Problems
On the theme of perseverance that these two entrepreneurs have demonstrated throughout their company’s growth, no where is it more evident than the troubles they have faced in growing the company, and the personal sacrifices and challenges they have overcome to be where they are today. “Looking back at some of the earlier times I can’t believe we stayed in business. There have been several moments when we looked at each other and said is enough enough?”
When asked if there were any particular problems that stood out most evidently during their years of business, First could not think of any one because according to him there have been so many. “We have failed 5 million times! We have made many mistakes such as having inventory stolen, the wrong glass for packaging, incorrect inventory counts, delivery trucks stolen, delivery trucks vandalized, and even our product formulas stolen from our offices. We have done things because we did not understand the business well enough to make a wise business decision.” But in the face of such setbacks comes the knowledge to try and prevent it a second time. A very metaphor First’s that has come from his partner sums up such troubles rather well, “The skin on a scar is a lot stronger than your normal skin. We have a lot of scars.” Or, put into terms that all entrepreneur’s can relate to, “You make a mistake, you lose real money, you don’t make that mistake again.”
Success Factors
As First has had time to reflect on his company’s success, he has generated a strong self interest in learning and applying the marketing philosophies formulated by other successful businesses before him. Of course being in charge of his company’s sales process, this element of gathering marketing knowledge also helps him develop new strategies to utilize in continuing the growth of Nantucket Nectars. “I am fascinated by other people’s stories. When you grow as quickly as we did you don’t get a perspective on things until six months later. Reading about other people’s stories helps me understand my own story. I can read the story of a company that has become successful and say, ‘God, these guys went through that too,’ and I can say at least I know I wasn’t an idiot. I read the stories of people like the founders of Nike and I laugh. A lot of this is not brain surgery, it’s survival.”
When the beginnings of the larger operations of Nantucket Nectars are looked at, one can certainly see that the desire to survive has been a strong motivator for the two founders, “We did not have any capital nor a business plan. We did not have a marketing strategy. We did not have one damn thing. All I did was get on the phone and convince people that we were going to be a huge beverage company one day so why don’t you sell me the resources I need. Give two guys that have absolutely no credit, the credit to buy 200,000 cases of glass – and I did it. Nobody in their right mind would think they could go do that. I had us with all our suppliers on credit for 30 days and we didn’t have a business…we had a tax ID number and that was it.” Suffice it to say that their confidence in their product offering drove their efforts to search for resources and business partners to get the product into mass production.
An added benefit to the relationship First and Scott developed with their private investor was one of a knowledgeable business person that allowed them run the company as they saw fit after the partnership began, and the offering of advise to First and Scott as they sought out his assistance. “The investor was a big help. In 1992 when we sold half of the company to this guy, it just turned out that he was also a phenomenal human being that let us run the company, and is an advisor when we want him to be.”
Advice is something that First and Scott get a lot of. When visiting a bar or eating at a restaurant plenty of people offer advice to them to improve products or business activities. Amidst this deluge of advise, First and Scott have implemented a philosophy of taking a certain input deeply to heart, the input from their customers. “We get hundreds of letters, over a hundred a week. We respond to every letter and we listen to every letter. A lot are similar, sincere and sound advise, and we read them. We read them, think about it, then answer.”
An important aspect to First’s views on efforts for a successful business encompasses having an open mind to all aspects of the business and the willingness to examine them and to determine if there are opportunities for improvement. “Consider everything no matter what: your accounting practices, your sales style and technique, your sales team, your packaging, marketing, advertising, PR, and production. If you haven’t really stretched your brain in everyone of those aspects then you are missing something. We constantly go back to the table on everything.”
This all encompassing approach also applies to their views on the product itself and how it is all put together and marketed, “We look at what’s in the bottle, the bottle itself, the label, the cap and what is driving them forward.” When it comes to the marketing of the product, they take their strategies by the example of an extremely large and successful company mentioned before which is Nike, “Nike never shows a sneaker of theirs against the one of a competitor. Their advertising is all about attitude and lifestyle. Nantucket Nectars has been marketed with our label, radios ads, and advertising with a whole feel of young, exciting, quality health food with a story, and people love that. I don’t just market apple juice.”
Future Product and Company Plans
“We do have plans for product extensions. We have new, larger size bottles coming out in the next month and a half, and we have a new product introduction coming out within the next several months. As of now we haven’t begun to do things with our products yet.” When asked if the entrepreneurial bug has opened his eyes to the possibility of other ventures, First replied very quickly in the affirmative, “We have things on the table right now for new industries and ventures.” This includes Scott his current partner plus some other participants. The intention is to employ their developed business and marketing skills to apply to different business concepts. To stay with marketing and wholesaling but not necessarily in the beverage business.
The new age beverage business has become extremely crowded and competitive since the early days on their dock in Nantucket. One might think that trying to compete with huge corporations with bottomless pits of money to put into new product development and advertising would be a daunting task for a small company to take on. But challenges are nothing new to Tom First and Tom Scott. They fully intend to continue driving their successful product line head on against these larger competitors, and to open new markets to strengthen their positions. To them accomplishing this means to never stay satisfied or complacent with the way the situation is. To always look for improvement and new opportunity to improve the products offering and exposure to the marketplace. “We just going to keep focusing on product, packaging, customer service, quality. Keep doing what we’re doing. I think it’s hard to stop that.” Their intention is to just keep shooting high and stay very aware of the industry and the competitors. To them there is always an opportunity despite the fact that its crowded, “We have a distinct advantage of being flexible. We are reactive and can come up with a new product very quickly.” As a final note, a last piece of advice from First when considering the competition with larger companies, ” Know what your advantages are and use it against the big guys.” – ###