Sam Holloway, Ph.D. - Crafting A Strategy

I just returned from a great evening in San Jose, CA. Along with VP of Marketing & Operations, Joe Belcher, I flew down for a meeting of the newly formed Downtown Craft Beer Alliance (@SJ_CraftBeer). CAS member, Camino Brewing, formed this alliance as they attempt to change the mindset for economic development in downtown San Jose.

Downtown San Jose has a checkered past and has mostly been ignored by small businesses. The three newest craft breweries are all located south of downtown and away from the hotels and convention center. Camino Brewing aims to change this, and formed the Downtown Craft Beer Alliance to raise awareness of how collaboration instead of competition can allow for transformational good in San Jose.

I will be honest; my presentation about community entrepreneurship was uncomfortable to some audience members. Using words like collaboration, positive sum strategy, and civic wealth felt a little out of place in Silicon Valley. Silicon Valley has tremendous wealth, but this wealth usually resides in a very small segment of the population. It is also this segment that largely ignores the downtown area. Camino Brewing sees how cities like San Diego, CA and Portland, OR have used craft breweries to transform neighborhoods, and they see the same opportunities for San Jose. Yet, as we spoke to our audience about the benefits to entrepreneurs and to society from these special types of small businesses, there was a definite split among the crowd. Many of the audience members were inspired by this kind of strategic thinking. They see the craft beer industry as a way to keep money and jobs local, and give the part of society ignored by Silicon Valley and Venture Capitalists a chance. These folks are very open to collaboration, to sharing recipes and even sharing market share with other small craft breweries.

Some in the audience just didn’t buy it. They were stuck in the world of zero sum strategy, where one firm’s gain means another firm’s loss. And it makes perfect sense. The stereotypical “Silicon Valley Tech Startup” is built upon secrecy, intellectual property, and a goal to scale wealth in only a few people – the initial investors and inventers. Craft breweries scale value in other ways, and the value to society scales at least as fast as the wealth scales to the craft brewing entrepreneur. This is a different way of thinking, but it is a path forward for Downtown San Jose.

It is this type of community entrepreneurship that forms the basis for the craft beer movement. Consumers want to buy local, they like knowing the name of the brewmaster, and they like buying fresh products grown by their peers. They would much rather make themselves feel great and patronize a local small business than to buy a cheaper product that makes someone they will never meet more wealthy. Consumers get it, craft brewers get it, and many investors and Silicon Valley billionaires do not. That is the mindset we need to change in order to change San Jose.

Here is a challenge to ask your neighborhood millionaire or billionaire in Silicon Valley: “Do you have any investments you love?” My bet is they really like the financial return of some investments, but they do not have a strong emotional connection to many investments in their portfolio. They are doing the right things to cash in personally, and they don’t necessarily trust local government or traditional non-profits to fix society. They may love their town, but they aren’t investing in its future. Breweries bring this all together. Breweries are engines of economic and civic good. It works in communities all over the world. Maybe San Jose can be next.

Lastly, I want to give a shout out to our members from Camino Brewing, Allen and Nathan who put the event together. They joined our membership this summer and since then have not only been crafting THEIR OWN strategy, but have raised capital and formed the Downtown Craft Beer Alliance. We can’t wait for what comes next from Camino Brewing!