Entrepreneur Adam Trippe-Smith (FRR ’92) is generally recognised for his start-up, McLaren Vale Beer Company, better known as Vale Ale. The brand grew from a one-man operation in 2008 to one of Australia’s largest private beer companies by late 2011 when Adam sold his interest to investors, and was selling one million litres of beer across Australia annually.
Since Vale Ale days, Adam has become the founder and managing director of Kegstar, an asset pooling business, specialising in renting stainless steel beer kegs to breweries, and to spirit, wine, and other beverage producers. “We own the kegs so you don’t have to,” is their catchcry, and plans for a global rollout are well underway, with Kegstar operating in the U.K, U.S.A, and New Zealand as well as Australia. We caught up with Adam recently to talk about how he has landed where he is, and the secret of his success.
After Saints I studied Accounting at the University of South Australia and went into the profession for three years. Like most people of my age at the time, once I was qualified I wanted to see the world, and this led to nine years working in finance, mergers and acquisitions for corporates, which took me to London for three years.
I was lucky enough to join easyGroup, founded by UK entrepreneur Sir Stelios Haji-Ioannou, best known for easyJet, the airline. When I arrived in London in 1999, I was in the right place at the right time, and was one of the first 10 employees of easyGroup charged with creating new companies. Eight or nine of us launched easyCar; basically a car rental version of easyJet. Stelios gave us 10 million pounds and said “I want you to start a car rental business – off you go.” We bought 4,000 Mercedes Benz A-type cars, the largest order of Mercedes A-type at the time, and launched over four countries during Easter 2000. Following this adventure, I moved to Sydney in 2002 where I’ve remained since.
In 2008 a mate and I decided to give up our corporate careers and start Vale Ale. This was our first foray into the beer world, with no skills and no real right to do so, other than we thought it would be a good idea, it would be fun, and we would do a good job of it. Anyone who has grown up in SA, thanks to the Cooper family, has had a good beer upbringing. When we wanted to launch Vale Ale we wanted it to be a pale ale, cloudy and unfiltered. It was a great experience, we learnt lots along the way, and it was a good outcome for us.
In 2011 I realised there was an opportunity to do kegs better and so having sold Vale Ale my plan was to start a brewery in Sydney. I took some time off to reflect on the state of the beer market and think about where new opportunities might be. The brainchild was Kegstar. I had seen a simple model in the US and knew there was a gap in the Australian market.
In May 2012 I flew over to San Diego and met with suppliers at the US Craft Brewers Conference, and ordered my first container of kegs; 880 stainless steel 50 litre kegs in a container, roughly $100,000 worth, and that was it. I had no real idea of what was going to happen, other than to buy them and see if anyone would rent them. In December 2012 I rented my first keg to a brewery called Stone & Wood in Byron Bay. Fast forward four and a half years and we now employ more than 30 people and have almost 200,000 kegs across four countries.
When you first started Vale Ale I imagine it was done out of some level of passion for the product. Is it a challenge to balance the ‘business’ of selling wine with the ‘craft’ of making wine?
That’s very relevant. In 2008 there would have been less than 20 breweries that we were actively competing with. We all became professional friends but at the end of the day we were competing. Now there are more like 300 breweries. So it’s a fun great industry to be in – that’s the craft side of it – making beers, talking to the people who drink your beer, taking great pride in that, and having fun. But it’s still a business and you need to reward shareholders. It’s extremely competitive and it’s getting harder and harder as more people are doing start-ups.
When we started Vale Ale we had both been in Sydney and London watching the rise of craft and boutique breweries, and as any young people starting a brewery would, we expected to have fun. However, we went into it with eyes open. Having access to capital and cash is a deal breaker, so we needed to be very serious and do things properly in order to be able to compete not only with other craft breweries, but with multinationals as well.
Has your corporate and accounting background underpinned your success?
One hundred per cent. I can’t stress enough, that having business and finance experience, particularly when you’re asking an investor or bank for money, is critical.
These days I’m an investor in other start-ups, and the ability to sell what you’re doing both in the present form and future strategy and vision, and have someone believe and be able to trust you with their money, is helped by you having some sort of business experience. It doesn’t necessarily have to be accounting but that certainly helped me.
Coming out of big corporations, you understand the importance of shareholders and that ultimately they own the company and you’re accountable to them. Transparent information is very important. A lot of people want to raise cash and not a lot of people are successful at it because it’s difficult and there’s legal and financial implications, and it can get complicated. I learnt a lot working for easyGroup when it wasn’t my money, because it was a safe start up with someone else funding it, which certainly helped me along the way. My Vale Ale business partner and I were able to write a business plan and set a strategy, communicate it, forecast it, and ask for cash. These were valuable skills to have.
What impact did your time at Saints have on you?
A person is the sum of all their experiences to date and for me, Saints was an important part of that. Not many people studied Accounting at Saints, but I got a lot out of it. Going through that accounting education and building on it at university was very valuable and still benefits me today. I give credit to Mr Docwra, (I remember him fondly,) as it definitely set me up.
Saints gives you an outlook on life. I went to school with mates who had a global outlook; they were from overseas or had parents overseas. And I had mates that went overseas straight after school or university, so that global network rubbed off on me. I have Saints friends living in Sydney who I’m in touch with to this day. In fact, when I was raising capital for Vale Ale, it was a Saints’ old scholar that assisted us in an advisory and professional capacity when we were raising capital for the new beer start-up. I have benefitted immensely from the network.
Your family does not have a generational Saints background and your father was not an old scholar. What was behind your parents’ decision to send you to Saints?
My father went to Pulteney for 3 years. He didn’t finish and went off to be a jackeroo in the country so there was definitely no link to Saints. When the time arrived for my schooling we were living in the inner city area, so that defined the options geographically. My cousins were at PAC already but my parents thought Saints would be best for our family. We went to primary school at St Andrews and it had been decided early on that we were always going to Saints.
I come to Adelaide between 2 and 8 times each year and I often drive through the School grounds. If my children are with me I take them to where Daddy went to school and show it off with a bit of pride. In reading School newsletters, it’s clear the School is focussed on technology and is evolving with the times. I notice how much the Prep School has come along and the swimming pool (Burchnall Sports Centre) facilities after having an outdoor pool for so long. It’s 25 years since I was at school and you expect lots to change but I like the things that have stayed constant too, such as the old scholars network. It’s great to keep that alive and well, and it’s rewarding.
Let’s get back to what you’re doing now. What is your driving force to get out of bed? Do you have a mantra you live by?
Yes, we had a mantra at Kegstar. “Get s**t done.” I learnt that what sets apart start-ups and small businesses from larger corporates is the ability to cut through politics and bureaucracy, and just execute things. I love being able to get to the heart of it and get on with it.
I discovered, in part through the easyGroup experience in London and partly through Vale Ale, that I was skilled at starting things and getting something off the ground and I really enjoyed it. That’s what gets me out of bed; I enjoy the challenge to create something from scratch, the excitement of doing so, and then the reward of bringing others into it.
Taking Kegstar from nothing to a global enterprise is what drives me at the moment. I’m also an investor in a couple of other start-ups and like to help other start-up founders by lending advice, helping raise capital, getting them from A to B. It’s not that I’m unique or I’ve had stunning success but it’s just that you learn along the way through your challenges and failures. You can help people avoid some of the pitfalls.
Would you say there will be a greater need for people to invent themselves and their own careers? Should everyone strive to be entrepreneurial or is there still a place for traditional professions?
It depends on what you define as traditional. I still rely on my accounting and tax advisors, my lawyers, and people we engage to raise capital. Banking is one of the traditional careers in my world and is absolutely critical to keep big and small businesses heading in the right direction. So there’s definitely a reliance on these traditional careers.
But the world is changing and businesses have to evolve. Traditional industries and business models that don’t evolve will be taken over by more nimble and innovative companies that are solving the needs of the user or customer.
I haven’t been going that long but my traditional career background set me up with the skills to try something different when I wanted to. I think there’s opportunity for a lot more young people to develop an idea and have a go at it. If you’ve had traditional training or a career to start off with, the chances of success are increased.
If you could speak to your 17 year-old self, what advice would you give?
Firstly, for school leavers who want to be business owners, the first thing is to understand business and finance. There’s a tendency for entrepreneurs and business start-ups to think they know everything. Gaining experience working for someone else and learning from that is very valuable. I can’t stress enough the importance of having this experience. Any business model revolves around making a dollar, even if it’s a charity that’s giving back.
Secondly, in whatever you want to do, just take the first step. I see a lot of people who want to take a step out of a traditional career or a well-paid job who are paralysed and not ready. It’s not the right decision for everyone, but if it is, commit to it and just do it.
Thirdly, take calculated risks. You need to take risks to get reward. In small business you take higher risks because you’re putting things on the line, using your own personal money. If it doesn’t work, you need to think about what you can do next. You have to believe in yourself, learn from it and believe that you can bounce back. Every day we take calculated risks, making decisions based on limited information and you need to trust your gut feel, but never with a cowboy mentality. There’s experience built into the decision, you add calculation to the risk, you use your experience, and learn to trust your gut feel.
Which people have been your mentors?
Stelios Haji-Ioannou at easyGroup. He’s an eccentric, out-there character. The thing I always admired was his ability to challenge the status quo. It’s not every day that someone decides to start up an airline. It doesn’t matter how wealthy your family is, starting an airline is a very big challenge. I learnt a lot from him. It takes guts to do something like that and he had the ability to keep pushing forward and never resting until it was done.
In my corporate career, I was at the old CSR Group that became the Rinker Group for 4 years. The Asia Pacific CEO was kind of a mentor to me. He took me under his wing and I learnt a lot about growing a business, growing a team and growing a company in a competitive industry.
I have kept around me a network of advisors and people who are skilled in different capacities. I surrounded myself with people who are good at starting things and you tend to feed off that energy. Along the way I’ve had people alongside who believed in me and helped both financially and by giving their time to help me get up and running; who walked with me through challenges.
These days I’m trying to play that role a bit; by giving time and guiding people in other projects. Sometimes people are afraid of taking the first step. Perhaps the risk of stepping away from a salary or out of the comfort of a corporate, or a well-funded business to do their own thing. Sometimes there’s a bit of self-doubt, but it’s just having the confidence to take the first step, and then the next one. You can’t over think it too much. Work hard, stay focussed and make things happen.
Pictured above, Adam Trippe-Smith (credit, www.logisticsmanager.com)