The Samovar Tea Lounge Growth Plan: One Slow Sip at a Time

Published by SamovarLife on February 07, 2007 under Jesse's Blog, Tea Blog, The Tao of Samovar

Thanks to amazing support from our customers, vendors, and employees, Samovar Tea Lounge has grown from a little tea spot in the Castro, to becoming a huge presence in the tea industry, with our new location in Yerba Buena Gardens, a great online store, plans for regional rollouts, and phenomenal national, and international press. From the Dutch foodie community surrounding Bouillon Magazine, to the Chicago Tribune, to the Japanese tourist industry featuring us in Figaro Magazine, the world has received us with a warm embrace. Thank you.

Because of this strong public reception, we are constantly asked “Are you going to grow? Are you planning on becoming the Starbucks of tea?” I actually saw a recent reference in an online blog that suggested we are in fact owned by Starbucks, and that Starbucks is testing out the tea market by going undercover in “stealth mode” as Samovar Tea Lounge!

I was amazed, surprised, and slightly alarmed, and, felt it was very important to respond.

First, to set the record very straight: Samovar Tea Lounge is NOT owned by Starbucks. It is owned by Paul, Robert and Jesse, and a few of their friends. That’s it.

Coming out of the hyper-speed, consumer-frenzied, coffee-fueled dot com bomb era, we three wanted to do something that made a difference to us, to our community, and to the world. A tea lounge was that special something that we conjured up that would serve these needs. And it has made a difference!

498 Sanchez Street was a love of labor. We three built it with our hands, and we were the first staff: cook, dishwasher, and tea-maker. There’s been lots of changes in how we do things and in what we offer. But the core, to deliver the ultimate tea experience to make the world a better place, has remained the same. And fortunately for everybody, we now have an amazing staff that is much better than us three at making and serving tea!

Now about growth…
The mission of Samovar is to make the world better place by delivering the ultimate tea experience. And, we’re only effective if as many people as possible experience what we offer. If it were possible to accomplish our mission by maintaining our single original location at 18th and Sanchez, then, that is what we would do–have just that single store. However, the tea lounge business is a very physical, visceral experience, and we accomplish our mission by spreading this experience as far and wide as possible. So, to accomplish the goal, we’ve got to spread it far and wide and and as deep as we can through additional locations.

How do we do that?
That’s the business part. For us to grow as “far, wide, and deep” it takes money. Money is the lifeblood of business, and there are three ways for us to get money to grow:

1. Wait until our two locations yield enough money to allow for more locations.
Pro: We own the company, and this is a super slow, natural, organic growth.
Con: This is really, really, really….(maybe even too) slow. We are in a tight margin business, so to expect our margins to fund our growth would take a really long time. So long in fact that we might miss out on the momentum we’ve created thus far.

2. Get loans to grow.
Pro: We own the company, and get necessary money to grow it.
Con: Repaying loans takes away from the money we use to run the business. Paying interest on loans isn’t good. And, getting loans is a very lengthy process that generally doesn’t fully fund our needs anyway. Also, you have to put your first born children on the line in addition to everything else you own.

3. Get investors.
Pro: People aligned with our vision, our mission, and whom we get along well with invest money in Samovar because they want to be part of something good, exciting, and to contribute to what we’re doing. And they want to know they are contributing directly to making the world a better place through our expansion. And of course they want a return on their investment.
Con: Investors own part of the company. How much depends on the investors.

That’s it. Those are the ways we can spread the gospel of tea and accomplish our mission. It is my belief that there are a lot of people out there who want to make a difference. And, it just so turns out that by joining us, they will make a difference, because we’re making a difference.

The constant question then is “how fast do we grow?” I can openly state in response to the “Starbucks thing” that we will never be the Starbucks of tea. Starbucks is all about churning people through a line as quickly as possible (to ensure hitting estimates and projections for the stock market’s expectations) at counter service delivering highly addictive milk and sugar loaded caffeine beverages. That is the modern commodity of coffee shop business: churn the customers through asap, get their money, send them on their way, and welcome them back for the 4pm slump.

Tea is the antithesis to all of that. Tea is about SLOWING DOWN, spending time with friends and family, taking time for yourself, and drinking something universally healthy that has survived the millennia, and touches nearly all the world’s cultures. Samovar Tea Lounge is about the tea experience. Therefore, it would be to our immediate demise if we were even to attempt becoming the “Starbucks of tea.” Personally, that’s an oxymoron that I don’t think is possible.

As a growth plan, our intention is:
1. Grow as fast and big as is reasonable
2. Embrace slow money. It takes time to grow with solid deep roots. We succeed as we maintain our community involvement, and success as a local business. There’s no IPO planned in 90 days. We’re not on the “for sale” auction. All the investors involved are here for the long haul because they understand developing something of quality and depth takes…time. Slow money fans can apply here and now.
3. Listen. Number 1, and 2 above may seem contradictory, but, if we listen well to our community of customers, employees and vendors, the best pace of growth will become self evident.

There’s no question that people need, desperately, what we offer. And with that, I see an unlimited market potential for our offering: an escape, based on community, health, and a splash of the exotic–but all totally approachable. And, partnered with the right people, the market is ready and waiting for us. Our market is anybody who wants to be healthy, who cares about the quality of their life, who embraces an affordable luxury, and who cares to make more time for themselves. As long as there are overworked, over-stressed, time starved people in this world, there is an absolute need for Samovar Tea Lounge. And that is a need that we aim to fill as soon as possible.

If you’re interested in participating in our growth, come in and have a pot of tea and snack. If you think you have what it takes to join us for the “next level,” just email us. If you think we’re whacky, that’s ok too. Either way, thanks for reading, and happy drinking.

PS–In case you haven’t yet tried our new Japanese senchas from Mr. Ko in Kagoshima, please come in and check them out before the staff drinks them all! Ask for: Morning Dew, Lobocha, or Spring Twig

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