Pizza & 40s with Phil Jaber, Founder of Philz Coffee

Hey guys, what's up? So, I'm Sam. I'm one of the co-founders of The Hustle. Basically, we're a daily email that's a mixture of The Wall Street Journal and The Daily Show. And we also have a big event coming up. It's called HustleCon. It's at the Paramount Theater in Oakland. In about 14 days. May 13th is a Friday. Hopefully some of you guys are gonna be there. And huge thanks to Thumbtack for having us. And so we do these monthly series. We call them Pizza in 40s because originally the idea was we're a young startup, so we don't spend a lot of money on food. So everyone was gonna eat cheese pizza and we were gonna get 40-ounce beers. And the idea here was that the speaker would drink a 40-ounce beer and when the 40 was done, the talk was done, 'cause that takes about 45 minutes to drink. Usually by the end of that 45 minutes you've got a nice loose and funny speaker. I have a feeling you don't need that today, so he'll be drinking a Diet Coke. Also, huge thanks to Steven at Cushman Wakefield. Where are you? Stand up. Steven here, they— Cushman Wakefield pays for this pizza every time we do this. Basically what happens is— why don't you give a 20-second pitch here. Yes. And they're good buddies of ours. So, if you guys need anything like that, Stephen here, they help pay for the beer every time and pay for the pizza. So, huge thanks to those guys. But, so here's what we'll do. We'll have about 30, 45 minutes or so where Phil will tell his story and then it's really casual. People can ask questions as we go and we'll also have a Q&A at the end. And also, there's about 5 or 7 seats up here. Anyone in the back, If you guys are sitting here, maybe we can like move in also if— so these guys can come and sit on the ends. But if you need a seat, there's a couple up here. If not, just stand and there's plenty of beer over here in the cooler. So without further ado, let's welcome Phil.

I want to tell you something. I never been nervous before, but you guys making me nervous. And whatever her name is, she make me feel so comfortable and relaxed. She said everything I need to say. Yeah. My name is Phil Jaber. I grew up in the East Bay, Alameda. When I was 13 years old, we used to come to San Francisco, visit the families. I could talk for a long time, but I'm gonna make it simplified. So when I was 13, I chose San Francisco to do my business, build my fortune. I chose San Francisco because it's only 7 miles by 7 miles. If you conduct business with Faith, love, and truth. Treat people like you want to be treated. Hospitality. Honest, sincere action. Long time ago, people used to talk about me. For example, "Hey George, go to Phil. He's a nice guy. The price is right. He treat you good." So these people build name and reputation for me. That I earned, I don't buy. And during that time, I used to have a mini Costco because I have that idea in the '70s, but my family doesn't want to work with me because they— I was young. So I always loved coffee when I was a kid because coffee is a social. Coffee put people together, communicate, make a friend, seal a deal from way back. 800, 900 years ago. Didn't have high tech then. So I have a vision long time ago because coffee and tea in everybody's house is a good commodity. And how can you go wrong playing with the water? So I worked in my mini market, 24th and Folsom, early '70s. In the meantime, I was working on my concept. I do not have money to open shops. I have a journey agenda. I have a concept. It's built in a good solid foundation. It's all written down how I'm going to conduct my business from day one to 100 years from now. It's the same thing. People change, companies change. Phil's Coffee tomorrow become excellent at what they do best because we have the same concept, the same rules and guiding we follow. You must have rules to follow to succeed. The first thing, you must love what you do. Get up in the morning with good thought, good mind, smile. You do good that day, you cannot go wrong. So that's the symptoms I was working on. So in '98, I took 2 years off. I visit 1,100 coffee shops, 5-star restaurants, hotels, not to see how they make things. Why people go there? What they're looking for? What their expectation? Are they there to impress each other? Is the employees happy? Is the owner in the coffee shop or in the restaurant? So I learned a lot of things. I used to sit outside in the cross street. That man with the red t-shirts, 8 o'clock walk into the coffee shop, 8:15 he's out. He's wondering, he's not happy, he's not smiling. So I used to walk inside the coffee shop. First thing I look at the employees, are they happy? Are they smiling? Are they enjoying themselves? I stand in line, order coffee, and I go sit at a table. I used to see people sitting like a plant. No communication. It's like going to a medical office. I said, that's not what I'm looking for. I want to put a community table. I want people to look at each other, communicate, make a friend. That's what I want. So what I did, I took the breakfast table from my house. And I put it in my coffee shop. I started in 2002. I work at my concept 25 years, never give no one taste, never sold it. In 2002 when I open, excuse me, it took off because first thing, I have a good concept. There's businesses for everybody. There's coffee for everybody. I was the different about me is the culture, the people, the young society right now. You all have class and taste, quality. You don't like BS. You walk to it, you drive to it, you fly to it, and you guys have Money. Am I right? So, long time ago they used to talk about me. Now this young society, they write about me. Instagram, Twitter, Yahoo, social media. You guys put me in the cloud. The cloud used to rain long time ago. Now there is no rain. So when you love what you do, you do the right thing, treat people like you want to be treated. Don't be greedy, be satisfied. Greed is a disaster, satisfied is a success. I'm very fortunate. I'm into health before wealth. And I earned my name, my reputation, how I conduct myself, present myself, the service. I love people, so I earned this reputation. So these days I have parents with little kids, 2, 3, 4, 5. They grew up in my shops. And these kids, they know First Coffee. My grandpa doesn't know First Coffee. So it's about the new generation. So we try to do the right thing. There's my coffee. It's the last wave in the coffee business. It's done the old-fashioned way. The old days, they didn't have grinders, they didn't have boilers. Everything is organic. Don't panic. So we opened one shop. I transferred it from market to a coffee shop. I used to have a liquor license, and you cannot get any other liquor license. I got rid of my liquor license because I have faith in what I do. See, that's power. So I get rid of my liquor license. I get rid of the lottery. I used to sell 2,000 cartons cigarettes a week. 2,000 cases Budweiser a month. Truckloads of liquor. 200 cases milk every other day. 150 cases eggs because I used to sell value at a good reasonable prices. And that's how I get my business. When it's happening, I have the name, I open the coffee shop. And one thing I want to adore my family, my wife, my kids, that they follow our footsteps. And I adore any family, their children follow their parents' footsteps. How can you trust anybody except your own children, but you could trust others if they commit and conduct and show me and result. Then you have faith in them. So my son came to me, he goes, "I don't want to go to college." I said, "Uh-oh, you're gonna bring trouble between me and the wife." He goes, "I don't wanna go, Dad. I wanna help you." I said, "Go talk to your mom." So I have two girls and a boy. My kids, when they were young, I spent all my money in their education. I sent them to kindergarten private all the way to 8th grade. They went to Mercy High School. They went to USF. Then they went to USC. My oldest daughter, I told her, become a doctor in case I go broke. And somehow it works. Really, my daughter is a doctor. She's a dentist in Orange County. My other daughter, I told her, become business major in marketing because marketing is number one in business. So she did. She became a marketing business. I told her, get your real estate license. Where is he? So I told my daughter, get your real estate license in USF. She did. I said, I want you to learn about big corporation leases. Spent another 6 months. She did. When she finished, she goes, Dad, I got a job with McKesson, the drug company on Market Street. I said, no, you're not going to go work there. Come over here. So I wrote a lease. I wrote a lease because I'm confident of what I do. I told her, this is my lease, you are my master agent, you're gonna make all the commission, but make sure I meet the owner of the building or the developers or whoever. I want to meet the owner, number one, and you conduct my lease to him. If he's just not gonna do it, put a cross on him, tell him you fail, because I have something really good. It's well studied. So she finished, I give her the lease. She goes, Dad, why didn't you put the Z in Philz instead of Philz with the S? I put the Z, and that was the best thing I ever did. That's what you call marketing. That's what you call team effort. You see, my father never used to listen to me, but I listen to my kids. Because it's the new society, the high-tech. I came from the old basics and value and morals, and this is the high-tech, and we complement each other. That's what happened to us. So we start to grow. I opened my second shop in the Castro. That was the hardest. The second shop was the hardest thing, but after 4 or 5 months We have so much love in the Castro that we felt it. I went, I opened another one, 4th and Berry, when it was nothing but sand. Then I said to my son, we're going to go south. So we went to Palo Alto, Middlefield. You guys know Middlefield? That's the best culture families I ever witnessed in my life. The children, what manners, respect. So I opened that shop. All of a sudden, developers called me. I don't have real estate, my daughter. Hey, we have a place for you here. Jessica, go look at it. She go. We're going to meet the owner. So I met many owners, and lots of them I turned down because some of them their eyes bigger than their stomach. It's like, I own it, you do it my way. I never pay attention to them because I have so much confidence in my concept. My concept is anywhere I go, I learn from the fourth location I have that when I go to that community, that district, that city, People desire to come to my shops. I put the building on the map. I raise the property value. I enhance all the businesses around me because you come to have coffee with me, you want lunch, you go to the salad bar. So I enhance— I saw that and I felt it. So that's more power for me, not to take advantage to deal with the right people who wants to deal with me. And we open Forest, then we open Vanasse. We used to be 2 people, now we have over 900 people. I give them health plan, I give them dental, I give them vision, I give them 401, and I give them opportunity to invest in Philz Coffee, 'cause I wanna keep them with me for a long term. It's not 6, 7, 8 months job. And we have a school. You must go to my school. And you must have 3 things for me before you work for me. Basics, value, morals. You love to work for Phil. These 3 things. Then if I see that, we put them under training and we have a school. This is what you do, this is what you don't do. And I have I'm successful because I have so much trust in my team. You must trust your team. But if you go home, you have second thought, and you get up in the morning, stress, drama. We have none of that. And the second thing, I follow rules and guiding of city. I go to the city, the building planner, the health, plumbing. I'm going to open a shop, what's your requirement? So I follow rules. That's why I'm successful in my house, in my business. So you must have rules before you open business or go to work or whatever. So we did all that, then we start to grow more. So I go back to my son when he was 17 years old. After 3 months, his mom and his sister, he agreed to come to work with me. I said, Jacob, I want to ask you a question. You want to work with me $6 an hour, sweep and mop? He goes, no, Dad. I said, what do you want to do? What do you want out of Phil? You know what he told me? I want to grow. I said, I'm a handicap in the English language. What do you mean you want to grow? Explain it to me, break it down. He goes, the way you train me, Dad, You go open shops and we train people 2 months in advance. The minute we open the shop, ready to open, we have staff ready to go. So we wrote things down how we're gonna run business. It's not open and we'll find. So I left my money breathe. I invested in my team and we started to open 1, 2, 3, 4 Now we have 33 or 34. We have 7 more coming this year, 15 to 20 next year. We just opened in Washington, D.C., Adam Morgan. May 12th, we're gonna open another one by the Navy Yard. Last week, we opened one in CNN, Hollywood, Sunset Boulevard. God bless. Your success is our success. We're opening in Pasadena, Lake Street, Huntington Beach. We're gonna go to San Diego, Boston. We look Austin, Texas, Denver, Colorado. I want to leave New York when the economy go down, the highway robbery. So I think from Washington, we have a name. It was— I want to cry, it's so good. We have over 2,500 people in our first soft opening standing in line. People who knows us, 70%. People flew from LA, San Francisco to come to visit our shop. One professor, he goes to me, "Phil, you're going to a hard market." I said, "I didn't know yet. Let me go test the water." So I went to Washington. I find out people in California, San Francisco, they eat, work, sleep, they go out, they drive, the same thing in Washington. So I came back to him. He said, "Phil, what do you think?" I said, "You're wrong, Professor. The only difference is destination." So I learned a lot from Washington, D.C. I could go anywhere in the country because of you all and the name and the reputation that we earned. And these things only happen once in a lifetime. You don't know how good it is till you get into it. And the key is listen to yourself. You could hear others, but listen to yourself. And you must love what you do. We have retail stores, lot of retail I turned down. I only deal with Whole Foods, Molly Stone, Williams-Sonoma, Leonardo and Deryko. We just got one in Crystal Farm in LA, 13 shops. We have it in the Fairmont Hotel. We have it in Virgin America Airlines for the last 4 years. I hope now we'll get Alaska. And we have business online. We ship all over the country. We have so much love this year, actually beginning of April. I said to my staff, you know Amazon free shipping? I want to do it different. Anybody order my coffee online, the shipping gift on me. So you could put this in your cloud. So anything you order online, the ship is on me. It's not free. I don't like word free. I like gift because my mind, my heart said do do it. And we're growing. Yeah, there's a lot of coffee shops, God bless them all. There's business for everybody, but Phil's captured the quality clientele like us. And that's what I have in all my coffee shops. I see lines all day long. It's, uh, I can't find words in the Bible to tell you how good it is. It's really good. And all this came from my team, the people, the cultures who work with us, the home office. We just built a roasting plant in Oakland, 50,000 square foot. We put two roasters, state of the art. And we used to be 10, 15. We have over 70, 80 people working there. I hope pretty soon it runs 24 hours a day, so I hire more people. And, um, what else? Yeah, you got to do business, do it the right way. Don't do it because you want to be like him, you want to match him. Every— each one of you have something good about him. The main thing is learn how to respect each other, live with each other. All my coffee shops, I call them Grandma's House because Grandma, she loved her grandkids. She feed them, she coached them, she advised them, and she probably say, hey George, here's $20, don't tell your sisters and your brother. That's Grandma, but she loves all her grandkids. So I treat my shops like Grandma's house, and there is more to come, best to come. And I do things with my pace. We're not greedy. We have investors who came to us. They love what we do, and I'm the only company in the country— no one sits at my table, in my chair, tell me what to do. We have the last word, but we are fair people. I always call them, I meet with them, I tell them what we're doing. My son Jacob, he explained to them what we're doing, where are we going, how we opening, and this and that. Any questions? They have no answer. You know what they say? We have more money for you. So I said, okay, it's good to have offense and defense. You know what's the beauty about my business? It's like a basketball team. In the locker room, the chemistry is working, no drama. And that's what we have in our home office, the warehouse, roasting, among each other. We have no drama, zero drama, zero stress. And I make them comfortable like my own children, which is I'm younger than them most of the time, I feel. But I treat them like my kids with respect, integrity, and love. And there's nothing I can't do for my team because they're the one who's making me growing. And the quality of my clientele come to my district, come to my county, come to my city, and I'm gonna conquer them one at a time. I learned I could put a coffee in the mountain I don't need permits. People will come camping. I have landlords, they call me up, "Phil, which building you like? I go buy for you." I'm serious. I have developers. I have a real estate who works for me. I pay her salary. I tell her, "Go to number, find me 5 location." Then I go take a look. But I have people from Denver call me. That's the beauty what happened for us. So it's, uh, you have to earn things in life and treat people with integrity, respect, hospitality. Because when we give you the cup of coffee, I didn't have barista make it. I have artist, I call him artist. Because they put the love in that cup of coffee before they hand it to you. They tell you, please try it, see if it comes to your taste, because I want you to walk out of my shop with a smile. I want you to go sit at my table. I might put seatbelt on it to keep you safe. So there's business for everybody. I know, pay attention. I have no competition. I am my own competition. And God bless everybody, because their success is my success. And that's how I feel. Do the right thing. Love what you do. Listen to yourself. Let your money breathe. What's one item scare people? One thing scare people, break families, sisters, brother, husband, wife. One item. Money. And then when I was 13, I scare money. Money doesn't scare me. As long as I'm healthy, I'm not handicapped, I could go work, pick up garbage, sewer line, do anything. You make money. It's not how much you make, is how wise you— how to save for the old age. But live right, balance your life, and Do the right thing. So I always loved coffee when I was a kid. One time I was asked by the Chronicle, "How much you love coffee?" I said, "I'm into coffee like the Pope into God." Hey, Phil, do you think we've got some questions?

Time for some questions. We could pass this microphone and let people—

I'm gonna ask them a question.

You want to do that?

Yeah.

And we'll pass this microphone if anyone needs it, and that's what we'll do.

Go ahead.

We could talk for 10 days, for a week, but I simplify things because I know you guys have other things to do. Better things to do. But I tell you, you could go to my website and read my story. I spent 25 years perfecting my concept. People climb ladder, I own the ladder. All right, we got a— yes.

Hey Phil, I have a question for you.

Uh, what's the origin story with the Iceman Mojito?

Oh, that was a good one. Actually, the soda took me 7 years to perfect. Something about me, I like beverage, I like food, I like quality products. They say it's too fat, you diabetic, don't eat this, don't eat red meat. Food was made to be eaten. I'll tell you what's bad is the drama. You get up in the morning, you say, do I need to go to work? Oh, do I need to face my boss? Oh, my mate. This is not healthy. So I worked in So Good. Almost 1 o'clock at night, I get up. And something tell me change the beans because I used to count them like the pharmacy, like it, like medicine, because coffee is medicine to your body. Believe me, guys. Yeah. So I made a cup of coffee and all of a sudden I said, wow, my wife wake up. She goes, she goes, the coffee is going through your head. I said, "No, you should taste it. I try it black, with milk, with low fat, with almond, with VitaSoy. You should taste this." She goes, "Boy, it looks good." When I put the cream on it, it looks like the desert. So beautiful when nobody sit on it, walk on it. I go to her, "How can I make the desert green?" Watch. I went to my backyard, I pick up the mint. I said, "You see how I make the desert green?" So that's where Mint Mojito came in from the mint. Me and my son Jacob, we worked at it and we came with the method how we make the mint. That's how it came out. And it's number one selling. Thank you.

We got another question back here.

So I'm curious, as Philz continues to grow a lot, have you ever felt pressure to sacrifice the values and the focus on community that you've had? As you continue to grow, how do you stay true to that and not become like other coffee shops?

I'm consistent. I have— I'm going to tell you guys, I have— in the Bible there's Ten Commandments, right? I have 10 myself too. That's why I'm successful. And my mission— one of the supervisors, he goes, Phil, you're getting big, it's getting harder. I said, "No, it's getting easier. I've been here 3 times, you already know what I'm all about. I didn't need to explain it to you." So, nothing will change because 1, 2, 3, that's how we do it, 1, 2, 3. There's no different and no one can change my concept. I could hear, listen, but no one can change because if it's working, why change it? People love it. So best to come, my friend. I hope we all witness that.

Thank you. We got a question up here.

Yeah.

So obviously you're ultra successful.

No, I built a solid foundation. Good.

Even better.

Earthquake-proof.

Okay, I'm sure. So what's the maybe most memorable mistake that you made as you were on your journey to becoming a, you know, a business owner? And maybe a biggest lesson that you drew from it?

Well, that I don't start it early in the '80s. I wait till 2002. I should have done it a long time ago. Yeah. You know, every day I become better at what I do best. And I hear, I listen, but I put things together and I draw things in my head like a drawer picture. You see, first I do the foundation. I make sure it's erected to God. You understand? And you must have faith. You can't go wrong. And let your money breathe. You don't know if it's going to work unless you work at it. But if you keep talking about it and your friends keep taking you away from it, you're delaying your concept. I had that concept long time ago, but I was waiting for the right time because Starbucks came in and he used to open in this corner, all of a sudden the next corner, all of a sudden the next corner, all of a sudden close that coffee shop. Or buy him out. So I said, I want to wait, see how far they go. And then after several years, Starbucks has more money than God. So I let him go. But I used to go to their shops in the '90s, and I see young generation. I don't know who they're trying to impress. I go to Beats. They're all young, smart, dress good, professional, educated. They have money. I used to go watch them. They like the coffee shop because of the graphic design. But their coffee, God bless them, but to me is awful. You love coffee, but you've been taken for a ride because that place has quality clientele. You want to be with them. So that's when I start to pick up things in life. So there's difference between coffee shops, other coffee shops, and the clientele. So I used to like Beach clientele, but they want a good cup of coffee, and I captured a lot of Beach customers. And you know who took them away from them? Jacob Wonderbar. I made that special just for Beach customers because I studied their coffee and I Try them all. And my coffee, my friends, stronger than espresso, really strong, the least possible acid has. So I capture the customers who are acid problem. They drink coffee, they have acid goes to their stomach. I capture that clientele. You go to any coffee shop anywhere in the world Espresso, double shot, latte, cappuccino. I have none of that. I'm different. I have name brands. Each name has a story. If you go to my shops, the newest one we built in the Hyatt by the Hyatt Regency in Bacadero Center, we have shelves with jars and beans and a story about that. We did the same thing in Washington, D.C. So our story is real. It's not carnation or imitation. It's— we don't need two people to talk about it. You guys know what's going on.

Okay, we got another question back here.

Hey, Phil, you've had such a successful journey so far. But if you had to go back in time, would there be something you would have done differently? No, I always want to do this when I was a kid. I have it written down. Even 50 years from now, I hope one day I'll have 10,000, 20,000 people working for me. So I always have that vision. Like Frank Sinatra was born to sing, I was born to make coffee. Every each one of you good at what did you do best, I'm sure, and we're getting better at it. Yes. Yes, sir. My question is actually like, can you tell us more about her working with these PCs when you're not in that car? Okay. In 2003, I have privilege to meet The guy who took Starbucks to Wall Street, he offered me the same deal. I turned him down. Two other cap— venture capital, I turned them down because I saw their vision. One day we get a phone call from— no. Venture Capital in Balalto. No, better than that. Summit Investment. They go to my shop in Alma'aan Forest every day. And so we get a phone call. My son said, Dad, I have these guys, they want to meet with you. I said, you go meet with them, see what they want. You know what I need. So he went and he started talking and they're talking and he said, Dad, they want to meet you. So I met with them and we sat in the table and the top guy, he said, I'm very interested. I usually do high tech. You're the only food beverage I'm going to do. I like what you have, what you're doing, your clientele, the service. He touched me the way he talks. The only reason I took him in, because he answered my question correct. And the last thing I told him, don't you ever think you're gonna sit in my chair and tell me what to do. You have no power. If you're really interested, deal with Jacob. And that's what happened. I'm the only company that I have investors big time. They can't tell me what to do. Then I have angel investors, huge actors, Snoop Dogg. Well, keep looking at my website. Because I'm going to have him come to the city. I'm going to give him my fedora. I'm going to give him a Cuban cigar and drive him around, take him for a tour. So keep looking at my website.

Okay.

All right.

We got another question back here.

Hi, Phil. Hi. How are you? Good. I was just curious, what does Snoop Dogg order at Phil's?

Great question.

You know, sometimes he's doing rap music and he have a cup of coffee. I saw that many times. He likes Jacob, he likes mint mojito, he likes Ambrosia, but he always go back to Jacob. Yeah.

So as an entrepreneur, you had a— sounds like you had a very long kind of upcoming. What along the way did you use to motivate yourself as you kind of— as every entrepreneur goes through kind of the lulls of confidence and belief?

Like I told you, I have a good mind. I believe. I have vision. I don't pay attention to other entrepreneurs, what they're doing. God bless what they do. There is business for everybody, but I, I try to move from this circle to this circle, this circle, this circle. So when I open in Palo Alto— Palo Alto, my friends, I want to tell you something about South. It's the last circle in life for the next 60 years. Palo Alto, Silicon Valley. And they were my first clientele. CEOs. I met Steve Jobs, Tim Cook, Mark Zuckerberg. They put me— they took me under their wings because coffee and technology complement each other. You could work, social, Drink coffee, go home, drive, you're not gonna stop by a cop. You're more alert. So they go together. So I always look for places where colleges, community, where I could build community. It become like, like a barber shop. That's the one you go to, your mechanic. I have people, they come study every day. My shops. So I'm not going to rush. I want to get wealthy when I'm 100 years old, my friend. I'm already wealthy by how many people like me, respect me, trust me. I'm a community guy. I don't like to talk about it. I have so little I can't afford to pay attention to no one, but I do What I can to do, whatever I can do to help the community, the schools, the little children. I like to help children because I don't want them to make the same mistakes we're doing because they need to be guiding. Their parents working, trying to survive, pay the bills. So when I go do school speech for 5, 6, 7, 8, I try to educate them to wake up, respect each other. Work together. Steal the knowledge from your teacher. Pay attention. It's good to go play basketball and run around, but when you're in class, pay attention. Open your ear, your eyes. Focus. So I do a lot of that stuff. Thank you.

We have another question over here. Hey, Phil. How do you measure your success?

With a roller. You know, you could go as high as the sky is what you want. I measure my success with my value, my morals, the quality of my coffee. Look at you straight in the eye, say thank you so much for your business. Tell a friend. That's how I measure my success. And you guys all my success. Because of you, I'm growing. Because of my team is conquering my concept and they're doing the right thing, I didn't have to be there. That's my success.

Thank you.

Hey Phil, um, what do you teach in your school and in your training and How many people fail?

What's your name?

Darius.

Darius? First thing I meet you, I say, Darius, I'm Phil. I want you to be calm, settle, don't be intimidated, don't sweat, be honest to me when I ask you a question.

I'm sweating already.

No, no, don't. So I try to make them feel comfortable, not, oh my God, Phil is here, Jacob is here. I like to make them feel comfortable from the first day. And if they answer right and honesty with my recruiting team and everyone works for me, I have nothing up my sleeve. I give them the power to make decision. You see what I'm saying? It's not you have to come to me. You make decision because when I met you, I make decision to give you a job. So now you, that's your mission. You are Phil, you make decision. So as soon as the recruiting okay him, they go to my training. And that's how we do business, my friend.

Thank you. Got another question in the middle over here.

Hey, Phil. I had a question. You talk a lot about having confidence in what you've done and believing in yourself from the beginning. Was there ever a time when you were obviously building your coffee empire where you took a gamble or you took a risk where you were unsure about the outcome, but you did it anyways because you had faith in your—

Beside I have faith, I'm like a German Shepherd. I smell the community, the locations, my friend. Because I do my work. It's not that location is good. I go at night, I park my car, I walk around. I go in the daytime, walk around. I go inside the shops, see how they conduct business with their clientele, their customers. I learned a lot from Santa Monica. My son, he said, Dad, there's a shop in Santa Monica between 5th and 6th, is really good. 'Go see if it's okay to open, yes or no.' So I went there 8 o'clock in the morning, my friend. I stand in front of the place, I look up, I saw God looking over me. I felt it. Then I start walking. The shop open, go inside. I saw plastic people. I walked into many shops. They don't recognize me, but they recognize him because he lives there. They treat him different. They talk to me different. So what I did one day, lunchtime, I walk into a bar. I said, "I'm from Pennsylvania. I'm here to write a book. Can I use the bathroom, please?" You know what he told me? "Are you gonna buy something?" Because he recognized I'm a stranger. I said, "Of course, if you let me use the bathroom." Give me Diet Coke. He said $3.75. I put $5. I said, where's the bathroom? I go to the bathroom. I didn't need to use the bathroom. I just want to test them. So I go to the bathroom, I wash my hand, I came out, I grabbed my Coke. He left $1.25 on the counter. I put the Coke back. I left the money. I said, this for you. So I start walking like this. 2 guys were behind me. Then all of a sudden they were laughing. What do you learn from that? Like, we got him. I left the coke and the money and I walk out. So I did 3 hours walking this way, go up, go down, go up like this, zigzag. Then I came back to the location. I called Jacob, I said sign the lease. And it's one of my best shops right now. We build culture, community. We open one in Hope Street, is doing the same thing. We open in CNN, is doing the same thing gradually, because Hollywood, they've been there before me. I have to improve myself. Even they hear about me, but I have a strong feeling it's going to be another Blas.

So, okay, I have a question. You talk about putting the Z on Philz, which is marketing. Since then, since the Z, what's the best marketing strategy you've done? It's easy to go into one community and build a brand, but you have a brand that goes across the country. How would you have advertised yourself? What's the best way that you've marketed?

I don't need to spend so much money now because people from other cities, they come visit their friend here or go back and forth. I didn't know what happened. People bring people to the coffee shops. It's a new thing. So they build my name, my culture. So I will do the same thing. I will do soft opening, gift on us. I will try to go to high-tech companies, do events on us. I will go to Georgetown in the yard and serve coffee on us. That's what we do. It's good to forgive and forget, and don't you all forget how to give. You like that one? All right.

Okay, let's have one last question. A question if anyone has one. Sorry, beat you to the punch.

You said at the beginning that you'd like to ask us a question. What's your question?

Why you all here? Why you all here? I should come to your classroom and learn from you guys. Huh? No secret. My secret is 3 words: action. So—

We'll do one last one then.

Okay, yeah, thank you for the great presentation and sharing all your knowledge. You mentioned that the way that you work is you pay a lot of attention how you recruit people and then you have a training. And I wonder then after that how you ensure that the momentum of the culture stays alive and that, you know, over time it stays, you know, the way that you have been envisioning it.

Even you go through recruiting, training, now you have your own shop where you're going to work. The previous people there, they look after you, they watch you, they guide you. They make you become better than you were yesterday. I have a team that they complement each other. It's not I'm the manager, your boss. They respect their leadership because one day I want you to become a leader. I want you one day to come take over my job because I have other things planned I want to do. See, so we're building team culture. The chemistry is working, you see what I'm saying? And they respect each other. That's number one key. Work. You go to work, no fears. Oh my God, I'm gonna see him there. None of that. That's how we approach them. I have two young ladies over there.