How I Built This with Guy Raz: Advice Line with Travis Boersma of Dutch Bros

Release Date: February 13, 2025
Host: Guy Raz
Guest: Travis Boersma, Co-Founder of Dutch Bros Coffee

Introduction

In this episode of How I Built This, host Guy Raz welcomes back Travis Boersma, the co-founder of the renowned coffee chain Dutch Bros. Together, they delve into the intricacies of scaling a business, maintaining company culture, and navigating the challenges that come with rapid expansion. The episode also features the "Advice Line" segment, where aspiring entrepreneurs seek guidance from Travis on various business hurdles.

Main Discussion with Travis Boersma

Transition from Push Cart to Corporate-Owned Stores

Travis Boersma shares the journey of Dutch Bros, highlighting the pivotal moments that transformed it from a humble push cart into a sprawling chain with over 975 locations across the United States.

Travis Boersma (05:03): "It's kind of like learning how to walk. You start crawling, then balancing, and eventually take steps. That's what it is with any kind of business."

Emphasizing Culture Over Franchising

A significant decision in Dutch Bros' expansion was moving away from the franchise model to a corporate-owned structure. This strategic shift aimed to preserve the company’s unique culture and ensure that each store delivered a consistent customer experience.

Travis Boersma (06:13): "Scaling the culture and doing the right thing for the people was always most important to me."

Handling Growth Without External Investment

For approximately 25 years, Dutch Bros resisted taking on outside investment, choosing instead to grow organically. This approach, though financially demanding, allowed the company to maintain control over its values and operational practices.

Travis Boersma (07:21): "We chose to grow from within and protect our culture, which made the most sense for us."

Adapting to Business Challenges

Travis emphasizes the importance of adaptability in business, especially in unforeseen circumstances like the COVID-19 pandemic. This mindset has been crucial in keeping Dutch Bros resilient and forward-moving.

Travis Boersma (49:14): "Adapt or die. The world is changing around us, and if you don't adapt, you're dead."

Advice Line Segment

The Advice Line segment features three entrepreneurs seeking Travis's expertise on different challenges. Below are detailed accounts of each interaction, complete with notable quotes and timestamps.

1. Sean Cheng – Mocha Korean Fried Chicken

Background:
Sean Cheng, co-founder of Mocha Korean Fried Chicken, shares his journey from a motor vehicle accident that left him paralyzed from the waist down to launching a unique Korean-American restaurant in Atlanta.

Challenge:
Facing thin margins due to high commissions from delivery platforms like Uber Eats and DoorDash, Sean seeks effective customer acquisition strategies beyond relying on these apps.

Discussion & Insights:

• Travis Boersma (12:02): "Any questions for Sean first before we tackle his?"
• Advice on Catering and Unique Offerings:
  Travis encourages leveraging catering partnerships and introducing unique menu items to differentiate the brand and drive word-of-mouth marketing.

Travis Boersma (16:51): "Why don't you consider introducing one or two new items to your menu that no one's doing? Like Korean street snacks."

• Sean's Implementation:
  Sean mentions launching corporate catering partnerships, which have proven successful in securing steady contracts and reducing reliance on delivery apps.

Sean Cheng (14:30): "We locked in a fourteen hundred dollar contract and want us every month."

Conclusion:
Travis highlights the importance of finding a niche and utilizing creative marketing strategies to build a loyal customer base.

2. Trenton Yoder – Pine Ridge Coffee

Background:
Trenton Yoder, co-founder of Pine Ridge Coffee in Belleville, Pennsylvania, aims to expand his coffee roastery and café beyond the local market.

Challenge:
Seeking guidance on whether to pursue direct-to-consumer sales or engage with wholesale partners, including other coffee shops and grocery stores.

Discussion & Insights:

• Travis Boersma (25:18): "Would you go direct to consumer or pursue other wholesale partners?"
• Emphasis on Storytelling and Differentiation:
  Travis advises Trenton to deeply understand and convey the unique aspects of Pine Ridge Coffee, ensuring the brand stands out in a saturated market.

Travis Boersma (27:35): "How can you paint a picture for somebody that really looks at and says, oh, here's something really exclusive, unique, fun, cool. I want to give it a try."

• Learning from Established Brands:
  Drawing parallels with successful coffee companies, Travis suggests adopting strategies like those used by La Colombe Coffee, which gained traction by partnering with fine dining establishments.

Conclusion:
Travis encourages leveraging brand storytelling and building a strong presence in key markets to foster growth and differentiation.

3. Yasmin Santos – Alternative Bar

Background:
Yasmin Santos, founder of Alternative Bar, operates a non-alcoholic elixir bar offering functional beverages designed to enhance mood and cognitive function. Operating in Austin, San Francisco, and Miami, she aims to scale her business into the mainstream market.

Challenge:
Looking for advice on scaling the business and identifying suitable models to expand the reach of her non-alcoholic beverages.

Discussion & Insights:

• Travis Boersma (39:11): "Would you go direct to consumer or pursue other wholesale partners?"
• Exploring Ready-to-Drink (RTD) Options:
  Travis suggests Yasmin consider developing RTD products, such as bottled or canned beverages, to simplify consumption and broaden appeal.

Travis Boersma (43:42): "There's a lot of interest around these nootropics and brain-enhancing herbs. Alcohol consumption is in decline, so there may be an opportunity."

• Drawing Inspiration from Kombucha and Yerba Mate:
  Using successful beverage models as inspiration, Travis encourages Yasmin to focus on clear branding and effective storytelling to communicate the benefits and uniqueness of her products.

Travis Boersma (40:58): "Your storytelling is so critical. Convey the health properties and who your consumers are."

Conclusion:
Travis emphasizes the importance of simplicity in product offerings and leveraging unique brand stories to capture a wider audience.

Final Advice from Travis Boersma

Towards the end of the episode, Travis reflects on the invaluable lessons learned throughout his entrepreneurial journey. He underscores the necessity of adaptability and continuous evolution to thrive in a dynamic business landscape.

Travis Boersma (49:14): "Adapt or die. The world is changing around us... if you don't adapt, you're dead."

Closing Remarks

Guy Raz wraps up the episode by encouraging listeners to engage with future Advice Line segments and explore Dutch Bros' successful business model. He also promotes ways for entrepreneurs to share their stories and seek guidance through the How I Built This platform.

Key Takeaways

• Culture is Paramount: Maintaining and scaling a strong company culture can be more beneficial than rapid expansion through franchising.
• Adaptability is Crucial: Being flexible and ready to pivot in response to unforeseen challenges ensures long-term business survival.
• Effective Storytelling: Clearly communicating the unique value proposition and story behind a brand is essential for differentiation in crowded markets.
• Diversified Customer Acquisition: Relying solely on third-party delivery platforms can erode margins; exploring alternative strategies like catering and unique product offerings can mitigate this.
• Leveraging Successful Models: Drawing inspiration from established brands and adapting their successful strategies can provide a roadmap for growth.

Notable Quotes:

• Travis Boersma (05:03): "It's kind of like learning how to walk. You start crawling, then balancing, and eventually take steps."
• Travis Boersma (49:14): "Adapt or die. The world is changing around us."
• Travis Boersma (27:35): "How can you paint a picture for somebody that really looks at and says, oh, here's something really exclusive."

By offering a blend of personal anecdotes, strategic insights, and practical advice, Travis Boersma provides invaluable lessons for entrepreneurs aiming to build and sustain successful ventures.