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Interview: John Sage on how Pura Vida turned an inspiring story into a real business

,    /   Apr 22nd, 2010International, Interviews

One time he was two weeks away from payroll and he didn’t know how he was going to pay his staff. Another time, he delivered a customer coffee beans that were so hard they broke the blades of the man’s coffee grinder. John Sage, the founder of Pura Vida Coffee, recalls the early days building his pioneering social enterprise. Today, the organic coffee and tea company donates five percent of its earnings to support at-risk youth in the countries where its products are sourced. Here Sage recounts the life path that led to the creation of Pura Vida and some of the mistakes he made along the way.

Dowser: What in your early years most influenced your life path?
Sage: My family and I moved to Berkeley in 1967 when I was 6, and my mom was participating in anti-war protests. I have one vague memory of her trying to roll the windows up in the station wagon before the tear gas came in. The church that we went to was one of the first churches to play an active role in the Sanctuary movement for Central American refugees.

Those things were instrumental in giving me a social-justice orientation, yet, at the same time, I was a bit of an odd duck because I always enjoyed business. I had the paper route, worked in the deli, sold lemonade. So as long as I can remember, I enjoyed the give and take of capitalism and the feedback that comes with selling a product.

Did that pose a moral quandary for you?
I’ve always been interested in trying to see if there was a way to weave business and social justice together, where you would have the best of both worlds. Martin Luther King said to be ‘tough-minded and tender-hearted.’

‘Tough-minded and tender-hearted’?
Yes. Could you simultaneously embody the discipline, the rigor and the accountability that most people associate with a successful for-profit, and the social-mindedness and heart that’s associated with a nonprofit? That question is what ultimately got me to Pura Vida.

So how did you figure out that you could combine those qualities?
In 1987, I was a first-year student at Harvard Business School.  I met another student there named Chris Dearnley, who became a co-founder of Pura Vida many years later. Chris had worked in Central America where he had seen the power of microfinance with his own eyes. So he not only had this optimistic view that business could be a catalyst for social change, he had actually done the work.

We became very good friends. When we got out of school in 1989 he moved back into development and now he’s a pastor in Costa Rica and also the director of Funda Vida, a Costa Rican NGO which works with at-risk youth in San Jose and is funded in part by Pura Vida. I came out to Seattle to take a job with Microsoft and spent the better part of 10 years in high-tech.

How’d you make the transition from high-tech to Pura Vida?
Coming out of 10 years in high-tech, I was going, ‘Now what?’ I did some consulting work with Starbucks, and I gained an appreciation for the coffee business. We ended up creating a line of merchandise to help fund literacy programs and raise money for AIDS.

When did Chris come back into the picture?
With all of that kind of percolating in the background, I got together in 1998 with Chris, who had been doing work with at-risk youth in Costa Rica’s inner-city areas. He handed me a bag of coffee he had gotten at the airport on the way up from Costa Rica, and the light bulb just went on. I said, ‘Wow, this looks like really good coffee. How much was it?’ He said it was about $3. I said, ‘That’s a $10 bag of coffee in Seattle. What if we use the Internet as the means of telling the story of your work as well as a place for value-driven customers to buy coffee?’

It took a year to work it through and to make sure that it was a viable concept. We incorporated it as a business in the fall of 1999.

And the rest is history, right? Pura Vida is now sold in over 200 universities across the country and in the House of Representatives among other places.
Not exactly.  We had to figure out logistics – How are we actually going to get coffee? Who are we going to sell it to? What is it that we have to offer that’s unique, relevant, distinctive, and for whom? Originally we did things about as stupidly and as badly as you can.

Aha – here come the forehead-slapping mistakes.
We were roasting in Costa Rica because we wanted to keep as much as the value chain in-country as we could. Then we would ship it. But then we started to get complaints.

Complaints?
‘Your coffee’s not that good.’ And in actuality, it wasn’t. It was going bad while it sat in its warehouse waiting for orders to come through.

Uh-oh.
In 2000, we had one customer whose whole bag of beans had calcified. They broke the blades on his grinder; they were basically rocks. He said, ‘I love the story but the coffee’s terrible. I want my money back and $19.95 for a new grinder.’

What did you do about the crummy coffee?
A local roaster at a family-run business in Seattle said, ‘Why don’t you let us roast your coffee up here? It will cost less.’   So we partnered with them and that kicked things into the next level.

On that note, what advice would you give to someone in his/her initial stages of research and development?
Make sure you’ve looked around to see who else is doing what you want to do. The chances are almost 100% that someone else is doing it. Learn from other people’s mistakes. Have a healthy respect for planning and really explore the market before you dive in.

What about seeking out opportunities for partnership?
If you find a way to ally yourself or partner with an organization that’s ahead of you, do it. Oftentimes what motivates entrepreneurs is that they have a sense of ‘I want to do this, and I can do it better because I’m willing to work harder,’ or ‘I’m smarter,’ or ‘I have more money.’ They undervalue or discount the power of partnership.

What advice would you give to someone looking to start a career of social impact?
If you can learn relevant skills and make money working for another company before you start an organization, do it—particularly if you can learn the industry, or if you can gain tactical skills.

The other thing: consult with your life partner or spouse. If you haven’t discussed things and gained some agreement on the boundaries in terms of time and finance, the cost and the toll on those relationships can be devastating.

Any inspirational stories from Pura Vida’s early days?
After realizing that sinking my own money into Pura Vida was unsustainable, I went out to raise capital. I was having a hard time: three days in Chicago networking with Harvard alums, and nothing to show for it. I had one more meeting the next morning in Indianapolis. I drove down at night, the highway froze, and there was a huge truck accident. I was stranded all night long. If I didn’t have gas in my tank I would have probably frozen to death.

Glad you didn’t. What happened next?
I got in at 5 a.m.; my meeting was at 7. I had breakfast with this guy I’d met once – a used car salesman. I didn’t even try to make the pitch. I just said, ‘I’m sorry to waste your time; you won’t be interested.’ He said, ‘No, tell me.’ I was two weeks away from having to make payroll, and I knew I couldn’t. At the end of it, he said, ‘This just became my most expensive free breakfast,’ and he wrote me a check for $30,000 on the spot. And eventually we raised over $4 million. That experience made me think, ‘There are philanthropists out there who also believe in capitalism. I just gotta find them.’ I’ve held onto a copy of that check forever.

Photo: Julie Furbush for Dowser

2 Responses

  1. [...] Sage explained how he went from a Microsoft executive to a founder of a coffee company that promotes social values. He shared two pieces of advice that stuck with me. First, that anyone going into a business, [...]

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