Brewer Kelly Meyer Started a Damn Brewery at the Wrong Damn Time

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My guest for Episode #133 of the My Favorite Mistake podcast is Kelly Meyer, the author of How NOT to start a Damn Brewery: Ten Business Lessons From The Front Lines of The Craft Beer Industry — and a podcast of that same name.

In today's episode, Kelly shares his “favorite mistake” story about starting a brewery (New Braunfels Brewing Company) at the wrong time — and how he sold that brewery ten years later. His book talks about 10 major mistakes that he made… it’s a fun read, even if you’re not interested in starting a damn brewery.

We talk about that story and other topics including:

• Not getting out – 3 moments of insolvency… How close were you to getting out?
• Had sold a chain of fitness centers — what made that successful? Did you think that would be transferrable?
• 2022 – when the EIDL funds run out…
• Why write the book? Cathartic? Warning for others?
• Are you working as an advisor to others?
• Was it a mistake to curse in the book?
• “Most people… don’t want to hear the truth” — Magazines don’t want to print anything negative
• “Mistakes are just weaknesses leaving your business”
• Would you ever start another brewery based on what you learned the first time?
• Tell us more about the podcast — No shortage of guests?

Scroll down to find:

• Quotes
• How to subscribe
• Full transcript

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Quotes:

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Automated Transcript (Likely Contains Mistakes)

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Mark Graban (1s):
Episode 133, Kelly Meyer author of the book. How Not to Start a Damn Brewery.

Kelly Meyer (8s):
I did not learn from my one big seminal mistake, which was literally just opening a brewery the wrong time.

Mark Graban (19s):
I'm Mark Graban. This is My Favorite Mistake. In this podcast. You'll hear business leaders and other really interesting people talking about their favorite mistakes because we all make mistakes, but what matters is learning from our mistakes instead of repeating them over and over again. So this is the place for honest reflection and conversation, personal growth and professional success. Visit our website at myfavoritemistakepodcast.com. For more information about Kelly and his book, you can find links in the show notes or go to markgraban.com/mistake133. As always, thanks for listening.

Mark Graban (59s):
And now on with the show, our guest today is Kelly Meyer. He is among other things, the author of a book, How Not to Start a Damn Brewery: 10 Business Lessons From the Front Lines of the Craft Beer industry. He has a podcast of that same name. Kelly founded the New Braunfels Brewing cCmpany in Texas. He sold it after 10 years and his book talks about 10 major mistakes or 10 mistakes that he made. Chapters are structured around mistakes. It's a fun read, even if you're not interested in starting a damn brewery. So Kelly, welcome to the show. How are you?

Kelly Meyer (1m 38s):
Fantastic. Thanks for having me today, Mark.

Mark Graban (1m 40s):
So I think, you know, there's a lot to talk about. I mean maybe on some level it's how not to start a damn business.

Kelly Meyer (1m 46s):
Yeah. I mean, for me the purpose of the book and one of the reasons I said 10 lessons from the front lines of the industry is that I think they are somewhat universal. You know, w what kind of supply chain logistics you have, isn't that applicable to someone who cuts hair for a living, but some of the same lessons are, you've still got to have the supplies through there. You have to price them accordingly if the market. So, yeah, that was the idea is I w I wanted the book to transcend the beer industry, but to really be a sharp stick right into the center of the beer industry. For sure.

Mark Graban (2m 18s):
So we'll come back and talk more about the book on the cover and everything it says by Kelly K F M Meyer, I would guess, but I'll just ask what what's, what's the KFM,

Kelly Meyer (2m 30s):
It's probably exact, my middle name is Michael. So it's exactly what you think. And if that one happened to have been a dare from one of my employees, once back in my first company that I started, he had dared me to make my license plate that, and then the name sort of stuck. And so if you read the book, you can tell the personality and there is someone that needed a moniker of that site. And so it's that very, very clearly. So

Mark Graban (2m 52s):
That's a moniker that I guess it could be used if people are upset with you or if they're celebrating.

Kelly Meyer (3m 1s):
And it's, I don't know if it's split down the center, but it is definitely split. So you put 10 people in a room you'll have a bunch of different opinions on which way you fall. For sure.

Mark Graban (3m 10s):
Yeah. Yeah. So I introduced Kelly a little bit before we get into the mistake question. Thank you for the book Kelly. And he sent a couple of things here. I was going to comment on this little mini coaster. If I had a little mini beer, I guess that's small. It says author podcast, host father consultant, asshole, and husband,

Kelly Meyer (3m 34s):
In that order. Right. I had to put them in a logistical order based on how I felt I behaved throughout the day.

Mark Graban (3m 41s):
And I, one other thing, I was going to comment on a little notepad, which I, I have been using here. You've sent me more swag than, than any other guests. So thank you for that. Well, a couple of come back, w w we'll we'll come back and talk about this later. There's a little quote at the bottom. I'll just leave that as a teaser. That would be a good question for later. So in the book, you're open about mistakes that you made Kelly is, is there one, whether it's from the brewery or some other aspect of your career that you might label a favorite mistake?

Kelly Meyer (4m 15s):
Yeah, unfortunately it is a lot of the guests I've listened to show and they have this sort of seminal moment. That was just the one thing. And they were able to learn from there. And I think it's clear based on the book and the content in it that I did not learn from my one big seminal mistake, which was literally just opening a brewery the wrong time and, and, and in the wrong way with it's at the time, I didn't have a business plan. Not really. And we had it conceptually, we hadn't written it, and the industry was popular at the moment, and it just got literally a hundred times more popular subsequent to that, and I didn't get out. So the first mistake was opening a brewery. The second one was not getting out at any one of those 10 chapters that you read.

Mark Graban (4m 59s):
So, well, you say you didn't learn from mistake one. I mean, like, is there this temptation and start another brewery that you're fighting or are you just done with that?

Kelly Meyer (5m 8s):
All right. Touchee — no, there is not, not only would I not do that, I would be a single man if I did, and I love my wife tremendously. And so I'm not willing to start another.

Mark Graban (5m 18s):
So how much of it was the mistake of opening the brewery versus just the wrong time? Like, what was the year that you were up and running,

Kelly Meyer (5m 27s):
But we incorporated everything to the paperwork in 2011 and moved in our building in January, 2012. And to really dial that down. I mean, at the end of the day, the, the issue was when I think back now to the, the arrogance that I had that moment, I had just sold a company of eight fitness centers at the right time. The market had kind of started to decline right after that. So we sold at the top, you know, made millions of dollars and was very happy, paid the house off. And I took that to a place that I could, anything I was successful in business, quote, unquote, underlying empirically. And how hard could it be? Look at all the idiots in the industry. And I just didn't do my homework and I don't, I don't think I approached it as responsibly or maturely as I, I, I did not approach it as responsibly and maturely as I should have.

Mark Graban (6m 14s):
I mean, I don't know much about the beer industry, but I know somebody, I know the, the distilling industry can be really difficult. Do you know Dan Garrison? Who's there in central Texas…

Kelly Meyer (6m 28s):
I know we've exchanged emails, but if he wouldn't probably remember who I am, but yes, I haven't met him,

Mark Graban (6m 32s):
But, you know, Dan was a guest on the show and he talked about mistakes and that's been a rough ride. They've had, they've had really rough years in, in the wine business, like, especially in California, there's this, this joke. That's mostly true. Like the best way to make a little bit of money in the wine business is spending a lot of money to open a winery. Like you have doctors and people who are successful in some other aspect of their life. And then they sink money in this, this, this business. But your yours was not just a, a fun semi-retirement hobby. I mean, you were trying to, you were really trying to build something at the brewery. Right?

Kelly Meyer (7m 8s):
Well, I said it was a fun semi-retirement thing, but at some point I think everyone's got a, a threshold of what they're willing to invest without a payback. So just like any hobby, you know, people will spend five grand a month to do a hobby. That's, that's one thing, but to have invested three quarters, a million dollars, I didn't get back in a hobby. And at the end to have gotten kind of beat up by the whole industry, I w it wasn't worth the investment, I guess, put it that way.

Mark Graban (7m 36s):
I mean, what were, what were some of the things I'd be curious to hear more about the, the fitness business? I mean, what were some of the things that led to that success? And did you think that would be transferable into the brewery? Or is it just more of a, I think you used the word arrogance, like you had success more successful and you'll figure it out. It'll follow.

Kelly Meyer (7m 58s):
Yeah. I mean, at the end of the day, there's not a lot of that. There, there isn't a fitness management degree in most colleges. I'm sure you can find one now, but especially back then, there was mostly, it was on the job training. So we would learn based on there's different industry, trade publications, and trade shows you could go to. But a lot of it was talking to the people, you know, learning what worked and what didn't and pivoting from there. And that worked in that industry by and large, because fitness is a membership based business where you asked me on May 1st to predict what my revenue was going to be for the month of June. I could do that within 5% and you cannot in gear.

Kelly Meyer (8m 39s):
And no matter how hard you try, I tried to extrapolate that in. And I talk about that a little bit in one of the last chapters, just couldn't we had a bottle club, so we did have a membership and that works, but we, it never was going to get to the point that it would the brewery, the way that a winery does. And some of that is the, this, the price per package, like a wine bottles, 20 to 50 bucks in a one single bottle beers, usually two at most.

Kelly Meyer (9m 28s):
Yeah, absolutely. In fact, the very first facility that we opened, I used used equipment in it. And so we had, I think the cardio was actually new, but it was a, what they would call light commercial. So it wasn't the high end stuff you would see in a Gold's Gym today, but it was a much cheaper version of a treadmill. The equipment was repainted, powder-coated again. And so the machine weights were maybe a 10th of the price I would have spent renew and you sell memberships, you build up and it's very easy to sort of replace those things. Not only because the entire package of equipment per facility for us back then was maybe 130,000 and our brewing equipment.

Kelly Meyer (10m 8s):
And this brewery was 300 just to, just out of whack. I'm not counting all the little things that had to go with it. So

Mark Graban (10m 15s):
You had one successful business and then you had, you know, a ten-year run with, with the brewery. I mean, how much of it was you, you mentioned earlier the wrong time. Like if you had started that five years earlier, do you think it would've gone down a different path? I mean, you, you would have hit the great recession 2011 was sort of coming out of that. I don't know the dynamics of the beer industry. Like what, what part of it do you think was quote unquote, wrong time?

Kelly Meyer (10m 43s):
Yeah. It just being literally kind of too late to the party at that point and, and not really understanding the dynamics, but so in 2012, there were 40 breweries maybe in the state of Texas. And now there are over 400. And so at the end of the day, the lesson would be, I shouldn't have opened, but had I opened five years earlier, we could have been capitalized differently. We could have had the relationships in place that would have sustained us. And the guys that are the early two thousands, they have enough brand recognition now to kind of carry them through, even though they're struggling a little bit as well. But

Mark Graban (11m 19s):
I mean, there there's one brewery you mentioned in the book that I had visited as part of, I did a spirits tour kind of in the San Antonio to New Braunfels area. And the, the, the brewery was part of the tour. So I guess it was just an alcohol tour. It wasn't spirits there. And remember we did the tasting, we did the visit. And as I learned from the book, Pedernales also ended up out of business. Was, was there, do you know, w was there a situation similar to yours or where it was a different dynamic there?

Kelly Meyer (11m 53s):
I was a similar problem, and I actually made one of the seminal mistakes in the book, or that I could see a lot of brewery owners make. And especially now in the podcast, it's one of those questions I asked everybody is that Pedernales made empirically good beer based on a kind of an outdated model of what beer is. And so if you flash forward even five years after they started a clean, crisp lager made in a German tradition is not as exciting as a dark stout beer with marshmallows in it. And they kind of struggled from that, that they didn't innovate at the time when innovative would have overseen the breweries that were doing on the surface doing well, but they also had some bad distributor relationships.

Kelly Meyer (12m 39s):
And unfortunately we just, he did the best he could, but he was spread so thin on such a low margin product that without the volume and the reach, he just wasn't going to make it work. And they were a sad one to see, go in my opinion, because I think that they did empirically make good beer and on the surface, every consumer's like, wouldn't that be enough? It is not, not at all.

Mark Graban (13m 0s):
So that was one chapter one. That mistake was one that I wanted to explore here, because I think there's a broader lesson for all sorts of businesses. So the mistake there was focused on quality over marketing and branding, and maybe Kelly, you can set a little more context for the audience. I mean, you were making funkier beers, like I've tasted some of these beers. I have a friend of mine who's really into the sour beers. Like for me that I think it's just not a flavor profile that works for me, but there were a lot of people who really liked these little more wild beers, I guess, literally that's true if there's wild yeasts or, but it's, it's a totally different type of flavor.

Mark Graban (13m 43s):
Can you talk about some of the decisions about focusing on products like that as opposed to a more typical kind of beer?

Kelly Meyer (13m 51s):
Yeah. I think if I was going to, if I was going to go back and talk to myself in those strategy meetings about the decisions that we made, I don't think I could with any clarity, tell my, tell myself that I did the wrong thing in the sense that we were making German style wheat beers in the beginning, a hefeweizen a dunkelweizen, Weizenbock, solid beers in a range. You know, people recognize that the idea and the market was already crowded. It just people, I just couldn't get anyone to quite frankly give a damn about a cup of icing because it wasn't exciting. They already had one. And if they did like hefeweizens, they usually already had a favorite a Paulener or spotting. And so my decision was let's go niche and let's make something esoteric and spend the time to educate our customers on why it's different and unique and exciting.

Kelly Meyer (14m 41s):
And it works. We garnered a following of people who were fiercely loyal and were super interested in whatever I had coming next, but that was maybe 400, which is not enough. So yeah, that was basically what we ended up doing is I focus more on making beer that had more in common with wine than it did beer. And it just sort of sat in the middle of both industries and was challenging to get any real traction.

Mark Graban (15m 8s):
The, you know, this idea of, I think, as we talk about in the book, this idea that the best beer would automatically win in the marketplace, that, that may, you know, that that might not be true when it comes to say a software business or a gym that the best jam with the best service or the best software with the best features and the best customer support, doesn't always win in the marketplace. So what advice would you have for whether it's a brewer or another entrepreneur to try to figure out a business model around the business, not just the product itself, product excellence, how do you figure out if it really has legs as a business?

Kelly Meyer (15m 49s):
Well, let me think. Obviously you can look and see if there's a marketplace for it. So are there consumers currently demanding that product at that price point? And one of the things that I had done is I, I wanted to see if in a sense I wanted to go to the top of that market. So I was looking for a higher price, more artistic product. And as much as that can work, I think the examples of being outside the norm, outside the stream of where all the money actually is, it just, you don't see that succeed as often on the longterm, as the guys that are making something very simple appeals to everybody and then well marketed and well-made in that stream.

Kelly Meyer (16m 31s):
You know, even, even Apple, if you look at the products they make today, they're really all within a pretty tight range. They're not swinging for the fences that you don't need a, a genius at the store to explain you how to turn your phone on anymore. Whereas you may have 10 years ago, or maybe it was a, I don't want to vapor started, but I guess the normal, that story is as much as I hate to say it out loud, stay boring, stay in the middle, price it correctly, and market the living crap out of it.

Mark Graban (16m 60s):
I mean, it seems like there's a catch 22 there of being where the market is. You have a lot of competition to have the hefeweitzens, the pale ales, the lagers, as you, I think it described in the book, the lifestyle beers, like where are you going to go drink a bunch of tailgating at a Cowboys game? People there probably aren't consuming a lot of the sour beers. I don't, I mean, maybe it's fancy tailgate party relatively. I don't know. But, but, but I, I think you made that point really strongly in the book, but you know about the marketing and the branding, how people don't drink beer, just because of the flavor. I think, you know, you made that point.

Mark Graban (17m 40s):
Well, but back to the idea though, the catch 22 of like, you know, if you want to be like to use the old Wayne Gretzky quote of skating to where the puck is like, you, you can find a niche, you know, you can say, well, nobody's making that kind of beer maybe for a reason. Or if I'm the only one making this kind of beer, I could be genius. It could be idiotic. Like it, that's tough to figure out other than giving it a try and just seeing what happens.

Kelly Meyer (18m 6s):
Yeah. Which I did. So learn from my mistakes,

Mark Graban (18m 9s):
So buying this book is a lot cheaper than making mistakes yourself. Right?

Kelly Meyer (18m 15s):
I think the, I think it was a first episode of the podcast. I did the owner of a brewery up in Dallas that had gone out of business, said something along the lines of, if you really want to open a brewery, go get a very expensive $15,000 Homebrew system, make beer on that. Give it to your friends. I promise you'll come out ahead. No.

Mark Graban (18m 35s):
So is that a trap? I mean, I've watched the, the, I was big fan for a while. The show bar rescue Jon Taffer, are you familiar with that show and Gordon Ramsey in his Kitchen Nightmares show. And there was this common theme, like, you know, when it comes to cooking, people say, oh, I love to cook to have dinner parties. People love my food. I'm known as the best chef in the family. That's totally different than running a restaurant. Is there a similar trap with like the successful home brewers of thinking like, oh, I love making beer. People say, it's amazing. I'm going to start a brewery. So similar trap,

Kelly Meyer (19m 11s):
I would say that I don't talk to as many people around the country, but I know the majority of the ones in Texas and you were probably 74% of the breweries in Texas started with that same theme, which is also why next year, it's going to be a bloodbath when the piper has to get paid. Unfortunately. But yeah, there's a lot of that. And that's one of the reasons I referenced a few books in my book that I think people should read and The E-Myth is one of them, which is literally just whatever it is. 350 pages of talking about how stupid that is.

Mark Graban (19m 43s):
Well, I remember I read The E-Myth maybe was it 20 years ago? Maybe almost 20 years ago. And the one, the one takeaway from the E-Myth was, and I say, this is, you know, I have a business, you know, a consulting business and other things, but I've, you know, tried to think through, and maybe I'm in that trap a little bit of like, you know, you think you've got a business, but you may have just bought yourself a job, right. A job that you can't take. You know, I, I don't get, you know, I've paid the people I know talk about going off on PTO for me, it's just T.O. It's just time off. I'm not making money when I take a vacation. And you know, maybe I'm more of a,

Kelly Meyer (20m 23s):
You can send texts and emails and while you're there, but otherwise you're not. Yeah. You're not, you're actually off. You're not actually making money. And you can scale that though. I mean, at some point, if you look at a 12 month number and you're like, you know, I can take December off cause I had a good 11 months. That's one thing. Unfortunately, the other advantages you don't have overhead in that sense, either of a $12,000 a month rent payment on the building that you're trying to lease and payroll expenses while you're gone. So at least you can manage your cost structure a little bit.

Mark Graban (20m 53s):
A little bit. Yes. So before we talk more about the book and the podcast, you know, w when you teed up some of the discussion here, Kelly, you said mistake, one was opening the brewery. Mistake two was not getting out at different points in time in the book. You talk about your wife. I don't know if you had other advisors, quote, unquote. I mean, how tough or how close were you to getting out and what do you think had you kind of sticking with it? It sounds like in hindsight, longer than you wish you had,

Kelly Meyer (21m 24s):
I would say there was three big catastrophic moments where we were effectively insolvent and, and that happens in many businesses. You either refinance something or get a new investor or pivot and find a new product line that's going to drive revenue. So then that happened to us early on. That was one of the things that we did with pivoting to the mixed culture beers. We just couldn't get excitement and enthusiasm back in. I think this is like '17 is when we made that switch. And so then we switched over to that and that did make a run for a few years. That did change things up 2019 is actually when I started writing that book and my wife actually quit that year.

Kelly Meyer (22m 7s):
She was like, I'm done I'm out. I can't do this anymore. Wow. So that was another one. And that was literally our distributors warehouses had gotten full in December by the time the end of January came through, nobody had an order, anything. And we were just, there was no pathway to profitability for 90 days that we were pretty much screwed and opposite. Didn't have the cashflow runway to keep that going. So that was a big one. And then honestly, I thought we were closed for COVID and during the lockdown, we grew tremendously and actually hit some record numbers for our company. And then the bottom dropped out of that again, also in the spring.

Kelly Meyer (22m 47s):
So it just, none of these little runs had been sustainable to get us out. They got us out of the hole, but didn't keep us out of the hole, I guess, a good way to say it.

Mark Graban (22m 56s):
A couple of minutes ago, you made reference some of the follow-up real quick reference to there'll be held to pay next year for a lot of these breweries. What what's the what's going on there?

Kelly Meyer (23m 6s):
Well, so I don't think that the brewing industry is necessarily unique in that, but we, for the most part, it's a very tight margin business, especially at the big guys, they're, you know, under 10% operating revenue or operating profit, some of these small guys are even lower than that, where they, maybe the is not taking a paycheck or a dramatically less paycheck. So for the most part, we have been a zero to no profit business for years. And when the EIDL happened last year, that saved tremendously the breweries, because all of a sudden you got 75% of 2019 numbers, which were a loss, but was revenue to get paid for.

Kelly Meyer (23m 47s):
So most breweries had their best year ever last year, but they did not change their operating budget. And they were still under-capitalized for the longterm. And we always have a seasonal slowdown December to March. And so that's going to hit everybody exceedingly hard this year and just, you know, a lot of people are going to look at why am I in it? And then taking another hard look at it. And you're just going to see a lot of people walking away first quarter of next year.

Mark Graban (24m 13s):
So, so what you're saying is the COVID relief funds may have kept some of these businesses alive on life support, but that didn't mean they were going to get back to being healthy.

Kelly Meyer (24m 26s):
No. So if you look at the burn association has one of the big independent craft brewery, kind of, they do a lot of the numbers for us, but I guess what everybody's revenues third, July, 2022, July, 2021 numbers show a 450 brewery net increase during COVID, which means we were in deep crap before now it just got over our heads. Like there's, you know, I mean, there's no, there's not enough money to go around on that ethanol being that it just everybody's fighting for the same dollar bill and it doesn't work.

Mark Graban (25m 4s):
So I want to talk a little bit about writing the book. Was it the motivation? Was it mostly cathartic for yourself? Was it to be a cautionary tale for that home brewer who thinks, oh, I started, I can start a brewery. What, what was some of the motivation for, for, for documenting it this way?

Kelly Meyer (25m 28s):
Yeah, so all of the above, it, it basically started as when I would made, made a list. Well, my wife was like, look, I'm I'm out. I gotta get a real job. You need to wind it down. And so we had had a building lease, we had a license for production, and so we had sort of a deadline and it was nine months out. And so I made a list of what I needed to do to make sure that we could get to that point and not, you know, money for the, for the rent payments and all that kind of stuff. And when I, when I started to write it, then I started to get angry and all the things that I had done wrong. And some of those were my mistake, but they were based on your relationships with the distributor or retailer or an ex-employee.

Kelly Meyer (26m 14s):
And so, you know, while I was still my business still my fault, there were some outside influences. And so I got angry. I went off on a rant and the rant essentially became the book. And as you saw in there, the, the language supports that there was definitely a lot of anger. I had some emotion to get out. And that that's actually the second version of the book that you read. I did release the first one about a year before that, but about 20,000 last words. So the one you're reading is the cleanup sort of cleaned up version. Yeah.

Mark Graban (26m 50s):
And I mean, I guess for your target audience there, and, you know, as a reader I have had, you know, it didn't bother me. I curse as much as anybody, but what was it a mistake to, I guess there's two, two questions was a mistake to come across, you know, w was it a mistake to be ranty and or angry? It was a mistake to curse so much for your target audience. Like math doesn't matter.

Kelly Meyer (27m 13s):
I don't think that was a mistake because the, there was no other way for me to do it. Any, anything else that I had written would have been disingenuous and it would have been just a money grab. I hope that there are, I mean, and there are people that have read it. I hope that I earn an income from selling the book, but at the end of the day, it was more important for me to be transparent as to who I was and tell the story, the way that I wanted it told. And it was like, my kids are 15 and 17 probably shouldn't have read it, but they're very proud of the book that I wrote. And that's all that really matters to me at the end of that.

Mark Graban (27m 47s):
And that's why on the coaster father is listed before asshole. Right.

Kelly Meyer (27m 51s):
That's right. I'm more of a father than I am, I guess, depending on the day. But yes.

Mark Graban (27m 58s):
So, I mean, you're talking about being a consultant or do you work as an advisor for other breweries or w w w w what work are you doing in that consulting realm?

Kelly Meyer (28m 10s):
I actually haven't yet. And I went back and forth on, as you can imagine that knowing that the industry is in free fall, I don't imagine that I would not be extending credit to anyone. It would be all upfront payments. And I, I, most of the people that I know don't want to hear the truth. And so I have decided not to invest in pushing that, but I would definitely, I guess the short answer is I have given a ton of free consulting, but I have yet to actually push that as a career, but I am available if someone wants to go that route, but you're paying up front.

Mark Graban (28m 46s):
Yeah. I mean, cause a lot of consulting right or wrong is built off of this notion of I was successful. I'm going to share my success secrets with you. Are people open to the idea of, Hey, learn from my mistakes. I appreciate that. You're sharing those mistakes in these different formats. Are there people who say, yeah, yeah, yeah. I, I, I'm going to learn from Kelly instead of making the mistake myself, but there's, I'm sure a lot of denial of, I'm not going to make that mistake. I'm smarter than Kelly.

Kelly Meyer (29m 16s):
Oh, there's a lot of that. In fact, so I, when I was, when I was working to get the book published and then some different things throughout, since then, I've written some articles even about like kind of the sale and how that went. And I've pitched that to some of the industry leaders, as far as publication wise, there are a few plates, few magazines and some different podcasts, publications, even a better out the podcasts have been pretty receptive, but the magazines by and large refuse to print anything that is negative. And the argument that I've gotten back and I actually printed one and framed it is that the reason is that everybody knows business is hard.

Kelly Meyer (29m 57s):
Why would anybody want to read about that? But conversely, the, the breweries that I have had a lot of people reach out to me and just really thanked me for the content, both in the book and in the podcast. And, and the reason is that the story's not being told and that's across all industries, you know, guys like you and I that want to talk about things that went wrong or rare. You managed to find a bunch of guests on your show. I have been told no many times. And part of the reason is that they just, and actually I like it. I'm not trying to call out negatively, but Lee's an example of that at Pedernales stories is still tough for him. Like, he's sad about what happened and he doesn't want to talk about it. I get that.

Kelly Meyer (30m 36s):
But the people that are listening to it are definitely learning from it and taking away information, that's going to make them better in their career. And that's at the end of the day, the whole reason.

Mark Graban (30m 46s):
And I, and I think there's a lot of great advice in here in general, just looking at some of the other mistakes, don't worry so much about online reviews. I mean, I think as an author mistake, I made just a quick detour. One of my books got a two star review on Amazon and I thought the review was really unfair. I'm like if the guy basically thought the book was this, even though I think the book description clearly said, it's, it's this, you know, and, and you know, here's the reviews said basically like, you know, this book was so bad. I threw it in the garbage, there was nothing to learn from it. So I kind of got into it a little bit.

Mark Graban (31m 26s):
I'm like, well, wouldn't that I wouldn't a normal person. Just send it back for a refund. And I kind of tried to argue with them about why it was wrong. And then that just, that's not a good use of time. That that was not a good look on my part.

Kelly Meyer (31m 40s):
No, but the ridiculous thing is if you were to have that conversation in person, you probably could get him to come around. He would probably have a conversation where he was like, you know what, you've got a point mark, and it will, Lisa walked away, not unhappy. And for some reason when they go online, people are in capable of having that conversation.

Mark Graban (31m 57s):
Yeah. And, and he may have had a point, but it's just, you know, angry type sense, you know, that dynamic of social media or what have you. But you know, you share that, you know, managing cashflow is such a key challenge for all sorts of businesses. And some people have talked about that here on the podcast. But one of the things I wanted to ask you about on this notepad coming back to the notepad, mistakes are just weakness, leaving your business. Where, where did, where does that phrase come from? Or how would you explain that for his mistakes or just weakness leaving your business?

Kelly Meyer (32m 37s):
Well, it's probably something that obviously an expert witness guy with a put in there. So pain is weakness, leaving the body, that mentality that if it doesn't kill you, it makes you stronger. And when I wrote that book, one of the things that I realized is that I wasn't still making these mistakes. So clearly the business was stronger in 2021 than it wasn't 2011. It just still wasn't strong enough or that, you know, there were outside influences or whatever. But I do feel that throughout the process of the 10 years that I am a better brewery operator now than I was in the beginning. I just, maybe not good enough, but I am better than I was. So I did get better.

Mark Graban (33m 16s):
So even though you've talked so much about mistakes, what I hear you saying is you, you were learning from mistakes along the way, but there was some mistakes that just were, were, were dragging the business down that you couldn't escape from.

Kelly Meyer (33m 29s):
Yeah. In the end, the industry changed so dramatically quickly. And the competition was such that, you know, you can't even foresee what it's going to look like when the, the, there are 10 X, as many breweries walking in to try to sell to the same account that you're trying to sell to. How does that change it? What do you need to do? What who's going to win? And the guy's making brownie batter of beers. I did not think were the ones that were going to win. So I bet wrong and whatever there it is.

Mark Graban (33m 56s):
And as you were describing the book, like people are literally putting brownie batter into his, into the fermentor or

Kelly Meyer (34m 6s):
Yeah, it is just dumping Betty Crocker brownie mix in there. It's, it's not, not anything much more scientific than that.

Mark Graban (34m 14s):
So it's just kind of sweet. obnoxious beer. There's a market for it. You wouldn't drink it. You don't care for it. Beer snobs. That's the world's best beer.

Kelly Meyer (34m 26s):
Well, though, so here's the part of the industry that changed dramatically. The beer snobs are the ones lining up for it. The ones Instagramming, it, the ones telling their friends about it. They are driving the market. So, and granted, you know, have all hypocrisy aside, the beer that changed the story for us was pickle juice, sour beer. So that is not purist by any stretch. But,

Mark Graban (34m 49s):
And I, as I was reading the book and I was, I was sharing some tidbits with my wife. She does kind of like the sour beers. She doesn't drink it often, but she'll, she, she likes that flavor profile and she loves pickles. And that's a beer she would have tried. I don't know if she would have ever, would she have had a second one, I guess that we have unique beer like that. I mean, you're, you're, you're betting on repeat business, not just the novelty of it or, or how much of it is just the novelty of, Hey, people are going to buy it. I don't care if they are repeat business because then I'll come up with another flavor. Is that part of the dynamic?

Kelly Meyer (35m 27s):
Yeah. So, well, that's the big challenge in the beer industry today. Why is spirits? Don't quite have it near as badly yet, but we'll see how that changes as it bleeds over. But the, there a movement maybe a year ago, I believe that was, they call it flagship February, I believe. And the idea was that the big incumbents with these great beers that have been around for 10 years were boring. No one wanted to drink them anymore. They were struggling. And so they created this flagship beer February, go back and drink the old crap that, you know, you love and support that again. And that is the only way to truly make it. And that's been proven over the last a hundred years. The only way to truly make a longterm business is to have a product that works consistently for people.

Kelly Meyer (36m 9s):
They'll always have a six pack in their fridge. They'll tell their friends about it. Maybe they won't put it on Instagram that they're drinking it unless they're also on the boat, the lake, but they'll tell people, but the industry changed. And now there are a few guys that are making money by literally releasing a different beer every week. That in most cases is a variant of that. Beer does with cinnamon sticks or strawberries in it or whatever. But the fact that it's new and different means I can walk into the bar and go, Hey, I know you got that on there, but you don't have this. You should buy this. And I, everyone I know agree is that that is largely unsustainable, but it has been sustained for 24 months, at least. So what do I know?

Mark Graban (36m 47s):
Well, I think you've learned a lot, the hard way Kelly, as documented in the book, our guest again is Kelly Meyer. The book is how not to start a damn brewery. The book, the book is labeled, as it says here on the cover, the book, right? The notepad is labeled. I just realized the notepad.

Kelly Meyer (37m 9s):
So as the business card, I like to entertain myself. That's an old Spaceballs reference that you remember that.

Mark Graban (37m 16s):
Oh, right. Yeah, yeah, yeah. The merchandising

Kelly Meyer (37m 20s):
Of, yeah.

Mark Graban (37m 23s):
And then you've got the podcast. So a final question. Tell, tell, tell us a little bit about the podcast. It sounds like unfortunately there's no shortage of guests. Is it all people whose breweries have sadly gone under? If it's sad, you know? Well, no, I guess it would be. I mean, anyway, I'm asking a bad question there. T T w w who do you have on there as a guest? That's my mistake there.

Kelly Meyer (37m 48s):
So I've, I've split it up. So I probably barely was focusing on breweries. I went out of business, but decided that there were a lot of lessons that everybody could teach. So this week, for example, I don't know when this will air, but so this is in the end of November, we, I just released an episode from Southern star brewing, which is one of the oldest breweries and taxes, you know, distributed all over the state and outside of the state. And the idea was that sat with Dave and I said, Hey, you're the old guy, tell us where all of us kids are doing wrong. And he was like, I don't know. I can't figure it out either. So it runs again, but I've had some retailers on there. I've had some distributors on there. And the idea is it's mistakes that were made in the brewing industry.

Kelly Meyer (38m 30s):
Primarily focused on guys, went out of business, but ultimately everybody can teach us something. I met a guy, had a coffee shop. They ended up having to sell cause he was struggling. And I had him on there because again, universal lessons in my opinion. So

Mark Graban (38m 42s):
Yeah, if you ever want to branch out, if you run across Dan Garrison, again, he's pretty open about talking about mistakes as a distiller. He's got more stories that I'm sure he didn't tell in my episode. So I I've met. Maybe I'll find a winemaker, you know, businesses business, but there are certainly commonalities and there's some unique things, but the book again, very interesting read, I'll recommend to the people, even if they're a beer drinker who wants to learn a little more about the industry with, with the business focus of the mistakes you've shared there. So Kelly, thank you. Thank you so much for joining us today. I know people can find the book online.

Mark Graban (39m 23s):
I don't have a w w what's your website. My mistake is not having that handy right in front of me.

Kelly Meyer (39m 28s):
Oh, did she go to anchor.fm/damnbrewery? Start there and I'll get you everywhere.

Mark Graban (39m 34s):
All right. So I hope people go check that out and, and listen. I'm sure you can find it wherever you're listening to this podcast. So again, our guest Kelly Meyer, how not to start a brewery. Thanks for being a guest. Thanks for sharing so much of this today.

Kelly Meyer (39m 49s):
Absolutely. Thanks. Well

Mark Graban (39m 51s):
Again, I want to thank Kelly Meyer for being here today. I guess we could say, I think he was a damn good guest to learn more about his book on how not to start a damn brewery. Look in the show notes or go to markgraban.com/mistake133. As always. I want to thank you for listening. I hope this podcast inspires you to reflect on your own mistakes, how you can learn from them or turn them into a positive I've had listeners tell me they started being more open and honest about mistakes in their work. And they're trying to create a workplace culture where it's safe to speak up about problems because that leads to more improvement and better business results. If you have feedback or a story to share, you can email me myfavoritemistakepodcast@gmail.com.

Mark Graban (40m 36s):
And again, our website is myfavoritemistakepodcast.com.