American wine startups a business model of innovation
American wine start-ups, a business model of innovation for the French wine industry? Dr. Evelyne RESNICK ISG Bordeaux, ISERAM (Management Institute for Business Research) evelyne. resnick@gmail. com
Start-Up, Scaler A few words to define what we’re talking about… (Onetti, 2014) o Start up: fast growth & innovation o Scale Up: growth and market development o Scaler: a scale up becomes a scaler “when it has validated its business model hypothesis”.
The 5 types of start ups (2017) Discussion of Donatas Jonikas’ typology q The “small business startup” q The “Lifestyle startup” q The “buyable startup” q The “scalable startup” q The “social startup”
Scalable Wine Start Up Case study Online wine sale: Snooth vs. Grands. Vins-Privés SNOOTH Launched in 2007 by Philip James: traditional online site created to surf on the new online business trend. - Raised US$3. 7 M - 2011 - Looking for new investors to “to finalize the implementation of its fully scalable existing online business platform”. - Proposed a new business model to their investors.
Snooth new business model
Group Carrefour 2017 revenue 88, 24 B€ Negoce Johanès Boubée 2017 Revenue 845 588 600€ (Expects 1, 2 B in 2018) Grands. Vins. Privés. com Structure & Organization Launched in 2013 by “La Vintage Company”, a wine broker specialized in fine wines Bought by the Carrefour Group in 2015 to diversify its offer on wine and expand on line Also part of the negoce Johanès Boubée Grands. Vins-Privés Revenue - Unknown
Grands Vins Privés’ New Business Model (From an interview with Gerard Spatafora, CEO) Key Elements of Success Logistics+IT Sourcing & Buying ECommerce Site+CRM+ Datalake Strategy Customer Centric Time to market Agile (test & learn) Product Value Proposition STRONG EVOLUTION CURVE FOR BOTH STARTUPS THRU FINANCING
A strong Evolution Curve (Source: Donatas JONIKAS, Startup Evolution Curve, 2017)
Wine Start-Ups – France VS. America or France AND America? FRANCE USA q Bto. B Importance of professional clusters: Innov’In (in Bordeaux) or Vinseo in South West A lot of ag companies financed by major agricultual industries q Bto. C Since 2016, La. French. Tech q Bto. C The US were the pioneers with search engines dedicated to wine Strong funding Is France a « start up nation » ? (E. Macron)
French & US Funding Country Nbr Business Angels Comparison Budget/year France 10 000 1 for 6600 hab. 41. 2 M€ USA 265 400 1 for 1200 hab. $20. 1 B
Local Culture vs. Global Culture q In France, local culture (terroir, region) is deeply ensconced in vineyard management and wine making. CRM and marketing are not a concern. q In the US, marketing and Customer Relations are priority. Cartograph Winery Tasting Room Vineyard worker (Chaigne vineyards)
Local Culture vs. Digital Culture Is there room for innovation and/or disruption? (Adapted from BCG, the 2% Companies, 2018) Innovation Long term Flexible adaptation External Focus Growth Focus Efficiency Short term Discipline Internal Focus Productivity Focus Most successful wine startups US – Vinfolio ($5 M investment), Coravin, Kuvee FR - Mostly French versions of US companies (Vivino)
The Innovation Platform Model Why would an outside business “use your platform rather than taking products to market themselves or through others”? (BCG, 2017) … because your platform/service/product is attractive enough for them to build their business on it … because your platform/service/product provides data, artificial intelligence, blockchain, augmented or virtual reality … because your business provides a digital and agile solution to their questions This is what BCG calls the “Innovation Platform Model”. How do or should wine startups provide this type of answers to the wine business?
A few potential and existing answers q The Goals - “Articulate, Activate and Align – 3 Steps to a Digital Culture” (BCG, 2018). q The tools to Goal #1 – Articulate the change required. q The tools to Goal #2 – Activate: bring creativity and imagination in your business as well as funding. Become #1 q The tools to Goal #3 – Align: embed the new culture
THANK YOU! MERCI! evelyne. resnick@gmail. com
- Slides: 15