Laurent Vernhes: Quality-Obsessed Exited Founder: "Business is a Form of Art"

0:00The challenge was to never compromise the standards, because that's what made people mutually obsessed with us. Laurent Bern. He spent 20 years shaping tablet hotels into a tech and luxury travel icon, culminating in its acquisition by the discerning Michelin Group four years ago. Now, Laurent is channeling his expertise and refined taste into launching a wine company committed to delivering the world's finest wines at fair prices. In this episode, we explore the art of building luxury brands, quality obsession, and treating business as an artistic endeavor. A deep and independent thinker, Laurent shares his life lessons with us in a beautifully vulnerable way.

0:42It's not like I have like five cycles left in my life. So how do I maximize the time I have left? Winemaking is an art form. I do blind tastings and guess who wins? Not the fancy bottle. Real art is not people looking at what the market is looking for and giving the market what they want. It's people just looking inside deeper and deeper and kind of coming up with something that's in their essence. When you get to that level, you realize we're all connected. So that's how people, that's how it touches other people.

1:18Hi, Laurent. So good to see you. So good to see you. How are you? Very well. I'm very well. Laurent, we've been friends for a dozen years, believe it or not. And I've always admired how you can think out of the box and how deeply you process your life experiences. So I'm thrilled to have you here today because I want you to talk about the very important life changing experience you had after you sold your fantastic business called Tablet Hotel. So if you don't mind, I'd like to kick off with asking you to tell me more about that journey, the 18 years of building tablet hotels and then selling it six years in Michelin.

2:02Well, you want me to summarize the last 24 years of my life? Exactly. All right. How about what motivated you to start tablet hotels? That's a good way. That's a good place to start. I think what motivated me was two things. One is when I was in the corporate world, I felt I had to fight with a whole bunch of people for my ideas and intuition to be tested in the real world. And I had to convince all these people. And it was very frustrating to me because some of the people were brilliant and not many, but some. and the others were like people, why do I have to convince these people? So that was very frustrating to me.

2:52Also, you know, that process of having to, of creating consensus with other people, which is a way to look at it in the corporate world, you know, I felt because it didn't motivate me. So I felt, you know, I was not going to do super well in the corporate world because I was not motivated by that approach. And therefore, I would probably not reach my potential in that environment. So I thought I had only... I was doing quite well, but I had got to the point where I was going to be running some businesses. I was running one already, but bigger businesses. I was going to get more and more people to convince.

3:39And that whole concept. kind of i thought you know why don't i test whether my if i'm free from having to do this which is an illusion but it was an illusion but what would what would happen if i was free uh so that's that was the the main the the main driver you know that freedom a freedom to test your own ideas test yourself in in the with the outside world because not within your team which was you know totally an illusion because in the end you still have to do that anyway and as a leader you know it's very important even more so but you try to convince some people of something you deeply believe in something that comes from your heart and soul so it's a different kind of convincing i'm absolutely with you on that one so then i then i then i launched into that and and um you know i picked you know anything i could think of you know i just wanted to be an entrepreneur and it's like i had no particular inspiration as to what you know what it had to be and then i realized what i know the most about is travel because my obsession until then i'd be had been to travel and see the world and so i thought how can i apply this and then um then you know i started this uh this this business which was which is still uh you know hotel curation business and what was a bit like you know what Michelin had been doing for a century on restaurants except on hotels and globally and the business model what was innovative there were two things that were innovative about this so one was the business model was commerce you know it was building an online travel agency within the curation and if you put yourself back 23 years ago.

5:32If you had an editorial mission, you were selling advertising. If you were doing commerce, it was discount, discount, discount. So connecting commerce and editorial mission was actually quite innovative. I don't think there were many companies doing that. In fact, I can think of one doing that at the same time. So that was the innovation. Now, everybody understands that the best way to sell is the storytelling. So the editorial is everywhere now. Mostly fake editorial, but people understand that's the way. And at the time, it wasn't so obvious. And the other aspect was that if you're selling something that's not exactly inexpensive, you need to connect emotionally with your clients.

6:23People buy, you know, people, you know, so that emotion, you know, was the communicating that emotion. It was very important. And that's something we worked very hard on. So that, so, you know, I go, I had a pretty unusual journey for tech companies because the bubble, the internet bubble burst like something like two months after I started the company. you know so you don't choose when you do things but you know this time was my time i you know i couldn't define the perfect time there is no perfect time but what it meant was that there was no after the initial angel money there was no institutional investor for like about three years that would touch anything that had the word internet and consumer in it in its description so I had to make it work without any outside money and of course I asked the angel investors some of them were relatively very high profile people, one of them is super high profile legendary, in fact I'll quote him because he deserves that credit, Chris Blackwell who discovered Bob Marley and launched Island Records and so on and became a friend much later, like 10 years later, but then he was just an investor.

7:57And then I contacted him and said, I'm not very good at asking for money, but I have no choice. I need money, otherwise I'm closing this thing. and i had already fired everyone in a kind of in a kind of uh uh collective suicide uh way i told people this anyway so please break well i told chris i need money i have to ask i i everybody else has told me oh they lost so much money in the bubble and he's like i'm not going to tell you that you know and he's like he's like this is when we're going to find out whether you're a true entrepreneur or not and that's that's all he said and that was you know what you've proved yourself now i i then i did and you know i like i credit him for for you know bringing my mind back to you know this is this is the there is no escaping your your path your journey you're just like you know this is what you wanted to do then we're gonna we're gonna find out uh whether this is uh what you are meant to do on that or whether you have what it takes so let's say anyway so i i i did find a way to to make it work and generate money uh cash and cash is obviously like air you know if you don't have any uh you're dead um and you know in a way that that business model became you know i discovered also uh search engine marketing uh at the same time as google actually you know we were you know i was using overture and actually sold to yahoo yahoo killed overture because they killed everything they bought basically but google saw that model and launched adwords and the rest is history and that but that's at the time for a while i was the biggest client of adwords they had six account managers can you believe that and then i i had to kind of function i miraculously won a mountain bike i never win anything at raffles but of course you know i was a good client so laran when i first met you i i've never told you that before but when i first met you you were 12 years into the business yeah and i was baffled by the way you ran the business because i was coming from a very different side of of the tech world where everyone is obsessed with growth and suddenly i meet this man who is building a business for years who basically would not allow a hotel to join his network unless he actually went there and physically experienced it yeah but i remember talking to you about it and i said how do you plan to scale this business if you have to if you have this restriction which is self-imposed you were completely unfazed completely unimpressed by my concerns i remember it very well and yeah whatever um and it was not it was actually much later like years later that i've heard uh your countryman uh bernard arnaud speak about desirability this is when when um i understood you better because what he was saying of course today he is the richest man on the planet he founded and he runs the largest luxury brand in the world, LVMH.

11:10And he has proven that his business thinking really works and it's very resilient through all the crises we had in those several decades that he's been around. So what I found fascinating about his logic is he said, I don't care about growth. I don't even care about profits. I care about one thing and one thing only, and that's desirability. and I remember thinking oh I think I understand why Daraan is doing what he is doing it must be about resourability yeah no that's one way to frame it and I agree I think you know it's the most powerful sales tool you know there is nothing stronger that I can think of and it comes from really focusing on the product you know I mean he has a way to really attract to acquire the best talent out there.

12:07And what is done with Tiffany in New York, you know, the store is unbelievable. Invested a massive amount of money, clearly not thinking purely in terms of numbers, but kind of betting that getting to that level of desirability and beauty will attract, you know, will generate success. In the case of hotels, you know, to me, the challenge was to never compromise the standards because that's what made people literally obsessed with us. There were clients who all loved us. I was a very loyal client. I love you. Thank you. I still do. So you cannot compromise the desirability. But the growth comes from getting a bigger market share of these places because it's possible because you're creating a connection, some kind of horizontal connection between these places that didn't exist.

13:08So you become the club of people who like these places where there was no kind of connection, even no marketing connection. There are some marketing companies that specialize in leading hotels of the world that specialize in trying to create these connections because their model is driven exactly by getting more hotels the the the standards are not there there are some shitty leading hotels some great shitty hotels leading hotels so you can't really trust them so they don't get to that to that to that objective that they that they're setting for themselves which is to to create this connection because because there is no substance to it in that case so for me this obsessive belief in this particular culture where you're building trust.

14:02This is so you. For me, this is so much Loran Incorporated. I would be very, very curious to hear how you continued after you sold tablet hotels. Did you keep that essence for your next business, which is, of course, the wine business that they really want you to tell me more about i'll tell you about in about it in a second but i'll just say one more thing about what you are talking about in terms of growth of course i wanted to grow you know because you because you know because you know there are more people out there who could you know who are if they knew about you would would love you so why not increase the love you know connect more people as long as there is some this kind of substance behind the connection but I think unlike you I think you had a VC right on more than one but most entrepreneurs have VCs you didn't okay so in your case different scenario that's why I think you think that way we walked away so in the case of VC driven companies are pushed by the VCs to grow at any cost because most of these companies fail and now they need that shining success to make up for all the failed businesses that they've invested in.

15:28I'm pretty sure a meaningful portion of these businesses would not have failed without that kind of pressure. But anyway, so they're pushing every business to grow at any cost and often kind of removing what could define the business, which is some real substance, something that clients would connect with just for the sake of growth. So I think, you know, I think you, I'm not trying to say that I'm some kind of, I'm trying to say I'm not some kind of monk who didn't care about growth at all. But at the same time, you know, there were phases when I was obsessed with the numbers like any other kind of business manager.

16:14These phases were not the phases of ideas growth. And there were phases when I was completely in some kind of zone with the creative process. They were launching all these new features and completely in love with the features, obsessing about the features. These phases were the phases of highest growth.

16:36So you may think the causality is that maybe I had success before, so I could afford to be just creative. And the success came from the number crunching before. You could try to interpret it one way or the other, but I am completely convinced that the correlation was when I could channel creativity, substance, digging in myself, the people around me, the team, and came up with exciting stuff. That's what created the most growth. Of course, you have to be disciplined about the money, but that's actually in my DNA. So that's a gift I got from my parents is the financial discipline. We'll get to your parents later.

17:25Yeah, okay. That essence, if your philosophy of how you do business, survive the exit and you took it to your next venture. Or you rethought it. so you know the the the path to the next venture where we are both part of uh we we both have entrepreneur friends and often you know people jump into another one i didn't do that you know i i tried you know i i thought this is a an amazing opportunity to stop and and think about but what i want you know it's not like i have like five cycles left in my life so how do i maximize the time I have left and in which way do I want to maximize it? What's meaningful to me?

18:11So I stopped. So maybe doing another venture was one of the possibilities of being on boards,

18:22education, investing, whatever. Or just being kind of a donistic explorer of what's fun to do. So all these possibilities and more are there. So I wanted to, why jump? Why not dip into these things a little bit and not go full on into something, but test and see if anything seems to resonate. So it took about a couple of years before I actually decided that, Well, after all, I want to go back to being an entrepreneur. And because, in fact, the way I am an entrepreneur, my version of it, and I'm not the only one who's like this, but resonated with the process of looking in itself. I do believe, I think it's the difference between art and commerce, and not that they are incompatible.

19:32But, you know, real art is not people looking at what the market is looking for and giving the market what they want. It's people just looking inside and deeper and deeper and kind of coming up with something that's in their essence. And basically, when you get to that level, you realize we're all connected. So that's how people, you know, that's how it touches other people because you realize the connection as human beings. And that's what artists can do. That's why we need artists because they help us understand that we're all connected, basically. The human condition is something we share, the good stuff, the bad stuff, even the really dark secrets and stuff.

20:19We all have that in common, except it's very difficult to actualize that connection. So, you know. For me, it's more a spiritual matter than art matter. It's very interesting for me to see how you came to the same conclusion, but through art, because I found that this human connection is actually how we grow spiritually. That's where we go. We kind of become less self-focused, less selfish, and appreciate more that we're part of the whole. But the path to it is by looking deep inside yourself. That's when you find that connection. And I think that's what true artists do. You know, but a majority of people who call themselves artists are just business people with a skill that they see, okay, this is what the market wants, and they give the market what they want.

21:11I don't call that art. So, you know, in a way, I think art is a kind of a purely spiritual endeavor. That's where you and I, that's the so-called artists would just know, okay, people seem to like this and give them more of this. They are just doing commerce. But does it mean that commerce is bad? No, so I don't think so. I think commerce is actually one way for artists to broadcast that connection, to give more people a chance to feel that connection. so I think you know so commerce you know or business you know is it can be can be used to further that connection between people and that's that's the way I want to do business that's how you see yourself you is it is it how you see sort of your your identity as well as a person who merge who can merge being an artist and being an entrepreneur in one My version of art is that through a process of individuation, to use the Carl Jung concept, I find myself being a catalyst to make sure artists have as much influence on the rest of us as they can.

22:35I mean, to help artists kind of broadcast what they're discovering inside themselves to a wider audience, so that that wider audience feels that connection with the rest of humanity. So going back to your wine business, how does art and wine and commerce merge into one? So I think winemaking is an art form. So that starts with that. So, I mean, I think of the best winemakers as artists. They're not, you know, a majority of the wine industry is just like any other industry, you know, basically, you know, it's difficult to make money in wine and to scale wine because of the process of just making wine.

23:20but they what they do you know let's take america as an example what they do is uh in america people love you know a majority a large the biggest the single biggest uh segment is people who love big cabernet sauvignon and okie chardonnays so these are produced in in may majority of the wine in america is that just because this is the mainstream taste and that's what companies do in fact you know the the product is so industrial they are they are like something like over 30 possible additives that these companies use to add to the to the liquid you're drinking to make sure it's kind of close enough to what they think is your taste that's the reality of the wine industry you're drinking a chemically driven product for most of the wines are like that are they the best wines of course not you know in fact the you know the best wines are are why do i say of course not because because none of these wines will give you the kind of uh high that that uh that a good wine will give you so the best wines are usually made by by artisans what what do they do it's like you know they they're basically you know they they they have a connection with the the nature that's producing these grapes you know they they're like they treat literally i mean i've seen that over and over again they treat their vines with like with love basically that's their that's the only way i can i can uh describe it and uh and so they are artisans they cannot do that on on a large scale they and then they you know they they ferment the juice and but and they put they put their heart and soul into this like literally and it and you know what they do it for themselves they don't do it for other people and to me that's kind of you know that's a sign that you're on on the path to art they are doing it purely for themselves and and of course they're not all super talented you know they don't always succeed but the ones who succeed they create stuff that when you drink when you drink that stuff you know you know what i'm talking about you know it's good wine there is something about it right that that i guess it's the same with art, right?

25:39Yes, there are artists. That is just fantastic. And most of us would react to it and know that. It's the same. It's exactly the same. I mean, the alcohol portion of it, you know, whether you get drunk or, I mean, in fact, I wish there was no alcohol in wine because I could drink more of it. Why not work on that then? No, I looked into that. i looked into that for that reason because but no it's uh the process the process is to remove the alcohol from the wine which is the way it's done at the moment is no there it's like it's like a it's removing the it's like killing the soul of the thing so at the moment you know it's not it's not working but so i think these people are artists and i you know so what we do is that we are basically scouting people like that endlessly.

26:34There are literally, there is over a million wine labels in the world, which is why everybody is lost. It's like, how do you know whether a wine is going to be good or bad on the label? A friend of mine has developed this kind of intuition for labels. Not so reliable. So nobody knows, and people are, you know, people, not everyone is willing to try and fail repeatedly. In fact, most people are not willing to have this approach. And why do it on wine? So, you know, so people either, you know, find some wine they like and just keep drinking the same wine over and over again, or people with some disposable cash will just buy the most expensive wine because that's kind of an insurance policy.

27:24and also it enables them to show off oh look at this very fancy bottle of wine but you know and that gives them kind of a threshold of quality it's not the best wines it's really the best wines you know I've had a lot of them thrown at me to make a point and I do blind tastings and guess who wins not the fancy bottle we can do it you know anytime and it's like a fun game to play with people who show up their wine cellars.

27:58So I want to help people discover, fall in love with good art, with good wine. In a way, and remove a big chunk of the risk of failing when you try something new. So we're scouting all these wines, and then we have this process of, blind tasting at the end. So the scouting takes forever. It's like ongoing all the time. And then we meet every two months now in my place in Italy. And we have something like wines from 50 producers. And I invite other producers. These days we are on the fourth collection. So I invite the winemakers who were selected before and a few other people. And then together we blind taste everything and we come up with six wines and we create a collection.

28:59And then this collection is sent to the members as a way for them to discover pearls of happiness. So, Leran, you actually answered my question, which was whether you kept that obsession with customer trust and desirability and quality from Tablet Hotel. Yes. MBA wine. And I guess the answer is yes, because you're still curating and tasting every single wine that you're giving to your customers. Yeah, I could have just said yes. I could have just said yes to your question. But, Laran, before you started envying wine, you started Rhone wine, right? Maison Berne. No, I was not growing wine. I have too much respect for the people who do it well to pretend I can do the same thing.

30:00No, I was not growing it. I actually white-labeled. I was, I was, I was, it was one of these spaces at Tablet where I was crunching numbers all day long. And, you know, I needed some, some creative, some fun in my, in my professional life. So I, you know, I, I've had an obsession with champagne for a long, long time. And by chance, I found a champagne at a friend of mine's place that was like incredible. You know, it's like, I couldn't stop. I can drink champagne a bit like water. but this one was like this is like where is the source of this stuff and they told me a lot of the small producers in champagne never sell in retail they just sell directly to families some of the best champagne never reaches retail basically that was one of those and I said do you mind if I call these people so I called these people and then I said I'd like to do an experiment so I understand this whole wine thing better and can i buy some of your champagne put a a my own label and see and i want to understand how i can market wine yeah in america in the world i want to understand how this works yeah it was more of an experiment yeah that was an experiment and it was a it helped me understand the the uh you know So ridiculous complexity of wine distribution in the US.

31:30You know, it's just like Soviet Union 10.5. You know, it's crazy the regulations around alcohol in the US. And so it helped me understand that, which allowed me to start this business. There is a reason why the way I'm doing the business doesn't exist. is because it requires a lot of creativity from how to go around regulations. And the structure is strangely complex just because of regulations. Just to be able to do what I want to do, which is fairly simple, but nobody is able to do it because of the regulations. So that champagne was the beginning of understanding that. And also a way to test whether my personal taste resonated whether there was some kind of truth in wine and champagne and whether I was personally close enough to the truth of what's something that's good versus not and it turns out I was not too far because it was an instant success through blind tasting and to this day people are you know people are calling me saying do you have any more of this champagne you stopped doing it i did and then now i'm bringing i'm bringing back a new one which i will also use as a white label uh approach the the wine business is not white label it's it's a collaborations with the winemaker so we pick a cuvee and then we we and then we basically take cover a whole cuvee and then we co-brand you know and the idea is to also express our admiration for for these winemakers so we're not trying to hide who they are quite the contrary we are telling you know these people are like amazing and um but for the champagne it's uh i found another one which i like even more it's uh it's taken two years but that's what i use only for to reward people in the context of the wine business.

33:42So if you're a member who's helped us find some winemakers who really don't know, here's some champagne. It's like a gift. This gift that people don't expect that's special, and they think, oh, it's some cheap thing, and then they're drinking, and it's like, oh, no, it's not some cheap thing. It's really good stuff. And that's when you have that loyalty. because you've done something that came from the heart. So you mentioned that your parents taught you financial discipline. How did you think about money change from before the exit, after your exit? No, I did a couple of things that, you know, things that I had told myself when I was a kid, you know, if I ever had money, I'd do this.

34:36I did one or two of these things. But basically, I think what surprised me is that, I guess, you know, sometimes you talk to people, it's like, what would you do if you had money? What would you do with that money? And then you have all these ideas of things you could buy and do. And to my surprise, once you have the money. You don't want any of that. That desire is gone kind of almost instantly. Because you can. In fact, the point was that you could, for most of these things. It was not the ownership or the... No, I mean, so yeah, that was an interesting... That's what happened to you. You lost desire in all these material things once you could afford them.

35:23In most of them. I mean, I live well, you know, I mean, I live very well. But, you know, all these cliché things that a lot of people do with money,

35:36why so what is money for you today what's the meaning of wealth for you well you know i think the one of the what when i talked about money before i you know i thought about it as fuck you money like you know the ability to to not think about money so it's freedom freedom yeah I'm having to earn money. Yeah. So, you know, so when I stopped, when I sold that business, when I was finally out after the integration phase, which lasted a couple of years, I mean, you know, so I had told myself, you know, I'm going to stop and just find time to think. The issue was that, you know, I couldn't, i was feeling guilty every day it took a long time to stop feeling guilty about not solving some problem every day not not you know i felt like what have i done you know i said i'm wasting my days like because you're so used to kind of fixing something and dealing with some situation and and you know it's like that was the that was the main issue um not the money was like So you felt restless and guilty that you were not actually doing something.

37:03Was it the business itself or you felt that you were not contributing to the world, what you had? Your arts, your talents, your skills? All of the above, you know. I mean, I'm like, what's the, what's, what, I'm just wasting. I mean, I've got this, I find myself in this life, you know. So I should, you know, from just going back to my French roots, like the existential, you know, the French existentialism. It's like whether you believe in God or not, there is only one answer, it is to engage. So I was not engaging. I felt I was not engaging. I was wasting this situation I find myself in by not engaging enough.

37:57So besides that white label project for wine, what else did you try to do before you found your new art business in MBA wine? I became an angel investor. How did that go? Well, these companies are still alive. So we'll see whether there is any return. Good. it's like a long-term a long-term project you know um that was interesting you know that you know that um i mean the way the way some people do it professionally and i respect that it was i was doing it in the context actually of the of the hbs group of angel investors which you know So it was great to have different angles on what matters to you, what are your criteria for investing.

38:50And clearly, we all had different criteria. And that kind of freed me to think of only the criteria I felt was I had something to contribute more intuitively because the other guys were so analytical that I didn't need to use my analytical skills. Did it satisfy your desire to engage with life again? No, no, because, you know, I want to be the person who's doing something. I'm, you know, in fact, it's kind of brought back this kind of idea that, you know, seeing the difference. I connected with these people. If I didn't connect with the CEOs, I wouldn't invest. It's kind of a necessary condition for me to invest.

39:49But obviously, we're different people. But it kind of reminded me of why I had become an entrepreneur.

40:00And it also reminded me that I learned many skills that I didn't really want to learn, like managing people. Once you scale and you have to create, you have to formalize the culture and all these things. I used to say, I didn't start a business to manage a bunch of people, a ton of people. That was not my motivation. And I find myself in that situation and almost reluctantly, but it forced me to do it better, to get better, to become quite decent at it. And I'm very grateful I learned, I understood. I mean, there is a lot of depth about this, about doing this, which I didn't expect to find and I was not looking.