How Jacob Jaber Built Philz Coffee From 0 to 70+ Locations

Hey, Justin here, and welcome to Just Go Grind, a newsletter sharing the lessons, tactics, and stories of world-class founders! Premium subscribers get full access to this newsletter, exclusive events, event discounts, and more.

I love Philz Coffee.

I love even more how a father-and-son company grew into a giant in the coffee industry.

Phil and Jacob Jaber founded Philz Coffee in 2003 out of passion for brewing coffee and building community.

What started in a bodega eventually became the first location in the Mission District of San Francisco, where Philz grew a solid, loyal customer base that would soon enough be demanding to expand.

Next thing you know, Philz now boasts over 80 locations nationwide, and the brand has made a name of itself.

Now, Jacob is channeling that same entrepreneurial spirit into Humble Lion Holdings, a firm focused on backing the next generation of standout brick-and-mortar brands.

Listen to Jacob’s interview on Spotify, YouTube or Apple Podcasts.

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• Jacob and his father believed in a different and better product. In the rise of black-coffee-to-go culture, Philz stood out with their focus on crafting a whole experience, making hand-made coffee in a cozy space with baristas that talk to you and actually look you in the eye.

• They were hospitality-obsessed. Something as simple as remembering a name, a birthday or an order can make someone’s day. Along with a good cup of coffee, of course. “Interestingly enough, what people really valued the most was that they were seen, they were cared for. It was a moment of rejuvenation, not just through the cup, but through the connection”.

• “The best growth is when you’re pulled. People want you, versus you pushing in on people." For Philz, it was the customers themselves who decided on the expansion. They liked the brand so much, that they let it be known they would welcome more of it. Jacob and his father listened to the community to take this big step in a practically risk-free manner: “We controlled growth, growth didn’t control us”

• “Come again and tell a friend” was their only marketing. When creating a brand focused on community that’s the best thing you can look for—word of mouth.

• For hiring they developed a CCE framework: Character, Competence and Experience. Their emphasis was mainly in the first. To deliver a unique, curated experience in every Philz Coffee store, they were looking for kind and driven people, and that was their non-negotiable.

• Some of the keys to Philz’s expansion were choosing really good real estate and really good people, as in managers and employees. Those were the priorities when scaling the company in order to stay loyal to the vision of that first Philz store in San Francisco.

• Firing should not be a taboo; it’s actually a big part of how you shape the culture of the organization. Who did you fire and why did you fire them? It sends a stronger message about the standards the company upholds. 

• From Jacob’s experience both in Philz and Humble Lion, if you’re looking to build a brick-and-mortar there are a few things you should keep in mind. Firstly, make sure to fit into a sustainable category, one that’s growing in popularity. Within that, also look for something you can do better than anyone out there. Something that excites you and keeps you curious. Lastly, you need to have different and better ideas than anyone else for the product in question. When all of these elements align, success is virtually guaranteed.

Listen to Jacob’s interview on Spotify, YouTube or Apple Podcasts.

00:00 What’s coming in the episode…

1:14 Introduction

2:32 The story behind Philz Coffee

7:13 What made Philz stand out?

11:05 Expanding Philz

18:01 Hiring for the new locations

24:19 Challenges of expanding

29:00 Raising capital

36:09 The keys to scaling Philz

40:02 Long-lasting brands

42:57 Starting Humble Lion

51:17 What to look for in a brick-and-mortar

54:29 Contact Jacob Jaber

Best,
Justin

Founder of Just Go Grind

P.S. Hiring? Check out the team at Athyna