10 Timeless Lessons I Learned About Business from the Founders of America’s Biggest Wine Brand

by / ⠀Blog / July 11, 2016
four bottles of barefoot wine

Last month I had the pleasure of interviewing Michael Houlihan and Bonnie Harvey, the founders of the world’s most popular wine brand, Barefoot Wine.

What’s most humbling is that Michael and Bonnie had absolutely NO idea what they were doing at first.

From the start, with virtually no money and no wine industry experience, they had to employ innovative ideas to overcome obstacles, create new markets and strategic alliances.

Having learned the hard way, Michael and Bonnie fell forward into success.

The lessons they taught me were…invaluable.

1. Stop thinking about following your passion, and start thinking about following opportunity passionately.

Michael and Bonnie had absolutely no experience in the wine business. They were both business coaches who happened to have a lot of clients in the wine business. One of their clients was a grape grower, and this grape grower hadn’t been paid by a particular client for three years. Michael went straight to the delinquent company to collect funds for his client, only to find out that the company was bankrupt. Makes sense why they couldn’t pay!

Now, here’s what distinguishes an entrepreneur from anyone else. The company didn’t have any money, but it did have a ton of extra wine. Michael noticed this and struck a deal, taking $300,000 worth of wine instead of the cash owed to his client.

Hidden Opportunity #2: Upon returning to his client, Michael was met with more resistance: the grape grower said he couldn’t possibly run another business, and so he wouldn’t be able to sell the wine Michael claimed.

And that’s exactly how Michael and Bonnie got started in their wine business – because of a completely unexpected opportunity that revealed itself through persistence and finesse.

2. Pay attention to the little, annoying details.

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Early on in their venture, Michael and Bonnie won a gold medal at a wine tasting event. In the middle of celebrating, a regulator walked over to them and asked: “Do you have the right license for this?”

It turns out they did not, and were fined $10,000 for their negligence. Sometimes you have to learn the hard way…but it doesn’t have to be so expensive! That’s why – as annoying as they can be – you must pay attention to the smallest of details to come out on top.

3. Do “worthy cause marketing.”

Having no money for advertising, Michael and Bonnie didn’t know what to do to get their product in front of consumers. They couldn’t get into the big supermarkets, because nobody knew the brand. And, to make it worse, the logo of their brand was a foot. Who puts a foot on a bottle of wine? And who buys a bottle of wine with a foot on it?

They couldn’t even get into any of the local community’s stores.

Then, one day, they got a call from a guy who was running a local charity event and was looking for donations. Again, here’s what distinguishes an entrepreneur from anyone else. They said they didn’t have any money, but that they had plenty of wine. He took the wine and auctioned it off at the event. And, following that event, sales of Barefoot Wine skyrocketed in the surrounding area. They tried the same thing in a few more towns – and got the same results.

Marketing via worthy causes is a brilliant way to advertise because you don’t have to spend any money whatsoever. Doing this, and only this, is how Barefoot started to become one of the fastest growing wine brands in the country.

4. You only need a few advocates to love your product – not thousands.

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Who are you more likely to listen to, your friend or an ad on Facebook? It’s a simple truth, but one that seems to be easily forgotten amongst startup founders.

By focusing on worthy causes and smaller communities, Michael and Bonnie made their customers fall in love with the brand. Those originals spread the word like wildfire, and the rest is history.

5. Be generous but don’t be free.

There’s no need to merely give someone else a “win” when you can create a “win-win”. If you’re giving someone your product or service for free, ask to be in their newsletter, or ask them to write a blog post about you, or give you some sort of publicity. Be smart about how you give. This is how Michael and Bonnie spread awareness about their brand in communities in which they had no foothold or connections. Strategically, they created awareness and supporters in one fell swoop by having an awesome product and a valuable offer.

6. Spend 80% of time on sales.

Why? Because it’s so hard to achieve steady cash flow in a new business. And when Michael and Bonnie say “sales”, they don’t mean just a few sales here and there. They mean opportunities where you can sell hundreds, or thousands. That’s where the time needs to be spent.

7. Ask people how you can help them, not what you can get from them.

People have to trust you before they work with you and before they buy from you. You might be the most trustworthy person in the world – but they don’t know that. Show them that you are by asking what you can do for them, and then do it better than anyone else. Even better: do your research and find out what that person or company needs, and then offer to help them with it. Successful entrepreneurs take the initiative.

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8. Your first goal should be to know everything about your business, not to expand.

Everybody, when first starting a business, wants to expand expand expand. This won’t work, according to Michael and Bonnie, because when you’re first starting out, you probably don’t understand every facet of your business. There will be stuff you don’t even know that you don’t know. Get to know your business, get to know everything about your business… only then will you be ready to expand.

9. Mistakes are beautiful.

“We weren’t born with the ability to start or grow a successful business,” Bonnie says. We make mistakes and then learn from them. There’s absolutely no excuse for wasting a perfectly good mistake, because every mistake is beautiful! They’re beautiful because you have the opportunity to never make that same mistake again! That’s how you grow a profitable business, by not making the same mistake twice.

If you do it right, after making a lot of mistakes, you start to make a lot of right decisions over and over again – and those compound!

10. Taking breaks during your day is essential to success.

There’s no getting around it: you need to take the time to recharge that biological computer between your ears. If you’re a self-diagnosed “workaholic”, this should actually be even more important to you than it is to most people, because taking breaks will allow you to be sharper and more productive and to make better decisions. And isn’t that much more important than working every single minute of the day?

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