At Eli’s, we always focus on our customers, our people and the
quality of our products. As a measure of service, we have always used the level
of care and concern that my dad, Eli, personally gave each diner at Eli’s the
Place for Steak. Although we can’t personally greet every customer as Eli did,
we want to connect in the same way, whether we bake 100 cakes or 20,000 each
day. For that reason, we took note of today’s New York Times which has a feature
on” keeping the little touches while growing big.” We work very hard to be a
great “small company” and we congratulate the companies described in the article
for their work on being great corporate citizens.


Keeping Little Touches While Growing Big


Published: May 12, 2005

Retailing start-ups like corner cafes and mom-and-pop bookstores
can get a lot of mileage out of their antiestablishment aura. Customers love the
idiosyncratic touches that set small shops apart from the chains, not to mention
the allusions to third world cooperatives and the Amazon
rain forest.

Besides, who can resist the spectacle of the little guy outwitting greedy
corporate giants? David victorious over Goliath is a theme that runs throughout
American business history.

Trouble is, all giant corporations started out small, and most small
companies want to grow. As they do, they face the conundrum of how to hang on to
their image as laid-back niche players while they are selling franchises or
opening up new stores all over the place.

Consider the Mud Truck, a former utility vehicle converted to a mobile coffee
shop that parks each day between Starbucks
franchises in Greenwich Village. Twice a day, Angela Velasquez buys her coffee
at the Mud Truck in a gesture of solidarity. “I’m a small-business owner, too,
and I’d rather give my money to the small guy than a behemoth like Starbucks,”
said Ms. Velasquez, 24, a T-shirt maker who sells her designs on the sidewalks

The Mud Truck’s owners, Greg Northrop and Nina Berott, say they offer more
than just a cheaper price – $1 for a small cup versus $1.65 at Starbucks. They
also provide a neighborly warmth that they say is absent at their bigger

“We’ve gotten pieces of art, love letters and music demos,” said Mr.
Northrop, who says the truck serves about 700 customers a day. “People leave
keys with us and say, ‘My roommate is coming in from Australia and I’m leaving
my keys with you for him to pick up.’ ”

But how long can that human touch last? Since the business opened in 2001,
the Mud Truck has expanded. A second vehicle on Wall Street already matches the
original cart’s business, and there is a restaurant in the Village as well.
Sales have doubled each year since 2001, reaching $920,000 last year. At what
point between $1 million and the $5.3 billion in revenue that Starbucks reported
last year does a business lose its quirkiness?

As their client base increases, and they ponder franchising or selling their
coffee products through vendors in other cities, Mr. Northrop and Ms. Berott
admit that their main concern is how to maintain the irreverence of their brand
in the public’s mind. They know that any number of companies that started off as
revolutionaries within their industries, like Starbucks, Microsoft
and Hewlett-Packard,
came to be viewed by some as corporate giants that needed to be taken down a peg
or two.

Their predicament is common among literally millions of small businesses that
play up their funky, off-the-beaten-track identity, according to George
Cloutier, founder of American Management Services, a small-business consulting
firm in Orlando, Fla. “The question is, How do you keep your soul, yet
compromise on getting management controls” and business systems in place as you
grow, he said. “I think that anyone who says you can hold onto all those ideals
is probably fantasizing.”

Once-tiny businesses that are on the fast track acknowledge that maintaining
the appearance of an underdog is not easy. “How long can you keep this up?”
wondered Dov Charney, founder of American Apparel, who built his T-shirt
business into a $140 million company with 50 stores across the country this
year, up from just 6 shops last year. Already, a chorus of critics has thrown
him on the defensive: feminists complain about his stores’ posters of scantily
clad models and labor activists accuse him of hypocrisy for promoting the
“sweatshop free” origins of his clothes while his own workers remain
unrepresented by any union.

Mr. Northrop and Ms. Berott, who raised $70,000 from friends and family to
start their coffee cart, are taking a cautious approach to growth. They have
opened a cafe inside Kiehl’s, a beauty products store in the East Village owned
by the cosmetics giant L’OrĂ©al. They sell Mud Truck coffee, coffee mugs and
T-shirts on their Web site and are hoping to link up with Whole Foods, the
organic-food supermarket chain that blossomed from a few stores in Texas into a
$4 billion nationwide food merchant. They also sell franchises, which they call
friend-chises, to entrepreneurs in other cities.

But Mud Truck’s founders shun the cookie-cutter formats that big fast-food
chains impose on their franchisees, even insisting that no two Mud Trucks be
exactly alike. And they say they have rejected several venture capital firms
that wanted to buy into their firm.

“Investors have offered us money and said, ‘We can put 20 more trucks on the
street tomorrow,’ ” Ms. Berott said. But she said she and Mr. Northrop want to
avoid growing too fast or losing control to outsiders.

Judging by the experience of Zipcar, a five-year-old company based in Boston,
it is possible to grow fast and still retain a noncorporate image, as long as
you keep delivering the goods that consumers want. Zipcar saw opportunity in
traffic congestion – and came up with a product that helps urbanites live
without cars but still have easy access to one when they really need it.

Zipcar rents cars, but only online. It then directs a customer (actually a
member, who pays an annual fee) to a car parked on a street near home or work,
eliminating the trip to a rental office. It charges a flat fee, about $8.50 an
hour or $65 a day, covering gas, insurance and features like satellite radio -
all a big hit with users tired of add-on fees at big car rental companies.

“We take away all the fear that the rental car companies have created,” said
Scott Griffith, the chief executive.

Since it started in Boston, Zipcar has spread to New York and Washington and
attracts 1,500 to 1,700 new members a month. Mr. Griffith said that he hoped to
introduce Zipcar in 15 more cities across North America and that the company’s
nontraditional model would work well in urban centers like Toronto, Chicago, San
Francisco and Vancouver.

The company says it tries to appeal to consumers under 35 by making claims of
positive effects on the environment and on members’ wallets.

Mr. Griffith said a recent survey of the 35,000 members indicated that the
convenience of renting a Zipcar motivated 40 percent of them either to sell the
car they owned or to decide against buying one. Not only did they save money but
they eliminated the temptation to drive routinely to places that are easily
accessible by public transportation, he said.

“For every car we put on the road, about 20 personally owned vehicles are
coming off,” he said. “We have 500 cars now, so more than 10,000 cars across
three cities have come off the highways because of Zipcar.”

Specialists say Zipcar customers are a special breed. “They’re not just
antisomething,” said Andrew Pierce, a senior partner at the New York brand
consultancy Lippincott Mercer. “They’re pro something else.”