On September 29, 2020 the San Diego Entrepreneurs Exchange (SDEE) virtual event was an interview with Casey Miles, founder and CEO of The California Spirits Company. Differently from usual, the event was not focused on life sciences; however, it was very interesting to hear how a San Diego entrepreneur built a successful company.
Casey worked for a decade for an IT company. Although his responsibilities increased over time and he became a senior manager, he felt that he wanted more control of the business. Thus, he decided to enroll in the MBA program at UC Irvine. Going back to school and starting a business from scratch required sacrifices for his entire family. His wife and family supported his decision and, to save money, drove used cars and lived with his in-laws for 3 years.
In the second year of the MBA program, Casey began to think of becoming an entrepreneur. Solar energy seemed a good idea, but then he opted for a distillery. This brings to lesson one: what matters is the business, not necessarily the product or the service. Thus, be committed to the success of the company, but don’t be attached to a particular product, service, or idea. And if an idea does not work, just move on without shame.
The start of a distillery
Casey and his brother-in-law started by applying for the various necessary permits to open the distillery. After one and a half years, they were finally cleared to start production in a small facility in San Marcos in 2015. The two of them were doing everything from placing orders for machinery and grains, to bottling, selling, and marketing the final product. But with only two people, operations moved slowly. Things picked up in 2018 when they began selling ethanol for commercial applications. Ethanol is used in many different ways and, as a distillery, they were well positioned to take advantage of this opportunity. Same thing for hand sanitizers at the beginning of the COVID-19 pandemic. Here are the second and third lessons from Casey: explore all the possible values of your product and, if an opportunity presents itself, go for it and figure out how to make it happen.
The evolution of the business
There were setbacks along the way, including a legal battle that slowed down the business, caused layoffs, and shut down private events for 10 months. However, things picked up again when The California Spirits Company won a competition sponsored by Walmart. Being chosen to participate was a big deal; winning was a game changer. In fact, to increase production to the extent that was needed, they outsourced to a co-packer. The visit to the co-packer facility was the eye-opener that transformed The California Spirits Company into a co-packer. Business grew exponentially, and with it the number of employees, the square footage, and the lease contracts.
A successful business takes a village
Lesson four: teamwork makes the dream work. Hire quality people, mentor them, match the person to his or her strengths, and structure the company so that every person has a well-defined role. Also hire a law firm to deal with forms, permits, licensing deals, and the inevitable legal complications. Complications arise also from growth itself: as the team grows, there may be conflicts and adjustment periods.
Community is important, too. For example, Casey is a member of a whiskey and cigar club where owners of craft distilleries in San Diego County meet and support each other. Community can be invaluable also at the beginning to understand the industry one wants to go into, as the time spent understanding the business, even with simply an internship, saves a lot of time and money down the road. This brings us to lesson five: learn from the people who do it, not just from books.