How Success Happened for Nicholas Stone, Founder of Bluestone Lane
Stone wants everyone to feel like a local -- and with his rapidly growing cafe chain, it seems to be working.
When Melbourne native Nicholas Stone opened his first Bluestone Lane coffee shop in Midtown Manhattan, he hadn’t worked a day in hospitality. He’d never even brewed his own coffee. But he knew that something was missing in New York coffee shops, and he wanted to fill the void.
It started with a mediocre cup of coffee and what Stone called a “transactional experience devoid of human connection.” Stone, an Australian Rules Footballer-turned investment banker, came to New York in 2010. For him, coffee was a daily escape from his long hours.
As Stone told me in the latest episode of How Success Happens, his immediate thought about American coffee chains like Starbucks (which failed in Australia) was, “There has to be something that is more focused on this individual, independent spirit where you have recognition and you feel like a local.” And so he decided to build it himself. “That really was the purpose,” Stone said. “It was more about human connection and the social ritual than coffee.”
Fast forward seven years and Bluestone Lane is among the fastest-growing businesses in New York City, and one of the fastest-growing premium cafés in the U.S.
It started as a side-hustle, which Stone believes is a good idea for most founders starting out. “Some people claim you’ve got to go all in early and then fail fast, fail early,” he said. “I’m more like, hedge your bets until you’ve got enough indications and you’ve done analysis that it’s worth jumping into because you’re going to blow up the cost structure as soon as you come in. … You want to stay in the game and iterate as long as you can. Buy yourself enough time to keep iterating.”
In 2016, with 12 locations, Stone finally left his banking career to run the business full-time. With organic traction from celebrity locals like Taylor Swift and Victoria's Secret models, business was booming. “It got to the point it was unsustainable. I either needed to let go and bring someone in or go full-time.”
Going full-time allowed Stone to expand across both coasts. The thinking was, “If we could open in California and it was successful, and if I could cover two coasts and build a brand, I’m going to answer a lot of questions about the scalability.” The expansion was a success. The business now operates over 50 locations across both coasts.
Following Bluestone Lane’s rapid growth, when the COVID-19 pandemic hit, the impact was brutal for Bluestone Lane’s urban footprint. Revenue tumbled about 80% in the span of two weeks. But with the myriad challenges the pandemic brought, it also gave the brand a chance to reinforce its core values as it made a series of quick changes.
“I’m so enormously proud of what we achieved in our team,” Stone said. They shifted to a fully digital transaction model in March, and digital payments still make up about 90% of their transactions to date. They also donated over 45,000 coffees to hospitals across their markets as part of a Fuel For Heroes initiative. As Bluestone Lane looks to open up to 15 new locations in 2021, Stone said that his initial goals for the brand remain at the forefront of his operations.
“We are a brand centered around health and humanity, and nothing is going to change that. People spend so much time ‘connected’ on their devices, and they’re having a lot of connectivity, but they’re not having a lot of human connection – and the pandemic has accelerated that.”
Ultimately, Stone says that is Bluestone Lane’s purpose. “ To bring people together and to really tackle some of these big externalities linked to mental health and depression and isolation … that’s what we want to pride ourselves on being. We want to be a place where you walk in, and you feel special and you’re part of our community.” It’s a tall order for a coffee chain, but if anyone can do it, my bet is on Stone.