Naked Wines CEO: Setting Culture

Clearly, you’ve thought about a new way to build a business, with customers at the forefront, that actually become the shareholders and finance the business, in a way. What about the culture that you looked to build, at Naked?

The interesting thing is, we never really thought about the culture. The first time I thought about culture was when Naked was acquired by Majestic Wines and, all of a sudden, I was stepping into a job. I’d never had a job before; I’d always started the companies that I worked for. When you start the company, you never think about the culture, because you start with nothing. When we were setting up Naked, to be honest, I think the way the culture was formed was a function of a couple of things.

First of all, it was 2008 when we started, so it was quite a weird time. There was a real feeling of, we’re on our own here; no one is going to help us. The second thing was, one of our competitors tried, quite hard, to get us closed down. They called our suppliers and said, don’t deal with these guys; they’re going to bankrupt you and that kind of thing. So it was a bit of an, us against them, against the world. We landed up with a very tight group of people. I read that one of José Mourinho’s techniques was always, us against the rest of the world. In a way, that happened for us. Then, of course, we were a bit anti-wine establishment, so a lot of the wine critics were scathing, I think is the kindest thing to say. It did build up this really strong feeling of, we’re trying to do something right, here. Lots of people don’t want us to succeed and, for that reason, fuck’em. It just spurred us on.

What I think that led to was a really collective sense of responsibility, which was aided by the fact that everybody left good jobs to start at Naked and everyone was a shareholder. Everyone had burnt their bridges and, if we succeeded, everyone was going to benefit from that. But if we failed, then we’re all in the shit together. I think, without doing anything else, that does create a really strong culture. I think a lot of start-ups benefit from that.

I think the hard thing is when you then go from one office to an international operation. Naked Wines is based in Norwich, which is quite a small town; a lot of people socialize together. All of a sudden, when we had an American business and an Australian business, I think one of the most surprising things to me was how similar the culture is. In fact, the Australian business was six months old, the first time I set foot there. The weird thing was, it was instantly identifiable as a Naked culture.

I think the key was, always try to move enough people into a new business. So if you were making sourdough bread, there was a really good starter and there were enough people to get the culture moving. It is an attractive culture. It’s very meritocratic, so there are a lot of young people who have not come from a glamourous track record – unemployed French horn players, unemployed actors – very talented people, who have gone on to do great things at Naked. I think it’s very meritocratic.

Secondly, we’ve got a very strong culture of testing, which means that a lot of the things that eventually end up working, actually, a lot of the ideas originate out of somewhere else in the organization. It’s not a case of, the higher salary wins, because the organization is built around trying to build a better sort of company. I think that the fact that the people feel as if we are trying to do something good, really helps, as well. There are a couple of things which, I think, are emblematic of that. One of them was, we had the big wildfires in California and we said that it was completely inappropriate to be trying to sell wine to customers, while there were fires burning around us. So we did an appeal to customers. We said, people are going to need money. We don’t know who and we don’t know how much, but there are going to be some people who are going to be in a real pickle, after this fire. Please help out. We raised about $800,000 on the back of that.

By contrast, I think Facebook raise half a million dollars and Google raised a million dollars. Tiny little Naked Wines raised $800,000. I think that just shows that our culture extends beyond the people who work for the company, into the customers themselves. I think when your customers and your people feel the same way about a company, actually, the culture tends to survive. I think where you see culture fail, is where what happens inside the company and what it looks like, outside the camp, are two different things. Eventually, it becomes obvious that one of them is a fraud.