5 Startup Lessons From Barefoot Wine Co-Founder, Michael Houlihan
I’m not a connoisseur of wine. I’m still confused about which type of grape corresponds to which type of wine, and still have not perfected my pronunciation of “sauvignon.”
Over the years, I haven’t improved much when it comes to wine selection, but I have spent a decent amount of time walking the aisles trying to figure out which one to bring home. When I need to grab a bottle of wine at the store, I still ask for help.
However, even with my high level of wine ignorance, when I heard a reference to Barefoot Wines recently, I immediately knew the wine. It made me think of the wine bottles I have seen over the years, with the very distinguishable logo: a footprint. Bottles with a footprint appear in many different locations, and I expect it to be in the lineup whenever I’m browsing the aisles shopping by labels.
As luck would have it, my friend Ric Franzi, of Critical Mass For Business Radio Show, recently introduced me to Michael Houlihan and Bonnie Harvey, the founders of Barefoot Wine, arguably the most recognizable wine brand in the entire world.
Starting with a Skype call to get acquainted, Michael and Bonnie welcomed me as I virtually visited them in their beautiful home. In our initial conversation, their passion to help entrepreneurs find success came across loud and clear.
Bonnie and Michael spent over 20 years building the Barefoot Wine brand, literally starting from their laundry room and ending up as an international success eventually acquired by Gallo Winery.
Nowadays, they focus on entrepreneurial education helping startups. In the past two years, they have visited and lectured at over 40 universities worldwide, and also have co-authored a New York Times bestseller.
I was fortunate enough to spend the day with Michael in Orange County. I have to say, it’s always refreshing to hear people speak about entrepreneurship in a raw and real way. After hearing a plethora of stories that were both entertaining and eye-opening, I have learned a tremendous amount during the time I’ve spent with Michael.
When we were having lunch, he paused the conversation and reached for his phone. After a brief moment, my own phone vibrated with an email from Michael, who was across the table. He smirked at me and told me it was a link to a recently published Forbes article about him and Bonnie.
So there I was, chatting with Michael over salad, while his five top tips for startups circulated around the World Wide Web.
I suddenly thought to myself, “Is this Forbes article stopping me from sharing my take-aways from Michael?”
Absolutely not.
(side note: as an entrepreneur, you’ll have these small doubts all the time, but you have to keep pushing)
In fact, I’m more excited than ever to share my five not-so-obvious but valuable insights from Michael.
1. “Ryan, you have to get from ‘No, thanks’ to ‘I’ll have a truckload,’” Michael said to me within the first five minutes of our discussion. It was at that moment, I knew he was a closer; there is no doubt about it. His skills are as genuine as the leather cowboy boots he paired with a full suit and tie. I heard him say the same thing about five different ways, which was his opinion that the most undervalued skill of any entrepreneur is good old-fashioned sales. In the over 40 universities he’s visited, less than a handful of them teach and focus on sales as core parts of the curriculum.
Like an immature wine, he sees many entrepreneurs needing ‘more time in the barrel’ of real sales experience. Business schools talk about sales management, inventory management, sales processes and theory, but most universities do not teach closing techniques, practical prospecting, or other historically successful sales techniques.
Key #1: Learn sales, in the real world. Learn to be a closer.
2. In a walking tour around The Vine, when we moseyed through EvoNexus, a technology incubator, I was waving my hands around, explaining the layout, when I noticed that Michael was no longer next to me. I turned around to see that he had stopped, and was staring quietly at a poster on the wall. As I got closer, Michael held out a finger to the sign and pointed with scrunched eyebrows. It read, “Find one thing you do better than anyone else.” He said, “If it were up to me, I would change that poster to say ‘Do what you do best and delegate the rest.’”
He whole-heartedly explained that he felt this poster gave the wrong impression to entrepreneurs working out of the space. The concept of realizing what you’re good at, he explained, and delegating things to others who have more strengths in other areas, is a way to fast-track growth for your startup.
Key #2: Do what you do best and delegate the rest.
3. While answering a question about how he was able to grow the Barefoot Wine brand into so many regions, Michael paused, smiled from ear to ear and said, “Strike where the enemy is not.” When Michael said this, the audience laughed. He repeated it again, with even more conviction, and it resonated so much that a dead silence settled over the crowd as everyone processed the learning moment. It speaks to the opportunistic mindset that helped make Barefoot Wine so successful. Michael and Bonnie looked for markets where there was less competition to gain earlier traction in target demographics. Instead of Los Angeles and San Francisco who hosted large markets, they focused on smaller markets like Portland, where they soon got traction and became notable for the quick turn-around time their bottles spent on the shelves. This helped to springboard their ability to move into other states and eventually into international markets.
Key #3: Strike where the competition is not.
4. What should startups do first, according to Michael? “Start with the end in mind,” he answered. Michael is quick to point out that as an entrepreneur, asking good questions is key. This means not only asking customers questions, but more importantly it means asking oneself questions. He learned this lesson the hard way: if he could’ve done everything over again, he would’ve asked himself better questions when he started. Questions like, “Who would want to acquire the brand that I want to build?”
In the Forbes article, Michael suggests finding a local business broker. After a closer reading, however, it becomes clear that the real magic lies in the ability to look for information through pointed questions aimed at these business brokers. The right questions will guide your compass course and will help you understand not only the direction that you need to be going, but more importantly, your destination.
Key #4: Aim with the right questions.
5. Michael talks a lot about failure, but in a way that focuses on failing forward. He rejects blind optimism, and embraces bold decisions in an attempt to create innovation before innovation is forced upon him. He shared that Barefoot Wines was technically bankrupt for the first 10 years, but it didn’t stop him and Bonnie from pushing into new markets. He described being broke and backed up against a wall with little to no options as a great motivator; it was the catalyst that helped him and Bonnie to realize and develop their innovations. The willingness to take potential failure as due course allowed them to avoid easy routes with less risk, which leads to creating even more innovation. As they sought to explore new markets, they learned the value of a good dose of failure as a positive part of the exploration process.
Key #5: You’re guaranteed to not fail in the markets you’re not in.
Admittedly, after talking with Michael for a few hours, I still know diddley squat about wine. But I learned a great deal about business in the short time I spent with Michael, and I hope you try to apply the above keys to help your startup grow through strategic failures and the inevitable learning processes.
Now I’m off to the market to grab a bottle of Barefoot, some cheese and crackers, and read more stories in Michael and Bonnie’s book The Barefoot Spirit.
#barefootspirit