Q: Why did you get into the juice business, which is dominated by so many major players?
A. I think that we got into business not because we were business people, but because we were looking to do something that we loved. And it took many years before we even thought about the company in terms of value creation, or what it might be worth. It was more about building something that we were really proud of - both the company and the product. It started out as a boat service business, and it ended up becoming a juice company, but we had passion for what we were doing. Whether it was delivering ice to someone on Nantucket Harbor or making our orange-mango [juice] great, or working on the label, or finding great people to be a part of our company. It wasn’t driven out of understanding how business works or a model or even a plan, it really from the very beginning was passion.
And the other thing is that Nantucket Nectars is also about a place. We were looking for a way to stay on the island and not go write a resume and get a traditional job at a time when very few people our age were entrepreneurs. I knew of one or two other people my age who were starting their own businesses. And it’s really changed. Today, there are so many young people that look at starting your own business or being an entrepreneur as one of their choices. It wasn’t like that in the early ‘90s.
As an investor today, what do you look for in beverage companies that you consider investing in?
I run a small fund that invests in emerging beverage companies. That’s First Beverage Group. When I look at an opportunity for investing our money, I’m thinking so much about the people and the authenticity of the product, and the drive and the passion and their reason for being. Obviously I’m looking for fundamentals that can make a business successful because I’m responsible for investing other people’s money, but top on the list are great innovative products and passionate people who have started businesses for the right reason, and who have created products for the right reason. And I think that Tommy and I were lucky to have been in a place and had that kind of passion to build something that we were pretty proud of so early on.
In recent ventures, has it been difficult to build a business relationship similar to the one you had with (Nantucket Nectar co-founder) Tom Scott?
I don’t think I would ever have a relationship in business like the one I had with Tommy. I mean it was a time in our lives when we were not married and we worked 7 days a week, 15 hours a day, and we developed a trust and, in some respects, a reliance on each other that was like a marriage and that was a big reason for the success of the business. The way we looked at our product and our company was so similar, and we cared so much about it, and I think that both of us also felt throughout the history of the business that we were each other’s greatest supporter when push came to shove. It didn’t mean that we weren’t different, and it didn’t mean that we didn’t have times when we disagreed or had issues or even arguments, that happens in any relationship, but at the end of the day, we were such great supporters of each other and what we were building that it was unique. Now I’ve had great business relationships with people since then, and I’m part of a great firm right now and there are people who I have incredible respect for, but when you’re in the trenches building a business and you’re 25 years old, it’s a unique experience and I’ll never have it again.
You’re clearly a creative person. Why remain in the beverage industry after your initial success?
I’ve dabbled in other stuff. I started and ultimately sold a technology business at one point. I own a grocery store. When we sold [Nantucket] Nectars, I built like a miniature Whole Foods, and we own it in our town, so I’ve been involved with that. I’ve also been advisor on the boards of other types of companies. But I just love the beverage industry. I think it’s a unique sector of consumer products and it’s a dynamic industry. The products have color and flavor and they move very quickly off the shelves. There’s an emotional connection and response to beverages. I think that’s one of the reasons why the beverage industry is so dynamic - people consider beverages an important part of their lives. And as much as I’ve experienced other industries and dabbled in other things, I find the beverage industry the most interesting area that I’ve ever touched or been a part of. I took art courses and architecture courses at RISD, and I love design, I love art. And in the beverage industry there’s a lot of that. There’s industrial design, there’s color, there’s graphic design, and there’s science, there’s microbiology. I loved math too growing up too, and when you look at the metrics of this industry and data and modeling, it’s all there in beverages as well, so I find it to be a very liberal arts industry.
If you could go back, is there anything you would change if you were starting Nantucket Nectars again?
The only major thing I would change would be that I probably wouldn’t have sold Nantucket Nectars when we did. Of course, there were a bunch of reasons for our sale at the time but, in hindsight, it’s really hard to get a business up close to 100 million in sales. Not many people ever do that, and we did. And when you’re there, there are so many choices on how to take your next step. I was in my early 30s and I think we may not have been aware of all of our choices at that time, and I think if I had to do it again I probably would’ve thought very hard about not selling the business. That’s the first time I’ve ever said that in an interview, by the way.
Where do you think some of your best business advice came from at that time?
Probably from our investor. We raised capital really [only] once. There was a little bit of seed capital at the beginning, but we raised from a guy named Michael Egan who built Alamo Rent-a-Car. Mike had a boat on Nantucket and we used to take care of his boat and he ended up putting money into Nectars. He was the only investor we ever had and he was an incredible mentor and advisor to us in a lot of different parts of the business. We became very close with Mike and we still are today. In our situation, we could never have found a better investor. He wanted us to run the company; he trusted our ability to make good decisions. He allowed us to make some bad decisions and then get them right. He was amazing. We raised money from him before there ever was a term “Angel Investor.”
Originally published July 9th, 2014.
Tom First is an entrepreneur and investor. In 1989, he co-founded Nantucket Nectars with college friend Tom Scott. Dubbed “The Juice Guys” in advertisements, the duo’s business was quickly named to Inc. Magazine’s “Inc. 500″ list of fastest-growing U.S. companies and was subsequently sold to Ocean Spray for close to $100 million in 1997. Since Nantucket Nectar’s sale, Mr. First started several other successful ventures, including Eleven Technologies and OWATER. Today, he is the managing partner at First Beverage Group, a financial services and investment firm that focuses on the beverage industry. Mr. First graduated from Brown University in 1985 with an A.B. in American History.