Walking Barefoot Into America’s Top Wine Brand (part 2)

A continuation of my conversation with the founders of Barefoot Wines

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In our previous post, I spoke with Michael Houlihan and Bonnie Harvey, the founders of Barefoot Wines, on their advice for aspiring entrepreneurs like they once were, as they were about to release their New York Times bestseller, “The Barefoot Spirit: How Hardship, Hustle and Heart Built America’s #1 Wine Brand.” They had so much to share in our time together that I had to share a second helping of their advice in a second post.

 

DAN: I’ve attended events in which entrepreneurs are put into “Shark Tank”-like situations where they have to pitch a venture capitalist on their concept. And they may have only 5 minutes maximum to do that. If you were sitting on a panel listening to this style of pitch, what would you want to hear most from the entrepreneur presenting?

MICHAEL: I’d like to hear them say they have a buyer who is interested in their product. The words, “I have a purchase order” would get my attention. In the wake of our most Recession, so many investors don’t want to throw a lot of money at R&D anymore like they used to. They got burned by that and used up so much money on development that they had no money left for marketing. Today, they prefer to invest in expanding a business that already has some kind of traction in the marketplace.

  

DAN: We often talk about separation of work and play. But so many times your business is your life as it is your passion. How were the two of you able to separate your work and your life so that you didn’t completely lose yourself in Barefoot?

MICHAEL: Bonnie and I were blessed with two different skill sets with great respect for each other because of that, so we meshed and didn’t butt heads. She handled the back office, dealing with leases, compliance, contracts, applying for lines of credit and more. I couldn’t have handled that. I was the front man talking to distributorships, cold calling, negotiating deals and meeting with salespeople. So we both had exactly the same goals but came at it from different tracks.

BONNIE: As far as business, that worked out just fine. As far as our personal lives, we had a rule that there was no business talk at home. We’d commit to setting time aside for a vacation. To ensure we’d have the time to do the things we loved to do, I would even buy non-refundable plane tickets to Hawaii that forced us to go since we couldn’t get our money back! By having that kind of attitude, we’re able to balance both worlds.

 

DAN: In the settings you’ve been speaking at, you’re talking to entrepreneurs at the very beginning of their journey. But you’ve talked about the importance of thinking about the endgame too, which may feel light years away.

MICHAEL: On Day 1, start thinking about what your acquirer’s due diligence looks like. What does he want? He likely wants all your intellectual property, including getting a release from the designer who’s done your a logo now rather than 25 years from now when it’s worth over $100,000. The same is true in working with anyone who does a website for you or performs any writing or social media. You have to have contracts with releases built into them.

Similarly, you have to vehemently protect your trademark. Are most students thinking about that? No, because it seems so distant and removed from where they are now. But trust me, it can become a full-time job when you get popular – and if you get popular in a hurry and haven’t addressed that, it could take you by surprise.

Many of these issues impacting their business tomorrow are crucial to think about today, long before they occur.

 

DAN: Social media shares some similarities to your experience, in that brands are seeing a revolutionary way to tell their story outside of the boundaries of traditional media. What’s your view on the evolution of social media marketing over the last decade?

MICHAEL: Social media has to be used like any tool in the proper way to achieve the desired result. It’s not how many friends you have. It’s whether or not you have the 5 friends who are going to play an influence on who buys your product. Social media as a business tool is only as good as your ability to target. Hits and retweets don’t mean anything if you don’t sell any product. Social media is a great way of communicating with people, finding out what your clientele wants, doing comparison shopping, obtaining endorsements and more.

When it comes to starting relationships, we believe face time trumps Facebook. Ice breaking and rapport building requires face-to-face contact. But once you’ve done that, absolutely go ahead and engage with them on social media. Back when we were launching, our version of social media consisted of bonding with local non-profits who would influence the purchase of our product in the community.

BONNIE: Social media affords a company the opportunity to tell their story easier, that’s for sure. But what is that true brand story? Now more than ever, companies have to stand for more than the service or product that they’re offering. Barefoot is a wine product, but the essence of that product, the “Barefoot Spirit,” is about how to treat people, support your community the right way, how to work with others in your distribution network and so on. Having a great product is one thing. But living up to your brand promise – and keeping it – is another. Because in reality, your brand is owned by your constituents. Always.

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The future of the country lies in the hands of entrepreneurs and I can’t think of two better people to share their wisdom with such an audience on a regular basis than Michael Houlihan and Bonnie Harvey. If you’d like to get some insightful business advice from them weekly, catch up with them on one of the two weekly blogs they write:

www.barefootwinefounders.com

www.thebrandauthority.net

 

 

 

Walking Barefoot Into America’s Top Wine Brand

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Dan with Bonnie Harvey and Michael Houlihan, founders of Barefoot Wines

A 2-part conversation with the founders of Barefoot Wines

When I first spoke with Michael Houlihan and Bonnie Harvey, founders of the brand we know today as Barefoot Wines, they were about to release their New York Times bestseller, “The Barefoot Spirit: How Hardship, Hustle and Heart Built America’s #1 Wine Brand.

Our conversation at that time was about Michael and Bonnie’s most improbable journey of entrepreneurship, with humble beginnings of running a business out of a laundry room in Sonoma County. Without a lot of capital whatsoever, Michael and Bonnie became the brand of Barefoot Wines – a brand they would ultimately sell in 2005.

These days, Michael and Bonnie are enjoying sharing their experiences via speaking engagements to entrepreneurs across the country, so I caught up with them as they came through Chicago to do just that at an event at McCormick Place.

 

DAN: Michael and Bonnie, when we spoke the first time, we retold the inspiring story of success you enjoyed as founders of Barefoot Wines, bootstrapping the company. I think what would now be fascinating for many to know is the story after the story – what happens once you move on from the company you launched and how do you continue to inspire others while finding your own excitement? What does that next chapter look and feel like?

MICHAEL: Certainly imparting what we’ve learned – good and bad – in our time as entrepreneurs has provided its own kind of excitement for Bonnie and I. Some of the ways we’ve done that is through our book authorship and speaking to aspiring business owners as early in their process as we can.

For “The Barefoot Spirit,” we published the book 1 day after our 30th anniversary and we were thrilled to find it would reach #2 on the list of New York Times bestselling paperbacks in the Business category. We spent a lot of time pre-selling the book with free downloads and approaching the distributors of Barefoot Wines to help promote the brand story.

Our goal is to make the book required reading at colleges and universities that teach entrepreneurship. Some schools were teaching entrepreneurialism in the 1970’s but actual Schools of Entrepreneurship are still a relatively recent thing. At this point, we’re proud to say 12 universities have made “The Barefoot Spirit” required reading and we hope all of them will add it to the course list.

 

DAN: Are there other categories of entrepreneurs than typical young professionals you’ve been speaking to?

BONNIE: Absolutely. We’ve been speaking to the Entrepreneurial Bootcamp for Veterans with Disabilities (EBV), which is a year-long study, the first month of which is spent online preparing vets to go into business on their own, followed by intensive study at the University level, followed by a year of online study with mentors and professors. And some of these vets have already started their own businesses.

When you have a book that includes ‘hardship, hustle and heart’ in the title, it’s very interesting to talk to a vet because they know all about hardship, they know about hustle through their prior experiences and they’ve all got big hearts. So they’re very receptive to what we have to say.

 

DAN: What would you say the both of you offer in speaking that isn’t frequently taught in school?

MICHAEL: Entrepreneurship in school is kind of like automotive engineering in that it teaches you how the car operates. You learn that you’ve got to have a business plan, be able to write a loan application, know how to hire and fire, be familiar with compliance laws, understand all the licensing you have to obtain, etc. These are the technical aspects.

What we offer is the navigation of actually getting the car from here to there – and in the worst of conditions when you face them. What obstacles need to be overcome? The minute you open your doors for business, it’s not the business plan anymore. It’s the cash flow plan and all about paying your bills.

BONNIE: We came to realize we had seven sales we had to make in order to get our product to market – and for each of those people along the line, we had to figure out what they wanted most so we could get the product on the shelf to be seen by the end consumer. As we’ve been talking to students about this area of distribution management, it seems to be an area that isn’t well addressed at the university level. We thought if we had an award-winning wine at a low price that featured a cute label you could remember, it would fly off the shelf. At first, it didn’t. What we had to learn was the entire distribution network and the series of sales that had to be made. That was a huge lesson for us and a big lesson for any student today.

 

DAN: What are the biggest fears that students express to you?

BONNIE: They’re afraid that they don’t have enough money to start the business and they’re afraid that they don’t have enough knowledge and experience in that industry.

But I can tell you when we were starting our business, Barefoot would not be here today if Michael or I had either one of those things.

If we had money to throw at the problem, that’s exactly what we would have done. And you know what? We would’ve run out of money and still had a problem. We had no paid advertising because we couldn’t afford it, which led us to discover “worthy cause” advertising that led us to support non-profits in our community. The membership of these non-profits understood that we were caring about their concerns, so when they had an option to buy a bottle of wine, they knew ours was the one that supported their fundraisers – and they supported us. It was a great way to get our message out to the greatest number of people in the shortest period of time.

If we’d had experience in the industry, we’d have done things exactly the way they had been done before in the business and there probably wouldn’t have been any great change in the wine industry for a number of years.

For example, when we understood the majority of wine buyers in our area were women, we realized that the quality many of our female buyers wanted was consistency in taste from year to year. Well, when you’re a vintage wine, different vintages taste different. So one of the things we did outside of the norm of the industry was to be a non-vintage wine. Our busy female buyer making all the purchase decisions for her household at the grocery store wouldn’t have to worry about that lack of taste consistency. Our wine gave her that ability.

In addition, while the wine business was generally a bit stuffy and the labels featured fancy French-sounding names, we decided that it should be more fun, with a product that was easy to recognize and easy to pronounce. So our Cabernet Sauvignon was called “Barefoot Cab” and our Zinfandel was called “Barefoot Zin.” I hadn’t been a wine drinker and the whole business to me had been intimidating. What we were creating was a brand that was more approachable, something that, frankly, hadn’t been properly addressed in our industry.

 

In part 2 of our conversation, I speak to Michael and Bonnie on how they advise entrepreneurs to brush up on their “pitch,” why it’s important to think about selling your business on Day 1 and their views on social media in brand building. Stay tuned for that in our next post.

 

“The Profit”: When Ego Fights Brand Evolution

One of my favorite new shows I’m enjoying is CNBC’s “The Profit” in which billionaire Marcus Lemonis attempts to turn around struggling businesses by offering them a check and in return, he gets to do pretty much everything his way for a week, including making all decisions on the company. And the current managers can’t do a darn thing about it.

If you think all episodes featuring these business owners work out and they live happily every after, you’re wrong. So far, only about half of them have.  There are some businesses Marcus just can’t fix. And it’s not his fault – certainly not because of his business acumen. No, although Marcus judges a business based on People, Process and Product, from my point of view the reason some of these businesses featured aren’t successful deals for him really comes down to one thing above all:

It’s because the management doesn’t want to listen and can’t admit their mistakes.

Period. Oh, they can say they were wrong. But it doesn’t mean a THING in saying that if they don’t actually do something about it. And that’s where Marcus can help the business. But something in the human element is fundamentally flawed. They have other problems to be sure too – like not knowing their numbers accurately – but even that can be fixed easier over time.

For example:

One owner has anger management issues and can’t control his emotions. Everyone but him is wrong and stupid. He arrogantly thinks he knows better than everyone, including Marcus.

Two co-owners used to be a couple, broke up and now can’t stand each other…but they still jointly own a company. They’ve let their hate for one another ruin the business. Buy one another out? Nah. It’s easier to blame and point fingers.

One owner just doesn’t want to even be in the business and lacks all passion for making any kind of meaningful change. He bolts early on the day of the business’ re-grand opening.

The ones that worked out? Boy, do they work out brilliantly. Because they listen. Sure, they’re a little nervous to give up making decisions for the company temporarily for a week – come on now, A WEEK – and do things radically different in some cases, but they surely realize that the current path isn’t doing anything for them financially, emotionally and in terms of their goals and dreams. So they take the deal and shut up and listen to an outsider – an outsider who happens to be a highly effective CEO too. We’re not talking about Joe Schmo off the street.

I’m no billionaire (yet!), but I’m fascinated by this pattern when recommending changes not on the operational front but for brand strategy. It’s absolutely shocking to me when I see this play out on a grand scale on “The Profit” because these people are throwing away an absolutely golden chance to change their businesses in an opportunity they will probably never have again.

And for WHAT? Trying to be…right? Trying not to look stupid? Seriously? Seems pretty childish to me when, in the case of this show, an entire business hangs in the balance. But some are just…blowing it due to their constant inability to eat humble pie. And ironically, in doing so, look mind-blowingly idiotic for their digging in their heels anyway.

This is why the willingness to listen and be open to change is a pre-requisite for me. I can’t and won’t convince the patient they’re sick. They have to know they are. And they have to want my help – or at least somebody’s help.

Unfortunately, while I have many positive stories to tell, I’ve also seen stubbornness surface from people who don’t know how to get out of their own way. Agency heads who think they know everything and have a formula they can’t break out of. Marketers who have always done it a certain way. Creatives who would rather wax nostalgic about the good ol’ days of print than learn about social media. Micromanagers who hover over agency creatives and direct them like umpires making calls behind a catcher. 

Some have gone against what clear data is telling them. Hell, some have gone against what their own customers are telling them.

When otherwise good people think they know better than their own client and that the brand’s message should appeal to so many people within their own walls, none of whom is the client, you’ve got a bad situation. When some twerp serves the client what they want to hear no matter what rather than growing a pair and telling them what they need to hear, you’ve got an even worse situation.

That’s why I say, in reality, I don’t really write for clients at all. I write for their audience. The ones I have the best relationships with get why that’s important and why the brand can’t always sound like their official mouthpiece. Because there’s something much bigger at work than one person trying to be the loudest heard. There’s an attempt to have a meaningful connection and that takes identifying with others. And caring. And actually demonstrating that love in consistent gestures.

Wait. Is that love applied to your own people or your customer? Hopefully it’s both.

Ego is the enemy of evolution. 

You’ll be amazed by how fulfilling life can be sometimes when you just be quiet and listen. Especially when someone who only wants to help you is walking through the door.

I’d love to hear your experiences and challenges with this and/or your thoughts on “The Profit” if you’ve seen it. Sound off.

What Doctors Can Learn From Designers: Tales From The Cusp

“If we as health care providers do not think like designers,
we will fail in our mission to serve our patients.”

   -Dr. Joyce Lee

In attending Chicago’s recent Cusp Conference, I came across a host of innovative guest speakers who are changing business models through better design. One of them I thoroughly enjoyed hearing was Dr. Joyce Lee, who is an Associate Professor of Pediatrics at the University of Michigan Medical School and an Associate Professor in the Department of Environmental Sciences at the University of Michigan School of Public Health.

Dr. Lee’s design inspiration evolved from a very personal issue: Both of her children have allergies, one of them at a very severe, life-threatening level. If her 6-year-old were exposed to certain foods, he might go into shock and have difficulty breathing.

Think about if this was your child and you had to instruct their daycare teacher how to save your child’s life without you being there. A terrifying thought for any parent, really – especially since the Allergy Action Plan chart that Dr. Lee could’ve potentially provided was a maze of confusion.

Bad Design: An Allergy Action Plan That’s Impossible To Understand

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“Here, Mr./Mrs. Teacher – in addition to all your other responsibilities, I need you to save my child’s life in seconds. But first, read this complex chart of conditions in order to know what to do.”

It’s no wonder that between 1994 and 2007, there were over 15,000 unintentional injections in the U.S. with EpiPens. Even trained nurses, paramedics and physicians were inadvertently self-injecting.

That’s bad design.

Knowing that the above option wasn’t realistic nor could she expect to teach her 6-year-old to administer an EpiPen (medical device used to inject epinephrine in the event of a severe allergic reaction) to himself to save his own life, Dr. Lee knew there had to be a better way out of necessity that was more user-friendly.

During her sabbatical, Dr. Lee studied data visualization and figured out how to think like a designer. She started to blog about design and its intersection with health care. She wondered how the very model of health care could get a redesign. 

And that’s when something simple became better design.

Dr. Lee scripted a YouTube video – but the real star was her child, who illustrated and narrated the video.

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Come on. Who can possibly ignore a cute 6-year-old’s drawing as he or she explains it? 

Very few people. Which is exactly the point.

Dr. Lee posted it on her blog and sent the link to her child’s teacher.

The teacher thought the idea was brilliant and shared it with hundreds of other people within days. Those people sent it to more people (undoubtedly some of them parents of severely allergic children in a similar predicament). Before long, Dr. Lee’s little instructional video starring her son had gone viral.

While at a conference, a colleague of Dr. Lee’s spoke of how her video brought the action plan to life. You can find the result yourself at: www.IHaveFoodAllergies.Tumblr.com

A follow-up video was also made in this format, such as one relating to handling sensitive food ingredients.

Think about this for a moment. A video series by a 6-year-old is better design than a complex chart of circumstances and actions that was probably created by a council of physicians.

Suddenly the phrase, “Explain it to me like I’m a 6-year-old” has even more relevance than we thought.

The lesson here for brand marketers is that there are countless times when we can outthink ourselves out of good design. We don’t think like the person who actually has to use our product or service as much as we should. We don’t think about the way they make decisions. We go by what we think sounds best instead of envisioning their lives and the way they absorb information. Which is why we get lousy ads full of specifications and marketing jargon instead of simplicity and English.

Instead of just getting to that next logical step in the thought process, we spew every possible piece of information at them in a first impression, overwhelm them and turn them off because they don’t have an eternity to spend with us.

Taking a look at the example of Dr. Lee’s son, how well do you think that approach would’ve worked out?

So take a fresh look at the processes and language you’re creating around your brand with this in mind. Is that good design? Or bad design?

To see more of Dr. Lee’s presentation and learn about another terrific medical innovation that comes from “good design” called the Auvi-Q, click here:

Jack White, Quentin Tarantino and Equivalency Branding

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Jeff Segal, Message Therapist

Today’s guest post is brought to us by Jeff Segal, Content Manager of Kauzu, a social venture that’s changing the way jobseekers and employers connect. An experienced marketing professional and disciplined writer with creative flair, Jeff also consults for businesses under the moniker of “Message Therapist.”

Something occurred to me recently when I heard Jack White’s cover of “I’m Shakin’” on WXRT: Jack White is the Quentin Tarantino of rock.

They’re both obsessive fans who push well-worn genres beyond their traditional boundaries—low-budget crime, martial arts and western flicks for Tarantino; blues, rockabilly and R&B for White. They’re both unapologetically indulgent—Tarantino’s movies are rarely short of three hours, and White’s guitar solos can singe the hair from your ears—but find forgiveness with fans and critics alike. Both Tarantino’s movies and White’s music can feel like parody and homage at the same time.

Golly, Jeff, that’s some fascinating media criticism. What does it have to do with branding?

Say you’d never heard of White but you’d seen most of Tarantino’s movies. If I told you, “Jack White is the Quentin Tarantino of rock,” you’d have a pretty good idea what to expect from his music.

If you’d never heard of Jimmie Johnson, but I told you he was the Tiger Woods of stock car racing, you’d probably guess Johnson was the favorite to win every race and championship—even though Woods himself hasn’t won much of anything in years.

If I told you Sub Zero was the Ferrari of refrigerators, you’d probably guess it would be beautiful, high-performance, and staggeringly expensive.

If I told you Mr. Lee was the McDonald’s of China, you’d probably expect to see Mr. Lee outlets selling fast food on every street corner in Beijing.

You get the point. The human brain has a hard time understanding new concepts, but less trouble associating a new entity with a known entity. If you’re marketing a new concept, try to describe it as the equivalent of a known entity—in other words, a recognized brand—and you’ll get the idea across faster. It’s a branding shortcut.

Let’s call it Equivalency Branding.

When Kauzu introduced the employers’ portal to its hyperlocal, mobile job search tool, we had a hard time summarizing its benefits—until we called it “The Help-Wanted Sign for the 21st Century.” Then employers understood: it attracted jobseekers who were already in the area, with the added reach, mobility and analytics of a modern web platform.

The founder of a Chicago startup with an innovative online video editing platform sometimes describes it as “Shutterfly for video.”

Promoting a legal environment that helps Chicago startups pursue business models with a positive social impact, a successful local entrepreneur says she wants to “make Chicago the Delaware of social enterprise.”

Equivalency Branding doesn’t work in every situation, but it’s surprisingly adaptable with a little creativity.

Say you’re an independent operator in a field dominated by a massive competitor called Megajumbo. Here’s how you might leverage the well-recognized Megajumbo brand to position your own:

  • By niche market—“the Megajumbo for medical office management.”
  • By locale—“the Megajumbo of River North.”
  • By specialty—“the Megajumbo of custom-designed micro-widgets.”
  • Or by competitive advantage—“like Megajumbo with better customer service.”

You might not want to use Equivalency Branding for your official marketing materials—for one thing, Megajumbo’s lawyers might not appreciate it. But it can be a great way to introduce yourself in a small group, networking or sales situation.

Hey, and if it catches on, I’ll be the Steve Jobs of Equivalency Branding.

Evolution Windows and Why “Existing” Is Worse Than Death

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“I just don’t get this whole blogging thing.”

“We’ve gotten by just fine on word of mouth.”

“I just see Facebook as being for kids, not for business.”

“The eNewsletters I get are so boring so I don’t know if it’s for us.”

I wonder if the owner of the above business ever uttered statements like these. I’ll bet he probably did. The big deal to me about this isn’t the resistance to new media. Yes, I’ve heard statements like the one above and I don’t agree with any of them for a variety of reasons.

But there’s a far bigger problem with all of those statements – can you spot it?

I. We. Us.

Time after time after time, you will hear the same skeptics with their arms folded looking inward and placing their own opinions over those who are far more important:

Their customers and prospects.
Their employees.
Their distributors, vendors and strategic partners.

Evolution of your business is vital to survival but even more importantly, a resistance to listening to those who would support your products/services through either their dollars or their labor is one of the greatest sins of a marketer I can think of.

And let me call it like I see it – the more resistant to listening to others, the bigger the ego. “Well, we’ve been successful for 100 years” or “I’ve been in the _____ business for 25 years and it’s always worked this way for me.”

Again with the We statements. I statements. Us statements.

What about the Our and They questions? As in:

“What is our audience using right now?”

“How are they communicating with us and if they’re not, who are they talking to?”

“What do they value most? Have those priorities shifted as their household changes?”

Remember, this doesn’t apply merely to your customers. It applies to the fellow in the mailroom who has been a part of your culture for the last 10 years. The guy who walks the floor of your business who also happens to get invited to after-work happy hours and interacts with the rest of the team. He could be just as connected to the real sentiment of the company than you are because, let me guess, you’ve got more “important” things to worry about.

By the way, it doesn’t mean everything you develop as a product or service has to rely strictly on their opinion here and now. You can actually project what you think they’ll want. But that comes from knowing and understanding their innermost behaviors. What does their day look like? What are their challenges? How does your brand fit into that agenda and help them through it?

It’s possible for long-established businesses to lose their way and forget this stuff. After all, the guy who started a business 100 years ago left the business – and this world – long ago. And then it changed hands from one generation to the next.

The reality is that every business has an Evolution Window.

In that Evolution Window, the business has the opportunity to re-evaluate, modernize, even possibly re-invent itself. It’s more than a new chapter – it’s a real moment of truth that defines the next era.

Sometimes the Evolution Window comes from internal changes, like:

  • New leadership
  • New product/service development
  • An initiative to change how customer service is delivered
  • A shift in how the brand’s messaging is being conveyed
  • A change to the structure of salespeople in the field
  • New hirings (and firings)
  • Entry into new markets

Sometimes the Evolution Window is due to external trends at work, such as new technologies in the social media realm that present themselves or changing tastes and behaviors of the target audience. And many times it can be a combination of several factors in play simultaneously, both internal and external, that influence each other.

The business can make that important evolution of talent, processes and technology or ignore it and rest on their laurels – saying “that’s the way it’s always been done.”

Do they face a choice of Evolve or Die? Not always. More accurately, the choice is Evolve or Exist. Because there are a whole lot of companies that are evolving and others that are going through the motions. They’re not officially dead. Yet anyway. They’re just thinking that existing is the same as being successful. And it’s not. Not even close.

These Existers are easy to spot. They’re not questioning if it’s time for change. They’re not learning. They’re not integrating. They’re not evolving. Instead, they’re waxing nostalgic about the only methods they’ve known and talking about the good old days before the new stuff came along.

And they sure aren’t listening hard enough to voices other than their own.

It may not happen right away, but when they miss the Evolution Window, they shouldn’t be surprised why, after all these years, they have to trim their staff or close their doors.

It’s actually a fate worse than death. Because if your business dies, at least you have a chance to figure out where you went wrong from failure quicker and create a new entity that’s learned from past mistakes. Existing without evolution is just being on life support. Congratulations. You have your name on the door and provide the same services as everyone else. Punch in, punch out. Repeat until retirement or business closure.

The effect on company culture of the Existers isn’t often great either. Employees go about the motions too. They get comfortable – too comfortable – in the way things are done. This can lead to either complacency, cockiness or both. “We don’t need to change. We’re the best.” or “We don’t need to change. If it’s not broke, why fix it?”

Committees can be bureaucratic and ineffective at their worst, but it’s certainly a good idea to have a group of people (non-title specific) who study the tools and trends affecting your industry and report back to upper management on a monthly or at least quarterly basis. Agencies and consultants, where appropriate, can only help provide insight and in turn, an extra value to their own services. It becomes more than just creating ads or blog posts or public relations tactics but actually helping the client create a better culture, product, operational structure and more. I personally love being a part of that process.

Every business has their Evolution Windows. You might be seeing one right now. Which means there’s no time like the present to get the right people on board to help plan for adjustments.

Because when that window closes, there’s no telling what else can close with it.

Walking Barefoot Into An Entrepreneurial Adventure


A conversation with Michael Houlihan, founder of the Barefoot Wine brand

 

Michael HoulihanFounder, Barefoot Wine

Michael Houlihan
Founder, Barefoot Wine

Michael Houlihan may represent one of the ultimate “pulled up by the bootstraps” stories of entrepreneurialism.

From humble beginnings in the laundry room of a rented farmhouse in the Sonoma County wine country, Houlihan, along with partner Bonnie Harvey, co-founded the Barefoot Wine brand in 1985.

Without much capital, industry knowledge or advertising budget, he built one of the most successful wine brands in the country – selling Barefoot to E&J Gallo 20 years later. He retells the story in a new book titled: The Barefoot Spirit: How Hardship, Hustle, and Heart Built a Bestselling Wine.”

Dan Gershenson: First, what’s your relationship with Barefoot Wine today?

Michael Houlihan: After we sold the brand in 2005, we continued to work with Gallo for a year to keep the entrepreneurial spirit of the brand alive and well. This is important because you’re talking about a mindset of preserving a positive company culture that often gets lost in corporations due to large budgets.

DG: Large budgets, in what way?

MH: When you do have financing and plenty of money, that’s not necessarily as good as you might think because now you can just throw money at every problem – and think that’s going to fix everything. On the other hand, there’s something to be said for the creativity and passion of someone who burns with desire but doesn’t have as much money. You can’t lose that ability to think outside of the box even when success happens – if you lack creativity and don’t keep your customers as the top priority in amazing ways to make them feel like their #1, money won’t make up for that.

DG: I’m sure like many entrepreneurs, you made a mistake or two out of the gate. If it’s not too painful to share, what would say one of your big ones was?

MH: You start off with this idea that it’s all about the product and that you’re sure you have the very best product, price and quality. It’s a big mistake many entrepreneurs make. They overvalue the product itself over the distribution of the product. Excellent distribution trumps production every time. What’s more important is to get your product out there. This is hard for some folks to believe, I know. But when you think about it, if it’s not out there, they can’t buy it, can they?

DG: I’m sure some will be shocked to hear you say that about product quality. Especially since we’ve often believed quality is King.

MH: Of course, quality is ultimately king. And I’m not saying that just anything goes. But in our early stages, just because we believed we created the very best wine at the best price didn’t mean instant success. And we got tons of accolades at Barefoot Wine too. So guess what? We got overconfident about distribution. We thought distributors would now just have to present the product to retailers, sell it to them and the retailers would order it repeatedly when it ran out.

We smoked cigars in celebration the first time we sold to a distributor but we should have been working harder to help them sell into the retailers repeatedly. In businesses like ours, the first true buyers are not the general public but the distributor and then, if he picks you up, the retailer. We forgot that side of the equation and it could have been disastrous.

DG: Did you have a team in the field to self-police this better?

MH: We had to. The product can be technically “sold” and yet, the ball can be dropped in all kinds of ways – it’s not often due to the fact that it isn’t selling. It can get hung up in a warehouse. The store could program in the wrong SKU number. The clerk, manager or distributor salesperson just might forget to re-order it. So you need that “cop” who not only sees your product go to the store but checks to make sure it stays on the shelf each week.

DG: What other kind of challenges did you face?

MH: Many stores said they would never carry a wine with a foot on it. They said they would only carry it if we spent millions on advertising. Of course, we couldn’t. We barely had any money at all.

That’s when we decided to sponsor some worthy causes and nonprofits that were in the neighborhoods of where those same stores were. If they used our wine at fundraisers or silent auctions, they would announce our presence in thanks. They would put us in their newsletter. They would give us a story that we could use to promote their cause right on our brand.

Suddenly, those people paying $200-400 a plate were receiving a pitch from us – not a commercial pitch – but why we supported their group or cause. Social reasons can be more powerful than traditional advertising. In fact, even when we had the budget to advertise, we never went there.

I think that was the moment when we realized the Barefoot spirit was more important than the wine. We discovered that worthy cause marketing helps build community, so we found worthy causes to support that resonated with the logo and with us. Many companies forget that in today’s transparent market, they have to stand for more than just the product they sell.

DG: Yet, even when you excluded advertising as a cost and began to build your brand, you still had a lot of other expenses. How did you address those?

MH: We thought hard about who our true strategic allies were. You have to align yourself with people who benefit if you benefit. We realized we had to sell a ton of wine to make a break even early on – This meant more printing, foil, glass, etc. So I went to the glass company and said, “We stand to be your biggest client,” and I explained the volume at which we would sell our wine. We were willing to be honest with them about our sales and make them an exclusive supplier. We laid out a plan with them in advance and treated our strategic partner as if they were our banker. You’re not alone when you’re an entrepreneur – you have to find out who’s running down the street with you.

DG: As your team began to grow, how did your culture grow with it?

MH: Performance of the company plays a huge role and we made sure everybody knew it was how they were compensated, including our strategic allies and other vendors we negotiate with. There are only two divisions in every company whether they know it or not  – Sales and Sales Support. Nobody is outside of those two divisions ultimately. I don’t care if you’re a receptionist or an accountant, everybody works for sales. It’s their job to keep the salespeople up to date with the information, supplies, marketing, and excellent products they need to succeed.

On Day 1 of their employment, we gave our people a “Money Map” that showed the money trail from the customer who bought our product from their local store, who bought it from the distributor in their city, who bought it from our company, and then all the people our company paid with that money and the portion that went to their check, benefits and bonuses. When they saw the big picture, they understand how they fit in and how they share in the cash flow. Without that early warning system, they may think the boss has a Big Rock Candy Mountain out behind his house where he can just grab more money any time he wants. Not so. All the money really does come from the customer. The more they appreciate that fact, the less they see their job as somehow isolated from the process.

In the Spring, Houlihan is releasing his new book on building Barefoot Wine and the lessons for entrepreneurs. He describes it as a “business adventure” story in how he and his partner faced failure in many ways but always found solutions in of a variety of surprising places – whether out of thin air, his allies, his own people or practically anybody else. You can go to Amazon and pre-order it if you like. But for readers of our blog, the CEO is giving us a special deal. Go to: http://www.barefootwinefounders.com/sample-tasting/

There, you can order the book from the Barefoot Wine Founders directly and download the book right now. Why? True to his philosophy of inviting feedback from every corner of his company, Houlihan wants to get people’s opinions on the book even before it gets formally reviewed. He’ll put several reviews online, with people sharing their opinions of the book ahead of time. It’s available right now at the link above for just $15.95. Go get it. I know I will.