5/30/2020 Nantucket Nectars
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While many of their fellow Brown University graduates headed for Wall Street eight years ago, Tom First and Tom Scott retreated to Nantucket to loll on Mr. Scott's 22-foot Boston Whaler and work odd jobs like tending bar, shucking scallops and even shampooing dogs to pay their rent.It was hardly a textbook formula for getting ahead.
Yet, from those inauspicious beginnings, the two wharf rats somehow stumbled into one of the entrepreneurial success stories of the mid-1990's. Today, they reign over a $60 million 'new age' juice-drink empire, Nantucket Nectars, a start-up that some people liken to the early days of Ben & Jerry's.And in contrast to so many entrepreneurs who expound upon their savvy in achieving fortune and fame, Mr. First and Mr. Scott, both 31, merrily confess they have little clue how they did it. 'We didn't know what we were doing,' Mr. 'We didn't know how bad things were.
It was a combination of passion and naivete.' 'Tom and Tom, as they call themselves on their labels, cannily took a strikingly simple idea to build a strong niche for themselves in a highly competitive market where giants like Coca-Cola and Tropicana are always throwing their weight around.
The speed with which they succeeded stands in contrast to the arduous struggles most starting entrepreneurs endure as they fight off creditors and grapple with the strains of growth. By one estimate, only half of the hundreds of thousands of new businesses started annually survive more than five years. In the face of such discouragement, the Nantucket Nectars story stands out as a sort of lighthouse beacon.Both men like to point out that they never took a business course in college and actually failed accounting. Scott says he 'still isn't sure' what investment banking is. And indeed, their company, Nantucket Allserve Inc., was born on a whim: for a Nantucket cooking contest, Mr.
First tried to recreate a peach drink he had sampled in Spain. He mixed sugar, water and peaches in a blender and won a prize.
Soon, the two Toms were selling the concoction off Mr. Scott's boat, along with ice, beer and groceries.They figured they had found a perfect life: blend juice in the sunshine, spend days on the water and never have to leave their idyllic island.No such luck. The peach nectar was such a hit that they could not resist the temptation to branch out to lemonade and other blends, selling them in recycled wine bottles for $1 each.
At first, their biggest decision was which setting to use on their seven-speed Hamilton Beach blender. 'We used to 'chop,' and then we switched over to 'liquefy' when we figured out we were making liquid,' Mr.
First said.As sales picked up, they set up shop in a converted ice house they dubbed the Allserve General Store, paid a New York bottler to produce their drinks and expanded their distribution to Martha's Vineyard and the much more populous Cape Cod. But the odd jobs they did led to their biggest break. One yacht they cleaned was owned by Michael Egan, who ran the Alamo car rental company. Egan has very deep pockets - when Republic Industries bought Alamo this year for $625 million, his 94 percent stake was worth $587 million. First called him for support in 1993, Mr. Egan saw another good investment in the industrious deck-scrubbers.Mr. Egan said he was getting several investment requests each week and dismissed most.'
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'You find all kinds of people starting businesses who you know don't have a prayer of being in business in three years, but these guys were just personally attractive, very hard working, dedicated, visionary and so on,' he said.' 'Really, when you invest in a business,' he added, 'especially a start-up business, you invest in the people.'
' In fact, the product initially left him unimpressed.' 'The juice wasn't actually too good,' Mr.
'They had some flavors that were horrible. They had this bayberry tea that had to be about the worst-tasting snake oil elixir you could find and put in a bottle.' Egan paid the two Toms $500,000 for a half-stake in their tiny company, giving them plenty of room to make mistakes.At first, big choices were made with short-sighted logic. Tom First recalled the debate over switching their beverages to 17.5-ounce bottles, instead of the 16-ounce industry standard. 'Tom said, 'I think we should be bigger than 16,' ' Mr. First recalled.
'And I said, 'Yeah, go with it.' ' Today, they also have 12-ounce and 32-ounce sizes, but the 17.5-ounce model is their best seller.
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