Behind the Scenes at Global-Roam

Di Bella Coffee

Phillip Di Bella, in 2002 started a coffee business with $5000. The empire that he spawned was listed in the BRW Fast 100 three years running, which would have been four years except his accountants forgot to file the paperwork on time (d’oh). He recently turned down a $28 Million offer for Di Bella Coffee. Suffice to say Phillip knows how to do business.

I did not really know what to expect when I went to the presentation as I had no idea about any of the information listed in the previous paragraph. All I knew was that this presentation was going to be made by someone who had a successful coffee business. Coffee being essentially a commodity market in Brisbane today (think of all the coffee chains and independents around the place - Coffee Club, Zaraffas, Gloria Jeans and even McCafe), I wanted to know what it was that he had done to make his business successful. In the end I took five pages of notes, which I think is about the same amount of notes as I took in my whole time at university. While I would love to expound upon every single point taken I will take mercy on you, the reader, and only highlight the points that really stuck out.

Marketing

The first lesson that Phillip tought was that marketing is about education. Advertising is trying to sell someone something, while marketing is about you trying to educate people about your products and company. The current government anti-smoking campaign is a very good example of marketing done well. Many companies advertise and advertising does work, but the truly remarkable companies, the ones that really stand out are the ones that market themselves well. The first company that comes to mind that does this is Google. Everyone knows their mission statement - do no evil, and many people know about their 20% time (that is, 20% of their engineers’ time is spent working on their own experiments). Nobody is a fan of google because they have the best search in the world (which they do) or because they have the best email client in the world (which they do). People are fans of google because they like the company itself - the way it operates, what it believes and the way it does business. If you had have told me in the late 1990s that in ten years time the biggest company on the internet would be an advertising company, with the moto “do no evil” and that people not only believed them but adored them I would have laughed at you and probably thought that you were more than a little crazy. At the time advertising companies were hated and reviled for all of their annoying tactics. Google totally changed what an advertising company could be and do. And not once have I ever seen google trying to sell me any of their products. But they have educated me as to why I am a dill if I still use hotmail for my web mail. Anyway this is supposed to be about the Di Bella story, not the Google story.

Values and Focus

One thing that I liked about Phil’s presentation was how he communicated the values of Di Bella Coffee. It is his belief that Di Bella Coffee is not a coffee company - it is a people company. Take a moment to ponder that for a moment. Just because your company sells coffee does not make it a coffee company. Just because Google sell advertising does not make them an advertising company. Internally at global-roam there has been some debate as to who we are as a company. It is my view that global-roam is not a software company but a market education company. We leverage software to educate and inform people involved with the electricity industry, but primarily what makes us remarkable is the way in which people gain an understanding of how the electricity market works through using our services. The key word in that sentence - people. A software company outsources their help desk to India. At global-roam we have no help desk - if you have an issue with our software and call us you will speak to the programmers who wrote the software. We care about our clients and our clients care about us. At least, we think they do - our retention rate is north of 90%. Phil made the point that product, service and price are not things that will land and keep a customer. If you do get a customer through the door because of one of those three things, it is likely that they will walk out the second that they have a better offer from someone else. It is the passion that you inspire that keep people returning. To reinforce this, Phil told of how a competitor offered free coffee for six months to anyone who was returning after having switched to Di Bella Coffee. Phil did not lose one customer to this tactic as his customers were not interested in the cheapest coffee - they were interested in the whole Di Bella experience. Di Bella customers are sold on Phil’s passion (and really good coffee).

Corporate Structure

On the theme of being a people company, not a product company, Phillip went on to explain his view of how Di Bella coffee was structured. Many companies have a “Christmas tree” structure, where the top of the tree was the most important people and each level down had less and less important people. Nearly everyone has worked in a company like this at some stage and I know that the last place at which I worked structured itself this way. Di Bella Coffee structures itself differently. It views its company as a target, a bullseye with the customer at the center. The closer to the customer you get, the more important you are. Di Bella Coffee treats those who directly interact with the customers as the most important people in their company. The further away from the customer you get, the more responsibility you have and pay is linked to responsibility, not importance. It is for this reason that Phil does not believe in investing in publicly listed companies (in a publicly listed company the people with the most to lose are not the people who have the most responsibility).

Pay
Which brings us to the topic of pay. On this topic Phillip was very strong - noone in the company was to talk about pay, everyone who was worthy of staying with the company for another year deserved a payrise and nobody was paid award wages as Phil expected more than “award work”. Pay is negotiated with each individual. After this has been done, it is written into the Di Bella policy that talking about salary is a sackable offense. This is very different from the viewpoint given in Maverick (see the earlier book review), in which the author promoted the viewpoint that everybody should know what everybody else in the company gets paid. Phil’s view is that pay like clothes is expected at work, you just do not talk about it. Talking about pay with peers will lead to a focus on money, which is not what Di Bella is about. I am inclined to agree with this viewpoint. Money is nice, and necessary to survive, but coming to work (actually this statement is somewhat ironic as I am telecommuting today) should be about the work, not about the pay packet .

The Di Bella Story

Finally, the story of how Di Bella got started is one that interests me greatly. In 2002 Phil started with $5 000 cash and had a vision for a company that sold coffee. Instead of trying to get a loan, then starting a store in a supermarket and going through the process that way, Phil reasoned that it was better to work within his means and so started by asking other people if he could use their coffee roasters while they were not using them. This meant that while everyone else was asleep, he was up at 3:00 am roasting coffee. He then sold his coffee at the farmers markets. This was his beachhead (which is a concept from “Crossing the Chasm” by Geoffrey A Moore - a must read for anyone in business). At the time nobody had sold coffee at markets and this was the way he began to gain momentum for what would later become one of the greatest success stories of the last seven years. In Phil’s words “do what others are not prepared to do”.

Having heard the man speak, I cannot wait to read his book. I got the feeling that Phil had so much knowledge and experience that simply being around him would be an awesome learning experience. Oh, and now I have to drive to Bowen Hills to try out his coffee.

This entry was posted on Wednesday, September 2nd, 2009 at 12:24 pm and is filed under 01 - Leadership & Management, 04 - Sales & Marketing, Company Roles, Event Review, Life-Long Learning. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.