49: How Naked Wines Crowdfunded Its Way to £100m Sales Year
If there is one thing recording this podcast is teaching me it’s that the familiar tech sites almost brainwash us into judging the success of any start-up by the funding amount raised or its valuation. But with every episode I’ve recorded the biggest lesson is it really has nothing to do with funding amounts or even technology. The biggest success factor I’m increasingly seeing is that yearning to break down geographical barriers and use technology to actually bring people back together.
My guests today further hammered home that point. They are from an exciting company called Naked Wines and I invited the marketing director James Bagley and the President of Naked Wines Anne Saunders to share their story.
Can you tell me a little about yourselves and the concept behind Naked Wines?
Anne Saunders: I have spent my career in the U.S focused on marketing and general management with big brands like Starbucks and AT&T. I joined Starbucks when it was a young company and when I left we had 15,000 stores worldwide. I’ve also spent a lot of time in e-commerce. The reason I was attracted to Naked and joined it is because I see a new use for the internet in really disrupting this enormous industry but bringing incredible value to winemakers and wine drinkers. We try to connect wine makers and wine drinkers directly.
James Bagley: I was in completely different industries. I was a Naked Wines customer in the U.K and one of the things that made me fall in love with it was the convenience factor and being able to get wine shipped directly to my home. When I was a customer I heard a story about an English winemaker named Katie Jones who had been devastated when vandals let out all of her white wine vats from one harvest. Naked Wines and their customers joined together to raise a quarter of a million pounds to help her get back on her feet. I knew I was part of something special so a couple months later when I was asked to join the Naked Wines team in the U.K it was a no brainer for me.
I recently read how angel investors have crowdfunded $18 million to give more than 135 winemakers the chance to live their dreams. This has resulted in 100 million bottles of wine a year to the consumer. For those unfamiliar with crowdfunding can you explain your journey and how you made that happen?
James: Those are certainly some big numbers there but it started from pretty humble beginnings. Rowan Gormley, founder of Naked Wines, in the middle of the financial crisis found himself out of a job. He took some of the best people he worked with and they got together in a room. They wanted to go about starting a wine company with a difference. They thought about the opportunities that were out there about wine and wanted to bring some of the passion and excitement and some of the more positive developments back into wine.
Anne: The crowdfunding thing is interesting. Rowan and that team said the best way to bring forward the best wines is to pre-pay the winemaker. So rather than have them foot the costs, we could really get them to make their dream wines if we could pay them up front so they didn’t have to worry about that. But they didn’t have any money so that’s why they Crowd Funded.
They went to customers and said “How about if you give us an amount, a subscription of $40 a month and we’re going to use that to pre-pay wine and you use that to buy wine anytime you want.” The great value that our customers get, much less expensive than you would get in retail, is because of that direct funding.
Do you think the wine industry is broken?
Anne: I think a lot of people are happy with how they buy wine until they see the other possibilities that we present. A really excellent wine at a better value, knowing where your wine comes from, hearing the stories behind the people that make it and forming connections with other customers on the site. It’s a community which you wouldn’t have buying from a supermarket.
What’s next for Naked Wines?
Anne: James and I, being new to the team, have lots of plans ahead of us. We have right now about 90,000 angels (Naked Wines customers) just in the U.S and worldwide we have about 136 winemakers. Our goal is growing those numbers and expanding so that Naked becomes the preferred way that wine drinkers get their wine. As that happens what we’re able to do is attract more and more wine makers. We give them the freedom with the pre-payments to make any kind of wine they want.
What’s the best way to get in contact with you or find out more?
James: Hunt me down through nakedwines.com. You can find us on Facebook, Twitter, Instagram as a company. I’m on there as James Henry Bagley and on Twitter.
Check Out Neil’s Column at INC. called Tomorrow’s Tech
Please also see check out the related article from my column: How Crowdfunding Is Transforming The Wine Industry