By Ferol Vernon ’09; Originally published January 29, 2008
Can you tell us about your ZICO story. How did you get started with Zico coconut water?
Well, I had been living in Latin America for a number of years working for a US multinational as a supplier to the beverage industry. And at some point decided to start something on my own, was very interested in the beverage category, and had been familiar with and drank coconut water all the time, and had seen people drinking it as a natural sports drink all throughout Latin America.
At that time, I looked around and being interested in the beverage space couldn’t help but seeing the plethora of new, enhanced waters and artificial sports drinks that were coming out in the market and having great success.
And so I thought, “Hm. Here’s an all-natural product with all the properties of a sports drink, loaded with electrolytes that can meet this need in a natural way. So if we could just find some way to get very, very high quality coconut water and market it to the right kind of audience, we have a chance to basically develop the first all-natural sports drink for the US market.”
So exactly how did you get started? Administratively, how did you start up your company? After you found this product, when did you decide to really go for it?
Well it was probably a year in development where I basically used some ex-business contacts, friends, consultants to do some investigative work, market research, how we would produce it, source it, branding work, and all that was done kind of nights, weekends, anything it took to evaluate that over the course of probably a year.
And during that time it became more and more clear the kind of focus we wanted to take, the kind of approach we wanted to take. And I was able to do that pretty much with no fulltime employees.
Just using consultants. It took a little bit of initial funding on my own part. And at some point I brought in some friends and some business associates to put in some funding as well. And after about a year, it became clear--the market studies were proving out. We found out we could get it produced cost-effectively and there was a market for it.
So we actually did a pilot launch--a trade launch at a tradeshow in New York. And that’s where we really decided that this was legitimate. The response from retailers, distributors, other people in the industry, was very, very positive. And we already knew we had a good, positive consumer response. So that point was when I really decided to leave my day job and commit to this full-time.
So at that point, we set up the business as an LLC, which is a common entity nowadays and very easy to work with, and started off with one employee and really just built from there. Very, very grassroots. I used to work out of my home office and we put all of our efforts into building on the street.
So as a Fuqua alum, what sort of lessons learned from your MBA do you feel you carried through to the process of founding this business?
Well, I’d say everything and more. One of the things I enjoyed about Fuqua is I’ve always been kind of a generalist. I’ve been good at and interested in marketing, finance, ops, human resources, but never really felt drawn to one particular area.
And in hindsight, I’m so glad I had a chance at Fuqua to take advantage of all of those because I’ve been stretched and had to put to use every single one of those areas.
Financing--how we’re going to finance the business from the financial structure on through to the cost structure, on through to managing the cash flow and dealing with investors. Operationally, there’s just the logistics of getting a product produced to your specifications in another country and brought here cost-effectively and then distributed out.
Human resources and trying to determine who we’re going to hire, how we’re going to motivate them, what the right kind of organizational structure is, and everything else associated with getting the right team in place. But probably more than anything has been marketing. The whole structure of how introduce basically a totally new product to a totally new category without a lot of money to back it. And so certainly, all the marketing training I had helped enormously.
That’s a really interesting point. Can you talk about your marketing strategy and what you did given that you didn’t have a huge marketing budget and a large amount of capital go-ahead with that? And how you went about getting the Zico name out there?
From the beginning what we knew is that typically, the large beverage companies, Coke or Pepsi, when they launch a new product--particularly trying to launch a new category--might spend a hundred million dollars. We weren’t going to have anywhere near that.
So from the beginning I decided advertising is not going to work for us. We’re not going to have the distribution to take advantage of it, and the resources to do that. So what I used as my guide is what many businesses have done in the past, and many authors have written about.
“Tipping Point” is one of them, a lot of people talk about it as “guerilla marketing” or “influencer marketing.” What we did is basically focus on creating a brand that we believed consumers would identify with and integrate into their lives. But then ultimately just allow them to do so and find ways where they could experience ZICO, integrate it into their lives, and allow that in and of itself to help create the marketing experience.
So what that means is we did a lot of demos, a lot of product giveaways.
We got a lot of people basically hooked on it by using it as a post workout recovery drink, particularly athletes and people that had a need for this. And athletes that were previously using an artificial sports drink that said, “Hey. I’m active, I’m health-conscious, but I want to live a natural way and I buy other natural foods, and great: this is a natural sports drink for me.”
And from that, that allowed us to reach specifically some high influential people. Personal trainers, yoga instructors, winners in local triathlon events, people that then would spread the word themselves and say, “Hey. I’ve got this great product I’m now using, ZICO.” So that was one avenue we approached.
And the other one was PR. To really try to create a story that would be compelling enough for magazines, TV, newspapers, website blogs to take an interest in telling the story without being paid. Because it was an interesting story. And so we were able to tie those two together and find influential people that were willing to talk about it that then would attract these media outlets to take an interest in talking about it to their consumers.
Entrepreneurship always is a risky endeavor. No guaranteed salary, no real guarantees of success. Did you feel like the risk reward has paid off and is that something that entered into your mind when you decided to go for this?
Absolutely. I had been, I think it was probably over five years, probably seven years out of my Fuqua experience. And so the benefit of that is I had some experience--I had some corporate dealings and I had some management experience that I could bring to the table. And I also was able to have a little bit of financial security.
The downside was that I developed--and my family and I developed--a level of comfort which made this sort of change difficult. But we talked a lot about that and I thought a lot about that. Recognizing that on the financial front the equation was in the long-term. If there’s going to be a payoff to this, it’s going to be in the long-term.
It was clear that I would never be able to make any salary or pull out of the business for year to year compensation what I would make in the corporate world. But I believed that long-term there would be a payoff. But there’s other risk and reward factors.
And the other rewards that I felt and believe and will feel make it very, very clear that even if it doesn’t pay off financially--which I’m confident it will--even if it doesn’t, it’s worth it.
You mentioned these other things, and your family. How do you balance the fulltime demands of running your own company, having to be dedicated to this entrepreneurial lifestyle, and still maintaining a family life?
That’s without a doubt my biggest challenge
I think fortunately for me, I had been clear all along from the time I was married (now I have two little girls) and from the time I had my first daughter that those were my priorities. And at the end of the day when I want to look back on my life, if I’ve succeeded as an entrepreneur and failed as a husband or father, I will not have succeeded.
That’s always been clear to me. And for me it’s been about discipline. Drawing certain lines and recognizing that I can’t possibly get everything done in a given day, week, month, or year. It’s just going to take time. And so if it’s going to take some time, I can draw some lines. What I’ve found works for me, and particularly with a family…6:30 I’m home for dinner.
Unless I’m traveling, which is not too frequently. Less so than I did previously. 6:30 I’m home for dinner every night. And that is my time with my family, particularly with my girls. And I’ll do a little bit of work later in the evening but really not too much.
Sundays are off-limits. I don’t do work, I don’t pick up the phone, that’s time for my family. So I’ve found that by physically drawing some lines in the sand that allow me to have a life for my family that forces me to keep that balance.
And then there’s things that I work in my own time. My time is early morning. Fuqua got me in training to be an early riser.
So, I work out and I have my private time from 5:00 until 8:00 a.m. And then the rest of my life is ZICO.
What advice do you have for other entrepreneurs leaving Fuqua, going out into the world? What advice would you give them today?
What I would say is, find your purpose. For me, it took some time. I didn’t have my life’s calling clear to me that I wanted to launch ZICO or start a coconut water business. But it was a conscious decision to find a purpose.
And once I found that, I found it’s been infinitely easier to have the sort of dedication and focus that I need to make this succeed. And that’s what I believe is an important part of entrepreneurship is have that goal, have that dream, have that purpose. And once you have that, lock onto it and stick to it.
It may change, it may morph, but if fundamentally your purpose is good and authentic and true to who you are, I believe that it’s possible to see anything through.
Original audio interview available here: