Dave Arena, CEO of Horn & Hardart, on why no investor would fund the Automat and how cold brew rebuilt the business. Bricks and Risk Ep. 147 (Part 2)
Everyone loved his pitch deck, and nobody would give him money. In Part 2 of our first two-part guest interview, Dave Arena tells us what he did next: scrapped the Automat plan, raised a smaller round around coffee e-commerce, and landed his first two investors in the Hardart family itself.
We get into the real numbers behind a brand people remember fondly. Dave breaks down why his customer acquisition cost is around $11 when most coffee brands pay $30 to $50, why a bag that cost $2.07 now costs 70 cents and still isn't cheap enough for grocery shelves, and how a coffee company shipping to all 50 states plans to become a $100 million business. We also hear his path: Audi salesman at 20, Air Force medic, real estate agent, and a guy who says the most successful people he's met weren't the smartest, just the hardest working.
WATCH PART 1 (Episode 146): https://youtu.be/hDu86tEKs6Y?si=JH24Vta4HgRd-n6e
LISTEN ON SPOTIFY: https://open.spotify.com/episode/1m3YgqZj7TXXPseTUKBt0S?si=9FegCq4BRzSqda0x8-Eysw
LISTEN ON APPLE PODCASTS: https://podcasts.apple.com/fi/podcast/reviving-an-icon-david-arena-brings-back-horn/id1735838599?i=1000796102036
CHAPTERS
0:00 Cold open: everyone loved the deck, nobody wrote a check
3:43 How people reacted: a photo of a dad, a bench, and a Horn & Hardart
10:45 Dave's biggest struggle: raising money for the Automat $100M biz
13:17 The new round and the Hardart family investors
14:46 How an Automat becomes a $100M business
16:04 The Automat vision: no lines, no tipping, no robots
22:15 Customer acquisition cost: $11 vs. $30 to $50
26:12 Collab ideas, including Bassetts and premium ice cream
29:24 Hard work beats smarts: Dave's Audi sales days
37:55 Why grocery is a margin trap
44:02 The New York Times: "call us when it's open"
47:20 Branding: what your coffee says about you
53:30 "The readers of today are the leaders of tomorrow"
57:01 Dave's Automat date prediction and Philadelphia, 2029
WHAT YOU'LL TAKE AWAY
If you're building a business, this is a straight look at what happens when the idea is good and the money still doesn't come. Dave explains the gap between loving an idea and convincing someone to fund it, and how he recalibrated by asking what people would actually invest in. He also covers why a heritage brand can acquire customers more cheaply, why wholesale can lose you money, and why he passed on the easy volume play to stay focused on the Automat. For anyone starting out in real estate, insurance, or their own company, his hustle-first story is worth the listen.
A LINE WORTH STEALING
"The readers of today are the leaders of tomorrow." Dave got it from Tim Sanders, author of Love Is the Killer App, and it's why he listened to audiobooks through 25,000 miles of driving a year.
ABOUT THE GUEST
Dave Arena is the CEO of @hornandhardart the Philadelphia-born brand behind the original Automat, which he is rebuilding one step at a time through coffee, cold brew concentrate, and merchandise sold online to customers in all 50 states. He previously owned Alcove Media, a bootstrapped business, and before that worked as a real estate agent and photographer. He started out as a volunteer firefighter, EMT, and Air Force medic, and he's open about being more of a doer than a student.
CONNECT WITH DAVE ARENA
Website: hornandhardart.com
LinkedIn: David Arena
TOPICS WE COVER
Horn & Hardart, the Automat, cold brew concentrate, raising money for a startup, angel and institutional investors, e-commerce customer acquisition cost, paid ads on Meta and Google, nostalgia marketing, influencer marketing, wholesale and grocery margins, direct-to-consumer strategy, and building a business without a college degree.
THIS EPISODE IS BROUGHT TO YOU BY
Property Management Redefined. PMR isn't just managing properties, they're building partnerships for long-term success. They work with owners who value accountability, reliability, and a results-driven approach, with a local team on the ground managing your properties and your tenants every day.
Reach John Sacks and his team at manage@gopmr.com or 267-753-6005.
FOLLOW BRICKS AND RISK
All episodes are on Spotify, Apple Music, YouTube, and anywhere you get your podcasts.
ABOUT BRICKS AND RISK
Bricks and Risk is the podcast for real estate, insurance, and building your business. Sean Mooney, President of Mooney Insurance Brokers in Ambler and Tim Garrity, Team Lead at The Tim Garrity Team, take you along their own business-building journeys, with advice from a network of local and national experts.
#BricksandRisk #HornandHardart #Entrepreneurship #SmallBusiness #Podcast