Episode 3 - Vova Kagan, co-founder of Sputnik Coffee
Guest: Vova Kagan, co-founder of Sputnik Coffee https://www.sputnikcoffeecompany.com/
Host: Andrey Kolesnikov, co-founder of Steersman Company https://steersman.works/
Interview topics/content:
Taking it from a hobby to a business
Family expectations - education vs entrepreneurship
Sputnik Coffee gets its real start - one step at a time
Setting goals from the start
How the first year in business went - all the work to open the store
The people and companies that helped get things going
Evolving Sputnik, seeing opportunities, pursuing feasible growth
The work days of owner-operators, hiring people vs buying machines
Starting with partners, staying on the same page in goals and commitment - figuring the possibilities at the start
Costly mistakes in the early years
Strategic planning for growth - space, equipment, automation, volume to get into ground coffee
Adding construction and figuring financing while running daily operations - a 3.5-year process
Avoiding bad mistakes when getting commercial real estate at a bargain - searching, financing, getting it fixed up
Proper steps for remodeling - unexpected complexities with financing, Chicago grant funding, and getting the work done - a narrowly avoided end
Dealing with stress month after month in the bad times
The changes that come with growth
People without whom Sputnik wouldn't be here
What led to successes along the way
Entrepreneurship, personality, happiness, and personal relationships
Interview transcript:
Andrey: Hi Vova, I'm excited to have this conversation with you. I've been a fan of Sputnik Coffee for three years already.
Vova: Andrey, I'm happy to chat with you about it.
Andrey: You and your brother run this company. You have automated lines, which are behind you there. You produce a lot of coffee. You, you serve as hundreds of stores across multiple states, but how did you get started? Why did you choose coffee? How did you get on this path in the beginning?
Vova: It was more of a chance, I guess. I used to work in healthcare technology and we would always have coffee in the office and it was always bad. And so I brought in some equipment to make better coffee. I used to be a barista in college and at home we would always have coffee or tea. So, at a certain point it got expensive to keep bringing in all this craft coffee that everyone in the office would drink, but nobody would contribute to the pot, so to speak. And a family friend just brought his own roasted coffee that he roasted in his oven to a party. We tried and we're like, this isn't the best thing ever, but it's also not bad for somebody roasting in an oven. So the next day I went on eBay and found a used little home roaster, a little electric roaster.
And that kind of started it. And then there was another electric home roaster. And then suddenly we were tripping the breakers in my West Loop basement. The neighbors were complaining about the smell in the stairway. From there, we kind of expanded and just kind of one thing led to another.
Andrey: It was a hobby that went into a profession.
Vova: Yeah. And it was a kind of a shorter hobby. We've always had, I've always been into coffee and you know, in college I had an old 1960s lever espresso machine in the dorm, you know. So, it was one of those things where I was always into it. And so was my brother. And then one thing led to another and it quickly became more serious.
Andrey: So in your family, there were expectations from the children, right? That they would go to grad school, some education, type of job. But then you said before that when you decided on this, you know, doing coffee, your family supported you. Your parents were supportive. They were wary, but supportive. So I was wondering, could you say, you know, how did it feel to basically say that, hey, I'm not going to grad school, I'm going to roast coffee professionally. And how did it feel to say that? How did they respond and why do you think they responded the way they did?
Vova: I'm not sure if there was that specific kind of moment, you know, sometimes life just happens and things escalate and then you forget, you miss that moment where you could have told anybody that clear thing of like, hey, I'm about to do this, you know, where they, I think we take our parents for granted and we think that parents don't realize what's going on and they do, you know? And so I think part of it is we just started doing this thing and I think my parents may have had some thoughts about what we were doing. And at the same time, there was a moment where I think they realized that I wasn't that I'd gotten into grad school and I, know, but that I hadn't like sent a deposit in or had it like actually, gotten ready for the fall semester to start. And they were like, Hey, what are you doing? What's going on? And, and they were supportive. I think, um, there was an expectation for a grad school, but at the same time, I think my parents have seen enough of in, in the world, in the U S right now, any country, just having a grad school degree isn't usually enough anymore. You know, and a lot of people go down that trap where they get a degree and expect certain amount of immediate ROI from that degree and it's not there. So they were, I guess that helped where they were like, you know what, at least they're doing something that they enjoy and they're putting a lot of hard work towards it. So I think they saw the hard work and therefore they were supportive. I think that's the order of operations in that.
Andrey: in that case. So they basically saw that you weren't just slacking off. It wasn't just something that you were like, I don't know, wasting your time on. You were actually serious about it. And so they wanted to let you be serious.
Vova: Yea, I think the seriousness and I think they saw that whatever would happen, it would just be a phenomenal amount of work. And so they have some experience with that in terms of, eh, on my mom's side - building out a pediatric practice. I think part of it was like, well, let them see how much work it actually is, you know, and then we just did it. It's a lot of work.
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