“We’re banding together” – Paul Mabray on the future of Pix Wine

CEO Paul Mabray spoke with Christian Smith following Pix’s failure to secure a second round of funding, despite what Mabray called unprecedented annual recurring revenue for a wine tech startup.

Credit: Twitter/Paul Mabray

A little over a year ago, Image launched in Napa as a startup that sought to solve a common problem: finding a specific bottle of wine online and figuring out where to buy it can be a frustrating process. Mabray says the company made $600,000 in annual recurring revenue in six months, but even so Pix was unable to secure funding in its most recent attempts.

Part of the problem, says Mabray, is that there are very few wine technology success stories to present to potential investors. According to him, using technology to bridge the gap between wine and consumer is key to securing the wine industry’s position in the future of the beverage alcohol sector.

Do you think the complications of alcohol advertising on social media platforms are part of why tech companies seem reluctant to invest?

“The complications of tied house laws transcend social media, but yes, I think they are key to the challenges venture capitalists face in understanding how to invest in alc-bev. The addressable advertising market for wine is difficult to measure but also spends much less than the other categories (~5% of gross turnover). I argue that the reason we spend is due both to regulatory challenges, but also to the lack of meaningful and measurable opportunities.

Why are investors struggling to see the potential of wine digitalization?

“Alc-bev does not behave like other normal categories. There is so much product complexity – regulatory challenges, distribution complexity, product complexity, etc. It is difficult for them to understand the combination of these factors or even the basic challenge that we are the only very long tail consumable product that has growth limits and incredible product complexity that changes every year.

What are the biggest challenges in creating a comprehensive wine database for the typical internet user?

“There is NO authoritative and usable wine database. The closest are CellarTracker and WineSearcher built over decades but not open to other applications. But it’s a perennial problem that starts over every year – last year alone, in the US alone, 111,000 new products were submitted to the TTB (Alcohol and Tobacco Tax and Trade Bureau).”

Do you think there is a risk that a giant like Amazon could seek to fill the space? Especially since it now has physical stores through Whole Foods and Amazon Fresh?

“Amazon has always been the sleeping giant and we’ve never seen a category that had such a combination of clicks and mortar as Amazon in combination with Whole Foods. Amazon is already a very serious competitor against Drizly. The good news for our industry is that wine is tough. From a regulatory point of view (US) and the category ranges from basic wine to luxury wine (US and UK). Amazon struggle with luxury.

How do you balance small winemakers and producers against wine giants, especially since mass consumer interest is generally skewed towards the more well-known brands?

“Wine is not a monolithic category. He represents everything from Bota Box to Petrus. Physical space limitations (150-300 shelves in supermarkets) mean that only a select few REGULARLY [sic] the wines go through mass distribution (~2500 products out of hundreds of thousands). But digital (content, discovery, engagement and shopping) is the great equalizer that can help these consumers find a boutique producer on the endless digital shelf. That being said, if they don’t participate or facilitate, their likelihood of being discovered is next to impossible.

What role do wine reviews play in a successful digital wine business?

“Wine reviews are extremely important to a key segment of consumers and always will be. But as I said above, wine is a complex category. Some consumers just want a little advice, others are on their own way. Some want influencers, others just want a simple score. Some want the wisdom of the crowd, others see it as the yelp of wine. Different shots for different people. That being said, expertise is fundamental to helping people explore regions, styles, and more. I think the industry should continue to elevate reviews to key guides while looking for easier signposts to help consumers find their way from wine as a drink to wine as a magic elixar that delivers time and space in a bottle.

How do you reflect on the online reaction to Pix’s recent fights?

“Aside from a small group of naysayers who represent the worst kind of wine elitism, the response to our challenges has been extremely kind and supportive. to build by people only focused on trying to negate our vision. Plus, there were a lot of armchair experts who lamented that we didn’t explain our model enough for them to understand. Frankly, we don’t We’ve never had the obligation or concern to explain our business to them, our only concern was to make sure our paying customers and retail partners understood what we were doing in spades.

The only hurtful part is that the vocal opponents were too cruel in that they forgot that so many great people made up the team that was Pix. People who believed (and still believe) that we were building something of incredible value for consumers and commerce. Our team included some of the brightest, most experienced and dedicated people in the industry. Throwing shade at Pix was often targeted at me and although I have thickness [skin] directly overshadowed their work.

Can a search engine properly define the characteristics of a wine in a way that is both precise and understandable by the consumer?

“Unfortunately not. I think the subjective nature of wine and the limitations of language make this almost impossible.

What is the biggest challenge wine tech faces with consumers?

“We have a myriad of problems, but it’s fundamental to understand the real NEEDS of the consumer and to serve them rather than to create tools for our needs.”

Home page of the Pix Wine website
The first page of Pix’s search function as it currently appears

And with trade?

“Commerce must continue to treat digital as central to human interaction to facilitate learning, buying and interacting with wine, other consumers, content creators of all types and wine sellers. wine.”

What is the next step for Pix Wine?

“We’re coming together to figure out how Pix can achieve the vision we’re trying to achieve.”

Do you think the wine industry could do more to embrace the technology?

“The industry must make it a priority and a center of excellence. And, as a risk-averse industry, we also need to understand that there must be an acceptable number of failures for us to progress. NO ONE has the answer for digital for wine and because wine is such a broad spectrum – what works for Opus One won’t work for Apothic. What works for a small Napa DTC winery will not be the same formula for a small NZ DTC winery etc. etc etc

Read more:

Napa wine tech site forced to sell, despite high-profile investors

Sales Force: The Changing Landscape of UK Beverage Retail

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