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The Lucky Cup | Phil Morrison & Jimmy's Coffee

The Lucky Cup | Phil Morrison & Jimmy's Coffee

After hours of meandering through the streets and alleyways of Toronto's most vibrant districts, you may find yourself on the footsteps of a curious yellow door. Above you, clad in gold, the name "Jimmy's Coffee" stands proudly. As you push open the door, you're immediately met with the warming fragrance of fresh coffee and a familiar-looking sanctuary, offering shelter from the hustle and bustle behind you. From a vacant run-down retail front in 2009 to 9 locations today, I sat down with Jimmy's Coffee founder Phil Morrison to learn more about the journey behind the iconic yellow lid.

The First Forays

In 1983, a young bright-eyed Phil Morrison was faced with a conundrum. He wanted some spending money for the summer, but the entry-level jobs in town were bland. As he helped his parents paint their house, he racked his brain for ideas. Suddenly, it hit him...

Given his newly acquired skills, Phil and his friend could start a neighborhood painting business. Only one major problem stood in their way: finding customers. Phil leveraged the resources available to him and asked his dad, a career salesman, how to build a book of business. The answer was a simple one: "Go knock on some doors." And so they did.

After visiting only half of the street, Phil & Co. were fully booked for the summer. They were officially in business – Phil's first zero-to-one was complete. And so, the pair of young entrepreneurs set off to wreck the walls of a few houses until they had perfected the art.

After the first successful summer, the duo parted ways since Phil realized he could hire a team of painters to support him and dramatically grow his business. In doing so, he inadvertently became a manager for the first time. By the third year, he had four students working for him and he started turning his attention towards optimizing pricing and handling suppliers. Business was roaring as Phil managed to rake in over $30,000 that summer. Life was good.

Phil leveraged the cash flow from the painting business to fund his university education at Ryerson. Given the low-stakes nature of it, he molded the business around his personal life – knocking on doors to generate sales during the summer and keeping things quieter during the school year. Opportunistically, he expanded the business into other revenue streams.

"One customer asked me to clean their eaves troughs and gave me $100. That was the fastest $100 I've ever made. So I started doing that as a side business line. In the fall I'd go out and do $500 to 600 days. Short window but you do those 3 weekends in a row while you're in school... all of a sudden I've made more than if I had worked a job part-time the whole year."

Unbeknownst to Phil at the time, he had learned an incredibly important lesson during these early days that would set him up for future success. Ignorance can be bliss when starting a new venture as you may not fully understand the complexity of the task ahead of you. While analyzing the opportunity is highly encouraged, overanalysis can ultimately overwhelm a would-be entrepreneur and prevent them from pursuing the said venture. Instead of spending months getting bogged down in planning supply networks and drafting pricing schedules for a business that may or may not work, Phil simply started knocking on doors and figured the rest out later – a recurring theme in his career. The ability to act quickly on an idea is a powerful skill.

Budding Movie Star

As Phil made his way through university, he was plagued with a fear of presenting in front of classmates. Irrational, given his early success as a salesman, but a fear nonetheless. To confront it, he decided to enroll in acting classes which he would soon discover had a much different impact on his career than the one expected. Phil's natural knack for sales translated well to acting and culminated in him being invited to act in a play.

One night, Phil ran into a well-known producer at a party who he recognized from some of the research he was doing on the film industry. A complete coincidence but an opportunity he knew he had to capitalize on – and so he did. He flexed his newly acquired knowledge about what films had sold the prior year, which festivals the producer was at, and a number of other esoteric facts. Thoroughly impressed by the kid standing in front of him, the producer hired Phil to work in his office once per week. In exchange, Phil had the opportunity to read for small parts in the producer's movies. Before he knew it, he had an agent and was flying out to LA.

Unfortunately, his acting career in LA didn't take off as he had hoped – but his dream of writing and producing his own film kept eating away at him. He had moved back to Canada after a year abroad and was making enough to sustain himself through various roles. However, to make his dream a reality, he needed to figure out a side gig that could truly finance his ambitions. Phil called up an old high school friend and convinced him it was time to put their chatter of starting a nightclub into action.

Club Club Goose

First things first, they had to find a property to lease. Given this was the early 90s, you couldn't go to and simply set your search parameters. Instead, they hopped in their car and drove around town scouting out "For Lease" signs. The problem was, as they soon realized, no one would take two guys in their early 20s seriously. Down on their luck after searching for a while, Phil's phone rang - a real estate agent wanted to meet them about a location on Queen Street.

As the two of them arrived, they were met by what looked to be a casual rock star in broad daylight. Long hair, stylish glasses, the whole nine yards. No questions asked, the duo jumped in the agent's Jaguar and start driving around town. The agent took Phil under his wing for the follow year, giving him the time of day when no one else would. If he had an ulterior motive, it wasn't clear at the time, but good faith ultimately earned him a loyal client in Phil.

"He calls me up one day and goes, 'I got the place'. I'm literally still in bed. He goes, 'Get dressed, I'll come pick you up' and takes me down to where the Blue Note used to be, which was a 5,000 square foot warehouse bar, nightclub. It was so famous. Whitney Houston did her debut there."

The property, located in Yorkville, required them to put down the first and last month's rent. Money was tight and the owners had already turned them down before, not viewing the pair as serious. Personally invested in the affair, the agent leveraged a connection to bring in two mid 40s business partners as a means of legitimizing the transaction and capitalizing the business. With a small loan of $10k, Phil's friend selling his car for cash, and an equity infusion from the two partners of ~$25k, they were able to secure the property.

Next up was designing the spot. Named "The Bohemian", it was inspired by a coffee shop called the Bourgeois Pig which Phil would visit when he was in L.A. Given most of their money had already gone towards rent, they had to get creative on a shoestring budget – naturally, Phil took out his paintbrush. The the lights were dimmed, couches scattered, pool tables in the back, custom art, a funky ambiance; you could be a college student or you could be a stockbroker, it didn't matter. It was comfortable. It was cool. It was hip. With the place ready to launch, they started hand-delivering flyers door to door.

But no one showed up... for months. They were barely breaking even, taking home $100 per week and quickly running out of fumes. The two of them were working 16-hour days and doing every job in the bar – cooking food, cleaning bathrooms, bartending. In the mornings, Phil would run to the bank with whatever revenue they had found the night before and hoped that their cheques would clear. If they didn't, they'd make phone calls asking vendors to hold off another day before cashing the cheque. While the lack of business wasn't ideal, it meant that the club was available to book out on weekends – a unique feature most other bars in town couldn't offer. Given Phil was still acting on the side, he leveraged this advantage to host parties at The Bohemian, celebrating the end of filming for shows and movies he had appeared in (dubbed "wrap parties"). After a good party, they'd suddenly be able to pay their bills again.

"To summarize my whole career, if it's not fun, I'm not really interested in it. It's got to be a paycheck at the end of the day. But at the same time, if it's not getting you motivated to get out of bed and life's too short. There's a million ways to make a living. Why not pick something you like to do."

In the fall, after 8 months of hard work, there was a small lineup one night. Whether it was word of mouth from the wrap parties or the hand-delivered flyers, something was working. The going got good for a month or two and then winter killed them again. Not to worry, summer was right around the corner. But the summer bump never came this time, it was worse than the year before. What they had failed to realize was that given their location in Yorkville, their clientele was mostly coming from Forest Hill – the likes of which would go up North to cottage country during the summer. They kept their heads down and weathered the storm as they always did.

Then fall of the second year came and it was better than the prior one. The parties were building, the word was spreading. Something had clicked and The Bohemian had seemingly escaped the Valley of Death. For every party they threw, there were 100 new people at the venue. 100 people that had now heard of The Bohemian and experienced its magic. If they told a friend or two, it was a powerful outcome. Word of mouth spread like wildfire.

The Power of the Flyer (expand)

"This one flyer I delivered to this big director out of Hollywood, David Anspaugh, who had did the movie Rudy. He was a sports guy and director, and he was doing Moonlight and Valentino (1995) here in Toronto. I was bartending one night by myself. It was him and maybe one or two other people in the place. It was like one of these dead quiet nights.

"We get chatting and I see he's reading the call sheet and I say, 'Oh, it's a call sheet. I've been working on some films. It's a schedule for the next day of shooting, right?' He goes, 'Yeah, I'm working on this film. I'm a director.' I'm like, yeah, whatever, everyone's a director. Then he starts telling me that Whoopi Goldberg is in the movie, Kathleen Turner, Elizabeth Perkins, and Gwyneth Paltrow who wasn't even famous yet. Nobody even knew who she was. Seven (1995) hadn't come out yet. And of course, John Bon Jovi, who I was like, you got my attention. I said, 'Okay, you're the real deal. You're a real director. Tell me more. What's going on?'

"So he starts telling me about the movie and I start telling him about my movie that I just finished. I said, 'How did you find this place'? He goes, 'Oh, I got a flyer in my door'. I go, 'Can you tell me what street you're staying on?' He told me the street, told me the address. I delivered that flyer myself the day before.

"So then the next day I get a call. David wants to have a welcoming party for the cast coming in from LA. By now we were busy enough and it was a Friday night, so I said, 'I can't close'. David says, 'No problem. Bon Jovi is coming. Kathleen Turner is coming. Elizabeth Perkins is coming, and Gwyneth Paltrow'. I'm like, 'Come on down.' They come down, they drop like three, four grand. It's great for us. It's a huge injection of cash... Then we become friends. All of a sudden, he's inviting us to the set. I'm going to watch dailies with him. That's crazy. Then I'm sitting with Gwenyth Paltrow watching dailies in the trailer and she's telling me about her sister who's a model. I have no idea who this person is. Just happy to be here."

After several years, The Bohemian was an objective success. Huge actors and actresses would visit on a whim and they could do no wrong. The dream just kept growing.

But all good times eventually come to an end – and after a particularly rough patch in Phil's personal life, he decided that he'd step away from The Bohemian and attempt getting another club off the ground.

Phil's second go at the club business was markedly different than his first. He partnered with Jeff Healey, a Canadian blues, rock and jazz musician to open a club named Healey's. Phil and his original partner from The Bohemian were going to get it set up and run it; Jeff was going to be the face of the bar and leverage his connections to bring in musicians every night. The core concept being live music would be a massive draw. Simple enough.

Things started well. They generated a ton of publicity and had some great opening nights. After a few weeks, Phil started to notice that people were only coming in depending on who was playing. If you book wrong, you got a slow night. If you didn't book at all, it was dead. Slowly, it turned into a nightmare scenario as Phil had to take over the bookings side of the business. His phone was ringing non-stop. Local musicians usually had allegiances to other bars and international musicians were a logistical nightmare. Even if he successfully booked a massive band, there was still the next night, and the one after that – it never stopped.

As the chapter managing Healey's came to a close, Phil ultimately paid $100k for some very valuable lessons. Not everything he touched turned to gold – he'd need to be more thoughtful in the future.

All Roads Lead to Jimmy's

While the club chapter was behind him, the learnings didn't leave him. The Bohemian had strangly been a big lesson in real estate. He was offered the opportunity to buy the building in their first year for $650k which Phil turned down. Two years later, they offered it to Phil for $850k, a price he thought was completely out of line given the real estate market was incredibly slow in the 90s. At the end of the 10th year, they sold it for $2.3m and The Bohemian made way for a set of luxury condos. From that point forward, anything Phil was going to do, he would also have a hand in the real estate.

So he started buying storefronts with his old real estate agent – the first being 107 Portland. When the building was sitting empty for longer than intended, he decided to get creative. He had the idea to turn the space into a hip stomping ground for him and his friends which just so happened to serve coffee in a bid to breakeven on rent. The decision led to several unintentional but important differences from other boutique cafes in the city.

The Location - 107 Portland and most other locations in the Jimmy's portfolio all share similar characteristics. They are located in vibrant neighbourhoods where the streets are lined with local boutiques and there is an underlying air of counterculture. Large chains like Starbucks struggle to compete in these domains; locals and visitors alike opt to support the scrappy underdog.

The Interior - Jimmy's was designed with the intention of letting you take a break from boutique hopping and exploring alleyways. The spaces are large and inviting, curated to feel reminiscent of home. As the streets in these areas are dominated by foot traffic of friends and couples, a coffee spot that invites you to continue the conversation in a comfy chair often wins.

The Magic Behind Jimmy's Early Success

So why did Jimmy’s succeed where others have failed? Quite simply, because Jimmy’s wasn’t designed to be a high-throughput coffee shop – it was a hangout spot. Initially, when I was researching Jimmy's, I assumed the reason for its success was simply the branding, the locations, and the interior design. I came to realize after spending time with Phil that these strategic choices were significantly strengthened by his philosophy on life and relationships.

Autonomy and Responsibility. By giving almost full autonomy to the staff, he set the brand up to succeed. His managers had closer touch points with the customers, and as a result, they were able to help sculpt a brand that fit the clientele and location(s). To succeed in neighbourhoods where counterculture thrives, this was vital.

A great example of this is Phil putting trust in a 20-year-old university student to become his first Operations Manager. Phil could tell she understood the vibe that made Jimmy's a success, so he put his trust in her. She helped him scale from two shops up to five, introduced branded merchandise and was the reason each cup from Jimmy's is crowned with an iconic yellow lid.

"One day, I walk in and there were these yellow mugs that say 'Jimmy's Coffee' on them. I go, 'What are those?' She's like, 'Well, we're going to sell these in the store.' I go, 'No one's going to buy those.' They became so popular we couldn't keep up with our regular supplier. I had to go direct and order 5,000 of them."

Enduring Relationships. Phil's general philosophy is that a trusted relationship is worth its weight in gold. Switching suppliers to save a few pennies usually isn't worth the hassle, and oftentimes, you lose out on reliability and accountability.

My plumber, is he the cheapest? I don't know, but he shows up when I need him to. That's more important to me than anything.

Phil's longstanding relationship with his coffee bean supplier has helped him weather some of the inflation seen in today's environment. Given the relationship's goodwill which has been built up over the course of a decade, Phil doesn't need to worry about price gouging.

And as a page out of his old real estate agent's book, sometimes you can do a good thing without asking for anything in return. You never know when it may come around in the future. When the man who makes the gold leaf signage for Jimmy's was in the hospital receiving a serious surgery, Phil waited for him. He opened his new location with a banner and waited six months until the craftsman had made a full recovery.

So what is the magic behind Jimmy's? It's hard to pinpoint any one specific person, strategic choice, or chance event – even Phil himself contributes it mostly to good fortune. However, at least some of the success can be attributed towards the right philosophy towards management, which in turn enabled an incredibly talented team to build an iconic brand in the heart of Toronto. And maybe Phil is right, sometimes all you need is a spoonful of luck.

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