By Bill Anderson
When we sit down with beverage entrepreneurs to talk about a long-term investment and partnership, we’re always intent on asking them a lot of the standard questions about their skillsets, distribution network, initial investors and financial model.
But over the course of the conversation, the dialogue often begins to center around the company’s culture and the brand architecture. More than ever, it’s critical that brands have an authentic story which is truly differentiated, whose benefits are real and legitimate and needed, and whose ingredients can stand the test of time.
Once we can see the outline of how the founders envision the brand‘s adoption by consumers, we can then move on to the even more important questions: Where do they see the brand in 10 years? How fast do they want to exit? How quickly do they see getting the brand to a level that will gain the attention of a strategic buyer?
These questions shed the most light on the real internal make-up of the entrepreneur. In many cases, an entrepreneur will show that his or her commitment is to a ‘get rich quick’ strategy, believing that a great brand can be built with the consumer in three years (false) and that a company can grow from $0 to $10 million in sales virtually overnight (false again, save for the rarest of brands). These presumptions are not only unattainable, but they provide the foundation for a series of inevitably faulty decisions – too much money raised too early, too many hires, and a ‘wide, not deep’ go-to-market strategy.
When I recently sat down with a group of local beverage entrepreneurs, I asked them what they wanted to build with their company in the long term. They first answered by saying, “We want to build a great 50-year brand. We believe thinking that far out – and knowing that it won’t happen overnight — will help us build a more remarkable brand.” But they then went on to say that they know there will be a good time to exit to the right buyer, and that they would be open in the years ahead to doing what’s right for the company and for all of the investors. In my opinion, parts 1 and 2 of their response form the perfect answer: long-term stewardship of the brand mixed with an openness to various exit strategies as they come along in the future.