[Congressional Record Volume 154, Number 187 (Friday, December 12, 2008)] [Senate] [Page S10973] From the Congressional Record Online through the Government Publishing Office [www.gpo.gov] ALAN NEWMAN: CONDUCTOR OF COSMIC SYMPHONIES Mr. LEAHY. Mr. President, the Burlington Free Press recently published a profile of Alan Newman, a habitual entrepreneur who has be the genius and force behind a number of companies established in and around Burlington, VT. Anyone who has met Alan is immediately embraced by his creative exuberance. That creativity combined with his unique vision and style create a special brew that has resulted in an incredible run of establishing successful companies. I wish to recognize Alan for his accomplishments and I ask that a copy of the entire Burlington Free Press article be printed in the Record. [Burlington Free Press, Dec. 8, 2008] Alan Newman Opens Up (By Dan McLean) South Burlington.--Alan Newman, co-founder and president of Magic Hat Brewing Co., has helped create about a half- dozen Vermont-based companies. During his decades of building businesses, he has learned where he excels--and when he has reached his limit. ``My skill appears to be starting and growing businesses,'' including building a brand and a culture for the company, Newman said. When businesses hit about $7.5 million in annual revenue and reach about 50 employees, Newman says he has arrived at his ``level of incompetence.'' Newman said he reached that modified Peter Principle with Magic Hat about six years ago. Newman said if he remains at the helm after a company has hit that threshold, ``the organization starts to fall apart.'' ``We started having trouble shipping things that people had ordered. Communication within staff starts to falter. Planning doesn't happen properly,'' he said. ``As you hit a certain size, you need a little more discipline. You need a little more management. That's where I start not performing well.'' ``I'm really an opportunity junkie,'' Newman said. ``I'm very good at seeing opportunities and going for them . . . but at some point you need to stop chasing every possibility and focus on a plan.'' That's where Martin Kelly comes in. Kelly served as CEO of Magic Hat and is now CEO of Magic Hat's parent company, Independent Brewers United Inc., which was formed when Magic Hat bought Seattle-based Pyramid Breweries Inc. last spring for $35 million. Newman said Kelly has been a crucial part of the operation during the past few years. ``I create chaos and he tries to control it,'' he said. Newman is president of Magic Hat, but prefers his informal title, ``conductor of cosmic symphonies.'' `` That's really my title,'' he said. Newman, who had a hand in the creation of Gardeners Supply Co., Seventh Generation and Magic Hat, says he has no secret to starting successful ventures. ``I really don't. It really started by accident,'' Newman said in an interview in his office located in a modestly appointed trailer, named Sweet Lillian, next to the South Burlington brewery. ``I was sick and tired of getting fired,'' he said, recalling his time in Vermont in the mid-1970s. ``I just figured I better figure out how to support myself if I wanted to stay in Vermont. I just kind of followed my nose. ``I irritate people. I'm really not a good employee. I'm highly insubordinate,'' he said, explaining that starting a business was a better option than working for someone else. ``It's been a constant theme in my life and career.'' Newman insists he is in an unlikely executive. ``Honestly,'' he said, wearing bright-yellow glasses and a tie-dye shirt. ``There is nothing in my background. I never had any interest in business. I never had any interest in starting businesses. ``I've never taken a business course in my life,'' he said, downplaying the importance of an MBA. ``I'm not an education- driven guy. I believe in experience.'' Newman, 62, was born in Brooklyn and grew up on Long Island. He attended Long Island University with a major in psychology and minors in sociology and English. ``I have always been interested in culture. I grew up in the '60s.'' Newman said his strengths are creating culture, branding and a vision for the companies. ``The business, to me, is secondary. I'm more interested in painting pictures,'' he said. A crucial part of forming a company's ``painting'' is culture and philosophy. ``It's never been about making money.'' ``It's about trying to create a picture, trying to create a culture and trying to marry them. This is kind of what I do know,'' he said. For Magic Hat that philosophy is: ``to be a good neighbor in our community,'' he said. Magic Hat, he said, assists a series of nonprofits including Vermont Cares, Committee on Temporary Shelter and The Women's Rape Crisis Center. ``That's the part I get addicted to,'' he said. ``I make things more complicated'' by connecting events with charities, he said. The Women's Rape Crisis Center, for example, gets about $20,000 from the annual Mardi Gras parade, which Magic Hat created in the mid-1990s. Not all of Newman's ventures have been a success. But he said he learns lessons--the best lessons--from the failures. He and a friend created a yacht time-sharing company, Highland International in Hanksville, in the late 1970s. Highland International never generated any revenue. Newman and his partner burned through $300,000 of seed money in about 18 months. Reflecting on the business misfire, Newman said he should have purchased one boat with the funds, instead of trying to leverage it into millions. Lesson learned: proceed slowly. Another one of Newman's business mistakes was Magic Hat's Ale of the Living Dead, a garlic beer. One of the bottles sits on Newman's desk. The beer, he said, was often returned as ``undrinkable.'' The lesson with the garlic beer: ``Don't let me drive recipe creation.'' The acquisition of Pyramid gives Magic Hat the potential to place its bottles of brew on shelves in many more states. Magic Hat is sold in 18 states now, mostly on the East Coast. Pyramid's beers are sold in 28 states. Newman said they had no choice but to expand Magic Hat because the company ``had already passed through the overhead level where small could work.'' Newman said the idea for Magic Hat emerged in 1993 with co- founder Bob Johnson. The next year the pair were making beer on Flynn Avenue in Burlington. After three years, Magic Hat moved to a larger operation in South Burlington. When Magic Hat left Flynn Avenue, 6,000 barrels were being brewed a year. This year, Magic Hat will brew about 130,000 barrels at the South Burlington location, Newman said. A barrel is 31 gallons. Not including brew pubs, there are 300 to 400 microbreweries in the U.S. fighting for a 5 percent share of the beer market, Newman said. ``In order to be a survivor, we think you have to get bigger. You can't stay small,'' he said. Perhaps, recalling the lessons learned from his failed yacht time-share company decades ago, when he learned to ``start small and grow,'' Newman said Magic Hat's expansion ``will be slow and methodical.'' ____________________