Two Men and a Bottle

The cofounder of Nantucket Nectars recounts how he and his partner, Tom First, started their business almost unintentionally and soon found themselves running a fast-growth start-up.

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Testimony

The origins of $50-million-a-year Nantucket Nectars were like those of most fast-growth start-ups: sloppy, unintentional, vaguely ridiculous, and brilliant

When Tom Scott and Tom First--both 23, fresh from Brown University, and possessed of no particular aim in life--started a come-what-may odd-jobs business from a 19-foot Boston whaler in Nantucket Harbor, they couldn't have imagined what it would lead to. Despite both having flunked the only business-related course they'd ever taken (accounting), they built their eventual company--juice maker Nantucket Allserve Inc.--into a $50-million-a-year enterprise by 1997. Ocean Spray Cranberries Inc. bought a substantial chunk of the company early in 1998, but founders Scott and First retain about half the company's ownership and remain active in its management. That they began with no such grandiose end in mind makes them anything but unique. From the simple early questions (Let's see, do we set the blender on chop or liquefy?), to the weightier later ones (This Florida guy wants to lock out other investors; should we take his half million?), they progressed through a series of challenges that almost any growth-company founder could relate to. Or would sure like to relate to, in any case. Tom Scott tells the story:

Our company really started as a boat business. In 1988, before my last year of college, I was living on Nantucket, an island off Massachusetts, driving a taxi. It was my way of getting away for the summer. The money was excellent, but I hated it, frankly. I hated working for other people. Not that I liked the prospect of working for myself, but it seemed it might be better. So I started a business, called Allserve, that involved going boat to boat in Nantucket Harbor, selling muffins and newspapers, taking trash, doing laundry. You name it, I was doing it. It was like a floating 7-Eleven.

As Allserve grew I fell in love with both the business and the lifestyle. What better life? I was outside, on a boat, making money. I was a junior in college. Until that time, I didn't know what passion was. My father had always given me the line everybody's father gives: "You're lazy; when I was your age I worked 15 hours a day." Well, one day that first July, I realized I was working all the time! Seven days a week, 16 to 18 hours a day. Not only was I doing way more than my father expected, I was enjoying it. I wasn't paying a price.

The next summer, after our senior year, Tom First joined me, and the business grew. We did towing and rescue, and we fixed boats. I got my captain's license. We became a legitimate business--though we still didn't have a lot of money to show for it at season's end. That winter we stayed on the island, trying to squeak by until the following season. We were out there with a bunch of friends, and on Nantucket winter is cold and slow. We made dinner for one another; it was a competition. This was 1989. One night Tom made this juice for dinner, peach juice made fresh in the blender. Within five minutes we were saying, "Let's sell this off the boat next summer. We'll call it Nantucket Nectars."

That's basically how we got into the juice business. We started making it fresh and sold it off our boat and out of a little storefront we'd opened. We figured out a way to get the product into recycled wine bottles. Through this period we made money off everything but our boat business. We were doing anything else on the side: painting houses, bartending. Sometimes I lived in my car; other times I lived in a group house where the heat was never turned on. In terms of making the business work financially, what we did was pay our bills slowly, collect our receivables as fast as possible, and pay ourselves nothing. That's how you finance a business. Eventually, though, we came to the realization that the boat business would always be too seasonal and too small to allow us to live on Nantucket. But the juice was a ray of hope.

I had no idea what numbers were involved in juice. I'd never heard of Snapple at the time. To us, juice was a generically packaged product--not very good. Very Fine. Lipton Tea in a can. Hood juices in cartons. Not quality. But ours was good. We were juice freaks, always drinking it because we worked outside and were hot, and you can't keep drinking Coke. So we asked the question: Why don't other companies' juices taste like this? And what is fructose syrup? I didn't know what pasteurization was and what it could do to products, or what aging could do to break down products. We didn't know any of that, but we both knew what we wanted. That was an advantage. We found that being young was an advantage, too: no wives, no kids, no mortgages, no responsibilities. If we wanted to work 14 hours a day, we did; if we didn't have money for clothes, it was OK--we didn't need clothes. We didn't need a car. Also, when we went into the factories, when we met with distributors, there was definitely a sense that, Hey, here's a couple of young kids--give 'em a break.

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