Episode 06 : Seizing The Opportunity
Like many others, Arie built his company from the ground, literally, from his basement. In this episode, see how he managed to start a business part-time, while studying and then working, without any particular financial or human resources. Arie saw an opportunity, he grabbed it, and you could do it too. Today, Servomax is a highly successful, multi-million dollar, office coffee service company deserving all Quebec and Ontario, that Arie manages with passion while being a father, an athlete, and a world traveler.
Arie’s Growth Story Book Title: “Surf the wave“
When a wave comes… you wait for it for a while, and you prepare yourself. Then when it’s there, you have to paddle really, really hard to keep up with it, you can’t let it go. And once the wave is over you look for a new one. Business is the same, you have to be looking for the right wave, not too big not small for you, and work really hard for as long as the opportunity pushes you forward.
What you’ll learn:
- Arie was once the first to do all the different jobs of his company – first delivery guy, first accountant. He is now manager and leader.
- The federal and provincial governments don’t offer free coffee. Arie knows as he tried to offer his services, in vain.
- Arie first worked on a vending machines company before moving to coffee service.
- Traveling the world helps your business for two reasons. First, by seeing things, innovation comes from everywhere. Second, you develop relationships.
- “University is more important than ever.” – Arie on the importance of learning how to learn, because it teaches you how to learn, in a world where technology always evolving.
- “A Russian Jew needs at least a graduate degree in whatever, otherwise you’re basically homeless, and hopefully, you’ll be a doctor or an accountant…” – On the parental pressure to go for a profession rather than entrepreneurship.
- “You always remember your first clients… and your first girlfriends!” – Arie’s first clients were a construction company, a car dealership, and a big telecom company.
- “If your employer won’t pay for your coffee… don’t work there.” – Arie saying that nowadays, it’s pretty standard.
2:32 – Arie is an avid athlete, whose hobbies include skiing, running, biking, snowmobiling, water-skiing, water wakeboarding, mountain biking…
2:50 – Describes himself has a daddy first – father of three kids. And then, as “An athlete in the sports of doing a business.”
3:15 – Arie’s company is called Servomax. It’s an office coffee service business. They cater to companies that want to offer coffee to their employees as perks.
4:00 – They serve all types of businesses of all sizes. Small companies choose to offer the coffee because it’s a very inexpensive perk compared to big insurances packages that they can’t afford.
5:20 – What keeps Arie Koifman up at night? Like most entrepreneurs – cash flow, and strategic planning regarding employees, their career plans, their morale.
5:40 – What keeps Arie Koifman busy during the days? Unsuccessful business. Now that he has a successful business model, he needs to make sure his people are doing what they need to be doing in the best way.
7:30 – Arie as a younger brother, who is also president of a company, where Arie is a partner.
7:50 – Arie says that growing up in Israel was awesome – growing up on the beach, worry free. Absolutely nothing like what we see on TV now, and even back then. It was very safe and people were friendly.
8:15 – Canada was very strong in welcoming immigrants when Arie moved here. He attended a “Welcoming Class” for a year to learn French, Canada’s history, etiquette.
10:10 – For the first 6 months of his life in Canada, his parents were still in Israel and Arie lived in Canada by himself, not speaking English or French very well. He had lots of time to study!
15:30 – He had a very nifty lawn-cutting system, but that worked well, and within three years he had built a business. He made enough money to be able to chip in when his parents decided to buy a house. He raised over 20K.
17:00 – University was depressing for Arie. He didn’t fit in, he didn’t enjoy it. CEGEP was very difficult academically, and the university was a little better because there were more people, a more interesting social aspect to it, but still difficult.
18:00 – Arie disagrees with the school of thoughts that university is not as important if you aren’t studying a profession because you still need to learn how to learn.
18:35 – Arie mentions the book “Thank You for Being Late” by Thomas Friedman. The book is about modern technologies and Arie explains that the biggest gift we can teach our kids is the ability to learn, because, in our time, everything else they learn will be irrelevant in a minute as the technology evolves.
22:10 – Arie started his career with a summer internship in New York in investment banking. Back in Montreal, he tried launching his own investment firm. But it didn’t work out.
22:40 – Arie started Servomax when he was doing an MBA, he was 24-25.
23:00 – During one summer of his university years, Arie was also a waiter at Peel Pub. A job he still describes as “awesome” for the money – about 1500$ a week in cash.
25:00 – Arie started his business with the idea of having a vending machine that could sell products on its own and that he could go back to once a week and collect money from. But it was not the case: the machine breaks, customers complain, the profit margin is low.
25:50 – First rule in MBA class: “Competition reduces margins”
26:00 – Through his experience with the vending machine, Arie got the idea about coffee. There was a big influx of coffee chains in Canada, such as Second Cup, that were growing at an incredible speed.
28:10 – At first, Arie was doing his coffee business on the side while still in school. Then he got a job at a trading company. In the meantime, Servomax starting generating more and more money, until it was 2 000, 3 000 per month… then it was like a real job.
29:40 – At one point, Arie had a partner, his best friend from high school. He was working and was also a student, so he would come during the weekends to help Arie put together the marketing and all other aspect Arie wasn’t as good at. Arie tried many times to enroll him full-time. The business could be twice as big today.
31:05 – The big challenges of starting a business: “I didn’t know what the hell I was doing”. Many entrepreneurs launch their business with the naivety of not knowing better, but it works.
32:00 – Arie mentions the book “Mighty Midsized Companies” and explains how entrepreneurs of mid-sized companies are often the ones who are willing to work the hardest. Even harder than owners of bigger companies – who simply don’t need it anymore.
32:40 – “The early several years of the business are symbolized by: “What can I do for you?”. It’s the personalization of the business, the hunger, the need to please.”
37:03 – The big wins of managing your own business: The key employees that stood out and really made a difference in shaping and changing the way we do things.
39:15 – Arie speaks five languages: Hebrew, English, French, Spanish, Russian.
41:40 – Arie mentions another coffee brand he now distributes that he went to meet with in Italy, Lavazza.
46:50 – Servomax still grows organically, 40% this year.
47:00 – For the future, Arie is focusing on developing his Ontario sales.
48:30 – They are also looking into providing cold brew coffee, a higher-end type of coffee, and high-end tea with David’s Tea.