Lin Dai was at a wedding in New York. He ran into a friend he hadn’t seen in a while and told him about the job he had recently started, as one of the co-founding team of a free drink app startup, Hooch. At the time, the friend, Danny Yang, was a sales manager with Red Bull in Hong Kong.
Later, Dai got a phone call from Yang.
“He was so blown away, he called me from Hong Kong and said he would quit his job today if I would make him the Hooch GM for Hong Kong,” Dai says.
Yang was the perfect person for such a position, although Hooch was less than a year old. Dai and co-founders Aleksey Kernes and Jared Christopherson were not yet planning to go international, but Yang insisted.
“He said he was so confident he could do it that we didn’t need to pay him until Hong Kong started generating revenue,” Dai says. “He was so passionate about it; he did all the legwork and set up the market for us. He’s been like a one-man army for the most part of the last 12 months. Building up a market on his own.”
Hooch launched in November 2015, and quickly attracted new subscribers. As of August 2017, about 120,000 people were subscribed, and Dai says that the company’s goal is to grow to a million in the next year. Subscribers can use the app to get a free drink at more than 500 locations in 10 different cities.
“What I observe is that it doesn’t matter if you’re rich or poor, if you get a free drink ticket, you get a free drink,” Dai says. “It’s never being perceived as a discount, it’s always kind of an aspirational experience.”
The second layer of success contributing to Hooch’s growth is because bars have one of the highest profit margins, Dai says.
“Bar owners can buy a bottle of great booze for $25, and they can get maybe 26 one-and-a-half-ounce pours out of that bottle. So it costs them about a dollar to make a drink, which in a big city in a nice bar can sell for $15 to $20 per cocktail. That’s a huge margin,” Dai says. “So our model is asking our bar partners to offer that first drink for free for our customers, our members, and in exchange they get a customer inside the bar who will most likely purchase another drink.”
On average, he says, people spend one hour and 47 minutes in these locations per visit, and have a high likelihood of spending an additional $30 to $40 each time. The Hooch team is aiming to increase its bar partners to 5,000 locations in the next year.
The concept is an accomplishment, but Dai says that one of the company’s biggest strengths is its team. There are 10 full time employees and about a dozen part timers, and Dai says that personal references is one of the leadership’s favorite ways to find new talent.
“When we have the need to extend into a different city, we ask our advisers or friends or people who we know are connected to the business if they know of anybody who could help us,” he says.
Hooch isn’t hiring right now, but they expect to ramp up technology and data positions in fall 2017. Dai says his secret to hiring is to be brutally honest about the challenges and struggles of working at startup.
“I really try to spend last 10 minutes of the [applicant] interview trying to talk you out of the job, and see how you respond,” he says. “It’s not always smooth sailing; it’s not always the kind of super secure-like tenured job positon. Everything you put in potentially can build the company tenfold, but there’s a lot of pressure, stress, and” – he laughs – “things my wife didn’t predict.”
Most of all, he’s looking for more people who are passionate about what they’re working on, like the one-man-show in Hong Kong, Yang. Also, especially with a company that is still in the beginning stages and at a smaller size like Hooch, new employees have to be able to just do whatever needs to be done.
“I tend to hire a little bit more of the multi-functional or jack-of-all-trade type of employees,” Dai says. “At a small company, everyone needs to step in and take on additional responsibilities that are not always in their job descriptions. That’s almost a guarantee. So the operations person, they might have to design a flyer one day. The sales manager person might have to potentially go run a brand ambassador program.”
It’s an attitude, he says, and the capacity to do different things with little direction.
“It’s always a lot of tasks, and in the startup world I just look for people who have a really good multitude of skills, or at least someone with the right kind of attitude who is able to take more responsibility on to their plate,” Dai says.
April Nowicki is a contributor at Street Fight.