The Driving Eureka! Podcast - Find, Filter and Fast Track Big Ideas to Innovate

Your Innovation Podcast. This is the 30th episode of the Driving Eureka! Podcast. This is a 3-part series in the first episode Doug and I will discuss the importance of story for your brand (Yellow Card).

[00:00:01] Driving Eureka! Podcast

[00:00:39] Special 3-Part Series on Starting a Business

[00:01:19] Part 1 Was Building a Foundation to Build On

[00:01:31] Writing a Storyline Using the Yellow Card

[00:01:37] Who are Your Customers?

[00:03:49] The Need for a Place to Learn

[00:05:35] Craft Brings Opportunity

[00:08:51] Trademark, Story and Names

[00:09:53] Story Examples

[00:14:01] What Trademarks?

[00:14:50] Value of a Name

[00:18:49] Get the Trademark at the Start

[00:19:59] Make It Real with the Concept Prototype

[00:21:19] Hyper Local Story

[00:25:59] Crafting a Storyline

Tripp: [00:00:01] Welcome to the Driving Eureka! podcast. We share ideas and advice for helping you find filter and. fast track. big ideas.

Tripp: [00:00:14] Hi I'm Tripp Babbitt advisor to global organizations on the Deming philosophy and host of the Deming Institute podcast and I'm Doug hope inventor speaker teacher and whisk(e)y maker. I'm also the founder of the Eureka ranch and author of the driving the reasonable 30th episode of the Driving Eureka! podcast and we're doing a special series.

Tripp: [00:00:39] Right now it's going to be a three part series. The first part we covered off Doug about the mission and the boundaries and we even got into some of the decisions that you need to make about what direction you want to head and making distillery are going to build a facility are you going to kind of outsource everything at the beginning and then maybe go to a facility.

Tripp: [00:01:01] There are some decisions to be made like that. When we talk quite a bit about also some of the state and local and federal challenges associated in my case with Indiana and is there anything I missed on kind of what we covered last time.

Doug: [00:01:19] Now know it was about the foundation it was laying a foundation for how we're going to distillery now. In this episode we're going to start to get into the fun stuff. So we've got that foundation and now we're gonna get into.

Doug: [00:01:31] What's our storyline. What's the storyline for what we're gonna be.

Tripp: [00:01:36] And where do we start?

Doug: [00:01:37] Well we call this the yellow card and this is we start off with who do we want to be our customers. Now you know whether we're customers that we sell to because we sell them through bars and through stores or we're gonna have a tasting room because even if you if you bring the whisk(e)y in or it's finished or you do the finishing or whatever you might be doing gin vodka whatever you it's in a local place it's like Who do you want to have hang out at your tasting room.

Doug: [00:02:07] You know what are the kind of people do you want. Do you want old people. Do you want young people. Purple People green people spotted people. You know what. What is the vibe of this place. Is it hard rock is it country is it you know what is the spirit. The kind of place that you envision having you know and and and it's really important to think this through because that then frames a lot of the rest of what becomes our brand and our storyline that we're putting together.

Tripp: [00:02:40] Ok. And so one of the questions that I have so for instance I went out last night to dinner at a new place and it just opened a week before they have one of the big brands that they're doing and order their mixed drinks. And so I looked at that and I said you know that would be an opportunity I could get with the owners there locally owned and say Hey want to carry this brand as opposed to the big brand because it's going to be locally made. So that's kind of one of the things I have going through my mind. There you've got a mix of people. And so I don't really say I'm focusing in on this particular thing had all different type of people now was mostly a beer place I could tell. So I had that going through my head I got my friend at the at the liquor store the I that I could go to them.  So what's wrong with my thinking.

Doug: [00:03:35] There's nothing wrong with the thinking you know and you can put that together. I do say that it's going to be important to have some place I think to be a craft distiller.

Doug: [00:03:49] You can do it by just having a warehouse that does it but having a place. Where you stand behind the bar. Mm hmm. I think it's really important as much for the feedback loop as anything else. And but that can be your bar or it can be you partner with somebody that has a restaurant and you work in the warehouse right beside it. You know and it's you know you you you collaborate with them to do it. And and that's fine too because it has a real attraction to people. You find somebody that's in the restaurant business. And so they're in the restaurant business you're in the booze business and you work together growing traffic and sales and partner and collaborates out which is by the way the easiest way to do this is that you just need to work together with people. There's plenty of restaurants that could use more sales and and you know craft distilleries are very very popular. Just like breweries.

Tripp: [00:04:51] OK. So yeah. OK. I guess in my mind you know as as you're asking this question it's kind of I guess I've heard you talk about you really need to have a tasting room. You know I could have that. That would probably be as far as I don't think I'd have a restaurant. I like the idea of leveraging other restaurants that are already in existence and kind of going in there and saying Yeah you're using the big brand. How about a craft that's locally made.

Doug: [00:05:20] Yeah. It's the story I did the other day has flights I went to this farm to table restaurant and I said You craft whisk(e)y. And he pointed at the shelf. I said no that's made by the Japanese conglomerate entree that's made by Diageo from U.K..

Doug: [00:05:35] And he held up to sell the old brand I go. Now he's been dead for 50 years now that's owned the family sold out. They've sold out. So these are like Budweiser here. Guy looked at me in shock. He said What do you mean by craft? I said You mean like locally owned. You know small people doing it. He says No I guess I don't.

Doug: [00:05:56] And then I thought it. I didn't say it because at this point my wife is hitting me. I said I felt like saying it because I picked up his craft cocktail list. I felt like. So these art craft cocktails these are corporate cocktails that you're making it cause you can't make a craft cocktail without a craft whisk(e)y. No. No. Cut Me Some Slack some slack.

Tripp: [00:06:22] You know I think that and that's actually you know that makes it a good story because I think people you know they've seen now with the beer you know everybody a nobody. I don't know anybody anymore that goes out and buys their Lite Miller Lite in there you know Budweiser and those types of things they are all out doing you know wise and good. You know different things like that. So interesting.

Doug: [00:06:47] And by the way related to that what we're gonna do and we're opening up it in Windsor just outside of London. We just finalized terms on that and we're working with the craft brewery Windsor Eton. They're the people that make the the royal beer they're the official brew of the Queen.

Doug: [00:07:04] And so they do they've got one a Royal Windsor baby coming for the new baby that's coming. And they did the wedding you know like and stuff but special beers but one of the things we're doing with them is we're doing for the craft breweries we're going to focus on breweries to start.

Doug: [00:07:21] And we're working with the breweries and using some of the small ice stills where we can take their heavy beer and which is a grain and distill it so that we take it from 8 percent to 40 percent alcohol and and then add that into a whisk(e)y and make for them a custom whisk(e)y that has some of their beer in it.

Doug: [00:07:44] There is a very cool concept and so that would be something that we could work with you in Indiana and you and your son and daughter or whatever could literally you know we could work an arrangement where you just basically tell breweries Hey you saw craft beer you might sell your own craft whisk(e)y and we have to work the state. But like in Ohio we can figure it out so that we can sell it directly to that distillery.

Doug: [00:08:07] Just a beer for them put their name on it OK. They sell the tasting room. So it's a you're talking. That's a cool business.

Tripp: [00:08:15] Oh yeah I know. I like that now. Especially like that. Again again I'm gonna have to do my my homework on the on the laws but Windsor Eton is sad actually in Windsor by the Windsor Castle.

Doug: [00:08:29] You can see the castle from their door.

Tripp: [00:08:31] Really. OK. I've been there multiple times. Yeah. Good. OK. Yeah I like that that idea left a to flesh that out.

Doug: [00:08:41] Ok. So you to figure out who you want to hang out with. OK. And then you're going to work on brand name a storyline and I'm big on getting your trademark at the start or getting some trademarks.

Doug: [00:08:51] It's really hard to get trademarks in the beer and spirits industry because there's so many craft people but part of what you're going to own is that trademark. And so I would start to look for what's gonna be that name that you're gonna have. And because that story that name then creates a story and it's almost like it's bizarre. Tripp in that if you know what your idea is the name's obvious but you'll have a hard time come to the name because you won't know kind of what you want to be. And really it's the storyline what's going to be your storyline of this thing. A couple of thoughts that I have just some blurbs. And let's talk then let's talk about what you've been kind of thinking or just feeling OK you know one is is it can be historical You can take a name there there's something called voodoo brands. If you go on the Internet and you look up pre prohibition there were way more brands in their art today because they were hyper local. Everybody had their own brand. And so we've done this with old Dexter Kentucky Club.

Doug: [00:09:53] We've taken old brands that were years ago the trademarks have been abandoned. We filed refiled the trademarks. We now own the trademarks These are all long abandoned. And it gives us kind of an instant pedigree in history. So that's a way to do it. OK. Sometimes you can do it with a cause. You know our Noble Oak product that we partner with Edmonton on you know for every bottle bought they planetary. And so that's part of the element of this. You can. You could turn around and take your whisk(e)y. And like if you're working with us you could turn around take local wood so we've got a guy in Windsor up in Canada who is who's coming to us and he's talking to us about using. He wants to use local wood wood from his area. He wants to have in his whisk(e)y. So he's got a story of the local oak in Winnipeg is where he is. And he went to Winnipeg oak in it. That's cool. I can do that for him. That's not a problem. You know. So you start to think about you know what's the name.

Doug: [00:10:53] And I would think not just. OK. This is how we're gonna start. But I would imagine yourself ten years into the future. What might the line look like. You know it's just line going to end up having gin and vodka in it. Is there going to be a you know you talked about the family is it gonna be a white spirits line and a dark spirits line that they're going to be like two things that they're gonna be together. Are you going to add rum Brandy tequila or are you going to stay it as a whisk(e)y. I mean I've chosen whisk(e)y but that's up to people to decide.

Doug: [00:11:22] And then as you think about that storyline I would think about how do they play in cocktails so for example we've got this lying old old Dexter's part of our riverboat series and we changed Q about old Dexter which was Edmund Dexter was a big whiskey maker pre prohibition in Cincinnati. He had moved from London to Cincinnati the future king of England stayed with him. Lots of storyline lots of stories Charles Dickens stayed with him.

Doug: [00:11:52] And so this and now that we're opening at Windsor Eton you know we've got this English story and as the English thing came that gives me a storyline to it.

Doug: [00:12:01] And we found we looked up some photos and we found a photo of a painting in the Smithsonian which is in the public domain now and I had a guy redraw it and as it turned out there's a riverboat in the photo from 1855 or the drawing that has a revote called the embassy in it. And so I filed a trademark on embassy and so old Dexter is our brand and embassy it is our trademark cocktail. We've done it on the show here. And so Embassy's going to be my feature cocktail for old Dexter.

Doug: [00:12:37] And so you can see I'm starting to play out see I'm putting the thing together. Now my riverboat series I've got a series I've got an easy drinking which is Dexter which I'm going to sell in one leader bottles because it's using for cocktails and then it's 750 1750 M.L. bottles I've got paddle wheel which is my hardy in the 200 days of wood bourbon. I've got deckhand which is my five rye and I've got tall stacks like the tall stacks of the riverboats. Therefore for my smoked to whisk(e)y. So I've developed a riverboat series that has four products in it and then there's cocktails that they play with that I've got smoke storm as my Tall Stacks you see where I'm going Yeah yeah yeah I. So I've got basically got I've got my set of products I have the purpose for them I know what they are. And the whole thing now we're further along and we're making a lot of products so we can do for you might turn around and just do old Dexter as an example to start but you you've roughed out and it may be firm and it may be light. Here's what my set's gonna look like and you notice what's not in my set is I could have just as easily done.

Doug: [00:13:44] A whisk(e)y a rum a brandy you know or a rye and a bourbon. You know just as you know again it's what you what fits your storyline. In my case it's it's pre prohibition. Cincinnati is what we're celebrating where Cincinnati was kind of the heart of whisk(e)y.

Tripp: [00:14:01] So OK let's back up a little bit here. As you were talking these things that I have I've obviously thought about but. So when you're talking trademark I'm almost thinking that there's kind of the broader name. So for instance you know the company name. Yeah.

Tripp: [00:14:23] You know that that would have something to do with with the family with with my family. This is where my brain's going and then you would have your individual things like you're talking about with that hand and so. So I guess my question is Is it my trademarking my the family name part or am I doing trademarks on each of the the labels that I have to come up with of the different types of whisk(e)y or or vodka or gin.

Doug: [00:14:50] The answer is yes and yes I am. In my mind sometimes people just put their company name. They trademark that and then that's the name and then they go this is our gin our vodka doing it. I am a big believer. So to increase the value of what you own is to create. That is the parent name. So if you used food you know how products say Nabisco and then it's you know ultra lights or you know goodies or whatever but there's a Nabisco brand that's a company name. And then a brand name I like to have that because I also increased the valuation of my company because now I've got brands as opposed to one brand. You know when you put your company name on it and you just have flavor names you really are one brand and there is a benefit to that some people like to do it that way. And many craft do it that way and I'm good with it if that's what floats your boat. That's great. Myself personally I like to have a company name our company name is brain brew. Mm hmm. And then our products have different names. And then our cocktails ever name. So we have three levels of names. Some people just have a company name and a generic descriptor bourbon or rye. And it's one name I like to have the said. It gives me more value it gives me you know I can generate news I can create fans of those with my riverboat series. I've got four T-shirts. You can buy. They can be a fan of this one versus this one now. Now you got to recognize if I was distilling from grain I can't do this because I can't do these other permutations because of the way I work with with high compression finishing process I can have as many products as I want. That's one of the benefits of working with brain brew. If we're working with you you know you want another product. It's no problem.

Tripp: [00:16:39] Some things are going through my head so I have already have I am I have a company that I have incorporated 25 years ago. Yep. What are you should could should I leverage that or do I need a whole new one for this venture because.

Doug: [00:16:53] It doesn't matter. Ok Cause as you can file a CBA so we're brain brew ventures 3.0 ego corporate name. OK but we filed a DBA doing business as Brain Brew Custom Whisk(e)y. OK. And so the registered corporate name has not. Doesn't have to be the the name that you trade under.

Tripp: [00:17:13] Okay. All right. So I don't have to incorporate a new company I can just do a DBA.

Doug: [00:17:19] Yep.

Tripp: [00:17:20] I call it whatever the family name and then debate. But you're kind of what I'm hearing is that that trademark associated with the label with with the individual product. So in other words.

Doug: [00:17:34] And the company and the family name you got to make sure that you can get your family name.

Tripp: [00:17:39] Ok so so though the incorporated name or the family they're doing business as OK. The DBA.

Doug: [00:17:47] TradeMark. That's going to be on the on the package.

Tripp: [00:17:49] OK. All right. So I've got to look that up. And do we have a process for doing that. I do. I've not done that before.

Doug: [00:17:56] There are apps that you can get. You have to look in the beer wine and spirits classes and look up the numbers of those. And there's ways to do those on online. You can search at the TTB site but there's also apps for your phone that you can buy for searching them. The key is to look inside those things but at the end of the day you're going to need an attorney to look at it. Okay. And in your case Tripp we're friends do the initial search to see if you find it and then let me know. And you know I've got David Lafkas who's a patent and trademark attorney on here so I'll just do that for you as a favor. OK.

Tripp: [00:18:32] Appreciate that. What is the. OK so am I need to do that. The DBA name and do I need to come up with a trademark then for one of the initial labels I feel like I'm way too early.

Doug: [00:18:46] No yes no do it at the start.

Tripp: [00:18:48] Do it at the start.

Doug: [00:18:49] Yeah. Because the big mistake people make is they spend a whole lot of time with a kind of a working name then they can't get it and no name is ever as good as that one.

Tripp: [00:18:56] Ok.

Doug: [00:18:58] I get the names at the at the start and if and when you fight and cause you're going to find that you're going to go through 50 names to find one you can own.

Tripp: [00:19:06] Ok.

Doug: [00:19:08] And if you don't own it it's worthless.

Tripp: [00:19:10] I got you.

Doug: [00:19:11] OK. Remember we talked about what you own.

Doug: [00:19:13] Yes. This name is a key thing that you're going to own. Now in my case I started out with Paddle Wheel and then I love that. And then I could get Tall Stacks. And then that became we didn't start with this Cincinnati 80 percent of the whisk(e)y came from Cincinnati pre prohibition. So this whole storyline we're talking about that evolved over time and it was not where I started but then it just got cool and then my buddy Toby did packaging for me because the next thing you're going to get a package done and your first package will be one where you cut and paste on the Internet.

Doug: [00:19:47] You just make up something then you get an artist friend to sketch something for you but you want to get to a name and package as soon as you possibly can because now you've taken your idea and you've made it real.

Tripp: [00:19:59] Remember we talked about that. OK so now we're into concept prototype type of that mindset.

Doug: [00:20:02] That's right. You're gonna you're gonna get it.

Tripp: [00:20:05] So even if I change it later like you did with cool boat to old Dexter I at least some starting with something that's concept like a conceptual prototype fits your foundation that we talked about last week.

Doug: [00:20:16] Ok. It's your foundation. So what I so I own like 50 trademarks for whisk(e)y the spirits and they're at different stages OK because I started wine and then I got into another direction and so you'll get a system for doing this and then you'll get to your thing and it starts to become real. And as it becomes real. Because when.

Doug: [00:20:34] Because as we get into next week starting to deal with investors they're gonna want to see it feel it touch it and it and it can be ugly but they they they just you know can't be. Give me money and I'll go figure it out. You know you've got to get it a little bit further. And and so you need that concept prototype of what it is and then what I would do is write the copy for the back of the package. The back of the bottle. Okay.

Doug: [00:21:00] So I'd like beers that don't have any space.  Whisk(e)y is about stories. And so what's the story of you know. You know in our story on the back of the riverboats. You know this celebrates when Cincinnati was the heart was the birthplace of American whisk(e)y blah blah blah blah blah. You know and the great time of the riverboats.

Tripp: [00:21:19] Yeah.

Doug: [00:21:19] And see I've got a natural story that is hyper local because I really believe in hyper local because that really sets you up because you can't compete against the people with billions of dollars but they can't compete against your hyper local story.

Tripp: [00:21:35] Ok yeah I'm going to have to offer to a little tickets that I'm not sure. I haven't really thought about that. That part I guess in depth of trying to get the local story I know the importance of narrative associated with you know doing a blue car that we talked about in the last episode.

Tripp: [00:21:55] And I actually did a podcast with one of my new podcast which is on Mind Your Noodles about having a storyteller and the importance from a brain standpoint of how story actually helps people understand and remember your product is such a such a big deal. And I don't have a story at this point and I'm going to have to I guess do some digging if I'm going to be more what you would call the local legend which is I think more the idea of what what I'm trying to be you know.

Doug: [00:22:26] That's right. And that's what area yellow cards are stories. The Justice Story who's the customer problem promised proof and it's just that you know and it's just it's telling the story of what makes us think.

Doug: [00:22:39] So let me give you another example. So with Jarrett and I were doing a partnership this summer for fun and to learn a bunch and so we're doing a maritime whisk(e)y collaboration with the Maritimes of Canada. Okay. It are out there.

Doug: [00:22:53] And what we've decided to do is to create a we're going to create two and we think to do this it's a maritime whisk(e)y collaboration.

Doug: [00:23:03] And in it it combines the farm to glass richness of Nova Scotia whisk(e)y make a Jared steward of Caldera with the luxury smoothness of Cincinnati whisk(e)y maker Doug Hall Brain Brew custom whisk(e)y. Okay. And so that's that's what brings us together. And then we have two products. One is the Nellie Jay Banks which was a boat which was the last great maritime bootlegger that was arrested off Nova Scotia. They create story. They were there two or three miles out. There's supposed to be they changed the laws to 12 miles and the next morning when the law changed police the Mounties came and arrested him.

Doug: [00:23:38] He's like Dude I'm okay. I'm like No. It used to be basically a floating bar here. Was fishing. They were glad to have a drink on a boat during Prohibition. They tell it they tow the boat in Charlottetown. They hold a trial 8-4. The captain's acquitted. The federal government decides to give up because they say they can't catch islanders who will convict a bootlegger. The banks and Eddie. For me it's cool because Nelly Banks used to be right offshore. My house is in Prince Edward Island but this is a Nova Scotia. It's a legend.

Doug: [00:24:12] And then. So that's gonna be our easy drinking product. And it's a Canadian whisk(e)y so we're gonna use U.S. and Canadian we put them together and it becomes a Canadian whisk(e)y.

Doug: [00:24:22] Okay so simple story. Yeah right. And then we're doing a luxury product which is gonna be the Marco Polo which was the fastest ship in the world in 1852 its set of records traveling from England to Australia in 68 days. And it was built in St. John New Brunswick which is where my great grandfather was from. And it sank off Cavendish beach Prince Edward Island about two miles from my house and I saw it as a kid when it was down there and it's a very famous ship. And these are these are two products we've got a Canadian whisk(e)y and we've got a bourbon whisk(e)y. And you know and once a shipping product and once a cocktail product but you can see how this is. And then after we did them we just did them.

Doug: [00:25:05] I said I guess I'm into boats but you know it's here. I mean now I've got a story I've got richness I've got cool factor I got great T-shirts I got legend I've got this renegade and and in art unlike Cincinnati rum is huge up there. The Nelly Banks carried whisk(e)y rum vodka gin and but rum was over half of what would be in its hold that they would smuggle in.

Doug: [00:25:36] And so with success this year next year we'll do rum you know and we'll have a nice little business that is it's got a cool factor. It could go across Canada you know it because maritime there's literally a song that Nelly banks. There are songs that they sing and. OK so let me just give you some thought.

Doug: [00:25:59] Just some stimulus for what this storyline is because I'm I'm laying this out and I'm realizing that maybe you need a little bit more just to help. And people listening because it's like where do I start. I don't have a boat. You don't need it but you need to think something that's kind of cool that's got some story to it. You know what a local legends.

Doug: [00:26:21] Read the history. Read the history. I mean I didn't start by knowing all the history of Cincinnati with distilling that distilling was twice the size of beer. I learned that as I got into it. So look up the history of your region your area look up famous people from the area look up legends.

Doug: [00:26:43] Ghost stories I mean. I mean it can be anything that that resonates or some it could be a native flower bird animal. It can be the history of the early pioneers that came in and and what they did or something that that is that the people are proud of. I mean that's it. That day what you want is something that people are proud of. Because they're going to wear it literally.

Doug: [00:27:17] They're gonna wear it with their shirt. You know putting the Nelly Banks last great bootlegger. That's kind of cool to wear you know the you know the paddle wheel on deck and you know when Cincinnati that's that's a piece of pride for the local space you know. What is that thing that that creates that. That is authentic but that creates a bit of an emotion to it. You know and I'm not gonna overplay the emotional thing because but there is emotion that comes from that when you plant a tree for Noble Oak. You feel good about by the way noble Oaks in Indiana now by the way.

Tripp: [00:27:59] Oh yeah. Yeah!

Doug: [00:28:00] After look at it and it's actually one of the hot markets right now. Cool it took off much faster than anybody expected. So I just learned I thought.

Tripp: [00:28:08] I told you we're thirsty for good product

Doug: [00:28:12] We're getting there we're getting there.

Tripp: [00:28:14] So Doug as other stimulus you know I know you've gotten into the whole wood thing I can tell you. You know the two. Two symbols for Indiana. The tulip tree and the are the tulip and the peony. Those are the two. Something about peony. Doesn't doesn't resonate with me but anyway should i be looking for wood.

Tripp: [00:28:37] Would that be something you know around here.

Doug: [00:28:39] It could be if there was you know if there's an old estate if there's a type of wood this famous it's like I've got a guy who I'm going to meet and just a little bit.

Doug: [00:28:47] He's created big ash Brewery the ash trees were big here bugs came through or something disease and killed them all he say he when the trees went down he saved a bunch of them in his breweries making a whole bunch of the furniture from Ashwood and we're gonna make him a big ash whisk(e)y with ash in it.

Tripp: [00:29:08] Cool. Okay.

Doug: [00:29:10] So you know what it is. Now if I float my boat. But yeah. Well yeah but whatever excites them is excites them. And it's got a genuine link to the story so you know just. I mean I. This is gonna be terrible especially for me an engineer. You got to feel it. You know you got to feel it like that's cool. But you know the Internet's a wonderful place.

Doug: [00:29:37] The History Museum local history museum even I know you're outside but you know go to Indianapolis with the local historical society. You'd be amazed the stuff. I mean I got into this Nelly Banks and then the beautiful thing about the Internet is I find a book written about the Nelly banks by a couple you know it's probably you know not a big book but you know fascinating to read the history of it all you know. And so it's it's fun. It's a lot of fun.

Tripp: [00:30:01] OK.

Doug: [00:30:01] But you see there's a whole story and richness is a tapestry. That's what you've got to get next after you've got your foundation you need your storyline and then you need to make it real with a concept prototype which is the label front and back and badly I don't care badly just make it and then make a functional prototype and you can the first way I do this is mixing by a bunch of vodkas gins whatever you're making and just do mixology to get it's going to be kind of like this. OK. That's a way to do it the other way for you to do it is just come on over here to Cincinnati and will you show me the package of what it is. And then I'll get up who's are you know incredible taste. Whisk(e)y maker and Joe who's just like ridiculously good and these expert whisk(e)y makers and and myself who does the best I can. And the three of us will sit with you and we'll start crafting you know Hoosier whisk(e)y you know celebration or what it is and and start to make some. And then the last two parts of this is go out and we'll start running a concept in product test in Indianapolis or wherever. OK. And start to see what people think of it. OK. And then do some rough math on it just to make sure that the math works.

Tripp: [00:31:20] But typically just for clarity though I've got to get all these state and federal and all that stuff before you even get to that point.

Doug: [00:31:29] No. No. I'll do that currently. Now you just need to understand the rules from the beginning you need to know the rules but but you probably aren't starting that work yet until you've got this rough thing. OK you've got to have it. You've got why you were doing it and now you've got blue card first yellow card next. And then. And the yellow card has some very rough math.

Doug: [00:31:53] So we just know so if you know if you pick you for instance if you want to Japanese would because the Japanese were big in Indiana probably heritage wise or something or you know people came from Mongolia there and we find out that the cost to get wood from Mongolia here is going to add four dollars a bottle. If we're not going to do that that's why it's a feasibility math is all we're talking about.

Tripp: [00:32:17] Yeah. The only clean clothes I got to both Doug is one time. I remember in history class back in like third grade that there was a paddle wheel that tried to navigate the White River that runs through Indianapolis and there's not a lot of water dried out and the paddle the paddle wheel boat got stuck there for like three years before they were able to get it out. That's the closest I'm going to come to a boat. So maybe it's the stuck paddle wheel.

Doug: [00:32:48] My great grandfather was a great sail maker and I am I'm a boat person so I've just I've just subconsciously created boat whisk(e)y. Ok but that's me. You gonna be you.

Tripp: [00:33:02] All right. So OK so we've gone through this. We've got the trademarks we've got a functional prototype that we'd be working on trying to come up with something doing trials and things of that sort. And is there anything more we need to do on that or what's the next step. Well

Doug: [00:33:20] I mean that's why I said we're gonna do some testing. We're gonna we're gonna probably come up with three versions of the label. You might have two or three different name options we'll come up with two or three prototypes the beautiful thing with us is we can just quickly make your prototypes and we can sell you a bottle is one of our limited edition things that you can even do a concept and taste test with it or we can run it for you. Although we'd want to run it in the market so see if people react to it. And from that you know we've got some data that says Yeah this thing hits the success standards. We've got a good chance with the concept we get a good chance with the product and we do some rough math. And and you've done this phase you've done this phase you now having it haven't you.

Doug: [00:34:02] You've got in "it" and maybe a couple of "it's" depending upon which how you decide to do it. Now you're ready to start the process which is what we'll deal with next week which is the whole investment package. But you've you've defined why you're doing it and what you're doing.

Doug: [00:34:18] And we really you know this is this is really really important thinking. Even though they're going to still change that's the foundation on which companies are built on.

Tripp: [00:34:34] Whether you are an entrepreneur aspiring entrepreneur or part of an organization the Eureka ranch can teach you to startup innovate and grow your business. The yellow card discussed in this episode is available to download at go.Driving Eureka.com/yellowcard or click the link in the show knows. we'll send you what you need to start a company build a product or service or grow your company. Eureka ranch. will create a path for you to follow.

Your Innovation Podcast. This is the 29th episode of the Driving Eureka! Podcast. This is a 3-part series in the first episode Doug and I will discuss the importance of mission and vision, setting boundaries and other relevant topics (Blue Card).

Subscribe to learn how to Find Filter and Fast Track Big Ideas.

We discuss the Blue Card information in this episode. To get the Blue Card and information in how to fill out the Blue Card. Click here.

[00:00:01] The Driving Eureka! Podcast - Find Filter and Fast Track Big Ideas to Innovate!

[00:00:33] Episode 29 -31: How to Get Into the Whisk(e)y Business

[00:03:49] Two Types  in Whisk(e)y Business: Marketing vs. Extreme Craft

[00:07:21] Where Do We Start?

[00:07:33] Mission Vision Aim

[00:09:43] The "It"

[00:11:30] By What Method?

[00:14:37] Actions to for Creating the Blue Card

[00:21:48] Tripp's Why Do I Want to Do This

[00:29:07] Options to Begin for Spirits Business

[00:32:27] Options to Start

[00:37:56] Find Your Own Path

[00:42:03] Understand Your Laws

Tripp: [00:00:01] Welcome to the Driving Eureka! podcast. We share ideas and advice for helping you find filter and. fast track. big ideas.

Tripp: [00:00:14] Hi I'm Tripp Babbitt advisor to global organizations on the Deming philosophy and host of the Deming Institute podcast and I'm Doug Hall inventor speaker teacher and whisk(e)y maker.

Doug: [00:00:27] I'm also the founder of the Eureka ranch and author of the Driving Eureka! book.

Tripp: [00:00:33] This is Episode 29 of the Driving Eureka! podcast and we're going to do a couple of special episodes where we're going to basically apply some of the things that we've been talking about the last 28 episodes of Doug has been talking about his distillery and I don't have millions of dollars to spend in order to build my own whisk(e)y company but I think some of the things he's been talking about makes sense to me that it's kind of financially makes it more financially capable for someone like me to get into this business and I want to learn. How do you do it. And so the next three episodes we're gonna kind of walk through how to do it. And from my standpoint I'd love to do it. It's something that I've been talking to my family about so it's personally I've been talking to friends of mine about investing in it as well as family and investing in it and I at least my belief is is that the system that Doug is set up here is something that makes it. Available to people who don't have the millions of dollars to start their own whisk(e)y business.

Tripp: [00:01:46] So with that Doug you know as we talk we've talked on and off on the phone. We've texted each other of text the drinks I make on Friday night. Those types of things I don't have. I mean I've gone through the innovation engineering system but I haven't got applied it to building a product for myself. So I think this is a great opportunity to make this real. And as I started into it I started to realize I got lots of questions and so I wrote up a few questions. But you know I think the basic question is how do we go from zero to selling something.

Doug: [00:02:26] Well yeah I mean yeah and it's a common and it's a great question and I was I was excited to see your text message because it was like yes yes we might add to the craft movement because I will tell you it is a I just had my board meeting yesterday.

Doug: [00:02:46] I have quarterly board meetings because I brought in investors and I'll just tell you in advance it's a stupid amount of work but you have to do and it's mind numbing the paperwork you have to do with the government it is just mind numbing.

Doug: [00:03:04] But at the same time you know I then sat the investors down and I said Here you want to see our new luxury product.

Doug: [00:03:10] And you know that we've been crafting. And the lead investor took a sip and his eyes got big and he's guy. Oh my he's Oh my. That is amazing. And you know what Tripp all of the other stuff done matter don't matter. It's so cool to make your own thing you know and and it's really cool when you can make great products.

Doug: [00:03:38] Okay. And we're going to have as we talk over the next couple episodes we're gonna keep talking about that because the thing that really drives my energy and real craft companies.

Doug: [00:03:49] Okay so you got people out there that are kind of marketing driven craft people. They're into just the branding and the bling and and the flip it and and it's it's a business. It just happens to be whisk(e)y or broadcast Jane or whatever it is. But it's just a business. And then you got people that are craft who who really love the product. Okay. And that are into it. Now some of those are too extreme. Okay. They're what we call Copperheads. You know they like to play with their copper stills and screw with it. And and and there's no commercial sense what we're going to talk about for the next two weeks is how to be craft yet commercial.

Doug: [00:04:29] In other words which is sustainable.

Tripp: [00:04:32] OK.

Doug: [00:04:32] You know because those craft those real comprehends the true craft guys a bunch of them are starting to go out of business too. Recently I just got calls on people selling off their stuff. They're done they've gone bankrupt. And so we don't want to be 100 percent Kraft and we don't want to be 100 percent commercial.

Doug: [00:04:49] We want to be a healthy blend with the DNA of it is craft. And so you have pride you know real pride in your work of what you're doing and the products that you're offering and you're bringing joy to customers.

Doug: [00:05:04] But at the same time we're confronting the realities and the thing. I mean you can at least make a living on the thing. It's sustainable. You're not worrying about how are you gonna pay the bills.

Tripp: [00:05:14] Got it.

Doug: [00:05:16] So that's that's what this conversation is gonna be out which which by the way contradicts. There are courses online there are places you can take and some of them they tend to be one of or are those extremes. They tend to be into the way deep down into the craft and the grains and the mash bills and that or they're way off into the branding stuff.

Doug: [00:05:38] I'm going to try to walk you down through the middle which is where I find success but the energy for this comes from a product that comes from the product and and then it comes and then it comes into the branding and the packaging and in the service as to how you how you do it.

Doug: [00:05:56] And that's basically the DNA of how we're going to do it which to me makes for a successful thing. So it is a it is an adventure. It's the dream of every baby boomer. Okay. And millennial and and Gen Xers is. We just did a study. Eighty five percent of young people said they would love to have a business of their own. And if I asked Would you like it to be a brewery and distillery.

Tripp: [00:06:20] Yeah. It goes off the scale right. Well that makes perfect sense.

Tripp: [00:06:27] And you know I think one other thing that we probably want to tell our audience to as we go through this these these principles apply universally even though this may be more looking at just the you know making a Spirits Distillery we're walking them through in essence the innovation engineering system.

Doug: [00:06:47] That's right. And it's how start a business that's how I start every business that I do. It's the principles are exactly the same. The steps are exactly the same.

[00:06:56] The details are a little different but it's a good lesson and in some ways it's good. Even if you're not doing a distillery. This is almost even more valuable because then you're you know you're you're not caught up in your own head. Oh but my thing can't be this thing or that thing that you're just listening to the story and you get the beautiful thing it's a podcasting listen to it again and again.

Tripp: [00:07:19] There you go.

Doug: [00:07:19] Yes. If you can't sleep.

Tripp: [00:07:21] And we'll probably do a content upgrade so people will get off give them kind of the steps to go through something they can download too. Sure sure. OK. All right. So where do we begin.

Doug: [00:07:33] Well the starting place of all of these things is you got to set in and you can use a lot of different words for this. You've got to set your vision your mission your purpose your aim. I mean you know in the corporate world they've got all these triangular values and all of this junk what we call it is.

Doug: [00:07:57] We call it the Blue Card is what we call it an innovation engineering and it's in it's it's just a piece of paper that's blue that that has that sets out the mission the boundaries and and the why we're gonna do this thing because if you don't have grounding in. Why. You're about to embark on this. Then you can get confused. And so we're gonna setup the narrative as to why this is something you do. What we're trying to do there we're gonna set the boundaries both strategically we we want to do this we don't want to be these kind of things because we got to decide what we don't want to be and then we're also going to define that the tactical boundaries. OK you know you can make a decision you can do what we're about to talk about spending fifty million three to five million or a half made. OK. That's a choice that that's a choice you've got to make. And depending upon which you pick you're gonna be in one one level or the next.

Doug: [00:09:00] And so you know real boundaries on that are really helpful. And then we're going to set some areas that we're gonna go do some exploration which will be that the rest of the stuff that will start with. OK.

Tripp: [00:09:12] All right. And just out of curiosity Doug as you've done these over the years I don't think many people actually start with the things that you talk about. They're usually either have you know just go and build a product or they are talking about you know vision those types of things. What are they missing. Why why would they start. Why would you start with let's say the Blue Card and the you know the narrative and kind of the strategic mission and the boundaries and things like that as opposed to just going and doing something.

Doug: [00:09:43] Yeah well you're right. What they'll start with is the it of but not the why they're doing me it. OK. And so the result is they then fall in love with it. And when it doesn't work they're stuck with it.

[00:09:57] So instead what I want you to start with is the why you're doing it what's your purpose why are we doing these things and what's our in bounds and what's out of bounds. OK I want you to start with those things and then start to work on the ETS and those it's you can then do 20 or 30 and you can change the idea the ideas change. I mean in my board meeting one of the board members said so I get it. You know he said so we've changed where we're going. Based on what we've learned and and we're a different company than what we are. Because we're pivoting now it's it's not a big pivot but there's a pivot that's happening. And I said you're absolutely right he says. But the mission is the same. I say yes the missions exactly the same. He says I get it. He says this is awesome you know because we can keep changing the products the products will change. They're consumers changing there's different things that are happening out there. But the mission should stay because that's the thing that is your source of energy. That's what gets you up in the morning because you say this is gonna be cool to go do this.

Tripp: [00:10:59] Yeah. You know. As you say that gave back to mind that as you're filling out the blue card that it's not as inflexible as an it is. So that you can update it and change it over time.

Tripp: [00:11:15] Right. I mean it's right. As you learn your blue card may change that to some degree because you've learned. Oh well that that really doesn't work and so you continue down there as opposed to if you build a product as you said you're kind of stuck with it.

Doug: [00:11:30] That's right. That's right. It's going to. Yeah. The Blue Card will still change. It will adapt but it's gonna give you a foundation that when you're pounding your head against the wall you're okay. Why am I doing this. Okay I get it. Yeah. Let's go back to this. I wanted freedom. I want freedom from the corporate rat race. I wanted to create something for my family. You know I I wanted to make a difference in this part of the community. There's a there's an area of town that's you know a distillery helps revive a community space. Yeah. And I mean breweries and distilleries are what coffee house is worse. Sometime ago you know they've start to form a place. I mean in the early clearly they those taverns were the places and and so your purpose for doing this is something that you have to think about but it has to be authentic but it can't be is. I want to do this to make a billion dollars. If you if your purpose is to make a billion dollars you will fail. It's just the way it is. If your purpose is to make a difference in the world whether in a community where it's hyper local or in a space or with the type of product or in our case it the technology then then you could end up making a lot of money. But it's the mission of the business that results in money not money being the purpose of the business if that makes any sense. It is. I'm not against making a lot of money. That's right. Right. Great idea. But it's the outcome. Money is the outcome. It can't be the purpose of you. And so the trouble with corporations about this is our goal is to make an ROI of 700 and a billion percent with 18 trillion dollars in profits. That is our strategic goal. I go That's not a goal that's an outcome. By what method are we going to do this. And that's what we're talking about here.

Tripp: [00:13:29] Ok. And so I think you've stated this before in some of the previous podcast episodes where you've talked about you know you've got to be passionate about what you're doing or the sustainability isn't there.

Doug: [00:13:44] Intrinsic motivation intrinsic motivation intrinsic motivation has to come from within. Ok. It has to come from within.

Tripp: [00:13:50] All right. So help me through this. What. Where am I starting.

Doug: [00:13:54] Well the first thing you got to start with is you've got to start about. And and this is going to mess up some people's heads. OK. So so just bear with me here for a second. When it comes to setting this mission and boundaries of what we're going to do. It's an iterative process so you may turn around and so you're going to.

Doug: [00:14:19] It's like playing whack a mole. Remember that carnival game Whack a Mole logo. And then you're gonna start one you're gonna start on the boundary. Then you got to set that boundary and you got to go away to meet with that boundary. I can't do that mission. Okay. Okay. Yeah. Okay so but with that boundary that mission is gonna be lame I don't care anymore. Okay so I'm gonna do it again.

Doug: [00:14:37] Okay so it's a it's a juggling of these things. The first thing I would do is I would take a piece of paper and write. Why do I want to do this. And fill up two pages just keep writing. Why do I want to do this. Why do I want to have a distillery. What is it that I'm looking to have. Why do I want to bother. Why do I want to commit my life. And a lot of energy. Why would this be what you can also do is write and so write two pages to fill two pages typed or handwritten. You could also turn around and write. OK. The distilleries there. Why are you happy that you did it.

Doug: [00:15:16] Why are you so happy of what you've done. And related to that is. What is your life like now that you have the distillery. Give me a day in the life. What I'm trying to do is to project you forward. So that you can see your future.

Doug: [00:15:38] Because as soon as you can I use those words a lot. Somebody was poking at me the other time you say. You keep saying I can't see it and I don't get what you say. I said it's in my head the minute I can visualize that thing it happens. But if I can't visualize what it is we're going to then I kind of wander in the wilderness. When I can really visualize it then when somebody says do you want to do this. I got no. You know I can say no. And and you know we can see stuff. Let me let me give me an example. A subject we're gonna talk about cannabis because you can't talk about distilleries today or alcohol without talking about cannabis because this is a storm coming and I and I respect anybody's personal policies on this or they've got family issues or they get what it is lot of complexity in this but the fact of the matter is is the legalization of cannabis whether it's CBD the non psychoactive or THC are coming in they're going to have an influence on alcohol sales. It's just going to happen and concurrent with that there is a rising tide of young people reducing their alcohol consumption. And and in some cases moving to CBD. THC in some cases not. I don't care your policies. This is a reality that's going to happen. I had a very clear vision that we were gonna be a whisk(e)y company. We were going to just do whisk(e)y. We have a patent that covers CBD THC. And when I did investors I said that's out of bounds.

Doug: [00:17:27] But we have the asset. So I'm just gonna go sell the asset. At my meeting yesterday I said I've changed my mind. Experiments that we were doing in Canada Colorado and different places where it is legal. I'm now seeing a pathway I can see a way for us to do something here. And so that is now in bounds instead of out of bounds. And I let them know because it had been out of bounds. And but new information. Part of it is a lot of information because I've been doing a project for a big multinational that has me looking at cannabis for them because they want to look at it but they don't want to be seen looking at it. You know one of those kind of things about black ops job and and so I've gotten access to scientists and doctors and I've been doing a you know an objective review and the combination of that review plus some experiments that I've we've had I've changed my mind. And so that used to be out of bounds but now it's in bounds. And and so but you've got to set those. It was not like maybe I said it at the start. It was out of bounds. Now it's coming inbound. So after you've got down what you doing and why you're doing it I want you to next start with these boundaries. What things are inbounds. What things are out of bounds so strategically I don't want to do this. Make a list of the things you don't want to do.

Doug: [00:18:50] I don't want to be a multinational you know low cost spirits company. I'm not going to compete with the you know the Jim Beams of the world. That's not what I mean to be. And don't just say we can be a craft can be the people love and we're beautiful and we're wonderful. No no. What do you not want to be.

Doug: [00:19:10] You know. And and then define what you don't want to be and then define it like in our case here. We defined early on we said we are going to be whisk(e)y. We're not going to be rum. We're not going to be brandy. We're not going to be tequila. We're not going to be gin. We're not going to be vodka. We're gonna be whisk(e)y.

Doug: [00:19:33] Now. We did that in part because we had I had done some work and I had found that for the same cost to make a rum I can make a whisk(e)y with our technology. But for the whisk(e)y I get ten dollars more a bottle than I can get for the rum and I'm not justifying it's just the way the consumers are. And so it made a difference. And so I set those boundaries. But even when I set them I said we're gonna be whisk(e)y whisk(e)y whisk(e)y because that's the hard thing to do. It's the king of spirits. By far I mean it's 50 percent of brown goods. So you've got whisk(e)y and then add together rum Brandy tequila etc..

Doug: [00:20:20] It's 50 percent is whisk(e)y which is Spirit made from grain. Again we've said this before Brandy spirit 40 percent alcohol. Spirit made from fruit. Rum is from sugar or a sugar cane No tequila from a Garvey. It's from whatever source of grain they had or are sugars basically that they had in the region. So we were going to be whisk(e)y but I said even when I said that I said we're going to be whisk(e)y first. In fact I put in the name that we do business as Brain Brew Custom Whisk(e)y. SOMEBODY SAID WOULD YOU DO ME Rama I said Did you see my name. I said it's whisk(e)y. Now that said I've also said that there will be a day. Where we will probably go into those other spirits. But first we're gonna make whisk(e)y work and we're gonna stay because you know we just I just set the boundaries.

Doug: [00:21:12] I just thought the this and I just decided that I could just as easy as that all spheres. But for me the magic was making it happen in whisk(e)y because that was so much harder and that excited me.

Tripp: [00:21:22] Okay so So with regards to my looking at this are you going to try and steer me a certain direction that makes sense because you know I remember and one of the previous episodes you said you know you may want to start with gin and vodka because it's easier to make that while you're working on your whisk(e)y. Is that kind of the mindset I should have as I go into it or first off.

Doug: [00:21:47] Let me ask you this why do you want to do this.

Tripp: [00:21:48] Ok that's a fair question. Yeah. No I think well one you got me excited about it. And then I started you know the self don't. OK. Well well no. I mean I am a long time wine drinker. I mean that's been my go to thing I love you know cabernet is you know from you know inexpensive too expensive and then as we you know I've had whisk(e)y off and on over the years and scotch you know Scotch whisky and good ones and you know there is a difference you know as far as the taste goes I don't know all the nuances or I didn't know all the nuances. And then as we started talking I was like you know this is a whole thing and this is you know and I'd like the taste sealed from a craft standpoint. It kind of made sense. I started to look at and you're probably gonna ding me on this you know from a monetary standpoint but just looking at it saying jeez you know Doug created something here that's got got early entry. But I also I guess then started to say OK well why asking the question you just asked why what's the sustainability of it. You know from my mindset and that is well there's I get a couple of things. One is learning how to do do this learning is a big thing for me. That's not when I say that I don't mean it lightly like I just like learning. I do like learning it's like part of me. And then the second thing is you know I have a son that's in the craft brewing business and a daughter that's graduating from college and it seems like a great way to kind of pull a family together and I've got relatives that live within three miles of me in every direction. And I thinking Boy this would be really cool to have something for the family. Now whether that's good enough you know as you're listening to it I don't know. But those are the kind of the reasons that it's attractive to me there.

Doug: [00:23:48] That is exactly perfect because what's perfect is what you want to do is is that that you have that now the question is is time to play this out. And see you know realistically is there a reasonable business that fulfills the needs of what you want to go do. You know but you start with the why you going do it. So then the boundaries and some you may not know it's OK to put a question mark to say I think this but I'm not sure. All I care about is zat you be honest with yourself. I mean let's just start from product. Would you get excited having vodka and gin. Or do you really want to be whisk(e)y brown spirits.

Tripp: [00:24:38] I mean. Yes and no. I mean from a standpoint of if the gin and vodka provide me a path to getting to whisk(e)y. In other words it's part of the learning or it's it's an easier path to get some learning from in order to get to the whisk(e)y. That then that makes perfect sense to me. I do drink gin I don't drink as much vodka but I can tell you people my family do. I'm more interested in the whisk(e)y and I can tell you that my son is my daughter not so much.

Tripp: [00:25:15] So there's you know you've got different people involved so as I look at the boundaries you know associated with the the pipe I I'm pretty open with that. For me it would be the whisk(e)y that I would focus in on.

Doug: [00:25:31] K but if I go back to your narrative of why you're doing this for the family then it would seem like vodka and gin would be would be important to have there.

Tripp: [00:25:40] Probably yes.

Doug: [00:25:41] You know because of the family dimensions and while you may be more focused on the whisk(e)y side. Mm hmm. Okay. So you said a bunch of things. So let me just give you just a quick blurb to subscribe. Doing vodka and gin so you can get to whisk(e)y I think is fool's gold for most people. I think that's a thing that a lot of Distillers say and I don't I think it's a giant sucking sound of their life and energy force and they don't love it they hate it they're doing it because they do it and they can't do it well and it just doesn't work. I just I don't think that's a pathway that gets you there. The world does not need more vodka as the world does not need more gins. Now I'm going to put an asterisk beside that OK. The world does not need vodkas and gins. There are not that many people that drink gin and gin is a juniper forward spirit.

Doug: [00:26:28] Ok now there is another thing. Called a botanical vodka. Which would be a you know the flavors like of gin but without Juniper being the primary taste OK. And I think there's a great opportunity for botanical. Vodkas. Which is basically quote gin but not because it's not because all at all gin is vodka with juniper.

Doug: [00:27:00] Okay that's it. It's Juniper flavored vodka that's gin and sugar. They usually put one or two percent sugar in it. That's what genius and so the number of people that like a juniper forward drink is is small.

Doug: [00:27:16] I mean reality but I think it's a fool's gold now but doing it for the family. That changes that conversation because now making a vodka the people can make into cocktails that they can have. Making a gin for those who like their gin and tonics or botanical vodkas. So to have where you can have a lot of creativity. I mean this like opens up the creative juices because different botanicals you can use you can make amazing different botanical vodkas.

Doug: [00:27:47] Now you've got a real creative place that you can play then you can do stuff which is wonderful. You know as a place to play but going down the route that you're going to make it from that and get to the other. I just I mean people do this and you can taste their stuff. It just isn't that.

Doug: [00:28:08] It just isn't that. And so. So that would be fine with me that that would be fine with me as a pathway to getting there because that's that's what you're going to need is that direction. OK. So we can do gin and vodka or botanicals. OK. So that sets us up that there's different ways to do that. And so there's a consequence to that to both of those. So let me just give you some of those.

Doug: [00:28:35] Options because that also then leads to a question that you have to confront at the front which is what number of zeros you're going to have in your fund raising.

Doug: [00:28:45] Ok you know how much cash you're gonna do and you got to confront this cash issue at the front okay. You just gotta set this number and you know how many zeros are you gonna do. And yes you could do this for very tiny zeros. There is a pathway to doing this whereby you you basically just become a rectifier.

Doug: [00:29:07] You have no distillery. You're basically you have no facility. You basically buy stuff in from us or others is sometimes even bottled and you basically then just sell it to people and you can do that for a couple zero you know for five zeros in five decimal places.

Doug: [00:29:29] Fifty thousand dollars. Hundred thousand dollars. You could do that. And there are people we've got a couple people coming to us now want to start a brand and then they say I want you to make 500 cases of this and I'll and I'll go sell it.

Doug: [00:29:39] And that's a pathway that's a pathway to do it. The next pathway is that you're going to have a facility and you're going to serve consumers that from your tasting room restaurant depends on the laws of the state and you're gonna be distributed in the local market. Not in the state but in the local market. And in the context of doing that you've got a couple options. One option you have is you can get what's called an iStill which we've talked about which I think is the best. And they have a wonderful class that you can go to. You don't have to have bought it. In fact people go to the class usually first and going to one of their courses is is really really recommended and they'll show you how the whole thing works. And they even have recipes to get you started quickly. And in particular they can get you started with vodka and gin. Now you can make vodka a couple of ways. You can do it from a mash from the Greens or you can buy what's called neutral green spirit and G.S. and Reid is still it a bunch of times to purify it and clean it up to make it even better. You can also when you're distilling that you can throw botanicals in and basically make either gins or herbal spirits basically flavored favorite vodka and and you don't need a very big one and they're not that expensive. I mean twenty thousand dollars thirty thousand dollars fifty thousand. I mean depending upon the size I mean I'll be down to ten thousand dollars for a little tiny one and you can start doing now you can't do this.

Doug: [00:31:21] We're not allowed in the US to become a moonshiners. Unlike beer where you can do that which is a problematic so you have to do it at a facility that's licensed to do that but so you have to decide are you gonna start all the way from grain.

Doug: [00:31:36] Which is a lot more expensive a lot more learning curve where you're going to start from Spirit that your read is still into basically your finishing process. Versus from the green. And that's a choice that you have to make. And really that has to come from. I really want to do it or I've got a partner that really wants to do that. You've got to decide. Because that's a different place of where you're going to spend your time. You can't do it all. You can't do it all.

Tripp: [00:32:03] So. So is there a pathway then Doug looking at this kind of first go down this road which is kind of what I would call I guess outsourcing people. You make it I'll sell it type of thing versus the building a facility. Is there a pathway from you make it then then go to a facility is that is that one that makes more sense.

Doug: [00:32:27] It is. It is. Yes it is. And people do that. If it was me. I would. I would think long and hard about what I was doing to be a craft place that has a facility. You need to have some level of DNA that you're doing the stuff. Now that can range from. I bring it in and I do the finishing which adds the real flavor to it. Which is fine. That's fine. History's made most people are like that. I mean most of your big whisk(e)y brands are actually bought from MGP in Indiana and they do the finishing. I mean that's what most of the big brands are. You know the big names that you see I'm not going to stick and throw stones at them which you can look online you can find out all at once. The big big names they don't even make those products and that's fine. But they do the finishing and the blending to make the taste that you get and that's the value add that they provide the artistry is there. You can go to the point of buying finished product that's to your specifications so you designed it and then you had somebody contract make it. That's fine.

Doug: [00:33:38] You can turn around and take the grain that you buy to do it or you can be like Jarrett my partner in Canada who's I mean if you want to say true craft people say well if you're buying in the spirit you know a true craft. Well Jared I will tell you you're not true craft unless you grew the corn.

Doug: [00:33:54] He said I grow the corn. He says buying corn from a big industrial corporation that doesn't sound very craft to me. Now he's being severe here.

Doug: [00:34:03] You know on this so. These are all fine and consumers are fine with all of these and I don't have a political position on this. To me the return on energy from my life. I'm not interested in growing corn. Okay. I'm not interested in running mash tanks you know to me where the value is added is in the flavor in the finishing and that process the maturation the the aging know whether it's our accelerated aging or however you're doing it putting together the mash bills. I mean to me that's where the artistry is. You know the chef doesn't grow you know the cattle you know but there's still an artist. They buy beef and then they do their artistry to it. So the question is you know are you gonna be a farm or are you gonna be a chef. And to me the chef is what appeals to me. But that's up to each person. That's up to each person.

Tripp: [00:35:10] Yeah. Part of me to turn it says I mean I guess what was in my head.

Tripp: [00:35:15] Doug was you know you and I kind of outsource it at the beginning trying you know learn to get a sense of kind of how you put it together how I get something that that taste you know something worth selling I guess. You know you you're talking about souvenirs you know at the beginning in the last episode but going from kind of you know help help help along come up with something like you have your you're tall stacks and your Keelboat in your deck hand and all those things but come up with something similar to that. And then as I get volume and learning then move start to move and maybe take on some of that stuff you know. And then now we're talking about a facility you know in an iStill and things of that sort. Is that. Is that a desert. Is that a worthwhile path. Do you see or do I have to make that decision right. Right at the beginning that I need.

Doug: [00:36:14] Well I would make a decision. But then be open as you get through the rest of it to see if you want to change it. Okay. So but the answer is yes. That's a fine process okay. Yeah that's it. Yeah. Jared and I in Canada are about to do the Nellie banks and the Marco Polo. OK. We're gonna do two products that are exactly that. I mean and here's a guy who grows his own corn and he's doing it and and he's doing it in part because we can do it quickly and he wants to have the fun on that side because right now his time is sucked up so much on the other side that it's hard to do that. And so you know he's gonna both you know he's got the farm to glass the true farm to glass and at the same time he's going to have stuff that we're making for him in Cincinnati. So which is fine that OK.

Tripp: [00:37:03] Well I know you've got knowledge and you've got 30 years and it. From my standpoint it makes sense to kind of work with you come up with something you know. You make the initial and then at some point decide OK we'll get enough volume here or we want to kick you out of here or whatever comes first I guess and then start into. OK what do I need from a facility standpoint. It just seems like it makes more sense because now I've got traction with a product and now that I've got traction with the product I would think going to investors would be easier and maybe I'm completely wrong.

Doug: [00:37:45] Okay we're jumping ahead but yes. OK. But but I'm just gonna I want to recognize though that there are some people for you. That's what's right for you. And that's awesome.

Tripp: [00:37:56] OK.

Doug: [00:37:56] But there are other people who that's not what they want to do. They want to get the iStill. They want to play with botanicals. They want to do it themselves. You know it because that's where they find joy. And I'm good with that too. OK. You know it really it just depends on It's each person's perspective as to what they want to do.

Tripp: [00:38:15] By the way I did. I and I was looking at the iSstills. I think the smallest one is somehow a new product they have is like the Mini was like 3000 euros which I think would be like a four thousand dollars.

Doug: [00:38:26] That's right so that we would have one of those.

Tripp: [00:38:29] Okay. All right. So what else do I need to talk about. It looks like I'm gonna have homework here.

Doug: [00:38:34] Okay so this is this is got you started. OK so so now you've got this thing and the last thing I want you to think about. So money wise then you're gonna be a lot less money.

Doug: [00:38:46] You know. You know the simple math is if you want to start a distillery with traditional aging stills you need three million dollars minimum. That that's jacks or better to open. You got to have three million dollars and don't tell me you'll do it otherwise because it's not going to happen. I mean we can show you the spreadsheet the cash flow needs.

Tripp: [00:39:05] Know what. And I want to interject this because when I went back and I listened to one of the episodes you had talked about and I was reading and one of the things that said was Well you could go in to a someone who's making whisk(e)y and you could you know get a combination of their already aged whisk(e)y type of thing but I think you made a comment and. And one of the two previous episodes about that's not a good idea. Usually the product that comes out of it is bad.

Doug: [00:39:35] Well it's really tough to age whisk(e)y and get it great. I mean the people that are doing this have huge warehouses which have all different temperature ranges all kinds of different barrels and they've got this huge pallet to do from and you put away you know 10 barrels 20 barrels a 100 barrels. You just don't have it's like you don't have colors in your coloring box to play with. And you have to get amazingly lucky because there's so many things that can go wrong. So it can be extremely challenging extremely challenging to do that. So. So the last thing I want you to think about on the scope is I want you to focus on. Are we going to be retail focused. Are we going to be venue focused. Are we going to be hyper local. Are we gonna be statewide national international. And that may change as you learn more. But you've got to set some dimensions associated with that as to what you're gonna do. The classic rule of thumb to be successful in this is the advice that is pretty much the standard industry standard from people who have walked this path is do your town first get successful in your town and then either decide that you're going to stay there and have a nice business.

Doug: [00:40:52] Or then go do another town where you aren't a local legend. And prove that you can make your brands work in that other town and and when you've proven that you can work in a place where you're not. Don't have the value of being a local company. That's when you've really shown that you have something you can go across the state the nation or the world.

Tripp: [00:41:17] Ok. And when you say do your town what's with fall falls under that umbrella.

Doug: [00:41:25] Selling the bars. Having it at retail. You know doing that that local town.

Tripp: [00:41:32] Ok. And if they're retail I don't know. And I'm not too familiar with all the liquor stores.

Tripp: [00:41:39] I know some of them are probably locally owned. Some of them are Indiana wide. Some of them are nationwide type types of facilities. If I'm selling into you know a liquor store liquor stores does that automatically. I mean do people go into the headquarters of a liquor store and say I only want to sell it in these three stores. Yeah it sure is Indiana.

Doug: [00:42:03] So. So it really it depends. So you got to go figure out your state laws. This varies in some cases like you know Ohio is a craft guy I can sell direct and direct delivery even though the state owns all liquor stores all liquor store all liquor and all stores in Ohio is owned by the state of Ohio. They are agents when you see one that has a name other than state of Ohio. It is a agent for the state of Ohio. OK. And so it's all thrown through the state but they allow craft guys to sell direct. So what we can sell direct and deliver. But even so the state still takes their piece of it. And so in some cases you have to have a distributor deliver the product but you're still going to end up having to sell it. I mean they'll list it and they'll have it. But the reality is that you're going to have to be pounding the pavement there. And so you've got to check through your local laws in your state or country. I mean this place around the world as to what those rules are you know up in up in Canada if you're at a craft person and you're under a certain volume you get really advantageous math on the margins that you make. You just do much better than others because of that. And so you really need to check that that local math as to what the laws are and where.

Tripp: [00:43:27] How do I do that.

Doug: [00:43:29] This Google thing. It's pretty good.

Tripp: [00:43:30] Well no I get that but I mean even I will when I Google.

Doug: [00:43:35] Well I would just love the state liquor laws how to start a distillery in Indiana and start start some of those things. OK. I mean that's where you're going to.

Doug: [00:43:46] Here I'll look it up distillery. Rules in Indiana.

Doug: [00:43:59] More state. So you've just had a change in the laws. Good or bad. Oh good. Then change regularly. You can search small distilleries serve samples a tasting room sell bottles of spirits directly to the consumer.

Doug: [00:44:16] Sample tourist pour them a cocktail. Oh you have to wait three years before becoming eligible. You have to hold a regular distillery permit for three years before to qualify. That weight will now decreased 18 months. So you gonna have to get into these things to find out what the rules are on how this is done. OK so it's coming it's coming. And by the way to get a federal permits going to take it twelve months anyways. If you had a facility. So this is something we got an IV. You can do it yourself by digging through stuff. There are also alcohol attorney attorneys who specialize in alcohol permits and stuff who you know for an hour or two with them they could they can walk you through the maze. There's also probably a distillers guild in Indiana.

Tripp: [00:45:05] There is.

Doug: [00:45:07] And so one of those people would be happy to help you too I'm sure.

Tripp: [00:45:10] So are you saying I can't sell anything for 12 month.

Doug: [00:45:15] Depends on the laws. You'd have to check this out. But it could very well be the case. OK. That could be the case.

Tripp: [00:45:22] All right. So even if you're doing it I guess I don't understand how that works. You know if I had you know putting them together I couldn't be selling them here and Indiana.

Doug: [00:45:33] Depends on that. Yeah there may be a permit that you can but you've got to. That's you've got to figure out OK.

Doug: [00:45:40] Generally you're still going to need a DSP distilled spirits producer plant from the federal government and then a local but there may be a state way that you can do it as more of it is importer instead of a producer. You may be able to do it that way too. So yeah I'm not a lawyer nor do I play one on TV so this is now and you can't. Our rule number one is don't put Doug in jail so do not mess with this. You not winging it on this. This is not something you wing the federal and state governments have in intensity of enforcement on this because it's taxes.

Tripp: [00:46:20] Ok.

Doug: [00:46:22] And so they're very intense on it. So you gotta figure out what those rules are.

Tripp: [00:46:26] Ok. So these are some of the hurdles of things that I'm going to have to figure out right. OK. All right. Doug we've gone through quite a bit today. We're Forty four minutes into it.

Tripp: [00:46:37] What can we look forward forward to in the next episode of this.

Doug: [00:46:42] So so Tripp. I know there's people out there they're getting frustrated because they're like wait and all they're talking about is my mission and why I'm doing this. My scope I just want to get onto it. Well let me just tell you folks you've got to have a foundation before you can build the house and the time you spend thinking about that mission at the front is invaluable. So in the next episode we're gonna talk about developing your storyline and this is the craft storyline of your brand your product. Kind of what this business is gonna be. We're talking about making a functional prototype and looks like prototypes and trying to get some data on it and doing some initial math for your business model. Just some rough math. And then in the third episode here we're going to start to deal with the nitty gritty. We're going to start to deal with the investment decision the investor plan writing your investor distillery game plan selling investors selling investors and getting the permits and building that the store.

Driving Eureka! Newsletter #28

Your Innovation Podcast. This is the third episode of the Driving Eureka! Podcast. Segment 1: Using math to innovate; Segment 2: Math game plan; Segment 3: Brain Brew Whisk(e)y Academy.

Subscribe to learn how to Find Filter and Fast Track Big Ideas.

[00:00:01] The Driving Eureka! Podcast

[00:00:34] The 28th Episode - Numbers are Your Friend When Innovating

[00:01:12] Tim Feely - The Gift of Failure

[00:03:23] Are You Afraid of Numbers?

[00:04:57] Got a Prototype - Ship It!

[00:07:24] You Can Ship a Concept Prototype for Feedback

[00:10:16] Shark Tank is Entertainment Only

[00:12:15] Driving Eureka! Book Segment

[00:12:28] Math: The Gas Pedal for Change

[00:13:43] Death Threats - Explained and Used to Nail the Numbers

[00:16:43] Start with Industry Data

[00:18:24] Get Help with Your Numbers

[00:19:23] Brain Brew Whisk(e)y Academy

[00:19:38] Math and Whiskey

[00:20:16] 3-Ways to Make Money in Spirits

[00:23:06] Get an iStill and Learn

[00:27:10] Brain Brew Distillery Update

[00:29:02] The Need for Space and Automation

[00:30:04] Craft Cocktail Recipe - Rum Runner Beach

[00:30:57] Step 1

[00:31:01] Step[ 2

[00:31:06] Step 3

[00:31:17] Step 4

Tripp: [00:00:01] Welcome to the Driving Eureka! podcast. We share ideas and advice for helping you find filter and fast track big ideas.

Tripp: [00:00:14] Hi I'm Tripp Babbitt advisor to global organizations on the Deming philosophy and host of the Deming Institute podcast.

Doug: [00:00:22] And I'm Doug Hall inventor speaker teacher and whisk(e)y maker. I'm also the founder of the Eureka! ranch and author of the Driving Eureka! book.

Tripp: [00:00:34] This is the twenty eighth episode of the Driving Eureka! podcast. And in this episode we're be getting back to the math of things of what numbers that we need. I gotta tell you Doug in the last few weeks I've been getting beat up by a lot of Deming people saying what's Doug thinking you can't. There are still unknown and unknowable numbers out there and they give me examples like grains of sand and stars in the sky and things of that sort what would you say to these folks that say hey you can't get numbers for these things.

Doug: [00:01:12] Well they just don't. Yes. I don't know the grains of sand. I don't. Nor do I care at all I know is that when you're innovating numbers are your friend and we can't get numbers on all of these things. There'll be variance in our estimates. But to not do them is just plain foolish. OK you've got to do the math. I mean the secret to my success has been math. And if you don't know how to do it you've got to find a friend to help you with it but you really need to do it. And I really came to me years ago at Procter Gamble my team and I were trying to sort out what to do after we got some really horrible product testing results. I mean we got flushed and I got it. I think he was a product department director. I'm not sure what his role was but a guy named Tim Feely stopped in and was listening to us and he said he said numbers are your friend when innovating.

Doug: [00:02:04] Of course I looked up at him and like not these numbers do these numbers are horrible. These are horrible got to watch. I mean in the whisk(e)y business it was at whisk(e)y but the whisk(e)y business we call it a "spitter" as they adapt to your taste that you spit it back.

Doug: [00:02:26] And there was one of those and he whether he went on and you know we laughed and he said a solid failure was a great gift because he said it when you fail as badly as you guys just failed. The good news is is you're not going to be able to kind of tweak it to fix it. You've got to do something different. You've got to do something different.

Tripp: [00:02:48] Yeah I got it. I got to ask this question which is you know you've talked about you know how you push the limits those types of things I'm assuming this may be before you had maybe that whole mindset and you know I especially when I think of Procter and Gamble I think of safe and you're not pushing the limits type of thing. Is that kind of where you were in your mindset are you have you always kind of did you take the failure and know I'm going to fail I'm going to push the limits on what this product can do. And you hadn't quite put the numbers to it yet. Where were you kind of mentally at that time moving for all your day.

Doug: [00:03:23] I knew I knew what to do. I mean I knew at the time and we were pushing the edges on it. But the thing that came to me from Tim which has stuck with me all these years over 40 actually is that people are scared to get numbers.

Doug: [00:03:44] And I think it's because psychologically they know deep down inside that they're probably not there and they don't want to get the number to get confirmation on it. But the minute you go get the numbers. You can then start the next cycle of improvement.

Doug: [00:04:00] And I just had it happen to me at the Ranch and there was a team that was there was a test that was scheduled to go out and they had two ideas and that one idea was ready and the other idea that said oh I don't know that we're gonna be ready for it. Well we'll just pass on this. And I said you know basically paraphrase Tim and I said numbers are your friend win or lose we're going to be smarter than we are now. My vote is to ship ship to test. And they shipped it. And they set two records to record a record for uniqueness. The most unique in all of the ideas and the most unique and the worst.

Tripp: [00:04:42] You have a lot of that Doug. I noticed that you remember the Johnson and Johnson thing. You know you had the best idea ever in the worst.

Doug: [00:04:52] A package deal. You know what it's hilarious.

Doug: [00:04:57] And but they did. And what was interesting was the idea created great debate the next morning. You know as we're sitting there with it there was a wonderful debate amongst people with regards to. This idea and and the general conclusion was this idea is probably quite a bit ahead of its time. And I can't give you the details but it's a technology that is just not there. It's really out there really out there. And and it was a healthy conversation about the future of where things are going. And so it probably didn't hit the objective for this project that we're working on.

Doug: [00:05:39] We're inventing these breakthrough ideas to ship in three to five years. It's not in the three to five year range it's further out than that. But man it was so useful having having the test. You could have debated this thing forever.

Doug: [00:05:54] But going out and getting the numbers in this case customer research results data not qualitative data on the idea really helped. Now when I'm talking numbers I'm talking customer data on the idea. Yes but I'm also talking about forecasts for sales or profits or fund raising or cost savings. As well as forecasts for the investment required to be able to have production capacity or marketing. And these numbers that you need.

Doug: [00:06:31] The key to being able to generate the poll for your idea from investors management stakeholders as you see they're all scared of your ideas. But when you can show them the math that shows them they can make money.

Doug: [00:06:47] Then the one thing greater than fear the one emotion greater than fear is greed. Because now they see the opportunity to make money and you've transformed your idea from an abstraction into a tangible business opportunity.

Tripp: [00:07:01] And there's one thing that's as I listened to you talk Doug that that's a little confusing to me which is I can't quite. And maybe just can't reveal and just say if you can't. But is this concept I'm shipping something. But the technology for the product isn't even there. What are you shipping. I guess. Is there an analogy I could use or we ship when.

Doug: [00:07:24] It was a concept prototype prototype. So yeah. And I just use the word ship because that's the way I think it's going. Yeah sending out and so we send it out to consumers. And it was a concept prototype of what this idea could you got it.

Tripp: [00:07:39] Okay. And so you got feedback associated with that saying you know they love the idea that.

Doug: [00:07:47] They hated the idea.

Tripp: [00:07:47] Oh they did. Oh. But it really unique very.

Doug: [00:07:51] Said that but a very high uniqueness. They say wow that's like nothing I've ever seen before. And I don't want to see it. Would. And there's different back. This was different.

Tripp: [00:08:05] I get it now. Right. So now now now I understand.

Tripp: [00:08:10] So the combination of that square when you read it in here you've got a record high for uniqueness and a record for purchase interest meaning. Yeah. That's that's that's that's really cool. Never would buy it.

Doug: [00:08:22] Right. OK.

Tripp: [00:08:25] Now now now I understand a little bit. Well that also kind of separates out from our conversation that we had last week about the concept prototype and then I forget what the other prototype is called Love or type functional functional prototype that they're they're basically a trial balloon on just the concept itself and getting feedback on you know what people think of it then is is where they were in the process. And just by my understanding are you always doing a concept prototype before a functional prototype. Is that kind of order. They done concurrently or.

Doug: [00:09:03] Sometimes it goes both ways. No it's not so. Sometimes. Sometimes we'll have the product first OK and we'll test the product and then sometimes develop the concept.

Doug: [00:09:13] But you know change generally I guess does a concept prototype in most organizations first although in our case I mean I'm a product person I love product and oftentimes I'll go make it first because I figure if I could make something that's a while I can figure out a way to sell it but if I can figure out a way to sell something that doesn't mean I can necessarily break the laws of physics to make something. So I like the making that sometimes you make something nobody cares much. That's a problem too. But I like to make it real.

Tripp: [00:09:45] Yeah I know I and I know we talked about this last week on about Shark Tank those types of things but people typically will have some functional prototype I guess or maybe it's got a little bit further than that but they're actually bringing something to the table at that point it doesn't make any sense for them to go back to do a conceptual prototype does it.

Doug: [00:10:08] No but you've got to remember that the people that are on that show runner it's an entertainment show right. Right. They don't have some visual. They didn't get through the screening.

Doug: [00:10:16] So I get a weird chair helps weird here helps a weird accent a bit of a nuttiness that helps too because it's no it's entertainment. The more entertaining you are the better chance you have of getting through.

Tripp: [00:10:31] So this is this isn't reality. Don't get your knowledge about how to innovate from Shark Tank.

Doug: [00:10:38] Please don't leave yourself even their conversations. It would drive me crazy cause the conversations of the other judges on patents or technology I remember one episode we're sitting there and this guy comes out and he's got this idea for a bike that when you pedal it's like it's like self-power it makes you go even faster because it's got this amazing flywheel thing in it. And and it and he had all these amazing claims and I said and because the other J Oh this is wonderful you're a genius you're a young teenage genius Europe and I said this would be called perpetual motion. I said this is this is not possible. Oh you're not being open. No it's just not going to be real. You can't do that.

Doug: [00:11:25] Ok you can't do that. In fact with patents it's oftentimes you know one of the things that patent. You can't do it in the example it's always used as perpetual motion. It's just not real. And so these TV shows the advice and what the judges are saying may or may not have any connection to reality. But don't get your advice from them.

Tripp: [00:11:49] Ok that's a probably good way to end that that particular segment.

Tripp: [00:12:01] It's time now for the Driving Eureka! book segment with author and inventor Doug Hall.

Tripp: [00:12:15] Let's go to the Driving Eureka! book segment and you're talking about. We're talking about math. And you're saying that math is the gas pedal for change. How does that.

Doug: [00:12:28] We talk about it is math game plan and it's the first math forecast of what impact the concept is estimated to have. It's either what your organization is going to realize from it or investors are gonna do it or non-profits are connected to your mission. How many birds you're gonna save or student you're going to graduate. Whatever it is and the resistance to change inside most organizations and with outside forces is epic and the primary reason for this is they can see the cost side of the balance sheet. They can see how much work it's going to take and how hard it's going to be. Blah blah blah but they can't see the benefit side of the balance sheet. The revenue side. And so what you need to do is you need to help them see both sides of this. And when you do that math it that's first estimate it's going to have a lot of variance to it.

Doug: [00:13:19] So talking to folks is gonna be a lot of variance to a lot of those numbers. I got it. But that's then the starting place for your plan. Do a study act cycles of learning to reduce said branch so you run a test to reduce the variance. In the beginning you got wild ass guesses and then in time you make it smaller and smaller and smaller and smaller and you make it better and better. And that's how it works.

Tripp: [00:13:43] Can you give us like an example of where. Because I know there's different things so soon we talk in terms of in previous episodes I probably had to bring the term up on a more regular basis but death threats associated with a product. As you start to address those you start to reduce the amount of variation associated with your forecasting also. Do I kind of have that right. And can you give us that simple.

Doug: [00:14:07] Yes that's exactly right. So say you don't know say for example you don't know who this is going to appeal to. You don't know how many potential customers are there that you could sell. You're not gonna sell them all but you know you don't know like say on a on a whisk(e)y product you don't know is this product going to appeal to whisk(e)y hardcore whisk(e)y drinkers. Light whisk(e)y drinkers are non whisk(e)y drinkers. And you know you run a test and you find you know the hard core group of whisk(e)y drinkers is only about 18 percent 18 percent of the population drank whisk(e)y in the last 12 months in the US. OK. It's just. That's it. That's all it is 18 percent. OK. And within that group you know this there's about 10 percent that probably consume half of it. And so you're dealing with about two or three percent of the population that are the heavy heavy consumers of whisk(e)y. And so you know the difference between the hardcore and then the next ring if you're thinking about concentric rings going out when you can appeal to that bigger new audience then you're working with a much larger audience. And so in the beginning you know you're going to guess at it. And then as time goes on you get better and better and better as you know you run a test. You figure out who it appeals to.

Tripp: [00:15:25] And therefore because you're you've now instead of just saying it's 18 percent of the hardcore drinkers you know as far as the field of people that you have out there now you know how much a percentage of that those people are going to be like the product that yeah.

Doug: [00:15:42] Now it's actually it's the other way around. OK so so. So it's like this you might say it's anywheres from all of the people that drink alcohol experience it could be 50 percent or 10 percent I'm not sure. OK. And then as you do the research you find that there's about 20 percent that the prime audience for this that are going to drive it. So you went from 10 to 50 40 percent of spirits drinkers which is a huge variance. It could be that high or that low.

Doug: [00:16:13] And now suddenly you're at only a 20 percent because you know who the whisk(e)y wannabes. The people who would like to drink whisk(e)y but don't. That's the people that we want to get to.

Tripp: [00:16:22] Ok. So as an example. OK. And so one of the questions I have for you too is you know there's numbers out on the Internet and people will make assumptions based off of those numbers. What I'm hearing at least and maybe I have this wrong is that you don't you wouldn't start with those numbers you would find out for yourself.

Doug: [00:16:43] Well I would do that. I'd use the numbers to find you know Googling to start. But I would cite them as to where they came from. So you had documentation with it. Mm hmm. But then I would want to find out that might be a general population of what goes on or what happens for a clap. Most products. But then I'd want to find out what my idea is gonna do. Okay so I can start with industry data to start or if you're inside a company you can start with the last two times you did something like this what happened as your starting place and then adapt it as time goes on.

Tripp: [00:17:16] Okay. Because I sit there and I think you know how many of these numbers are actually wrong and where people have maybe come up with a product and they say only 1 percent of the people would use a product like that.

Tripp: [00:17:30] And do they miss opportunities have you found Doug by kind of taking what you know what numbers are out there versus taking it you know a product and saying you know I don't know that 1 percent doesn't sound right you know and maybe they look into the study or do a little bit more digging on it but then they go go ahead and go out and do it or do this that kind of stop the whole process.

Doug: [00:17:54] That's usually the reverse. They usually say they're going to sell billions and billions and they're not going to get it's usually all too high.

Tripp: [00:18:05] And actually you know it's funny I. THAT'S WHY IT'S EASY HERE ON THE SHARK TANK a lot. You know some who say this is a 60 billion dollar industry you know type of thing that they're tapping into.

Doug: [00:18:17] Let let me just close this by saying if you don't know how to do this you've got to get help. This is where you gotta get help.

Doug: [00:18:24] You've got to either find a number person that you do or contact us at the ranch. We've got a project personnel thing where we'll look at your math and give you a review on it and help you with it. And it's really really popular because you know the team at the ranch has looked as done you know 20 or 30 thousand sales forecasts. They're really good at it and they can smell it when it's wrong. Plus they've got lookup tables and reference standards that you're just not going to have. So just contact them. A project to is what you want to ask for it's real simple not real expensive. Sure with this on it for now but it's it's it's designed to be an easy thing for you to get and then you've also got an independent source for your for your estimates. OK good. This is the Brain Brew Whisk(e)y Academy podcasts where we will take you behind the scenes so you can see what it takes to build a whisk(e)y distillery business.

Tripp: [00:19:23] Eureka ranch team led by Doug Hall are creating a craft whisk(e)y company with patented technology like has never been done before. All right.

Tripp: [00:19:38] Well what's go ahead and move on to the Brain Brew Whisk(e)y Academy and you you know there were some nuances last week that you talked about that whisk(e)y was a little bit more difficult when you're trying to put the numbers together for investors but it looks like he kind of had the same problem with math and whisk(e)y.

Doug: [00:19:56] Oh it's a disaster to do the math. It is so hard. I mean think about it every state province country different taxes and rules. The yield in a barrel. Will vary depending upon where it's been stored. To prove the Angel's Share what they talk about leaks in the dam things.

Doug: [00:20:16] The three tier system results in variable dips into who takes what profitability. Marketing distribution expenses capital expenses. I mean you start building and then the building inspector says I've thought about this. I've changed my view. You know what I mean and and barrel aging requires high capitalization to fund the inventory. And without this math it's almost impossible to make smart investment decisions on a craft distillery. The good news is is that when you do sort it out there are a number of clear pathways for making very good profits. OK so I thought what I do is I would explain if there's some approaches to doing this. This kind of three ways that you can make money as in a distillery. The first one is a retail focused distillery. In here you stay focused on create an experience for your customers. You're gonna be awesome at cocktails food and consumer service. And if the regulatory environment allows it some states allow you have two or three of these but you're basically a restaurant that happens to have a distillery and these things are cranking it. If you if you really state now if you don't care about food and the rest of stuff forget it don't try this but you're creating just a wonderful experience for people to come have some food have some drink and it works it works. And if you stay constrained you can make a decent income from this and do well.

Tripp: [00:21:49] Ok. OK.

Doug: [00:21:51] The second one is cost efficiently create while products and brands and in this case here what I would tell you to do is very clear which is by an eye still to make vodka and gin. And then work with our Brain Brew team to create your own line of two to four award winning whisk(e)y brands. Okay. Because this is gonna get you going with great product really fast.

Tripp: [00:22:15] Okay. So um look let me get some clarity on this because you're saying you get an ice still and start making vodka and gin and then you mentioned whisk(e)y. Sir I see a progression here. Are you saying that you need to make a vodka and gin first before you start making whisk(e)y it.

Doug: [00:22:33] No it just as it's craft spirits person for most craft spirits people getting going it just gives you a nice blend of stuff that you're making versus stuff that you're buying that's been customized just to your wood Bill and stuff. And so it just gets you in the game in a very inexpensive way. I mean literally for like 10 percent of the cost it would normally be. Okay. So it's. And it gets you some cash flow and learning okay.

Tripp: [00:23:00] So vodka and gin is just easier to make and lower overhead cost.

Doug: [00:23:06] No aging especially if you do it with an eye still. Okay. No computer controlled very simple goof proof they have incredibly good education. And we don't get anything from them might I just I'm just really a big fan of them. They've got. I mean that's what we use to. So I love them. And then you know you got to remember that when you're a craft distiller and you're going to market. So in this case here we're gonna go to market in our local market. And we're gonna do cycles of learning and until we get ourselves a winner in the city and you got to remember that that first flood of sales are souvenirs. People are buying souvenirs of their local whisk(e)y or whatever it is that you get. And so don't overthink this because you're going to have a surge and then it's gonna die. You got to get yourself in a repeat purchase where people are really buying it and drinking it.

Doug: [00:23:59] Now when you get this done go to another market. We are not a local legend. And the goal here is to validate that your brand and product has the potential to be scaled up. At this point you know you can use some initial investors to get started and at this point. You might do another round of funding because now you've got proof that not only in your market but in a market where you aren't there. You've got something reliable and reproducible that can go. And that's how you do it. That's that's how you do it. If you're going to do it with wild products and brands.

Tripp: [00:24:32] So vodka gin are lower cost things to do that you can do in the ice still so you can start to generate those products that generate some cash flow then you can start into the whisk(e)y portion.

Doug: [00:24:47] And I do them at the same time I that at the same time.

Tripp: [00:24:49] Ok. So I'm doing. So you have whisk(e)y vodka and gin and then you're saying they're souvenirs meaning that they're not good or what do you get.

Doug: [00:24:59] Mostly in the beginning. You just I just want to caution people because I talked to craft guys they go Oh I just opened it I'm selling as much as I can do. That's right. You're filling a whole bunch of people buying souvenirs of you. I don't want to hear about the first sale I want to hear about the repeat sales. Is your product awesome.

Doug: [00:25:19] And it probably won't be except I mean the stuff that you get from us will be awesome because we'll make sure it is we'll work with you to help you get it awesome.

Tripp: [00:25:26] Ok but it gives you a starting point. I guess I was always kind of under the impression and I know there. You know you guys work on you continually innovating the products that you have that you would want to get it to a certain point where you're kind of it's not a souvenir that you're getting a product where people want to continue to buy it.

Doug: [00:25:46] But you need money I need money. I got a ship OK ship. All right. All right.

Tripp: [00:25:53] And then that the third pathway here is something that you've actually talked about in the previous episode which is if you're going to age it the old fashioned way that it's going to cost you millions of dollars to do.

Doug: [00:26:09] Billions of dollars decades of time. And so if you've got a whole lot of money. You can deal with the big companies do to still your own whisk(e)y. Putting it away for years. First couple batches won't be very good but after about 10 to 30 years you'll be able to create a successful classic whisk(e)y company like the big corporate brands. So that's the other option. Now what you're not going to do is take your whisk(e)y distill it put it in little barrels put it in barrels with the inserts and have world class whisk(e)y it's just not going to happen. You're gonna have a new make spirit the taste Woody. And so you've got to decide are you're going to use something like us with time compression.

Doug: [00:26:51] Are you going to. Or are you going to stay in white spirits where you don't have to head to aging. Or are you going to buy a stock that can be extremely expensive just ridiculously expensive. Or are you going to just sit there and pray and let it go for a long time. OK. That's it. That's it.

Tripp: [00:27:10] Ok. Doug we haven't talked very much about the Brain Brew how it's come in and what's up with it today and what's been going on.

Doug: [00:27:21] We are in production. We are making it as fast as we possibly can. The DSP we have our license. And that's that's that's cranking. I am actually in route to Scotland right now to meet with Eddington who is our partner for a couple of products that we do for them and in discussions about expansion because the volume is 100 times bigger than we had anticipated it would be.

Doug: [00:27:47] And that's good and bad.

Doug: [00:27:50] 100 X in sales is is spectacular but it's also a very very stressful on our system and so and and we just tested some more new products some really high end high end stuff that was interested. Amazing. So the business is outstanding but we need to expand already and it sets the tail of Distillers is that we we tend to have not enough space we build just what we need. So we're about two way overbuild so that we can literally do a 10 another 10 x on our sales this year which are gonna be significant but we're we're building for another 10x increase in sales with automated bottling lines and stuff like that. So it's it's pretty exciting pretty crazy actually.

Tripp: [00:28:41] But you have talked about this and one of the previous episodes too about the scalability of things and having to kind of keep the quality as you go or you kind of step on yourself.

Doug: [00:28:55] Yeah. So we've got I mean the compression aging that kind stuff we're fine with all of that thing that's out there right now it's packaging.

Doug: [00:29:02] We have like most people a manual packaging system and we really need a full automated line to be able to do it at the speed that we do. It's a packaging issue right now. We're fine with capacity. We've got plenty of equipment and systems are really good in that case it's the packaging that's the problem. OK. All right. The other thing. The other thing Tripp that you're going to get and if you're thinking about starting one of these is. You need warehouse space. I mean even though we don't have to store barrels. When you start to get to the flow that we're at sending pallets out every week you need warehouse space for empty bottles filled bottles caps laid. I mean it's just amazing how much pallets. When you start selling pallets and pallets of product it just takes up room and you get forklifts and stuff. It's amazing.

Tripp: [00:29:52] So this is the reason that you're trying to get ahead of it with with additional space. Then yes. Yep. In anticipation of how you're growing presently.

Doug: [00:30:03] Yep.

Tripp: [00:30:04] Interesting. Ok well let's go to our craft cocktail recipe. The Rum Runner beach.

Doug: [00:30:11] Yes I thought I'm thinking summer. OK I'm ready. We have a brain brew beach bar in Prince Edward Island on the New London Bay where I have a home and I am I will go up there somewhere around June and I am a great fan of tiki drinks. So this summer you're gonna get a bunch of tiki drinks but tiki drinks instead of made with rum. I like to use our relativity which is the easy drinking whisk(e)y up in the Boston area and and so it just gives more depth and character to it. And so the rum running the beaches it's choosing ones I mean make it simple because after you've had a few and you've got to keep the measurements then you do it. And that is the truth.

Doug: [00:30:57] And so two ounces of Relativity easy drinking whisk(e)y.

Doug: [00:31:01] One ounce of coconut cream. Two ounces of pineapple juice.

Doug: [00:31:06] And an ounce of orange juice.

Doug: [00:31:08] So two whisk(e)y and to pineapple one coconut cream one OJ shake it with ice and then put some nutmeg sprinkle.

Doug: [00:31:17] Some nutmeg on top and umbrellas optional.

Tripp: [00:31:23] Okay. There's there's something missing from the rum runner beach ingredients Doug.

Doug: [00:31:29] I know.

Tripp: [00:31:34] I'm still looking to see where. Okay so you're place the rum here  Maybe a half to no use of the Relativity right. Well you got your mind on on summer already so I'm still at 50 degrees right now and rainy.

Tripp: [00:31:52] So. OK. Well that closes out our Brain Brew Whisk(e)y Academy final comments. Doug.

Doug: [00:32:02] Now I'm off to England and Scotland and all places beyond in Geneva as were we're doing things so I'll I'll have some stories for you when I get back of some some of these cool adventures I'm going to be seeing a whole lot of really cool people talking about trends but it is kind of crazy and that I'm kind of you know coming from the colonies over to the old country to teach them a little bit about whisk(e)y. So that's always humorous.

Tripp: [00:32:31] You probably didn't want it. Probably want to say that. Hopefully this episode will come out after your back. So.

Doug: [00:32:37] I tell them I tell them. I think my family came from Perth Scotland up on the north end of Scotland. And I always do it with a good sense of humor with them and I just say well I'm gonna give you a little lesson today in whisk(e)y. Of course they all laugh but got a lot of laughter just a ton of meetings.

Doug: [00:32:59] I mean I think I miss making 12 to 15 different meetings over basically a week's time and it should be exciting and it's going to be exciting to see because we're you know I've got some products with me as always kind of push the envelope on things and so it's gonna be interesting to see what people do and to learn. I've got some really cool people that I'm excited to get with because they're interested in helping us and being part of it and I'm interested to hear their ideas as to what they've got to be good.

Tripp: [00:33:30] So so these meetings are gonna be all over Scotland and England then. Is that.

Doug: [00:33:35] Yeah. Switzerland. And Switzerland. Oh I'm gonna be in Switzerland. Yeah yeah. We've got a potential thing in Geneva we may be doing. We may be bringing brain brew to Switzerland and so I'm having a meeting there with some people too so it's some Eureka! Ranch work I'm doing some of that too. So it's like kind of a hodgepodge of things and lots of miles of travel right.

Tripp: [00:34:02] Well a lot of planes and a lot of trains especially going around England and Scotland. All right. Very good. All right. Well have a safe trip. Doug and we look forward to talking to you and get back about your adventures.

Doug: [00:34:13] Thanks a bunch.

Tripp: [00:34:20] Because we appreciate you as a listener. We are offering for limited time for things a one hour abridged audio of the Driving Eureka! book. A subscription to the Driving Eureka! newsletter which contains weekly advice from Doug Hall on how to find filter and fast track big ideas and the newsletter. Has other offers that are not made public.

Tripp: [00:34:50] The Driving Eureka! prescription for success. You answer questions and we'll help you assess your ability to find filter and fast track big ideas and you get advice on how to grow your ability to innovate. and the last item. Access to a Doug Hall interview with a radio legend to get these offers. Go to w w w dot Doug Hall dot com forward slash. Podcast.

Tripp: [00:35:19] And don't forget to subscribe to the Driving Eureka! podcast on iTunes.

Driving Eureka! Newsletter #27 

Your Innovation Podcast. This is the 27th episode of the Driving Eureka! Podcast. Segment 1: 3 Secrets to getting investors to invest in your idea; Segment 2: The importance of clear communication to investors 3: Brain Brew Whisk(e)y Academy. Subscribe to learn how to Find Filter and Fast Track Big Ideas.

[00:00:01] The Driving Eureka! Podcast

[00:00:31] Episode #27 - 3 Secrets to Getting Investors to Invest in Your Idea

[00:01:07] Cincinnati Enquirer Article About the American Inventor Show

[00:01:42] Doug Hall - the Simon Cowell of Innovation

[00:05:55] YouTube Clips of Doug on TV

[00:06:32] Get Ideas for Real, Not Entertainment - A Method

[00:06:49] Make the Idea Real - Need Two Prototypes

[00:09:38] Must Have Numbers for Your Idea

[00:11:08] Selling Products Help Your Valuation

[00:11:50] Protect Invention Through Patents

[00:13:59] Driving Eureka! Book Segment - Communicating Your Idea

[00:17:50] Inside Companies Need to Think More Like Investors

[00:19:06] Brain Brew Whisk(e)y Academy

[00:19:43] Getting Investors for Your Whisk(e)y Business

[00:20:22] You can Use a DSP to Start Your Whiskey Business

[00:22:14] Get Help for Your Math

[00:23:52] Don't Say Your Protection is Your Brand

[00:27:00] $5,000 - 10,000 Start_up Investment

[00:29:46] Craft Cocktail Recipe - Orlando Rush

[00:30:31] Step 1

[00:30:40] Step 2

[00:30:46] Step 3

[00:31:01] Step 4

[00:33:06] Need Help? Call the Ranch 800-INVENTS

Tripp: [00:00:01] Welcome to the Driving Eureka! podcast where we share ideas and advice for helping you find filter and fast track big ideas.

Tripp: [00:00:12] Hi I'm Tripp advisor to global organizations on the Deming philosophy and host of the Deming Institute podcast.

Doug: [00:00:22] And I'm Doug Hall inventor speaker teacher and whisk(e)y maker. I'm also the founder of the Eureka ranch and author of the Driving Eureka! book.

Tripp: [00:00:31] This is the twenty seventh episode of the Driving Eureka! podcast and this week we're going to be talking about how to get investors for your products and services and Doug. As I was reading this newsletter a couple of things happened. One was first of all I'm a huge fan of Shark Tank. You know a lot of people watch that show apparently like five or six million people. But when I was doing that I thought you know I remember somebody telling me at one time that you were on TV and you did a show called American Inventor and I.

Tripp: [00:01:07] Yeah I know. And I looked it up so I googled it. You know that's that's what you do. So I googled it and I there's an interview that are not in it. Well I guess it's an article that the Cincinnati Enquirer did about you on this American Inventor show. And I didn't know it but Simon Cowell who does American Idol had started the show and there was a it's the whole thing is kind of an interesting experience. I'll put a link to it so people can can can read the article but I got to ask you about that experience. What was that experience like.

Doug: [00:01:42] Oh well yeah. So I played the role of Simon cow on this show with Peter Jones and others and it was a it was a Tripp I got to say. I did the first season and then begged off. I ended up doing another show in Canada called backyard inventor which is which was was London. So I've done TV stuff over the years different things. But but doing it with ABC it's pitch crazy it was it was like 20 hours of filming or 30 hours of some ridiculous number for every hour that you saw on TV it might've been 40 hours. It was just ridiculous. It's ridiculous ridiculous to do a network show. It was just crazy it but it was quite an adventure to see it in between. I've done a national radio show on public radio international.

Doug: [00:02:31] And so you know talking to inventors citizen inventors or professional inventors in that community. I mean since I mean for. Forty something years I've been doing inventing you know and for a long time almost 50 years now. And so it's my life it's my life. And I thought that this week that it would be. Interesting and I'm not sure why I thought of this. Something must have bumped into it but getting investors because people are always calling and they'll call me and they'll say hey do you want to invest in my idea. And I'm like Dude if you knew how many ideas I have that I can't get to. Why do I want to add your idea on top of the pile of ideas I've already got. You. Okay. And so but I thought as a service it would be useful to help because generally I've been very blessed over the years to have done well so that I've been able to sell fund my inventions and I've done games and toys all kinds of crazy stuff over the years and then license them and some taken to market myself and I thought that it would be good to talk about this how you do it because with the whisk(e)y company I did raise money because it's just it's just I mean just the equipment and everything is pretty significant and I also thought it would be good to get some investors to get their brains not just their money. And that's proven out to be incredibly helpful incredibly helpful. They've been to me as a result of that. So. So that was the plot here.

Tripp: [00:04:12] Well you know and and I I definitely get to get into what you think about that because every time I watch Shark Tank people will bring their ideas to table and some of them aren't even half baked so they're coming in they say well I've got this idea and I want five you know five million dollar saying the value of my company is. And then I went 10 percent of my company for two hundred thousand dollars and they haven't sold anything. They it's just an idea. And then you've got others that have done a pretty good job you know they've sold some things those types of things.

Doug: [00:04:46] Well I always wonder remember it's not it's not like a. Representative sample.

Tripp: [00:04:53] Mm hmm.

Doug: [00:04:53] So you have to remember this is not the news division. This is the entertainment division. Okay. So they have screened 40 people for every one you see. So they're purposely bringing in people that they know are gonna be a train wreck. So that is that is designed for entertainment purposes. Okay. Any connection to reality is coincidental on these shows.

Tripp: [00:05:20] That's an interesting comment. That's good to know. Okay. Well I know I understand it's entertainment. It just it's crazy. You know it's some of the half baked schemes that come out. But you're right. If it's entertainment that that is interesting to people like what the heck is that guy thinking by bringing that product or that idea to the table when it's it's not vetted by any means. So that's why I always wonder why. Well you know I tried to put myself in to look at what it would Doug would think when he's watching this show. And so your first reaction is this is entertainment. So now I know that it.

Doug: [00:05:55] It is it's well it's a long story. It's a long story. And if we go on YouTube you can find clips of me doing it and and being mean because I'd say it's impressive what you've done. But it's just not going to work. And because I was the role of Simon all you would hear me say is it's just not going to work for me. Doug being in a bad mood today is like it is what it is. Let's talk about how to get money to the real not the TV not the energy in the fake TV way.

Doug: [00:06:32] But the real way that you get real money from real people okay is you know I've been I've been doing this for a long time I've been selling ideas inside companies to help people get money inside companies I've been selling people for licensing non-profits.

Doug: [00:06:49] I mean you name it I've been I've been doing it for a long time and I've learned it's three things that are nearly foolproof when it comes to getting money. And number one is you've got to make it real. I mean don't don't talk to me about ideas ideas are worthless if you're not going to take some time to make what I call prototypes and there's two types of prototypes. If you haven't at least on that then I don't have any interest in hearing anything about what you do and nor does any investor. When I went out with the whisk(e)y I was able to put a bottle on the table and say so drink this. Okay. And you could taste it. And I made it real. We'll talk about more about whisk(e)y in the last segment of this podcast with regards to how do you do this associated with whisk(e)y. But there are two prototypes a concept prototype is ideally a piece of paper that presents your idea in the way you would want a possible customer or consumer to see it. And if you don't have the actual thing and use illustrations to help them see it as you envision it. In other words help me see what it is. And with today's with desktop publishing and computers it's nothing to do this. But help me see what the end state is going to be what you're going to do. The second thing is a functional prototype. Whatever is the magic whatever is the element in our case what I whisk(e)y it smoothness.

Doug: [00:08:15] And I don't care how ugly it is. But you need some kind of a demonstration to help them see feel and experience the value you vision what we do accelerator projects at the Ranch we just did one. I mean we're making it faking it finding a way to help people see feel and touch it in some way and it can be as ugly as anything. But something that brings it to life in a three dimensional form is the first love secret.

Tripp: [00:08:41] Ok. So. So when you're when you say these two things a concept prototype a functional prototype. Is that an And/or. Or is this an a a concept prototype plus a functional prototype that you need both.

Doug: [00:08:54] Yeah. You need both now and the reason I separate them is because. The ultimate prototype is a works like looks like. So it looks just like it is and it works like it is but that's really expensive. If you break it apart and you make a concept prototype just basically what what it would look like basically like a web page or a flyer or a direct mail piece or whatever it might be. That's easy to do. There's there's no excuses for not doing that. The functional prototype can be just part of it but it doesn't have to be pretty. It can be ugly but you've got to have both of you if you want to get one if you want to get money you've got to have both.

Tripp: [00:09:36] So what's the second one here.

Doug: [00:09:38] Second one is you've got to get the numbers if you want to invest their money. You gotta have if you want them to invest in money you've got to have numbers. And this includes customer research on your prototypes. So on your concept prototype how likely are people to buy it. How new and different is sales and cost forecasts already. Production and marketing investment needs no math no project. No math no project you've got to be out. You say I don't know it. Well same thing. We don't have to prototypes you don't have customers they can't take the Eureka ranch sign up for our online fundamentals course it teaches you that it teaches you this.

Doug: [00:10:16] And if you don't want to take the course and learn yourself just call us and we'll do a small simple project for you. But you gotta have the math. No math. No project. And don't tell me I can feel it. I can feel it's going to be big. I can say how big really big. What's really big. I don't know. You gotta have the math.

Tripp: [00:10:36] Okay. So when you and just a question from presenting to investors what do you need. Have sales then associate with it or just a a forecast of it. In other words. And again I go back to Shark Tank because they always ask you know how many. Only sales do you have to date or how much and sales have you done. Is it important to have sold a certain amount.

Doug: [00:11:00] Or Well if you want to increase your valuation. And and and that's a whole separate thing. We'll do a podcast on about valuation.

Tripp: [00:11:08] Ok.

Doug: [00:11:08] When you if you sell even one of the product your valuation goes up. So selling is valuable if you can but you can't always do that. But you can always have a sales forecast with the assumptions beside things as to how you got there. And there are ways to do this. Go find somebody at your local university or our business development group to help you do this. But there is a ways to do this that investors will accept. And if you don't call us. We've got some amazing tools that make it easy to do it. Okay got it man. Okay. I mean I love it when you can sell it but oftentimes you're not going to get that.

Tripp: [00:11:46] Okay. And then the third thing is to protect your invention.

Doug: [00:11:50] That's right. I don't want to invest in a generic thing that anybody can do. I mean it just wouldn't be any good. You've got to own something. And so you got to define it in writing how you can keep yourself from being copied. Don't tell me the key to this is we got to go fast. That's a loser strategy. That just means you need a lot of money.

Doug: [00:12:18] And it's very unlikely to work. And the best of all is it's patentable. I mean because a patent means your idea is not obvious to somebody with ordinary skill. And again if you don't know how to do a patent then learn learn sign up. We've got courses we can teach you this. Or we can do a little project for you. Now you can use trade secrets or a specialized supply chain or in a very few cases trademarks. If they're very clear distinct and real.

Doug: [00:12:50] But I got to tell you those things your value goes down significantly if you don't have a patent gotta have a patent and if you don't protect it. So there it is.

Doug: [00:13:01] You got to make it real. You got to have the numbers and you got to protect your invention. Have something John. If you have those three things investors interested now they may like or dislike your category because of their personal interests. But fundamentally that that's what you need and most inventors that I see are missing one or two of those three things.

Tripp: [00:13:28] Or all three. Yes. That's right. That's right.

Doug: [00:13:35] Sadly. Yes.

Tripp: [00:13:47] It's time now for the Driving Eureka! book segment with author and investor Doug Hall. All right.

Tripp: [00:13:59] Well let's go to the Driving Eureka! book segment and we're continuing this conversation about how you're communicating your idea to potential investors and and I know from the innovation engineering system that this is a big part of of what you teach.

Doug: [00:14:16] Yet. The segment this week is about how to clearly communicate your idea. To potential investors.

Doug: [00:14:23] And you know we teach create communicate commercialize is what the book talks about and people get excited about the create because it's about coming up with ideas and they like to commercialize the hands on doing. But the fact of the matter is is the ability to communicate your idea. Really clearly the people saying what's the problem your innovation addresses what's the promise you're gonna make to address the problem and how does your product make that product promise possible. What's the proof that it'll do it. Because when you have that clarity in which would be in your concept prototype then cause then investors get it they get what you're talking about. But if you don't have it that clear they end up saying I don't get it. And the worst thing of all is to have an investor or a boss inside a company say I just don't get it. I don't get it.

Doug: [00:15:20] And there is a ton of data associated with this in the Driving Eureka! book and also in my Meaningful Marketing book. There's a ton of data on things you can do to increase your odds of success when it comes to communicating your idea to investors.

Tripp: [00:15:40] And so from what you found I know I remember an earlier episode that we did Doug where we talked about that if you don't have the proof there's not really integrity in your product. As far as being able to communicate to anybody the value of what you're building are there certain things within the communicate that are more important to spend time on than others.

Doug: [00:16:07] No it's it's you got to have it. It's a system. It's a system problem. Promise proof. It's a system three legged stool. You got to have all three you know. And because people are going to change their behaviors to try your new wonderful gadget. Unless it addresses a problem that they have in their life. And so you've got to have a problem. Then you got to promise so much you address it. And then the proof is what's the actual product or service that you're offering.

Tripp: [00:16:38] And is there anything that you would do differently. You mentioned you know whether you're presenting to your boss or whether you're presenting to investors that you need for investors is there something that they look for that maybe isn't in this format.

Doug: [00:16:54] Investors will be more disciplined in looking for the math and the things that I'm talking about. OK. Sadly inside corporations they tend to be pretty bad at evaluating investments opportunities. So they'll tend to be softer and go along with stuff even though you don't have the information that you should have. Mm hmm. In companies we work with. With innovation and sharing what are the things we do is we put in a system. That requires that all investment decisions where you're investing the company's time energy and money have a real purpose. Have the definitions of the three things I just mentioned.

Tripp: [00:17:41] So you're in essence trying to really make the internal people and organizations and companies think like investors more.

Doug: [00:17:50] Think like smart investors. Yes because that's what they are their investors are investing the corporate money. And whether you be inside or outside your investing money in an idea to see a better return. It's the same thing it's no different which is why I tell people inside companies learn how to do it inside. If you can't it's I can't get anything done here. I can't get anything done here. Well if you can't sell it inside you're never going to be able to sell it outside because you've got a much more favorable audience in that they know you inside. Then if you're going outside. I mean I sold and put nine products on the market in 12 months my last year P&G and you know Procter Gamble is not exactly a no go for it. Wild crazy place but that's where I learned the discipline of doing exactly what I'm saying here. I mean this is no different than than how I how I've done it for years.

Doug: [00:18:45] And I know there's people right now whining they're whining about that. I didn't make it. I don't want to do the math. I don't like math. We'll get out then. Then just stop stop. Put your right your way and Go pour yourself a nice glass of whisk(e)y and Doug say that was nice. It's over.

Tripp: [00:19:06] Ok well I was going to I was going to ask you also about you know how you might look as an entrepreneur but in essence that's really this last section as far as Brain Brew Whisk(e)y Academy so. So let's just go ahead and move to that. This is the Brain Brew Whisk(e)y Academy podcasts where we will take you behind the scenes so you can see what it takes to build a whisk(e)y distillery business.

Tripp: [00:19:32] Eureka! Ranch team led by Doug Hall are creating a craft whisk(e)y company with patented technology like has never been done before.

Tripp: [00:19:43] So in this Brain Brew Whisk(e)y Academy let's talk about how we get investors for a whisk(e)y or spirits business.

Doug: [00:19:54] Ok so the three things make it real. Get the numbers protect your innovation. The first one making it real. This is where whisk(e)y guys and gals have a real disadvantage because homebrew for beer guys you can do homebrew and get yourself ready and get kind of a product and you can kind of show people and then scale up but we're spirits. Most areas of the world it's illegal to do that.

Doug: [00:20:22] Now there is what you can do is find a local craft distiller. And there's almost 2000 of them now so there's plenty of them around. Who has the spirit distilled spirits production licence a DSP it's called and do that. And that's what I did with Brain Brew in the beginning. I worked with a local distillery who they can register. They registered my company as as as doing products and I made products using their license and I paid them a fee to do this. And you can do it that way you know. In effect it was quote their product but it was you know that's how I can make prototypes and make products and do stuff and do research and and actually get some product to market. So until I got the funding to build my own place and get my own DSP.

Tripp: [00:21:14] So let me ask you a question Doug. At that point. Did you have to already apply for some type of a license in Ohio. Since you're located in Ohio. Because I I take that.

Doug: [00:21:24] No no. I did. I did it in Kentucky. I did. I just had this where I happened to in Kentucky. So I did it in Kentucky but I could have done it in Ohio just as well. But it was under his license. He paid the taxes and I mean I paid him for everything. But you know the idea was I was using him to do my research.

Tripp: [00:21:44] Ok. So does that mean that since you would have having it done in Kentucky that you couldn't sell in Ohio.

Doug: [00:21:52] Well I just. That's that's a whole separate issue to distribute. Well that. They're not connected to each other. Oh not that they're a whole separate thing.

Tripp: [00:22:01] Ok. All right. OK.

Tripp: [00:22:03] Anything else to say about making it real you say it's more difficult for whisk(e)y and getting a distiller is kind of the way to go. Anything else on that.

Doug: [00:22:14] No no. That's the key. So the second thing is to get the numbers and you got to do the math. And I got to tell you the math in this industry we'll talk more about this next week but math is really difficult really difficult in this in this industry. And so you're going to need help. You can't do it yourself. You can't do yourself. I got two people that you can contact. One is Scott Schiller who owns a company called Thoroughbred Spirits Group and they are really the craft spirits experts. They've helped dozens of distilleries go and they think they can help you do your math. And it's worth every penny you pay because of the wisdom that you're gonna get there. And second if if you don't want to do that then the Ranch team we we have a very cost efficient system that we can help you with your math as well. So but you're gonna have to go get help. You're gonna have to go get help on your math. Don't just show me pretty labels of what this brand is gonna be. Show me the math and how it's gonna work. I mean you know that's just got to have. I mean just no math no project.

Tripp: [00:23:19] And then protect your innovation.

Doug: [00:23:24] Yes and this is a bit tricky. You really I mean in our case we went the patent route because that's just what I believe because I'm worth more if I have patents. It's really simple. Valuation goes much higher like a 10x. So I do that now. Short of that protection is relative to the size of the market. You're thinking about. And so you can have something that's meaningfully unique.

Doug: [00:23:52] And you can protect in your town region or state. You know with local protection it could be your product. It could be the location the brand you know where you're tasting room is it has something that connects to the community. You can make that work on a regional basis but if your goal is to go big if you're really going to go big then you're going to have to have a patent or a truly secret recipe that can't be copied. Really secret recipe because of the raw materials or method that you've got. Don't try to say that your protection is your brand. That's only the case after you created it and spent millions of dollars to try to claim it at the start. It's just plain foolishness.

Tripp: [00:24:40] Cool. So. So I would guess that these challenges that you have with whisk(e)y that each product would say you even outside of whisk(e)y all have their own individual challenges associated with doing all three of these things. As far as me I get real and get the numbers that that there is there. Each one has a little nuance to it. When you're putting it together is there is there any kind of recommendations they have other than these three things. As far as somebody who says you know I really like whisk(e)y I want to do my own thing that you would suggest to him other than these three.

Doug: [00:25:18] No this is it. OK this is it. This is it. You've got to have a prototype. You've got to make it real. Concept prototype. You know what's your name. Package might be what's the product. You've got to have a product. You've got to have the math to say that people think you're ideas awesome relative to some standard plus revenue costs. I mean and it'll be rough in the beginning. I get that. But it's a starting place to start the conversation. And then you've got to have some protection that you actually own something that you actually own something that others can't just copy.

Doug: [00:25:52] Okay. And that may seem that may seem impossible for people. And I get that. Well then I'm just telling you don't whine to me if you don't have them. You know because when you have them investment is easy. I mean we got one round of funding right now.

Doug: [00:26:09] I'm actually on my way to to England where looks like we may have other investors. And I've got to decide kind of what we're gonna do if I'm going to take the money or not take the money I think in one case I'm going to and I don't know what the other will see.

Doug: [00:26:22] But you know it goes from impossible to easy when you have these three things. And if you don't know how to do it learn by the frickin book Driving Eureka! why that's the cheap way. Just buy the book and read it or or take the online fundamentals course. But you've got to have these things. I mean it's as simple as that.

Tripp: [00:26:45] So. So Doug as far as a as an individual and let's say a personal investment in order to kind of do these three things. What what what type of equity would they need in order to kind of start this process.

Doug: [00:27:00] Oh is to do this thing here. Yeah. I mean I think you're probably talking five thousand dollars OK. You know I think with five that five to ten thousand you could and we were ten you could make a really cool product. Some nice packaging. You get a provisional patent filed easily. It's not money. That's the issue here. It's time and thinking that you have to do OK. And investors can smell it. You forget the fact that you're pitching but they've seen it's like you know on these damn TV shows I've done. You know I've seen three or four thousand ideas and after a while you know you've just kind of seen them. And so they're benchmarking you versus the others to see you know what you've got together. And these are the three things that I've done the shows this is the stuff I was doing I would look to see did they make it real. I would look to see if they had the numbers you know that could make sense.

Doug: [00:27:58] And sometimes I could just look at it and I could reverse engineer the product and they tell me what it was going to sell for and I'm like There's no fricking way you can make money of that. You know the raw materials they're like Well it's a craft thing. We really crafted. Yeah. It's called craft your self to bankruptcy. You know because it's just the raw materials that just aren't going to make the math work in what you find with whisk(e)y and Scott Schiller will teach you if you want to start a whisk(e)y distillery you need three to five million dollars if you're going to do it the traditional way. That's the math. Don't leave me. He's got a spreadsheet. He'll show you if you're going to do traditional aging whisk(e)y you need three to five million dollars. Now the good news is is if you do it using our time compression and with I stills and some other stuff you can do it for probably a half million depending on the place that you do. So I mean you get choices you get choices.

Tripp: [00:28:47] Okay. So if they came to you and you basically need say five to ten thousand dollars and then you help them through these three steps it is kind of what catch.

Doug: [00:28:57] Actually that wouldn't all be to me. I mean we would just be doing you know turns out what parts they can do themselves. Okay. You know I'm assuming they're doing a bunch of the work so it might be you know I might be a thousand dollars for a concept test for them and a product concept and product test that we're doing just to get them independent data that can say that this product. How does it benchmark because I mean we've tested I don't know 500 to a thousand or some like some crazy number of whisk(e)y over the years or spirits and so we can tell you how your idea stacks up you know how good the concept of the product are. Okay so it might be just that or it might be a provisional provisionals are real cheap to do. You know might be helping you just do the math you know day so I mean it really depends on what what things they can do and what things they can't do.

Tripp: [00:29:46] Ok very good. Well let's go to your craft cocktail recipe. The Orlando rush so I know you just made it had a recent trip to Orlando is this something you ran into down there. Is this something you crafted.

Doug: [00:30:01] Now it's just it's just a riff on the Gold Rush. And I was in Orlando and there's a there was a link to an post that went up to sixty five thousand people of all things. It's this bizarre about a wonderful story from the rich top down there and I just saw it as a nod to them that would be fun to do Orlando. And and it's it's just it's a simple riff. It's it brings together some taste. It'll just really work together.

Doug: [00:30:31] Three quarters of an ounce of honey water and honey water is a 50/50 mix of water and honey. I usually use a wild honey.

Doug: [00:30:40] Three quarters of an ounce of orange juice and let's make it a Florida orange juice in this case.

Doug: [00:30:46] And then two ounces of our noble oak bourbon and then that's finished with Sherry oak staves and the sherry oak from Europe that's in there really goes nicely with orange and the honey. So this is really.

Doug: [00:31:01] And then we're gonna top it off with a splash of champagne or sparkling wine just to give it a little bit of sparkle. So think of it as like a mimosa gone gone funky in Uptown is what we're dealing with here.

Doug: [00:31:14] Ok. All right well that sounds like something I want to try. I like orange juice honey water and he thinks we don't like that.

Tripp: [00:31:23] Still haven't had your Noble Oak. When is it coming to Indiana. Doug.

Doug: [00:31:28] I don't know. Partners take care of that. Yes take care of that.

Tripp: [00:31:33] Okay. All right well at some point I want to actually try that one. So that will be a good thing and a good substitute again for the noble oak would might be what.

Doug: [00:31:45] Another craft bourbon. So find a local craft bourbon. Support the local craft people because if you want to make a craft cocktail Tripp Tripp is the deal. If you're using stuff that's sold which 80 percent of the bourbon or some crazy number like that is actually owned by either Japanese or European companies. I mean they're not actually even American or the big multinational corporations. And and if you use their products in it you know be it you know angels and read the beam stuff or bullied or any of those then you're not making a craft cocktail. You're making a corporate cocktail if you want to make a craft cocktail. You need to use craft whisk(e)y. Otherwise you're making a solid corporate cocktails because that wouldn't be reasonable would it to use our multinational conglomerates whisk(e)y and call it a craft cocktail that would be ridiculous.

Tripp: [00:32:42] That's heresy.

Tripp: [00:32:44] Ok. Any other comments. One thing we didn't talk about Doug was if somebody was you know would say you have an entrepreneur out there and they have nothing right now at this point. How how how best should they get in contact with. Do they call the Eureka! ranch or they Brain Brew brew. Where do they want to contact what you want to say.

Doug: [00:33:06] Just ranch. Just call a ranch 800INVENTS.

Doug: [00:33:10] I N VENTS  if you're in North America or just visit the Eureka ranch dot com Web site. That's easy way and we're all there because the brain brew our distilleries right there at the ranch on the grounds.

Tripp: [00:33:22] So OK very good. Any final comments about our.

Doug: [00:33:28] Oh you can do this. Folks you can do this. OK you can get money you can get ridiculous money for your things. I mean the stuff I've seen over the years funded is just amazing. But you got it.

Doug: [00:33:40] There's some fundamentals you've got to do and if you don't know how to do it learn about it learn about it get the booker or take a class A local class although some of them I'm a little scared on some of these business plan. You notice I didn't say business plan. I didn't say that it's because those things are you know you get these templates you do them and they just kind of worthless in the context of the business plan there's only three things I'm looking for I'm looking for the prototype. So I get it. I'm looking for the math and I'm looking for the protection. That's it.

Tripp: [00:34:09] Very good. OK. Good words of wisdom.

Tripp: [00:34:20] Because we appreciate you as a listener. We are offering for limited time for things a one hour abridged audio of the Driving Eureka! book. A subscription to the Driving Eureka! newsletter which contains weekly advice from Doug Hall on how to find filter and fast track big ideas and the newsletter.

Tripp: [00:34:44] Has other offers that are not made public.

Tripp: [00:34:49] The Driving Eureka! prescription for success. You answer questions and we'll help you assess your ability to find filter and fast track big ideas. and you get advice on how to grow your ability to innovate. and the last item. Access to a Doug Hall interview with a radio legend. to get these offers.

Tripp: [00:35:13] Go to w w w dot Doug Hall dot com forward slash podcast.

Tripp: [00:35:20] And don't forget to subscribe to the Driving Eureka! podcast on iTunes.

Driving Eureka! Newsletter #26 

Your Innovation Podcast. This is the 26th episode of the Driving Eureka! Podcast. Segment 1:Confront Reality & Build a Plan to DE-RISK your Innovation Project!; Segment 2: Reducing Risk by Understanding Variation 3: Brain Brew Whisk(e)y Academy.

Subscribe to learn how to Find Filter and Fast Track Big Ideas.

[00:00:01] The Driving Eureka! Podcast

[00:00:33] Episode 26 - Risk and Innovation

[00:01:09] Eureka! Ranch Project to De-risk Innovation

[00:03:18] Depending on Project - High and Low Risk

[00:04:14] Trailblazer to Help You with Existing Projects

[00:04:30] Ranch Can Help and Train You

[00:05:07] New Product with New Capabilities

[00:06:34] Must Understand Variation and the Causes of It to Reduce

[00:08:25] Eureka! Ranch Will Help with the Numbers

[00:09:31] Driving Eureka! Book Segment

[00:09:44] You Must Understand Variation in Management and Innovation

[00:11:59] Common Cause the Responsibility of Management; Special Cause Usually Felt by the Worker

[00:13:16] Run Experiments to Reduce Variation

[00:14:04] The Innovation Engineering System Helps Bring Data to Life Through Modeling

[00:18:28] Using the Weather as an Example

[00:21:04] Inherent Uncertainty Makes Life Exciting

[00:23:30] Brain Brew Whisk(e)y Academy

[00:23:54] Scalability and Risk

[00:24:17] Scaling in the Spirits Industry is a Problem

[00:25:30] Reduce Variation to Scale

[00:27:45] Quality Mindset has to Be Addressed at the Start

[00:29:32] Brain Brew Sweats Over the Wood

[00:29:45] Craft Cocktail Recipe - Strawberry Mint Julep

[00:30:13] Step 1

[00:30:15] Step 2

[00:30:17] Step 3

[00:30:21] Step 4

[00:30:22] Step 5

Tripp: [00:00:01] Welcome to the Driving Eureka! podcast. We share ideas and advice for helping you find filter and. fast track. big ideas.

Tripp: [00:00:14] Hi I'm Tripp Babbitt advisor to global organizations on the Deming philosophy and host of the Deming Institute podcast.

Doug: [00:00:22] And I'm Doug Hall inventor speaker teacher in whisk(e)y maker. I'm also the founder of the Eureka ranch and author of the Driving Eureka! book.

Tripp: [00:00:33] This is Episode 26 of the Driving Eureka! podcast and our subject or theme this week is risk and you're talking here Doug. Basically all three three sections with the Book segment and Brain Brew Whisk(e)y Academy two about reducing the risk and it looks like you've got a new way to do that. Tell us about how your de-risk if that's a word it is a word de-risking your innovation project.

Doug: [00:01:09] So this has been a lot of thinking this has been a lot of thinking by the Eureka ranch team. So I'm sharing what they're thinking about I didn't come up with this the thinking went along these lines. Okay. So people buy into the idea of innovation. But the idea of doing it is scary. So theoretically it's a good idea as a way to grow sales and profits. But I'm kind of scared that we might lose. And I don't want to fail the ranch team thought about this for a bit and they said OK. So we approach it as a system of interconnected parts. What if to D risk projects. We need to have a place to focus our energy because the problem with a system of interconnected parts is if you're not careful you play whack a mole. You grab one part and then another part another part another part and they never come together. And the team came to the conclusion that the project piano the profit and loss statement of what's going to be our revenue what are going to be the expenses what's the profits. And related to that what's the return on investment. That is the one document. Where the entire innovation system comes onto one piece of paper.

Doug: [00:02:23] Mm hmm. And we said Huh. And and in that document if we do the math in the way that we teach at the Eureka! Ranch with innovation engineering if we.

Doug: [00:02:38] Model the variance or risk. OK so risk is because a number could be higher could be low. There's this variance in that input. So the number of potential customers the trial rate awareness distribution repeat rates how much they're going to buy when they buy. They're gonna make a small purchase or a large purchase all of the different things that go into a forecast of sales.

Doug: [00:03:02] All the things go into cost raw materials packaging overhead manufacturing cost energy etc. etc. Each one of those numbers has a degree of risk associated with it some of them have small risk or small variance.

Doug: [00:03:18] Some of them have high risk high variance because we're really not sure what those are. And so by using the trailblazer software that the team has created which allows you to do basically a virtual introduction of your innovation basically a marketplace simulation where you can introduce that some 10000 times in in the marketplace you know virtually. It can predict five years of trial repeat and diffusion of innovation to the marketplace and it gives you the uncertainty so that now you can identify which of the three areas whether it's in revenue or in cost. That could cause the greatest impact greatest potential for you to not hit your targets or where's the areas where you could fail. So now you know where to focus some energy.

Doug: [00:04:14] And. Kind of cool kind of cool. You don't even do it and you do it with existing projects. So you start with a project that already exists. So you've been working on this project for a while. The team can come in and quickly teach you how to do it.

Doug: [00:04:30] Doug with the Ranch team would do it to begin with but then in time what happens is you take it over and your people get trained to be able to do it yourself. And suddenly we're bringing data. We talked a little while ago about the data was a great way to start to confront some of these risk things. We're dealing with this on a on a very factual type basis.

Tripp: [00:04:53] Is this an addition then to the software that you're already had or is it kind of a culmination of some of the things that were already in Trailblazer and then adding this component to it.

Doug: [00:05:07] It's really a combination. It's like we've been working on different parts of this from Delphi to rapid testing to a whole lot of different components and they've all now come together into this whole tapestry where you can you now have the ability do it we didn't have this a couple of years ago you couldn't do this. We didn't have the capability to do it. We couldn't do all the cost modeling we couldn't do those things. It's only in the last really two and really even last year that we finally got all of the components to make this possible do it. It's quite a bit of work but it's easy once you've got it automated with the software.

Tripp: [00:05:43] Ok. And this is going to help people then know OK here's kind of the range I guess of what your your sales forecast is going to be. This is what costs are associated with it because these are some of the inputs that you're putting into this. This P&L project P&L software and then it's can also tell you based on and this is the part I'm trying to understand a little bit better is going to tell me the amount of risk associated with those inputs.

Doug: [00:06:17] That's right. That's right. And what we're doing is basically looking at the standard deviation of each divided by the mean it's a general sense to see what's the relative impact that each one of those have. So we're looking at the standard deviation so we're going to model those.

Doug: [00:06:34] So when we do a consumer test you know you know you do a consumer test and you get a number. Well the truth is that no actually it's a number with a plus or minus with it. And sometimes there's wide agreement on your on your offering and sometimes it's not. We use that variance in the model. So best set. The crazy thing about this is sometimes the companies already have all this data but they're not looking at it in this way. Now there's usually some missing you know this is usually third to half that they don't have in this way which we have to get them but we show them how to do that but they've got a lot of this information to make it smarter but they've just not been taught you know statistics was not exactly a class that many people took for fun. You know it's just so the.

Tripp: [00:07:18] So if I have a product out there and we're we're working on it or doing different things but we we're still not sure what my piano is going to look like for this particular product. But basically you're going to come in with with the software say OK we're going to need the data for this this this do you have these things and if they have them you're going to input it and then if they don't you're gonna help them find the other things on the checklist of other.

Doug: [00:07:48] Do the P&L the assumptions and the P&L. We're gonna we're gonna help them get it. We're gonna show them some new ways that they've never done before and oftentimes on critical numbers what we'll do is we'll you know measure three times cut once to use the thing where we will will measure like the persuasion ability of the idea with three different methods. So to increase our confidence in the number that we got.

Tripp: [00:08:11] Ok. So you're going to take their existing numbers refine those even before it goes in based off of some of the things that you already know by some of the questions that you're going to ask them assessing with the numbers that they have and then help them get the ones that they don't.

Doug: [00:08:25] Yeah I mean we've literally as a team we've got the staff that we've got now we've got new lady Vicky who's with us now in between her Greg me and the others. I mean we've literally got hundreds and hundreds of thousands of sales forecasts that we've done probably. Our teams probably done more sales forecasts than any other innovation firm out there.

Doug: [00:08:46] And so we've got a lot of not only we have tools but but we've also got miles underneath us of of traveling through these things and then seeing what happened and then you know learning from that.

Tripp: [00:08:57] Ok. And with this tool is there some way if somebody is interested in it how is there a place we can send them for.

Doug: [00:09:08] Yeah I mean you can call if you're in the U.S. or Canada you can call 800 invents. INVENTS to reach the Ranch team or just visit Eurekaranch.com and connect with the folks there and they can help you with it.

Tripp: [00:09:31] It's time now for the Driving Eureka! book segment with author and inventor Doug Hall.

Tripp: [00:09:43] All right.

Tripp: [00:09:44] Well let's go to your book segment and reducing risk by understanding variation you know every time I see something on understand various. I get really excited and mere fact someone posted on LinkedIn last week. I a media firm. I can't remember which paper it was actually posted a control chart in an article. And I can't even remember what the subject was so excited to see that somebody had actually used it in a publication because it's one of the tools that that's so needed by every organization.

Tripp: [00:10:22] And unfortunately very few people really understand what variation is about and what it does. So when you're talking about reducing risk by understanding variation I got excited already. So tell me Tell me how you're using an understanding variation here.

Doug: [00:10:38] Ok. So. So people need to understand and this is a small excerpt from the book and there's this much more. We're going to get through here in a few minutes. But basically every measurement has this basic Deming has variation to it that's a plus or minus with it. However and this can be charted and systems have a regular variance that has some you know there's a certain level of raw material variance that causes variance in your product. I mean there's certain things that happen and there's two types of variance. There's common cause and special cause common cause are built into the system. So if you have a ruler that only measures two inches then you're going to have a pretty big variance when you're trying to estimate how many you know an eight or sixteenth or a 30 second to this. If you have a ruler that goes to 130 second you're gonna be much closer. You're gonna have less variance and you still can have variance because you're going to be looking at it and you're not going to quite see it the same if three people did it. And may see a little bit different but it can be smaller variance.

Tripp: [00:11:41] You know Doug there's just to interject here real quick here. Dr. Don Wheeler he calls that chunky data when you have large measures like that when when he can't go down to you know a 16th of an inch or a 32nd of an inch or even more versus you know measuring in one inch.

Doug: [00:11:59] I just thought it and it depends and it depends on the system in some cases that's fine. That's good enough on human systems because the variance is so high that may be enough. But so that's built into the system and only we have to change the system to change that the worker can't do anything about that. And then we have special cause which is an error by the employee. They didn't follow the procedures. They fell asleep. You know they just made a mistake they made a mistake and we need to first separate common costs from special costs because special cause you retrain the employee you do this need to learn how to do it or you have to fire them because there is some that disobeying men are following the process whatever it is. But usually you educate them and they find the common causes where we need to reduce the variance. And when it comes to the risk associated with innovations what we find is when we go back to the project piano and we're looking at that stuff is there will be variance in it. And so for example we'll find variance when we do modeling of how much what. What percentage of stores are going to take the offering. What percentage of consumers will be aware of you that you're doing it. What what amount of repeat purchase are you gonna get. We'll find these numbers sometimes have huge variance associated them because they're built into the systems that we do it.

Tripp: [00:13:16] And so you have to then start to break this down and break this down to reduce this variance in it by running experiments and by changing your offering so so to reduce the variance in it. And but understanding it the whole process starts with understanding there is variance in systems and and that the system can reduce the variance and for those of you say well you can't do this with innovation you're no different than the guy in makeup and you Pennsylvania told me a paper machine can't be done.

Doug: [00:13:43] They were wrong then and you're wrong now. I mean it's just reality. OK. And so we've got to reduce the variance in the in the process and do it but we've got to make sure that we're dealing with common cause not special cause because if you take a special cause and you're putting rules to prevent it you create a hopeless bureaucracy.

Tripp: [00:14:04] Before I met you I mean. I struggled with trying to understand how from an innovation standpoint I would be like everybody else I think. And I think it's probably something I spend a couple of minutes talking about. Is that it is mystifying when you're talking about innovation because it just seems like there's so many unknowns when you're working on something that's innovation. And it was the first time where you know when I attended your classes that I started to understand how to go about it. Everything from measuring whether a product is meaningfully unique which we've talked about in previous episodes to Generally in the forecast to some of the forecasting methodologies those types of things you take a couple of minutes and just talk about those things well.

Doug: [00:14:56] So we take the variance that we're dealing with and rather than ignore it. We model it and in fact I went at the National Institute of Standards and Technology with the Department of Commerce I went through a big review with a guy named Jim Philbin on forecasting and they had never really approved a forecasting system before for innovations. And he sat down and he said Doug. So they tell me you can tell me how much I'm going to sell. I said That's ridiculous.

Doug: [00:15:23] Of course I can't do that. He said What do you mean. I said because this variance in the inputs and if this variance in the inputs has to be variance in the output. He said So what you're saying is that variance is the fundamental key to being able to model it. I go yes. He looked to me says you're the first person who's ever understood that. Tell me more. Long story short after six months he ended up doing a two hour presentation on what we were doing because we were modeling that uncertainty as opposed to ignoring the uncertainty. And so all of our test systems are sales forecasting systems all of our methodologies take that information that is in that variance and use them to make the forecasts by running Monte Carlo simulations with it. So you start to see the dynamic range and this is truth. This is true. That variance is true.

Doug: [00:16:17] You know when we've got this in sometimes you get mad they say Doug but you're saying we can have results all over the place. I go and that's the truth. They go Well I don't like that. I said then we have to reduce the variation. It's the same as manufacturing it's no different. This is no different than reducing the variance of raw materials to make a factory run better and reducing the variance to make sure our innovations hit their numbers. It's the same thing folks. It's not any different. It's exactly the same. You just didn't have the tools and techniques and frankly in damage time you couldn't do them. I mean because you couldn't you couldn't do the modelling today with the computers. We can do 10000 simulations in a microsecond and we can run permutations and we can run simulations that literally five years ago you couldn't do. I mean what we were doing five years ago was horrifically compared to what we can do now. There are new tools that you're just not even aware of.

Tripp: [00:17:12] You know it's interesting when I was taking your class there. I was also reading a book that a friend had given me and I called the Signal and the Noise. It's a book by Nate Silver who's the statistician that does 538. Sure I know. Yeah. So. So he had when I was reading that I was also reading the chapter about how they forecast weather. And I made so many comparisons associated with some of the things that you were talking about that hey this this you know even in weather what's take the weather first. This one input if it changes just a little bit it could change a lot of things. But knowing that is part of the knowledge that you guys bring to the table from my standpoint is you know which ones are kind of. OK we got to watch this one or we need to dig in deeper to this one because we know that it's really going to affect that particular project or product that someone is working on and I thought I said and I was it just now sometimes you were set up with things that are very similar. But I I was fascinating to me how you guys had gone about it and how really well it followed.

Doug: [00:18:28] Yeah. And when we sit with finance department folks who generally get this pretty quickly one of the things becomes do you want to air on the side of false positives or false negatives. And so it becomes more sophisticated. So let's take the weather example. You know when the weatherman says 70 percent chance of rain. People read that and go it's going to rain. OK. The fact of the matter is is three out of 10 times it shouldn't rain for the forecast to be right.

Doug: [00:18:57] That's just the way it works now as it turns out the weather stations the TV stations have learned this and the newscasts. And so what they do is they increase the odds. So if you look at the government forecast which you can get a stream for in this Apps for it will tell you the true odds. But what the weather people do for snow and for rain and storms is they increase the odds of bad things happening early because when it doesn't happen you feel good.

Doug: [00:19:34] So if you're a weather man just take the odds and had 10 points and you've got a better chance of people liking your forecast because their memory. They will remember when you said it wouldn't rain. Did they get mad. But when it's the other way around they're happy. So there's a bias. If you read about it it's hilarious. There is a bias in the weather forecast you're given and you can look it up yourself. It's it's it's pretty funny. It's pretty funny.

Tripp: [00:20:05] I got it. I got to tell the story Doug I can't remember it's probably it's probably going over 10 years ago but you know big event here in Indianapolis is obviously the Indianapolis 500 which happens in the end of May every year and one year. There was a there was a weather person that was on there and saying it's going to rain 100 percent. It's definitely going to rain tomorrow. You know just be prepared you know I wouldn't even go out there. It didn't rain at all that day. I never saw that that weather caster again. Now I haven't seen that person on that channel. I haven't seen it on that person on any other channel but it was just it was so funny that this person was so and it looked bleak. I mean it was it had been raining and everything but the next day came out it was a little cloudy in the morning and the sun came out and everything went on time and everything. Never saw that person again.

Doug: [00:21:04] I'll tell you that this this idea of variance is part of what makes life exciting. Is this an inherent uncertainty. The inherent uncertainty of these things and when you become comfortable. With uncertainty and you understand that this variance in things and you learn how to confront this manage it reduce it. Then it suddenly becomes a lot easier to do things because you don't get. You don't get as frustrated and I mean I don't know. It's just it's just so much better to know this. And because otherwise you're like I can't believe this happened. How could this happen. Well of course it could have happened. You know I have never found a team when an innovation has failed and they have me do a forensic.

Doug: [00:22:02] So we do these forensics which I am beginning to hate doing them because you know where they say well this has failed it should have succeeded I don't know what happened something's wrong. And so you start to go in to look at it and then it's like a search for the guilty and it just becomes these nasty things. But every time you do it. Every single time and I've been doing these for over 30 years every time I do one of these we find that there are some fundamental systemic flaws in the companies systems that are the root cause of it and has nothing to do with this project. This project just happened to hit at the low end of the control chart on two or three variables this time versus if they did it again it might hit on the higher end of the control chart. There's just so much variance in the system. I did it once for a guy I took the same product that had been introduced in like 12 different countries and we did the forecasts for them and we modelled the variance and the senior executive in charge the president. He looked at the results he said. So what you're telling me is when they come in and tell me a number I'd be just as good just throwing a dart as the number they're giving me I said Sir Yes you're absolutely right. I said your system is so far out of control. It is a random walk each time. If the idea is not what matters here it's the different elements of the system when they kick in the sales and distribution system. You've got huge variance in that very good.

Tripp: [00:23:22] Well a lot of fun unless you're a weather caster it may not be so much fun.

Tripp: [00:23:30] This is the Brain Brew Whisk(e)y Academy podcasts where we will take you behind the scenes so you can see what it takes to build a whisk(e)y distillery business.

Tripp: [00:23:41] Eureka ranch team led by Doug Hall are creating a craft whisk(e)y company with patented technology like has never been done before.

Tripp: [00:23:54] Ok well let's move to the Brain Brew Whisk(e)y Academy Doug you went to Orlando. My you went to Disney World my favorite place in the world. I did when I read this section have little bit trouble understanding how the scalability of things relates the risk or maybe it doesn't. And you just like talking about scalability.

Doug: [00:24:17] Well so so the issue was as I was at the Wine and Spirits Wholesalers Association conference and they had a brand battle seven entrepreneurs camera to pitch their product. And when I went through my notes from the event I was I was surprised that every single person was ask a variation of Do you have capacity can you scale. Interesting. It's been the same question I've got with rainbows. I've met with potential customers. Can you scale. Do you have volume and this constraint on capacity is one of the greatest various craft spirits success. And if we're not careful what happens is this. We spend so much time getting started. We don't take the time to put in place systems to reduce variation in our process. And so as a result when we start to scale the system quality just becomes a disaster. I mean it's typical if you're doing hundreds of cases and then thousands of cases and then tens of thousands of cases which every step change what happens is is that you know when you're small you can do work arounds. Oh that's a little off here I'll just add here. This is a law for justice here. But as you get bigger and bigger you can't do that.

Doug: [00:25:30] I mean the system is just cranking and running and so on so that whereas we're getting more scale to the thing. And so in order for you to get scalability you've got to reduce variance and end and all of that variance is the risk that you're not going to be able to scale. I mean it's just all connected. And so those small variances that don't matter when you small matter a lot when you're big. And so it's easier to build this discipline in when you're small than when you're large. I mean we went twenty eighteen 10 times what we're supposed to do 20 19 is 10 times what we originally supposed to do. That's right we're a thousand hundred times greater today than we were thought to be in 20 19 thankfully thankfully we worked on variants early on we didn't have to bring it in today. And so we've been able to scale still having to deal with challenges but we've been able to scale because we've reduced that variance. We're much tighter on our wood were tighter on our spirit. I mean our equipment runs that you know tenth of a piece I mean very tight tolerances on everything that we're doing so that we can scale.

Tripp: [00:26:48] You know this is true for almost every industry I can think of there's stress tests in software where you you've tested the software at working fine and then all of a sudden instead of you know 200 claims are coming through the system let's say in a health care environment now you've got a million claims coming through in a day and it just breaks the breaks the code basically.

Doug: [00:27:15] That's right.

Tripp: [00:27:15] And the same thing with equipment. You know I've seen it in contact centers where they have equipment set up and they've tested it. And then all of a sudden the real call and real volume starts to come in it just just explode.

Tripp: [00:27:28] So you're so you have the same issues then in a distillery in that you have these in essence bottlenecks that have to be cleared out as you go and I guess your point here Doug is that you need to do it as as your moving forward is that kind of your message here.

Doug: [00:27:45] That's right. You got to get the mindset in at the start. You got it because it's very hard when people have been winging it. It's very hard to suddenly turn around and say OK now we need to put some discipline into the decisions that we're making and we need to reduce the variance as we're going along. It's very hard to add that later. And so you need to get that in at the start. You need to get that in at the start because otherwise you're just going to be frustrated. You're gonna be frustrated with it.

Tripp: [00:28:14] So what you just. Just out of curiosity when you read these. Why why were they asking. They were asking about capacity at this conference and scale because it's such a big problem in the industry then.

Doug: [00:28:27] It's a total disaster. It's a it's a disaster. It's an absolute disaster everywhere. People can't you can't scale you can't get larger and so it just because it causes massive problems. And when they do scale the quality goes all over the place or they just literally don't have capacity. They just don't have the capacity to do it.

Tripp: [00:28:50] This also brings up and I know we talked about this before but every time I see Joe Girgash's name I think of it which is your you try these different words that you're you're putting in and I always kind of blows my mind from a standpoint of wood and variation being so great and how you guys are able to control that.

Doug: [00:29:15] I mean that is our focus. I mean that that is literally our focus is to reduce that variation in that because the wood is where all the magic happens. And that's where all the magic happens.

Tripp: [00:29:28] Is that where you get most of your variation from then.

Doug: [00:29:32] When it actually happens all the way through the process. But but the but the one that we are at. We sweat more than anything else is. I mean that's where the biggest value add happens is is in the wood.

Tripp: [00:29:45] Ok. All right well let's go to your craft cocktail recipe. The straw Berry mint julep. Kind of on a julep roll. This is our third Julep up recipe that we've had in Brain Brew Whisk(e)y Academy.

Tripp: [00:29:59] We had the jalepeno and then we had your basic in your face mint julep that you talked about last week. So what's the strawberry mint julep. Is this something you made up.

Doug: [00:30:09] Yeah. Just this still a bit of fun. So a basic julep you know.

Doug: [00:30:13] Five leaves a mint.

Doug: [00:30:15] A teaspoon of simple syrup.

Doug: [00:30:17] Three sliced strawberries muddle it really firmly.

Doug: [00:30:21] Add some ice crushed if you got it.

Doug: [00:30:22] Two ounces a noble oak stir and enjoy maybe with a strawberry is a garnish and it's just it's kind of a fun way to open it up tones down the mint a little bit strawberry and mint play well together very well together and so it's just a perfect summer kind of spring summer refresher at a little bit of spring champagne sparkling wine to it and it becomes even more magnificent.

Tripp: [00:30:48] Ok so are you doing something with the sliced strawberries or are you just adding them.

Tripp: [00:30:53] I'm muddling them. OK. I was I wasn't sure because I knew you didn't have the medal simple syrup but. So when I saw that on there I want to make sure that that that was being muddled also comes like a another interesting drink to try and you've got your noble bourbon in there again. All right. Very good. Any final comments for our Brain Brew Whisk(e)y Academy.

Doug: [00:31:15] No it's just it's just folks when you get into this kind of stuff you've got to look at the variation.

Doug: [00:31:23] Look at the variation associated with things. I mean that's the whole key to this whole process and the more you get to understand that variation and make it your friend instead of your enemy sort of being a victim to it the more successful and the more fun you're going to have.

Tripp: [00:31:38] Well that concludes this week's Brain Brew Whisk(e)y Academy. Thanks Doug.

Doug: [00:31:43] Thanks.

Tripp: [00:31:48] Because we appreciate you as a listener. We are offering for limited time for things a 1 hour abridged audio of the Driving Eureka! book. A subscription to the Driving Eureka! newsletter which contains weekly advice from Doug Hall on how to find filter and fast. track big ideas.

Tripp: [00:32:10] And the newsletter has other offers that are not paid public. The Driving Eureka! prescription for success. You answer questions and we'll help you assess your ability to find filter and fast track big ideas and you get advice on how to grow your ability to innovate. And the last item. Access to a Doug Hall interview with a radio legend. to get these offers. Go to w w w dot Doug Hall dot com forward slash. podcast.

Tripp: [00:32:48] And don't forget to subscribe to the Driving Eureka! podcast on iTunes.

Driving Eureka! Newsletter #25

Your Innovation Podcast. This is the 25th episode of the Driving Eureka! Podcast. Segment 1: How Leadership can learn to Trust Their teams; Segment 2: How to create an innovation culture; Segment 3: Brain Brew Whisk(e)y Academy.

Subscribe to learn how to Find Filter and Fast Track Big Ideas.

[00:00:01] The Driving Eureka! Podcast

[00:00:33] Episode #25 - The Theme is Trust

[00:01:24] Why Don't Executives Trust Their Teams?

[00:02:43] Small Ideas are NOT a substitute for Big Ideas!

[00:03:49] Cost Cutting is a Dead End

[00:05:06] Executives/Leaders Lack a System (Method) to Innovate

[00:07:11] You Have to Do Innovation - End the Talk

[00:09:39] Must Find a Way to Win

[00:10:32] The Innovation Gurus Don't Know How to Ship

[00:12:36] Make it a REAL

[00:14:54] Driving Eureka! Book Segment - Absolute Conviction

[00:15:22] Absolute Conviction - Bill Conway, Nashua Corporation

[00:19:59] Brain Brew Whisk(e)y Academy

[00:20:23] Absolute Trust Come from Your Product, Not Marketing

[00:22:17] Craft Beer Brought Something New and Better

[00:25:33] Some Whisk(e)ys are Just Bad

[00:26:35] Whiskey Companies Spend too Much Time on Marketing and Distilling

[00:27:27] Focus on the Wood!!

[00:28:55] Craft Cocktail Recipe - The Mint Julep

[00:29:08] The Mint Julep - The Kentucky Derby Drink

[00:29:59] Making Mint Juleps Requires Firm Muddling

[00:30:29] Step 1

[00:30:33] Step 2

[00:30:37] Step 3

[00:30:39] Step 4

Tripp: [00:00:01] Welcome to the Driving Eureka! podcast where we share ideas and advice for helping you find filter and. Fast Track Big Ideas. Hi I'm Tripp Babbitt advisor to global organizations on the Deming philosophy and host of the Deming Institute podcast.

Doug: [00:00:23] And I'm Doug Hall inventor speaker teacher and whiskey maker. I'm also the founder of the Eureka ranch and author of the Driving Eureka! book.

Tripp: [00:00:33] This is Episode 25 of the driving Eureka podcast. You can learn more about this episode by reading Doug Hall's newsletter at Doug Hall dot com in the menu. You can see newsletter. Click on it and you can subscribe. So Doug trust this week it's funny I. I've just been interviewing some folks for a neuroscience podcast and and this is one of the big topics especially around neuroscience and how people gain trust in an organization some of the things that happen and how the brain works. That's kind of when we've talked we've touched upon some of these things before about fight fight or flight type of scenario for people when their fear strikes them.

Tripp: [00:01:24] And we've definitely talked about fear so in trust what you're talking about this week seems to be how or how leadership and trust and trusting their team. So let's get into this a little bit. Talk to me about what you're seeing in leadership and why they don't trust their teams.

Doug: [00:01:48] Well I think when you get to the root cause you know I've been doing this for a long time almost 50 years from when I did my first invention in years of consulting and you know the premise that you'd innovate so to grow sales and profits people buy into that concept.

Doug: [00:02:09] But at the root cause of why leaders don't sort of put their their weight behind it their time energy and money behind it. I think at the root cause of the issue is they don't trust that their people can actually innovate successfully that they can do it. And in this lack of trust in their people doing it creates a chain reaction of bad behaviors you know because they don't trust their teams that they can do big ideas. They say well let's just do some small ideas.

Doug: [00:02:43] The problem is the small ideas are you know not enough of a change to matter. And so they don't have enough wow factor. So the small ideas fail because small ideas fail. You know people think well if I do a small idea it's a higher odds of success. The answer is No that's not what the facts say. It's just a smaller loss.

Doug: [00:03:02] When you do them but but the odds are about the same actually. And when they fail on the easy ideas they lose confidence. So then they eventually turn around they go let's go get a guru let's get a design blah blah blah whatever to come do it. And they come up with these fancy ideas a lot of marketing smoke and mirrors but not being connected to the reality of how the actual service is delivered or the nonprofit or the product or whatever it is is delivered. Those ideas soon fail. And so management turning around and saying OK we can't do big ideas we can't do small ideas the guru ideas don't work. Clearly we can't innovate or our industry can't innovate or whatever dimension whatever excuse they wrap themselves up in.

Doug: [00:03:49] So then they go to the what what seems to be the practical and prudent thing to do which is to cost cut their way to growth and this you know initially works but it soon hits diminishing returns until soon they're replaced and the cycle begins again. I mean this is this is the way this is the way it happens. And it started because the leader didn't trust in the ability of the company teams to innovate.

Tripp: [00:04:18] You know this there's a lot to unpack here. First of all because one of the things that I find in working with leadership teams is usually that's a reflection of themselves. In other words they don't trust themselves. They don't have from a from a leadership perspective. When you start digging into it you know these are people that they hired into their system and then to kind of back off and not trust their teams. Really is a reflection on that leadership team as far as being able to do it.

Doug: [00:04:54] I'm going to give them more sympathy I'm going to have more sympathy I'm going to have a lot more sympathy for them than that. Okay. I just don't think that they've ever been taught a way to do it.

Tripp: [00:05:05] That I would agree with.

Doug: [00:05:06] And so you know ignorance of how to do it. Ignorance of a discipline system ignorance of a discipline system of investing in the systems we have all these huge systems for finances we have always used some systems now for manufacturing but we don't have real systems in place. We have a lot of judgments you know. Well the you know the criteria things have to hit but the systems to enable innovation. Until we started with innovation engineering and started to put together the courses I mean we're really the first course ever that teaches you how to create communicate and commercialize ideas. There's no other field of study that does that. I mean this being built to do design thinking at the front end this people that do engineering but in this people who do marketing and finance but to take you from idea to the market it's the first integrated system that teaches you a mindset which is all based on applying the work of Dr. W. Edwards Deming of systems thinking approaching innovation as a system of interconnected parts just as he changed manufacturing from a departmental silos to a system of interconnected parts.

Doug: [00:06:23] And people can do this but they need to be trained and they need to learn they need to learn and and so what we're finding is as we go in and we talk this and we say you need to learn they go. I got it. And they say well how can we learn. Well we've got to we've got a course you can take it on campus for credit you can take it off campus you can go online you can do in person I've got books I've got a 10 hour audio book driving record you can listen to allow Well no no no no. That seems like an awful lot. What we're finding is under the leadership of Maggie Nichols the CEO of the ranch is we're finding that the best way for them to build trust is to do what we call a Eureka and Benning project in collaboration with their people.

Doug: [00:07:11] In other words walk the talk with them all the talking's not going to do it. You've got to actually get your hands on and do it. And when they can see that their teams can actually create communicate and start the process of accelerating it to market faster than ever before they then start to build the trust so they don't trust because they've never seen it happen before but it can't happen because there's no method by which to do it. And so you're in this crazy do loop and so you have to just get started and you have to just get a proof of concept that we can do it. You just have to do it. Now I mean nobody would talk no more debate. Just do it as our friends at Nike say.

Tripp: [00:07:53] So Doug when when you. I agree. I if you have method that that certainly breeds trust in an organization but then you know I also look at and curious as to your view on this where you have an organization that has you know we talked about fear before. You've got you know they're almost there so command and control within their organization. You know they don't they don't inquire about anything everything is about advocacy.

Tripp: [00:08:22] You know you got to do it this way and make sure they're following the process type of thing versus I watched actually a documentary last night on Pixar where you know John Lasseter had these these teams and they're putting together Toy Story and they're putting together all these different movies and then they did after they've had you know for great success successful movies with Bug's Life and took Toy Story and Monsters Inc. They are. Yeah. They bring in a guy named David de that John Lasseter and worked before. And instead of people going oh no we know everything because we've done it. They cut. They embrace this guy as he comes in but with new thinking. So you get it. So from my first look I see this almost spectrum of things. For an organization that really you know so command and control so much fear little.

Doug: [00:09:18] Yeah. But how do you get of by Tripp. How are you going to stop that. How are you going to stop.

Tripp: [00:09:21] Well that's why that's my question.

Doug: [00:09:22] You're not going to stop it. So you have to. I think you have to ignore all of that because you can quickly get in. And I you. I mean of course the organization screwed up. Of course the system screwed up. Of course it is. It's a hopeless bureaucracy. That's why they're in trouble.

Doug: [00:09:39] Ok. But the only thing I can think of is you have to get you have to run to daylight. You've got to find them a way that they can win. And so you know just like we enable an individual in their sphere of influence you've got to enable that they can win.

Doug: [00:09:56] And I'm going to I'll be. I'm not in delusion land here. You've been doing it as many times as I've done. I'm not going to tell you that. You do what idea a miracle happens and the good do it. No sometimes you got to do it a dozen times before they believe because they'll come up. OK. Well yeah. You did it this time but that was because of this. A fine. OK. Let's do it again OK. Do it again. We do it again. Do it again. Nobody is against innovation at the heart of hearts. Nobody's against it. They're not against the idea of innovating what they're against is actually doing it because they don't know how. And they need to be done.

Doug: [00:10:32] And it's not enough to teach them it's not enough to preach them it's not enough to cajole them. It's not enough to debate it. You got to get your hands dirty and do it. And the problem I have with most innovation gurus is they don't know how to ship. They don't know how to ship. They've never gone from idea to market.

Doug: [00:10:50] And unless you've done that a dozen times then it's very very hard for you to sympathize with the operations people the finance people the sales people and all the rest of it of all of the things we don't need more frickin ideas. We need people that know how to ship and play the tradeoffs and that and the gyrations that have to happen.

Doug: [00:11:11] I mean it's really hard you know which is why I love having the whisky business because it makes it so real even to the ranch team who is used to shipping because we ship software and education courses. I mean we have to go to market. We have customers and people that we have to ship those products so they get it in a you know and in the New Economy way digital and training and that kind of stuff.

Doug: [00:11:36] But shipping physical product and getting approval from the TTB and then the insurance companies and then oh yeah head blows up. OK. But you gotta learn how to deal with it.

Doug: [00:11:49] Keeping an operations plant running maintaining quality reducing variation in the process. I mean this is the stuff that successful entrepreneurs. The devil's in the details. And and when we get people engaged this way that's when they start to trust that's when they start to trust because then they can see the organization engaged and that's the only way that's the only way. No amount of preaching is going to do it. No amount of teaching no four day seminar. It's not going to make the change or it will make it with about 10 or 15 percent.

Doug: [00:12:25] If you look at the diffusion of innovation curves 10 to 15 percent you can get to the vast majority you're going to get nothing.

Tripp: [00:12:32] So. So that the emphasis on the doing.

Doug: [00:12:36] You've got to make it real. If it if you don't make it real and the problem is is that making it real it's inherently risky. I mean to the outside person if you're a consultant or an internal person it's like well we failed at this for 10 years. And what makes you think you can solve it.

Doug: [00:12:53] Well the reality is is that we have methods that make a significant difference in getting you to look at ideas and see ideas and accelerate them differently than otherwise. We can test faster cheaper we can fail faster. We can inspire more. I mean there are other methods.

Doug: [00:13:11] I mean I'll never forget the chief marketing officer of one of the biggest companies in America brought his team to the Eureka! Ranch and we were we were talking and and we were out at the bar that we have at the ranch the Brain Brew Bar and that.

Doug: [00:13:31] And he said he said Doug okay I got to tell you the truth. He said the reason I came here this week is because management's decided to shut this down. And I was like Well let's see if the ranch can do it. If they can't do it there's nothing so I came here. We've already got a death sentence. And this was the last gasp. And the team doesn't know it. I said I said So what do you think. He says I'm going back to fight for it he says we can save this thing.

Doug: [00:14:04] And sure enough they did. They saved the thing they made an acquisition and it's a big business right now. Confidentiality prevents me from saying the name but it's a it's a one that people would know because we were like the last gasp because when we do it and and you know you're kind of annoyed that he would do such a thing. But at the same time you're proud that he you know he said if he failed I was OK with it because we like geez I don't like it when somebody says I'm OK if you fail it irritates me. Had that happen again recently on another one. Doug it's OK if it doesn't work it's like what mean it's OK if it doesn't work that's ok ok with me.

Tripp: [00:14:43] Yeah. Now that's that's good.

Tripp: [00:14:54] It's time now for the Driving Eureka! book segment with author and inventor Doug Hall Well let's continue this conversation in the driving Eureka book segment where you're talking about creating an innovation culture. And your lesson four as you put in your newsletter is absolute conviction.

Doug: [00:15:22] Yeah yeah. So this came from an interview with Bill Conway the former CEO of National Corporation who was the first Fortune 500 leader to embrace the system thinking of Deming and as I sat with him and talked you got a real sense of absolute conviction. He was 84 at the time. He's since passed in his absolute belief in the power of Systems Thinking was still clear and very persuasive.

Doug: [00:15:53] He he said you can't dip your toe in. You got to jump all the way and you got to do it. You can't you can't hold back. And so when we get those leaders to that point where they believe there's a certain point where I have a conversation I said OK now it's time to go all in. Now it's time to go Alan now is the time. Let's go and some are ready some or not. But when the senior leader says we're doing it and that's it it creates an alignment and it creates a belief. And it has an echo effect that energizes the organization. So in the beginning you got a few pioneers who were doing something amazing and they're fighting against the world. And then you get more people through the system you know production manufacturing all that believing sales believing in it. And as you get to that belief you get to a certain tipping point and then the leader to create a culture if you want this to go from an episodic event to a cultural dimension the leader has to have absolute conviction that that makes sense.

Tripp: [00:16:59] Well what what is a certain inflection point then where they have to be all in. I mean where do you look for for that or is it different by organization.

Doug: [00:17:09] Well it is different by organization and some of them have lead times that are massive you know I mean I'm working on it with a drug company right now and we're looking at a clinical for an experimental thing that we think is pretty cool. Well this is going to be 18 months to do the clinical study. OK. So this has got a long burden to it. You know and while we can have some indications and we're optimistic it's an 18 month burn to see if we can win in the clinical. So it's a it's going to take a lot longer. In other cases you can do it quicker.

Tripp: [00:17:41] But but getting the buy in what what are the criteria then that that where you're going to have to say OK it's time to be all and I guess I'm trying to look for a little bit more of a meaning around what you mean by all in what.

Doug: [00:17:54] There's an urgency when the teams are starting to say OK we've compartmentalize it so people will compartmentalize they'll say OK you people do the innovation you people don't innovate or I'll say you don't think anymore OK. You just keep doing what you're doing. And suddenly the people that are innovating you know are running into friction and friction and friction. And the other people are saying well why don't we get to innovate too.

Doug: [00:18:21] And there's a certain point where there is a it's a groundswell across the organization that causes this. It's the organization that becomes engaged in it. And you can feel it. I mean you can feel it in the organization. They're ready to go. They're ready to go as a simple sign is people are quitting because it's not changing and they're deciding they can go do something else.

Tripp: [00:18:47] Interesting that that's. Yeah. That's funny. I see different things but kind of the same types of inflection points when I wrote redesigning an organization. There comes a point where we always have. Especially if you start with a team as you say you guys go with the willing. When you're working with an organization to start with and then some of the people around it that weren't necessarily the willing but they may not have been fully out either they want to become a part of that because they see them doing fun things. I mean it looks like a lot of fun.  for what you're doing. So it seems to fit to be when people start to see that there's some momentum around something. How do I become a participant. So that's one of the criteria.

Tripp: [00:19:37] At least I'm hearing that you look for when you start to hear somebody say hey how do we how do we begin to participate. And then that is one of the indicators then that takes you to the leader is that sure OK. Sure. Very good.

Tripp: [00:19:59] This is the brain brew whisky Academy podcasts where we will take you behind the scenes so you can see what it takes to build a whiskey distillery business Eureka ranch team led by Doug Hall are creating a craft Whiskey Company with patented technology like has never been done before

Tripp: [00:20:23] Well what's move to our Brain Brew Whiskey Academy absolute trust comes from your product not marketing I love this one as far as the message that that's here around the role of marketing versus you know the role of a repeat customer.

Doug: [00:20:42] So if you're in the craft spirits business or any business marketing will get you your first purchase but repeat purchases are driven by is the product awesome. And frankly that first purchase usually lose money on it because the marketing expense for that first purchase your profits come from product not from marketing. I'm sorry marketing people I know I know you think you're God's gift to the corporation but nobody repeat buys marketing. OK it's just the thing that gets the attention. You're just a trial generating device. And don't don't give me the foo foo on this because otherwise what you're going to end up with. You know what happens in the craft business is there's a whole lot of people that sell products it's a one and done you know it's a souvenir of visiting the distillery. Oh wait. Oh and that's such nice people. I love what they're doing here. There's spirits at products not really that good but here this is the least bad one I'll buy one of those. And just us to support them and now they've got a tourism trinket. It's a souvenir. It's not a product that's consumed. Mm hmm. And what I want is a product that's consumed which is why I love blind tests. I love blind tests with this no marketing with it because it's just straight up is my product awesome or not. No spin movement on it. No hype on it just straight up. Is this product awesome. I mean that's what that's what you want to do. And and and in fact this is the problem. I mean the American craft spirits association did a survey a couple of years ago. Poor product quality.

Doug: [00:22:17] One of the very top issues associated with what was holding back craft spirits products aren't good. The products aren't good the product isn't great it's not great it's got to be better. The beer guys the craft beer guys had more flavor than the Budweiser is. They brought something new to the party. Craft spirits people were not careful.

Doug: [00:22:45] I know you love your vodka but it's kind of hit really hard to get anybody to give a damn about your vodka make your cocktail with three different vodkas and tell me you can tell the difference.

Doug: [00:22:56] I challenge you make your gin and tonic with most gins and you're except for a few which don't have Juniper or not it's not gonna be that different by the time you put all that sugar in it now make your whiskey unique really unique. Use finishing use different methods to really make it unique. Push the grains way two different places change the way you do your aging cause 70 percent of flavor comes from the wood manage the wood and now make a cocktail and one of things we do is what will make for old fashions with our four core products. And then we'll also make the old fashioned with vodka. And and it's five different experiences five totally different experiences because of the amount of flavor in the way that we're doing it because we purposely make our stuff taste different. So you got to have product product first then marketing. That's my view. It starts with the product. You got to have amazing product. And the industry of the Spirits world tends to be less on product.

Doug: [00:23:58] I was at the wholesaler show down in Orlando and they had brand battle where people came out and they talk blah blah blah about their brand and the amount of conversation about the product was about 5 percent and I'm like Mom then worked for me is the product. Awesome.

Doug: [00:24:18] One guy actually said well yeah we're doing it and we've got a bourbon. You know it's a good bourbon like everybody's bourbon. He literally admitted he had a commodity. I'm like if I had a button I hit the button and he would be like Bugs Bunny would've gone to the floor. So I'm sorry I'm ranting I'm ranting and tired of this marketing b.s. that's going on. Oh fancy bottle fancy package fancy this. We got bottles that cost more than the juice bottles and cap label cost more money than the whiskey inside the bottle. That's ridiculous. Ridiculous and that's why I love Tito's. He puts it in the product not in the package. Something to be said for that.

Tripp: [00:25:08] Yeah. You know it's interesting. Obviously you know since we started these conversations I really didn't know that much about whiskey. You've taught me everything really I've learned at this point about whiskey but as I've gotten into it now I still haven't tried your Relativity product that I know of unless it was one of the samplings that I did. One time I was at the ranch or or the Noble Oak.

Tripp: [00:25:33] And then you've got the four new products but one of the things I am finding is there are certain there are some whiskeys that I and I sometimes I wonder Doug it is a matter of my palate that I just don't like that particular whiskey or is there something more. I guess I have risen to the level of knowing what's what's good and bad. Now I did have I won't mention the name but but in Indiana whiskey and there is not that many actually here in Indiana but that are that are Indiana made and tried a couple of them. And in my opinion they were awful. I mean they were just I couldn't mix them with anything and they tasted terrible straight up to me. And you know so bad.

Doug: [00:26:19] Yes bad. Yeah. They bad products. Yes at products.

Tripp: [00:26:22] And so people then as you see it from what you're finding is they're leaning more on the marketing than actually trying to get a product that's good. Is that kind of what you're seeing in that industry anyway.

Doug: [00:26:35] That's right. They're not if they're not investing. Well the big problem. I mean I mean just really cut to the chase. The big problem is they don't understand what whiskey is whiskey is made from wood not from distilling the distilling is five or 10 percent of it then it's the mash bill and then it's the wood. I mean the wood is this 70 percent of the flavor. I mean that's where the flavor comes from 75 70 percent from the wood 25 percent from which grains you use and 5 percent is in the distilling and they spend all their time on distilling as opposed to the wood you know and it's the wood and the wood maturation and how you manage that wood that is it.

Doug: [00:27:16] And by the way it's epically expensive by the way. I mean the problem with it is it's really expensive to have all these different woods and to be finishing them and to be having barrel. It's really expensive.

Doug: [00:27:27] It's really really expensive. I mean it makes the cost of the distillery look cheap by the time you have to get the barrels that you need which is why systems like our time compression approach are critical for something like this because we're able to do it much faster much cheaper and still getting the amazing tastes but you have to manage what you've got to manage wood and you have to be careful about it because if you're not careful like some people are using small barrels thinking that help and you've got to be really precise when you manage those because if you're not careful what you'll end up with is a wooded new make spirit meaning that you'll have a whole lot of oak in the product. It's like a doughnut. Like at the center of the doughnut but it's wrapped around this harsh new make spirit because you haven't converted the alcohols which is one of the things that has to happen through the aging process.

Tripp: [00:28:19] Mm hmm. Interesting that that. And so so people are working in your view in the whiskey industry people are working on the wrong problem.

Doug: [00:28:30] Well but they just don't understand. Maybe they just don't understand and they don't understand that. I mean they don't understand how whiskey is actually made that would be a problem. Then I guess then you would have to lean on marketing quite a bit. Then it becomes more expensive obviously to do that. Yeah. Over time. Yeah. Interesting.

Tripp: [00:28:55] Well let's move to our craft cocktail recipe now we've had the Jalapeno julep I think was one of our earlier drinks that we had. This one is the mint julep.

Tripp: [00:29:08] So try this at this. This is this is a staple though isn't it. This is the mint julep is the one that they serve. So like at the Kentucky Derby and that type of thing. Right.

Doug: [00:29:17] Right. And coming up to derby time I thought it was a perfect time to do that and to get people prepared so that they can have one most Mint Juleps are horrific. And the three floors are they had too much sugar you know and they use a lot of sugar when they have the wrong whiskey. And that's number two is the wrong bourbon whiskey that they're using and the three thing is is not muddling with force. You really have to use real force when you do the muddling in order to make it work.

Tripp: [00:29:56] So how do you model with force.

Doug: [00:29:59] You really really take the muddeler and press and press and press and press the press and I really learned this down in the Dominican Republic where the Mohit ho there was a lady there who really just ground the with a moral and pesto really. Did the Mint. And after that I was I was very impressed. OK.

Doug: [00:30:29] So it's really simple the muddle really firmly five mint leaves.

[00:30:33] One teaspoon of simple syrup. That's it. One teaspoon.

[00:30:37] Add some ice crushed if you have it.

[00:30:39] Two ounces of our noble oak bourbon which you can get if you're looking for it go to Noble oak bourbon noble whiskey search it up on the Internet we put in the show notes there's a product finders that you can find it where you are it's in most of the states now stir and enjoy with a sprig of mint as a garnish and you got the classic mint julep it's an elegant product in fact I think I'm gonna have one of these tonight I think I have never made one so it's all it's always a bourbon so.

Tripp: [00:31:11] So just a question I have for you Doug is is one of the four your local Cincinnati whiskeys. Is that a bourbon or are they all more complex than that.

Doug: [00:31:24] We have two bourbons awry and a four green whiskey.

Tripp: [00:31:27] Okay. So the bourbon would be the kill but now it's paddle wheel paddle wheel had a wheel and then the smoked the Tall Stacks up top stack. OK. And tall stacks will give you a smoked julep which is actually magnificent. So it's really cool.

Tripp: [00:31:45] But but for this one you prefer the No. Noble Oak then?

Doug: [00:31:49] No I just thought I mentioned noble oak. I just I just decided to use this one. This is this uses a sherry oak staves so it's a little different taste. And I just thought I'd do this I I. I had a cool experience at the craft at the wholesaler conference was at the Ritz Carlton down in Florida. I was in Nathan's the big restaurant. They are the big fancy restaurant.

Tripp: [00:32:15] I saw the picture. Yeah.

Doug: [00:32:16] Yeah I said I said Do you have anything that's craft. I mean you've got all these big corporation stuff and you know Johnny Jimmy and Jack and you know all these mega corporations that on those brands you know there's no people there anymore. And I said Do you have anything real craft. And Christine the bartender can move over and she says I have this thing here called Noble oak. We really love it. We've been we just got a bottle of it and the staff loves it. Yeah I know it that is.

Doug: [00:32:44] So she gave you a wonderful cocktail and we had a great talk about it. No sooner had everybody over there and I I put it up.

Doug: [00:32:51] I just snapped a picture put a little thing on linked did. It's almost 50000 views. Wow. It's crazy. It's crazy but it was it was awful nice to be you know. And she hadn't heard any of the marketing of the hype of the rest of this stuff and she just said I like the taste. And again it was it's product product wins product wins.

Tripp: [00:33:13] Very good. All right. Any parting words for our Brain Brew Whisk(e)y Academy.

Doug: [00:33:19] Now the big thing is folks make products that you love OK don't make crappy products and don't ship crappy products. And and I know I know the industry you want to make everything yourself. The fact of the matter is is in the history of whiskey the biggest whiskey people pre prohibition were blenders who would take the whiskey from different people and put it together. That's an honorable profession being a whiskey maker.

Doug: [00:33:47] Remember the whiskey maker the person who takes the barrels or puts it together or if you're working with us where you choose you would build and put it together. The whiskey maker is the higher paid employee versus the distiller the whiskey maker gets paid sixty five percent more than the distiller this isn't beer it's whiskey. And in the world of whiskey the talents are bring it together. And if you don't know how to do that come see us we'll teach you. We'll teach you how to do it.

Tripp: [00:34:17] Very good. And for the consumer don't settle now.

Doug: [00:34:22] Probably don't buy the souvenir when you go visit them. Don't buy that souvenir. Tell them. Tell them you know they'll buy a bottle and just have it sit as a souvenir.

Doug: [00:34:31] We need to help everybody and we need to fight for great products. We've got to get everybody making great products

Tripp: [00:34:43] Because we appreciate you as a listener. We are offering for a limited time. For things a one hour abridged audio with the driving you read the book. A subscription to the driving Eureka newsletter which contains weekly advice from Doug Hall on how to find filter and fast. Track big ideas. And the newsletter. Has other offers that are not paid public. The driving Eureka prescription for success. You answer questions and we'll help you assess your ability to find filter and fast track big ideas. And. You get advice on how to grow your ability to innovate. And the last item. Access to a Doug Hall interview with a radio legend. To get these offers. Go to w w w dot Doug Hall dot com forward slash

Tripp: [00:35:41] Podcast. And don't forget to subscribe. To the driving Eureka podcast on iTunes.

Driving Eureka! Newsletter #24

Your Innovation Podcast. This is the 24th episode of the Driving Eureka! Podcast. Segment 1: Innovation Mixologists and Bartenders; Segment 2: Why Should You Care?; Segment 3: Brain Brew Whisk(e)y Academy.

Subscribe to learn how to Find Filter and Fast Track Big Ideas.

[00:00:01] The Driving Eureka! Podcast

[00:00:33] Episode #24 - Head, Heart and Soul

[00:03:13] A Mixologist, Bartender and a Whiskey Maker Walk into a Bar

[00:03:26] Difference Between a Bartender and a Mixologist

[00:04:44] Mixologists are the Innovation Gurus that Tell You What to Do and Bartenders are the Mentors in Innovation

[00:09:40] The Driving Eureka! Book Segment

[00:17:20] Brain Brew Whiskey Academy

[00:17:44] Brain Brew Whiskey Academy

[00:18:13] How to Decide What Brands and Products to Pursue

[00:19:08] With New Products/Services - Use Data at the Beginning

[00:19:20] With Experience - Half Data and Half Judgment on Where You are Trying to Go

[00:20:15] Nike Experience

[00:20:58] Brain Brew Uses No Additives - Natural Only

[00:21:22] At he Beginning Don't Restrict Yourself

[00:21:58] Mixologist to Bartender

[00:25:46] Craft Cocktail Recipe - the Lynx Pineapple Rush

[00:26:58] Step 1

[00:27:00] Step 2

[00:27:02] Step 3

[00:27:06] Step 4

Tripp: [00:00:01] Welcome to the Driving Eureka! podcast where we share ideas and advice for helping you find filter and fast track big ideas.

Tripp: [00:00:14] Hi I'm Tripp Babbitt advisor to global organizations on the Deming philosophy and host of the Deming Institute podcast.

Doug: [00:00:23] And I'm Doug Hall inventor speaker teacher and whiskey maker. I'm also the founder of the Eureka! Ranch and author of the Driving Eureka! book.

Tripp: [00:00:33] This is episode number 24 of the driving you Rekha podcasts now as I read this Doug. I'm in the newsletter. I see the things that came through my head were the right stuff you know getting the right stuff.

Tripp: [00:00:49] Head heart soul those types of things but funny. I first started reading it. I almost thought it was a joke. I saw mixologist and a bartender and a whiskey maker there and I'd go on. What the? Where are we going here. So as confused as I was in the last one episode with the commencement speech. I had no idea. So is I don't know.

Doug: [00:01:16] And you know something, Tripp Okay. That means I'm doing it. Keeping you on edge edge is okay. Some of these episodes are gonna work some or not. That's the way it works. Why. Do what's expected you know that be boring. So this.

Doug: [00:01:31] This happened at ADI the American Distillers at in Denver and I was with a guy I met a guy in the morning. He brought a friend that friend contacted another friend who who was into whiskey. It's a next thing you know that friend and his stepson were getting together because we'd David was out with me we we had we were doing some research out there and it's like 10:00 at night. I meet this person who's like three steps removed you know. So we go into a bar and we start ordering cocktails and of course I have my little black bag with me that might have a few others. So I'm ordering like parts of a cocktail and then making the rest well as I'm proud to do. And.

Tripp: [00:02:17] Is that even legal Doug. Can you do that.

Doug: [00:02:20] what what what. I don't know. I don't know. Colorado isn't everything legal  So the next day he goes.

Doug: [00:02:31] He says I'm going to teach you something now. How okay. I'm 60. He is older than me but he's treating me like I'm like the kid right. Then I'm like OK fine. At this point what the hell. And he says you need to understand because I'm talking about cocktails. He says the difference between a bartender and a mixologist because you know these mixologist you know you know the type they got kind of the funky mustache or beard and had use you know the kind you know we're talking about you know. And that have become you know foo foo in this and I believe you know I'm like oh which is where's he going. And and we start to talk about it and end it.

Doug: [00:03:13] It struck me as something and I'm going to use it as the feature article. This isn't the Brain Brew. This is the feature article for this because I'll connect the dots here in a minute. But you know the mixologist is a guru who creates cocktails.

Doug: [00:03:26] Ok the bartender is a friend who creates connections. OK. So the mixologist is about the chemistry of the liquid the bartender makes connections through cocktails and conversation. OK. OK. So mixologist do brilliant work. I'm not I'm not dishing them but the bartender creates the cocktails that match the unique tastes and desires of the customers.

Doug: [00:03:54] Okay so one is about kind of themselves. They're a celebrity here to taste the perfect blah blah blah. Oh yes. This is a Mongolian cuckoo berries that I've distilled in 17 ways. And the other one is. So what do you like. Okay. And they make this thing that matches your tastes.

Doug: [00:04:14] They adjust and we'll talk about this more. Well they just maybe the bricks level the sugar level they might address the alcohol they may pick which one. And without even knowing it they make you this cocktail and you go Oh my God that's amazing.

Doug: [00:04:25] And you go home and look it up on on on the Google and you try to find it and you make it and you go to name it and taste it all which you don't know is that bartender listened picked up some cues and as they were pouring it into the jigger they made small adjustments based on what they thought.

Tripp: [00:04:43] Mm hmm.

Doug: [00:04:44] And so the it's a friend told me a story. He walked into a huge wonderful bar in New York City. He sat down and a drink appeared. It was the same drink he'd ordered two years before. That's a bartender. And he said he saw the guy when he walked in and said hi. The guy didn't look anything up he just made it I mean because there is a connection a unity of the customer and the person and the drink. It's about the person in that connection not about just you know the wonders of my mixology ability and it's the same with innovation. You got gurus who tell you what to do. They preach they pontificate. And their idea is the idea all of this is not worthy. It is the perfection of idea where the bartenders of innovation are the mentors.

Doug: [00:05:40] Sometimes they call teachers or coaches who enable you to do great things they help you discover within your heart brain and soul the right idea for you to pursue at this moment in your life. Then maybe a better idea.

Doug: [00:05:52] But at this moment in time for your organization your capabilities your courage your confidence your capabilities what is right right now for you to do right now to push so I mean basically mixologists are about ego their ego bartenders are about heart head and soul and so I mean I just people think about in your life you know are you fixated on your idea your ego your thinking or are you a bartender embracing the conversation letting your heart mind and soul guide you to the right idea for your current situation your team your organization where you are. It's about moving outside of ourselves to a bigger purchase and that concept really really struck me. Between mixologists and bartenders and throughout life we have them.

Tripp: [00:06:46] I could say when I think of a mixologist I could say Think in terms of well you said it in here. You say you know they are the gurus that there is one best way and I think all of that has has it hasn't disappeared.

Tripp: [00:07:05] Everybody is still there. There's still a lot of believers in that thinking. I call them a majority of the people that believe in gurus. And when you talk in terms of mentors you're talking about learning and you know that's one of the things that I look for in methods now purposefully is innovation engineering. It's not a guru thing. It's a mentor learned thing and it has to have that learning component in it in order to be useful for my perspective.

Tripp: [00:07:39] In other words that there is always something that that's improving or moving as opposed to something that's static and not dynamic in nature. And you know there aren't enough of those I call them methods. So I consider Innovation Engineering a method about gurus use the same word. But it's more of a maybe I need to come up with a better name for it but I process something very a rigid process a rule based process or something associated with it.

Doug: [00:08:21] Yeah It is. I mean there is a there is a methodology that you can follow. The key is that you're really open to the whole. I mean that's that's the part is is that you are. I mean it's kind of Zen I guess. You know you you are in the moment with regards to what is the right thing to do and yes with innovations you're going to give you a structure we're going to give redefinition. Yes yes yes. But at the end of it the heart and soul is that that it's meaningful. I mean our whole definition of innovation is meaningfully unique and that's not just meaningful as in measuring the purchase intent it's meaningful to the world to you your organization and to the customer.

Tripp: [00:09:16] Yeah I agree. Yes. Interesting approach to that subject. It's a little a little surprise but I had a chance to talk to you about it I understand better how how you're using those things.

Tripp: [00:09:40] It's time now for the driving Eureka book segment with author and inventor Doug Hall what's moved to the driving Eureka book segment. So why should you care?

Doug: [00:09:58] So Innovation Engineering. It's going to as I say in the book excerpt innovation and sharing will help you increase innovation speed decrease risk however that's not that's not the most important benefit according to Shawn Scott CEO of the Whitney Blake company of fine company up in Vermont.

Tripp: [00:10:13] And a fine guy by the way.

Doug: [00:10:15] He's a really good guy. Yeah yeah. You've met him. Yes. You've got to use it. Most important benefit and I quote him is to make work fun again.

Doug: [00:10:26] Which is not far from Deming premise at the start of seminars when he said why are we here. We're here to come alive to have fun to have joy in work and by fun we don't mean frivolous play. We're talking about the joy the joy that comes from doing something that makes a difference in the world and said in the irreverent way of members of Innovation Engineering movement you know it's like Austin keep Austin weird. The fundamental aim is they'll say campus. The fundamental aim of innovation engineering is to enable people to do and I apologize to those offended but is to do cool shit that matters.

Doug: [00:11:03] The fact is is that when you spend your time and energy on projects products and services that matter to you your organization of customers then you will experience a chain reaction. You'll get your pride of work you'll get increased sales and profitability prior to work doing something that matters. Make work fun again meaningfulness. It's all the same. Same concept. Doing things that make a difference that matter. That's what it's about.

Tripp: [00:11:36] Okay so a good subject that's kind of been on my mind when you talk about these things making work fun again.

Tripp: [00:11:49] You equate to failing. I mean that was our our previous episode where we're talking about failing and and having fun doing it type type of thing. Do you have a thought. Oh I know you have a thought on somebody who's got an idea but they're not sure how to to to move it forward.

Tripp: [00:12:21] They're having. I mean they have fun they're doing the best that they can. But if you're at the beginning you're an entrepreneur you're trying to figure out what do I do with a product maybe that they've come up with what would be give me the first two songs.

Doug: [00:12:43] First things you gotta do is make it real. And whatever for me to make it real make it real and sell one. OK so that's beyond your scope. The first thing to do is make it real and sell one. I mean you make it real so when you gonna to learn. Yeah I mean you're gonna get an encyclopedia of knowledge. OK. Now that you don't even know how to do that if you don't know how to do that because this is all new to you then you're gonna have to learn more. Get the book read it go to Doug Hall.com slash VIP sign up and you get the one hour audio summary for free. Free. It's like no cost. doughall.com slash VIP. I mean you gotta learn more folks. You gotta learn more. This is not random. You know it is not a random dice roll. There are methods reliable methods and systems for prototyping testing learning doing the math doing forecasting. Doing your project P&L. All of this stuff is doable. It's all doable.

Doug: [00:13:44] Ok you're not going to learn it from a corporate executive because they've rarely done the startups. There's a big difference between going from zero to sixty five miles an hour and going from 45 to 55 miles an hour and so get help from somebody who has done the startup at least a half dozen times if they've never done a startup they're not going to be helpful to you. I'm just going to stay at straight as it is. And if they've done it once and got lucky they're not going to be helpful to you because they're going to make it better. But when they've done it half dozen times half of them failed. Well whatever. Then they've got they've got the resilience and the wisdom to be able to help you.

Tripp: [00:14:29] So is innovation engineering. Is that is it. I mean there are concepts in there and I get that. But it is. Is it not for those people. From a startup perspective.

Doug: [00:14:39] No it's it's perfectly for them because it's built off the screw ups of almost 20000 screw ups.

Tripp: [00:14:44] OK.

Doug: [00:14:45] And now it is the lessons of everything that we've learned it's a quantification of it. It is a systematic way to go do it. But and you can do that you come take the online class just sign up do it it's easy. Nothing to it. I mean you'll get you'll get all the knowledge you need. But I'm just saying if you don't want to do that. Go go find a warrior. You know that's what you need so.

Tripp: [00:15:08] So from a I guess you know when especially when I first ran a.. You know you get a little overwhelmed at the Eureka ranch for instance and I see all these big companies that you've worked with and you know those types of things and I don't I don't see the little guy in there type of thing. I see these big you know kind of organizations. But what you're telling me is these concepts apply easily to a startup and that you guys are set up to help a startup.

Doug: [00:15:35] Yeah. I mean we've got 35000 people that we've talked over that now probably closer to 40 or 45 by now. But and the vast majority of them are small businesses and we get huge scholarships to those folks for things. So yes. And for individuals who just want to do it all of that's all doable all doable.

Tripp: [00:15:54] Ok. All right. Well that's I think that's good to know. You know as we get into these these things like you know I get overwhelmed. Like I said with the with the with the Eureka! ranch and even then even on the Web site you know you've got all the Disney and those types of things. I think it's important to point out to people these these concepts apply to to startup organizations too and that they can use this method in order to take you know a product that they have and what you're saying is first the first step. Other than reading the book of driving Eureka is to make it real and sell one.

Doug: [00:16:36] Well yeah. And it's not just a product. I mean the majority of the time it's problem solving something in your life right now. But you need to use these things for. I mean because the number of times that we do in the product tends to be small. And so now you're looking for you know ways to work through that stuff. So it's to solve your problems. All right. All right. Yeah. Anything else on why should you care that you went in make a comment. No no.

Doug: [00:17:09] I mean. I mean that's really what it's about folks is doing stuff that's gonna matter to you that's gonna make a difference for you. I mean that's what you're trying to do.

Tripp: [00:17:20] This is the Brain Brew Academy Whiskey Academy podcast where we will take you behind the scenes so you can see what it takes to build a whiskey distillery business. The Eureka! Ranch team led by Doug Hall are creating a craft whiskey company with patented technology like has never been done before.

Tripp: [00:17:44] All right well let's move to the Brain Brew Whiskey Academy how to decide what brands and products to pursue. I always I guess as as you've talked about the Brain Brew Whiskey Academy in the past it kind of seemed like you started with something and then you kind of found your market and then I'm guessing that you go into your brand is that kind of the method or do I have it wrong.

Doug: [00:18:13] Yeah yeah pretty much. But the challenge that we face is we have an overwhelming number of things that we can do and so we could approach it. You know I've talked about earlier on in this podcast I've talked about you know mixologists sewer kind of precision people and then the bartenders who are you know connected to the customers under a much bigger heart and head and soul basis. And it's the same thing here. You know when we first started doing this stuff we used data from the research we did just ridiculous hundreds of research studies and it was probably 80 percent was the data made the decision and our opinions and this is despite I've been in this business for 25 years and I know that when you push the edges of something new it's very hard to know is a new and different good or new and different bad.

Doug: [00:19:08] But now after having done all these tests we've kind of moved to the next level. So the first level is you use it. You go use the data to make the decisions because you don't know enough how people are going to react to the really new things.

Doug: [00:19:20] Then as you start to move up and you get more and more experience we've now moved to a higher level where we're saying OK I know how to make a product that consumers like I know how to make a conscious brand that interest people. That's not hard I can do that. So now we push the edges and we're looking at it's probably about half data that is an aid to our judgment. It's not our judgment it is an 8 to it and half is a vision for where are we trying to go.

Doug: [00:19:50] In other words we're building this incredible wall and we're building it a brick at a time is we're building it and we're saying OK what do we want to become. It's like I'm right in the process right now of changing one of our brands because my vision for what I want it to become as I was we're thinking down the road of what we want to be. I want to set this up so that I'm set up for what I want to be in the future.

Doug: [00:20:15] And so you know it's it's not just it is data but it's data and vision data. And what we want to be. I mean this I remember working with Nike years ago there you know mentioning a big company and and at the time there was some shoes out for kids head lights in them and I talked to the Nike people and so what do you think they were really popular. So we think so and and it's fine but it's not us. We're about authentic performance. I mean Nike is the swish and swish logo is the sound as you blow by somebody. And so it's just not what we are. And as you learn more and more about what you are and what you want to be there is ideas people come to me.

Doug: [00:20:58] And so like one of our rules is we don't use anything artificial. We don't use any chemicals. You know we use jet 100 percent natural no additives. You know just wood and alcohol interacting together and in clever ways. And that's just that's our policy. And and I understand that if I threw in flavors or I threw sugar in I could make it better.

Doug: [00:21:22] Yeah you're right you're right. I do that because I just. That's not what I want to be. And so that's off the table whether you like it or not it's off the table. And but you can't start with that. Sometimes people start with that. They put all these boxes around themselves and they can never get going. You have to get into the game first and you have to try some things. You have to experiment. And I think it evolves at the good companies. People that start out with these rock solid things at the front yeah maybe they're right maybe they're wrong but I think you have to get in the game first before you can know that.

Tripp: [00:21:58] So as you talked and you talk about the mixologist to the bartender and trying to equate that to some of the things that you're talking about here the mixologist being you know the creation of amazing drinks. Is it that you start out as a whiskey maker then as a mixologist and you want to become a bartender. Is that is is that kind of the continuum you're talking about here or is that.

Doug: [00:22:27] That's well said. I think that that could well be the case is that you start out technically doing it. It's just like when you learn to play tennis you know they they teach you how to hold the racquet step swing and you're thinking so consciously of it and then eventually you get that you can put the spin on it and that kind of stuff because you don't have to worry about this fundamental so that's well said that that could very well be the case you have to start how do you learn to play jazz you learn to play the scales first. You know and you play the trumpet you play the scales over and over again and then that teaches you how to do it. You know how to improvise.

Tripp: [00:23:07] You know there's a there's a there was a book and I think it was back in the 70s that was called Inner Tennis. Did you ever read that book by chance. No. OK so there's a book called Inner Tennis. It's actually a video of this guy. Can't remember his name right now but the guy that wrote the book but he actually did things really differently when he taught people how to play tennis as opposed to you know teaching all the skill. And this is just kind of me throwing out random thoughts that enter my head. But what he what he learned was people get tied down too much in the technical to the point that they weren't able to play and then they actually became it. You talk about fear you became an inhibitor. So he picks this one lady in this video off to send you the video. It's it's it's quite amazing.

Tripp: [00:24:00] Doesn't look athletic at all. Takes a tennis racquet. Didn't know how to hold it doesn't know really know what to do and he just starts throwing balls at her and just kind of the reaction and then how he goes about and works with the person on there. Her innate instincts basically to hit the ball as opposed to all kind of all the the technical stuff.

Tripp: [00:24:24] Now technical stuff then enters later but it's just a very fascinating approach and very different than than anything that I had seen at that time or since. As far as a purchase to hitting it. But I you know I remember even with my kids when we played golf you know they'd worry about you know how do I am I holding the way you hold the club dad or you know those types of things I said don't worry about hit the ball you know if you can get the hand eye coordination going type of thing. So how much is it. You know it starts to make me wonder how much of it becomes technical and how much of it becomes innate to what you do. Or am I talking apples and oranges because I'm talking about sport versus a whisky.

Doug: [00:25:05] Oh I think there is a fundamental set you need to understand and then you have to make it your own. OK. And I think that's I think that's the case in everything. I think there is a fundamental that we begin with and and then we start to learn what we're doing. I mean I I really do think that that's that's the way the system works. And so you have to get those those basic things to start with and then you then you go from there. I just I think that's the way it works.

Tripp: [00:25:35] Ok. All right. Very good. So moving from a mixologist to a bartender in the whiskey business. Yes it applies. Yes.

Tripp: [00:25:46] So what's talk about your craft cocktail recipe the Lynx Pineapple Rush it's got it's trademarked as this one that's been around a while or did you.

Doug: [00:25:58] No it's ours just a Lynx and and then this takes the classic gold rush and it makes it up the people and for the people. So the Gold Rush uses lemon and honey water and it is a bit it has a pucker to it. Because of the lemon to it. And in this case here we switch out and this was inspired down at our Brain Brew Beach Bar in spring Brook Prince Edward Island up in Canada. And I am I am now excited as I say I look forward. You know we are the time has changed the light is changed. We're looking forward now to the joy of summer and winter is past. And so I figured it was time to start to look towards summer drinks and at least in hopes that we don't get another dump here. And so we're taking honey water we're adding some pineapple juice to it instead of the lemon.

Doug: [00:26:58] So it's a half ounce of honey water.

Doug: [00:27:00] Half ounce of pineapple juice.

Doug: [00:27:02] And an ounce and a half of our power Paddle Wheel whiskey.

Doug: [00:27:06] And a splash of champagne. And if you don't have champagne you can use 7 up or diet 7 up if you want and that little bit of sparkling gives us that kind of a beach drink which is very unique for a whiskey to be able to get kind of a beach drink out of whiskey in fact if you take the exact same thing and you make it with vodka you gotta go man.

Doug: [00:27:28] That is very good. The whiskey really gives it the backbone and and it's just it's a fun light drink. If you shake it the pineapple frosts a little bit. Served in a champagne Coop. If you want and it just it's elegant it's fun. It's light and fresh. And if you don't like whiskey you're going to love this one and if you like whiskey you're going to love this one.

Tripp: [00:27:57] I see a common theme here in the Paddle Wheel seems to be your go to mix mixed whiskey. Ah no I'm sorry. Keel boat is the one the I normally about usually.

Doug: [00:28:08] Yeah. So this one here I've gone to Paddle Wheel. It uses the 200 year wood so it's got a little bit more depth to it. And it's a little bit richer and so it stands up to the pineapple and the champagne and it just has a better balance. I think you know so.

[00:28:23] That's interesting. As for as far as those and we haven't talked about it in a while now. But but you might want to share with the audience the the the four that you're making have the Keel boat the Paddle Wheel the Tall Stacks and I always forget the other one.

Doug: [00:28:37] Deckhand Deck Deck.

Tripp: [00:28:38] Yeah yeah.

Doug: [00:28:39] So we've got four four products and four different whiskeys and easy drinking a 200 year would bourbon five wood Rye which has crazy complexity and then Tall Stacks which is a triple wood smoked a nutty product that bakes in and get ready folks through the summer you're going to you're going to see a whole lot of recipes here. Tiki get ready. We're taking Tiki. You're going to take it to a new place and with it wonderful smoke cloud in it. We're going to do some cool stuff about this summer so cool.

Tripp: [00:29:11] And then we won't see you in Cincinnati for three months or something right.

Doug: [00:29:17] Yeah that's right. You're going to think migratory patterns like the bird go.

Tripp: [00:29:23] And a different beach and take all your tall stacks and your paddle wheel in their Keel boat.

Doug: [00:29:31] And you have to figure out do we record or do we take a summer hiatus. I think we're going into summer hiatus. I think we're going to do. But we'll figure that out just as we get there.

Tripp: [00:29:41] So OK very good. Any other final comments on Brain Brew Whiskey Academy.

Doug: [00:29:47] Yes. I mean the big thing is folks you've got to get in the game. OK. And and the way you make decisions at the start will be different when you have a few thousand bottles under your belt. You got to get in. You've got to get in and don't overthink this stuff. Just get started. Just get started. Make some stuff.

Doug: [00:30:10] Sell some stuff do a crappy and then do it better. That's how it works. The challenge is is people spent so much time preparing for their opening when you're ready to open. You better have at least 50 percent of your energy your mental and physical energy because the start is just the start.

Doug: [00:30:32] Now you're in the race now you're in the race and that's what you really need the energy and so manage that I don't tell my teams all the time or we're introducing weather software for the Eureka! Ranch or new training programs or inventing things I said keep your energy for the end. And you know the game is one running through the tape at the end. And too many people blow all their energy they get started and they got no resources no money left. You just got a because once you get in then you can start. That's when the fun part begins

Tripp: [00:31:10] Because we appreciate you as a listener. We are offering for limited time for things a one hour abridged audio of the driving Eureka book a subscription to the driving Eureka newsletter which contains weekly advice from Doug Hall on how to find filter and fast track big ideas. And the newsletter. Has other offers that are not paid public The driving Eureka prescription for success. You answer questions and we'll help you assess your ability to find filter and fast track big ideas and you get advice on how to grow your ability to innovate. And the last item. Access to a Doug Hall interview with a radio legend

Tripp: [00:32:02] To get these offers. Go to www.doughall.com/podcast. And don't forget to subscribe. To the driving Eureka! podcast on iTunes.

Driving Eureka! Newsletter #23 

Your Innovation Podcast. This is the 23rd episode of the Driving Eureka! Podcast. Segment 1: Fail Fearlessly; Segment 2: The Wonder of Failure; Segment 3: Brain Brew Whisk(e)y Academy.

Subscribe to learn how to Find Filter and Fast Track Big Ideas.

[00:00:01] The Driving Eureka! Podcast

[00:00:56] Failing Fearlessly

[00:15:03] Add to Doug's Commencement Speech - Reach Him at [email protected]

[00:15:43] The Driving Eureka! Book Segment

[00:16:08] Fear of the First Step to Innovate

[00:16:20] One Small Step to Change Your Life

[00:17:40] Innovation Breaks Down Innovation into Small, Easily Digestible Steps that Mitigate Fear

[00:20:46] Deming Gave a Problem Solving Philosophy

[00:25:52] Brain Brew Whisk(e)y Academy

[00:26:06] The Wonder of Failure

[00:26:21] American Distilling Conference

[00:27:24] I-Still

[00:29:10] Stories of Epic Failures

[00:31:48] Admiral Perry's Advice

[00:34:33] If You Can't Fail - You Have Problems

[00:35:15] Craft Cocktail Recipe - Vermont Toddy

[00:36:37] Step 1

[00:36:43] Step 2

[00:36:47] Step 3

[00:36:50] Step 4

Tripp: [00:00:01] Welcome to the Driving Eureka! podcast where we share ideas and advice for helping you find filter and. Fast Track Big Ideas. Hi I'm Tripp Babbitt advisor to global organizations on the Deming philosophy and host of the Deming Institute podcast.

Doug: [00:00:23] And I'm Doug Hall inventor speaker teacher and whiskey maker. I'm also the founder of the Eureka ranch and author of the driving Eureka book this is episode number twenty three of the driving Eureka podcasts and this episode we're going to talk about fear failing fearlessly. So Doug you've written this newsletter. It's it's quite a bit different than what we've seen in the past.

Tripp: [00:00:54] What what do you doing

Doug: [00:00:56] Okay I figured it was a labor saving device. Okay I've got to do this commencement address for a university. I'm speaking to the graduate school is doing a commencement. They've asked me to do it and I had spoken at the university before to the undergraduates and I'm doing the graduate students and I'm stressing out because they're like well we've got to see what your talk is and all this I'm like Oh my God.

Doug: [00:01:20] I thought wait a minute I got an idea. I'll write it up a first draft and then I'll like do it in the podcast and get Tripp's help with it and get listeners help with it.

Doug: [00:01:33] So to improve it it's kind of like doing what we talk you know we talk about fail fast fail cheap cycles of learning this is it's like a labor saving device you know what would you say if you were standing in front of a bunch of people that were getting their doctorate and their masters that you know which you know their interest in you is somewhere around none you know they want the certificate in the party afterwards right. And you're trying to say something in a short period of time is meaningful. And so when I did the last time I got it was it was pretty stressful. And you say you're trying to say something. I figured hey what a great way to practice.

Tripp: [00:02:13] Okay. All right well look let's give it a shot.

Doug: [00:02:16] Okay. So I'm going to go through it and I'm going to you know I'll stop a couple of times and we'll talk about it and I've got my pen here all scribbled down my notes on our thoughts that we've got and we'll go from there. OK OK. Here we go. OK so imagine the scene you know pompous overdone you know wearing those funky hats and you know gowns and all that stuff and you know the president and the chancellor of all of our rah pontificating on all the stuff and and and then we say we have this guy here who's going to who kind of a whiskey maker an inventor who's gonna talk and and I say thank you to God motherhood and all of the distinguished food who's on the stage you know because that's the kind of stuff he's supposed to say right. And I say you know that to his house that's right.

Doug: [00:03:01] Family and friends before us is a very special group of people to be awarded an advanced degree requires that the candidate formally or informally make an original contribution to the world's knowledge. These amazing people before you are explorers and adventurers they have demonstrated the courage to push the boundaries of human knowledge. Let us recognize that courage here. Thank you. Now I'd like to thank the university for giving me the opportunity for a do over. You see I spoke at the 2008 commencement and there I urged graduates to declare independence to declare their independence from baby boomer conformity. I urge them to think for themselves and to not sell out their values as many from my 60s generation have done OK. Tripp what you think. What do you think what you think the opening.

Tripp: [00:03:59] You know it's funny I wrote down a couple of things within the introduction you know and I'm thinking OK if I'm the audience. First of all I want to especially set up that you said they're looking forward to the afterparty. They want to be entertained and they want something different than what's going to be expected and everything that I've learned about narrative is kind of in a format of. And but and therefore so you kind of end a little bit at the beginning. But you know it's going to be different than than 2008. Therefore and that's now what I'm expecting. That's that would be my comment at this point.

Doug: [00:04:41] Ok so you say you're waiting for something profound.

Tripp: [00:04:43] Yes. Now I'm leading you know OK give me give me.

Doug: [00:04:46] Man oh man okay. It's okay here we go. Okay. Over the past few months I've reflected on that speech and concluded that I made a mistake. Today I corrected the drum roll now. I guess this.

Doug: [00:05:05] Follow graduates instead of simply encouraging you to think for yourself. I challenge you I challenge you to go forth and fail fearlessly. Yes I said fail fearlessly is only by learning to love failure that you can achieve great things. It's as basic as the scientific method that you embraced on your journey to this day. It's as fundamental as Dr. Deming theory of knowledge plan to study act. It is how we learn everything. It's how we learn to ride a bike. We try we fail we learn. We try again. It's how we learn to read to write and to invent amazing solutions to the challenges the world faces we think.

Tripp: [00:05:49] Yeah. No. Yes. That follows up. It's funny. I'm preparing actually for an interview with somebody that that does kind of neuro linguistic programming stuff and when the things they talk about is fear and in that they say that to mitigate fear you have to have safety belonging and and doing something really that matters or mattering in the universe. And so I'm kind of as you're reading through this I'm kind of checking the boxes in my head. Ah you. How do I get safety yet fail fearlessly. That's the question that's coming up in my head at least right now.

Doug: [00:06:31] Ok well let's keep going. OK. Twenty nineteen graduates you have been given a special gift as a result of your persistence grit and importantly the support of your family friends and the university community now is not the time not the time to become academically retired in place now is not the time to become prudent proper and puckered I think of this a laugh there at that point somewhere.

Doug: [00:07:00] Hopefully hopefully now is the time to become an expert at failing fearlessly. Now is the time to use your degree as your license to fail. I thought that was kind of good. What do you think. License to fail know the degree.

Tripp: [00:07:17] Yeah. That's the way maybe we should look at it. I think a lot of people as you have pointed out look at look to it as a more of a safety net though as opposed as opposed to a license to fail.

Doug: [00:07:32] Oh yeah I can see which say. I'm thinking that might be the line they remember. I now have a license to fail.

Doug: [00:07:39] I mean I could see my dad hearing the talk and saying to me bless him he's passed but he would say well I guess you have a license to fail now you have a degree that allows you to do that. I mean I'm at a service I can see him thinking that way.

Doug: [00:07:54] In his warped sense of humor use your success that we acknowledge today as a platform for teaching the naysayers the insecure and the mentally the mental scaredy cat of this world about how failure is the foundation for greatness. To paraphrase Dr. Deming how could they know how could they know how could they know the value of failing if they've never traveled travelled the journey that you my friends have crashed travelled in your journey to this day on campus you live in a community committed to learning as you go forth to the real world that will not always be the case to help you I offer you three simple lessons I've learned. Number one fail fast fail cheap. Use your creative abilities to find ways to do rapid and cost effective experimentation. To think big. Focus your efforts on projects that are bold and have the potential to make a meaningful difference in the world. And number three. Embrace the crazy don't give Pat they don't give patents to people who are prudent. If your idea is an obviously leap by those with skill in the art your patent application will is rejected.

Doug: [00:09:07] They only give patents to the crazy ones. Author Stephen King who met a man who knows a little bit about fear feels that within all of us is healthy craziness. Stephen wrote I think that we're all in fact mentally ill those those of us outside the asylums only heightened a little better and maybe not all that much better after a. So you know it's OK. I'll stop there. What do you think.

Tripp: [00:09:37] Ok so now you're kind of giving the method to be able to apply these things. I definitely think you know it's going to be hard difficult in a commencement speech speech to be able to give them all the tools but you've roused the curiosity. I think at this point okay. Where did I have this and maybe they've already had some of this and their graduate studies. I don't know the school. So yeah.

Doug: [00:10:04] Okay. So then I might close. So so you know I'm not preaching without practicing my team set out to invent a way to accelerate the aging of whiskey in one crazy week. We failed 72 times in seven days. We made horrible horrible whiskey and with each failure we got smarter and smarter. Then one morning we connected the dots experiment 13 experiment 30 and 70 and we had trapped what we had discovered is a way to transform the space time continuum for whiskey aging double gold medals and market success followed. And it was all because of a courage to fail fearlessly without failure.

Doug: [00:10:49] There will be no learning as Ben Franklin wrote up sluggard and waste not life in the grave.

[00:10:54] We'll be sleeping enough deep inside all of us as a magical curiosity a curiosity that fuels our courage to fail. Learn and fail again in closing. In recognition of your courage and in the memory of my family's graduates of this great university my grandmother mother father brother sister son nephew and niece Jill who graduates tomorrow I drink a toast with our brain through whiskey. I drink to the College of our hearts always and I will raise a glass. Probably the only one who's ever drank at a commencement. Well maybe maybe not. That's flask. Oh yeah.

Tripp: [00:11:35] Yeah I think we were drinking actually at my commencement. But anyway one thing one thing I was going to just say that that really stands out from my perspective that I'd like to see added to this is in here where you're talking about crazed week we failed 72 times in seven days. We made horrible horrible whiskey and I wrote down immediately after you said that just from our previous conversations on purpose that you do you push the limits that you wasn't by accident you were actually pushing the limits not there. Awesome.

Doug: [00:12:12] Awesome. Yeah.

Tripp: [00:12:13] That though is just when you said said that that just popped in my head immediately just from our previous conversation. So. But I know I like it. It has a very good ABT format. It's got something that's got practical application of how you've done it now. I like the I don't know if this is just a skeleton at this point or you know this read into it.

Doug: [00:12:37] That's it.

Tripp: [00:12:38] And yeah everybody can go drinking and so this is almost like the Gettysburg Address.

Doug: [00:12:44] Well they have to be sure that these things because you got the people to do it go a little longer I think a graduate school because a smaller but when you're doing the universities with thousands of graduates they really I mean it's it's like precision you have to have to be short. And I've been very blessed.

Doug: [00:12:57] This university is giving me an honorary doctorate I've gotten a couple of those so I'm not worthy of any of these things but the. But I guess I must entertain them enough the last time. But the the you know it is it's an interesting thing doing a commencement and a good friend. I asked him advice he says.

Doug: [00:13:17] Say what you would want your kids to hear if they were graduating and. And so last time it was all about declaration of independence from baby boomer conformity. Don't do it. I mean this was ten years ago. Don't do what your parents do. Do your own thing you know be yourself you know. Don't be like our generation who started out in the 60s caring about the environment and now it's a political hot potato. You know how the frig did that happen man. You know. And you know it's it's just it's just you know generations. Some people say that's always going to happen. But but the human condition is a hope that the idealism of youth will not totally be lost. You know the people do it.

Doug: [00:14:01] And I do feel like that just that independence it was a reaction I was talking a reaction against what was going on as opposed to what to do.

Doug: [00:14:12] And you know listeners to this podcast readers of my books this concept you know I write about how to create ideas and how to face fear. I mean that's it encouraging creativity. That's all I know. That's all I write about seven books on creativity courage you know whether it's the North Pole or whatever it is. There's only two subjects that I know and and so we return to it a lot. And I don't know there's something about this concept.

Doug: [00:14:38] You know what you're hoping for. Former Governor Kenneth Curtis spoke at my graduation a long time a long long time ago and I have no idea what he talked about. I've tried to look it up on the Internet and I never could find much of anything on it. You know you hope as a commencement speaker that you reach somebody somewhere so anybody out there who's got a thought please send it to me.

Doug: [00:15:03] You can email me at Doug Hall at Doug Hall dot com. Doug Hall at Doug Hall dot com just send me any advice and suggestions they are all welcome. Cause these are stressful when you do these because they're expecting you to do something of significance.

Tripp: [00:15:19] So now a very good day I think people will be entertained and it's like like you said a lot of these commencement speeches can go go on and on and on and I think this gets to the point very quickly.

Tripp: [00:15:43] It's time now for the Driving Eureka book segment with author and inventor Doug Hall Well let's move to our driving you Rica book segment and we continue on this theme small steps to build courage using PDSA.

Doug: [00:16:08] Yeah. So you know we want to do big ideas but it's that first step. That's the hard step. And people tend to look at the mountain go Oh my God how am I gonna do this.

Doug: [00:16:20] Well you know you have taken a step at a time and and I had the good fortune I was at Canyon Ranch and Robert Mauer author of the book one small step can change your life. The Kaizen way was was a guest of Canyon Ranch. I got to hear him talk I and I got his book and he's about the cycles and he's he writes all changes even positive ones are scary attempts to reach goals through radical or revolutionary means often fail because they hate and fear.

Doug: [00:16:53] But the small steps of kaizen disarm the brain's fear response stimulating rational thought and I in the book excerpt that's in the newsletter I talked about you know plan to study act these cycles of learning through these are confidence encourage grow and it's not about throwing stuff against the wall it is about you know discipline steps of learning and so whether it's the way we make the whiskey whether it's a way we approach projects you know.

Doug: [00:17:19] Yeah the first 50 times it's probably going to mess up probably a hundred times. But if the mission is worthy and you're disciplined about it and you study and you look back and look at them that's how you do it. The problem is getting people to do the first one because they want to sit there and figure the whole thing out before they even begin. Well that's not going to happen. Not going to happen.

Tripp: [00:17:40] I think you know and that's one of the things that I learned from going to the innovation engineering classes is I didn't have a method I didn't have a way to break it down as I would other things. So you know if I was consulting with someone on their organizational structure I knew how to break that down. I knew what steps to take. You know one by one in small chunks to be able to kind of move them through to what a new structure might do for them an actual test it. I mean you know being able to test that structure I didn't have a method. I think people sometimes you know they're they're looking for the well the one thing as you've mentioned before as far as the big idea. Hopefully that that will you know drive it through.

Tripp: [00:18:28] But it's really what you've done in innovation engineering is break it in to into smaller steps for people to be able to grasp the concepts of really innovation.

Doug: [00:18:40] Yeah. For some people this is natural they can they can see those steps and they can do it. But for most people it's not. And that's where the classes and the lessons whether it's the online class or live and the software that makes it methodical makes it almost seems like contradiction terms innovation logical.

Doug: [00:19:02] Oh yeah. Discovery is. I mean it's the scientific method folks. I mean this is not there's no great discovery. You know this is the fundamental. This is how science happens.

Doug: [00:19:12] This is how new things are discovered and whether you're discovering a cure for cancer or you're working to discover a cure for you know your business challenge or your non-profit challenge or your life challenge. There's a methodical approach. And people have just not been shown that I spent the weekend with you with Kevin Cahill the grandson of Dr. Deming and the executive director of the Deming Institute which if you go to Deming dawg you can learn a lot more about it.

Doug: [00:19:42] And we had some incredible conversations about about Dr. Deming and his teaching and he was showing me they've got this new online class that they're in the process developing and so I get to see one of the first prototypes. And and I said to him I said I said Kevin you know you know what you've got here.

Doug: [00:20:03] But what Deming really was doing was teaching us problem solving and we stopped for a second because I and I realized what that said and I said you know this we tend to think of this plan to study act as this other thing but what it really is it's how to solve the problems of life. That's it. That's what it is. It's the simplest most effective problem solving system on earth. And whether it's the way we teach it at the Institute which is the same and we are beholden to them for all of their their help. That's what it's about. And but we don't have that system and we're not taught that in school we're not taught that unless you go to a school where they teach innovation engineering of course she plug you know.

Tripp: [00:20:46] So. So as I as I'm listening to you talk about you know from a problem solving standpoint it takes me back to. And we may be touched upon this since in an earlier episode but it takes me back to Frederick Taylor and his method force problem solving and really what was references Taylor ism as being the method that was used. But Taylor ism has now been basically just modified to neo Taylor ism so. So we're we're still not using the problem solving of PD essay of Dr. Deming thinking it's still stuck in something from really the early nineteen hundreds. Any thoughts about that.

Doug: [00:21:29] Yeah I mean we've gone from a world of command and control to empowering workers to back to command and control again and and and the worker you know we quote We hire these people because of their creativity. We see you creativity problem solving I want entrepreneurial people. And then we ask them to just do what we tell them to do. You know it's like why do you bother me. Why do you bother. I mean I was just going through that with brain we've got a few investors that we've got and and and I reach out to them every single week. I give them things I need help on and I was talking to one of the best assistants Doug I've got a bunch of investments I have none like you. You just are endless in asking for my help.

Doug: [00:22:15] They say and frankly I can't. I don't know how you do it because I can't keep up you. I mean it's only once a week you ask me for help but I can't keep up when I feel really bad.

Doug: [00:22:22] And he says you know none of the other investments that I have do they ask me for help. None. He said Why do you do it. I said well I I. Yes your investment was helpful but the reason I selected you because I was fortunate I could turn down other people was because I thought you were a smart person and I wanted your help. So why would I recruit you because you can help me and then not listen to you that would appear to be stupid. And it appears that most managers are stupid. They hire smart people who think differently and then they try to get them to think like themselves. Well what the f. You know I mean come on people it's crazy it's crazy.

Tripp: [00:23:06] I think that's the the burden of consulting in general. You find out a lot of times for when people hire you and they just want you to affirm what they're doing as opposed to actually improving what they're doing you they want reinforcement. You know they went they went Oh yeah look how great you are.

Tripp: [00:23:24] You know type of thing. I said if you wanted me to do that we could have made this a very short conversation at the very beginning and you know well.

Doug: [00:23:32] I have an executive vice president at one of the biggest banks in the world. He said he said he says Doug Hall is a royal pain. I mean he is just absolutely obnoxious. The problem is is he's right. And he tells the truth and I'm like well that's good. I guess I didn't mean to be obnoxious but. But you know I've.

Doug: [00:24:00] That's how I've been in this business for 40 years. You tell the truth politely politely. That's the key. Politely but you know you you educate and you you speak the truth because the minute you stopped speaking the truth you're your value is lost and your soul is gone.

Tripp: [00:24:18] That's true.

Doug: [00:24:19] That's the only reason I'm still in it. Many most of the people who were doing innovation whether it's innovation education or inventing work for clients are just gone. They're just gone. I mean it's. It is. I mean another one bites the dust. Another friend just retired he says it's beyond me now and I'm like oh man and you guys are killing me man. Stay in the game.

Doug: [00:24:42] But they do they they they just give up because part of it is is they lost their integrity at some point along the way. And so now they it's just just horrible. But when you're doing meaningful stuff in meaningful ways and and in you there are clients out there who really want help. What we'll talk about it next week I'm going to talk about this the difference between bartenders and mixologists OK. Well let's speak to this. We'll talk about that next week. But there is a difference in how you approach this and that's how I'm still having more fun. Forty years later I'm still having fun with it which is amazing. Most people are burnt out longer go.

Tripp: [00:25:23] Or searching for new ways to try and tell the truth. You know that that resonates.

Doug: [00:25:30] I don't know. I don't know that that's the case. I think they give up. I'd like to think that they did but most of them just give up. But my generation at least

Tripp: [00:25:42] This is the Brain Brew Whisk(e)y Academy podcasts where we will take you behind the scenes so you can see what it takes to build a whiskey distillery business.

Tripp: [00:25:52] The Eureka ranch team led by Doug Hall are creating a craft whiskey company patented technology like has never been done before.

Tripp: [00:26:06] Ok well let's move to our Brain Brew Whisk(e)y Academy. The wonder of failure.

Tripp: [00:26:13] So you've attended a American Distilling Institute conference in Denver Tell me about that experience.

Doug: [00:26:21] Oh fine. About 2000 people about 90 percent of which are not in the spirits business or whiskey business. They're trying to decide if they want to get into it. So a lot of newbies that are there but there were a few people who had done it and I got to spend some time maybe having a wee dram with some of those folks distilling conference I'm sure and maybe a little bit.

Doug: [00:26:47] And it was interesting because you got the newbies who were sitting there nervous scribbling down every single piece you know trying to get every little detail. So the case are going to miss something and not realizing hey it's not you know you just got to get in and you know just keep swimming as the movie says hey you got to get into the game you know you sitting on the sidelines you can't figure out what it's like to get into it.

Doug: [00:27:17] And and that's frankly I'll tell you one of the challenges that I'm going to make a plug I'm going to make a big plug here for somebody.

Doug: [00:27:24] One of the great challenges people have is you know brewers have been able to do you know homebrew and learn their way to get ready to get going. And distillers have had a very hard time with that because to really do distilling I mean unless you do in moon shining and the time it takes to age et cetera et cetera I mean it's just you mean you have to get in before you learn much. There's a company called I-still. And anybody listening to it I'm going to give you my strongest strongest recommendation and that includes here in the U.S.. Also one of the most respected whiskey makers in Scotland a top top notch person from the very top companies told me the only still to buy is an ice still it's a computer controlled system.

Doug: [00:28:12] But what's most impressive is they have an I-still mini that's only like four leaders or something like that a little tiny thing that actually fits in a roller board that you can check kind of on a plane like or it's a little tiny thing.

Doug: [00:28:29] And so you can do. You can do your batches you can find your cut points and you can work with it. But I still is the only way to go only way and they have amazing courses that you can take if you're thinking of getting into the spirits business to make your gin and vodka. I would use an ice still to make whiskey work with brain. Will help you with the whiskey part but to to get there going that way because that's where you're gonna really do something amazing.

Tripp: [00:28:57] Okay. So you. But you didn't buy you didn't have one of these.

Tripp: [00:29:01] Yes I do. Oh you do. So yes I I. And so I'm still grasping the concept of it that I still does things in smaller batches.

Doug: [00:29:10] It does very small fast runs. OK. So that means you can run a lot. You know we talk about fail fast fail cheap. It's a system fulfill fast fail cheap like we can make whiskey in our time machines in in 40 minutes. So too can you make batches of distilling batches and run some experiments much faster with this. So if they're awesome. They're absolutely awesome owners incredible rep team is it's just awesome. And it's the only way to go. I still I still. OK. Yeah. So when I was at the conference I got to talk to a bunch of these people and you know a couple of grams as you go along you start talking about failures and things that didn't work. And you know one of these distillers is telling me the story about how he had a he kind of messed up some stuff he was doing and he had a small fire in the distillery her cheese disaster disaster the bite about a small explosion just a small one.

Doug: [00:30:11] But they cleaned it up and he discovers like he's three to five bottles just a very tiny amount of liquid was in one of the vessels there. And he tastes in comedy and that's pretty good.

Doug: [00:30:26] So a bottle shop he submits it direct competition and wins Stop.

Tripp: [00:30:32] Oh no. Really.

Doug: [00:30:34] Mm hmm. Awkward. I haven't thought of that just the three I said.

Tripp: [00:30:42] Yeah. How do you recreate that.

Doug: [00:30:44] So that is like how do I make it a game without you. That's fine. But the thing is is that he was laughing about it you know and other people started telling stories of epic failures Ed and there were some newbies around looking at are as you know they are worried about that they're gonna mess up and we're just talking about our screw ups all the time. And and and it's I don't know if if you're not comfortable with failing don't bother to start a distillery just don't start it don't tell me that you know everything because you're an executive or buy food for what.

Doug: [00:31:24] Just get over yourself. This is a live and dynamic process. OK when you eat when you're making whiskey. Consumers are fickle. You have a 95 percent failure rate. Everything fails. That's not the question. It will all fail. The question is do you pivot. Do you change. Do you learn from that. Do you make it right. And and it's interesting because I I was thinking of Paul Shirky when I went to the North Pole.

Doug: [00:31:48] He's one of the greatest. He spent more nights sleeping below zero than anybody else. They say I don't know how you figure out rule I got but. So he's gone to the pole a whole bunch of times by dog Lipski the Admiral Perry way. And I asked him I said Why do you go to the North Pole. This is as we're getting ready for the trip but he says this is because it feels so good when you stop now.

Doug: [00:32:09] As I'm getting ready to go to the Pole with him I'm thinking what can a nut case. But he was right. You know and it's the same with the distillery. You go through the ups the downs the failures and but you survive. You survive. Sometimes you make the Poles sometimes you don't. But whether you make it or not you sit down and man it's like Damn it. You know I pushed myself. I did it.

Doug: [00:32:38] I did something I did something I put myself out there versus those people that sit on the couch and go whose looks pretty tough to me you know not gonna do anything. Get up. Get out. Get going.

Tripp: [00:32:54] One of the things that I have curious just from your experience as you talk about whiskey and you talk about going to the North Pole type of thing are businesses. I mean they all should be failing right. I mean isn't that. Or do you see different scales associated a bank versus a whiskey company. In other words that that you should be failing more because of the nature of the business.

Doug: [00:33:19] No it's not humans humans life. Everybody everybody. If perfection is highly overrated you need it.

Doug: [00:33:30] If it's obvious and you can get it then you haven't done anything worth doing stretch yourself push the edges push the edges you know you know whenever anybody says they're okay with fear I know they're not you know I mean it's just how it happens it's how learning happens Demi said theory of knowledge it's how it happens failure is part of the system if if when you when people say oh you know we're not really good with was failure here well and then you're stupid and you're gonna die because you know the plants as the seeds are spread on on the air a whole lot of them hit pavement then work hard to grow on pavement but some make it and the natural selection and the evolution of the genes happens that's just how it happens.

Doug: [00:34:33] I mean it's just the way it is. And I have zero sympathy for people so I think I can't fail what if I say well and then you know it's like one day I said to myself feel fast real cheap. Like I really can't say that I trust you. It could be say learn fast learn cheap. I said no fail. I can't say that. I said you have psychological problems that I can. I mean you truly have psychological problems. And I'm sorry.

Doug: [00:35:00] That's beyond the scope of my knowledge base. You should get professional help. I'm serious. I mean this is not just there's not a joke it's not just a fun slogan fail faster and you will get there quicker.

Tripp: [00:35:15] Ok. I think that's the strongest we can get that message out. Tell me about the Vermont Toddy. Our craft cocktail recipe is that. Is this a an original or is this one that's been around.

Doug: [00:35:30] Well this is an original. So I've always wanted to go through this winter and I figured it may as well get this out before spring gets too much further in here. Got to get this hot drink out. You know for the winter should've done it earlier. But I've always wanted to have a toddy. There was a good toddy and I've tried and tried and tried it and I've done complicated ones. And usually they're pretty thin. Chef Phil works for the distillery came up with a recipe using tea. That was really good. It was good but I didn't like the caffeine in it.

Doug: [00:36:01] You know in the non caffeinated tea didn't work and then I kept playing with it and then I made just a simple switch.

[00:36:09] He's classically used honey or sugar a sugar cube sugar cube common Honey's common and and you'll use all kinds of different flavors and you'll put different things in and you'll put in spices and I went to spice right with all kinds of spices and then I had some friends from Vermont here and I started joking about we'll make a Vermont Toddy. And so we took it and it's in the show notes.

Doug: [00:36:37] But three quarters of an ounce of maple syrup you know good Vermont maple syrup.

Doug: [00:36:43] Three quarters of an ounce of lemon juice ounce and a half.

Doug: [00:36:47] In this case of our keel boat whiskey.

Doug: [00:36:50] And then three ounces of boiling water. And so if you add that up it's about a 50 percent water 50 percent of the stuff and suddenly in spit in place of all of the spices not the kind of stuff that good quality maple syrup the real stuff. Now the real stuff really gave me the backbone that I was looking for in it. And finally after dozens and dozens of tries I got a toddy that I really enjoy on a cold winter's night OK.

Tripp: [00:37:23] And so you don't get in trouble is there a Canadian Toddy.

Doug: [00:37:29] Well the session there but these were my rights so I'm going to keep it there for them.

Tripp: [00:37:33] OK. All right.

Doug: [00:37:36] Lois Lois this one's for you the Vermont Toddy. So in your memory and Sue Hogan too.

Tripp: [00:37:43] Okay. All right. So feeling fearlessly with the Brain Brew Whisk(e)y academy it was. It's this whole theme of a failing and being able to laugh about it and have fun with it.

Doug: [00:37:58] Until we talk about it again and again and again and again because it is the root issue for most people. I'd love to do it but I'm just scared. Well let's do something.

Tripp: [00:38:19] Because we appreciate you as a listener. We are offering for limited time for things. A one hour abridged audio of the driving Eureka book a subscription to the driving Eureka newsletter which contains weekly advice from Doug Hall on how to find filter and fast track big ideas and the newsletter has other offers that are not made public. The driving Eureka prescription for success. You answer questions and we'll help you assess your ability to find filter and fast track big ideas. And you get advice on how to grow your ability to innovate. And the last item. Access to a Doug Hall interview with a radio legend. To get these offers. Go to w w w dot Doug Hall dot com forward slash podcast. And don't forget to subscribe

Tripp: [00:39:21] To the Driving Eureka! podcast on iTunes.

Driving Eureka! Newsletter #22

Your Innovation Podcast. This is the 22nd episode of the Driving Eureka! Podcast. Segment 1: You Change the World When You Change Your Mind; Segment 2: You Have to Change the Person First; Segment 3: Brain Brew Whisk(e)y Academy. Subscribe to learn how to Find Filter and Fast Track Big Ideas.

[00:00:01] The Driving Eureka Podcast - Episode #22

[00:00:32] Theme of this Episode is Change

[00:01:06] Kinky Boots?!!

[00:02:20] How Will You Frame Your Mind

[00:04:06] Culture or Person? Regardless, the Person Can Improve and Influence

[00:08:43] Innovation Engineering is about the People

[00:09:31] Take Responsibility for Your Own Development

[00:11:09] Driving Eureka! Book Segment

[00:11:24] The Bill Conway Conversation

[00:12:52] Using Your Sphere of Influence

[00:14:15] The Frauds of Change - Move on From

[00:16:58] Brain Brew Whisk(e)y Academy

[00:17:21] Change Your Mind to Transform Whisk(e)y

[00:17:52] A Keynote Message - Deaf Ears?

[00:22:24] Jack and Jimmy - A Downfall

[00:23:38] Big Companies Kill Companies They Buy and Kill Them

[00:26:36] Craft Whisk(e)y Cocktail - The Italian Manhattan

[00:27:47] Step 1

[00:27:50] Step 2

[00:30:07] The Birth of Five Woods Rye

[00:33:48] Rules on Whisk(e)y Buying

Tripp: [00:00:01] Welcome to the Driving Eureka! podcast where we share ideas and advice for helping you find filter and fast track big ideas. Hi I'm Tripp Babbitt adviser to global organizations on the Deming philosophy and host of the Deming Institute podcast.

Doug: [00:00:23] And I'm Doug Hall inventor speaker teacher and whiskey maker. I'm also the founder of the Eureka! Ranch and author of the driving Eureka book.

Tripp: [00:00:32] This is the Driving Eureka! podcast episode number 22 our theme this week is change and it's actually one of the quotes I put out on my website Doug which is if you change your thinking you change the results that you see so on changing your mind. I mean everything is really about change isn't it.

Doug: [00:00:56] Yeah. And then this came I was in New York recently for the for the show with the community colleges league of innovation League for Innovation and community colleges.

Doug: [00:01:06] And I went to see the show Kinky Boots the Broadway musical and which is a great fun show. And the big lesson at the last song is you change the world when you change your mind and which is sort of a theme we've had last couple of weeks here.

Doug: [00:01:24] You know you have that mindset of curiosity you're going to bump into new ideas when you have a mindset of experimentation you're going to bump into stuff and you mindset of learning. Then then when something doesn't work you just say hey that's cool. I learned something and call it discovery collaboration responsibility. I don't care what it is but it's a matter of how you make a choice to is your mindset going to be one that is to quote Norman Vincent Peale positive thinking or negative thinking. And when we think positively when we think towards the future we unleash the power of the brain to do just truly amazing things. And when we think negatively we just become a wimpy whining huddled masses.

Doug: [00:02:20] I mean I mean that's what I'm talking about. It's how am I going to approach life. How am I going to approach life right now. What is the framing that I'm gonna take because it's just stuff but our mind interprets it any this sees opportunity or dread.

Tripp: [00:02:41] So so as you work with with different organizations just your feel what is there what kind of what is their thinking is there kind of a set on an individual basis this is on a cultural basis or both. How do how do you see it.

Doug: [00:02:56] I think it is primarily I think a lot of individuals will blame their culture and there is some truth to that but I've worked for the world's biggest corporations. I did 10 years time inside the Soap Factory Procter and Gamble and I maintained my mindset even in a world of bureaucracy and you know blue blooded ness if you would they you are not a prisoner to your organization. It's a mindset that you've taken. And I think you know throughout organizations you find people that can get stuff done. You find stuff people doing amazing things you go Well how do they get it. Well they've chosen to have that optimistic mindset. They've chosen to going to work that way. And and that's it that's it. So I think it really is inside the person I think. I think it's a personal thing mostly. There is some element of the culture makes it easier or harder. But it comes from within. I mean it comes from within you.

Tripp: [00:04:06] Well with so many organizations that do have you know cultures that are facilitating where you have two thirds of the people are not engaged in their work. That was from a Gallup poll that was out there. You know those types of types of things I know and I get what you're saying. If you have a that your mindset is set anyway no matter what the culture is you know you're going to find a way but it does have an impact on the masses isn't it easier to. Well I'm not going to say it's easier.

Doug: [00:04:37] But yeah let's flip let's flip the two options. Yeah. Yeah. I have a mindset of optimism and discovery and curiosity and I'm going to drive new things and I'm in a culture that doesn't support it. Ok that's option one option two. I have a culture that supports this but I don't have any desire or any curiosity myself. Which one's going to have the bigger chance of success. I'd say the first one a change comes from within you we use the culture as excuses for not taking responsibility for our lives. We use it as an excuse. That's my view. Because it's become easy to us.

Doug: [00:05:23] You know you start out on the job and you're a volcano of new ideas. Then you learn about all of this stuff and you either give up or you figure out a way to make things happen.

Tripp: [00:05:34] Yeah I mean there's part of me and you know my my pull on the Deming side in a night and and this is where I'm gonna challenge that a bit which is 94 percent of the performance of an organization coming from the system and you know 6 percent not just the individual but certainly associated with the individual. So how do you how do you square that.

Doug: [00:05:58] I mean and I give you that ok. Regards to the overall organization. Yes but I have a as Kevin Cahill his grandson says I have a sphere of influence my life is not determined by the stock price I work in X department trying to do things and I can find joy in work in my area by the mindset that I take towards that. Words don't boil the ocean don't make me responsible for the dance stupid board of directors and the dumb CEO. That's not my problem but I can take charge of my life right now because I have a sphere of influence which is always much bigger than people realize that you can change your mindset in the way you work right now and that's why with our with our fundamentals course so we teach that you can take online or in person our whole thing. When we took and flipped Tripp from teaching while we'll do the culture if you want but when we took a flip to empowering people enabling individuals to be able to think quicker smarter more creatively to help them do it. It was just just mind blowing the impact that you had when you were able to just ignite people and say Stop whining for Christ sakes let's do something let's do something with our lives.

Tripp: [00:07:18] Yeah. It makes me wonder though if you know some people for instance that would take the class they still run up against the system and they may get to the point where they just say oh you know the heck with thiss. That's right. I don't believe it somewhere else and that is why.

Doug: [00:07:35] Well I have an option too. Yeah that's an option too but that's why we tell them when they're starting to focus on where they're going to apply the stuff because we we coach them through applying it is we say let's take something that's in your sphere of influence what's the things where you can control it. You know it because that's where you do that. And it builds your build your confidence to build your capability and then you do it again do it again. Then next thing you know people in next department over I mean we've seen it over and over again. People the next department are reaching over go man. That's kind of fun. How do you guys get to do that cool stuff. Can we do that. Oh yeah sure. This is how we did take this course read this book you know whatever it is we can do that too.

Tripp: [00:08:13] So this is this is kind of the the the process of creating critical mass. I guess I could see I could see that that's certainly a longer process. But I also see nowadays with especially the mindset of people today almost being individual contractors just saying yeah I could do this at my company but you know that's just bureaucracy I don't want to fight I'm going to start an idea you know on my own and I'll start to build a business off of that. I mean I I know that would be an option.

Doug: [00:08:43] And I'm agnostic to that. I mean our mission is to change the world by enabling innovation by everyone everywhere every day. Right. I'm here to do the people we're about people you know if if a CEO wants to get a lot of their peoples I'm good. But we work for people we change lives by changing people. When you change the mindset of a person that's how you make amazing things happen. Corporations don't think people think corporations don't get patents. A person gets a patent and assigns it to the company power to the people is what we're about. You know that's what old hippies like us do.

Tripp: [00:09:26] Speak for yourself. OK well let's continue this conversation with but let's move slowly.

Doug: [00:09:31] There's one thing I will say and so I started out with the Kinky Boots quote you changed the world when you change your mind. And and you know the secret to changing your life truly is. I honestly truly in my heart of hearts believe that it's about change you might just take money or contacts or resources. It requires taking responsibility for how you're thinking. I mean if you think about it you are the leader of what is right.

Doug: [00:10:02] Your boss your partner community are not the leader of you or of what's right for you. And when you have the mindset of the bigger person you generate energy around you in support of the change that's needed in your world and the broader world as Hamilton sings in the play by the same name I just recently saw it in the song non-stop he's talking to bird at the time he said Hey what are you waiting for Woody what do you stand for.

Tripp: [00:10:41] Well he was a Burr wound up being a guy that in essence kind of wasted his life. At the end after after shooting Hamilton. So he kind of lost lost his way.

Doug: [00:10:56] Yeah kind of lost it.

Tripp: [00:11:00] There was all that was kind of a sad story actually a guy goes from being vice president to there. But

Tripp: [00:11:09] It's time now for the Driving Eureka! book segment with author and inventor Doug Hall. Ok well let's move to the drive in Eureka.

Tripp: [00:11:24] Book segment and it's a continuation basically the conversation that we have and it's this conversation they had apparently with with Bill Conway once you share with us about that.

Doug: [00:11:35] So I was doing it with Bill Conway. He's the first Fortune 500 CEO to bring Deming back from Japan to work with him and he told me that Dr. Deming had told him that it was important to work with the willing and that. And I challenged Kevin Cahill Dr. Demings and said leader of the Deming Institute. What advice would you give to an employees working for a leader who is unwilling to learn or change. And I'm going to read this quote because I think I think it's important and this is an excerpt from the book. There's a wonderful Q and A with Kevin Cahill in the book that's. It's worth the price of the book just to read it because you know so much of damning is written about in the past of where he was that he can become a museum figure for not careful and the interview with Kevin brings to life today's world and things like this a leader that's unwilling to change. And he said Kevin said I agree. You've got to work with the willing whether it's at the bottom at the middle or at the top.

Doug: [00:12:37] I know my grandfather said quality starts in the boardroom and I've heard many people say unless you're at the top it's not worth doing. I disagree because you're not always going to get the person at the top right off the bat.

Doug: [00:12:52] I believe that every single person in every single organization has some sphere of influence they can impact and ultimately that's what I did when I started out working just out of college I had leaders who are fantastic people but they really didn't want to change because what they were doing at the time was working well I started out as an assistant to an assistant but I realized that I could use my grandfather's ideas and thinking to improve the areas that I had some influence over in time. It had a real impact and people started noticing that this guy did something really interesting and different what it enabled me to do was to move up the organization. Eventually those who are willing to learn the new way of thinking and applying it can end up being in charge of that leader was unwilling to learn or to change. I mean that he's got it. Tripp Kevin's got it.

Doug: [00:13:54] We can't wait. We can't wait for the leader to get it. We can't wait for the leader to retire. We got to find the willing get started and let it grow from there and that's the purpose of Driving Eureka! book Driving Eureka podcast. Every talk that I do every class that we teach it's let's find the willing and let's get started.

Tripp: [00:14:15] You know it's interesting. Is as I read through here I reflect on some of the clients that I've had in the past and there are groups of them that did really great things with with the Deming philosophy and then there is also their reflections and failures. You know I'm on my part but there are people that do as you're trying to change the thinking that appear to be getting it and then the fruits of what happens later you start to find out that they were really kind of. I can't think of a better word for it right now but frauds. In essence you know they kind of went through the motions. They they say that they're they buy in from a change. How do you have you run into that before. As far as people that do start to work with you think they they got it. And then they're not really committed they're just kind of there. I don't know how else to.

Doug: [00:15:18] Yeah that's right that's right. There are people who will do that and then you try to teach them and if they don't get it you move on. Let's move on. I mean I don't dwell on it. I just don't dwell on it. If you're willing to learn. I will make you amazing things. You won't have a breakthrough that transforms your industry change the company. No problem. OK. No problem. I mean I can do that. You want to learn how to become incredibly good at this. No problem. Now if you don't want to do it then no problem on my part either because I'm moving on. OK. I've been doing this 40 years and you're not going to change people. People choose to change. Oh yeah. I can't change it. I think too many trainers think they can go in and basically do a mental lobotomy to people. It's never going to happen never ever. The person changes when they're ready to change. That's it. It's as simple as that.

Tripp: [00:16:11] Yeah I think in the harder ones are when they think they've changed in and essence by the fruits of what they do. You can tell that they haven't. People that I went up working with for for years and then found out later that they were. Well you know I get a big bonus if I do this. But we've talked about this. It's the wrong thing. So anyway. OK. Well that's.

Tripp: [00:16:35] Yeah that makes sense is as far as being able to change in the sphere of influence that you have or you move on. I mean that's right. Kind of kind of the choices that you have associated with it. But are you are you are you true to it. Sometimes I always wonder whether I stay to true to it.

Tripp: [00:16:58] This is the Brain Brew Whisk(e)y Academy podcasts where we will take you behind the scenes so you can see what it takes to build a whiskey distillery business Eureka ranch team led by Doug Hall are creating a craft Whiskey Company with patented technology like has never been done before

Tripp: [00:17:21] Ok well let's talk about the Brain Brew Whisk(e)y Academy. Change your mind to transform your business. So how are you using change.

Tripp: [00:17:31] I mean it's pretty obvious you guys are put in the last episode we talked about failures and that's certainly a type of change. So it's one of the things that happens when you have change is you. You're also gonna have failures associated with it and because you're pushing the edges so are. How are you using change in the Brain Brew whiskey.

Doug: [00:17:52] Well this is inspired by the keynote talk at the craft spirits Association up in Minneapolis recently. The opening keynote was a guy who makes snowboards and his whole the gist of his story was he tried to sell through the normal distribution channels his innovative snowboards and he tried that whole process and he had massive failure. And then he changed the game. He started doing them custom. He started selling them direct.

Doug: [00:18:23] And his whole message was You can't use the same playbook as the multinational conglomerates. You can't do it you know. And and he was trying to get these people to do it. And sadly his message fell on totally deaf ears. Because so many craft spirit companies are interested and in fact they're embedding it in following the rules and thinking about how they make whiskey the same way it's been done for generations. You know Johnny's Jim's and Jack's whiskeys. Those companies have systemic advantages. You can't beat you can't compete with them. You can't play through the three tier distribution system for the rest. You can't do that. You've got to come up with how you're going to make money. And what's your system for doing it and you got to change the rules and that means a transformation of the business and a transformation of your mindset. And in it comes from. In this case here with crafting there's nobody you can look to except the founder and the leader of this thing is you've got a vision on how you're going to do something different then than others. You know in our case mastering Wood is our playbook.

Doug: [00:19:42] I mean we are about becoming the absolute best at managing the alcohol wood relationship. I think it's probably fair to say we know more about that relationship than everybody else in the world combined. Just because we've run you know too close to 3000 experiments now we've just done more experiments than anybody else knows and we we understand a lot more of this because we can and we are incredibly focused. And so if you like it finishing with different woods and you like to have different flavors and tastes we can create amazing things for you. That's ours. Now other people we work with. You know we encourage them to do it that way. And as I've said before you know we had a guy just recently said Can I have your paddle wheel bourbon. I go No that's my product. And he says Well well but I just want to sell it. I said no. Do something original create your vision. I'll work with you. I'll help you. We're called Brain brew custom whiskey. We're not Brain Brew stock whiskey we're custom whiskey.

Doug: [00:20:44] We will sell you a customized whiskey to your specifications at a fair price that you can bottle and sell in your marketplace and and that is like being it blows people's brains out because they're just so used to thinking well if I just do something that just like Johnny Jim and Jacks whiskey I'll have something. Well now you're just going to have another mass market mediocre whiskey to be by and I'm not doing them. It just it is what it is. They're just cheap whiskies. All three of them in their categories.

Tripp: [00:21:19] So what was the outcome then of this. These people are they are they going to try and craft their own.

Doug: [00:21:26] Interestingly there were two partners. OK. There were two partners sitting at the table. OK. And one was a chemist. And the other one is is is a manufacturing guy. So there kind of wasn't even a marketing person in the room really. It was one is sort of a chemist a scientist and one is a production person. And interestingly the chemist surprisingly was like I totally get that. It's like the scientist in him of discovering something new or something. Got it. And he swayed swayed the other partner.

Tripp: [00:22:02] So are they going to do it.

Doug: [00:22:03] Yeah yeah yeah yeah. I mean he said on the way he says we're going to do business we're gonna make this work.

Tripp: [00:22:08] Thank you. Interesting. Are they going to. Are they going to bring you in to help. Well I'm just going to try it on their own.

Doug: [00:22:16] Well. Well they can't. I mean. I mean the equipment's ridiculously expensive. What we've got. So now we're going to do it together. Yeah. OK I'm your partner.

Tripp: [00:22:24] Cool. So. So when you look at some of these other ones you know when you talked about Jack and you know Jimmy and all those guys will you think they'll ever make the change or do you think that they're just smug. Well you know I we're making money doing what we're doing or what. What's your thought there.

Doug: [00:22:50] Well I think I think the same as what's happened with Budweiser and Miller and all the rest of them. You know bourbon is hot right now so they're doing fine whiskey is hot right now so they're doing fine.

Doug: [00:23:01] And so way they'll play with old few little fake you know craft washing things that look craft but aren't really craft they'll play with a little bit of that stuff but you know they've got a juggernaut. They've got a machine that makes a lot of money. And by the way that's fine. That leaves the other market for crazy people like us. OK. It's beer all over beer. Beer is going to happen all over again.

Tripp: [00:23:23] So we have. So what happens Doug like every other industry unless you're Amazon obviously they were able to kind of keep it keep it separate and you're still kind of you know you're growing but the Jack comes along says OK we'll buy it.

Doug: [00:23:38] And some will sell. And then those products historically what's happened is this is will then kill them because they go into the system. I mean let's face it most corporate acquisitions never work out. Yes you know. So you know though they'll milk it for a while every now and then they'll get lucky. But most of them will fail because the heart and soul that made that thing what it is the mindset that came from that will die. Mm hmm. And that's the cycle of life. And then the entrepreneur will drink umbrella drinks down on the beaches. Then they'll decide they'll do it again. And then they'll say

Tripp: [00:24:16] Well I just you know and I look kind of at your history because I know you remember I remember you telling the story of I think it was a kind of polling business that you had at one point you wound up selling it and you remember your comment and there was always sell when you're not trying to sell. I guess I could do it. And if people are.

Doug: [00:24:36] And then I went back and after a number years I invented a even smarter system which is a truth ruthless system so you know I mean that's just life. I mean in this case here I built the distillery is right here my house we're on 80 acres here with a private lake in that just east of Cincinnati.

Doug: [00:24:52] And so the distillery is you know in the lot right beside my house and and everything's right here so I put it here because I I this is not for sale. I intend to do this because there's just a lot of fun to do. And there's just so many different things that we can do with it that I just really enjoy it. Now could somebody come around and do something. Yeah. Pop that's always possible but it's highly unlikely in this case because this is just too much fun. I have too much to do with this. Now ten years from now who knows. But but right now my intent is to do this to help enable other craft distilleries around the world to be able to do amazing things.

Tripp: [00:25:31] Ok but you don't see because of the nature of at least the way I listen to the words that you say when you talk about some of the you know big company it's the big spirits companies that they're not going to get this that they're they they think they might be by trying different things but you don't think they're going to.

Doug: [00:25:50] Well we we've got you know we have a pot. We have a wonderful partnership with Edrington. It's a non-profit trust to the benefit of the children of Scotland. They make the Macallan and others and so we have a partnership with them which is a very wonderful wonderful partnership. And we make products for them. And that's all the big companies in Canada and they're good. These guys are way better than most because I know all the different big players. Well you've worked with them over a long time. Yeah I've taught over 20 years and so. So they're just wonderful people. They're just just just great people. So we work with them and that's enough you know. And so then we go work with others. So but mostly with small people that that's that's where it's fun because that's where we can do crazier stuff and learn things together.

Tripp: [00:26:36] Okay. All right well let's talk about this week's craft whiskey cocktail which is the Italian Manhattan which if that name came up before I think it one of the other drinks that I can't remember the context now and I think yeah we've done it we've done some different Manhattan so.

Doug: [00:26:55] So Manhattan is the classic Hardy drink suite removed and rye. It's a drink of old men in you. I'm going to have a Manhattan or it's got a manliness to it you know.

Doug: [00:27:08] And so the idea of changing your mind. We've flipped it on its ear to make it lighter cleaner and fresher. And we did this by taking lemon cello which is an Italian liqueur. Where do you use just the Peel not the white pith but just the peel. You soak it into high alcohol solution and it comes the there's no juice in it when you do it properly and in it and then you add some sugar to it and it's very light fresh and so mixing.

Doug: [00:27:47] An ounce of lemon cello with.

Doug: [00:27:50] All right in this case rye deckhand rye some ice and stir it and it just gives a brightness so a way to think of this as it's it's a good spring Manhattan or when we want to have some spring in the dark months to bring some lightness and brightness to our sort of more whiskey forward cocktails.

Tripp: [00:28:11] And so looking at that I guess I'd not really had the lemon lemon cello or Ali say that I know of no point of order and drink that might have had it before. Are there other drinks that that contain that I would assume so.

Doug: [00:28:25] Oh yeah there's all kinds of things we've got two or three of them actually that we do. But this this gives us it's just fun. It's a really fun light kind of thing for you to try.

Tripp: [00:28:36] So is it from four people that drink the classic Manhattan than the day. This would be a natural different yeah.

Doug: [00:28:44] I mean what we've done is we've taken the sweet remove and and put it in a sweet lemon flavor. Okay. So the carrot the body of the drink is the same body that you'd have in Manhattan. It's just instead of the vermouth you're getting LEMON Okay. And and and so and and a brightness I just I mean that's the best way I can say it. It just has a brightness to it.

Tripp: [00:29:10] All right. And then the deck hand is your five wood rye.

Doug: [00:29:14] Yes that's right. Ninety five percent rye FIBROIDS IN IT THREE OAKS maple and cherry. And so it's just got a stupid complexity to it. And so that complexity gives a good base upon which to bring the lemon with it.

Tripp: [00:29:33] Okay. We talked a couple episodes ago about the you know the problem the promise and the proof. What is what is the proof of the deck hand.

Doug: [00:29:40] It's the five woods. It's a five to five wood. Okay. All right. And the proof is is you know using those five different woods which was interesting as we were going into a competition and I was messing with different things and I was with a buddy of mine Tim Hogan and while the night had gone on for some time as one would say.

Tripp: [00:30:06] Say no more.

Doug: [00:30:07] And at one point I said I said we were tasting different woods and you know individual samples. And I said I wonder what the hell happens if we mix some of these. And while one thing led to another and next thing you know there were five Woods added to it. I go What do you think of that. He's damn that's pretty good. And so we mixed up some others I put it in a bottle I said well let's try it tomorrow. Maybe as a first drink. The next morning we tasted it and we gave it to our wives we're staying over their house and we gave it to their wives and they went ahead. That's pretty good. And thus was born. It's also known as the working man's rye right as it because the deckhands of course were the working men on the on the riverboats. And so it sort of celebrates them and it's the kind of drink that bartenders really like because bartenders generally tend to like a rye rye generally will have 48 percent alcohol by volume as opposed to 40 percent for many whiskeys or 45 for bourbons.

Doug: [00:31:10] So it's gonna be a little bit higher. It's gonna be a more whiskey forward thing it's not for newbies but it makes it really stands up to just about any cocktail you're going to do and the five words really just give you a complexity that it's really really quite nice compared to summarize can have a bit of a bite to them. And this this has got a smoothness and it's just a stupid complexity to it.

Tripp: [00:31:36] Yeah it's interesting I'm finding I like I'm kind of gauging my taste and I seem to like the ryes a little bit better than the others. I'm not sure why but it seems to kind of fit my fit fit what my what my tastes are. But I mean well.

Doug: [00:31:52] The more you drink them the more you drink. And that's not uncommon. Okay so every Friday night when I get your your your text messages the more you drink them the more you're gonna tend to go.

Doug: [00:32:06] But I would encourage you to also go back though because the even just Keel boat are easy drinking product and there are there are cocktails that are still better with that than they are with rye rye. Okay. Yeah yeah. It's just it depends on the taste. Depends on what we're trying to do.

Tripp: [00:32:24] And apparently the cocktail that you have out there. So so one question I have I need you. We talk about your Deckhand you're tall stacks and your keel boat and the paddle wheel on all those types of things and you've already stated that it's pretty much local to Cincinnati but if somebody is going through Cincinnati it's the only place to get it. Is that you're at your place in Newtown or are you starting to distribute it through local liquor stores or.

Doug: [00:32:51] Through the spring we'll get it into the local liquor stores.

Tripp: [00:32:53] Okay. Okay.

Doug: [00:32:54] I mean look at liquor stores and there is there's some conversation we may go to a couple of other states out. I haven't decided yet but we've had some people approach us about bringing it into some other states and some some other things. So it was designed totally to be a su ultra local. That's one of the things I recommend to craft people is do an ultra local product that's where you've got the leverage against other people.

Doug: [00:33:18] And so it really is made to celebrate Cincinnati which was as you know I mean like 80 percent of the whiskey was coming from around this area but this was the home of American whiskey pre prohibition 80 distilleries in Cincinnati alone like it was not a beer town it was a whiskey town. I mean the value of spirits that went out was like five or seven times or something like that the amount of beer even though it was a German population. This was this is a whiskey town is what it is and that's what we're hoping to bring back.

Tripp: [00:33:48] Very good. Well one last question I have for you and I'm not sure exactly how it works I'm just gonna ask the question for I'm sure probably 90 percent of the audience probably already knows the answer but so so is is whiskey. I mean I know you like for instance Indiana is a weird state. So I'm not gonna use that as an example but can you order online and get it get whiskey delivered or the rules against that or what you know this rules.

Doug: [00:34:15] There's a Supreme Court case that may change that wine. Got it broken. But when they overturn prohibition they put the authority into the States. And so each state has its own rules. And so there is not it is not. There is a few states where you can buy stuff or there's some online people who basically what they basically do is give you a thing and they have a local retailer in the state that that mails it inside state lines doesn't go over state lines and there are retailers who illegally will ship to you.

Doug: [00:34:52] You know I'm just acknowledging it not supporting it but as a general rule you cannot buy whiskey or spirits of any type in order to them across state lines. It would view it. There's like four states where you can do it if you register in the States but it's really not something that's able to do the general system that people use. And again I'm not condoning it. I'm just reporting what I've observed is that they'll get a friend who's near the area and I'll have them get one and send it to them is is I I've heard stories of people doing that. But again that's not that's not the way it's supposed to be. You're not supposed to do that.

Tripp: [00:35:31] What if what if you're driving through the city. That's fine. That's totally fine. All right. OK. So what's the Supreme Court case. Is this something you're following or.

Doug: [00:35:43] Yeah yeah. So it's a Total Wine case. Tennessee says that they can't open up a retail outlet unless they've lived there for 10 years or 15 years or something like that. And that's in front of the Supreme Court. And this has to do with. Does. So what what you got in the Constitution and I'm not an expert at this but there's a contradiction in the Constitution between the commerce clause that says there's gonna be free trade across states and alcohol which the states can regulate.

Doug: [00:36:13] And so the question is you know basically the amendment to the Constitution contradicts the commerce clause. And and so you know eventually this has got to get resolved. And they did resolve it for wine but they only mentioned wine they didn't mention spirits which is why you can oftentimes buy wine across but even then some states say you can't. And then eventually they get challenged in court and gets overturned sometimes so. So it's long term this is gonna get resolved. It's just a matter of time same in Canada. Canada had a case they thought it was going to do it. Their Supreme Court punted on the issue. Eventually there will be an opening of this stuff you know a crossed and a mechanism because right now the states make a lot of money on booze and I think primarily the biggest thing is going to be is making it possible for the states to collect their money when it's shipped in. And you know I this it it will be I would be surprised if five years or indefinitely 10 years from now if this is still the case I think it's going to happen quite quite broadly. You're going to be able to get it in most other countries you can ship. We just happen to have a kind of a frankly a backwards system. You know it was done to protect people the three tier system and all these things it was done to protect people from staffing and there's people that lobby a lot. But the pressures on this are are severe and and you know the question is is it in the public interest honestly. And the reality is no it's not.

Tripp: [00:37:49] So would you would you find. So for instance says the growth of these craft whiskey companies come around. I would think there would be even more pressure to to open it up and that the big ones would probably say now is that kind of where the battle lines have some some.

Doug: [00:38:06] But it's mostly the distributors. It's mostly the distributors that will fight that. The three tier system the other one so you can do it more so than the manufacturers. Okay. I mean it's really the distributors who you know right now have a hammerlock on it so that you get to go through them. So I understand it. I mean it is what it is. They built a business on it and you know and they they risk money and stuff at the beginning I I respect all of that stuff. But at the same time I am you know I'm for free trade whether it be from here to Indiana or here to London.

Tripp: [00:38:42] Well in Indiana just got Sunday liquor sales a year ago. So I don't plan on big change in Indiana. We are going to be leading that charge a little bit a little bit. Just that just a tad. So yeah I was a big celebration to get Sunday. Sunday liquor sales in Indiana which was it's so bizarre. But anyway OK. All right.

Tripp: [00:39:07] Well interesting change change in the whiskey business. Try to.

Doug: [00:39:14] Change the mindset. Change or I play by your rules not others

Tripp: [00:39:25] Because we appreciate you as a listener. We are offering for limited time. For things. A one hour abridged audio of the driving you read the book. A subscription to the driving Eureka newsletter which contains weekly advice from Doug Hall on how to find filter and fast. Track big ideas. And the newsletter. Has other offers that. Are not a public. The driving Eureka prescription for success. You answer questions and we'll help you assess your ability to find filter and fast track big ideas. And. You get advice on how to grow your ability to innovate. And the last item. Access to a Doug Hall interview with a radio legend. To get these offers. Go to w w w dot Doug Hall dot com forward slash podcast

Tripp: [00:40:25] To the Driving Eureka! podcast on iTunes.

Driving Eureka! Newsletter #21

Your Innovation Podcast. This is the 21st episode of the Driving Eureka! Podcast. Segment 1: The Joy of Failing; Segment 2: The Power of Passion; Segment 3: Brain Brew Whisk(e)y Academy. Subscribe to learn how to Find Filter and Fast Track Big Ideas.

[00:00:01] The Driving Eureka! Podcast

[00:00:32] Theme of this Episode - Failing and Failure

[00:01:33] You Don't Start Out an Expert or With Skill

[00:04:42] You Need to Break Down a Big Innovation

[00:05:54] Stupid Ideas - the Key to Success

[00:08:21] The Big Fail in Innovation - Looking at One Idea and Not Developing It

[00:11:13] Do You Have a System to Innovate

[00:15:00] Need Passion to Get You Through the Failures

[00:15:41] Fear is There - Passion Can Overcome It

[00:18:25] Neuroscience and Innovation

[00:22:27] Brain Brew Whisk(e)y Academy

[00:22:58] Brain Brew Whisk(e)y - A Bunch of Losers

[00:23:04] The Art of Crappy Whisk(e)y

[00:26:03] The Opening of Brain Brew

[00:27:47] A New Line

[00:28:03] The Experiment in Cincy

[00:29:12] Craft Cocktail Recipe - Rattlesnake

[00:29:19] History of Rattlesnake

[00:29:51] Step 1

[00:29:59] Step 2

[00:30:03] Step 3

[00:30:05] Step 4

[00:34:03] Don't Stop or Start with A Winner

[00:36:43] Pushing the Variables

[00:38:51] Sluggard - Doesn't Push the Edges

Tripp: [00:00:01] Welcome to the Driving Eureka! podcast where we share ideas and advice for helping you find filter and. Fast Track Big IDEAS. HI I'M battle advisor to global organizations on the Deming philosophy and host of the Deming Institute podcast.

Doug: [00:00:23] And I'm Doug Hall inventor speaker teacher and whiskey maker. I'm also the founder of the Eureka! Ranch and author of the driving Eureka book.

Tripp: [00:00:32] This is the Driving Eureka! podcast and today our theme is on failing and failure which is really dug I found this newsletter interesting from a standpoint of most of the time. It's kind of the American mindset especially about kind of you know get losers and winners and you know if you're a failure then you know that's the end. As you start down this this you know your first statement basically is the joy of failing. How do we get joy out of failing.

Doug: [00:01:12] The joy of failing. I I have had an epiphany recently because I'm just tired of being surrounded by people who say I'm OK with failing you know failures. Ok well we're a group where well we can't really fail. I mean for Christ sakes get over it people you know.

Doug: [00:01:33] I mean if you think about it you know how do you learn to ride a bike. How do you learn to cook something. How do you learn to play tennis. Do you start out immediately and do it perfectly. Of course not. Of course not. You learn you make mistakes you learn. You try something new you try something new. Playing the guitar you okay maybe you're not going to play like Springsteen you're gonna play in a different way but you're going to get your own style and you're going to get your own thing. And and so there is a frame of reference that comes to you that if your self worth requires you to be perfect every time you're going to have a crappy life I'm just telling you. And so we've got to get over this mindset. We've just got to get over it. And I think frankly those people who have a problem with failing have got internal psychological problems that they're trying to make you feel bad. So they feel good. Mm hmm. Well I'm not going to wear your problems OK. I've got my life to do. And and recently you know I was just looking back over the week and it's like I mean I just blew a whole bunch of stuff. I mean you know I've been cooking for a while and some folks over I cooked a meal. It was really pretty crappy to be perfectly honest. I served extra whiskey. You were not right. I blew some some math numbers. They weren't right. And and then there were some others where I figured out I screwed up and the rest of the world didn't even notice it.

Doug: [00:03:08] And those are even worse because you're like Oh man I know I blew it now sometime ago these things would have infected me I would have played the woulda coulda shoulda game and I would've thought it over and over and I would have relived my failures like experiencing their pains again and again and again and today I just see it as just the journey of life. You know and it's a frame of mind which we're going to be talking about this for the next couple of weeks. It's a mindset. You know the fundamental call it the scientific method call it The Deming cycle plan do study act (PDSA). That's the way knowledge is built. That's how we get smarter. And if you never have anything that goes wrong you never get smarter simple do do it. I mean it's just that simple.

Tripp: [00:04:06] Well I don't. Yeah I mean I don't see that as as that simple. I mean there's a difference between burning near a simple amount Whoa whoa whoa whoa whoa. If you're you have a huge product that's coming out and it's a and it's a failure when it comes out that's different than burning you're burning your meal. Well I mean there's there's a scale of things associated with this.

Doug: [00:04:33] So what I'm not talking about you know like saying I got an idea let's jump out of this plane without a parachute.

Doug: [00:04:42] I think it might work if I flap my wings. I mean that's stupid. What I'm talking about and I'm not talking about taking these things you know having epic major failures that have a high cost to them. You know I break those I go to great lengths to break those big challenges into a bunch of smaller things where I can run fast and cheap experiments. So you know how do you eat an elephant a bite at a time. How do you take that big fear and break it down. You break it apart step by step and you drive down the overall risk is what what it takes to do it in. And so you know there's a method to the madness. I mean it's just you know you don't you know turn around. I got an idea let's build these pyramids. OK let's just start building it. No no yet you have to start small manned. But the key is that you turn the crank you turn the learning cycle as fast as possible and so you you know you tear it apart into pieces. And if you're driven by something that you want to have happen if you're driven by something that you're trying to create then it gets easy.

Doug: [00:05:54] And frankly trip I mean you know they've called me a genius inventor and all this kind of stuff for Eureka and branding and one of America's top idea people in all of this kind of foolishness that they say you know the secret to my success successes I'm willing to say stupid ideas that can't work and then another one and then another one. And then when people have got their arms crossed and their eyes rolling in the back of the head I say five more and eventually you get it.

Doug: [00:06:25] You know the top professors fact the professors that have written the most meaningful papers that have as evidenced by the number of academic citations the other papers people cited their papers are also the people that have written the most papers. In other words the people that write the most important scientific discoveries also write some of the dumbest papers But they do it. They do it. If you're waiting for genius to strike you gotta wait a long time. You just got to do it and end it. And it's a frame of mind. It is a frame of mind. And when you find joy in failing when you find joy. I mean my team just turned round and they're working on a project and they they did. I don't know a 12 something like that different products and they laid them out when they were all crap but they were crappy in different ways.

Doug: [00:07:25] I mean we had him on. We have that big table on a map. We put a big piece paper down and we kind of plotted them and and they were not very good but each bad in a different way. And in the process I'm excited this morning because this morning I'm about to taste the next generation that happened from the work that we did but without last week's failure we couldn't get to this week's success. And I'm saying it's simple because it is that simple.

Doug: [00:07:55] People are no no no. I can see the thought balloon people driving in the cars right now. Oh no you don't understand my life now. Get over yourself. That is all within you. It is all within you. When you see failure as a step towards something that matters to you that's when you get excited.

Tripp: [00:08:15] Ok. So. And a former executive or advisor to executives.

Tripp: [00:08:21] I see flaws in the process of decision making that are leading up to innovation and we've touched upon this a little bit in the past which is they go through this process and somebody comes up with an idea. Maybe they don't look at five ideas. We already know that they kind of narrow their focus. You called it out as ego. We get those types of things but but then they they focus in on an idea and then they're going to devote let's say 10 million dollars to that particular idea and then a group of people go go out there their harness they get their project manager they're their team together and they get this idea. And now the pressure is on them because it's either gonna go or it's going to fail. A lot of times just because you make the decision. Executives follow it up by making more stupid decisions.

Doug: [00:09:13] But you just said you just said the floor to the floor. OK. The floor was we've got the idea. Yeah. And it's either going to succeed or fail. Well I can tell you right now your ideas crappy all ideas are crappy at the start because you don't know enough to know. And so what I'm saying is they've got a direction I'm going to restate it. They've got a direction it can go. It can stop the 90 percent probability if there's if they want to make it successful is it's going to adjust adapt and pivot and change as they go forward. I mean they're making a decision early in the process without a lot of information. I mean that's like sitting in here in Cincinnati and saying I'm going to San Diego. I got it. I mean you don't know what's going to happen until you get going and you adjust and you adapt and you go. Pam there's a mountain there. I don't want to go over that Mom. Let's go around it.

Doug: [00:10:15] We change and that's the element is that it needs to be more dynamic and the cycle of learning of plan Do study act that cycle of learning is what we're talking about where we're driven by a mission not by an idea. The idea is a way to accomplish the mission whether it's to get new customers whether it's to save the piping pullover whatever it is whatever the cause or get students educated. I don't care but it is a dynamic process and this rigidity this waterfall approach that we have the answer or we're gonna do this thing this crazy thing at the front end to make it perfect before we put it into development.

Doug: [00:10:55] When you get into development is when the ideas change the most because you find this thing she just can't do the math just doesn't work and you have to adjust and adapt. That's why it's so much fun to do because it's a it's a giant adventure with an unknown outcome.

Tripp: [00:11:13] Yeah. And I think I think this is it is such a huge point because when you look at the way executive teams companies are making decisions about new products they have this mindset of kind of go no go on a particular idea and you bringing this up and I know you've brought it up before that. You know I don't know I probably get the percentage wrong. But like 90 percent of of the innovation comes from the development process. And most people don't have a system or a process or a method to go through. And to me that's the value add associated with with the innovation engineering pieces it gives them a method. It takes their mindset out of that.

Doug: [00:12:00] Yeah yeah they've got a method for command to control tick the box. You know here's a list of tasks project management conformance to requirements. The problem is is innovation isn't that certain it has uncertainty what we've brought to the art is the ability to deal with the dynamic nature as you're going along. So if it's the seventy fifth time you've done something you can make a checklist and just do it. But when it isn't an innovation things are gonna happen that don't work and that means you're going to have to pivot and adjust and you're gonna have to adapt things. I mean that generally a lot of these project management systems have been put together by somebody who's never shipped in innovation yet. And so they think that the way to do it is to have certainty. That means you have to have certainty before you start going. I remember I had I had a guy who was an expert on lean product development. He came to see me and he said well so to make the product development process very lean low cost. He says you've got to have absolute certainty before you start. I said Sir if I had that I wouldn't need you. That's not the way it is. Well the more it meaningfully unique it is the less uncertain it is. And I and I it's called you figure it out.

Doug: [00:13:18] You know you adapt you adjust you make sure the math works you make sure regulatory works progress supply works the customer works you know you you know all the ethical issues are are resolved.

Tripp: [00:13:28] Well you're left with a choice. I mean you well. I think there's there winds up being three choices on the table one is you take this go-no go mindset associated with you know an innovative idea and you take that attitude. To me that's that's a that's just as you would say stupid.

Tripp: [00:13:47] Then there's a second which is you could develop your own system for going through in the development process will probably take you a few years to do or you come up or you have methods out there including innovation engineering that already you have done this and they give you a system to be able to take a product or an idea or a service through a kind of step by step or a system so that they can have it logically broken out into the pieces that you talked about earlier that takes them through logically to be able to get there not only faster but but more cheaply.

Doug: [00:14:27] Yeah. Yeah. I mean it's firm but flexible. You know it's a process that that demands thinking curiosity and that's just plain fun. Because you're actually making something

Tripp: [00:14:50] It's time now for the Driving Eureka! segment with author and inventor Doug Hall.

Tripp: [00:15:00] Well that's actually a good segue to the second segment which is well if you're going to have failure you better have passion because there's gonna be a lot of failure associated with it and then there's gotta be something that kind of keeps you going on a particular idea.

Doug: [00:15:16] Yeah it really does. So in the Driving Eurek! Book excerpt I pulled the section on passion we have something called yellow cards it's our system for persuasively communicating it gets everybody talking into the same language and then a key part of this is passion which is really the higher order purpose. Why do you care about this idea.

Doug: [00:15:41] Care about it so much that you're going to do the problem solving the patent work the addressing the death threats you know accepting fear because the journey is worth the pain that you might feel along the way. And this allows you to embrace this uncertainty and and really the secret to reducing fear is not taking fear down or let me say that let me say that again I'm going to say that in a totally different way. The secret to confronting fear is not reducing it because it's going to be there because you're human. And saying it's don't be scared is stupid but it's increasing the passion side so that it's worth the effort. In other words it's it's worth going for. What's a problem is when we've got a fear and even if we're successful it's not worth the effort I was talking with the president of a company this past week and they've got a project where they've got a whole lifetime like six months they're investing in R and D and something for an idea that at its best might make them a half million dollars. And I said that math doesn't work. And he agreed. Now if it was worth 50 million dollars yes I get it maybe even 10 million dollars but it's balancing out the passion. Why are we excited about it what is the thing that drives us. What's the thing that we love. What's the destination. How are we going to. What are we going. Different we're going to make for students our customers are our company and what's the cost. What's it's like a balance sheet passion. What's proactively driving us versus fear what's the thing that's preventing us. You know it's like gas pedal and brake. You know we've got to have more gas and we can't break.

Doug: [00:17:36] And in the excerpt I quote Francis Mallman who is the crazed Argentinian chef who I am quite a fan of. And from the Netflix series he said My life has been a path at the edge of uncertainty. Today I think we educate kids to be settled in a comfortable chair. You have your job you have your little car. You have a place to sleep and the dreams are dead. You don't grow on a secure path. All of us should conquer something in life and it needs a lot of work in order to grow and to improve. You have to be there at the edge of uncertainty you know it's you've got to have something that's cranking it up.

Tripp: [00:18:25] You know it's it's interesting to me and you know I let me just kind of sit back and absorb this a little bit and especially knowing you I interviewed a guy by the name of Dr. Paul Zak for the other podcast that I'm I'm doing another one I'm going to launch next month. But is he talking about kind of the neuroscience of things and he talks in his book about jumping out of an airplane and he he tests what types of chemicals are going on you know in your in your system when you jump out of a plane and the cortisol the stress chemical really is high.

Tripp: [00:19:10] And the first time you're jumping out of a plane but also there is a degree of oxytocin that's coming out which is kind of the trust enjoyment you know type of chemical associated with it. And when he first does it obviously cortisol is just off the charts as far as the stress that that he feels. But then in subsequent jumps the cortisol starts to go down in your body because you've done it over and over again and you know it's funny I kind of when I was when I was listening to him talk about that or when I was reading about it I thought of you because I sit there and I said okay here's Doug you you know you went to the to Anartica. You know you did that. You've done innovation for a long time taking people kind of out of their comfort zones already you're quarters old level isn't as high as some of the people that are going to be beginning this.

Doug: [00:20:06] You know what I mean. I mean it's true. I mean it could be I mean you could just get you know it I mean there could be a biochemical dimension to it. I mean I just think of it as up as a way I look at life you know I live it forward not backwards Yeah. But it's in the AP that that got embedded at a young age. In at age twelve about 600 balls and 600 rings wanting to learn to juggle kid business. You don't know enough to not do it. And and so yeah it could very well be because I don't even think about it. I don't. It doesn't even enter my head you know. Yeah. Whether it's mindset or biochemical it means you can train yourself to be that.

Tripp: [00:20:53] Yes. And I think that's the point that you have to overcome that initial stress the cortisol in your body in order to kind of get by that they have the fun associated with whether it's jumping out of an airplane or going to frozen regions which I have no desire to do. So the passion there but but the same thing for innovation you know that you have to it's scary for people especially in organizations don't have that build up and in their culture and the things that they do yeah.

Doug: [00:21:24] So the simple answer to that is step by step. You know it's just like you decide you want to run a marathon. You know you don't go out and run the 26 miles. You start out by taking one step and then another step and you document it and you start to push yourself a little bit further a little bit further a little bit further in time and time again. I mean you get there and I mean life's meant to be lived.

Tripp: [00:21:50] Agreed I did. But people need a method to be able to do that I think. Otherwise it's just gonna be more hit or miss and if you happen to hit the homerun that's great. But every thing else is gonna be a strike out and the strikeout levels too high especially around around innovation unless you have a method to do it.

Doug: [00:22:10] Yeah but I always just remember the good ones.

Tripp: [00:22:14] Well but you get there right. Because you said it's in the development of it. It's just not hit or miss.

Doug: [00:22:19] It's statistics. It's just odds. Eventually you're going to get it. You just have to roll the dice faster.

Tripp: [00:22:27] All right. Brain brew whiskey Academy. This is the brain brew whiskey Academy podcasts where we will take you behind the scenes so you can see what it takes to build a whiskey distillery business. Eureka ranch team led by Doug Hall are creating a craft whiskey company With patented technologies like has never been done before. So twelve failures in.

Tripp: [00:22:58] So what you're telling me is the brain grew whiskey Academy is is a loser group that's a loser.

Doug: [00:23:04] We lose faster than anybody. We have made. We have made more crappy whiskey than anybody on earth. You know we do 72 whiskeys in seven days. You know nobody else can do it. And so we're pushing the edges of the envelope and taking it to new places and I'd mentioned this earlier. You know we have a statistical team at the ranch that's just ridiculously good. And they put together this testing matrix for this project that we've defined. And there were like 250 seven tests that would need to be done to to look at all the variables that we were playing with. And so they decided to map the edges and they found the twelve that could determine it and hasn't said they all failed but they each failed differently so it's a different failure.

Doug: [00:23:57] Mm hmm. And so from those failures we learned a bunch and now this week we will do the next round of twelve failures and then the next round and and then eventually we will have a two to one winner versus two of the most popular whiskies in America. And that's what we're gonna do. And you know I call it a fail fearlessly you know because we're excited. I mean I was at dinner last night. I was in a bar and I ordered a cocktail and they use this whiskey which I'm not going to give them advertising by mentioning their name.

Doug: [00:24:39] They use this whiskey in it. And as I was drinking it I said I can't wait to do a better version of this happened in this bar because I could just I could taste it in my mind. I know where we're going and it's just gonna kick butt. I had sold by a big conglomerate. You know it's just it's not a craft thing it's a faceless corporate you know an international conglomerate that makes the product and then not even American owned.

Doug: [00:25:11] And so it'll be fun it'll be fun to poke them. It'll be fun to poke them. And so every time we fail we just we just like we got a bull's eye on him and that's what this craft guys do is is that you know what the big companies have to worry about is there's some nut case like us who says I think I can take them out and I may have been around for a long time but yeah we can do something better so now we see the disruption.

Tripp: [00:25:36] It's kind of the Amazon mindset with regards to the retail. It's because they found it found a way in order to beat it but help me with one thing Doug.

Tripp: [00:25:46] When you're talking about these 12 whiskeys and just because we talked about different things before I know you're trying to set up a system where people are tasting different grains and those types of things in order to come up with their own whiskey. Is this part of that or is this something else now.

Doug: [00:26:03] These are this is just a couple of brands that we're gonna do and we're gonna run them as a test here in Cincinnati to see how it is. So we're open now for partners so we've got all of our federal and state approvals in fact we're working with some some distillers around the world to make their own whiskey. In fact I had one last week to look tasted my our craft products and he said Well I'd like that I said Well I'm not gonna sell you that.

Doug: [00:26:30] I said I I'll make your own whiskey though but you're not gonna sell my whiskey that's my whiskey. You make your own whiskey. And so we have deconstructed. We've got a bourbon thing where you can taste bourbon with different types of woods. We've got a whiskey one where you can turn around and bring together rye and barley and different things in different ways and you can make your own product.

Doug: [00:26:48] And so we work with the distillers to help them craft their own custom whiskey. And then we'll make it to their specifications just for them and then they bottle it and the result is as much more profitability than they can make significantly more profitable. And the best thing is is they can have it like within 48 hours. We can make it you know and then they can have it. And so and we've got unlimited supply so. So it's just a change of the game and it's not a replacement for the stuff that they're distilling themselves. It's not a replacement. It's an end not an oar but it's opening up the doors to new tastes new flavors and new ways because you know it's all wood. It's all about wood and and that's what we're doing.

Tripp: [00:27:37] So this is adding then to your line of tall stacks and Keel Boat those types of thing is that that when it's actually going to be it's actually gonna be a separate line and it's really.

Doug: [00:27:47] And it's really just an experiment. It's a business model experiment that we're going to do to see if there's a couple of products that are that do a disproportionate amount of volume out there in the marketplace and the question is is can we can we compete.

[00:28:03] Can we can we take 20 percent of the buyers in Cincinnati. Can we get them to flip to us if we have a better. I mean we don't have anywhere near the money these guys have. But will the bartenders when we give them a better product at reasonably the same price. I mean we'll be a little bit higher. Will they switch to us or will you know the money that these guys give the promotional money even though you're not supposed to give money for bars. I'm not saying that these guys are but it does appear that there's a lot of benefits that bartenders get from various brands will we be able to to compete or not. Or will they just their giant size you know squish us you know kind of thing I don't know.

Doug: [00:28:52] I don't know but let's see making some you know making three or four hundred cases taking them around to the bars in Cincinnati and seeing what happens. I mean it's not a you know I mean don't lose money on it. And and if it really works then then we would work with distilleries around the country to do the same thing.

Tripp: [00:29:12] Ok. All right. Well tell us about our craft cocktail recipe this week. The Rattlesnake.

Doug: [00:29:19] Yeah. So the Savoy Hotel and bar in London is the famous American Bar at the Savoy. There's a famous book called The Savoy cocktail book which is how ironic that it would be in London because they've not been as big with cocktails they're getting much better now much much better now but historically it's not been. And so if you took a Sazerac and a gold rush and you cross pollinated them this is what you'd get. And so it's in the show notes but basically.

Doug: [00:29:51] It's an ounce and a half to two ounces of bourbon. In our case we use our Paddle Wheel are which has the 200 year wood in it.

Doug: [00:29:59] A teaspoon of absinthe which is a nod to the Sazerac.

Doug: [00:30:03] A half ounce of simple syrup.

Doug: [00:30:05] And a half ounce of lemon juice which is a nod to the Gold Rush type of product.

Doug: [00:30:12] And I just think it has a really nice complexity to it. It's it's definitely cousins of those. Last night I had that cocktail I was mentioning it was a Sazerac made with honey water instead of simple syrup which again is kind of going towards gold rush. So so in that vein this three or four different types of cocktails that you can make and if you're if all you've drank is old fashions is which what you've had which generally will have orange sometimes Cherry sometimes not. Not if we've only had Old Fashioned which is the number one cocktail in the world. These are great ones for you to start to experiment with and start to play with so that you can get you know something a little bit different for you.

Tripp: [00:30:59] Very good. A good idea. The Bourbon and the absinthe. So as opposed simple syrup you're not using that honey water that's in the gold rush then you go simple circle. But that's what's in the Sazerac.

Doug: [00:31:15] So yeah. Yeah. And that's what's in the Sazerac because I want to make the absinthe come up although the one I had there and the lemon I want those to be intention more so.

Doug: [00:31:25] I mean here we've got the lemon in the absence working with each other. There's just some sweetness when you start to do the honey and the lemon those two become the drama to it. So you know there's only so many tastings and then of course in our case the powder we bourbon because remember we're taking wood from an old barn that's air dried at least it would be 100 years when they built the barn. Another hundred years air dried so 200 year old wood which is technically actually cleaner than the trees today because it was less pollutants and we take that wouldn't cut it up and then we put it into the whisky and we finish it replicating seasons of barrel aging and it just there's just a richness in the back of that bourbon that just you know grounds it. You know sometimes bourbons can be very simple I guess is a word corny you know very one dimensional without a lot of complexity to it. This puts this takes the bourbon in and takes it to a much richer much deeper complexity than than any other bourbon that you're going to have.

Tripp: [00:32:31] Ok. All right. Any other suggestions or comments with regards to especially in the whiskey business around failure.

Doug: [00:32:42] You just have to you've got to change your mind. You've got to change your mind. You've got to open up your mind to this as a step. In fact if you if you're compulsive about planning planned 20 failures just put it down. OK so we're going to fail 20 times over the next three months we're gonna fail 20 times and then just build it in it start from the fact that you're going to fail because you're going to. OK. Having been doing this now for 40 years I can tell you you're going to fail. So just get over yourself. You know that false sense of perfection is not how you get to making great stuff. Now that said we want to do it fast and cheap. So you got to find ways to do it fast and cheap. And I'm not talking about one shot on my take a two shot I'm talking about literally dozens of shots. And that's how you know so it's like before work with a distillery. I mean I'll encourage them to make 20 or 30 different whiskies using our technology. And so that they get something. Somebody. OK. That's it. I got no cameraman. All right. But let's really push the edges of this thing. Let's do something let's do something it's really cool and and and so if you change your frame work on this there is truly joy in failure.

Tripp: [00:34:03] Mm hmm. So so one last question and just kind of because I'm not into the whiskey business per say. What is the. Yeah I see these experiments. I mean have you ever gone out and you started an experiment and the first one was a winner. I've been or or decode with the mindset that I'm going to start with 20 and I'm going to try all 20 and then you've maybe the first one was the winner or you hit it or whatever.

Doug: [00:34:35] Yeah. Yes. And and and it drove me crazy because what happened is is in the beginning it took like 72 cycles to get to anything that was even drinkable. And as time got on we got smarter and smarter. So we knew areas to not go and then we had about a six month run where I looked back and I realized we hadn't gotten smarter.

Doug: [00:34:57] I mean we were just we were setting the pressure we were setting the wood we were cutting it we were twenty four variables and we were literally playing in the safe zone. And so I got furious because if you're hitting it too soon that means you're not stretching the edges which is why on this project we're we're going way out on the edges. And and they you know because if you're hitting it all the time that means you're not taking chances. I mean you're not as Frances mom and says you're not at the edge of uncertainty. And so it is a bad sign if you're getting it right away because that means you actually haven't hit the best you've just been lazy and so failure is not optional. When it comes to what I do at the brain brew in the éric ranch otherwise we're never gonna do anything great.

Tripp: [00:35:49] So is that the same for as you're testing these whiskeys that you have. I don't know if you've got your 20. And you said something in there that that caught me which was we knew not to go there I what you're saying now is yeah we need to go there even though that's kind of an area that I would have said no we won't go down that path that you're going to test it even though you believe that's not the right path.

Doug: [00:36:24] Yeah. So so 24 variables right. We know that variable by itself doesn't do it but if I change five other things. So this new product that we're doing we've changed our whole you know the guys ran a whole different framework on stuff and so we're finding things that we didn't realize before.

Doug: [00:36:43] I mean with 24 variables 24 factorial there's a lot of permutations we got here. And so but you signed certain recipes and that's what sadly companies that don't do well they find a recipe they love and then they optimize that recipe as opposed to experimenting. If I have to give one thing to the beer people you know you go to a craft brewery and they'll have those weird kegs of bill of made. Now some of these things are beyond hideous but at least they're trying things. They're pushing the edges and that's what we need more in the spirits business is people pushing the edges. I'm going to go to a place tonight where a guy is pushing the edges and I've already heard from some people that he's that they're terrible. But I want to taste them for myself. But I give him a lot of credit for pushing the edges on tastes and flavors versus what one would normally do. I think that's I mean that's what that's how we're going to discover new stuff.

Tripp: [00:37:41] So this is the same on the mindset you said there's 24 variable variables. Is there ways to add to those 24 variables or.

Doug: [00:37:49] I'm sure there is. Right now we've we've defined 24 that are meaningful. I mean there are many variables so we can add. I'm trying to put to the ones that have a lot of umph to them in other words if I move it up 30 percent it has a tangible impact on the product. These these are the ones that are the the bigger ones.

Doug: [00:38:09] Now that said there could be others that we don't know. And when we get into it you know there will I'm sure there are. I'm sure there are. But right now we've got a set of 24 that we have that we play with. Okay. So I can make the same product probably 10 different ways by playing off you know different ways to approach it and depending upon the wood and spirit and what we're trying to do for a taste that that's the art that goes with this science.

Tripp: [00:38:36] All right. So what I learned from this is embrace failure push the edges and if you're winning too soon you're not pushing the edges far enough. You've got it that you have to go through there guy.

Doug: [00:38:51] A sign that you've become a slugged is when you are just getting it right right away. So plan for failure and enjoy the ride

Tripp: [00:39:05] Because we appreciate you as a listener. We are offering for a limited time. For things a one hour abridged audio the Driving Eureka! book. A subscription to the driving your weekend newsletter which contains weekly advice from Doug Hall on how to find filter and fast. Track big ideas. And the newsletter. Has. Other offers. That. Are not made public. The Driving Eureka! prescription for success you answer questions and will help you assess your ability to find filter and fast track big ideas. And. You get advice on how to grow your ability to innovate. And the last item. Access to a Doug Hall interview with a radio legend. To get these offers. Go to w w w dot Doug Hall dot com. Forward slash. Podcast. And don't forget to subscribe

Tripp: [00:40:07] To the driving Eureka podcast on iTunes.