Lessons from a local coffee company

Doomed to Fail

Even those who are unfamiliar with business may know the old adage that coffee shops are “doomed to fail.”

Trevor Corlett, owner of Madcap of Coffee Company in downtown Grand Rapids, suggests that many people who open coffee shops do so under the false perception that there is nothing to it.

“They spend a lot of time hanging out in coffee shops and it’s super chill and it’s fun and they drink coffee and hang out with friends, and they perceive that is what it will be like to own one,” Corlett said. “You get people that have no background in managing retail, without being  able to manage a staff that tends to be younger and all of the things that come with it. So that failure rate that you see from 10,000 feet up includes that.”

The coffee industry is incredibly diverse. Forbes ranks Starbucks among the world’s 50 most valuable brands. Biggby, an East Lansing born coffee chain, has 182 locations across Michigan, making up 48% of coffee shops across the state. For those who like to keep their spending local, Grand Rapids alone has more than a dozen independently owned coffee shops.

Grand Valley State University professor Dr. Timothy Syfert teaches entrepreneurship at the Seidman College of Business, and explains how these different types of coffee entities serve different functions.

“People go to Starbucks or Biggby for the coffee,” Syfert said. “People go to coffee shops to meet other people–for the community,” 

What can entrepreneurs approaching different product markets learn from this? Well, coffee shops are a great example of what every entrepreneur should bear in mind.

“That it is not always about the product or service– it’s about what is around it,” Syfert said.  “It’s the thing beyond the product or service that keeps people coming back.”

Another coffee shop?

When Trevor Corlett and Ryan Knapp opened Madcap Coffee Company eight years ago, the Grand Rapids Press ran a headline that read, “Does Grand Rapids really need another coffee shop?” And for good reason; they were opening their cafe next to another coffee shop…and right down the road from another…and right around the corner from another that closed it’s doors two weeks before Corlett and Knapp signed their lease. But the two entrepreneurs were confident that Grand Rapids hadn’t seen a coffee shop quite like what they had in mind.

“I told the media at the time, ‘We are going be doing something different than what everyone else is doing,’” Corlett said.

Although Corlett had no formal business education prior to opening Madcap, he had opened several cafes throughout the Midwest.

“They were financially successful, however they kind of just looked like everything else,” Corlett said. “…the drink menu would look similar to just about any other coffee shop that you could go into. Nothing really set them apart. If they were successful, it was because of the location, and people got what they expected there.”

Something Different

With Madcap, Corlett and Knapp decided on a different approach; to pick one thing about the cafe business and do it really, really well. That one thing? Coffee.

The two have became involved with all things coffee on a national scale; Corlett is the current Past Chair for the Barista Guild of America, Specialized Instructor for the Specialty Coffee Association of America (SCAA), subject matter expert in espresso for the SCAA and Editorial Advisor for Barista Magazine and contributor to Fresh Cup Magazine. Ryan has competed in nearly a dozen Regional and US Barista Competitions, taking first place in the North Central Regional Barista Competition in 2011 and 2012, as well as the third place in the 2011 US Barista Competition. Along with being a member of the Roasters Guild of America, he is a Lead Instructor for the SCAA.

“We became experts in a sense,” Corlett said. “…we decided to just pour as much into it as we could.”

They also took note of something that was being practiced in the industry, but not yet in Michigan.

“At the time, consumers were really starting to get to this point where they really wanted to know where their products were coming from,” Corlett said.

Corlett and Ryan built direct relationships with their suppliers, and can make good on the claim stated on their company website: “All coffees on our menu can be traced directly back to the farm or cooperative where they were produced.”

“The idea is that we experience something when we have different coffees and different flavor experiences that relate to the people that created them and where they come from,” Corlett said.

Patrons of Madcap will immediately notice the space differs from the average neighborhood coffee shop; seating is minimal, and the counter space is not cluttered with stacks of magazines or baskets of bagels. The setting is sparse, and it isn’t necessarily cozy, which Corlett said was exactly what they were going for.

“Initially, when we designed the cafe, we went super minimal with it,” Corlett said. “We designed the space as this kind of coffee experience we were trying to provide, but at the same time still be inviting.”

Along with continuing to enjoy wholesale growth, Madcap is opening another location on Fulton. The Fulton street cafe will feature one major food component–Belgian waffles–along with a variety of cold drinks on tap.

“It will be a very different feel from what the cafe (downtown) is now,” Corlett said.

The takeaway 

So, what can be learned here? Coffee shops have been neighborhood staples around the world for ages. Coffee itself is reported to have been discovered in Ethiopia in the 11th century. One of the most successful companies in the world, Starbucks, revolves around coffee. Depending on who you ask, most people will tell that they already have a favorite local coffee shop. Yet, Corlett and Ryan still found room to innovate, and carved out a distinct–and highly regarded–spot in an age old industry.

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