Turner also had a knack for changing the rules when presented with a nowin scenario.
Four suitcases and a plane ticket to California
Another personal axiom of mine is less poetic but every bit as useful: “You are what you did.” You are not what you talk about or believe or are planning on doing more of someday. You are what you did, so get to work.
My freshly reminted self was making a surprising amount of money at the printing sales job
Because they had to spend weeks aging before they tasted their best, they were known as ‘Lager’ beer. Lager is the German word for ‘storage’.
ings like heat-exchange ratios, hemocytometers, commercial lease negotiations, basic uid dynamics, workman’s compensation insurance, trucking companies, payroll taxes, and cash-ow statements.
For the owner it is heartbreaking when the people who have helped make the rst part happen leave before the promised land appears on the horizon.
making the beer stronger does not really cost the brewer a few dollars more, but making stronger beer allows the brewer to charge a few dollars more
He said how there was increasing growth in consumer interest in the more avorful imported beers at the time, and he gured that if he could make a beer just as good, then he could deliver it fresher, and it would have the bonus of being locally produced. Imported beers were more expensive, and so he looked to their pricing as a model. Besides that, craft beers made up something like 2 percent of all beer sold, and imports were 12 percent.
when a beer lover walked into the beer aisle in those days, and he had six dollars to spend on a six-pack, there was a two-to-twelve chance that he would grab a microbrew and a ten-to-twelve chance that he would grab an import. I liked the import odds a lot better
un-cultured Yeasts that produce bone dry, sour, face-puckeringly tart beers called Lambic Ales
One time, due to a dispute with our two distributors, Sierra Nevada’s pale was taken off tap and our pale ale was put in its place. Instantly we were selling ve kegs a week—more than any other account we had anywhere. I knew that this was not because we were so loved, but rather because people were ordering “pale ale” and expecting to get a Sierra Nevada beer. So far, my dangerous assumption seems to be accurate
One spring, always a nancially hard time because the big summer ramp-up in distributor inventories would begin
we had never, ever missed a payroll. at would have been like using a Bible for kindling, or smoking in a cancer ward. Payroll is the highest sacred trust in running a business.
I turned to our house for liquidity.
I did not know why at the time, but my bank seemed more than willing to continuously renance my house if I xed up parts of it enough to move the needle on the appraisal even slightly. Once I got the hang of it, I would purloin a few thousand dollars from the brewery to x up a bathroom, have it reappraised, slip the appraiser a couple of cases of beer, yuck it up a bit with him, get the appraisal up by $50,000, borrow back the revised maximum loan to value metric, and—presto!—$3,000 in diverted cash ow became $40,000 in new working capital for the brewery.
I was later told a story by a senior guy at that bank about a $1 million line of credit that the other brewery was in danger of defaulting on. As can be the case with big-bank logic, their internal analysts decided that if one brewery could have such troubles, the whole category could be doomed.
I THINK WE’RE ALL BOZOS ON THIS BUS… I mean, really; who would ever have given their money to a guy with a name like ‘Made-Off? If one day an oily guy named Soprano showed up at your door wearing a suit that said ‘Countrywide’ offering free money; who would have taken it? Isn’t ‘free money’ an oxymoron?
ROBBING PETER TO PAY PAUL
Drains and the six-inch-thick slabs seemed in danger of failing altogether under the hundreds of thousands of pounds of beer-lled fermentation and bottling tanks.
capricious
So over the course of 1993 I opened a dozen different bank accounts so that the money would be harder to nd, and as the net grew tighter, I began moving checks around daily. Something like this: I’d deposit a check for X dollars in Bank A, then I’d walk down the street to Bank B and deposit a check from Bank A for the same uncollected and freshly deposited X dollars. I’d repeat this up and down the block between the banks, arriving back at Bank A again, where I’d rewrite that same check. e deposits would all reconcile the next morning, and if the IRS or California tried to get the money, some other bank would already have earmarked it for transfer. I thought it was pretty clever. Truth is, banking was not nearly as efficient in the backrooms as it is today, and the banks I was using were mostly small mom-and-pops, so they were inclined to be more friendly than suspicious. But it was genuine check kiting! Finally, one of the banks detected the “unusual movement,” closed my account, and notied the other banks too.
Here’s what I learned about how the IRS does what it does: if you have a problem, and you don’t have the money that you owe on April 15, le anyway. Forty-ve days later they will send you a letter demanding the dough. Take the letter and smoke it. Don’t answer! If you do, you will end up talking to very menial 1-800–type attendants who will push a little button on their screen and start a sinister timer running. ere will be no negotiating. Instead, if you can stand it, wait until you get the h letter around September. It will come via certied mail. Answer that one right away. at letter will have a different phone number on it that rings into a Seattle office called the ACS (Automated Collection Service, but it is not automated at all). e hold music is Vivaldi, and it will drive you crazy. Eventually you will speak to a person who can make deals. Not on the amount, but on the terms. Make them a promise, and then, by all means, keep it. If you can’t keep it, call the day before and tell them. ey won’t like it, but if you keep up your end of the deal—which includes telling them before you are late—they will keep up their end of the deal too. No more seizing bank accounts.
If you’re keeping score, then you have guessed that instead of catching up and paying my taxes on time, I was putting all of my money back into the brewery. at is correct: even though no bank would step up and fund a growing business because of its immaturity, the IRS did! Of course, they didn’t know they were funding my growing brewery, but it seems like they might have agreed to it if they had been disposed to consider it. e interest rate they charge on unpaid taxes is better than any bank would have offered me, and the “loan” helped support the brewery’s cash ow and ultimately helped to generate the remittance of millions of dollars of my current and future employees’ income taxes as well as many, many more millions in future excise-tax payments. It was a classic win-win. By 1997, even though I was still not on payroll myself (although we did have ten or twelve others on payroll by then), the brewery had sufficient cash ow for me to make a payment arrangement with the IRS.
So I went to the private world for money in July 1998. at project was a high-wire act for me.
My future landlord, Mike Buckley, put in a good-sized portion. He agreed to it one morning during a very plain two-hour conversation—our rst meeting—without any haggling or posturing. ere was no “I’ll need to think about it” or “Let me discuss it with my accountant or wife.” ere was just a simple “is looks good. I like the beer; it seems like it’ll be fun.” us began the most straightforward and integrity-based relationship that the business or I ever have enjoyed. In that sort of relationship it is so very easy to tell the unvarnished truth, good or hard, and know that you’ll get useful feedback. Would that they were all like that. Mike has also ever since been the single most important business advisor, nancial mentor, and fearless supporter of me personally and of the business. It was another of those “unbelievably right thing at the perfect moment” events
stock-market bubble du jour
e signed subscription agreements already in place included a deadline of December 31 for completing a minimum capital raise