I heard a presentation today by Karan Bilimoria - the founder of Cobra Beer. He is an extremely intelligent and personable guy, with a very clear and measured presentation style. He was also prepared to be very frank about his own experiences, and the progress of his business.

Here are some of the points he made:

  • He started small and he started cheap. He started making his deliveries in a second hand 2CV that was so worn out he could actually see the road through the holes in the floor. He used to park it down the road from the restaurants he was delivering to and carry the big heavy crates of beer a bit further because it looked so bad - but it was more important to keep costs down.
  • His business was originally called Panther Beer, but just as they were about to launch they got feedback that their distributors and customers didn't like the name. Rather than plough ahead regardless, they checked some of the other names from their brainstorming list and the customers chose 'Cobra'.
  • On the subject of the brand name Karan said 'How important is the actual name anyway? What does Budweiser mean?'. The key to creating a great brand is what you make that name mean for your target customers.
  • The first five years in the business were hard going, and Karan's business partner actually left the company saying that it wouldn't work. He must regret that pessimism now! Karan said that his own favourite quotation is from Winston Chruchill - "Never, ever, give up."
  • Karan's accountancy training meant he was very smart with how he raised the money. He selected to fund the business through debt rather than equity, so still retains about two thirds of the shares. He showed a chart in which the funding mix of the company was different in every single year since it was founded. he says that fundraising and managing the funding structure is not something you just do at startup - it's an ongoing process. He had used the Small Firms Loan Guarantee Scheme, overdrafts, loans, invoice finance, and other more specialist methods such as loan notes. There were very difficult times in the early days however when he would be way over his overdraft limits, but he kept going.
  • He believes passionately that you should not just be the 'best in the world' you should also be the 'best for the world', and is working to give something back. He has launched the Cobra Foundation, and is ensuring that his company minimises it's impact on the environment as well as maximising the benefit to communities.
  • His management team meet regularly in offsite away days to discuss opportunities and challenges and plan strategy. One manager presented statistics showing that more people were drinking wine in Indian Restaurants, so they researched this further and eventually launched 'General Bilimoria Wines', named after Karan's father. These are good quality, good value wines designed to be offered as the house wine in Indian restaurants - protecting their dominance of alcoholic drinks in this market.
  • Cobra Beer has a policy of never asking for exclusivity of supply in any of the restaurants it sells to, even now it is in a dominant position and could do that. Karan believes that the customer's choice should not be restricted, and that it is you simply have to make the best possible product and have the best marketing to encourage the customer to choose your beer.
  • In the early days, Cobra Beer marketed itself only through Point of Sale materials. Initially these were just cards to be displayed on tables in restaurants, but this progressed to having specially designed glasses. Then the graduated to using PR, and only when they had become a much larger business did they begin using advertising.

Lord Bilimoria kindly gave me a signed copy of his book, so I'll read it and write about it here in a few weeks.

The event was organised by the brilliant London Business Forum, and I'm grateful to them for inviting me along.