The NEW Entrepreneurs
Wednesday, March 15, 2006
It all started because Nick Cho's wife, Suzy, wanted a really good cup of coffee.
"We used to have these fights every Sunday because she wanted to stop at Starbucks on the way to church," he says. In self-defense, he set out to prevent marital discord by learning how to make coffee. Great coffee.
Five years later, Cho has established himself in his home town as the founder and chief executive of Murky Coffee. The four-year-old company has cafes on Capitol Hill and in Arlington that grossed more than $1 million last year. Dozens of specialty food companies have been launched here in recent years, offering coffee to curry. If they follow national trends, eight out of 10 of them will be out of business in five years, according to George Solomon, director of the George Washington University Center for Entrepreneurial Excellence. But the lure of the food business endures.
Cho, 32, is one of the Washington area's new young food entrepreneurs. A tireless promoter, he hosts a popular coffee podcast and is known as a champion of "specialty roast coffee" -- the industry term for high-quality beans grown on small estates, roasted in small lots and brewed with care. Cho will help anyone -- including potential competitors -- interested in roasting, brewing or selling, in his words, coffee "that's better than customers ever imagined it could be."
Cho says he is not content to do business as usual. For him, the thrill lies in building something that combines his appreciation for "all coffee has to offer" with his conviction that how you treat people -- employees, customers, suppliers, competitors and the farmers who grow coffee beans -- "really, really matters."
And he has company. "People my age don't want to make money by selling unhealthy products that pollute the soil, the air and the social environment," says Adam Borden, 30, founder of Bradmer Foods. He believes his Baltimore-based firm is the first in the nation to specialize in venture capital for food startups. The business school graduate has raised several million dollars to help such businesses get off the ground.
"Our generation has a special connection to food," Borden says. "We'll scrimp in other areas to eat food that is interesting, beautiful and healthy." Many of these same young people, Bordon believes, "are disillusioned with traditional professional careers." The markets entered by these fledgling entrepreneurs tend to require relatively little capital -- think mortgaging a house or borrowing from family -- and are clustered in fast-growing niche areas.
The trend, which Borden says began on the West Coast, is exemplified by the seven new food companies profiled here. Selected for their good-tasting products, these businesses are as varied as their founders' backgrounds.
Shimba Hills Coffee
Six years ago, waiting for a traffic light to change, Andrew Agak, then 26, decided to quit his job in accounting and go out on his own. "It took 22 seconds for me to make up my mind," says Agak, who was born in Kenya, where some of the world's best coffee is grown. Soon he was importing coffee beans from East Africa and selling them to specialty roasters in the mid-Atlantic region.
Next week, Agak and partners Lillian Karuri-Magero, 33, a childhood friend from Kenya with a long résumé as a marketing consultant, and Shalin Carter, 32, a barista and customer service specialist, are expected to launch Shimba Hills Coffee on the ground floor of Verizon (formerly MCI) Center. The cafe, named for one of Kenya's national reserves, will feature fine coffees and teas from East Africa and elsewhere, pastries and other nonalcoholic beverages, plus wine and beer. The management of the sports complex has named Shimba Hills its "official" coffee, and the first of four planned Shimba Hills concession stands inside the center will also open at the same time.
The stakes are high for the Shimba Hills owners. "We're mortgaged up to our knickers," says Karuri-Magero, noting that construction and other costs escalated to $500,000 -- twice what was estimated. To compete with other coffee bars in the area, they say, they are relying on quality and service. While some chains are moving toward fully automated machines to make lattes, cappuccinos and other drinks, Shimba Hills baristas will prepare espresso drinks in the traditional way.
Though Shimba Hills could be seen as a potential competitor, Cho of Murky Coffee has helped Agak and his partners perfect their espresso blends and served as their coffee adviser. "There's plenty of room for everyone," says Cho.