Last year I brought you the story of David Pearlstein, a former research librarian and Microsoft project manager who quit his lucrative tech job to become a full-time dad and pursue an unusual dream: making artisan sausage in his garage.
This was no half-baked bachelor vanity project. Pearlstein converted his Seattle garage into a USDA-inspected meat processing facility, with a government inspector on site every day.
When I visited him in May 2011, Pearlstein was just getting started, making 100 pounds of fresh sausage per week and selling to two restaurants and one grocery store. More than a hobby, yes, but nowhere near a sustainable business yet.
(Photo Credits: Matt Wright)
The other day, I walked into a shop in my neighborhood and saw Pearlstein’s Link Lab Artisan Meats brand sausages for sale, and I smiled, thinking, “I guess that guy hasn’t had to go crawling back to Microsoft. Good for him.”
So I gave Pearlstein a call to learn the latest on Link Lab and see whether I could learn anything about taking your small business beyond the honeymoon phase.
Out of the garage
The biggest news is that Link Lab, like fellow startups Apple and HP, is no longer based in a garage.
“I did a really big week, 450 pounds in a little space,” said Pearlstein. “It was actually not that hard to produce it, but just playing Tetris and trying to figure out how to make my limited refrigeration work for storing it was tricky. That was when I started to seriously understand it was time to move out.”
Pearlstein found a small commercial kitchen not far from his house. It’s only 900 square feet, but that’s a big difference from a 180-square-foot garage.
Most weeks he makes between 200 and 300 pounds of sausage—beef, pork, and poultry, in over a dozen flavors, like chipotle-tequila and shiitake-sage.
He’s now selling to 20 restaurants and a dozen retail stores, including two locations of PCC Natural Markets, a large Seattle-area natural foods chain. “Their demographic and the people that are their customers are my customers,” said Pearlstein. “We’re all on board with responsible consumption.”
One of the most challenging aspects of the business has been growing the supply chain.
Pearlstein would like to make 1,000 pounds a week, but meat is obviously something different from nuts and bolts and if you want to make your sausage from locally raised, sustainable meat, you can’t just pick up the phone and demand instant meaty satisfaction.
“You can get thousands and thousands of pounds of meat overnight from a traditional meat source,” said Pearlstein. “But my whole business is focused on supporting the right kind of farmers and they cannot supply that quickly.”
It’s weird to think that a tiny business worries about its supply chain. If we hear about supply chain issues at all, it tends to be in the context of a giant company scooping up half the world’s supply of memory chips.
But Link Lab has grown to the point where it has to think weeks ahead and ask farmers to start raising pigs for a specific order.
“It’s kind of fun to delicately grow all three of those things: the farm supply, my capability and throughput, and also the demand,” said Pearlstein. “All three of them have to grow together or the whole thing breaks down.”
Pearlstein has also hired two employees to help make and deliver sausage, and he said his project management experience at Microsoft prepared him well for the experience.
“They can’t read my mind as well as I thought they could,” he admitted. “I have to speak clearly and I have to write things down.”
A chef weighs in
Thomas Horner is executive chef at the Waterfront Marriott in Seattle and its restaurant, Hook and Plow. He lives in Pearlstein’s neighborhood and heard about Link Lab on the neighborhood blog.
“I thought, that’s interesting, and it’s right up the alley of what we’re trying to accomplish at our restaurant,” said Horner, who invited Pearlstein to come into the restaurant and demo his sausages.
The chef was impressed. “I think I made him panic a little bit, because I ordered like 50 pounds of each sausage. And he was like, ‘I don’t have that much.’”
Eventually they settled on a turkey breakfast sausage, available daily as a side dish or as part of the roasted tomato, spinach, and egg white frittata. “It’s very, very flavorful, and it’s been a big hit,” said Horner.
Pearlstein is thrilled to have Hook and Plow as a customer, but he has a small quibble: “I hate to call it a breakfast sausage, because all of them are good for breakfast.”
From one Washington to another
In August, Pearlstein traveled to Washington, DC and gave a talk at the USDA, which is housed in a hulking building near the US Capitol. He spoke about his experience as an ultra-small producer working within the intense Federal regulatory apparatus.
“No one had ever heard of someone doing it so small and quirky a space, or at least getting started that way,” said Pearlstein. “I think I was a pretty unique character coming through the doors, and they were real interested and positive, and I think they appreciated that I was complying. I’m not trying to cut corners.”
The USDA, which wouldn’t talk to me for this story, seems sensitive to the criticism that they work for the big commodity producers and make life difficult for small producers, so it makes sense that they’d want to showcase Link Lab’s positive experience.
But that doesn’t mean Pearlstein’s cordial relationship with the agency is unrepresentative. The USDA oversees thousands of small producers; those that run into problems will complain loudly.
Those that don’t aren’t going to go on Twitter to say how awesome the USDA is. When the system works, you pass your inspections and nobody gets sick.
The meat of the matter
So, unless you live in Seattle and enjoy sausage, why should you care about Pearlstein’s story?
Luck is a huge element in the success of any startup, but there’s also a big “those who fail to plan…” factor.
Pearlstein saved, budgeted, and studied carefully before launching Link Lab, which meant he was prepared for slower-than-expected growth (a reality for nearly every small business), regulatory and supply chain issues, and whatever else came along.
No business plan survives contact with the real world. Businesses survive financial obstacles the same way families do: by having enough cash on hand and having a flexible plan that takes a realistic view of what might go wrong.
I had one last question for Pearlstein: what about the garage? Now that Link Lab has moved out, is he renting it to an even smaller meat producer?
Nope. He has higher priorities.
“The 3-part sink is now a dog-wash station for our cocker spaniel,” Pearlstein said. “I have a feeling the room will be a kid’s play room very soon. They can spill anywhere, and I know it is easy to clean the floors and walls.”
Matthew Amster-Burton is a personal finance columnist at Mint.com. Find him on Twitter @Mint_Mamster.