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Episode 9: Building a loyal following

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All Xero In episodes

Hosted by Jeanne-Vida Douglas and Rob Stone

It’s a competitive market spanning boutique to mass market, amateur to global production. So how can you make your mark in the world of wine?

Andre Eikmeier, co-founder of wine-buying group Vinomofo, reckons the answer is by building and maintaining a loyal following. Using social channels to share bespoke and user generated content, Andre has taken Vinomofo from garage to global with his ‘tribe’ along for the ride.

Andre chats with Xero In hosts Rob Stone and Jeanne-Vida Douglas about his journey from wine fan to small business owner, his authentic approach to storytelling, and the importance of keeping it real.

Episode transcript

Participants: Jeanne-Vida Douglas [JVD], Rob Stone[RS], Andre Eikmeier [AE]

Promo: Welcome to Xero In, home of the entrepreneur's small business journey. Here are your hosts Jeanne-Vida Douglas and Rob Stone.

AE: People that were really engaged with us were engaged with the whole sort of journey and I think what we learnt was … people felt like they'd really built this company with us - the early - the early, you know, tribe that we had, and they really had.

JVD: Welcome back to Xero In, and I have to say I’m super excited about our guest today, because he and his brother have built a business around two of my favourite things: wine and storytelling.

RS: I can't wait to have this conversation. So many of you out there who may be wine drinkers will be aware of Vinomofo and we're delighted to be able to talk with Andre Eikmeier around what is Australia's largest and most successful wine group buying site - Vinomofo. So it's going to be fascinating.

JVD: Absolutely, and the really interesting thing for business people is that he’s really open about the fact that things really didn’t work out at first, it was four years of trial and error before Andre and his brother Justin hit on a business model that actually made money. So let’s pass the message stick onto Andre and find out how they did it.

AE: Welcome. Hi, how are you?

JVD: Yeah, great, and really keen to find out more about Vinomofo, I mean it’s a gorgeous site to visit, and you know, unlike a lot of wine deal sites and offers, the selection is phenomenal – where did all of this start?

JVD: [We're an online wine retail site, you know, where we're sort of focused - we sort of, curate it roughly, so we - we choose wines and - and learn what our members like and then sort of, match those wines to what they like.

VK: So how did the idea of Vinomofo come about?]

AE: Well, my brother-in-law Justin and I had started a business back in 2007. We were like a wine social site and then we did a - bought a kombi and travelled around the country and we – we did like a location base, checking out the cellar doors. We loved wine and we wanted to do something in - in sort of the online space, but we never had a good business model. So we were in four years, going broker and broker and broker.

And Vinomofo was, you know, I guess this last ditch desperate effort to - to make money in the wine industry.

JVD: OK well, tell us about that shift, that pivot that took you from broke to brilliant.

AE: Justin sort of - you know, one day came in - like, we were really close to the edge of having to give it up – he came in and said, “I think we should start a wine group buying site” back in 2011, which I thought was a terrible idea. So - and I was like - no we can't sell wine and like, deals. That's like dirty.

But we needed to make money, so we sort of modelled it out and we thought well, If were to want to buy wine from somewhere, what would it be like? You know and we – we sort of modelled that out, and I felt that wouldn't be dirty - that would be pretty cool.. So that was - that was then the catalyst to go - all right, well let's try it.

RS: Now you've had huge success since launching this business model. Can you give us - share with us like, you know, the growth that you've had?

AE: Yeah. So we - we started in April in 2011, and look we're now about a 40 million revenue run rate. We've got 75 people. So when we started we were pretty much just about two of us in a garage.

RS: Wow.

AE: The first year was just - wow, this is actually the first time anyone's paying us money to do something, and we're actually selling wine, and the second year was a big adventure with a - where we sold a part of the company to Catch of the Day. So we were sort of born of desperation and this realisation that before that, we were sort of helping people discover good wines, but we weren't helping them get their hands on them. So Vinomofo - I got comfortable with it when I realised that actually this is just that sort of full service.

JVD: So you’ve got this strategic shift around the way you procure and structure your sales, but you still need to the get the message out there – talk us through that process.

AE: Yeah.

Justin had discovered Facebook overseas and I had - I'd sort of got excited about this idea of consumer generated content and customer reviews and that sort of thing.

I had a video production company background, so I guess that sort of content meeting with the social sort of thing was what brought us together and we had no money. So it was a great platform to be able to communicate with people and for them to share stuff with their friends and for you to film content and put it up. And so that was in our DNA.

JVD: That’s a great place to start clearly, but your videos for example they’re just great to watch, they look beautiful, they feel fun, there’s a real sense as a viewer of being “part of the party”, how to do you that, how do select and create your stories?

So when we brought it in, I guess it was natural to go - well, this is how we should do things. It - it has to be engaging if we're going to be talking to people all the time and it was just - it was just a platform where people are and I think we appreciated that and we were like - well, this is where people like to communicate so let's get on there and communicate with people on these platforms

It’s less about - oh, let's sell you a wine here and let's - let's share all the fun stuff that we do whether it's behind the scenes in the office or, you know, just the fact that if you - if you - if you're liking a wine page like Vinomofo - you know, you like wine, and you probably like food and you probably - you know - it's sort of this common interest.

So we’re like - oh, what's exciting about this common interest and then and then that real sort of appreciation that we’d - you know what - let's invite people behind the curtain and show them what goes on here. And then when you do something you know, with a – with a great cause that you know we sort of started a few things like Vinobomb where we drop off a box of wine and all sorts of other goodies to - to someone that's nominated because they're doing great, thankless, tireless work for some good cause, whatever - for a charity or for - for something that's selfless.

And that's a fun thing to share because you get to go - well, here's someone's story and you get to tell their story, not our story. So I guess, that's what we started. That's the kind of content we use and the videos are just fun and I think people like, we’re in a people era, and people like to know the people behind a company.  

RS: And it definitely works as well, because I mean, you do make that connection. You've got a huge - a huge tribe of five thousand and growing, but you know, the content and the cause and just the fun that you guys have. Yeah. It - it really comes through. What's the future?

AE: Sorry. I’ll just tell you, so we've got – we’ve got like three hundred and thirty thousand customers now.

RS: Oh. That's massive.

JVD: And you started with…?

AE: Five thousand was when we started Vinomofo. We sort of had - actually it whittled down to the one thousand who joined, but that was of the tribe we’d spent four years building, so it was a good start.

RS: I mean, you know, you sat and you said you didn't want to be grubby or you know - how did - when did you get it to the point where it was like - yeah, I'm really happy with this?

JVD: Yeah, when did you realise that the new approach was actually working?

AE: I think honestly it was deciding we'll only be comfortable doing this if we can sell the kind of wines that we love, because we built up this trust with - it's probably sort of like, you know, three to five thousand engaged - a tribe of three to five thousand wine lovers who sort of came to us for the recommendations on wine and tuned in with the video content we did. That was sort of what we had. We had a real relationship with them. We had this trust and there was that purity of it, where we were recommending wines. We had no commercial interest in the wines we were recommending, so you know - so we - there was that trust, and so going into starting to sell wine into a regional proposition, we were like - well, we can't blow that trust. We can't suddenly going - oh here's a shit wine. Good luck. And that's when I thought it would come undone.

So we just thought - all right, as long as we're only wines that we love genuinely, then - and in fact we asked our tribe, you know, we sort of – we sort of said look, we need to make money or we're going to have to shut down the business. How would you guys feel if we launched this thing? And they were like - yeah, we'd love to buy wine from you. We trust you. You know, we'd love to support you as long as you don't sell us stuff that you don't believe in. As long as you don't sort of change the relationship that we’ve got.

So we had the right time. We launched it and it went well. People went - this is great. This is exciting.

JVD: So you started getting your name “out there”, because of the content as well as your product, how did it go from there?

They told their friends and we started selling wine and - and it was great. It was exciting and it saved it, but we very quickly came on the radar of - of the power players in the wine industry who were big distributors who were looking after most of the producers and then the Woolworths brands like Dan Murphy's particularly, and the Coles liquor brand - it's a real duopoly in retail…

RS: In the land of duopolies.

AE: …in the wine making [overtalking]. Yeah. And look, it's exactly like groceries - and they weren't online with liquor yet, and they weren't online with groceries altogether in 2011. So as soon we came on the radar - because there was quite a bit of - the media was talking about it. It was that good buying - remember that time when BRW and those sorts of things - they would talk about nothing but group buying and there were transactions going on left, right and centre and [unclear [0:12:26] bought by Yahoo - all that sort of stuff. It was such big news. So we got brought into that news and - so these, the, the, the powers that be were obviously not excited about - about us coming on the scene so buyers started contacting us and going - oh guys, I'm so sorry. Can you pull that deal down because I've just had a call from my distributor? The guys from Dan's Murphy's have just chewed my ear off. What are you - how come this wine is on our – your site?

 So we sort of found ourselves - I mean the industry was like - oh, we're not allowed to deal with Vinomofo.

So we hit the pitching circuit which was really interesting, because we tried to raise money before Vinomofo with no success, because without a business model, people saw through it. We sort of hit - we started talking to small VCs and private investors and everybody wanted to invest which was exciting. But then we were growing so fast and we were like - we don't - we sort of – we sort of went - oh great. Okay we need you know, three hundred grand - oh hang on, no we don't, we need six hundred grand, and then we were like - we don't actually need money. We just need people. We got approached by the founders of Catch of the Day who had like three big online brands and they were the number one sort of online retail group in Australia at the time.

JVD: So suddenly you’re talking to people with a strong background in eCommerce, that could actually see potential in your business.  

 And they were very persuasive and I guess we saw that they had plenty of capital. They were a really profitable company and they had one and a half million customers and we thought - and they knew retail - and we thought - that's probably the play. So we did a deal with them that was - that saw us - they bought the majority share in the company which was scary, but then that was our - that was our sort of scaling play.

AE: That was a year after we launched - well less than that - 11 months after we launched we did that deal.

RS: Yeah. And Andre, did that time - did it affect the trust that you'd built up with your tribe of five thousand followers?

AE: Yeah. Do you know what? It actually did and we only learnt this after we bought the company back again a year later and we're - if you - if you build a relationship with your customers, you really put it out there when you open up, and we’d sort of invited people into our business story. We'd always been very much - this is us - people behind a company, but there's a lot of - a lot of stories and we would share a lot of stories about what we did and there was a lot of video content. So everybody - people that were really engaged with us were engaged with the whole sort of journey and I think what we learnt was there - there was a sense of you sold out and a sense of - or a sense of you don't need us anymore. I think people felt like they'd really built this company with us - the early - the early, you know, tribe that we had, and they really had. So we didn't really - we didn't really - we got a bit of a sense of that. I think as well, when you do something like that, when you've stood for something, and then you - and even though we were a better company during that time with Catch - and we weren't doing anything particularly wrong or so, and we weren't getting interfered with, you know.

Just as they were like - all right we've invested in you. Go for it. They weren't trying to control or change the culture or change what we did. They loved what we did, but people perceived – perception is are a funny thing. If we'd do one sort of thing that was a bit different, and we'd try a different sort of product or try to expand or something like that, I think we got judged - oh, that must be Catch of the Day telling them and they're - oh, they're really losing their way.

JVD: OK, so why do you think they did that – you know a lot of business owners are very wary of taking on funding, or any kind of investment because they’re worried about losing control, what was it about this more ‘hands off’ investment which you think made it successful for both you and the Catch Group.

AE: I think culture is successful when it's consistent. A lot of companies have - oh, this is our internal culture. This is the culture that we present to our customers and this is the culture we have with our suppliers who we’re trying to screw, and I think culture's got to be culture, so we – we look at the stakeholders as our - our team and us and then our customers and then our - the wineries - the producers. You know it's our job to bring good wines and good people together, so they're – they’re really equally important. It's got to be consistent and I guess we just - we always really were that and we put a lot of effort in that and it's one of those things as well - I think culture starts at the core. It's got to be - it's got to be what the founders or the leaders conceive and want and it's that combination.

This is our vision and these are our values and this is the way we're going to go about things and this is the effort we're going to put into. I think that's - we sort of - you've got to decide that but it's got to be then a layer in every decision, every policy, every action that you take as a company and that's where I think it falls down for a lot of companies. They get it right on paper, but really it's been constructed by a sort of, a marketing team or a, you know, or with a consultant. On this sort of stuff, it's amazing how many companies put together a culture with – with a branding agency or something, which I think - it's pretty hard to be authentic if you're not even putting it in your own words or it's not coming from that pure place. But you go - unless it's there in everything you do, then you know, you ask someone in customer service or ask a sales rep or ask a customer what the culture is of that company, and it's rarely the same thing as these leaders have, you know, contrived. 

Whereas if it's in everything you do and it becomes the - the - the litmus test for every decision that you make, I think that's when you get this consistency and that's where you get this pure flow of - well, this is the culture that we wanted to be and this is the culture that the outside world seems to see. That’s I think a successful culture, and it's not always easy, because quite often you have to - you've got this commercial reality compromising with your ideals, and I think that good cultures don't compromise on those ideals.

JVD: So where did these ideas come from, like is there anyone who’s been a source of inspiration, particularly in terms of the way you make decisions and create that really strong sense of brand culture?

AE: Seth Godin.

JVD: A yes, so he’s the US Marketer who really focuses in on differentiation, you know on how to make your brand different from others, and invent and authentic voice that your customers, your audience really, can trust.

AE: He was a permission marketer. He - he's got - really – he’s idealistic and he’s pure and he believes in not bothering people. He's leading thought in - in you know - being - communicating with people and marketing to people in a way that you are actually wanted and needed.

JVD: For sure, because people hate to be interrupted, it’s all about fitting into their flow.

RS: Yeah I love Seth.

AE: Yeah.

JVD: OK, so what about books, is there something you’ve read that’s really changed your thinking and way you do business?

AE: Yeah. Look, the one that's probably made the most impact on our culture was - was this book called First Change All the Rules and it's about - it's a sort of a research in what makes for a - a happy and motivated productive employee.

RS: Well, I want to read that one.

AE: It's really - it's really cool. It's really… because the guys are from the Gallup Institute who are an amazing HR sort of consultancy in the US and they really – the way it’s thought that it's your responsibility as a company to provide this environment that brings out the best in people. It's cool.RS: And so, yeah, what is the future. You know, are you looking at international expansion - you know, just consolidate on what you're doing now and going deeper with you know, building on that – on that huge base?

AE: Yeah. A really exciting time actually and that's exactly what we're doing. We're - we're well down the path of moving into China…

RS: Great.

JVD: Now that’s going to be a whole new challenge in terms of culture and authenticity, and I guess finding the right partners to work with on the ground. I can’t wait to see what kind of stories and content you create around this next phase.

RS: That's really exciting and we wish you the very best of luck.

Promo: If you'd like to try Xero, head to xero.com. There's a 30 day no obligation free trial. So go ahead and check it out.

JVD: OK – so tell me Andre, what’s that priceless bit of advice you wished you’d received early on that would have really made a difference to the way you work. You know something you’d like to share with other entrpreneurs?

AE: Yeah. That we as entrepreneurs - there's so many people - whenever you've got ambitions and goals you can just be so driven towards them, that I think you cannot live your life. I think - don't measure your life by how far away from your goals or how far from the path that you want to be on, you are. Just measure it by each day and remember to go - right, this is my life - today. No matter what, it is not what I'm headed towards. That's not my life. Because when you - when we die, what we wanted to do in life is going to be worth absolutely nothing. It's going to be what we did in life.

RS: That's really - that's really helpful.

AE: Just completely, this is my life. Not yeah...

RS: I'm definitely going to start using this myself like because I - I struggle with that as well, so that's…

AE: Yeah?

RS: …really - really helpful.

 

RS: …and I think I don't know - I know I need to make more of a concerted effort about drinking more wine and being present in the moment.

AE: [Laughs] I usually say I need to make a concerted effort to drink less, but I encourage you to drink more. Absolutely.

RS: Listen Andre, thanks so much for today.

JVD: Yes, thank you so much for coming in and sharing your stories with us here on Xero IN, and I’d strongly encourage listeners to check out the Vinomofo website, it’s just full of so many great ideas, and fabulous stories.

AE: Oh, I love talking to you guys.

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