In December 2007, I blogged, enthusiastically about a new coffee house, Maui Wowi – Coffee & Smoothies. The article covered my various residences over a decade, and my relationships with coffee house businesses over that period.
A couple weeks later I posted again, about how Maui Wowi had made me feel at home.
My initial enthusiasm, aside, it became clear, quickly, that Maui Wowi Coffee and Smoothies would fail. I had morning coffee there just a week ago, Friday. Last week, while I was attending the NACE National Conference, Maui Wowi shut down. A peek into its front doors shows that everything was removed while I was away. It was deconstructed, leaving only the flooring as a sign of what was there.
Clearly, Maui Wowi was not a wedding business, but as a student of entrepreneurship, there are lots of lessons to be gleaned from this. Symptoms that spelled doom from the jump. Take a look at the list and analysis. If you see any element that might apply to you and your business, let it be a cautionary tale.
- Build out cost overruns and delays: The business was supposed to open up in the summer, for smoothie season. Not only did it open 4-6 months late (early December), but cost overruns and delays cost the new owners approximately 6 figures ($100k or more).
- Absentee Owner: The business was owned by Paul Goldberg and his nephew Jeff Goldberg. Jeff lived back in New York Metro and visited the franchise a handful of times. His financial contributions kept the business afloat, but he was never able to relate to the day-to-day operations. This was a major frustration to Paul.
- Have Landlord Disputes: The complex of several buildings was comprised of offices and retail space, wrapping around an existing corner lot with a Chevron station and Walgreens. The landlord marketed the buildings collectively, but contracted them individually. The Goldbergs elected to rent a space on S. Rainbow Blvd., passing on a larger space on the far busier Tropicana Blvd., a major morning thoroughfare. They thought they were contractually protected from direct competitors. They were shocked when Dunkin Donuts, opening 64 Las Vegas locations in 2008, put up its sign on the Tropicana location. In the vernacular, the landlord punked them, and either Paul and Jeff or their attorney completely missed this basic issue.
Get It In Writing: The location was not an obvious pull-off-the-street location. That being the case, prominent signage was important and high occupancy density throughout the complex would be key. Once again, the landlord-tenant relationship was left wanting. Paul indicated that complex was supposed to be two-thirds rented, per the landlord. It never got close. The notion was that people working at these businesses would be the foundation revenue. The lease didn’t allow for any concessions to the tenant if the occupancy level was not met or maintained.- Managing The Manager: Initially, Paul had a full-time manager… Mike. The Maui Wowi training program called for a full-time manager, and that’s what they did. Mike had previous coffee house experience and seemed like a good choice. Their relationship dipped, quickly. Paul had no equivalent business experience, but he was THE BIG KAHUNA. He was a retired teacher and THE business owner… THE BIG KAHUNA. And he would remind anyone and everyone that he was THE MAN. Within a month, Mike was gone.
- Work Too Many Hours: Maui Wowi was about a 40-minute drive from Paul’s house, on the North end of town. He couldn’t just drop in. He was either there or not there. With his manager gone, Paul started putting in brutal hours; often 14-16 hour days. He immediately stopped taking days off. The uphill struggle, combined with overwork, and his overbearing attention to detail transformed him into an edgy grouch.
- Forcing the ‘Aloha Spirit:’ Paul never made it to Hawaii. That was supposed to be part of the training. It would have helped. When you walked into Maui Wowi, you were practically accosted with a poorly trained employee shouting out ‘Aloha!’ The Aloha Spirit is casual, warm, and genuine. It doesn’t come out of a training manual. Wearing a Hawaiian shirt and blurting out ‘Aloha!‘ doesn’t engender the spirit. It comes from the soul.
- Believing Your Own B*llsh*t: The Maui Wowi training had obviously steeped the origins of its island coffee blends into those that attend. Problem was, while Paul could spout all the Hawaiian coffee trivia, except for Island ex-patriates, no one really cared. People either like the coffee you serve, or they don’t. True of Maui Wowi, Peet’s, Coffee & Tea Traders, Tim Hortons, Starbucks, It’s A Grind or any other chain or local coffee house. Ultimately, you can’t explain coffee to customers. They either like it or they go somewhere else.
- Employee Turnover and Over-Management: Employee turnover was a constant. People were trained, to varying degrees, and then thrown to the wolves (aka customers). When a customer walked in the door, Paul would leap out of his office, toward the counter, like he was shot out of a cannon. He would stand over his fearful employees, intimidating them, and correcting them in front of customers. First of all, they were rarely ‘customer-ready.’ Second, his annoying presence tended to enhance the likelihood of mistakes, not minimize them.
- Sending Mixed Signals To Customers: The one element that Paul was brilliant on was cleanliness. One didn’t stand behind the counter in a slow store without doing something. That usually meant buffing up any glass top on the beautiful rattan tables, right after a customer had just left. Crumbs on the floor? Never. Contrast that with the incredibly sparse bakery products on display. They were more like collectibles, in plastic wrap. Freshness was an endangered specie at Maui Wowi. Other products, came and went, during the business’s tenure. Lunchtime Hawaiian-themed sandwiches were one of the many. None of these changes made much impact.
- Loyalty Cards and Credit Cards: For a couple of months, one could get a Maui Wowi Card (in various denominations). Paul quickly killed that because of the clerical cost of issuing a card. He ignored the fact that if people invest $25 or $40 in Maui Wowi (Debit) Card, they were far less likely to go elsewhere for coffee. If you dared to use a credit card, Paul would give you the evil eye, because he knew EXACTLY how much the transaction would cost him in fees. Never mind that you may have come back from a business trip or vacation and hadn’t hit the ATM yet. You were at his business, first, and yet he consistently turned customers into ex-customers.
- Open in December, Have a Grand Opening in April: This was due, in major part, by the delay in opening. For me, I understand letting December pass, but it surely would have been wise to have a Grand Opening in January.
- Marketing by Throwing Darts: Marketing Plan? There didn’t appear to be one. Print ads in the regional section of the Las Vegas newspaper, some couponing, children’s karaoke (What?), remote radio shows, outreach to local high schools and businesses. All these things happened, but with no visible connection or plan. There was a basic website which never changed. There was no use of online social media.
- And There Is That Economy Thing: The business could not have opened at a worse time. In fact, several businesses on the same frontage have opened and closed. That certainly didn’t help.
- Don’t Talk Politics: 2008 was our Presidential Election Year. Paul couldn’t shut his yap. You are a host, not a political commentator. Let your customers discuss politics. Just smile politely.
Given enough time, one could probably find another half-dozen reasons for failure in this case, but one thing was obvious. Paul Goldberg did not have the experience or disposition to run this business. He was not effective at training or managing employees, had no clue about marketing (no big help from the franchisor), and found a myriad of ways to alienate the few customers he did have.
It is sad to see two people invest big money and time, only to fail miserably.
If this sad tale offers any pointers, perhaps that will be a helpful epitaph for Maui Wowi.
Andy Ebon
The Wedding Marketing Blog
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And a long slow GRIND it was. You, my friend, tell it like it is or was.