As online wine seller Vinomofo expands its global reach, co-founder and co-CEO Justin Dry has found the board is helping him to sharpen his commercial focus.
After online wine retailer Vinomofo raised $25 million in 2016, things got a lot more serious. Investor Nick Dignam, from Brisbane-based asset manager Blue Sky Venture Capital, and his colleague, Dr Elaine Stead, joined the board.
“They’re just really smart people,” says Vinomofo co-CEO Justin Dry. “We get on very well, but they challenge us. They question our strategy deeply, there’s no hiding and you certainly don’t get away with anything. They read everything and challenge our methodology. If you’re not confident about something, they will find you out.”
Dry says Dignam and Stead have brought a sharper commercial focus to Vinomofo, plus the advantage of strong business networks. “Because they see and invest in so many businesses, they see patterns,” he says. “And they’ve introduced us to the founders of other companies in their portfolio, here and overseas.”
Melbourne-based Vinomofo, founded by Dry and co-CEO Andre Eikmeier in 2011, has kept its four directors busy over the past year. Dignam, Dry, Eikmeier and Adelaide Crows chair Rob Chapman have been charting a rapid overseas expansion course, starting with New Zealand and Singapore in 2016, then the US this year. There’s plenty of upside — Singapore has doubled its growth targets — but also potential risk.
“Blue Sky are a fund [investing on behalf of others] and you’ve got to understand more about risk factors,” Dry says. “For the first time, we are looking at potential legal issues and worst-case scenarios and how we can protect ourselves. We’ve broken down all the areas into risk factors — and how to mitigate, minimise or remove risk and know which risks we are willing to accept. You don’t do that when you’re two guys in a garage.”
In the beginning
Vinomofo did indeed start out as two guys in an Adelaide garage, after Dry, who has a wine marketing degree from Roseworthy Agricultural College (University of Adelaide) and his brother-in-law Eikmeier launched Qwoff.com, their first website, in 2007. It connected wine lovers — Dry describes it as “a Facebook for wine” — and grew to 20,000 members, then the biggest online wine community in Australia. The business model was based on wineries paying to be part of the community. That didn’t happen and Dry and Eikmeier could not work out how to monetise their idea. In 2010, the pair finally came up with a business model that married their passion for wine with sound commercial foundations, by selling premium wine to its network of wine lovers rather than just talking about it.
The Vinomofo site launched in 2011 and has been profitable ever since (although it did miss its revenue target this year by about $11m). Initially, there were four directors: Dry, Eikmeier and two angel investors. When Catch Group (owner of group buying site Catch of the Day) bought 70 per cent of Vinomofo, the angel investors were replaced by two Catch representatives.
Fourteen months later, the deal was unwound, and Dry and Eikmeier bought back their company with help from nine investors, represented on the board by Rob Chapman.
“At the start, [board arrangements] were pretty casual. Then, when we had our first investor, everything becomes a bit more real,” Dry says. “Now we have a grown-up board, it’s more important to deliver on the vision, to stand in front of a group of smart people and have your plans and numbers torn apart, but have the confidence to learn. Open conversations, no egos.
“I used to believe leaders had reached a level where everything was comfortable. I’ve learned it’s never really comfortable because the landscape is constantly evolving and there is always something outside your comfort zone.”
As the company prepares to launch in San Francisco this month, it will have a new director to help steer its next phase. Chapman, juggling many roles and overseas commitments, has retired, prompting the remaining directors to assess what skills, networks and experience are needed for the increasingly international company. “People are everything,” Dry says. “The challenge is to hire fast enough to not slow down the growth of your business, but slow enough to make the right decisions.”
They have identified two areas: technology, (but they quickly realised Vinomofo’s head of development had all the talent they needed) and global outlook. “Our big push is global,” Dry says. “We wanted someone globally connected with a macro-global view of the wine world and connections with producers and governments. Australia is growing, but our business in five or 10 years will be 80 per cent offshore.”
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