Karben4 – A Personal Look Back at How it all Started
The past half decade (plus) has been a whirlwind – thinking back to the end of 2011, the three of us were all living in different states. We were fleshing out a business plan over the phone at night and on the weekends. Pouring over go-to-market strategies, brand development concepts, asset purchase agreements, lease agreements and running different proforma scenarios until we were blue in the face. Nothing was certain, it was all still just a dream.
Zak and I had been in this position a couple of times before, with different business plans, for different companies that never came into fruition. We’ve been best friends since kindergarten and starting in high school we developed a mutual ambition to become entrepreneurs, to control our own destinies. But the reason our ideas had failed in the past was in part due to the fact we didn’t have a craft that we were particularly passionate about. Our passion was the business.
But this time it was different. This time we had Ryan by our side and the collaboration between the three of us created an almost tangible feeling that anything was possible. However, the process was not void of obstacles and challenges. We would spend the next handful of months calling on banks – most of which laughed us off the phone or out of the room. I have attached an example of one of the bank denial letters to the end of this blog post. Yes, as you will see – pre startup we were operating under the name “Geeks Brewing Company, LLC”….
We needed a fair amount of startup capital to make this project work. We decided that we would do whatever it took to become bank financed. We did not want bosses (investors) but the banks were not easy to convince. In a past life I was a commercial banker, so I had a decent idea of what they were looking for and the angles we could take – I called on a handful of banks. Zak knew our numbers inside and out and could make them sing on the page while Ryan had a wealth of operational knowledge, previously running a brewery and having a firm grasp on the industry. The partnership was truly perfect. Zak and I didn’t know much about beer, and Ryan didn’t know much about business. By the 7th or 8th bank call we all started to come into the swing of things and would come off as experts with any question a banker might throw at us. A handful of meetings later we were fully financed and ready to move forward on this project. It was the end of March 2012.
I was still in California at the time and spent the next 2 months on the phone with Ryan and Zak, shifting the focus from how do we get financed to how are we actually going to do this now that we have the money.
I sold 90% of my possessions, got into a truck and drove across the country to meet Zak in Madison. I was crashing on his couch and during that time we were in our element. We had each other, our ideas, an excel spreadsheet, a few notebooks filled with our various brainstorm sessions and Dominos on speed-dial. The best part – we were now working on a project/business venture that was fully financed and going to happen.
Ryan moved to Madison shortly thereafter and the three of us had about 2 months before it was time to move into the brewery. We spent a lot of that time having deeper conversations about our branding. “Geeks” was out, and we needed to come up with something different. We kept all the underlying themes we had developed for Geeks Brewing but the name didn’t feel right. It had to be better. Hundreds of hours were spent inventing, proposing and debating different names. Finally, around 8pm on a hot summer night and while eating at our favorite east side establishment, Sala Thai, we landed on “Karben4”. We would spend the next couple hundred hours developing the logo…
Turning Ale Asylum into Karben4
The benefit of moving into an existing brewery is that there is somewhat of a built-in cow path to the door. Additionally, there was a fair amount of infrastructure in place that we were able to acquire from AA. It turned our venture into more of a hybrid/turnkey startup. The challenge however was to disassociate ourselves from AA. We needed people to walk into the space and not see it as ‘The Old Ale Asylum’ but as the new ‘Karben4 Brewing’. We spent 60 days, very long days, gutting the taproom and building it back up. Aside from the layout and aesthetic overhauls, we designed and built out a kitchen which would allow our taproom to also be a fully functioning restaurant. We owe a great debt of gratitude to Jonny Hunter and Underground Food Collective for helping to get our food operation off the ground – at the time the three of us had basically zero experience working in a restaurant, let alone running one, and Johnny came to our rescue.
We also hooked up with our good friend and local artist Tom Kowalke. He was not only a huge asset in getting the space built but he also brought visual life to our beers via paintings that would drape our taproom. Since we would open via draft only we did not have labels to represent our products. Tom created an art studio in our warehouse (which we called “The Fantasy Factory”) and would create a large dramatic painting to represent every beer we would release. This helped make our taproom experience unique in that people were eventually equally as excited to see a new painting unveiled as they were to try a new beer release.
Soft Opening December 28, 2012
We had hired about 4 servers. Zak, Tom and myself were behind the bar, the UFC crew was in our kitchen slinging food and Ryan was walking people in and out of our production space, giving tours (At the time our brewery was a vast open space with only a couple of tanks). A full year of blood, sweat and tears had lead up to this point and it was all really happening. We owned and were now operating our own brewpub – already a dream come true, we were flying high.
It was 7:00pm and the place was in full-swing with standing room only and over capacity. The three of us behind the bar could barely keep up and then it happened. We ran out of $1 bills and could no longer make change. Apparently, we did not know how to adequately stock the cash drawers and didn’t account for this type of volume. We were stuck, it was so embarrassing. Our good friend Jihad Alialy could tell something was up and approached the bar, “What the hell is going on?!” I responded, “We ran out of $1 bills, we can’t make change, we’re fucked!” He told us he had an idea and to give him a stack of $20s. I reached into the cash drawer and handed him 2 large stacks of bills. And with that, he was off. We spent the next 15 minutes scrambling, apologizing to people, and generally looking like idiots that couldn’t even manage a small taproom. And then, seemingly very quickly, a triumphant Jihad reappeared with both hands up in the air flashing stacks and stacks of $1 bills. He handed them over the bar, we stuffed the money back into the cash drawers and were back in business. Later in the evening we asked where he got all of the $1 bills and he responded, “You guys are only a few blocks away from a strip club. Seemed like a no brainer…” He definitely saved the day and it is one of those funny little moments that I’ll never forget. Jihad has remained a good friend and brand ambassador to K4. A lot of you are probably familiar with the beer that we named after Jihad’s famous nickname – Horse Face Wheat Pale Ale.
2013 – Year 1
Our business plan for 2013 was simple – keep overhead low and don’t go out of business. We would intentionally suppress distribution at any major level of scale as we wanted our growth to be entirely organic and felt that it was the most authentic approach to the market. Had we signed on with a distributor immediately and released multiple beers via draft and package across Madison and beyond from the start, would anyone really care? By moving slowly, we were able to build out demand before making any major moves.
It was a foundational year for K4 and a foundational year for me as a newly minted business owner. We were a bootstrapping startup and as such I wore many different hats and experienced just about every position within our organization, outside of the production side of the business (I’m still basically useless on the brewery floor). Mornings were spent managing all day to day business tasks, evenings were spent managing the bar and late nights were spent getting to know our future Madison retailers – downtown bars and restaurants. It was a very exciting time and a lot of our long lasting local relationships were forged in these first few months.
The taproom was starting to hum and we were able to put our first true manager in place – Ben Jackson. Although he is no longer with us, a lot of you probably remember his jolly spirit and huge handsome red beard. Ben was not only a good manager but was also a culinary whiz and took full control of our kitchen operation and menu development. He turned a couple of food options into a full scale proper menu. With Ben in place I was able to take some of my focus off of the taproom operation and place more emphasis on the business and marketing it.
Our first order of business was to begin to introduce our beer and ourselves to the city of Madison. We literally signed up for every event and beer festival possible – nothing was too small or too big for us. We were hustling and willing to do whatever it took to expose our products to the general public. Simultaneously I was coming into K4 early in the morning to take care of day to day stuff like food ordering, payroll, accounting, social media, downloading with Ben, setting up taproom events, etc. Once things were in order in-house I would fill up a couple of cases of growlers and hit the streets. I turned into a door-to-door salesman, calling on hundreds of bars/restaurants sitting down with owners and bar managers and pitching our products to them. I received a lot of “What distributor are you with?” “Who are you?” “What’s Karben4?” “Another brewery?” It was a truly humbling experience.
I probably should have started here, but given our relationship with Underground Food Collective I called up Forequarter and asked if they would be interested in hosting the first K4 tap line. On our soft opening, Jonny Hunter had taken a liking to our NightCall Smoked Porter and graciously agreed to host a keg. This was our very first account, ever. We hand delivered the keg and later that evening we stopped by for dinner and to hoist a pint of our beer – our first time ever drinking K4 beer at a restaurant, we were flying high. I have attached a picture of Zak, Ryan, Tom and myself celebrating that evening. I will never forget this moment.
Door-to-door sales continued and slowly but surely, we started to build up a small base of accounts. Our company vehicle at the time was an old school Ford Ranger Sport. It could hold 5 half barrels comfortably and day by day week by week I would fill that thing up and hand deliver kegs – servicing about a dozen accounts I was starting to develop some great relationships however things were still moving slowly.
Fantasy Factory IPA – No Looking Back
Ryan is an absolute master at creating exceptional malt-forward ales. We thought we had a pretty clever idea and originally planned to juxtapose a market filled with super hoppy IPA’s. NightCall Smoked Porter was to be our flagship product.
But that spring Ryan had developed a Citra focused IPA with a malty backbone that was to be a seasonal offering. We all could feel that there was something special about this beer – it just needed a name. We were having a difficult time deciding on a name and finally called a late night meeting at my apartment for a brainstorming session. The smell of Thai Pie from Glass Nickel filled my living room and I’m pretty sure we were all on the floor, lying on our backs and at wits end about this name, nothing was good enough. Then it finally clicked when one of us said “Why don’t we just name it after our warehouse/art studio – the Fantasy Factory.” In unison we all said “Yes. That’s it.”
We had the Fantasy Factory release party in our taproom and our customers went absolutely bonkers for it. I hit the streets with growlers and began sampling it out to as many bars as possible. The response was palpable – this was the K4 beer that the people wanted, the IPA they had been looking for. Our self-distribution effort was quickly becoming a success as we were signing up retailer after retailer. In a matter of weeks I was servicing over 30 bars, most of which were pouring Fantasy Factory and cruising through it at that. This was no longer to be a seasonal offering, we couldn’t afford to turn off this faucet of growth. The market had spoken, and they chose Fantasy Factory as K4’s flagship offering.
K4 Distribution Deal and Shenanigans
From the very beginnings, distributors were lining up outside our doors asking for our business. But as mentioned earlier we wanted to go slowly and do things our own way from the onset. However as our account base continued to grow steadily we knew that it was coming time to settle on a distributor to pass off logistics and bring our product to an even wider base of customers. Zak, Ryan and I spent months meeting with different distributors, analyzing every aspect of their respective operations trying to find the right fit. By August we had narrowed it down to 2 major Madison distributors and the week before Great Taste of the Midwest 2013 we had finally settled on General Beverage Distributors. We took a particularly strong liking to their up and coming Sales Manager, Darric Hawkins. Now Darric is going to kill me for telling this funny little story surrounding these events, but I would be remiss if I didn’t share….
Thursday: We call Darric and his boss Phil to let them know we’ll be signing with them. They’re excited and we decided that we would have some drinks Pre Great Taste Eve to celebrate the partnership.
Friday (Pre Great Taste Eve): Zak and I hook up with Darric and some other folks from GB downtown Madison to hit up some of the premier Great Taste pre parties. It was a long afternoon of professional drinking – beers were going down like water and every time we turned around there was another shot on the bar that needed to be consumed. The entire industry was on the square that evening and everyone was letting loose. Fast forward 5 hours and we all stumble into our favorite bar – The Tipsy Cow. Tipsy was one of our very first customers and we all had a great relationship with their staff and owner, Michael Banas. The place was packed to the gills and Michael was behind the bar laughing at our antics as he poured Fantasy Factory after Fantasy Factory. Around 1am all three of us were no longer in a position to make responsible decisions and we decided to have our very own Cayote Ugly moment. In perfect unison we jumped on top of his bar. Michael handed us each a bottle of booze and we all began serving shots to his customers. At one point even Michael got on top of his bar to join in on the antics. He instructed one of his bartenders to crank the music to level maximum and we all decided to have an impromptu karaoke session – which led to us adding a little flair to the situation by pulling our shirts off and swinging them around above our heads, like complete idiots. We were three sheets to the wind and felt invincible. I can speak for all 4 of us in saying that the rest of the evening was a total blur.
Saturday (Great Taste): Never have we been more hungover at a beer festival in our entire lives.
Monday (Post Great Taste Weekend): Ryan, Zak and I drive over to GB Madison to officially ink our distribution deal. We’re sitting in the boardroom of a multi-billion dollar company signing documents for the most important deal of our careers thus far. Darric and Phil were at each side of the table and directly across from us was the company’s President and their CFO. After all of the paperwork had been signed the President took to a very serious tone and explained to us “Boys we are a very serious company and this is a very serious business. Yes we are all in the business of selling alcohol but specifically to that end I want to make everyone well aware that we are now representing each other in the marketplace”. Mid statement Zak and I immediately shift our focus over to Darric. We’re all thinking the same thing… Darric refuses to lift his gaze from a stack of notes in front of him. He looks very uncomfortable and refuses to make eye contact with us. The President goes on, “We need to make sure that we always conduct ourselves in a professional and responsible manner. I have full faith that we will hold up our end of the bargain and I’m sure that you all feel the same way and will conduct your business and personal dealings accordingly. Boys, welcome to the GB family, I look forward to a long and prosperous relationship.” Darric’s head is still in his notes, he refused to look up. Eventually the meeting lets out and when we get to shaking Darric’s hand we all give each other a knowing look of “Friday night did not happen and we will never speak of it again.”
To this day that story has never been shared with anyone and I can honestly say that we have never had another one of those ridiculous moments. But I thought that given this is our 5 Year Anniversary blog post it is as fitting a moment as ever to share the funny memory. We love you, Darric!
Post Distribution Deal and Beyond
We would spend the next year working to fill out the Madison market. Fantasy Factory continued to evolve, representing 70% of our draft business. GB was begging us to bottle it immediately following our deal – they knew that they could position it in bottle shops and grocery stores alike for success. However, we made an intentional decision to hold tight with draft only offerings. By waiting and penetrating more and more bars/restaurants locally we were inherently creating more demand and excitement for Fantasy Factory bottles. In October 2014 we had hundreds of draft placements across the Madison market. We were satisfied with our brand awareness and after a very long year we finally racked FF into bottles. FF package absolutely exploded – people were literally following around the distribution trucks and waiting for it to be delivered so that they could be the first to bring it home. Retailers were unable to keep it on their shelves for more than a day or two. Our plan had worked. By taking a pragmatic and methodical approach to market we were able to capture the consumers attention in a very awesome way.
From that point we would slowly release our other brands into package one at a time. Once Madison was filled out via draft and package there was organic demand built into the Milwaukee market for our products, so we decided to sign a distribution over there and repeat the formula that we created in Madison. Over the next 3 years we would follow this same model, opening one market at a time. There was a lot of work and grit involved in opening new markets but at a high level our distribution plan was very simple – make big circles around small circles until the entire state was filled out.
As of December 2017 K4 products were available across the entire footprint of Wisconsin. We are now one of the largest breweries in the state with thousands of retailers selling our products. It is quite easy to get bogged down in the weeds of the day-to-day but occasionally the three of us have to force ourselves to take a step back and reflect – How did we get here? It has been a wild ride and I’m proud and honored to be a part of the K4 story. We are so lucky and fortunate to be in this position, controlling our own destinies and building a brand that has become much larger than any of the three of us individually. Our staff includes 40 amazing team members and there are hundreds of distributor sales people representing us, all brand ambassadors to our humble cause – make and sell great beer and have fun doing it.
Key Team Members
Meena Dayal – K4 Director of Operations
I honestly don’t know where to start. Meena walked into our brewery in March 2013 as a newly hired waitstaff member and has been with us ever since. Her background was science and she was tired of her lab job and decided to take a summer off and have a little fun, waiting tables on the side. Immediately we could tell that she was someone special and we did everything in our power to hang onto her, promoting her through the ranks and exposing her to every position imaginable. Every time we threw a new task at Meena, she would take it, run with it, and prove to us that she could manage it more proficiently than any of us. Today she runs the lions share of day to day operations. K4 would not operate without Meena. She is our right hand woman, the Big Boss Lady in charge and will one day surely become the President of Karben4 should we be so fortunate to retain her into the future.
Jeff Olson – K4 Head Brewer
Jeff cold called us all summer long in 2013 asking if we needed any support in the brewery. To be honest it was just too soon and we could not yet afford to bring him into the fold. Ryan was the only one working in the brewery at the time. But Jeff was persistent, he did not stop calling… Finally we told him that if he wanted to come in and volunteer we would be happy to facilitate, but that we could not afford to pay him. He agreed and spent over a month working for free in the brewery – scrubbing tanks, scrubbing our bottling line and handling a lot of other unglamorous chores. His work ethic and intellect were not lost on any of us and eventually we hired him on full-time. He quickly gained the respect of us all and became Ryan’s right hand man and K4’s Head Brewer. In his spare time he can be found playing bagpipes, building boats, camping in teepees, sailing, has taken courses in Scotland and learned to distill spirits AND much much more. Jeff is a true renaissance man!
Sam Koelling – K4 Lead Brewer
Sam handles a big portion of our brewing operation and is also in charge of building out and implementing our barrel aging program. He has an infectious, sarcastic personality that makes him one of the most fun team members to work with – constantly keeping everyone on their toes. If you enjoy any of our barrel aged beers at our 5 Year Anniversary Party, please give a nod to Sam as he’s the man behind a lot of the work.
Sammi Ervin & Joanna Merrill – K4 Taproom Manager and Assistant Manager
Sammi and Jo run our taproom. They started out as servers, eventually becoming bartenders and have from the onset shared a mutual penchant for leadership. Even before either of them moved into a leadership role, they would pass a notebook back and forth of what they would do differently to make the space better and enhance our taproom experience should they be in charge. How could we not promote them? They’re independent thinkers and phenomenal leaders for our front of house staff. Expect big things for our taproom in 2018 and beyond with these two at the helm.
Mari Klasna – K4 Brand Ambassador & Event Coordinator
Mari used to manage the bar at Craftsman Table & Tap on the west side of Madison. They’re a great customer of ours and we’ve hosted many events with them over the years. These events always stood out to us because Mari would go above and beyond to make sure they were unique and a success. She lives for craft beer and is one of the most knowledgeable people I know with respect to the goings on in our industry. When a new beer is introduced to the market, Mari is always the first person to try it and analyze it. Mari manages everything event related at K4, works with all of our distributors to organize meetings and sales days, she’s also out in the markets constantly selling, runs K4 social media and a whole lot more. Mari has taken ownership of her role and has proven to us that it’s best to stay out of her way and to let her do her thing, because it’s gonna be awesome!
Cheers to the next 5 years! Thanks to all of you for your continued support and we look forward to running into you very soon!
Enjoying the first pint of K4 beer ever served at a restaurant – NightCall Smoked Porter @ Forequarter.
Darric Hawkins @ Tipsy Cow Pre Great Taste
Great Taste of the Midwest 2013
Bank Denial Letter