#4: When Should You Go All In On A New Business?

Sam: Hello and welcome back to another episode of the lazy entrepreneur. Today we’re going to be doing something slightly different, and you’re basically going to eavesdrop on me and Emma having a conversation about our future, about what we’re going to do with our businesses and what we want to do with our lifestyle, and hopefully it will be interesting. If it’s not, I probably will just delete it. And not put it online. So yeah, we’ll see how it goes. What brought this up is we’re currently living in Tunbridge Wells, which is a very sort of quaint nice town on the outskirts of London. We’ve been here a little over a year, and before this we were travelling full time. We were nomads. We lived out of a suitcase, we had our laptops with us and we were working remotely. And then we decided we wanted a life change, we wanted to be more productive with our businesses. We wanted to have more long term relationships. 

Emma: we wanted community, and to be part of a community. 

Why did Sam and Emma decide to stop travelling full-time? [1:30]

S: And we wanted to enjoy some of the finer things in life. A nice house, a car, a big bed. A warm shower, all the luxuries. But now we’re getting a bit of wanderlust. Our tenancy is up for renewal in July and we’ve got to decide, do we want to stay here or do we want to go again. Do we want to get rid of all our possessions, get back to living out of a suitcase and travel the world. Originally, I thought this was a bit of a no brainer. Three or four months ago I thought, yea we would like to travel. The stuff we were working on was taking over, the lifestyle was taking over, we want to work on the things we’re interested in and focus on our hobbies. We were doing a lot of yoga and jiu jitsu, but since then we’ve done quite a lot with our brand Pipehouse Gin, a craft gin brand, and it’s got to a point where we’ve got to decide, do we want to go all in on it, do we want it to be huge. Do we want to focus on that for the next few years and try to build that into something spectacular? And if we did that, the best way to do that would be by staying here. It would be by taking on staff, by putting some more money in, either our own or an investment. It would be spending all of our time and energy on that. Not on sight seeing and globe trotting and enjoying ourselves and doing jiu jitsu. And it is quite a difficult decision. It is something we’ve spoken about briefly, but we don’t yet have a decision about what we want to do. So what we’ll hopefully do today is cover some of the pros and cons and see where we get to. We probably won’t end up at a decision today.

E: No not yet. 

Sam gives an overview of the episode: What are the pros and cons of living in one place vs. living more nomadically? [03:30] 

S: We’ll just talk about what’s good and bad about both lifestyles. So where are you at since our last chat about this Emma? 

E: That’s a good question, I think everyday I completely do a 160, 180 and kind of one day I really want to stay and build the pipehouse gin brand, I want a physical location, I want a really big project that I can get stuck into. And then the next day I want to go to Asia and do loads of cooking classes and explore Asian food and improve my skills and also meet new people and kind of get out of the bubble that is Tunbridge Wells with a lot of similar views and a lot similar people. Which means a lot to me. It is something that I really enjoy, and something that I really enjoyed about living in London that I don’t get here. And it is a really hard decision. Both polar opposites. 

S: One of the reasons we wanted to go travelling before was we wanted to get out of our comfort zones again. We find it a little bit too comfortable here. We’re having too much fun and not pushing ourselves that much. But that was before we thought about going all in on Pipehouse and making it a big project. And trying to turn that into and pushing our comfort zone in that project. 

E: And that was one of the main reasons you wanted to move to Tunbridge Wells, you wanted to be more productive, spend more time doing work rather than sightseeing and focusing on meeting new people and the community element of being a digital nomad. 

S: Yeah, because it is really tiring being a digital nomad where you’re constantly moving, you’re always in your accommodation, none of it is as comfortable as you want it to be. You’re having to think about different languages, everything is a bit of work. You always have to be on form, meeting new people, making new friends, you don’t have any of those old friends you can always just mooch about with. And it’s exhausting and it didn’t leave me much energy to focus on my businesses. And also I was working and Ben my business partner lived in Tunbridge Wells and we were kind of working on it together but remotely. Whereas before going for a while we would together for a while every day at an office, we would work from our flats, he’d come around to mine or I’d go to his. And we would actually get a lot more done. It is possible to have a successful business while travelling and that is what we actually have and we have made it happen. But it is very much a lifestyle business. The business is nowhere near reaching its potential. 

What do you sacrifice in a business when you run it as a digital nomad? [06:45]

S: The table tennis grand and the blog both never reached the potential they could’ve gone if I went all in on them.

E: WHich is interesting because they’re both very successful. What do you see as them reaching their potential?

S: On one thing, the more successful something is, the more doors are opened for other things that could be done which we’re kind of seeing with the gin at the moment. 

E: Yeah and that is kind of never ending, the more successful it is, the more time you want to spend on it. 

S: Yeah, and the bigger something can be, it is kind of like with gin, we start off with one product, we’re now about to launch a second product. But the timeline of doing that remotely would be really long. Whereas if we were based somewhere and there are unending products we could release from different spirits to glasses to gift boxes to all sorts of things, then the turn around does just work a lot better when you’re physically there. And same with the table tennis brand, we’re very successful with bats, but that’s not the only thing in table tennis. There are also balls, and tables, and events and all kinds of other things. We were best sellers in the UK but not in the USA so we could really push that and also non-english speaking places. There is kind of, the nice thing about successful business is we get to a point and we got product people where it makes sense financially so were there for scaling it up. It does have its appeal. Same with the blog and the readership is quite small compared to the english speaking world. 

E: Is that your target. Wow. 

S: I mean the blog is small enough that if you speak to 99.99% of people on the street they would have never heard of it, which means that there are going to be a lot people out there who would probably like reading my stuff but will never ever learn about it. And as its a business model that works and makes quite good money and the people who read it like the stuff. It kind of should be a no brainer that we spend more time producing more content that people like, and also trying to get it out to more people, and building and audience. Same with the table tennis bats. It is a product that people like, it’s doing well. It’s a bestseller in the UK, the margins are good, it’s making money, it’s profitable, we have an investment in it. So it makes sense to scale it up internationally and go to other countries and expand to more products that we can sell to more customers than we already have. All of those things are put on the back burner because there are other things that I wanted to do. We kind of joked maybe like, maybe it was 2014, we were retiring.

E: Well you did. 

S: I did, you didn’t really appreciate it. 

Sam muses on his retirement [10:08]

S: I would just focus on the stuff I enjoy versus just trying to make the businesses as big and successful as possible. And I quit a business, my most profitable business pretty much over night. Just said that I didn’t want to do it anymore, shut it down.

E: ANd then you had two other businesses that you tried to get rid of the next.

S: Yeah I had other businesses and I tried to spend a long time trying to extricate myself from them. But then I kept doing the table tennis, I started writing the blogs, I thought that would be quite fun, and then we went travelling and focused on self-development, learning new skills, travelling, travelling, seeing the world, meeting new people and living a slightly different type of lifestyle. The problem with that is 20 somethings aren’t meant to retire. We’re not meant to live a life of leisure and I am quite opinionated on that. And I never want to retire and do nothing. I think it is very unhealthy. 

E: Yeah, you will always be working. 

How have Sam’s views on fulfillment changed over time? [11:26] 

S: I want to always work. But what is fulfilling seems to change in my head. At one point it was doing something that makes loads of money, other times it was do stuff that might help people and sort of altruistic. A charity kind of stuff. 

E: Yeah, I was going to say that was kind of a big part of travelling for us, realizing that it was actually quite hedonistic and individual. It is sort of about your immediate needs and it wasn’t really about helping other people. There was definitely an element of meeting people for coffee that you’d never met before and then giving them advice, particularly about Amazon FBA which was very good. But everything around that felt like we were being quite selfish.

S: Definitely. Definitely. And to be fair, we’re stilling living that life. On Pipehouse Gin, would we then get a bit more fulfillment from having that. From working really hard on something that is worthwhile. 

What did Sam say he would never do again when he sold his coffee shop? [12:58]

S: Maybe. I used to have a coffee shop at one point in time and when I sold it, I was extremely happy. And I said I would never have a physical location based business again. And here we are. 

E: And managing people.

S: And managing people. And here we are. Likewise, I had a business that took quite a bit of investment or money and quite a few people and ended up losing money. I found that really stressful and horrible and ended up paying everyone out. 

E: Of your own pocket.

S: Of my own pocket. And said that from now on I wanted to do business that we could bootstrap and scale up without investing too much into it, which is what we’ve done with Pipehouse Gin so far. It is profitable already, we’re doing table tennis focused on building sort of profit producing businesses, whereas if you go all in, we’d be focused on producing an equity focused business, which means that it probably won’t make any money or pay us out any money for quite a long time. It might pay like salaries but in terms of paying out profits, it probably won’t happen because we would be reinvesting all of those profits in growth. Which is kind of something we got slightly burned before on. And was very pleased to leave. So it is a bit of a foolish thing for me to be considering. Really trying to turn it into the next international huge alcohol brand. I don’t know, or have all the lessons from the past meant that this time it would be different? 

E: Yeah, I suppose a big part of that is being clear between the four of us, being me you, and our other two business partners about what the risks are, what we’re investing, and what we want to get out of it. And being clear about when we can take money out in terms of salary, when we can’t. How much we’re willing to invest and also lose. 

S: Yeah.

E: And going through both scenarios and not just looking at it like oh this is a great opportunity, let’s just run with and not really going through all of the downsides. Which sounds really negative. But I guess those are the lessons learned from previous businesses. 

S: Yeah, I mean lots of lessons learned from previous businesses.

E: That’s what your blogs all about.

S: Generally yeah. Yeah, I don’t know I am pretty torn. One other thing that we need to take into account is that the life of a digital nomad is quite a cheap life. Especially if you’re in Asia, you have a very good quality of life for not very much money. And given the state of the business at the moment and investments of money maybe before means you could probably go pretty much indefinitely without having to 

E: Scale up any of the current businesses. 

What are the risks of doubling down on Pipehouse Gin and building it up? [16:40]

S: Yes, without having to get a job, without putting kind of that four hour work week dream where we don’t really need to spend that much time on anything. And just keep everything ticking along. It  doesn’t matter if they drop down quite a bit. Whereas if we go the opposite route and we take on a chunk of savings and we start putting it into a business and start spending money, we start taking on leases or spending a lot of money on new stock or machinery or things like that. And that is a risk. That is a risk that could mean if something goes wrong, we’ll have to go do something else, you might go back to Peter Eating (sp?).

E: You do keep threatening that.

S: I might have to go work at Waitros (sp?).

E: In the freezer section, your favorite ever joke. 

S: I am not particularly employable either way. There is a bit of a risk there, but then again we’re 29 so not much of a risk there. We’ve got a lot of time and a lot of productive years ahead. I don’t know. 

Emma broaches some questions about the lifestyle that accompanies scaling up Pipehouse Gin [17:31]

E: I guess another thing for me is what does that lifestyle look like if we did stay indefinitely in Tunbridge Wells and focus on the gin business more like a full time job. What does look like in terms of holiday and travel. And what does our working week look like? And for example if we had a location that is quite central in Tunbridge Wells, would we look to do a bar on evenings and weekends? Would we look to do one off events like what we’re doing now, where we kind of schedule our life around say for example in the summer we did a number of weekend markets and events which was quite manageable for us because we didn’t work full time during the week. We could negotiate some rest time on either side of the weekends. 

S: So what I kind of would envision as an ideal scenario is something central to Tunbridge Wells, not somewhere people would walk past but somewhere they could walk to to eat that was mainly a distillery packing center warehouse that also had the capacity for people to come in and buy and drink on the premises. What I would envision is that place would then become a destination that we would then generally stay for people to come in would also be somewhere we would have events and tastings, things like that. And then we would also have other services that we could provide such as contract distilling, gin making consultancy for other businesses.

E: So rather than a full time bar, it’s more of a one off

What four categories of staff does Sam envision for a scaled up version of Pipehouse Gin? [20:00] 

S: It’s more like, you know those kind of craft beers, breweries that have a little tap room attached to the side. They’re open like one day a week kind of thing, it would be someone that we could have open one day a week and it would still be worth it. What I envision is splitting the business into multiple sections and then hiring people to take over those sections. So I want to build a marketing team, someone who can just focus on targeting as many events as possible throughout the country. I want to have a specific product development team and get a much quicker cycle on producing products. Maybe aim for something like three a month and have people working full time on that. I would want a specific marketing team who do all the online stuff, content marketing, blog posts, business development, PR, that sort of thing. I would want also a business to business sales team. So people whose job it would be to talk directly to bars and restaurants. Talk to distributors. Bigger supermarkets, international exporters and importers. And then on top of that potentially even if there was a bar, bar staff and that kind of thing as well. But those are the categories and I would be keen to get people that I could get to work as partners and excel with them and then build up those four aspects of the business almost independently. 

E: So it’s more that actually we would remain in the management team and we would kind of retain a similar role in terms of making decisions and keeping control but in terms of the day to day, running we would hire a team that we would manage. 

S: Kind of, but more intense than that. So, for instance, we get in, we find someone who we think will be good doing B2B sales and then for whatever 2 months you would be working with them full time. 

E: Yeah, it would have to be a massive training. 

S: Training them up, whatever it is, it would not be, the thing about hiring employees is that generally to get the most out of them and have them be useful, you need to be putting in as much work as they are. So if we have people working full time, it is not like I would be, by going for them, what I mean is we would be taking on more than full time jobs. As it were. Back to my advisor days, where, and this is a comparison. 

E: Your tech start up. 

S: My tech start up while I would be in there before everyone else, opening up and all the staff would come in and work and I would be the last to leave at the end of the day. Looking up and working with them all day everyday. 

E: Yeah, I guess that makes sense for the more admin and office based roles. But the market, it makes sense in terms of the training, but the idea would be the team would sort of run it themselves. 

Do Sam and Emma ever envision hiring a CEO for Pipehouse Gin? [23:20]

S: Yeah of course, and I am thinking it growing to be quite a big business. You end up having. What would be nice is at the end hiring a CEO who could take a lot of the managing day to day stuff and almost. Well when I talk about building equity based business, I think about a business that has value in itself and the more you are a key person to that business, the less value that it has. So to build a business that is all its own, it has to basically be self sufficient, so building self sufficiency is the long term goal. But that is like a 3, 4, 5 year timeline for that. So yes you’re right, it’s not off with, it’s a lot of training, it’s a lot of hands on. And each part will eventually run itself. But we’re not talking like a 3 month timeline, we’re talking years. 

E: Sounds scary.

S: It is scary! It is a very different style. 

E: And it is interesting that this has come up now because we have seen so many of your businesses that you promote and want to talk about are hands off. They are working remotely, you’re not spending a huge amount of money, you are spending a huge amount of time. 

S: Businesses I generally suggest people do are the ones that are baby steps all the way. So you don’t start by quitting your job and investing all of your life savings and opening a bar. Instead, you spend your evenings doing some things or running pop ups or whatever it is. You start off by not spending much money and once you get some buy in for the first step, you slowly scale up and build up slowly and gradually. In as low risk of a way as possible. 

What is the difference between a start-up and a lifestyle business? [25:25] 

S: I kind of describe it as the difference between a start-up and a lifestyle business. They say that if a start up is making a profit than something is wrong. They’re not scaling up, they’re not ambitious enough, I think of the sort of silicon valley start up, they’re trying to shoot for the moon. 

E: In terms of growth. 

S: They’re going to be losing money for years on end, just focusing on getting as big as possible.

E: And that is the business model, that is what everyone does. That is what you work towards. It’s not unusual. 

S: No, it’s very legitimate way of doing things but it is also very high risk. It burns for you as well because it’s high intensity and you need to be spending all your time on it, especially if you have investors, they’re invested in you and you are their workhorse but also a smart decision maker. So generally if people are looking to build an income, maybe quite their job, those aren’t good businesses to do, they are the ones you do because you have a passion for whatever the product is. And they wouldn’t take that risk, and then maybe you spend two years and it fails and then you go back to…whatever job you were doing before. Whereas, how we would be doing the gin so far is that we would be putting in a bit of money, we’ve got our stuff going, we’ve got our first product out, we’ve got buy in from that, we then took out a bit of money as it was making some profit, and we’re putting a bit more back in to launch our next product. But we know that we’re slowly scaling up our order sizes, our print runs for labels and things like that. Because we know now that we are going too soon, we’re taking very baby steps at the moment. 

E: That is the next thing I was going to say, I think it is quite interesting to discuss how we were running so far, which is organically, and making business decisions that we’re comfortable with, not necessarily being very risky or giving kind of a responsibility or some control to outside people. I think that is going to be a big part of the decision process for us as a team because that is going to be really out of our comfort zone.

S: And this is something we’re just talking about together, because if we stay, the reason to stay would be because we wanted to go all in on something, and it might be that Ben and Katie are the other partners and they actually really enjoy as it is and we’re growing slowly, the day to day stuff, they’re enjoying the amount of time that we spend doing the events or whatever the focus is is manageable with their commitments because it’s all very well saying that we’re going to stay and focus on it but it’s actually true that they have a busy schedule as it is. 

S: And it suits us because we’ve got other businesses but so do they. Table tennis for me, and also they’re studying at Bible College and they’re very involved at the Church and Ben is also doing table tennis coaching and he’s writing his blog and he’s doing art and food photography stuff. So at the moment it is very chilled and we can do a lot of things. 

E: And they would have to sacrifice things, we’re talking about a sacrifice of not going travelling but it’s also the sacrifice of 

S: Well we would be asking them to give the same commitment that we would. But before we ask them that, we wonder if that’s what we want ourselves. Because if we don’t want it, there is no point in raising it. 

E: And actually the ultimate goal of selling the gin business in five years time and have it be worth x amount is our goal, but it might not necessarily be theirs. 

Emma and Sam talk about their goals for Pipehouse Gin [29:51]

S: I don’t think that necessarily is our goal either. The goal is to build equity in the business, build the business to be worth a certain amount, but that has value in itself, it has equity because it is a good business, so it might be that we’re at a point where can sell it but we don’t want to because we’re enjoying it and we’re loving the business. Or it might be that we want to sell it and then go do something completely different. Talk about facebook, the people that want to buy facebook are giving really good deals but he didn’t want to because he said something like, if I wasn’t doing this I would just start another one. He is doing the job he wants to do. And that is kind of where we’re at thinking. What do we want to be doing with our lives, our time? Our 9-5, or 8-8, or whatever it is. What do we want to with our time? 

E: That is a good question isn’t it.

S: I was thinking in the shower, what if I want to go full time in jiu jitsu for 6 months, try to get into the europeans, trying to focus on that and forget completely on this sort of stuff. Maybe I don’t, maybe you want to go and study more cooking stuff, go to Cordon Bleu or something like that.

E: I’d love to.

S: You’d love to, yeah? Would you love to do that?

E: Well yeah. I’d love to.

S: Instead of going to Asia, or going travelling? 

E: I guess I always thought of going to Asia and travelling as an opportunity to have more time to do cooking classes. So the reason I don’t do it here is because of the price. 

S: Yeah. 

E: Not really because of the time.

S: Yeah. 

E: Because I could definitely study full time at cooking class and still do the gin stuff outside of that, as I am currently, as it is currently. I mean I’d struggle if it was something where were doing a lot of physical events as well as studying during the week, but we’re in the winter so we haven’t committed to a huge amount of it. 

S: Yeah, I think it is worth saying that us going travelling doesn’t mean gin ends. It just means it continues at the pace that it is going now.

E: Which is manageable to do remotely. 

S: Especially with Ben and Katie still here. And we could always go back later in a few years and then go off.

E: I think it is a good point because I see traveling as a sort of passive development, and doing things that are out of my comfort zone and new, and I kind of see staying here as the opposite. But actually, I can do that stuff here. 

S: You can do that stuff here, and bear in mind, if we went all in on the business, that would be a lot of hours out of our own personal development, getting used to managing people, working full time, taking on apprentices, whatever it is, we’re having a big life change in July is just…maybe there is a third option, maybe we move to Paris and you go to Cordon Bleu and learn french and wear a cool hat. Make macaroons.

E: Why would we go to Paris? 

S: It’s in Paris isn’t it?

E: Yeah but there’s one in every country. We could go to Mexico City, as it’s the cheapest place, but I’d need to work on my spanish first. 

S: Well, unfortunately we haven’t come to any conclusions, so sorry if you listened to this hoping we’d decide on our future at this point. 

E: I’ve learned a few things. 

S: It’s always good to chat through this sort of stuff and then hopefully we can each go away, think about it more and then chat about it again. Maybe you will have a completely different idea. Maybe this will inspire us to think of something completely different that we want to do and go do that. Maybe I’ll become a racecar driver. On that note, thanks for listening and this has been the lazy entrepreneur, I am Sam Priestley and I have been here with my lovely wife Emma. If you want to get in touch with me you can find me at sampriestley.com or email me at hello@sampriestly.com.