How-This-Man-Built-a-Massive-Business-in-a-Frontier-Market--Interview-with-Steve-Aronson-Founder-of-Cafe-Britt
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00:00:31.960 | Welcome to Radical Personal Finance,
00:00:33.120 | a show dedicated to providing you with the knowledge,
00:00:34.760 | skills, insight, and encouragement you need
00:00:36.800 | to live a rich and meaningful life now
00:00:39.100 | while building a plan for financial freedom
00:00:40.700 | in 10 years or less.
00:00:42.340 | My name is Josh Rasheeds, I am your host,
00:00:43.800 | and I am here today with my friend Steve Aronson.
00:00:47.900 | Steve, welcome to Radical Personal Finance.
00:00:49.500 | I'm so glad you're here.
00:00:50.780 | - Well, thank you very much for having me.
00:00:53.640 | - We are here in San Jose, Costa Rica,
00:00:56.780 | and the reason I point out where we are
00:00:59.780 | is because I'm very excited to bring your story
00:01:02.580 | to my audience, because if anyone has visited Costa Rica,
00:01:06.960 | if anyone has passed either in or out of the airport
00:01:09.500 | or practically anywhere in this country
00:01:11.060 | or many other Latin American countries,
00:01:14.600 | they have seen the brand Cafe Brit.
00:01:17.160 | Coffee, gift shops, cafes,
00:01:20.140 | and you've expanded far beyond that,
00:01:22.140 | and that is your business baby.
00:01:25.740 | You are the founder of Cafe Brit,
00:01:27.700 | and so I'm so glad to be able to bring
00:01:29.820 | a little bit of your story to Radical Personal Finance.
00:01:32.580 | Thank you for being here.
00:01:34.340 | - Well, thanks for the introduction.
00:01:38.420 | - So I would like to go back a good number of decades.
00:01:42.540 | You, as I understand it, are not originally from Costa Rica.
00:01:46.140 | You weren't born and raised here, is that right?
00:01:47.980 | - Nope.
00:01:48.820 | - Where did you grow up?
00:01:50.340 | - I grew up in New York City in the Bronx,
00:01:52.140 | and then a little bit later, high school,
00:01:55.460 | I lived in Connecticut.
00:01:57.580 | As most people sort of, when parents make some money,
00:02:01.580 | they want to go to the suburbs.
00:02:02.860 | - Right.
00:02:03.820 | - And then I wanted to get out of the East Coast,
00:02:08.140 | so I went to school in the University of Michigan.
00:02:10.420 | - Okay.
00:02:11.260 | - And became an economist
00:02:15.540 | and always dreamed of traveling.
00:02:18.420 | So I figured that I better learn something
00:02:23.460 | that would allow me to travel to warm countries.
00:02:26.700 | And so I did an apprenticeship
00:02:30.620 | as a coffee taster in New York City.
00:02:33.340 | And that's sort of how I ended up.
00:02:37.780 | To make a long story short,
00:02:39.380 | that's how I ended up in Costa Rica,
00:02:41.260 | because at that time, Costa Rica was sort of considered
00:02:46.180 | to be, and I guess it still is considered to some extent
00:02:49.420 | to be the Bordeaux of coffee-growing countries.
00:02:53.500 | At that time in my travels,
00:03:01.020 | what I became was sort of a quality controller
00:03:06.300 | of coffee exports, and then ultimately a buyer
00:03:11.260 | for a big trading company.
00:03:17.540 | But at that time, and I'm talking about the '70s,
00:03:20.220 | what we really did was what we were buying
00:03:24.940 | were ingredients,
00:03:29.500 | because you have to sort of put yourself back
00:03:34.500 | past and before the era of Starbucks and coffee shops
00:03:39.660 | and all that sort of stuff,
00:03:40.820 | and think that at that time what people thought
00:03:43.540 | of as coffee were cans.
00:03:45.860 | Cans that were, cans were maybe instant coffee jars,
00:03:50.820 | but they were cans that had a brand,
00:03:54.940 | and that's what you knew.
00:03:57.200 | You didn't know that coffee came
00:03:58.900 | from any particular country or anything.
00:04:00.700 | You just thought of it as being something
00:04:03.300 | that you put milk and sugar in and you...
00:04:07.620 | And also the other interesting part about it then
00:04:12.860 | was that marketing for coffee
00:04:17.860 | at that time was basically being a loss leader.
00:04:23.000 | So what that meant is that you knew that the housewife,
00:04:29.340 | who was the only person who went to the supermarket,
00:04:32.740 | would have to buy coffee.
00:04:34.460 | So coffee companies compete by having a lower price
00:04:39.460 | so that they would go to that supermarket
00:04:42.700 | to buy everything else,
00:04:44.220 | because they bought, because the coffee was cheaper,
00:04:46.300 | because that's something that was like the staple
00:04:48.300 | that they had to buy.
00:04:49.500 | So our job as coffee traders and suppliers of ingredients
00:04:54.500 | were, and as a coffee trader is also like a,
00:05:02.180 | as a taster, but also a blender,
00:05:07.060 | our job was to figure out how to allow
00:05:13.060 | the brand to have the taste that people wanted
00:05:18.060 | in the cheapest possible way.
00:05:20.300 | And what that means really is understanding
00:05:24.540 | the crop cycles of different countries.
00:05:27.260 | And, you know, coffee is a one-year crop,
00:05:30.380 | but it's harvested at different times in different places.
00:05:33.900 | And also you wanted to know about
00:05:37.620 | sort of relative pricing of places.
00:05:40.580 | So that was sort of the skill that I acquired.
00:05:43.300 | And Costa Rica was a really great place for that because,
00:05:49.980 | and that's why I say it was considered to be the Bordeaux,
00:05:53.220 | is Costa Rica was the place which had,
00:05:58.220 | for some reason, had the characteristic
00:06:01.020 | of producing a coffee that smelled as good as it tasted,
00:06:06.020 | or tasted as good as it smelled,
00:06:09.460 | which if you stop and think about it
00:06:12.300 | is actually pretty rare.
00:06:14.300 | You actually think that, "Oh, it really smells good."
00:06:16.780 | And you taste the coffee, say,
00:06:17.700 | "Hey, I better put some milk and sugar in it, right?"
00:06:19.620 | - Cover it up.
00:06:20.540 | - Yeah, so Costa Rica was a pretty cool place like that.
00:06:24.340 | And so people would, you know, coffee roasters
00:06:31.020 | would buy Costa Rican coffee in order to sort of
00:06:35.580 | upgrade their blends or to get that smell.
00:06:38.380 | We always thought one of the funnier ones was the whoosh.
00:06:42.300 | You know the whoosh when you open up the coffee can?
00:06:44.220 | - Yeah, it would pop out.
00:06:45.060 | - That smells Costa Rica, you see?
00:06:48.020 | - Right.
00:06:48.860 | - You know, who cares what else you put?
00:06:50.020 | Ah, wow, that really smells good.
00:06:52.260 | So that's sort of what brought me here and what got me,
00:06:57.260 | and I became a coffee exporter and a miller
00:07:01.660 | and doing things that,
00:07:05.220 | and ended up supplying coffee to people,
00:07:07.860 | green coffee to people all over the world.
00:07:10.460 | - But a question.
00:07:11.620 | So you were in your early 20s, it sounds like.
00:07:14.380 | You had gone to college, studied economics,
00:07:16.360 | and then you'd gotten a job working as a taster
00:07:20.060 | for a coffee company.
00:07:21.680 | So were they sending you to Costa Rica to be a buyer?
00:07:25.060 | - No, I sent myself.
00:07:26.060 | - Okay, so there was an entrepreneurial aspect
00:07:28.420 | to the kind of--
00:07:29.260 | - Oh yeah, no, I just went, I printed a business card.
00:07:32.020 | - You printed a business card, you got on an airplane,
00:07:33.820 | flew from New York to San Jose.
00:07:35.780 | - Actually, I flew from New York to Mexico and met my wife,
00:07:40.060 | met a lady who became my wife,
00:07:41.580 | and we just started to travel together.
00:07:43.700 | And we ended up saying, "Here, this is where we wanna be."
00:07:47.980 | - How did you meet her?
00:07:49.140 | - She was sitting on the grass in Mexico
00:07:52.920 | talking to a nice-looking lady,
00:07:54.420 | and I actually wanted to talk to that lady.
00:07:56.860 | And she sort of bawled me out,
00:07:59.260 | and I was sort of attracted to that, to her personality.
00:08:02.800 | (laughing)
00:08:04.200 | And yeah, it was pretty, it was random.
00:08:08.080 | - Okay. - It was random, I mean.
00:08:09.880 | - So did you have savings?
00:08:13.920 | Were you a penniless hitchhiker,
00:08:16.840 | or did you have some savings from your jobs?
00:08:19.000 | - No, no, I was pretty, I had about $1,000.
00:08:20.920 | - Okay. - Yeah.
00:08:22.120 | - Okay, so this is the 1970s.
00:08:24.120 | You had $1,000 or so saved. - 1973, exactly, yeah.
00:08:26.760 | - And you go to Costa Rica, you print up some--
00:08:28.960 | - Well, I go to Mexico. - To Mexico,
00:08:30.800 | and then you meet your wife,
00:08:32.520 | and you-- - And I had a business card,
00:08:34.120 | and so the first job I got was as a consultant
00:08:37.600 | to the Mexican Coffee Institute.
00:08:39.160 | - Okay. - You know,
00:08:40.000 | 'cause I had a business card from New York, right?
00:08:42.080 | So that was-- - Right.
00:08:43.000 | - Coffee taster. - Big shot, right?
00:08:44.560 | - Yeah, and I had a New York address,
00:08:47.080 | so they thought that was cool.
00:08:49.200 | And yeah, so I worked for the Mexican Coffee Institute
00:08:53.400 | for a while, and then since I had already been an apprentice,
00:09:01.080 | you know, I mean, I had already worked in New York
00:09:04.160 | as a coffee taster, and I'd worked on the exchange,
00:09:07.720 | but as an apprentice, I mean, I was working,
00:09:10.320 | I was making $800 a month or something.
00:09:15.200 | I think the highest salary I had was $1,000 a month.
00:09:19.620 | And it was, you know, because I was like the low man
00:09:22.280 | on the totem pole, I was a young guy, you know,
00:09:24.560 | I'd take samples to different coffee trading companies.
00:09:28.480 | At that time, the center of the coffee trade
00:09:31.880 | was in lower Manhattan, where the South Seaport is,
00:09:36.880 | Seaport Mall is right now, that was sort of the center
00:09:40.760 | of the coffee trading world, actually.
00:09:44.160 | So yeah, when I, so after, since I knew companies
00:09:49.160 | and they knew, you know, they knew that I was a cheap guy,
00:09:54.440 | a cheap guy that nobody was doing, I ended up getting hired
00:09:58.600 | by one of them to be their sort of outside man
00:10:05.720 | to check on shipments and ultimately become a buyer.
00:10:10.200 | And I did that, and I sort of moved up the totem pole
00:10:13.320 | in the company until they wanted to give me
00:10:16.760 | a real serious promotion and let me go and live in New York
00:10:22.440 | and work on the 25th floor of a building
00:10:24.520 | and take the subway and live like a normal person.
00:10:28.520 | And I said, "Nah, I think I'll stay here,"
00:10:32.080 | which is where you are right now.
00:10:35.000 | - Right.
00:10:35.840 | - And I told the fellow who offered me the job,
00:10:40.400 | I said, "Well, you know, can you give me this lifestyle?"
00:10:43.280 | And he said, "No, but you'll live like I do, you know,
00:10:47.920 | "you have two vacations," and all sorts
00:10:50.640 | of cool stuff like that.
00:10:51.720 | So, and make a lot of money.
00:10:53.200 | - Right.
00:10:54.040 | - So, yeah, so then I started my own business
00:10:58.680 | with two other partners, and it was,
00:11:01.160 | and the business at that time, because of the situation,
00:11:06.160 | the way the industry worked at that time,
00:11:11.580 | the way for somebody who's starting a business
00:11:16.800 | was to do something different.
00:11:19.000 | And there were a lot of people doing things different then,
00:11:24.000 | when there were guys that started,
00:11:26.160 | the guy who started Pete's in Berkeley,
00:11:30.760 | or actually in Emeryville, but it was one store
00:11:34.680 | and a couple of hippies from, who worked for him,
00:11:38.520 | went to Seattle and started a coffee shop there,
00:11:43.520 | these guys who started a place called Starbucks.
00:11:47.400 | And then there was another fella that worked for,
00:11:50.000 | in a coffee shop in Los Angeles,
00:11:53.480 | who started something called Seattle's Best Coffee,
00:11:55.920 | and they were all like that.
00:11:57.040 | They were all young guys that were doing something else,
00:12:00.240 | that were selling coffee for what it tasted like,
00:12:04.160 | and where it came from, and things like that.
00:12:06.960 | But they didn't, you know, they didn't have the training,
00:12:11.960 | the industry training that I did.
00:12:14.680 | So I became a supplier to a lot of those guys.
00:12:18.800 | So that was our business.
00:12:19.640 | - So when you say supplier,
00:12:21.200 | you're physically here in Latin America.
00:12:24.640 | Are you going out to the plantations, the farmers,
00:12:27.880 | and sorting through the green beans and saying,
00:12:30.400 | "Okay, we're gonna send these beans to this guy up there."
00:12:33.760 | - Yeah, yeah, I used to have, I had a motorcycle.
00:12:37.200 | I'd go visit people all over the place, yeah.
00:12:40.120 | I mean, I visited every quarter of this country, sure.
00:12:43.200 | That's what, I mean, you didn't only sort the green beans.
00:12:46.000 | We would actually buy the cherry.
00:12:47.640 | - Okay.
00:12:48.480 | - Which, coffee's the product of a cherry, right?
00:12:50.560 | So we'd buy the cherry, and then either,
00:12:54.320 | I mean, ultimately I became partners in mills,
00:12:57.200 | in a couple of mills, but--
00:12:58.560 | - So you developed your own sources of collecting,
00:13:03.760 | 'cause the way, my understanding
00:13:04.760 | of the way the coffee business works,
00:13:06.280 | I've spent a total of one day harvesting coffee.
00:13:08.120 | It was one of the hardest days of work of my life.
00:13:10.400 | Those guys are amazing, the harvesters.
00:13:13.160 | But my understanding is, it seems to me,
00:13:15.680 | like most of the coffee growers,
00:13:18.040 | and maybe it's different today versus how it was,
00:13:19.880 | most of the coffee farms are independent.
00:13:22.280 | Guy has his own crop.
00:13:23.760 | Then a team of pickers will come through,
00:13:25.820 | usually migrant laborers.
00:13:27.560 | They'll pick, and then there seem to be now
00:13:30.320 | a good number of co-ops that will bring the beans together.
00:13:33.580 | Was it that way back then as well?
00:13:35.240 | - Oh yeah, yeah, absolutely.
00:13:36.080 | - Okay, so then you would set up the relationship
00:13:37.960 | with the co-op, and come and buy the co-op's beans.
00:13:40.600 | - Yeah, or I would have a relationship with a grower,
00:13:45.600 | and tell him what co-op to go to.
00:13:49.280 | - Got it.
00:13:50.120 | - Because it's sort of, we have this little saying,
00:13:53.540 | is that what you do in the coffee mill,
00:13:56.260 | or in the, what's called the beneficio,
00:13:59.340 | can add or subtract 200 meters from the coffee.
00:14:03.020 | 'Cause one of the characteristics that you look for
00:14:09.280 | in coffee is the height at which it was grown.
00:14:12.260 | And you can add or subtract height
00:14:15.480 | by the way you treat it after harvest.
00:14:19.400 | - Got it.
00:14:20.240 | - So a lot of what we were doing,
00:14:22.720 | a lot of what, especially since I was supplying
00:14:26.280 | or buying coffee for people who really cared about it,
00:14:30.280 | who were selling coffee for two, $3 a cup,
00:14:34.360 | or $8 a pound rather than $1.99 on sale
00:14:38.600 | in a supermarket, they really knew their stuff.
00:14:43.600 | And they wanted to, they really knew
00:14:47.520 | what they wanted to buy.
00:14:48.760 | And so I had to give them the stuff
00:14:52.920 | that they wanted to buy.
00:14:54.160 | - Right.
00:14:55.000 | - And so yeah, so that was sort of the expertise
00:14:58.520 | that we, that me and my partners developed at that time.
00:15:05.880 | So what we did is really translated the expertise
00:15:09.360 | of commodity suppliers to the expertise
00:15:14.360 | of finding the finest coffees.
00:15:17.440 | And so these oddball guys that were very, very marginal.
00:15:22.440 | I mean, these were very small companies
00:15:25.680 | and sort of oddballs outside of the coffee business, right?
00:15:30.680 | Until they became the coffee business.
00:15:34.240 | - Yeah. - Whereas now,
00:15:35.240 | most of people I know, I'm the weirdo
00:15:37.640 | who I will still, I can still drink a cup
00:15:40.520 | of Maxwell House or Folgers coffee and enjoy it.
00:15:43.400 | But I know almost no one who does that,
00:15:46.360 | at least in my social circles.
00:15:48.320 | - Yeah, it's a very interesting sort of business story
00:15:53.000 | because the sort of the specialty coffee industry
00:15:58.000 | by sort of mid '90s represented about 50%
00:16:03.840 | of the dollar volume of the coffee world.
00:16:07.240 | And in the '80s, it represented like 1%, right?
00:16:10.960 | So and the 50% that they took,
00:16:13.840 | they took it from companies like General Foods
00:16:16.720 | and Nestle and Procter & Gamble.
00:16:19.560 | I mean, so here are these gigantic companies
00:16:23.280 | who weren't looking out the window, right?
00:16:25.840 | Who weren't looking in the rear view mirror of their car
00:16:30.240 | because it was just coming right at 'em.
00:16:32.000 | - Right.
00:16:32.840 | - Because it's sort of the beginning of disruption, right?
00:16:37.840 | Of the small company with the guy in the,
00:16:41.280 | or the apples of the, it was sort of the apples
00:16:44.200 | of the coffee industry in a certain way.
00:16:46.240 | So that's, so then it sort of occurred to me
00:16:52.080 | that it was probably a good idea to start to do that here.
00:16:57.080 | And well, I'll just tell you a little.
00:17:02.800 | An anecdote which I always think is sort of cool
00:17:05.200 | is when I was 40, I went back to college
00:17:10.200 | and took my whole family to California,
00:17:14.600 | went to Stanford for a year.
00:17:15.960 | And was, and the goal was to get a master's
00:17:22.280 | in agricultural economics 'cause I thought,
00:17:26.320 | well, I should really understand a bit more
00:17:28.600 | about what I was doing.
00:17:30.560 | And so we bought a house in Palo Alto.
00:17:35.560 | And then we decided to remodel the kitchen.
00:17:42.600 | And as we were, guy who came to remodel it,
00:17:45.720 | to do the work, the guy, the plumber actually,
00:17:48.440 | who put in the sink, asked me, "Well, what do I do?"
00:17:53.320 | And I said, "Oh yeah, I'm in the coffee business."
00:17:54.800 | He said, "Well, you know, I really like Ethiopian Yirgacheffe
00:17:57.920 | but sometimes I blend it with Kenya."
00:18:00.160 | And I said, "Whoa, this guy's a plumber."
00:18:03.920 | (both laughing)
00:18:06.840 | I said, "There's something going on here.
00:18:09.200 | There's another conception of what coffee is."
00:18:13.040 | And so that was, so when I came back,
00:18:16.840 | I said, "Well, I think I should start to do that.
00:18:19.600 | I think you should start to think about
00:18:22.400 | what my customers are doing."
00:18:28.600 | And at that time also Costa Rica was getting on the map
00:18:33.280 | because Oscar Arias won the Nobel Peace Prize.
00:18:37.240 | And there was peace in Central America
00:18:40.040 | and people wanted to go to a place that was peaceful.
00:18:44.960 | And people were starting to become conscious
00:18:48.120 | that coffee's some sort of a cool thing.
00:18:52.360 | And so here's a place that's peaceful,
00:18:55.920 | has nice weather and coffee grows here.
00:18:58.600 | Well, maybe we should start to give them
00:19:03.640 | the type of coffee that they think is really good
00:19:05.720 | and they're buying in the States.
00:19:07.440 | And that's sort of how Cafe Brit started.
00:19:12.240 | So it really started as a small subsidiary
00:19:17.240 | of a coffee trading company that was supplying green
00:19:21.800 | or that is unroasted coffee to coffee roasters,
00:19:26.320 | sort of specially coffee roasters around the world.
00:19:28.680 | So it was like a little tiny,
00:19:31.400 | you know, we had a little tiny roaster and we did that.
00:19:34.600 | We roasted coffee for hotels and places where tourists went.
00:19:39.600 | And then it just started to grow
00:19:44.800 | because really our customer base started to grow.
00:19:48.120 | And really, I guess what really gave it its first big push
00:19:53.120 | was what I was telling you earlier was mail order.
00:19:56.880 | Which was at that time was mail order.
00:20:02.240 | You actually sent stuff by mail and people sent you a fax
00:20:07.200 | or sent you a letter in what's called snail mail now
00:20:12.200 | with a check in it.
00:20:15.680 | And then you'd put coffee in an envelope or in a box
00:20:20.240 | and take it to the mail, take it to the post office
00:20:23.080 | and send it to them.
00:20:25.200 | That was mail order.
00:20:27.200 | And then we realized that in Costa Rica,
00:20:31.440 | if we took the coffee to the post office,
00:20:35.680 | the post office would try to figure out
00:20:38.920 | how to send it to the United States.
00:20:40.760 | And this is a Latin American country.
00:20:43.520 | So it took them a couple of weeks to figure that out.
00:20:46.320 | And so we figured out is that once they figured out that,
00:20:50.640 | they would take it to the airport
00:20:52.320 | and send it as a package.
00:20:56.920 | And so then we went to the post office and said,
00:20:59.360 | well, what if we become like a subsidiary of the post office
00:21:03.880 | and you can give us a stamp machine
00:21:05.800 | and we'll take it to the airport ourselves.
00:21:08.440 | And the post office said,
00:21:09.800 | nobody's ever told us that before.
00:21:12.880 | And then they said, yes.
00:21:15.520 | So all of a sudden we cut two weeks out of the trip
00:21:19.400 | because somebody said, we want coffee.
00:21:23.760 | We just took to the airport and sent it to them.
00:21:26.800 | And then the internet came and then mail order
00:21:31.960 | became online ordering and e-commerce.
00:21:36.520 | And we ended up with a warehouse in Miami
00:21:39.120 | so that then people really could get their coffee
00:21:42.000 | within a day when they ordered it.
00:21:45.080 | And that was sort of the beginning of...
00:21:50.720 | So little by little,
00:21:52.720 | I got out of the green coffee supplying business
00:21:55.760 | and started the coffee roaster.
00:21:59.560 | And that coffee roasting company
00:22:07.240 | also became sort of a traditional,
00:22:11.680 | specially coffee roaster,
00:22:13.320 | which meant that we got the representation
00:22:17.080 | of espresso machine companies
00:22:19.160 | and commercial grinder and brewery company.
00:22:24.160 | So we would go to hotels and say, here you go.
00:22:29.600 | You got your coffee, you have your machines.
00:22:31.120 | We'll put the little coffee maker in the rooms
00:22:34.680 | and all those things that didn't exist
00:22:38.600 | because this was a country
00:22:41.240 | in which the tourism industry was just starting.
00:22:44.640 | And so we were at the ground floor of that.
00:22:47.800 | And the end of it is a story
00:22:51.640 | that you started this whole thing about
00:22:54.720 | is that they first started to privatize the airport here
00:23:01.840 | and that happened in all sorts of other countries
00:23:06.720 | in Latin America.
00:23:08.000 | And we set up stores in the airports,
00:23:14.720 | in the airport here,
00:23:18.080 | and became part of that industry
00:23:21.200 | of what's called travel retail.
00:23:23.640 | Which in effect, again,
00:23:28.840 | it's sort of a luck thing
00:23:32.080 | because as in the specially coffee industry,
00:23:35.920 | we happen to be around at the ground floor, right?
00:23:40.000 | And the same thing happened with travel retail.
00:23:42.000 | That is that travel retail really started
00:23:45.400 | to develop seriously as the airport business
00:23:50.320 | became a lot more than just planes flying in.
00:23:55.040 | It became sort of malls.
00:23:58.840 | And when the sort of the ground services
00:24:03.800 | became more and more important,
00:24:05.920 | now you have lounges and you have all sorts of things.
00:24:09.400 | You have spas and churches
00:24:13.560 | and all sorts of things at airports.
00:24:15.360 | We think of this as being the normal thing,
00:24:20.040 | but that was very new.
00:24:21.040 | I mean, the first place that did that was Dubai
00:24:22.960 | and everybody, and people would go to Dubai to watch it,
00:24:25.400 | to look at it, say, wow.
00:24:28.160 | There's all these things you can do in the airport.
00:24:30.440 | But it really became important
00:24:34.600 | as international tourism grew
00:24:39.040 | and as countries began to realize
00:24:41.640 | that they really couldn't run airports
00:24:44.680 | as well as airport operators could.
00:24:48.240 | And they found out that when they gave the airport,
00:24:52.040 | when the contract to the airport operator,
00:24:53.720 | the government actually made more money.
00:24:55.840 | And the airport operators realized
00:24:58.720 | that they have real estate that they can use
00:25:01.960 | and they have a captive audience, the real estate.
00:25:05.680 | So they had the best mall in the world
00:25:07.240 | because people didn't have to go,
00:25:09.360 | you didn't have to ask them to come.
00:25:11.680 | They were there anyway.
00:25:12.640 | - Right, and they were there with an hour on their hands
00:25:15.320 | and they're probably affluent buyers who are traveling.
00:25:20.320 | Most people who travel are probably more affluent
00:25:22.760 | than many non-travelers.
00:25:25.000 | And Brit has become a powerhouse of a brand.
00:25:27.080 | I mean, it began in Costa Rica,
00:25:30.060 | but even in the airports, I think,
00:25:32.800 | I've seen it in Colombia.
00:25:34.760 | I've seen it in Mexico.
00:25:36.200 | Where else have I, I mean--
00:25:38.040 | - Peru, Chile.
00:25:39.240 | - Peru, yep, yep, I saw it in Peru.
00:25:41.360 | Yeah, and so--
00:25:43.120 | - Curaçao.
00:25:43.960 | - All over the place.
00:25:44.840 | And so it's just become an amazing brand.
00:25:48.520 | Now I wanna go back for a second
00:25:49.680 | 'cause at this point,
00:25:52.560 | your children are involved in the business.
00:25:54.920 | - Yeah, most of them.
00:25:56.080 | - And so I wanna go back.
00:25:57.120 | So your wife was originally from Europe, right?
00:26:00.400 | - From France, yeah.
00:26:01.240 | - From France.
00:26:02.080 | And you met in Mexico and she said,
00:26:04.480 | "Hey, I'll come along on this adventure together with you."
00:26:07.360 | And you've built this together and you have five children.
00:26:11.320 | Now, one of the things that I think is so fascinating
00:26:13.800 | is being here in Costa Rica,
00:26:16.640 | your wife saw the need for your children
00:26:19.280 | to have a high-quality education,
00:26:21.920 | but she, as I understand it, and correct me if I'm wrong,
00:26:24.520 | she was a little frustrated
00:26:25.360 | with some of the options available.
00:26:26.840 | So she began the European school here in Costa Rica.
00:26:30.320 | Tell me more about that.
00:26:31.240 | - She was already an educator.
00:26:32.440 | I mean, she'd already,
00:26:33.440 | she came from a family of educators.
00:26:35.080 | Her parents had a school and she grew up in--
00:26:39.320 | - So she grew up in her parents' school?
00:26:41.320 | - Yeah, yeah.
00:26:42.600 | - And so the idea of starting a school
00:26:44.240 | was not a scary thing for her, was it?
00:26:46.120 | - No, no, and I met her in Mexico.
00:26:47.800 | She was actually in sort of a seminar.
00:26:52.480 | She was in a one-year seminar about education.
00:26:54.680 | So yeah, so she'd been,
00:26:56.880 | she was already professional in that area
00:27:01.440 | or had those skills and that vision.
00:27:04.600 | And she waited until the kids were old enough
00:27:08.840 | to go to school because we had five kids.
00:27:10.760 | Some of them were pretty little.
00:27:12.080 | They were in school age.
00:27:14.520 | But yeah, she started the school with,
00:27:16.360 | in a house with a couple of kids
00:27:20.080 | and three of them were ours.
00:27:20.920 | - And today it's one of the leading private schools
00:27:24.280 | here in Costa Rica, right?
00:27:25.120 | - Yeah, it was pretty much the first all IB school
00:27:29.840 | and it's bi-trilingual.
00:27:33.120 | There's pretty much a waiting list to get in.
00:27:37.280 | There are 500 and some odd kids in the school.
00:27:40.560 | But it was not that when it started.
00:27:45.320 | It was when it started,
00:27:48.560 | it was pretty close to a one-room schoolhouse.
00:27:52.400 | It was actually a house that we bought
00:27:56.280 | that one, the bedroom was second grade
00:28:00.960 | and another room was first grade.
00:28:03.760 | And there was a little patio outside
00:28:06.840 | and that was the playground.
00:28:08.520 | And that was the school.
00:28:11.200 | - So you taught, so your children matriculated
00:28:15.120 | through the school, the international school
00:28:18.200 | that your wife oversaw.
00:28:20.720 | Then did they go to university in the United States,
00:28:23.760 | here in Costa Rica, in Europe?
00:28:25.040 | How did they handle their educational process?
00:28:27.120 | - All of that.
00:28:27.960 | - All of that, okay.
00:28:28.800 | - Yeah, there's one that went to Europe,
00:28:30.720 | two that went to the United States,
00:28:32.440 | one that went to Costa Rica,
00:28:35.760 | one who sort of went from place to place.
00:28:38.040 | Yeah, there was all of the above.
00:28:41.280 | - Okay, so what was your philosophy as a father
00:28:45.640 | and an entrepreneur towards the involvement
00:28:48.040 | of your children in your family businesses?
00:28:50.720 | - Well, it wasn't, I don't know if I sat down
00:28:58.120 | and had a philosophy, nor did my wife,
00:29:01.640 | but it was, there was, two of my children
00:29:06.320 | had a very natural connection to the school.
00:29:10.560 | And everybody is, everybody's different
00:29:13.720 | 'cause one of our children went and studied in France
00:29:17.400 | and was there, and had a no natural connection
00:29:20.480 | to any of the things that we're doing except to the family.
00:29:23.520 | So I think that it's,
00:29:27.520 | there was, there's something organic here that went on
00:29:34.920 | because, for example, one of my sons who now is in,
00:29:39.640 | now is one of the two sons that are running the company,
00:29:42.240 | I remember when he was 11 or 12, he said,
00:29:47.000 | "I just wanna carry some," he's a very strong guy,
00:29:50.600 | and he said, "I wanna carry one of these bags,
00:29:53.400 | "these are 69 kilo bags that people, that they'd coffee,"
00:29:57.240 | he says, "and then when I get older,
00:29:58.760 | "I'll do more sophisticated stuff."
00:30:01.360 | So he was really, and the other son also worked,
00:30:06.360 | worked in coffee mills and ended up working,
00:30:09.520 | ended up being a body stead Starbucks on Times Square,
00:30:13.920 | which was at that time the Starbucks that sold,
00:30:17.680 | that had most traffic of any Starbucks, you know,
00:30:21.120 | and so they ended up,
00:30:23.800 | without us doing very much
00:30:30.160 | or pushing them in any particular direction,
00:30:32.520 | two of them were attracted to the school world
00:30:36.320 | and two of them were attracted to the coffee world.
00:30:40.760 | And so they ended up running things.
00:30:45.760 | (laughing)
00:30:47.080 | That's sort of the, it became fairly natural
00:30:52.080 | for that to take place.
00:30:53.700 | - Do you think, so I would say back then, right,
00:30:59.800 | 30 years ago, without question,
00:31:01.720 | Costa Rica would have qualified as, I guess,
00:31:04.640 | what maybe you would have called a frontier market
00:31:07.000 | in college, something like that.
00:31:08.640 | I don't think it qualifies that today.
00:31:10.200 | I mean, I don't think of this as much of a frontier market,
00:31:13.600 | but do you think that your children,
00:31:17.000 | how would you, how do you think your children's experience
00:31:20.560 | was growing up here in Costa Rica
00:31:23.680 | as compared to if you had stayed in the United States
00:31:28.360 | or if you and your family had gone to France
00:31:30.920 | or to some other kind of place?
00:31:33.920 | How do you think their experience compared?
00:31:38.380 | - Well, first of all,
00:31:43.220 | they grew up around, I would say that my wife
00:31:47.740 | and I are both entrepreneurs.
00:31:49.560 | We both sort of defined our lives.
00:31:52.780 | And I have a feeling that if you grow up in the States,
00:31:57.940 | it's harder to find your life.
00:32:00.040 | It's harder to find your life.
00:32:03.980 | You end up either you're working for somebody else
00:32:08.820 | or you're working for yourself,
00:32:10.500 | but there are lots of rules
00:32:14.580 | and there are lots of rules that are written or unwritten.
00:32:17.420 | And maybe rules is a very restrictive term,
00:32:24.740 | but it's sort of, a lot of things have already been invented.
00:32:33.940 | Whereas as you, the word that used frontier market,
00:32:38.940 | where you are is you can invent things.
00:32:43.700 | I mean, my wife invented a school.
00:32:46.700 | She just, she didn't go and buy somebody else's school
00:32:50.820 | or open up a book and say,
00:32:52.300 | "Well, this is how the school should be."
00:32:53.760 | She said, "Well, here, this is how I want the school to be.
00:32:57.220 | "This is the curriculum that I want."
00:32:58.940 | And she actually wrote the curriculum.
00:33:00.340 | And these are the things that I,
00:33:02.040 | and nobody got in their way in doing that,
00:33:06.460 | and sort of the same thing that happened with us.
00:33:10.060 | So I think that we were lucky to be,
00:33:15.060 | as you say, in the frontier,
00:33:18.060 | in a world where, or in a country where,
00:33:23.000 | everything hadn't already been established.
00:33:27.440 | And also, and I think I have to be fair about this also,
00:33:32.020 | we were in a world without YouTube.
00:33:34.620 | 'Cause these days you could sort of have that idea,
00:33:37.700 | and if you don't have the idea, you could look on YouTube,
00:33:39.620 | and somebody else has that idea and has put it on YouTube
00:33:42.500 | or put it on the internet.
00:33:45.580 | So we had that advantage of being able to have an idea
00:33:50.580 | and turn it into something,
00:33:52.580 | and be an innovator in that sense.
00:33:57.580 | So I think, and my children are no longer children.
00:34:01.360 | They're in their late 30s and 40s.
00:34:03.100 | So they grew up still in that world of,
00:34:08.100 | with that level of freedom.
00:34:12.560 | Now, obviously, there's another level of,
00:34:16.740 | there's another whole level of freedom now,
00:34:19.260 | which is very hard for me to understand completely,
00:34:23.980 | understand how one would operate in it,
00:34:27.060 | which has to do with the fact that information's free,
00:34:30.460 | and that you can end up having an idea
00:34:35.380 | and then finding out best practices
00:34:37.980 | by just looking on your telephone.
00:34:39.680 | - When you think about,
00:34:44.060 | so I think a lot about family wealth and legacy, right?
00:34:50.500 | I have four children, and I think about
00:34:52.820 | how do I train them in such a way
00:34:56.420 | that they have abundant opportunities,
00:35:01.420 | but so that they identify with the family enterprise?
00:35:06.780 | I used to think, oh, the way to go is just
00:35:09.580 | that children have to do it all themselves, right?
00:35:11.580 | They start off from scratch, and they do it all themselves.
00:35:14.500 | And then I realized that I was really wrong about that.
00:35:18.100 | So you want to kind of balance a healthy mix of,
00:35:22.020 | here, we're here to support you.
00:35:26.060 | You don't have to come and work in the family business.
00:35:28.300 | You're free to go to France and build your own career
00:35:30.340 | as one of your children has done.
00:35:31.900 | You're not under restraint.
00:35:34.540 | But in your case, you've built this powerful family legacy
00:35:39.540 | that two of your children are involved
00:35:41.180 | with the European School,
00:35:42.440 | two of your children are involved with Café Brit.
00:35:45.260 | As I understand it, you've ceded
00:35:48.140 | most of the operating control over to them,
00:35:50.620 | and so this can continue to be a powerful brand.
00:35:53.380 | And you said that your children have massively grown
00:35:56.460 | the brand even beyond what it was
00:35:58.380 | when you were running everything, right?
00:35:59.820 | - Sure, absolutely.
00:36:00.740 | - So what advice do you have from your perspective
00:36:03.900 | for a young father about how to cultivate
00:36:07.740 | and kind of inculcate a culture
00:36:11.260 | of family identity with your children?
00:36:14.160 | - Well, one thing is,
00:36:23.080 | I've never really thought through that.
00:36:25.360 | I've never thought of that question before.
00:36:29.560 | I haven't given that as much thought as you,
00:36:33.100 | 'cause we didn't sit down and write a series of rules.
00:36:39.120 | But I guess the first thing I think about
00:36:41.240 | is that we are a family.
00:36:44.620 | That is, everything we were doing
00:36:49.240 | that our children knew about
00:36:51.080 | and were very much aware about it.
00:36:54.200 | And so the border between business or work and life
00:36:59.200 | was very, very porous.
00:37:07.680 | I can imagine somebody who comes home from work at night
00:37:14.080 | and they say, "How was work, Daddy?"
00:37:16.640 | And he says, "Let's turn on the TV," or something else.
00:37:20.360 | Or he tries to explain what it is,
00:37:23.900 | but that doesn't really mean very much to a young kid.
00:37:28.900 | Whereas in our case,
00:37:32.520 | if you're now running the school
00:37:37.440 | where you went as a child,
00:37:39.960 | you actually knew what was going on.
00:37:42.880 | At the dinner table, your mom was talking about
00:37:46.760 | needing to hire an English teacher,
00:37:50.160 | and those teachers actually lived at the house.
00:37:53.000 | What she generally did was when a teacher came from abroad
00:37:57.380 | before working in the school, we'd invite them to stay over.
00:38:02.360 | So you got to know them, and some of them stayed over,
00:38:07.320 | and then didn't end up being in the school too.
00:38:12.180 | So, and then if my older children,
00:38:16.620 | they'd see me, there are coffee trees right around the house
00:38:20.800 | and there's a warehouse down at the end of the road,
00:38:24.540 | and they grew up around what we were doing.
00:38:29.540 | So I guess that's a long way of saying,
00:38:36.040 | yeah, we were a family for 24 hours a day.
00:38:40.540 | There weren't aspects of our lives
00:38:44.960 | that were not shared with our kids.
00:38:48.360 | And I don't,
00:38:53.720 | and it wasn't anything that we imposed on them.
00:39:00.000 | But if you think about history,
00:39:05.840 | think about what people did in the Middle Ages
00:39:08.160 | or people did in the front,
00:39:09.920 | and think about the American frontier,
00:39:12.280 | that's what happened.
00:39:14.240 | People grew up and somebody take care of the,
00:39:17.460 | somebody built the cows,
00:39:18.760 | and they helped dad out in the farm,
00:39:21.680 | or if they're pioneers and going across the country,
00:39:26.680 | there wasn't that strong borderline between work and life,
00:39:31.800 | which is also a little,
00:39:37.820 | if I have one philosophy is that this idea of retirement,
00:39:42.820 | this is a very strange concept, it doesn't,
00:39:47.580 | sort of like, oh yeah, I'm gonna live
00:39:49.640 | once I finish working at the end,
00:39:52.200 | and that's usually when people die.
00:39:53.940 | - So that's an appropriate transition.
00:39:57.320 | I was next gonna ask you,
00:39:59.340 | one of the taglines of Radical Personal Finance
00:40:01.360 | is how to build a plan for financial freedom
00:40:04.000 | in 10 years or less.
00:40:05.720 | And as a former financial advisor,
00:40:08.120 | I've spent a lot of time talking to people about retirement.
00:40:12.280 | Many people have an ambition
00:40:13.580 | to someday accumulate enough wealth
00:40:15.760 | that they can choose to work if they want to,
00:40:18.080 | but not because they have to.
00:40:19.960 | I think it's safe to say you've been financially successful
00:40:22.360 | that you can choose the kinds of work that you do,
00:40:25.320 | and you've passed over operational control
00:40:28.100 | of Cafe Brit to your children,
00:40:30.460 | you're not involved in the day-to-day activities.
00:40:34.300 | From your perspective now,
00:40:36.940 | having reached financial freedom,
00:40:39.700 | and thinking about your life now,
00:40:42.460 | and your life along that journey,
00:40:44.740 | what lessons have you learned
00:40:46.920 | that would be helpful to a younger guy like me
00:40:49.540 | about financial freedom and retirement?
00:40:52.780 | What's great about it, what's difficult about it,
00:40:55.380 | how your life changes about it?
00:40:57.940 | What lessons do you have for someone like me?
00:41:01.240 | - Well, as I said before, I don't believe in retirement.
00:41:04.360 | In other words, I just think
00:41:08.120 | that you have phases in your life,
00:41:10.880 | and you just have to,
00:41:12.620 | you wanna optimize your lifestyle or your life experience
00:41:19.240 | in those different phases, that's all.
00:41:21.640 | I didn't invent that, I mean, the Greeks did.
00:41:28.320 | So it's not a,
00:41:30.680 | and I guess,
00:41:35.340 | I've never really thought about financial freedom
00:41:43.200 | as a goal.
00:41:48.720 | That is that I and my wife, both of us,
00:41:54.880 | we've always sort of lived within our means.
00:41:57.720 | That is whatever we happen to have as an income,
00:42:02.040 | especially since we were both building businesses,
00:42:04.080 | which meant that we had a piece of land,
00:42:06.360 | and it was always mortgaged, for example.
00:42:08.640 | But it's partially because
00:42:16.840 | we're really lucky to not have to,
00:42:25.080 | when I think about people who pay $5,000
00:42:30.080 | for a two-room apartment in New York,
00:42:31.600 | so one and a half-room apartment in New York City,
00:42:34.100 | 'cause they wanna live in New York City,
00:42:38.000 | or people who right now
00:42:42.880 | have to really think about saving that last bit of money
00:42:53.320 | because the cost of living is so high.
00:42:55.520 | Whereas we're living on a farm,
00:43:02.280 | and we bought it 45 years ago when you could do that.
00:43:07.320 | So there hasn't ever been a serious issue
00:43:12.360 | about saying, well, if we save up enough,
00:43:19.720 | then we don't have to work anymore
00:43:21.520 | because there is a sort of a continuum
00:43:26.520 | of activities that we're doing.
00:43:29.520 | So what does that mean in terms of advice for you?
00:43:37.580 | I don't think I can give you any advice
00:43:41.880 | considering what you said,
00:43:43.520 | the way you're considering living your life.
00:43:46.140 | I think that you're thinking about living your life,
00:43:49.480 | if I was your age now, I'd probably do what you're doing.
00:43:54.480 | I think that you don't wanna be,
00:43:58.720 | you certainly don't wanna,
00:44:00.960 | you wanna be able to be the author of your own book, right?
00:44:05.600 | You don't wanna have other people
00:44:08.640 | or other organizations telling you what you're doing.
00:44:11.880 | And you wanna be the, and maybe not even
00:44:14.920 | the author of your own book,
00:44:16.040 | maybe the journalist of your own newspaper,
00:44:18.960 | 'cause you're going to be doing investigative journalism
00:44:22.400 | all of your life.
00:44:24.600 | You're gonna be looking and being,
00:44:28.600 | and enjoying discovering things
00:44:32.800 | that you feel that you wanna be involved in
00:44:36.080 | and rejecting things you don't wanna be involved in.
00:44:39.320 | So, and if you're, as you told me that you were,
00:44:43.400 | that you lived in a house trailer with all your kids
00:44:46.720 | and traveled around the United States
00:44:48.240 | for a while, I think that you also have that idea
00:44:53.240 | that that line between your work life and your life life
00:44:58.920 | is not, doesn't exist.
00:45:02.080 | So, I think that probably,
00:45:04.320 | if I'm thinking about one bit of advice
00:45:07.680 | or one thing that I think was successful for us
00:45:10.800 | is never drawing that line.
00:45:13.880 | - Yeah, it's one of the things
00:45:16.360 | that I love the most about my current lifestyle.
00:45:19.960 | My wife and I are with our children 168 hours a week, right?
00:45:26.320 | One of us is.
00:45:27.560 | And I'm not sure that we'll always do that.
00:45:30.400 | I think there are very good reasons
00:45:31.720 | to enroll a child in a school,
00:45:34.040 | many good reasons to encourage children
00:45:36.640 | to pursue their own things
00:45:40.720 | that might be physically separate.
00:45:42.480 | I don't believe that 168 hours a week is the standard,
00:45:46.160 | but I do love, I really love being able to have
00:45:50.320 | that kind of integrated life
00:45:52.160 | because it feels very natural and right.
00:45:57.160 | This is how our forebears for millennia have lived, right?
00:46:01.160 | Children haven't been sent off away from dad and mom.
00:46:04.420 | There's always been an integrated family life,
00:46:07.060 | an integrated village life, an integrated life
00:46:10.400 | where there's intergenerational sharing
00:46:12.840 | and transfer and teaching and social interaction.
00:46:17.840 | And it's something I value very greatly.
00:46:21.300 | Go ahead.
00:46:24.800 | - There's a, I was thinking about something
00:46:26.720 | that I read a long time ago,
00:46:28.560 | which is a pretty simple little aphorism.
00:46:31.400 | It says if you follow your passions for work,
00:46:36.400 | you'll never work a day in your life.
00:46:38.640 | - Yeah, I feel that way.
00:46:41.840 | And even as an entrepreneur,
00:46:43.080 | it's interesting the comment you made earlier
00:46:44.600 | about kind of the choice between,
00:46:46.280 | well, you can go to New York City
00:46:47.880 | and you can make X number of hundreds of thousands dollars
00:46:50.320 | a year and work on the 25th floor
00:46:52.720 | and have two weeks of vacation.
00:46:54.040 | And you said, I'm in a frontier market, right?
00:46:57.140 | I'm an entrepreneur.
00:46:58.480 | I can enjoy a really interesting integrated lifestyle.
00:47:02.560 | I'm on my motorcycle traveling all around Costa Rica,
00:47:04.960 | visiting coffee mills,
00:47:07.440 | and I don't have to account for every moment of every day.
00:47:11.600 | I work hard, but I have a lifestyle
00:47:13.640 | where I'm not on the clock in that sense.
00:47:16.760 | And it's interesting because I'm not as wealthy as you are.
00:47:21.400 | I'm a good bit younger,
00:47:23.400 | but because of being an entrepreneur,
00:47:26.900 | I am enjoying in many ways a very similar lifestyle to you
00:47:33.080 | as an experienced wealthy,
00:47:36.600 | I won't use the word retiree,
00:47:37.960 | but what a lot of people would say,
00:47:39.040 | oh, this person is retired in the sense
00:47:40.920 | that doesn't run this one active business.
00:47:42.800 | You're involved in many things.
00:47:44.480 | And to me, that's the power of entrepreneurship, right?
00:47:46.720 | You can write your own ticket
00:47:48.120 | and you can enjoy from the age of 25 to the age of 75,
00:47:52.680 | you can enjoy that sense of control
00:47:55.600 | and a more relaxed and appropriate pace of your life.
00:47:58.360 | If when you take responsibility for your business
00:48:02.160 | and for your life, and you know,
00:48:03.560 | if it's to be, it's up to me, right?
00:48:04.800 | I gotta make it happen.
00:48:06.520 | That also comes with it,
00:48:08.240 | the reward of being able to have a more integrated lifestyle
00:48:11.960 | and more enjoyable days, at least in my experience.
00:48:14.560 | - I think you've summarized it better than I could have.
00:48:19.720 | - So here's my final question.
00:48:22.480 | I believe the strategies that you have used
00:48:25.200 | are very powerful strategies for other people to consider.
00:48:30.200 | And I'll just identify them.
00:48:31.880 | I don't think they're right for everybody,
00:48:33.240 | but I think there are strategies
00:48:34.920 | that are good for other people to consider.
00:48:37.000 | So for example, leaving the country of one's birth
00:48:40.520 | and going to another place can often help someone
00:48:43.760 | to be an exotic foreigner,
00:48:45.960 | which comes with it a certain amount
00:48:48.120 | of benefit, of prestige, right?
00:48:50.440 | Your wife could be the exotic French woman
00:48:53.440 | who's opening the European school.
00:48:55.360 | And while she may have the exact same qualifications
00:49:00.040 | as a native born Costa Rican in Costa Rica,
00:49:04.000 | she'll have a little bit of that exotic ability
00:49:06.680 | from her being abroad.
00:49:08.480 | Similar for you being the US American businessman
00:49:12.000 | working here.
00:49:12.920 | There are downsides to it as well,
00:49:14.160 | but you get some more valuable access.
00:49:16.840 | And then I think also when you go to a frontier market,
00:49:19.640 | a lot of times you have less competition.
00:49:21.440 | If you had been in that New York City office,
00:49:23.800 | there would have been lots and lots of people competing
00:49:25.880 | for that because there's lots of candidates.
00:49:28.720 | But here you had fewer competitors
00:49:31.360 | competing for the exact thing.
00:49:32.880 | And so I frequently recommend to,
00:49:36.600 | if a young guy wants to go and make his fortune,
00:49:38.480 | I say, take a corner of the world that you're interested in,
00:49:41.760 | go and check it out
00:49:42.720 | and see what opportunities come along the way.
00:49:45.040 | And you may look back later and say,
00:49:48.320 | I was really lucky because of this trend
00:49:51.120 | of the coffee growing and whatnot.
00:49:52.440 | And you were, right?
00:49:53.560 | But the reality is you saw something happening
00:49:55.800 | and you took advantage of it.
00:49:56.720 | And I believe that,
00:49:57.720 | well, I don't know what those opportunities are
00:49:59.800 | for me right now or for someone else.
00:50:02.480 | We can be open to them and looking for them.
00:50:04.960 | So here's my question.
00:50:06.160 | If you were starting over again today,
00:50:12.120 | you know, a young 25-year-old guy, something like that,
00:50:15.040 | what are some of the regions and/or industries
00:50:18.000 | that you have noticed that you think,
00:50:20.200 | you know what, I bet there's some opportunity there,
00:50:22.200 | some of the countries, some of the regions,
00:50:23.760 | and some of the industries that you think
00:50:25.560 | would be worth checking out and investigating?
00:50:30.520 | - Well, I mean, the industry parts,
00:50:33.120 | it's not gonna sound very original,
00:50:37.000 | but I think that it's really important
00:50:40.360 | to think about two things.
00:50:42.480 | You think about anything to do with climate change
00:50:45.760 | or circular economy or things like that.
00:50:48.240 | And you wanna think about things
00:50:50.520 | that have to do with people.
00:50:52.280 | You know, there's this,
00:50:55.480 | one of my sort of mentors said,
00:50:59.840 | "You know, if everybody's walking north,
00:51:02.240 | "you should start walking south
00:51:04.160 | "because one day they're gonna end up there."
00:51:07.040 | So, you know, the standard thing to say is,
00:51:10.960 | "Well, the future's all about tech.
00:51:12.560 | "It's all about algorithms.
00:51:14.640 | "It's all about artificial intelligence.
00:51:16.720 | "It's all about robotics and stuff like that."
00:51:19.640 | And I think that there's gonna be a lot of opportunities
00:51:24.560 | of things that have to do with high touch,
00:51:27.840 | with things that have to do with, you know,
00:51:30.480 | I have a theater, things that have to do with,
00:51:34.360 | instead of ordering stuff online,
00:51:39.880 | having a restaurant or a cafe
00:51:43.320 | where you don't take a iPad and order things,
00:51:48.320 | but you actually talk to somebody.
00:51:50.480 | So, you know, so that's just examples,
00:51:54.200 | but I think that Evan, as I said before,
00:51:57.840 | anything to do, and I think that it's more interesting
00:52:02.840 | to think about things that have to do
00:52:06.040 | with circular economy than to say,
00:52:07.920 | "Well, I'm gonna plant more trees."
00:52:09.440 | - What do you mean, circular economy?
00:52:11.560 | - Not throwing stuff out.
00:52:12.720 | - Okay, so-- - Figuring out ways
00:52:15.200 | to use stuff that people think should be thrown out.
00:52:18.800 | - Got it.
00:52:19.640 | - Or use, or being able to maximize resources in other ways.
00:52:23.480 | You know, lots of things you can do with petroleum.
00:52:25.880 | - Right, right. - That's not burning it.
00:52:29.120 | You know, we have an economy that has to do,
00:52:31.440 | which is, you know, it's linear.
00:52:33.040 | We make stuff, and then we throw it out.
00:52:36.760 | - Right. - And the more stuff
00:52:38.020 | we can make and the more stuff we can throw out,
00:52:39.920 | the more the GMP grows.
00:52:41.800 | Well, that isn't the way-- - It's destructive, right.
00:52:44.240 | - That isn't the way it's gonna be.
00:52:45.920 | - Right, absolutely. - You know?
00:52:47.240 | I'm not even putting any moral label on it.
00:52:51.000 | - It just doesn't make sense. - It's destructive.
00:52:52.480 | - It may serve you for a time,
00:52:53.760 | but it doesn't make sense in the long run.
00:52:55.280 | - Yeah, and that isn't where we're going.
00:52:58.600 | And that's probably the only thing
00:53:01.280 | that artificial intelligence and all this handling
00:53:04.640 | of information is telling you,
00:53:06.240 | that you can optimize the use of resources
00:53:10.760 | and find all sorts of other uses to resources
00:53:15.600 | than just throwing them out.
00:53:18.520 | So those are the two things that I would focus on.
00:53:24.360 | - Are there any particular regions or countries
00:53:28.120 | of the world that are interesting to you?
00:53:30.840 | Or that would be in the way that I laid it out?
00:53:34.040 | - Well, this is gonna get into sort of personal,
00:53:39.040 | personal preferences, right?
00:53:45.600 | So, I mean, and you can put it two ways, right?
00:53:52.480 | There are people who really like risk
00:53:54.120 | and there's probably a good return
00:53:56.600 | if you can handle a lot of risk.
00:53:59.360 | But if you're gonna have a family,
00:54:03.840 | you sort of wanna look the other way.
00:54:05.120 | You wanna be in a place which is relatively safe,
00:54:09.640 | which has a social contract that's working.
00:54:13.320 | And maybe that may end up being places
00:54:21.280 | that have actually had a war
00:54:23.720 | and are now recovering from it because they know.
00:54:28.720 | We were talking earlier about former Yugoslavia
00:54:33.200 | and Bosnia may be a place like that.
00:54:37.000 | But there's other places that have had a war
00:54:42.160 | and haven't figured it out yet.
00:54:44.200 | Nicaragua was a good example of that,
00:54:46.560 | a place that it went through a very nice period
00:54:49.520 | of saying, well, you were tired of having wars
00:54:51.840 | and then things are going up again.
00:54:56.160 | So, but that's a little side thing.
00:55:01.160 | But I do think that, or I was gonna say,
00:55:06.680 | I was pretty impressed with,
00:55:08.560 | I was sort of hired as a consultant in Rwanda for a while
00:55:15.040 | to take a look at the coffee industry there.
00:55:18.080 | And I was really surprised
00:55:20.600 | at how well things worked in Rwanda.
00:55:22.520 | One of the things that they,
00:55:25.440 | one of the first things that I saw was I went
00:55:27.640 | to the Rwandan agency that handles foreign investors
00:55:33.720 | and the lady sent me down and she said,
00:55:38.120 | "I really wanna apologize because it only takes six hours
00:55:43.120 | "for you to start a company
00:55:45.200 | "and do all the steps to start a business.
00:55:47.880 | "We've really wanted to get it down to two,
00:55:50.480 | "but we haven't been able to do that."
00:55:52.960 | And all the offices were in the,
00:55:55.680 | it was a three-story building,
00:55:56.720 | you could do everything you needed to do
00:55:58.760 | to start a company.
00:56:00.560 | So it takes about, in Costa Rica, it takes about two years.
00:56:03.800 | (both laughing)
00:56:05.240 | Minimum, and a lot of help.
00:56:06.960 | And in the United States, it takes a while too.
00:56:11.800 | And it costs you a lot of money per hour to people.
00:56:16.120 | So Rwanda may not be a really good example right now
00:56:20.400 | because it's gone through,
00:56:21.880 | it's recently gone through a lot of problems.
00:56:25.960 | But I would, I'd sort of look at that list
00:56:30.000 | and there's those lists are all published
00:56:32.040 | about how easy it is to start a business.
00:56:36.000 | And that would be another, so that I'd,
00:56:40.400 | instead of, as I pointed to individual countries,
00:56:46.000 | I'd look at those types of characteristics.
00:56:47.880 | I'd look at a social contract that seems to be working,
00:56:52.880 | that there's some level of safety.
00:56:58.240 | And that it is,
00:57:04.120 | and that whatever it is, the government,
00:57:07.320 | or whatever the, or even the culture,
00:57:11.680 | because sometimes it's not the government,
00:57:13.600 | it's culture that says, that's friendly to people
00:57:18.600 | from outside who have ideas.
00:57:20.880 | And I'm saying that because, you know,
00:57:24.640 | you have, there are cultures which think
00:57:26.600 | that it's really a bad idea to make money.
00:57:28.880 | You know, it's, ah, that's sort of,
00:57:31.440 | it's sort of contrary to their thinking.
00:57:34.360 | Or there are cultures that have very, very strong elites
00:57:39.360 | and say, you know, I just wanna keep it.
00:57:42.200 | If anybody wants to try to make money, we'll--
00:57:44.520 | - It's just gonna be us. - Yeah.
00:57:46.480 | So that's why I'm saying that it's not only
00:57:51.480 | the rules and regulations, it's also the cultures.
00:57:55.360 | So you put that in some sort of a,
00:57:57.540 | you put, you have to put that in some sort of a sieve
00:58:04.360 | and sort of look through it,
00:58:07.920 | and you'll, probably some countries might pop out.
00:58:11.800 | You know, Estonia might pop out,
00:58:13.480 | or Bosnia might pop out, or Mongolia.
00:58:18.480 | Mongolia probably won't pop out, but it could.
00:58:22.840 | - Right. - It could.
00:58:24.000 | But, you know, Georgia, they do that too.
00:58:28.960 | The only problem is, you know,
00:58:34.480 | I'm talking about ex-communist countries,
00:58:37.440 | the problem is that you do have, in some of these places,
00:58:42.280 | you have some really strong elites, new elites that really,
00:58:47.280 | they haven't quite, not as good as old elites,
00:58:50.080 | but they're getting there.
00:58:51.240 | - Right, right. - So.
00:58:53.520 | - No, I agree.
00:58:54.920 | I think that it's one of the things
00:58:56.640 | that makes me a little sad about our home country,
00:59:00.400 | United States, just feels like sometimes
00:59:03.320 | there's been so much success that it just feels to me
00:59:06.360 | like the way that we got there
00:59:08.680 | has been kind of forgotten about.
00:59:10.760 | But I often don't get that same experience and sense
00:59:14.840 | in a place that remembers pretty recently
00:59:17.240 | how rough things were.
00:59:18.280 | It's like, well, we did that socialism thing.
00:59:21.240 | That was pretty rough.
00:59:22.280 | We're pretty glad now to have this opportunity that we have.
00:59:25.360 | And it feels like those memories are a little fresher,
00:59:30.080 | and it inspires more confidence,
00:59:32.520 | more of a desire to work hard,
00:59:33.760 | more of an appreciation of opportunity
00:59:35.720 | than sometimes I sense in some of the other places
00:59:38.400 | that we're from.
00:59:40.240 | - Yeah, and it changes, right?
00:59:42.560 | I was gonna, what you just said occurs to me
00:59:46.040 | that an experience that we had in Café Brit
00:59:50.080 | is that we opened this representative office in the EU.
00:59:55.080 | And you know where it is?
00:59:57.640 | It's in Riga, Latvia.
00:59:59.720 | - Yeah.
01:00:00.560 | - And it was quite successful,
01:00:04.000 | quite successful because of our partner
01:00:06.400 | who was an entrepreneur who actually made his money
01:00:11.400 | by building gym equipment, by importing gym equipment.
01:00:16.560 | And right when the wall came down,
01:00:19.520 | he said, "I gotta find something.
01:00:21.480 | "There's gotta be some things that are gonna happen here
01:00:24.620 | "that didn't happen before."
01:00:26.800 | And he somehow came on the idea of gyms and hotels.
01:00:32.720 | And he noticed that in the West,
01:00:35.040 | people that all hotels had machines in them.
01:00:40.040 | So he got the representation for machines.
01:00:44.320 | And now in Latvia, not only do hotels
01:00:49.040 | have really good machines,
01:00:51.200 | but you see gyms on the street.
01:00:55.120 | - Right.
01:00:55.960 | - Walk on the street, see it.
01:00:58.120 | So it's in a certain way,
01:01:03.120 | that may be the idea of walking South
01:01:06.640 | when people are walking North.
01:01:07.880 | But the other way, the other part of that story
01:01:11.200 | is to say you're probably be more successful
01:01:16.200 | doing things that other people are not doing.
01:01:19.280 | - Right.
01:01:21.520 | - Maybe what you wanna do is sort of,
01:01:23.540 | consultants will do things like that.
01:01:27.160 | People will say to you,
01:01:28.760 | well, let's see what's the 90%,
01:01:33.120 | let's look at that bell curve and say,
01:01:34.920 | here, these are areas that have really been successful.
01:01:37.520 | And so really what you really wanna do is say,
01:01:39.220 | well, look at the tails of the bell curve.
01:01:41.460 | Say, let's look at the ones that people haven't looked at.
01:01:44.760 | Or maybe the ones that haven't been successful, why?
01:01:48.160 | - Right.
01:01:49.000 | - There's probably a bigger return to that.
01:01:50.340 | - Yeah, I think, what's the old joke, right?
01:01:52.440 | Invert, always invert, right?
01:01:53.920 | I always think of the nation of Bhutan.
01:01:57.120 | From a tourism perspective, as I understand the story,
01:01:59.920 | I can't confirm this firsthand,
01:02:02.880 | but I understand the story.
01:02:04.440 | Bhutan was trying to figure out,
01:02:06.760 | how do we appeal more on the tourist market?
01:02:10.680 | And so they hired consultants,
01:02:12.380 | and those consultants said,
01:02:13.780 | well, you need to go ahead
01:02:16.340 | and make it easier for people to come
01:02:18.240 | and build more tourist infrastructure
01:02:21.040 | so you can have more people come.
01:02:22.700 | But they looked at it and they decided,
01:02:24.200 | you know what, we're gonna go
01:02:25.040 | in the exact opposite direction.
01:02:26.040 | And so Bhutan is, the kingdom of Bhutan
01:02:28.440 | is incredibly difficult to get into.
01:02:31.280 | Everyone has to get a visa.
01:02:33.760 | You can't come in without a tour.
01:02:35.320 | You have to book a tour guide.
01:02:36.920 | You have to commit, I think a minimum tour
01:02:39.160 | is $250 a day for a person.
01:02:42.120 | And so all the tourism is high-end.
01:02:44.440 | And so what they have done is built
01:02:46.520 | this tourist infrastructure that's all very high-end,
01:02:50.880 | very high-dollar tourist infrastructure.
01:02:54.080 | But it's allowing the kingdom of Bhutan
01:02:56.760 | to be a very exotic and unique destination.
01:03:00.160 | And when travelers go there, they find,
01:03:02.360 | hey, we're not overloaded with $1 T-shirts
01:03:05.440 | and people hawking cheap stuff to us.
01:03:07.940 | This is a really beautiful, amazing tourist experience
01:03:12.200 | that we're having.
01:03:13.120 | But it's because Bhutan chose to go to the opposite end.
01:03:16.980 | And so as you say, in a world in which
01:03:20.260 | you can order your food so easily through an app
01:03:23.080 | and it'll show up a few minutes later,
01:03:25.520 | all of a sudden now, having a nice experience in a cafe
01:03:29.200 | becomes that much more powerful.
01:03:31.920 | It's not to say you can't get wealthy
01:03:33.440 | selling food through an app.
01:03:34.400 | You can.
01:03:35.220 | But you can always look and say,
01:03:37.040 | all right, if the market is going this way,
01:03:38.940 | can I serve that market?
01:03:40.360 | Or maybe I can go the other way and find a market
01:03:42.800 | that I can serve effectively.
01:03:44.520 | - Well, I'll tell you another little anecdote
01:03:48.160 | from our past, which is one of these little anecdotes.
01:03:52.720 | Anecdotes that you use to live by,
01:03:56.040 | they get a little bit more sort of fairy tale-ish
01:03:58.840 | as you think about them.
01:03:59.760 | But when we started Mail Order,
01:04:03.600 | we had this consultant who was the fellow who was doing the,
01:04:09.560 | it was a company that sent out flyers
01:04:12.560 | and had mailing lists and stuff like that.
01:04:15.040 | 'Cause there was a whole world out there
01:04:17.120 | of mail order prior to online e-commerce.
01:04:23.120 | And so we started to talk about,
01:04:27.160 | well, which coffee products would be best
01:04:30.120 | and where they should be,
01:04:31.600 | and let's look at where everything is
01:04:33.240 | and what people are buying.
01:04:35.720 | And let's look at what's the most popular stuff
01:04:40.160 | and look at the different areas.
01:04:42.200 | And he said, "Wait a second.
01:04:44.920 | "All you guys need is one suburb of St. Louis
01:04:48.180 | "to sell your whole product.
01:04:50.180 | "So why don't you just think about being sharpshooters
01:04:55.180 | "rather than dropping Adam Bobsog things?"
01:05:00.560 | And he was right.
01:05:03.160 | That's a very, it's, you wanna do your own thing
01:05:07.320 | and you wanna be an entrepreneur and be successful,
01:05:12.320 | you don't have to be Bill Gates.
01:05:17.720 | You just have to be who you are and maximize who you are.
01:05:21.180 | - I love it.
01:05:22.260 | Steve, thank you so much for coming on the show.
01:05:24.700 | Is there anything you'd like to promote as we go?
01:05:26.060 | Obviously, the Cafe Brit is there.
01:05:27.420 | Anyone who goes through an airport in Latin America
01:05:29.620 | can enjoy some Cafe Brit.
01:05:30.820 | - No, I'm fine.
01:05:31.660 | - Yeah, any other products or projects
01:05:33.920 | that you'd like to share with my audience
01:05:35.220 | about what you're working on right now?
01:05:37.420 | - Well, I'm working on a whole series
01:05:39.380 | of circular economy ones.
01:05:41.420 | Actually, the coolest thing we're doing,
01:05:43.580 | the coolest thing that I'm involved in
01:05:45.380 | as a minority shareholder is a company
01:05:50.060 | that collects used oil, that is used lubricant.
01:05:55.060 | It's when you change lubricant in your car,
01:05:57.420 | most of it gets thrown away or burned,
01:06:01.780 | ends up being carbon.
01:06:04.620 | And actually, there are processes
01:06:08.020 | that you can re-refine that lubricant
01:06:13.580 | and get out of the 100% lubricant,
01:06:17.220 | you get 80% of base oil,
01:06:21.540 | which you can then just add additives to
01:06:23.820 | and then you have lubricant again.
01:06:25.540 | And the other 20% is asphalt.
01:06:27.260 | So that what used to be just thrown into the rivers
01:06:33.580 | or burned actually just becomes something that can be reused.
01:06:38.500 | - I love it.
01:06:39.340 | I am convinced that 30 years from now,
01:06:42.180 | maybe it's 30 years, 50 years, I don't know.
01:06:44.140 | But I am convinced that over the next couple of decades,
01:06:46.460 | to your point about circular economy, as you say,
01:06:51.460 | we're going to solve so many of these problems
01:06:53.780 | in the next couple of decades.
01:06:55.280 | So many items of pollution.
01:06:59.180 | Just yesterday, a couple of days ago,
01:07:00.900 | I saw this amazing video of this young Kenyan engineer.
01:07:04.100 | And she had invented and is working on perfecting
01:07:07.320 | a process of turning plastic garbage into bricks.
01:07:11.380 | And she had created these really high quality plastic bricks
01:07:14.860 | with a very simple thing and she spent years working on it.
01:07:17.820 | But when you can go into a nation like Kenya
01:07:20.220 | or Costa Rica or anywhere and take all that plastic,
01:07:23.500 | and even though Kenya now bans plastic bags,
01:07:25.660 | but there's still just everywhere,
01:07:27.220 | take that plastic and turn it into high quality bricks
01:07:30.080 | for pavers, high quality bricks for building,
01:07:31.980 | it's phenomenal.
01:07:33.100 | So whether it's lubricants or really anything,
01:07:36.060 | I'm convinced a few decades from now,
01:07:37.740 | we're gonna see a massive transformation
01:07:42.180 | where a lot of these lines of waste are gonna be cut off.
01:07:45.300 | And much of the waste that is there already
01:07:48.660 | is going to be upcycled.
01:07:51.460 | And we're gonna figure out how to use it more effectively.
01:07:53.860 | Because whenever there's a resource like that,
01:07:55.780 | someone's gonna find a way to use it.
01:07:57.260 | - Yeah, you just reminded me of something
01:07:59.100 | that I think is really cool that I'm involved
01:08:02.660 | at a national parks NGO.
01:08:04.740 | One of the things that we do is we replace
01:08:08.100 | some of the railings and the wooden lookouts
01:08:16.060 | that you use, which in the tropics don't last very long.
01:08:21.180 | And we replace them with plastic wood.
01:08:23.500 | And plastic wood is wood, looks like wood, acts like wood,
01:08:28.420 | but it's made out of the caps of all.
01:08:32.940 | And we collect caps all over the country.
01:08:34.660 | You probably have seen even these things.
01:08:36.660 | We collect the plastic caps and you can also use things,
01:08:42.980 | like there's other very strange things, like hospitals.
01:08:46.620 | In operating rooms, people use plastic aprons and things.
01:08:53.020 | And they use them once, they throw them out.
01:08:58.180 | Well, you can turn that into wood.
01:08:59.740 | - Awesome.
01:09:00.580 | - So there's national parks in Costa Rica
01:09:02.700 | that have lookouts made out of plastic wood.
01:09:05.020 | - Perfect, yeah.
01:09:06.380 | With human engineering, all of these problems are solvable.
01:09:11.380 | I mean, even every ecological problem,
01:09:14.660 | like all of these things are solvable,
01:09:16.380 | but it takes smart men and women to buckle down
01:09:18.900 | and do the work and find it.
01:09:20.460 | So Steve, thank you for coming on the show today.
01:09:21.980 | I really appreciate it.
01:09:22.820 | - No, no, it was fun, thank you.
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