The 5 Truths About Innovation – 0001

March 26, 2019

This podcast episode corresponds with Doug Hall’s newsletter. https://blog.doughall.com/newsletters/5-truths-about-innovation-learned-over-40-years-driving-eureka-1

This is the first Episode of the Driving Eureka! Podcast. Segment 1: 5 Truths About Innovation; Segment 2: A False Cure of Innovation: Segment 3: Brain Brew Whisk(e)y Academy.

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Show Notes

[00:00:35]
Introduction and Overview of the Episode

[00:02:00]
First Truth about Innovation

[00:04:21]
MeaningFul Uniqueness History

[00:05:27]
Impact of Being Meaningfully  Unique in Your Product or Service

[00:07:02]
Impact of an Innovation Strategy

[00:08:28]
The Second Truth of Innovation

[00:10:37]
Third Truth of Innovation

[00:11:29]
Death Threat Introduction

[00:12:14]
Doing the Math

[00:16:04]
Definition of Death Threat

[00:16:45]
#4 Truth of Innovation

[00:18:40]
#5 Truth of Innovation

[00:20:50]
5 Truths of Innovation Summarized

[00:22:14]
False Cures – WhyStart Here?

[00:23:08]
#1 False Cure – Inspection, Metrics and Bigger Rewards

[00:25:19]
The Problems with Stage Gate

[00:26:11]
You Can’t Innovate Without Changing the System

[00:28:10]
The Problem with Rewards

[00:29:10]
Brain Brew Whiskey Academy

[00:30:05]
Start with the Aim

[00:30:55]
Aim – Everyone Can Have Their Own Whiskey

[00:32:19]
Meaningful Uniqueness

[00:32:31]
The Artisan Whiskey Experience

[00:34:04]
Difference of Distilled Spirits

[00:38:21]
Craft Cocktail Segment Introduced

[00:39:23]
Gold Rush Craft Whiskey Cocktail

[00:39:29]
Gold Rush Recipe

[00:39:55]
Gold Rush – Step 1

[00:40:23]
Gold Rush – Step 2

[00:41:07]
Gold Rush – Step 3

[00:41:29]
Gold Rush – Step 4

[00:41:47]
Operational Definition of a Shot

[00:44:08]
Offer to Listener at www.doughall.com/podcast

 

 

Transcript

Tripp: [00:00:01] Welcome to the Driving Eureka! podcasts where we share ideas and advice for helping you find filter and fast track big ideas.

 

Tripp: [00:00:14] Hi I’m Tripp Babbitt advisor to global organizations on the Deming philosophy and host of the Deming Institute podcast.

 

Doug: [00:00:23] And I’m Doug Hall inventor speaker teacher and whiskey maker. I’m also the founder of the Eureka ranch and author of the driving Eureka book OK.

 

Tripp: [00:00:35] So this is episode one we have Episode 0 where we’ve introduced ourself and what the aim and narrative is of the driving Eureka podcast.

 

Tripp: [00:00:47] And as we mentioned in the introductory piece that this podcast is a conversation about this week’s edition of the Driving Eureka! newsletter this week In segment one our feature story is the Five Truths about Innovation Learned Over 40 Years. In Segment 2 the Driving Eureka! book excerpt Doug discusses one of the false cures for innovation and in the final Brain Brew Whisky Academy segment will discuss the Driving Eureka! book and its application to a whiskey distillery.

 

Tripp: [00:01:29] And we’ll also share a craft cocktail recipe Doug let’s start down this path on these five trips. Why did you begin with these five truths to start off.

 

Doug: [00:01:44] I just thought it made sense to start the podcast and newsletter saying it over the last 40 years twenty five thousand ideas $17 billion in an innovation valuation so let’s just begin with cut to the chase.

 

Doug: [00:02:00] What does it take to be critical to success in the first one is alignment on what is an innovation is the start and you really have to have a clear definition of the word innovation is thrown around so much for so many different things and in the process of our work we’ve really focused on a very specific and clear definition and that is “meaningfully unique” and we ask customers how meaningful it is how much they like it or how likely to buy it and then how new and different or unique it is. And then we we we do a waiting to them and this has been validated in an academic paper with Dr. Lin colleague University of Oregon in marketplace study after study and this meaningful uniqueness measure helps us quantify what is an innovation it drives word of mouth that drives repeat purchase it drives trial and it gives us a number now to quantify our innovations.

 

Tripp: [00:03:05] Can you give us. I know there’s a paper but how did you move into meaningfully unique from the beginning.

 

Doug: [00:03:13] I love math so which is bizarre. Being a inventor I really really love math. I’m a chemical engineer and I took statistics as a night course for fun. That’s crazy. Nobody does this as you don’t take statistics for fun. And I really love it. And so I’ve had for many years at the ranch I’ve always had a full time statistician who just Kronk’s numbers and what happened was many years ago I had a company called Accupoll where we did research and we would test ideas for companies and as well as our own ideas for clients and then we would track them in the marketplace to see how they did. And this database was a huge database. We had all kinds of questions we asked potential customers for these innovations and they were everything from non-profit services to consumer products to industrial products depending upon the country. And and we spent two years at one point I had two PHDs and a statistician that were here on sabbatical some of the PHDs doing nothing but research to try to find truth as to what was what could we find.

 

Doug: [00:04:21] There would be a dependent variable that could predict and and out of that came meaningful uniqueness and a weighting of 60 percent on purchase 40 percent of new and different or like new and different whatever it is that was the most predictive of success and that’s what led to the academic papers so this came from true research and development to try to quantify what is because if you don’t know where you’re going How the hell do you know if you’ve gotten there OK.

 

Tripp: [00:04:48] That makes sense.

 

Tripp: [00:04:49] And so what’s happened to Occupy is that part of Eureka ranch then or what. No I’m just curious.

 

Doug: [00:04:56] Two people came to buy the company that wasn’t for sale and let me tell you a good time to sell a company is when it’s not for sale and in fact I sold it and that got me the money to actually build the Eureka Ranch! just outside of Cincinnati to be able to do it and let me just give you some little sense on this. This is the impact I’m talking about. We ask using what’s called a Juster scale which is geeky for people but it’s the most approved scale zero to 10 scale used to mean and the average score for mega corporations.

 

Doug: [00:05:27] I’m talking Fortune 20 companies historically has been around a 5.0 when you move that target to a seven point so you don’t increase your odds of let’s just say word of mouth where somebody tells somebody and they actually buy it from going up 5 percent or 10 percent or 50 percent or 100 percent but you increase your odds some two hundred and fifty percent. So it literally is at exponential kick as you push the me for as you do something that nobody else has done before. You get more successful. The problem isn’t why ideas fail we know it they’re selling something that everybody in the world already has and nobody cares. Customers don’t change for no good reason. They have to see something that’s really different.

 

Tripp: [00:06:17] So let me correct me if I’m getting this wrong but if I if I have a new product out and it scores a five out of 10 let’s say on a meaningfully unique scale that you’ve put together here and then it goes up to a 7 it’s 200 plus percent more profitable.

 

Doug: [00:06:40] No 250 percent more likely to get word of mouth word of mouth.

 

Doug: [00:06:44] Ok. Yeah. And about that but the probability of success goes up exponentially to all of the factors go up trial repeat awareness. Literally it’s a chain reaction of positives that happen. I mean you know in your world how many times do you go to the store. And this for things that are about the same and you just pick the one that’s cheaper.

 

Tripp: [00:07:01] Oh sure all the time.

 

Doug: [00:07:02] And the research says that it’s like a 200 percent increase in profitability when your strategy is innovation when you’ve got something that nobody else has. I mean you’re live in big. You live in big because customers can’t get it from anybody else.

 

Tripp: [00:07:17] So so the movement basically from commodity to stuff put me use my own words a commodity to something meaningfully unique is as really that scale from five to seven is what you’re telling me and mathematically you’ve figured out a way to use data in order to come up with meaningful uniqueness.

 

Doug: [00:07:38] And I’m going to say it even stronger and in a positive way even though the word is oftentimes thought of as a negative I’m talking about moving from commodity to Monopoly. Oh we’re the you’re the only one because governments around the world enable patents they enable you to have a legal monopoly for a period of time and that’s what we want because people that have legal monopolies make a lot more money than people selling pork bellies Oh absolutely.

 

Tripp: [00:08:10] Sure makes sense.

 

Doug: [00:08:12] So so the first thing is you’ve got to have alignment in what innovation is. If you don’t have that then do not pass go do not collect 200 dollars OK.

 

Tripp: [00:08:20] So these are these are in their chronological order then five thing. Ok. These Five Truths to up.

 

Doug: [00:08:28] So the first one is you got to know where you go and the second one is and I put the second because it’s it’s gonna cause stress for people. Failure is fundamental. If you’re doing something that’s never been done before you’re gonna have to try things and you’re gonna feel like when you learn to ride a bike you didn’t just get on the bike and ride it you had to have a couple of falls along the way. Now the key is to make those failures fast and cheap. That’s the key. Not expensive and long. And so you have to learn how to do that with discipline but you’ve got to embrace the concept that you’re going to make mistakes along the way. And if you don’t if you have to get it right before you start then you’re practical prudent and puckered and it’s not gonna work okay. That’s the challenge that we’ve got to face. We’ve got to be willing to accept failure as a step in the process. And if you do that and don’t do it you give it up cause you’re never going. One person. He said Doug I can’t say the words fail. You say fail fast fail cheap as you said I can’t see fail can you say win fast win cheap I go I said I just can’t say the word failure. I said Sir you have psychological problems that I can’t help with. I mean get over yourself. You’ve got to be willing to say it. And if people say well we’re okay with failure. No you’re not.

 

Doug: [00:09:45] The fact that you’re even bringing it up tells me you’re not Richard Branson say Screw it let’s do it.

 

Doug: [00:09:52] You know by the way I like podcasts versus public radio. You can say words like that but.

 

Tripp: [00:10:01] I mean you’ve got to run into this all the time Doug. I mean for organizations I mean you get canned for failing. I mean that’s.

 

Tripp: [00:10:11] I mean there has to be a huge fear factor within new organizations you’re working with.

 

Doug: [00:10:17] There is and because it’s culturally embedded into the culture you know at home on the weekend you know you cook something you put together some food and you mess around or you go out to the workshop or the garden and you do stuff. We get to the office and we have to have it right before we start.

 

Doug: [00:10:32] I mean it’s just inane it’s totally inane

 

Tripp: [00:10:37] And so the third thing no math no innovation.

 

Doug: [00:10:41] That’s right. My problem with a lot of this there’s a lot of systems out there Lean Startup design thinking they’re wonderful from a right brain perspective. OK. They’re fine. OK. They get you going.

 

Doug: [00:10:54] They get you thinking. Wonderful. No problem with that. But it’s only half the problem. You’ve got to have a left brain and you know I’d love a Ferrari but when I do the math the math doesn’t work OK you got to be willing to confront reality.

 

Doug: [00:11:10] And what we have found is that this has to be done at the start and so you have to do the math. And the minute you do the math you find out as we say I’m originally from Maine the state of Maine and we have a saying that we say you can’t get there from here and you do the math it doesn’t work.

 

Doug: [00:11:29] Now you don’t give up you don’t give up but you then tag that issue as a death threat. This is something that could kill a project.

 

Doug: [00:11:39] And what we teach in in the courses that we do and what I wrote in Driving Eureka! is that we then take you through a disciplined keyword discipline that works with the logical rational cultures the Deming cycle Plan Do Study Act.

 

Doug: [00:11:54] You start those rapid cycles of learning documented and disciplined yes. TRIPP I’m going to give it to you. We run practical prudent cycles of Plan Do Study Act and that’s how you make a miracle happen but it starts with you in the math. You’ve got to do the math.

 

Tripp: [00:12:14] So how do you know what are the basic questions that I always have with this stuff. And you and I have talked about this before but it’s the how accurate is this. I mean it sounds so because it’s so fluffy when you’re talking about ideas and things of that sort. It seems like the accuracy is just so broad that you can’t really you know address these things.

 

Tripp: [00:12:38] How did how does that get addressed okay.

 

Doug: [00:12:42] I’m going to apologize in advance for those of you who don’t like math because this is going to mess with your heads but the fact of the matter is is this that everything can be measured.

 

Doug: [00:12:53] There are but all estimates have variance with them. OK.

 

Doug: [00:13:00] We have this false sense of precision in our world. The fact of the matter is every measurement or every estimate has a plus or minus around this is just variance. And so when we do the math what we teach and we have tools that enable you to do risk adjusted forecasts. OK. So to prevent failure and what we do is for every input number you do to do your math you would put your best guess and optimistic and a pessimistic number and then what we use that to do is to draw a probability distribution and it’s done automatically with computers these days so it’s painless and we run what’s called a Monte Carlo simulation. And now we can understand here’s our number and here’s the range of probabilities of outcomes that we can get. And here’s the number that has the greatest variance the greatest risk in this number we’re pretty certain on it has very low variance on it.

 

Doug: [00:13:59] Okay. And so by doing it this way we’re able to model the truth of how we’re feeling. I’m I’m not making up stuff if right now at the beginning.

 

Doug: [00:14:11] I don’t know how many potential customers there are that it could be a thousand or it could be a million. Well that’s a pretty big range. And so I put it in a thousand to a million and then after I’ve done my first forecast I then run experiments. I go look up data. I run a survey whatever it might be. So that I find out actually the number is somewhere between 50 and 70 thousand and I get it tighter and tighter.

 

Doug: [00:14:38] That’s the process that we use to use the math. So we’re going to do the math on a probability basis understanding the variance with it. And you’ve just gone from math that’s impossible to math that works. I mean look at the weather man. Does the weather man say it’s going to rain no weatherman says there’s a 70 percent chance of rain. And people say but it didn’t rain. I said well good 30 percent of the time it shouldn’t. It changes how you think when you start to look for a probability it isn’t epic epic shift. It is an amazing shift in what happens with it. OK using shift.

 

Tripp: [00:15:19] So so what’s happening is is well just taking your example you said you know anywhere from 1000 customers to a million customers out there. But after you’ve gone through some additional cycles and of learning basically and using PDSA that you’ve now got a more accurate forecast. So each cycle you’re learning and getting a sense of what that range is going to be a narrowing as that kind of happens. Right.

 

Doug: [00:15:45] That’s right. And that’s why our big promise is we’re going to increase your speed to market by up to 6 x and decrease risk up to 80 percent. That’s how we decrease the risk. And by using data we avoid the mind numbing conversations that go on where people are trying to make a decision on things.

 

Tripp: [00:16:04] Ok.

 

Tripp: [00:16:04] And just one other thing on this subject is is can you give me an example of what a death threat is a death threat is something that could kill a project that could cause it to fail. So that could be a regulatory problem. Usually the number one is it’s one of two. I don’t know that we can actually make this thing that we’re thinking about can we actually produce it at a reasonable price. And two will the customer buy it. I mean. We think it’s cool. What will the customer buy it. I mean those are probably the two big ones.

 

Tripp: [00:16:38] Ok. And then through your cycles of learning then you’re basically either mitigating those or there you’re moving on to another idea.

 

Doug: [00:16:45] It’s that kind of either literally takes innovation and it moves it from the kooks and crazies to everybody logical rational people can practically prudently be part of this journey to turn these ideas into reality. So so the four things I’ve learned. The first one is is that we we have to have discipline associated with what is innovation. Number two is failure is fundamental three. No math no innovation and no for no patent no innovation and this one kind of gets people angst. But I feel like if you’re going to go to all the trouble to create a new idea you may as well own it. And the patent laws have been changed dramatically. They’re much easier to use. Much more useful to use and I get here and I can see the thought balloons above race head listening to this why no patents is this is this. Well I tell you what we’ve got. I wrote in the book a patent literacy exam the average it’s a true false test average score by executives is 50 percent 60 percent 50 percent would be guessing and they get 60 percent.

 

Doug: [00:17:56] So you don’t know what you don’t know. You want to own it. You want to own it. And when you’re really meaningfully unique when you change in the world then you can patent it.

 

Tripp: [00:18:06] Ok.

 

Tripp: [00:18:07] And is this this Patent patent test is it something that people can have access to that are listening or is this something that’s part of the driving Eureka in the driving Eureka book or what it is.

 

Doug: [00:18:23] Right right now it’s actually it’s in the book. So OK if you get the book you get it in there or in the audio book It’s also in the audio book you can follow along you’re in a future episode. We’ll talk about patents and we’ll put it up so that listeners to the podcast can access it directly we’ll put that in. OK.

 

Tripp: [00:18:40] Very good. And then this fifth thing as far as these five truths about innovation that you’ve learned over 40 years.

 

Tripp: [00:18:47] You gotta love it. And I’ve heard you say that a lot. And what do you mean by that.

 

Doug: [00:18:53] Well if you don’t love it and I mean really love it then you’re not going to invest the time energy and money to make it happen and when you’re doing something new it’s going to cause some stress. That’s going to be things is going gonna be stuff that you have to do. So you gotta love it. You have to have intrinsic motivation.

 

Doug: [00:19:15] You have to have intrinsic motivation.

 

Doug: [00:19:18] You can’t be doing it to get rich. You have to be doing it because it’s something that really really matters to you or else you’re just not going to keep doing it.

 

Doug: [00:19:27] Steve Jobs says you don’t keep doing it because you’re saying I mean who would put up with this stuff if you didn’t really love it. He said and I totally agree.

 

Tripp: [00:19:36] So how would you mitigate that. And in an organization. So for instance you know everybody’s going to have their idea of something on that and they may not you know be bought into somebody else’s idea that they’ve come up with. That’s that could you get to him all right. You have to pick at least one and take it through the cycles of learning in order to get to a final product. So. So how are you getting that passion put in to people.

 

Doug: [00:20:08] So you’ve got to move it from tactics to mission from ideas to mission. You’ve got to fall in love with the mission. We’re going to make the world easier for people. We’re going to make people healthier. We’re going to make people better. We’re gonna prevent people from dying. We’re gonna do something that matters. Okay. And then the method by which you do it the idea you got to be more agnostic on it. We have a tendency to get in love with ideas which are tactical versus the mission. And when you get this right then you you know now you’re focused on doing something matters and you enroll other people. If it becomes us all fighting over our individual ideas nothing’s going to happen.

 

Tripp: [00:20:49] Well that makes sense.

 

Doug: [00:20:50] So the summary the five truths about innovation that I’ve learned over 40 years is one alignment on what innovation is at the start. You’ve got to have that number two failure is fundamental. We need to embrace this learning mindset. Number three no math no innovation. Confront the realities front. You’re going to have to hit him someday. May as well do him at the front where do you have the time and energy to do something about it. Number four no patent no innovation ideas that are patentable are not obvious. If they’re if your idea is obvious it’s not patentable and that doesn’t sound like a very good innovation. And number five you got to love it. It takes a lot of work to do anything so you may as well love it because otherwise you’re not going to keep with it.

 

Tripp: [00:21:46] It’s time now for the driving Eureka. Book excerpt with legendary inventor Doug Hall so let’s move on to the second segment now which is the driving Eureka book excerpt and I guess the first question would be why did you choose false cures as opposed to something else in your first newsletter.

 

Doug: [00:22:14] Well it’s interesting you know in the book I wrote this old section on the problem and solution to chapter one is about the innovation problem because I’d always skipped over it and but most people don’t understand it.

 

Doug: [00:22:28] And so there’s a tendency for people to especially leaders to turn around and say tick the box oh I got it I got it we got a cure for it and I finally hit the point that I said let’s start the newsletter off by dealing with at least the first of the five.

 

Doug: [00:22:45] There’s five of them in total will talk about that in a minute. But but let’s talk about the first false cure because it’s the one that tends to cause barriers all over the place. And so I just thought it was a fun place because otherwise people said oh yeah innovation I got that already.

 

Doug: [00:23:02] And by confronting them on these issues it gets them to pay attention and so.

 

Tripp: [00:23:08] So this first false cure that you have is more inspection metrics and bigger rewards.

 

Tripp: [00:23:16] What are you seeing. So the thought is is that if I just give them a number they’ll all of a sudden get motivated.

 

Doug: [00:23:25] And if they’ve just have a number they’ll just work harder. And then if I bribe them to do their job they’ll work harder and there is no evidence whatsoever of this is that we could if we went to court in this it would just not be there factories if the factories ran under this they would all be shut down like they were close to being in the in the 60s and 70s because of poor quality.

 

[00:23:51] No you have to just giving people metrics to hit doesn’t motivate them. What it results in is people gaming the system to hit the numbers now. Metrics are invaluable as a tool for improving the system but destructive when it comes to motivating metrics of the outcome improvement in the system comes right. Changing the methods and tools that people have a beating work is bribing them only increases fear and decreases internal motivation. So what we’re working on is giving people work fun again teaching them enabling everyone everywhere to be able to find filter and fast track ideas. You have to teach them how to do it expecting people to do something. With no method to do it is madness. It’s just not going to work.

 

Tripp: [00:24:48] You know you’re right. In my experience in looking at things for a Deming lens you know one of things that’s talked about in Dr. Deming 14 points is more inspection so you know you can’t inspect in quality into a product that you aren’t able to accomplish that. And I’m having a little bit of difficulty here and maybe help me with this Doug is the more inspection component when it comes to innovation. How does that play.

 

Doug: [00:25:19] Well people will tend to have. It’s a great question because a lot of companies and it’s it’s sad because there were two inventors of a system called stage gate. One was very business focused one was more academic focused and sadly the system was designed to increase speed decrease risk and that’s not what it’s become. And and it’s it’s because what management is done is they’ve tended to make it into the gates of hell where they’ve just put up numbers that you have to hit that are random numbers and you have to sell at least 50 million or 20 million or 10 million or whatever it might be. And then people just game the system to do it and there’s no integrity to the system. And so they tend to run the business by a metric that isn’t necessarily connected to the reality of the success potential of of the idea.

 

Doug: [00:26:11] And this just causes amazing frustration. I mean the real reason you know you know executives really want when it comes to ideas they want a real big idea that doesn’t require them to change anything that they’re doing right now.

 

Doug: [00:26:30] Say manufacturing same sales same route to market. If I can do the exact same thing I’m doing now and get a totally different result. Well get over yourself.

 

Doug: [00:26:37] I tell people frankly if your idea as a screw up at least three departments it’s not worth doing. Think about that for a second that messes with your head.

 

Doug: [00:26:49] You know well we want our ideas to be you know so that they fit our exact existing system. That’s just where the company last week and they said well we need the ideas to fit our existing ways of working our existing route to market our existing manufacturing our existing capabilities.

 

Doug: [00:27:05] And I said and what do you want to do. All we want to be more successful. I think we’ve done the last 10 years. No. This is what I mean. I said no that would be madness. I’m out. So what you mean you’re out. I said you’re not confronting reality here. We’re going to have to change something. Well or do or Oh eventually they’ve started to see the light.

 

Doug: [00:27:30] Now we’ll see that coming to the ranch in a couple of weeks so we’ll see what happens.

 

Tripp: [00:27:33] Yeah and the. The last two companies here as far as metrics and bigger rewards you know I see that and really every organization there’s so such short term thinking associated usually with these things so you know you’ll see a measure. And as you and I both well know in the silos in which measures are done everybody could be reaching their their goals and the measurements associated with them and the company could be going to crap basically. And then there’s rewards associated. I hit my goal. You know everybody is hitting their goals but the company is going under metaphor.

 

Tripp: [00:28:10] That’s yeah. You know it’s interesting it’s one of those things that in the Deming podcast talked about with Paula Marshall at Bama companies. I mean she in essence said hey we’re all. Everybody was hitting their goals and they were getting their rewards. But but the company McDonald’s was ready to dump them because they make the apple pies for McDonald’s. So you know it’s it’s just one of those scenarios I see that playing out almost in every way.

 

Doug: [00:28:38] So. So your bottom line is inspection metrics rewards. That doesn’t solve the problem.

 

Doug: [00:28:45] You’ve got to build quality and you’ve got to give them education. You’ve got to learn. I mean that’s what it takes. That’s the first of the five false cures. We’ve got a special audio interview I did on just this on all five of them. And that’s gonna be made available to listeners.

 

Tripp: [00:29:10] This is the Brain Brew Whiskey Academy podcast where we’re going to take you behind the scenes on what it takes to build a whiskey distillery business. The Eureka! Ranch team led by Doug Hall are creating a craft Whiskey Company like has never been done before

 

Tripp: [00:29:33] Doug I’m really looking forward to this Brain Brew Whisky Academy because I think it’s going to be a whole lot of fun.

 

Tripp: [00:29:42] You have the Driving Eureka! book and the Innovation Engineering system within it centers are a lot around practicing what you preach. So so in doing this you’ve created this whiskey distillery.

 

Tripp: [00:29:58] Share with me a little bit about how you’ve applied and what you’re doing with the whiskey distillery.

 

Doug: [00:30:05] The beginning of anything whether it’s a whiskey distillery or a new business or a new nonprofit or anything that you’re going to do it starts with the aim which is a famous thing that Dr. Deming if Kevin Cahill of the Deming Institute when he spoke at our conference at the Eureka ranch he spoke for 45 minutes about aim you really need to have the purpose why are you doing this. And it’s got it. It can’t be to get rich forget it. It’s never going to happen. You’ve got to have something that really becomes your rallying point as to what you’re gonna do.

 

Doug: [00:30:39] And ours is built around two things. It’s built around a premise that everybody deserves their own whiskey and that there is a great power in enabling local entrepreneurs around the world.

 

Doug: [00:30:55] And so our business is going to be unique in that we’re using we have a time compression technology that allows us to make whiskey very very quickly in 40 minutes we can make amazing luxury spirits but that nobody cares about that. What we’re doing is enabling you so that every individual can make their own whiskey every bar every restaurant every wedding can have it. And instead of us building an empire we’re gonna do it through partnering with local distilleries and breweries and entrepreneurs who want to start their own whiskey company all over the planet. And so I believe that the future is local. And I get a lot of excitement out of enabling that entrepreneurial spirit. And the joy that I feel when I’ve made my own whiskey and I share my whiskey with people. It rocks man it rocks and I want to bring that same joy to everybody. You don’t need to get Jimmy and Johnny you know Johnny Walker and Jimmy Beam’s whiskey anymore. You can have your own whiskey and I think everybody deserves their own whiskey. Whatever you’re trying to do whether it’s a whiskey distillery or something else you have to figure out first why are you doing it. What’s the aim. What are you trying to do. What’s the thing that’s going to generate your excitement.

 

Doug: [00:32:13] And and that’s really the beginning for for any thing that you’re gonna create.

 

Tripp: [00:32:19] So one of the things that you talk about in measuring new products that are coming out is this concept of meaningful uniqueness. And so how does that play in this Brain Brew business.

 

Doug: [00:32:31] Once you’ve got your aim now your question is is you’re gonna have to develop this idea and you’re going to have to take it to whoever are your customers and make sure that they see it as meaningful unique that it makes a difference in their lives and in our case what we did is we took people through a personal whiskey experience called The artisan whiskey experience where you taste wheat corn Ryan barley old world new world and craft style. So twelve whiskeys then you put together your own and we teach you we take you through a process. So it’s not hard to do. You can do this and you find the one you like. And then we ask as you people a week later after we gave him a bottle they get the bottle the next day and we check to see what do they think of it. And in our testing we use zero to 10 scale and meaningful and uniqueness and we wait them five is the corporate norm. Six is good seven is outstanding. We got an eight point nine the highest score ever in nearly 40 years of testing that I’ve ever seen on an after use product. And people say Yeah they liked it because it was theirs. I said Da that was the whole idea. So the second thing after you’ve got your aim you’ve got to quantify that you’re things right and we’re gonna talk about that a lot in this podcast of ways to do this but you’ve got to make sure that you’re not delusional that your idea is is real and that people can do it and that’s gonna be something that’s going to be never ending by the way it’s going to be never ending work to keep making that bigger and bolder and more meaningfully unique.

 

Tripp: [00:34:03] Okay. Very good.

 

Tripp: [00:34:04] And so just maybe a little fun thing but but something from my perspective which is I would not consider myself an expert on whiskey at all. You know I know the difference. Let’s say you know I know scotch now you know probably five years ago I probably didn’t that scotch is made in Scotland.

 

Tripp: [00:34:23] There is also this difference between whiskey with an E and whiskey without maybe you can talk about that a little bit but then also what’s the difference between you know is there is there a major difference between us a Scotch versus an American whiskey and is there you know and how does bourbon fit in there is that a whole separate family. These are all things that I think are basic questions.

 

Doug: [00:34:47] Yeah so real simple whiskey is spirits of 40 percent alcohol or 80 proof that are made from grains: wheat, corn, rye, barley and others rum is spirits made from sugar cane Brandy is spirits made from a fruit based oftentimes wine and tequila is spirits made from agave.

 

Doug: [00:35:13] Ok so so they’re all spirits and whiskey is like the higher name.

 

Doug: [00:35:18] And then from that you’ve got territories or I say sometimes tribes if it’s made in Scotland according to Scotland’s rules it’s scotch if it’s made in America according to bourbon rules it’s bourbon.

 

Doug: [00:35:33] No it doesn’t have to be made in Kentucky.

 

Doug: [00:35:36] Kentucky likes to say that.

 

Tripp: [00:35:39] Really. OK all right.

 

Doug: [00:35:41] If it’s Canadian whiskey it’s made it. Let me give you that. You think where you think he was falling.

 

Tripp: [00:35:47] Oh yeah I got you.

 

Doug: [00:35:48] If it’s and if it’s Irish whiskey it’s made and if it’s Japanese whiskey it’s made OK so those are just some things what’s happened in the industry is there’s been a lot of a breakup into tribes of I’m this and I’m that our brain brew custom whiskey logo uses the “e” we put parentheses around it to be agnostic to it because in Scotland they spell it without an “e” in the USA spell it with any and in Ireland really I mean it’s all different. And the minute you say that it says what you’re going to what tribe you’re gonna be part of. And we just don’t care.

 

Doug: [00:36:22] I’m talking about grain based Wood aged spirits that can taste amazing that are this ultimate thing to sit with friends and enjoy in amazing cocktails which is sacrilegious to some but it make it you know what can a cocktail.

 

Doug: [00:36:40] I mean why the freak bother. I mean intrinsic you can’t taste anything whiskey on the other hand in the varieties of whisky make amazing depth to cocktails and just take them up a notch or enjoy it on the rocks or or enjoy it neat and and so that’s what we are is is we’re open to all of those things and that gets to the second part of one of these decisions you have to make at the front is what once you defined your aim the next thing you’re going to have to do is to set some boundaries on those boundaries will shift but you’ve got to decide are you going to be a distiller or are you going to be a blender. Most whisky that you get in the world is distilled in different places and people put it together that that’s the case for more brands than you would imagine that do that. And there’s nothing wrong with that. OK. Your crafting a product and putting that together at the distillery they have a whole bunch of barrels and somebody puts them together that’s no different whether they come from the same place or for places that you put together. You’re still the whisky maker you’ve got to decide are you going to be local or are you going to try to be national. I mean you’ve got to set some sense of boundaries around it to give you a little bit of discipline or else you’ll be spending forever you don’t have to keep them there. You can change them but setting up your aim and the boundaries strategic and tactical we’re gonna spend a maximum of X amount of money you know etc. You got to set some of those and with that you can start to get going.

 

Tripp: [00:38:17] Well let’s move on to the next segment.

 

Tripp: [00:38:21] Now we’ve reached a lighter portion of this podcast where Doug picks a particular cocktail that he wants to feature. And so Doug wants you to a little bit about not only this week’s cocktail but a little bit about the thinking in this segment.

 

Doug: [00:38:37] Yeah. So for each of these podcasts and in the newsletter we share a cocktail and cocktails are experiencing a massive resurgence and some of them are historic such as this one which came from New York’s Lower East Side at a bar called milk and honey and it’s a it’s a modern more complex twist on a whiskey sour which which is a which is a classic drink. And so we’re going to share each week we’re gonna share with you a new cocktail don’t stress. You can look at the show notes you can get the recipe there so you don’t have to write it down while you’re driving. And so we’ve got that there and there’ll be some of them will be simple and some of them will be more complex but the world needs more cocktails I think because it’s five o’clock somewhere.

 

Doug: [00:39:23] So the gold rush I learned about it actually because in the competition.

 

Doug: [00:39:29] So we go into a lot of competitions with our brain brew whiskey and we’ve been we’ve been very fortunate. They’ve been extremely nice to us because our products are meaningful unique and so we get very very high ratings most recently the cocktail for testing whiskeys was the Gold Rush and I go Geez I envy you know a Gold Rush. So I contacted the competition and they gave me the recipe and then we’ve played with it. Got it to where we want it. And so this is how you make it.

 

Doug: [00:39:55] First thing I have to do is you don’t have to make up what’s called honey water and this is kind of cool because there’s so many craft honeys of so many different taste characters. It’s kind of endless permutations you can do but you basically mix a 50/50 blend of honey and water. Ok so take a half cup of each and put them together. Stir that up. Sometimes you have to heat it a little bit for it to go into solution but it doesn’t take much. And then I keep it in the fridge. And so it’s what I’ve got it.

 

Doug: [00:40:23] So then to make the cocktail you take a glass. I usually will use like a rocks glass put some ice in it. Add three quarters of an ounce of the honey water three quarters of an ounce of fresh lemon juice. And that’s key. Don’t be using the bottled stuff. I’ve tried. It doesn’t work. You’ve got to use fresh lemon juice. OK. Don’t be messing with me I’ll come get you if you start to use that bottled reconstituted crap. This is craft spirit. You use fresh juices. That’s what killed the cocktail scene quite frankly in America where corporations use crap. They used to make it from real stuff. They went to crap and people stopped drinking them. So cocktails are living today because of fresh ingredients so fresh lemon juice.

 

Doug: [00:41:07] And then two ounces of whiskey. Now I use our Relativity American whiskey which is available in the Boston area. I would suggest that you go find a whiskey you can use a bourbon but find a local craft spirit that you like. I’m just I’m gonna support the craft world because that’s that’s that’s what we’re into. But find a craft one that you like.

 

Doug: [00:41:29] And then stir it about a dozen times or so and then enjoy it. Now if you want sometimes depending upon where you are. I’m just gonna bring this up right now because there’s a tendency for cocktails to get bigger and bigger. And I said two ounces of whiskey which is how I drink it.

 

Doug: [00:41:47] In truth a shot is an ounce and a half. But the industry has moved to two ounces and sometimes even higher creating more whiskey forward cocktails. So you’ve got to find out on all the recipes we do. Do you like it in an ounce and a half do you like it. Two ounces. We’re also working on session cocktails which are gonna be three quarters to one ounce. So basically kind of like half cocktails that were there we’re putting together you just got to get the mouth feel up in that to go do it. So that’s all it is. And it’s refreshing. I think you’re gonna to find it an amazing people that don’t like whiskey. Love this cocktail it’s a great way to bring friends in and you never think of whiskey as refreshing but there’s something about the honey water plus the lemon and the whiskey they together create this a chord that is just absolutely amazing. I mean if you showed up at the Eureka ranch at our distillery and you walked in and you say certainly whatever you want it’s much more often than not it’s going to be that I’m going to the cocktail that I’m going to make you will be Gold Rush.

 

Tripp: [00:42:57] Okay. Very cool. That’s interesting. I’ll have to try that to mix something together and then see how that how that tastes and be sure to use all the fresh ingredients of course. All right. Well that could make that entire first episode. Doug I if we get claps and cheers or something for completing our first one.

 

Doug: [00:43:20] Yeah. This is fun. This is this is gonna be a ton of fun.

 

Doug: [00:43:23] It’s an adventure of a journey having done some radio shows and that over time. It’s just wonderful. It’s wonderful. It’s gonna be a neat thing and I really love the idea of being able to take the thoughts and go deeper on them because while I love writing I hate the fact that the world is becoming so tiny in the amount of words you can do.

 

Doug: [00:43:47] So this is just a wonderful forum I think to bringing it up and thank you for your your questions to help. You’re forcing me to think. And it’s always a good day when you think.

 

Tripp: [00:43:57] Well you always make me think so. Back at you. Very good. Well that concludes this episode 1

 

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