How To Turn Your Passion Into A Business Without Sacrifice - James Hoffmann
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So the hero bullshit of entrepreneurship of like, I must grind myself down. I'm a fucking hero. I'm working super hard. I'm doing it right. And it's such bullshit. And it's such a toxic aspect of all work. And I hate it. But I definitely worked 110 hour weeks for months. Ground myself down to the point of deep misery. And there is no quicker way to hate a thing you love

Than to work like to work on it like that, right? Like I really love coffee. I definitely got to the point I was like, I should quit coffee. I should just I I hate this. I hate this. I hate my life I hate working in this I should just do something else

'Cause I worked in a stupid way and I burnt myself out physically and emotionally because people do that because the world says, "Good for you, get the grind on." You know what I mean? "It's your thing, it's yours, pour yourself into it." And you're like, "No, don't. Don't do that, that's really bad." What you should do is start with enough capital that you can hire people to work with you, pay them properly, and then work in a healthy manner. Do you know what I mean? Like, just have work and home be separate. That's helpful. Turn off. Don't work at weekends or don't work some days a week.

It's very satisfying early doors to pour yourself into a business. It is rewarding, it's enjoyable, but you're just burning through yourself so fast. And so I regret not starting with probably twice as much money, hiring more people out the gate and going home at five o'clock. Hey friends, welcome back to Deep Dive. If you're new here, my name is Ali and in each episode I chat to entrepreneurs, creators, authors and other inspiring people about how they got to where they are

and strategies and tools that can help us along our shared journey of living healthier, happier, more productive lives. Now, many of us dream about turning our passion or hobby into a business, but very few of us manage to successfully do it and at least keep it fun while we're doing it. One person who seems to have really nailed it is world barista champion, author, creator, James Hoffman, who is one of the most famous people in the world when it comes to

He's got his own coffee shop, he's got his own coffee roasters, he's got his own YouTube channel with 1.2 million subscribers, he has hundreds of thousands of followers across all the other social media platforms, he's written a best-selling coffee-themed book. And in this episode, we talk a lot about how he's managed to build this empire themed around this passion, this hobby of coffee. We talk a bit about how to actually build a bricks and mortars, like physical goods, coffee roastery type business completely from scratch. And we talk a little bit about James's regrets when it comes to hustling and burnout.

I definitely enjoyed the conversation. We could have talked for hours and hours more because there was so much more to unpack in James' story. So we're definitely going to have him on for a part two at some point. But in the meantime, I hope you enjoyed this conversation between me and James Hoffman. I want to understand, how do we get here? How did you end up becoming the world's most famous coffee person on the internet? I don't think I can say I'm the world's most famous coffee person on the internet. I feel like Howard Schultz still will maintain like higher. Howard Schultz, never heard of him. Never? No. You know, there's James Hoffman and then there's like...

I don't know anyone else in the coffee world, to be honest. So you're in a category of one as far as I'm concerned. How did this happen? It's a good question. So I've been in coffee since 2003.

Most people start in coffee for the same reason, which is sort of- - How old were you in 2003? If you don't mind me asking. - 22, 23. - 22, 23. - Yeah. - Okay. - So I'm like, how old am I now? I'm 42 now. I think about that. - So at the age of like 23, you got into coffee. - Got into coffee because- - What were you doing before 23? - Oh, I worked as a crew PA in casinos. - As what, sorry? - A crew PA. - What's a crew PA? - You deal casino games. So if you go gambling in the bow tie and the nonsense, I would do that. - Did you go to university?

I did go to university for no real good reason. What did you study? I have a combined arts degree in philosophy, central and east European area studies, and east Asian studies. Okay. From Durham University, which gives me the extra letters on the end. Wait, what? Extra letters on the end? You get the BA on Dunelm. Oh. Oxford, Cambridge, and Durham. Oxon, Cantab. Oh, yeah. So I get a Dunelm for no good reason. I thought that was like a furniture company.

No one's it is I think No one's ever asked to see my degree. I I don't regret going to university. I should not have gone to university Okay, I gained nothing other than debt and weight That was my good and friends and life experience all that stuff, but academically Yeah, total waste of time after university. Were you like I have this combined arts degree in philosophy and stuff What am I doing with my life? Totally? There was a job demonstrating domestic coffee machines in a house of Fraser department store that paid weekly and

and you know paid six pounds an hour and I was like whatever I don't drink coffee how hard can it be and so I got this job

What I've always done that's a sort of weird sickness for me is whatever I've worked in I've tried to kind of read up upon so when I worked as a croupier I got really into like the history of card shopping and and kind of a little bit of magic stuff cheating at cards Sorry, card shopping is the sort of broad term and this is a really interesting history around that anyway coffee same thing I started buying whatever books I could find about coffee and I read a couple that just

Really interested me Book called the devil's cup that's kind of essentially about coffee's journey from Ethiopia as it spread throughout the whole world and it was kind of the way it infects and binds itself into different cultures just really interested me I was like coffee is way more interesting than I thought it's not just Nescafe that was my kind of limit of understanding and so I decided I would learn to drink coffee and I did and I just sort of fell in love with it and I tried to work in wine when I was a little bit younger sort of university time and just sort of hated that industry and

What was it about you that makes you want to kind of, because I imagine if you're getting like a six quid an hour job, most people wouldn't think, you know what, let me read up about the history of coffee so I can understand it more. I don't know. I mean, there wasn't a lot to do most of the time is one part of it. And I don't know, like I've always been a reader, an aggressive kind of reader. And so I was like, well, I may as well know what I'm talking about. I dislike, you know, I'm not a comfortable liar or bluffer.

to a point. And so I just, you know, started reading about it. And then I just kind of fell into this rabbit hole where it just fascinated me. And I started working my way up that company's kind of, I started doing training and teaching for that kind of company who did demonstrators. Yeah. So I looked after kind of demonstrators and like Selfridges and House of Fraser and John, all the kind of big department stores here. And then I got a job training for a kind of big commercial machine company rather than domestic ones. Commercial, like those big ones that cost them Starbucks to use. Yeah. Like, like, like car money. And how old were you at this point?

24, 25. So in about a year or two, you sort of worked your way up the House of Fraser department store hierarchy to become a kind of demonstrator of coffee machines. Yeah. And then you did a sort of lateral move to the industrial. Teaching people about coffee, right? So I would then go around the UK. I had like a big commercial machine in my car, a projector screen. I would turn up and do these trainings because the coffee scene in 2005 was,

Wasn't really there. You know what I mean? It was growing and it was kind of being fostered and there were these things called barista competitions So I went in my demonstrator job I'd met this guy who was the UK barista champion and I didn't know that much I did know that he would come in I would clean everything prep it for him He would work for four hours and then leave and I would clean up again and he would earn more that day than I did That week I was like tell me more about these competitions And so I got into the competition thing and I won the UK barista champion. What is the barista competition? It's kind of part

cooking competition part sommelier competition part dog show like you are dog show it's performance right like you're sort of assessed on your performance as well so you make um there's four judges who are your customers and you make them each an espresso each a cappuccino each what's called a signature drink which is a non-alcoholic coffee cocktail of some sort they judge you on your drinks are they delicious on your knowledge on your presentation skills there's a

And the best barista in this weird game based on coffee wins. And so I competed in 2005, won in the UK in 2006.

And ended up winning the world competition in 2007 so it was kind of Coffee so this is kind of really important coffee was so young in some ways at that point That a kid could come in start drinking coffee in 2004 and be a world British champion in 2007 that shouldn't be allowed right like I'm not some sort of Savant in the world of coffee It just was an immature industry that if you were willing to work hard and you got lucky and I got lucky Then you could sort of have these kind of breaks so

Yeah, it's kind of weird to me. MARK BLYTH: And is that a thing now? Could someone listening to this decide, you know what, I'm going to become world coffee champion in the next two years? MARK BLYTH: It's so much more competitive now. It's a much more developed thing where people might train for a long time. The competitions are just much harder. The standards keep going up and up and up. So the nice thing about winning the world is that they put you out to pasture. You're not allowed to compete again. So you are undefeated.

It's not like every year you have to sort of fight back and retain your title. Exactly. You're not welcome. And that's good. It's also bad in that every year you dilute the pool of world champions one more time. So you are less interesting every year, which is kind of something I worked at quite early on. And that wasn't really a pursuit of being a world champion for...

Whatever. So in 2008, I started a business. Okay, I'm sorry. Can we rewind a bit? So you're doing the selling industrial coffee machines and training people in how to use industrial coffee machines. And then you discover that there's this thing called the Barista Championships. Roughly. And so what was the process from the...

There is a thing such as this to I'm going to actually start competing in this thing pretty I mean pretty short So, you know the community was very small then so finding people who knew about the competitions It's pretty easy I began to work with people who understood them or judged in them or that kind of stuff and my boss at the time was hugely supportive of them and they were doing work to kind of get these competitions happening because

Because they saw that if coffee boomed in the UK if you sold commercial machines you would benefit So their job was very much to come found the flames of getting coffee going in the UK So I was kind of supported very much by that employer, which is kind of unusual In some way all was back then I ended up quitting my job

Before I competed in 2007 I sort of if you go and tell people what to do for a long time There is a point at which you should be like just go and do it like stop stop Pre just go and open a coffee shop and that's what we were gonna do So myself my business partner we're gonna open a coffee shop in Shoreditch. I'm gonna roast the coffee on site and We quit our jobs and I was gonna compete. I didn't think I would win and

Went to Tokyo where the competition was. One, that kind of ruined everything because suddenly I had to-- there's kind of responsibilities and travel and opportunities when you win. That pushed us back until 2008, which was kind of good in that we were about to sign a lease just as the global economy tanked. And so we didn't sign a lease. And we were like, this is just a bad time to sign a 10-year lease.

And so we took a little railway arch. There's loads of railway arches. They were cheap spaces back then in London. And we started roasting coffee there and trying to wholesale it into London cafes. And that worked. And that turned into a whole other thing.

To what extent are independent coffee shops concerned by the Costas and the Starbucks of the world? We're going to take a very quick break to introduce our sponsor for this episode, who is Brilliant. I've been using Brilliant for the last few years, and they're a fantastic interactive platform with online courses in maths, science, and computer science. My personal favorites are the computer science courses. I think they're absolutely fantastic. And when I was initially applying to med school, I was actually torn between applying to medicine and applying to computer science. And I ended up going with medicine in the end, which I really don't regret.

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Most independents see other independents as competition. By and large, they are trading on the idea that you're buying from them something of higher quality, made with better ingredients, made with more care. Costa is trading on it's convenient and relatively inexpensive. You know what I mean? And that's a different audience who is prioritizing one thing over another. Independents are more focusing on space, experience,

Should be a nice place to go and hang out. Right. It's important. You want to be in a space for an hour. It should be a nice space. I don't particularly enjoy being in most chain coffee shops for an hour. I don't like the space. They want me to move on. And they need me to move on, because that's part of the business model. Whereas I think it's kind of different in independent businesses. MARK BLYTH: So does the coffee from Costco or Starbucks just taste objectively worse to you than coffee from an independent place generally?

I enjoy it less. Let's go with that. Like, better and worse, it gets very subjective. It gets easily quite preachy of like, well, this is why I think it's bad, or judgy, or those kind of things. And a lot of people enjoy coffee from Starbucks.

millions of people enjoy coffee or even coffee from mcdonald's right and the fact that i don't enjoy it is not a reflection on them if i say it's it's it's worse than what i drink that is a reflection on them if i say i don't enjoy it as much it's not and that's kind of an important i think one of the things that kind of has helped me in the kind of uh growth on youtube is having an attitude of like i'm not trying to judge what you drink but if you want it to be better i want to help you

That's the kind of vibe there. Not this is what you should drink. This is how to be correct. This is what you should order. None of that nonsense. It's just no one likes it. So, yeah, I don't enjoy it as much. It's a different product. It's just a different thing. And it's got a different intended sort of target price point process than what you would see at a good independent. Okay. So it sounds like, I guess, with any...

Even with a business model I'm more familiar with, like starting a YouTube channel, it's very hard to do unless you have a way of differentiating yourself in the market, as it were. And even then, it takes a large amount of consistency and effort and sticking with putting a lot of stuff out there and not making much money for a very long time. And then once you get that product market fit, as it were, you then benefit from good things happening.

Yeah, I think there are successful coffee shops out there that make people a good living and they enjoy running that business. But I think you've got to want to enjoy running the business. You know what I mean? And that's the bit where... Kind of like if you enjoy baking, you shouldn't necessarily open a bakery because those are two very different things. Absolutely. And, you know, I think the best operators are people who love hospitality and they understand coffee's place within that, food's place in that.

You know how signage works that has a place in the experience hospitality and and those are the best operators to me They're also the most profitable most successful because they're they're kind of the holistic operator Not just the coffee obsessive who's like I'm gonna serve the best coffee in London and then they're kind of bummed that no one cares Because the wait is long that it's not comfortable. It's not enjoyable It's not what I need necessarily from the coffee shop

I don't need every time I go out for coffee for it to be the single best cup of coffee of my life. I'm often with someone. I want coffee as a social lubricant. I want it as a little caffeine. I want it maybe as an intellectual experience like, oh, this is interesting to taste. But, you know, it can't be the sole focus of a business. And I think it's taken London coffee shops and globally coffee shops maybe 15 years to work that out. Oh.

Yeah, there's a lot of thoughts that sparked through that. Have you come across the e-myth? Oh, yeah. That was a super early read for me. So to go back to sort of starting a business, I was a classic. I was a coffee obsessive. I was like, well, I understand coffee. I'm good at making coffee. I should open a coffee business. And very quickly, it was like, oh, yeah.

Then there's the business of business. And how rapidly can I get good at the business of business to build sort of the machine underlying that? And I didn't have time to do anything other than read and read. I did. And so, yeah, Michael Gerber's book, I think, was super, super informative, very relevant to me and further encouragement to to work on the business in it, which becomes slightly glib when you say it. But it's so interesting.

So important. I can't you know what I mean? I can't emphasize enough that the need to get out from the the the daily of the manufacturing of a business whatever it is that you make and sell and do into a higher level think or sort of thought process and

To understand the model the mechanics of them. It's a machine right you're tweaking cogs and you're kind of making it work Just nice that's hard and you need to get good at that and that has nothing to do with coffee Yeah, there's nothing to do with coffee and everything to do with understanding everything from people through to sort of marketing sales economics finances reading a balance sheet understanding the impacts of decisions you make on your balance sheet on your future on your cash flows all of that sort of stuff and

I really enjoyed it, which is fortunate. Lots of people are immediately turned off and go to the safe space of the thing that they know and care about. And that's, you know, not healthy for the business long term. Yeah. Yeah. I think that's an insight that so many people have only once they have started a business. Yeah. When you realize, oh, actually, I don't know, like, I guess YouTube is a different example because you do actually make money from it. But like, you know,

Just being good at making coffee does not make me a good owner of a, or manager or operator of a coffee business. Not at all.

And so I first read the E-Myth, I think, in like 2019 or something. And I'd had a business at that point that had been going for five years. And I was like, my God, I wish I'd read this book five years ago because all of the mistakes under the sun. And the first time I came across that phrase that, you know, you should be working on the business, not in it. I was just like, my mind was completely blown. And now it's just so, it feels so standard to me that I almost can't remember a time where I didn't know that that was a thing. Right.

And even now when kind of coaching YouTubers and stuff, this is the thing I try and encourage more creators to think a little bit more businessy. Because I think creators are very easy at thinking like, oh, it's about the craft. It's about the video I want to make. Sure. It's about how it makes me feel. Which is fine. But also I think if you want to turn it into a business, there is a level of let's actually approach this from a slightly more businessy angle. It's, you know, coffee...

has historically had a difficult relationship with profit because you know a lot of specialty coffee ran as a kind of counterculture to commercial coffee which is coffee for profit right and so when specialty coffee emerged it very much was like the it's not about the money it's not about profit it's about the coffee right

And to focus on the money was not to focus on the coffee, and that was to dilute the purity of what you were trying to do, and it made you something of a charlatan or just someone looking to extract money from the system, which is not what it's about. The ethics of coffee aside and the challenges there aside...

You know it took me a little while to get comfortable with the idea of like I need profit to do the things I want to do like it's the enabling factor in being able to pay people properly hire more people do more interesting stuff improve what we do, you know However, you feel about the the model of capitalism aside in this model I need to make profit and good profit to have a sustainable business and that you know, I think a lot of people

Certainly in the coffee industry would have heard the whole like, you know, you need to make profit be like no no No, I need to make great coffee. I need to find my customers. I need to build the relationships and yeah But but what keeps you going what builds a sustainable business is an underlying profit you can choose to focus too much on that sure and you can compromise your product but but the

they can be mutually beneficial if you kind of do it right. If you're reinvesting, if you're creating profit for a purpose other than personal gain or that kind of stuff. Yeah, because I guess profit is often seen as a bit of a dirty word. It is in many situations, right? Like lots of terrible things are done in the name of profit. Absolutely. Like loads of big businesses do terrible things for the benefit of shareholders to maximize profits. And I think that's

I'm uncomfortable with that. But at the same time, we end up in this very binary sort of world of black and white. Profit is good. Profit is bad. Well, it's sort of agnostic of that. What you do with it can be good or bad, I think. But there shouldn't be the kind of shame that a lot of business owners have around making money in order to do good things. That's how I feel about it. I think I got very interested in the idea of sustainable businesses.

No, because I how do you build a business that that exists outside of the people that work within it? and and this in coffee is a particular challenge because Go back to this and I'll promise to make sense of it You do loads of barista training as a coffee roaster and supply you train loads of people and what you end up feeling is that you're just pouring water into a bucket with a hole in it because you train a bunch of people they leave because they're just there for a little bit and The business itself doesn't retain the knowledge. I

And you look at businesses that are hundreds of years old. How did they exceed the will or the ideas of one person and become this thing where they are almost a living entity themselves? And you get into the boring answers of like systems and structure and you build a business that is able to retain knowledge independent of the people that work within it. And that isn't a bad thing. That doesn't strip people of their value or utility. That makes their job easier, more enjoyable because they can still access that information and knowledge. But when they leave...

half your business doesn't walk out the door. That for me became a very interesting sort of thing to think about of like, how do you treat it like a thing that can learn independently, right? Can you teach a business? And we got very interested in this with a bunch of customers of like, okay, we need to stop just training your baristas. We'll keep doing that, but we need to work with you in a way of collecting and systemizing the knowledge that we are delivering so that it's yours, regardless of who's executing it.

And that sounds dehumanizing, but I don't think it is. I think it's about creating actually a much healthier environment to work in where you don't feel like you can't leave because you'd break the business. And lots of people have felt that way of like, I can't leave when I want to. I want to do something else, but I feel stuck here because I know too much of this company rests on me. And that's an awful thing to do to someone. It's not good retention. That's a bad thing. Yeah.

So yeah, I think not enough people talk about that, the idea of like, you know, be it a founder or key people or, you know, the business itself has to retain information knowledge. It has to have a purpose bound into it.

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I think this is, again, one of the things that you only really start to appreciate once you have a business. And before, when I was reading about businesses, system structure, processes, HR, values, vision, what the hell is all that bullshit? And then as soon as you start like, oh, okay, now I see what's happening. Now I see why it

with my first business. It's bad that I am the one staying up until 12 midnight making sure that our book deliveries for our course, which is happening in Manchester tomorrow, have actually arrived because I'm the only one who knows how to deal with the supplier. That's probably bad. And figuring out all these things, like, oh my God, what started off as...

me enjoying teaching courses for medical applicants now turning into it to turning it into a business is actually a lot of the quote boring stuff which then at least for me became the fun stuff when i realized how much there was to learn and how much of a kind of uh what the learning curve was like and that every new book i was reading i was just my mind was blown like oh my god businesses have been solving these problems problems for decades after hundreds of years there's there is a system behind this and i can learn the system um yeah

Yeah, I think that's the that's the you know, I think for me, though, I read loads and loads and loads of books, but there was still the kind of lag of the conversion of information to knowledge through the application of it. You know, I mean, like it took me doing it, messing it up, doing it again, messing it up to kind of get to the point where, OK, now I truly understand the ideas here and how they work.

Yeah, yeah, like it's all it's all well and good to read a book about hiring but until you've done it and made mistakes a bit Yeah, absolutely. And you know like, you know, I come from I suppose a family of entrepreneurs So I was fortunate in that I had in my family people to be like hiring is gonna be the hardest bit You know all the advice they gave me I was like a little bit blase about the time they were it's gonna be really hard starting business is really hard really hard got it great and then you're like a year in you're like this is really hard

You tell me. And they're like, what's wrong with you? And they're like, hiring is going to be the hardest bit. And it stays the hardest bit forever. And you're like, nah. And the first, we had some really great first few people. And you're like, this is fine. This is easy. And you're like, no, no, no. You learn a bunch of awful lessons. And it still remains the hardest part. And especially if you want to, I think that there are businesses out there that still want to find a human, extract the value,

On you go. You know what I mean? For us, not that interesting. We're interested in development, enjoying where you work, satisfaction, all of that kind of stuff. It's the slightly trite line of like we want to be the place where you do your best work. But I think that's very true for what we certainly aspire to. But that obviously, it does make things harder. It just changes the challenge and changes the sort of focus. It does.

Okay, so let's go back to 2008. You're 27-ish years old-ish, James Hoffman, deciding, I've become world barista champion. I'm going to start a coffee shop. What's the dream there? Is this going to become the next Costa or the next Starbucks? Is it going to become independent pro? What's going through your mind to make you decide, you know what, starting a coffee shop is the way forward? I often think about the staggering lack of long-term thinking that I had

And how that might have saved me multiple times. Okay. I think you know we had when we started we had a five-year plan. Mm-hmm That was kind of revenue based of like we want to get to this kind of a revenue and if we get there in five years That'd be really super successful And we'll be really happy with that and that would be it and we'll do that through Wholesaling more coffee and I think that once we focused on coffee roasting and not coffee shops because economy tanked forget about the shop those roast and

Simpler lower overheads become like a b2b service almost super b2b service super just providing roasted coffee beans to right Starbucks up until The pandemic we were still 80% b2b as a business. Okay And then obviously that changed On that front like I've never once had the dream of I want to become a you know A coffee roaster selling coffees to companies I don't think many people have it like people have a dream of starting a coffee shop But not a dream of becoming a coffee roaster. I think sure

Sure. But I mean, most people, very few people dream about coffee generally. It's a weird industry. No one has aspirations. People aspire to work in wine or, you know, whiskey. I don't know. A bunch of my friends want to start coffee shops or bakeries or restaurants. Right. They want to have a social space. But no one thinks, I want to supply flour to...

two bakeries, they think I want to start the bakery. Yeah, but if you get a bit of a sickness for wheat and grains, then yeah, I could totally understand how you would want to specialize in flowers for bakeries. If you really get into the industry of wheat and you understand a lot about it. Or the product and you get interested in provenance and flavor and terroir and traceability and taste of place and all of these things, that can totally suck you into ingredient...

Obsession when you're a layman you want to make the shop when you're a pro you want to make the product of that You know, it's a different sort of obsession or a different sort of passion I guess So, okay So what we wanted to do super early doors is we had been part of this global culture of specialty coffee that hadn't really kicked off in London, you know it

We may be talking about this later. I'd been part of it online for a number of years, and I'd felt part of a global specialty coffee community, but didn't really exist in London back then. There was like Monmouth had been going since 1977, and there was like a little place called Flat White in Soho, and that was sort of the beginning and end of coffee in London in 2008. That's unfair to a couple of places, to Plimpson and Sons and so forth.

there wasn't much. For a city of 8 million people, there wasn't much. And so our goal was not to sell loads and loads of coffee. Our goal was to foster a community of specialty coffee in London to help drive the consumption of good coffee. We wanted great coffee to be part of the city's

experience and DNA. So we named the business Square Mile because between 1650 and 1750, London was the greatest coffee drinking city in the world. It had a totally unique culture. We had more coffee shops per capita than anywhere else in the world. We had this really unique

Culture here and we didn't in 2007 2008 we had the Americanized Italian version of coffee But we didn't have something that was London's coffee culture and we wanted to sort of help foster that and we did that through working with cafes and and you know That was the route that we did it And so yeah, we kind of grew as a wholesaler and our job was to give good ingredients and and help and

Coffee shops succeed because if they succeeded we succeeded they sold way more coffee So did we so we were motivated to do a good job with product and then in our customer relationships

you know, to help them win. That was the goal. And if they won, great. And that also meant helping competitors win. If they didn't use our coffee, more shops meant more culture. Rising tides lift all boats kind of thing. Very true with coffee shops back then. So yeah, that was the kind of goal. How much was culture? I mean, like we want to develop this coffee culture versus I need a job to make money.

So it wasn't necessarily early days. It was community, not culture. We wanted to bring people who felt weird about coffee together and then, you know what I mean? Make them coherent. We figured that was a great way to grow the business.

But also it was what we wanted. We were people who were weird about coffee who wanted to find like minds. And it was a really strong, really coherent community. And the advantage of that is that if you are a deeply passionate person, if you're a lone voice, you go right at the back end of the news right before they did the summary again with, hey, check out this one weird person. He's really into, I don't know, water bottles.

And he's really into it. And here's this weird person. Yeah, I'm really into water bottles. And you're like, how nice is that? How hilarious. And they treat you as the one lone obsessive. But back then, magazines like Time Out or the newspapers would talk to the one

crazed person about coffee who'd then be like you've got to go and talk to these five other people and then talk to them and they Talk to those five other people and it made the sort of the voice the voices of the community much louder and more coherent and suddenly the media paid much more attention to coffee because there was this coherent voice of

Coffee can be good. Yeah, if it can be better coffee could be interesting and that really supercharged London and London just Exploded compared to most of the rest of the world had you know density it had enough money But it also had this really coherent community and London led the world for a little while in terms of coffee culture Everyone else caught up. I mean Melbourne was way ahead Australia all that sort of stuff But London had this really interesting explosion certainly in Europe or also the northern hemisphere That made it a focal point for a lot of other places Okay question on that front

When you're starting a business, like now that you've done this, I think like a few times and you've been in the game for a while, it sounds like you had a vision or a mission that was bigger than just, I want to make money. Sure. In that you want to create this coffee community. How important do you think it is if, let's say someone wants to quit their job and start a business today, for them to have a wider, altruistic, somewhat vision behind it that's other than coffee?

I need a business to make money because I want to try and quit my job and do something that's fun. If they wish to derive satisfaction from the work they do, I think it's essential.

Because earning from-- I mean, for a certain sort of mind, just extracting wealth is satisfying. They see the number get bigger, and that's satisfying enough. But for most people, it's quite hollow and empty and unsatisfying. And they end up doing work they don't like because the number goes up, but they don't feel good about it, and they look for something else. So I think having a purpose or a meaning behind it, for me, is essential. Like, what am I-- you know what I mean? I don't really believe in legacy, but I think it's a shame not to leave something better than you found it. That seems-- you know what I mean?

the decent thing to do. So I want to improve things or have a positive impact. And so that's driving a lot of the decisions I might make around starting businesses or doing stuff like that. And I would say the people who enjoy their work the most, I've met miserable billionaires. You know what I mean? Like miserable people because they're just, the number's very big.

So what now slightly bigger like what is that that is and you're in there just miserable. I have no aspiration for that So yeah for me, I think it's essential if you want to enjoy the work you do and feel like it has meaning and purpose Yeah, there has to be vision nice And is this how you were feeling in the early days as well or is this something a philosophy that's developed over time? That's a good question. I think like

I'm I'm aware that I grew up middle-class and so I grew up with a safety net and that I started a business and I was never gonna go to zero, you know what I mean? I think that that's always worth noting in people like me who took risks started businesses There was a safety net

I was going to be okay. And I, you know what I mean? That changes your relationship with money. I think if you don't have a safety net, then I'm much more open to the idea of like, no, I need money. I need to build my safety net because I don't have one. But I was aware I did. And so for me, you know, I was a very passionate person about the product. I just really, I really enjoy coffee. I get very excited about it.

So that was always a driver for me, but I also like learning stuff And so you know learning to build a business was satisfying learning to sell or market or do the other things that went alongside that So like with YouTube now like learning to shoot better films Do better audio light properly all of those things. I enjoy that process. That's just part of me. I like the the constant obsession It's just it's just very satisfying to get better at something. I like that. I'm always gonna like that. This is what it is. I

So yeah, I think I wasn't super money focused. I didn't earn very much from the business for a long time and and You know even now I think my my because we've always been bootstrapped so the coffee company's bootstrapped everything else has really been bootstrapped I have

left it in a lot of the time. I like, especially going into pandemics or going into whatever the economy is going to do now, having cash inside a business is a good thing to me. And that's just because I don't like to be responsible to other people, because I suppose I have a bit of a control freak aspect to me. And it's not that I'm against investment or I'm against

you know, raising money in different ways, but I just like the control. It's just how we've always done it. Like we've done everything out of cash from the beginning. And you would argue, and I would hear you and say, you're probably right. That was not the best use of that money that we could have

borrowed, leveraged the business a little bit, borrowed a ton of cash, grown faster, done all those things. But if the goal is to make better stuff and feel good about it, then that was not a route we needed to go. So yeah, historically, we can talk about money, I guess, a bit. I've never really pulled tons out of the business, which is--

Maybe foolish, you know, I mean, I never really cashed the chips in so to speak But I you know, I'm interested in the businesses that I work with doing the work and being long-term sustainable So so yeah, that's been the general approach interesting Yeah, there's a good book by Matt Smokery the the great CEO within one of the things he says is that because he did he does a lot of coaching for like tech founders Silicon Valley type

And he says that basically people want to go, people want to work or start a business for three reasons, to make money, to have fun and to help people. But if you ask them that if they could only pick one, it would be to make money. At that point, once they've ticked that box, if they could only pick one, it would be to have fun generally. And once they've ticked those two boxes, at that point, people then shift to the helping people thing. And I think that's certainly true for me. Like it's very nice that right now, the thing that I'm doing does all three. Yeah.

But I think yeah when I was starting out I was like, you know what affiliate marketing to selling t-shirts on the internet I'll do whatever I can to make money then it was cool I'm making money now do whatever I can to have fun while doing this and it's only kind of now that I've done it for a few years that I'm now shifting to actually to realize this point about how Having a wider mission is ultimately the thing that makes it most satisfying Yeah, I think I think purpose is kind of everything for me and that the bit, you know, I suppose of

Have enough time to look back on what are we at 13 years old or whatever else like there? It's the same. It's ultimately it's the same as YouTube metrics like subscriber counts are deeply unsatisfying hitting a million subscribers

Isn't rewarding in any way. No, not a single way It's it's it's you know, it's coming deep down when it happens and then you're like, oh, yeah But it really doesn't feel like anything And it's the same sort of thing for me in business the same sort of thing like like a big fat balance sheet at the end Of it sure good fine, whatever it's it's an indicator It's same as an audience you could do something with it if you want to but is what you're gonna do with it that's more interesting more satisfying than the accrual of the number and

So let's go back to coffee roasting business just getting off the ground. Just again, because I'm totally naive to this space. If I decided tomorrow I want to make the Ali Abdaal coffee roasting business, what does it take to make a coffee roasting business? Very broadly. Are we talking like what's the cost of the capex of going? I guess like how much would it cost to get started and what do you actually have to do?

Do you have to go to like Columbia and buy coffee? No, you don't have to. You probably shouldn't. Okay. That's complicated. We won't go too far down that rabbit hole. But no, there's a lot of coffee tourism that happens under the guise of buying, but it's really... Oh. Anyway. What about Fair Trade? Like, I guess...

It's a whole other conversation. So you would need a coffee roaster, a machine that roasts coffee. It depends how big you want it to be. The old metric used to be per kilo of capacity would cost you about 1,000 pounds. That's now more like 2,000 pounds. So if you want a 15-kilo roaster, that's probably 30 grand.

And so this is roasting 15 kilograms of raw coffee beans in one go to turn it into those nice brown beans that you see in the coffee shops. Indeed. So that's sort of the biggest capital expenditure is probably the roaster. If you're in London, you probably need to treat the smoke coming from the roaster because no one likes that. So that might be another...

10 through 20 can be quite a lot more. MARK BLYTH: Oh, what, to make the smoke less bad for the environment? MARK BLYTH: Yeah. You either sort of react it away, or in a feat of pure elegance, you burn it. MARK BLYTH: You burn the smoke. MARK BLYTH: Yeah, we burn smoke, which is net better in terms of greenhouse emissions.

Burning smoke is better than just letting the smoke out because there's things in the smoke that are very bad, worse than carbon dioxide. But yeah, you try and build them as efficiently as you can. But yes, you have what's called afterburners that burn smoke. And owning these is the dumbest thing you'll ever do. But it is what it is. Are electric roasters a thing? Electric, but they still produce smoke. And it's the roasting of coffee itself. As it goes brown--

Smoke is a byproduct. So it's inevitable. The bigger the roaster, the more the smoke. MARK BLYTH: How big is a coffee roaster? Like, if we wanted to make one here,

Habit what like so a 15 kilo roaster would occupy this space of this rug. So it's not huge Oh pretty big like yeah, it's hard to fit into a bedroom. Like yeah Yeah, I did once go to someone's Brooklyn loft conversion and they somehow managed to get a 15 kilo roaster into there Yeah, which is highly illegal but it was pretty impressive anyway

So you need roasters where to treat the smoke. You need machines to package coffee, at least to weigh coffee. You don't have to have fancy packaging and just buy bags and put coffee in, but you need to weigh it properly. MARK BLYTH: Weigh it properly? Like beyond just a measuring scale? MARK BLYTH: It would need to be trading standard certified. You'd need to-- you know what I mean? If you were selling by weight, at some point you need to prove the weight is the weight. Buying a scale on Amazon using that is not adequate for trading standards unless it's properly calibrated and you have a calibration process.

It happens now and again that roasters don't pay attention to calibration and end up selling you 230 grams instead of 250. That's illegal. You get in trouble with trading standards for that if you get caught doing it. What does trading standards do? Trading standards is the body in the UK that regulates how people trade and the units they trade and that kind of stuff. So if someone is selling you

230 grams of coffee in a 250 gram bag. That's who you report them to oh and they would investigate They probably wouldn't if it was a mistake They probably wouldn't but you know obviously that's a very cheeky way to make money you can short someone a product They're probably not gonna check you know I mean when was the last time you checked how much granola came in the box? Yeah? My 50 grand bag walkers or whatever it is right you know it's a lot of trust that um

But, you know, unsurprisingly. You need some kind of special calibrated scale and thingy so you can tick the box of regulation. You are doing this thing. Anyway, that's very boring. I'm sorry. No, this is interesting. I find it so interesting getting an insight into bricks and mortar businesses because you just don't hear about them.

No one talks about what it's like to own a freaking coffee restaurant. It's really true. So starting in 2008, all of the startup stuff, and I didn't know what a startup was, actually. I didn't know how is that different to a normal business. I would see this word, startup, and I'm like, what exactly is a startup? It's a question I feel like no one's really good at answering yet either. But I was trying to start this coffee roasting business, and all of the books were about

Online startups. Yeah, everything was about my status like no, but I mean, how do I what is it? What is my model like how you know, you know No one would tell me how much money to make no one would tell me how much is a appropriate amount of money a profit What's the model? You know, I mean it wasn't out there, which is very frustrating. I

Yeah, which I guess is kind of unusual because bricks and mortar businesses have been going on for loads longer than online businesses. Right. But all the stuff is written by the online business owners and the courses and gurus and the videos and the podcast, the whole shebang. It was all about that stuff. And it felt weird. What I will say is that bricks and mortar is satisfying in a way that digital is not. Yeah.

lot of us The day could be summarized into I have slightly less digital stuff now than I did earlier this morning And I'll have more tomorrow because all I've done is write emails today Jeremy like that That's that's I sent a bunch of emails is like I have slightly less in my digital studio If you've manufactured a wall of coffee that you're gonna sell for more money than it cost to make it and

That's quite satisfying. Here's the thing. I made it. I packed it myself. I sealed the bag. I weighed it out. I put it in a box. I sent it to someone, and they paid me, and I made money on that because I created value as part of this process. That's rewarding in a way that...

I struggle to find the same level of manufacturing satisfaction. Videos are different, because it's different. But certainly other jobs or roles that's been less-- MARK BLYTH: Yeah, I guess being an affiliate marketer, you don't really see the tangible output of the thing that you're creating. MARK BLYTH: And for a while, when I was doing more office-based stuff as the company grew, occasionally I would just want to go down and pack coffee for an hour.

That felt more satisfying than the seven hours of staring at a laptop for me. You know what I mean? And that's just-- anyway. All the way back to starting a coffee roaster. MARK MANDEL: 15 to 30 grand for the 15 kg roaster, another 10 to 20,000 for the weird machines that purify the smoke that comes out of it. MARK BLYTH: Say another 20, 30 of stuff, equipment for packing coffee.

You're going to need computers and stuff to run stuff. And then ultimately, I suppose you need raw material. MARK BLYTH: Yeah. Where do you get raw coffee from? MARK BLYTH: Initially, you buy it from importers. So there are companies out there that source this stuff, bring it in, warehouse it in the UK. And you can look at a shopping list and be like, I'll have one bag of that, one bag of that, two bags of this, and one bag of that, a bag being 60 to 70 kilos of the kind of jute sacks.

And you would need to, for your first order, probably buy 10 bags of coffee, about 700 kilos. How much did that cost? Four, half, five grand, probably. So this is the business that requires large amounts of upfront capital. Right. In fairness, a lot of bricks and mortar businesses. Yeah, absolutely. And the great lesson from my point of view is that we didn't start with enough because I worked too many hours. Yeah, yeah. So I fell for the classic...

What's that can I swear here? Yeah, oh great. So the hero bullshit of entrepreneurship of like I must grind myself down I'm a fucking hero working super hard I'm doing it right and it's such bullshit and it's such a toxic aspect of all work and I hate it But I definitely worked 110 hour weeks for like months ground myself down to the point of deep misery and there is no quicker way to hate a thing you love

than to work on it like that. I really love coffee. I definitely got to the point where I was like, I should quit coffee. I hate this. I hate this. I hate my life. I hate working in this. I should just do something else.

Because I worked in a stupid way and I burnt myself out physically and emotionally because people do that because the world says, "Good for you. Get the grind on." You know what I mean? "It's your thing. It's yours. Pour yourself into it." And you're like, "No, don't. Don't do that. That's really bad." What you should do is start with enough capital that you can hire people to work with you, pay them properly, and then work in a healthy manner. Do you know what I mean? Like, just have work and home be separate. That's helpful. Turn off. Don't work at weekends or don't work some days a week.

It's very satisfying early doors to pour yourself into a business. It is rewarding. It's enjoyable. But you're just burning through yourself so fast. And so I regret not starting with probably twice as much money, hiring more people out the gate and going home at five o'clock. Do you know what I mean? Like, just be done. Just turn it off. Turn off the, go home. Enjoy life. You can build this thing. You don't have to sacrifice yourself for this. The downside is you need more money to start with. So that's the trade-off.

We didn't have that money. We didn't know we needed it. We had enough to buy the physical things, not enough to build the systems, hire the people. And so we just worked ourselves to the bone and it was miserable and I regret it. And it was a mistake. Oh, okay. On that point. So-

I feel like sort of at least in the online discourse around starting businesses, circa 2013 to 2019 was the era of the hustle culture movement saying that, look, you're starting from nothing. Your 20s are for hustling. You've got to grind yourself to the ground, work on weekends, work on evenings to start that thing. Since pandemic, I think, has accelerated this, there's a lot more like that kind of approach of actually sustainability is important, etc., etc.,

But what a lot of the kind of pro-hustle people say is that, look, when you don't have that startup capital, like, and you're working your crappy job and you need to start the business, there is not much you can do other than kind of work between, I don't know, 7 p.m. and 2 a.m. and also work on weekends and all that kind of stuff. And I guess you're just hoping it's just a season of time so that you can build enough money, build a business off the ground, because it will take blood...

theoretically, it takes blood, sweat, and tears to get a business off the ground from moment one. And a lot of entrepreneurs that I've spoken to who have done that kind of grinding themselves to the ground say that, yeah, it wasn't ideal. It wasn't really a happy time. But without that period of crunch, which for several years potentially, the business wouldn't have gotten off the ground. So I guess my question to you is, do you think that you would have been able to do it in a more nicer, sustainable way? Or do you think it was necessary to put in the blood to get this off the ground?

I think the tricky bit is that if I had had the understanding that I have now and a little bit more capital, then yes, we could have built the same business far more enjoyably. I don't think it would have been a bigger business necessarily, but it would have been a more enjoyable process to do that. And I think certainly I may start more businesses in the future. And I know that I got a little bit

Hustley when YouTube started to kick off for me and I you know I mean I was like I gotta feed this a little bit because you know he feels when you when it feels like you pouring just straight gas on flames and there's just Every everything you put in comes back ten times. You're like mom. Oh mom. Oh mom addictive Yeah, but then you still end up with their world where you going with this like what's that? Yeah all the big questions It doesn't you might get to where you don't know where you know you get to a point slightly quicker But what's the point you're trying to get to hmm?

Does it need to happen quicker? Is that better? So, look, I'm not saying that there's a perfect way, right? Like, to...

back in 2008 to raise another 100 grand would have been really hard. You know, the system that we live in makes it much easier to raise 1 million than 10 grand. Really? Yeah. We can get a 10 grand bank overdraft. But I feel like if you go and pitch big and you make big promises, yeah, you can raise lots of money on the promise of lots more later. But if you want, I'd just like a 10 grand overdraft, please. The bank's like, hmm.

No, yeah, you're like I turn over like 30 grand a month and they're like, uh-huh. I'm like 10 grand You know, I mean like pre financial crisis you could get like a month's turnovers overdraft was the sort of rule of thumb Yeah, and post financial crisis the banks were like nah Which is really unhealthy for loads of small businesses It was it really restricted access to capital from 2008 probably 2015 was really difficult right if you wanted less than 100 grand and

The moment you wanted serious cash to make big promises to roll out this giant thing that little IPO or there'll be an exit Much easier Jeremy and for a while as I could easily raise it to me in quid Yeah, I in a way that I couldn't raise 200 grand That's what that's messed up But that's that's the way it was back then the least ill is now reminds me of that quote Which is that I think you probably come across it that If you owe the bank 200,000, it's your problem. If you owe the bank 200 million. It's their problem It's

Weird system of capitalism. But that's what it, I mean, like it's messed up, you know. But yeah, so, you know, I'm perhaps talking about this idealized world where I could have found another hundred grand...

Somewhere in a way that that didn't you know result in me signing over control or Direction or you know what I mean some aspect that would be later important But I do know that had we accrued more capital at the start We could have worked in a way that was less damaging to our physical and mental selves Yeah, and and you know, I think you can justify us culture all you like but

Just I don't think I'm proud of those years the way that I worked I mean am I proud of the way we got to yeah, maybe sure but I don't like that that was the the route and I certainly wouldn't wish that on anyone else and I would wish for or encourage a system or a way of working that wasn't that and

I mean like I I would hope for other people, you know, I don't feel like I suffered you should suffer too That's a sickness that infects our culture. I'm a I suffered I would like you not to suffer because this sucked That's sort of my feeling about life

So yeah, I'm not saying there's a perfect way. It's a messed up system. But that's my experience and how I feel about it at the end of it. So I guess, okay, so let's say if we could rewind 13 years and you have the same understanding you do now, but you're in those market conditions. Yes. It sounds like you probably would have spent more time trying to figure out how do I actually raise the startup capital I need such that I don't burn myself out rather than, oh, can't raise 100 grand. You know, there's always other things we could do if we knew the value of it. But I guess...

at the time when you're at that stage of life, you're like, oh, I'll just work harder. - Yeah, that's absolutely it. And certainly everything around me told me that was the right thing to do. You know what I mean? That was the culture around entrepreneurship was, yeah, you work, you can put those out, no one else can do it for you. It's your business, get out what you put in. And I believed it. But I don't want someone watching this to hear me say, yeah, you should hustle, yeah, you should suffer.

you know what I mean? I, I don't feel comfortable saying those words to someone. Were bits of it fun? Yeah. Lots of it was fun. Like it, it was, it was growing. We were part of this booming thing. Like, um, you know, uh, we felt, um,

Like we were making an impact. You know, I mean like we felt influential that was very satisfying We felt like you know, I mean like we felt like we were pioneering in some ways that feels very Arrogant to say and awful but it felt that way at the time. It's not really a phrase you get to use about yourself But that's how it felt it felt like we were kind of pushing your ground and it was people were excited about it and I think that we were having a wider impact and growing more than just our business and

So yeah, that was good. Yeah, because I think this is the kind of conundrum I find myself in sometimes with this business and the team that we've got here, where it's very easy for things to feel very frantic that, oh, we're doing all these things, we're launching a new project, NFTs are a thing, let's get on that, ABCD, AFG. And the other day, I kind of just got a bit of an impression that everyone was just a bit like,

sort of working flat out and I kind of stopped and took a step back I was like why the hell are we working flat out here like this is a this is supposed to be calm the reason I left medicine is because I didn't want a life and death job I didn't want something that was like massively stressful right so why are we creating these these like constraints for ourselves where we have to be wedded to oh this course needs to come out in q1 because 31st of March is an arbitrary deadline that we have decided and if we push it back two weeks that's the end of the world and therefore we have to burn the midnight oil and I think without a it's

I guess, you know, our team's fairly young, average age, like 27-ish. When you have like a youngish team of people who are, you know, hungry and keen and hopefully enjoy the jobs, it's very easy to unchecked it sort of to turn into this flywheel of,

sort of frantic franticness and stuff and it needs a bit of a Moderating influence like a coolant to be like hang on. Let's just actually think about why we're doing this Yeah, you know are we all happy broadly happy with how much money we're making into the extent that we're not on the poverty line poverty line Yes, cool. So then chasing more and more for the sake of like, I don't know an extra an extra dose of revenue or profit or whatever at the risk of sacrificing our mental health and burning out and stuff and

probably unsustainable. Let's, you know, let's be prudent. I think it's back to the idea of, you know, your best work does not happen in that environment. You know what I mean? Like, yeah, you might occasionally pull out something from the bag under pressure, but constant pressure? Yeah. No, no one does their best work like that. Do you know what I mean? Like, you need space, you know, like, you need to just have, for everyone needs a little space in their work. I'm just like, I'm not,

I can have time to think and read and be bored briefly. And those things are really important, really useful, especially in creative work. So going back to our roasters. So we've contacted one of these wholesale suppliers of like raw coffee beans needs to be roasted. Yeah.

Now you have a wall of coffee beans that needs selling. Yes. What do you do then? Do you go to Starbucks? No. Email Starbucks.com and be like, hey, do you want some coffee? How does it work? No, no, no. By and large, you're going to sell to independent businesses. But Starbucks already have their own system. Starbucks roasts their own coffee. They've got a massive facility in the Netherlands that supplies most of Europe and Europe.

Most of Europe now. I don't think they-- anyway. So you're probably going to sell this either online, which is one sort of challenge, or you're going to sell to other coffee shops. And I think it was a little bit different when we started. But these days, it's back to having a bit of a problem in that most people who start coffee roasting companies are very passionate about producing the best coffee they can. And so they'll think that because they have what they believe is better coffee, that's going to be quite easy to sell.

But the problem is that if you go to a coffee shop and you say, hey, I've got better coffee. One, you're saying that the coffee that you have chosen to serve so far is not very good. And two, that's probably not fixing a problem that a business owner has. Right. Like sales is solving problems to me. And so if you think about what problem a coffee shop might have.

Better coffee probably not one of them actually like they probably already chosen coffee They like and so why would I buy your better coffee then you know I mean, why would I write this? Yeah, if it's not a problem people aren't gonna pay to solve it like exactly so then you're into okay Well, what what do you do that's different and and that's a much more complex thing and that's also why a lot of small coffee Roasters struggle to grow because they don't have a compelling answer to a problem that a cafe owner might have

But yeah, that's that's that's what you're gonna do You're probably quite early get stuck in the trap of credit where you might say oh you you're gonna let someone get the coffee and pay you 30 days later. Oh, yeah, that's a thing isn't it like invoice terms and that can't be able and all the yes that normal businesses non-online businesses have to deal with and and that historically has come from larger businesses leveraging capital to gain customers of like what's the problem the coffee shops got not enough cash flow

Great. Let me solve that problem for you. If you sign with us, this binding contract to buy coffee from us for 12 months, we'll give you 28 days from invoice. So you'll order coffee through January. We'll send you an invoice February 1st. And on the 28th of February, that coffee's due.

Because we've got enough cash that we can lend you this much cash. And you've got loads of time to sell that coffee, make the money, and have a bit of cash flow back. Okay. So this sounds good and bad. Yeah. I guess the good part is that you can then get the product without paying for it. So for the coffee shop, it's great. I can get £500 worth of coffee in the door. I can sell that, turn that into £10,000. Obviously, I've got to pay wages, I've got to pay rent, all the other stuff. But I get a chance to do that, but I have to pay off the bill for £500 at the end of it.

That's the upside. Then also, however, I'm a bit stuck because I can't buy anyone else's product because they won't give me the terms. I'm in a binding agreement. So essentially, they've bought my loyalty, but they've solved a problem for me, which is cash flow. And that's a very common problem in a business that coffee shops have big VAT quarters.

Sorry, big VAT quarters? So they'll often have a large VAT bill at the end of each quarter to pay to the government. Yeah, and then that causes the cash flow issue. Right, it's often a cash flow issue for businesses that don't make large margins and aren't accruing a lot of cash at the bottom. So having suppliers give you credit terms essentially gives you liquidity. The problem is that if you're a small coffee roasting company...

It's very easy to get into that. And then coffee shops, well, they often fail. At that point, if they go into administration, the best case from Liquidator might be 10p on the pound kind of thing of your debt. If you manage to get to the top of the pecking order of who's getting paid out by those, which you weren't, so you're getting nothing. So there seems to be a straight bad debt. So you've given them the coffee. You've said they promise to pay you 60 days from now. But in that 60 days, they go bankrupt. Right.

And you've already given them the coffee. And you can't do anything about that. Classic. This happens all the time. Loads of bad debts out there. And chances are, actually, you probably kept-- they probably missed the payment February 28. And we're like, no, no, we'll get it to you. We'll get it to you. Just keep sending us coffee. Sorry, we messed up. We forgot to write the check, or someone messed up, or whatever other story. And so you might get 90 days of product to that customer. And then they go bust. And then you're out that much money. If you're a giant coffee company, eh.

It's cost of doing business. It's built into the price. It's fine. If you're a small independent coffee roaster where you haven't built that margin in because you're trying to be competitive with pricing, you can have a $5,000 or $10,000 debt that would take you down too because that might be your cash flow gone. And then historically, we were always taught bricks and mortar is like profit is one thing. Cash flow is everything. You go under because you run out of cash in the bank. Not because you weren't profitable, but you ran out of cash in the bank.

Because certainly, you know, we got we were never not probably were always profitable But we got real close on running out of cash because you do if you're growing, you know, the roast is buying stock buy bags We're not getting the same sort of term. So we're laying out much larger invoices. We've got you know, say a hundred grand of stock That's cash out. We've got all these other outgoings and we're still waiting for money coming in and there's profitable money coming in But there's a gap. Yeah, and so, you know

That doesn't exist as much in the online world, but bricks and mortar businesses, cash flow is the main concern, which is why credit is such an appealing way of selling coffee. So, yeah, that's the bit that you create quite a fragile market. And certainly, right now, there's a lot of debt in the market. There's lots of businesses that are strolling for cash that will owe money to suppliers

And they'll owe money to fruit and veg suppliers, milk suppliers, takeaway cup suppliers, coffee suppliers. And they're hoping their restaurant or coffee shop or bakery will do well enough to be able to pay those. To make it through. That sounds quite hard from their perspective as well. Yeah, it's incredibly stressful. Yeah, you're like always running in the red. And at the end of the month, you're like, oh, my God, we just need to wait for tomorrow. But the person paying our invoice is off sick, so we can't do payroll this month. Right. Or we can't afford payroll this month. We don't have the cash in the bank for payroll. Right.

And then all the employees are like, well, I need to pay my mortgage. I'm not coming to work if you're not going to pay me. Yeah. Yeah. Yeah. It's, you know, it's, yeah. Then this, but this is the reality of a highly competitive old industry. It's been going a long time. It's developed certain bad habits. And certainly I think credit is one of them. Um,

But I mean, that's, again, further encourage people to underprice product. You know, coffee is probably too cheap. But, you know, it's as cheap as people can make it and still just about survive. That's kind of how pricing ends up being in a highly competitive market, which isn't in anyone's best interest long term, but it is what it is. So how did Square Mile succeed despite all of these? I think initially it was a different sort of...

Our problem early doors was like people aren't really drinking specialty coffee and people didn't really know how to build businesses doing that. And we had a background of teaching and training and education. And like, we're going to help make you successful. Our goal is not to sell you beans. Our goal is to make you a successful cafe and we'll work with you on your training programs. We'll work with you on,

equipment or anything else. But our goal is your success. MARK BLYTH: So way more than just selling them coffee. MARK BLYTH: Yeah, yeah, yeah. That was our approach. And everyone's problem is I'm not successful enough. So if you're focused on like, we're going to increase your top line, aim to increase your bottom line too, somewhere in there you buy some coffee. But we're trying to help you build a better business. That was our initial kind of goal. And it's changed over time.

At some point if you have a more recognizable brand that problem you can fix is my customers don't trust me because I'm a new coffee shop and The answer is if I buy a brand of coffee that they do know they might trust me They see the logo of X coffee company. Oh, this is probably good coffee, right? That solves a problem It's a difficult problem because other brands solve the same problem. It's not as effective But but yeah, I think that was always our approach of like we want to help our customers succeed it feels disingenuous now like

I did all the sales early doors. It's very easy for me to talk about that time. I don't do the sales now. You know what I mean? It feels like I'm speaking on behalf of people, which is-- I don't want to minimize their jobs. MARK MANDEL: I know. I appreciate that. MARK MANDEL: It's more complex now. MARK MANDEL: We're kind of talking about early days. Where? MARK MANDEL: But yeah, certainly early days. That was our kind of approach. And I think we had some experience in what great coffee was. And I suppose I had this weird title to be like, well, I know what good coffee is because I'm on this stupid dog show. So that's how that went.

Okay, so the way you differentiated yourself in this potentially crowded competitive market was not actually competing on the quality of the coffee, but in fact being like the service as a whole where we help you be a better cafe solves the problem that you're having. And by coincidence, by the way, we also sell some of these things. Yeah. Kind of. Yeah, I think so. It was designed to be a more collaborative relationship and not just here's a box, here's my check, see you next week. So what's happening with the Square Mile these days?

Well, it's been an interesting couple of years. Obviously, when the first lockdown came in,

We you know 80% of our revenue stopped because every cafe shut initially well a handful said open but almost everyone shut because that was the thing to do and businesses shut down and I think we were very fortunate that over the years clearly people had developed an attachment to our coffee through the businesses they were buying it from because when when B2B disappeared online exploded mmm

And so we very rapidly transitioned into being very focused on, you know, we were aiming to be good online already, but suddenly there was just a bigger market for that. And I think we had a lot of growth. And that was, you know, something that we worry about quite a lot in that it's been a really busy, successful two years.

that's definitely put a strain on people inside the business and I think you know like Focus for this year is not rampant growth in terms of top line or any of that kind of stuff It's a kind of it has to be a year of consolidation and I think a year of Making a stronger company and a stronger company is not necessarily growing the top line at all costs A stronger company is looking after the people inside it Making sure that they enjoy coming to work are not exhausted by the process I think we all have like a

layer of fatigue Globally from the pandemic like this there is a I think everyone feels fatigued by it all so fair Yeah, do you know I think that impacts everything Just it's been draining It's been emotionally draining and physically draining for lots of people and that's regardless of where you work or what you do and I think you can't ignore that fact when I think if you've been successful in that time and you've had that and

Then I think it's maybe the temptation would be now we just got to go harder again and harder again and harder again I'm just not sure I think we're not sure that that's the right way to go and I think we want to build a healthy strong company Because again, we're interested in sustainability. We're not working to an IPO. We're not working to an exit We're just trying to do what we're doing do good meaningful work, but sustain and last you know

So it sounds like Square Mile's kind of grown from 2008 to 2022. Things seem to have gone pretty well with pandemic transition to online and stuff. When did the other stuff that you do fit into the timeline? That's a really good question. So I sort of took on a de facto managing director role in Square Mile in the early days. We didn't really think in those terms, but I suppose I did those kind of things regularly.

And I have also worked with other companies as a kind of collaborator in terms of designing or promoting equipment and those kind of things. And so by 20, I want to say 2013, maybe,

I was like early 30s. Yeah, traveling enough 2013 2014. I want to say I was traveling enough that we realized that if anything Inside the company was reliant on me being in the building. It's broken Because I wouldn't necessarily be in the country. I was in Melbourne for a month at one point I was traveling all over the place like it was just a lot of travel a lot of away time and I think that the dual fact is combined of the kind of person who might be good at starting a company and

is not necessarily the kind of person who's good at running a small, medium-sized company. I don't know. You know what I mean? We were initially a small company, and then we got to be a big, small company, and then I think we're now a small, medium-sized company. In Square One now is about just under 30. But I think the role of running a business changed, and I think it wasn't...

what I was very good at. And again, I wasn't always there. And I think you have a broken system. That's bad. So I stepped out of the managing director role. And a new managing director stepped in. She'd been with us for a while. Very capable. And she runs the company still. And we began to work out how that relationship would work and be healthy for both the company and specifically, actually, for her in that role. If you talk to a lot of founders who

in theory move out of operations they often love a medal they'll have to come back set some fires and leave right and so we you know we've tried to learn other people's hard lessons the easy way yeah and so really early doors were like how do we stop this happening okay you know what are the ground rules of how i interact with the company now that i'm not operational

Do you not have a thing of like okay? So I have this problem where it's all well and good trying to get other people to do stuff And then you see something that you think this seems dumb. Why are we doing it that way? And then you start meddling. Yeah. Yeah, but I'm not allowed. Okay, that's the deal right? That's the deal It if I want someone to take on this mantle and to work with me and then be satisfied by the work I let them do the work and and it I have to move into a more passive role of How am I useful to you?

right but it's a yeah sure there's times where i'll i'll be like i have to be in my body about something i'll be like talk talk into the office can we talk about this and but that's the first point of contact it's not me going to the person in the role and being like can you just go and do this because i've seen this and i want this and do that yeah i did that a little bit in the past i'll get told off and i'm like good because i shouldn't be left unchecked because it creates a really difficult dynamic in a business because ultimately i'm a founder and if you're a

Relationship you have if you work in the business the founder walks in the door. That's different right and so It's easy to accidentally override or derail a direction that the managing director is is dictating correctly Don't mean to be like what you know I it's easy to come in about oh I'm thinking about this here and you can set someone off on a task for a week and and you know

then at the end of the week, the management director was like, so where are you with this? And they're like, oh, I'm way over here. And you're like, why are you over there? Because we're going over here. I said, well, James said, and that's really unhelpful. That just, that's a company working against itself and that's bad. So the rule is very simple. I can be called upon by the team. If they want something from me, they can take something from me. And that might be ideas for marketing. That might be ideas for products. That might be

Knowledge or specific things or whatever it's gonna be But anything that I wish to inject into the company has to go through the managing director and an appropriate time We will sit down and talk about my ideas and then those that that are deemed worthwhile Yeah, can then be taken in further, but I am not allowed to come in and give direction to anyone in the company about anything That's the deal that we made nice and that's because I'm saying you're in charge of this company. Yes

I have to mean it. Otherwise, they're not. And then it's just a very... I'm not in charge of the thing. I have all the responsibility of running this thing, but I'm not actually able to steer the ship because someone's got their wheel on it and they keep pulling it to the side every five minutes. I'm trying to go over there and they just had a moment of like, but I want to go here quickly. It's unhelpful. And I think it's bad. I am not perfect in that regard, but I try really hard and we talk about it a lot and we make sure that we are constantly aligned because you just can't have the bit of like, well...

You said this, but she said that. Which one do we believe? Which is the truth? Really unhelpful. If I'm to be useful, then I have to be a resource. I have to be passive and I have to be respectful of what I've asked someone to do in that role of running the company, which is please let me run the company. If you want me to do the job, let me do the job. That's the deal.

MARK BLYTH: So I guess you need quite high confidence in that person that you have hired them to run the company. They are competent. MARK BLYTH: But they also should be comfortable saying, I need a little help with this. Or I'm not sure of this. And the person I speak the most to in the company is the managing director. We talk a lot about everything. And it's just great for me to feel connected and also for her to have a sounding board and another person she can talk freely to about any aspect of the business.

That's a good, healthy relationship, I think, inside a business. And I think it allows us to be very coherent. And it just stops me setting fires.

I want to don't get me wrong. You're like I see stuff and I'm like I just want to go and meddle with that But I know the deal I can't have it both ways. It doesn't work Jeremy and I can't have the freedom so to speak Yeah of the responsibilities and then all of the fun meddling that just that that just breaks the thing might be fun for a year But it breaks the thing. Yeah Meddling meddling I have so much stuff I want to ask you about this more, but I think we're getting we're getting into weeds That is not applicable to most of our show show So if I can take you back so when when did the YouTube channel start?

And how did that fit into your whole business model? MARK BLYTH: So I-- I'm pretty familiar with you. I blogged early days. I started blogging in 2004. I felt very isolated and alone in my coffee obsession. And the internet was full of people, enough people that I could connect to. It's like a healthy version of flat earth.

Where I was the one isolated person being like, I really love coffee and no one else cares. But the internet cared. And so I started a blog to sort of chart what I was learning to go through the classic process of if I understand it, I can explain it to someone. And in sharing it with someone else, that's valuable. So that's why I will write this blog. And the win of the blog, which is a bit like YouTube, I kept doing it.

I just kept doing it and for years and years and years and years and years and years and years I kept doing it and blogs came and went But I sort of was consistent throughout and consistency has this really fascinating value and it wasn't that I'd blogged every week I wasn't Seth Godin doing every day like, you know, it was I was just regular I kept going and and it made it more rewarding for me and also more valuable and and as a thing however by 2016

People have moved from blogs to video and I'm a little I feel late. I feel late actually in 2016 Like Casey nice that's exploding at that point Jeremy like and I'm like I should I guess I should start on YouTube I guess you know And I knew people that would do like starting to spend money with influences and I was like, what's good Is there an economy here? I didn't really know about no one takes YouTube very seriously at that point and

outside of people already in YouTube, if that makes sense. So yeah, 2016, I started uploading videos, which were initially like-- I bring up Nystat because it was a really easy thing to copy. MARK MANDEL: Yeah. Very distinctive style. That's very-- MATT GAUNT: Right. I'll do vlogs. But I'll do a weekly vlog. I'll cut up my week, put some head nodding hip hop in there. And you know what I mean? I'll do that. And I'll try and work out how to do that. And I did like 12 weeks of that, I guess.

I was like, OK, actually, I wanted to develop a practice of making videos. But these aren't the videos I particularly want to make. I'm not actually interested in sharing my life that much. I'm interested in kind of communicating with that. And really early days, I wrote a blog post about takeaway cups and how they're not that bad and what the actual impact of them is. And I made a video about them. And the time on site on the blog was like a minute and a half on average. It did like, I don't know, 10,000 views.

And then back then, that video did like 15,000 views on YouTube with like a six minute time aside. And you're like, all the attention is on YouTube, is on video. And so if I want to communicate with people, if I want to learn and share and teach, I have to move to video. That's just what it is. And I'd made little videos in the past and I liked it, but I wasn't very good at it back then. So I started making videos on YouTube. And, you know, a couple of really interesting lessons early on for me was that

Moving audiences between platforms was almost impossible however many subscribe like 20,000 followers on Instagram And I could not get them to go to YouTube I was like, but I'm making videos and they're like you have we like Instagram Same with Twitter same sort of proof 30,000 on Twitter couldn't get anyone to go to you Yeah, and you got that initial audience through the blogging through just being well the initial effect I got to 2000 quite quickly

And then I flatlined for a long time and it was really like, you know, it took me a long time to get to 10,000 subs from that point onwards. And that's the, that's YouTube, right? Like it's just the graft and it's just, it's a, it's a difficult place to be discovered. It takes time. You've talked about this a lot. It is what it is. And that was again, totally my experience too. So yeah,

Yeah, I think by 2019, I crossed the 100,000 subscriber mark. Three years to get to 100,000. Yeah. That's great. I'm not mad about that. No, that's interesting. Because I think people have a lot of like unrealistic expectations about YouTube. Like you see the big YouTubers and often they're the ones that sort of broke out earlier on. And then I find, you know, we have hundreds of students going through our YouTuber Academy, every cohort, and people are always like, oh, I'm on video number 32 and I'm still only on like...

3,000 subscribers. Like, bro, it took me 50 videos to get my first 1,000. Like, what are you talking about? And even you with that inherent unfair advantage, as it were, of being a world barista champion, of running a coffee roastery business, of like being very, very pro at this thing, talking about the thing that you're pro at, still took three years to get to 100K. Totally. Damn.

Yeah. That's great. I love that. But it took me a long time to get better at making videos, to understand how to... I've done a lot of presenting over my life. I've done a lot of talks on stage. I did in the job, my first kind of...

Training job on with the commercial machines. That was a lot of presenting essentially. It was to a two-hour talk I would give several times a week, so I got comfortable Presenting which is a whole other skill that I guess I had a lot more practice at coming into YouTube than is normal I guess which maybe helped a little bit So yeah that that that took a while I had a few videos do really well, but but you know the way that you know it was interesting to me that

Weirdly coffee's a part of some people's lives and coffee's a part of loads of bloggers lives and bloggers lives and you would see a lot of people have a little coffee part of the videos but actual coffee content on YouTube there wasn't very much and quite early on on National Coffee Day like YouTube's Twitter account was like go and watch James and I was like wow that's cool but also you don't have many choices this is a really empty niche it's changing very quickly now as the sort of niche fills in inevitably and

That's good. That's really helpful So yeah, like so yeah for the first three years. It was like I had a little space That I used for making videos and also a sort of office near home far enough away that it was healthy But still convenient and then that was a bad studio and it was sounded awful and slowly we've sort of improved that and then it kept going and going and it sort of gave momentum and

And for a long time it made no money and I took me a long time to discover that I had somehow at some point unticked a box

On Adsense that was like the the essentially this box of like can Google serve people custom ads to who they are and for some reason I don't check this. I have no idea when I unchecked it, but basically Google couldn't serve a Spits tailored ads which meant that my Adsense was appalling Really like appalling for the views that I was doing I was only like a fifth of what normal adsense would have been for those kind of things I don't really know but the point was I had a job

I had a living and this was like a thing that I was doing because I was passionate about teaching and sharing and communicating and doing that kind of stuff. And then it grew and grew and grew. I was like, okay, now this is a business and I have to sort of switch my thinking in this to being a business now. And I still struggle with that part of it because my instinct is to try and build a sustainable thing. And you're constantly wrestling with YouTube of like,

When do I hit the top of the bell curve? When am I going to see the decline? How do I build a sustainable thing? But then you sort of listen to other channels. I think Marquez has been particularly interesting on this front. He's just like, no, I'm just going to build a production company in a sector that's always interesting, and we're just going to go.

And you're like, oh, maybe that's-- because part of me is like, OK, this is-- am I going to be a YouTuber in 10 years? MARK MANDEL: Yeah, I think about this all the time. MARK MANDEL: I don't know. But I genuinely enjoy making videos and producing them and sharing them and doing this kind of stuff. So I'm like, maybe I want to do this in 10 years. I don't know. My career has taken so many weird routes. Like, I've done so many odd things as part of the stuff that I've done. I'm very bad at predicting the future. So two years feels like a long time to be predicting for.

But yeah, so now I'm trying to understand how to build this into a sustainable thing. What that is, what that looks like, how much time I spend doing that. Like I have quite a condensed work week, probably more so than most people would think. I'm sort of, for various reasons, I probably get everything done that people see me do in about 25 hours a week. And then I have other stuff the other part of the week. And I try and sleep, but whatever. But yeah, 25, 30 hours is my kind of active working time in a week.

on this sort of stuff and this tangential stuff of that as well. You know, this sort of advisory work that I do or other things that are off topic. So, yeah, I'm trying to work out what what what, you know, is better the ideal day. What do I want?

a week of making videos to look like. What do I want a day to look like? I've always enjoyed having no structure to my life. It's just easier. I don't have any routine. I don't know what I will do tomorrow. I do tomorrow, but I mean, tomorrow I'm going to get on a plane and go to Italy. That's not normal. So, you know, like, you know, there's no rhythm.

And I'm sort of OK with that to some extent. I've lived that way for a really long time now. So yeah, now YouTube is a thing. I have to pay attention to it. And I feel a responsibility with it. Do you know what I mean? Like, I feel like I-- especially as a large creator in a small niche,

Have a disproportionate influence I think is unfair and inappropriate, but that's the nature of having a loud voice in a relatively quiet room So that's that stresses me out a bit, but yeah, mostly I just like I like making videos And I think I have ambitions to be better at that as well as the stuff inside them I just I don't know do I want to be a director no, but also kind of yeah anyway, yeah, I

So what is your overall like business portfolio as it were look like you've got YouTube channel. You've got the roastery Do you have other stuff going on? So what is it dreams of income? Like lots of them aren't income if that makes sense. I don't take anything from them at this point. Okay, what are the streams of revenue? Sure, revenue is pretty fine. So square mile is one square mile owns most of a cafe called proof rock and

Which is another business square mile also? Well we sort of have an investment in a espresso machine distribution company in the UK they so I collaborate with the manufacturer in Italy And I've helped them design and build and sell machines not so I haven't built them, but they built them You've designed espresso machines that sort of I've had input into these things and

And so that relationship has led to kind of us beginning to import those machines into the UK And then they've mostly taken over that business. It's branch office for them, but we're still sort of involved a little bit Yeah in that business there's YouTube and the sort of bucket of YouTube that is also things like money from books as I wrote a book in 2014 that continues to sell in a way that I don't understand but I'm very happy about It's one of those ones where they sat me down early doors and I'm like, yeah

you're not going to make any money. You'll have a beautiful business card, but you will not make any money. And I was like, cool. And then it's done like 300,000 copies and everyone's a bit like, uh,

I know, I know, I know. And that's in translation. I've only recently got into the publishing of that, so 300,000 is a hell of a lot of copies. But that's over, that's since 2014. So it just ticks. It's just one of those books. That's kind of good in a way. That's the Marques approach to selling books. It's gone really well. This is your Atlas of Coffee. This is the world Atlas of Coffee, yeah. So just finished another book. We wrapped the photography on it last week. That'll come out in August. Hello. Can you send me a copy? Of course. Of course. It's just about making coffee. It's kind of the YouTube channel as a book. Yeah. And kind of,

Flushed out in a different sort of way. It's a book anyway, just just another gig so we show the 300,000 number like does that like how Much do you make on a royalty from a book so very little? Oh, like pennies are we talking dollars tens of dollars like oh? Okay, so um I think I'll make less than a pound a book at best okay, so

And often less than 50p a book and often less than that. Because a lot of them have been in translation. That's the way the licensing of translation works. Because the atlas is very image heavy. It's a ton of cartography, ton of licensed images. The word component is a little piece of the book. So the words don't earn that much money. And that's okay. Like, you know, over those eight years...

It's been really nice to have that revenue come in. It's money I never expected. And it's been really nice. But yeah, it's not. I haven't earned 300,000 pounds from it. Part of me is like, I should write fiction. That seems to be much better. Children's fiction in particular. It seems to be the real side hustle these days. Yeah, not going to do that. But the book has been a great way to sort of

Don't know the book was written to be not about me, which is kind of weird There's my pictures not in the book nothing about square miles in the book It's it's built to be useful to anyone interested in coffee and that could be competing businesses to mine I'm sort of I'm the name on the front and that's the only time I'm really in the book is the name on the front thing And and that's sort of same with the YouTube channel obviously I'm not there to advertise the coffee company because I want to be useful to

companies everywhere who can be like, oh, you want to know about this? You can watch James' video about that. And if it's sort of apolitical, that works much better. Anyway, so that's the book. I'm bouncing around a bit. So yeah, the book and other sort of royalties or other things like that would fall into sort of the YouTube-y business. We have a merch business separately called Tens, Hundreds, Thousands. That's one thing. And then there's a few kind of investments. In some cases--

I've started and sold some businesses in the past and those have gone different places and one of them Was a kind of part cash part paper deal so I have a little investment in one company that bought a business of mine and they have some investments in various things and

I invested in a canned coffee beverage in San Francisco called Taika who kind of a coffee and adaptogens in a can and it's great It's very good if you could get it here. It'd be great. I said you some I work with a Danish booze creator called empirical spirits who do really interesting stuff There's a non-alcoholic brewery in the UK who I think are amazing called big drop of tiny investment with them there is a

Oh, there's an interesting software as a service platform in coffee I'm working with a little bit called beans who are doing interesting stuff But really on like business to business coffee stuff and a few other bits and pieces I think out there I'm not really an active investor in that regard

But I'm interested in seeing cool businesses do cool stuff. And there's times where I'm like, yeah, OK, I'd like to be a little bit involved. But I'm not writing big checks. You know what I mean? Like the little checks, little tiny checks. Just because. Having you on a cap table is just a value added in itself. Maybe. To some businesses, yes, maybe. And it's been interesting to learn about that world. Yeah.

You know what I mean? Like most people never have to worry what a convertible note is. And that's probably for the best, if I'm honest. I've heard that term so often, I still haven't Googled to find it to know what it means. And then you get into like blind trusts and like, you know, like the whole deal of preemption rights and dull things. And I don't want to get into this. I have lots to learn about that particular. Yeah, I'm not sure. It's certainly not something I'm interested in deepening my involvement in meaningfully.

But yeah, like that's the sort of sort of, you know, I run a very boring. I have a decent pension. I have a little bit of money and like a like a Charles Stanley ask kind of thing. But I but I historically I've just chosen not to pull much money out of my companies. And so, yeah, that's been a kind of high paper net worth, but not necessarily. Yeah. Oh, you know, like, yeah, like a.

Don't have a particularly extravagant lifestyle or demands for one really you know what I mean so it I don't know part of me is like you should get the chips off the table the kind of dealer to go the Gambling part of it is like, you know, like cash out a little bit cash out cash out, but I'm like, I don't I don't know So yeah, like that's that's maybe not the healthiest approach to money but it is it is mine and and and like I don't know I

I'm not driven by accruing an enormous amount of wealth because I don't know what I would do with it. I'd probably aspire to give a bunch of it away or use it sensibly because I didn't want very much. You know what I mean? Which is something I'll try and maintain. I don't know. Again, I've had interesting talks with incredibly wealthy people and they're not very happy. Miserable people. I've got a bunch of miserable people. And, you know, that doesn't appeal to me.

Just I don't know. I think you very easily get into just make the number bigger and that's the least rewarding game in the entire world So that's I'm like, how do I not play that game? I don't know and I also think like I think I think generational wealth is important but I also think you easily cross a line to just like

the easiest way to destroy a human is give them an enormous inheritance. I don't think there's ever evidence of that going particularly well. So like, like I believe people should be able to build generational wealth, but I also think there's these kinds of points where I get so little screwy. And I think, I don't know, like, you know, I was never promised any, I was given a safety net growing up. Sure. But I was never promised. There's never going to be like a, you know, but I imagine how it must be to grow up and be like, at some point I'll have a hundred million quid. I don't think that's good. Is that good? I don't think that's good. I'm not sure that's good. I,

You know what I mean? You can do with your money what you want to do, but I don't know if giving an enormous amount of money to someone will help them lead their happiest life. I think about that quite a lot. So anyway, a little bit like the die with nothing thing, right? A little bit similar to that. I don't think you should. It's a world where you might want to pass on enough that you're kicking it out of the housing market or, you know what I mean? Like they can get through university debt free and not carry a student debt throughout their entire life unnecessarily and stupidly crippling.

But I don't know if millions of pounds at some point is good and healthy. MARK MANDEL: Question. One somewhat standard piece of business advice is stick to your core focus. Stick to the thing that you're good at, your Hedgehog concept, your whatever, your unique ability, et cetera, et cetera. We've been thinking about this. I've been thinking about this a lot when it comes to setting up a kind of merch company.

So I was very inspired when you gave a talk at the Ziggurat Summit a few months ago, actually, around how you have this separate company, 10th of thousands, which does your merch, as it were. But it's not like a T-shirt with your face on it, although those would sell. It's more like these cool products, like the decks of cards and stuff like that.

And I like the idea of making physical products. And in fact, we have some physical stationery, which is around here somewhere. But I also see the advice of, you know, the physical products are a bit of a side hustle. Like, I'd love to make my own mechanical keyboard. I'd love to make my own everyday carry laptop bag, just because I freaking love keyboards and bags and pens and journals and, you know, the daily productivity kit.

But it's not our core focus in that when we as a team are not very good at making physical products, we don't have any expertise in it. And the thing we do is content. So one argument is double down on the thing you're good at. There's another argument for diversification, for building a brand outside of me necessarily that I can be the marketing director of, but not necessarily the managing director of, or not so intrinsically tied to the brand that it is unable to function without me in the room. But it's like, yeah, any thoughts on that balance between stick to what you know and

content around the thing versus branch out into multiple things where you might not necessarily be an expert like physical products. Sure. I mean like I we do it because the actual creation process is very enjoyable like making fun new things is Satisfying I think that's why we do some t-shirts and posters, but we also try and do more interesting stuff That's just kind of satisfying in that regard You know

I think the reason we kept it separate is, again, it's that kind of part of like, how do you build a sustainable thing? I want it to have a relationship with its audience outside of me. I can do the marketing for it in some ways. That's good. But I like the idea of it being its own independent thing, that it can grow a team inside. It can have development for the people inside that. It doesn't have to be huge. It doesn't have to turn over millions of pounds. It can do that.

as a smaller business and still be satisfying. And at the end of it to be like, we made some cool stuff and people really enjoyed using it. And that for me is a, a, probably a bigger motivator than it generating thousands of pounds of profit or, or payout. But that's just, you know, going into this because I've had a job from the beginning and this hasn't been,

stuff, I've had a stronger feeling of like, what's the thing I want to do that I enjoy? You know what I mean? Like, I have no doubt that the Essentially stuff has been very satisfying for you. Like, sitting down with it and using it. Yeah, I get to use my diary every day. Right. That's enjoyable. Even though it doesn't make much money. Yeah, yeah. In fact, I don't think we're at break-even just yet. But still. It takes time. But it's one where at the end of the year, that may be a moment that you reflect on and be like, I've enjoyed that.

I was that was that was you know like That was a return on whatever I put in I felt a return on that and I think that's that has its place I think you know running around trying to do six million different t-shirts and mugs and all the rest of it can easily be a distraction It's not a great margin business unless you get deep into the manufacturing and then that's building the manufacturing like you're gonna start a paper factory and

there's a whole other thing. You know, you'll make a lot more money on each little diary, but you'll have had to build a paper factory to do it. Like, you know, that's the, that's the trade off. Um, so, you know, yeah, I think for me, one of the requirements of business is I enjoy it. I'm satisfied by it. And I think this is a great way to do that. And again, I think I'm also interested in poking around in the places that people aren't

You know what I mean? Like no one's really making trays for dosing coffee into before you put it in your grinder. Lots of people are making t-shirts. And so the t-shirt real estate available to get my t-shirt on a body is limited. You know what I mean? Like you're going to have to pick the, and we still make them and I enjoy them and we just have some fun with them. But like it's t-shirts are not as satisfying as like, we've got a,

some botanical prints coming like botanical drawings an artist who works with Kew Gardens a lot like it's like legit botanical drawings turn into like these posters I want to own it actually like I if I don't want to own at the end of it we don't make it if I don't wear the merch we don't make it if I don't want to drink out of the mug we don't make it like I have to want all of it

And I really want to own these prints because I love botanical drawings. So we're going to make it. And, you know, like we can. And why would you not if you could? That to me is the better why would we do this? Because we want to and we could. We have the opportunity. Like I think switching to YouTube for a second, like I'm in a weird place where

Can I have the freedom to make videos that really no one else in my industry can make it doesn't and you know, I like I From Adsense or patreon or other things I can spend money to make videos So I feel like I have a moral obligation to make things that no one else can Because they don't have that opportunity and I would be squandering the opportunity to make stuff. I

So that's what we want to do. I'm going to fly to Italy tomorrow because I want to talk to someone who's the biggest collector of vintage espresso machines in the world. They have a museum. They are their person. I want to buy a vintage espresso machine. And ultimately, I want to put it on bar in London and have people drink coffee from a machine made in the 50s and have a really, that's a nice thing. You know what I mean? But that's the upfront cost of that. And actually, it will lose money as a video, but it doesn't matter. I can do it. I should do it. And that would be cool because I want to do it.

So that's a weird metric for making decisions, but it's very satisfying. That's a great way to think about it.

MARK BLYTH: Yeah, if I think of the keyboard, if I think of the bag, the stationary, it's like, it's cool and I want to do it. And I know it's not going to make much money. But I think I need to start shifting my thing from the thing that we should be doing is the highest ROI thing to ROI is measured in things other than profit. MARK BLYTH: Yeah, it shouldn't be damaging for the longevity of the business. But I think that, yeah, it's not-- it's easy. It's a nice metric.

Which makes it very appealing. Yeah. But I don't think it's always the best metric. Yeah. And I really like the idea, for example, spinning this off into another company that can have its own team, that have ownership, that have equity, et cetera, et cetera, so that it feels like... And, you know, I think the model that you described sounds like you are the owner of multiple businesses, but not necessarily the operator of multiple businesses. And that feels... I'm not very good at it. Yeah. That feels interesting. I think I'm kind of like you. I like the idea of starting stuff and shaping the vision initially. And then when it...

When it comes to the day-to-day stuff, I would much rather someone else deal with that. MARK MANDEL: Yeah, but I think it is important to understand that there has to be a trade-off in that. And that there's days where I want

To get in the nitty gritty and I just can't. I shouldn't. And that's just that's that's part of the trade off. But yeah, I think I'm not very good at a bunch of stuff. I'm quite good at certain things. And I think I'm most useful if I'm doing creative stuff. I'm kind of good at ideas and ideas are valueless without execution. And I'm not the world's best executor. So I need to work with good executors to be vaguely useful to anyone. And I think we over overreact.

Value ideas, you know, we sign NDAs around ideas you sign awesome. It's a nonsense They're worth nothing until they're executed upon. Do you worry about like money these days? No. Yeah, I mean yes and no like You know going into the current economic future Yeah, we go through if we get into the spiral of inflation and all sorts of other stuff. Yeah, that's concerning. That's a worry but

Yeah, I don't I don't really meaningfully where I mean, I've worried about it in the past, you know, like I've sold food, sold clothing items or vinyl to pay rent. And, you know, like I don't worry about it the same way now. But I'm you know, what I'm aspiring for is just I want the brain space back to think about other things. So, yeah, I think that's but that's easier if I don't want a ton.

And I think if I had a lot of, I'm trying not to get into the hedonic adaptation of that stuff where you just consume more, can't commensurate with that stuff. Again, I'm desperate to learn other people's hard lessons the easy way. And you don't always, you intellectualize it, you understand them.

But you still kind of get sucked in. And then two years later, you're like, oh, no, this is the lesson I need to have learned two years ago. And I can't learn it on paper. I have to learn it by making mistakes. MARK MANDEL: OK. So I'm 27 right now, probably in a similar position that you were probably a few years ago, just getting started with all this stuff, not taking a lot of cash out of the business because reinvestment, et cetera, et cetera. I'm noticing a tendency of lifestyle inflation in myself where it's like, you know,

£1,000 a month rent is good, but £5,000 gets you a really nice apartment. Oh, I wonder what £10,000 is like. You know, et cetera, et cetera. We were talking about espresso machines. We were like, oh, I'd like to get into this as a hobby. And I see the warning signs of like, hang on, the more the kind of,

baseline how much money I need to comfortably live, the more that increases based on just hedonic adaptation and lifestyle inflation and stuff, the more worries about money I will have further down the line. Whereas if I can actually be very comfortable living a slightly more frugal life, keeping in mind the principles of Die With Zero, then it would free up a lot of headspace because right now I spend a lot of time thinking, oh shit, what's the business going to look like three years from now? Are we still going to be profitable? Am I still going to be a YouTuber, etc., etc.?

Any advice? Just throw that wallet to you. What do you reckon? I think it's really paying attention to the dissatisfaction or the lack of satisfaction that comes with spending more money sometimes. Do you know what I mean? Like, you buy the nice thing and you're like, take a nice camera. You buy the nice camera. That is nicer.

But I'm not satisfied and part of your brain goes you didn't spend enough right and so that's the answer is you can't spend enough You're this feeling is inevitable. You can't you can't spend it away, so it's it's when you have that feeling I think it's really useful and nice be like okay. That is I

oh, there isn't-- what I'm looking for is not here in the thing. And I think a nice-- I'm not picking on you, because I saw you buy a nice camera. But I think that's a good example of that. Like, that feels nice to use. And there's moments where it feels special. But it's left you feeling like, what do I get for even more?

Right. I suspect. Yeah. I'm like the Leica Q2 is nice, but like the Leica Q3 is going to be even better because it's going to have a way of recharging for USB or the Leica M whatever that has film. Oh, hello. Do you know? Yeah. And it's, that's the wrong diagnosis of the symptom. You know what I mean? And it's just trying to catch yourself in that loop of like, oh, I can't,

I can't upgrade my way into a more into satisfaction. Yeah, I mean it isn't there and and stop chasing it Jeremy like But at the same time lean into the things that do give you real satisfaction. I really enjoy feel I really enjoy restaurants I don't want to you know, I think the fun thing about restaurants is that The really super expensive ones a terrible value for money, right? You can eat

The cutting, the most interesting food is not necessarily the most expensive. Sure, if you want to get a Noma or you want to get a Fat Duck, that's an experience. But I think really interesting food doesn't have to be very expensive. And that can be satisfying. It's discovery. It's just straight deliciousness. You know what I mean? That I'm happy to lean into and spend on because I find a strong return on that. Yeah.

Yeah, particular thing, you know, and and and try not to fall into food as fuel or just like whatever else that happens because you've got stuff to do and I eat at my desk like most people and that's wrong and messed up. But the trade off of trying to work more in less time. So, yeah, that that that's a kind of piece of it. I think of just like where are you finding genuine satisfaction and not just the that's good. I enjoy it.

And there, like, that's a dead end. And you can go further. It's a dead end down there. The minute you buy the nice thing and it's not quite what you wanted and you want more, no, not going to happen. Yeah, I guess Ramit Sethi has this kind of idea he talks about figuring out what is your rich life. Like, what are the areas for you in which...

uh the addition of more money does in fact lead to more enjoyment satisfaction etc and it sounds like for you being able to just eat at whatever restaurant you want is a significant value add yeah absolutely whereas for other people who are happy with like the local fried chicken joint that's not a thing that they should spend money on because it's not going to bring them any satisfaction but but i think that's you know it's it's understanding where your passion is kind of intertwined like i'm a flavor person you know what i mean so that's unsurprising that i'm interested in food and then you

things like provenance and story and all these kind of things get woven into good food and good restaurants. Zonghua fried chicken. Yeah, fried chicken is great. But yeah, I think that's it for me. And just like thinking about budgeting for those things separately, but also understanding them well enough to buy them well. You know what I mean? Like I love food. It doesn't mean I should be spending 500 pounds a meal to be satisfied. That's a different, that's just the wrong shortcut. You know what I mean? What is your sort of vision these days?

In what regards? Because you said that before you had this vision of building a community of coffee lovers or equivalent, and you were agnostic about the details of the execution. Sure. Do you have a similar thing for your life or what you want to do personally? I think there's a bunch of... I work in a deeply broken industry. Okay.

Coffee's messed up coffee is built on colonial wealth extraction. Coffee is ethically highly questionable It's bad Even if you're paying better prices you're still working within a system designed to extract as much wealth as possible From producing countries and and capture it and keep it in consuming countries. That's not very good. That's a massive imbalance of power It's ethically highly questionable and while we try and operate within that ethically

It's a more extreme version of there's no ethical consumption under capitalism. I'm very uncomfortable with that being a part of my life, and I don't know how you change that, but I'm interested in working towards change.

Coffee being a better industry. On my end, I feel like I have an opportunity to have people see coffee as being more valuable than they do. The coffee industry spent 100 years teaching you that coffee was cheap, easy, commoditized, gets you caffeine and a bit of bitter taste, and it's fine, and that isn't true. And I need people to see it as being a bit more valuable because they enjoy it more. That's the secret. If you enjoy it more, then you've got a bit more space to spend money on it because it's rewarding and you enjoy it. So that's my...

kind of raison d'etre for YouTube is to like have people enjoy coffee a little bit more. So they see it as being more valuable because coffee needs to get more expensive because it's just too cheap and it's wrong. Yeah. End of story. And then I have responsibilities further back in the chain to how we buy and that kind of stuff to do a better job. But I don't feel like I should necessarily lump

Ethical challenges on to the consumer who just wants a cup of coffee in the morning if I get you enjoying it delighting in it It's a very positive experience for you Then that's easy for me to develop that relationship If I just tell you you should feel bad about yourself for buying coffee that again dead ends things a little bit So that's kind of a thing. So I yeah To make a coffee sustainable coffee has to be much more expensive that money has to go to producers They need more power in and more sort of equity in the whole supply chain. Um

And at the end, though, that means a more expensive cup for consumers. And I need them OK with that, seeing the value in that, to sort of have that happen. I can't do this on my own, but it's a role I can play. MARK MANDEL: That's very cool. PAUL LEWIS: I don't know. It feels tiny and pointless some days and satisfying and wonderful in others. And that's just the nature of this. MARK MANDEL: Yeah, it's like you're not being so grandiose as like, I want to change the world single-handedly. But it's like wanting to make the world a slightly better place in your own way where

kind of leaning into the things that you're good at, the things that you enjoy and the platform that you've built. Therefore, the opportunities and privilege that you have to make this change happen or work towards it.

I think so. I think that's a pretty good summary of the aspiration of the project right now. Yeah, I think it's a good place to end the conversation. Thank you very much for coming on. I feel like we could talk for hours and hours. It would be good to do a round two sometime where we go more into, I'm very curious about the ethics of coffee. We kind of went a little bit into the whole like Nestle stuff, which I still like have so many unanswered questions about. And I'd love to learn more about the sort of more specific, the business side of things that you managed to pull the strings of. Yeah.

But I think, yeah, this has been great. I think people will get a lot of value from the conversation. I hope it was fun. Thanks for coming along. Yeah, great. Thank you very much. All right. So that's it for this week's episode of Deep Dive. Thank you so much for watching or listening. All the links and resources that we mentioned in the podcast are going to be linked down in the video description or in the show notes, depending on where you're watching or listening to this. If you're listening to this on a podcast platform, then do please leave us a review on the iTunes store. It really helps other people discover the podcast.

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