Banking on KC – Danny O'Neill of The Roasterie
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Kelly Scanlon:
Welcome to Banking on KC. I'm your host, Kelly Scanlon. Joining us on this episode is Danny O'Neill, the Bean Baron himself. He's been a long time entrepreneur in Kansas City back when entrepreneurship wasn't even cool. Welcome to the show, Danny.
Danny O'Neill:
Thank you so much for having me, Kelly.
Kelly Scanlon:
Speaking of longtime entrepreneur, I think last year you celebrated 25 years with The Roasterie, is that right?
Danny O'Neill:
Yeah, 26, actually.
Kelly Scanlon:
26. Tell us a little bit about how entrepreneurship's changed during that time, how it shifted in just those two decades. What do you think is the most significant and encouraging thing about that shift?
Danny O'Neill:
Well, I was in the basement of the old Kauffman Foundation, which is now Russell Stover's taken FastTrac and, oh, I was just in this little protective cocoon and I didn't want to leave, I didn't want the 14 weeks to be over. I was, shoot fire, I was probably 32 years old. The company was maybe a year old, I can't remember exactly. I think about one year, though. Dan and Mark from Three Dog Bakery were in there with me and I remembered distinctly the night that the professor called us entrepreneurs and I still remember thinking, "Oh, what the hell does that mean?" I was never cognizant of that term and certainly was never referred to by that.
Danny O'Neill:
But then she put on the board all the characteristics and attributes of an entrepreneur and still today, 25 or six years later, I still vividly remember they were all the things that got me in trouble in the Catholic school. I would have to stay after school to write that I would improve my handwriting, I'd stand straight in line, I would basically, the phrase "color within the lines." It was steadfast, don't quit, stubborn, all the grit, all the things that really taken to an extreme were always the things that got us in trouble. That was entrepreneurship defined 1995-ish, '94-ish.
Danny O'Neill:
Then over the years now, we kind of throw the term "entrepreneur" around like we do "hero." There are true heroes, but doing the right thing and helping people and serving others isn't really heroship. It's admirable, we should do all those kinds of things, but it's not... There are heroes and not every act of grace or generosity or just doing the right thing is heroic.
Kelly Scanlon:
Yeah, it's being a good human, yeah.
Danny O'Neill:
I think one of the key differentiators is we've mentioned grit, but it's really the risk tolerance and how much risk are you willing to take? That's where I see the real clear differentiators, so I do see the shift over time has become much more collaborative, much more in a space of what folks call disrupting, but maybe it's always been that way, but I don't know that it was always so intentional as it is now.
Kelly Scanlon:
There still are, but a lot of accidental entrepreneurs that came out of that period of time.
Danny O'Neill:
I would consider ourselves one of those. It was just insane passion. It was almost like a neurotic need to get to inside of coffee. I never thought about disrupting anything. That term wasn't even used. Again, not good or bad, it's just today, I think the folks are, at least for me, they're a hell of a lot brighter than I ever was, they're smarter than I was, and then I think the Internet made such a difference in that like the first year-and-a-half of the research I did, I had to drive coast to coast, I didn't have any money, I flew to different cities. I went down to Costa Rica several more times. I read countless books. I think it took me a year-and-a-half to do the research that somebody could do on your phone in a half a day today and that's not an exaggeration.
Kelly Scanlon:
The other thing that's changed is the amount of resources, not just the platforms for doing the research and accessing the information, but the resources themselves in Kansas City are, you use the word earlier, much more collaborative than they used to be. I know that you have taken advantage of some of those resources. You mentioned FastTrac, Helzberg, that's been a really big part of your life and your business. Talk to us about some of those.
Danny O'Neill:
Yeah, and you're totally right, it was like a godsend to find out about the Kauffman Foundation. It was like a beacon on a hill that, jeez, how would somebody ever get on the inside of that place? 1993, it just wasn't anything like today. They were just starting, right? I think Ewing had passed away earlier that year, so they were just starting out in SCORE.
Kelly Scanlon:
Yes, the retired executives, yep.
Danny O'Neill:
Yep. Maria Meyers hadn't been on the scene, so it was really difficult to try to find anybody. The chamber of commerce, Pete Levy was the head of it at the time and they were really getting their arms around the small businesses and figuring out that, jeez, 70, 80% of the jobs are created by small businesses, so that was a big help.
Kelly Scanlon:
To us about the Helzberg Entrepreneurial Mentoring Program. That has been a huge part of your business life. A lot of your relationships have been formed through that and I know that you just really benefited from the mentorship that you receive and you're now playing it forward and you're mentoring others.
Danny O'Neill:
Yeah, it was life-changing, altering. I really can't overemphasize the importance of it. I was just lucky enough Barnett sold his company, Warren Buffet, and was reflecting back on who had helped him and Ewing Kauffman had helped him so much and he called Ewing Kauffman and said, "What can I do for you? I'm grateful you helped me so much," and Ewing said, "No, no. You'll help others. Just help others."
Danny O'Neill:
Barnett thought about it and he thought, "Okay, here's what I can try to do. I can try to help other entrepreneurs," so he started the HEMP, and Barnett's got a great sense of humor, as you know, Helzberg Entrepreneurial Mentoring Program. He started that and the idea was to get seasoned entrepreneurs to help those budding entrepreneurs. I met him inadvertently at a gala that they used to have on New Year's Eve at the Midland and he came up to me and I didn't know him from Adam and said, "Hey, I've had my eye on you," and I said, "I've had my eye on you, too. That's your third cup, decaf." He looked at me and handed me his card. He said, "I'd like to talk to you sometime." I looked. I still remember. I said, total smart-aleck fashion, I said, "Well, you can talk to me about anything you want anytime you want."
Danny O'Neill:
It took him about six months. I think that he was thinking he'd be my mentor, but after I vomited all the help I needed and all the things I give the world I was carrying around with me, he threw Henry Bloch into the bus, so Henry became my mentor. I think it was right at the end of '95 or early '96. I would meet with Henry about once a quarter and it was kind of the old school. If you think back to the Stoics and Socrates, the Socratic method, they would really ask simple but not simple questions, wise questions. That's how it was with Henry. He'd ask about two or three super-insightful questions.
Danny O'Neill:
As I was leaving those first meetings, I was probably a clerk because I would answer real quickly and it would dawn on me like a week or a month later what he really meant, right? I just treasure those memories and thoughts. I've saved every single piece of paper he ever put his hand on. I have a file of all the letters that he sent me, same with Barnett: studies, articles, just all kinds of stuff. It was huge because it was '93, four, it wasn't all that far from Gordon Gekko, "Greed is good." Wall Street titans, stomp on the fingers right up the ladder. It was, in our culture, it's kind of like bad role models in sports sometimes, there were some really nasty people in business that were role models and I'd never succumb to it, but who knows?
Danny O'Neill:
Just having Barnett in front of me and Henry in front of me and Bill Dunn and Bob Bernstein and just these wonderful people, you would always do the right thing. I think Midwestern in general, Kansas City in particular, we're just super lucky. I used to say that "In Kansas City, we didn't care how much money you had, but we cared what you did with it and we sure as hell cared if you made it here."
Kelly Scanlon:
Exactly.
Danny O'Neill:
It's our business and I think that's super different than Dallas or San Diego or someplace like that. I just think it's part of our culture.
Kelly Scanlon:
You mentioned earlier that entrepreneurship is much more collaborative now. One of the ways that I'm seeing that collaboration isn't just the sharing of stories and the sharing of advice that is prolific these days among Kansas City entrepreneurs and organizations, but you're also collaborating in other ways, like you're in the food industry, the beverage industry, and there's so many of Kansas City's iconic food brands who are coming together to blend their products, create new flavors, new products and that's been fascinating to watch. You've been a part of that. What's been your take on all that and what do you think that's done to elevate some of these brands in Kansas City?
Danny O'Neill:
I love the idea of putting things together that don't normally go together in and of itself, whether it has anything to do with business or art or anything else. I've always loved that, so coming together with Andres or Joe Polo in coffee and barbecue sauce and coffee rub, just whatever the case, I loved it.
Danny O'Neill:
Then we have a huge bias to do business locally, but again, even in saying that, it makes me feel guilty because anywhere in the Midwest, particularly in small towns, it would be like a duh factor. You'd be stupid to not do business locally, not that you should get some kind of a accolade or something. Of course, you would. Why would you go somewhere else if you could do business right in your own hometown? That was part of our culture in small-town Iowa and certainly part of our culture starting the company in 1993.
Danny O'Neill:
It's still that way. Local guy wins all the time. Local company wins all ties. We only go outside when we have to. You should just do that, period. Shouldn't even have to think about it, but there's lots of other inherent obvious reasons economically and socially and community-wise and otherwise. The thought of it, the idea, the strategy, I just love it. It gets me going. We go out of our way for that. We have a coffee-infused, espresso-infused balsamic vinegar. My wife even puts it on ice cream, it's so good.
Kelly Scanlon:
Really? Is that through The Tasteful Olive?
Danny O'Neill:
Yes, exactly. Gene has been great. Those guys are... We just love them over there. All of those products I've mentioned aren't huge sellers, or it's not a big revenue thing, right? CLEAR10 Vodka, we do a coffee-infused vodka and we do a coffee-infused, kind of a Kahlua-type cordial that they're just unbelievably delicious, but we don't even sell it, but the idea to collaborate was just so fun, right?
Kelly Scanlon:
But it's not just Kansas City. You are very involved in the countries where your coffee is sourced and building those communities as well. I know that's near and dear to your heart.
Danny O'Neill:
Yeah, for sure. Again, it seemed intuitive. Maybe, I don't know, maybe our small-town Iowa and just working on farms my whole life, but I love farmers, I always have. I have a bias towards farmers. Anybody who works with their hands in the dirt are special people, it doesn't matter what the crop is, so it just seemed totally intuitive to connect with the folks wherever we got our coffee and then the selfishness of that was we have a special sauce of being able to find some of the best coffees that exist on the planet and then our selfish best interest is that we get to keep buying that coffee, so it just seemed, again, it's common today, but in '93 and '94, it seemed that I had to explain a lot more of it.
Danny O'Neill:
But we would do whatever we could to help that community and we connected the quality of the coffee with our ability to help them in the likelihood that we would keep buying that coffee and we've always paid a premium for it, so it was just the perfect ecosystem that we would commit to longer periods of time, like we would commit to one up to three years, "I will keep buying this coffee if you can keep producing this quality." They knew they didn't have to wonder and live hand-to-mouth, they could take better care of the coffee, better care of their folks, offer healthcare, offer school, offer permanent jobs, and then all the way down to buying soccer balls and uniforms.
Danny O'Neill:
We build schools in Brazil and Colombia, quarter schools in Costa Rica, we put in showers and kitchens and food and taught hygiene, all the way down to connecting a fourth debate in Brazil to a fourth grade in Chillicothe, Missouri, this was like 15, 16 years ago, where they could talk to each other through a smart board and a software program that was just cutting edge at the time and it was just really super cool and just very, very gratifying.
Kelly Scanlon:
Yeah. Well, and the systemic approach: You're not just buying the coffee, you are looking at the underlying systems, the underlying infrastructure in those communities to create a whole picture that's going to elevate the whole community. How did expanding and opening the cafes fit into investing in the Kansas City community?
Danny O'Neill:
Well, I think it probably took 10 or 15 years off my lifespan.
Kelly Scanlon:
I can imagine.
Danny O'Neill:
Because retail is so hard and we knew it was going to be hard and it was just as hard as everybody had warned us, but going back, showing my age a little bit, all the way through the '80s with Nike, "Build a brand, build a brand, build a brand, build a brand," that's really been my mantra. I'm not a business guy, but poli-sci major, so there's still so much about business I don't really understand, but the fundamentals of just doing what you say you're going to do, being there, being easy to do business with, doing the right thing, treating people the way you want to be treated.
Danny O'Neill:
Then having a brand, for me, I just think it's like your reputation, so keep your word, do what you say you're going to be. Be that person that you can count on, if you say you're going to do something. Kind of like the farmers, they'd say, "You can bet the damn farm on it," and if they shook your hand, you could. That's how my boys wanted to build a brand and then after 12 years, I think we were in business, or let's see, yeah, 12 years before we opened up our Brookside, which would become our flagship store at the time, we just assumed it would be our one and only store.
Danny O'Neill:
That was the idea. It would help build a brand, it would help us serve others, we would share all of our knowledge and learning and recipes and everything else with our customers, which we have. We'd be open book about it and it would help us, kind of like walking in somebody else's shoes: If you know what they're going through, you're going to be in a better position to be able to be of service and that was the idea and that was certainly the case. Yeah, it doesn't matter what retail somebody is doing, I have utmost respect for them because it is so hard. It's almost like the cards are stacked against you to be able to be successful.
Kelly Scanlon:
I know you're going to downplay this, but I'm going to ask you anyway, Danny, and that is: When did you realize that you had influence?
Danny O'Neill:
Oh, I would say immediately that we stole from Ben & Jerry's, we stole from Barnett and Henry. Honestly, I don't think we have a lot of influence, but I'm not conscious or cognizant much. I think about it probably with more, if I'm going to... I'd read this morning on something where somebody said something ridiculously stupid on social media and they ousted him, as they should have, so I probably am more concerned about if I say something, could it get twisted or could it be used negatively?
Danny O'Neill:
But more to the gist of your question where people thought from the outside, "Oh, my god, these guys are made it. I'm going to talk to him," so I had many, many hundreds of meetings with people who just wanted 15 minutes and just want something to run past you. I think that maybe in the mid-'90s or late '90s, that started happening quite a bit. But again, we're pretty forthright. If you walk through our plant and say, "Oh, my god, that's so cool," I'll say, "Oh, we stole that from Guinness, we stole that from Ben & Jerry's, we stole that from Apple." I don't think you'll ever hear any of us brag about what we came up with, but we bragged about other people's ideas and how we maybe use something that we got from someplace else.
Kelly Scanlon:
We started this conversation talking about you being in business for 26 years and that you've seen so much change in the entrepreneurial community here in Kansas City. Moving forward, what could just put us over the top when it comes to entrepreneurship?
Danny O'Neill:
Boy, that's a good question. I would start with probably a big fat, "I don't know." I do think grit. I think Jack Welch and his wife were in Country Club Bank and we had an awesome Q&A with him and that was, I don't know, maybe eight, nine, 10 years ago? If we were to take what Jack Welch, a longtime CEO of GE, right, and what are the top two or three things that you can be best at, I think about that all the time. I think about that at least once a day: What can you really be great at or what can you be number one, two, or three at?
Danny O'Neill:
If you talk to a typical Kansas Citian, in a good way, "Oh, we're great at everything, we're the..." and I would say, "No, we're not. What do we really have? We will not in our lifetime likely become the next Boston or Silicon Valley or Seattle." That doesn't need to be a bad thing. This is just my opinion. What are our God-given resources? What's in our cultural DNA? What are we really good at? What can we be great at? I would say the community, we focus on two or three things, whether it's animal health or the arts, I don't think it matters so much of what we focus on, but that we focus on in. I think it's way more important to develop our God-given talents than it is to go out whatever direction you want and scrape another square mile and run streets and sewers and whatever other infrastructure and leave these huge swaths of undeveloped space unearthed.
Danny O'Neill:
Again, this is me, my, just my opinion. I think we should tax the heck out of doing something like that and encourage development inside the or existing footprint. There's bazillions of square feet of left of open space that already have all the infrastructure right at the street, right at the curbside, right there, ready to go, and then focus on those top, maybe two or three isn't enough, maybe we need to go five, but that's what the city, the counties, the state should really, in my estimation, put their muscle behind, including the universities and the Kauffman Foundation and stuff. This is KCADC and several other organizations.
Danny O'Neill:
This isn't my new idea by any means, God knows, but that's what I really think we should double down on. We are not going to be able to do all things to all people in all ways. We never did have the resources, we really are not going to have them now, but a couple of things could make huge differences. The baseball stadium were able to be moved downtown and if and if, and if, what would that look like and what could that spawn? Yeah, I think we should focus on where we can really, really have an edge on other folks. I don't mean across the border, I mean other parts of the world, other parts of the country. We're geographically located right here in the heart of the US, which is less important than it used to be, but there's still a speed factor, so whether that's distribution or manufacturing, however that manifests, and being able to take advantage of a competitive edge, that's where I think we should be.
Kelly Scanlon:
Yeah, so focus, prioritize a handful of things that we can be really, really good at and then collaborate around those to just be the best that we can at it. When you stop and think about it, that's really not any different than what advisors will tell business owners, too.
Danny O'Neill:
Amen.
Kelly Scanlon:
Focus on a couple of things, don't worry about what your competitors are doing, just do what you do well.
Kelly Scanlon:
With that, Danny, it's just so much fun watching your entrepreneurial journey all these years and just thank you so much for your positive influence that you've had and that you're having on a whole new generation of entrepreneurs and on Kansas City itself, this wonderful place that we all call home. Really appreciate it.
Danny O'Neill:
Right back at you. Thank you for all you've done for Kansas City and the entrepreneurs in particular and what you guys are continuing to do. Tell all the great folks over there at the Thompson family we said hi and wish our best.
Joe Close:
Thank you to Danny O'Neill for being our guest today on Banking on KC. Kansas City has long entrepreneurial history dating back nearly 200 years to when François Chouteau established a trading post here in 1821. That adventurous entrepreneurial spirit continues today in entrepreneurs like Danny and others who follow their dreams, embrace new ideas, and make a mark in their industries. They build up our community and they break down barriers. They are the heart of Kansas City.
Joe Close:
Country Club Bank was built on the entrepreneurial vision and spirit of Byron Thompson. His entrepreneurial legacy continues to drive our approach to banking, to fostering deep community relationships, and to supporting our local businesses. We are here to keep the entrepreneurial heart of Kansas City healthy and strong. Country Club Bank, member FDIC.