About this episode

This week’s featured founder is Chad Phillips, co-founder of Highpoint Brewing Company in San Dimas, California. This episode combines a few things that I love dearly, small business and creativity. When it comes to beer and brewing, I don’t think many people would have thought about the creative side of it all. Chad will discuss just how personal beer making is to him and how his beers are a personal expression of his creativity.

In this episode, you will hear how important it is to maintain long-term focus even if it means you’re starting out with immediate health issues. You will learn, firsthand from Chad, just how critical it is to develop a thick skin when creating a product that is susceptible to public opinion. And lastly, this episode also features a more tactical conversation as we walk through the launching of a brewery, which is fascinating.

Every single founder we have had on The Startup Story has someone in their family they point to as an entrepreneurial influence. Chad’s story is no different. So, here is Chad Phillip’s startup story.

In this episode you’ll hear

  • His childhood and upbringing, watching his grandfather run his own business (a machine shop) and how his interest in engineering was born
  • His journey to becoming an engineer, going to college, what he did after he graduated, and how he climbed fast in one of his first jobs
  • How chronic migraines plague him for many years following college and how the talk of permanent disability gave him a push to start a company and go out on his own
  • Some of the things that went through Chad’s mind when he thought of entrepreneurship
  • His love for welding and how it is what drove the idea of handcrafting something as a business, and how that led him to homebrewing.
  • Learning to homebrew, what he did and how long it took him before he got a batch that was palatable
  • Sharing his homebrew with the public for the first time, what it was like, and how he went about testing public reception of his own beer before he committed to opening up a brewery
  • How and when he decided to open up a brewery, plus what went through his mind as he was processing this realization that he was actually going to do it
  • Dealing with doubt, and the first steps he put into motion to make his vision a reality
  • The business of running a brewery: who, what, how, and when
  • Growth and growing of Chad’s brewery business, plus what’s next

“For me, brewing our beers is an expression of my creative talents. It really is more personal
than many would think.”
—Chad Phillips, Highpoint Brewing Co.

Resources from this episode

Connect with Chad on LinkedIn: https://www.linkedin.com/in/chad-phillips-b66aa2b7/
Highpoint Brewing Co. website: http://highpointbrewco.com/

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Full Episode Transcript

Special Guest: Chad Phillips.

Sponsored By:

Episode transcript

The Startup Story - Chad Phillips

Chad Phillips: Hi, I'm Chad Phillips, co-founder of Highpoint Brewing Company, and this is MY startup story.

James McKinney: Every wildfire began with a spark. Every superhero has an origin story. And every single startup has a moment that they point to as their beginning. And every founder has a purpose that drove them in the midst of all obstacles. THAT is The Startup Story.

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[01:07]
James McKinney: Before we jump into our episode this week, I want to share a review that was posted on iTunes by Nicole Rowe, who gave The Startup Story a five star rating and wrote, "such an inspiring podcast. So easy to relate to and inspires so many to go after their dreams." I love this feedback, Nicole, and thank you for leaving this review. One of the many reasons I created The Startup Story was because after years of sitting with founders and running numerous live events with founders, I saw a commonality in all of them, regardless of their industry. Yet when we got real with each other, the commonality became much more apparent. That is why you find these episodes so easy to relate to, because all entrepreneurs have so much in common with each other. The Startup Story wants to strip down all the vanity that is built around entrepreneurship so that all who are considering starting their own business are fully informed on what to expect, as well as to let them know how they're not alone in their struggle. All of this is to help inspire you, and all of our listeners, to keep moving forward. So for all of you that are listening right now, if you have found any value in any of The Startup Story episodes, please leave a review. I'll continue to read one each week, so plug your brand in the review as well. Giving your business a plug is the least I can do if you take the time out of your day to write a review.

Now let's jump into this week's episode. Our guest today is Chad Phillips, co- founder of Highpoint Brewing Company in San Dimas, California. This episode combines a few things that I love dearly. First, small business. I love small business. The large global companies are the brands that become household names, but it's the small businesses across the country that provide for all of the households. It is the small businesses in our cities that contribute the greatest economic impact to our country. It is the small businesses that move the needle on the employment rate of our communities. I absolutely love small businesses.

The second thing about this episode that I love is that it speaks about creativity. I really wish I was create like these artisans, like Monkwood Studios that we had, or even Chad Phillips and beer making. I'm sure most of you don't consider beer making creative, but in this episode, our featured founder Chad will discuss just how personal beer making is to him, and how his beers are a personal expression of his creativity.

In listening to Chad's startup story, you'll hear how important it is to maintain long-term focus, even if it means you're staring at an immediate health issue. You'll learn how critical it is to develop a thick skin when creating a product that is susceptible to public opinion. And you'll hear a very tactical conversation, in fact more so than most startup story episodes, as we walk through the launching of a brewery. Like I mentioned earlier, The Startup Story is relatable because there's so much commonality in the entrepreneurial journey, and one of those areas of commonality is the influence of our family. Every single founder we have had on The Startup Story has someone in their family that they point to during their childhood that was their entrepreneurial influence at a very young age.

[03:58]
Chad Phillips: My grandpa was the entrepreneur. So my grandpa started a family business when he was in his twenties, started a machine shop in the same city that I own the brewery.

[04:07]
James McKinney: And what city is that again?

[04:08]
Chad Phillips: San Dimas.

[04:09]
James McKinney: San Dimas, got it.

[04:10]
Chad Phillips: So that's where that comes from. My dad's now running that, so he gets some of that business sense from that, but in my childhood he was just working for my grandpa. My grandpa's definitely the one that started that business.

[04:21]
James McKinney: What about your mom?

[04:22]
Chad Phillips: My mom was a teacher.

[04:23]
James McKinney: Teacher okay. So your mom's a teacher, so obviously there's that stability mindset that comes with being a teacher. Your grandfather was really the risk taker, the machine shop owner. Blue collar, hard worker. What industry was he tooling things in?

[04:39]
Chad Phillips: Mostly medical and dental.

[04:42]
James McKinney: Medical and dental, okay. And your dad was working in that business as well. Any siblings?

[04:46]
Chad Phillips: Two siblings, two younger sisters.

[04:49]
James McKinney: So you're the oldest.

[04:59]
Chad Phillips: Yeah.

[04:51]
James McKinney: And the only boy.

[04:52]
Chad Phillips: Yeah.

[04:53]
James McKinney: Was there a difference in the way your parents raised you versus them?

[05:00]
Chad Phillips: Yeah. It's hard to pick out what those things are, but I would definitely say that there were. I think there were more expectations for me.

[05:07]
James McKinney: As the oldest or as the oldest and male?

[05:09]
Chad Phillips: Both. Definitely both, yeah.

[05:11]
James McKinney: What were those expectations? If you were to think back now, what were some of those expectations?

[05:16]
Chad Phillips: It was always what I was going to push to do. So I went into engineering, that was my first field. I kind of was pushed into that. I love engineering, but that was definitely what I was encouraged to do. Both my sisters are teachers and my mom's a teacher, so it just kind of fit naturally that way. But for me, I didn't really have a path. I think they knew, my mom was a teacher, they wanted to be teachers, it was kind of an easy fit.

[05:41]
James McKinney: What did you, you say pushed but what did you want to do? Again, junior and senior year, those college and career days, you're now thinking maybe SAT/ACT to go to college. What was in your mindset towards the end of high school? What did you want to do?

[05:54]
Chad Phillips: Oh, I wanted to be an engineer. It fit. It fit so perfectly. I was always taking things apart, putting them back together. Pushed might have been the wrong word, because it was definitely very natural. I found it fit me right. I knew freshman year that I wanted to be an engineer. It wasn't that they pushed me towards it, but they definitely helped guide me in that direction and show me what I needed. Kind of give me the tools of that's what you want to do, you're in the garage, you're taking apart VCR's and pulling out the motors and making little RC cars out of them.

[06:24]
James McKinney: What I love most is we have listeners right now that don't know what VCR's are.

[06:28]
Chad Phillips: That's true.

[06:30]
James McKinney: I love that about technology, how fast things go. I had another, Zack Swire a couple episodes ago, his brother had five locations and it was a pager sales business. I love that there are people that have no idea what pagers are. So you knew you wanted to be an engineer as a freshman. What type of engineer were you thinking at the time? Or better yet, as a 15 year old, what was engineering to you?

[06:57]
Chad Phillips: I always wanted to be a mechanical engineer at that point. I knew. But in my head, I was going to go work for BMW. That's what I wanted to do. I was going to work for BMW, build cars for BMW. I don't know why. No one in my family had BMW's. That was just something that got stuck in my head of what I wanted to go do. Literally ninth grade, I'm going to go be a BMW engineer and I'm going to design the new BMW's. That's where I was at.

[07:22]
James McKinney: That's awesome. So what was your first step out of high school?

[07:26]
Chad Phillips: I went to Cal Poly Pomona Mechanical Engineering program.

[07:30]
James McKinney: Okay. And throughout that entire time in Cal Poly, was there any inkling whatsoever of entrepreneurship? Because again, you're talking about employment as an engineer. That is a mindset. Not necessarily a punch in, punch out mindset but a stability mindset. It's I know I do this, I get a paycheck, there's no risk. Was there any inkling in college for entrepreneurship at that time?

[07:51]
Chad Phillips: It always interested me.

[07:53]
James McKinney: What was it about it that interested?

[07:55]
Chad Phillips: So I always just had different ideas about businesses. I think the thought of being your own boss was always nice. Doing something in that is very different, but obviously watching my grandpa do what he did with the machine shop, it was something I thought about definitely. Could I invent something fun, and that was kind of what it was. If I invented something fun, could I turn it into a business.

[08:15]
James McKinney: Were there any failed attempts in college to try and create something and sell it?

[08:19]
Chad Phillips: No. I never got that far.

[08:22]
James McKinney: Never got that far, you just had a bunch of ideas.

[08:24]
Chad Phillips: Yeah, no. College kept me way too busy.

[08:27]
James McKinney: So after you graduate college, your first step was what then?

[08:31]
Chad Phillips: I started my internship with an engineering company, it was sophomore year of college. So I was working throughout college. When I graduated, I was actually managing the company by the time I graduated.

[08:45]
James McKinney: The engineering shop? Wow, okay.

[08:47]
Chad Phillips: Yeah, so I was their youngest manager. It was very weird. It was weird to graduate and kind of be in the upper part of my company because I wasn't looking for a job. I wasn't… there was really nowhere for me to go. I didn't know if I was going to leave that place and try and go somewhere else, but at that time, there really wasn't anywhere further for me to go.

[09:08]
James McKinney: Did you finish college in four years?

[09:09]
Chad Phillips: No.

[09:10]
James McKinney: How many years did it take?

[09:11]
Chad Phillips: Seven.

[09:12]
James McKinney: Seven years. So you were, were you doing it part time or just some life happenings that took place that delayed it? Why seven years?

[09:20]
Chad Phillips: Life happenings.

[09:22]
James McKinney: The reason I ask that question is because previously, assuming it was four years, like wow you really got to management fast. Seven years, a little bit more understandable, but you had graduated college while you were a manager. So what happened in those seven years, one why it took seven years, and how did you climb the ranks still so fast without a degree?

[09:45]
Chad Phillips: So Cal Poly was really impacted. Their engineering program I think a regular degree there is like 175 units, engineering is like 220 units.

[09:55]
James McKinney: Oh wow.

[09:56]
Chad Phillips: So they call it a four year program. It's really not. It's pretty uncommon for people to graduate engineering at Cal Poly in four years. To do it, you have to take like summer school and I travel a lot, so I wasn't taking summer school very often. Couldn't get the classes I needed, working full time, and I didn't have a reason to rush having this job already. So I kind of took my time. So that, life happenings, all sorts of things.

[10:20]
James McKinney: Got it, yeah. How did you climb so fast in that, what was the name of that company?

[10:25]
Chad Phillips: HiRel Connectors.

[10:26]
James McKinney: How did you climb so fast prior to completing your degree?

[10:29]
Chad Phillips: it was a combination of the first part of the company was really old, people were retiring. Made for a lot of openings. Then there were a lot of big contracts that came up, so I just worked really hard on those contracts, got us some of those bigger contracts, and that put me in a place long-term to kind of have more say in the company.

[10:50]
James McKinney: Were you there up until the time you started your brewery?

[10:54]
Chad Phillips: Yeah.

[10:55]
James McKinney: So I'm assuming you loved it. You were probably there, if I'm doing the math right, 12 years?

[11:01]
Chad Phillips: Yeah, that's about right.

[11:03]
James McKinney: So you were there for 12 years, so you must have enjoyed it.

[11:06]
Chad Phillips: Mm-hmm.

[11:07]
James McKinney: So how do you get from a comfortable income, a stable life, a job that you love, exercising a skill that you've wanted since you were a freshman, how do you get from there to I think I want to start a brewery?

[11:25]
Chad Phillips: For me, it was really, I started getting really bad migraines. I had some medical issues going on and I was taking a lot of time off for those issues. I would get a migraine, I would call in sick, and I really couldn't do my job as well as I wanted to anymore.

[11:41]
James McKinney: What year was this, when these migraines started coming?

[11:44]
Chad Phillips: This was 2013 I want to say.

[11:47]
James McKinney: So six years ago, so about the seven or eight year mark of employment with HiRel Connectors. So you were there for eight years, migraines start occurring, continue.

[11:58]
Chad Phillips: So that was the time when I really started thinking, doctor's were talking about permanent disability and I was 28 at the time. I didn't want to go on permanent disability at 28, so it was what can I do to be my own boss? How can I make a future for myself and not just collect a paycheck for doing nothing?

[12:19]
James McKinney: So at 28, you were having migraines either so frequently or so intense that a doctor was thinking permanent disability?

[12:29]
Chad Phillips: Still do.

[12:30]
James McKinney: You still get the migraines?

[12:32]
Chad Phillips: Yeah.

[12:33]
James McKinney: Wow. And you didn't have them your entire life?

[12:35]
Chad Phillips: No, never. Never went to the doctor. I didn't even have a doctor when this started happening because I didn't go to the doctors. Now, I have doctor's appointments weekly almost.

[12:46]
James McKinney: Associated with the migraines?

[12:48]
Chad Phillips: Yeah, all to do with the migraines.

[12:50]
James McKinney: Wow. Any idea what brought this on at 28?

[12:54]
Chad Phillips: They're still, they think it's something spinal. Bunch of different opinions, but yeah.

[12:59]
James McKinney: Yeah, that's what most medicine is, just opinions. For the doctors listening, I'm sorry but I'm not. So really, it was your health and well being that started thinking well maybe I want to have a little more freedom.

[13:17]
Chad Phillips: Right, exactly.

[13:18]
James McKinney: Oh, that's incredible. I do not hear that story very often. So 28, migraines start becoming more and more intense and more frequent. You started thinking maybe I want to start doing my own thing. Walk us through that process, because I can't believe the first thing you thought was, "I'm going to open up a brewery." So when you start having the thought of entrepreneurship, what are some of the things going through your mind as opportunities?

[13:39]
Chad Phillips: A brewery definitely wasn't my first thought. It was what can I do? What tools do I have? What skill sets do I have where I can go be my own boss? Again, family still owns the machine shop so it was do I want to go work at the family business, do I want to work for the machine shop? What could I do? The family business, I don't want to go there and be the one who's the son running the business but calling off sick once a week. That just didn't seem right to me. So I tried to look at what tools I have, what skills I have. I love brewing. I had a ton of hobbies. Breweries are very popular. And it was just one of those things where my partner Dominic, he was a friend at the time and he wanted to open a brewery. I brewed at the house I was at on and off, and we just started talking about it. It was just something that kind of clicked and fit. It fits the times. It fits what I want to do if I'm not there one to two days a week.

[14:33]
James McKinney: So at 28, 29, is when you had this idea for a brewery.

[14:38]
Chad Phillips: Closer to 30. Yeah, I started getting the migraines and I kind of battled that for two years. I battled what I wanted to do. It was kind of an on and off thing, so it took about two years for me to really pull the trigger on this.

[14:48]
James McKinney: But obviously one does not consider opening a brewery unless there's extensive knowledge in beer making, so how many years have you been making beer up until that moment where you decide let's open a brewery?

[15:05]
Chad Phillips: About eight years.

[15:06]
James McKinney: About eight years?

[15:07]
Chad Phillips: Yeah.

[15:08]
James McKinney: So this started in college.

[15:10]
Chad Phillips: Yeah. I started when I was-

[15:12]
James McKinney: And that didn't contribute to why it took seven years. Just kidding.

[15:14]
Chad Phillips: Not at all.

[15:16]
James McKinney: So let's talk, because obviously that plays a critical part. Because again, a successful brewery has great beer. Obviously, great atmosphere, a lot of things that can contribute to a brewery being great. But a person doesn't jump into the idea of opening a brewery unless they have knowledge of beer making. So let's go back to the very first time you started thinking about making homebrew. How old were you, and what was that?

[15:43]
Chad Phillips: I had a family friend who I actually, I've had a ton of hobbies, and I was welding at the time. A friend of mine's dad was like, "Hey, if you want to make beer, you weld this stand, you attach a burner." I'm in engineering school, so that all sounded fun. He goes, "You get one keg, you cut the top off a keg, you make your own beer." 21, college, that sounds awesome. It kind of spiraled from there. Then he told me if I got three kegs that I could do all grain brewing which is what you should do. So then I got three kegs, welded this big tower stand in the backyard. It was really more my passion for welding and building things that led me to build this whole brewing setup when I was like 21. I started brewing from there.

[16:27]
James McKinney: That is hilarious. So your love for welding is what drove the idea of what you could make, and then started home brewing. So what about the education side of brewing? There's a lot that goes into that. So now you're enjoying the welding process of making these towers and you have something in your backyard, because it's larger than would fit. I think a lot of people I hear these stories, people making homebrew in their bathtub or something like that. Obviously, you have a much more advanced setup than that. Where did the education and knowledge come from on how to make beer?

[16:58]
Chad Phillips: I started reading. Everything I did was self taught. This guy kind of gave me the basics, buy this book. There's a couple good books out. So I started reading books and it was more just hands on too. The first two or three batches I did didn't taste very great. Started trying to read why, figure out why and experiment, and go from there. Just started getting a little better. Every time, it'd get a little better. I started dialing in different recipes I liked, different techniques I liked.

[17:30]
James McKinney: How long until you had a batch that was palatable?

[17:33]
Chad Phillips: Probably my third or fourth batch.

[17:35]
James McKinney: Third or fourth batch. Has that recipe made it to the brewery?

[17:39]
Chad Phillips: No.

[17:40]
James McKinney: No? What did make it there? Now that I put the idea in your mind, might there be an OG on tap somewhere?

[17:45]
Chad Phillips: It could. It was an IPA. It was a pretty basic IPA, so I would say we have some sort of version of that, something pretty close.

[17:53]
James McKinney: All right. So making homebrews for some years, but again just because you make it at home, there's a huge gap between just making it at home. I'm assuming probably giving them as gifts. Your friends tasting them at parties, you bringing them for people to sample. Before it starts becoming something you really want to put out in the public. I assume the first time the public tasted your beer was not when you opened the brewery?:

[18:17]
Chad Phillips: No.

[18:18]
James McKinney: From all those years of making your own beer, what were you doing to test the public reception to it before you committed to opening up a brewery?

[18:26]
Chad Phillips: So it was mostly friends and family. When you're making beer, the most common size is five gallon batches for a home brewer, so five gallon batches you're not going to drink five gallon batches to yourself.

[18:38]
James McKinney: Hopefully not.

[18:39]
Chad Phillips: Yeah, that's true. Again, being in college it's pretty easy to get rid of beer, so.

[18:45]
James McKinney: That is true.

[18:46]
Chad Phillips: Friends, family. I was giving away beer as fast as I could, and people really like getting free beer so even if it's not the best, it's free.

[18:55]
James McKinney: Yeah, that is… yes. So now you decide you want to open up a brewery. What goes through your mind as you're processing? Because again, you didn't pick an e-commerce company. You didn't pick something that had low risk. There's a lot of capital to put any type of brick and mortar business in play, let alone all the equipment you had to install in order to make a brewery happen. You're not just a distribution place where someone else is making the beer. This is your beer that you're making. There's a lot of thought that has to go into do I really want to do this, do I not want to do this. What was that process for you? At any point in time, was there any doubt that this was going to happen for you?

[19:40]
Chad Phillips: Oh, there's always doubt. There's still doubt. It's tough. You're giving something to somebody, you're giving them a product, and there's going to be people who judge it. There's going to be people that'll love it, there's going to be people that will hate it, and that's always definitely tough for me to see somebody telling me they don't like what I made. It hurts. I haven't really developed that skin because in engineering, I delivered you a product, the product was tested, it worked. It was right or wrong. Now, with beer it's not right or wrong. It's personal opinion to different people. So that's still kind of tough. So there's definitely doubt. There's doubt in is it good enough. There's doubt in the business, is the business going to go anywhere. The doubt is there, but I think part of the doubt is, it drives me and I think that's important for business too, is letting the doubt be something that keeps pushing you to be better.

[20:34]
James McKinney: Yeah, letting that doubt be a catalyst, whether it be a product improvement or distribution, whatever the case may be. Letting that doubt be a fuel for something else.

[20:43]
Chad Phillips: Right. I don't ever want to get comfortable.

[20:46]
James McKinney: Yeah. So you and Dominic say, "Let's open up a brewery." What are some of the first steps, some of the first wheels you put in motion to make that vision happen?

[20:57]
Chad Phillips: For a brewery for us, it was size, capital, business plan. Those were kind of givens. But the key for us was location. So we wanted to open, we're a little mountain town. There's nothing around up there. It seemed fun, kind of get away from city life. Brewery in a mountain town-

[21:16]
James McKinney: Wear flannel all the time.

[21:17]
Chad Phillips: Yeah, exactly. I love my motorcycle so I can do the two things I want. I can go in the morning, brew beer, and then ride my motorcycle out of there, go on a couple trails. We looked up there for a while and were just striking out, so we started looking kind of-

[21:32]
James McKinney: Striking out on trying to find a space that would work?

[21:34]
Chad Phillips: Yeah, a location that would work. It's small. There just weren't a lot of options. We were maybe impatient. I don't know, we looked for probably four or five months there but we wanted to get a place open and we were kind of seeing the entire area. There was nothing left to look for. So we started looking everywhere around where we lived, and found San Dimas. We're next door to where my grandpa opened his machine shop, which just completely coincidental, but perfect.

[22:01]
James McKinney: The physical location is next door to where your grandfather opened up his shop?

[22:04]
Chad Phillips: The complex is next door, yeah.

[22:06]
James McKinney: The complex, oh wow. That's incredible.

[22:07]
Chad Phillips: So not like door to door, but the complexes are next door, yeah.

[22:11]
James McKinney: You said your dad was now running that business, right?

[22:12]
Chad Phillips: Yeah.

[22:13]
James McKinney: There's got to be a bit of nostalgia, just the idea that you started a business. Because your grandfather was your entrepreneur guide if you will. He was the entrepreneur in the family. You watched him so there's got to be a bit of nostalgia knowing that now I'm paving my path relatively close to where my grandfather paved his. That's pretty cool.

[22:29]
Chad Phillips: It's fun, yeah. I like it.

[22:31]
James McKinney: That is pretty cool. So you find a place in San Dimas. What about that location? Because not being a brewery owner, I have to believe location is huge like it is for restaurants as well. I just took my son to The Habit. It's a location I never think of because it's not in a busy center, so for a brewery, what were some of the key considerations for you?

[22:53]
Chad Phillips: So the city plays a big part for us when we were looking. We didn't want to open in a city that already had four or five breweries. A couple of the cities surrounding us already have a lot, and we don't want to crowd in on other people's places. Definitely wanted that demand. So being the first one in San Dimas was a big thing for us. It's really close to their downtown. It's really close to their kind of restaurant center. And we're front facing on a major street, which was also an appeal to us. A lot of breweries, tucked back into industrial complexes so having big windows that face the street, I love that. As soon as I saw that, I was like this is nice. We can draw people in that way. So it was perfect when we found it.

[23:33]
James McKinney: Okay. So you find the location. You're a welder. Do you make your own equipment or do you buy your own equipment? What was some of that thought process?

[23:41]
Chad Phillips: I bought it. I was a hobby welder and stainless is a lot harder to weld. We knew we wanted to go with equipment that was made in the US. There's a lot of Chinese equipment out there, but quality was definitely a big factor for us, something that would last. Used brewing equipment right now goes for like $0.90 on the $1.00 so it didn't make a lot of sense for us to go for used, so we went new. But the engineering side, I definitely did everything I could to hook up the chilling system, lay everything out. Everything else I did that I could yeah.

[24:12]
James McKinney: Other than manufacture the actual tanks themselves.

[24:14]
Chad Phillips: Yeah, exactly.

[24:15]
James McKinney: Awesome. How long was the process from commitment to opening a brewery, to opening the doors?

[24:22]
Chad Phillips: 18 months.

[24:23]
James McKinney: 18 months.

[24:24]
Chad Phillips: Yeah, right around there.

[24:26]
James McKinney: That time you were working full time. This is all a side gig.

[24:29]
Chad Phillips: No, actually for me I had quit my job and went back to school and got a second degree.

[24:37]
James McKinney: A second degree in what?

[24:38]
Chad Phillips: Business Leadership from APU.

[24:41]
James McKinney: Okay, because you were going to be running a business?

[24:43]
Chad Phillips: Yeah. I knew I wanted to do that and like I said, the migraines. I knew that I couldn't work at the job I was at anymore, so I really wanted to focus on opening the brewery.

[24:53]
James McKinney: So did you quit your engineering gig at the same time as you were thinking I'm getting these migraines, I can't be here anymore, I want to open a brewery, and you just quit.

[25:02]
Chad Phillips: It wasn't opening a brewery at the time, but it was knowing that I was going to do something different, yeah.

[25:09]
James McKinney: And so you went and got a business degree from APU.

[25:12]
Chad Phillips: Yeah. So I didn't want to sit around. I took a part-time job at a little local liquor store. They're like a BevMo! size, but a local shop called Liquorama. They were super nice. They taught me distribution.

[25:25]
James McKinney: Was that an intentional job that you got or did it just happen? The stars aligned and it just happened?

[25:30]
Chad Phillips: No, I took that once I started talking about opening the brewery. So once I decided that a brewery was the direction I was going, I had a friend that worked there. They offered me the position. They were looking for part-time work and it just kind of made sense. It was definitely just a fun way to kill time.

[25:46]
James McKinney: So what were some of the considerations? Now let's talk a little bit about the business of a brewery. Again, you're my first brewery founder on The Startup Story. I love beer, so I'm going to ask a lot of questions that I probably wouldn't ask from a lot of other founders, but I'm just fascinated with this business that you have. And I've had your beer, and it's incredible. What are some of the considerations when opening up a brewery? As an outsider, I think beer quality, the variety. What other things am I missing?

[26:13]
Chad Phillips: Our first consideration was the size, how much capacity do you want to go w. do you want a seven barrel system, do you want a 100 barrel system.

[26:24]
James McKinney: Does that determine how much variety you can have at one given time because of cleaning the tanks and everything?

[26:30]
Chad Phillips: Not really. The nice part about beer is it takes basically the same amount of time to make a thousand gallons as it takes to make five gallons.

[26:38]
James McKinney: Oh wow, okay.

[26:39]
Chad Phillips: But definitely it's a consideration of your capital, where that comes into play. The style of beer I never really thought about honestly. I mean, there's places that specialize in Belgian beers. There's people that specialize in East Coast styles. I make beer that I like. It tends to have a very West coast feel, but that's just the beer that I like anyway. So I would say that we definitely have a West Coast influence, but I'm born and raised here.

[27:07]
James McKinney: What does that mean from a beer perspective, a West Coast influence?

[27:11]
Chad Phillips: So West Coast beers tend to be a little higher in alcohol, a little bit hoppier. If you were to say compare maybe a big beer like a Sam Adams to a Sierra Nevada, Sam Adams would be more of an East Coast style where Sierra Nevada would be a West Coast style.

[27:28]
James McKinney: Okay. That's a great comparison. Excellent. So you open the doors. How many months ago?

[27:33]
Chad Phillips: Six and a half.

[27:34]
James McKinney: Open the doors six and a half months ago. What was your first month like?

[27:41]
Chad Phillips: Chaos.

[27:43]
James McKinney: How so?

[27:44]
Chad Phillips: There's so many unknowns. There's are people going to come in the door today? Do we do a soft opening? Do we do a grand opening? I've never opened a business, so everything's a guessing game. What should our hours be? Were our recipes good? Beers take two months at least to make so I think we opened with eight beers. We didn't want to open with four, but we wanted to open the doors as soon as possible. So at what point do we open the doors, have enough beers to serve? Are the beers good enough? How are people going to respond to them?

[28:20]
James McKinney: So let's answer all those questions. What did you go with and then what adjustments did you make from that first month of learning?

[28:28]
Chad Phillips: So we tried to cover a pretty broad range. So a couple light beers, couple middle of the road beers, couple dark beers. Something to please… you're never going to please everyone, but cover a good spectrum there. Then the hours were something we talked about. We're open 4 to 7 during the week, and 12 to 7 on weekends.

[28:54]
James McKinney: You're open 4 pm to 7 pm during the week?

[28:56]
Chad Phillips: Sorry. 4 pm to 10 pm.

[28:58]
James McKinney: Got it, okay. I was like three hours, wow.

[29:00]
Chad Phillips: We close at 7 on Sundays, yeah.

[29:02]
James McKinney: Got it, okay.

[29:03]
Chad Phillips: But we didn't know if those hours were going to be right. They kind of felt natural. People would start to roll in about 4, leave about 10, and so we're like okay, we got the hours right. People are liking the beer. Keeping the place clean, just seeing what people wanted. We didn't have really any entertainment at the time besides music. We didn't have any food. So we slowly brought those things in, but it was always just what can we add? How do we keep people in here, what do people want? They seemed to receive the beer well, but on top of the beer, TV's. We added TV's.

[29:40]
James McKinney: Was that a miss upon opening or was that something that you realized after the fact, like oh people want TV's? Or was the intention not to have TV's and have people talking to each other?

[29:50]
Chad Phillips: The intention was to have people talking to each other, but most people wanted TV's when they came in. We didn't have anything non alcoholic when we opened. We didn't have sodas in the fridge, so we added sodas we just bought from the store, Gatorade, stuff like that. Just didn't that ink about it. We should have, but now we have those. It was just kind of getting into that rhythm and finding what people wanted.

[30:11]
James McKinney: Do you feel like six months in you're in a rhythm now?

[30:14]
Chad Phillips: I think so, yeah.

[30:15]
James McKinney: How long did it take to get there?

[30:16]
Chad Phillips: Probably four months.

[30:19]
James McKinney: Four months, so that's really new to you then.

[30:22]
Chad Phillips: Yeah, and we keep adding new things. So anytime it gets comfortable, so two months ago we added distribution. We started distributing case to local restaurants, so that's just one more thing. So anytime I get comfortable, I try and add something new.

[30:36]
James McKinney: Yeah. So let's talk about how a brewery grows, because I'm sure many listeners have been to one of their local breweries and they think of the beer they're having right there. There is a scaling cap that can take place in a physical location, but you brought up distribution. Is that how a brewery really grows to that next level?

[31:01]
Chad Phillips: It depends on the brewery. So know breweries that don't distribute and do great. It's more their business plan. For us, definitely distribution, we want to be in local restaurants. Tasting rooms are great so if you decide you want to keep adding tasting rooms, there's breweries that go that route. I guess the limiting factor would always be the size of your equipment. You can only make as much beer as your equipment will allow you.

[31:24]
James McKinney: There's also only so much volume of people to come through the doors of your location, San Dimas, right.

[31:30]
Chad Phillips: Right, that's true.

[31:31]
James McKinney: So there's only so many people that can come through the door, so then it becomes I would assume the question is how much beer can I get outside of my doors because there's your other revenue opportunity.

[31:42]
Chad Phillips: Right.

[31:43]
James McKinney: I don't know what the laws are for selling online. I don't even know, is that an opportunity?

[31:47]
Chad Phillips: It's an opportunity, yeah.

[31:48]
James McKinney; Okay, so you can sell alcohol online.

[31:49]
Chad Phillips: Yes.

[31:50]
James McKinney: Oh, I didn't know that. I don't think I've ever done that.

[31:52]
Chad Phillips: It's changed recently.

[31:54]
James McKinney: Oh, that's not true. I bought wine online, so you can buy alcohol I guess. Never thought beer.

[31:57]
Chad Phillips: I think Amazon sells liquor online now.

[31:59]
James McKinney: Amazon does? Amazon sells everything.

[32:00]
Chad Phillips: Yeah. That was part of when they bought Whole Foods. I think that's part of why they bought Whole foods.

[32:05]
James McKinney: Interesting. I've bought Sangria online on Amazon, so I guess you can. It's just funny the things you don't think of.

[32:13]
Chad Phillips: No, definitely. Honestly, it's something I had never thought about us doing, but I know a couple breweries that do. So right now we do kegs to local restaurants that you'll find on tap. We're starting to add canning, so we'll do cans to local liquor stores and that route. Yeah, that's definitely a great way for us to get our name out there without actually looking at a secondary location or something along those lines.

[32:36]
James McKinney: Is there a big craft beer maker that you look to as kind of a model mentor that you kind of want to walk their path a little bit, because you see that's where I want to get to?

[32:48]
Chad Phillips: Yeah, there's a couple different ones.

[32:50]
James McKinney: Who?

[32:51]
Chad Phillips: When I started brewing, it was probably Stone, and Port and Lost Abbey are the same brewery. But those two guys down in San Diego. I would drive down to san Diego to get craft beer, because there were no craft breweries here and now every city has its craft brewery. So Rogue up North.

[33:12]
James McKinney: What is it that they're doing that you want to be doing at some point? Besides the fact that Stone's opening up its own hotel. That's next level. I don't think any other brewery could pull that off but them right now.

[33:24]
Chad Phillips: I liked Rogue. Rogue has their own farms. They grow everything on premise. If you ever go to their farms, it's outside of Portland, south of Portland. You can go to their taste room. It's a shack. It doesn't look like any brewery I've ever been to, but you'll have beers there where everything that goes into the beer, you can see from that little tasting room.

[33:42]
James McKinney: Wow, that's pretty cool.

[33:43]
Chad Phillips: The hops, the grain. I have jalapeno beer there. They have a little garden with vegetables. That was fun. I liked that. I like knowing where everything comes from, how it all comes together, and knowing that it's fresh, knowing that it's right. But those are all breweries, Port and Lost Abbey are still doing okay, but I feel like Stone is almost getting a little forgotten, Rogue definitely, because beer is changing so much. Now there's trendier breweries that are more popular, definitely.

[34:15]
James McKinney: So do you think by staying small, and this is an interesting growth conversation and strategy, do you think staying small allows you to adapt to how beer is changing faster than the bigger ones?

[34:26]
Chad Phillips: Definitely.

[34:27]
James McKinney: Because I think you're right. When I think you have Stone in the retail space, it's the same beers all the time.

[34:33]
Chad Phillips: Mm-hmm. But I think that they've put those beers out there and they are huge because they did that. That was their whole motto in the beginning that they were only to make those whatever 10 beers they have. Now, they make a ton of different beers and they've tried to change, but I think at this point, they're kind of too big to follow like the hazy beer trend, different beer every week trend. They kind of are who they are. I don't think that's a bad thing.

[34:55]
James McKinney: No, not at all.

[34:56]
Chad Phillips: Yeah.

[34:57]
James McKinney: Again, I have never and will never drink Coors. I would say it is a bad thing, but I'm not. They're doing all right. Lot of people drink them, lot of people love them. Not my gig. But obviously they have a fan base, and that's really… when I think of beers it's about the loyalty and the fan. It's the brand, and that's really what you're building right now for yourself is that brand. Some people think of Highpoint Brewery, whether it be retail, restaurant or whatever, they know what they're getting and that consistency, and that quality, right?

[35:34]
Chad Phillips: It's an interesting time in beer. I think that right now that's not as important.

[35:38]
James McKinney: What's not as important?

[35:39]
Chad Phillips: Brand recognition. I don't want to say quality, because it's definitely quality is always something that's very important, but I think there's a lot of people right now that are looking for a variety, looking for the next new hot thing. You've got this beer coming from Vermont that I got shipped in fresh, and that makes it seem more special. I think that's just kind of the trendiness of craft beer right now. I don't think that's going to last very long, but I definitely thing that's where the beer scene is right now.

[36:07]
James McKinney: Why do you think that won't last long? The reason I ask that question is because man, this is going to age me, but I remember when coffee shops on every corner, I thought that's' not going to last long. I remember when bagel shops, that's not going to last long. There have been so many things that I thought were just a trend, said that's not going to last long, and I was so wrong. So what is it about you as an insider in the beer industry, why do you think that's not going to last long?

[36:34]
Chad Phillips: I think people are going to continue to drink beer.

[36:36]
James McKinney: That's a given. That's a given.

[36:38]
Chad Phillips: I think the trendiness of… I remember my mom loving Zima because Zima came out. I think it's kind of along that same line where I've had a Zima, they're not great. They were just something that everyone loved. So I think that beer right now, everyone's kind of looking for that trendy beer. It's kind of a popular thing to like beer right now. But I think at the end of the day, the quality products are the ones that are going to stick around, and that's what we try to do is just maintain a quality product rather than chase down some of these fads that are kind of happening.

[37:10]
James McKinney: As you're creating your different beers, are there a few that you are hoping and grooming to be your flagship beer of the ones you put out in the restaurants, and the ones that make retail?

[37:23]
Chad Phillips: There are, yeah.

[37:25]
James McKinney: What are those?

[37:26]
Chad Phillips: So our Uncle's Red, it's one of our favorite beers that we make. It's one of my first recipes. Not one of those first three. But no, I've been making that one forever and kind of tailoring that recipe. I love reds. I love the different pallet that it suits. You have malts, you have hops, you have kind of a little bit of everything in there. Our IPA's, the Tom Down IPA, the
Bad Kitty IPA. I love those beers and I want our flagship beers to be ones that I would go into a bar and order, rather than a beer that is maybe something we make. We make a pumpkin beer. Our pumpkin beer is fantastic, but if I had to make that beer year round, I don't think I'd have fun brewing it all year.

[38:10]
James McKinney: Yeah. How much of what you do in owning a brewery is the making of a product versus some type of expression of you? Because there's been a few things you said where it's, "I want to be able to like… I want a beer that I would order at the bar. I want a beer that I can drink regularly." How much of beer making is an extension of you versus just a product?

[38:36]
Chad Phillips: For me, I feel like it's all an extension of myself. I think what attracts me to brewing is it's kind of a combination of art, science, engineering. It lets me express all of my creative talents. So any beer we put out, even if it's a beer that is not necessarily a beer I would normally drink, our Blonde for example, I don't really care for Blondes, but if you taste our blonde, I enjoy it. It's definitely got a little bit of my own personality. It's a little hoppier than most Blondes. It's more of a style that I would drink.

I always say I just want to brew beer. That's maybe 5% of the job. I wish it was more. The other 95% is cleaning, marketing, meetings, all of those things. Those things don't always let me express myself the why I want to or do what I want to do. It's all part of it.

[39:29]
James McKinney: So now that you're in it for six months, your challenges now are different than your challenges before because before is about getting the doors open and learning the things you didn't know. Now it's six months, what are the challenges?

[39:41]
Chad Phillips: Sustainable growth, always what we talk about right now. We got the doors open, how do we grow? How do we grow at a rate that we don't outgrow ourselves?

[39:53]
James McKinney: What does that mean in brewing, outgrow yourselves?

[39:57]
Chad Phillips: We buy too big of a building, we expand too quickly, we take out a loan that we can't afford. How do we make sure that we have enough money coming in but we keep putting it back into the brewery rather than taking back out ourselves.

[40:10]
James McKinney: Yeah. What for you, as an engineer, you're a planner. I know you have an answer to this question. What does Highpoint Brewery look like in three years?

[40:22]
Chad Phillips: I would hope that we are in some local liquor stores, in the local restaurants, really more part of the community. I would love to be a part of the community. I want to be able to give back to the police department, the fire department, to the city itself. I want to feel like we are a part of the city. Not even the city, but the entire surrounding area.

[40:50]
James McKinney: That's awesome. I love that. So there's two questions as our time comes to an end. There's two questions that I ask every founder. The first one is, it's about reflection and gratitude. I believe if we forget the people that helped contribute to where we are today, then we'll begin to think we did this all on our own and that will inevitably lead to your failure, because you're going to isolate yourself. So when you think back along your journey from childhood all the way up to now, who are the people you look back to with immense gratitude for their contribution in your journey? Even if it was just for a season and they're no longer in your life. Who do you look back to for what they contributed and what did they contribute?

[41:32]
Chad Phillips: It's the easy answer, but the first one is my parents. I think about that all the time. They really, they gave me the foundation that I needed. And my family, they're always supportive. Everyone is always supportive. But I've had a lot of really good mentors. Even in the engineering community, some of my teachers. It's weird to say that engineering translates to business or brewing, but it does. Business is business, so those people who have taught me those life lessons, taught me how to work hard, taught me what it means to take pride in what you do. Those people are always important to me.

[42:07]
James McKinney: That's awesome. And the last question that I ask is this podcast, and really any podcast, is a digital mentor. It's a chance to just gain perspective from someone who's farther down the road, and while your first entrepreneurial gig with Highpoint Brewery is only been open for six months, but you had the lead up time to it. So your entrepreneurial journey is we'll say two years. That is still farther than some people. And there are some people right now that are working that 9 to 5, that have a bunch of dreams and ideas but maybe there's some reluctance to start something. Or maybe there's entrepreneurs that have been punched in the gut from challenges and trials, whether it be health related like recurring, frequent, very strong migraines, or even more drastic, cancer, where it sidelined them. Now they're starting to wonder if entrepreneurship is for them. This is where I want you to speak to just one listener. I don't care which of those listeners it is. If you were to speak to one of those listeners, what do you say to that one?

[43:11]
Chad Phillips: For me in entrepreneurship, it has to be something that you're passionate about. You have to be driven by passion. I don't think it's ever something that's going to be easy. It's not something that's ever going to be given to you. It's kind of you against the world when you decide to do it, and you have to have something driving you. So you have to make sure that's something that you're willing to put your all into. You have to make sure that's what you want. You have to make sure you're committed to see it all the way through the end.

[43:37]
James McKinney: Chad's final words at the end there are quite possibly one of the best parts of his startup story process. There's so much vanity built around entrepreneurship and it creates these false perception that entrepreneurship is an easy journey. We hear these stories of brands and products being built and sold for millions of dollars within a short period of time, and the media makes it sound so easy. Don't get me wrong, those are amazing stories but they're not the norm, and therefore should not be the narrative that consumes 99% of our attention. Entrepreneurship is hard. But it's also what makes it so rewarding. Regardless of what brand, product, or service you want to bring to market, it is going to present some incredible challenges for you. But those challenges will also create opportunities of learning and growth for you. And on the other side of those challenges, it's so incredibly rewarding.

I hope you found real value in Chad's journey and his willingness to share with us. If you have been around The Startup Story for any length of time, then you know how much emphasis I put on the idea that entrepreneurs support other entrepreneurs. One of the most important ways we can support our featured founders is to help them be discovered. For that reason, I hope you will follow Highpoint Brewing Company on all the social media channels, Instagram, Facebook, and Twitter. You can find them @HighpointBrewCo. Time and time again, we hear from our founders how hard it is to raise their message above all the noise out there on social media, so I hope you'll take 30 seconds to follow them on your favorite social channel and help raise awareness for this great small business. Entrepreneurs support other entrepreneurs, so let's make sure to show up for Chad and Highpoint Brewing Company.

And now, for my personal ask. The Startup Story community has been so incredible with sharing our podcast with others, but we have more stories to tell and more people to reach. We are a startup and the most powerful way you can support The Startup Story podcast is to leave a review on Apple Podcast or wherever you get your podcast. Follow us on Facebook and Instagram @TheStartupStory.co. Share The Startup Story on your social media, either with a link or a screenshot. Make sure you tag or mention us @TheStartupStory.co so we can see your help and say thank you for it.

Lastly, share the podcast on your LinkedIn profile. The Startup Story is for entrepreneurs, so please do not underestimate the power of sharing The Startup Story on your LinkedIn profile so other entrepreneurs can discover us. In fact, most people struggle to share good content on LinkedIn anyways, so if you want to support The Startup Story then search for The Startup Story company page, follow us, and share our posts to help encourage other founders and spread the word about the podcast. Every single founder has a story, and the startup stories we bring you every week can encourage and inspire another founder. It might just be what they needed to hear to keep moving forward on their dreams. I look forward to sharing these stories every Tuesday with hopes to inspire you to start YOUR story.

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June 11 2019
Chad Phillips, co-founder of Highpoint Brewing Co.

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