How I Got Here: Episode #2

Mike Raab (00:05):

Welcome to How I Got Here, a podcast from The Garage at Northwestern, exploring interesting journeys of young professionals working at exciting companies, and the role that entrepreneurship played in getting them there.

Mike Raab (00:15):

My name is Mike Rabb and I love dissecting nonlinear and non-traditional career paths and the lessons that we can all take away from those who forged them.

Mike Raab (00:23):

In this episode, I’m joined by Lucas Philips, the founder and chief product officer at Brewbike. Lucas founded Brewbike in 2015 as a sophomore at Northwestern University. With the mission of bringing high quality coffee to students on campus.

Mike Raab (00:36):

Since then, Brewbike has raised millions of dollars in venture capital and expanded to multiple college campuses around the country, allowing Lucas to work full-time on Brewbike after he graduated. A rare feat for a student entrepreneur.

Mike Raab (00:48):

In this conversation, Lucas shares how his motivation has changed since founding Brewbike, why college is the best time to start a business, and many of the lessons he’s learned along the way. I hope you enjoy this conversation with Lucas Philips.

Mike Raab (01:11):

Well, Lucas, thanks for being here with us today. I want to dive right in. So you founded Brewbike as an undergrad at Northwestern University. Did you know when you entered college that you wanted to go down an entrepreneurial path or did you imagine having a different career at graduation when you started at Northwestern?

Lucas Philips (01:28):

So, yes. I knew that I wanted to have an entrepreneurial path. My dad is an entrepreneur. He’s always been an entrepreneur and his dad was an entrepreneur and his dad was an entrepreneur. And so… witnessing my dad’s lifestyle and his ability to be around me and my family growing up, relative to my friends and their parents growing up in Manhattan right in New York City, I realized pretty young I think that that was what I wanted for my life.

Lucas Philips (02:04):

And… I didn’t, I had no idea what I would do directly after school when I got to Northwestern.

Mike Raab (02:11):

And so, how did the idea for Brewbike come about? Because I think many people and especially students, they have tons of ideas for products or companies or startups, but a much smaller percentage actually take the first step to making them come to life. So what were kind of those first concrete steps that you took to make Brewbike a real thing?

Lucas Philips (02:32):

So, while I wasn’t sure that I wanted to be an entrepreneur or like run my own business or work at my own business after school, I was sure that the extracurricular that I wanted to pursue at Northwestern was starting a business.

Lucas Philips (02:50):

When I was a freshmen, that was like something that I wanted to do my freshman year, I was sure of that. And so I joined The Garage and I was fortunate enough to join The Garage right when The Garage opened. So, got my foot in the door when the door was really wide open to everybody, including naive young freshmen who wanted to start businesses and thought they could do it really quickly and it wasn’t as hard as it really is and et cetera, et cetera. And so, it was at a dinner event with alumni from Northwestern who were coming to The Garage, was this catered dinner and we were doing kind of like we would, the students would switch tables and meet with different entrepreneurs or alumni of Northwestern.

Lucas Philips (03:31):

And I met with all of these different investors and tech people and other folks, and really impressive. And I’m not technical and I’ve never really been technical, so I finally got to this table with Neal Sales-Griffin, who was telling me about his career. And this was like in 2015.

Lucas Philips (03:51):

So I didn’t know, I didn’t know who Neal was. And Neal was telling me about how he opened barbershops when he was an undergrad at Northwestern. And that blew me away because I was in The Garage. The Garage seemed like this tech hub of company, of helping students start the next Uber at the time, like The Garage wasn’t, there wasn’t as much definition around what The Garage was so that was my understanding of it at the time. And I never thought that I could work at The Garage and start something more of like a small business at first or a brick and mortar something shop. And everything kind of clicked, then within maybe 24 hours I knew that I wanted to bring better coffee to Evanston because I grew up, again in New York and there’s amazing coffee there and I was a total coffee snob, and I could not find my fix. And Neal’s experience helped me get there. It flicked that light bulb on.

Mike Raab (04:53):

Can you walk me through just kind of, obviously you kind of started early freshman year in launch and thinking about entrepreneurship and Brewbike. Can you just kind of walk me through your career at Northwestern with Brewbike, and maybe the major milestones or setbacks or decisions that you had to make throughout?

Lucas Philips (05:13):

Totally. So that was in October, towards the end of October of my freshman year. So I think five years ago from right now, when we’re recording this. And pretty soon after that, I teamed up with a friend and she and I worked on Brewbike together. We essentially campaigned with the university to get a space to open a coffee shop. It was, there was like a lot of passion behind it.

Lucas Philips (05:44):

From all of us. And so we would meet with the director of dining every few weeks. And we met with Sodexo a few times, which was the food provider at the time, and we were dead set on opening a coffee shop.

Lucas Philips (05:56):

And by mid-winter quarter, it was clear that wasn’t going to happen with, unless we partnered with Sodexo and the partners, here’s the period where the terms of the partnership, we would, Sodexo would employ us to run their coffee shop.

Lucas Philips (06:13):

So we wouldn’t have any ownership.

Lucas Philips (06:15):

It might [crosstalk 00:06:16] just kind of entrepreneurial, but it wouldn’t have been entrepreneurial. And at that point, we knew that we wanted to do something that was really student run and owned by students too. And so we said no to that opportunity and that was a bummer because we didn’t know what to do at that point. And so we went searching for a bunch of different ways, solutions to our problem, which by the way was, it was really, it was too hard to get conveniently delicious coffee on campus.

Lucas Philips (06:46):

So either you have to walk off campus to Coffee Lab, which is a 20 minute walk, be late to class, you can get good coffee there, but there’s still kind of a line. Or you could wait really long line at Starbucks, but our friends and college students weren’t that into Starbucks at the time. And then the dining hall coffee is like, we don’t even need to talk about that.

Lucas Philips (07:06):

So we wanted a really short line, really quick cycle time, delicious well-branded coffee on campus. If we could, if we could do that, we thought we could win. And so, we go searching for all these different solutions to that problem. We were thinking of doing a coffee bus. We thought of doing a… what else? We were going to do a pop-up tent in front, like near the main library, right in front of Deering. And then finally we were at a family dinner at The Garage, which is the weekly meeting of all the residents and there’s this entrepreneur who comes in to talk to the residents about their experience. And Matt Matros, who was the founder of Protein Bar and was starting Limitless Coffee at the time. He just had an exit maybe six months ago, he sold Limitless to Keurig Dr. Pepper.

Lucas Philips (07:59):

And Matt was telling us about this coffee business he was starting. And we were like, “Oh my God”. So we asked Matt if we could go into one of the rooms at The Garage and we chatted with him for like 30 minutes afterwards, this is in the evening, like 7:30 at night. He’s so nice for lending us his time.

Lucas Philips (08:15):

And Matt was like, “You should check out this coffee bike, this cold brew bike.” And so, we were onto the cold brew trend at the time, but it was 2016, early 2016, cold brew still hadn’t really made its way to the Midwest. It was on the coast. And we thought that was a great way to start. It was low cost. So we could build one for very little money.

Lucas Philips (08:36):

We could get it permitted by the city of Evanston, which is a very tricky thing to do as well. The insurance costs were much lower than a food truck. And we could get it built in Chicago. And we, most importantly, we could put kegs of cold brew on tap, on the bike, and that would allow us to serve coffee really quickly to our peers. And we could park it in the most convenient locations on campus. And so we thought we could win with this bike model.

Lucas Philips (09:02):

We launched an Indiegogo campaign. We raised $10,000 on that. We participated in The Garage at Northwestern’s accelerator program my summer after my freshman year where we built the bike. Kind of did everything else that we needed to do and we launched it the fall of my sophomore year.

Mike Raab (09:20):

So now you’re in your sophomore year and you’re running a real business. That’s actually bringing in revenue.

Mike Raab (09:27):

I’m curious, what were some of the positive and negatives of running a business as a student? Did you feel like you were missing out on other things or other experiences, I guess where was Brewbike prioritized in your life at the moment?

Lucas Philips (09:42):

Well, at the time I, Brewbike was prioritized in my life because it kind of needed, it needed the most attention, or it needed a ton of attention then. And so it was fall of my freshman year, my business partner left the business. So I was, I was so low. We had accumulated a bunch of credit card debt because we didn’t understand that we would need to buy thousands of dollars of coffee and run payroll. We didn’t have an understanding of cash flow and working capital that we would need to really get the business started.

Lucas Philips (10:19):

And so we spend all the $20,000 that we raised on supplies and capital expenses that we needed to launch the business, like the actual bike permits, et cetera. And then we had to buy all this coffee on top and we wouldn’t, and we didn’t, we couldn’t pay for the coffee until we sold the coffee. And so the credit card kind of gave us that room. And so there was a ton of credit card debt for me as a 19 year old at the time. And from this place of fear, really, I was needing to make this work because if it didn’t work, I was on the hook. And that was really scary at the time. So the fall of my freshman year, my sophomore year, it was awesome that the business was alive.

Lucas Philips (11:01):

And I was waking up at like 6:00 AM every day to go get the bike a mile off campus, bike it to my fraternity house, where we were brewing the coffee in the commercial kitchen, in the basement, the windowless commercial kitchen.

Lucas Philips (11:14):

And I lug these really heavy five gallon kegs onto the bike. And then I, and then a barista would meet me and bike it to Tech, which was very close. And I’d pray that the bike would work until 2:30. Most of the time something would go wrong and I’d have to leave class and go fix it. And then I had to, at 2:30 or 3:00 in the afternoon would bike it back to the shed where we keep it. And on days when it rained, we weren’t able to operate. And then about a month and a half in it started snowing and we had to shut down the bike and we were ready to go out of business at that point. So it was really, really, really, really, really hard. It took precedent over, I mean, it was just prioritized over everything else.

Mike Raab (11:54):

Yeah. Were there times throughout your college experience with Brewbike where things were more difficult than usual, and maybe you considered playing it safe after college and pursuing some of the more common careers like consulting or banking or anything like that?

Lucas Philips (12:13):

Definitely.

Lucas Philips (12:15):

But throughout college, I knew that the more that I grew and built Brewbike, the better situated I would be to do whatever I want after school. And so I didn’t find myself ruminating or mulling that much over what I do after school, because I knew that if I spent the time and effort on building what I was working on in the present, I would just simply have more options later and I could figure it out later.

Mike Raab (12:44):

And so it’s obviously very rare for a college student to have built and scaled a business that they can then work on full-time after graduation, which is what you’ve done with Brewbike.

Mike Raab (12:55):

At what point did you actually realize that this was a possibility and that you made the decision to go full-time after school?

Mike Raab (13:02):

And I think I know the answer to this part because we’ve been talking around it, but did you have fear and anxiety around that decision?

Lucas Philips (13:10):

So I never thought that I wanted to do Brewbike after school until my junior year when I partnered up with Randy. And Randy is a, he was at the time, was a booth MBA, which is U Chicago’s business school. And Randy hit me up, over email randomly and was like, “Yo, I would love to meet about entering you and Brewbike, and working with you, in this accelerator program at Booth, which is called the New Venture Challenge.”

Lucas Philips (13:38):

So I was like, “Great, let’s meet.” And we met and he was like, “I want to do this.” And I was like, “Okay, sure.”

Mike Raab (13:48):

Really?

Lucas Philips (13:50):

There’s, the upside of doing this is very high. There’s a huge upside. And the downside is he doesn’t deliver and it doesn’t require much of my time at all. And so there’s like, this is a great bet to place on Randy.

Lucas Philips (14:03):

And so I, we, he, like a week later sent a 40 page business model, a business plan and I was very impressed because I had never done anything like this, like that is so business school. And I had never put together more than a one pager on the business. And so kept working with Randy. We got into the New Venture Challenge. We ended up, I ended up pitching at VentureCat this year with this plan that he and I, and an awesome team of Booth students that he recruited put together. And he finished his, so his team at Booth finished fourth in the competition. This is the best academic accelerator program in the nation. We won $45,000 there. That was in a SAFE note, so as an investment in the business, and then at Northwestern, we finished second and we won $20,000 at Northwestern VentureCat. The prizes are so much bigger now.

Lucas Philips (15:03):

And so I think it was at that point when there were a bunch of other investors in Chicago who wanted to help join our journey and help us build the business and grow it to more campuses. And Randy wanted to come on full-time. That was when…I was “hell yes” about growing Brewbike and continuing with it.

Mike Raab (15:27):

Yeah. And I want to get back to investors in a minute but just to rewind for a second, it strikes me as incredibly mature and a healthy perspective to have that when someone reaches out to you completely cold and basically says they want to become involved with your baby, your startup, your company, that you have been growing since freshman year, that you were so open to it. Because I feel as though a lot of people are very protective over their companies or their products and not as willing to share or be open to other people’s ideas. And just to emphasize how open you were at one point, you actually make Randy the CEO of the company. How, I mean, where does that kind of perspective or openness to collaboration come from with you?

Lucas Philips (16:19):

Well, it was at the end of the New Venture Challenge, when I’m still a junior. And so I have another year of school to wrap up.

Lucas Philips (16:31):

Randy had done such awesome work for the business, and you got to remember, Randy didn’t have a title. He’s just like a Booth student at the time. He’s not really a team member, but he really earned his role on the team throughout that process and through the validation that we received at these competitions and this plan that he really, we worked together on the plan, but Randy really drove that process. And so at the end of the New Venture Challenge and at VentureCat, that summer we were really figuring out Brewbike 2.0 and Randy was wrapping up business school. He was about done with it. I think he had one semester left that summer because he dropped a bunch of classes because of New Venture Challenge. Right? So there’s more evidence how [crosstalk 00:17:25] committed Randy is. And I have a whole other year of school left and I don’t want to be one of those people that drops out of school to pursue my business. I wanted to finish my college degree at Northwestern.

Lucas Philips (17:35):

And so it seemed best for the business that Randy be in charge because he was ready to go full-time on it. And he had really driven this growth model plan that, that we presented to investors. He had built relationships with investors. And so, and he also, he really wanted to be the leader. So again, right, similar to when I met Randy when I was like, I could not work with him or I could work with him, upsides really high, downside is capped. I was again like, okay, I could say no to Randy and maybe run this for a year or two myself and try to grow it alone.

Lucas Philips (18:17):

Or I could partner with Randy, hire him as CEO. And he, and I could do this together, we have access to all these investors then and it just seemed much better for the business.

Lucas Philips (18:29):

And it has been, it’s been great working with him.

Mike Raab (18:33):

Yeah. It sounds like it. How lucky you are that he reached out to you, for both of you. I mean, both of you are lucky. And so that first summer, kind of after graduation, when you joined full-time, what was that experience like of, you know, being a full-time entrepreneur and founder and trying to grow this business? Was it as glamorous as I think a lot of students think that experience is, or were you comparing yourself to friends who had different lifestyles and different types of jobs, what was kind of your emotional and mental state at that point?

Lucas Philips (19:08):

Well, I brought Randy on when I was a junior.

Lucas Philips (19:12):

And so the summer between my junior and my senior year, I was doing my practicum because I was a CES B student. And so I had an internship, a 10 week internship. During our 10 week internship, we’re converting the business into a C Corp. We are hiring Randy as a CEO. We are distributing stock, founders equity, we’re raising an $800,000 pre-seed round, and we’re figuring out where we’re going to grow to next. And so that was like a wild summer.

Lucas Philips (19:46):

My senior year, we expand to Cafe Bergson, which is our highest grossing cafe by far. It’s in the library at Northwestern. And so that was, that was my job my senior year.

Lucas Philips (20:02):

We ended up bringing a COO on from Kellogg, named Kelsey to help me, help me open that and really figure out how to run it. And then Kelsey came on, moved to Austin and has grown the business since then with us.

Lucas Philips (20:15):

And so it wasn’t for, and then, and then I graduated after all of that and moved to Chicago and we raised another $2 million, August, September, right after I graduated. So there was some time in between when I hired Randy and when I graduated.

Lucas Philips (20:37):

And I at that point, the business had been, it’s, we’re still an early stage startup, right?

Lucas Philips (20:45):

Survival is still a question mark at that point.

Lucas Philips (20:48):

But by the time I graduated, we had two schools lined up with Compass Group, to Texas State University and the University of Miami to grow to the year after I graduated. We had a term sheet for an investment in a business that was more than twice the size of the razor did a year earlier. And so my faith in us was at a high.

Mike Raab (21:13):

Yeah. I mean, that sounds like the ideal scenario, is you have all of these external signals of validation from customers and new locations and campuses and investors, and you already have a full-time CEO running the business for you. Like that sounds like a dream.

Mike Raab (21:30):

You mentioned raising a couple rounds of venture capital. I’m curious how, first that influx of capital kind of change the business and the day to day, but also if there were large expectations of scaling and growth, that also changed kind of the experience of running and working on Brewbike?

Lucas Philips (21:53):

A good question. So the pre-seed round, we haven’t worked with a truly institutional investor. So the five-year exit expectations have not yet been imposed on us.

Mike Raab (22:11):

Mm-hmm (affirmative).

Lucas Philips (22:12):

And they may be in the future, but we’re, it was a number of angel investors in Chicago, a family office. And so we’re not, it hasn’t been, the pressure hasn’t, I don’t know that that level of pressure, the pressure is still there, but I don’t know the tech that what you’re talking about.

Lucas Philips (22:29):

And I think what listeners understand as the venture route, it’s, it’s similar, but we’re not totally that.

Lucas Philips (22:36):

And then in terms of how it changed the business, we were able to pay off all the credit card debt, that’s the first thing we did. And we were able to grow and try new things. So before we, we weren’t, there was no room for mistakes and no room for as much testing of new ideas.

Mike Raab (23:03):

Right.

Lucas Philips (23:03):

And whereas we were really able to do that.

Mike Raab (23:07):

Yep.

Lucas Philips (23:08):

And figure out a lot more about the business and what our customers wanted with that infusion of capital.

Mike Raab (23:15):

Yeah.

Lucas Philips (23:16):

And we were able to afford salaries for a few full-time folks to help grow the business after school.

Mike Raab (23:22):

I’m curious, we’re wrapping up, just a few questions left for you. How much of your identity do you think is tied to Brewbike and its success or failure, and has that changed over time?

Lucas Philips (23:35):

It’s definitely changed over time. A lot less now than…I think the peak was probably my sophomore year.

Mike Raab (23:45):

Were you just known on campus as like the Brewbike guy?

Lucas Philips (23:48):

Yeah. Yeah. Brewcas.

Mike Raab (23:53):

That’s a good one.

Mike Raab (23:56):

In your opinion, obviously, you started this company and this concept as a freshmen five years ago, as you mentioned. What are the most important traits or skills that you’ve learned for an entrepreneur to have?

Lucas Philips (24:11):

So I’m trying to think if there’s anything new, but I don’t think there’s anything new. The one that I kind of always, that I always say that has helped me the most is to focus on doing less, but doing less but better.

Lucas Philips (24:27):

So saying no to so many things so that I have room to say yes to the opportunity, that’s really going to make a difference.

Lucas Philips (24:40):

I’m trying to think of what, I mean, one example is I said no to catering for the business to catering coffee throughout my entire college experience, because while it was a source of income for the business, it was incremental. And so, so small compared to figuring out how to sell pastries from the shop every day, which is five days a week, it just worked into our operations.

Lucas Philips (25:10):

And, and I think that maybe before I read this book, Essentialism and started trying to practice that, I would have said yes to both of those things.

Mike Raab (25:19):

Mm-hmm (affirmative).

Lucas Philips (25:19):

But if I said yes to both of those things, I would have made some progress on both when really the only one that matters is the pastries.

Lucas Philips (25:32):

And so if I say no to catering, then I am freed up to do, to go, to sell a lot more pastries and do it quicker and better. And so I’m doing less, but I’m doing it better.

Lucas Philips (25:46):

And I try to apply that in even more granular ways than the pastries, but also really, really, really broad ways. And so right now, something that we’re thinking about or something that I’m thinking about is Cafe Bergson and I mentioned before is our highest grossing cafe by far.

Lucas Philips (26:07):

It’s also our only brick and mortar cafe, this indoors, in a prime location. And our bikes do very little in revenue relative to our indoor shops. And so if we were to, for a year, let’s say coming out of COVID do no more bikes, just shops policy, what would that do for our business?

Lucas Philips (26:32):

And if I were able to free my time, designing, developing, working with a partner to construct, to ship, to launch and train bikes, how much more could I do for shops and what, and what would that do for the business? And so there is another less, but better consideration I’m making these days.

Mike Raab (26:55):

I’m curious. This is a very broad question. So I’ll give you some time to think about it, but I’m curious, obviously, everything you’ve done has been impressive. What motivates you?

Lucas Philips (27:09):

I think it’s changed. I think a big part of what motivated me when I was starting Brewbike was proving to myself and maybe to my family, that I could build something and on my own support myself and be independent. And I did it and that motivation is not there as much anymore.

Lucas Philips (27:45):

Now, once I graduated, I realized that I’ve gotten so much from Brewbike. And so many folks on our team have gotten so much from Brewbike. The students who helped grow the business at Northwestern in the first place and the ones who remain on the team now.

Lucas Philips (28:04):

So the motivation now is more, how can we provide that learning opportunity, this kind of experiential learning opportunity, that’s really unlike anything else that’s offered at school to more students on more campuses.

Lucas Philips (28:20):

And so there’s this mission side of the business, which is helping students learn about how to be an entrepreneur by starting and running Brewbikes on their campuses. And that’s what motivates me now.

Lucas Philips (28:36):

And it’s been really tough during COVID because we haven’t been able to do any of that and we’re really back in survival mode, although we’ve figured out how to survive quite well without campuses. Still, the motivation is to be back on campus, to be hiring more students on more campuses, and growing our team.

Mike Raab (28:57):

I love that so much because it’s so clear that your motivation changed from being on yourself, an external validation to, as you said, providing this experiential learning experience to others. And so it’s just so clear that like the focus isn’t on yourself for proving yourself to others, but now it’s to helping others, which I think is more sustainable and more positive in the long run. So kudos to you for figuring that out.

Mike Raab (29:27):

Last question. What would you tell a young Lucas starting college, who’s interested in an entrepreneurship?

Lucas Philips (29:35):

If there’s a young Lucas out there who wants to start a business in his or her lifetime, their lifetime, there’s no better time to do that I think then at school, because you could fail and be okay. You’ll just go back to your dorm room and go to class the next day. And yeah, maybe there’ll be some embarrassment or something that, that will pass. People will honestly respect you for doing this thing. And you’ll learn so much in the process. And so, and also in line with that, there’s no better way I think, to learn to be an entrepreneur by then than actually just doing the thing.

Lucas Philips (30:22):

It’s a very, it’s a very doing process. Not as much thinking, so yeah that’s my advice.

Mike Raab (30:34):

Couldn’t agree more. All right. Well, thanks Lucas for joining, really appreciate your time and insights.

Lucas Philips (30:40):

Thank you so much for having me.

Mike Raab (30:42):

Good luck to you and Brewbike.

Mike Raab (30:45):

If there’s one lesson I would take away from Lucas, it’s the advice he showed at the end of our conversation. There’s no better time to start a company than as a college student because even if you don’t succeed, everything will be okay. His conviction in this philosophy was evident by an earlier statement he made. That no matter how things turned out, he knew that working on and growing Brewbike as a student would afford him many more opportunities down the road than if he took a more traditional route.

Mike Raab (31:09):

So if you’ve always dreamed of starting your own company, what are you waiting for?

Mike Raab (31:15):

How I Got Here is a podcast from The Garage at Northwestern and is produced by Melissa Kaufman, Ben Williams and Elisabeth Wright. If you enjoyed this episode, please rate and review us on your favorite podcast platform.