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Jim Koch has been in business long enough to know that having a philanthropic mission is a key ingredient of long-term growth. For the past 15 years, the founder of Boston Beer Company has been helping other entrepreneurs through Brewing the American Dream, the main philanthropic program of Sam Adams beer. In partnership with the Accion Opportunity Fund, a nonprofit that provides financial support to small businesses, the initiative provides mentorship and capital to food and beverage entrepreneurs across the U.S. and has loaned more than $99 million to more than 4,100 small business owners.
Inc. recently sat down with the 74-year-old Koch in New York to talk about how having a mission has a been boon for Boston Beer -- which will celebrate its 40th anniversary in 2024.
This whole idea of giving back is something I've believed in for a long time. I actually wrote an article in the Harvard Environmental Law Review in 1978 about evidence that businesses that embraced the idea of what was called Corporate Social Responsibility, or CSR, actually performed better financially. The thesis was that businesses that recognize that responsibility are much closer to social change and what's going on in society. They're engaged in trying to create value in more ways than just shareholder value, and by recognizing that broader equation, they actually perform better in the marketplace. They're also more likely to engage their own employees, and those things all create financial success.
It's two problems, and they came out of my experience starting Sam Adams and Boston Beer Company. When I started, I hoped to be able to get some loan money. No bank would touch me. It was a very small brewery. The third or fourth banker who turned me down said, "No banker is going to lend you money. We're banks. We're not in the business of taking risks. You are laden with risk." That was the first thing that I wished I could have had but didn't.
The other was nuts-and-bolts business advice. When you're an entrepreneur, you're making a great number of crucial decisions on which your success may depend, and you're doing that for the first time with no experience. When I started Sam Adams, I had a JD, an MBA, and six and a half years at Boston Consulting Group. You would have thought that I knew everything I needed to know about business. What you don't think about are things like how to design a label -- or any kind of packaging. I didn't know how to negotiate a real estate lease or how to set up payroll.
In Brewing the American Dream speed coaching sessions, somebody shows up with their beer label and in 15 minutes our designer will say, "OK, this is too busy, get rid of this, move this over here, and make this bigger." For small up-and-coming businesses, we can provide an enormous amount of value and make a big difference in 15 minutes. If somebody comes in and they meet with four or five coaches, they can get four or five significant problems solved.
It was kind of conventional. In 2007, we were doing community service in our neighborhood and we took our whole management team and spent almost a whole day painting a community center. I remember walking back to my car and thinking, "Something's not right here. I don't feel good." I realized it was because I had just spent around $10,000 worth of management time doing about $2,000 worth of bad painting. We weren't painters! I wasn't going to feel good until I felt like we used $2,000 worth of management time to create $10,000 worth of value. It's this idea of what businesses are supposed to do. We're supposed to take certain inputs of value and make them worth much more. That's fundamentally what we do. We're not graded for giving money away. So I said, "Let's challenge ourselves to do something much more difficult; something that creates value in a leveraged way, that we get value out of too." The more value we get out of it, the more we're going to want to do, as opposed to budgeting a certain amount of money to give for philanthropy.
I would try to find something that's core to your own identity. We're now a $2 billion company, but we're still a small business in the big, global beer business, and we need to keep that startup mentality. And having our people involved with all these small startups that don't have lots of resources and have to be scrappy -- that reminds us of who we are, and that we have to be scrappy like they are. One test might be, if you don't get any publicity for your mission -- if you have to do it for its intrinsic value -- ask yourself, would you still do it? If the answer is no, then go back to doing what you're doing.
A refreshed look at leadership from the desk of CEO and chief content officer Stephanie Mehta
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Sam Adams Creator Jim Koch on Why Your Company Needs a Mission
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19.12.2023
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Jim Koch has been in business long enough to know that having a philanthropic mission is a key ingredient of long-term growth. For the past 15 years, the founder of Boston Beer Company has been helping other entrepreneurs through Brewing the American Dream, the main philanthropic program of Sam Adams beer. In partnership with the Accion Opportunity Fund, a nonprofit that provides financial support to small businesses, the initiative provides mentorship and capital to food and beverage entrepreneurs across the U.S. and has loaned more than $99 million to more than 4,100 small business owners.
Inc. recently sat down with the........
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