Exclusive Interview With Saxbys Coffee Founder Nick Bayer

What do you value most about your experience at Cornell?

Bayer: Well, I would say what I value the most at this point are two things. First, the people. I’m still incredibly close with my inner circle of friends at Cornell. They’ve been hugely supportive of both my personal and professional life. The Cornell network is second to none.

I would say the second thing is that Cornell was so challenging and competitive. I played baseball and was in a fraternity, but then there were also academics. I think just every corner of it was very challenging because everybody was really smart, everyone was social, and everyone just had a lot going on. You either chose to compete and do your best every day or you didn’t. I chose to compete and reach out to really talented people.

As your entrepreneurial spirit grew and you became CEO of your own company, what lessons and experiences at Cornell did you draw on?

When I was your age, I wasn’t smart enough to realize that I should’ve been in the Hotel School. I was taking courses in government and economics which I don’t rely on much today. What I relied on the most was being surrounded by amazingly talented people who forced me to really up my game and use my time efficiently. There's no better training for being an entrepreneur than having similar experience as an undergrad because being an entrepreneur is an incredibly lonely thing. You’ve got that particular vision that no one else really sees or believes in, so you really have to believe in yourself and have that confidence, efficiency, and drive to actually execute it. I was the first person in my family to go to college. It was a tough experience for me, so I had to learn to start swimming very fast. That level of competition was hugely important for me as an entrepreneur.

What was your main inspiration behind creating Saxbys?

I love people. I like being nice to people as well as being treated nicely by others. I didn’t realize that you could actually build a business on that. So, when I graduated school, there were a couple of really important things I thought about. First was my parents. They didn’t get an education and they didn’t get to chase careers they were truly passionate about. Everything about their work was stressful and uninspiring; they didn’t feel like they were making a difference in the world. So I knew first and foremost that I wanted to do something I was truly passionate about and made a difference. Secondly, I wanted to wake up every day and truly love what I did. I used my summers in college as an opportunity to try a bunch of different things. I tried finance in New York one summer, then logistics in Charlotte, then real estate in Los Angeles. I liked all of it but I didn’t love any of them. I realized in order to truly love what I did and feel like I was impacting this world, I needed to create my own lifestyle company that would focus on making people's lives better. So that's when I knew I needed to become an entrepreneur.

How did you strive to create a legacy and spirit for Saxbys that contrasted from existing brands such as Starbucks?

For the first 5 years, I was drawn to coffee because I like people and wanted to be in a business that welcomed all types of people. I did not realize that my business strategy could also focus on a company culture committed to hospitality and social impact. For the first five years I was constantly focused on what Starbucks and Dunkin Donuts were doing. Saxbys was trying to be a company that competed on product just like everyone was telling us to. Then about 5 years ago I started getting involved with the Cornell Hotel School. I started to go out with professors there and read some impactful books. One was Setting the Table by Danny Meyers, which talked about company culture and how hospitality can be your competitive advantage regardless of what industry you’re in. What two different customers like will almost always be different, but they both want to be treated the same way. We want people to look at us, smile at us, say nice things to us, and be attentive to our needs. When we wrote our mission statement five years ago, we focused on what our culture was going to be. We already had 15 locations, but we needed to make a lot of changes. Over the last 5 years, I’ve spent 99.9% of the time focusing on us. Are we living our culture? Are we making decisions based on who we are as an organization? If so, we’ll continue on our current path, which is competing and differentiating in an intensely competitive marketplace.

As CEO, how did your role and mindset change as Saxbys grew from a small, unknown coffee shop to an acclaimed brand that won titles such as “One to Watch” and “Best Coffee”?

When you are a true startup entrepreneur, you have to be a jack of all trades and be willing to wear every hat. From being the head janitor, barista, real estate developer, accountant, you really have to be everything because you cannot afford to hire others to do that work for you. Essentially, you need to understand every aspect of your business. But as the scale of our business has increased, we are now in a position where we employ hundreds of people across thirty-five cafes in a bunch of different states. As Saxbys has grown, so has my role. My role today centers around a few major tasks. One of my biggest responsibilities is to be the driver of the culture within the organization. Since culture is what truly differentiates us from our peers, I spend a lot of my time answering questions like "Do we have the right people?", "Are we treating them well?", "Do they have the tools to treat our guests well?". The other aspect is business development which is basically me trying to visualize where the company needs to be in a month, a year, and potentially a decade. Lastly, since we are private equity backed, I have to work with my investors and my management team to create a successful business model that allows us to have a strong focus on customer loyalty while focusing on profitability.

How have you thought about franchising your stores?

We originally started as a franchise organization. However, over the last 2 or 3 years, we have stopped franchising. The reason for that is personal. I always liked the idea of teamwork, having been an athlete. I love the idea of people working together, sacrificing together for a common goal. That drove us to franchising, but that’s definitely a difficult model to grow. It was too early to franchise, but we did it anyways. We did it for about 7 years, and a majority of our growth came through franchising. My Board of Directors, the private equity group, and I believed that in order for us to be on the next level as an organization, we had to start operating cafes ourselves. That doesn't mean we won't come back to franchising in the future, but we are having a lot of success operating our own cafes.

What was your inspiration behind opening the completely student-run café at Drexel?

A lot of the inspiration came when I started coming to Cornell as Entrepreneur in Residence at the Hotel School and spending time on campus sitting in front of this generation that is incredibly entrepreneurial. We had a pretty good number of locations that were adjacent to college campuses that were really successful, and we were serving this demographic really well. Additionally, universities were definitely looking for ways to teach entrepreneurial students experientially. This was a huge opportunity that had worked on other college campuses, and we believed we had the infrastructure and support to capitalize.

At that time, Drexel University in Philadelphia was the largest school for entrepreneurship and was looking to incorporate experiential learning into its curriculum. We reached out to the president of the University, realizing that this was something that didn't exist. It was a lot of risk, but we told him that we would love to work with the university to find a place. We could work with design students to design the cafe and business students to run the cafe for full entrepreneur credit; the president said he loved it. It was definitely risky, but he believed that their successful track record would lead to a great coffee shop. We started working and opened it last year, and it has just been a phenomenal success.

Do you see yourself opening one up at Cornell?

Actually, yes. Obviously, there has been a lot of change, specifically at the Hotel School with the creation of the College of Business. I have had a lot of conversations with several of the Deans about that opportunity. It is something that we would love to work on. We are rolling out the current program, we are doing another one at Drexel, and new ones at Temple University, University of Maryland, and Penn State. We are starting to scale that program, so Cornell would definitely be both personal to me and something that would be tremendously successful because I see how great and entrepreneurial our students are.

What sorts of expectations do you have regarding Saxbys in terms of growth opportunities? Where do you see the company in 5 - 10 years?

In the next 5 to 10 years, I see us staying with the young at heart. I see us staying at college campuses and big cities. Big cities never go out of vogue, so I think that is always going to be popular. But I think depending on our growth, the next natural progression involves two initiatives. First grow our geographic footprint. Right now we are just Mid-Atlantic, and we might move to Boston, Chicago, or maybe Florida to start to expand the geographic footprint a little bit more. The next stage comes when your generation starts to move to suburbs and we’ll look to open more suburban locations. But over the next 5 to 10 years, the big things will be expanding our geographical footprint and potentially following the life cycle of going to suburban real estate.

Is there anything about Saxbys that you would have done differently if you had the chance?

There are always things you wish had gone differently, but you can't live with regrets. First and foremost, I shouldn't have franchised so quickly. I should have opened the first location and run it for a long time. I should have had the discipline to work out the kinks in my model, my culture, and my operation.

What is the most important thing a Cornell student should graduate knowing?

I think the most important thing at this stage in your life is to pick a company whose culture you truly believe in. Don't say “I have to have a marketing coordinator job. I don't care if it's some awful company in Alaska or some amazing company in New York City; I just know it has to be a marketing coordinator.” Go to a company because of what they stand for. It's about having experiences, and when those experiences are within an organization whose mission is meaningful to you, you are instantly going to be more productive. You are going to love your job, your company, your culture, and your coworkers; you are going to be much more successful.