Entrepreneur Wines: The Power of Giving BackPublished by Carrie Schuster on Fri, 05/18/2018 - 16:55
Gentry Magazine, July 2017 Interview by David Needle
Blog content courtesy of Randy Haykin, Founder of Entrepreneur Wines
David Needle catches up with Silicon Valley’s Randy Haykin, founder of Entrepreneur Wines and The Gratitude Network, to discuss giving back, great vintages, and the power of two.
Social good, entrepreneurship, and wine. Serial entrepreneur and investor Randy Haykin has woven all three of these seemingly disparate things into two ventures focused on making the world a better place. The Gratitude Network is a nonprofit that Haykin founded to support social entrepreneurs focused on sustainable social change with a particular focus on issues related to children and education. Separately, he established Entrepreneur Wines, a philanthropic wine brand that lets individuals and companies support the work of The Gratitude Network through the purchase and enjoyment of high-end wines.
GENTRY: How did The Gratitude Network evolve?
RH: The idea behind The Gratitude Network was to take my background in venture capital and find a good way of applying that to help those doing something good for the world. A lot of our team members have been successful in Silicon Valley and we’re grateful for having had that opportunity. The Gratitude Network identifies, grows, mentors, and helps fund entrepreneurs who are making an impact in the social sector, particularly with children and education. It could include non-profit and for-profit. Half of what we do is in the U.S. and the other half is global.
GENTRY: Such as?
RH: One favorite is Drinkwell, founded by Minhaj Chowdhury. His parents moved here from Bangladesh and he grew up in Texas. When he was a teen, he lost his grandfather in Bangladesh, apparently due to water poisoning, and vowed he would do something about it. Minhaj got into Johns Hopkins (not easy) and got every professor and scientist he could find to help him create a resin that takes impurities out of water, particularly those that are affecting the Indian and Bangladesh water system. The resin they developed at Johns Hopkins now removes these bad chemicals so when they move the water from the wells they can run it through this resin. The resin can be replenished as needed and turns the water pink to let them know it needs to be replaced. Minhaj has created a network of entrepreneurs in India and Bangladesh that operates these water replenishment and clean water systems. That creates an entrepreneurial job for whomever is running it, and it also produces clean water at way below the cost of bottled water.
GENTRY: What’s another one?
RH: Library for All. Two women in New York City who are originally from Australia started it. They were recognized by Forbes two years ago as social entrepreneurs highlighted in the “30 Under 30” feature. They’ve created a crowd-based system that allows kids anywhere around the world to have access to content they wouldn’t otherwise have access to. They have programs that allow schools to package this content, and they have a system that allows access to the content, particularly in Africa. They are amazing founders. Another group we just started working with is the Representation Project started by filmmaker Jennifer Siebel Newsom, Lt. Governor Gavin Newsom’s wife. They are using film and media to challenge and overcome stereotypes related to things like gender, race, class, age, religion, and sexual orientation, to help people fulfill their potential.
GENTRY: How do companies find Gratitude Network and apply?
RH: We partnered with major NGOs who have their feet on the street around the world. They help us get the word out to social entrepreneurs who want to apply because they are all looking for money and, more importantly, mentoring and connections. They need connections into the Silicon Valley and the right people to help them build their business. We announced our first five win-ners out of 15 for 2017. For example, Lauren Bush was an awardee last year for FEED, the organization she started in 2007 that’s fed more than 95 million meals to children in Africa through the sale of fashion accessories.
GENTRY: What’s coming next?
RH: We’re expanding our Gratitude Network to include a deep mentoring program for entrepreneurs. We have over 40 Bay Area entrepreneurs and experienced tech veterans who serve as mentors for these aspiring social entrepreneurs. We also have a set of 10 trained strategic coaches who meet month-to-month and work hands-on with the social entrepreneurs at two of our awardee organizations. They are the diagnosticians who figure out what assistance each organization needs to grow. Then, they reach out to the best mentor (based on need) throughout the year: “Are we in need of a mentor for financial modeling? Let’s get the guy from eBay. Do we need a mentor for fundraising? Let’s get the venture capitalist who’s done that for 30 years.” We work exclusively with growth or scale stage entrepreneurs (not early stage) who already have a shipping product and customers.
GENTRY: But they still need help?
RH: Yes, because what they don’t have is scale. We’re all about helping to scale these organizations.
GENTRY: Tell us about your first big event.
RH: Last November was our first Gratitude Network fundraiser and auction. We raised $325,000 that went to Gratitude Network to grow and solidify our coaching and mentoring. We are now becoming matchmakers for funding as well. Many social entrepreneurs at a growth stage have to do a song and dance to find money. We are going to use the matchmaking we’ve done with our mentors and start matchmaking for funding. We want to become the dominant matchmaker for matching funds to the social entrepreneurs. We’ll make an introduction to the top 10 funders that can help them so they don’t have to go looking for a needle in a haystack. Right now, the process can take them 9 – 12 months to get to the right person at a foundation, but we’re going to make those introductions for them to the ones we already know intimately.
GENTRY: There are examples of younger and very successful entrepreneurs giving back, like Mark Zuckerberg.
RH: Mark is mature beyond his years in that and many other ways. I think when people get married, their “better half ” often plays a bigger role than people realize. Priscilla Chan is a true partner with Mark. Another great example is Melinda and Bill Gates—together, they are all over the world looking at how they can give back and help. I have a theory that great shifts come in teams of two. With social giving, we ideally involve couples. When one falls in love with what we’re doing, the other one comes along. It’s the power of two.
Founders Randy and Patty Haykin
GENTRY: Switching gears—let’s talk about Entrepreneur Wines and how Gratitude Networks fits in with that.
RH: Like so many here in Silicon Valley, my entire life has revolved around entrepreneurs. I started at Apple, then I joined Media Kitchen, a subsidiary of Paramount located in Palo Alto. It was a think tank before digital media was even in vogue. At Media Kitchen, we spun off digital companies. I was really intrigued with the idea of launching digital media enterprises. It was there that I was introduced to the founders of Yahoo and joined them as their original VP of sales and marketing. After that, I was involved with a string of other high-profile digital startups. Later, I started a venture fund so investors could put their money in the startups we were working with. We called it Interactive Minds, later renamed Outlook Ventures. Over 15 years, we built three venture funds and invested in about 35 startups, working closely with entrepreneurs.
GENTRY: Was the interest in wine already in play?
RH: Yes. My wife and I have always enjoyed wine collecting and wine tasting with friends and we love Napa and Sonoma wineries. I always wanted to start a wine brand. About 2005, I stepped out of Outlook Ventures and almost purchased a winery in Livermore Valley (an area that now boasts over 60 wineries). I lost the bid but was left with a plan we called Entrepreneur Wines. The concept marries the fact that I love to build brands and that our family wanted to give back to others.
GENTRY: When you say that you lost the bid, was Gratitude Network and giving back part of the plan if you won the bid?
RH: Not yet. We got outbid by a couple of hundred thousand dollars and in retrospect it made me very happy because real estate then went tumbling around 2008. But I still had this thirst, literally, to create a brand that would honor entrepreneurs. My thinking was that today’s entrepreneurs have become heroes and heroines who take big risks for big gain. (Haykin shows an impressive, elegantly designed Entrepreneur Wines bottle with the words: “Passion, Creativity, Intuition, Risk-taking, Attention to Detail” printed on its label.)
GENTRY: This is almost a mission statement for entrepreneurs?
RH: Yes, but in addition, my wife and I thought: “Why don’t we honor the social entrepreneurs and help raise money for good causes?” We launched in 2006 and immediately began to give 25% of the top line revenue to Gratitude Network to help coach and mentor entrepreneurs. You’ll see on our website that there’s a lot about children and education. Our Gratitude team decided by 2016 that we should focus in the area of social entrepreneurship that impacts disadvantaged children in poverty.
GENTRY: How would you describe your target market?
RH: Because the wines are scarce (only 300 cases a year) and from highly selective vineyards in Napa and Sonoma, we are targeted to wine enthusiasts and collectors, particularly those who appreciate a high-end wine and don’t mind “giving back” at the same time.
GENTRY: It’s a club in a way.
RH: Yes, we use the wine to gather people together to talk about causes like children and education. That’s the power of what we do, the network we’ve built. We have a network of 150 members who enjoy great wine, but when we’re together we also feature impressive speakers and hold engaging conversations about the topic of giving back. The wine serves as a social lubricant and now you’re discussing philanthropy and social impact.
GENTRY: What about the buyer of the wine?
RH: The target market for Entrepreneur Wines is someone who has done well. They probably collect or have a wine cellar and they often give wine as gifts. Entrepreneurs love to get one of our bottles as a gift—their eyes light up. The interesting thing is the idea of giving back appeals to people, particularly when you’re giving a gift. We discovered an untapped market in Silicon Valley that we are selling the wines to. It’s perfect for a corporate or entrepreneurial setting. Imagine the board of a growth-stage company that has some money and imagine all the activities. Picture Salesforce for example. They are holding events three times a week. The last time I went, the lobby was full of Millennials drinking wines. All of these organizations have a marketing department, sales off-site meetings, and executive planning and board meetings. Amy Tupper, who works with me, has put together several packages where we bring the tasting room to you and we help you organize a meeting. When you mix this with a dinner, it becomes a great bonding event.
GENTRY: Have you seen other wineries doing similar things?
RH: No. Most of the wineries couldn’t pull this off because their brand doesn’t link to the entrepreneurial idea, but our brand fits beautifully in the corporate market. Many companies use this for a thank-you to the team for a good product rollout, planning meetings, off-sites, retreats, and end-of-year celebrations. The idea is that 25% of our top line today goes to social entrepreneurs and they ask: “What is social entrepreneurship?” And we get a discussion going.
GENTRY: Let’s say a company is doing an event. They look at the budget and there’s certainly a range for what you would pay for any kind of wine, but am I paying a huge premium in this case?
RH: No you aren’t. Let’s talk about what’s different about Entrepreneur Wines. In our first year in 2009 our varietal was Cabernet Sauvignon from Mount Veeder in Napa Valley, which is very exclusive and sought after. We only make 48 barrels—that is about two cases. Then there’s the vineyard where the grapes are coming from. We found a great winemaker, Jeff Fontanella, and we were able to get access to a small amount of Mount Veeder wine through Jeff and he became our winemaker. Several years later, I met winemaker Kirk Venge. He loved what we were doing, our name, and our whole story because we’re giving back. He’s running an extremely successful winery of his own up near Calistoga that is completely sold out at 3,500 wine club members. You can’t get in. With Kirk, we added a Chardonnay, different appellation Cabernets, and we recently rolled out our first Pinot Noir. We have these different exclusives. We keep it very small. The vineyards are hand-selected by Kirk and Jeff and the wine is exceptional.
GENTRY: You never bought a winery?
RH: No, everything’s been done virtually —but we’ve created a strong brand that is attractive to the high-end wine enthusiast. People in the Bay Area seem to love the brand and the bottle design. I’m a consumer design guy. I’ve had people when I hand it to them say, “That bottle looks like a museum piece. Thank you.”
GENTRY: Let’s talk prices.
RH: The Cabernet Sauvignon goes for $150 a bottle. Today, many good Cabernets go for $200 to $300 a bottle. We’re getting ours from the same high-end vineyards and we’ve teamed up with two rock star winemakers (the aforementioned Venge and Fontanella).
GENTRY: Do you think there is a pent-up desire by successful people in Silicon Valley to give back or is it more about convincing or educating them as to how they can help?
RH: Great question. I think there are two camps of people. There are those that have got so focused on what they’ve done that it’s become all about making money. Everything becomes a quest to buy new cars and bigger houses. And then there are those who have paused and said, “Well I don’t need another Tesla and I want to have an impact before I die and leave a legacy.” The thing about entrepreneurs is it’s about high leverage; it’s about building something that is going to impact millions of kids through their success as opposed to giving millions of dollars to try and help millions of kids. There’s a difference, and it’s a model Silicon Valley understands. As we get older, we get wiser—there’s an appreciation and gratitude for what we’ve been given. It feels good to give back.
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