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Click to listen to the latest episode of The Richards Report featuring Bluestone Lane CEO Nick Stone.
Nick Stone grew up in Melbourne and was recruited to play Australian football at Collingwood at the end of 1999, when he was in year 12. During his six-year AFL career - an incredible achievement in itself - he also spent time at Hawthorn and St Kilda and says he learned a lot during those years.
Nick says that while it’s common for American sports to separate offensive and defensive teams, AFL’s lack of segmentation means you need to get used to working and communicating with different people. It also taught him about dealing with pressure and scrutiny and the importance of self-belief and hard work.
Nick studied during his AFL playing years, which gave him the opportunity to move straight into his next career - investment banking. After a period of working in Australia Nick moved to New York with his partner Alexandra (who is now his wife) to finish his MBA at Fordham Business School. It was during this time that he first identified the opportunity in New York to provide an improved coffee experience than what cafes were providing.
He studied Starbucks and was fascinated with the brand that they had built. Whether you like their coffee or not I think it’s still an incredible business. However, he had noticed that their average customer was getting older and the Starbucks brand wasn’t resonating with younger customers. Nick identified the gap in the market he wanted to serve: he wanted a coffee brand that resonated with younger customers.
Nick was working full-time in investment banking so initially this cafe venture would be a kind of side hustle. He and his partners put up $170,000 and in 2013 he opened his first cafe, a small location that was cheap as it was hidden underground so people could only really find it through word of mouth. The location of this first cafe was quite strategic though, with Australian banks NAB, ANZ and Westpac New York offices all nearby. At the time most Americans didn’t really know what a ‘flat white’ coffee was so on the first day the cafe offered $1 flat whites. They sold more than 1000 that day. Not long after, he opened up another cafe that was equally popular. However, when they opened up their third cafe (which had a food menu), Nick really knew he was onto something.
Over the years Nick continued to work full-time in banking as well as CEO of the growing Bluestone Lane business. In mid 2016 when he had 14 cafes (12 in New York and two in Philadelphia) he made the call to go all-in with Bluestone Lane and step away from banking.
Bluestone Lane now has 44 stores, with a further 13 scheduled to open in the next six months. Nick takes us through some of the stories of Bluestone Lane’s six-year history, including the times when Taylor Swift and Victoria's Secret models put them on the map when they’d come in for their coffees.
Nick always focused on the power of branding with Bluestone and took the coffee culture from Australia to the US with uniformity and consistency. The name Bluestone honours Melbourne’s cobbled bluestone laneways, which are filled with great cafes.
Nick has steered the business through different stages of a start-up and transitioning it to the growth stage it’s now in. He currently employs 700 staff, which comes with stress, but as hard as the process has been, he says football gave him an introduction to opening himself up to pressure and mass scrutiny.
Where to next? Well, Bluestone Lane has just closed a $20 million funding round that will be spent on three buckets: the team (more talent to help the business grow), more stores (30 more stores in the next year), and new products including ready-to-drink iced coffee and cold brew drinks that can be purchased at supermarkets and consumed on the go. Investors in this funding round included Stephen Ross and Matt Higgins.
Nick’s story is a fantastic example of taking something Australia does so well and executing it successfully overseas. It’s one thing to get the coffee right, it’s another thing to get the branding right. For someone that had never worked in hospitality he used the skills from his time in football, banking and marketing to build the business, and it’s certainly resonating with Americans.
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