1 00:00:00,000 --> 00:00:02,583 (upbeat music) 2 00:00:07,411 --> 00:00:09,544 (moves into serene atmospheric music) 3 00:00:09,544 --> 00:00:11,558 - Beautiful Sonoma County is known 4 00:00:11,558 --> 00:00:14,066 for its spectacular vineyards. 5 00:00:14,066 --> 00:00:17,137 We're visiting with Michael Houlihan and Bonnie Harvey, 6 00:00:17,137 --> 00:00:20,500 founders of Barefoot Wine, to learn how they turned 7 00:00:20,500 --> 00:00:24,667 a bold new branding concept into a household name. 8 00:00:26,208 --> 00:00:28,430 So Michael and Bonnie, thank you so much 9 00:00:28,430 --> 00:00:31,143 for being on the show, and I'm so excited to be here, 10 00:00:31,143 --> 00:00:32,885 and I have a lot of questions. 11 00:00:32,885 --> 00:00:34,913 - Excellent, we've got a lot of answers. 12 00:00:34,913 --> 00:00:39,396 - Everybody thinks that Barefoot was an overnight success, 13 00:00:39,396 --> 00:00:42,159 but you guys had some really humble beginnings, 14 00:00:42,159 --> 00:00:43,798 and I'd like to talk about that today. 15 00:00:43,798 --> 00:00:45,340 - Yes, absolutely. 16 00:00:45,340 --> 00:00:49,221 We started with no knowledge of the wine industry, 17 00:00:49,221 --> 00:00:52,269 and we started with no money, so we had a lot of challenges 18 00:00:52,269 --> 00:00:56,249 to deal with, but what we did have was an opportunity, 19 00:00:56,249 --> 00:00:58,920 and it was an opportunity that we didn't wanna pass up. 20 00:00:58,920 --> 00:01:00,752 - Yeah, she had a client who was owed 21 00:01:00,752 --> 00:01:03,766 for three years' worth of grape harvests. 22 00:01:03,766 --> 00:01:05,884 And he hadn't been paid. 23 00:01:05,884 --> 00:01:08,491 So she asked me if I would maybe go see 24 00:01:08,491 --> 00:01:11,417 if I can negotiate some kind of a settlement 25 00:01:11,417 --> 00:01:13,980 with the winery that had just declared bankruptcy, 26 00:01:13,980 --> 00:01:16,540 and all I could get out of the winery was, 27 00:01:16,540 --> 00:01:19,296 wine and bottling services. 28 00:01:19,296 --> 00:01:22,706 And so that's great, as long as you got a label 29 00:01:22,706 --> 00:01:26,077 and a marketing program, and you've gone through compliance, 30 00:01:26,077 --> 00:01:29,042 and you've figured out the distribution system, 31 00:01:29,042 --> 00:01:31,372 and you have retailers that wanna buy your product. 32 00:01:31,372 --> 00:01:34,043 - But you guys weren't even in the wine industry! 33 00:01:34,043 --> 00:01:37,066 - We were business consultants here in Sonoma County, 34 00:01:37,066 --> 00:01:39,712 and because there's so many grapes grown here, 35 00:01:39,712 --> 00:01:42,535 and because it's such a perfect wine-making region, 36 00:01:42,535 --> 00:01:44,804 a lot of our clients were in that industry, 37 00:01:44,804 --> 00:01:47,858 but we weren't even wine drinkers when we started. 38 00:01:47,858 --> 00:01:50,384 - Let's talk about entrepreneurship a little bit, 39 00:01:50,384 --> 00:01:52,939 because you guys are entrepreneurs. 40 00:01:52,939 --> 00:01:55,008 What were some of the challenges? 41 00:01:55,008 --> 00:01:59,097 - Oh gosh, I think the biggest challenge was thinking 42 00:01:59,097 --> 00:02:02,340 that if we had a great product, which we did, 43 00:02:02,340 --> 00:02:04,602 at a great price, which we had, 44 00:02:04,602 --> 00:02:06,931 that it would be great sales. 45 00:02:06,931 --> 00:02:09,774 But no, that really wasn't the case. 46 00:02:09,774 --> 00:02:14,451 We had to understand the whole distribution network, 47 00:02:14,451 --> 00:02:18,534 and everyone that touched our product, we had to deal with, 48 00:02:18,534 --> 00:02:22,234 and understand their job, and be able to do their job, 49 00:02:22,234 --> 00:02:26,535 if they didn't, because any time that chain is broken, 50 00:02:26,535 --> 00:02:30,072 the end user, the consumer doesn't get your product, 51 00:02:30,072 --> 00:02:32,297 and that was the biggest lesson, I think, 52 00:02:32,297 --> 00:02:33,783 that we had to learn. 53 00:02:33,783 --> 00:02:36,369 - You guys were disrupting the wine business, 54 00:02:36,369 --> 00:02:40,051 how on Earth did you even launch it? 55 00:02:40,051 --> 00:02:42,721 - It wasn't easy, believe me. 56 00:02:42,721 --> 00:02:46,888 We got kicked out of more stores at the beginning. 57 00:02:48,853 --> 00:02:51,969 The wine industry was very staid, 58 00:02:51,969 --> 00:02:55,302 and very reserved, and very French-like, 59 00:02:57,904 --> 00:02:59,525 and exclusive. 60 00:02:59,525 --> 00:03:01,739 And so here comes Barefoot, it's friendly, 61 00:03:01,739 --> 00:03:03,822 it's inclusive, it's fun. 62 00:03:04,914 --> 00:03:06,831 And that incensed them. 63 00:03:07,726 --> 00:03:10,735 They went, "Well, you're making fun of wine, 64 00:03:10,735 --> 00:03:14,484 "'cause this is a novelty," or, "It's a joke, 65 00:03:14,484 --> 00:03:16,584 "it's not gonna be around very long." 66 00:03:16,584 --> 00:03:18,499 And because they had that attitude, 67 00:03:18,499 --> 00:03:20,797 they didn't even wanna give it a chance. 68 00:03:20,797 --> 00:03:23,463 And it's interesting, because we were after 69 00:03:23,463 --> 00:03:27,147 an entirely different market than they had identified. 70 00:03:27,147 --> 00:03:28,812 - There was a market that hadn't been addressed. 71 00:03:28,812 --> 00:03:32,862 - How did you guys define your new target demographic? 72 00:03:32,862 --> 00:03:35,151 - We realized that we had to sell our product 73 00:03:35,151 --> 00:03:38,645 in chain stores here in California, 74 00:03:38,645 --> 00:03:42,108 because that's where the greatest amount of wine was sold, 75 00:03:42,108 --> 00:03:45,495 and we had a lot of wine that we had to sell. 76 00:03:45,495 --> 00:03:49,639 So we looked at who was buying wine at the chain stores, 77 00:03:49,639 --> 00:03:53,806 and it was a 37-year-old mom, average 2 1/2 kids, 78 00:03:54,889 --> 00:03:58,788 and she was buying all of her groceries, her staples, 79 00:03:58,788 --> 00:04:02,481 her weekly meals at the grocery store, the chain store, 80 00:04:02,481 --> 00:04:06,052 and that's where she wanted to pick up her wine as well. 81 00:04:06,052 --> 00:04:09,276 - Well, with 2 1/2 kids, you need a bottle! 82 00:04:09,276 --> 00:04:11,049 - Once in a while, right. 83 00:04:11,049 --> 00:04:13,739 So this was a market that hadn't been addressed 84 00:04:13,739 --> 00:04:15,452 by other wineries. 85 00:04:15,452 --> 00:04:18,008 It's something that had consistent flavor, 86 00:04:18,008 --> 00:04:21,945 and something that was easy to remember and recognize, 87 00:04:21,945 --> 00:04:24,449 and something that stood out on the shelf. 88 00:04:24,449 --> 00:04:28,616 So, in a big sense, we were made aware of this market, 89 00:04:31,075 --> 00:04:33,666 and that was the market that we were addressing, 90 00:04:33,666 --> 00:04:36,979 and it hadn't been addressed before. 91 00:04:36,979 --> 00:04:41,703 - As outsiders, when we looked at the wine industry, 92 00:04:41,703 --> 00:04:46,027 we thought of it and said, like Bonnie said, 93 00:04:46,027 --> 00:04:48,543 who's buying the wine? 94 00:04:48,543 --> 00:04:51,787 And they thought that the person who was buying the wine 95 00:04:51,787 --> 00:04:55,954 was an attorney, who was buying a $37 Cabernet Sauvignon, 96 00:04:58,466 --> 00:05:03,425 that was vintage-dated, vineyard-designated, you know? 97 00:05:03,425 --> 00:05:06,092 But actually, it was these moms. 98 00:05:07,314 --> 00:05:09,946 - The greatest volume. - They were buying the volume. 99 00:05:09,946 --> 00:05:11,624 And they wanted Tuesday night wine, 100 00:05:11,624 --> 00:05:13,740 they didn't want Saturday night wine. 101 00:05:13,740 --> 00:05:15,934 They wanted wine that tasted the same 102 00:05:15,934 --> 00:05:19,013 from year to year to year, and for us, 103 00:05:19,013 --> 00:05:21,228 that was a real challenge, because, 104 00:05:21,228 --> 00:05:23,619 it had to taste the same. 105 00:05:23,619 --> 00:05:26,627 And when you start talking about wine tasting the same, 106 00:05:26,627 --> 00:05:29,830 that's the opposite of the vineyard wine business. 107 00:05:29,830 --> 00:05:31,355 I mean, the vintage wine business, 108 00:05:31,355 --> 00:05:34,188 because every vintage is different. 109 00:05:34,188 --> 00:05:36,848 In fact, they celebrate the different vintages, 110 00:05:36,848 --> 00:05:41,100 they say, "Oh, this vintage was a little chalky, 111 00:05:41,100 --> 00:05:44,232 "the elephants got loose in the vineyard this year," 112 00:05:44,232 --> 00:05:46,868 or whatever, and so here we come along 113 00:05:46,868 --> 00:05:49,862 with a wine with no numbers on it, no vintage date, 114 00:05:49,862 --> 00:05:52,698 but every bottle of Cabernet Sauvignon 115 00:05:52,698 --> 00:05:55,416 tastes just like the one last year. 116 00:05:55,416 --> 00:05:59,301 And the way we do that is by blending different vintages, 117 00:05:59,301 --> 00:06:01,735 and having a really excellent winemaker 118 00:06:01,735 --> 00:06:05,887 that knew what she was doing, and understood the market. 119 00:06:05,887 --> 00:06:08,728 And so that was our big challenge, so here we are, 120 00:06:08,728 --> 00:06:11,379 coming out with a non-vintage wine product, 121 00:06:11,379 --> 00:06:13,847 really the first non-vintage wine product 122 00:06:13,847 --> 00:06:16,779 that ever became popular in the United States, 123 00:06:16,779 --> 00:06:19,162 and it was tough, because the buyers 124 00:06:19,162 --> 00:06:21,817 were all men at the time, 125 00:06:21,817 --> 00:06:23,668 even though the customers were women, 126 00:06:23,668 --> 00:06:25,520 the gatekeepers were men. 127 00:06:25,520 --> 00:06:27,599 They couldn't understand it. 128 00:06:27,599 --> 00:06:28,963 They didn't have any place to put it, 129 00:06:28,963 --> 00:06:32,005 there was no place on the shelf for non-vintage wine. 130 00:06:32,005 --> 00:06:34,221 So they said, "Where are we gonna put it?" 131 00:06:34,221 --> 00:06:38,192 And there was no labels that were fun. 132 00:06:38,192 --> 00:06:41,183 - This was in 1986, when we started. 133 00:06:41,183 --> 00:06:43,875 - So we broke all the rules right off the bat. 134 00:06:43,875 --> 00:06:47,721 - Tell me about your branding and your logo, and your name. 135 00:06:47,721 --> 00:06:49,912 (chuckling) 136 00:06:49,912 --> 00:06:54,187 - We got ideas from people that were in the market. 137 00:06:54,187 --> 00:06:57,519 Michael had asked a buyer, major chain store 138 00:06:57,519 --> 00:07:01,841 in California here, where he had room in his market, 139 00:07:01,841 --> 00:07:03,277 what he wanted. 140 00:07:03,277 --> 00:07:07,884 And he told us that he had room in the 1.5 liter area, 141 00:07:07,884 --> 00:07:11,269 where he only had five or seven different brands, 142 00:07:11,269 --> 00:07:14,381 and not the 750, which is the regular table wine 143 00:07:14,381 --> 00:07:16,660 that you'd see a bottle of wine, 144 00:07:16,660 --> 00:07:19,919 because there was so many different wineries 145 00:07:19,919 --> 00:07:22,232 that were producing in that size. 146 00:07:22,232 --> 00:07:24,283 So that's how we got the size, when we started, 147 00:07:24,283 --> 00:07:27,476 it was the 1.5 liter, and also, 148 00:07:27,476 --> 00:07:31,643 he told us that it should be in plain English and no French, 149 00:07:32,787 --> 00:07:36,382 and he told us that the name should be the same as the logo. 150 00:07:36,382 --> 00:07:39,426 So that was basically what we started with, 151 00:07:39,426 --> 00:07:42,460 and because grapes were originally crushed barefoot 152 00:07:42,460 --> 00:07:47,150 to make wine, we thought the name Barefoot would be perfect, 153 00:07:47,150 --> 00:07:49,071 with the barefoot image, and the name 154 00:07:49,071 --> 00:07:50,793 Barefoot being the same. 155 00:07:50,793 --> 00:07:54,882 So we satisfied a lot of his needs, which turned out 156 00:07:54,882 --> 00:07:58,810 to be a lot of the consumers' needs as well, 157 00:07:58,810 --> 00:08:02,975 because it can be very confusing, looking in the wine area, 158 00:08:02,975 --> 00:08:06,688 on all the shelves, all of those different wine labels, 159 00:08:06,688 --> 00:08:09,263 they're hard to pronounce! 160 00:08:09,263 --> 00:08:11,640 Barefoot is not only easy to pronounce, 161 00:08:11,640 --> 00:08:13,470 it's easy to remember. 162 00:08:13,470 --> 00:08:15,569 - You can see the label too! 163 00:08:15,569 --> 00:08:19,073 - It jumps right off the shelf, it's easy to see, 164 00:08:19,073 --> 00:08:22,490 it's easy to remember, and at a low price, 165 00:08:22,490 --> 00:08:26,865 and a gold medal-winning wine, it's easy to make a decision 166 00:08:26,865 --> 00:08:30,350 that that would be a good wine to give a try. 167 00:08:30,350 --> 00:08:33,744 - And we got a lot of ideas from, we say, 168 00:08:33,744 --> 00:08:35,789 we made friends in low places. 169 00:08:35,789 --> 00:08:37,939 And we don't mean that disparagingly. 170 00:08:37,939 --> 00:08:40,603 We're talking about people who do the real work. 171 00:08:40,603 --> 00:08:41,984 - People with dirt under their fingernails. 172 00:08:41,984 --> 00:08:46,151 - The blue collar people, like, the clerk in the store. 173 00:08:47,375 --> 00:08:50,323 What wine labels sell, which ones don't? 174 00:08:50,323 --> 00:08:53,190 The mechanic that ran the bottling line. 175 00:08:53,190 --> 00:08:57,589 He told us that the labels that he saw that really sold 176 00:08:57,589 --> 00:09:01,024 were simple, they didn't have a lot of curly Q's on 'em, 177 00:09:01,024 --> 00:09:03,824 they didn't have a lot of French on 'em, they had one image, 178 00:09:03,824 --> 00:09:06,162 and a lot of white space around the image, 179 00:09:06,162 --> 00:09:08,267 so that they would pop, so that you could see them 180 00:09:08,267 --> 00:09:09,508 from the shelf. 181 00:09:09,508 --> 00:09:13,155 And we designed the label to be viewed from four feet away, 182 00:09:13,155 --> 00:09:15,138 which is how far she is from the shelf 183 00:09:15,138 --> 00:09:17,043 when he's pushing her cart. 184 00:09:17,043 --> 00:09:21,307 So all of these things had to be taken into consideration, 185 00:09:21,307 --> 00:09:24,793 but because we were outsiders, we looked at it, 186 00:09:24,793 --> 00:09:26,909 and we said, you know, we really don't understand 187 00:09:26,909 --> 00:09:29,679 this industry, we better ask some questions. 188 00:09:29,679 --> 00:09:31,904 But we didn't ask the experts in the industry, 189 00:09:31,904 --> 00:09:33,359 we asked the workers! 190 00:09:33,359 --> 00:09:37,341 - Bonnie and Michael, you guys had some really interesting 191 00:09:37,341 --> 00:09:41,172 concepts when it came to marketing in the beginning, 192 00:09:41,172 --> 00:09:43,992 within the community, can you share with our viewers 193 00:09:43,992 --> 00:09:45,926 a little bit about what you did? 194 00:09:45,926 --> 00:09:49,705 - Yes, I'd love to, because it worked so well 195 00:09:49,705 --> 00:09:52,390 that I really want to share that with other companies, 196 00:09:52,390 --> 00:09:54,119 other businesses out there. 197 00:09:54,119 --> 00:09:56,882 We really couldn't afford paid advertising, 198 00:09:56,882 --> 00:10:00,006 so we had a problem being a new product 199 00:10:00,006 --> 00:10:01,662 that we had to get the word out, 200 00:10:01,662 --> 00:10:03,920 we had to bring customers in to buy the product, 201 00:10:03,920 --> 00:10:07,119 and without advertising, we were pretty much stumped 202 00:10:07,119 --> 00:10:10,030 about what we were going to do. 203 00:10:10,030 --> 00:10:14,197 But we soon realized that by contributing our product 204 00:10:15,225 --> 00:10:18,311 and other things to nonprofits, 205 00:10:18,311 --> 00:10:22,514 that we could get their message out in the marketplace, 206 00:10:22,514 --> 00:10:25,114 where they were unable to get to, 207 00:10:25,114 --> 00:10:28,454 and also that their members would support us 208 00:10:28,454 --> 00:10:30,992 in return for our supporting them. 209 00:10:30,992 --> 00:10:33,827 So we went into the communities around the markets 210 00:10:33,827 --> 00:10:35,626 where our product was for sale, 211 00:10:35,626 --> 00:10:38,193 to find out what the people were interested in, 212 00:10:38,193 --> 00:10:40,210 what were they concerned about? 213 00:10:40,210 --> 00:10:42,637 And then we supported those causes. 214 00:10:42,637 --> 00:10:46,634 And it worked very well, and we ended up doing that 215 00:10:46,634 --> 00:10:48,296 throughout the nation. 216 00:10:48,296 --> 00:10:49,383 - That's amazing. 217 00:10:49,383 --> 00:10:51,129 - And there's a real subtle difference 218 00:10:51,129 --> 00:10:53,380 between what we did and what they call 219 00:10:53,380 --> 00:10:55,428 cause marketing today. 220 00:10:55,428 --> 00:10:59,817 Now, cause marketing, you support the American Cancer 221 00:10:59,817 --> 00:11:03,274 Society, you put the pink ribbon on your product, 222 00:11:03,274 --> 00:11:05,751 people see that, and you hope that they buy 223 00:11:05,751 --> 00:11:08,377 your product because they see you have a big heart, 224 00:11:08,377 --> 00:11:10,200 and well they should. 225 00:11:10,200 --> 00:11:11,634 But we didn't do that. 226 00:11:11,634 --> 00:11:14,539 What we did was something very different. 227 00:11:14,539 --> 00:11:17,913 We actually marketed our product 228 00:11:17,913 --> 00:11:21,544 to the members of the nonprofit organization. 229 00:11:21,544 --> 00:11:24,485 So we didn't address the general public and say, 230 00:11:24,485 --> 00:11:27,853 "Oh, what a good boy are we, look what we're doing 231 00:11:27,853 --> 00:11:30,979 "for this nonprofit," we didn't say any of that, 232 00:11:30,979 --> 00:11:33,697 we just helped the nonprofit get their word out 233 00:11:33,697 --> 00:11:36,711 into the marketplace, and we helped them with product, 234 00:11:36,711 --> 00:11:38,730 and we helped them with setup and teardown, 235 00:11:38,730 --> 00:11:40,607 and other kinds of things that helped them 236 00:11:40,607 --> 00:11:42,641 with their events, and their fundraisers, 237 00:11:42,641 --> 00:11:45,449 we basically helped them raise funds, 238 00:11:45,449 --> 00:11:47,565 in the hopes that their members 239 00:11:47,565 --> 00:11:50,289 would have a social reason to buy our product, 240 00:11:50,289 --> 00:11:53,884 which we found to be stronger than a mercantile reason. 241 00:11:53,884 --> 00:11:56,251 So then they became advocates. 242 00:11:56,251 --> 00:11:59,221 So like for instance, the Surfrider Foundation. 243 00:11:59,221 --> 00:12:01,270 We support the Surfrider Foundations 244 00:12:01,270 --> 00:12:03,684 with the clean beaches and their clean oceans projects, 245 00:12:03,684 --> 00:12:07,179 and we help them raise funds, and as a result, 246 00:12:07,179 --> 00:12:10,798 they became advocates for our brand. 247 00:12:10,798 --> 00:12:12,819 They didn't just choose Barefoot, 248 00:12:12,819 --> 00:12:14,529 they could've chosen any wine. 249 00:12:14,529 --> 00:12:17,312 They didn't just choose Barefoot because we supported them, 250 00:12:17,312 --> 00:12:19,247 they told their friends and their colleagues, 251 00:12:19,247 --> 00:12:21,607 and their coworkers, and their families 252 00:12:21,607 --> 00:12:23,441 to buy our product as well. 253 00:12:23,441 --> 00:12:26,439 - Then bridging the local community, that's brilliant. 254 00:12:26,439 --> 00:12:29,106 - Absolutely. - It was networking 255 00:12:30,171 --> 00:12:32,265 before it was so popular. 256 00:12:32,265 --> 00:12:34,451 Today, everyone's talking about networking, 257 00:12:34,451 --> 00:12:37,006 but instead of building our own followers, 258 00:12:37,006 --> 00:12:40,698 we joined organizations, we actually joined the nonprofits 259 00:12:40,698 --> 00:12:43,764 that we were a part of, and we took on the members 260 00:12:43,764 --> 00:12:46,697 that they had, as our networking members. 261 00:12:46,697 --> 00:12:48,407 - How did you persevere, and what were 262 00:12:48,407 --> 00:12:50,097 some of your challenges? 263 00:12:50,097 --> 00:12:53,538 - We always get asked the question, "What kept you going?" 264 00:12:53,538 --> 00:12:55,940 And especially from students who are studying 265 00:12:55,940 --> 00:12:59,118 entrepreneurship, and we think it's a really good question, 266 00:12:59,118 --> 00:13:03,917 given all of the unknowns, and all of the challenges, 267 00:13:03,917 --> 00:13:07,494 and the tremendous amount of tenacity and perseverance 268 00:13:07,494 --> 00:13:10,596 that it takes, so what keeps you going 269 00:13:10,596 --> 00:13:15,536 is really a deep belief in your product and your market. 270 00:13:15,536 --> 00:13:18,151 You believe that there is a market for your product, 271 00:13:18,151 --> 00:13:19,998 and you believe that your product 272 00:13:19,998 --> 00:13:23,602 is going to be accepted by that market. 273 00:13:23,602 --> 00:13:28,176 Tenacity is great to say, but what is the fuel of tenacity? 274 00:13:28,176 --> 00:13:30,948 It's encouragement, and it's encouragement 275 00:13:30,948 --> 00:13:33,001 from early adapters. 276 00:13:33,001 --> 00:13:35,932 So you have to go back to the people who told you 277 00:13:35,932 --> 00:13:39,135 you were doing it right on those tough days and say, 278 00:13:39,135 --> 00:13:43,302 "Tell me again about why I should continue to do this, 279 00:13:44,229 --> 00:13:46,869 "'cause I'm up against a big brick wall right now." 280 00:13:46,869 --> 00:13:49,786 - What do you think some of the challenges, 281 00:13:49,786 --> 00:13:51,794 how do you think they've changed since you started? 282 00:13:51,794 --> 00:13:54,574 A lot of people are now thinking brick-and-mortar 283 00:13:54,574 --> 00:13:57,245 is no more, what's your thoughts on that? 284 00:13:57,245 --> 00:13:59,851 - Well, there's a lot more sales that still take place 285 00:13:59,851 --> 00:14:03,051 in bricks and mortar than online. 286 00:14:03,051 --> 00:14:06,348 And there's certain products that you really don't want 287 00:14:06,348 --> 00:14:10,311 to buy online, if you've got a low-cost product, 288 00:14:10,311 --> 00:14:12,789 shipping can be as much as the cost of the product, 289 00:14:12,789 --> 00:14:15,417 so you're not going to be doing that. 290 00:14:15,417 --> 00:14:18,513 And if you have a very heavy product, 291 00:14:18,513 --> 00:14:20,554 you don't wanna pay for the shipping either, 292 00:14:20,554 --> 00:14:23,101 because that's just gonna be too costly, 293 00:14:23,101 --> 00:14:25,341 so there's certain restrictions to online, 294 00:14:25,341 --> 00:14:29,508 plus, the shopper wants to be able to touch that product, 295 00:14:30,965 --> 00:14:33,903 wants to be able to pick it up and see how it works, 296 00:14:33,903 --> 00:14:36,100 maybe even get a demonstration, 297 00:14:36,100 --> 00:14:39,600 and that's very important to the end user, 298 00:14:40,663 --> 00:14:43,683 is to have the opportunity to pick it up and feel it, 299 00:14:43,683 --> 00:14:46,608 or try it on, or have a taste of it or something 300 00:14:46,608 --> 00:14:49,218 before they buy, so I think there's always 301 00:14:49,218 --> 00:14:52,259 going to be a lot of bricks-and-mortar stores, 302 00:14:52,259 --> 00:14:56,471 for those certain kinds of purchases that are made. 303 00:14:56,471 --> 00:15:00,007 - And people who have physical products, 304 00:15:00,007 --> 00:15:02,684 all secretly wanna be in bricks-and-mortar stores, 305 00:15:02,684 --> 00:15:04,521 and for a very good reason. 306 00:15:04,521 --> 00:15:06,394 They want notion buying. 307 00:15:06,394 --> 00:15:09,436 So, notion buying is you go to the store, 308 00:15:09,436 --> 00:15:12,469 and you went to the store to buy a screwdriver, 309 00:15:12,469 --> 00:15:16,671 but you saw a really cool hammer, and you bought the hammer, 310 00:15:16,671 --> 00:15:18,892 but you didn't go to the store to buy the hammer. 311 00:15:18,892 --> 00:15:21,415 Now, that never happens online. 312 00:15:21,415 --> 00:15:23,509 The other problem with online is, 313 00:15:23,509 --> 00:15:27,334 it becomes inadvertently a race to the bottom price-wise. 314 00:15:27,334 --> 00:15:30,132 When you're selling online, you're selling by price, 315 00:15:30,132 --> 00:15:32,270 you're not really selling quality. 316 00:15:32,270 --> 00:15:34,133 When you're selling in person, 317 00:15:34,133 --> 00:15:36,699 people have a chance to really look at it, and see, 318 00:15:36,699 --> 00:15:40,556 "What is this made of, how does it feel? 319 00:15:40,556 --> 00:15:43,574 "Can I compare it to another product that's right there?" 320 00:15:43,574 --> 00:15:47,007 And then of course, the last thing is instant gratification. 321 00:15:47,007 --> 00:15:49,627 People want to have instant gratification, 322 00:15:49,627 --> 00:15:50,734 they wanna buy that product, 323 00:15:50,734 --> 00:15:52,594 and they wanna have it that night. 324 00:15:52,594 --> 00:15:54,664 And it's not just food and beverage, 325 00:15:54,664 --> 00:15:58,225 it's things like tools, it's things like clothing. 326 00:15:58,225 --> 00:16:01,906 And people also who are in those product-production 327 00:16:01,906 --> 00:16:06,540 businesses who are building brands in the physical space, 328 00:16:06,540 --> 00:16:10,505 can build their brand faster in bricks-and-mortar. 329 00:16:10,505 --> 00:16:15,212 And the reason is is because they get major distribution. 330 00:16:15,212 --> 00:16:19,061 So if you get in with a chain store, or a big box store, 331 00:16:19,061 --> 00:16:21,566 and you get to be in all of their outlets, 332 00:16:21,566 --> 00:16:23,799 just imagine how many people your product 333 00:16:23,799 --> 00:16:26,490 is in front of, instantly. 334 00:16:26,490 --> 00:16:30,657 So, that's why we think that the death of bricks and mortar 335 00:16:32,012 --> 00:16:34,306 has been greatly exaggerated. 336 00:16:34,306 --> 00:16:35,591 - Good point. 337 00:16:35,591 --> 00:16:39,037 So, Michael, can you tell me how difficult it is 338 00:16:39,037 --> 00:16:41,111 now to get products on the shelf? 339 00:16:41,111 --> 00:16:43,726 - It's very difficult. 340 00:16:43,726 --> 00:16:46,642 They're not building any more shelf space. 341 00:16:46,642 --> 00:16:49,475 And so, we as Americans are always 342 00:16:51,070 --> 00:16:53,730 on the buying side of the shelf, 343 00:16:53,730 --> 00:16:56,485 we're never on the supplying side of the shelf, 344 00:16:56,485 --> 00:16:59,894 so we say things like, "I haven't seen anything 345 00:16:59,894 --> 00:17:01,945 "like this in the marketplace, 346 00:17:01,945 --> 00:17:04,742 "why hasn't anybody thought of this before?" 347 00:17:04,742 --> 00:17:07,162 And the fact is, they might've thought about it, 348 00:17:07,162 --> 00:17:08,698 but it's still in a warehouse somewhere, 349 00:17:08,698 --> 00:17:10,937 it never got into that store. 350 00:17:10,937 --> 00:17:15,104 And so, what we found is, to get into bricks and mortar 351 00:17:16,544 --> 00:17:20,711 requires that you first of all develop a reputation 352 00:17:22,689 --> 00:17:24,722 for being a hot mover. 353 00:17:24,722 --> 00:17:27,337 So you have to go into a small store, 354 00:17:27,337 --> 00:17:29,639 and we suggest that you go into small stores 355 00:17:29,639 --> 00:17:31,239 right around your house. 356 00:17:31,239 --> 00:17:34,282 Don't sell further away than you can drive and apologize, 357 00:17:34,282 --> 00:17:36,429 because you're gonna make a lot of mistakes, 358 00:17:36,429 --> 00:17:38,533 and you wanna get your act together 359 00:17:38,533 --> 00:17:40,909 before you take your show on the road. 360 00:17:40,909 --> 00:17:44,448 - And that's what a lot of producers don't understand. 361 00:17:44,448 --> 00:17:47,488 They get real excited if they have a test market, they say, 362 00:17:47,488 --> 00:17:49,549 "Oh, I'm in this chain or that," 363 00:17:49,549 --> 00:17:53,196 when really, all they have is a test market. 364 00:17:53,196 --> 00:17:55,726 They have an opportunity to prove to the buyer 365 00:17:55,726 --> 00:17:57,764 that their product will sell. 366 00:17:57,764 --> 00:18:00,434 But there's so many things, we've identified 367 00:18:00,434 --> 00:18:04,866 about 23 different ways that your product wouldn't sell, 368 00:18:04,866 --> 00:18:06,539 that has nothing to do with the price 369 00:18:06,539 --> 00:18:08,908 or the quality of your product. 370 00:18:08,908 --> 00:18:12,728 And you can be out of the store for reasons 371 00:18:12,728 --> 00:18:16,459 that you could blame, if you chose to, 372 00:18:16,459 --> 00:18:20,265 the retailer, or the wholesaler, the distributor, 373 00:18:20,265 --> 00:18:22,528 you could blame all of these people, 374 00:18:22,528 --> 00:18:26,905 but in reality, you have to understand everyone's job, 375 00:18:26,905 --> 00:18:31,451 and be able to work with them, and sometimes do their job, 376 00:18:31,451 --> 00:18:35,324 in order to get your product on the shelf and keep it there. 377 00:18:35,324 --> 00:18:38,491 It takes more than a better mousetrap. 378 00:18:39,465 --> 00:18:43,271 Just having a better product, or just having a great idea, 379 00:18:43,271 --> 00:18:45,687 doesn't meant that you're going to be successful, 380 00:18:45,687 --> 00:18:49,717 and we really learned that, and because it was a long, 381 00:18:49,717 --> 00:18:52,650 and painful, and expensive lesson, 382 00:18:52,650 --> 00:18:55,510 we're really excited about having an opportunity 383 00:18:55,510 --> 00:18:58,081 to share that with other producers. 384 00:18:58,081 --> 00:18:59,997 I wish that we'd had somebody 385 00:18:59,997 --> 00:19:02,456 who had been successful in our industry 386 00:19:02,456 --> 00:19:04,735 that we could've talked to when we started. 387 00:19:04,735 --> 00:19:06,881 And now, that's really important to us, 388 00:19:06,881 --> 00:19:08,963 to be able to share that with others. 389 00:19:08,963 --> 00:19:12,810 - Bonnie, Michael, what advice would you give new startups? 390 00:19:12,810 --> 00:19:16,158 - Well, first of all, a new startup is so excited 391 00:19:16,158 --> 00:19:18,757 about their idea, about their product, 392 00:19:18,757 --> 00:19:22,797 and they're just sure that it's going to sell. 393 00:19:22,797 --> 00:19:25,538 Having a great idea isn't enough. 394 00:19:25,538 --> 00:19:29,799 You really have to start small and learn all your lessons, 395 00:19:29,799 --> 00:19:31,943 as Michael had said earlier, before you take 396 00:19:31,943 --> 00:19:33,394 your show on the road. 397 00:19:33,394 --> 00:19:36,902 So start in a small territory, so you can learn 398 00:19:36,902 --> 00:19:39,048 and you can make all your mistakes, 399 00:19:39,048 --> 00:19:42,508 and then you can go out and make some larger sales, 400 00:19:42,508 --> 00:19:44,491 because that's really essential, 401 00:19:44,491 --> 00:19:47,108 to understand what it takes to get your product 402 00:19:47,108 --> 00:19:49,272 to the shelf and keep it there, 403 00:19:49,272 --> 00:19:52,855 by understanding the complete distribution channel, 404 00:19:52,855 --> 00:19:56,032 and what everyone does along the line. 405 00:19:56,032 --> 00:19:59,148 - It's really important to have some beta people 406 00:19:59,148 --> 00:20:01,201 who are telling you what you're doing wrong, 407 00:20:01,201 --> 00:20:02,958 and for you to discover. 408 00:20:02,958 --> 00:20:04,945 You might think that you know all there is to know 409 00:20:04,945 --> 00:20:06,625 about your product, and you might, 410 00:20:06,625 --> 00:20:10,333 but then once your product gets into the stores, 411 00:20:10,333 --> 00:20:13,479 you start to realize that they've got their own rules, 412 00:20:13,479 --> 00:20:15,553 and the distributors got their own rules, 413 00:20:15,553 --> 00:20:17,756 and the government has its own rules, 414 00:20:17,756 --> 00:20:20,119 and so, sometimes you'll go into a store 415 00:20:20,119 --> 00:20:22,446 and you'll see a mediocre product and you say, 416 00:20:22,446 --> 00:20:24,938 "How come this mediocre product is in every 417 00:20:24,938 --> 00:20:27,193 "store I go into," it's because they have 418 00:20:27,193 --> 00:20:29,887 excellent distribution management! 419 00:20:29,887 --> 00:20:31,812 So distribution management turns out 420 00:20:31,812 --> 00:20:35,193 to be more important than the product itself! 421 00:20:35,193 --> 00:20:38,484 And that's a really hard lesson for people to understand, 422 00:20:38,484 --> 00:20:40,782 so when you do have a wonderful product, 423 00:20:40,782 --> 00:20:43,261 and you're very excited, it's very fragile 424 00:20:43,261 --> 00:20:46,055 toward the beginning, it's like these plants. 425 00:20:46,055 --> 00:20:48,510 When you plant them, they can be killed easily, 426 00:20:48,510 --> 00:20:50,603 they can be stopped, they can have too much sun 427 00:20:50,603 --> 00:20:53,378 or not enough water, so it's really important 428 00:20:53,378 --> 00:20:58,113 to watch that very fragile little flower that you planted, 429 00:20:58,113 --> 00:21:00,194 to make sure that it gets roots, 430 00:21:00,194 --> 00:21:03,986 because what you wanna do is establish a reputation 431 00:21:03,986 --> 00:21:05,736 of being a hot mover. 432 00:21:06,704 --> 00:21:10,019 Everybody who's a retailer who deals with your product 433 00:21:10,019 --> 00:21:13,437 says, "Yes, I like this product, it's a hot mover," 434 00:21:13,437 --> 00:21:16,221 because even if only three retailers say that, 435 00:21:16,221 --> 00:21:19,042 you'll get that reputation, and that's what you need 436 00:21:19,042 --> 00:21:21,837 to take to the next one, and the next one, and the next one. 437 00:21:21,837 --> 00:21:24,805 So we say, start small, make all your mistakes 438 00:21:24,805 --> 00:21:28,972 in a small place, sorry, it's a get rich slow scheme. 439 00:21:29,907 --> 00:21:32,067 - Well, you guys have managed to make it 440 00:21:32,067 --> 00:21:33,314 and come out the other side, 441 00:21:33,314 --> 00:21:35,452 now you have two bestselling books. 442 00:21:35,452 --> 00:21:39,105 - The first one we wrote with Rick Kushman, 443 00:21:39,105 --> 00:21:41,214 it's called The Barefoot Spirit: 444 00:21:41,214 --> 00:21:43,801 How Hardship, Hustle, and Heart 445 00:21:43,801 --> 00:21:46,482 Built America's Number One Wine Brand. 446 00:21:46,482 --> 00:21:50,649 And it's really a cute, fun story, Rick is a great writer. 447 00:21:51,685 --> 00:21:55,754 It's all the things that we went through starting our brand, 448 00:21:55,754 --> 00:21:58,525 and it's really a lot of fun to read, 449 00:21:58,525 --> 00:22:00,498 so if you want something that's enjoyable, 450 00:22:00,498 --> 00:22:02,660 and you're gonna learn some lessons. 451 00:22:02,660 --> 00:22:06,094 So we have this book, and then we also wrote, 452 00:22:06,094 --> 00:22:10,092 on our own, The Entrepreneurial Culture: 453 00:22:10,092 --> 00:22:13,661 23 Ways to Engage and Empower Your People. 454 00:22:13,661 --> 00:22:16,042 And we wrote this book because our staff 455 00:22:16,042 --> 00:22:17,886 said to us over and over again, 456 00:22:17,886 --> 00:22:20,732 "You've got such a wonderful company culture, 457 00:22:20,732 --> 00:22:23,315 "the team that you built," and how we really loved 458 00:22:23,315 --> 00:22:25,910 each other like a family, that you've gotta share 459 00:22:25,910 --> 00:22:28,958 those things, and there's so many companies 460 00:22:28,958 --> 00:22:33,238 that have asked how to engage and empower their people. 461 00:22:33,238 --> 00:22:34,930 They say that they want their staff 462 00:22:34,930 --> 00:22:36,646 to be more entrepreneurial, 463 00:22:36,646 --> 00:22:40,137 but they've got no idea how to go about doing that, 464 00:22:40,137 --> 00:22:43,191 and what kind of changes they have to make. 465 00:22:43,191 --> 00:22:46,748 It's best for us if we could start working 466 00:22:46,748 --> 00:22:49,786 with people before they get started in their business, 467 00:22:49,786 --> 00:22:52,532 so they really start off on the right foot. 468 00:22:52,532 --> 00:22:56,398 So, by reading these books, anyone that wants to start 469 00:22:56,398 --> 00:22:59,812 their own business is going to be really way ahead 470 00:22:59,812 --> 00:23:02,626 in the game, by understanding so many of the things 471 00:23:02,626 --> 00:23:06,070 that we learned, that made us very successful. 472 00:23:06,070 --> 00:23:09,027 - We're Monday morning quarterbacks with 20/20 vision, 473 00:23:09,027 --> 00:23:11,345 so do like we say, not like we do, 474 00:23:11,345 --> 00:23:14,456 because we learned a lot of this doing it the wrong way, 475 00:23:14,456 --> 00:23:17,136 and so we're adamant, these are lessons 476 00:23:17,136 --> 00:23:20,456 that cost us $250,000, $300,000. 477 00:23:20,456 --> 00:23:22,435 We look back and we went, "Wow!" 478 00:23:22,435 --> 00:23:25,667 - That's why we're so excited about having an opportunity 479 00:23:25,667 --> 00:23:27,805 to talk to young entrepreneurs, 480 00:23:27,805 --> 00:23:30,716 and to talk to people in business 481 00:23:30,716 --> 00:23:32,411 that want to improve their business, 482 00:23:32,411 --> 00:23:34,659 that want to improve their company culture, 483 00:23:34,659 --> 00:23:36,658 or, people that want to get their product 484 00:23:36,658 --> 00:23:38,447 on the shelf and keep it there. 485 00:23:38,447 --> 00:23:40,954 - These are the kind of lessons that we learned, 486 00:23:40,954 --> 00:23:44,059 and we wanna pass 'em along to the next generation, 487 00:23:44,059 --> 00:23:46,265 and we think we have an awful lot to offer. 488 00:23:46,265 --> 00:23:48,532 They certainly see our brand everywhere. 489 00:23:48,532 --> 00:23:49,565 - They do! 490 00:23:49,565 --> 00:23:51,682 This has been such a pleasure, thank you Michael, 491 00:23:51,682 --> 00:23:55,514 thank you Bonnie, I've enjoyed talking to you guys so much, 492 00:23:55,514 --> 00:23:57,513 thank you for being here. - Thank you, thank you. 493 00:23:57,513 --> 00:23:59,777 - It's been a lot of fun, thank you. 494 00:23:59,777 --> 00:24:03,360 (serene atmospheric music) 495 00:24:08,441 --> 00:24:10,696 - This has been Lea Woodford of SmartFem TV, 496 00:24:10,696 --> 00:24:14,344 thanks for watching, and to get Michael and Bonnie's books, 497 00:24:14,344 --> 00:24:16,829 go to thebarefootspirit.com. 498 00:24:16,829 --> 00:24:19,412 (upbeat music)