The following mini-case is broken into several parts with a question for each part. It is important that you not read ahead, but rather read each part and answer the associated questions.

It's not every day that a tech guru and serial entrepreneur becomes a vintner and online retailer of wine samples. It only happens when your two passions happen to come together in a great opportunity. Tim Bucher (pronounced bu-CARE) was raised in the wine country of California on a farm in Healdsburg. He loved the land and, by the time he was 16, he and his siblings managed to pool all their resources and buy a two-acre vineyard. But it was while he was in college at UC Davis that he found his second passion—technology—and so upon graduation he went to work for Sun Microsystems. Over the next 25 years, he designed hardware for companies like Dell, Microsoft, and Apple and, on his own time, developed other technology solutions, one of which was a data access device that he sold to Seagate for a reported $30 million.

About 2010, while a VP of consumer and entertainment software at Dell in Austin, Texas, he was spending many hours flying back and forth to California to maintain the online olive oil business he was running on the side in addition to the vineyards. However, he used his flying time productively. Since he had experience selling olive oil samples online, he wondered if it would be possible to do the same with wine. After all, most people would like to know if they like a particular wine before they spend a lot of money to buy a full bottle. He decided to call the venture The Tasting Room. The problem with his idea was that wine begins to oxidize when it's rebottled and it would be very important to maintain quality if he were ever going to get vintners to partner with him.

This was the moment when his two passions came together. Using his technical expertise, he designed a system (and later patented it) that consisted of a pressurized chamber for "total anaerobic sample transfer" that would move a 750-ml bottle to where a robotic arm would open and decant the wine and pour it into 50-ml bottles and cap them. In this way, he avoided the oxidation that might otherwise have occurred when transferring the wine to the sample bottle. Bucher realized that with this device, his idea for The Tasting Room had the potential to scale to a very large operation, but it required more wine than his tiny vineyard could produce.

As Bucher began to talk to winemakers, he learned more about the supply chain for wine and how many complex problems there were to solve. For one thing, the vintners were skeptical that the quality of their wine could be maintained; however, taste tests eventually convinced Seghezio to become the first winery to come on board. Bucher also learned that every label for every one of his projected 900 varietals would have to be approved by the Alcohol and Tobacco Tax and Trade Bureau. In addition, he needed to secure the appropriate packaging that would protect the sample bottles and he had to meet the requirements to ship to 33 states.

If the supply chain issues were daunting, raising money was not—at least for the first round where he was able to raise $10 million from several VCs while retaining about 10 percent of the company. However, spending $300,000 a month meant that he would quickly run out of cash and need to go for another round. As it turned out, the success of the taste tests convinced more than 1,000 vintners to sign up by 2012. In 2013, Lot18, an online retailer of fine wines, acquired most of the assets of Tasting Room.com, which meant that Bucher could now focus on the technology side of the business and leave the marketing to Lot18.

Epilogue

While spending time in the vineyards is where Bucher finds his best ideas, as of May, 2018, he became Executive Vice President and Chief Product Officer at Scientific Games Corp, a company that provides gaming and lottery solutions. Having been issued more than 40 patents over his career, Bucher is well positioned to help the company drive innovation. 1: As you look at what led to the concept of The Tasting Room, why do you believe Bucher could make the assumption that consumers wanted to try a wine before they bought it? 2: As you look at what led to the concept of The Tasting Room, why do you believe Bucher could make the assumption that consumers wanted to try a wine before they bought it? 3: Does Bucher have options for handling the distribution of his sample bottles?