Jan 26, 2024
Dropped Out at 18, Built 80 Philz Locations Without School
An interview with Jacob Jaber, Founder of Philz Coffee
Founder Focused
"You know, if you want to go from 0 to 100 on something, don't go to school. Go find the 5 best people in the world that do it." It's not the advice you'd expect from someone who built one of Silicon Valley's most beloved coffee brands. But for Jacob Jaber, dropping out of college to run Philz Coffee wasn't just unconventional—it was transformative.
What started as a small grocery store experiment by his Palestinian immigrant father has grown into nearly 80 locations, serving everyone from Facebook employees to Google engineers. Philz Coffee didn't just caffeinate Silicon Valley—it became the unofficial meeting ground for some of tech's biggest companies, earning invitations to open inside Facebook's headquarters and Google's kitchens.
In this interview, Jacob reveals how dropping out of school at 18 became his greatest education, why hiring people who can deliver great service without training is his secret weapon, and the Palestinian hospitality principles that turned a corner store into a Silicon Valley institution. His story challenges everything we think we know about formal education, scaling culture, and what it really takes to build something people love.
Watch the full interview now on EO's YouTube channel! Below is the complete transcription of the interview. Minor edits have been made for clarity and readability.
Key Highlights:
"You know, if you want to go from 0 to 100 on something, don't go to school. Go find the 5 best people in the world that do it."
"My dad told me, Do you want to go to school or do you want to grow? So it was kind of a couple of questions in one. He's like, What do you want? And I told him, I want to grow."
"We started with one store and now we're nearing 80 stores. We started building those customers from Facebook, from Google, from all these wonderful companies."
"Sometimes the best way to see if someone's good at customer service is to have them do customer service without any training, because it's not rocket science to figure out how to treat people well."
"Sometimes it's true that the least stupid person wins. Avoiding stupidity is more important than seeking brilliance."
"My dad told me, Do you want to go to school or do you want to grow? So it was kind of a couple of questions in one. He's like, What do you want? And I told him, I want to grow."
"We started with one store and now we're nearing 80 stores. We started building those customers from Facebook, from Google, from all these wonderful companies."
"Sometimes the best way to see if someone's good at customer service is to have them do customer service without any training, because it's not rocket science to figure out how to treat people well."
"Sometimes it's true that the least stupid person wins. Avoiding stupidity is more important than seeking brilliance."
The $100,000 Decision: Why School Became the Enemy
You mentioned dropping out of college just weeks after starting. What led to that pivotal conversation with your father?
Jacob: I have a competitive nature, but after you win a lot, the journey seems less interesting. It's like you hit a little bit of a wall, so you have to find something else. So that's when my interest level started going down. I wanted to stop going to school. As a matter of fact, I tried as hard as I can to skip school so I can go home and play video games.
My dad told me, "Do you want to go to school or do you want to grow?" So it was kind of a couple of questions in one. He's like, "What do you want?" And I told him, "I want to grow." And right when I said that, he supported me, was OK with me not spending more time in school. So I left school and this was just a couple of weeks after going to college.
From that point forward, he gave me the opportunity to run the business. When you do that for a long time at a young age, you develop instincts, and those instincts really pay dividends over the course of your life because you've seen so many behaviors, you see the way people conduct business, you understand it really well, and I think that was the best form of education.
My dad told me, "Do you want to go to school or do you want to grow?" So it was kind of a couple of questions in one. He's like, "What do you want?" And I told him, "I want to grow." And right when I said that, he supported me, was OK with me not spending more time in school. So I left school and this was just a couple of weeks after going to college.
From that point forward, he gave me the opportunity to run the business. When you do that for a long time at a young age, you develop instincts, and those instincts really pay dividends over the course of your life because you've seen so many behaviors, you see the way people conduct business, you understand it really well, and I think that was the best form of education.
That's a radical approach to education. How do you recommend others find mentors and accelerate their learning without traditional schooling?
Jacob: You know, if you want to go from 0 to 100 on something, don't go to school. Go find the 5 best people in the world that do it. For me in particular, I didn't know how to scale a business and grow a business, so I had to find people who were good at it and I had to figure out how to build some level of a relationship with them, have a coffee meeting with them, have a phone call with them, feel comfortable to give them a call or shoot them a message or an email about an issue I'm having, how they solve it.
I think your limitations in life are the result of the people around you. When you spend time around people that are ahead of you, that you admire and respect, you accelerate the learning curve in a really positive way.
And how do you get in touch with those people? One of the positive things about social media and the Internet is that you have now been exposed to a lot of different types of people and you can find your flavor, find their contact, trying to reach to them, don't give up, and if you do that with 10 of them, maybe you'll make friends with 2 of them, and that's all you need.
I think your limitations in life are the result of the people around you. When you spend time around people that are ahead of you, that you admire and respect, you accelerate the learning curve in a really positive way.
And how do you get in touch with those people? One of the positive things about social media and the Internet is that you have now been exposed to a lot of different types of people and you can find your flavor, find their contact, trying to reach to them, don't give up, and if you do that with 10 of them, maybe you'll make friends with 2 of them, and that's all you need.
From Palestinian Hospitality to Silicon Valley Institution
Tell us about your father's journey from Palestine to opening that first grocery store in San Francisco's Mission District.
Jacob: My dad had 9 siblings. His family didn't have much money growing up. They all had to work and chip in at a young age. Growing up in Palestine was special because being in that environment was, it's all about family. It's all about community, treating people like family, treating people with good hospitality, doing it from the heart was central to how they lived.
My dad moved to the United States when he was about 15 years old, didn't have much, didn't know many people. He opened up a little grocery store in the Mission District in San Francisco, started working and selling things like diapers, milk, eggs, beer, wine, and he wasn't really passionate about those products, but he was passionate about the people.
Over the years he thought about ways to bring the environment that he grew up in Palestine. Somebody buys a gallon of milk, they buy it and they leave. How do you make people stay for a while? So he thought about coffee. He thought about creating a place, and he started experimenting with coffee after school. I would take the BART and I'd go help him. My dad and I were baristas. It was a wonderful experience.
My dad moved to the United States when he was about 15 years old, didn't have much, didn't know many people. He opened up a little grocery store in the Mission District in San Francisco, started working and selling things like diapers, milk, eggs, beer, wine, and he wasn't really passionate about those products, but he was passionate about the people.
Over the years he thought about ways to bring the environment that he grew up in Palestine. Somebody buys a gallon of milk, they buy it and they leave. How do you make people stay for a while? So he thought about coffee. He thought about creating a place, and he started experimenting with coffee after school. I would take the BART and I'd go help him. My dad and I were baristas. It was a wonderful experience.
What did your father teach you about resilience and making something out of nothing?
Jacob: One of the things my dad taught me is this idea of making something out of nothing. He came from a lot of hardship but also a lot of optimism. That was wonderful because when you have that outlook on life and you have those experiences, you develop resilience and you develop a good attitude.
As a matter of fact, if you come from a place of disadvantage or hardship, use it to your advantage because people don't have your perspective. Personally, we didn't grow up with much. We had to work at a really young age and work hard, and I feel grateful for that because you have to earn it. And you value it.
As a matter of fact, if you come from a place of disadvantage or hardship, use it to your advantage because people don't have your perspective. Personally, we didn't grow up with much. We had to work at a really young age and work hard, and I feel grateful for that because you have to earn it. And you value it.
The Saturday That Changed Everything: Scaling from 1 to 80 Stores
You've grown from one store to nearly 80. What was the pivotal moment that showed you this could scale?
Jacob: We started with one store and now we're nearing 80 stores. Early on when we had a few stores, there was a moment on a Saturday afternoon that changed things. When I came to the store, it was busy. There was a line out the door. There was people sitting and enjoying coffee. The employees were doing a great job. It was just a wonderful sight. It looked like success and that moment really struck me because it made me realize a few things.
Number 1, what we're doing is more than just coffee. The other thing is it gave me a lot of confidence that what we were doing has the potential. We can do this in more communities and we should try to do this in more communities. When we opened the 3rd store, we did it well. It worked. The 4th store that just kept working.
But I will say once we passed the 10 store mark, things started getting really hard. Things started breaking. We had to figure out how we can make the quality scale consistently.
Number 1, what we're doing is more than just coffee. The other thing is it gave me a lot of confidence that what we were doing has the potential. We can do this in more communities and we should try to do this in more communities. When we opened the 3rd store, we did it well. It worked. The 4th store that just kept working.
But I will say once we passed the 10 store mark, things started getting really hard. Things started breaking. We had to figure out how we can make the quality scale consistently.
How did you solve the challenge of maintaining quality and culture as you scaled beyond 10 stores?
Jacob: The secret to scaling quality is figuring out your playbook. What the Philz way was is really just questioning things. We learned how it's worked in other places. We've applied first principles thinking, and after it went through that filter, we came out with a better way to do it.
We developed three core values at Philz helped us hire people. It helped us make decisions. It helped us guide how we behave and how we treat people. The first core value is obsessing over customers. We wanted to create the grandma's house environment where people felt comfortable. When you talk to a Philz employee, it feels really good because they're kind, they're welcoming, no matter who you are or where you come from, we make you feel like you're coming at home.
The second core value is in pursuit of better. We're not perfect. We are never going to be perfect. We have to keep learning. All of the employees in the organization need to be open minded to learning. And one of the mistakes I see is that people actually divert their energy amongst too many things. It's hard to be really good at a lot of things. You want to choose the things that are most important, product and people, and you want to keep getting better at those things.
The third core value is to be kind and keep it real. Philz, it's a place, it's a community.
We developed three core values at Philz helped us hire people. It helped us make decisions. It helped us guide how we behave and how we treat people. The first core value is obsessing over customers. We wanted to create the grandma's house environment where people felt comfortable. When you talk to a Philz employee, it feels really good because they're kind, they're welcoming, no matter who you are or where you come from, we make you feel like you're coming at home.
The second core value is in pursuit of better. We're not perfect. We are never going to be perfect. We have to keep learning. All of the employees in the organization need to be open minded to learning. And one of the mistakes I see is that people actually divert their energy amongst too many things. It's hard to be really good at a lot of things. You want to choose the things that are most important, product and people, and you want to keep getting better at those things.
The third core value is to be kind and keep it real. Philz, it's a place, it's a community.
The Anti-Training Philosophy: Hire Heart, Teach Craft
You have a unique approach to hiring and training. How do you identify people who will naturally deliver great customer service?
Jacob: The most important things that we did was focus on who we hired and how we trained, hiring the right people who have a predisposition to doing that without training. Sometimes the best way to see if someone's good at customer service is to have them do customer service without any training, because it's not rocket science to figure out how to treat people well.
If you can deliver great customer service without training, imagine how much better it could be with training. We did not want to hire people who did not value service and hospitality.
One of the other things that we did was we invested a lot in training, so we spent a lot of time with all new hires, not just teaching them how to make the coffee, but showing example, leading by example, talking about stories. Stories are a wonderful way for people to learn. So even though training costed us a lot of money, it was worth it. We looked at it as an investment, not a cost.
If you can deliver great customer service without training, imagine how much better it could be with training. We did not want to hire people who did not value service and hospitality.
One of the other things that we did was we invested a lot in training, so we spent a lot of time with all new hires, not just teaching them how to make the coffee, but showing example, leading by example, talking about stories. Stories are a wonderful way for people to learn. So even though training costed us a lot of money, it was worth it. We looked at it as an investment, not a cost.
How do you maintain culture as a leader when you're scaling rapidly?
Jacob: The other thing is when you're a manager or a leader, you need to live and breathe the culture that you want to create, and it needs to be genuine. You need to inspire them through action. There's no better way to build culture than showing people what it looks like in real life.
So all of these three core values work together, but I will say the most important one is customer obsessed. Even when you visit the original Philz location, which is a very special location, you can feel the history in there. That spirit will live on forever.
So all of these three core values work together, but I will say the most important one is customer obsessed. Even when you visit the original Philz location, which is a very special location, you can feel the history in there. That spirit will live on forever.
Becoming Silicon Valley's Coffee: The Facebook Call That Changed Everything
How did Philz become so embedded in Silicon Valley culture, serving companies like Facebook and Google?
Jacob: We kind of started being the coffee of Silicon Valley and our 4th store was in Palo Alto, and there was a lot of technology companies there and we started building those customers from Facebook, from Google, from all these wonderful companies.
One day I got a call from the culinary chef at Facebook and he said, "Would you guys ever be interested opening a Philz store in our new headquarters that's opening up in Menlo Park?" I said, "An actual Philz store? How much is it going to cost? Who's going to pay for it?" He said, "Oh, nothing, we got it." I said, "OK, sign me up, let's do it."
It turns out the reason why Facebook wanted to have a Philz on their campus was because their employees loved Philz, so we had a lot of support from the employees. Ultimately because the product was great, that's the beautiful thing is when you create something really, really good that people want, good things will happen. I think that really started the momentum of more and more got into Google's kitchens, we've got into Adobe and Yahoo and all these different companies we connected with them.
One day I got a call from the culinary chef at Facebook and he said, "Would you guys ever be interested opening a Philz store in our new headquarters that's opening up in Menlo Park?" I said, "An actual Philz store? How much is it going to cost? Who's going to pay for it?" He said, "Oh, nothing, we got it." I said, "OK, sign me up, let's do it."
It turns out the reason why Facebook wanted to have a Philz on their campus was because their employees loved Philz, so we had a lot of support from the employees. Ultimately because the product was great, that's the beautiful thing is when you create something really, really good that people want, good things will happen. I think that really started the momentum of more and more got into Google's kitchens, we've got into Adobe and Yahoo and all these different companies we connected with them.
The Wisdom of Avoiding Stupidity Over Seeking Brilliance
What's your philosophy on intelligence versus wisdom in business?
Jacob: I think the truth is entrepreneurs can come from anywhere. I think it's also true that if you have a family that's well off, you probably have a little bit of a head start, but on the other end that can create bad attitude, bad behavior.
I think people who may not be lucky to have grown up in an environment that is inspiring or encouraging or easy, it's tough. For the most part, you can really fight for your environment.
When I was younger, I used to believe that intelligence and being smart was one of the most important things, but it's not always true that the smartest person wins. Sometimes it's true that the least stupid person wins. There's a great saying by Charlie Munger, and he says, "Avoiding stupidity is more important than seeking brilliance."
Invert the question. So instead of saying what's the smartest thing to do, say what's the most stupid thing to do, and then avoid that. If you can avoid making stupid decisions, I think you're going to be successful.
I think people who may not be lucky to have grown up in an environment that is inspiring or encouraging or easy, it's tough. For the most part, you can really fight for your environment.
When I was younger, I used to believe that intelligence and being smart was one of the most important things, but it's not always true that the smartest person wins. Sometimes it's true that the least stupid person wins. There's a great saying by Charlie Munger, and he says, "Avoiding stupidity is more important than seeking brilliance."
Invert the question. So instead of saying what's the smartest thing to do, say what's the most stupid thing to do, and then avoid that. If you can avoid making stupid decisions, I think you're going to be successful.
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