The deal launched. Within 40 minutes we had sold out of beer. We were so excited and the people at Groupon were too – they’d never sold beer before on their site so perhaps we had helped them to discover a whole new category of opportunity. Now all we had to do was to send the orders across to the warehouse to be shipped to our customers.
If only it were that simple – we had never shipped glass bottles of beer before and hadn’t thoroughly tested our packaging, in our rush to get our product to market. Within days we were flooded with hundreds of complaints – about a third of the packages had arrived smashed at our customers’ doors. Not really an ideal way for our brand to introduce itself to the world.
In the end we replaced all of the broken bottles and refunded those customers. A lot of them were so impressed by how we handled the problem that they’ve stayed with us to this day. We went on to improve our packaging and have since seen more than 100,000 members join our club.
We’ve sold many millions of bottles of beer and worked with hundreds of the most pioneering breweries from around the world. Our magazine, Ferment, is the largest-circulation publication on craft beer in the country and we’ve been able to raise investment to launch our brand internationally.
I think what made this business work was that we just ran with an idea. We didn’t sit around planning things out perfectly – we just picked up the phone to breweries and tried to sell them our concept. When they didn’t like our initial idea, we changed it instantly.
Sure, when we launched it wasn’t plain sailing but we did go from zero to over 1,000 customers in a day. As the business has developed, we’ve continued to apply these same principles. We’re constantly testing ideas very fast and on very small budgets. If things work, we scale them up. If they don’t, we scrap them and move on.
Human behaviour
Another one of the reasons for Beer52’s success is that we used a business model that fitted well with our customers’ natural habits. I know in my own life that if I sign up for a subscription, unless I don’t like what I’m being sent, I am usually happy just to let it run and run.
If our customers had to come to our website every month to place an order, they’d probably buy less on average than if they have a subscription set up. Partly because they share my laziness but also because a subscription can be a really convenient way of receiving a regular supply of something you enjoy, especially if it’s something as easily consumed as beer!
Beer52’s customers have a high lifetime value, because when someone signs up they’re not just buying one box of beer; they’re typically subscribing for a large number of months. Thanks to this, we can spend a lot of money on marketing upfront to attract customers to sign up in the first place.
YOU AREN’T ALONE
What we’ve learned is that it’s possible to have an idea in the pub one night and develop it into a business the next, with a credible website registered to a catchy domain name for all the world to see. This can all be done extremely quickly – and that means by the competition as much as by you.
A phenomenon that I’ve observed countless times is that whenever we’ve been working on a new idea – one that we thought was totally original – we weren’t alone. Someone else in the world has read the same articles, maybe has the same interests and has started thinking about how to solve the same problems.
Often, products come to market at almost the same time, and one looks like a carbon copy of the other. Sometimes they are exactly that – a fast-follower – but quite often they’re part of this phenomenon of simultaneous invention. With all of our ideas – our beer club, our coffee club and many of the new products that we have presented to retailers through SuperJam – the competition has created exactly the same concepts at or around the same time.
The idea of a craft beer club didn’t exist a few years ago but at the last count there were more than ten in the UK alone, all started within a short space of each other. While we’re by far the largest, there are certainly a lot of upstarts following fast on our heels.
It’s my belief that, in this environment, our only defence is to move more quickly than the rest. Whatever your idea is, the chances are that someone else is already working on it. So if you can give yourself a head start by getting off the ground first, that could make all the difference between success and failure. There’s nothing worse than planning your idea for months and months only to be pipped to the post by someone launching their version before you.
STARTING UP FAST
Especially during my time creating SuperJam, I had a lot of ups and downs, and there were plenty of times when I reached a dead end and thought of giving up. With Envelope and Beer52, there were also steep learning curves – all kinds of things that I didn’t know about selling online and creating internet businesses.
But each time I have set up a business, the process has got faster and faster. I’ve learned that even if the products you are trying to sell are completely different, many of the processes you need to go through are exactly the same.
Having done things the ‘hard way’, I wondered whether it was possible to short-circuit the lengthy process of coming up with a successful product and bringing it to market. I wanted to see if I could get something off the ground and have money coming through the checkout at lightning speed, ideally in just two days, from a starting point of nothing.
Based on the mistakes I’d made while growing SuperJam and starting other businesses, I knew there must be an easier way of doing things. Over those ten years, I had figured out how to outsource manufacturing, get great design work produced, handle customer service and arrange photo-shoots, and had learned all kinds of other bits and pieces necessary for creating a business. All things that I didn’t study beforehand but that I figured out through trial and error.
SHOESTRING BUDGETS
Starting a business can be an incredibly expensive process. That’s if you do things the conventional way. By the time you pay for designers, lawyers, accountants, stock, printing, web development, domain names and office space, I’d be surprised if you had any change left out of ten grand.
And that’s money down the drain before a penny has even gone through the checkout. If your business idea proves unsuccessful, you stand to lose a huge amount of money.
I wondered whether there might be a smarter way of doing these things – a way to avoid many of the normal costs involved in starting a business. If so, that would mean it was no longer such a big deal if it didn’t work – you could just go back to the drawing board and try something else, armed with the lessons you’ve learned from your first idea failing.
Ideally, I wanted to take an idea to market for a few hundred pounds – not because I don’t have more capital at my disposal, but because I wanted to show that it could be done. If you can start a business for such a small amount of money, surely that would mean that anybody could do it?
Very often, wantrepreneurs use a ‘lack of capital’ as a scapegoat for not starting their business right away. They create vast shopping lists of all the things they believe they need – an office, a world-class design agency to create their brand, an all-singing-all-dancing website. Surely you don’t need all those things to at least get a product onto the market?
THE 48-HOUR START-UP
Despite wanting to ‘bootstrap’ my 48-hour start-up and build a website for very little money, it was important to me that it was still well designed and professional. Most of all, my product would have to be a good one that people would actually want to buy. There is definitely a bare minimum in terms of design and quality that your product needs to achieve.
Starting a new business has to be something that creatively is an exciting project to work on, otherwise what’s the point? Besides, if you’re not working on something you love, then when the going gets tough you’ll quit at the first hurdle.