Jacob Jaber: Philz Coffee

Jacob Jaber is the CEO of Philz Coffee, a coffee retailer with 17 locations around California. Philz is known for high-touch customer service, interesting blends, and lack of espresso.

“My dad was running a grocery store, and experimenting with a lot of coffee varietals and all these special blends. We didn’t use much machinery and didn’t have espresso. I’ve been involved since I was ten years old.”

“The best coffee in the world is the coffee that comes to your taste. At Philz, we have the platform to optimize for that. When you can talk to your barista or your chef, it’s a much more special experience. It may seem inefficient, but there is beauty in that inefficiency.”

“It’s really special. The concept is tightly tied to our values and our philosophy, and we love it.”

There have been three waves of coffee: the home brew wave of Folgers; the second wave of Starbucks; and now the third wave of high-touch coffee shops.

“Starbucks revolutionized the way people think about coffee. They are part of the second wave. There’s this third wave: the artisanal micro-roasters that put a lot of care into crafting the perfect cup, and procuring the highest quality beans. However, Philz is different–we are in the people business. And many people in the third wave think they are in the coffee business.”

“Our vision is to reinvent the coffee experience.” An example of that reinvention is the lack of espresso at Philz. “A lot of times it’s not about what you do, it’s about what you don’t do. We’ve converted a lot of latte drinkers into Philz drinkers.”

As Starbucks grew, the culture became diluted.  Jacob is focused on scaling the culture at Philz correctly.

“In the beginning, when my dad and I were working alone as baristas for 14 hours a day, we did great. It was hard, but we cared, it was ours, and we were committed to delivering a great customer experience. Bringing on our first employee was easy because we were right there with them.”

“Culture is the collection of normalized behaviors that occur regularly. First and foremost, you need a strong commitment to hiring people with the right values. And you want to have a training process that represents the culture of the company. We make sure our trainer is a cultural ambassador.”

“We spend several thousands of dollars to train one individual.”

Maintaining the culture at Philz is about simplicity and repetition. “I don’t say a lot of different things. I say the same things over and over again. Every conversation is an opportunity to reinforce why we do what we do.”

Jacob emphasized that he was not intimidated by the challenges of scale. “Business is common sense, not rocket science.”

“I get inspiration from people, but not so much from companies.” His biggest influence is his father, Phil. “My dad is basic–he’s authentic.”

Prior to becoming CEO, Jacob was occasionally fired by his father.

“In the early days of being a barista, he kicked me out in front of a line. I was almost crying. There were some arguments and disagreements over the years, but it’s gotten better.”

“When I was 16 or 17, I had to work 7 days a week, and some days when I’d finally get a day off, he’d call me in.”

“Every kid will disagree with their parents. I wanted to do a lot of things my own way.”

As a teenager, Jacob was not motivated by academics. But he excelled in work and hobbies.

“I wanted to get an outside experience. I worked at Abercrombie as a greeter. They told me they wanted me to just stay at the front and sell everything.”

“I never liked school. I hated it because I was forced to learn what I wasn’t interested from people who weren’t interesting. I used to play a computer game called Diablo. At first I sucked, but after eight months I was top ten. I can be incredibly focused.”

“I’ve always been motivated by excellence, impact, and learning.”

“There are a lot of similarities between games and business. Business isn’t complicated. What has helped me at Philz is my lack of experience. I come at things with a fresh perspective.”

“I imagine the best-case scenario and I aim for it. I learned that from the gaming. The game has taught me resilience and determination, and those are the same things that make someone successful at business.”

“I spend probably an hour a month looking at financials. I spend all my time with people. The output is the financials. I reward people for giving customers and team members a great experience.”

“Don’t focus on the results, focus on the inputs.”

“We don’t have a fear of money. We focus on doing what’s right, because we know it will reward us in the long run.”

“It’s simple. It’s all hard work. There’s no easy way out. You gotta work smart, and you gotta work your tail off. The simplest things matter.”

“Retail is tough. Every business has it’s own challenges. You can’t scale authentic human interaction. You have to hire great people, give them some guidance, and give them freedom. It’s not easy, but it’s really rewarding.”

“Being able to walk into our 50th or 60th shop where people are happy to be there–that’s success to me.”

Another scalability concern is providing food to customers. Many coffee shops fumble and wind up with subpar options.

“Food is very important. It’s the second highest sales item after coffee. I’m passionate about health and quality ingredients. But we never want food to overshadow the coffee experience, and we don’t want to prepare, so we want to find great partners–craftsmen who can provide the highest quality.”

Much of Jacob’s spare time is spent educating himself. Since he is young, he welcomes advice with a measured humility.

“I love learning so I read a lot. I love Quora. It’s one of the best websites in the world.”

“You gotta be smart enough to recognize when you don’t know it all. You gotta have responsibility and have people who believe in you. You gotta be open-minded, especially to elders. When you have those things, age is less important.”

“The issue is that you don’t know what you don’t know. But you also gotta be careful of getting too much feedback from the experienced folks. A lot of times, experienced folks have less of an open mind.”

“I’ve always thought for myself. I’ve never just taken what somebody’s said and believed it.”

His parting wisdom was to be authentic.

“Presentation is not as important as authenticity. I’m not the most tactful person, but I speak my mind.”

“You should be kind. Be authentic.”

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