Trace3 IT Leadership

Insights on Innovation

The Value I Found in Wine

Recently I was listening to a great speaker and he was discussing the idea that it is not possible to serve two masters.  He talked about how you would eventually despise one and love the other and the conflict would tear you apart.  As the talk progressed it boiled down to the two masters being money and spirituality.   I found I was really drawn into it.  Initially, it was because I did not believe it to be true.  I started taking notes so I could look at them later and try and figure out my opinion on it.  If in your core, money is the main driver for what you are doing on a day to day basis I do agree that things like value, customer experience, people, and eventually ethics could all suffer.  It made my brain hurt a little.  I wanted to believe that profits and purpose/spirituality could coexist.

Memento Mori came to mind.  Memento Mori is the name of the winery that I started with two of my very good friends in 2008 with one main purpose.  We wanted to make amazing wine that we would love to drink.  That was it.  Make an absolutely amazing wine.  That simple.

We had so many decisions to make as we began the venture.  Where would we source grapes?  Which winemaker should we pick?  What consultants should we engage with?  Which crush facility should we use?  The list went on and on.  I believe there were well over 200 things, some large, some small, which we had to decide upon.   We did recon and research for over two years before we actually even made any wine…  Seems like that would be pretty tough doesn’t it.  Turns out it wasn’t.  It was actually just really fun.  The reason for this was that the only real criteria for making a decision was – will it make a better overall finished product?  This even translated to the packaging: wood boxes, fire branded, messaging on the inside lid, a secret under the bottles, custom printed tissue paper…It was so fun to work on.

I believe our defining moment occurred when we did our first ever blending in early 2012.  We make a Cabernet Sauvignon and had sourced those grapes from a couple of different vineyards.  We had exactly 13 barrels of wine that we had watched our very talented winemaker, Sam Kaplan, shepherd along for a little over two years.

Sam made four different blends for us to taste.  The goal would be to narrow to one of the blends and use that to produce the first vintage. Each blend used a different total number of barrels.  Lucky for us, all 5 of us agreed on which blend was the best one.  It was clear.  In fact, our consultant Nancy Duckhorn even declared that blend could easily price at $150 per bottle!  We were ecstatic!  Our first vintage was going to taste possibly even better than we had hoped.  I looked at Sam and asked him how many of the barrels had gone into that exact blend which we were so excited about.  He looked at me for a moment, then sheepishly answered, “Only 5 of them.  But guys, I could maybe sneak a couple of the other barrels in there and we would not degrade much in quality.”

Adam, Adriel, and I looked at each other and without a moments hesitation said no.  To this, Sam smiled.  We had in our glass the wine we wanted.  As it turned out, financially, just using 5 of the 13 barrels was a guarantee the vintage would lose money.  It would lose a lot of money.  It was a big setback for our fledging winery.  We had modeled it out many different ways and there was no way around it.

When we released the wine in late 2012, it sold out in two months.  After much debate we let the esteemed wine critic Robert Parker taste it and he gave it a stellar rating of 91.  More importantly, every time I open a bottle, I am proud of that product.  I am proud of Adriel, Adam, Sam, and myself.

What gives us the best product?  What can we do to make it better?  These are still the questions that drive us.

We lost money, but we made an amazing product.  We were happy.  We release our 2011 in 3 weeks.  It is subtly different than the 2010 but also tremendous. We narrowed in on the right grapes and barrels and were able to use almost 75% of our production in the blend.  Our 2012 (a perfect growing season in Napa) is looking so good we have joked about not releasing it so we could keep it and drink it all…

We still have not even broken even on the winery.  We probably will not for many more years.

Normally in business this would give me so much angst.  With Memento Mori Winery, it never will because I completely separated our purpose from profits.

Here is the reason I struggled with the speaker’s talk saying the two things had to be separate.   I believe when the winery does turn the corner in a couple years that we will not only have an absolutely amazing product, but it will make a ton of money…And the ONLY reason I think this is true is because we never put making money anywhere in the top ten for decision making.  Hell, it was not even in the top twenty.

Could it be that a maniacal focus on quality and customer experience somehow, if funded well enough, begets eventual landslide profits?  I really cannot say for sure; but I can tell you this – It is sure as heck of a lot more spiritually rewarding.  Adding real value, making a great product, watching people truly enjoy that product…those things give you a smile both inside and out.

Would it be possible to do that where you work?  Are you already doing it?  If you are, are the people surrounding you doing it too?  I decided to test it.

I applied the Memento Mori business plan to Trace3 last year.  We came out with products that make us no money…But holy crap are they pretty awesome in the ways they help our clients.  The Table Group, VC Briefings, Big Data and Cloud Workshops, Training, expanded services, PoP – turns out we don’t break even on any of them.  We do them because the help our clients cross a raging river of transformation in the IT landscape.

These offering don’t make Trace3 and money, but something IS happening.  The clients are starting to completely change how they view us.  They are really starting to love us.  In fact, they are even introducing us to their peers asking them to do business with us.  Journalists are starting to write about us.  Oh, and the mature business lines we have been operating for the last 10 years…it turns out they are totally taking off.  Over $100,000,000 in sales growth (30%).  I believe it happened because it was not the goal. In fact, we did not have a stated monetary goal for the year.  We just wanted to transform our offering to be relevant since the market was changing beneath our feet so quickly.

In the end I think the speaker was right.  You cannot serve two masters.  My hope is by serving the right one, in time, you will find all the profits you ever need.


Twitter: @hayesdrumwright (PoP)

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