La Colombe Coffee Roasters: Todd Carmichael and J.P. Iberti. A Brotherhood Built on Coffee (2020)

25:03Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1993, and JP and Todd have decided to start their own coffee business. But the first thing they need is a name. And JP finds inspiration in his hometown. I come from a little town called Saint-Paul-de-Vence, is very well known for the culture that a lot of painters, a lot of writers spend time there, you know, big name, Picasso, Matisse painted there. And there's a little bed and breakfast that became really famous because the artists used to stay there. And instead of paying women board, they just left sketches. And it's called La Colombie d 'Or.

25:43And I have a connection to it because, you know, it was one of my father's accounts. You know, he served fruit and vegetable there, but we also knew the family very well. The family that founded it were friends. And, you know, I ended up having a summer job there when I was 13, 14, you know, washing dishes. And, you know, so I think the inspiration of the name is connected to the place, but it's also the symbol of what La Colombie is, you know, internationally. Because colom means dove, right? The dove, yeah. Yeah. And so that sort of evoking that kind of idea, la colom, was the idea behind it.

26:24Wow. So here's the amazing thing. This is 1993. You're back in Seattle. Seattle is the epicenter of U.S. coffee culture at this point. I mean, this is ground zero for the explosion of coffee in America. And you guys are in Seattle. I mean, it would make total perfect business sense to open up in Seattle at that point. But instead, you start looking at cities on the East Coast and you end up in Philadelphia. Why Philadelphia?

26:59So Philly was a different place then. But we ended up walking the city. And it's a beautiful city architecturally. The way it's laid out is an amazing city. And being European and walking and cycling everywhere, I still use my bicycle to go to work. For me, the fact that we could walk anywhere was just like, this is definitely making the top of the chart right now. And there was a huge opportunity in terms of getting production space, warehouse space, just because the city was probably at the bottom. So the two main beautiful roads in the city right now is Walnut and Chestnut. They were pretty much closed down.

27:39There were no cafes in the city. You know, it's a city of a million some people, and there wasn't one cup of coffee. And so JP and I, we went and I said, hey, let's, remember JP, we sat and we had some beers together. And I chose to interpret everything that we'd seen this way. That if you were going to take an elevator ride and you were looking to get altitude, you want to get in on the ground floor. And that Philadelphia was displaying that it is here on the ground floor and it can't stay this way and will not stay this way. This was, had you, either of you ever been to Philadelphia at that point?

28:13No. You'd never been there? Never. I mean, we saw great opportunities in Philadelphia. You know, we saw a city with great bones. And it was fine for what we wanted to do, that the city, especially after sundown, there was nobody in the streets. But, you know, it didn't really matter because our idea was to be purveyors and to serve the kitchen. So it didn't really matter. Yeah. And what I think that was important is at the time, Le Bec Fin was voted, which is the Philadelphia restaurant, was voted number one restaurant in the country. Georges Perrier was the chef at the place, right? Chef owner.

28:49That's correct. Yeah. And also the proximity to New York City. Yeah. And also presumably Philadelphia was cheap. Very. Insanely so. So you find a location on Rittenhouse Square, which is probably the most famous place in Philadelphia today, one of them. What was it? It was like a small storefront that you found? It was actually two. This area of the town was really suffering. Businesses would come and go so quickly that there was spaces almost everywhere. Wow. But they were all Philly spaces, so they're really narrow. So we found two side by side. So we took them both. and we just smashed the wall between them and started working.

29:30And where did you source the equipment from? You just bought a bunch of, I mean, you had some money to start out with because you'd saved that money. So you used all this capital to buy roasting, like roasting machines? Yeah. Yeah. We took an epic trip during the summer. We traveled from Nice all through Italy and we bought everything we needed. Roasting equipment, espresso machines. Machines, yep. Hand-painted ceramic. grinders, everything that we needed. Hand-painted ceramic, because you served your coffee, and I think you still do. I've been to that location up Rittenhouse Square, and I remember the first time I went there, I was struck by the painted earthenware ceramic mugs that you got and the little plates, the little saucers that they came on.

30:14And that was from the beginning? That's how you served coffee there? Yep. We were traveling all the way through Italy. I always remember it because we had an envelope, we had traveler's checks, and we would go directly into a factory and begin negotiating like on the floor. And we went, okay, we'd like those two espresso machines. We'd negotiate, negotiate, and we'd go, all right, take the box off. How about if we don't take the box? And we would hump these machines into his dad's car. And we found the roaster in northern Italy, paid for it, strapped it to a pallet, and watched it ship. So this is 1994.

30:51You've got a small location off Rittenhouse Square. You're roasting beans there. And by the way, I live in the Bay Area. So I pass by several roasters on a given week and you can smell that smell. It is really strong. Like when you're by a roastery, I mean, were any of your neighbors and the other businesses like sort of, I don't know, complaining? It's a nice smell, but it can be overwhelming. Well, we ran our first load, and it was clear that with that environment and that part of town, you couldn't roast in that cafe. You had all this equipment in there. You realized you actually cannot roast in there.

31:29You presumably didn't have the ventilation for it. We didn't have the ventilation. It was not going to work. The way the building is formed, the way the wind comes down and the barometric pressure, it was that moment where I thought – like we were ready to open. I mean, we had now spend all, I think we had maybe$500 left in the bank account. I mean, there wasn't anything left. We needed to go. And we had all the green there. Everything was ready to fire up. The green was the coffee beans, right? Yeah. And it was really clear that we would not be able to open. I mean, it was just this, the nightmare scenario in my mind was like, oh, they came this close, right?

32:10so i went and rented a jackhammer and i jackhammered a hole into a garbage chute that runs the outside of the building and i think it's about 20 stories high yeah and i piped the then cemented the piping into the garbage chute and told jp to fire it up and uh you know it takes forever to get that whole chute heated up but once you get hot air to rise it just sucks it like a syringe up the garbage chute the garbage chute was your chimney yeah i'm assuming you did not ask for permission to do this no no no in fact we built the cafe by like with no permits like i did all the wiring all the plumbing like we asked forgiveness rather than permission on pretty much anything but the the big deal was someone would force a giant bag into that chute and it would get lodged.

33:04And so I would take the freight elevator up, go up on the roof, and we would drop bowling balls. Remember, to dislodge the trash. Didn't anybody complain in the building? Yeah, we did get a lot of complaints. We got the fire department in, you know, about two, three times a week. Because somebody was like something's burning. Yeah, exactly. Yeah. And did the fire department cite you or anything or did they? No. We would turn the lights off and hide behind the bar. We would hide, totally hide. And then we roasted in the middle of the night, which helped, but it made the life just really, really, really rough.

33:44Yeah. How did you, in that initial batch of coffee, where did you get it from? Where did you, was there like a distributor in the U.S. that you went to and said, we want, you know, 100 bags of this and 100 bags of that. That would have bankrupted us. Yeah, we bought only a few bags. And where did you buy it from? I think the broker was, I think they're still around. I think it's called Paragon Coffee out of New York. And how did you know which coffee to buy? Like which one was going to be good coffee? We sampled a lot of coffee. I mean, hundreds, hundreds. Hundreds. We have just behind me, obviously the podcast folks can't see it, is the original roaster.

34:23It's a little cylinder. It holds about a half a pound of coffee and you put it on a gas stove. You put your green coffee into it and you turn it by hand. And then you dump it all out to a colander and you use some kind of cool air to cool it down. And if you would have gone to JP's apartment at the time up in Sprout Street before we settled on all the buys we would make, we had hundreds of bowls of this coffee everywhere. And we were hand grinding it and cupping it and hand grinding it, cupping it. And we built up our first blends there. And in 1994, right, even though Starbucks was starting to kind of grow, it was in San Francisco and Los Angeles and people were sort of starting to develop a taste for that Starbucks darker roast, which a lot of people for a long time hated.

35:06They thought it tasted burnt or bitter. How did you know what people would want to drink at that point? I mean, it was still, you know, our coffee palate wasn't that sophisticated in 1994. Yeah, but you see, we had the best audience. You know, we had chefs. Because you were going to restaurants. You were focused on really trying to appeal to chefs. Oh, yeah. That was it. That was it. And part of it, too, is it's you. If you love it, then that's the one you should stick with. So first, we wanted to please ourselves. And then you introduced this to some of the best palates in the world. And they like it.

35:44You're good. I think it's really hard to make food and beverage for everybody. It's like Kurt Vonnegut wrote for his sister. He wrote for one person. And I think that when I make food and beverage, I have like one or two people I think about. How did you find the restaurants? How did you get into them? How did you, did you just kind of pound the pavement and start to call and? Well, I'll tell you about the first one. And then that started the whole kind of process. So it was October 15th. We walked on the street. went to the number one restaurant in the country at the time, Le Becfant. We went into the back of the kitchen.

36:23Someone stopped and asked us, what are you doing here? And we said, we're here to make coffee for chef. So they just assumed maybe that was an interview. So we went and we tore the grinder down, cleaned it, tore the espresso machine, cleaned that, put our coffee into it, made a beautiful, beautiful coffee. And I said, where's chef? We went upstairs. He was screaming is, you know, he was a screamer. It was the 90s, right? Wanted to know. And we said, we're here to make coffee for you. And we just put it in front of him and you step back. And so that's how we got the Becfant that day. You mean he said right then and there, OK, you can be my coffee supplier for my restaurant.

36:58He actually picked the grinder up with the old stuff and threw it all in the trash and said, go get your shit. Wow. You know, it's like, in other words, bring your stuff now. It's the truth. And you thought, all right, we got to start with Le Becfant because that is the best French restaurant in the United States. And if we're in there, then other French restaurants or other high-end restaurants are going to want our stuff. Well, the second one was the same day, was Jean-Marie Lacroix, extraordinary chef. Also in Philadelphia. I think he was the Four Seasons, right? Yeah. That's right. And we did the same deal.

37:29We just walked in the back. So we're here to make coffee for chef. And he said, bring it today. So that night, we were being brewed in two of the best restaurants in the country. And by the end of that week, we're getting calls from major players in New York. And everyone's saying, what is this coffee? I want to try. It was all the Frenchies. Yeah. And, you know, the media were not what it is today, obviously. And back then, chef would only talk to chef. You know, they wouldn't buy things because they saw an ad somewhere. But once somebody finds something, they're eager to talk about it. And by the way, what was your price point higher?

38:05I mean, was it more expensive to buy your coffee? When we arrived in Philly, coffee wholesale to restaurants was at about$1.50 a pound. And ours was the mid-sevens. So weren't some restaurants, like, are you out of your mind? No. They weren't? No, because what we explained to them, I go, chef, coffee is a spice. And that's all I had to say. Because you could buy saffron for nothing, and you'd have to use like a bird's nest amount in your dish to make it taste anything like saffron. Or you get the stuff from Pakistan or Afghanistan where you use a pinch, but it's going to cost you. Yeah. And they understood that.

38:42And was it pretty clear to both of you right away that you were going to have a sustainable business within the first six months, that you were going to turn a profit? Yep. Do you remember, JP? Yeah. And I don't want to look at it and say it was destiny or whatever, but it was so clear because the space between the food that these restaurants were serving, the level was so high. The food was so good. And where the coffee was in their dining room was such a void. It was so clear. Yeah. And, you know, we got one, two, three, and it started. We got no. It just burned. It just burned. When we come back in just a moment, how Todd and JP started to explore sourcing coffee beans directly from farmers all around the world.

39:31And later on, how a big private equity investment in the company turned into a nightmare. And how Todd and JP managed to wrangle their way out of it. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

40:01Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1994 in Philadelphia, and Todd and JP are selling wholesale specialty coffee to more and more high-end restaurants. But the idea of premium and expensive coffee still isn't mainstream. And Todd and JP find that it's a challenge just to describe to consumers what's different about the coffee they're making. Because espresso in America up to that point was an abrasive liquid. It was not to be consumed without tons of sugar or milk on it. And we wanted to break that mystique. So we were looking for something that was European, but like nine levels higher.

40:43We wanted something nutty, sweet, that was like molasses. So that's what really guided us. Yeah, I mean, the word I remember using describing the first coffee we did was balanced. We really wanted to achieve a soft, sweet finish because we felt like the American consumer, the public at this time, needed to be intruders to better coffee, but also not to scare them away. So it was important that the coffee were really clean. And this is something that we focused on. And we had a rule. It was three words. That's right. Remember, it was three words per blend. to describe them. And that played a really important role in creating those first three, four blends that we made.

41:27I'm just curious why you were so focused on the cafe, I mean, the ceramic cups and the service in that cafe, if you never intended to open cafes, if that was not your business plan. Street cred. Yeah. Street cred, street cred. We're serving some of the greatest chefs in the country and if we were going to have a brick and mortar space, which we really felt we needed one to have some street presence, we needed to execute on a level that no one else could. And did you get beyond sort of the Northeast and the Mid-Atlantic? Were you distributing to places beyond that? Yeah. Yeah, it's a funny thing with kitchen.

42:08You know, a lot of people go into a kitchen and then move away to San Francisco, LA, Denver, Miami. And we had such roots in the kitchen, we supplied that people ended up taking us with them when they moved. So we did move from kitchen to kitchen, you know, and it went, when this started, then it went a lot faster. Meanwhile, in the 1990s, were you still buying your coffee from brokers or were you starting to buy it directly from farms? Yeah, as the 90s, we started weaning off that because it was clear that, you know, at first we, you know we were the only ones looking for that type of coffee so we had you know the everything was easy to get easy to get no one else wanted it and you could pick whatever coffee you wanted at the beginning but then it became harder as high-end roasters started to come online yeah the demand started picking up and then it was it was clear that we our timing was right so it dovetailed right into let's go look for ourselves right how did you do that well i mean one of the first ones was, strangely enough, we met a Swiss guy who owned a farm in Brazil.

43:18Remember that? What was that Swiss guy's name? Orse. Orse. Yeah. And you met him. We met him where? Where'd you meet him? Oh God. How did we meet him? We met him through 19th street, Ritonel's cafe. He came in. Oh, that's right. So I think we met him through like chocolate. I think we were playing around with chocolate. He's got a farm. We go to the farm. And once you do that, then you become hungry for it. So you go to visit this guy's farm and he has a coffee plantation in Brazil? Yeah. Yeah. Okay. So you go there and what do you see? Well, then, you know, you spend time on the farms and we start figuring out right away exactly what's making the better coffee and what's making the inferior stuff, right?

44:00We start immediately getting interested in varieties and growing styles and all that, which is not a big giant leap. The real key is how do you get all these boxes from, let's say a mountain in Rwanda to Philly? This is the challenge and the processes that it has to go through. So that is the real big first step. It's like figuring out how to do that, how to put a supply chain together. And once you get that, then you go, all right. Then you feel confident walking into Haiti, going up in the mountains and saying, all right, let's look for some farms. So it was literally because the coffee business is very, very, I think, complex is an understatement, right?

44:42There are so many middlemen. And when you go to the actual farmer, they're making pennies. They're not making anything. They're selling it to a middleman who has a couple of connections in the bigger city and then sells it to somebody in the bigger city. And the bigger city person is, they're the ones who are selling it to a distributor in the U.S. So there's a lot of hands it goes through before it comes to the roaster and the people at the bottom of that chain get jelly and nothing. Nothing. Very little. And you have an idea that that's what's happening, but when you go and you visualize it, you see it.

45:16And you see the eagerness that farmers have to work with you because that chain of events that you described can sometimes be 10 or more deeper than that. Wouldn't there be middlemen who would feel threatened by this, who would threaten the farmer or maybe even threaten you guys? Didn't that happen? Well, in the case of Brazil, no. Brazil is a very sophisticated country when it comes to farming, and you're not going to really run into it there. You can go directly to a farmer and say, I want to buy your beans, and they'd say, fine. But you say El Salvador? Oh, indeed. Haiti? Oh, my God. In Haiti, there were times that I felt, yeah, this could be it.

45:56I'm probably going to not make it out here alive. How do you buy directly from farmers in places like Haiti or in a place like El Salvador if there are middlemen who depend on that income too and who are going to be threatened by you going around them? Well, I mean first let's use Haiti for an example. What you realize is that there is strength in numbers. Once you get the faith and confidence of farmers, then you can do pretty much what you want. The problem is in places like Haiti or in Africa or even El Salvador, there are loads of gringos that show up making promises and then never come back.

46:33You have to show a resilience that you're coming back time and time and time again. And once you've done that, again, Haiti, I was called un blanc, a white gay. But now I'm called le blanc. I'm the white gay. They know I'll come back. So then they can buck the system. And traders that are trading over borders or they're taking big lion's share and it ends up in some Maxwell House blend, they're looking for giant volumes. And we're not disrupting that. We're looking for this creme de la creme. And often they leave you along. So, all right. So you've got this business going, you're doing well. And then in 2000, six years in, Todd, you decide to take a three month sabbatical, go to a tiny island in the South Pacific with, I guess, a hundred people who live on it and just kind of live there for three months.

47:25So first of all, Todd, what was going on in your life? Why did you feel like you needed to take a sabbatical? I think that I started to, well, I was suffering from my brain. You know, I was a hard driving guy and I was just, I was having difficult times. I just said, oh. And so I actually went to JP and I felt really bad. I said, you know, I was going to end up like my father, right? I thought I was going to go mad. Just total 24 seven anxiety mania. I just couldn't sleep. I couldn't, you know, it's just really, my furnace was just burning really hot. But I just got in a space where I didn't think I was going to be okay.

48:06And, you know, there was a lot of problems back home with my, my mother and my sisters and my dad, you know, my dad had killed himself and it was just like, and it was just loads of pressure. And then I got involved in bad relationships and just like, I wasn't managing well. Right. So I went to JP and I said, you can have my shares. I don't want to ruin this thing. You can have it all. Wow. I was just, and this is the kind of brother this guy is. He could have easily because I would I mean when I was saying it my hands were shaking and when I get that way I stop eating so I wasn't eating I wasn't sleeping so I just drove myself into this really really tough place.

48:43JP when he said to you hey I'm gonna leave the business you um you got it can you handle it were you like wait what? Yeah I the story is you know he was Todd was going through a hard time you know and he needed to hit reset you know I felt like you know being brothers you know I felt like, hey, listen, go take your time. You know, it was even to the point where it was like, you know what, I think I'm done. So I told, I said, listen, don't make any decision now. And, you know, it was clear. It was like, you know, you're going to help somebody that you love and not going to take anything from you.

49:19You're going to go get better and come back and we'll talk. So you went off for three months and you picked some tiny remote island to just live there. and what did you do for three months there? Well, okay, so I built my own little hut and I arrived with zero money and just a little backpack and a surfboard. There's a giant wave not too far away called King Kong. I fished and I surfed my brains out and then I wrote a book. And it was a piece of junk, let me just tell you. It was trashy. You would not make it past the first chapter, but I think I did that like chopping wood. you know it was therapeutic and i wanted to prove to myself that i could write something right so i did and so there was a lot of stuff from my past that i'd never dealt with and it was it helped a lot this was three months or almost three months on this remote island no wi-fi but this is 2000 so don't internet and jp you were not in touch with him that whole time yeah yeah and were you not worried were you not like you were just like yeah okay go and i'll figure it out and you just ran the business while he was gone?

50:26No, I mean, I was worried that he was not going to go for a while, you know, which would have been bad. So once he went, I knew that was the start of him getting better. And the business, you know, work, we always had such a group of very tight people. You know, if we look at the turnover that La Colomba's had over the years, it's very low. So we just had that core of people from the beginning. So three months felt like two weeks. I mean, it was just not much to handle. It wasn't like impossible. So when he comes back, how did he see him to you? Much better and in a different place completely.

51:11I mean, I was just like a completely different person. And, you know, happy to see him, that's for sure, you know.

51:21You decide 13 years after you open your first location off Rittenhouse Square in Philadelphia to open a new location outside of Philadelphia for the first time. Because I think at that point you had like two locations in Philadelphia maybe or three. Was it two, JP? Yeah, no, Dilworth. Dilworth had just started. We had two. Two in Philadelphia. And you decide to go to New York to the most challenging market in the world, right? And by the way, it sounds like the business model at this point was starting to change because – Oh, it changed big time. The cafe wasn't really the point. But now you're opening a cafe in New York.

51:55So why? 2007 and 2008 was the major fault line in the company. It was a massive shift in everything. See, we thought for a long time that the 19th Street Cafe was just an anomaly. Yeah. It wasn't due to the fact that we're any good at what we do. It's just that we got lucky. And we were really afraid of making a second one because it would prove to everyone that the first one was just an anomaly. Yeah. So, to be honest with you, we were scared. Yeah. Because what if it were a failure? And so, we finally decided to face our fears and we opened one in New York. Like, we'd evolved in isolation that we've got to this point that we're going to turn this thing into a true business.

52:42Mm-hmm. We could become the reference coffee roasting company in the world if we start right now. And if you look at the top line revenue of La Colombe, it is an intense hockey stick that started in 2008 where it just completely decided that we were going to dominate in this area. So clearly you are shifting now at this point to cafes. And does that mean that at this point, 2007, 2008, you were shifting away from the wholesale side or did you continue that? Oh, we continue that. No. They're called categories, right? So you never abandon the energy that you're giving to one category because you've added a second.

53:22And we have five now. And you realize that you don't have to leave your first child because you're having a second one. So you guys are now fully on to this new path of cafes. And tell me about how you were able to do this. I mean presumably you had to go seek out outside investment. right? Which was going to be the first time you were going to get outside money into the business, right? Yeah. I mean, there's a couple of things that were going on too, is that I became fascinated with this thing that wasn't being done anywhere yet called cold brew. I had this idea that you could brew coffee, put it in a bottle and sell it to stores.

54:01So that was just starting. So I knew when JP and I believed in the ready to drink coffee. So we had that and we had the cafes. So we looked at each other and went, man. So we started the old investor discussions. And it was so awful because we have different blood types to such a degree that it just, it was so difficult. And we landed on one. We did the deal. And that lasted 52 days to the first board meeting. I said, OK, I believe that cold brew is going to be a thing. And La Colombe needs to be the father of it. we also need to create ready to drink drinks that include milk and hopefully one if i can invent it one that's frothy yeah and they said nah we don't want to do that what they want to do they wanted us to build 200 cafes and this is your new board this is your board because you you had to have a board when you bring in outside investors and of course some of those board seats were held by that was there a private equity company yeah so it was a private equity company me and jp so i just I said, we're out of here.

55:07We're going to buy you out. I gave him a sum too, actually. I told him how much, double. But in order to buy them out, presumably you'd have to find like another investor to get the money to do that. That's true. First, we agreed we would need an angel investor. It would have to be someone who's craft-based, who believes in behaving themselves in the world and creating value for other people and participating in communities and being decent. And so I thought of, hey, there's that Hamdi Ulicaya guy. From Chobani. From Chobani. I'd met him months earlier. He, as well as JP and I, are concerned about the refugees coming across the border from Syria into Turkey.

55:48He's a craft man. So you make things, you understand, right? I mean, he understood the complexities of Greek yogurt and why that mouthfeel is so important. He understood the beauty of clean milk. He understood clean ingredients. So I go in my lab and I create the very first draft latte. Drill a hole in the can. I put a volleyball valve in it. I put coffee. I put milk. I seam the can. And I jack the contents up with nitrous oxides to make it self-foaming. And I bring it up to New York. And I said, this is going to be the most expensive coffee you've ever tasted. And yeah, he loved it. And then what?

56:25You say, hey, I need a favor from you. Or hey, would you be interested in investing? What's your pitch to him? What do you say to him? That's exactly how I said it. I don't know how smooth or awkward I was, but I said, I want to take coffee into the future. And I want you to be a part of it. In order for that to happen, you need to take out this VC. And he said, great, let's meet him. And we met him. And he did. And they had no problem with it? They were like, sure, we'll sell. That's fine. Yeah, they doubled their money in a couple months. Right. That's pretty good. Yeah. So it did cost quite a bit to get out of that bad decision that I guess you guys took.

57:02It did, but you know what? In retrospect, it didn't. It was very helpful. We had to go to the next level of growing up, and we ended up getting a lot of really good executive people from it and a real different way of looking at our business. So it was like, oh, there was a whole bunch of maturity that we got out of that deal that I'd still say I would do it again. And this, the draft latte cans, I mean, they became an incredible hit. Like they're distributed all over the country. I read something like they're in like one out of three U.S. grocery stores. I'd say, yeah, it's probably higher than that now.

57:36I'd say we're getting like two out of three. It's close. And JP, what do you think of the strategy now? I mean, it seems like you guys chose the right path back when you kind of told the private equity company, hey, you know, we don't want to open 200 locations. We're going to go in this different direction. Yeah. You know, I've seen so many good concepts over the years being pushed to really roll out. I'm not saying that, you know, we can't get to a big number of locations, but there's a balance of things. Right. I'm really, really, really happy that we kept growing the business in different channels than just retail.

58:16I mean, how many great concepts have we seen over the years that, you know, just got crushed because VC money got in and pushed it too hard? I mean, there's dozens of examples. And it's, you know, I think we were a little naive to think that that was a solid plan. And we learned and, you know, thank God Hamdi is with us. And we're on a different path. Yeah. This business has made both of you rich. and I know that Todd, you grew up in like serious insecurity, food and financial insecurity. What does it mean to you to have money? What does it enable you to do now? Well, I think that first and foremost is, you know, I can guarantee the future of my children.

59:07And that was a big thing for me. I always wanted to have a family and I wanted to be able to provide for them. what you learn though is that there's no such thing as security ever there's no amount that will make you secure that's just something that you then have to live with yeah it lets me uh make a change if i see things i don't like i could fund programs i can do things like that and i i could do more than just bitch about things now i can actually go and move the needle and food and food food food i could i still i'm 56 years old and i can go to a store with my wife and i'm walking in front of the car and I'll spin around and I say to her, I can buy anything in this store.

59:48God damn it. That's awesome. I could buy anything in this store. And there was years and years and years that wasn't possible. But I guess the most important one is that, you know, I have a safe home with my kids in it and I like that a lot. How about you, JP? You grew up in different circumstances. You grew up comfortable, but I mean, obviously now you are well, this made you very wealthy. Yeah, you know, and this is one of the things I respect the most about the U.S., you know, it's how people become wealthy, give back, and that includes us, you know, and it's a great feeling. And it's amazing.

1:00:25It's not that way in Europe. And this country is amazing. You know, not just us, à la Colomb. It's amazing, you know, it's pretty cool. So being part of that, doing your share. Yeah, it's great. JP, when you think about how much of your success has to do with your hard work and talent and how much has to do with luck, what do you think? What weight do you give to each of those? I think luck plays a really big part, really big part in the success of La Cologne. It's, yeah, luck plays, I mean, hard work is a given, right? You're going to work hard. If I were going to give you a percentage, I would probably call it close to 50-50.

1:01:07I mean, if you call luck, you could also talk about timing. Well, the fact that the two of you met in the first place. Yeah, and people you meet along the way and the opportunity to create all that are put in the same bag. For me, that's luck. How about you, Todd? Yeah, I don't know. When he was talking, I got an image in my mind. it. It's like we have these mosaic tables. They're broken pieces of La Colombe ceramic, you know, that they put together to make this mosaic top. So I would say that the grout is luck. It's what holds all those broken pieces together, whatever percentage that is. Because obviously they would mean nothing if it weren't for the grout, right?

1:01:52It wouldn't hold together. So I would say, I guess, 35 % of it's luck or good fortune or destiny or, you know, the gods or because it's true, man, that luck begins with Green River. And whether he was wearing a gold vest or not, I'm not sure, is meeting JP. Huge piece of luck. Had I not gone that night, there would be no luck alone. That's Todd Carmichael and J.P. Iberti, co-founders of La Cologne Coffee Roasters. By the way, in addition to founding La Cologne, Todd also once held the world's speed record for trekking to the South Pole on foot, unassisted. There's a whole documentary about his trip called Race to the Bottom of the Earth that aired on the National Geographic Channel.

1:02:44Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And please sign up for my newsletter at GuyRoz.com or on Substack. This episode was produced by Casey Herman with music composed by Ramtina Ablui. It was edited by Sarah Saracen with research help from Dareth Gales. Our production staff also includes Neva Grant, Catherine Seifer, JC Howard, Sam Paulson, Chris Messini, Alex Chung, Carrie Thompson, John Isabella, Andrea Bruce, Ramel Wood, and Elaine Coates. I'm Guy Raz, and you've been listening to How I Built This and don't stop the podcast just yet.

1:03:22Because right now, you're about to hear an amazing small business story that you don't want to miss. This segment is presented by American Express. With a business platinum membership, the best just got even better. And this week's story starts back in 2009, when a former Dell engineer named Peter Mann set out to solve a very personal problem. My son struggled with asthma. When he was an infant, he would have an asthma attack to where he would change colors and not breathe. And it was really distressing not being able to do much for him. As he was a little bit older, more middle school age, he would have an asthma attack just sitting on the couch.

1:04:05Peter learned that one of the big triggers for those asthma attacks were allergens and other particles in the air. So he started looking into air purifiers, and he was pretty underwhelmed at what he found. It's almost like bulletin board looking terrible websites. And some of them are selling these same products with just different logos on their product. Peter came from the world of tech, so he knew how to develop a product and market it online. And he thought, why not just do this myself? So he hopped a flight to Hong Kong, negotiated a deal with a manufacturer, tested some samples, and about six months later, Peter's own air purifier, which he called Aronsi, arrived at his door.

1:04:49I remember opening it and plugging it in and turning it on. And within about 15 or 20 minutes, the air just felt different. And his son's scary middle-of-the-night asthma attacks? They went away. It wasn't waking him up, which wasn't waking us up. It was just a huge win-win. Customers loved the product, too. And Aronsi's sales grew steadily over the next decade. When COVID hit, demand for Peter's air purifiers skyrocketed. But so did competition. It just got to the point where it was oversaturated. So Peter decided to pivot and focus instead on the technology inside the device, specifically the electric motor.

1:05:31He merged with a partner, bought a huge factory in Virginia, and built an air purifier in-house from scratch as a way to validate the technology. Now, Peter's setting his sights on a much bigger market with a seemingly endless demand for cool, clean air. AI data centers. Now, around the same time he made that pivot, something happened in Peter's personal life that completely changed how he looked at his business and himself. In 2022, my wife was watching CBS Morning Show. And in April, they do profiles of people that are autistic. And she's like, oh, you need to see this. And I watched it, and I was like, oh, my gosh.

1:06:18I didn't know it. Like, now so many things make sense. Peter thought, that's me. The hyper-focus, the ability to build systems, and some of the social challenges he'd experienced as well. Sure enough, at age 55, he was diagnosed with autism. I did a LinkedIn post and I said, you know, hey, I was recently diagnosed. If anyone that's autistic that, you know, is going through interviews or navigating the workplace wants to talk, I'd be happy to talk. And wow, I had video calls with dozens of autistic adults. Probably 75 percent of them were just struggling with the interview process. So he's spending more time thinking about ways his company can set people up like him for success.

1:07:03This kind of hit me like my son's asthma did. By the way, the son whose asthma attacks inspired Aronsi to begin with? Peter says he's doing great. He seems to have largely outgrown it. He still has an air purifier. That's all these years later. That's Peter Mann, the founder and CEO of the air purifier and now electric motor company, Aronsi. His small business spotlight was presented by American Express. To build a business like no other, you need a card like no other. There's nothing like Business Platinum.

1:08:03Thank you.

1:08:32Thank you.

1:09:02or survey at wondery.com slash survey.