Top tips to run a successful start up: Part 1

As most of us have witnessed over the past few years, anyone and everyone can launch a new spirit brand. But just what does it take to be successful?

A panel of experts at Tales of the Cocktail discuss what it takes to run a successful start-up spirits business

You could have the best idea for a new product or brand that fills a niche but without the right business acumen, investors or funding, the project could fall flat on its face before it’s even begun.

Equally, you may have the right cash behind you but a lack of focus on your core consumer or a bad quality product will cause the project to fail.

Help is at hand. Speaking at the What’s the right deal to take? seminar at Tales of the Cocktail in New Orleans last week, a panel of experienced spirits company owners discussed the lessons they learned in venturing into their own start-up companies.

Led by Dan Gasper, COO of Distil Ventures, a Diageo-funded company that specialises in aiding new spirits firms, the panel consisted of Chip Tate, founder of Balcones and now Tate & Co; Simon Ford, founder of the 86 & Co; and Brian Ellison, founder of Death’s Door Spirits.

While the biggest message from the seminar was to “never give up,” one word of advice from Ford for anyone considering entering the business was simply: “Don’t do it.”

For those undeterred from the path of releasing a new spirits brand, the panel presented 22 tips to help guide you into success.

Click through the following pages to view the first 12. If you have any other pieces of essential advice, let us know by leaving a comment below.

Don’t spend your investment pre-launch

Before they’d even sold a bottle 86 Co founder Simon Ford had treated himself to a slap-up dinner at three-Michelin starred The French Laundry in California. “It was like the last supper,” he said, admitting the firm was on the edge of bankruptcy already.

If you’re not solving a problem, how do you make yourself relevant?

“Stop making your product relevant to a consumer and make it relevant to an investor instead,” advises Ellison. “Have something compelling that will get investors to write a cheque.”

Growth can be a problem

“How much can you actually make in your facility should all go well?” asks Tate. He recommends at least drawing a map for every foreseeable problem that may come along, including rapid growth. Being a quick success is great, but ensure you can continue to supply that demand sustainably.

The Golden Years

The world loves great new products and the drinks business is obsessed by them. While sales are growing, as a producer you’re focused on ensuring your supplies meet that demand, but in the meantime other brands are stealing your limelight. Gasper recommends: “Use your golden years wisely. Create a loyal following but have an ability to shine beyond your first few years.”

The dead don’t represent themselves

“We all have wild plans but 99% of all brands brought into the world are dead – only 1% make it,” says Ellison. Brands are advised to have more than one plan and to not only know what success looks like, but also failure. “People ask me ‘how do you keep going?’ and I say, ‘fear’,” Ellison adds.

Love your distributors

Understand that when going into a partnership with a new distributor that you will be doing a lot of the work yourself. “Don’t go into it making wild demands of your new distributor,” says Ford. “Treat them like they are a new customer you need to make love your brand.”

Escalator of death

Gasper uses the analogy of running up an downward escalator to describe the initial period of launching a new spirits brand. “You need to start running straight away,” he says. “To maintain momentum you need to run up to avoid standing still, which is why you need to drag in more resources straight away.”

Exceptional first; local second

Don’t get hung up on the fact that local means better. Consumers may buy your product once but to obtain repeat business it needs to shine. “Make good products; don’t make shitty products,” Ellison says.

You’re only new once

Focus on how to get your brand to sell itself from all over the world in the early days, but you should be 100% focused on your local market right away. “Get it right at home first,” suggests Gasper.

Focus on what matters

“There’s a reason fire fighters drill,” says Tate. ”When stuff happens in a way you can’t predict you have to have a plan.” The best way to steer around obstacles is to have a clear focus on the most important thing, he explains. “Understand why people buy what you sell. You’ll get pulled into many directions by different people but maintain that focus on why people buy what you sell.”

Triage

Tate also recommends taking a triage approach to problems “so that items that are priority number one don’t end up in number four”.

Don’t grow too quickly

Focus on your local market before expanding your business elsewhere. For Ford, 75% of the 86 Co is in three US states, despite the portfolio being available in many countries around the world. “Look at how Tito’s Handmade Vodka managed its growth,” he recommends. “It went massive in Texas before growing anywhere else and now he can fund his expansion. It’s a fantastic business model.”