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Cork’d Paper

Gaining traction with wineries was an integral part of Rona’s core strategy, but the finances of the company made getting signing even more vital. Start-up funds were delighting, and Corked was shorthanded on developers; the demands of the new site placed a heavy burden on the lone developer on the payroll. It was encouraging that despite the work needed on the site, users loved it, quickly became loyal, and were growing in number. But the $999 winery sign-up fees were the company’s primary source of revenue, so Rona knew that to hire another developer, let alone cover the current payroll, Corked needed more wineries to join?and soon.

Background In February 2006, entrepreneurs Dan Benjamin and Dan Stockholder launched Cork’s, a website dedicated to wine lovers. Cork’s was Initially Intended to provide people with a place to rate and review wines, and Benjamin and Stockholder envisioned ultimately expanding the site Into a fulfilled wine social network. In this early version, Cork’s used an ad-based business model and featured a limited relationship with wine. Com whereby users could shop for selected wines from wine-com. The most loyal Cork’s advertiser was Gary Evanescence, a brick-and-mortar and online wine retailer based in New Jersey.

In May 2007, Benjamin and Cathedral felt that Corked had grown large enough that it needed a more suitable home, and they sold the site to Evanescence. Evanescence had developed a passion for wine at a very young age, since wine was his family’s business. By the time he was 30, Evanescence had grown the family’s local liquor shop into a national brand, renamed “Wine Library,” by becoming one of the first retailers to sell wine on the Internet. As Wine Library expanded, Evanescence pursued several parallel business ventures that complemented wine retail.

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In addition to purchasing Cork’s, Evanescence created a ally wine video blob (a flog) he called “Wine Library TV. ” Wine Library TV aimed to demystify the often Intimidating world of wine, offering viewers an accessible approach. Evanescence’s humorous, hyperactive style (e. G. , spitting wine into a metal New York Jets Ducked, Ana s Eng Lord Ana rocks on alarm to demonstrate Tailor) struck a chord with web-surfing wine aficionados. Evanescence and Wine Library TV quickly Professor Peter Coles prepared this case. Research Associate Matthew Chaos provided excellent assistance. HOBS cases are developed solely as the basis for class discussion.

Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright 2010, 2011, 2012 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www. Hobs. Harvard. Deed/educators. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. This document is authorized for use only by Pretests Nair in Understanding the

Customer – VIM – Alamo Square at , 2014. 91 1-026 Corked: Building a Social Network for Wine Lovers developed a dedicated following, eventually reaching over 90,000 daily viewers (self- described as Maniacs”). Evanescence activities led some in the media to dub him a “wine social media guru” and the “first wine guru of the Youth era. ” Evanescence built on his success through consulting, speaking engagements, appearing on talk shows (notably getting Cowan O’Brien to put a dirty sock in his mouth), and publishing two books, the second of which, Crush It! , became a New York Times Business Best Seller in 2009.

While business ventures and traveling engagements were keeping Evanescence busy, Corked received less attention. Not wanting to “go halfway’ with a project, Evanescence let Corked stagnate almost as soon as he bought it. Meanwhile, Rona was getting her MBA at Harvard Business School. Prior to business school, Rona had spent four years in investment banking and private equity, but her real passion lay in wine and technology. In the summer of 2008, Rona worked for Charmer Sunbelt, a large wine distributor in Brooklyn, N. Y. , where she studied the wine supply chain, measuring the value added in its various stages.

That summer, Evanescence and Rona met over beers and instantly connected, talking about wine, social media, business, and family. The next year at Harvard, Rona became president of the HOBS Wine & Cuisine Society. She invited Evanescence to visit HOBS and “shake things up” at the school’s sometimes pretentious wine tasting. Evanescence agreed to come that fall. During the visit, Evanescence and Rona talked some more and realized they shared a passion for making wine less intimidating. Evanescence agreed to supervise Rona on an independent field study of Corked.

Over the year, the woo hired an outside developer and design team, and put together a plan to overhaul ten Wesley. Six months into the field study, Rona decided that after HOBS, she wanted to work for Corked full time. She put together a proposal for a role and a compensation package, and went to New York City to discuss the idea in person with Evanescence. Rona was nervous; she had never proposed anything like this before, worried that her requests were too aggressive, and didn’t know how Evanescence would react. Rona met with Evanescence at an event where he was an invited speaker, which added to her fears of appearing too presumptuous.

He stepped outside the event to meet with Rona for, as she described it, “as long as it took. ” She put her offer on the table. Evanescence looked away and thought for about 15 seconds. Then he said, “Okay, but then I want you to be CEO. ” Under the arrangement, Evanescence would provide the initial funding for the company?enough to hire Rona and a full-time developer. Rona would receive equity in addition to her salary. Any additional capital would come from revenue generated from the site itself. Rona accepted the “offer,” and after she graduated in May 2009, the wheels at Corked started to turn.

Evanescence and Rona’s first hire was a chief technical officer, Kyle Bragger; subsequently, Rona hired five interns for the summer. Since Evanescence purchase of Corked the site had received no development attention and, at one point, was even hacked and redirected to a pornographic website for a day. Despite the stagnation, the user base had continued to grow. But the lack of maintenance, combined with a flaw in the early site design, created an unusual problem. Corked relied heavily on user-generated content, but the site lacked functionality to check for errors.

As a result, the Corked team was faced tit an extensive wine-review database, but one filled with misspelled wines, duplicate listings, and incorrect information. Convinced this data was worth salvaging, Rona spent several weeks correcting errors herself. And to partially address these problems going forward, Bragger developed a wine-input system that made it nearly impossible to add a duplicate wine and let users flag duplicates that slipped through. 2 Envisioning the Corked Community The new version of Corked accommodated two types of users: individuals and wineries (see Exhibit 1 for a screens).

For individual users, Corked offered several eaters shared by social networks like Faceable and review sites like Yelp, but with dedicated functionality for wine. Corked users could upload profiles, interact with other users, and choose friends (aka “drinking buddies”). Users could also review and rate wines, maintain a “wine cellar,” create wine shopping lists, and, importantly, actively engage Walt wellness. Slice well coeducation was a primary Touch, users could easily navigate to learn about grapes, producers, and wines. Users generated much of this information themselves.

Corked directed users to an external, third-party site o purchase wines, and it received commissions for outbound clicks. Individuals could also link their Corked profiles to their Faceable and Twitter accounts. At the same time, wineries could maintain profile pages where they could post information, provide links to their own websites (where, among other things, they could presumably make wine sales), and interact directly with devotees of their wines. Corked hoped that these features would help wineries establish engaging, direct-to-consumer relationships.

Accounts for individuals were free, and there were no paid, premium features anywhere on Corked. Only after exiting the site to purchase wine would individuals make any payment. In contrast, a winery account required a $999 annual fee. For this fee, in addition to having access to a profile page, wineries were identified as and were occasionally featured on the site’s home page. Corked also featured wines from verified wineries in promotional tasting (during which tasters used Corked to review and comment on the wines), and interviewed verified winery owners for publication in Cork’s weekly e-mail newsletter.

For each winery in the database that did not have a paid account, Corked created a bare-bones page. Wineries could click on a link to claim their page, go through a verification process, and upgrade to full membership. In theory, this could be a means to attract paid accounts, but as of January 2010, no wineries had signed up this way. Rather, direct interaction with Rona and Evanescence accounted for all winery sign-ups. Unlike the original version of Corked under Benjamin and Stockholder, the new version was free of advertisements.

Rona reasoned that by creating an ad-free site, she could offer users the best possible experience, which would attract the greatest number of users?those who would remain loyal for the long term. Wineries in turn would respond to a large and active community, and would recognize the value of marketing to such a dedicated group of customers. The marketing that wineries might in engage in?responding to fans and posting detailed information about their wines and vineyards?would itself be valuable content, Rona believed.

In developing this ad-free, higher-for-wineries approach, Rona drew from a model used by Sermons, a social network designed for doctors, which let pharmaceutical companies offer information about their drugs if they paid a fee to Sermons. (For information about Sermons, see HOBS case No. 809-142. )1 Competitive Landscape As of January 2010, several websites offered wine social networks, although the most popular of these were somewhat distinct in emphasis and appealed to different kinds of users. (See Exhibit 2 for a flogger’s perceived positioning of several wine sites. ) 3 For ten exclusive use AT P Snoots. Mom Snoots. Com, launched in June 2007, described itself as “the world’s largest and most comprehensive online wine destination. ” After creating a free account, users could browse wine scores and reviews, and could interact with fellow users, wineries, and other merchants. Shopping was an important part of Snoot’s offering: users could reach for specific wine varieties, compare prices across merchants, and make purchases via links to third-party vendors. Snoots also allowed users to track their own inventories online, link their accounts to Twitter and Faceable, and use a free phone application.

Online traffic comparisons suggested that Snoots consistently outpaced other wine sites with social networking features (see Exhibit 3 for user trends). In November 2009, Snoots reached 250,000 registered users, which represented a 500% growth rate over a 12-month period. In 2008, Snoots. Com won the Enforcement Group Model of Excellence Award. 2 Accelerated. Mom In 2003, former Microsoft manager Eric Levine designed an online system to track his own extensive wine inventory and document his experiences at wine tasting.

Impressed with his work, Olivine’s friends encouraged him to expand the system so they too could manage their wine collections and record reviews. On April 25, 2004, Levine opened Accelerated. Com to the public, letting users register free. By integrating wine reviews with their own inventories, users could better understand whether to open a particular bottle or to hold it until it matured, which was often a critical question for wine collectors. In January 2010, Cellar Tracker reported 93,374 users with a total of 1 5,922,545 bottles in their collective inventories.

Though registered use was free, Levine solicited voluntary payments of $30 per year for users with fewer than 500 bottles, $60 per year for those with 500 to 1,000 bottles, and $100 per year for those with larger collections. Paid users could access the site’s premium features, which included automatic valuation of one’s collection using data from Wined. Com. 4 In January 2010, Cellar Tracker announced and demonstrated a site redesign that further emphasized social networking features.

Over the 12 months preceding January 2010, Cellar Tracker ranked Just behind Snoots in traffic, but had a large lead over its competitors in time spent per user visit. Venire. Com Founded in 2005, Venire. Com was primarily a wine search engine that offered limited social networking features. Venire had a database of over 1 million wines and used proprietary crawl technology to maintain current price listings for each entry. By creating a free account, users could review wines and retailers and could malignant snooping lists, out Vulture 010 not offer tracking AT personal well collections.

As of 2009, Venire ranked consistently lower than its competitors in daily page views and time spent on the site. September 2009 Reliance By September 2009, Corked was ready to reliance with its new social networking features and pricing structure. The company’s reliance strategy consisted of two components. First, Corked planned a broad PR and social media campaign timed to coincide with the coming public launch. Just before the launch, Corked would host a grand unveiling of the site and wine-tasting perchance party 4 in New York City to which it would invite key influences.

Second, Corked had in place variety of features and promotions to sustain momentum after the launch. The Corked team was confident that it could use Evanescence celebrity to grab attention and attract new sign-ups. But equally crucial was keeping newly recruited wine lovers engaged while on the site so they would ultimately become desirable, long- term users. Rona and Evanescence recruited 14 wineries to sign up for full memberships and join in the unveiling of the new Corked. 5 The team also sent loyal Corked users and New York supporters invitations to the party, to be held on Monday, September 14, at Corked headquarters.

Over the course of the evening, a collection of wine lovers sampled wines, while Evanescence and Rona personally demonstrated the new features of the website. Attendees tasted wines from the 14 reliance wineries and wrote reviews on their laptops. Representatives from the reliance wineries as far away as South Africa sat in front of computers at home awaiting user comments. Soon, tasters were interacting with the winemakers and vineyard owners of the wines they were sampling. The community was operating Just as the Corked team had envisioned.

As hoped, the tech-savvy attendees spread the word about their experience by tweeting, posting Faceable updates, and blobbing. (See Exhibit 4 for one of the blob posts. ) Although the tasting was a success, Corked needed to do significant development work before it could release the new site to the public. But two days after the release party, Evanescence was featured in the Wall Street Journal for his growing social media influence. Because of the hits to the website and the number of e-mails Corked started receiving, Rona wanted to open the site ahead of schedule.

Even though a number of bugs still needed to be fixed, Evanescence agreed, and Corked opened to he public on September 16, 2009. A flurry of blob posts and several articles in influential tech outlets accompanied the launch, and user traffic spiked (see Exhibit 5 Tort an article In electronic). To build on the excitement of the launch, the Corked team devoted significant time and effort to recruiting more users. A first step was to reach out to users from the old, stagnant Corked to let them know that the site was active again.

The team found that many of these former users had migrated to competing wine review websites, but some were amenable to returning. Evanescence celebrity was a key tool in reaching UT to new users. By posting links on Twitter approximately three times per week, Evanescence was able to direct many of his followers to the site. Wine Library TV was also a useful recruiting tool. After each tasting episode, Evanescence would provide viewers with a direct link to Corked so they could post a review of the wine he had Just discussed. Corked also used Twitter to recruit users unfamiliar with Evanescence.

By searching for wine-related tweets, interns at Corked would find and correspond with users who indicated an interest in wine. If there was a mutual fit, the Corked interns, Ewing careful not to be too aggressive, would encourage the posters to add their commentary to the Corked site. In the weeks following the launch, Twitter led to about 200 fresh Corked user sign-ups each day. (See Exhibit 6 for growth trends. ) Corked provided incentives to keep new users engaged. It introduced a “newbie badge” that users could earn once they performed certain activities, like uploading a picture to the site and posting a minimum number of reviews.

Corked also launched a contest in which the users who wrote the most reviews each month won a trip to New York to a wine-tasting party with Evanescence and the Corked team. Evanescence believed that maintaining fresh content was important in bringing repeat users to the site. While user-generated reviews were a source of material, Corked introduced a feature to ensure that new articles about wine were available on the site on a regular basis. Led by senior editor Jonathan Trumann, “Corked Content” employed a model inspired by the Huffing Post. Guest 5 writers would create content that would be available on Corked.

Corked would simultaneously license the content to other websites, and since the articles included links to Corked, they generated traffic (and potentially new users) back to the site. Corked also made plans to release a mobile application. The company signed a deal with Bridgeheads development team BOOK to craft a tool for Corked users to read, rate, and review wines while “on the go. ” Corked competitors Snoots and Cellar Tracker each offered their own phone application, although user reviews of these applications suggested that reception had been lukewarm.

Challenges Ahead Reflecting on wineries’ concerns when deciding whether to Join, Rona knew that wellness wanted to De addle to measure ten Detentes AT cork to Justly D TN ten price and the resources they would need to maintain an account. How could current, verified wineries know how much business their paid account at Corked had brought them? And more important for recruiting purposes, how could wineries predict the relevant metrics before signing up? Other concerns arose, such as the site’s limited ability to allow wineries to customize their profiles?for example, by adding photos.

Most of these seemed easy enough to fix, but then again, development resources were limited. The $999 price point seldom came up as an obstacle, although Rona knew that she could never really be sure if silence on price reflected politeness or an unwillingness to sound petty or damage relationships with Evanescence. Broader questions lurked in the background. Had Corked properly balanced effort spent on recruiting wineries with effort recruiting individual users? Was recruiting wineries essential to developing a thriving community?

Was there a risk of signing wineries up before enough users were active on Corked, leading to wineries’ frustration about limited activity? Perhaps Corked should focus on other ways to increase its user base and activity on the site, so that down the road, wineries wouldn’t think twice about the value of signing up. But how long would that take? With a tight budget, it was not clear that Corked had the luxury of patience. 6 Exhibit 1 Corked. Com Home Page Source: Corked LLC, http:// www. Corked. Com, accessed January 27, 2010. 7 Exhibit 2 Article In grape (September 22, Class vs..

Mass and the Battle for Your Tasting Notes By Jeff Leftover It’s somewhat De arguer for wine enthusiasts to state that they believe in the demagnification of wine: a chicken in every pot and a wine glass on every table. As the saying goes, “if I had a nickel for every time somebody said they wanted to ‘demystify wine I’d be a very wealthy man, indeed. Vive been thinking about this since word came out last week via a press release and an article at Outstretch that tasting note and social community site Corked reluctance with a new CEO (Lindsay Rona?a freshly minted Harvard MBA hired by Gary Evanescence who assumes the mantle of “Chairman”).

In my opinion, watching these various communities develop and grow is some of the most dynamic and interesting water cooler action in wine today. Historically, tasting note sites like Cellar Tracker, Evincible and Corked started out as a closed-off combination of personal cellar management and tasting notes, but has quickly morphed into their own communities on par and exceeding many of the most heavily trafficked wine sites on the web. Pick Your Flavor Each of these sites brings the same basic premise to the table, with very different executions.

Evincible is the Wine Advocate of the online wine tasting note scene – collectible wines with a very high-end user. Cellar Tracker, easily the largest service of its kind, is more of the Wine Spectator / Wine Enthusiast audience?educated and smart while casting a wider net of inclusiveness for wine lovers. And, Corked. Well, Corked is a bit of a mystery and deserves time to develop under focused leadership, UT it’s not a stretch to say that their audience consists of a significant population of those Just earning their first wine merit badge.

How else to explain the fact that one of the top rated wines is a Timescale dessert wine, alongside a ’95 Chateau Maraud? It is ironic that these three sites represent the three different strata of customers in the wine world. And, each takes different approaches to their ongoing development strategies. Evincible is one of a myriad of services offered by wine company Finally. Evincible aids the Finally cause as a complementary vehicle for their high-end audience interested in cellar management and other wine portfolio needs, with tasting notes acting as an ancillary benefit.

Credit where credit is due, Alder Yarrow, the online wine community’s most influential writer is, by day, a user-experience expert who worked on the Evincible redesign project. His combination of wine knowledge and usability expertise creates a very elegant site experience. Cellar Tracker, the grand old dame of this space, is more community and tasting notes driven with a very high-level of activity from their user base, having recently notched their one millionth tasting note.

Compare to Evincible’ self-reported number of ASK tasting notes and you can see the wide delta in user engagement, if not quantity of users. 8 For ten exclusive use AT P Offered as a donation-based service with some premium offerings, Cellar Tracker sprung out of founder Eric Olivine’s desire to create exactly what he has today?an online community of wine lovers trading thoughts and notes on their bottled wine adventures. What’s lacking in elegance in design (Erie’s rolling out a new version sometime in the next couple of months) is made up for by depth and breadth.

Corked, on the other hand, is definitely more proletariat if Evincible and Cellar Tracker are bourgeoisie. With a decidedly more common touch, Corked is re-launching with the idea of bridging the gap directly between winery and consumer. Leveraging Faceable Connect, a universal web sign-on of sorts, with direct integration into Faceable, Corked has a tremendous opportunity to tap into the very significant segment of the wine consuming public that drinks the stuff, but doesn’t wax poetic with purple prose.

The fact that Corked is directly integrated with Faceable also allows them to ramp up number of users very, very quickly. Here’s the thing about these tasting note sites – they haven’t been tapped for marketing from wineries, though Corked is looking to change that. Their business model is to engage wineries to setup a page on the Corked site for an annual subscription fee of $999, allowing the winery to directly engage with consumers. It’s a smart move, with a lot of implications.

Life Gets More Complicated I can imagine a very near future where even the most casual of wine fans is avidly logging their notes as an ongoing historical Journey of their wine adventure. And, given my belief that winery marketers will come to tasting note sites, all tasting note ties, coupled with what could be a huge expansion in people doing tasting notes online, this has me wondering what it all means. Unfortunately, people want to associate with people that are like them.

Sure, I want to demystify wine and I want more people to enjoy wine because a rising tide raises all ships, however, I’d prefer not to have to spend a whole lot of time around somebody who thinks Burgundy is a jug of wine, or somebody whose self-proclaimed love of wine takes them about as far as the wine aisle at Safety looking for a $7 Reselling?especially if I have a choice of where I hang out online. So, ultimately the question is this: as tasting note sites become a widespread tool in the arsenal of people who pursue their love of wine online, and wineries engage on that turf, what will ultimately happen?

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