By far the hardest is being a small business owner, but we are also the most resilient because our mentality is we're more grit driven.
Below is an abridged audio transcript of Episode 51 from Season 4 of Rock The Boat: Making Waves, edited for clarity.
This is Part 2 of the interview with Boba Guys founders, Bin Chen and Andrew Chau. In Part 1, we heard about the origins of Boba Guys and what their early experiences with boba tea or bubble tea were.
In this part, Bin and Andrew talk to Lucia about what has happened with their company since the COVID-19 pandemic started. Andrew talks about testifying in front of Congress and how small businesses can get through this period of coronavirus crisis.
I. Shutting down shop
Andrew: The term we've used is what we call hibernating. It's when a business essentially goes onto only essential or must have, like no one's going in and out. Bin and I had a long conversations about like health, and then I'm sure everybody knows, and I'll answer briefly about it, is like everybody knew I had a little bit of a inside information because I work with the government so much and so I knew how serious it was before everybody else did.
And so my own team asks, "How serious is it, Andrew?" I had just come back from DC at the time. And I had testified in front of Congress, and obviously given my role in both small business and in the Asian community.
I was seeing both the hate on one side and then the small business infrastructure about to die.
And we were obviously one of the first ones to pull the emergency break and go into hibernation, which, but Bin and I have to make. The decision together. We deliberated and we felt it was both in the best interest of the team because we were afraid that our team was going to get sick more than anything. Cause we still had like four or five stores that were killing it. We had Palo Alto that had like an hour wait, but we didn't want to be like, you know, two months from now, especially now that we're kind of deeper into it, people saying, "Well, Boba guys had that long line. That's not social distancing."
Lucia: So you're on Capitol Hill and you were testifying in front of the government about how hard small business were getting hit.
Andrew: They wanted me to speak on two things. One is small business because the committee that we work with a lot is, they house small business committee, both houses of Congress.
A lot of it is giving them information and painting a picture of what it's like. And they have experts come in to these hearings. The very famous one everybody remembers is probably Fred Rogers. Mr. Rogers went to testify to get funding for educational television.
So long story short, I said that, and then I said something about racism, which I also talked about because I said you're also gonna see a lot of racism. This is March 10th and then now we see it.
Bin: I think everyone that knew what was going on knew it was pretty serious. And I think that there was, There's obviously bigger things at at play. You know, I think there was a lot of, there was a couple of weeks where it's like, "Hey, I can't say a yes or no," but it's in our best interest to prepare for this.
And so I think that's where with information comes great responsibility. And I think for us, we were one of the earliest companies to kind of go into hibernation. I think that, you know, we feel for a lot of the small businesses and restaurants that are still fighting this, staying open and also take care of their employees.
But we also knew that was going to be a really tough road for a lot of companies. The moment that he had to get on an emergency flight to DC, I knew that was kind of a signal for big things to come.
Lucia: How did you round up the employees and deliver the message.
Bin: Lots and lots of Zoom calls going on. I think that was the most painful part.
I think we were not surprised, but maybe outsiders might be surprised, but, everyone really, I think it, that's just a testament to our culture. Everyone, they all understood. It's not that they weren't, eh, it was a overall just sad. Some of the employees have been with us for six years, four years, seven years.
That's a really long time in our business where the average, turnover rate is 100%, which means if you join at Starbucks, this year, the same amount of people are going to be gone by next year.
They were really sad about what we built and, but they also kind of understood.
II. Reentry strategies
Andrew: I think the biggest concern, if we ever came back, as I mentioned earlier, is public health. You know, like we can figure out a business model. We're entrepreneurs, but the health is, it's not like I'm a scientist or a health worker who are really putting their lives in danger the most. So I don't want to add to the problem.
We're trying to figure out a way in which we go online, purely digital, which is like a hack between a delivery online only system and a pickup system. And you pick up and you're in and out of a store in less than 10 seconds. So it's like ten second turnaround.
It's not a secret that we did take an angel round about a million dollars of angel money, friends and family, but given our 17 stores and our factory, that does not go far.
One store, it costs about half a million dollars to bake. Right? So, and we're definitely don't have that money cause that's not. That's not how working capital work. So we have much less than that in the bank as we speak. so we have entertained the idea of raising money.
So here's the problem. We don't franchise. That was one of our rules. And the other thing is we didn't want people telling us what to do. That's how Boba Guys got to where we are. The problem is, is that as we keep on growing and if there's more pandemics, possibly, or this thing is going to go on forever, sadly. We haven't done this yet, we might actually be very transparent to the public and ask them, you guys vote. You tell us what you guys want.
Lucia: What do you want other small businesses like yours to know?
Andrew: I think, number one, I think we want to know that we're all in it together and that, you know, if there's one group that can make it out of a true crisis, and this is no shade to anybody in corporate America or anybody in VCs. My friends that are consultants out there, but I've done both corporate side and I've been an entrepreneur and I've been a small business owner.
I will tell you by far the hardest is being a small business owner, but we are also the most resilient because our mentality is we're more grit driven.
I firmly believe this, which is why I'm so hopeful. The hard part is that to be realistic is that there's still a lot more bad things to happen. We really got to think about, you know, longterm damage with the economy and then the workforce. and fundamentally, does it change restaurants? Are we losing restaurants forever? Which I do think a lot of restaurants are gone forever. Fine dining is probably decimated. So we have a lot of those situations we've got to take care of.
III. A bigger boat
Lucia: Thanks for all you guys do. So last question. This is our signature question. We asked this to everybody. It has changed over the course of a few seasons, but, how do you intend to rock the boat?
Bin: In a time like this, like what I said before about the spirit of the company and how that really doesn't change whether we're four people or 400 people or 4,000 people. I think it's like when you become an entrepreneur, if you're the type of person that can't stick to your guns, then I think that's a signal for a lot of people.
I would say my message personally for anyone that's maybe built similar to me, which are more logical, more highly, highly rational, I think that's just how I'm built. But at the end of the day, I think that there is still that hope of change.
When you're in that moment where people need you, they need to be comforted, that you're going to be there and you're going to show up for them and you're going to stick to your guns.
And so that's why for those that are maybe more stoic like me. There is those opportunities to be transformative and I would encourage our community to do that, especially for males out there too, to just let yourself be that and it'll have the opposite effect of what you might think, which is that people will trust you even more.
Andrew: The ones who truly have platforms and don't rock the boat then shouldn't also, how do you say, complain about why things don't change and improve. No change ever happens by passive happenstance.
The one thing that I wished the Asian American community would do more, and this is not out of passion or spite or anything, this is all out of love and all out of exhortation to the community, the Asian community likes to say, let the work speak for itself. And I disagree. I think it's a spectrum. I think it's a balance.
The moment somebody who normally says, "Oh, I'm just gonna let my work speak for itself," they're doing themselves a disservice because usually the person who says that doesn't also speak up for themselves.
You do need to speak for yourself. So the more of that, then the boat will fully rock and probably tip over, which is great because we'll get a brand new boat and we'll all be up.
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Help support an initiative helmed by Alex and Maia Shibutani (Olympic Ice Dancing Bronze medalists), the “Protect Our Protectors - Get us PPE” fund. They are almost at their goal, you can help support here: https://charity.gofundme.com/GetUsPPE