Rowan Gormley, 51, launched Naked Wines, the crowdfunded online wine retailer, in December 2008. The company is based in Norwich but has offices in Napa, California, and Newport Beach, Australia. Its customers – known as “angels” – are investors in vineyards and buy the output at much reduced prices.
Rowan Gormley CV:
Born: Boksburg, South Africa, 1962
Education: Selborne College, East London, followed by Commerce degree at the University of Cape Town
Career: Trained as an accountant before moving to London in 1987 to work for private equity firm Electra. Helped Sir Richard Branson launch Virgin Money in 1994/95 before setting up Orgasmic Wines, later acquired by Virgin. Set up Naked Wines after Virgin Wines was sold.
Lives: Norwich, with wife Jenny and three grown-up children
Did you think you would get to where you are?
No. In my early teens I loved to windsurf and my ambition in life was to stay in East London, which was a surf city. Going into business just happened. I think I was 25 and in London before it dawned on me that business was a huge amount of fun, but I certainly did not envisage myself as a chief executive.
When you had made your first £1m did you want to slow down?
No. I set up Virgin Money in 1995 and that is how I made my first million. When I left the company at 33 I got bought out for £5m. I reinvested all that money into Virgin Wines, and promptly lost the lot. It took five years to make and one year to lose. I had to remain optimistic that I would succeed, and I did.
What is the secret of your success?
I have always been able to find a better way to do business so that people don’t get screwed over. The two most important people in the wine industry are the winemaker and the wine drinker and they are both being swindled. The makers are struggling to make a living because supermarkets are pushing prices down and at the other end of the spectrum the wine merchants have pushed prices to ridiculous levels. Fine wine prices have quadrupled over the past 20 years. These prices play on people’s insecurities.
We finance our winemakers so they don’t have to waste time and money selling. More than 200,000 customers, or angels, invest £20 a month in them and earn wholesale prices on exclusive wines.
What was your best preparation for business?
As much as I hated accountancy, it was fantastic training for business. It teaches you how to recognise a company’s financial situation at a glance, something that takes other people time to figure out. It’s an invaluable skill, being able to drill down into numbers to understand the real underlying issues.
Do you have time for personal financial planning?
None whatsoever. My personal finances are a shambles. It is my wife who deals with the household expenditure. After spending all my time and energy in business the last thing I want to do when I come home is to look over more sheets of figures. It would all fall apart without my wife, who is very good at it.
How does Naked Wines generate more business?
Personal recommendation plays a big part. As wine is a naturally social product people want to share their enthusiasm for it with others. We do advertise but spend a lot less than our competitors. We are able to price our products at a discount of 20 per cent to 50 per cent on competitors’ prices. It is said that supermarkets achieve eye-popping promotional offers by artificially inflating the selling price.
What was the most challenging period of your career?
It was probably realising that I was not just fallible but stupid when we launched Virgin Wines in 2000. I thought that the combination of Virgin Wines and online was just so sexy that we only had to set it up and people would come, but that just did not happen.
I forgot the basic business philosophy: there is no point in going into a venture unless you can improve on what your competitors are offering. We raised a pile of money, and we spent it all. Then we had to get rid of 80 per cent of the staff, shrink the business right down and build it up again from scratch. It took me a year longer than everyone else to realise it would not work, because I could not accept that I had made a mistake.
Do you want to carry on till you drop?
I don’t see myself carrying on until I drop, because there are other things I want to do. I made a promise to my wife when we got married that we were going to travel to India, and I’m going to have to keep that promise one day. But I honestly don’t plan too far in advance. Three years into the future seems like a long time. And I do believe that once you are over 50 you ought to make way for younger people.
Have you made any pension provision?
I have a pension with Virgin Money. I was 33 and I took it out because I started the company. I’m pleased I did. It is astonishing how the fund – now worth a few hundred thousand – has piled up over the years in a very painless way. It is probably a good discipline for me that it is a chunk of money I cannot get my hands on.
Do you allow yourself the odd indulgence?
I take sailing holidays with my family, to Croatia and Thailand. I think I am a very unskilled skipper, but I always insist on sailing myself. We are constantly going aground, but it is very therapeutic. The Thai islands are probably easier to navigate because they are less crowded.
Picasso or Art Deco as an investment?
Neither. I invest in other entrepreneurial start-ups, such as Pact Coffee, which I love. It is very exciting. People asked me to do mentoring, but I don’t really have the time. As for investing in wine, I think it is a mug’s game because the market is managed. It is not an open, transparent, liquid market. Inventories are artificially constrained to force prices higher. Nobody really knows how much wine is being made, sold, or drunk.
Do you believe in leaving everything to children?
I don’t. Overendowing your children is a curse and there are more deserving causes. I grew up in South Africa, a land of extreme wealth and poverty. What I have done is to create a scholarship for students at Selborne College, my old secondary school.
What is the most you have ever paid for a bottle of fine wine or champagne?
The answer is probably £50, which was a real extravagance for me, as I don’t spend much money on wine. It was a bottle of Napa Cabernet on my son’s 21st birthday at Auberge du Soleil, a restaurant in California. When you are in my business, no wine is worth £50.
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