Benny Augeri moves from doughnuts to dollars.
A town without a doughnut shop seems so sad, right?
That’s what Benny Augeri thought, and like many young entrepreneurs with a hot idea, he was prepared to do whatever it took to transform the doughnut delivery business he started as an Oregon State University undergraduate into a brick-and-mortar operation.
Even if it meant sneaking into the geology lab at OSU to use mapping software to identify the best spot in town to site his new enterprise, Benny’s Donuts.
“Risk is fun, but it’s mitigated by research. I’m very analytical,” Augeri says on a recent Friday, from a window seat in the well-lit doughnut shop, located in downtown Corvallis.
The 26-year-old geology major designed and built much of the interior, which features locally sourced maple burl tabletops. He waves as his former geochemistry professor walks by. (The course was one of the most difficult classes of his college career, Augeri recalls, so tough he got a C- the second time he took it.)
In 2015 the “intuitive networker” — that’s how Augeri’s business mentor, Donna Lesch, describes him — charmed his way into the OSU Advantage Accelerator, which is more likely to invest in startups focusing on robotics and other hard science and technology research emerging from Oregon State.
“But we also work with doughnut entrepreneurs,” remarks Karl Mundorff, director of the accelerator. Mundorff says Augeri came to the accelerator with an established concept that has potential to be scaled up in nearly every college town in America. His business leadership and networking talent also caught the accelerator’s eye.
“There are other entrepreneurs who have a great business idea, and we try to give them the skills to execute the business idea,” Mundorff says. “[Augeri] was very plausible in what his intentions were, receptive to advice and counsel, tenacious and diligent.”
So tenacious and diligent that within two years of graduating (in December 2015), Augeri opened a second food venue, Sidecar, an upscale dining concept that’s separated by a sliding barn door from Benny’s Donut shop. He now has a third cafe on the way near the OSU campus and, at last count, nearly 20 employees. Augeri’s thinking about a brewery — and has a tech idea percolating, too.
“He does not slow down,” says Joan Wessell, the executive director of the Downtown Corvallis Association.
A native of southwest Ohio and a longtime rower, Augeri transferred from Ohio State after he met rowers from Oregon State at a summer program in Philadelphia. He made the varsity team at OSU and qualified for a scholarship that helped offset the cost of out-of-state tuition and fees (around $28,000 for the 2015/16 academic year).
Augeri loved the intellectual rigor and challenge of his science studies. But as an undergraduate, he saw how some of his fellow geology majors a few semesters ahead of him were struggling to find stable jobs after they graduated. Oil and gas engineering jobs were volatile, he realized, and renewable energy subsidies were politically uncertain. So he decided in his fourth year of college to add a second major — business.
The idea for doughnuts originated in Philadelphia, where Augeri and a friend would wait in line after rowing workouts for the blueberry fritters sold by an Amish bakery in the Reading Terminal Market. Plus, the Corvallis market was ripe for the concept: The population was too small (57,000) even for chains like Dunkin’ Donuts to consider a franchise. Sure, gourmet doughnuts from Blue Star and Voodoo had swept Portland, but the trend had yet to make it to Corvallis.
Using $2,000 from student loan money refunded to him after he dropped one of his OSU classes, Augeri started his doughnut-delivery business in 2015. He spent about $300 on initial marketing, including 2,000 door hangers advertising doughnut delivery in an area near the OSU campus. (A half-dozen friends were paid in doughnuts to deliver the flyer.) Soon he was selling as many as 2,400 doughnuts a day. Capitalizing on his accelerator contacts, he applied for a $20,000 low-interest loan from Business Oregon. That helped him open a physical shop in late 2016.
A whole lot of doughnuts later, Augeri’s success mirrors that of downtown Corvallis, where growing interest in food and drink and a booming OSU enrollment — fall 2017 enrollment clocked in at 31,904, up from 14,618 in 1998 — have enlivened a thriving but once sleepy college town.
Located on the main drag, at the corner of Third Street and Monroe Avenue, Augeri’s eateries are just down the street from a slew of small businesses, including a book bindery, a yarn store and a specialty footwear shop. The walkable downtown features wide, flower-box lined sidewalks that fill on festival and football weekends. Third Street is the route most people use to drive in and out of town toward Interstate 5, a choice Augeri made deliberately.
Deciding whether to continue doughnut delivery once he had a storefront proved trickier. The hassles and expense of delivery helped answer the question, and it became even more clear when Augeri opened the shop and abandoned the delivery — without any loss in customers.
As for Sidecar, the eatery he opened next door in August 2017 — the second venue capitalized on a another dining trend: farm to table. Willamette Valley restaurant owners have long relied on the region’s fresh ingredients, and Philomath’s Gathering Together Farm has been a mainstay of the movement for decades. But Sidecar was among the first in Corvallis to embrace the latest iteration of the local organic concept. The restaurant — marking a major shift in the pizza, burger and brewpub mainstays of the college-dominated Corvallis food scene — features seasonal ingredients, salmon smoked in-house and coffee from Benny’s espresso bar.
The venue also reflects the millennial inclination to eat out and eat out well; his target audience, Augeri says, are young people who “just want good food.” Augeri himself eats out frequently, because, he says, he doesn’t want to spend his time preparing or cleaning up after meals.“It’s all about time, eating out to maximize time.”
Sidecar, Augeri’s foray into fine dining
A buregoning population of diners is good news for Corvallis, says the downtown association’s Wessell. She pestered Augeri for a meeting after reading he had been awarded Entrepreneur of the Year by a regionalangel-investment group. Wessell wanted his brick-and-mortar business in the central core, what she calls “the living room of the community.”
There were around three restaurants in downtown Corvallis when she started the job 25 years ago, Wessell says. “Now people are complaining because there’s never any parking.”
Compared to Portland, rents are affordable. One big downtown landlord charges as little as 30 to 50 cents a square foot because she likes to keep her properties occupied, Wessell says. Average rents are closer to $1 or $1.50 a square foot, a price she says allows new businesses like Benny’s Donuts to thrive.
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Self-discipline is another factor driving Augeri’s success. Since graduation, he has nearly paid off his student loans, and he has made a big dent in the $20,000 small business loan he got from Business Oregon. He was warned not to pay it off too fast, because the agency makes money to reinvest in the next round of entrepreneurs from the interest payments on loans like his. Augeri himself reinvests half of his profits in new ventures. (He declined to disclose revenues).
Lesch, a human resources consultant who coaches corporate leaders, credits Augeri’s success in part to his engaging personality. She accompanied him once when he went in search of supplies in Portland; whenever people didn’t have what he was looking for, he’d strike up a conversation. “I just help him think things through,” says Lesch, who met Augeri when her daughter, Ellie, brought him and other college friends home to Portland for Thanksgiving a few years ago. “My focus is to get him to stop and reflect.”
A self-described “opportunity seeker,” Augeri says if he weren’t making doughnuts, he would find some other idea to pursue. Actually, even when he is making doughnuts, he finds other ideas (and hobbies) to pursue — an avid motorcylce rider, he’s working on a technology-based idea with college friends that will fuse social networking and event planning. Doughnuts were just the start.
“I think it could have been anything,” he says. He expresses a stronger attachment to Corvallis. Augeri says he felt at home in the area from the start and plotted ways to stay in Oregon after his graduation. “I like it here.People challenge your thinking.”
The feeling is mutual. About the professor who kicked him out of the geology lab when he was borrowing OSU software to find his perfect location: She invited him back to speak to her class about the real-world applications of GIS software.
Augeri declined but does visit former business professors at the university to share his story with their classes.
And yes, he always brings doughnuts.
A version of this article appears in the April 2018 issue of Oregon Business. To subscribe to Oregon Business, click here.