Roger Steele, a golf enthusiast turned entrepreneur, shares his journey from reluctant golfer to passionate advocate. He discusses golf's positive impact during the pandemic, the challenges of inclusivity, and his transition from engineering to storytelling. His story emphasizes community, resilience, and the importance of collaborative partnerships in business.

Dr. Victoria Ramirez discusses the Arkansas Museum of Fine Arts' history, community engagement, and future initiatives. We touch on the role of women in shaping the museum, its outreach efforts, successful fundraising, and programs tailored for younger generations. Ramirez emphasizes honoring the museum's legacy while adapting to modern needs and preferences.

Lily Cochrane is the former executive director for the Wake Forest Center for Private Business. The Center assists privately owned businesses in North Carolina, providing resources for various industries and ownership structures. Cochrane discusses the Center's evolution, business challenges, especially family-owned businesses, and the importance of networking and mentorship.

Welcome to This Is Capitalism: Inspired, Explained, In Focus the podcast that brings capitalism to life through stories of innovators, entrepreneurs, philanthropists and academics. Here we explore the power of capitalism in driving economic growth and creating opportunities.

I’m Patricia O’Connell for This is Capitalism. Today I’m talking with Brian Lipton, who is the Chief Theater Critic for Cititour.com and the former editor-in-chief and currently a contributing editor to TheaterMania.com. He is going to take us behind the scenes at Broadway and give us a little bit of a look at what’s going on with Broadway, the return to Broadway for both actors and theatergoers.

Key Takeaways:

[:29] Patricia O’Connell introduces Brian Lipton, a theater critic for Cititour.com and contributing editor to TheaterMania.com, and welcomes him to This is Capitalism.

[1:01] What does the closing of Phantom mean after 35 years? Is it just time? It has made its money back so many times that its lead producer, Cameron Mackintosh, could run it as long as he wanted to. With its closing notice, its grosses have soared to their highest in years. Winter is not the tourist season, and COVID-19 is still a factor.

[3:01] All Broadway shows are capitalized, which is really the amount of money it takes to put the show on from start to finish: rehearsals, scenery, rent, and things up until day one. For a large musical now, $15 to $25 million is not an unusual capitalization. You have to make that money back during the run to get a profit.

[3:38] Then you have the weekly running costs. The set’s already done, but you still have to pay rent, actors, and union people every week, and make that money back. For a musical like Phantom, that’s estimated to be in the $750,000 to $1 million range because Phantom is a very elaborate show to make every week just to break even.

[4:17] If you’re doing a limited run, it’s often built in that you need to be running at pure capacity. Into the Woods is still at the St. James, but it was originally scheduled for an eight-week run, and the only way that could’ve made money at eight weeks is if, for eight weeks it ran 100 percent. It did come close to that, but it’s no longer coming close.

[4:45] The longer the run goes on, sometimes the less you have to make that 100 percent. But you can’t do badly; you have to still pack a fair amount of the house at full-price tickets if you’re going to meet your running costs. And the minute you don’t do that, you run the risk of being in the red.

[5:05] Discounting tickets is a major factor. If you’re selling 1,000 seats at $60 or $70, you’re making $700,000 a week instead of $2 million a week. The Music Man doesn’t discount, so it is taking in over $3 million every week. That will help it to be profitable by the time it closes. If they discounted by 50 percent, they wouldn’t have a chance.

[5:51] The Music Man had the option of running after Hugh Jackman decided to leave. And he is staying a few weeks past his contract. This has been done before when you have a star who is so powerful. Maybe the wisest business move, even if you could still make money — it’s an expensive show with a large cast — is to take the money and go.

[6:23] Hugh Jackman is one of those rare people who is a true movie star and a true theater star even though he has only been on Broadway three or four times, most notably, of course, in The Boy from Oz, his big Broadway debut. But he has created a huge following. Some people go back to see him four to six times.

[7:04] There are shows that have always done stunt casting. You’ll see, for example, Pamela Anderson doing Chicago. She was quite good. But more to the point, she brought in business. She had the highest grosses for Chicago in many months, if not years. And that was a perfect example of the right way to do stunt casting.

[8:08] A lot of Broadway will be dominated, especially straight plays maybe more than musicals, by star casting, whether it’s stunt casting or not. In a lot of cases, they’re going to look for that star power to motivate the box office.

[8:27] Now conversely, the musical, Some Like It Hot, stars Christian Borle, Adrianna Hicks, and J. Harrison Ghee, who, their talents notwithstanding, are not known stars. They are banking on the property and the careers of Scott Wittman and Marc Shaiman, who wrote the score. They have Tonys for Hairspray and they’re very well known.

[9:00] Brian doesn’t think we’re going to see a lot of truly original work on Broadway for a while. Everything will be based on a movie or a book or is a revival of a famous play. Theater that comes from scratch is few and far between.

[9:21] This ’22 to ’23 will be the first “normal” Broadway theater season that we’ve had in several years now. I mean the 2019 to 2020 season got cut short, of course, because of Covid. What we’re seeing now is a lot of flux.

[9:42] This is a very unusual year in that a number of shows opened in December, including one, The Collaboration. It’s an imagined conversation between Andy Warhol and Jean-Paul Basquiat. It’s also being filmed simultaneously and it’s coming in for a limited run. By the end of 2022, Broadway will be surprisingly full.

[10:12] But January will bring the closing of Beetlejuice, after eight months. A Strange Loop, which won the Tony in 2022, for Best Musical, is closing on January fifteenth, which will make it, depending on how you count things, either the shortest or the third-shortest running Best Musical ever. There are also some limited runs now.

[10:43] Phantom closes in February. But spring is usually the more prominent season than fall. Again, better weather, maybe more tourists, and closer to Tony time. Almost all of the big musical houses, The Winter Garden, the Marquis, and the St. James, are vacant for the spring. Brian wonders if the producers are hedging their bets.

[11:20] Back to the Future, for example, is the kind of show that would probably have to take a million to a million-and-a-half every week just to be in break-even territory.

[11:31] There is a symbiotic relationship between the New York City economy and Broadway. In the last full theater season, 2018 to 2019, Broadway ticket sales were $1.8 billion. That is more than the ten major league sporting teams in the New York City area, which is staggering, because what’s more popular, sports or Broadway?

[12:05] Can Broadway rely on locals? This fall, Broadway is doing surprisingly well without a huge tourist influx. There is a very strong local audience — New York City and the tri-state area, that will come to Broadway for something they want to see. The tourists augment locals in any season and are most important in spring and summer.

[12:53] If we looked at a forecast and said that nobody is coming in the summer of 2023, that may be why spring producers are hedging their bet. You’re never going to be able to run big, expensive shows without the tourist base. You can run Laura Linney for 16 weeks, and it’s probably not a big deal because that’s not what the tourists flock to.

[13:37] When the tourists come, they want to see musicals. Broadway has some very long-running musicals like Hamilton, that’s still bringing in insane amounts of money, Lion King, that’s doing super well, and Wicked,

The art market is big, unpredictable, and endlessly fascinating, not just to potential buyers and sellers but to art lovers the world over. The art market is also big business. One estimate put the sales number for 2021, the third-best year for sales on record, at $65.1 billion. Here to paint us a picture of the intersection between art and commerce is Kathryn Tully, who’s been covering the art market for 15 years.

Listen in to learn about the fascinating art market and how you can be involved in it.

Key Takeaways:

[:21] Patricia O’Connell introduces Kathryn Tully, freelance journalist, and welcomes her to This is Capitalism.

[1:14] Kathryn has been a financial writer since she graduated from college. Fifteen years ago, Kathryn started writing about the art market, around the time when she started freelancing.

[1:30] Kathryn holds that too much of the press coverage is about big auctions of multi-million-dollar artworks sold in New York. It suggests prices always go up, which is not the case. The art market is a pretty difficult investment market.

[2:02] Kathryn felt that writing about the art market enabled her to put non-nonsense articles out there that aren’t being written otherwise.

[2:20] The multi-million dollar works that sell for high prices comprise a tiny sliver of the art market. There is incredible art being produced all the time that you would love to have in your home. Most art produced is not going to be sold for a profit. The art you buy devalues by 90% when you take it out the door, so you will not resell it at a profit.

[3:03] You read about Basquiats, Warhols, and art that’s sold at a profit between high-net-worth individuals at auction, for transparency. You would have to spend $500 thousand or more to get a good shot at reselling art for a profit. Most art doesn’t have a release value. For the art that does, the art market is not brilliant, considering the risks.

[4:40] Commercially-valuable art can take months or longer to sell through a dealer or an auction house. You’re not guaranteed to find a buyer. It’s not just an illiquid market, it’s a tiny market. In 2021, the third-best year for the art market, the overall sales were $65.1 billion. Compared to the daily trading volume of stocks, that’s tiny.

[5:18] There are holding costs in owning art. You have to pay for insurance and storage and there are buying and selling fees. Art is a good investment if you buy something you love and you find that it’s gone up in value. Kathryn’s friend bought a signed Banksy screenprint in 2003 for £150. In 2020, a dealer estimated its worth at £150K.

[6:55] Kathryn’s friend didn’t buy the print because she thought it was going to go up in value. She fought it as a gift for her husband. Pricing in the art market is very subjective. No two artworks are the same, except for prints and multiples. Artworks are unique objects. Artworks from the same artist can sell for different prices. Pricing is subjective.

[7:54] Artists go in and out of favor. The Banksy print market goes up and down. There’s a very thin part of the market, with a very small amount of transactions, that generates the most value. Are you going to find a buyer? There may only be ten people in the world that are interested in buying your expensive Warhol or Basquiat at a certain price.

[8:49] The print market is an area where you can acquire artwork by those artists at a cheaper price point. There is a bit more data about prints and multiples because of their higher volume, and because they aren’t unique; they are one of an edition. You can see what they are selling for. You can get a sense of what the resale price may be.

[9:34] The art market is opaque, besides art indices that show the records of public art sales at auction. Auctions are the most successful part of the art market. The majority of global art sales don’t take place at auction houses but through galleries and dealers but through galleries or dealers who don’t reveal their transaction information at all.

[10:16] Artworks sold through galleries or dealers are not revealed publicly. The art market can be a vehicle for pricing fraud because they are no public records of gallery and dealer transactions.

[11:44] Contemporary art is in vogue at the moment. The old masters and the impressionists don’t necessarily stay in favor because the generation of art buyers that did buy them is dying out.

[12:52] Art value is driven by subjective factors, not just supply and demand. You can’t see the demand a lot of the time because so many of the transactions are not disclosed. It’s different from a stock or a commodity that you can sell on any day at the price listed. In the art market, you can’t see the price or the fundamentals driving the price.

[13:40] During the pandemic, a lot of the art fairs started going online with virtual viewing rooms. Dealers at art fairs started revealing more of their prices, creating transparency.

[14:42] As a prank, a Banksy piece at auction was shredded the minute it was purchased. The piece is said to have increased in value, though, after the prank.

[15:27] Kathryn’s suggestions for investing in the art market: 90% of art sold does not have a resale value. For prints and multiples, an accessible part of the art market, you can get a sense of resale value through price indices. You’ve got to buy art because you enjoy owning it. You don’t know if or when you can sell it for a profit.

[16:36] Kathryn has not sold any of the art she has bought because she loves it. There is so much art she would have loved to have bought that got away. She buys artwork she loves that her friends have produced or that was created in her neighborhood, to support their market. The internet has opened up the market for new original art.

[17:40] Kathryn’s dream artwork would be any Basquiat work. She would be over the moon to own even one of his sketchbook drawings. She would never sell it!

[18:07] Kathryn’s newsletter, Priceless, is linked below.

[18:37] Patricia thanks Kathryn and the listeners for joining us today on This Is Capitalism.

Mentioned in This Episode:

This is Capitalism

Kathryn Tully

Priceless.substack.com

Basquiat

Warhol

Banksy

“Banksy Artwork Shredded After Auction May Have Increased Its Value”

 Like a lot of aspiring actors, Gabrielle Kurlander came to New York City at 18 with stars in her eyes and a dream of making it big. It turns out, there were stars in her future and she did make it big, though her dream got a rewrite along the way. She’s still active in theater but the best part she’s ever played is as President and CEO of The All Stars Project. The non-profit teaches young people from disadvantaged backgrounds how to use the power of performance to help them navigate new experiences, such as summer internships or interacting with a group of people they’re completely unfamiliar with. Gabrielle joins us on This Is Capitalism to talk about The All Stars Project, why she’s a big believer in non-government-funded programs, and the true meaning of philanthropy.

Listen in to learn about the partnership between corporations, donors, and teenagers working toward a path for growth.

Key Takeaways:

[:21] Patricia O’Connell introduces Gabrielle Kurlander, CEO of The All Stars Project, and welcomes her to This is Capitalism.

[1:23] The All Stars Project is a national non-profit for youth development, using a performance approach on stage and in life, to help young people growing up in places of poverty, go on and pursue their hopes and dreams, learn more about the world, and create a place for themselves in it.

[1:59] Performance gives you a way to create new versions of yourself. Young people who are growing up without a lot of opportunity, and without much experience of things outside of their neighborhoods need a tool or mechanism to build confidence and get over obstacles. Performance helps to do that.

[2:42] Gabrielle uses the example of applying for an internship. Use performance to practice how you meet the interviewer and behave in the interview. In performance, you can make mistakes. There’s no right or wrong. It helps free people up. In The All Stars Project, young people are directed in creating new performances to recreate their lives.

[3:28] The All Stars Project uses old-fashioned grassroots outreach to bring young people in. They walk through their neighborhoods, even the most violent neighborhoods, and talk to young people. They bring other young people to the neighborhood to create a performance there.

[3:57] Young people can join The All Stars Project, regardless of their grades or how they are doing. If they are looking to grow as leaders and experience new opportunities, they can come in and The All Stars Project will use performance to help them to grow.

[4:15] The All Stars Project specializes in upper teenagers, 16 to 21, and even into their early 20s. There are some opportunities for people after graduating from college. There are performance programs for kids in middle school and grade school.

[5:03] Gabrielle shares her experience growing up. Performance helped her be a successful and confident person. She moved to NYC to pursue acting when she was 18. She met The All Stars Project as a grassroots project with no funding and she became the founding CEO. Being a performer helped Gabrielle do new things.

[6:12] The All Stars Project is 100% privately-funded. Gabrielle had never asked people for $50K or $10K. She used her performance background to invite people to donate. The same performance skills help the youth. The All Stars Project is a partnership between caring, affluent adults and young people from underserved communities.

[7:02] It’s about doing. With performance, you can start right now. Performance gives you the freedom to act as you will. You can take everything that you are and also try some new things. Performance is a freeing mechanism.

[8:03] Gabrielle tells how she created her approach to potential donors. Being a CEO in her 20s was intimidating to her. Performance helped Gabrielle create a version of who she wanted to be as a CEO that was true to herself.

[8:54] The All Stars Project does the same thing for young people. It’s an important key to issues of diversity and belonging. Performance gives a person a version of themselves that they choose to be, a new creation of their own making.

[9:43] Performance enables, empowers, and encourages young people to write their own scripts. Young people growing up in a place of poverty get messages that work against their success. They are taught in their neighborhoods they have to be perfect to succeed. But perfection is the enemy of growth.

[10:46] Gabrielle shares a success story of a young woman raised in poverty and violence. The young woman came into the intern program at a partnering corporation. Gabrielle says the corporate professionals also receive performance training.

[11:41] Thousands of individuals donate to The All Stars Project. Philanthropy is exerting yourself on behalf of your fellow man. If you would like to be involved, start at allstars.org and select an opportunity to volunteer. You can bring The All Stars Project into your corporation, You can become a development coach.

[12:56] The All Stars Project has offices in Dallas, Chicago, New York, and Newark, New Jersey, with virtual programs in more than 20 states. They have another program called Operation Conversation. Small groups of diverse individuals use performance in a series of exercises to connect with and learn about each other.

[14:16] Virtual programs have been amazingly effective. The All Stars Project is about relationships and connecting different kinds of people — wealthy people and people growing up in poverty, people of different ethnicities, preferences, ages, political beliefs, and ideologies. They build community with diverse people.

[14:52] They found that virtually they could create contexts where there was a lot of intimacy and new kinds of discoveries being made.

[15:19] The more people you want to reach, the more funding you need. The All Stars Project has big corporate partners, community college networks in Dallas, and police, in Operation Conversation Cops and Kids in New York City and Newark, New Jersey.

[19:55] The All Stars Project is looking to partner with bigger institutions to scale and impact in new ways.

[20:17] Gabrielle reflects on the career she has made and the stage career she dreamed of as a child. While working with The All Stars Project, she continues in theater and is about to start in her 40th production.

[21:01] Gabrielle talks about the benefits that have come through our capitalism in science and medicine. But in the poor areas of our country, we haven’t made as much progress as we need. Poverty is just not economic but also social.
[21:34] Dr. Raj Chetty at Harvard conducted research that found that people with lower incomes were more likely to improve their financial situation over time if they were connected to people with higher incomes. The All Stars Project creates those relationships to expand the opportunities and growth for everybody involved.

[22:46] A poor person needs to see the opportunity and then needs to be surrounded by people who support them in various ways so they can get on the path and pursue their dreams. Gabrielle also says we can all volunteer and we should volunteer about things we feel passionate about.

[23:50] Gabrielle’s last thoughts for listeners: We need to not only drive things through data, economics, success, and money, we need to look at people’s hearts and minds. Data and money can do a lot, but we need creativity, human relationships, and new opportunities for people. Find something you’re passionate about and go do it!

[24:41] Patricia thanks Gabrielle Kurlander for joining us today on This Is Capitalism.

Mentioned in This Episode:

This is Capitalism

Gabrielle Kurlander on LinkedIn

The All Stars Project

Operation Conversation

Antoine Joyce

Kait Hill faced a tough decision in 2021 — finish college or start her own business after two years of doing corporate sales. She chose to start her own business, and thus was born Rock City Digital. The digital marketing agency leverages its young staff’s familiarity with new ways of creating and consuming content to help companies and individuals build brands and create identities that resonate in today’s dynamic market. Kate joins us on This is Capitalism to share her journey from working in politics to going into sales to being her own boss, and why the future will belong to content creators of all kinds.

Listen in to learn about digital marketing.

Key Takeaways:

[:22] Patricia O’Connell introduces Kait Hill, Founder and CEO of Rock City Digital, and welcomes her to This is Capitalism.

[1:23] Kait started working when she was 15 years old. At age 20, she had her first corporate position. She saw a lot of issues with how things were run and cultures weren’t tended to. When she was mistreated at the agency at age 21, she saw she could run a company better, so she started one.

[2:05] Before starting her business, Kait was going to school online and working. She wasn’t learning a lot and wasn’t giving her all at work, so she made the decision to quit school and the job to start a business. She had the passion and drive and knew what she wanted to do so she decided to start the company.

[2:51] No one ever told Kait she had entrepreneurial traits, but she has been finding ways to make money since she was eight years old, so she sees she has always wanted to be an entrepreneur. Her first “job” was a lemonade stand. She also helped her neighbor with their garage sales on commission.

[3:35] Kait explains how she went from political science and politics to digital media. She had convinced a man in the media to sign a petition. In their conversation, the man introduced Kait to digital media and later helped her get into it. Kait had wanted to get paid for being a high performer, and digital media sales was a good way to do it.

[4:44] Kait put out applications and one agency didn’t reply to her. Her new friend advised her to find out who was the person in charge, call them, and ask for an interview. She did and ultimately got a job with that agency.

[5:13] Kait has been running Rock City Digital for about seven years. The most surprising thing to her is how much time you spend handling problems. There’s always something you have to learn. The biggest lesson she has learned is that developing yourself is your best investment. With training, you can handle anything.

[6:10] COVID-19 was an unsettling time, not knowing if they would lose clients. Kait’s clients decided how they would work, which also meant how Kait would work with them. Kait worked on the finances, and if anything needed to be cut, she got rid of it. She met with other business owners and compared notes. Everyone was willing to share.

[7:09] Rock City Digital has always been a remote office, so that was a leg up that was extremely helpful during the pandemic.

[7:38] Kait started developing herself after reading The Miracle Morning, by Hal Elrod. Following the practices listed in the book, she started meditation, exercise, reading, affirmation, visualization, and journaling. These practices helped her find clarity to handle hard conversations and see the root causes behind problems.

[8:41] Kait finds the time for her morning practices by waking up early. These practices improve the way she lives her life. Her clarity helps her move forward and not return to old routines and old ways of thinking that are not beneficial.

[9:31] Kait talks about current conditions in B2B marketing, including TikTok. Which led to YouTube Shorts, Instagram Reels, and Facebook growing more videocentric. TikTok has niched down how video is offered to you. Their algorithms show you what you want to see before you know that you’re interested in it. They build niche communities online.

[10:33] You are seeing a change to personal brands becoming the next cornerstone of marketing. Kait is starting to build a community around her personal brand on LinkedIn. If you can build a community around your brand, and tie it to your business, it will follow you “for life.”

[11:08] Kait tells how the influencer space is changing. The number one thing is authenticity. Instagram is known for beautiful content. TikTok is known for more casual and natural-looking content that adds value to the users. Creators will be the new influencers. Software solutions will make it easier to connect with creators and brands.

[12:25] It’s important to be active as a brand on social media. If you are not on social media, you are not going to be a credible brand for Millennials and younger generations. People are now searching for businesses on Instagram and TikTok. That’s how Kait searches, because the results are visual.

[13:10] Building a brand personally applies not only to the CEO or owner but also to employees who can post on their personal brand on behalf of their company brand.

[14:11] The way people consume content has shifted. The type, length, and content of videos have changed dramatically. If you’re not leading the changes, your brand will not get a lot of exposure. The algorithms are not chronological but are based on what the viewer watches and the comments they post.

[15:17] Some of Kait’s clients are interested, while some do not get it yet. As long as they are on social media, that’s what matters. When Kait is on a business website and clicks out to their Facebook page, if they haven’t posted in a couple of years, she thnk’s they’re probably not operating.

[15:54] Kait grew up poor. She had no resources, connections, or college degree. What helped her was seeing what successful people were doing, and doing as they did. She heard you need a mentor. So she found a businessperson she enjoyed talking to and asked him to be her mentor. They met up for dinners and talked business.

[16:29] In those chats, her mentor gave her life-changing advice. Having him there helped her stay focused on her business without being distracted by new ventures. That made Rock City Digital grow a lot better. There’s always somebody above you that you can learn from. Mentors have played a massive role in Kait’s life.

[16:52] Books have also helped Kait tremendously. Some of the greatest thinkers, operators, and business owners have written books telling what they’ve learned and how they do it. She reads a book and extrapolates the information to her business.

[17:35] Kait’s initial drive was not wanting to struggle as her family did. She decided she would provide for herself. Besides wanting to earn money, Kait always had the drive to help people succeed. She wanted people to be treated fairly and right. She tried to be good to people at work, and it didn’t make sense to her when she was mistreated.

[18:29] In one job, Kait was working in politics, seven days a week, over 80 hours a week.She was sick one day and had to go to the doctor. She called in, and was 20 minutes late for the morning huddle and got yelled at. She quit not long after that. A month or two later, she got into marketing.

[19:30] In her marketing job, Kait was mistreated by an older man. She made a sale and he bullied her about her commission. Kait went to an executive who told her he couldn’t do anything because the man was a high performer. So she decided if they could run a company, she could, too. She quit within a month or two to start Rock City Digital.

[20:52] Kait’s advice is to ask yourself “What’s the worst that can happen?” If the worst that can happen is you failing, that’s OK, because you’re going to learn something from that to take to your next venture. Also, ask a person you admire to be your mentor. Kait was shocked by how readily people help. What’s the worst that could happen?

[21:51] Kait says Rock City Digital’s biggest goal is spreading workplace and culture awareness. They treat people with the respect and autonomy they deserve. In turn, the people help build an amazing business that everyone wants to be a part of.

[22:09] Find Rock City Digital at Rock City Digital on Instagram, Facebook, TikTok

A couple walks into a real estate office in Napa Valley, looking to buy a second home. If you guessed the next sentence would be, “And instead, they bought a winery!” you’d have the story of Laura Swanton, owner of Laura Michael Wines. Laura, a former high-tech exec, knew nothing about producing wines back in 1999 but she did know what it took to make and sell a product. And that’s what she’s been doing ever since, with her award-winning cabernet and zinfandel. In this episode of This is Capitalism, Laura talks with Patricia O’Connell about her journey from wine lover to wine producer. She shares the mistakes she made on the way, and how she arrived at the sweet spot in the volume of sales for Laura Michael Wines.

Listen in to learn about running a small winery and producing premium wines.

Key Takeaways:

[:24] Patricia O’Connell introduces Laura Swanton, owner of Laura Michael Wines.

[:39] Laura, a former high-tech exec, knew nothing about producing wines back in 1999 but she did know what it took to make and sell a product.

[1:03] Patricia O’Connell thanks Laura for joining This Is Capitalism, the podcast, extraordinary stories of extraordinary people.

[1:33] Laura shares how she got into the wine business. She and her second husband purchased a winery on an impulse, then added a second property! Laura continued in tech while her husband quit his job to run the winery. After three harvests, her husband left so Laura bought him out. She left her career to become a winery owner.

[3:10] Being a single woman winery owner was unique at the time. Laura married again, and they run the winery as a couple. Self-funded winery owners, as opposed to a multi-generational business, are also rare.
[4:09] When Laura was working in tech in San Francisco, she only got involved in the business on the weekends in the tasting room. When her second husband left, in August of 2002, the first harvest was coming in “like a freight train,” and she had to be there full-time for that.

[5:09] Laura’s high-tech career of 17 years, with manufacturing, had taught her about product distribution. Her college degree in organizational management taught her how to run a company. The big difference for Laura was that it was wine.

[5:53] Her first hire was a consulting winemaker, through a local winery. He taught Laura all about growing grapes and making wine. Laura has been training on the job for 20-plus years.

[6:20] In the world of wine, mastery is something you hope to achieve, but there is so much to it, you are always learning. Laura manages the relationships and farming practices of the places she purchases fruit from, while her husband manages their vineyard. They produce wine and sell it directly to consumers, not to distributors.

[7:57] Only one of the producers Laura buys from is 100% allocated to her. Laura contrasts the competition in the high-tech world to that in the winery world. Napa Valley growers believe that helping each other and maintaining a high level of product quality benefits the entire valley. Patricia comments that a rising tide lifts all boats.

[9:16] For eight months of the year, Laura is a farmer, and she shares workers, soil, air, water, and intelligence with everyone around her. If you’ve got a blight or pest, it’s not going to stay in Napa. It’s going to travel to the neighboring counties. Everyone needs to be very cooperative with each other to maintain the health of the industry.

[10:09] Laura talks about the humility and hard work that both sets of her grandparents showed. Her paternal grandfather was also a farmer who kept a large garden. Laura helped her grandfather in that garden. That background has helped her stay humble.

[11:04] Laura explains how she deals with natural problems. She tries not to worry about things she can’t control. She mitigates as much as she can any negativity that comes because of drought, wildfire, or a bug. The plants are resilient enough to get through the weather. It just causes major fluctuations in your yield.

[12:01] Lower yields can produce higher quality fruit.

[12:26] The quantity of production is legislated and requires a use permit. Laura has a small permit for 5,000 gallons. Laura is doing 1,600 cases a year, as opposed to the 15 million that others produce. Some producers only make a few hundred cases yearly. Laura is making a living at it; some wineries are passion projects.

[14:30] Laura tells how she started in distribution according to the conventional wisdom of the time. Distribution meant she could not sell to stores, restaurants, or stores in other states but only to a third-party distributor. It’s an expensive model to follow. Laura would bear most of the risk and little monetary benefit.

[16:18] It took Laura 10 years to realize she was not going to make the volume of product to make up for the low margin. Her husband, Michael, pointed her toward setting up a tasting room and selling directly to the consumer. That’s when the winery became profitable.

[16:59] It had become so ingrained in Laura that she wanted to be successful at running the winery that failure wasn’t an option. She had been building inventory (which takes years) for distribution and there’s a lot of cash involved in making inventory happen. Her biggest challenge as a business owner was managing cash flow. She was cash-poor.

[18:11] It’s not easy even now that she is selling direct, but she’s gotten better at managing the cash flow and the winery has gotten a little smaller. They were not selling the product fast enough to justify making as much inventory as when she was in distribution so they reduced volume by 25%.

[18:40] Now she concentrates on relationship-building with their wine club members and their extended families. They have been on Highway 29 for 20-plus years, so the visibility draws people to the winery. Laura makes friends with every concierge, limo driver, and hotel person that she can so they will send customers to the winery.

[19:29] Laura is a Calistoga Chamber member and her marketing is word-of-mouth. They are members of other industry groups, as well, with programs Laura Michael Wines participates in for more visibility. Being a community player is an important part of marketing, too.

[20:11] Laura Michael Wines has found its sweet spot and is not looking for a lot of growth. It would be very expensive to grow past the use permit they have. They would have to re-outfit their winemaking facility at a cost of millions of dollars with financing. They are living comfortably and enjoying life. Bigger is not necessarily better.

[21:09] Laura tells how the sales territory training she received in the high-tech world served her in the winemaking world. Only the product was different.

[21:59] Laura advises if you want to learn a new industry that the best thing you could do is to find a job in that industry. Laura would have learned a lot more and learned faster if she had been part of a winery administrative team or sales team before buying a winery without industry knowledge. Study and immerse yourself in the industry.

[22:40] Laura didn’t make the best financial decisions in the first years of her winery ownership. She’s thankful she was able to survive that lesson and get out of the financial sinkhole of distribution. She notes that in the last 15 years, most states’ laws around the industry have changed, to the benefit of tiny wineries like hers.

[23:57] The national recognition that premium wine could be shipped directly to homes was a game-changer for the industry. The larger wineries have to be in distribution. They cannot ship directly to consumers so she does not have to compete with them. The laws for the bigger wineries are different than for the smaller wineries.

[24:38] Laura’s succession plan is not in the family. Laura will sell the winery when she and Michael are ready to retire. Today, you can’t build what they have, so it will be a very interesting sale when it happens. Laura and Mike hope to find someone who loves the industry as much as they do. But there is a lot of consolidation happening.

[25:48] Outside of her product, Laura loves sparkling wine, whether from France or down the road. She and Michael also visit the neighboring wineries and take advantage of some of the varietals th