What an amazing feat by Robert Eberhart. He did a remarkable job of transferring skills from his experience in electronics and transforming the learnings into a successful California wine import business in Japan. What's more, he did it by focusing on execution while his competitors focused on wine as a prestige product.
I also particularly loved the portion of the case where he became a "part-time retail anthropologist", the on-premise customer observation definitely struck a chord with me as a former product manager. And as far as the insight in the case about how most people select the second cheapest wine -- let me tell you, many of my restaurant clients back in New York confided that they price the cheapest wine they buy as the second cheapest wine on the menu, so you're often better off getting the cheapest (or third cheapest) wine on the menu.
But let's get back to the question at hand. To sell or not to sell? The question is really about working capital. The 3x import volume growth that Khoo was able to achieve as CEO in such a short time was remarkable, but it certainly came at a cost. Cash is definitely king, especially when you increase your headcount so rapidly while closing larger deals than ever before. But does that necessarily mean that selling the company to mysterious and untraceable investors is the way to go? An exit would certainly help Eberhart get to spend more time at home with his family. But there are alternative avenues to achieving this. Raising debt to pay for the additional staff plus someone to oversee the cash flows so Eberhart could take on a more removed advisory role seems like a better choice at this time. This way, he can continue to hold a steak in the company through this high growth phase and wait for a more attractive and transparent offering at a higher valuation.
No comments:
Post a Comment