Carolyn: Welcome back to another episode of Uniquely Small Biz by Selective Insurance, a podcast for small business owners to share their inspiring stories. I'm Carolyn McCardell and we are so excited to be bringing you another round of insightful conversations with small business owners who are as unique as their ventures.
Today, I'm speaking with the CEO of The Office Coffee Shop, Mike Keith. The Office Coffee Shop is a new take on your favorite cafe. Mike is here today to discuss how The Office Coffee Shop is changing the way we work by providing a space for people to work, hold meetings, print/scan, and more, as well as tasty coffee too.
They also offer IT, business development, and marketing assistance. So get ready, it's time for Uniquely Small Biz brought to you by Selective Insurance.
Carolyn: So, let's start out by asking the question that we like to ask everybody when we start out; Mike what makes The Office Coffee Shop unique? What makes you different?
Mike: What makes us different? So, there's not a lot of people that mix coffee, co-working, and community together all at the same time.
We're different in the sense that we're not just a co-working space, we’re also a full-blown coffee shop. So, which is unique in itself. And recently there actually has been some trends in the café/shared workspace that's become more popular. So, we're continuing to differentiate in some ways, in terms of like, our pay-it-forward approach to where that each transaction we have at the coffee shop, our guests get to choose one of three charities to donate a portion of their purchase towards. So, we started out at the beginning, like full-blown first time we did it. The first year we had four charities and we did it for a full year and then we started to find the value of the, the name, right.
Just saying the name multiple times and learning about other ones to where that other charities wanted to participate. And we thought it was a great way to just hit a bunch of people to where we give back maybe smaller portions because we break it up across the quarters, but we still get, you know, there's a lot of social marketing side of it, you know, is in terms of helping people be aware of different charities that are locally for pets and homeless or whatever it might be. Right. I mean, we've done, I mean, we do everything really.
Carolyn: I love the idea of giving back to charity for so many different reasons, for the obvious reason that you're helping, you know, the less fortunate or you're giving back to a charity just in general. But a lot of people don't realize it's good marketing for you too. I mean, it's sort of a win-win for both sides because the more charities, as you said, as you bring more charities into play, it gets the word out about, you know, The Office Coffee Shop too, to more organizations.
Mike: Yeah. And really, we've tried to make that a spot for them to run their businesses out of, right? So they're nonprofits typically. We have basically free memberships at some level. It's a pay as you go, right? So if you need an office space, you need a room - here at grab a room for two hours, right. We work with you, you know what I mean? They can do their quarterly summits, we've got a space for 20, they can get a mailbox, right, they can get a suite number. So it's a low cost entry to, you know, that type of support for those types of businesses.
Carolyn: So when I come into The Office Coffee Shop, it's a place - I look at it as hoteling with coffee sort of, right? Like sort of a Starbucks meets WeWork. So when I come in to The Office Coffee Shop, I can bring my laptop.
If I have work that I need to be done, I can sit there and do my work, but enjoy a delicious cup of coffee at the same time and not feel that pressure like you would do if you rolled into any old coffee shop that I need to get out of there, I'm taking up a table or a space.
Mike: A hundred percent. So, right, we are a space where somebody can come in and start their day for two to four hours. They come in, they grab coffee, they boot up, they might have a meeting or two, you know, and then they roll out by 11. So we're meant to be a spot where you can come in and hang with friends, jam on your laptop, read a book, you know, kind of just get away with some background music, with some good food and drink.
And, and then also areas to really grow entrepreneurs. So we sponsor different things for talks and do coaching and different things that we try to engage with different organizations across the community. Because we're very community focused, so we do a lot of those types of events and things of that nature just to bring in that level of, not innovation, but, that creativity. A shared workspace is relatively quiet, it's more traditional to a business setting, or even more so to a library or a coffee shop - kind of loud. So, and we kind of focused on some key components to that.
We focused on the sound and we focused on the different types of seating that you would want to engage. And then, so we do that with, we've got some areas that we have, you know, just sound masking, no music. We've got other areas where we've got high music, so we can go back and do, we've got like, if you go back, it was back in the day, we’ve got a friend working for Herman Miller, you know, and he showed me a bunch of different concepts of the different types of space design. So you've got your hive, you've got your different things. So we outlined different types of spaces so that it would cater to different types of collaboration, discussion, just kind of hanging out. So we've got a variety of things and each of our tables are four foot by 30 inches. So basically they were designed to have a plate, computer, and a notepad. So if you can sit comfortably and you can have those three things, then you've got a nice setting and you want to be able to do it with two people our table.
And ideally we would like to have bigger tables, but we have them set up too big for a coffee shop, you know, but they're too small for, you know, four people to be jamming at that same type of space.
Carolyn: How's your wifi?
Mike: Wifi is key. Wifi, that’s always, you know, we always get an increase in business a lot whenever wifi goes down in town, you know, certain pockets of town, right. People head to the spot, you know, if we've got power outages. We've been fortunate to be on some good infrastructure. So we've actually been able to avoid some of those, you know, we still had our hiccups.
Carolyn: Sure. You can never, in the days of wifi, you will never say we're a hundred percent up and running all the time.
You just can't. I don't think you legally can even say that. So do people rent by the hour? How do the packages - do you have group packages or package deals? How do you, how do you charge?
Mike: So we have a shared workspace platform called Cobot that they can sign up, we build memberships. So, we've got like a Road Warrior, which is a certain amount of hours in the office. We've got, you can buy a mailbox, ala carte. We've got more, basically custom is essentially what we do a lot of times. So you basically buy hourly space that you book in advance and you know, go about your business.
Carolyn: That's cool. I love this concept.
Mike: We have we've got conference rooms. We have private offices, so 2 - 4, 6 - 8, and then we have a space up to 20. Which we can do more for like, we do a lot of like quarterly strategy sessions, you know, because it's nice to get out of your business, and have some energy.
You have a coffee shop and typically you get more creative – I mean the studies show it right? If you go find the studies, it shows that if you get out of your space to go to a third space, if you want to call it, for those types of meetings, you are more open and more creative.
Carolyn: Yeah, it's a great off-site idea for like a sales team or a smaller group that can utilize a conference room.
The fact that you have a conference room in your coffee shop is amazing. And you have the, you have food there too. I mean, let's not forget that everything that they would need for that offsite or for that meeting is already there. You don't have to worry about bringing in food from the outside, coordinating certainly the coffee effort. Kind of an all-in-one, which is really neat. Where did the concept of this come from? What's the backstory on your company?
Mike: So I do consulting engineering services as like my career in one side. And, you know, I traveled a lot doing those, but I guess it really stemmed from two things, really. The idea came from some spaces at college that I would work out of. So I had a place called Video Hits Plus that I went to in Western Michigan. And as I was studying, I would go up and study there versus the library because it had a large screen TV, it had a coffee shop, it had like a couple arcade games and ping pong tables in the basement.
So I studied in that type of environment. No clue did I know that I was going to ever come up with The Office. You know, so that was just how I got through college. And then I went right into consulting engineering, so I traveled a lot. I spent a couple of years on the road. Shared workspace was starting to get more popular.
We had a consulting business, we ran 13 people out of an office, but we all would go to the job site every day. So then you got one person sitting there and as we were expanding to 2 to 12 offices, it became a lot of overhead to the business, you know? So that was a fixed cost. And as a consulting engineer, realistically, you'd prefer that to be a variable cost because jobs come, jobs go situations come alive, and based on how, well you know, there's a point, there's a tipping point, but truly you can morph most of these into whatever size you want in terms of shared space, you know?
Carolyn: And two words that I'd like to never hear again in my lifetime, are continental breakfast. When you're talking about the Marriott days, when you've got a kickoff meeting and they bring in the juice and the old bagels, the worst.
So when you're A/Bing it, let's rent a ballroom in a hotel with that cold feeling, no offense to the hotels, but, and then this continental breakfast, or we could take it off-site to this more intimate place with great coffee, great food, and just something different. What are you going to choose? Yeah, I love that.
Mike: That's where we strive to hit that mark. For sure.
Carolyn: Yeah. And when you hear about more and more of these popping up, do you feel like you're ahead of the curve with this? Do you feel like you played a role in the innovation of this? How do you feel you fit into the world of sort of…
Mike: You know, I've never really thought about it that way. So I followed the industry a lot, like there's a new brand called Vel. They're doing crowd funding right now. Their first location I think, is going to be in Savannah, Georgia. And they are a shared space, food court, type of environment. And so they're working on getting funding. And have been able to secure it, which is awesome because the reality is, there's a market for it, right?
It's your local pub to some degree. I mean, and they need a lot of them and you need different types and you need all kinds. So more the merrier kind of, I think in a lot of ways, because you just want to be able to provide and people will gravitate to the energy and the brand or of their choice, you know?
Carolyn: How many locations do you guys have?
Mike: We just have one.
Carolyn: You have one. I want to know about your marketing. So you've got one location. Obviously, you want to grow. I want to know how you market a one-location business. Do you strictly stick to social media? Do you buy Facebook ads that target demos? Like what is your strategy for marketing?
Mike: You know, a lot of it is - social media, to us, is really just like, kind of the necessary game. Right? That's really not to me a market. I mean, it is marketing a hundred percent and it's required. You can't get away without doing that. And then secondly, really it's word of mouth.
Word of mouth has really been a big focus working through the businesses and, the chambers, right? The local chambers is a big area that we focus on. The downtown development authorities. But, outside of the Google ads and some things, you know, we've tried our fair share of those. But a lot of it's based on just the local chambers and things of that nature.
Carolyn: Yeah, isn't it funny too, how important word of mouth is for a business like yours, that's a one-location business? It's obviously local to a specific area. It makes or breaks you. How good you are, how great your staff is, the image that you portray to the customers that come in the potential clients.
Like you have to be on point all the time, because word of mouth, you know how it goes? Yeah. I mean,
Mike: You don't let anybody leave unhappy. There's no doubt about it. You cant, you can’t. You can't give away the farm, you know what I mean? And that's what took us for our first couple of years is we've had the mentality.
The focus is not making money, right? The focus is being productive for the space for the people, and providing that service to the, to the service. And then the charity aspect of it. The goal was never to make a lot of money. Not saying that we don't want to make money, you know what I mean? The goal has been to ride the sales side, the revenue side.
And then figure out the cost. Because we don't live in the business that you can be like, well, I'm sorry, you only get two forks, you know? And not that people are, but if you make a mistake, you just gotta fix things. And those cost money, you know what I mean? And when you're small and you don't have that buying power, you just live on smaller margins.
Carolyn: You got to get the people in the door first, before you can worry about those things. I mean, you got to get the people in your shop.
Mike: You do, you do. And so that's with the reputation. So we do focus a lot on Yelp. We focus a lot on our Google profile, of making sure that we address all feedback, all comments, all questions. And that is a huge part of that feedback loop of social media. And again, I think that that's just required as a restaurant.
Carolyn: Yeah. Yeah. Do you guys have a demographic that you go after, particularly - male, female, 25 years old, 45 years old? Like, what is your demo?
Mike: You know, it's 20 to 45 probably is our demographic.
Carolyn: You know, you guys have created sort of this interesting ripple effect, if you will in that you're supporting local small businesses, not only internally with the services you offer, but also externally through outsourcing for the shop itself, like your coffee supplier, the bakery that you use for the pastries, the donut shops. So was this intentional from the start or did your plan sort of evolve as you got going to include these other businesses? How did that all come to be?
Mike: It really started from the beginning. I mean, we initially started out with the Water Street Coffee, which is our roaster, which is where my wife and I went to college. It was kind of that local coffee shop there and they had a brand, so that's on the west side of the state. And so we were on the east side of the state of Michigan. And so we knew we could also get some of that brand recognition from them. You know what I mean? So we brought Water Street to the east, to the side of the state. So now any Western peron, oh my God, there's Water Street? I'm going down. You know what I mean?
So it's - we were trying to utilize other brands to, you know, help that stamp of approval, I guess? You know what I mean? Like that we're working with those players. And then we've continued to do that with our New York bagels, which is a huge hit.
Carolyn: If you could have anything you want, like, what is your absolute dream and where you wish this concept or this company could go, if you could have anything in the world, what would it be?
Mike: Oh, you know, I mean, I'd love to see it in as many places as possible, you know? I mean, I think it's amazing for the community and in terms of, and I'm not saying that we're that good, I just think the services provided are critical. Right? And so that for somebody to be able to go out and be productive, right.
If that's go to school, if it's work, if it's anything and if it's in a welcoming environment and that there's other people and you get in solid energy, it's a great way to stay focused and move forward. We've looked at ways that if we could, you know, work with the libraries, right.
So I initially had a growth plan to go through libraries, in terms of like, Hey, let's work together, right. You guys could use, you know, at the time. And I still think that there's a lot of opportunity within library, like, growth, in terms of the experience, you know? And if you put us in a corner of that and you allow it to be that local business, now you’re starting to help found, you know, build that foundation within a community. The thing that we bring to the table that is really weird and it's energy, right?
It really is of a sense of energy that people were coming through the door and somebody's working, whatever it might be. Right. It's just an energy that you get out of it, like a coffee shop.
Carolyn: I feel well, and I, yeah, true. I love the idea of this and I feel like you you've pretty much got the blueprint.
Right? You've got a model that you could take and do it in so many different ways, in so many different places. And how exciting is that to have like such a solid foundation and a solid idea? I just can't wait to see where you guys go with this.
Mike: with. It is pretty powerful, pretty amazing. You know what I mean? And I've actually really don't look at it that way, oddly enough. You know what I mean? Which is probably just because -
Carolyn: You’re too close to it.
Mike: Exactly, that is the reality and there's things I would do for version two. You know what I mean? There's differences that I know I would want to bring to the table for version two, and it's just trying to get there right. And we haven't shopped it, I guess, as much in terms of like, you know, looking to go find that Vel or that next, you know, tried to go down that path. You know, we've been focusing a lot on our feedback loop just in terms of scale, right? Of making sure that we can, we have a really good process for ordering.
Right. And so that, that it could actually go, cause we've used spreadsheets for years. Right. And it's like, all right, we got it. If we want to grow, we have to build systems in place. And really operate them so that we can understand where the money's coming in and where it's going out and, you know, and we're still at that growth so that I do have a great footprint model of a lot of that, but it's like, it's fine tuning that so that we truly would be able to go with more confidence and not that, you know, lack, we lack confidence. But, I think that that's one of the big steps as we move forward, you know, to go to scale.
Carolyn: I think that's such a smart business owner move too, though. I mean, you see that there are a couple of tweaks that need to be made before you really roll this out and really go for it. And I think another challenge that you have is you're still trying to get your foot under you.
You're still, you know, building this. And so it's like, you're smart to wait and not roll it out too soon. Or try to ask for more too soon, because then you might not be fully ready. So I think you're probably doing the right thing, but it is exciting to think about isn't it. How far can we take this?
Mike: That would, I mean, that’d blow my mind. You know what I mean? It would be. And we, you know, we get a lot of compliments, you know what I mean? And I remember like the first time I was getting phone calls from some people in Dallas and they were like, talking to me about, you know, are you franchising it or are you trying to, you know, like, how are you trying to go about doing this. And you're just like, all right. Um, I have no idea, you know what I mean?
Carolyn: You're like, I’m trying to figure it out too!
Mike: We're 12 months in, we're 16 months in, we're just kind of working through this man.
Carolyn: Yeah. That is really funny. Well, I'm excited for you guys. I see good things ahead. It's Mike Keith, CEO of The Office Coffee Shop. Thank you for being with us today. I'm very, very happy for you.
Mike: Thank you so much. It's been a great time.
Carolyn: Joining us now to speak about some of the considerations for building an innovative small business and how innovation can work for an entrepreneur at a smaller scale is the Assistant Vice President of Innovation and Strategy, Amy Cusak.
So, Amy, let's start with this. I want to talk to you about the strategy of signal scanning and how Mike might've used it without even realizing it with The Office Coffee Shop. Can you talk to me about that a little bit?
Amy: Yeah, sure. So we define signal scanning as looking at the environment outside of our four walls. So we may look at anything from trends in technology, distribution, our competitors, the economy, even talent, anything that could really impact our business. And we use the signals to inform basically two things.
Number one is our overall corporate strategy. And then second, the concepts we want to pursue for innovation. Mike mentioned he's always looking at trends, for example, with his competition. What he learns he uses that to differentiate. I think his pay it forward approach was a great example of that. That's exactly the right approach. You want to take to finding new ways to evolve your business.
Carolyn: And you know, as an innovation professional at a Fortune 500 company, what advice, I mean, you're totally the right person to talk to and ask this question of - what advice do you have for somebody that has like an innovative idea, but they aren't sure what the next steps are. Like, how can they protect that idea when they bring it to the market? Cause that's a scary thing.
Amy: Yeah. Yeah, absolutely. So the first question that you really want to ask yourself is, do we have a right to win? And what I mean by that is ask yourself if you're good enough at a specific element of your business, that your innovation or you believe your innovation has an above average chance of being successful.
So, for example, we're an insurance company. We have a ton of knowledge and expertise around risk mitigation and safety, for example. So leveraging that knowledge and expertise to bring new products and services to the market is a really good place for us to explore. Once you've identified that you have a right to win and you have an innovative concept, then at the highest level, you want to ensure that your customers or your perspective customers will adopt it. And even more importantly, that you have the ability to bring the concept to life quickly and efficiently.
Carolyn: Yeah, I think checking yourself sort of, as you just mentioned, and being honest with yourself before you go getting everybody else involved in all these other people, check yourself and say, is this a legit concept?
Do I see this succeeding? And I'm sure every business owner, at some point, you know, when they first started there, they think this is going to be amazing. This is going to make me millions of dollars, but you really do have to like be true to yourself. Don't you?
Amy: Yeah, absolutely. You know, I get the question a lot about how much is it market research and how much of is it intuition? And so we always say, we like to play in the space where there's more unknowns than knowns. And solving for those unknowns is the basis of innovation. And it needs a little bit of intuition to get off the ground. Intuition is not just a hunch or a gut feeling. It's typically based on experiences and experiences provide very valuable insights. But once that concepts evolved into something actionable, it's essential to also gain the insights from your target customers. The other thing I'll say about market research, it's you can't just ask the customer what they want.
I always tell this story about when I was in business school in the early 2000s and I had to buy the - I was required to buy this $120 financial calculator that I would only use for one class. Now that now, today, that same calculator is available on my iPhone simply by turning my forward sideways on the calculator app.
So if you had asked me 20 years ago, what do I want? When I was in business school, I never would have said put the calculator for free on my telephone. That would have made no sense to anybody. A better question to ask would have been, what can I solve for you? And I would have said find a way to give me access to the calculator that I will only need for three months for less than $120. And that would have been the birth of a concept.
Carolyn: Yeah, isn't that - that's such a great example. We all remember, even in math class, in high school, when you had to buy the protractor and you had to buy the calculator and your parents were like, are you kidding me for one class?
So yeah, to think that however many years later, this will be free on a calculator by turning on a phone by turning it sideways is, is crazy. But you know, that's, that's the world we're in. Everything moves so, so fast paced. So when an innovative idea becomes a reality, what advice would you give to a small business owner when it comes to making nuanced decisions like creating atmosphere and customer culture and things of that nature?
Amy: Sure. Yeah. So I would say start by identifying what you're solving for. I mean, we're always clear and saying around here, we want to hear people's concepts, not their fully baked ideas, and we can build on it from there. One of our favorite exercises to do is to create a fake customer persona. And then invent a personality for that customer using empathy mapping.
So we'll ask what is this customer thinking or doing or saying, or feeling, and it truly paints the picture of the customer you're trying to serve. And it really makes it easier for you to envision what they might want or need.
Carolyn: It's like intuition versus reality in a way. Right? Like you've done the research, but you also have a hunch and it's the kind of combined notion of both maybe.
Amy: Yeah. It helps to have a customer, a person in mind, a picture of a person in mind and who you're actually trying to serve as opposed to some sort of technical business process that you're trying to embed something.
Carolyn: Yeah. Well, how then, if you are a business owner and you're a new business owner, how do you figure out the difference? Like, how do you know who that target customer is before you even open your doors? I mean, a little bit of that has to be intuition don't you think?
Amy: Yeah, I agree. A little bit of it does have to be intuition. You know, who you serve, and we, I spoke earlier about the right to win, you know, where you have your expertise and you're comfortable in that market.
When it comes to innovation, though, you have to be able to get a little bit uncomfortable and understand that there's markets outside of your, outside of what you're currently doing, outside of your core competencies, maybe an adjacent space, and try to understand how maybe something that you do can benefit someone somewhere else. I love Mike's example. He, if you think about it, he called himself a blend of WeWork and Starbucks. Right? However, his idea did not come from either the coffee or the office space industry. It came from two other places. If you remember, it came from his college experience and his experience as a traveling consultant.
So he was a customer of those industries. And he said, how can I serve them, doing something completely different by opening up a coffee shop that has workspaces in it? So that is a very powerful takeaway from, from his interview is that you can look outside of what you're doing to things that others are doing, and you can find inspiration for yourself.
Carolyn: Isn't that so neat too. It didn't involve sifting through books or, you know, being a genius, like he just paid attention to what was going on and where there was a lane for something that didn't exist and thought I'm going to have rolled the dice on this and now look it up. He's doing great.
Amy: Of course. Look, I always, I always say this to everyone. Remember, every one of a small businesses’ customers is also a customer of other goods and services. They have so many personal experiences that you can learn from and implement into your own design solutions. Ultimately, you just want to identify what type of experience you can offer them that will exceed their expectations, and then finally make yourself indispensable to them.
Carolyn: It's so neat to see those people succeed when they take those risks like Mike did and things are working out so well, because it really is a roll of the dice sometimes, but it's working out great for him. So from your perspective, is innovation more about evolution or revolution?
Amy: Great question. Absolutely has to be both. Mike gave gave two great examples of this. He talked about his version two. He said, in order for him to scale, if he wants to grow, he needs to put systems in place and operate them really well. And that's absolutely critical innovator your core, but then he also talked about pursuing innovative strategic partnerships with libraries, which is innovation into an adjacent market and where the revolution side of growth. So the best innovators, they're not stifled by or satisfied with their own successes. They're constantly looking for ways to improve their core, but also generate new ways to be successful.
Carolyn: I mean, do you think there is a difference when it comes to coming up with a new idea? It's just sort of expanding on something that's already out there or coming up with a brand new idea on your own. Is there even an answer to that? Or could it be both? It could be either both or is there a right or wrong?
Amy: I think it depends on the amount of risk you want to take as a business and the amount you're willing to invest into it. The core innovation and getting better every day is critical. That's the key to survival. Now, the key to growth though, is looking outside and trying to find those new ways. And again, remember it's solving for unknowns. It's not so easy. It's not as simple as sitting around, you know, dreaming up the future. It's really finding those unknowns, finding those customers that you haven't reached yet with, with a core competency that you have to offer them maybe in a way that's different than they’ve consumed that competency before. That's the key to really, really growing through innovation.
Carolyn: I would consider you an innovation expert, fair to say, and if I'm a new business and I'm just getting started and obviously budget is hugely important. Let's say I don't have the funds to hire a “you,” like what does a new business owner do in a more budget-friendly sort of arena?
Amy: So our company is 96 years old. But my department's only three. We're just the toddler of the organization. However, not having a dedicated innovation function didn't stop us from innovating over the past century. So a few things I would suggest; building a simple but methodical approach to innovation that everyone's accountable for contributing to. For small business, it doesn't need to be someone's full-time job, but having that deliberate discipline focused on innovation and improvement initiatives can really go a long way.
Carolyn: That's awesome. Awesome. Final question for you. And I've been wanting to ask this one that. An established small business, a business that's already up and running. Can they utilize innovation to grow or even change their business?
Amy: Yeah, of course. I think you have to take all of the things collectively that we talked about today. So signal scanning, what's going on in the market. What's going on with my competitors, my customers, technology, are there things in technology that I can implement quickly and efficiently that might help me grow and scale? You got to look at how I can design new things to meet customer needs. Maybe borrowing from adjacent industries being methodical, disciplined about it. Holding everyone accountable, not putting any idea off the table with an open mind and an, and open eyes just like Mike had when he was in college and traveling as a consultant and, and really thinking about new ways to apply what he learned. Absolutely innovation can be used for a small business, even an established one.
Carolyn: Very good. Amy, thank you for being here today.
Amy: Thanks for having me.
Carolyn: And that's all the time we have today. I want to say thank you so much to Mike Keith and Selective’s Amy Cusak for joining us today. And thank you, the listener for pressing play on this episode of Uniquely Small Biz. I’m Carolyn McCardell and this has been Uniquely Small Biz from Selective Insurance.