Two Laid-Off Brothers, One $12K Loan, and the Coffee Cart Now Challenging Starbucks

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In 1992, brothers Dane and Travis were in a heap of trouble.

Dairy farmers, they watched helplessly as local milk prices tanked, the industry collapsed, and the family business was effectively over.

The brothers were in their 20s. They had no backup plan, no training, no money, and definitely no other jobs. But what they did have was gumption. So they asked themselves a simple question:

What could we sell that brings people joy, that they actually love?

The answer was coffee.

But the problem was they were farmers, not baristas. They didn't even know how to pull an espresso shot. And just to make thigs even more interesting, they were starting exactly when the Starbucks juggernaut was beginning to steamroll the country.

Undaunted, they scraped together $12,000, bought a single pushcart, and learned how to make coffee drinks. What they lacked in experience they made up for in personality, enthusiasm, and fun.

They took their cart, hit the streets of their town in Grants Pass Oregon, and started smiling, laughing, having fun, and blasting music while handing out free samples on a street corner.

Dutch Bros was born (and yes, it’s “Bros", not Brothers 😃.)

The Big Hurdle

But they knew that that $12,000 loan wasn’t going to last long.

Most entrepreneurs in that position might try to play it safe. They might try to act "professional" to hide the fact that they’re small and inexperienced.

But the brothers Boersma went in the opposite direction because they realized that being a smaller version of Starbucks was a death sentence.

The Big Lesson

The breakthrough wasn't the coffee. It was the realization that they weren't in the beverage business at all. They were in the "feel-good" business.

While the giant focused on efficiency and "third-place" real estate, the brothers focused on creating a great vibe. That first “location” became a go-to spot. It was fun. Friendly. Smiles all around. And the coffee was good too!

One cart begat another, and another.

Boom!

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

Before long, they were able to start selling franchises, but only to people who had worked at Dutch Bros for at least three years and who shared the vision.

The other thing the brothers realized was that drive-through kiosks were ascending and were cheaper to run. And yet, as I personally can attest, whenever I drive through my personal Dutch Bros, the kids who work there are still 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. Today, Dutch Bros is worth over $5 billion,

And they are the fastest-growing coffee company in the country.

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The Takeaway

As an entrepreneur it is so important to remember that you bring something special to the game. It might be a unique skill set, or a killer customer list, or simply a great personality. Whatever it is, that’s your secret sauce - and don't forget it!

Steal This Strategy

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

🛠️ ToolTypeform
Use this to create feedback loops that turn customers into loyal fans.

🎙️ PodcastStartups For the Rest of Us
Realistic guidance for indie founders building sustainable solo ventures.

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

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!

“Be bold! For boldness has genius, magic, and power in it.”

- Goethe

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