“Our company got funded late.”
That may not sound like the beginning of the origin story for a dive bar in the Mission, but it is. H. Joseph Ehrmann opened Elixir—a neighborhood bar on 16th Street now known for its fresh cocktails—right after the dot-com bust.
Ehrmann—who had entrepreneur and business experience, plus an MBA under his belt—was working in software sales at the turn of the century. He was recruited by a company in Silicon Valley in the year 2000. As he explained, “Our company got funded late. While a lot of people were losing their jobs, we’d gotten another round.”
That round of funding created his position, but it didn’t last long. Ehrmann relocated to the Bay Area for the job and had been there less than a year when the company’s headcount was slashed from 120 people to just 9.
Ehrmann also had years of bartending experience under his belt, so he fell back on that in order to make rent. It didn’t take long for him to feel frustrated, though.
“I had $100,000 in MBA debt and the kind of job that I wanted was non-existent,” he explained. “What was I going to do: sit around a few years and keep applying to jobs until the economy turns?”
“I was watching the money the bar was making everyday,” he added. “All these people were unemployed, but were still going to bars and Starbucks. I was frustrated. I was like: I know this business and I love this business. And I was working for somebody who didn’t really know the business but had some money and had started a bar. So I was like: I can do this.”
Ehrmann lived a block away from what would become Elixir. He quit his bartending gig and, on New Year’s Day in 2003, sat in his room and wrote a business plan. Then he got to work looking at properties, researching neighborhoods and analyzing foot traffic flows.
“I was excited,” he said. “I had never felt more focused or more on-target. And when I found this place—though it stunk to high hell and was decrepit—I went across the corner, looked at the building and realized: This is a real-deal Gold Rush Saloon. These people don’t know what they’re selling. And I made an offer.”
Indeed, Elixir hangs its hat on being one of the oldest bars in San Francisco. The building has been nothing but a bar since at least 1858; Ehrmann verified it himself. The saloon burned down in 1907 but was rebuilt a year later, then survived Prohibition as a soft-drink parlor. Unsurprisingly, it needed some love when Ehrmann got ahold of it, so he totally shut it down for several months and resurfaced the interior.
But even after after that was done and the bar opened, Ehrmann’s work was really just getting started.
“Those first couple of years I was really getting my legs under me as a business owner,” Ehrmann said. “When we first opened… I was trying to be low-scale: shots and beer. But I did that for two years and wasn’t happy with numbers, so I decided: I gotta do something different.”
Ehrmann did some downsizing of his own. He got rid of half his staff and shifted the bar’s focus to higher-priced cocktails. “As soon as I did that, business went through the roof,” he said. “I was an island in the neighborhood.”
Despite some parallels with the tech scene (in both cases, for instance, a good idea doesn't necessarily translate to good business), there's one big different with bars like Elixir.
"A bartender who can't run a bar is not going to have financial backers who are going to give him a third round of funding to stay afloat," Ehrmann explained. "In the bar business, you either make it or you’re done. It's less forgiving than the tech industry. "
photo by darren edward