- that small business, not the 1% are the true job creators, the community creators and the key to a recovery not ever imagined before.
May 22nd, 2012
What happens next in the economy – the nation’s, the state’s, and Seattle’s – no longer lies in the hands of Capitol Hill politicians, the Federal Reserve, or even the boards of companies like Microsoft and Starbucks. It depends on entrepreneurs like Jason Brown, who has big ambitions for his small business. Jason recently opened a grocery store in the heart of downtown Bellevue called Your Local Market. It combines the best features of Whole Foods, like high-quality local and organic products, with down-to-earth prices and familiar brands of low cost cleaning products.
Jason, however, is not your typical small businessperson. For more than three decades he has been an innovator in retailing. He brought Columbia Sportswears to New Zealand and Australia. He created the Natural Apothecary, which was sold to Wild Oats, and then went on to develop Andrew Weil Vitamin Advisor. He grew a bi-coastal company called Organic To Go, which at its peak made healthy options available in 33 cafes and 150 outlets.
Today, Jason is all about “local.” He and his team have scoured the Pacific Northwest for great suppliers of local fruits, meats, and wines, and now has more than 3,000 regional products. He has turned his store into a community center, with a full calendar of speakers and special events like single’s nights. He holds monthly fundraiser in the store that has generated more than $36,000 in new donations for children’s organizations. He has recruited local angel investors to become owners, and is committed to keeping the store into the hands of the community. Unlike Organic To Go, which was a national chain that ultimately was taken over and then taken apart by international investors, his is committed to growing more stores only in the state of Washington.
So far, the business has fared remarkably well, considering the times we’re in. It opened in November and weekly sales have grown steadily to a peak of over $200,000. It has added 75 jobs to the Bellevue economy (probably double that when indirect effects are counted), and has already become a significant generator of taxes for the city, county, and state. For three years prior to opening, site was an eyesore with an empty parking lot and a boarded up building. After a $2 million makeover, the market is now bringing a local streetscape back to life.
Yet even in the hands of a skilled entrepreneur, Your Local Market is no guaranteed success. The grocery business is notoriously difficult, with huge perishable inventories and tight margins if you want to serve the best in local products yet be competitively priced. Like other businesspeople, Jason made a series of bets that the economy would recover more quickly. To survive, he has become the business equivalent of a kayak runner, surveying each week’s challenges and then deciding when and which direction to shoot the rapids.
If Jason can just grow his weekly sales to $200-250,000 per week consistently, he will clear break-even and be able to focus on growing his business, which is good for everyone. In the meantime, besides courting more local investors, Jason has created a membership for his customers, which gives them deep discounts on your groceries over the next year or two. This program awards huge savings—20% or more—on the household necessities at a time when many Bellevue residents are economizing to get by.
Across the country, smart entrepreneurs are pioneering alternative financing methods like this to survive the recession. Unlike investments, presales usually do not require expensive legal work. In Oakland, California, a popular coffee shop called Awaken Café was able to finance its move to another store by preselling coffee. In Hardwick, Vermont, Claire’s Diner has financed itself through a frequent-eaters program.
Small business innovations are key to our national recovery. Studies consistently show that small businesses, especially new ones, are the most important creators of new jobs in U.S. economy. Two Harvard economists analyzing metropolitan areas across the country found that the greater the presence of small business, the higher the economic growth rate. Two Penn State economists also found that more local businesses meants higher per capita income growth.
The verdict is virtually unanimous. The United States will only succeed if small businesses like Your Local Market succeed. The message for Seattle residents is equally clear: If you want to bring the region out of recession, buy local, invest local, and think local first.
There is an advantage to being a stranger in a strange land. Our perspective is fresh. So here is mine of the breadmakers of this magnificent republic. Really? Sugar / molasses/high fructose corn syrup / honey in every damn loaf?
My 7 year old son Harper is on a 17 week sugar strike. In return, he will be getting a cash reward. (yes, you can assess the ethics of that but let's stick to this for now). Lo and behold when the stakes are high, behaviour changes. I have never seen him so eager to read every label before he eats anything. Fruit is now the go-to snack (amen). So two weeks in and I am doing the weekly shop when it occurs to me that the bread we eat may have sugar in it. Why of course it does because bread here has to be sweetened with something and on the front panel of the loaf it says: "No High Fructose Corn Syrup". So there HAS to be sugar in there. And so it was. Every loaf had either sugar, HFCS, honey or molassess. That pinnacle of Scottish-American fusion fine dining, McDonalds puts so much sugar in its buns, they are classified not as a bakery item but as a confectionary item.
But why I ask? Why, in a daily staple is sugar or a sweetener involved? It is unique to the US. Every time I go back to Sydney (oh look, I didn't say home) I devour the bread as it is, well, bread. And it isn't sweet.
France, America's nemesis has it right. In 1993 they enacted the Bread Law which stated that bread must be additive-free and contain only four ingredients–wheat flour, water, salt and yeast. And yet my "Franz Oregon Trail 100% Natural, 100% Whole Wheat Grain" bread has sugar, palm oil, cornstarch, natural flavour, honey, salt, soy lecithin, wheat gluten, honey (again), yeast, soy bean oil, raisin juice concentrate, molasses, wheat bran, calcium sulfate, cultured wheat flour, vinegar, guar gum, non-fat milk.
This loaf hit the trifecta - sugar, honey and molasses. And thank goodness the milk is non-fat. And what is raisin juice doing in there. And soy beans? Is this a stir fry? And define "natural flavor".
The obesity epidemic is hardly surprising. We are our own worst enemy.
Four score and seven years ago our fathers brought forth on this continent a new nation, conceived in liberty, and dedicated to the proposition that all men are created equal.
Now we are engaged in a great civil war, testing whether that nation, or any nation, so conceived and so dedicated, can long endure. We are met on a great battle-field of that war. We have come to dedicate a portion of that field, as a final resting place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this.
But, in a larger sense, we can not dedicate, we can not consecrate, we can not hallow this ground. The brave men, living and dead, who struggled here, have consecrated it, far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what they did here. It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us—that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion—that we here highly resolve that these dead shall not have died in vain—that this nation, under God, shall have a new birth of freedom—and that government of the people, by the people, for the people, shall not perish from the earth.
Pebble - a watch that syncs with your smart phone went on Kickstarter to raise $100,000 in seed capital. They ended up raising $10M. Not sure how I would manage 68,000 investors but the result is startling and a profound shift in the power of many people to effect change in launching companies and sharing the prosperity. The very early stages of the end of the vast wealth disparity in the West. It could be a 100 year journey but it has to start somewhere.
Not only do they have the capital they need, they also just met their first 68,000 customers.
Some consumer facing brands struggle to really tell the truth. There is always a bit of spin. Is the product claim fact or "puffery". Or facts are left our of a claim so it is "truthy" but not totally truthful. And the consumer wears that confusion.
Then you have that group of companies in the "natural" set who are founded on a bedrock of straight talk and being real. Pom Wonderful is one such brand. So it was with a very big laugh that I saw this just now on the front page of the New York Times. The expense and effort of it and then the messaging. "We only bullshitted you 2% of the time. Oh and read the asterisk because that is not an entirely correct statement either".
Consumers lose every which way they turn.
Our innovation work continues apace at g. We are all seeing new possibilities unfolding above and beyond our current business. And we are getting there somatically. That is, using a daily physical standing practice. More to come.
Related to this is my now daily ritual of catching practice with the boys in the backyard. We play a hybrid game as I am hopeless with a baseball bat. I use a cricket willow, the boys throw a baseball to me, I crack it back to them and there are no gloves allowed. As the session progresses, the speed and degree of difficulty increases. The boys are loving it.
Last week I needed to practice delivering a part of our Board Meeting presentation to the Board. But I was out of time at work and didn't want to miss out on the "cricket-(base)ball" catching practice. So I did both. As I smashed balls around the kids heads (perfectly safe Kim, Dad did it to me all the time and I survived) I rehearsed lines. Fynn (9) helped enormously. And I was reminded of something I learned while training as a teacher a decade ago. When it comes to boys, the last thing they need is to learn in a classroom, passively sitting at a desk. They need activity while they learn. Research shows a lot of ADD / ADHD can be attributed to this mismatch of learning style / learning environment.
I proved this out as I really saw I could get my message across and hit a pretty good cover drive (that'd be a type of cricket shot) at the same time. And best of all, after our Board Meeting, Fynn checked in to see if I had hit the highlights.
So today the tables were turned. Fynn has a 3 minute presentation to give next week, all about Wisconsin. So as I was bashing baseballs at him, off he went. He played around with a number of different approaches. He put a gag (joke) in here or there as we Graham's like to do. I learned a ton too. The state bird is the American Robin. The state tree is the sugar maple. And the state flower is the wood violet.
So all in all, we proved the research right and Fynn's catching is getting really good. Next up, we need to conquer using the baseball glove.