Quench Your Own Thirst
By Jim Koch
*A Book Review*
by Michael C. Gray
© 2018 by Michael C. Gray
In Quench Your Own Thirst, Jim Koch tells how he created the Boston Beer Company with a business partner, helped launch the craft beer industry with the Sam Adams brand, and lessons that he learned along the way. Jim wrote the book as if he and the reader were sitting at a bar having a conversation over a couple of beers.
Unlike many of his Harvard Business School classmates, Jim Koch wanted to start his own business. His previous experience was at an outdoor experience company called Outward Bound, and he worked after graduation from Harvard as a consultant at Boston Consulting Group.
When Jim told his father that he had decided to quit his consulting job to start a beer company, his father told him he was crazy, and gave him the family's best beer brewing recipe. The Koch family had a long history of being brewmasters.
Jim was determined to keep the maximum control of the company, which meant not financing the company using venture capitalists. The initial financing was raised from friends and family. Those funds had to be nurtured carefully, so Jim and his partner, Rhonda Kallman, decided not to "play company" and pay for fancy offices, image advertising, computers and employees. Instead, they would operate by "String Theory," operating on a shoe string budget and stretching resources to their limits, focusing on the most important investments. (Rhonda was Jim's assistant at Boston Consulting Group, who only had an associates degree in secretarial science but frequented bars, and understood bartenders and servers.)
Initially, the Boston Beer Company didn't even follow proper payroll practices. They would just clean up the mess later. (I would not recommend following this procedure. There are inexpensive payroll services, as Jim eventually discovered. The potential penalties from failing to properly report payroll and pay payroll taxes can put a company out of business.)
At the beginning, the Boston Beer Company brewed its beer by subcontracting excess capacity from other beer companies. Eventually the company bought used brewing equipment and operated in an industrial building that it rehabilitated.
Despite operating on a string budget, there was no skimping on the family recipe or the quality of the beer. That was paramount. The major selling point for the company was offering a more expensive, superior beer.
Jim and Rhonda quickly learned the most important skill for the entrepreneur isn't taught at Harvard Business School. It's salesmanship. They visited bars with samples of their beer and brought tents to put on bar tables telling their story. As the company grew, they continued hiring salespeople for in-person sales. Major beer companies just took orders and didn't make personal calls, so personal salesmanship was a competitive advantage for the fledgling company.
Anyone interested in starting a business would benefit from reading and studying Quench Your Own Thirst. If you enjoy beer, keep a Sam Adams at your side as you read.
Buy it on Amazon: Quench Your Own Thirst: Business Lessons Learned Over a Beer or Two
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