CEO Interview | Danny O’Neill
The Roasterie Factory
Interview with Danny O’Neill, Bean Baron, President/Owner of The Roasterie Factory
The Roasterie Factory
1204 W 27th Street Kansas City, MO 64108
- Where did the idea to start THE ROASTERIE come from?
I signed up to become a Foreign Exchange Student in High School. I wanted to go to either West Germany or Australia, and they sent me to Costa Rica. That summer, my friends were going coffee picking and asked me to go and I had this searing, awesome experience. I just loved being in the mountains. It doesn’t matter if I’m in Iowa, Ethiopia, or Kenya, or Brazil…the farmers are farmers are farmers and I love being with farmers. I loved the whole experience. So that was really the genesis of it, although I didn’t know it at the time.
Later, after college I was working for a corporation headquartered in Seattle about the same time that Starbuck’s was taking off. It was really high quality, really special. We had them in our cafeteria. I was into coffee in a big way so being in Seattle, it was great…got all the experience. After a few transfers and some leadership changes, I realized I didn’t love what I was doing any more and starting to feel disillusioned. I wanted to take a sabbatical like John Sculley, who left Pepsi to run Apple, did. So that is what I did…I went out into the world.
I started thinking about a coffee shop. My best friends thought, “You are way too high energy for a coffee shop. You’ll go crazy! Then what are you going to do?” My whole ONE idea was shot down! But I kept thinking about coffee. I just started going around the country lookin’ at coffee shops, looking at different coffee aspects, and made several trips back down to Costa Rica. One thing led to another, to another, to another. I started focusing on becoming a coffee roaster. I bought an old roaster on a whim and had it shipped to my home and just started roasting coffee in my basement and knocking on doors. That was really how it all began.
- When did you decide it was a success?
I remember vividly one Sunday morning, sitting in the sunroom with “Stormin’ Norman,” my roaster, and it was raining outside. We were sitting there drinking coffee, reading the paper, one of the rare—I mean really rare—days in the first 18 months that we didn’t work. We had just gotten 3 grocery stores from The Hen House as trials. I put down the paper, and I go, “Oh my God, Normie—just think of it…right now there might be people in the grocery stores buying our coffee”. That was the first time I had that realization that we’re sitting here, and something or someone out there could be pulling coffee through.
But as far as, like feeling “we made it”….I have never felt that. Even after 18 years, I wake up, and wonder if someone could make us obsolete. Once you start believing the headlines, that’s when you’re in trouble. Unless I have my best foot forward and really have my nose to the grindstone, someone can come in and knock us out. So I don’t ever feel like “we made it.” We just keep moving the goal so far ahead that we don’t ever feel that way.
- So if the high bar is always raised higher, how do you avoid burnout?
Speaking as an entrepreneur, there is a ceiling of complexity that you either figure out, break through, or you run. A friend of mine says that “you entrepreneurs are just too stupid to know when to quit.” And most people would quit. And maybe most people should quit. But I think a good leader does a couple of things. They find a way forward, they make calm out of chaos, and then, when everything is too calm, they might shake it up—because I do think that’s whats needed sometimes.And also, I think what a leader needs to do is have this vision. Most of the time I am thinking 5/10/15 years ahead. So by the time we hit those ceilings of complexity, I already have them figured out in my mind. And then it’s important to slow down and articulate the plan, and wait for the team to catch up, and show them forward.
- After 18 years, what is your dream for the company now?
In a nutshell, I’d say our next dream is to grow into our reputation. I came from a sports family so when my head hits the pillow, I want to feel like I left it all on the field. It’s never been about money. Never has been, never will be. Our team is growing, the capabilities are growing. So we have embarked on a fairly aggressive goal, fairly audacious–and we put it on paper. We want to grow ten times—not so much ten times revenue—we can be ten times more efficient; we can give ten times more to charity. I really don’t care what the growth is—in what category. It’s about the mentality. If you want to be great, it’s a different mindset.
So for example, when we’re hiring people, or changing processes, rather than ask it is good enough, we ask is it ten times? No? Well then, what will it take to get to ten times? It’s continued measured improvement with your foot on the pedal. The other piece that is just really critical –it is absolutely, totally about the team. If the team doesn’t buy in, nothings happening. I can’t make ten times happen unless the team gets engaged with the idea; my job is to create the conditions that will foster that and will let it happen.
- What is the over-arching philosophy that guides you as you make decisions?
I have this intense energy, it’s just natural. You can do all kinds of things with it. Mine has always been about creating, achieving, and the “it” doesn’t really matter, as long as it’s about quality. I hate mediocre. It really sucks my energy. I would rather swing for the fence and miss; I just really don’t want to be a placeholder and take up a spot. Right now I say floor it; I still love it. I still dream about coffee every single night. But when there’s a time when it’s not fun, well then…I know it’s my time to go.
- What or who has had significant influence on your leadership style?
Barnett Helzberg and Henry Block have probably been the two most instrumental throughout the building of The Roasterie. Love Henry Ford, love Walter Chrysler…and then the book—probably the most important single book was GOOD TO GREAT by Jim Collins. Their message is you can be good, and there’s nothing wrong with good. If you want to be great, that’s a whole different mindset—and it’s hard…hard in a challenging way. The other thing is, we can’t get there alone. It’s all about building a team.Another new favorite is DELIVERING HAPPINESS by Tony Hsieh from Zappos. It’s been life altering for me. I read that, and there’s nothing hugely intellectually challenging but you just “get it”. I just started testing it. I’ve always been pretty happy. I’m just kind of low-threshold for not being happy. I change things quickly if I’m not. But I starting asking myself “would that make me happy or would this make me happier?” After a couple of weeks, it became pretty apparent that it was cumulative—the happiness aggregated by doing all those simple little choices. So then, we read the book as a company. We started a book club. In the back of my mind, I wanted this book club, to be an instrument of change. As we go to ten times, there’s gonna be a lot of habits and activities that we’re gonna have to lose if we’re gonna be ten times, right? And so my idea was to use the club for that. We call it “The Culture Club.” They’re doing things like, “Hey, why don’t we have popcorn?” And so, let’s do it. “Can we have flexible work time?” Of course we can. We’re just starting to do these things, and I’m just really pushing them to do as many things as fast as they can to enhance the happiness in the workplace.
- How do you decide on a day-to-day basis what you are going to spend your time doing?
Over the years, I have become a lot more focused, intentional, and deliberate about that and what I try to spend time on is what I’m best at and what I’d like to do. My goal is to have, at every single position, somebody better at that position than I would be if I did it myself. I would say, as of a couple three years ago, we hit that. I focus on marketing, public relations, recruiting and only those things that only the founder can do and should do. I try hard to stay out of my teammates’ way. I am unabashedly, unashamedly a perfectionist. I have two speeds…I am at a full stop or floored. So I need to be deliberate with that, or otherwise I’m going to find a way to have my hands in everything. Not that I don’t trust, it’s that I’m intensely curious, I care, I’m passionate.
I also want to be the best husband, the best father that I can be; that is where I start. Then its being the best leader and after that, I want to be a good citizen and be active in the community.
- Would you put your “worst foot forward” and tell us about few mistakes and what you learned?
Over the first 18 years of the business, in terms of recruiting, we focused on talent, skills….skills, skills, skills. Now, I wish I could go back the whole 18 years. I would focus on fit, fit, fit, fit, fit. It’s so intuitive if you think about it. Sports teams make a good example. They have people that they’ve recruited that are paid millions of dollars a year for them to be on the roster—and they’re sitting on the bench. Why? They are not a loser per se; they will go someplace else and be successful. Why? It’s fit. There’s a fit, there’s chemistry—call it whatever you want. All of us have it with our significant other or spouses. Well I, came very late to the game figuring that out with staff. We would recruit great talent. Sometimes they were great people. But often, they weren’t great fits. So there’s a horrible amount of disruption that that causes. We wasted a lot of time–we wasted some years—chasing our tails, until we figured it out. We’re still not perfect and make some mistakes but we are much better.
- How do you describe the company culture?
I would say “game day is really big.” You want to achieve. You want to win. Competition, continuous improvement, defined goals. We’re on a mission. We believe in supporting our community. That is huge for us. Teamwork is probably one of our top 2-3 values. And growth—yeah, we want to grow.
- How would you describe your leadership style in a few words?
Passionate, energetic, enthusiastic, demanding, and never giving up. We never quit—that’s never an option, we never talk about it, we never discuss it. It’s not a part of what we’re trying to do. Rather, we “fail faster, more often.” It’s been part of our DNA. What’s the worst thing that can happen? Let’s try it. If it doesn’t work, we’ll try something else.
We got off our game with that recently. And like in sports when you get ahead, sometimes you go into a prevent defense. Everybody starts to cringe, because you’re trying to protect this lead. You have to remind yourself that it worked when you were pulling ahead so you want to say, “Keep doing it!” Don’t all of a sudden stop and protect. I think when you get into that, you start getting into trouble. You quit growing, you quit innovating, and that sort of thing. You just get out there and try to just do it. Just do it. Just do it. Just do it. Just do it.
- What are the secrets to your success?
Number one, passion for what I was doing. I absolutely, positively, love it, dream it, I really sincerely can’t stand it…I love it more—the coffee more—everyday! And sometimes I love the business as much as that, but usually it’s the coffee, right? The coffee. Everything about the coffee I love. So the passion for that.
Then, the other thing is “I run scared” as Bill Gates said. I was SCARED to death starting off. Fear can either motivate you, or immobilize and paralyze you. And for me, the fear of failure was just absolutely overpowering. There were so many times when we were so close to death—and probably—coulda-shoulda died. If we probably ever had accurate numbers in some of those periods of time, we probably were dead and just didn’t know it, you know? But for us, quitting was never an option. You need to be doing something near and dear to your heart and soul….so the motivation comes from the inside. Nobody could ever push you harder than you push yourself, right?
- How did you stay above water in the last three years? Any impact from the economy?
I didn’t see it; I felt it, several months before it happened (the meltdown). I vividly remember having a company discussion about how to prepare for it and there was a lot of pushback because we were great, life was great, the economy was fine. So we made a deal. “If I’m wrong, great, we split profits 1/3 – 1/3 – 1/3. If I’m right, we’re gonna have saved a bunch of money, and our profit pool is going to go through the roof, and we’re all going to make a lot more money.” But I said, “If I’m not wrong, you know, we’re gonna go out of business”. We created about $400K in savings, and through the next two years, we wrote record profit-sharing checks. Last year was our biggest year ever; we grew 27% last year. Year-to-date, we’re up 27%, and our growth goal this year is 30%.
- What advice would you give young entrepreneurs starting out today?
To start a company they absolutely, desperately care about. I really don’t see how you can be really successful without that. And then I would say it’s about the team. You can only do so much, and it’s really about the team, and what you can do in terms of leadership. Never forget who brought you there; And then, make it fun along the way. It’s not worth doing if it’s not fun and doesn’t make you happy. Also, don’t listen to the cynics. Just be strong in the fundamentals. Then be insatiably curious, always looking to improve, and always looking for a new idea from out there. Because most of them aren’t going to come from within, they’re going to come from out there. Especially now…