Jul 13, 2020
Today's guest has a hilarious story of becoming a lawyer to further her stock marketing career. Yes, the full story is as unconventional as it sounds.
After building up a successful portfolio, she gave it all up and moved to Utah to ski and bike. Then a failing coffee shop that she frequented was closing, so she bought it... just because.
Just a few years later she's built it into a successful attraction destination for locals and tourists in the ski resort town of Park City, Utah, as well as expanded out to building her own roasting facility that gives back to animal rescues.
Please welcome Claudia McMullin from Hugo Coffee.
Contact Info
- https://hugo.coffee
- https://www.facebook.com/thehugocoffee/
Claudia McMullan. Thanks for joining learning from others. How are you? I'm great. How are you today? Good. Um, you know, we were joking before we hit record and I was saying our audience is largely entrepreneurs. What are we going to learn from you? And I like your response because you said, I don't know. I just, I'm going to bring some stories and that's why we're going to go.
Right. I have no stinking idea.
Okay. Well, before we get into what you've learned, I like to ask two questions. So question number one is, what is your background? What are you all about? Okay. So my background is, um, I'm a reformed attorney from New York city. I moved to Utah in 1999 when I quit my wall street law firm job and sold my apartment and moved to park city, Utah with the main goal of not being an attorney.
And it took a long time for me to not be an attorney. So I tried a whole bunch of things. And part of, some of the, couple of the things that I tried was, um, I'm in a, knock it off my head, roaster and talent behind the organ behind the operation.
So anyway, a couple of the things I did it's in my quest to not be a lawyer is I ran animal rescue. For two years. And that was nuzzles and company, which was formerly known as friends of animals, Utah. It was like a dream job because my friend John Hanrahan. I was looking to not, I was looking to do other things.
I got the perfect job for you. It's it's to run an animal rescue. I know how much you love animals. And they're like, yay. So I did that for a couple of years and simultaneous while doing that, I also ran for office and was elected for summit County council. And I was. In that role for two years. And in that role, I sat on a, um, the executive committee of our chamber of commerce up here that owns this beautiful visitor information center that has a coffee shop in it.
And the coffee shop operator was not going to renew its lease after one year. And I thought that was a travesty because I used to go there to drink coffee, have meetings with customers and constituents. So I went home to my husband and I was dead. So I bought a coffee shop. And then in about a year's time, I realized that I wanted to control the quality of my product a little better.
And I wanted to create a roasting company, my own roasting company that I then named after my dog, my rescue dog, who I got when I was a foster failure when I was running nuzzles and company. So I named the Hugo coffee roasters and we became a social mission based company where we give back to animal rescue.
So our mission statement is that we save dogs by roasting and selling fantastic fair trade, organic coffee, so many cool things to touch on. Okay. So I'm making notes here. I'm going to come back to them, but not until I asked you question number two, which is what are you not so good at so many things? Um, what, so, one thing I'm good at is knowing what I'm not good at.
And also, I also know what I'm not interested in becoming good at. Like, I don't want to be an accountant. I don't want to be a marketer. I don't want to be all these things that I don't know how to do. I pay people to do them. So I surround myself with good people who know what they're doing. So I'm not a Jack of all trades.
I am the vision and the checkbook and the city. Have you always, have you always been that way or did you like trip over yourself a few times? And then you said, okay, I need to not take on so much. Oh, no. I've always been this way. I'm like the anti entrepreneur. CEO who starts and does everything I immediately was like, well, I don't know how to do that.
So I'm going to hire a CFO. So I'm going to do this and I'm, I don't know how to read it. I think a naturopath, I'm not a roast. I have a roaster. I have talent that does all these things. Yeah. In many ways that probably saved you from, uh, the, the troubles that some entrepreneurs go through by you just delegating out to the people that know how to do it best.
Yes. I like I'm a huge fan of delegation. Yeah. What w okay, so why didn't you let's, let's go back to the attorney thing. Um, why did you get into being an attorney and attorney? And at what point did you say, I don't want to be one anymore. This is a crazy story, but it's a true story. Um, I moved to New York city and I didn't know which was dumb, like straight from college.
We probably want to land somewhere where you have connections and I didn't, I have any, so I, um, was muddling my way through or a career as a stockbroker. I took my series seven, my series 63 in the eighties. And, um, my best friend, uh, went to law school right after. Was this your bet? This was your best friend, pre New York move or a new best friend, but my childhood best friend went to law school and graduated from law school.
And got offered this ridiculously, this ridiculous job in my field as a stock analyst, just because he had a lot of great. And I said, Well, I'm going to go to law school. So I did that. I mean, it's ridiculous. Just having a lot of grades. She got offered like this $85,000 a year job in 1987 and I'm like, screw this.
I'm going to go to law school. So I went to law school at night. And, uh, I was in law school at night at Brooklyn law school when the market crash of 87 happened. And I'm like, well, I'm going to go full time because I want to get out before all these unemployed traders go to law school and then they get out.
And then I just happened to get, I did very well in law school and I got a great job with a big firm and I loved it. I mean, don't get me wrong. I loved law school so much. I even liked being an attorney for a long time. But I didn't want that life. Right. I didn't want to be a partner in a wall street law firm.
That was not of interest to me. I wanted, I'd been in New York a long time. I've been through two careers and like, let's, I'm going to go back to how I used to live in college. When I went to school in Boulder and I lived in outdoor lifestyle, I'd done the indoor lifestyle. I'd had lots of bars and clubs and restaurants and shows.
I'd seen all that. And I wanted to live an outdoor lifestyle. So I just quit my job and moved out here. So you said you went to law school at night. What were you doing during the day? That's what I was a stockbroker. Okay. And you said you liked doing law. What did you like about it? I love the smart, the intellectual challenge, and I love being around so many smart people.
I loved being around really smart people who challenged me all the time. So how, how, how long were you an attorney before you, so two questions. One. How long were you an attorney and then two, was there like a critical moment where you decided to check out or was it just a slow progression? It's a slow progression.
Um, when I got here, I didn't in 99. I didn't want to be a lawyer. Um, I didn't want to work in a big firm. Let's put it that way. I didn't, I didn't, I would've gone in house counsel. Um, but I didn't get that gig. I just hung a shingle and was my, and I ran my own small law firm out of my house and realized quickly that it's what I knew how to do.
And I was good at it. I didn't have to do it very much to make enough money to pay my mortgage. And so I practice law as little as humanly possible and skied and biked and hiked and did all the stuff you do when you move here. And then it really got bad when, as far as it got me, when I say it got bad, meaning I was getting clearer and clear about how much I don't want to be a lawyer when I ran for office and won and realize that basically everything I do upset somebody.
Right. Cause I'm making decisions as a, as a summit County council member. That's pissing people off the Gator. So somebody is always mad there too. And I just did not want to live a life of conflict and upsetting people. I wanted to make people happy by giving them great product. So I created a company where we provide a terrific product and people are generally smiling.
Now when they see you. Yeah. Okay. So, all right. That's an awesome story. I liked the background. Now, the next thing I'm curious about is you said you went to have, your husband said I can do that and bought a coffee shop. All right. So did you have, by the way, not having
flood, he married a lawyer. Not how, how long was there any discussion or was it a done deal when you brought it to him? I D I, unfortunately I said, and I'm not asking your permission, so there wasn't a lot of discussion. How long have you guys been married? It will. And by the way, that was when we were, that was, we would, but we'd been married awhile.
We've been married 17 years. Okay. Okay. He knows, you know, the personnel, he wasn't happy, but he wasn't surprised he wasn't happy, but he wasn't. He knew he couldn't stop the juggernaut. That is me. Alright. So you buy this coffee shop. Um, now what, what was like day one? What was your plan? What was your thought?
Like? It was really, I wish I had one you'd think I would know it was really just because you wanted to save something that you used to visit. Was because I wanted to save something I used to visit and I saw a way out of which, which one? Which one did you care for? More? Okay. All right. So then you, you pick up this one, walk me through coffee shop.
So I pick up the coffee shop. And again, because I know what, I don't know. I don't know anything about coffee. Um, I hired the barista from the prior owner and I paid her more and she taught me the business. Now, did you have savings or did you have to finance this. I actually had to find an answer I did through a personal friend.
Okay. All right. Small loan from a personal friend and I paid that off and, uh, yeah, I mean, there's a reason why the prior owner didn't want to renew the lease. The place was, it was not successful by any stretch. It was a disaster. So I had to convert, I had to turn what was. Not profitable at all coffee shop into, and in fact it almost had a stigma around it.
So I had to convert it from a stigma place to a destination. That was the other thing it's not easy to find. So you have to drive people there and to drive people there, you got to market it and you got to throw some money into marketing. So I did that. Did you know that it was not successful before you bought it?
Or did you further realize the extent? Okay. Okay. Those are two questions. Yes. It was not a profitable. No, I had no idea the extent to which it wasn't profitable. And was it, was it just poor management structure previously or was it just a bad idea to begin with or what was the main source of bleeding?
Here's what I've learned since. Um, well, no, I knew it at the time actually. Um, there was no, no effort to market it. There was no effort to alert the world that there was a coffee shop in this visitor center. And, um, there was, it was left in the hands of teenagers. Right. Um, and, um, Ours were inconsistent.
Product was inconsistent. Days of operation were inconsistent. I mean, it was just, it was not well done. So I took it over and growing. How long, how long did it take until things were turned around? I'm going to say two years and walk me through the marketing process that you introduced to start getting the name out.
A lot of it had to do with word of mouth because I'm well, I'm, I'm a pretty well known person in the community by virtue of the fact that I was a summit County counselor at the time. Got it. And by virtue of the fact that I ran an animal rescue, um, so I had name recognition. Um, so I had press done, you know, local, uh, radio and TV and newspaper press was done.
Um, lots of social media, uh, and, and word of mouth. I got a really big sign. Uh, I got a really big sign and it caused controversy with a couple of constituents because it was really big, but it also comported with the development agreement. So it's big, but it sounds great, but you really couldn't see it.
So it wasn't that great. Um, I did a lot, I think I did a little gorilla stuff for a bit. But I had to be very careful because I was again on some accounting council. So I couldn't do too much begging of forgiveness versus asking permission, but like I grew a banner out there for a week, like coffee shops and then took it back and then I had an, a frame and then I got yelled at.
So I took that back and, you know, and then I would just go places I would do for the first two. I mean, I still would probably do this. Um, but I would do anything that I thought people wanted. So for example, Cross fit's very big up here. And CrossFitters seven years ago tended to follow a paleo diet. So I created a paleo menu it's to get the CrossFitters into my shop, um, whatever you want.
And if you came into my shop, I'd give, I would be like, I don't have it now, but I'll have it tomorrow. I don't have it now. And that's, that is not really a smart way of doing business. You don't really want to, um, try to please everybody. But I had, that's what I did for a couple years was I tried to please everybody and then.
So have you, have you found your, your ideal customer now, do you have like a persona that you're, you have an audience that consistently comes in? Like you, you had mentioned that the CrossFitters, so like, is that the larger demographic now, or do you have kind of a, an avatar that fits the majority of your buyers?
Um, for the coffee shop, there tend to be entrepreneurs who work at home who want to work out outside of the house and they come in and have business meetings. And I created that intentionally, you know, for a place I wanted to create a place where people. Uh, could congregate and feel comfortable hanging.
And we have this and I created it for who I was when I bought it, which was somebody who was working out of their home, had one have meetings. But most of what I do now, by the way, has nothing to do with the coffee shop. I'm all thousand percent in on my roasting company, Hugo coffee roasters, and the coffee shops run by a manager.
Yeah, it is the coffee shop, bro. Is it the same name? Yeah, you go coffee. Um, and then the roasting companies, you go coffee roasters. Okay. So let's talk about the roasting. So you wanted to control your product better. You had said. So, uh, was that now and at day one, or as you started to grow the business, you said, Hey, I need to make this better and more consistent.
Well, there's a couple of things nobody's ever going to pay a mortgage. Owning a coffee shop is what I learned very quickly. And, um, I realized that, uh, where growth and profitability. I mean, there's, there's a couple of things. One can do. Like if you own three coffee shops, you could probably pay a mortgage one stand alone kiosk in a visitor information center.
Forget about it. Um, and I wasn't interested in opening many more coffee shops. So I wanted to, I wanted a business that was profitable that would give back to the world in a more effective way than a coffee shop in a, in a visitor center. So I created a roasting company for that purpose for to up the quality of the product, control the product and save animals.
So it was, and I want to get to the social mission here in a minute. But when you started the roasting side of things, was that almost like starting a whole other second business? Absolutely. It has nothing is completely a million percent. A manufacturing company is very different from a retail shop shop.
And I knew what I was doing. Like zero, like none. Did you ever come close to giving up on either of these two? Um, no, I didn't give up on the shop because I really enjoyed it while I really enjoyed it. And I really thought it was so fun. It was like, I would say for the first three or four years, it was like having a dinner party every day.
I was hugging and kissing babies and dogs and chatting, and it was great. It was super fun and it was making people happy. And that made me happy. Um, I forgot the question. Did you ever get almost give upon the roasting company? I do know in the coffee shop, um, the roasting company,
And the reason being as tough as it is, you know, how as toughest cashflow, crunches are as tough as. How am I going to, how, how am I going to grow this company? These you all at the end of the questions that entrepreneurs have to deal with all the time and the, and the, and the ups and downs of the vagaries of a business, and particularly a coffee roasting company in a resort based economy.
Um, I never was going to give up because I put so much money into it. I was never going to give up on my investment because I think of my roasting company as my future. And I'm not, you know, I'm gonna do everything I can to make sure that this is a big success. Now I can tell you on March 20th, 2020, it was definitely, there were definitely thoughts of giving up.
Yeah, it took me a week for it to sink in maybe not a week, maybe three days for the existential threat that COVID-19 poses for it to really sink in. Yeah. Have you, have you found a way to be stable with that because obviously that's still going on. Yes, partly. Um, I've been very, my job for the past last three months has been to raise funds to stay alive.
And I've done that through grants and loans and the PPP and all that's the thing everybody's done. But every, every restaurant bar owner, every anybody who's effect anybody whose business went away overnight has done the same things. Um, I think that one. One, one thing that was good is that my 2020 business plan was to grow my online direct to consumer sales.
That was the plan for 2020. I wanted to grow it from 5% of my business to 50% of my business because I did and I wanted to do so to make sure that I don't have these cashflow ups and downs that are natural in a resort based economy when you're, when you're wholesale. Customer base are restaurants, resorts.
Yeah. Coffee shops, all in a resort based economy. Either a four months of the year where you have these cashflow things, these flats and downs, and I wanted to make sure, and I want direct to consumer to even out that. So toward that end, I was in the middle. When this happened on March 15th, I was in the middle of hiring in house marketing staff.
I would say in the middle of a brand audit, I was in the room middle of updating my website, Shopify. And launching a more robust Shopify. So when COVID hit, I was, my brain was already in a pivot to direct to consumer and I just did it very. Yeah. Yeah. And so I've been growing direct to consumer sales since March and I was lucky enough to have a good friend who is, who has a very big following.
On Instagram, who called me and asked me what he can do to help. And I said, you could help by, um, Hosting a promotion. If you go coffee and Hugo coffee products, uh, with a coat or whatever. And my sales went from zero to like 10 grand in the first month. Yeah. That's a great, it's a good buffer. Yeah. It's so you almost, you basically got dinged twice because one just because of the virus just shutting down things anyway, but then also, because any inkling of, you know, customers that could sneak in are all based on the tourist economy, which got wiped out too.
And my coffee shop closed. I lost a hundred percent of one business and 95% of another overnight. Yeah. Are most of your wholesale buyers? Are it sounds like they're in the yes. So my wholesale buyers, my wholesale customers include like, St Regis montage, blue sky deer Valley, um, restaurants up and down main street.
I'm at the U I have some corporations down in salt Lake. So it's either the Wasatch front of the Wasatch back. I, I do drop ship wholesale cut to some whole sell customers in other areas of Utah and in other areas of the country. But. Not a lot. Yeah. Now for the listeners, you know, Claudia and I were, were both in, in Utah.
And so I'm familiar with these places that she mentioned, but for the listeners that might not be familiar, you know, st. Regis and deer Valley, these are nice high end resorts. Now, how, how did you get those clients to begin with? Um, let's see. So I've been here a long time. Right. So I have a lot of friends and con and I really have gotten most of my wholesale business.
If not, I'm going to say no percent of it just from reaching out to people. Do you know anyone at hi? Do you know anyone at, um, and have introductions is normally how I did it? I also happen to know, you know, people at I'm. Okay. I met the montage is executive chef. At an event. And I talked to him, what about bringing Hugo coffee into montage?
And he. Enjoyed the coffee and I got it. I got the, I got that gig that way by, from an event, um, deer Valley I've had relationship. I was their attorney for a while, so I knew everybody in deer Valley. Um, so that was helpful to get into deer Valley a little bit blue sky. I knew the developers from, um, my job as summit County counselor.
So I reached out to them and it doesn't matter how I know you, everybody goes, everybody does the same thing. We do the tastings and we talked about. You know, what, what works for them and, you know, pricing and equipment and servicing and all that kind of stuff. Yeah. Very cool. All right. Let's talk about your social mission.
At what point did you decide to introduce that to the copy company? Was that at day one or after things got leveled out? No, it was not day one. It was, um, 2018. And I opened the company. I mean, I incorporated the roasting company in August, 2015, but I only started operating in December, 2015 in 2017. I had the epiphany in the shower on how was I going to differentiate myself from my competition and big, and I had this epiphany that.
You know, in coffee roasting, at least in my opinion, um, it's particularly a high, you know, higher end coffee and this is high end coffee. You know, my coffee, I play in the sandbox with the best brands. Um, mean, are we ever really right? We're buying from company, we're buying beans from the same. Regions the same countries, the same elevations they latitude we're roasting it a little differently.
Uh, but how different are we ever really? Uh, as a small batch roaster. So I thought, well, I need to come up with something that is authentic and distinguishes me and. I'm my company's named after my rescue dog, I used to run an animal rescue. I had said that I wanted to convert my mission to that of a social.
Based mission of give back to animal rescue. And we did a whole branding exercise. And by the first quarter of 2018, we came up with the messaging and we changed the mission and we changed the company to, uh, animal rescue give back. And then in 2019, I went through the Goldman Sachs 10,000 small business program.
And that's when I realized I. My pivot to direct to consumer. I want to get cracking on that. And I also realized by virtue of that experience, that my messaging. My even my social mission messaging, my animal rescue giveback messaging, I was concerned. It was inconsistent over plat across platforms. And I that's what I wanted to do a brand audit.
Cause I wanted to make sure we nailed messaging correctly on the mission and the vision over all the various platforms. So it started as an epiphany in the shower to distinguish myself from my competition and it evolved into. A vision and desire to impact the country in giving back to animal rescues across the country.
So the vision for my company, what my mission is to save dogs by roasting and selling fantastic fair trade, organic coffee, but the vision of the company is to be the go to coffee for animal lovers nationwide so that I can impact animal rescues nationwide with my overall. Dream and goal in life is to have a world where there are no unloved, unwanted, abused, or neglected animals.
How do you give back w w w where do things go? So what we do is we give back 10% of profits, quarterly to animal rescue. And in addition to that, I underwrite on our local NPR station. I underwrite something called the adoptable moment. Yeah. Every week. And that benefits a local animal rescue called paws for life and paws for life brings animals to the local radio station.
And we've, they've been doing this. They are Nestles and company have been doing this for years and I've underwritten that program for years and have been involved therefore in saving and, and adopting out. Something between 150 and 200 cats and dogs in the last couple of years, in addition to the cash, you know, the writing of the checks also pop up at animal risk at any time, which there aren't any this summer, which is unfortunate because we had really gotten a lot of traction by going to super adoptions and paused, struck your months and yappy hours and any even little event of small local.
A soup, you know, hyperlocal animal rescues, and there's a lot of little hyperlocal animal rescues. We would go to those events and sell coffee bags of coffee and swag and give them bigger percentage. We give a big percent from every event, the beneficiary who, who was the sponsor of the event, or so now how do I pick the animal rescues?
Like currently we support. So with both of my, um, my online sales, my online website sales and my Amazon sales, those have a national reach. So I wanted to make sure I support a national, uh, a national impact rescue. So that's best friends. And I support nuzzles and company and paws for life and, and a number of smaller regional ones.
But if I were to get a customer, for example, in another state and they wanted to supply a grocery chain, a grocery chain in another state wants to look to benefit their local animal rescue. I would do that. Got it. Do you have, do you have a standout moment throughout these, how you've contributed back to animal rescue?
Is there just like a highlight that just always stands out the major day of an impact you've made?
So you, you said that, and I don't know that I had the impact, but the standout moment was, uh, I just love. Uh, super adoption events and I met two. So at two different super adoption events, one, I met this amazing pity named Toshi, this huge pit bull, huge who had been, uh, who had not been adopted and had been fostered.
And it's been in the system for really way too long. Um, but we did a lot of social media outreach about it, and I don't know that I had anything to do with it. But Toshi, she got adopted that made me very happy. And then there was, um, I'm a big follower on FA on Instagram of dogs. And I fell in love with this dog called punch the pit.
And I was engaging with the mom with the human of punches mom and I wanted to do a, an event that, uh, would benefit her favorite rescue and she lives in Chicago, but I wanted to do, uh, A promotion that would benefit Melissa's favorite animal rescue. And I was in the middle of doing that when Pudge unfortunately passed away and it was devastating.
It's so crazy. Then I don't know this dog and I cried for two days over the loss of a dog that I've never met, but I love this dog so much. Anyway, I'm at the next. Um, super adoption. And I see this dog that looks just like Pudge and I run over to it and I beat tug tug boat. And now I'm a human
and his owner. Who's also named Melissa who it actually works for best friends or heal Utah, which are, I think they're deleted organizations. Anyway. I just love being at the animal rescue events. Those are my favorite thing. It's just, I love it. It just takes me back to what I'm about. Claudia. You, you're a pleasure.
I love these stories. I like your personality. I love your enthusiasm. And I like, um, you know, everything you're doing with your business. And I want to tell you, thanks for jumping on learning from others. I'm gonna give you the last few moments to put out your contact information, you know, tell us about your coffee website and anything else you want to throw out there.
Sure. So, um, please, uh, if you're interested. And please be interested by the way. Come, come to my website, www.hugo.coffee and, and buy on online. That'd be fantastic. And help me with my pivot. Um, And follow us on Instagram and Twitter and Facebook. It's at duck Hugo coffee. You can always, anybody can always reach out to me@claudiaathugo.coffee.
And I would love to hear from any and all of you. And I hope everybody just survives the COBIT crisis and that we survive and thrive. If there's any, anything I can do for anybody who's listening. Let me know. Claudia McMullan, everybody. Thanks so much.