Simplifying an Overwhelming Category with Philip James

0:02Who's ready to rock today, Fire Nation? JLD here and welcome to Entrepreneurs on Fire. brought to you by the HubSpot Podcast Network, the audio destination for business professionals with great shows like Gold Digger Podcast. Today, we'll be simplifying an overwhelming category. To drop these value bombs, I am brought to Philip James in the EO Fire Studios. Philip is a serial entrepreneur dedicated to innovation at the intersection of wine and technology. He built the leading personalized wine brand and has helped more than a million people find wines they love. In today's foundation, we'll talk about doing just that, personalization.

0:35We'll talk about customer experience, being unique, and so much more. And a big thank you for sponsoring today's episode goes to Philip and our sponsors. Nudge, hosted by Phil Agnew, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Ever notice how the smallest changes can have the biggest impact? On Nudge, you learn simple evidence-backed tips to help you kick bad habits, get a raise, and grow a business. Oh, and it's the UK's fast-growing business podcast. A recent episode on how to win any argument shares decade-long research into persuasion from a world-leading neuroscientist.

1:08Listen to Nudge wherever you get your podcasts. NetSuite by Oracle brings accounting, finance, inventory, and HR into one proven platform, helping you reduce costs everywhere. Backed by popular demand, NetSuite has extended its one-of-a-kind flexible financing program for a few more weeks. Head to netsuite.com slash fire. Philip, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. John, thank you for having me on the show. Yeah, that's a good question. I think I might steal one that one of my investors says sometimes. It's like the overnight success, you know, 10 years in the making.

1:52And, you know, I just don't think that people see or realize kind of how much drudgery and how much work goes into building something that hopefully eventually people read or hear about and you know feels like an overnight success but there is often so much work that goes into it behind the scenes and firstly if I think we were 18 months or nearly two years since starting the company before we even launched the website. I mean, that's how long it took us not just to do the tech, but to make the wine and do everything else. And Fire Nation, that actually leads beautifully into just what we're talking about here today, which is simplifying an overwhelming category.

2:36Of course, in the intro, I talked about the innovation at the intersection of wine and technology. And that's why I want to start there, Philip. I want to hear the story behind First Leaf. You know, I think at this point, I'm a wine industry insider, but I didn't start that way. And, you know, but gradually sort of fell into the wine industry. Maybe we talk about it later, but kind of fell into the wine industry, fell in love with it. And, you know, I think when you're kind of in the stream, you can see an opportunity that you wouldn't see, you know, if you don't understand how the business works behind the scenes.

3:17And so, you know, some of the things that we realized, I think, are obvious, like, why is wine so complicated? You know, I think anybody can resonate with, you walk into a grocery store and there's a thousand different wines on the shelf, and how are you supposed to pick? And heaven forbid, someone slides you the wine list at the restaurant. You know, I've seen it like past the parcel, right, where nobody wants to touch it. Well, it's pretty funny. I don't know if you resonated with this, but always my friends are like, how do I classily choose the second cheapest wine on the wine list? So that's kind of feels like that's actually a strategy.

3:52Like, how do you become the second cheapest wine on the wine list? Because nobody wants to choose the cheapest because that's just that sends a bad signal. So let's go with the second cheapest, but keep going, Phil. The problem is the restaurants are wise to that, right? So they make a huge margin on that second cheapest wine. Anyway, so, you know, so it's this super weird, opaque and complicated category. And then working in the industry, I always had like a chip on my shoulder about that. Like, I originally didn't know a lot about wine. And people I knew, colleagues, would kind of roll their eyes.

4:26Like, you know, is Bordeaux a place or a grape? It's a place, by the way. It's a city. Now I've been there. I know that. But I didn't know that stuff at first. And there's no other category that makes me feel like that. And that just, I don't know, it feels unfair, right? And so I basically have this chip on my shoulder. And, you know, ever since starting my first company, you know, which eventually did lead to First Leaf, I've always tried to make it simpler for the average consumer. Like I said, I remember what it's like to not know anything about this product, even though I like it and I buy it.

4:59And, you know, I think I'm a good customer in this industry. I know what it felt like to have people literally roll their eyes at me because of how I knew. But there is nothing else I buy, even if I don't know much about it, that someone would do that to me. And so, you know, firstly, from the ground up is set out to make it simpler. Now, we do a lot on the back end in supply chain and technology in order to present something simple, you know, to you, to the consumer. And so it kind of reminds me like when you walk into a restaurant and you order the entree. I mean, you just sit there and wait 10 minutes and it shows up.

5:36But there's probably been someone in the kitchen since lunchtime, like chopping and prepping and, you know, getting everything ready. That's what I want to dive into next, Philip, is specifically the unique angle that you wanted to take with First Leaf. I mean, you obviously didn't want to just say, I'm going to create another wine just to add to those thousands of wines that we see when we walk into a winery or a wine store or fill in the blank. You saw a void. You saw an opportunity. You saw a unique angle that you wanted to take. What was that? You can kind of buy wine anyway, right? There are over 10 ,000, I mean, literally, there are over 10 ,000 wineries in the US.

6:12And that sounds like a lot to me. And I don't know, 30 plus thousand liquor stores and grocery stores and hundreds of thousands bars and restaurants and so on, right? So you can buy wine pretty much anywhere. And so yeah, we did not want to be the 10 ,000th and first winery. And so I think there are two things that we do at First Leaf that make us very, very different, right? So the first one is we make and source wine from all over the world. And really, no winery does that. If you go visit a winery, whether it's California or somewhere in Europe or anywhere else in the U.S., they normally make wine from one place.

6:50If you go visit a Napa winery, obviously, they make wine from Napa or maybe California. But we make wine from over a dozen different countries. We work with vineyards and growers all over the world. And so in that sense, yeah, we're a winery, but we also kind of come across a little bit like a retailer, right, with a full breadth of regions and grapes and prices and so on. And then the other one is about the technology, right? And because we have this huge range of wine, and I said I wanted to keep it simple to the consumer, we have to help them pick. And so from going to the website and taking that introductory quiz, the personalization, like picking what goes in the box, the customer service team that are all wine trained who can help you put together a custom order if you want.

7:37All of that is designed to help kind of reduce the complexity and the noise and help the consumer just feel confident that they're getting, you know, they're paying for something that they're going to enjoy. Fire Nation, I think it's really important that you go into an industry saying, you know what, I'm going to be able to disrupt it in this way or offer something new and unique in that way. And so with you, Philip, how did you actually know or when did you actually know that you were on the right track with First Leaf? you don't know on day one right i think is my best answer and it takes a long time and you know i spend so much time trying to trying to go back and think of things from like first principles right so what am i really sure is true because it's so easy to get caught up in the noise or and and you know we all have to do the sort of micro analysis right how did yesterday's ads do, right?

8:37What's the landing page conversion or whatever it is, right? And you have to analyze that and you have to improve it. But I'm always dragging and my team is really good at that, right? And so someone, it's usually me, I have to drag my brain out of the day to day and go back and think of like, why did I start this business? What's always going to be true? And make sure that we're still aligned with that. And so for me, it's things like, look, this is a big category. in the u.s wine is 70 billion dollars and the consumer confusion i mean you and i were joking about it right i mean i can ask anybody anybody i know even a wine expert and they'll still complain about buying in a grocery store or looking at a wine list and not knowing any of the or many of those brand names um so certain things are kind of always true uh and as long as we remain aligned with that.

9:31I think we stay on the right path. But whether or not you know, if you're perfectly meshed with that is hard, right? And entrepreneurs and VCs talk about product market fit. But it's usually not something that comes overnight. And I think it kind of happens in like different steps, right? At different levels of scale. So, you know, can you get one person to buy your product? Can you get a hundred people to buy your product? And then can you get a hundred thousand people to buy your product? And each is like a, you know, each order or two orders of magnitude is harder and harder and harder. But I think you have to keep tying it back to those for your category in your business.

10:15Like, what are those universal truths? And are you still aligned with those? Fire Nation, a lot to think about while we take a quick break here, but I really am excited to be diving into customer experience as soon as we get back from thanking our sponsors. Welcome to the world of entrepreneurship. More things added to your to-do list every day and less time to accomplish the things that matter most. Add to all that the number of tools it takes to run your coaching programs, online courses, growing team, and your physical product sales, and you've really got your hands full. Doing business has never felt harder.

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13:13Over 37 ,000 companies have already made the move, so do the math. See how you'll profit with NetSuite. Backed by popular demands, NetSuite has extended its one-of-a-kind flexible financing program for a few more weeks. Head to netsuite.com slash fire, netsuite.com slash fire, netsuite.com slash fire. All right, Philip, we're back. And as I kind of teased before the break, so few entrepreneurs focus on the customer experience. They just focus on the sale, then it's out the door, then it's onto the next sale. So they really fail to grasp that if the customer has a fantastic experience, they will tell their friends and boom, it's like free and amazing marketing for you.

13:55So share with us the consumer experience for Firstleaf. What's that like? Business is like playing sports at a professional league, right? There are really good people that you go up against. And so, you know, it's very, very different to go from, I don't know, the theory of business, or for me, I went to business school, and then all of a sudden, I'm running a business, and I'm like, oh, like some of the people I'm up against, these are multi-billion dollar brands with 100 years of history and just a giant budget. And I mean, you say that most people, most companies don't think about it from the customer experience, but But how can you not do that?

14:35I mean, how can you I mean, you you have a bunch of constituents, fine, employees, investors and whatever. But I mean, ultimately, none more important than the consumer because they bring in all the money that then pays for everything else. So, you know, we I really force my team to continue to re-experience. And this is hard, but to keep re-experiencing what it's like for a for for a new member, for a new customer. And so I host a meeting that's sort of cross-departmental, cross-functional. And for each time, and we don't meet every month, every two months roughly, for each time we meet, everyone who attends that meeting has to create a new account, go through the experience, receive the shipment, and, you know, stay, unsubscribe, change some parameters.

15:24Quite a high burden to come to that meeting, right? You have to spend the money and you have to put the time in. But if you don't keep re-experiencing it, I mean, imagine building a mobile app and like only looking at it on a 30-inch monitor. I mean, you need to put it on a phone and walk around and see how fast it is, you know, if the Wi-Fi isn't strong, right, or if you're, you know, downloading it over cellular. And so we spend a lot of time trying to re-imagine and re-experience what it's like for a new consumer. But let me quickly describe that. So it's simple, right? They would go to firstleaf.com.

15:58We have an introductory quiz that's, I don't know, half a dozen or so questions. Very simple. What kind of food do you like? Do you know anything about wine? Are there specific regions or brands that you know you like? If you don't, skip the question. But it gives us sort of a first cut of being able to understand what kind of wine you would like. And like I said, we have wine from all over the world. We have to reduce it to few enough to put in a box for you. we'll make that first choice we sell it roughly half price as an introductory shipment it's a really good deal it's pretty much break even for us but we want you to try the wines and we want you to experience the personalization ships out same day if you place the order early enough or next day if not we get it to you quickly enjoy the wine and come back and rate them thumbs up thumbs down jump on the phone with customer service if you want to refine your account in any way, but we will continue to use that feedback from you, again, however you give it to us, to refine your future shipments.

17:02And, you know, that's kind of basic, right? But one thing I think that's very interesting about wine is people's consumption may move up and down a lot throughout the year, right? Maybe you're on a health kick or you do dry January, you don't want any wine, But maybe you have an event coming up or or you have friends over and your wine consumption goes up. And it's not like that for a lot of subscriptions. Right. If I have socks every month, I don't need more socks. I use the same amount of socks per month. But wine people's consumption can vary massively depending on what's going on in their life.

17:37and so we we give the consumer a lot of tools to upgrade or downgrade or have a bigger box with more bottles or pause it change the frequency and so on and so yes we're a subscription but i sort of talk about it very much as like a polite subscription and it works you know within the framework that the consumer wants to set but they generally want us to pick the wine that goes in the box for them as we learn their tastes and can do that better often than they can do themselves. I compare what you're talking about to a couple of companies that I actually subscribe to, and they're specifically for coffee.

18:18So there's one company called Four Sigmatic, there's another one called Strong Coffee, and they both do that very well. I know that I consume a significant amount of coffee on a daily basis. That's just one of my morning routines for sure. but it can vary because sometimes I take trips, sometimes this happens, sometimes that happens. And so the companies that make it really easy to pause, to add on, to just delay one week, two weeks, three weeks, and to allow me to get into like what is a perfect rhythm. So I always have enough coffee on hand, but never too much that I feel like, okay, I'm overboard or I'm freaking out because I'm kind of running out.

18:53So those companies that really make it simple, Fire Nation, and make it just work, those are important because frankly, there's probably one or two other coffee companies where if they were as good as those two that I mentioned, I probably would be subscribing to them instead, but they either don't have that program or make it really convoluted and difficult and just not fun. So think about that as you're going through. And something that Philip and I talked about pre-interview is he and his company were kind enough to actually ship me a box of wine with individual wine bottles within that box.

19:27and it was just in time for my friends from college. They were in for a trip. It was three of my college roommates with their families and we had these lovely dinners overlooking the Caribbean and we shared these bottles of wine and we definitely talked about it. We talked about the design, the names because they stood out and they were unique. And I have no doubt that those three friends that went home that consume a lot of wine are going to be Googling First Leaf because they want to say, wow, that was really cool. That was great wine, cool design, all this stuff. And it was just different and unique for that reason.

20:03So, Philip, all this being said, we've talked about some really cool things. Your idea, your story, your unique angle, how to really judge if you are on the right track, the customer experience being so important to you. Take us home. What do you really want Fire Nation to know? Number one, about you, about First Leaf. But number two, what can they be taking away from your wealth of experience and knowledge building this brand? First Leaf is a very good service to try out if you're interested in wine, you want to learn more about it, but you find picking it in a store confusing, right? Kind of hit or miss.

20:43If that describes you, go take a look at firstleaf.com. um you know for aspiring entrepreneurs you know this is something I've thought about a long time right because you know I'm I don't know 15 plus years something like that uh as a CEO at this point and you know I've learned many things along the way but I still remember what it was like when I raised money a little bit of money from friends and family and started my first company and so I remember quitting my job writing the business plan you know scraping together a few hundred thousand dollars. I don't know, it felt like a lot at the time.

21:18I'm not really sure if that's a lot in like modern startups, but that's all I could get. And I sat down at my desk in my kind of, you know, rented kind of WeWork style space. And 10 minutes later, I remember phoning my mother and I was like, I don't know what to do now. And so that beginning part can be really slow, right? And there's no momentum other than what you create. And so my favorite cartoon has always been the Tasmanian devil. I don't know if you guys have it in this country. Oh yeah, we do. He spins really fast, right? But when he stops spinning, it stops. And so you, the founder, the founding team, you guys have to spin.

21:57And so it takes a long time. You know, those early days go slowly, but eventually you'll have something, right? Some teams, some customers, some other things. And for me, that feeling when I could actually log off and watch TV or go for a hike or hang out with friends, knowing that something's happening and I'm not pushing it. And that feeling when the company actually begins to have the beginnings of a life of its own. For me, that was the most satisfying part at all. But for a long time, and for us, it was nearly two years between, you know, legally incorporating the company and launching. I mean, we had to not just build a website, but source and make the wine.

22:38It takes a long time. It was just me and my co-founder spinning. but now I know, you know, there's a company running. And so finally I can take a bit of time off or also have a little bit of a balance in life at the same time. But for a long time, I wasn't able to. So, you know, I have empathy for people who are going through that for the first time, but know that, you know, if you succeed, the other side is a lot nicer and calmer than it needs to be for you in the beginning days. Philip, give us a call to action. What do you want our listeners to do to connect with you, your company, and then we'll say goodbye?

23:17Firstleaf.com obviously is the company. You can reach me through LinkedIn. I think it's just my full name, Philip J.K., the initials, James. But yeah, come take a look at what we offer. Connect with me on LinkedIn. Drop me a line. We'd love to hear from you. Fire Nation, you're the average of the five people you spend the most time with. You've been hanging out with PJ and JLD today, so keep up that heat. For links to everything we talked about, visit eofire.com. Type Phillip in the search bar. The show notes page will pop right up. And Phillip, thank you for sharing your truth, your knowledge, your value with Fire Nation.

23:54For that, we salute you and we'll catch you on the flip side. Thanks, Joe. Hey, Fire Nation, a huge thank you to our sponsors and Phillip for sponsoring today's episode. and Fire Nation, I've interviewed more than 4 ,000 of the world's most successful entrepreneurs. And guess what? I've created a revolutionary 17-step roadmap to your financial freedom, to your fulfillment, and I put it all into my first traditionally published book, The Common Path to Uncommon Success. Personally endorsed by Seth Godin and Gary Vaynerchuk, The Common Path to Uncommon Success, it's the step-by-step guidance that you need, Fire Nation, to achieve the lifestyle of your dreams.

24:32visit UncommonSuccessBook.com. I'll catch you there or on the flippity flip side.

25:02neuroscientist. Listen to Nudge wherever you get your podcasts. NestSuite by Oracle brings accounting, finance, inventory, and HR into one proven platform, helping you reduce costs everywhere. Backed by popular demand, NestSuite has extended its one-of-a-kind flexible financing program for a few more weeks. Head to NestSuite.com slash fire.