How Much Growth Is Enough for a Small Business

What We Need to Grow, Episode 013: How Much Is Enough. A Founder Talk conversation with Daniel Biro, Rapids End Coffee. Cleaned for readability; the words are the speakers' own.

Caleb Pedosiuk: Daniel, Rapids End Coffee. Quite well traveled, from what I understand. I think it was about fifteen years touring around North America, a fair bit accomplished with music, so you got to see and experience a lot of coffee culture, cafe culture, other things. And then after that stretch you made the decision to start roasting yourself. From earlier conversations, you started to learn a bit about it and realized there was quite a lot involved in doing it properly. And then there's this whole other aspect that involves farms and land and different people and cultures. So I would love to hear a little of that story, and how you arrived where you are, as someone who founded Rapids End but is also cultivating a culture in a local community connected to some really small farms and farmers and distribution systems.

Daniel Biro: Caleb, thanks for having me. I'm honored to get to do something that I love. Like you mentioned, I got to do music and travel, and during that journey you drink coffee. Most people around the world enjoy coffee. It's a huge industry. One of the stats out there is that it's the second largest commodity traded in the world, just behind oil. The more I dive into the logistics, the more I realize people need their coffee, and they're pretty passionate about it.

Caleb: Having been in your shop, I've heard you talk about it, and I've seen the sacks of beans coming from different parts of the world. What has it been like to know that your decision, even as a small roastery, to buy from different regions actually impacts the people there? Do you feel like you've seen some of that?

Daniel: It's an interesting supply and demand thing. Right now farmers know there's a lot of demand, and that's good because it drives prices up, and they deserve to be paid fairly. We want everyone to make a living through this whole exercise. Sometimes I get to work with individual farms, and that's really sweet. For example, there's a family with the last name Daza we work with in Colombia. It's multigenerational now, the daughters are taking over for their dad, and they have organic certification, bird friendly, all of it. They produce a really good product, and it's really cool to be part of that direct channel. Then there are places like Haiti or Ethiopia where people might only have a few trees, they pick the cherries and throw them in a sack and take them to the local co-op. I don't get to know those people personally, but I know that by purchasing from that co-op, a little bit of those dollars end up with them. And you can sometimes work with large family farms too, like we do in Brazil. Gabriel is here in the Greater Toronto Area, but his family is there, and he'll come into my shop and teach me about coffee, how it grows, why it's a peaberry, that it's the last flower of the season and the sun puts all its energy into a single seed instead of two. It's really interesting working with all the different tiers of the industry and the growers. Do I wish I could travel more often and see them all face to face? Of course. But raising a family and running a small local business, that's not happening right now. It's definitely not out for the future.

Caleb: I love what you've done brand wise. I remember a conversation not too long ago about AI visibility and building brand, and I was curious how you were approaching it. You made a comment that stuck with me. I've met some pretty self aware founders, but the way you put it, you have this sweet spot in terms of where you are growth wise. There's one perspective on growth that's just pedal to the floor, as much as possible, money, numbers, revenue, size, volume, and culture as a shorthand tends to view that as good, more and more. And yet there are plenty of examples, even in health, where a natural process that gets out of check, too much growth, can actually be awful. There's a sweet spot. That self awareness to know what success looks like at different phases of life is rare. You said you'd really found that sweet spot. Was that something you stumbled onto, or were you aiming for it before you got there?

Daniel: There are two points I want to make. One, ever since I was a teenager there's been this background question, how much is enough. I measure everything against that. The other side is that before this, I was in the music industry, an artist that toured. We got to go out with some pretty awesome artists, MercyMe, TobyMac, for King and Country, Skillet, the A level artists, pedal to the metal, cycling all the money back into the show. Our band, Hawk Nelson, was always kind of that B level artist, the support on the tour. All business has some risk. But I felt like sometimes wisdom is realizing not everybody has to be the A level artist. Not everybody has to be Starbucks or Tim Hortons when it comes to coffee. I felt it was a really sweet spot supporting the artists and being part of it. Sure, the payoff in terms of money maybe wasn't as sweet, but how much is enough? Do I have a roof over my head? Do I have food on the table? Can I provide for my family? Those are the things I ask. Maybe that makes me a little simple, or not that "more and more" entrepreneurial type, but in my experience, more isn't always better. That's the backdrop for getting into Rapids End Coffee.

Caleb: A couple of things come to mind. Culturally you get different waves, different eras and cultures value different things, and the timelines of what's considered valuable shift. Sometimes I'm looking for a truer north, a compass that actually works. One of the things I find interesting is going back to John the Baptist. Here's this man with an idea of repentance, of changing your perspective. People came to him, religious people, tax collectors, soldiers, and after being baptized they asked, what do we do? He gave very practical instructions. To the tax collectors, don't extort people, don't rig the books. To the soldiers, be content with your pay. And to others, if you have two tunics, give one away. That idea of "more" makes me wonder if the compass has been jammed a little on the larger levels. Yes, the tree wants to grow as big as possible, the plant wants to grow as much fruit as possible, but what is the purpose of the fruit? What is the purpose of the growth? I heard one aspirational entrepreneur say that when he asked someone how much money was enough, the answer was, as much as I can make. Another person pushed back and said it should be just enough for yourself. And he challenged that too, because if the stopping point is just enough for yourself, then you're only thinking of yourself in terms of what money can do. If growth loses sight of what's around you, your family, your children, your health, your well being, then growth for its own sake can be very harmful. But if those things are kept in good standing, and there's a sweet spot to achieve more, how great would it be to pour some of that into other resources or ways that help, whether through a commercial system like supporting farms in other parts of the world, or in a nonprofit capacity.

Daniel: That challenges me right there. Everyone has a barometer. If I'm putting in eighty hours and my body's failing, obviously that isn't healthy. Hopefully not wanting to build a massive empire isn't just me being selfish. I know so many business people who are very successful and very generous, and they make a huge difference locally and abroad. That actually would be really cool. I don't know if I've allowed myself to dream that big yet. I'm seven years in, and every year it grows, but for some reason I just don't have the desire to compete with the large conglomerates.

Caleb: What seems timely with all the shifts, technologically so much is changing on the digital side with AI, then the hardware component, robots, machines, automations, and geopolitical and cultural shifting. You see entire economies being retooled, and a lot of people displaced in terms of their work. It makes me wonder how many new small and medium sized businesses, ones that will never IPO or become a big franchise, are about to be born, out of necessity or as the silver lining of all this shifting. A lot of people are going to find a new kind of independence by learning to find a niche and fill it. Some of what you've arrived at, finding a niche that works with what you're interested in, how it supports others, the level of growth you've chosen, the focus on quality and serving customers really well, that model may be really timely for a lot of others in other industries.

Daniel: That's really interesting. I don't know the exact numbers, they change drastically from ten years ago, but every year businesses start, especially in the food industry, and something like ninety percent fail in the first year or five years. I've seen a lot come and go even in my small time. People ask, how do you make it work, what do you do differently? I don't think I have any special sauce or recipe. But I'd say, and this exists outside of, I don't even know if you can teach it, there's just the art of caring. Caring about your customer, caring about your product. For comparison, there was another small coffee roastery far from here, and I thought, they look pretty cool, vintage train, kind of the same theme we were going for. But on all their socials there was no face, nobody, no roaster, nothing. It was almost like AI created it. Pretty quickly I discovered it was a white label thing through some larger roaster in the city. They could still be here, could be having this conversation. But there's still something to be said for that human element, and at least with the interactions I have with my customers, they really love that whole personal, human interaction.

Caleb: In the tech world, the Y Combinator startup space, they say that in the zero to one phase, going to market, finding product market fit, getting your first thousand fans, you want to do the things that don't scale while you're small. You get such an understanding of your customer, your product gets so dialed in on quality, that that base becomes the base for your brand. Once you reach a point where you can no longer do those things at scale, you'll have established the reputation. In a way, you're doing what your larger competitors cannot. You're more agile in a canoe than you would be in a big shipping vessel.

Daniel: Right, yeah.

Caleb: There's a book, I think it's called Unreasonable Hospitality, about a New York City restaurant. They would go to such an extreme. I think twenty percent of the budget was flagged for staff to do outrageous things. One story, a couple was in for their anniversary. They'd met in New York and on their first date they'd had New York City street hot dogs. The staff heard that, and when the reservation came through they set up their own version of that hot dog for the couple. Just an insane, memorable gesture.

Daniel: That's so cool. Who wouldn't remember that and be a repeat customer? Who wouldn't leave a five star review? Actually, I've got a customer who just gave me a heads up that he's popping by, he's on his way to the cottage, he won't be long.

Caleb: This is perfect. Let's pick this up another time and do a part two. It's a fitting point that a customer is coming in, so by all means, go serve them. I so appreciate you, your family, the coffee. If anyone is even remotely in the Kawarthas area, in Peterborough, Ontario, to be able to check it out in person would be a real treasure. Rapids End Coffee. Daniel, you're awesome.

Daniel: We have more to talk about for sure. Thanks, Caleb. I appreciate you.