March 17, 2007

get the right culture going, and the tech looks after itself


So I've been working for the Stormhoek winery just shy of two years. Here are my tasting notes:

1. Two years ago I asked the rhetorical question, "Why shouldn't a small wine company see people like Google, Microsoft or Apple as their competition? Why should the conversation be only limited to other small wineries? It makes no sense." At the time, it seemed a really 'out there' thing to be asking. Not any more.

2. Stormhoek sold forty thousand cases in 2005.

3. This month we'll ship forty thousand cases. At least.

4. Do the math.

5. It was the Stormhoek blog that put us on the map. But it took 2 years of hard graft for it to turn into sales on a massive scale.

6. Two years ago, I estimated that a well-executed Web 2.0 marketing plan would take about two years to execute. In retrospect, that was a pretty good call.

7. Yes, I understand that not everybody has two years to play with. Some people are only as good as their last financial quarter. But that is why I work for a small, private company. If Stormhoek was owned by Wall Street, I'd be dead meat.

8. Comparing a good 2003 Bordeaux with a good 2003 Burgundy is not much different than knowing who won the 1992 Superbowl, versus who won the 1985 Superbowl. The intellectual barriers to entry are actually quite low. The people who pretend otherwise are weak and pathetic.

9. My mother, in her day, was a very successful businesswoman in the IT sector. Her best line ever was "Have you hugged your customer today?" I wish there were hundreds of clones of me, all out there on the road, giving customers metaphorical daily hugs.

10. One thing that the Tesco road trip nailed for me: Most wine is bought by ordinary folk. Most of them are women. Most choose the wine because they like the label. Most couldn't give a hoot about 'terroir' or country of origin. Most won't spend more than $10. And that, my friends, is the market I am in. Sure, the male-dominated, over-fifty-dollar "snob" market might be a good wee business to be in for some folk, but be warned: it's a surprisingly tiny niche.

11. One thing you learn fast in this business: Supply is not the issue. Whether you're talking two dollars or two hundred dollars a bottle, the world is FLOODED with great choices, from every wine-producing country in the world. Unless you have an outstanding product at the price point you're selling at, you're in serious trouble.

12. Because the average customer has so many great choices [too many, some would argue] the trick to this game is to rise above the clutter. The way to do that is to build meaningful brands that connect to people in real-world ways. Anything else is business suicide. Sadly, too many winemakers only learn this the hard way, AFTER they've sunk $20 million and ten years of their lives into the enterprise.

13. Stormhoek has 15 people working for it in its global HQ in London. We're tiny. A lot of the wine businesses doing the same number of cases as ours will have fifty to a hundred people on the payroll. So if I ever look a bit frazzled and burnt-out to you, now you know why.

14. We can make this as lucrative and as intellectually stimulating as we want to. The ball is in our court.

15. It took two years, but Stormhoek is finally starting to feel like working for a Silicon Valley startup. Everyone is really pumped up. Contrast this with the average staid, boring schtick of your average "gentlemanly" wine business.

16. What's driving innovation and sales on our end is not a technological issue, it's a cultural issue. Get the right culture going, and the tech looks after itself.

17. When I started working in the advertising business as a young buck in London, back in the late 1980s, Bartle Bogle Hegarty were considered the best game in town, even if they were not the biggest agency. Every young advertising student aspired to have a gig there one day, everyone daydreamed of one day having John Hegarty return their calls. The were considered the Praetorian Guard. Within two years from now, I want every smart, driven young person in the wine trade to be thinking the same way about us. That to me would be a far more worthy definition of "success", than how many cases we sell.

Posted by hugh macleod at March 17, 2007 11:56 PM | TrackBack

point 16 rocks... no culture - no soul.. the right culture, the right soul, belief, lots of passion and hey off u go... keep hugging... :0) and by the way... like the new look - no beard :). Keep on believing and keep on reinventing Sir!

Posted by: cat at March 18, 2007 12:33 AM

unfortunately, death lasts longer than life...

Posted by: cat at March 18, 2007 12:36 AM

Fortunately, death does not remember life.

Very good article.

Posted by: Norman G. Dillingham at March 18, 2007 2:03 AM

Unless there's bad canned salmon and kitschy elevators to hell, energy and love are all eternal.

Posted by: Mistress of Death at March 18, 2007 2:12 AM

it is what is accomplished during lifetimes and the knowlege that is passed on the eternal generations that ultimately counts.

The invention of the Wheel is still fueling mankind, centuries later.

Posted by: security at March 18, 2007 6:07 AM

Congrats Hugh,

glad to hear the work is paying off, and in spades by the sounds of it.

when i arrived in the UK recently, the first thing i new i had to find was a bottle of Stormhoek - it took me 3 bottle shops to find it, but i now have 3 bottles sitting next to me.

i would never have noticed it, if it wasn't for your blog.

i'll let you know how they drink :)


Posted by: adam at March 18, 2007 8:53 PM


I have been reading your blog on a daily basis for about three months now. How do you take all of the culture and connection to draw a customer in a B2B setting. I am challenged with looking for proxies of how to make it work.

I work at one of the largest companies no one has ever heard of (Large ag company with 75 billion in revenue) and the culture is very conservative. However, they hired people like me to make a change. Any suggestions?

Posted by: Michelle at March 19, 2007 1:06 PM

Great post, thanks for sharing. The two year patience on the plan is resonating with me. The hardest part is constantly telling anxious people to be patient. Or is the hardest part working franticly and being patient at the same time? It's all hard but fun, I love my job. Actually Tangler has a great wine discussion going. I should pop you in.



Posted by: Mick Liubinskas at March 19, 2007 11:22 PM

One of the best marketing tracts I have read in a v.long time. I am 4 years into a "Lazarus" venture, we bought 25% of a company from its receivers and recreated it, nearly lost our shirts in the process but continue to compete off the radar with competitors more than 20 times our size. We survive, we succeed. Cannot claim "web2.0" has helped...yet but we are working on it.

Posted by: Clive Birnie at March 21, 2007 9:13 AM

Hey Clive - why didn't you also tell us that your finance chief is a geek who loves open source? He's one smart dude.

Posted by: Dennis Howlett at March 25, 2007 7:09 AM