BTU #446: Growing Black Rifle Coffee with Evan Hafer
"I spent about $1,800 buying bags and thinks, built my own website and started trying to sell coffee online. So basically I started Black Rifle Coffee from a passion that I sought to test out." - Evan Hafer
Evan Hafer is the Founder & CEO of Black Rifle Coffee, a small batch coffee roasting company. He started out at the University of Idaho, after which he spent 14 years in the U.S. Army as an infantryman, a Special Forces soldier, and a CIA contractor.
I came across Evan in a 2016 Forbes Article about the Top 25 Veteran Founded Startups in America.
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Selected Resources
Forbes Article about the Top 25 Veteran Founded Startups in America.
Coursera is fantastic. It has an online catalgoue from Penn State, Stanford, Michigan. I signed up for courses from Wharton. It's a great outlet. YOuv'e got a lot of access to Coursera.
Udemy is another great online learning - courses from specific personalities.
Lynda is a fantastic resource - it's amazing.
The first thing I do is google it and then take a course on it. How do I built a dashboard with my KPIs based on division. I can't tell you how to do that based on military experience - but I can google this and find classes on how to plug this in. It may take a few days - you can't be too impatient.
One of the best books I've read - Good to Great and Built to Last. I've read Good to Great - listened to it or read it, probably six times. These are some of the best books that I've read.
Podcasts: every day I can get into a half hour on marketing, or leadership / management - any time I can spend 30 minutes listening. It might not be the most sage advice at that time, who knows what type f
Show Notes
Please note that I type these notes during the interview so there are likely to be misspellings, grammatical errors, and misquotes. This is not meant to be a verbatim account of our conversation, but a VERY basic text transcript of our discussion.
How did you make the decision to leave the Army?
Jioned National Guard in 1995 while in College. Was still in 2015. 20 years in active duty or in the reserves, and 8 years with the CIA as a contractor
Had been thinking about it for 2 years. I had another business in Idaho - fly fishing, white water rafting, etc. I was planning on getting out and going to grad school or something like that. I was burnt out on deployments, coming up on 20 years of military service and wanted a change
What was your first job search like out of the Army?
I didn't really have one. I knew I was going to start my won business. I had been roasting coffee for ten years in Iraq and Afghanistan. I had purchased another company a few years before. I wasn't thinking of doing an online roast to order coffee company. My wife and I were thinking of opening a coffee shop. We had gone back and forth on what he had wnated to do. Ultimately we wanted to try to test the market. Didn't want to spend $100k trying to get a coffee shop. Ultimately, I wasn't sure if we could make it work. I could build a website and invest a limited amount of capital - I spent about $1,800 byying bags and thinks, built my own website and selling coffee online
What was the genesis of Black Rifle Coffee?
I was roasting enough coffee at the time for a few different restaurants and few friends. When I stood up the website and started selling online, after my first month I repaid the money I paid into the company. I was fairly convinced at the end of first month
For veteran listeners, how would you describe Black Rifle Coffee?
A lot of people say, I need a full blown business plan. Well, I'm a military guy and we go through a lot of planning and cycles around the planning. Every plan doesn't survive first contact. It's fine to do a five paragraph mission order, but the mission statement can't be around the idea - it needs to be around your life. My mission statement was: I will become economically emanicapted from the government and be able to feed my family through my own endeavor. Then I put out a combination of things I could do iwthin this operatino order. A lot of guys become wrapped around a tactic - I have to be THIS. I didn't I was just attached to the idea of being free from the US goverment and drove into marketing and branding and tact. If I can market one of the skills I have - I was roasting coffee and doing outdoors-e stuff. Black Rifle COffee was built out of these two things. Then I started to get a positive Return On Investment really early. If I spend $10 I can make $20... i can actually make a profit. Especially if I start to scale. I started in my garage with $1,800. I didn't hire any employees for my first year. Just me and my wife (part time for about 6 months of that firs tyear) . I was doing customer service, packaging and shipping, photography, social media, website. I was a one-man show. A lot of guys thought that seemed fairly difficult. I only slept about four hours a night for th efirst year of the business - 7 days a week. I had a thermarest in my office. I hired employee #1 after the first year. After the second year I ahd 26 employees. Now I have 84 employees. I've never taken out any debt in my company - no investment. I run it completely off it's own profit margins. I've scaled the company, continued to purchase everything and anything through the profit.
I can beat up my employees over $0.03 and a box. If I'm going to buy 12 tonnes of cardboard from China I know exactly how much that will be. There is nothing I wouldn't tell you about this business. I can tell you down to the cent for the last 2.5 years.I'll spend an hour or two in fulfillment, and hour or two in purchasing. Just packing a box and understanding exactly how I want the product to be displayed when it hits their doorstep. The customer needs to understand that no detail can be overlooked. I try to drive a detail oriented ship. We miss things but it's not because we're not trying it's because when you send out a few thousand shipments a day, you miss a few things. It's not as precision as I'd like it to be.
At what point were you able to start paying yourself a salary?
14 months - it was a few thousand dollars a month. Now, we'll do over $20M annual this eyar, and I still only pay myself $70k. I went from $2k to $4k in increments. But I've only paid myself for over one year in the last two and a half years. The more money you take out of a business the less it will grow. A lot of guys make this mistake really early. We sold two houses, and my wife and I went from making $250,000 per year as a high paid contract for the government to making NOTHING. For over a year nothing. I had sold two houses, a truck, all my guns, just to keep going. My wife was ready to kill me. It's definitely worth it. I've got a 40k square foot building a 60 kilo roaster - all of them are
What did you do on Active Duty to help in startups?
I was doing payroll in mission planning and our budget for our small indigineous force. I thought, if I can run this Afghan with a third grade education, if I can train them to do these multi-level kinetic operations this can translate to business. I thought of it as a small business. If you don't run your budget in a strict and proficient way you're setting yoruself up for your own failure.
I had the unique opportunity of working with some guys who had run a small business. My original mentor was a SpecOps guy and he transitioned to a small business. It was always in the back of my mind - I was going to be a business owner. Every part of my service - how does this translate into the business world. When I transitino out I need to be able ot translate this into something I can monetize.
Not - I need to be able to tell these stories. How do I take these skills and use them on the outside? They're very unique skills that very few people acquire. Military people are some of the most complex problem solvers in the world. When I look at my service - always look tot ranslate what you're doing now into what you're doing
Seek professional development opportunies. Seek some skills that the military can pay for but it might not be translatable to your MOS right now but how about your future. I went to a lot of schools when I was in and would come back when I was home and take professional development training. There's this total access to online learning There are so many different ways you can learn that you don't need the US military - but you have the ability to have the military pay for all the training you want to do. I've sat in on university classes to learn about economics
Resources
Coursera is fantastic. It has an online catalgoue from Penn State, Stanford, Michigan. I signed up for courses from Wharton. It's a great outlet. YOuv'e got a lot of access to Coursera.
Udemy is another great online learning - courses from specific personalities.
Lynda is a fantastic resource - it's amazing.
The first thing I do is google it and then take a course on it. How do I built a dashboard with my KPIs based on division. I can't tell you how to do that based on military experience - but I can google this and find classes on how to plug this in. It may take a few days - you can't be too impatient.
One of the best books I've read - Good to Great and Built to Last. I've read Good to Great - listened to it or read it, probably six times. These are some of the best books that I've read.
Podcasts: every day I can get into a half hour on marketing, or leadership / management - any time I can spend 30 minutes listening. It might not be the most sage advice at that time, who knows what type f
What has been the most challenging moment to date?
WHn you have 80 people who work fory ou you develop personal relationships with them. It's an ecosystem - people rpovide the balance in the ecosytem. Terminating people or repurosing them - having really frank discussions with people in general about work performance. These are incredibly difficutl things to do. A loto f business owners avoid tough discussions with employees, and I know why. I want the best for people - however, some people will never conform to the environemnt you're trying to build. You may love them and appreciate them - but they may not be a good fit for the ecosystem. The ahrdest part is managing people - it's very difficult. Knowing you like people but they don't fit into your company this is a really difficult challenge. Because the company's ecosystem always has to be in balance. Hire slow, fire fast. It doesn't mean firing will be easier but yo have to do it to grow the company.
A redwood grows really well in a redwood forest. It doesn't grow really well in Sonora. Just becasue they don't fit in in your company doesn't mean they won't fit in somewhere else. They'll be good people wherever they go. It might not be a good cultural fit. We tend to over exagerate people's failures - it may not be a failure on either part it may just be confomring to the envirnonemnt. It's a difficult part for managers - you're done here. I try to say this sin't a good fit how do we make you succeed somewhere else.
What has been the most rewarding moment to date?
Not just one moment - I always tell people when I was in the government it wasa pleasure to serve the country. But I got to the point where Iw asn't enjoying my job or my profession. Here right now in my life, I go from my house - two little girls 3.5 and 8 weeks, a beautiful wife and a loving household. And I go to my place of work, ten minutes away, full of people who are competent and they love me and I love them. Every corner of my life - even though there is stress - there is great people and nothing in my life doesn't insprie me at this point. I don't drag my feet going anywhere. I've never had that before. It's very strange to look forward to every day or every minute of my life. I think that's the greatest achievement I've had - I've been able to rapidly change my life. A lot of my professional life i was unhappy - now every day is a challenge. The people around me are fantastic and excellent people. It's so rewarding to know I looking forward to it.
I started with my goal of economic freedom. Everyone needs to define what happiness looks like. I love to work, the art of business. But I love rolling up my sleeves and going to work. So happiness - I'm emanicipating myself from government service. I need to create enough welath to become happy. A lot of people say happiness is about wealth or a means to an end. If you're not happy along the way - yo have to enjoy the mountain climb not just the summit. YOu can't just look back - oyu have to enjoy the climb.
What advice do you have for veterans thinking of starting their own company?
You have to be dedicated to being a business man. Even though you served you country and that's an admiral thing, the people of the United States don't owe yuo anything. I'm not trying to be negative - you have to be able to translate things into a new profession. You need to concentrate on the future not what you've done in the past. You need to find what you've done in the past you can leverage to be a better busienss person. You have to be humbled at the alter of business - the world doesn't owe you anything. It doesn't owe you anything. It helps you've got dedication and complex probelm solving skills. You need to be more committed to this than anythign else you've done before. Themost stress I've experienced wasn't being shot at - it was having a wife and child at home and knowing they have to be fed and what I did on a daily basis was going to provide a good or bad life for them. That's the most stress I've had in my life - it's constant and heavy. You have to dedicate yourself, and humble yourself. You have to take it on like you've never taken on in your life. you have to be so committed to it - you have to prepre for the worst and hope for the best
In many ways you're discounted because of your service - you don't have any business experience
What does the next 12 months look like for BRCC?
We're going to move out of Salt Lake to another state. We're moving the corproate headquarters to Colorado Springs. The enxt twelve months we'll open up 12 brick and mortar stores, logistics in different states and state specific roasters. And we'll have some joint projects going on with some veteran companies. And I think the next twelve months will be really big.W e launch our franchise initaitive in 18 months. Th enext twelve months will be a lot of work, we'll expand quite a bit. The big expansion is september of next month.