Time to Get Tough

How Cookies, Coffee, and a Crash Led to Success in Business and Life

Michael J. Coles, Catherine Lewis

• Publisher: University of Georgia Press
• Year: 2018
• ISBN:
  9780820354613
• Topic: Betriebswirtschaft
• Subtopic: Wirtschaftsbiographien

Michael J. Coles, the cofounder of the Great American Cookie Company and the former CEO of Caribou Coffee, did not follow a conventional path into business. He does not have an Ivy League pedigree or an MBA from a top-ten business school. He grew up poor, starting work at the age of thirteen. He had many false starts and painful defeats, but Coles has a habit of defying expectations. His life and career have been about turning obstacles into opportunities, tragedies into triumphs, and poverty into philanthropy.

In Time to Get Tough, Coles explains how he started a $100-million company with only $8,000, overcame a near-fatal motorcycle accident, ran for the U.S. Congress, and set three transcontinental cycling world records. His story also offers a firsthand perspective on the business, political, and philanthropic climate in the last quarter of the twentieth century and serves as an important case study for anyone interested in overcoming a seemingly insurmountable challenge. Readers will also discover practical leadership lessons and unconventional ways of approaching business.

1 In the Shadow of Goliath

I started my business career young, and by the time I was twenty-five I thought I knew all the answers. The problem was that I didn’t know all the questions.

I was ten years old when I found myself looking into the basement window of our former house in the Buffalo suburb of Kenmore. I used my hand to wipe away the grit that had built up during the four years we lived there. I peered through the smoky glass. With no other light than the morning sun, I was able to make out the vague shadows of my train set and other toys that had been left behind. Magazines and papers were strewn about the floor. I had ridden my bicycle from our new apartment in Buffalo back to Kenmore. It was only a little over a mile, and took about ten minutes, but it felt like a world away.

Just a few days before, I had come home from school and found all of our belongings packed, the car loaded, the house empty, and my parents waiting for me. We had lost the house and needed to move into an apartment across town near the University of Buffalo. My father and brother had loaded most of our belongings in a truck while I was at school. I had no time to gather many of my toys, notably my train set in the basement. And we probably would not have had room for it anyway. The most devastating news was that my parents had arranged for a family down the street to take my dog Lucky because the apartment did not allow pets. I had had her for four years; my father had surprised me with her when I was six. My mother hated dogs, so the gift was a really big deal. Lucky was my dog, my best friend, and I fed her, walked her, played with her. She followed me around constantly and even slept on my bed. Giving her away was the most heart-wrenching thing I can remember doing as a child, but I knew I had no choice. I gently placed my beloved cocker spaniel next to her food and water bowl in my red wagon and pulled her down the street. It was the longest, saddest walk I had ever taken. The family we gave her to had a child two years younger than me. Even though they were really nice and would give her a good home, it was a terrible moment. I managed to control my emotions on the way to the house because I did not want the boy to see me cry, but on the walk back tears streamed down my face.

Looking through that basement window, I did not understand why this had happened so suddenly. Why had everything changed overnight? Scared, confused, and unable to comprehend these strange new events, I felt alone and isolated. My safe and secure childhood in Kenmore had been taken from me. Nothing was certain anymore. My life was taking another course, and it would be forever different. As I knelt on the ground staring through the window, I was not aware that I was standing in the shadow of the giant Goliath.

My father, David Coles, was born in the United States, but his family came from Russia. They had emigrated through France and eventually settled in New York. My father’s older brother was killed in World War I, and his father died from tuberculosis when David was eleven. As the oldest male child, he went to work after completing the sixth grade. This was not a casual job for spending money—it was to support his mother and two siblings. He started collecting rags with a pushcart, and later a horse-drawn cart enabled him to expand his scrap business. My mother, Leja, was born in Poland, but as she came through Ellis Island she was given the name Lena. She hated it her whole life and went by Lee. Her father had come to America first and later sent for my grandmother and my mother in 1920, when my mother was six years old. The rest of my mother’s family was killed in the Holocaust. My grandfather, who lived into his nineties, never recovered from that tragedy.

My parents married in 1932, when my mother was eighteen and my father was twenty. My brother, Gerald (Gerry), is nine years older than me, and my sister, Elaine, is halfway in between. We were all born in Brooklyn, but my family moved to an apartment in Buffalo, New York, in 1949 when I was five. I was excited to start first grade at my new school, but after a week I was put back into kindergarten because of the timing of my birthday. In the New York City school system, students started first grade at age five; in Buffalo it was six. My sister and brother were both held back as well. I had already made some new friends, but when I was pulled out of first grade, those friendships ended. The transition was traumatic, made worse by the fact that my former first-grade friends started calling me “kindergarten baby.”

At this point my father was working as a driver for an import-export company that required frequent travel around the region and into Canada. The move to Buffalo allowed him to spend more time at home. He was still gone quite a bit, but in the summer he sometimes asked me to go with him. I would gather up my comic books and toys and my favorite pillow and jump in the truck. To this day I remember sleeping with my pillow on my father’s lap while he drove to New York City. We were not wealthy, but we were comfortable in my earliest years. I did not know it at the time, but thinking back I remember that when Gerry turned sixteen, my father bought him a Studebaker. Getting a car as a teenager would be a big deal today; it was almost unheard of in the 1950s.

My father was doing well, and in 1950 we bought a house and moved out to Kenmore. We had always lived in apartments, so this was a big change for the whole family. The house seemed huge, and for the first time in my life we had a backyard. When I was six, my father came back from a trip to New York and surprised me with the six-week-old puppy that I named Lucky. She was all black and the sweetest, cutest cocker spaniel I had ever seen, and I was responsible for housebreaking her. My father planted a garden in our backyard, and I remember having homegrown vegetables on our dinner table for the first time ever. There were a lot of children my age in our neighborhood, and we spent most of our time outside playing in each other’s yards—building forts and climbing trees. Caught up in the postwar housing boom, Kenmore was growing fast, so we saw the fields we played in transformed into subdivisions. This was a period of tremendous change in America, and I witnessed much of it through a child’s eyes. Three years after moving to Kenmore, my father started his own company. Not long afterwards, there was a fire at his warehouse. He did not have insurance, and he was bankrupted overnight. I was only ten, and it took me a while to realize what was happening.

We left Kenmore and moved to a two-flat house, divided into an upstairs and downstairs apartment with a garage, in Buffalo at 218 Englewood Avenue. I did not want to move, but at first not much changed. We had lost the house, yard, my dog Lucky, and some toys, but we still had most of our household possessions. The apartment felt familiar because we had the same dining room set, the same television, and the same beds. My mother worked hard to make everything feel as normal as she could, though our meals became less elaborate, we no longer went shopping for new clothes, and there never seemed to be any extra money. My father always believed that he would rebound, and looking back now, we were probably living beyond our means.

The move to Englewood Avenue happened a month into my fourth-grade year. I remember this vividly because that was the year I was supposed to learn cursive writing. I discovered that my new school taught cursive in the third grade—so I had missed a whole year of instruction. When I got into my new classroom, the teachers thought I was slow. I was embarrassed to tell them that I had not yet learned cursive, so I had to use the border around the classroom that had both block and cursive letters as a guide. During exams, I had to look up to figure out how to write each individual letter. As a result, I could never finish a test. Up until this point, I had always done well in school. Because my parents were so preoccupied with my father’s situation, they did not realize what was happening. Finally my mother and I went to meet with the teacher, and I had to confess that I could not write in cursive. With some extra help I brought up my grades, but to this day I still print everything that I write.

It was while living on Englewood Avenue that I launched my first entrepreneurial venture, hoping to raise a little bit of spending money. In October I offered to rake neighbors’ leaves. Leaves do not have to be raked the moment they hit the ground, so I could manage five or six houses by myself, working on a house or two at a time. Yards could be raked every week or so, and even though the work was hard, it turned out to be a lucrative business throughout the fall.

As winter approached, I assumed I could shovel snow for the same customers to keep my income stream alive. But snow, unlike leaves, had to be removed instantly. I couldn’t spread the work throughout the week but had to do all the houses in the same day. I was small for my age and quickly realized that I could not handle the work alone. However, I was really good at getting the work and negotiating a favorable price.

That gave me an idea. If I could get the jobs and hire friends to share the work, I could manage things so we all made more money. I started recruiting neighborhood boys to help. We were paid fifty cents to clear each driveway and a quarter for each sidewalk. If we did both, customers sometimes paid us a dollar. Five friends helped me shovel the snow, and I took a percentage of the money to manage the whole process. The system worked pretty well, because many of my friends were too shy to ask for the work, while I loved trying to persuade the neighbors to hire us. By the third snowstorm, we had increased our houses to ten. Had my family remained in Buffalo, we probably would have ended up with a full-blown snow-removal business that rivaled the city’s crew—at least we thought so. This enterprise taught me that it was important to hire a good team. I also learned to play to my strengths. While I couldn’t do all of the heavy lifting alone, I was good at marketing and building a customer base.

My first foray into retail followed a similar trajectory. When I was eleven, I wanted a Tru-Action Electric Football Game that had been invented in 1947 by Norman Sas. Tudor Metal Products and Tudor Games was one of the first companies to make a profit in the electronic games business. This football game was played on a vibrating metal field that was modeled on an electric car race game that the company sold. The vibration helped move miniature plastic players down the field. It was an instant hit, and every boy in America seemed to want one. It was the 1950s, long before video games were invented, and it seemed like the coolest game around. Electric Football cost about five dollars, which was a fortune for a toy.

I told my parents about the game, and they said that if I earned the money, I could buy it. Raking leaves and shoveling snow depended on the seasons, so now I needed a plan for the warm-weather months. After thinking about it for a few days, I realized that there were some old toys, books, and household items in our garage that nobody seemed to be using. My career in retail was about to begin.

I set up two small tables outside our detached garage and created a sidewalk sale with old toys that I had managed to save from our move from Kenmore, comic books, and assorted household items. I began to draw a crowd, as I was selling things for spare change. Even some of my best items went for a quarter. It was not long before I had sold almost all of my merchandise. When I counted up the change, I realized that I only had a little more than three dollars. I was so excited about my new venture that I had not given my approach much thought. I knew how much money I needed to buy the football game, but I had not considered how much merchandise I needed to sell or what prices I needed to set to reach that goal.

In the meantime, several of my friends in the neighborhood saw what I was doing and set up their own sidewalk stores. Pretty soon there were five of them on my block. I had run out of merchandise, and now I had plenty of competition. I needed a new plan. I took my red wagon and went to see what my neighbors were doing. One boy was selling the same kind of books and toys that I was, but his items were newer and in better shape. I looked over what he had for sale and quickly figured out that, with the three dollars I had earned, I could buy all of his merchandise. If I resold the items for higher prices, I could make more money. I offered the boy two dollars for everything, and he happily accepted, because two dollars seemed like a fortune to a ten-year-old boy. Together we loaded it all into my red wagon, and I headed back to my house. On the way I met another kid with the same variety of merchandise. I only had $1.50 left, so I had to school myself quickly in the art of negotiation. I offered him a dollar for all of his merchandise. The promise of a crisp one-dollar bill was appealing. After some back and forth, we agreed on $1.25. We filled up the wagon, and I walked home.

I did not realize then that I had learned two valuable lessons that day. The first was: Do not start a business without a clear goal in mind and a plan for how to reach it. That is as important for a kid’s sidewalk store as it is for a Fortune 500 company. The second lesson was that I had overpaid for my first buyout. I had a lot to learn about the art of negotiation. Even so, my efforts paid off, and I did get the electric football game. More important, though, my career in business had begun.

In the two years after my father’s bankruptcy, we fell deeper and deeper into debt, which required that we move into an even less expensive apartment and even further reduce our expenses. My father owed money to nearly everyone in town, and soon his wages were being garnished. When we lived in Kenmore, I remember my mother creating elaborate home-cooked dinners; now we often had only enough money to eat noodles. The situation became so bad that my father decided to move the family to Florida because the state had more favorable laws for debtors. One cold January night before my thirteenth birthday, we packed what we could fit in the family car, a Hudson Wasp. My brother was at the University of Buffalo and elected to stay behind to finish college. Our family had already mailed invitations for my bar mitzvah, but we moved to Miami Beach before the ceremony could take place. This time we did not take any of our belongings, because we were moving into a 350-square-foot one-bedroom apartment. The rent was about fifty dollars a month, and the dilapidated building was filled with palmetto bugs, those large flying cockroaches that are so common in South Florida. There was no air-conditioning. I had to share a room with my sister, and we did not get along. She was eighteen, and I am sure she did not relish sharing her space with her thirteen-year-old brother any more than I did. For most of my childhood I roomed with Gerry, and we were really close. Now he was grown and had moved out. So much had changed so fast, and the tension between my parents was exacerbated by close quarters. I started to do everything I could to stay out of the house. Moving to Miami Beach was jarring, but also eye-opening. I could continue to believe that this was just a temporary situation, or I could face the reality of my father’s bankruptcy, from which he never recovered, and start to find my own way. If I had to pinpoint a major turning point in my young life, this was it. I no longer had a stable home that I could depend on; we were on the brink of disaster.

My father had some business contacts in Miami Beach, and his sister lived there, so he hoped they could help him find work. His last job in Buffalo was working at Delgato’s, an appliance store near downtown. He proved to be a great salesman and thought he might find a similar job in Florida. One night, while he was still searching for a job, he received a call from Nick Delgato asking him to come back to Buffalo to work for him. Two days later Nick showed up in Miami Beach, still hoping to persuade him. But we were there to stay.

The first Saturday that we were in Miami Beach, I rode my old Shelby bicycle around the neighborhood to explore my new surroundings. I came to Flamingo Park and saw a crowd gathered at the track. I had stumbled upon a bike race. There were only four competitors, and when I walked up to the fence to watch, one of the organizers asked if I wanted to join the mile-long race, which would be four laps around the track. I looked over at the other kids and at their shiny new English racing bikes; they had three-speed models that probably weighed thirty pounds. There I was on my old Schwinn knock-off that was at least twice as heavy. But I was the new kid and thought this might be a way to make some new friends. I joined the others at the starting line, and when the gun went off, my competitive juices started flowing. I never looked behind me or even looked up; I just pedaled as hard as I could. When I started the fourth lap, I could see the other riders ahead of me beyond the white ribbon. I thought I was so slow that they were holding the ribbon to stop me, so I began to slow down so I would not break it. Then I heard the crowd screaming: “Go, go, go!” I quickly realized that the other bikes were not ahead of me—they were behind me. I had lapped the field. I won the blue ribbon, but I did not make any friends that day.

I remember riding home and having nobody to tell what had happened. Our lives were in complete disarray. Gerry was still in Buffalo, so I no longer had his support. When my father went bankrupt three years earlier and my parents started fighting, anytime I found myself in the middle of their screaming matches, I could always turn to my big brother. Now he was gone, and my sister was out trying to make her own way. I was left alone, and I knew that in the face of this new reality, my little racing victory was pretty insignificant. But I really liked to ride. In Buffalo I used to go long distances, sometimes so far that my father had to come pick me up in the dark, miles from home. I was not very good at baseball or football and was usually the last one picked for those teams. But, by God, I could ride a bike.

2 Hey Kid, Do You Want a Job?

When a task has once begun, don’t put it down till it is done. Be it big or be it small, do it right or not at all.

About a month after moving to Miami Beach, my father landed a sales position in the appliance department at Sears, and I found a job as a beach boy at the Georgian, an oceanfront hotel. This was not a casual job but real responsibility, to help our family survive. On one hand I was proud of what I could contribute, but I was also resentful. I never participated in after-school activities, had no time for sports or parties, and missed out on much of the social life my friends enjoyed. There was nothing romantic about the work. I woke up at five a.m. during the week and laid out mats and put up umbrellas before going to school. After the afternoon bell rang at school, I returned to the hotel and put the umbrellas and mats away and swept the grounds. I made a dollar a day during the week, and two dollars on the weekends because of the increased volume of work. It was hard work, and I had no choice but to do it.

Six months later I left that job because of a hurricane. The day after the storm, I came in early and found that the wind had blown literally thousands of pounds of sand into the swimming pool. In fact, the whole pool deck looked like a beach. My boss met me at five a.m. with a shovel and told me to start digging out the pool. I began working, and he kept yelling that I was not going fast enough. I kept wondering why he did not get in to help me. I was doing the best I could, but nothing seemed to please him, so I quit. That day I was hired by the hotel next door where my friend worked, the New Yorker, for the same wages. On weekends I worked for our landlord as an apprentice, learning plumbing, electrical work, and carpentry. I kept five dollars a week for lunches and school supplies and gave the rest to my parents.

In that first year of living in Miami Beach, I met a person who would have a tremendous influence on my life. I had discovered a clothing store at 1574 Washington Avenue named Dorwins King of Slacks (later renamed Dorwins Ivy Shop) that had really up-to-date merchandise, and I soon began shopping there when I could save up a little money. Sometimes I just visited the store because one of my friends worked for the owner, Irving Settler. Irving was a brilliant businessman, but also a difficult and exacting boss, so none of his employees kept their jobs for long. Signs in the window looking for a new stock boy were a pretty regular thing. Although he was the most quick-tempered person I ever met, Irving was also one of the smartest. He loved the clothing business, and he was a real visionary with an impeccable sense of timing, style, and marketing. I loved watching Irving. He and I shared an appreciation for clothes—and built a friendship on that common interest. As a teenager, even though I did not have any money, I liked to hang around Dorwins to window shop, enjoy the air-conditioning, and meet the other customers. Irving knew I could not afford most of what he sold, but he let me try on slacks, sport coats, and shirts anyway. I remember once when my mother’s parents were visiting from New York, my grandfather gave me some money to buy clothes. This was a big deal because our family was really struggling, and I had not had new clothes for a while. So of course I went to Dorwins.

On the Saturday that I stopped to buy something, I was quickly drawn into a loud argument that Irving was having with my friend Steve. The way it sounded, Steve was going to be Irving’s next victim. Irving was yelling and waving his hands around as his face turned redder and redder. Steve was silent and terrified. I was embarrassed to be witnessing such a lashing, but just as I turned to leave, Irving spotted me.

“Hey kid,” he yelled. “Do you want a job?” (He knew my name but still called me “kid” or Mikey.)

In that split second I realized that he was giving me an opportunity to work in an air-conditioned store that offered an employee discount on the clothes that I had been admiring for nearly a year. I would no longer have to bake in the hot Florida sun in the afternoons. Without even pausing, I said, “Sure.”

Turning back to Steve, Irving said, “You’re fired. Get outta here.”

He grabbed me by the shoulder and said, “Kid, you’re hired.” Now, Irving knew me. I had been hanging around his store for some time, and he understood how much I liked and appreciated clothes. I started that very afternoon. I was thirteen years old, and it was 1957. Irving paid me fifty cents an hour, and it was a great job. I felt bad for Steve but was happy to have the opportunity. I was unsure it would last, so I...

Table of contents

• Cover
• Title Page
• Copyright Page
• Dedication
• Contents
• Foreword
• Prologue: Step into the Valley
• 1 In the Shadow of Goliath
• 2 Hey Kid, Do You Want a Job?
• 3 It’s All Sold
• 4 What Strike?
• 5 Do You Know How Many Cookies?
• 6 From Cookie to Counter
• 7 The Crash
• 8 Inch by Inch
• 9 Exit 666
• 10 TTGT
• 11 The Reckoning
• 12 That Was Pretty Fast
• 13 Building a Brand Religion
• 14 Fifty Percent to Go
• 15 This Is the Battlefield
• 16 Service, Service, Service
• 17 Love Spoken Here
• 18 The Last Five Miles
• Epilogue: The First Law of Nature Is Growth
• Acknowledgments
• About the Authors