Featured case: NakedWines.com

Share this page:
The case

Who – the protagonists

Rowan Gormley, founder of NakedWines.com


NakedWines.com changed the economics of the wine industry. Customers (known as ‘angels’) fund wine producers directly who are then paid up-front for their products.

Up to 75% of the price of a bottle of wine is traditionally made up of retailer, importer and distributor margins. The NakedWines approach got rid of these costs and at the same time offered customers great wine that represented genuine value for money by cutting out the middleman.


Rowan founded NakedWines.com almost immediately after being fired from Virgin where he had been the driving force behind the creation of Virgin Wines.


NakedWine.com was launched in 2008, but sales did not pick up until late in 2009. By the end of 2011, the company had nearly 100,000 ‘angels’ investing £20 per month to directly support wine producers and benefit from reduced-price wine in return.

Ryan OConnell Where?

The company is based in Norwich, UK, and supplies customers across the UK, Australia and the US.

Key quote

‘I remember how impressed and surprised we were that Rowan actually made the trip (to the vineyard). We gave him a tasting and he said, “Yup, I’ll buy all your wine”. We thought he was joking, we’d never heard anyone ever say that!’ – Ryan O’Connell, wine producer, France.

What next?

Bottles of red wine

NakedWines had grown rapidly, from a standing start in 2008 to a substantial presence in three of the world's most attractive markets for wine - the United Kingdom, Australia, and the United States.

But by September 2014 it was becoming clear that the company's long-time principal investor WIV was no longer able to fund NakedWine’s future growth. The company was running out of cash – what was the solution?

Interested in finding out more?

Download the case and teaching note

Educators can login to view a free educator preview copy of this case and teaching note.

Ref 816-0101-1
Ref 816-0101-8
The authors


John Mullins and
Tiffany Putimahtama

John and Tiffany offer some advice to budding entrepreneurs and explain why successful entrepreneurship is almost always a ‘team sport’.


The most common reason that highly motivated and talented people leave their job – whether voluntarily or not – is a disagreement with their boss or with the direction their company is taking. These days ‘30 years and a gold watch’ is not the kind of career that most people are looking for. So when they get fired, or when they see an opportunity that their boss fails to support, as was the case for Rowan Gormley, it’s not at all uncommon for such an event to be the catalyst that gets them out on their own.

Learning the hard way

I tell my students who are looking for ‘an idea’ (so they can become an entrepreneur) that the best use of their time is to find a compelling, even painful, problem that their knowledge, capabilities, and networks are well-suited to resolve. As the renowned venture capital investor Vinod Khosla once said: ‘Nobody will pay you to solve a non-problem.’ Gormley’s experience at Virgin Wines had identified such a problem for winemakers, and he set out to solve it by starting NakedWines.

Reducing uncertainty

The New Business Road Test

Among any entrepreneur’s most important assets is his or her network. The network of winemakers Gormley met in starting and growing Virgin Wines was crucial in his ability to hit the ground running as he got NakedWines underway.

As I argue in my book, The New Business Road Test, your team needs to be able to execute on the critical success factors in the industry where you operate. Where better to find them in Gormley’s case than at Virgin Wines? And, almost always, despite the entrepreneurial heroes lionised in the popular press, successful entrepreneurship is a team sport, not a solo endeavour.

Tenacious and persistent

Entrepreneurs must be tenacious and persistent in every industry, not just this one. The ‘overnight success’ of Starbucks, for example, took more than 20 years. But entrepreneurs must also be agile enough to know when to persist and when to pivot. Thus, it’s important, in my view, that the cases we teach show just how difficult life is as an entrepreneur, without all the sugar-coating that we see in today’s media. No puff pieces, please! This case, in reporting the daunting challenges that NakedWines faced in entering and trying to become profitable in the American market, does just that..

Naked Wines advert

Key principles

This case illustrates the key principles by which companies can be started and sometimes rapidly grown using customer funding, instead of venture capital. The cold hard facts are that the vast majority of fast-growing entrepreneurial companies never raise any venture capital. Most of our students should bootstrap and use customer funding, not raise venture capital.

Though Gormley needed external capital as well, his enthusiastic band of more than 200,000 ‘angels’ who pay £20 or $40 into their NakedWines account every month now provide more than 40% of the funding that enables NakedWines’ independent winemakers to pursue their craft.

The case also brings to life the core ideas in my 2014 HBR article, Break Your Industry’s Bottlenecks. I often use it for this purpose.

Meeting the protagonist

I had recently published my third trade book, The Customer-Funded Business, which is brimming with stories of companies that got started without venture capital by using customers’ funds. I then received an out-of-the-blue email from Rowan Gormley, whom I’d never met, saying: ‘You missed a story: mine!’

This case is the happy outcome.

About the authors

John Mullins is Associate Professor of Management Practice in Marketing and Entrepreneurship at London Business School.
e jmullins@london.edu
tw @John_W_Mullins

Tiffany Putimahtama is now President of United SP Corporation, a family-owned real estate investment company. She was an MBA student at London Business School.
e tiffanyrp@gmail.com
tw @tiffanyrp18


View a full list of featured cases