A year on from raising $25 million, a co-founder of wine e-tailer Vinomofo has detailed his struggle to balance the startup's "lean and accountable" culture with the imperative to "become a household name".
Andre Eikmeier, who along with Justin Dry started Vinomofo in Adelaide in 2011, broke the record for an all-Australian venture capital raising one year ago after selling a minority stake to Brisbane's Blue Sky Venture Capital for $25 million.
Its customer base has since grown 25 percent to over 500,000, including 7000 in Singapore where the company launched in December, and its revenue run rate just topped $50 million.
A lot of that growth can be explained by a $4.5 million above-the-line advertising campaign, funded by the Blue Sky investment. However Mr Eikmeier said the venture capitalist's "big bucket of cash" brought new challenges.
"The money wants to seduce you. It makes it much harder to stay lean and accountable," he told The Australian Financial Review.
"We know on one hand we've got to get more bullish, and throw money at billboards and TV ads. On the other hand we can't lose perspective. That $5000 to re-tile the office bathroom is no longer material, but it should be no more of a priority than it was before."
Mr Eikmeier was more worried about complacency creeping into the organisation than he was about mistakes in executing its growth strategy.
"High morale is good, but when I see that crossing over into people thinking we've got the Midas touch, I remind them that we're always only a few bad decisions away from oblivion," he said.
Mr Eikmeier wants his 109 colleagues to "keep interrogating the hell out of everything", and as a result much of Vinomofo's original strategy for offshore expansion has been binned.
For instance, a US launch was scheduled for mid-2017, however Mr Eikmeier said that would likely be delayed after the Singapore launch exceeded expectations.
Singapore itself wasn't meant to be Vinomofo's Asian beachhead, but the original choice of China was delayed to allow the company to develop more "educational" marketing collateral. Its advance merchandising party learnt there isn't much of a retail wine market to disrupt in the way the company has sought to do with its irreverent communications in Australia.
Even last year's New Zealand rollout had to be pivoted, when Vinomofo discovered that the refer-a-friend incentives its used on Australian customers were illegal across the Tasman.
The Blue Sky investment has also forced Vinomofo's founders to reassess their preference for senior staff to buy their own equity in the company.
"The shares are obviously now more expensive than they used to be, and you can't be making key hiring decisions based on someone's ability to pay," Mr Eikmeier said.
After buying out its first external investor after just a year in 2012, Mr Eikmeier said Blue Sky was subjected to a "no compromise" due diligence.
"At heart we're a 'throw it at the wall and see what sticks' company and they've fit in with that. In the day-to-day you've got to shut out those three-to-five year obligations to some extent - and that goes both ways - because they can stop you going about things the way you instinctively would."
Vinomofo is preparing to use fellow Blue Sky investee, aCommerce, as a delivery fulfilment partner in its Asian expansion. The etailer has also leased its own Australian warehouse for the first time. Mr Eikmeier said the warehouse's Port Melbourne location had allowed the company to set up a tasting room, offer click-and-collect purchases, and would soon see the business offer same-day delivery to Melbourne customers.
"And half-hour delivery on Friday nights to the CBD," he added.
Online liquor sales is a $344 million-a-year business in Australia, according to an April 2016 report by research house IbisWorld, however it forecasts that the previous five years' annual growth of 10.9 per cent will fall to 7.8 per cent out to 2021 as alcohol consumption declines.
