Mike Warn | Crain's Denver

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Mike Warn

Background:  

Mile Hi Distilling, founded in 2002, is a one-stop shop for distilling and moonshine still supplies. The Denver-based company carries everything from commercial volume distilling equipment to table-top home stills as well as measurement instruments and mash ingredients.

The Mistake:

I started this company in my garage, at a time when my employer was telling us our jobs were going to Mexico in the not-too-distant future.

At the same time, I had been wanting to learn how to make my own alcohol fuel. I found out cars could run off alcohol, and I’m into recycling everything. I had done a lot of TIG [tungsten inert gas] welding. I figured I had the talent and as it turns out, a lot of time on my hands. I built one still, and then another. At first, I sold them on eBay, and pretty soon, I couldn’t keep up.

I lucked out in terms of timing for starting Mile Hi Distilling. Making moonshine might be one of the older professions around, but at the time I started, there just weren’t many businesses around to support it.

I took it really slow. I’d build two stills, and I’d sell them, then I’d build four stills, and they’d sell. It was hard to keep pace with demand. It was difficult to find products.

I also had a hard time finding supplies, but the partners I did connect with, mostly from Europe, saw a big opportunity. They helped me expand my product base. I had just four or five alcohol essences when I started. The still makes vodka and then you can add various essences, schnapps, whiskey, etc. Today we carry about 60 different essences.

I probably ramped up too slowly in the beginning; that was a struggle. I also was a good welder and a good worker, but I did not know much about business. Let’s just say I was too naïve, too friendly and too helpful.

As word of my success spread, people started to inquire about my business. I proudly gave them tours of my shop, showed them how we built the stills, and about five months later, my still started popping up all over the internet. Only difference was, it was made in China. Pretty soon, I saw cheap knockoffs at three or four different companies.

They also began replicating cheaper boilers used in the distillation process. too.

Quality is what we offer, and made in the U.S.A.  

The Lesson:

That was pretty frustrating for me, to have been that dumb to share with people how well things were going, to open up my shop, let them see how we built stuff, basically clue them into how our entire operation worked.

But I turned that into an opportunity to distance myself from the growing competition. TIG welding is definitely an art, it’s very precise. It takes a steady hand, a good eye and practice over time to perfect, which we had.

Quality is what we offer, and made in the U.S.A. Our stills also produce 190-proof alcohol. It comes out nice and clean, without the toxins that are in lots of other alcohol. What gives you a hangover is the toxins from alcohol fermentation.

I also tell my customers that it’s not just better, it’s a lot cheaper. You can make 2 gallons of good vodka for less than $8.

There was a time, when the knockoffs first appeared, that I had to lower prices to keep up with the lesser-quality products. But customers came back to me over time, and new customers continued to buy our products.

Today, I’m a lot more careful about who we let in the shop and explain things to now. I’ve tried to help people in the past who wanted to sell things on eBay, and they turned around and tried to steal our suppliers.

It might sound terrible, but I won’t help smaller companies or people starting out anymore, at least not those in the same line of work. I’ve tried it twice and been bit both times. I’m definitely more careful about who I trust. I tend to stick with the suppliers I know and like their product and not keep seeking out competitors.

It seems to be working. We’ve moved from the three-car garage to a small industrial condo. We have eight employees now and continue to grow at a steady pace. And it’s gotten very comfortable to run the company. Moonshine is an American tradition. We’re keeping American jobs here.

Mile Hi Distilling is on Twitter at: @MileHiDistillin 

Photo courtesy of Mile Hi Distilling.

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