introducing america's largest, most reliable 4g lte combined with the most wifi hotspots. it's a new kind of network. xfinity mobile. good morning. coming up on "your business," how this owner picked himself up off the ground after failure and turned his love of wine and music into a restaurant business that's now grown to five cities. and a woodworker discovers an accidental business making beer tap handles that's now 50% of his growing company. information and advice to help you grow fast coming up next on "your business."

hi, there. everyone. i'm j.j. ramberg. welcome to "your business," the show dedicated to helping your growing business. michael dorff is an entrepreneur and urban wine maker who created a state of the art music venue and fully functional winery right in the heart of the city. the idea had a few snags in the beginning, but after working out the kinks, this entrepreneur is making the leap, expanding his business to several big cities with many more on the way. michael is a modern day impresario with a passion for food, wine, and music. he thought this would be a golden combination for a new business concept called city

winery, which he opened in 2008. an expensive operation to run, his new restaurant/concert venue/winery was highly dependent on the idea that deep pocketed new yorkers would be interested in owning their own barrel of wine. >> so the original wine side of the business was predicated on selling barrels of wine to really wealthy bankers, and i pre-sold about 150 barrels. gotten people to sign up to make a barrel. it was going to be about $12,000. you would get your 250 bottles, private labels. >> he was wrong. >> our first grapes arrived the same week lehman brothers imploded. and all of a sudden, it was financial armageddon. none of the people who signed up to have this luxury product of their own barrel of wine wanted to be showing off. >> suddenly, one third of his slam dunk business idea was dead in the water. and he had all his money tied up

in those barrels waiting to be sold to customers who were frankly just not interested. >> i was a little bit of a freak-out. 300 barrels at $12,000 a barrel, you can do the math of what we were expecting to come in. the wine started to show. i said to the winemaker, we gotta start selling this. he's french and a great wine maker and a real artist and business person, but he said, michael, we need to get the approval. i said, we have to sign this. >> michael was desperate. me needed to do something to bring in revenue. and so he suggested the unthinkable. tap the barrels. skip the whole step of putting wine into bottles and serve it right from the barrel in the restaurant. his winemaker david was horrified. >> he's like, oh, you stupid american. you can't put gas in a barrel. it will blow up. i'm like, we have got to sell this wine now. it's cash flow. >> david soon came around to the

idea. after all, it was more environmentally friendly, and the wine would always be fresh. >> for me, as a winemaker, it makes sense. you have the avant-garde. >> it turns out the new plan was better than the original one. >> we started putting it in stainless steel beer kegs and started tapping wine. in the beginning, it started to work. when we put it behind barrel heads and really dressed it up, all of a sudden, it started to fly. it became a home run. our wine by the glass became 70% of our wine sales, and we're, wow, the margins are way better than selling it by the barrel to bankers. let's sell it by the glass to our patrons at a much better margin. >> city winery was way ahead of the curve. the authenticity of the place with its steel fermenting tanks and oak barrels with your favorite wines just a few feet away made it so much more than your typical wine bar. and that dovetailed perfectly

with their other offering, music. >> musically, what's happening is very exciting. ten years ago, artists would still go on tour as a way to sell records. today, no one is making any money selling records. the only real money is in the live performance, and to have an intimate experience with an artist becomes very precious. >> wesley, otherwise known as john wesley harding, has had a long music career, but his sold-out cabinet of wonders cabaret show at city winery is one of his favorite gigs. >> i think we're up to our 92nd show. the whole idea of a comfortable evening out with good wine and good food is a good deal, too. the way our show is run and run here is tribute to the fact that there's a certain kind of thing that is perfect for this place. >> don't blink because in an instant, city winery has one more trick up its sleeve. this well oiled machine quickly

transforms, sometimes running three or four simultaneous special events in just one evening. david says the profitability of the business is like a table. each department is a leg. wine, music, food, and events. and they all need to work in harmony for the business to balance. >> if one of these three legs is not performing well, it doesn't stand too long. and it's falling. you cannot only be good in one thing. you need to be good in at least three or four. >> a concept fully fleshed out in new york city, they have managed to successfully duplicate the formula, opening locations in chicago, nashville, and atlanta. with just one painful hiccup. >> our biggest mistake as a company so far has been napa. we opened in napa for a year and a half. we got handed a most beautiful opera house. my son at the time said dad,

doesn't city winery require a city? and, you're right. we put a lot of money into this project, and napa is a small market. we weren't unique the way we are in new york or chicago or a big city. >> with this important lesson learned, city winery is making the leap with new venues opening in boston, washington, and more planned internationally. >> i want to see how far this can go. we're going from 750 employees this year to 1,000 by the end of the year. full and part time. i'm excited by that growth. it took 15 years to go from 0 to $15 million. it's really exciting to me and i love the process of building. every entrepreneur has an idea in mind when they start their company. but being married to that concept and that concept alone doesn't always work. one savvy business owner made a

big change when he noticed his customers buying a lot of beer tap handles, products that weren't even part of the original plan. >> when you have customers calling every day, it's hard to turn them away. nice people. they want to give you money. that's a good thing. >> mark never could have guessed what his best selling product would be when he started his small business in 1981. >> 20, 30 years ago, beer taps didn't play that big a part in the retailing of beer. and my feeling is that now it's a huge part. i think we have been very lucky to have this marked find us. this market grew around us. >> the owner of mark supick and company in baltimore, maryland, said his clients are the reason he decided to sell his now popular custom designed wooden beer tap handles. >> before this, the customer demand wasn't that high. it came in the back door, it was an aside, and we made them because it was a good fit for

us. >> mark originally focused on carpentry work, building pieces like cabinets for homes, but conversations with other small business owners pushed him in another direction. >> i had a couple local brewers come to me and say we want t handle. we made it for them. that's when it took off. i just started doing it as sales work. >> rather than drag his heels, he recognized the potential. fortunately, it didn't require a major pivot in production. >> it wasn't difficult. we just did more of what we were doing. >> also plenty of wood turning being done on site. >> we made beer taps which are lathe turned and go to the breweries and millwork, which is primarily lathe turned. we made stair parts, newals and spindles and handrails. >> as the number of orders for the handles grew, the team figured out a way to accommodate all customers, especially newer ones. the answer was to simplify the design. >> we are a wood shop, and we're trying to focus on a definite

line of handles that say a novice brewer can come in and say i want that handle, that suits me. or maybe i want that handle but this changed a little bit. >> customers know they're being heard, steven has a standing order, but he can always call with a request. >> he'll go out of his way. i think that's typical of a small business person. you know, your customer comes first, and he'll spend the extra time to go out of his way. i'm not talking about hundreds of tap handles, if i need ten, 20, he'll supply them. >> with customers nationwide, mark said the company has reimagined its production by becoming more efficient. >> more orders than we ever had, so it was really by necessity to get it done and really keep from banging our heads against the wall. >> staff has increased. when necessary, manpower can shift. >> we really sort of compartm t

compartmentalize each one. we have employees who only work on tap handles. >> it one of us would jump on temporarily. >> joseph believes the company has found a way to balance its work flow. >> we're fairly flexible with a lot of the stuff we do, so we can adjust for customer demand as needed. demand for tap handles itself has been steady. >> those customers have also given the business stability at uncertain times. >> when the millwork fell off, it kept us going through that. >> the decision to grow the line has worked out so well that sales for the product now account for more than 50% of business. the one catch about following customer demand is that the business is headed in a direction that mark didn't predict. he admits that making the tap handles can be a bit repetitive. >> it's not stimulated so we try to move people around and make things interesting. >> that being said, clients are

speaking with their dollars. >> i'm seeing companies we have been dealing with for years, their demand for tap handles has increased. they would ask for a small batch in the beginning, now their batch is now like once a month. it's interesting to see not only our business improve but their business improve as well. >> that's why there are conversations about ways to increase production across the board. >> since the mimwork side is plenty busy, it's not like we do less millwork. everybody is elevated. we just do more beer taps. >> the staff is keeping a watchful eye on beer flow to make sure every order is priority number one. we all want more visitors to our websites, entrepreneur magazine gives us five easy ways to get them. >> one, a blog can help you drive traffic to your site and give your visitors a taste of your brand's character and voice. but make sure you have a plan in mind. you need to do it well and often in order to add value.

two, become a thought leader. establish yourself as an expert in your industry by speaking at conferences and attending networking events. three, change up your e-mail strategy. use sites like mail chimp, boom rang, and mail track to improve the quality of your e-mail responses and follow-ups. four, form a partnership. you can align yourself with a successful business. find ways that you both can benefit from the relationship and tap into each other's customer base. and five, become a social media master. it doesn't have to be brain surgery. on whatever platform your target audience freak wnts, start a conversation and keep it authentic. all fast growing companies have one thing in common. they have built products or provide a service that in the eye of their customers are simply must-haves. so what can you do to harness the strategy for your company to grow fast? shaun ellis is the founder and ceo of growth hackers.com.

he's also co-author of the new book, hacking growth, how today's's fastest growing companies drive fast-growing success. thanks for wiig here. before we start, define growth hacker for me. >> growth hacker or growth hacking is really about understanding the full customer journey. and doing testing across that entire customer journey and contrast that with the typical marketing which tends to be more externally focused. so growth hacking takes it to a level where it's focused on all levels of growth and having a team work together to test those levels. >> i want to go through urtips because it takes people on the journey. the first one you talk about is understand your must-have benefit. don't you think when most companies launch a product they understand that or no? >> it's surprising that a lot of companies, when they launch a

product, they have an idea in mind of the value that people are going to get from the product, but when people actually use it, a lot of times they actually get more benefit from something that was unanticipated. so it's really important to i would crowdsource that from your customers and try to mock sure that you first consider what products consider it a must-have and dig into why they consider it a must-have. what is the benefit they're getting from the product? with that information, you really have now kind of a finish line as you're acquiring new users to bring them to that experience. >> number two, you talk about determining a key growth metric. it seems obvious, right? is it revenues, sales, users. what i have found is that people in charge change that key growth metric when the one they originally picked isn't working. right? so at first, it's users. then they say, we're not getting

users, fast enough so it's visitors. if you can't get to your first one, do you have to stick to it or think this is going to be slower than i thought and i need to think about this in a different way? >> you can be flexible with it. the mistake a lot of companies make is that they are focused on a business metric or a business outcome, where what really drives sustainable growth is this customer value. we talked about this must-have benefit customers get from a product. how do you quantify that in a single metric that over time that metric is going to be a much better indicator of sustainable growth. if you're delivering value, people will come back and want more of that value. >> so maybe repeat -- >> not your typical business metric. >> maybe repeat usage from your current customers? >> kind of the best example that i can think of would be airbnb, they have for their -- in the growth hacking world, we call it a north star metric. for their north star metric, it

would be nights booked. there's benefit for a host and there's benefit for a guest every time a night is booked. and so the more nights they have booked, the more value is being delivered. and the more likely that that growth is going to be sustainable over time. >> got it. build glass functional growth team. you take people from marketing, et cetera, and say you're the growth team? >> right. so this is what's pretty cool, and facebook really pioneered this. since the time they pioneered it, they built about another $400 billion in value in the business, it's this idea that testing across kind of all of the levers of growth is really challenged because a lot of the people who control levers that sit within product, for example, are not going to be the marketing team. what you want to be able to do is have this cross functional team that has permission to test really anywhere that can affect growth, and , so that's the big benefit is that by having this cross functional team that

includes marketers, potentially designers, engineers, data, a data analyst, but being able to bring together a group of these skills that have permission to test across anywhere in the business to drive growth can be really effective for being able to unlock growth in areas that maybe are a little less obvious than going out and spending more on advertising. >> the other two is optimize the full customer journey and test growth levers. it seems you're talking about a mind set as anything else. >> there's definitely a mind set. it's this continuous improvement mind set where you know everything that you're doing, particularly when it comes to optimization, there's a better way to do everything, and the only way to discover that better way is through testing and ultimately trying to see what the impact from that testing is on your north star metric. any test that expands value

being delivered to customers is going to be a successful test. >> when i hear hacking, when you hear hack, your think tricks to change everything and make it better. are there tricks people need to be using or tactics instead of tricks. these are big organizational thing. >> right, this is really hacking in the sense of just creative problem solving. it's, so like engineering is another sort of hacking synonym, so ultimately, it's about being able to use whatever resources that you have to come up with creative solutions to the problems that are holding back growth. >> great. so good to talk to you. thank you so much for coming on. >> thank you, j.j., i appreciate it. >> when we come back, we answer your questions on how to make key hires when scaling your business. and we'll see if this elevator pitch for a lactose-free ice

cream product moves our judges. will your business be ready when growth presents itself? american express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. find out how american express cards and services can help prepare you for growth at open.com. what are some key hires that an early-stage company should make in order to most effectively scale their business? >> in an early-stage company

your key hires are so important. it's going to depend what type of company you have. the types of company i've been involved in has been focusing initial on operations and marketing. if you think of supply and demand, those are so important in businesses that have some sort of product that you're selling, a marketplace, a service, i would say find a rock star markets and a rock star ops person. >> hi. i'm katy. >> and i'm gwen. >> we're the co-founders of minus the moo. i love ice cream but i'm part of the population that suffers from lactose intolerance. as a consumer i had to sacrifice

taste and texture. no lactose-free ice cream offered the same quality, taste and quality. we created minus the moo, the first premium real lactose free ice cream on the market. we use all the same ingredients as a lactose ice cream. >> last year $20 billion was spent by lock toes-free people trying to help. we've partnered with the largest national food distributors in the world. we're raising $500,000 to introduce our brand into the mid atlantic region and to launch online shipping on minusthemoo.com. >> you have fans over here. i'm going to have to take those away from you. >> no.

>> you put them back here now. two numbers from you. one, two what did you think of the product? what did you think of the pitch? which one didn't they eat? >> the chocolate. >> what i love is i had to suffer between one or the other. there was no option that you weren't going to eat ice kreecr. >> right. the rest of my life not eating ice cream? >> let's go. >> i'm a huge ice cream eater so you had me at hello. that was an easy one and i was fascinated if there was a difference in flavor. i love the idea of the product. you defined it by your personal expectations. it's something you believe in. you maybe feel emotionally connected to it. a short time to make that point. you also talked about the need for the money and what it's going zblsh give us the number. >> i love the idea for the product, and i love the way you presented it.

>> thank you so much. >> that's good from him, too. >> i am lactose intolerant and i've always suffered. it's still ice cream, and then i deal with it later. i like the fact that you know your numbers. i always love when people come and have done their homework. you know the product and the market. i'm going to give you a nine. a little seven. i want to see you work harder on presentation in terms of the things you say. and how you say them, but i love that you did your homework and that's easily resolved. >> this is amazing. it tastes so good. >> i'm going to take it back. >> congratulations to both of you. best of luck. i also love the packaging. thank you for your great advice. all of you out there, if you'd like to pitch your company just like you just saw, even if you don't have ice cream to give us,

you can still come on the show. send us a video of you doing your one-minute elevator pitch. send it to yourbusiness@msnbc.com. include a short summary of what your company does, how much money you're trying to raise and what you intend to do with the money. we look forward to seeing some of you on the show. we've now got the top two tips you need to know to help you grow your business. our guests are with us once again. thank you for giving us your morning. your tip is about being afraid. >> yeah. it's a biggie. we could talk about a lot of transactional tips. keep your budgets in gear. make sure you talk to your customers. but i've had the honor of working with over 1,000 companies over the last 30 years and there's a behavior that gets in the way of quality decision making. that's not anything to do with

the things that you think about are normal active items. they're about personal issues. fear. many of the startups i meet are fearful of things but they don't identify the fears. and in many cases they make decisions without dealing with those fears. >> i feel like if you're afraid, you start making short-term decisions. >> sure. absolutely. >> how do you deal with it? you talk about it with your partner or team? >> i have a methodology of identifying the things that are going to kill your business, the things you don't want to talk about. mostly ego gets in the way because you won't admit them and you hope they'll go away but they won't. >> and we're all very good at convincing ourselves it will go away. you're running and growing a business. you've got some ego involved. >> deal with the fears first. >> all right. you're up. >> for me, the biggest thing that people do when they say okay, we only have this much money to make it work and then

we're out of money, where can we cut? the one place people cut is on marketing. that turns out to be their biggest problem. if what you have to do is sell and you have a product you need in stores and you cut the one way to talk to your audience, there's a problem. you're cutting off your nose to spite your face. don't cut your marketing budget but look at different ways you can reach your audience. are you spending a lot of money for sort of a shotgun approach when you should be picking people audiotape one by one? perhaps use can change it. >> i think a lot of people waste money on marketing because they feel like they need to, and they may not be getting sales but they feel like they're building their brand. >> figure out how to spend the money better. >> thank you both of you. this week's your business selfie comes from linda o-boyle. she's a former graphic designer and opened her lifestyle boutique in 2016.

congratulations on. we love seeing your companies from all around the country. pick up your smart phone, take a selfie of you and your business and share it with our audience. no professional shots, please. send it to yourbusiness@msnbc. include your name, the name of your business, where you are and use the hash tag "your business selfie". >> here's one thing i took from today's show. when i was talking to shawn, his consulting bt about growth hacking, he talked about having a metric that everybody looks at that really you look at every day to see are you growing the way you're supposed to and making sure everyone in your company knows that metric. i can't stress how important this is. it gets everyone on the same page from engineering to marketing to finance. everyone, if you know what kind of thing you're going to look at to say you've been successful.

we try to do this in my company. it's not always easy, but you have to identify what it is. if you have any questions or comments about today's show, e-mail us at yourbusiness@msnbc.com. we posted all the segments from today plus more for you. connect for us on digital and social media platforms. we look forward to seeing you next time. until then, remember, we make your business our business. will your business be ready when growth presents itself? american express open cards can help you take on a new job, or fill a big order

or expand your office and take on whatever comes next. find out how american express cards and services can help prepare you for growth at open.com. good morning. welcome to politicsnation. a busy show today with lots of news. the former president of the naacp is running for political office. we'll talk to ben jealous in a few minutes. kmeed yen and friend bill maher is using a friend that he shouldn't, and i'm pretty upset about that. and those parenis accords, why they matter especially to poor and minorities