Weekly Distillation No.17
Slack; Coronavirus, The Quickening, Sept 11, Fractional Talent, Lockdowns, The Greeks, Bubbles, Macallan
#neverforget
This newsletter is written for entrepreneurial organisational leaders and aims to help identify themes of our current context and provide questions, tips and tools that can help in navigating these times.
“Have you forgotten, When those towers fell, We had neighbors still inside, Going through a living hell” - Daryll Worley
“We're hoping the 'Moonshot' approach will work and we will be able to deliver mass testing which will give people the freedom pass, the 'laissez-passer', the knowledge that they are not infectious and can hang out with other people who are not infectious in a pre-COVID way. “ - UK Prime Minister Boris Johnson
“I should never have switched from Scotch to Martinis” - Humphrey Bogart
“I wish we could be private with Tesla. It actually makes us less efficient to be a public company.” - Elon Musk
“You know, people talk about this being an uncertain time. You know, all time is uncertain. I mean, it was uncertain back in - in 2007, we just didn't know it was uncertain. It was - uncertain on September 10th, 2001. It was uncertain on October 18th, 1987, you just didn't know it.” - Warren Buffett
Skim it in a minute
Thematic insights from the news and the web to help you think about potential future and current contexts and how to be productive, creative and successful in your work now
Coronavirus
Well, that escalated quickly. In the last week in the UK we’ve gone from:
“we’re not like those continental types, we have this under control” to “will all the people aged 20-29 please stop going out and hanging out in pubs - but please go out to pubs and restaurants to eat out to help out” to a localised statutory curfew in Bolton to both England and Scotland returning to a limit of 6 people in a group - and in Scotland that being from just 2 households.
The great hope of the next few weeks was the Oxford Astra Zenecca vaccine - sadly this week this hit a pause after an illness in trials (apparently a normal cautionary response when this happens). But it doesn’t help. Therefore our UK Govt announced a plan to spend £100bn to test the population through Operation Moonshot, based on a test that is not yet (allegedly) in existence. In Scotland, Thursday saw the launch of Protect Scotland, the track and trace app - with over 350,000 downloads in day 1. We’re having a discussion in our house about the (de)merits of downloading it.
The future of work
Photo by Stephen Phillips - Hostreviews.co.uk on Unsplash
McKinsey produced this insight into “the quickening”, looking at how we have jumped years forward in many ways during 2020 (thx to Stuart Black for sharing this on LinkedIn).
Alongside this Slack got a kicking this week on the stockmarket. As a workplace collaboration tool that most people seem to be using more and more (I now am in 6 Slack workspaces and multiple channels which means it’s a constant flow of comms), and that definitely slashes the volume of work emails, it would have been an obvious beneficiary from the WFH jump. With over 30% growth in paying customers year on year, it’s clearly doing something right.
I’ve been talking to friends this week about how I rarely see people thinking more than six months ahead with their organisations and teams, and their detailed planning cycles are usually 6-8 weeks. Detailed planning for Christmas? No way. Get me to end October.
No-one I know is rushing back to the office - although there is a slow and steady rise in walking meetings, meet ups for coffee or co-working outside. The media narrative is that the WFH shift is killing all of the jobs that support office workers (this is worth a read - it’s pretty grim how broad the impact is). My experience is that spending is partially being diverted locally and there are growth areas as a result.
There are lots of ideas out there about how to move forwards - Fred Wilson’s “fractional talent” caught my eye this week - this is a great concept for a way of monetising yourself, but also to add to your team without the full time expense (I’ve worked with several part time contract CFOs and it can work really well). It’s basically the gig economy for executives. A friend shared about how companies are going all SoulCycle and seeking to provide spiritual guides in the workplace. And the passion economy keeps on growing as one of the key beneficiaries of WFH. The cacophony of excessive content is met by the value of the curator - they save you time, you can trust their discernment and it can break the social media reinforcement bubble.
The asset inflation bubble
Photo by Austin Distel on Unsplash
The Nasdaq (and other associated markets) took a breather this week - down 10% from highs. The noise of the bulls turned into people posting charts showing how Tesla is tracking the Enron shareprice chart (Enron = black, Tesla = green, indexed to 100).
Lots of people are continuing to save money and throwing it into the markets (here’s this week’s challenges with Robinhood) - but there’s a lot of speculation that the recent drive up in the markets was some gamma meltup (yep, read the article and get your dinner party chat ready for the next time you are allowed a dinner party with more than one friend) as the Vision Fund (he of WeWork fame started options trading. Having worked in a hedge fund where people traded theta on Hungarian Huf vs Polish Zloty, I still had to read this article twice - so I’m not convinced the average Robinhood trader has a clue what’s driving the market. The weight of money has overtaken fundamentals.
I swapped Whatsapp messages with a friend this week on where to put money on a 1,3 and 5 year view, with an aim to be inflation protected. Of course, if asset prices are heavily inflated then being able to protect yourself against CPI is pretty useless if your capital halves. You could always buy a Japanese bottle of whisky for $795,000. Or take a contrary view on office properties in city centres.
A long read for the weekend
Back in the late 1990s I was in New York for an equities conference. As part of it my wife and I were taken to dinner with a handful of others to Windows on the World restaurant, situated on the 106th floor of the North Tower of the Twin Towers.
A few years later in 2000 I was back nearby when I worked for Merrill Lynch in London and was visiting our offices at 4 World Financial Centre across the street from the Twin Towers.
On the 11th September 2001, every person present in Windows on the World after 8:46am died and the restaurant was destroyed.
Three people from Merrill Lynch died in the collapse of the towers.
For those who experienced it, it changed their lives.
This week, on the 19th anniversary of that horrific day, take time to hear from those that were in charge and what it’s like to lead in a time of chaos and uncertainty. Sound familiar?
The other weekly distillation
“the action of purifying a liquid by a process of heating and cooling.”
A very special guest today - David Robertson. Born at Royal Brackla Distillery, he grew up around distilleries before going to university to study Brewing & Distilling. David is a Keeper of the Quaich. In August 1994 he became the youngest Distillery Manager in Scotland. He went on to become the Master Distiller for one of the most revered of all distilleries - The Macallan. David was responsible for the creation of some of the most iconic whiskies ever released, including The Macallan’s ‘Fine & Rare’ range. In August 2006 David joined Whyte and Mackay as Innovation Director and led the renaissance of The Dalmore and championed the focus internally away from bulk and blend to premium and single malt. David set up his own Whisky Consultancy in 2012 providing expertise and advice to the wider industry which has now evolved as part of RW101. He has co-founded the first malt distillery in Edinburgh since 1925 and is also part of a team that owns a bottling business. A genuinely good guy and much liked by everyone who knows him.
What is it about whisky that engages you? What would you say to someone new to it as to why they should make it a key part of their drinks experience?
Wow, where to start. Romance. History. Alchemy. Family. Science. People. Craft. Taste. I love the stuff. For many, many reasons. It has been my life. Where I was born and grew up and has generously afforded me a professional career where I have been lucky to travel the world sharing the joy! It is easy, as a Scot, to take Scotch for granted. But when you see the wonder others around the world have for our local hooch it truly makes one humble.
You, along with Rob Carpenter, have started your own distillery - the exciting Holyrood Distillery (coincidentally across the road from Rankeillor Street where I spent two years living as a student, and where two of my brothers also lived at one point). What has that journey been like? What have you learned and what advice would you give to any budding entrepreneur about starting a business? What has the 2020 experience been for the business and what's exciting you for 2021? How can readers of this newsletter support the distillery?
Indeed, a grand part of town, near the "charmed circle" which supplied the surrounding breweries and distilleries with water. The journey has been full of joy, frustration, tears, anger, euphoria and every other emotion you can imagine.
Tremendous ups and downs on an almost daily basis. Advice - go for it. We live short lives. Have no regrets. Don't expect it will be easy. Fight hard for what you believe in. Budget well, plan well and push hard. Don't accept the first answer....particularly if it is a no!
2019 was amazing - the culmination in opening Edinburgh's first single malt whisky distillery since 1925. There were lots of hard yards as we completed the build, commissioned and opened for business. We launched our custom-made cask programme and sold just under 200 casks to people from around the world. I met many of them to conduct a "find your flavour" consultation where we sampled a range of styles of single malt and debated and discussed and developed recipes bespoke to them. We started 2020 in good shape, visitor centre traffic was growing, forward bookings looking strong and then in March....lockdown. Business stopped. Staff sent home. Thankfully we are now (September) backup and producing but we don't yet have confidence in opening to the public for visitor tours...but hope to soon. We have also just launched our next Custom Made Cask Offer and are enjoying strong interest. However, 2020 will be a "reset and restart" year as we seek to relaunch our offer.
For anyone keen to support our venture we would love to show you round - once we open - probably by appointment only in the short term to ensure social distancing, etc. Or, should you be interested please have a look at our Custom Made Cask offer. And if you are interested pop me an email david[at]holyrooddistillery.co.uk
You were the Master Distiller for the Macallan - arguably one of the greatest of all whisky brands (https://manofmany.com/lifestyle/drinks/best-scotch-whisky-brands). What makes a great whisky - is it just the advertising & promotion spend that goes behind the product, or are the products genuinely better?
Quality, quality, quality and then after that spreading the word. The Macallan was built on the very solid foundations of a fundamental belief in sherry wood maturation to develop and enhance the flavours of an incredibly rich and powerful new make malt spirit. They were pioneers in vintage whisky - and have released many "vintage" 18 and 25 year olds over the years culminating in the incredible Macallan Fine & Rare release in 2002 - 1926 to 1972 (mainly single cask) vintages! This focus on quality ensured the connoisseurs and collectors of the world embraced what the brand had to offer. Of course now it is a huge global power house - built on quality - and now effortlessly communicated around the world and driven by a mix of incredible new releases stimulating PR and demand and placement in the right bars, clubs, casinos, retailers and films...
Your other business, Rare Whisky 101, provides excellent insights to collectors & investors of whisky. Do you think we are in a bubble for collector items such as whisky? What's the most interesting trend in whisky collecting for you right now?
My business partner Andy Simpson has been collecting data from the UKs whisky auction market over the last 20 years or so. The data started to become really meaningful around 6 years ago and he was able to spot some trends. The focus on data creates information and intelligence for us culminating in powerful insight. We have used this knowledge and our contacts to provide a unique "treasure hunting" service for those that desire the rarest, oldest, most valuable, most delicious whiskies - be they in bottle or in cask.
Bubbles - not in our eyes. We continue to collect price data and see more bottles come to the market, greater demand for those bottles and as such prices hardening. However, not all that glitters is liquid gold. You need to ensure entry and exit are researched and executed well. Don't just buy any bottle and expect its value to appreciate. Do your research and as Ben Franklin says "An investment in knowledge pays the best interest". Download our free reports on the market on our website.
The hot trend just now is for clients who want to own their very own cask of whisky. Maybe for future bottling and sharing with family and friends,. Maybe as a conversation piece at the golf club or for some a pure investment....liquid gold indeed!
This year has been crazy for everyone. What's the one thing you're going to do differently in future as a result of this year?
Spend more time with my wife, kids and our doodle dogs. Though business was v v v tough in March-August, I absolutely loved the long dog walks, time at home, in the garden and cooking a delicious dinner. Simple things. Done well. Feeds my soul. And made dealing with the Covid chaos just that little bit easier...
What's your favourite drink? Where can it be purchased?
Macallan 1979 18 yo Gran Reserva. At whisky auctions...not cheap now - around £3K a bottle. I was lucky enough to create this as my first piece of new brand creation in 1996/7 just a couple of years after joining The Macallan as Distillery Manager. Rich, intense, unctuous - it is Macallan turbo charged! Alternatively a cold pint or real ale - Deuchars or Tim Taylor Landlord in a nice olde worlde Edinburgh pub hits the spot every time!
Around one third of the readers of this newsletter are in the US. Can you share some tips and locations they can source craft spirits from Scotland, given all of the multi-layer systems they have for alcohol sales in the US?
Now that is tricky. For those lucky enough to travel - airports around Europe and Asia always had some great whiskies on sale. Domestically I suppose you need to try your local spirit specialist where you can hopefully find some of Scotland's craft spirits - Gins, Rums (yes, rums), Vodkas and, of course, single malt scotches. Also, the distiller’s on line shop may be worth looking at, although shipping and delivery to many of the US states could be tricky. Failing that you could try on line retailers like Royal Mile Whiskies, Master of Malt and even some on line auctioneers like Whisky Hammer and Whisky Auctioneer.
If you have a favourite spirit you’d like to write about, or you make spirits, please do get in touch as I’d love to share about them.
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