They Started With a Pushcart and Zero Experience. Now They are Starbucks' Biggest Threat

I go to this coffee place at least once a week. Why? Convenience, sure, but also because that “little insight” makes a huge difference.

Back in 1992, Dane and Travis Boersma were at a crossroads.

They were third-generation dairy farmers in the small town of Grants Pass, Oregon.

Their family had run the dairy for over 50 years but then the industry collapsed. Milk prices tanked and the operation became unsustainable. Before long, the brothers realized the business was pretty much dead.

They were in their early 20s. They had plan, no money, no jobs, and no idea what to do next.

Their answer was coffee.

But here’s the thing - they barely even knew how to make coffee. They were farmers, not baristas. And even more, back at this time, the Starbucks juggernaut was just getting into full swing.

But even so, they scraped together $12,000, bought a pushcart, a single espresso machine, and started giving away free samples downtown with music blasting.

What they lacked in polish, they made up for in energy. They were happy and gregarious and friendly.

And so Dutch Bros was born (and note, the name really is “Bros” - not brothers!)

Their First Big Insight

At first, they just wanted to survive, but then something cool started happening:

Customers started coming back, again and again. Yes, for the coffee, but maybe even more so, for the vibe. They would say, “You guys made my day.” Or, “I needed that today!”

That was when the Boersma brothers realized they were not really in the coffee business. They were in the feel-good business.

So they doubled down on what was working, on their secret ingredient - being the good vibe tribe.

As they started to grow, that fun, feel-good, happy vibe was at the core of what they did and who they hired. They hired people with big smiles and bigger hearts. They memorized customers’ names. The encouraged employees to have fun.

Then they started selling franchises, but only to people who had worked at Dutch Bros for at least three years. Loyalty and culture were non-negotiable.

The Other Big Bet

The other thing the brothers realized was that drive-through kiosks were ascending and were cheaper to run. And yet, as I can attest, whenever I drive through my personal Dutch Bros, the kids who work there are sweet and fun. And it’s quick and easy.

So it’s no wonder that by 2021, Dutch Bros was able to go public.

The IPO raised $484 million. And as of today, there are over 800 locations and counting. In fact, they are the fastest-growing coffee company out there right now, growing much faster than Starbucks.

The company is worth over $5 billion.

Not bad for two guys from a rural town with no experience and a broke dairy farm.

The Takeaway

The Dutch Bros story shows that you do not need to be an expert to start something great. Sometimes, all you need is an idea that feels right, relentless execution, and a reason people want to come back. If you build something that makes people feel something, the money usually follows.

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Steal This Strategy

 📖 Book – The Power of Moments by Chip & Dan Heath
Learn how to create customer experiences that delight and stick.

🎥 Video – Dutch Bros IPO Story on CNBC
Watch Travis Boersma break down how they scaled from cart to corporation.

🛠️ Tool – Typeform
Use this to create feedback loops that turn customers into loyal fans.

About Steve

Steve Strauss is the best-selling author of The Small Business Bible (and 17 other books), Inc.’s small business columnist, a lawyer (non-practicing), and an entrepreneur. He sold his last venture, TheSelfEmployed.com to Mark Cuban & Zen Business. Need a ghostwriter or a newsletter for your business? Contact Steve