Pedro Earp, Chief Disruptive Growth Officer
“If you want to go fast, go alone. If you want to go far, go together.” (African Proverb)
No matter how many smart people we recruit, there will always be many more smart and passionate people out there. We believe in pairing up so we can achieve much more with our partners than we could alone. Everyone benefits: we can use our platform to help other people fulfill their dreams, and we learn from the passion and capabilities that our partners bring to the table. But who do we collaborate with, and how do we build those partnerships?
When we work with someone, our objective is to create a true partnership which leverages their passion and knowledge and gives them an opportunity to make a much larger impact than they would be able to on their own. We’re not out to take over other brands or breweries; we want to build a mutually beneficial collaboration that can help each side achieve their dreams.
Three key principles guide our decisions to create partnerships:
First and foremost, we look for great people who share our underlying values and beliefs. Our culture is an integral part of who we are at ZX Ventures, and it drives everything we do. If we’re partnering with a brand or business, our initial interest is based on their passion and ability to do something better than us that we can learn from. But more than that, we want them to share our mindset and culture. To ensure the long-term success of a partnership, we look for partners that believe in building great teams, have an owner mindset, believe in meritocracy and have a constant desire to improve. In many cases, we’ve found that the people at small businesses sometimes live those values even more intensely than we do, especially when it comes to ownership. Having both partners share those values and expectations is essential to a solid, long-term partnership.
Second, the business must have a superior product with a sustainable competitive advantage. This differs based on the types of businesses we are considering for new partnerships. It could be a specific beer, a brewing method, or a technology product. Whatever the partner’s product, we want to see excellence and scalability.
Third, the business model itself must be sound. We are looking for equal partners, so we want to work with businesses that can generate sustainable, long term value creation opportunities. We want to leverage our platform to create long-term synergies on top of what that business can already do on its own. We aren’t interested in “cheap acquisitions” where we need to rescue or rebuild a struggling business from the ground up.
Over time, we have learned that successful partnerships have a few things in common. For example, both parties must have the conviction that they are better together than separate. The parties need to believe that each one brings something unique to the table that makes both of them better. Without that complementary mindset, the relationship won’t work. In addition, listening to each other and constant communication are key – we exchange ideas early and often, and our relationships often begin with site visits to better understand how our partners are currently doing things and where we can step in to add value. Finally, there needs to be an owner for every decision to be made. If everyone involved feels responsible for every decision, the relationship gets complicated and convoluted; no one knows who is in charge of what. Usually, the final decision needs to belong to the partner that is in a better position to make the decision (the one who is closer to the issue, has the most experience, has more at stake, etc.). All partners should have an agreement and understanding of who’s responsible for what.
A great example of this kind of mutually beneficial partnership was our first acquisition of a craft brewery, Goose Island. Both John Hall, the founder, and his son, Greg, are visionaries—they created a craft beer in Chicago and built a huge market for it when craft beer was entirely new to the U.S. But they were still a regional brand. Our partnership enabled Goose Island to reach a national market. We’ve helped them grow Goose IPA from the #15 IPA in America to the #2 top-selling brand today. Now we’ve expanded their beer globally to 7 markets and we have Goose Island brewpubs operating in different markets around the world. We’ve maintained their values and creativity while providing a platform that allowed them to expand and fulfill their dreams.
With each partner we bring on, our hope is that we can help them achieve their ultimate vision while also benefiting from their knowledge and skills. We look for partners that have big dreams, great teams, similar values and understand that we can be more successful together than we could if we stayed apart. At ZX Ventures we are very proud of the fact that only one of our many partners has left the business since they’ve started working with us. Our partnerships allow our partners and us to grow and learn while expanding great beer globally.