Applying Silicon Valley thinking to a very traditional industry, the technology tycoon is taking the fine-wine industry in a whole new direction – and ruffling a few French feathers in the process
19 April 2020
“Would I describe myself as a nerd? Oh yeah, definitely,” says Michael Baum with a chuckle. “Now I can quite happily spend my days talking about how best to monitor nitrogen cycles in the soil.”
That’s a new topic for Baum, albeit one that fits his profile. Baum is an entrepreneur, philanthropist and, more recently, the owner of Château de Pommard – a French winery established in 1726 – making him the first American to own such an estate in Burgundy. It’s not only a new venture for him, but a new kind of venture.
Baum, 57, made his money in the very different world of tech, as the creator of six start-ups, five of which he sold and the last of which, Splunk (which produces software for analysing machine-generated data), went public with a record-breaking $5 billion (£4 billion) initial public offering. He can wax lyrical about the impact artificial intelligence will have on big data, the super-serious problem of cyber security and the fact that driverless cars are a long, long way off. He looks the part too, with a preference for wearing black – black jacket over black T-shirt, black jeans and black sneakers – offset with a flat top in silver-grey.
He’s not the only Silicon Valley king investing in wine, of course, although he’s looked well beyond Napa Valley to the old world. “Back in California they talk of old vines and they mean around 35 years old. Here they mean 120 years old,” he laughs. “But then it’s very different over there in many ways. The Napa Valley way is to make the same quality of wine every year, year after year. But in Bordeaux you have the vintage effect. Every year the wine is different. That’s something I find fascinating.”
With long tradition comes a guarded industry somewhat stuck in its ways – ways that Baum, an outsider in terms of both his nationality and his professional background, aims to change. “Burgundy has a tradition that’s powerful but limited, which only appeals to a certain audience. And historically producers have sold to wholesalers, so they haven’t had to think about their brand,” he says. “That’s very different to how things are done in Silicon Valley where the model is to really be in touch with the consumer. At Pommard we’re taking a more Silicon Valley model – 90 per cent of our sales are now direct to the consumer. And I have ambitions to apply tech to the wine business.”
That’s likely to include the use of genetic analysis of soil, for example, which is something Baum’s team at Château de Pommard is now investigating with a view to better understanding what type of plant best suits different types of soil (Pommard is unusual in having several distinct soil types across its land). “There’s a place for laboratories in making better wine, which is something Napa Valley is understanding. But here in France it’s all nose and palate,” says Baum.
It is because most wine lovers’ noses and palates are somewhat limited that, following successful beta testing, Baum will launch the Vivant app next year. Vivant will help subscribers better buy and understand their wine. Baum is well-versed in start-ups and his philanthropic pursuits have seen him launch Founder.org, an organisation that provides funding and mentoring to graduates who have a good business idea but might otherwise fail to follow it up.
“We looked at the data on job creation and found that start-ups are clearly a massive job creation machine, especially those launched out of university. But then over and over we kept coming across students who had a great business idea but no intention of doing it themselves,” explains Baum. “They all just planned to go and work for someone else. We want to help them pursue their ideas, to get them off the street – off Wall Street, that is.” So far Founder has invested in some 128 start-ups, with initial investment followed up with additional backing to the tune of $5 million (£4 million) a pop. With that eye for spotting business potential, Baum’s own Vivant looks pretty sure to succeed.
“The world of wine is complex. From the grape varieties to the chemicals used, from vintages to how best to pair it with food – understanding what you’re actually drinking is not easy,” says Baum. “But the more you know, the more you enjoy. So with Vivant we’re taking what we’ve introduced at Château de Pommard – wine experiences and vineyard visits – and we’re reaching more people by effectively putting that on a digital platform. I don’t know why this hasn’t been done before.” But then, as he says, with the benefit of hindsight, it’s easy to wonder why there was no Uber until a few years ago.
Subscribers to Vivant will be able to scan any microchipped bottle for a complete assessment of the wine and 24/7 access to a wine advisor, as well as to live-broadcast wine experiences around the world. “The idea came about 18 months ago when I was at a wine event in Shanghai,” recalls Baum. “People who didn’t speak English kept coming up to me with pictures of their experience at Pommard. They loved that human connection. The question was how to scale that up. How do I connect, say, a wine lover in Shanghai with an expert in Argentina?”
Vivant’s utility is also timely because, Baum argues, younger generations are paying close attention to what goes into their wine: transparency, he says, is set to be a major industry trend, which is why the whole process behind Pommard wines will, using Vivant, be trackable from the budding of the plant to the shipping of the crate.
Although “more people are waking up to the idea that they don’t want to drink wine with chemicals in it”, Baum says that there’s a lot of resistance in the wine industry to giving up conventional and “convenient” agricultural methods, and he has little time for the efforts made by the big players towards responsibility, dismissing, for example, moves towards biodegradable packaging as “a neat experiment, but they never scale it up. It’s just marketing.” He also feels that the industry has been “lousy” at giving information about what’s in wines because there’s “no regulation.” “I’d hope that we can encourage change across the industry,” he says, adding that driving reform requires an outsider approach.
To this end, as Californian progressiveness might dictate, Baum is leading a push for a more natural approach to wine making. Pommard’s own production is now close to 100 per cent biodynamic (a form of organic growing) and Baum aims to act as a curator for the increasing number of biodynamic, organic and responsibly produced wines now available. It is, he concedes, a small beginning. “Go into most restaurants and ask for a biodynamic wine and you normally get a blank stare,” he says. “But that also represents a huge opportunity.”
And exploiting opportunities has characterised the career of Michael Baum. “It’s the combination of tech and wine that gets me most excited,” he says. “An interest in the world of wine started as a hobby and has turned into a business. Going to a meeting with clients to talk about wine is fun, right? Well, that’s not always the case with tech.”