Thursday, December 8, 2022

Female Founders: Claudia McMullin On “Five Things I Wish Someone Told Me Before I Started Hugo Coffee”

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As a part of the Morning Lazziness series about empowering women who are encouraging and doing incredible things with their ideas in society, I had the pleasure of interviewing Claudia McMullin.

She is the founder of Hugo Coffee and she does week-long fundraisers on her Facebook page for small animal rescues and sanctuaries throughout the country!

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?

I am a reformed attorney and the founder of Hugo Coffee Roasters. Hugo Coffee is a roasting company whose mission is to save animals by selling fantastic, fair-trade, organic coffee nationwide. In my quest not to practice law, I chose several different paths, including running an animal rescue and holding public office.

As the Chair of the Summit County Council, I sat on the Executive Committee of our local chamber. The Chamber Bureau had a beautiful Visitor Information Center with a coffee amenity. In our December 2013 Exec. Comm. meeting, I learned that the coffee vendor was not renewing its lease. Thinking this a travesty (because I took many meetings there) and, again, trying not to practice law, I went home to my husband and said, “I can do that.” So, I bought the coffee shop.

Eighteen months later, I launched Hugo Coffee Roasters (named after my handsome rescue pup Hugo) because I wanted to vertically integrate, improve my product quality and, most importantly, impact the world of animal welfare. 

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In a former life, I ran the animal rescue, Nuzzles & Co. In addition to being an animal lover, I am also a coffee lover and thought: “What if something we consume with caffeinated vigor could be tied to animal rescue?” Why tie animal philanthropy with commerce? Because consumers WANT to know that their purchase choice will make a difference. Millions of consumers love animals and often understand that they, too, are sentient beings who feel love, pain, and loneliness AND want their purchase to have an impact. Over 63 million households in America have a pet and drink coffee. Hugo Coffee’s vision is to be the go-to coffee for animal lovers nationwide. 

Imagine a world where you can have your cup of organic, rich coffee AND drink in the satisfaction of helping animals too.

Can you tell us the most interesting story that happened to you since you began your career?

Probably the most interesting thing that happened to me since launching Hugo Coffee Roaster in 2015 was being approached by another animal welfare missioned coffee roaster, Fluffy Cow Coffee, to buy them because of our similar mission. So, I bought Fluffy Cow Coffee  Fluffy Cow’s mission is to support farm animal sanctuaries and promote a plant-based lifestyle. Purchasing Fluffy Cow Coffee made me hone my messaging and expand it to include support for ALL animals as fellow sentient beings that feel love, loss, and pain. As I love all animals, I love supporting farm animal sanctuaries as well as dog/cat rescues!

What do you specialize in, and why should someone choose you over your competitors in your field?

Out of thousands of coffee roasters, Hugo Coffee Roasters is the ONLY female founded & certified coffee roaster with an animal welfare mission sold nationwide. Our target consumers are people who drink coffee and have a pet – and there are over 63M households in America that qualify! Our consumer buys Hugo Coffee because they want their purchase to have an impact. Hugo Coffee gives consumers exactly what they demand – a fantastic cup of coffee with an impact. Hugo Coffee supports specific small, volunteer-based, cash-strapped animal rescues nationwide. We do this because, as a former ED of an animal rescue, I understand that the work of animal welfare is done by the thousands of small rescues across the country AND because I want our donation to have an immediate impact. 

Hugo Coffee consumers buy Hugo Coffee because of its animal welfare mission, and they buy again and again because our coffee is fantastic (consistent 5-star reviews/served in 5-star resorts).  

What are the three things that mostly helped your online business succeed?

Our organic growth can be attributed to:

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(1) our weekly weeklong fundraisers benefiting a specific small, cash strapped, volunteer-based animal rescue whereby we donate $2.50 for every item sold during the week to our rescue beneficiary of the week,

(2) our engaging social media and website content, and

(3) helpful influencer/affiliate posts/stories. 

In addition to the above, we also use paid digital ads to drive traffic.

How have you used your success to bring goodness to the world?

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At Hugo Coffee, we married animal philanthropy with commerce because consumers WANT their purchases to have an impact, and we want to impact animal welfare nationwide. 

Hugo Coffee Roasters fulfills its animal welfare mission in several ways. First, we underwrite the weekly “Adoptable Moment” on our local NPR station, benefitting Paws for Life. And every single week, the cat(s)/dog(s) highlighted find their forever homes. Every. Single. Week. This means that hundreds of cats/dogs have found their forever homes thanks, in part, to Hugo Coffee! Second, our weekly weeklong fundraisers for specific animal rescues. Just last year, we partnered with over 45 organizations, and our donations did things like (1) build a shade structure for pigs, (2) buy a large animal evacuation tool for wildfires and other emergencies, (3) help with many vet bills, and (4) feed countless cats and dogs! Third, we pop up at all regional animal welfare events (Super Adoptions, Yappy Hours, Strutt Your Mutts), sell our coffee, and donate the proceeds to the host animal rescue. 

I have also mentored women in every one of my many careers: lawyer, elected officeholder, nonprofit ED, and now with Hugo Coffee Roasters. I am active with my Stacy’s Rise fellow grantees with weekly peer-to-peer support meetings. I am similarly active in the Tory Burch fellows and Goldman Sachs 10000 graduate community, sharing opportunities and providing advice and support. 

None of us are able to achieve success without some help along the way. Is there a particular person you are grateful for who helped get you to where you are? Can you share a story about that?

Oh, so many people! First my husband, Tim Douglas. He thought he married a lawyer and had no idea that he married an entrepreneur who, at 55 (and with no experience), would launch a manufacturing company that would deplete our savings and dramatically reduce my compensation! Yet, he does nothing but support me and what I am trying to accomplish with Hugo Coffee Roasters. 

Second, my peer-to-peer group of fellow female founders! We met as part of the Stacy’s Rise Project (2020 graduates), and, to this day, we continue to meet weekly to support and help each other. The grocery world was not something that I understood before having to pivot to DTC online and grocery in response to COVID. I simply could not have done so without this group, as well as the PepsiCo/Frito-Lay mentors that I was lucky enough to have for 2020.

Third, all the fantastic people I have met via the Tory Burch Foundation: TB mentors, fellow Tory Burch Fellows, and amazing guest lecturers. In addition, to support, I have hired a new CFO, PR person, and attorney as a result of my Tory Burch Fellowship.

What were your most important challenges? & How did you overcome those challenges?

Claudia McMullin

My single biggest challenge to date was surviving COVID. When COVID hit in March 2020, Hugo Coffee Roasters had one revenue stream – food service. Thus, Hugo Coffee lost all its revenue overnight when all foodservice customers closed. This was terrifying. My immediate job was to raise as much money as I could as fast as I could. And I did this by winning grant money (Stacy’s Rise Project, Tory Burch Fellowship, Fed Ex, Main Street Preservation Fund, among others) and getting loans (PPP, EIDL, UMLF). Luckily, as a result of going through the Goldman Sachs 10000 Small Business Program in 2019, I knew that my revenue streams needed to be diversified, and when Covid hit, I was in the middle of hiring a marketing team, conducting a brand audit, and revising my website to include a robust Shopify online store. I was also hiring brokers and seeking distributors for brick & mortar grocery. By the end of 2020, my revenue streams were equally distributed among food service, brick & mortar grocery, and online sales. And our revenue was only down 20% year over year.

My second biggest challenge remains funding growth and access to capital. Unfortunately, commercial banks are not a great place for working capital for small businesses – unless you’ve been in business AND profitable for years. I have turned to local/regional nonprofits supporting disadvantaged businesses and government economic development organizations, crowdfunded debt, and, unfortunately, fell for a Fintech loan – which by the way, is NOT the way to fund growth even if it’s the only option. It is impossible to grow quickly without the appropriate working capital, and working capital is so hard to get. A real Catch 22. My plan to overcome this is to finally seek angel investment for working capital, marketing, and automation!

What’s your piece of advice for readers who want to achieve wealth and success in life?

I am not particularly motivated by money, but I 100% know that I am both wealthy and successful in life! 

My tip? Don’t be afraid to try something new! I’m in round 6 in careers -stockbroker, attorney, executive director of animal rescue, public official, coffee shop owner, and coffee roaster. And I FINALLY found the perfect fit. My passion for animals keeps me inspired and motivated, and my passion for creating a fantastic product that makes people happy keeps me satisfied. A win-win! Bottom line: it’s so cliche… but really do try to find something that inspires you and that you are passionate about, and money will follow. 

What do you think is the key to a truly successful online business?

A great product, a seamless customer experience, fantastic customer service, and MONEY for advertising and content!

Where do you see yourself and your business in five years?

I see Hugo Coffee Roasters becoming the go-to coffee for animal lovers nationwide! That means robust national grocery sales in the key accounts like Whole Foods, Sprouts, and Target. It also means robust online sales with lots of merch options. Finally, I see Hugo Coffee in airports around the country – with SLC Airport Phase 2 opening in November 2023 being the first!

What’s your piece of advice for people who want to quit their 9-5 job and start a business?

You must assess your:

(1) risk tolerance for uneven, even sporadic income,

(2) level of comfort from a consistent paycheck and benefits,

(3) ability to self-motivate,

(4) ability to pivot/react to constantly changing conditions, and

5) level of comfort from the lack of structure. 

Thus, if you have a high tolerance for risk, are ok with fluctuating income, are a self-starter, are decisive and flexible, and love an unstructured workday of constant juggling, then You Are An Entrepreneur!

What is the biggest sacrifice you’ve made in starting or running your business?

I have sacrificed my future by investing in myself rather than in my retirement. 

The future of the digital world might be ruled by blockchain and cryptocurrency. Do you think it would be challenging for all age groups to gain knowledge about the same? How can we educate them?

Oy. And 100%. I don’t know what I would do if my digital presence was ruled by blockchain and cryptocurrency. My guess is I would have to hire an expert to manage this new frontier!

What are your “5 Things I Wish Someone Told Me Before I Started” and why?

  • Entrepreneurship is 10x harder than you think.
  • Entrepreneurship is 100x more fulfilling than you think.
  • It will take SO MUCH more money than you think – even with planning. If possible, line up sources for funds (friends/family, non-traditional debt, angels, savings, whatever you can think of) in advance so that you are not scrambling and desperate for working capital when growth happens!
  • Delegate, delegate, delegate.
  • Do NOT try to do everything. First, you don’t know how to do it all. Second, focus on your highest and best use. 

What would you tell yourself ten to twenty years ago that you wish you knew then?

Experiences beat things every time. Collect experiences, not stuff.

Lastly, what do you think this world needs the most? 

In the immortal words of Elvis Costello: peace, love, and understanding:) 

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