkansas." I couldn't understand. You have to have a belief in yourself, the work ethic, and a plan together. You mentioned this, if it's going bad for them now, just step back and look. What am I doing wrong? Get someone else to evaluate for you.

Lauren:    Being open to feedback sounds really-.

Tim:    Most definitely. And not taking it the wrong way. When the SCORE guy kept telling me, "No, no, no," I just had to trust my own gut. I couldn't understand why no here in Tulsa but it's working in a smaller market like Arkansas. As you can see now, there's seven, soon to be eight. Nine and 10, it will be soon. It's in Oklahoma now, all in the western part of the state, Norman, Oklahoma City, Lawton. It stems from what Nicole and I did here in Tulsa, proved to everybody it can work in this market.

Lauren:    Thank you so much for coming in to share your story. I love it.

Tim:    Thanks for having me. I hope I was able to give some insight on-

Lauren:    Oh, absolutely.

Tim:    Tropical Smoothie and what we do and what we've done.

Lauren:    Absolutely. I need to go get a smoothie now. I'm hungry.

Lauren:    Next week on the "The F Word".

Eric:    There's a contingent of people that really don't get what we do and think that we're just out trying to get people drunk and put them on the streets.

Lauren:    The founder of Marshall Brewing, Eric Marshall, talks about blazing the trail for craft brewers in Oklahoma, both socially and politically.

Dustin:    "The F Word" is brought to you by 36 Degrees North, Tulsa's base camp for entrepreneurs. To learn more about our workspace, community, and resources, visit 36n.co. "The F Word" season one is recorded at KOSU studio, hosted by Lauren King and produced by Julie Combs.

 

Bridging the Gap between Business and Poverty

By: Ashley Riggs, 36 Degrees North Intern

There are 7 billion people on this planet. That’s a lot of people. And the fact is: the vast majority live in poverty.

Ted London, known for his work bridging the gap between businesses and developing countries, is looking to change that. “Poverty is the greatest challenge facing humanity,” London explains. And he says we need to work smarter to alleviate it. “Our focus should be not “should we do it?” but “how can we do it better?”

Here’s the gist of how London thinks we could improve efforts to help developing countries emerge from poverty:

Ted London speaks at Oral Roberts University in Tulsa on January 31, 2018.

Ted London speaks at Oral Roberts University in Tulsa on January 31, 2018.

Reconsider Conventional Wisdom

Overhaul traditional views of underprivileged people groups. London says, when most people think about poverty, they tend to victimize individuals. But he says change comes when, instead, we think of them as colleagues, partners and advisors with expertise to share. The key is to work with them, not pass out handouts from afar.

The Business-Philanthropy Model

The Business-Philanthropy model is one that is mutually beneficial for both for-profit businesses and the people of developing countries. Businesses, according to London, should establish themselves in developing markets, selling needed items (like cell phones and health care supplies) and creating jobs for locals. If done correctly, it’s a pretty sweet deal for both parties.

So how’s that going?  “There is a growing momentum behind this idea,” London explains. Especially with millennial entrepreneurs. Young people no longer see business as just a vehicle to make money. They see it as a way to also make a difference in developing countries.

What still needs work? “There are too many pilots… there’s lots of activity, but we aren’t sure what we’ve learned,” says London. “We need concrete reports of what is going on with businesses in helping alleviate poverty. How are they actually effecting change?” In other words, the whole thing has to be more data-driven.

Roadmap for Business Leaders

#1 - Find the right perspective: Don’t assume that you know how to fix things without first gathering lots of information. Go in with the mindset that the people in the developing market are smarter than you. After all, it’s their country.

#2 - Ask the right questions: What is their definition of success? What do they need to be self-sufficient? How can business work in their cultural context?

#3 - Professionalize the process: Businesses need to publicize the tools they use, the ways they’ve grown and the lessons they learn on the field. When development is documented, companies won’t make the same mistake twice.

CONCLUSION

Ultimately, the question is how can we make the world a better place? For Ted London, the answer is clear. To alleviate poverty, entrepreneurs have to take the lead. “Look inward and think about the future,” London says. “What will your legacy be?”

Ted London speaks in Tulsa on January 31.

Ted London speaks in Tulsa on January 31.

An example of the questions London says entrepreneurs should be asking.

An example of the questions London says entrepreneurs should be asking.

ORU students and professors listen as London presents.

ORU students and professors listen as London presents.

The F Word with Chip Gaberino, Topeca Coffee Roasters

Before trendy, local coffee shops became the norm, Chip Gaberino had a vision to bring high-quality coffee to Tulsa. He believed he could deliver beans from his family’s coffee plantations in El Salvador directly to consumers in a style that reflected the growing, high-end coffee craze popping up on the West Coast. And despite many obstacles and failures, he did. Listen as Chip talks about how he made Topeca Coffee Roasters a household name, while sticking to his personal ethos of sustainability and empathy. (PLUS hear honest insight on his experience co-founding local hotspots like Hodges Bend and the short-lived restaurant Torero.)

[TRANSCRIPTION]

Chip:    My expectation was to fail. I was gonna fail on a small enough scale that I could get back up. 

Lauren:    This week on The F-Word ... 

Chip:    If you're having to be pulled in lots of different directions at one time, you're setting yourself up for mediocrity at best. 

Lauren:    The founder of Topeca Coffee, Chip Gaberino. 

Chip:    There's always something that you can do better every day. 

Lauren:    Topeca Coffee is a staple for many Tulsans. Today we're chatting with Chip Gaberino, the co-founder of Topeca. It's one of the only companies in the world that follows a seed-to-cup method, meaning they control the beans from the time they're planted to the time they're roasted. Topeca Coffee is now sold in coffee shops and grocery stores around the US. But getting to this point didn't come without some obstacles. Chip, thanks for being here to share your story. 

Chip:    Thank you. Excited to be here. 

Lauren:    Great, we're excited to have you. Let's talk first about how it all started. Your mother-in-law in El Salvador approached you for help with her family's coffee farm. Tell us a little bit about her dilemma and how you and your family stepped in to help. 

Chip:    Definitely. While I was getting my MBA, it coincided with one of the biggest downturns in price for green bean coffee, or for the price that the farmers get paid around the world. Coffee is the second largest traded commodity in the world, only second to oil. My mother-in-law came to visit her granddaughter and started discussing with me the idea and opportunity of getting involved and trying to change the way that we were doing business. In order to figure out a way to make coffee-growing a more sustainable business that could last not only and appreciate the previous 150 years that they had been doing it, but figure out a way to do it for another 150. 

Lauren:    How'd you do that? 

Chip:    My brother-in-law was going to school in Portland, and I was getting my MBA. The early 2000s was really one of the times that, from our perspective, was a boom for, especially, coffee. Coffee shops, especially coffee shops, were growing rapidly throughout the US and an appreciation and willingness to pay a higher price was growing, but the dollars were not trickling down to the farms yet. Some of the roasters really were seeing both sides of the coin and were visiting the farms and sourcing the coffees and seeing the conditions. What, I think, ended up happening, we were one of those players, was the desire and then execution on creating, essentially, a separate market where price was not specifically tied or determined by the market, but was tied more towards quality with the idea that as the roaster or purveyor to the final consumer that we would make that connection with consumers that we're willing to pay a higher price. My desire and passion, initially, was really actually focused more on sustainability. I didn't specifically have a passion for coffee. I think that came later. But I just really always have focused on how to create a more sustainable, balanced business. 

Lauren:    Yeah. Now your coffee is a household name. Ask anyone, probably, in Oklahoma about it. "Oh, yeah, I know Topeca Coffee. We have it in my cupboard." But I know your journey getting to that point has had its fair share of mistakes and fears and failures. Can you share with us some of those times when maybe you screwed up and how you came back from that? 

Chip:    You know, I came to a point where I think I've always been this way, but it's especially just narrowed it and focused an understanding of the reality that failures or challenges are always gonna happen almost on a daily basis, and the idea that there's always something that you can do better every day, and that there's something to learn. With that perspective, it's all shades of gray to me. It's the ability to always want more but still also be content with where you are at at that moment. They're not mutually exclusive. I think one of my first big challenges was I have a lot of grit. 

Lauren:    That's a good thing. 

Chip:    It can be. It is. But I could be stubborn sometimes in wanting to just push through. I always was of the opinion, and still am, that if I put my mind to something and work hard enough at it, I'll figure it out. What I think I ended up having to learn was that I shouldn't have put that effort needed to learn everything. You have to pick and choose your battles. Just because you can do it doesn't mean you should be doing it. There are a lot of parts within the business that, initially, I loved to try to do everything, at least for a little bit. But there are things that I'm not the best at, and that's okay. 

Lauren:    Like what? 

Chip:    Oh, I mean, let's see. There's a long list. I actually finally, the most recent one that's easiest to remember, is I'm pretty good with numbers but I don't have the time to focus on accounting. But I always was the one doing all the accounting until about last year. We hired a CPA full-time and it's been awesome. I wish I'd done it earlier. It's one of those challenges of a small business is there are a lot of things that you know you need to do, but don't have the time or money, necessarily, to do it. 

Lauren:    Yeah. How do you decide? I'm sure there are small business owners listening who are like, "Yep, I get that. But now what?" What would you tell them? 

Chip:    My first probably seven to 10 years was honestly, for me personally, was sticking my toe in the water with the idea that my expectation was to fail. I was gonna fail on a small enough scale that I could get back up. I decided how much equity investment I wanted and I got some equity investors and took on some debt. From then on, everything else, for me, was natural growth, internal growth, from spending our profits. My growth had been determined initially, right or wrong, but it had been determined more on my ability to generate more profit. The more profit I made, the more I spent on equipment and people and training and all the things needed to grow. There's a challenge, also, that I think we had from a perspective, especially coffee, and it's that we were in Tulsa, Oklahoma, in the Midwest. It definitely was a couple years behind from the east and west coast. As far as appreciation and understanding and willingness and desire to pay a little bit more per cup, those things- 

Lauren:    Yeah, I'm sure it's so hard to convince people. 

Chip:    Yeah, nowadays it seems like that's the trend and that's what the expectation is from the general public, but 15, 20 years ago it was not. Also, I'm naturally just a very empathetic person. It took me a while before I learned how to manage employees. I'm always wanting to figure out a way to bring out the best in everybody. The first time I had to let an employee go was one of the hardest things I ever did, but it was also therapeutic and rewarding. For instance, that employee I helped find another job. Many times forward, if an employee isn't working out, then I try to find them another job or I let them stay until they find a job or try to find them another job within the company that they are good at. I think that everybody truly can be great at something, they just have to find what it is. 

Lauren:    Absolutely. That's so kind of you. Along that same line, let's talk more about your people. You are literally changing lives in El Salvador. You're giving them year-round work, higher wages than most, you're helping them and their children go to college. How has that mindset of caring for your employees well helped your business as a whole? 

Chip:    Yeah, it's a lot easier to operate a company when you have happy employees. As far as I know, at least, as we're the only company of the scale that we do that works as a family from seed-to-cup, from growing, harvesting, exporting, importing, roasting, serving. The reason for that is logistics. It's very difficult. It's not easy. It's not a solution, I don't think, for everybody. I think it could be replicated, but as far as I know it really hasn't yet. But what it has allowed for us to be able to do is identify at each stage how to make it more sustainable. To me, a core part of sustainability is every partner within the system is profiting and is being rewarded for the work that they're doing. Some of the things that we've done is by putting the mill on the farm itself, it allows us to give a lot more full-time jobs. Having the export company there, as well, allows us to give and have the depth to have higher-paying jobs. A big part of our success has been that because of the fact that we are focused on specialty coffee, there's very specific aspects of the harvesting through the picking, whether it's having the same people every single year in and year out doing the harvesting, you don't have to retrain them. It's imperative that they know how to pick just the right beans. We pay more per pound in order to make sure that we can get the people that we want. One of the challenges or failures, I think, was when we first started our business. I wanted, and we all wanted, to do it in a model of what I call the vineyard approach, where all of our coffees came just from our farm. That was where the only coffees that we roasted, other than decaf. What that forced us to do on the farm level was to experiment. I needed to figure out a way to replicated to some degree the profile of a fruity Ethiopian, even though I didn't have a fruity Ethiopian coffee. That led us to the point of doing experiments on natural processed coffee, which is where you dry the coffee seeds inside the cherries. All that fruit gets absorbed into the coffee bean. We would have never probably done that if it hadn't been for me on the consumer side seeing the demand and communicating and then willing to take the risk and say, "Let's do 5,000 pounds of natural processed coffee. If it turns out bad, I'll still buy it and I'll figure out something to do with it." 

Lauren:    Did that happen? Did you have some pretty bad batches? 

Chip:    There were years, definitely. There were challenges. Totally. Then again, the first seven to 10 years was a matter of taking those risks and taking them in sizes that we knew that we could get back up once we fell down. Putting in the processes and the people and the equipment, it's taken a lot of time but I'm super proud of where we've come. 

Lauren:    You have other ventures in town, too. You have Hodges Bend, Saturn Room, Open Container. What have you learned about balancing Topeca and these other projects? 

Chip:    I did Hodges Bend because something I kept seeing is coffee shops that were busy and profitable in the morning, and then in the afternoon and night they would either slow down or they were full of people that were not purchasing anything. From a business perspective, it didn't make a lot of sense. Coming from and having gone to school in New Orleans and seeing a more café environment of the idea where a coffee shop didn't have to be just coffee or a bar didn't have to be just a bar, I think that a lot of places have food, alcohol, and coffee. But some of them feel like a restaurant, some of them feel like a bar, some of them feel like a coffee shop. My goal and desire when we did Hodges was to create an environment where both coffee and alcohol were equals, with the idea of elevating, also, the expectation and the quality of what people were gonna be consuming. We really shot for the ability to have excellence on both. I think that one of the biggest challenges and one of the hurdles for anyone is boredom. It's the- 

Lauren:    Especially if you're an entrepreneur.

Chip:    Well, I mean, everybody's slow at some point in their business. Whenever I see an employee just going mind-numb because it's slow, it's so hard for me to watch. Besides the fact of knowing that we're slow and we're not necessarily making profit, but to see that employee's mind just go in circles. The idea of creating an environment where everybody's mind was challenged because they weren't just doing coffee, we cross train on everything. We have multiple certified sommeliers on staff. We reward and pay for certifications from certified wine tasters and certified spirit tasters, as well. We used to have two Q cuppers on staff. We have one Q cupper on staff, which is equivalent to a sommelier, but for coffee. We pay for all of the employees that work on the coffee bar at some point will go through our coffee training lab. We have an SEAA-certified training lab. One of the core aspects of sustainability, I think, for me, from the very beginning has always been about excellence, figuring out a way to have excellence consistently. I don't believe in or appreciate when you have an amazing experience one out of 10, and the other nine or eight were subpar. I'm always working to try to figure out a way to make sure that nine out of 10 is exceptional, eight or nine out of 10 is exceptional, and one or two are good with the understanding that we mess up. I call it the toothpaste rule. If I'm walking around with toothpaste on my face, I'd really like someone to tell me. It's a challenge 'cause customers typically don't want to tell you when they have a bad experience. They just keep it inside. 

Lauren:    Especially Tulsans, I feel like. Very polite. 

Chip:    They are very polite. But it's a challenge internally, I think, to express yourself. You feel like you'll be complaining or all the different issues with confronting the situation and expressing your discontent. But as an owner, I try really hard to pull that out of my customers and find people that I know that feel comfortable to tell me when they have a bad experience. Business in general is difficult. I think that for any entrepreneur, the key is also one of the keys for success, is finding people that you can trust and that will trust you and are willing and able to tell you when you're doing something wrong, or at least that they will give you their opinion. At the end of the day, it's your choice to listen and analyze and decide the validity or the value of that advice, but having someone that will give you their true, honest advice is priceless. 

Lauren:    Do you ever feel like you have, between roasting coffee and managing Topeca and thinking about Hodges and your other bars, too many balls in the air? How do you keep them all moving? How do you keep juggling? How do you not drop the ball in a certain area? 

Chip:    Yes and no, more no than yes. 

Lauren:    That's good. 

Chip:    There are days, obviously, where it seems like there's way too many balls in the air. The growth, actually, has allowed me to do what I was saying in the sense of earlier, to focus on what I'm good at and to find people and have the scale to afford to hire people that are exceptional at that task. There's a joy of wearing a lot of hats, but there's a sweet spot to where you have enough complexity in your life that it keeps you from boredom but where you can manage making sure that the balls don't fall. That applies to myself as well as any of my employees. It's really difficult to be exceptional at anything that you're not focused on. If you're having to be pulled in lots of different directions at one time, you're setting yourself up for mediocrity at best. One of my joys, actually, has been not only for myself but my other employees, as well, is to continue to grow to where I can have someone that is exceptional and focused on each different aspect of the business, whether it's marketing and graphics design or a CPA doing the accounting or HR. If it's not done, it has impacts on people's lives. Everybody deserves and wants to get paid on time and managing payroll and payroll taxes and sales tax. There's just so many things that have to be done. I remember doing it myself. I got it done, but a lot of times there were hiccups. It's awesome to have someone that's focused on it and know not only that there aren't gonna be any hiccups, but also that the employees are being serviced better and that everything that I can do make their lives easier is a positive. 

Lauren:    Sometimes that's letting go of the reins on stuff, it sounds like. 

Chip:    Exactly. 

Lauren:    One of the extra projects that you also worked on was Torero, a restaurant that was by the BOK Center. Unfortunately, that didn't last very long. How many months were you open? 

Chip:    We were open for about nine or 10 months, I think. 

Lauren:    Nine or 10 months. Okay, short lifespan. 

Chip:    Yep. 

Lauren:    Can you talk about what happened with that? 

Chip:    Definitely. We had some investors approach us with the idea of developing and opening a restaurant in that area. They have been a big part of the redevelopment of that area. They were looking for and trying to find the right match in order to be an anchor restaurant for the future development that was gonna be happening. I think a lot of the biggest challenges we had were size. It was a very big restaurant. It was designed probably anywhere from a year and a half to two and a half years before we actually opened. The whole process took anywhere from a year and a half to three years, probably, from negotiations and design and redesign. It was all based on an idea that what that neighborhood's gonna end up being that just hasn't come to fruition of multiple hotels and apartment complexes and multiuse buildings. We designed it both size and scale with the idea that quickly and soon after we would open, all that other stuff would actually have been there. One of our biggest challenges was we got Best New Restaurant of the Year from "Tulsa World" and "Tulsa People" and number of great articles and response from the community, but the challenge is that there's a lot of different opportunities and places for customers to go. A lot of times, people think about where they're gonna go by area as much as they do by restaurant. That area, when it was busy, was really busy. We were busy. Then when the area was slow, we were slow. 

Lauren:    You depended pretty much on the BOK Center to have an event going on for you to have people in your restaurant. 

Chip:    Yeah. 

Lauren:    Okay. 

Chip:    You know, there are some businesses that are there, but the majority are two streets off. Tulsa's weird in that at lunch time, you can be on a specific street and it's packed, and you walk one or two streets off and it's just dead. Having the lack of that consistency of volume of sales was a really big challenge, especially and amplified with the size of the restaurant that it was. I think that the area is a beautiful area and it has a lot of potential, but it's just gonna be another couple years before everything comes to fruition, I think. 

Lauren:    Is this still something you're passionate about that you could see revamping or bringing back somehow? 

Chip:    You know, we get asked a lot of times if we would add some of the items of Torero menu to Hodges or open it up again. You know, we all miss the food. We always talk about that. There's always a chance, so we'll see what happens. 

Lauren:    What do you think's the biggest thing you took away from that whole experience, that pretty big failure? How did you grow personally through that and learn, now that you have some hindsight and you're able to say, "Okay, that didn't work but this was worthwhile because X?" 

Chip:    Yeah, definitely. I mean, it was the largest project that we had done so far. With that, it was also the largest challenge I think I've ever had. With that experience, there were just a lot of things that it forced me to implement. One of the reasons why I pushed myself to finally hire a CPA was adding that to our number of businesses. That was the straw that broke the camel's back on forcing me to break down and hire a CPA. That's been awesome for all of my businesses. We got to work with a great consultant that came and gave us a bunch of advice with stuff that I'll use for the rest of my life. The challenge of managing that many employees and connecting and operating a restaurant of that size, there's a lot of things that we I think did right and there were some things, obviously, that we could have done better and did wrong. But at the end of the day, I think that, for me personally, one of the biggest challenges was just the fact that the neighborhood was not as developed as it will be. 

Lauren:    You said you grew a lot through that relationship with your consultant. You said it would change how you operate the rest of your life. What are some of those lessons that you learned through that person? 

Chip:    Restaurants are hard. I think it was him that said. Someone I remember once told me that restaurants are a place where you're trying to manage both manufacturing and retail in the same space. Managing your caustic goods with the idea of every time a hamburger sold, X number ounces of beef is taken out of inventory, two buns are taken out and a slice of cheese, and so on and so forth, isn't very effective. It's very difficult to have a system of that level. There are some places that are able to execute on that type of system. But he helped us implement a system that was a great combination of being able to be easy enough to use and small enough of time consumption on a daily basis to execute on that it allowed the managers to do it. I think at the end of the day, if something isn't easy then it's not gonna get done. As an owner or as a manager or boss, the easier you can make a task for an employee, the more likely it's gonna get done. It was really rewarding to gain that control over our numbers and information that we were getting out of the system that he helped us implement. 

Lauren:    Be more data-driven, it sounds like. 

Chip:    Yeah, and I'm naturally data-driven, but restaurants are extraordinarily complicated. There's just so many moving pieces. Coffee roasting is a million times easier than operating a restaurant, but this was a really empowering tool for me to be able to have that data and then have information that I could communicate and work with the managers to execute on. 

Lauren:    Talk a little bit about your personal growth. I think a lot of entrepreneurs face this internal, and you talked a little bit about risk-taking. What do you think is the biggest personal growth that has come from your journey? 

Chip:    For me, I've always been someone of searching for balance. I'm a pretty easygoing guy. I enjoy putting myself in environments where they are new and they are a little more uncomfortable, but the biggest personal growth has been just confidence. Little by little, you acquire more and more knowledge and experience. It's with that that you can enter into these complex situations where you have a lot more confidence in not only what's gonna happen and after you have succeeded and failed, both, multiple times, it makes it easier to weather the storms and how to confront those issues. I think, for me, the biggest reward and process has just been the development of confidence and understanding of the different variables in order to be able to execute better. 

Lauren:    My final question. What would you say to other entrepreneurs who are in the thick of it right now, might be facing some failures of their own? What would you say to encourage them? 

Chip:    They have to learn how to take risks and to fail and to be okay to fail. Take risks that they know they can get back up from with the idea of learning from them, and then executing differently on the next time. It's through those failures that you learn about yourself, where you learn about the industry and the business that you're in. You learn about other people and how to work with and to manage them. It's those challenges that create the perspective of how the world works. 

Lauren:    Thank you so much for coming in today to share your experience, your story, with us, Chip. We're really grateful. 

Chip:    Thank you. 

Lauren:    I need to go get a cup of Topeca Coffee, I think. 

Chip:    Me, too. 

Lauren:    Next week on The F-Word ... 

Tim:    It was scary there for a while. I mean, I didn't take a salary for two and a half years. 

Lauren:    Tim Smallwood talks about establishing Oklahoma's first tropical smoothie café. 

Dustin:    The F-Word is brought to you by 36 Degrees North, Tulsa's base camp for entrepreneurs. To learn more about our workspace, community, and resources, visit 36N.co. The F-Word, season one, is recorded at KOSU Studio, hosted by Lauren King and produced by Julie Combs. 

 

The F Word with Shannon Wilburn, Just Between Friends

A pastor’s wife, strapped for cash, holds a gently-used clothing sale in her living room. Fast forward 20 years, and the concept- now known as Just Between Friends- is an international franchise recognized by Forbes and almost every major media outlet. But the path to this point was filled with unknowns for cofounder and CEO Shannon Wilburn. She didn’t have a business background and knew nothing about royalty fees, disclosure documents or raising capital. Listen as Shannon discusses facing her insecurities and building something bigger than she ever imagined.

[TRANSCRIPTION]

Shannon: Because I didn't have the business background I didn't know you could go raise capital or get investors. 

Lauren: This week on The F Word

Shannon: I left that meeting, drove straight to Barnes & Noble, and bought the book Franchising for Dummies.

Lauren: Shannon Wilburn, the co-founder of the international franchise, Just Between Friends.

Shannon: Sometimes you are going through the valley, but you're going to see the sun soon.

Lauren: If you're a mom or a dad, chances are you've heard of this. Just Between Friends is a pop-up consignment shop with kids' clothing, toys, furnishing, maternity clothes and more. Today we're joined by Shannon Wilburn, the co-founder and CEO. Under Shannon's leadership, the company has grown to 150 franchises in 30 states. It's been featured on Good Morning America, The Today Show, CNN, and has been on Forbes' list of Top 10 Franchises to Buy for three straight years. Shannon, we're so excited to have you.

Shannon: Thank you for having me. I'm excited.

Lauren: I love that you have a classic start-up story. You began this whole thing in your living room. Tell us about that very first sale, why you did it, and how it went.

Shannon: Yeah sure. So I had a one-year-old and a two-year-old. My elementary education degree had served me well for a couple of years, but I wanted to be able to stay home with my kids. And so I had told my mom, who lived in the Dallas-Fort Worth area, if you ever hear of anything, let me know of something I can do to make a little bit of money. This was in the late 90s. So she called and said, "Shannon there's this event that they're doing in Fort Worth. I think you need to start it in Tulsa." She didn't have a lot of information. If those of you who are old enough can think back to before the internet and before email and really small business ... You had to make those connections over the phone. She didn't have any information for that business and she didn't even go to it. It was through friends that she even found out about it. She called and said, "Hey, Shannon, there's this business. It's a pop-up consignment event." I don't even think she used the word pop-up because that wasn't a thing back then. But she said families bring their gently used clothes, they make a portion of the proceeds and then the business makes the rest to be able to operate. And so she told me about it and it sounded like a lot of work. But I called a friend of mine from church and said, "What do you think about this idea?" She said, "That sounds great. I want to do it with you." So that's really how our partnership formed. Daven Tackett is my co-founder, and she's also a local Tulsan. We started there in my living room and we convinced 17 people to bring us their gently used children's and maternity clothes. And we sold about $2,000 worth of merchandise in two days. It was the hardest $150 I think I've ever made, because we prepared 17 families' items. Daven and I did all of the clipping loose threads, laundering, hanging up, tagging -

Lauren: That's a lot of work.

Shannon: There was no online bar-coding system. It was all handwritten tags. We used a ten key to check people out and used the kitchen drawers as cash drawers and someone tried to buy my couch. But it was inside. We didn't want it to be a garage sale. We went from my living room to three-car garage, then to a church gymnasium, then to the Tulsa fairgrounds. Paul and Daven actually ... Paul is Daven's husband. They actually run the Tulsa business now, still at the Tulsa fairgrounds. It's one of our top five events in the nation. We started franchising in 2003. I run the franchise system now.

Lauren: Okay, very cool. Before we talk more about the growth of Just Between Friends, your journey with consignment actually started at a really young age. There was a big change in your family.

Shannon: Right.

Lauren: Will you talk about that a little bit?

Shannon: Yes, absolutely. I have an identical twin sister. When my sister and I were 12 years old, 1982, my dad who was 33 at the time, was diagnosed with multiple sclerosis. He had the form of MS where he went from a cane to a walker to a wheelchair in a matter of six weeks. He went from a six-figure income, being CFO of an oil and gas company, to going on disability. So our life changed drastically. We moved out of our custom home that we had just built, got rid of our brand new cars that we had just bought, and moved into a rent house and life changed. I can't say that it was hard, really. I remember thinking, well this isn't fair. Probably my dad thought that it wasn't fair too. I really felt like the Lord was leading us through those times. Maybe even in preparation for what I was going to be doing in my future.  Anyway, I started shopping consignments. We didn't have a lot of cash and so we had to stretch our dollar. My sister and I, instead of shopping retail, we started shopping consignment because our dollars went further. I remember my mom saying, "Only buy it if you love it." Because she knew that we had to do that, and I know lots of families live like that. It was just natural growing up, shopping consignment. When I got married to a pastor, when we had kids, things were still tight. I knew that we needed to continue to stretch our dollar, so I shopped consignment for my kids. That was what led up to the birth of Just Between Friends, if you will.

Lauren: So this background, this passion fuels you today?

Shannon: It does. I love being able to see families stretch their dollar. I don't work at the events any longer since I'm running the franchise system. But one of the last times that I ran a cash register at the Tulsa sale, I remember a young mom coming in by herself. She was pregnant. She looked to be probably 18 or 19 years old. Didn't have anyone with her. She came up to the register with four items. It was like burp cloths, a bag of miscellaneous bottles, three onesies that were in a bag, and then something else. I can't remember what it was. But the total was $10.80. I remember her standing there, looking embarrassed, and she said, "Oh, I didn't realize you charged tax." And so she was looking at the four items, which are essentials, trying to figure out what she was going to put back. And I was devastated for her. Because I was like, "Take it." You know? Then I went in the office and cried. But that's real life for a lot of people. And really the passion that drives me and the passion that drives our franchisees across the country is just being able to have a community of people that really help each other because that's what this is about. If we didn't have families bringing items to sell, and we didn't have people purchasing items, then the concept wouldn't work. But thankfully we do have people that value saving money and people value making money so it works.

Lauren: Your first sale was in '97?

Shannon: Yes.

Lauren: And the idea caught on like wildfire like you were saying. Just grew and grew and grew. You decided to franchise in 2003. That's a huge step. What -

Shannon: I didn't know what I was getting myself into quite frankly.

Lauren: What was going on in your head and in your heart in that time of deciding to franchise? I think a lot of businesses reach a point of, is this something to do? I think it's a question that comes up across a lot of -

Shannon: Right. I meet ... It seems like every month I'll get a call from someone that says, "Hey, Shannon. I have a friend who wants to franchise your business or I want to franchise my business. What advice would you give?" I actually did that this past weekend. I did that with someone based in Oklahoma City. When we were growing the Tulsa business, we kept thinking that we were going to max out our revenue potential. We kept thinking it can't get any bigger than this because Tulsa really embraced it. I credit Tulsa and Tulsans for really putting us on the map because we wouldn't be here without just that initial interest and growth that we had here in Tulsa. But friends and family found out about the growth of the Tulsa business and they started asking us "can we start this here" and "can we start this there." Because I didn't have a business background, my elementary education degree did not teach me that you shouldn't let people use the name Just Between Friends. So, if we're talking about failure ... You know again, I feel like the Lord's hand was in this because we made lemons out of it. I mean, we made lemonade out of lemons. We went ahead and helped people get started in their own state and in their own city. I think we helped 10 people get started and let them use the name Just Between Friends because again we didn't know that we weren't supposed to do that. When the opportunity presented itself to franchise, meaning I was overwhelmed with helping those other business owners do what we did and do it well ... But they were really helping us prove the concept. I didn't know that term back then, proof of concept. But we went and told them that we're going to franchise and we want you to be our first franchisees. Many of them hung around and became our first franchisees and are actually still franchisees today. That was why we did it. I didn't know at the time that I should be nervous about it. We prayed about it. When someone made the suggestion that we should start looking into franchising, I didn't even know what franchising was. I mean I knew McDonald's was a franchise but I didn't know ...

Lauren: What that looked like ...

Shannon: What that looked like or you know. And so I left that meeting, drove straight to Barnes & Noble and bought the book, Franchising for Dummies. Read that from cover to cover. Talked to my business partner, Daven, about it. We were like, this might work. So we reached out to people who had been there, done that. We didn't know a lot of people that had franchised their business. But Daven and I had a friend of a friend in the Dallas area that had started Cici's Pizza. So we drove to Dallas and met with him for three hours. It was just golden gold information. We came back and we hired an attorney, and started selling franchises. The goal was to sell 10 franchises a year. Anyway, that's how the franchise system grew. In the meantime, the Tulsa business was also growing. It hadn't leveled out at that point. We had two businesses that were doing well. So, that was fun.

Lauren: Yeah, that's a lot. And you've met your goal of 10 a year. You're at a 150 franchisees now in 30 states and Canada. You're international. Congratulations. That's amazing.

Shannon: I love being able to say we're international. The international headquarters of Just Between Friends is in Tulsa, Oklahoma. Thank you very much. 

Lauren: Obviously, there's a lot to celebrate. But I'm sure these past 15 years, and you've touched on it a little bit, there've been some rough spots. Can you think of ... What's one big mistake you made or a scary time that when you look back maybe you still shudder a little bit like, "Oh my goodness, how did we get through that?"

Shannon: Wow, okay. So lots of scary points in the business. I'm trying to think of which one to share. I think franchising is hard. It is ... I love being a business owner and I love helping other businessmen and women realize their dreams of ownership. I love being able to mentor and help them. But you can't do the work for them. Probably early on ... We bootstrapped our business. So we borrowed from the profitable Tulsa business to support the franchise system because it was still so new. And our royalties are really low so we don't charge our franchisees a large percentage of their revenue like lots of franchise systems do. Mostly because they don't own the product. So it's not like you're taking a full retail product. There's not a lot of margin. Our royalties in the beginning were not really enough to sustain us and support us how we needed to be supported. And again because I didn't have the business background, I didn't know you could go raise capital or get investors, or even ask friends and family for money. That wasn't something that I even knew about. There was no 36 Degrees North back then. Anyway, the downturn in the economy at end of 2008, 2009 ... because lots of people were leaving corporate America and looking to really take their future into their own hands, we sold 30 franchises in 2009. So, while the rest of the country was in a downturn and people were losing their jobs and revenue was just really down, we were growing like crazy.

Lauren: It changed your business.

Shannon: It did. We sold 30 franchises that year. Everything was focused on selling franchises. Then because when you sell a franchise you're taking in initial capital for a franchise fee, but then the next year you have to support those franchisees, and they're not doing a lot of revenue at that point. And we're charging a small royalty, so it's not like we had hundreds of thousands of dollars coming in the next year to support these 30 extra franchisees. What happened was, everything was focusing on getting them up and running, that we were not focusing on supporting the franchisees that we currently had. So in 2010 we closed 10 franchises. I felt like that was a huge personal failure for me. Just that I didn't see that coming and that we weren't there as a franchise system to support these people who had put their money and their time into a business that they thought could be there for them. 

Lauren: How'd you come back from that and keep yourself from getting too stretched thin in the future?

Shannon: We realized really quickly that we needed to put some capital towards hiring more support. That became the next year... 2011 became really the year where we focused on supporting the franchisees in the way that they needed to be supported. That's something I'm really proud of now, is I feel like we have a great support system. There's still stuff to complain about. Like franchisees, they have expectations just like you and I have expectations. And sometimes we're not going to meet those expectations. But we try really hard. We have high franchise satisfaction. We're not perfect. We still have terminations. We still have closures. But we try really hard to be there for our franchisees when they're in a hard spot. 

Lauren: How do you maintain the quality of your brand? It seems like you really have to trust your franchisees to not slack off or not go rogue. What do you do to protect that?

Shannon: And this is in any franchise system, really. I don't know if you've seen the movie The Founder, the McDonald story. But if you haven't seen that, that's really a good ...

Lauren: I need to go watch that now.

Shannon: Yeah. You watch it on Netflix. It's really good.

Lauren: Add that to my list.

Shannon: But it's really about the quality of people that you are asking to ... recruiting into your system. I don't like to call it franchise sales, although I do sometimes. You're selling franchises. Really what we're doing is recruiting franchisees. So we're recruiting like-minded ... We're like-minded in culture. We all love a bargain. Honest people. There's a huge vetting process when we're asking franchisees to join our brand. If I have an inkling that you're going to be dishonest and you're not going to really live up to the standard that we have set, then you won't be getting a franchise. I think that's a lot of brands because they don't want to ask for future problems just by saying yes to someone who isn't a good fit. Now you do have brands that... They will take anyone with cash. We are not one of those.

Lauren: So you do enough vetting at the beginning that it's not as much of a problem later down the road?

Shannon: Yes. That's the goal. Because people can be dishonest. They can slack off and not do what they're supposed to do. That's going to happen. But you can kind of get rid of some of that by looking at the people that you're bringing in to represent your brand. We do have people that will maybe slack off on the inspection process or whatever. We hear about it most of the time from other franchisees who ... I always tell our franchisees, "We are only as good as our lowest performing franchise." Because when you're a part of a brand, you get blamed and you get ... I don't know, you all remember what happened with Chipotle last year, a year before. And just how that's hard for all of the franchisees. That's hard for the entire brand, when something goes bad at one location.

Lauren: I know. The stigma hits everyone.

Shannon: Yes. Franchisees want to protect their investment. If a fellow franchisee is not really upholding or following the brand standards, we usually hear about it. Then we'll step in and you know, is it a mistake or were you doing this on purpose? We try and bring them back into compliance. One of our employees is called our Franchise Care Coordinator. That's a nice way to say compliance. She works with franchisees who may need a little bit of handholding. But we have no reason to kick people out of the franchise system, unless they're doing something really illegal or not trying, or something like that. Again, back to whoever you ask to be a part of your brand.

Lauren: I asked you earlier on the phone, what your haters say about you. You said they say you're too optimistic. You're out of touch with reality. I'm sure you're just one of many entrepreneurs who have that same feeling. What do you do to combat that and find a healthy balance between realism and optimism?

Shannon: Yeah, thank you. I cry a lot. No. Irrational optimism, that's kind of what...

Lauren: I think that plagues entrepreneurs.

Shannon: Yeah, I know. Well, I will tell you one thing that I did this year. First of, I have several weaknesses. Not just being irrationally optimistic. Every entrepreneur, every business owner has weaknesses and you have to combat that by other resources. That may be money, that may be people. I surround myself with smart people. That's one of the things that... I believe that's really the main reason why Just Between Friends is still here today. I have a great executive team. We just hired a CFO. We've never had a CFO. We're 15 years old so I'm really excited about that change. Another thing is, this year we added an advisory board. I have four gentlemen who have been in the franchising space for years. I don't know what their combined years in franchising add up to, but I know it's a lot. Man, just being able to sit at their feet when I'm having to make hard decisions... It's really good to have a different perspective. Because I am irrationally optimistic they help bring a little bit more realism.

Lauren: Bring you back down to earth.

Shannon: Yes. But then they're also there to help me figure out. When I brought the advisory board on, one of the questions that they asked me was, "What keeps you up at night?" 

Lauren: What's your answer to that question?

Shannon: Oh, gosh. About 50 things. 

Lauren: You don't have to go down that rabbit trail.

Shannon: Actually, what I told them was, "Well, nothing keeps me up at night. I sleep really well, but I probably shouldn't." I heard a speaker. I went to a franchising conference in August in Minneapolis. The speaker was awesome. The keynote. He said, "We all have 43 things that we need to be working on." I mean every business owner, every entrepreneur, we all have those things out there. Your list continues to grow. And he said, "But we really can't tackle 43 things. We can tackle three or four. So really look at the three or four that are coming to the top of the pile and put some initiatives and some strategy and some capital around those, the bigger problems. The other things will still be there when you wake up in the morning, but at least know you're working on whittling that down." That kind of gives me a little bit of relief, of looking at that long list every day and knowing that there are so many things that we have to be doing as a company in order to stay competitive in a changing marketplace. But it's really good to have advisors to help me out.

Lauren: Let's talk a little bit about that. I'm sure there have been many copycats of this pop-up children's consignment idea. How do you stay ahead of your competition and how do you stay competitive and innovative?

Shannon: I think really making sure that we're doing competitive analysis and watching what our competitors are doing. Not like a hawk. Sometimes I think if you focus too heavily on your competitors you're not focusing on where you're going. You're focusing on them. I think it's good to, every month, look and see are they doing anything new? Have your employees that ... If they're on their mailing list or whatever, to be watching and seeing any innovative ideas that they're doing that maybe we can implement. I guarantee they're watching us. We have people copying our stuff all the time, which I guess is flattering, but it's also frustrating. We listen a lot to our franchisees. They have a great pulse on the business because they are doing it every day. We do a what's called a franchise business review survey every year. We ask them questions about our technology, leadership, core values, training and support; what we're missing, what are the threats to our industry. So, listening to them and acting on some of that stuff. Also, something else we did this year because our marketplace is changing significantly, really over the last year especially with Facebook Marketplace... What we did is in November, we invited about 30 of our franchisees to fly to Dallas. We met at a Best Western. I told them this is not a conference, this is a work weekend. We're not going to eat conference food, have plated lunches. We're going to order Zoe's and McDonald's.

Lauren: Dig in.

Shannon: Yeah. They were happy to come. We spent two full days looking at really the threats to our industry, and coming up with innovative ideas to combat that. 

Lauren: Can you share some of those?

Shannon: Yeah. Well, I think we probably came up with 300 different things that need fixing. But the three... We had them talk about it and over the course of two days we narrowed it down to three top-level initiatives. That was... We have a software portal called... And interestingly enough it's all around technology. So I should stop saying that we're a franchising company and I should say we're a technology company because I think most brands, everything is done over technology these days. For efficiency, you know. So we are... Well, not to get too deep into the weeds here, but our CRM is really dated. So, adding things like email campaigns and stuff like that... We don't have that in our core system and so franchisees are having to go outside of our core system, which we don't want them to because that's added revenue they're having to spend, which means it's less money that's going in their pocket. And we want them to be profitable. So, that's one thing that we're looking at. We've actually hired a technology strategist. He's going to be helping us. We're in the assessment phase. He's having conversations with my staff, with franchisees, with all of our vendors that are in the technology space. We spend a lot of money on technology. That was probably the top-level, is looking at our franchise management software, our CRM. It's an antiquated system. We're ready to have something new. So, we've got someone that's working on that. The second thing was our point-of-sales, so more technology. Also, looking to see what other options are out there. Our point-of-sale works great, but it is something that I think the franchisees would like more business intelligence, because that's the newest thing. They want to be able to follow a customer. Right now everything is segmented and fragmented at the franchise level. They know what their people are doing, but they don't know if the same customer is shopping in Tulsa, in Broken Arrow and Owasso, and how much they're buying and what they're buying. So that's something that we're looking into.

Lauren: Being more data-driven?

Shannon: Being more data-driven and being able to have access to that business intelligence so that you can, number three initiative is marketing. What are we doing as far as digital marketing and where we're going with that. Those are the top-level initiatives that we are working on right now. We actually have our annual conference in San Diego in January, and so we're going to be giving some information and asking for some more task forces at that time. So, it's fun.

Lauren: Sounds like fun. Sounds like a lot of exciting growth on the horizon. 

Shannon: Well, I hope so. You know, you hope you're going through all this blood, sweat, and tears because you're going to grow. And there's always that fear that... I'm not driven by fear, really. But I do a lot of praying because there are fears that can creep up. You just have to know... I just have to know I'm not in control. I surround myself with smart people and I love that you guys are doing this podcast because every franchise owner has things that they go through that probably make them question if what they're doing is really what they should continue doing. So, just some encouragement out there, you're not alone. 

Lauren: That actually leads into our last question really well. We always end with, what would you say specifically to encourage an entrepreneur who is in the weeds of it right now, who's working to make this dream a reality ... What would you say to give them that push to say, you can do it, keep going?

Shannon: Again, back to the surround yourself with smart people. Couple of years ago, I felt like the Lord was leading me to do something in the franchising space when it came to women and franchising. You just have so few women in C-level positions within the franchising space, so really most industry. What I did in November... Actually, before the Thought Leadership Summit that I just told you about... It was actually after. But I invited... There were nine of us that got to come together. Women franchisors. So, women that have started different brands. And Two Men and a Truck franchisor was started by a woman.

Lauren: Yeah, she's awesome. I've heard about her.

Shannon: Yeah. So, Melanie Bergeron. She was there. There was a woman there who has four automotive brands, which is very random. Usually that's a man's industry. We had someone who started a concept called Lash Lounge. Someone who started Massage Heights. We had some really powerhouse women. One of the things that we talked about... It wasn't like sit around and talk about negative stuff, but one of the evenings it got to a point where we were talking about challenges. Challenges that we had experienced, really so that we could help one another. Because I tell people there's no new problems in franchising. If you are experiencing a problem... and this goes for business as well... If you are experiencing a problem with your business, someone else has already been there and has figured out a way around it. If you ask enough people, ask enough questions, you don't have to reinvent the wheel and figure out how to handle something. Just ask. So that's what that was about. Like, "Oh my gosh I've got this person is suing me or this franchisee is doing this crazy thing or this vendor's doing this crazy thing." We talked about all of that. One of the franchisors that was sitting there in that circle, she is probably the most junior of us. She has 10 franchises and has not been in franchising very long. She said, "I'm listening to all of this. Would you guys do this again? Would you start another franchise? Would you do this again?" And I was afraid of what they were going to say. They went, without fail, around the room. Everyone said, "Absolutely I'd do it again." Because there's that rewarding side for entrepreneurs. Yes, sometimes you are going through the valley. But you're going to see the sun soon. And you're going to come up on the mountaintop here pretty soon. But I think a lot of that is about surrounding yourself with people that can help you. You do not have to be doing this by yourself.

Lauren: And you shouldn't be really.

Shannon: Right. Exactly. So, I'm thankful for this podcast. I know it's going to help a lot of people. 

Lauren: Well, thank you so much for coming in. Thanks for chatting with us. I love hearing your story. It's so good.

Shannon: Well, thank you Lauren. Thank you.

Lauren: Next week on The F Word.

Chip: My expectation was to fail, and that I was going to fail on a small enough scale that I could get back up.

Lauren: The founder of Topeca Coffee, Chip Gaberino, shares his highs and lows of building his international seed to cup coffee company.

Dustin: The F Word is brought to you by 36 Degrees North, Tulsa's base camp for entrepreneurs. To learn more about our workspace, community, and resources visit 36n.co. The F Word season one is recorded at KOSU Studio, hosted by Lauren King and produced by Julie Combs.

 

The F Word with Zac Carman, ConsumerAffairs

One could argue that ConsumerAffairs is the most “Google-esque” company in Tulsa. But before he built the international company, with a culture of beer taps, “Bacon Fridays” and free yoga, CEO Zac Carman was hustling in Silicon Valley working for tech companies and private equity firms. It was there that he first took stabs at entrepreneurship, building multiple startups that ended in failure. Listen as Zac talks about those experiences and how they prepared him to successfully navigate big changes at ConsumerAffairs.

[TRANSCRIPTION]

Zac: We don't value hard work, we value astonishing outcomes. 

Lauren: This week on The F Word.

Zac: I have 100% traffic coming from one place, and I have 100% of revenue coming from one place, so really this is the worst thing ever. 

Lauren: Zac Carman, the CEO of Tulsa based company, ConsumerAffairs.

Zac: If you're in the grind just be reminded of the prize. 

Lauren: Welcome to the first episode of The F Word. We are so excited to finally share this project with you all. It's been a long work in progress. I'm your host Lauren King, I'm the communications coordinator for 36 Degrees North in entrepreneurial hub in downtown Tulsa. If you haven't already, I highly recommend listening to the intro to this podcast series by our executive director, Dustin Curzon. He explains our goal behind the series, why we pick the name that we did, and gives a great preview of the entire season, so make sure to check that out. 

Lauren: But this week we're here with Zac Carman. He's the CEO of ConsumerAffairs, a company that has two parts. A, they help consumers learn more about products before making big purchases, and B, they help companies understand their customers better. Right now, there are over 5,000 brands on the Consumer Affairs platform. Under Zack's leadership, they've grown tremendously over the past six years. But Zack's road hasn't been easy, it's had twists and turns, including failed startups, and a complete overhaul of the Consumer Affairs revenue model. Zack, we're excited to hear the nitty gritty of all that, thanks for being here today.

Zac: Excited is an overstatement. But I'm happy to be here.

Lauren: Great. Hey, let's start with life before ConsumerAffairs. Before all this success, you actually had a few startups that ended up failing. Tell us a little bit about those companies, and more specifically what you learned in that process.

Zac: Yeah, well it's a long road. It's a long road. Even ConsumerAffairs has been a long road. I think we joke about it's seven year overnight success, and I think that most companies are that way. But before Consumer Affairs, I worked at a private equity firm, so my job there was to sell money to entrepreneurs, that's what most private equity and venture capital actually is. Then while I was there, I tried to start a couple companies, and one was pretty successful, ultimately taught a lot ... Taught me a lot about partnerships and that was a mobile content business, so we deliver content to people's cell phones on a subscription basis, and then I also co-founded a chain of fitness clubs while I was there. That's was it, so I owned a third of a chain of fitness clubs in Northern California, and we opened that one ... We opened our flagship club in December of 2008 in Sacramento, which was like if there had been a nuclear bomb center of the 2009 financial crisis and subprime crisis it would've been Sacramento. That was a really interesting learning experience.

Lauren: I bet.

Zac: Then before that I worked ... Before private equity, I tried to start a company while ... Moonlighting while I was at Atachi, and that was a company in the ... Like Netflix with a set top box. It's like Netflix, but you needed a Ti vo to make it work because once upon a time, the internet speed was so slow that you needed to download it over a long period of time.

Lauren: Crazy to think about a world without Netflix.

Zac: Yeah, crazy to think. Once upon a time, there was no Netflixing and chill.

Lauren: You were trying to create the Netflix.

Zac: Netflix did not exist. It wasn't common vernacular, but yeah, we started that business right at the same time Youtube was started. Our thought was, 'well we know how to build set top boxes, we know how to build user interfaces,' and we had some interesting technology around content distribution, and our goal was to go into the foreign language programing space because there wasn't a lot of offering. At that time, there were actually in large cities, there were ... There are these ... Like in Chinatown, there was a Chinese focused video rental shop. You could go in and pay them like Netflix, pay 'em a subscription, $50 a month and come in and take out 10 videos at a time. 

Lauren: So your goal is for people to do that from home. 

Zac: That's what I wanted to do, yeah.

Lauren: Yeah.

Zac: Totally failed. The worst idea ever.

Lauren: Okay, why'd it fail?

Zac: No, it was a good idea actually. I think it failed because it was ... I think we were talking to it ... Before we started it, I was mentioning it was big mistake that people make is not burning the ships, and when you are ... Context switching is real, right? When you're doing one thing all the time, you can't really do something else. Or if you can, you're not me. Maybe there are people that can do that, but definitely not me. I think when you are trying to do one thing, you should just do that, and do it well. This is a problem that a lot of entrepreneurs have, is lack of focus. It's exacerbated when you're trying to make a living, and then also try and start a company at night, just doesn't work. It can work, but just not as well as it could. 

Zac: So I didn't have that focus, I'm glad I didn't do that because it was also, we weren't the right people to be running that business. We weren't ... It's difficult, we weren't able to raise money. It took a lot of capital, and we weren't able to raise money because ... Something I still have difficulty with is distilling the story into a tight vision statement, that's really hard. I think successful entrepreneurs are able to take a step back and do that, and I just hadn't learned that. I was like, this was 15-20 years ago.

Lauren: Learned a lot between then and now?

Zac: 15 years ago, 15. Yeah, I think I learned a few things between then and now. 

Lauren: So this Netflix idea fails, you go on to your job in private equity, pretty cush job. Why did you wanna leave that?

Zac: Wasn't that cush. Private equity is, yeah, super cush. Private equity is a grind. It's really feast or famine to the extreme for sure. You do a deal and the number of transactions you do is very few, so I think that was a component of it. I think also I was ... I had ... The reason I took the job at Mainsail Partners, which was a total lark kind of thing, because it was a startup of its own. So these two young guys had left a large private equity firm called Summit Partners and started Mainsail, and I was one of the first ... I was the first person to join when they got an office. 

Zac: But we ... I think the reason I wanted to go in back into investing or into investing really was to learn what are the attributes of a good business, what are the attributes of a good entrepreneur, and what was so fascinating about the Mainsail opportunity 'cause it actually took a really big pay cut to go work at that private equity firm because I was already ... I'm an engineer, I was on a rotational program at IBM, worked in consulting, I worked in sales, and I was a really good sales guy. No, I was an okay sales guy, but I was-

Lauren: Honesty.

Zac: Yeah, or vanity. Let's be clear. 

Zac: No, but I was making a lot of money in sales, and it was not a hard job, so I played a lot of golf, went to the gym all the time, not ... Clearly don't do that now, but ... So it took a big pay cut to actually do it, but what was so fascinating about it was the job was cold calling. The first 18 months I was there, I made 8,500 cold calls and talked to 2,500 entrepreneurs. 

Lauren: Oh my goodness.

Zac: And flew to 400 companies, so over a four or five year period, I was able to fly out and meet 1,000 entrepreneurs, and see 1,000 companies, and actually go and see those operations. Not like due diligence them, and ultimately that was what came out of it, was that when you're cold calling a company and you get that entrepreneur on the phone and learn about that business from the entrepreneur for 20 or 30 minutes or an hour or whatever, like a sheet of paper in a ream. If you due diligence a company and invest in a company, maybe it's another 10 or 15 sheets that you learn, maybe 30. Then if you do board work, or do a project, maybe there's a 10 or 15 sheet that you're gonna learn.

Zac: I ran Corp Dev for one of our companies. You learn more, but you don't really learn the whole ream, and that's what I was craving. Was there were types of industries and types of business that were just really awesome, and I hadn't been able to invest in one, so that's why I left. I raised a search fund, what's called a search fund to buy Consumer Affairs, so it was more of a startup. You get a little bit of capital and then you conduct a professional search to find an asset that you would buy and then run, and that's how I came across Consumer Affairs, was through that effort, cold call. 

Lauren: So you found Consumer Affairs through this cold call, it was in Malibu at the time, and you decided to move it from California to Tulsa. I know you're a Tulsa native, but why come back? What made you wanna build your business here?

Zac: Well Tulsa's a great place to build a business. But I think, there was a company that I cold called in Oklahoma City called Pay Com, and there was this guy who built that business, Chad Richardson, who you should definitely have on this show if you could get him, he's amazing. That company's quite large now, publicly traded billions of dollars in enterprise value, and when I called it ... When I cold called it the first time, I think they were about 8 million in revenue. What was fascinating about that business is it's a software as a service business, and Chad had been able to bootstrap a software as a service business, raise no capital, and grow just like a weed, and in fact, do it really profitably. 

Lauren: And you think that's 'cause he was in Oklahoma?

Zac: 'Cause he was in Oklahoma. 

Lauren: Okay.

Zac: Yeah it was because he's in Oklahoma. It has to do with the sales efficiency lever that you can pull in lower cost operating environments. This is why you see the most successful ... I think the two most successful publicly trade software as a service business right now. I don't know, I shouldn't say that, but two really successful publicly traded software as a service businesses, one's in De Moines, and one's in Oklahoma City. It's ... Tulsa has a recipe above and beyond being fifth generation Tulsa. Tulsa has a recipe to build really big businesses here in a cost efficient way. 

Lauren: What's that recipe?

Zac: It's just we've got good people that wanna work hard, and the cost of living combined with that just translates to capital efficiency.

Lauren: Okay, so you came in, started growing Consumer Affairs and pretty quickly you completely flipped the revenue model on its head, you switched from just standard advertising on your website to a subscription based service, that's a huge risk.

Zac: Yeah, why did I-

Lauren: Yeah, why did you do it?

Zac: Why did I change the business model?

Lauren: Yeah.

Zac: It's not that I was super smart or anything, it actually had nothing to do with that. I bought Consumer Affairs and the business was just this really terrific asset, under managed asset, and we were able to grow the revenue pretty quickly, and this is an example. It was actually me ... I probably should not have bought the asset, it was a failure of my due diligence, and true understanding of the asset. 

Lauren: After all that training.

Zac: After all that training. What happened is we bought the business and we pretty quickly grew the revenue through some optimization. Thank God, we did because four or five months after I bought the business, we went down 55% on it Thursday, so the revenue on ... We come in at 10"00 AM, we're lookin' at it, we're like 'Gah, maybe somethings wrong. Is today a holiday? The traffics weird, what's goin' on?' Yeah, and Google had changed their traffic algorithm and that impacted the business really adversely as you can tell, and we need a right size cross structure immediately because we began hiring 'cause we're growing and we'd doubled the business in the first 90 days, which was great. 

Zac: But then I realized, 'Wow, this business has major concentration risks that I didn't understand.' I didn't understand them because ... It's not like I didn't articulated in the due diligence, I just didn't really appreciate the severity when you have a concentration risk like that. By that I mean 99% of the traffic came from Google dot com. So when Google changed their algorithm, it just one to one, you lose revenue. 

Zac: Then a couple weeks later, Google changed their publisher payout algorithm on the ads. So we were also running 100% of the ads through Google, so somebody comes from Google, lands on our site, sees an ad, clicks on it, we get paid. That impacted the business less severely, but I was like 'Wow, I have 100% traffic coming from one place, and I have 100% of revenue coming from one place, so really this was the worst thing ever. I need to figure out how to diversify that.'

Lauren: So they're really ... Are you saying there wasn't a lot fear going into how to change it or did you have any fear when you realized, 'Okay, something has to change and it has to be big.'

Zac: I was like 'Ah, it's not ... Look I can fix this. I'll fix this. That's what I'll do."'

Lauren: Is that your attitude usually?

Zac: Yes, you just cannot ... What are you gonna do? You can't change the unchangeable. Humans have a psychological trick to convince themselves ... This is not me either, it's a Ted Talk, but to convince themselves that unchangeable events are the best things that happened in their life. In this Ted Talk, the guy's like here's a guy who was wrongfully imprisoned and exonerated, talking about how going to prison was the best thing that ever happened to him because I was on the wrong path or something like this. So the best thing that ever happened to me was that the business went down 55%. It has to be 'cause I can't change it. 

Lauren: So how did you know what move to make after that?

Zac: I didn't, at all, so I spent about three or four months researching different things. I was like 'Well, we got this asset, still gets a million ... 800,000 visitors a month, it's great. What could you do with 800,000 visitors a month? 10% of them are mobile. What's the traffic like?' I really just dug into the asset and the business, and tried to think about what are the different things you could do. There was a nugget of an idea when I bought the business that something really interesting was happening in the type of content that we had, and something really interesting was happening in ... The whole thesis of it was that marketing was transforming from an opaque to a transparent format, and that in the context of that transparency, the content that actually enables transactions, i.e., commerce, would be the most value content. 

Zac: Here was this site that had reviews and complaints about products and services, really expensive life change oriented products and services. That content would be supremely valuable, maybe we could do something else with that content. 

Zac: Then I took a class on product development 'cause I knew nothing about product development, and there was this woman who had put together a course for why out of Stanford, so I took that class and it was like this is how you do product development. The answer is you build something, anything, idly something that will take money, and then you go and meet them. So I built a minimally viable product, if you want to call it that, that basically just charged brands money and allow them to log into something, and I sold 37 of those in ... 37 brands in 45 days in a variety of different types of brands, so Proctor&Gamble, pet food division, roofer, big online travel company, lots of different types of businesses that have different customer acquisition models, national versus local, online-

Lauren: But they all have this common thread of wanting to understand their customers.

Zac: Well they're all selling something.

Lauren: Yeah.

Zac: They're all sellin' somethin' for sure, and yeah, they all have reviews on our site, and they were all willing to pay for something. Then you just fly around and you ask them what they want in an unobtrusive way, ideally not coloring it, and they say they wanted to engage with reviewers, they wanted to learn from reviewers. Basically almost every product or service is oriented around that within a business, and I just realized, 'Ah-ha! Reviews can impact a few line items in the PNL.' They can impact customer SAT, which is ultimately a measure of your brand, and businesses would pay for that. 

Lauren: And you've proved that you could do that and here we are today. 

Zac: Yeah, overnight success. It took me 18 months to launch the product, so I gloss in the more ... In the less intensive story, I gloss over all that bad that happened the first year and instead talk about, 'Oh yeah, buy the asset, really takes you a year, a year and a half, to get your legs underneath you, a lot harder to build a business than you think.' Hiring or recruiting ... 'Cause there were three people when we bought it, so there was no engineering team, there was no product team, there was no design, there was no admin function, there was nothing. It was a 70 year old man running the website in his basement, and in a nice house in Malibu. So you gotta build those things, it's a lot harder to do that.

Lauren: Let's talk about your people for a second. You have about 270 employees, 130 of those are here in Tulsa, Consumer Affairs is known for it's Google-esque company culture.

Zac: Yeah.

Lauren: You have a cool office with beer taps, and bacon Fridays, which always makes me hungry when I see that on your Instagram, what's your theory behind all that?

Zac: Well I think we talk a lot about it. I think that we don't value hard work, we value astonishing outcomes. Astonishing outcomes come from creative, intelligent, driven, smart people and like myself, and I just don't ... 

Zac: I don't wanna work at IBM. I don't wanna work at ... Now IBM, I'm sure they're trying to change their culture and I shouldn't say that, IBM taught me a lot, all those things, but I just don't wanna work some place that sucks, and I want to have fun, and I'm relatively young, but it's not the years, it's the miles. I'm probably more like 60, 'cause I've driven the car hard, but if all you do is work, wouldn't you want it to be awesome? Wouldn't you want it ... Like work with your friends and have an environment where you can ... Now as you grow up, as the business gets larger and larger, as the hiring gets distributed, cultural fit, it becomes more and more difficult. But yeah, it was just about ... Yeah, I wanna play flip cup. Let's play flip cup. Let's build a table that ... For flip cup. 

Lauren: So you think it's way more about the end result. It doesn't matter if you're trusting your buddy getting there.

Zac: No, I don't care if you work hard. We say work hard, play hard, of course, because it turns out the luckier ... The harder you work, the luckier you get, but what we really care about are astonishing outcomes, results. Those results can happen in a fun environment as well as a really boring environment. In fact, I think for creative people and problem solving and content, all of these ... Any creative task, it really, really sucks to be in a cubicle thing. It doesn't mean you can't hold ... You don't have to hold people accountable, this is the hard thing that we've learned over time is. You've gotta really be buttoned up on accountability if you're gonna reward and fire based on results.

Lauren: Do you have any specific stories around that?

Zac: Well it's like ... We start implementing these employee net promoter surveys, and our employee net promoter score is pretty good. If you go look at us on Glassdoor versus other people or something like that, I have the hate. There's hate reviews about me out there, you should go read 'em, they're awesome. I'm a big review person, I'm happy for people who write reviews about me. But our score is pretty good on Glassdoor a little better than Quiktrip or something like that, or like Facebook or ... Not as good as Facebook or Google, but we look at those factors and we just we start ... I read all of those comments every single month. There's an anonymous employee net promoter score that happens monthly, and then an in depth employee opinion survey quarterly. I just read the comments. We just started to notice people mentioning accountability, like 'Gah, people aren't really held accountable,' and I was like 'Wow, that really sucks, so you've gotta-'

Lauren: Find that sweet spot.

Zac: Yeah. Look, we all ... That's what I said at the stand up, I do ... Not a stand up, but a snapshot is what it's called, like a monthly, all hands where I talk-

Lauren: I thought you were gonna tell us you do standup comedy.

Zac: Oh no, we do stand ups and all hands that we do. It's team based now, but every Friday during bacon Friday, we all talk about different things. The teams get up and talk about what they're workin' on, celebrate wins-

Lauren: That's cool.

Zac: And things like that. Then once a month, I'll do a state of the union kind of thing. I was like 'Look, it's like in college, we all knew of the friend who just couldn't hack it, right? Awesome dude, in fact, we let him in our fraternity, or we let her in our sorority, and she just couldn't handle the freedom of being able to party all the time in college.' Everyone knows that person, you could ... You create systems of control around yourselves, and there are companies that do that with people, and have strict performance management. It's ... You've gotta put those things in place, unfortunately, or put parts of them in place, but as little as possible because great people really don't wanna be in that environment.

Lauren: You mentioned it a little earlier, and then you and I were talking about it a few days ago. I asked you what your haters say about you. What you told me is that they say, "Oh I love to hear myself talk. I'm the worst assistant."

Zac: God, I'm on a podcast.

Lauren: "I lack empathy. I'm hyperbolic." How does knowing all that, having that self awareness, affect how you work?

Zac: Well a vain, bombastic, hyperbolist with reality distortion doesn't allow it to affect them. Doesn't change a damn thing I do, that's the answer. No, I think, no, you try, you try. I don't know though, the pendulum swing, right? You're aimin' for this ... For that middle, but pendulum swing, and I was thinking about it. This year's been choppy, it's been a rocket ship the years before. I was like 'Gah, did I really just become a softie this year?' I used to really Bobby Knight it like crazy. 

Zac: Originally, there was a big discord when I moved from San Francisco to here. When I moved in from San Francisco, 'cause in San Francisco I worked 80 to 90 hours a week, and then when I moved here I worked more because I was working for the first 18 months outta ... Or the first 15 months outta ... Where I was finding Consumer Affairs out of my bedroom. Wake up at 6:00, start working, be done working at 8:00-9:00, and just do that every day, and I'm by myself just crushing cold calls and researching things and doing things, and jamming a TU intern that was in my son ... Now my son's bedroom. But jut being like, 'Jeff, get on it, right?' 

Zac: Then when I bought the company, I was like 'Oh stand ups at 7:00, everybody gotta be here at 7:00.' When people didn't get things wrong, I just couldn't believe that people didn't wanna work all the time.

Zac: Until it's taken me years to build that muscle of empathy and understand that people value things other than this. Yeah, I don't know, not well is the answer. I think I take that feedback and you try and build those muscles, but I haven't perfected it for sure. I haven't really solved those demons.

Lauren: It's a process.

Zac: Yeah, you work on it. I think that's all you can do. It's like anything, right? It's like 'Ah, I eat too much. What am I gonna do?' My fitness pal premium, now I'm invested, keep that diary going. Then just because you ... It's like I read somewhere if you buy parents ... Parenting books, you're in the upper docile of parents, regardless of whether or not you read the book. It's nothing to do with whether you actually read the book, just buying them you're in the upper docile because at least you're proactively thinking about the quality of parenting that you're doing. I think just if you're thinking about ... If you're trying to be self aware, that's ... At least you're trying to be self aware and you realize that you may have some badness in you, bad traits in you. That's good, I think you should do that. Well one should do that, not you. 

Lauren: Well thank you.

Zac: I don't know you that well.

Lauren: Oh my goodness, yes, I think you're right. I think we can all use that. 

Lauren: Our last question is one we ask every guest. How would you encourage an entrepreneur that's in the grind right now, and just trying to keep going?

Zac: I hope that if you're an entrepreneur, you have read a book like Grinding It Out, which they made a terrible movie of, but Grinding It Out, the book is great. The book's really good, actually. The movie not so much, although I like that guy, but it's ... I think it's you ... You should do that, and then you should ... I love movies, you should then watch Wolf of Wall Street, and you should watch ... Then you should listen to some great early 2000s rap music like early Jay-Z kind of rap music. I think that then you'll be like you know what, hell yeah I'm gonna go do this. Bling-bling. 

Zac: Because it's like unless you ... It's just be reminded of if you're in the grind, just be reminded of the prize. Why are you doing this? You're not doing this really to make money, there lots of much easier to make money in other ways, on a risk adjusted basis for sure. So if it were a money thing, you'd be doing something else. The reason you're doing it is because you are so vain that you believe that you can do something, or you really like to build stuff. You wanna build something magnificently large, so just go do that. If it's too hard, then don't do it, that's fine too. There are a lot of people in the world who aren't entrepreneurs, but if you've chosen that, then just do it. Yes, stay focused, and just go do it. If you thought it was gonna be easy, please quit.

Lauren: Harsh. Thank you so much for your insight today, for your honesty, and sharing your story with us. I'm really grateful to you.

Zac: Thank you for doing this. This is great. 

Lauren: Next week on The F Word.

Shannon: When someone made the suggestion that we should start looking into franchising, I didn't even know what franchising was. I left that meeting, drove straight to Barnes & Noble and bought the book, Franchising For Dummies. 

Lauren: Shannon Wilburn talks about building her pop-up consignment shop just between friends. The company started in her living room and is now an international franchise. Make sure to tune in as she shares growing pains in best practices.

 

Announcing "The F Word" Podcast

[TRANSCRIPTION]

Speaker 1: ... because we were all in panic mode. How do we keep this thing afloat? I refuse to lose. I hate losing.

Speaker 2: If you're in the grind, just be reminded of the prize. Why are you doing this?

Speaker 3: I didn't even know what franchising was. I left that meeting, drove straight to Barnes and Noble, and bought the book, Franchising for Dummies.

Speaker 4: Many times, we would tell a customer, "Yes, we can do that," and I had no idea what I was doing.

Dustin: Hey, there, and welcome to The F Word, a new podcast from 36 Degrees North. I'm Dustin Curzon, Executive Director of 36 Degrees North. If you're not familiar, we're an entrepreneurship hub, here in the beautiful Tulsa Arts District, and we are pumped to shared some amazing stories you on the very first season of The F Word.

Dustin: You're probably wondering, what's the deal with the name? Well, we chose The F Word because it's the word that most of us don't want to talk about, failure. If you're an entrepreneur, it's really easy for us to think about all the great things that are ahead, and we're also really good at ignoring all the bad stuff that might happen. But the stats don't lie. Everybody's going to fail at some point. Also, if you ask most entrepreneurs, they'll tell you that their failures are just as important, if not more so, than their successes.

Dustin: We're going to talk about some epic failures. People who built great things, destroyed them, and then built them again. Our hope is that, through this podcast, you'll feel challenged, that you'll feel inspired to dream big and keep moving forward. This season is hosted by our Communications Manager, Lauren King. Say hi, Lauren.

Lauren: Hello.

Dustin: Because she joined 36 Degrees North, Lauren was a professional journalist, so she knows how to ask a really good probing question. I know this firsthand because usually I'm at the receiving end of these questions.

Dustin: Lauren, tell us, what are you excited about, this first season of The F Word?

Lauren: Oh, my gosh. There's so much to be excited about this season. I'm excited about the variety of entrepreneurs we met. One of my first interviews was with Chip Gabarino from Topeca Coffee Roasters. He talks about turning a struggling family farm into an incredibly successful seed to cup coffee company.

Lauren: Another episode I'm excited about it Shannon Wilburn. She's the founder of the Just Between Friends pop-up consignment shop. Shannon was actually a pastor's wife who just needed a little extra cash, and now her franchise covers the whole US and Canada, so really cool.

Lauren: I also really enjoyed our interview with Josh Juarez, the founder of Josh's Sno Shack, which is a Tulsa staple, of course. He started his whole business because he was in love. It's a great story. I think people are going to find something unique in each of these entrepreneurs that they can really relate to and grow from hearing their stories. I think it's going to be a good one.

Dustin: Awesome. Okay, so here's how it's going to play out. First episode's out today. Lauren's going to talk with Zac Carmen, he's the CEO of Consumer Affairs. He's going to talk about his first startup, that resembled something like Netflix. Then he's going to talk about how he totally changed the revenue model for Consumer Affairs, and then he's going to talk about why he thinks Jay-Z's music is critical to an entrepreneur's success. It's a killer way to start the season.

Dustin: After that, we'll release an episode every Tuesday for about eight weeks or so. We have a bunch of other entrepreneurs lined up; Eric Marshall from Marshall Brewing, Robin Siegfried from NORDAM-

Lauren: Who's hysterical, by the way.

Dustin: I'm excited for that one ... Adrian Kallweit from SeekingSitters and many more. We're excited about it, hope you are too, enjoy.

Lauren: Let's do it.

 

Serving Our Neighbors

We are excited to announce that 36 Degrees North is partnering with Family & Children's Services again for their annual Holiday Assistance program! Last year's drive was a huge success (see photo), but we're hoping to drop off an even bigger haul this year.

 
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Family & Children's Services is devoted to strengthening families and being a force of good in our community. They provide hope and healing to over 110,000 individuals each year by helping families in crisis, counseling abused children, serving those struggling with mental illness and addiction, and addressing other unique needs in our neighborhoods.

The Holiday Assistance program is a great opportunity to give back this season. Thank you in advance for your generosity!

Drop-Off Times: Monday-Friday, 8:00am-5:00pm

Drop-Off Deadline: Wednesday, December 13 at 5:00pm

Items Needed: Toys, books, games, hats, gloves, socks, toiletries, pajamas, coats

 
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10 New Tulsa Startups to Keep an Eye On

The number of startup companies in the Tulsa area continues to grow. A big reason for that is access to extensive resources to help founders develop their products faster and smarter.

One of those resources is BetaBlox, a business incubator that prides itself in the ability to accelerate startups' growth and increase their valuations- all in exchange for a little equity. Participants travel from as far as Dallas to participate in Tulsa's program. It's competitive, fast-paced, and turns out some sweet companies. And here's the proof! The following are the latest BetaBlox graduates. We have a feeling this won't be the last time you'll hear about them...

1. Patron's Mobile

This nifty service helps restaurants create their own, customizable apps- without big upfront costs or long-term contracts. The app can display a menu, collect customer feedback, create a loyalty program and send push notifications to users about discounts, happy hours, etc.

2. Gold Plated

An on-demand, personal chef to do all the grocery shopping and cooking? Yes please. Gold Plated assesses the specific needs of a family to match them with the best personal chef in town. Chefs then work for the family on an hourly basis.

3. Buffalo Matcha

Matcha is the one of the most ~tReNdY~ ways to pump antioxidants into your body these days, but a lot of what's on the market, quite frankly, tastes disgusting. Enter Buffalo Matcha. The nitro-infused matcha tea is delicious (trust us, we tried it) and should be on store shelves very soon.

4. LaunchPad Labs

It's a beautiful thing when entrepreneurship serves the greater good. The curriculum created by LaunchPad Labs teaches students soft skills, like confidence, creative thinking, personal branding and time management, and is incredibly easy for teachers to implement.

5. Chef Club Box

Don't let this sweet face fool you. Remmi Smith has been hosting TV shows, writing cookbooks and competing in Food Network competitions for a while. Now she's rolling out a meal subscription program called Chef Club Box, specifically designed to teach teens how to cook tasty, healthy meals.

6. OnDemand Mechanic

The days of waiting around at an auto shop to get your oil changed will soon be long gone, thanks to OnDemand Mechanic. Just schedule an appointment online, and they'll come to you to perform a wide range of services.

7. Weather Battle

What happens when you combine a weather man and a sports anchor? The fantasy sports of weather. Created by KJRH Chief Meteorologist Mike Collier, this game challenges players to predict the weather to win a little cash.

8. Claymore Group

This complete construction management company focuses on so much more than just the "brick and mortar" of construction. They want to change their industry by offering services from the very beginning to the very end of a development project.

9. Blender Unleashed

3D graphics are all the rage, and Blender Unleashed will teach you how to create them from the comfort of your own home. Their curriculum can help both beginners and intermediate designers take their skills up a notch

10. A to B Hauling

Stop waiting for bulky trash day to get the junk out of your house or yard. Set up an appointment with this on-demand service to get rid of big trash items, clean up property and even do the dirty work after a home remodel.

 

Say Hello to Our New Resource Manager

 
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We are excited to announce the newest addition to the 36 Degrees North team, Jessica Brent. Jessica will serve as our Resource Manager, working directly with 36°N members to connect them with the people, resources and tools they need to move their businesses forward.

Jessica brings experience working with entrepreneurs as the Executive Director of Tulsa Route 66 Main Street. She's also an entrepreneur herself! She is the co-owner of Homma Camp Co., a fully outfitted camping/event-planning  service and camp lifestyle brand.

With Jessica on our team, we look forward to better utilizing our partners' existing resources and working together to develop new strategies that educate and mentor entrepreneurs at all stages.

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Q&A with Jessica Brent

Where are you from and how did you end up in Tulsa?

I primarily grew up in Edmond, OK. After living in Los Angeles for a few years post-college, I followed someone back to Tulsa. I hadn't spent much time in Tulsa and wasn't planning on staying in Oklahoma for long, but I quickly fell in love with the city. It felt like just the right size after living in a big city like LA, and I was really energized by the pride and optimism Tulsan's have for their city. 

What’re your favorite things to do in your free time?

I love being active with my kids - going on hikes or walking downtown from our house. We enjoy going on mini-adventures - taking our VW bus on backroads and exploring the region. Of course we love camping. When I have some time to myself, I like to read, write and catch up with close friends over dinner or a drink. 

 
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Favorite local restaurants?

I love little diners and burger joints! Some of my local favorites are Meltdown Diner, Arnold's Old Fashioned Hamburgers, Bill's Jumbo Burgers, and Phil's Diner. When I want to splurge on something more upscale, it's hard to beat the Bull in the Alley.  

If you were to start your own business, what would it be and why?

I do have my own business - Homma Camp Co.! We started our business because we love adventuring outside, and with four kids, we have to be organized and efficient about it. We launched a year and a half ago with the intention of making it easy for people get get outside and enjoy the experience of camping, without all the gear and hassle. 

Favorite memory of 2017 so far?

Oh, there's too many! Rendezvousing with my bestie in New Orleans, adopting two foster kids, setting up tents at Willie Nelson's ranch in Luck, Texas, road tripping to Nebraska to see the total eclipse...

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What song would you sing at Karaoke Night?

I would not sing a song at Karaoke Night. Nope.

If you could splurge a whole paycheck on any store, which store would it be?

I'm currently feeling the urge to Instagram-ify my home a little more. I'd probably splurge on a great local home and lifestyle store like Jenkins and Co. or Retro Den. 

What are three things you would take with you on a deserted island and why?

Assuming the deserted island does not have wifi or cell service... A book (one I could read over and over, like the Poisonwood Bible). Pen and paper for writing and drawing. And a heavy blanket. I hate being cold!

What characteristics do you most admire in others?

Honesty, graceful confidence, and the ability to find humor in oneself and in stressful situations. 

 
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Email Marketing 101

Click rates. Lead magnets. Nurture sequences. You may have a rough idea of what these email marketing terms mean, but many don't know how they can directly affect the growth of their business.

Our friends at Prodigy Collective recently hosted a luncheon to explain just that. Their presentation is posted below. If you have any other questions after watching the video, we encourage you to reach out to their team.

36 Degrees North also plans to host a series of follow-up workshops to go more in-depth on these topics. Keep an eye on our calendar for updates.

Welcome Our Newest Team Member: Genyce Goodchild 🎉

 
 

36 Degrees North is excited to welcome Genyce Goodchild to our team! You’ll see her bright, happy face at our front desk as our newest Community Support Associate.

Genyce first joined the 36°N community as one of our coworking members. She and member Daniel McIntosh have used our space to develop the Brady Heights Church Network. Genyce has been a positive presence at 36°N since she joined, and she is a natural fit to fill this customer service role.

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Q&A with Genyce Goodchild

Where are you from and how did you end up in Tulsa?

Tulsa has been home since grade school. After the last of our four kids headed off to college, we moved into the Brady Heights area. We love the people, culture and neighborhood life of downtown Tulsa.

What’re your favorite things to do in your free time?

Explore, travel, hang out at local eateries, window shop at local specialty shops and galleries, reading, poetry and late-night conversations with deep-spirited friends 

Favorite local restaurants?

Wild Fork, Tucci's, The Palace Cafe, Stone Horse, Laffa, Antionettes, Kilkenny's and The Tavern

Favorite memory of 2017 so far?

My recent trip to Colorado and the addition of our 5th grandchild.

What song would you sing at Karaoke Night?

I would not sing a song at Karaoke Night.

If you could splurge a whole paycheck on any store, which store would it be?

Madewell or Williams Sonoma at Utica Square.

What are three things you would take with you on a deserted island and why?

Fire Starter - for warmth and cooking; Hatchet - for shelter building, cutting firewood and protection; Bible - for companionship

What characteristics do you most admire in others?

The ability to be hospitable, to listen and to be "with" people.

Seeing Tulsa as a Permanent Home

36°N Editor's Note: The following post is by 36 Degrees North intern Julie Combs. Julie is about to start her senior year as a marketing major at the University of Tulsa. Julie has served our team tremendously, and we know this sweet Alabama native will continue to do great things as she digs her roots in Tulsa.

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Looking back over the past two months of being the summer marketing intern at 36 Degrees North, it’s hard for me to believe that I’ve only been working here for just a short amount of time. Over the past several weeks, I have become fully immersed in the culture and groove of Tulsa’s “basecamp for entrepreneurs.” Every day is a unique and enriching experience, accompanied by new and familiar faces excited to be utilizing and enjoying our space. I cannot imagine another workplace in the city of Tulsa as vibrant and welcoming as 36°N.

 
Meeting Tulsa Mayor G.T. Bynum after a city council meeting at 36 Degrees North. So cool!!

Meeting Tulsa Mayor G.T. Bynum after a city council meeting at 36 Degrees North. So cool!!

 

This summer is all the more special as it is the summer before my senior year at the University of Tulsa. It is also the first summer I have not spent in my hometown of Birmingham, Alabama. For the past three years, Tulsa has been the perfect college town for me; I have gotten to know the city well and have enjoyed my time here. Yet, until beginning my internship with the George Kaiser Family Foundation, I didn’t really understand how special this town is. A growing art scene, incredible food culture, and vibrant urban development projects are just a few ways in which Tulsa is becoming one of the best places in America to live and work. Over the past month and a half as a GKFF intern at 36°N, I have seen first hand how this city is adapting for the better. My college town is swiftly becoming a place I could see as a permanent home.

While I’ve taken on a wide variety of tasks this summer (researching other coworking spaces, running errands downtown, working events and creating graphics), the project I have loved the most is taking headshots for all of our members.

I have always enjoyed photography as a way to give something unique of value to people I care about. There’s this great Annie Lebovitz quote that says, “When I say I want to photograph someone, what I really mean is that I’d like to know them.” In taking portraits for our members, I was able to get to know them on a more personal level and offer them something in return.

One of the members I shot, who I have loved getting to know this summer, is Amy Seigfried. Amy owns a triweekly email publication called Last Night’s Game, which she created specifically with a female audience in mind. Amy noticed a need for a sports publication that would recap all of the highlights (not just the stats, but the unique moments from the game as well) and deliver them in a neatly packaged, fun-to-read email that can be understood by even the most inexperienced sports fan. Needless to say, she is girlboss goals.

 
Amy is a serious #girlboss. Love learning from strong female entrepreneurs like her.

Amy is a serious #girlboss. Love learning from strong female entrepreneurs like her.

 

I have also loved getting to know the incredible staff at 36°N. I was able to take portraits for several of our team members as well. Whether it’s talking about one of my favorite Alabama authors (Rick Bragg, All Over But the Shoutin’ is an essential read) with Bethany, or soaking in Maye’s wisdom on higher education, or hearing about Tom’s trip to see Frank Ocean in L.A., interacting with the front desk staff is always one of the highlights of my day. Our staff is truly one of a kind, I have loved getting to know them on a more personal level and see how much they truly care about our members.

 
Maye! One of our sweet front desk team members.

Maye! One of our sweet front desk team members.

 

The best thing I have noticed about the unique environment at 36°N is the way in which our space facilitates community. Some of the moments that stick out the most to me are conversations around the kitchen island or back patio with members, talking about anything from how they met their spouse to why they decided to leave corporate America and try something a little different. I think that, often times, there is a misguided association of isolation with entrepreneurship. Here at 36°N, it’s community that is driving the individuals who work here. It’s not really the ergonomically-sound furniture or locally-sourced coffee; it’s the tight-knit community of people working incredibly hard to realize their goals here which makes our space a place where creative culture exists. It has been really special to see members who have joined since my time here slowly but surely warm up to our space and the welcoming individuals within.

 
Sweet Bethany is so full of life. Thankful to get to know her.

Sweet Bethany is so full of life. Thankful to get to know her.

 

This summer at 36°N has been incredibly memorable and enriching to me. The people in our community have made this an experience I will never forget in a city that I am proud to call home.

Amazon Web Services: Products Overview

Amazon Web Services is a great tool for entrepreneurs looking to store large amounts of data, host websites and make their businesses more productive.

36°N member Paul Dudley and his team at Sequoyah Technologies recently led a class on the different AWS tools and products. (Sequoyah is actually Amazon's only consulting partner in the state of Oklahoma, so you know they're legit.)

The following is a full recording of the class, including the question and answer session at the end. If you have more questions after watching the video, we encourage you to reach out to the Sequoyah team to learn more.

PS: Did you know that 36 Degrees North members get $1,000 in free Amazon Web Services credits? Learn more about membership perks here.

A Shift In Perspective

36°N Editor's Note: The following post is by 36 Degrees North intern Jordan Rambach. Jordan is about to enter his senior year as a finance major at the University of Oklahoma. We've so enjoyed having him on our team and look forward to what he will achieve in the future.

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When I became an intern for 36° North back in May, I had no clue what I was getting myself into. I was still in school at the time, and finals week was three weeks away and suddenly I got  an email from the George Kaiser Family Foundation that they wanted to reassign me to 36 Degrees North, rather than keep me in their main office. To be honest, I was pretty upset at the time because I had no inside understanding of what 36 Degrees North was or who or what was there, rather that it was just next door to my favorite place to get beer (Prairie Brewpub).

Jordan with Tulsa Mayor G.T. Bynum after a city council meeting at 36 Degrees North.

Jordan with Tulsa Mayor G.T. Bynum after a city council meeting at 36 Degrees North.

In the one month and 11 days that I have been an intern for 36 Degrees North, I can now say I feel exactly the opposite. Getting to meet new people everyday and hear about their lives and careers has been really important and valuable to me, and I’ve been able to take so much away from it. Whether I am standing in the kitchen making coffee or am working at the front desk, someone always seems to blow my mind with a new idea or something they are working on. For example, Malachi Blankenship and his team are about to launch UTown, a social navigation app, and Grant Burke with GradeDeck is looking for capital funding. There are so many people who I’ve learned a lot from just by hearing about the things they are working on. It makes me sad because I’ve had so much fun that time has passed so quickly, and I know that I’ll soon have to face the reality of being in a classroom and doing schoolwork again.

Something else that has been really important to me is the diversity of industries that people work in and the perspective they’ve shared about the paths they’ve taken to get where they are. I’ve learned about a broad range of topics that include but are not limited to: small business finance and taxes, event programming, marketing, customer service, investment, different coding languages, the different flavors of La Croix, and many others.

Jordan selflessly going out in the rain to run an errand.

Jordan selflessly going out in the rain to run an errand.

Two important takeaways that I will carry with me are the importance of having a diversified skill set and also what it means to be proactive in the real world, not just school. The highlight of my workday is meeting new people and talking to the ones I already know. As a wide eyed college student who doesn’t know what is ahead of me, I just want to say to everyone here that what you say to me means so much, and I take so much from it. I appreciate you all so much, and if I can ever be of help to you in the future, please let me know.

All the Best,

Jordan