Innovation Destination Hartford Website Curator Nan Price visited Waypoint Spirits in Bloomfield, CT to talk to the co-founders and learn about their entrepreneurial journey.
NAN PRICE: How did you come up with the idea to own a Connecticut distillery?
DOUG BOWIE: The three of us—John Taylor, David Rossi, and I—were looking for something that would be a good distraction from what we were doing in our day jobs.
Dave and I visited a distillery in New York, which is when the proverbial lightbulb went off. We sent John a text message from there to tell him we were starting a distillery. Within about 30 seconds, John texted back that he was in. We texted back to tell him we were serious. He responded within about 30 seconds saying: Me too, I’m in.
NP: Did any of you have any background launching a startup?
DB: David has started various businesses. He’s very entrepreneurial. John and I both owned small consulting LLCs, so we had a little bit of experience.
None of the projects any of us worked on dealt with the alcohol business whatsoever—but we went for it anyway. So this is really a story about three guys who were probably a little too arrogant and ignorant trying start a distillery.
NP: Tell us about the timeframe from iteration to opening.
DB: We starting planning in the spring of 2014. I filed the LLC paperwork in June 2014. Midyear 2014 we started raising capital and putting a business plan together. We ordered our equipment in September 2014 and got our leasehold here and started January 1, 2015. The buildout took almost six months.
So we were in, our capital was committed, but we really couldn’t produce anything because we had to do the buildout. We were basically paying rent and getting things going. We didn’t really start pushing juice through the stills until about July 2015.
NP: You mentioned raising capital. How did you fund the startup?
DB: We each put in money and then we made a short list of friends we thought would be good business partners and would want in—people who have been successful in other arenas on their own or with other companies. We put together a list of about 12 people and 10 of them said yes.
I’m more cautious than David and John. I thought we’d have a hard time raising money. John and David kept telling me I was out of my mind. They said: Everybody we talk to is into this—it’s going to happen fast. And they proved me wrong.
The interesting part of the story is that word got out to the rest of our friends we were starting a distillery. There were about 30 other friends who wanted to get involved. We had to go back to the lawyers and file another type of share.
In the end, we ended up with about 35 shareholders. We raised a good amount of money and it was all done privately through friends and family.
NP: You opened the doors in August 2015. How have things evolved since?
JOHN TAYLOR: Some of the bumps and bruises we went through early on were really painful and disheartening. The first few months I think we were all pretty sure we were not going to make it.
DB: That first year was really difficult. Summer of 2015 to early fall of 2016, we were really grinding it out. We ended up needing a little more operating capital, so we did another recapitalization with some shareholders who wanted to put more money toward our startup—because they really believed in the project.
2017 has been when things really started to settle in. We lost money our first year, which I think is pretty common for startups. Our second year, we finished just slightly in the black, which was good for us.
NP: To what do you attribute that turnaround?
DB: In the fall of 2016 we launched our fifth and sixth products, so we have more products to market. We’ve refined the products and they’ve gotten much more distribution around Connecticut. We’re also using different distributors for different areas of the state, which has really opened up markets for us. It’s helping us be much more successful.
NP: Going back to the touch-and-go period you mentioned, what would you say has been the biggest challenge for you as a startup?
DB: When you launch this type of startup, you think you’re going to make craft spirits and everyone’s going to buy them and that’s going to be your differentiator. It’s easy, right? It doesn’t work that way.
One of the biggest challenges was getting the quality of the spirits as high-quality as we wanted them to be. When we started, we rushed things to market because we wanted cash flow. We didn’t think things through.
We’ve learned now. We won’t bring anything to market unless it goes through a lot of testing and a lot of people in focus groups telling us: This is good. I would buy this.
Then, once you reach that level of quality, you have to convince people to buy your product. They’re not just going to buy it because it’s Connecticut-made. People have to try it and they’re kind of skeptical. They don’t know who you are. It takes a long time to build a brand and a following.
NP: So how are you doing that? You’ve been a lot of events, that’s for sure.
DB: It’s a lot of grassroots efforts. We have a small marketing budget. It’s all us doing tastings, going to events weekends and evenings, and meeting with restaurants and package stores. We also use social media and we’re at a lot of charity events—that’s a big one for us. We have never said no to a charity event. When people are doing charity events around Connecticut, Waypoint Spirits is going to be there.
NP: Going back to the challenges, if you could go back in time, what advice would you give to your future selves?
JT: I would go back and tell us to slow down. There’s such a high level of excitement about what we do. And when you’re working with something you’re so passionate about, it’s hard not to just share it.
But we’ve really learned to slow down and test things, because even today, we may think we’ve got something dialed in and we run into a variable we didn’t understand.
For example, we recently ran into a problem with filtration with our spicy vodka product. We had run a lot of tests, but we didn’t take temperature into account. There’s always a variable that you don’t know. In this case, it was extreme temperature. Now that we know that happens, we are able to control it and do something about it. But are we 100% sure there’s a variable we don’t know about yet? No.
DB: To John’s point, we’re getting much better at anticipating the variables and looking at as many as we can. You just deal with the other ones that come up.
I would tell our future selves to listen when people say: It’s going to take twice as much time and twice as much money.
Many people think: We’ve done this before, we’ve run businesses and learned from other people’s mistakes. And I think we actually thought we did collect twice as much money as we needed upfront. But you know what? We ended up needing more money.
NP: In terms of all those hurdles, what keeps you moving forward?
DB: The thing for us is, when you ask your friends for a significant amount of money, failure is not really an option. It’s not a comfortable feeling, so you just grind it out. You have to make it work. That’s a big drive for us. There’s also persistence and passion.
JT: The passion is definitely there. But I’m looking at Doug—who is one of my oldest friends—and I’m thinking the reason he does this is because he’s stubborn. He’s just using nicer words!
DB: There’s a little bit of pride in being stubborn, right? You’re just refusing to fail.
With regard to the passion, we finished this year in the black, but at this point, we’re doing all this revenue on free labor. John, David, and I put in a lot of hours and we’re not getting paid to do it. So that something you have to take into account.
JT: You hit the nail on the head with “passion.” We really do have to believe in what we’re doing here—that we’re not just trying to make another vodka. That would be just strictly a marketing effort. That’s not what we want to do. For me, it’s trying to expand the definition of what spirits are.
NP: You’ve done a good job getting your name out. Waypoint Spirits is already in a lot of local establishments.
DB: Yes. We are in a lot of local liquor stores, package stores, and restaurants mostly in Connecticut—we are doing a little bit of business in Massachusetts and New Jersey.
NP: With an eye to the future, where do you see more growth in additional states?
JT: I think our first year was trying to build the brand and build our process. Now we are trying to grow it. We know that that’s outside of Connecticut.
We launched in New Jersey and Massachusetts this summer and are getting ready to launch into Tennessee We are bringing Connecticut whiskey to “The Land of Bourbonut” a lot.
A new distributor is coming online in South Carolina and another that’s will to cover the Greater DC area—Maryland, Delaware, and part of Virginia—for us. So, we are starting to open new, bigger markets.
NP: Do you have an entrepreneurial network you can tap into?
JT: We do talk to other distilleries here in Connecticut and outside of the state. We’re building some really good personal relationships with the Connecticut Spirits Trail. A few of those distilleries are people we not only work at professionally, but they’re great people we can run ideas by.
Tom and Lelaneia Dubay, Co-Founders of Hartford Flavor Company are fantastic. I love texting Tom with an idea or a question. He’s so bright and so friendly.
DB: There aren’t a lot of distilleries in the state—and most are very young. So we’re all kind of in the same stages.
NP: As a startup, it’s good that you do have those lifelines.
JT: We think so too!