Growth Marketing, CPG Brands, and The Wine Subscription Business

As as I sat down to listen to Tom’s chat with Josh Lachkovic for the Maker Mixtapes I was reminded of a quote by WordStream founder Larry Kim:

“I think people who start companies are, without a doubt, just a little bit crazy.”

He’s right. Launching a startup is ridiculously hard work and comes with no guarantee of success. You have to be crazy to even attempt it. You also have to be a bit crazy to join the team at a startup in its early stages. Because if those crazy entrepreneurs get it wrong, you’re back on the unemployment line. 

So as someone who’s worked in two startups and launched one of his own, Josh must have some craziness in him. 

But what I learned from hearing about his journey with the marketing team at Pact Coffee and Head of Growth at Thriva to founding The Wine List, is that crazy is brilliant and bold; it’s a willingness to take chances and experiment and learn from every experience.

Those qualities are why Pact and Thriva both continue to be successful, and The Wine List is sure to follow suit to become one of the hottest subscription service startups around. 

In this post, we’ll take a trip inside Josh’s business mind to break down the key takeaways from episode eight of the podcast, including insights on marketing, hiring, and growing a startup.

Embrace experimentation in all fields

When Josh was part of the team of Pact Coffee, they faced a common startup problem: how do you get customers to choose you over the competition? 

In Pact’s case, being a subscription service was a key USP. But the competition was substantial: big supermarkets selling coffee at a third of the price. 

This forced the team to think outside the box, first with discounts, then by advertising on channels like Facebook and Reddit. They also tapped into the all-in-this-together spirit of startups: 

“We tried lots of things. I think this was a really good example of a kind of startup culture generally. Everyone, whether you were a part-time packer or anybody else, would come together for Friday drinks. And there would always be opportunities to share ideas and experiments.

“[One] experiment came out of the packing factory, which was, ‘Why don't we call up our customers to make sure they’re getting their bags okay?’ 

“And so one person led that experiment, which was with the view that we call up our customers, they’re going to have a better relationship with us and they're gonna be more likely to activate. 

“It was successful. It had an increase in activation rates.”

Pact’s approach can serve as inspiration to any startup. When you’re a fledgeling business, everyone—from the cleaners to the directors—is invested in your success. 

Involve everyone in brainstorming. Get feedback from outside of the marketing department. Create a culture that encourages ideas and experimentation. As Damon Salvatore said, “There’s no such thing as bad ideas. Just poorly executed awesome ideas.”

Keep your core competency in-house

For startups looking to grow quickly, it’s common to outsource work to agencies and freelancers on an ad hoc basis rather than bring in permanent hires. It's something the previous Maker Mixtapes guest, Rand Fishkin, heavily advocates.

During his time at Thriva, Josh opted for a different approach. With his team producing multiple creative campaigns each week, speed, pace, and execution were vitally important:

“Within growth generally [and] within kind of paid social, it's less now about, you know, hacking [and] battling the Facebook algorithm and more thinking about creative. Good creative execution. 

“So if you follow the Zappos approach of ‘don't hire out your core competency’, creative becomes a core competency within growth.”

Josh didn't see himself as a creative person. With creativity at the centre of what Thriva were doing, it made sense for Josh to bring in the right talent:

“I'm not a creative person in that sort of [social media] sense and I was the person who created most of our early ads. 

“[So it was] very good to get someone else in to take those things off [my hands]. It was very much driven by needs.” 

But working in a permanent role at a startup isn’t for everyone, which is something Josh is keen to make people aware of:

“[A] question I’ve often asked in interviews, when [the person] is not from a startup [background] is, ‘Hey, what do you think it is to be in a startup?’ 

“The worst possible response is when somebody says, ‘Oh, I think it’s going to be a really relaxed environment.’

“There is, in certain ways, a lot less support than you’re going to get elsewhere. You know, grants, multi-stage training programmes.

“At Thriva and The Wine List, we have performance development plans, which we brought in early. But it’s those sorts of things which are the outliers, not the norm. And even though we have them, they’re probably not going to be as developed as [they would be at] a FTSE 100 or some other big companies.”

Crowdfunding is good for growth and community

In November 2020, The Wine List raised 100% of its £375,000 target in one day on crowdfunding platform Crowdcube. By the end of the campaign, it had reached a total of £499,835 from 411 investors

If your idea gives something people want—and you have the knowledge and business plan to back it up—crowdfunding is a great way to raise capital for your startup. However, it’s not a magic money tree. Success comes from the work you put in before a campaign.

Before launching, The Wine List had around a thousand customers. They hosted a sold-out dinner for these customers and provided opportunities for them to get involved in the growth of the product.

This led to around 100 customers investing in the product, which helped drive the initial Crowdcube boom. Coupled with VC and angel funding, Josh was able to launch on Crowdcube with 70% of The Wine List’s target secured:

“I don't think there are any companies anymore starting a crowd raise with zero pounds raised so far. You know, everyone's got some money.

“I do find it slightly disingenuous when people say, ‘Oh, we raised a million pounds in 30 seconds.’ Well, you raised a million pounds in the six months leading up to those 30 seconds.”

Another big part of the crowdfunding success was engaging The Wine List’s audience:

“[You] need to be very active in responding to people [and delivering] outreach to people. I started treating every person on that list as if they were already an investor. 

“[Of] 400 or 500 people who were interested in the campaign, I think about 350 of them invested in the end. But all of those were getting daily [and] weekly updates from me. And the type of investor reports which we share with our investors as well. 

“So yeah, it was very much a hands-on approach and kind of a full-on process.” 

Josh’s work is proof of the adage, ‘there’s no such thing as an overnight success.’

Pay attention to your ideal customers 

In the startup world, getting to product-market fit is critical, and there are two important aspects you need to nail early on: 

1. Finding the right market

2. Having a product that satisfies that market

Getting it right involves a lot of testing, feedback, and more testing. When crafting crafting a strong value proposition for The Wine List, Josh was inspired by Rahul Vohra’s Superhuman Product Market Fit framework.:

“Pay attention to the customers who are likely to be your ideal customers and ignore the feedback from the people who are never likely to be your ideal customers.” 

Rahul’s method works on the basis that if 40% of your customers would be very disappointed without your product, then you’ve achieved product-market fit. 

To find out if this is the case with The Wine List customers, Josh uses Likert scale questions when gathering feedback:

“We do the infamous, ‘If The Wine List was to disappear, how disappointed would you be — very disappointed, not disappointed, somewhat disappointed’ — aiming for that 40% disappointment score.”

Content has also played a big role in helping The Wine List hone in on its target audience. Before scaling into a subscription business, The Wine List was a newsletter. This acted as a minimum viable product for what would become their core offering.

Through the newsletter, Josh was able to learn who was interested in learning more about wine and who trusted his voice. It also helped the brand define its jargon-free tone of voice:

“We try to be really clear with our descriptive words and, you know, don't use the kind of absurd descriptions which some people might be accused of using. And that's very much defined the tone and how we think about content.

“We are approaching what types of content we use in the same way we do everything else. We create hypotheses [and] we test [them]. 

“[We ask], ‘Do people want to know about wine news? Is that what our audience are interested in? In which case let’s start [adding] wine news stories. Do people want supermarket comparative tastings? Do people want tastings with old burgundy?

“We're kind of just testing all those different things, judging how well they react with the community and then doubling down where things do work.” 

Who are your 40%? Use customer personas to find your core audience and build your offer and content around them. Doing this will help to create brand advocates who attract like-minded people to your brand.   

Bring fulfilment in-house as soon as possible 

Another aspect of building and refining products to a place that suits the audience is delivering outstanding customer service. 

For The Wine List, after hearing that customers orders were being delivered late, bringing fulfilment in-house became a priority:

“I’m lucky enough to have lots of great heads of operations and CEOs in my network unofficially mentoring me. All of them have the same thing, which is, ‘Bring fulfilment in-house as soon as you can do.’. That's going to improve our customer experience.

“We [recently] sent out our very first shipment of wine ourselves. So at the moment a couple of members of the team are packing boxes. Eventually, we'll move on to that becoming a permanent role for someone. 

“But we got some wine out ourselves and we’ve suddenly got this very tangible, physical relationship with the physical product, which we’re sending and getting to a customer and knowing that everything in that box is perfect. And it met that same-day delivery promise.”

If customer experience falls short early on, it’s going to be hard to win those people back. Additionally, those poor experiences can define how your brand is perceived by the public. 

From fulfilment and delivery to communication and customer care, ensuring your customer service meets expectations will help to increase trust and loyalty in your brand.

Meet the makers

Maker Mixtapes is a podcast about the entrepreneurs, creators, and marketers building impressive things in their field. From content marketing to YouTube and growth, agency life to e-commerce and SaaS, this podcast aims to dissect and share lessons from their success.

Listen to Josh and other episodes from the brightest minds in tech and business on Spotify or Apple Podcasts.

ABOUT THE GUEST

Josh Lachkovic

Founder, The Wine List

HOST

Tom Whatley

Founder & CEO, Grizzle