Case Studies

The Fruits of Technology

Plum TV, launched by Nantucket Nectars co-founder Tom Scott, bases its business model on smart use of IT.
This story appears in the August 2005 issue of BizTech Magazine.
Credit: James Salzano

The Nantucket Nectars story is one of quintessential American entrepreneurship. Two friends—Tom Scott and Tom First—wanted to live on Nantucket Island, Mass. In order to pay the bills, they started selling supplies out of a boat in the harbor. Soon they were selling their own juice concoctions and in 1990 Nantucket Nectars was born. Twelve years later, the "juice guys" sold the company to Cadbury Schweppes for an estimated $100 million.

Now 38, Scott has launched Plum TV, a company that provides programming customized to particular vacation hotspots. It's now available in Aspen and Vail, Colo.; Martha's Vineyard, Mass.; Nantucket and the Hamptons. Information technology is the very heart of this company. In fact, one of Plum TV's first hires was Lee Gordon, the original IT manager at Nantucket Nectars. BizTech's Editor in Chief Lee Copeland and Managing Editor Tam Harbert talked with Scott about Plum TV and its strategic use of IT. Here BizTech presents highlights from that conversation.

BizTech: When did you first realize you wanted to be an entrepreneur?

Scott: Actually, I never really considered going into business in the first place. I always wanted to be a teacher when I grew up. I wasn't the type of person who focused much on his career. Oddly, I would always get into business for myself in these little ways. But I never thought of it as a job, which I know is strange. I just thought, I'm going to go make some money, and have fun doing it. I always wanted to enjoy myself, and I always enjoyed working for myself.

My first summer on Nantucket, I drove a taxi. The second summer, I started this boat business, which was like a floating store, and I'd go from boat to boat selling things. The next thing I knew it was July10, I had worked 40 days in a row from 5:30 a.m. to 11 o'clock at night, and I didn't mind one bit. It was as if I wasn't doing anything. I was just literally having fun.

When I started Nantucket Nectars, I was about 24 years old and somebody called me an entrepreneur. I thought it meant I was a shyster. I didn't even know what the word meant, literally.

BizTech: Tell us about Plum TV.

Scott: First, a little background. At Nantucket Nectars, I was co-CEO, but I ran the marketing side of the business, produced the creative materials and bought all of our media. I became a fan of the art and the science of media buys, guerilla marketing and growing a brand. Every now and again we'd work with these great radio stations or these great special events, where I admired the way they did things. It just sort of became a passion of mine.

So about seven years ago some guys on Nantucket were starting something called Nantucket Television. I thought it was an interesting idea. Look at Nantucket—there are 10,000 people who live there, but about 650,000 or so who visit there. It's an incredible demographic.

After I sold Nantucket Nectars, I was considering what I was going to do next in my life. I enjoyed starting a small business. I enjoyed coming out of nowhere.

I bought Nantucket Television and renamed it Plum TV. We're a mix of arts, entertainment and functionality. About 60 percent of our content is local. We do live morning shows. We cover events. We give the weather. In Nantucket, the newspapers always come at a different time because Nantucket Airport was built at one of the foggiest places on the East Coast in order to train Navy pilots. That's good for the Navy, but not good for getting things on and off the island. So the ticker that runs along the bottom of the TV screen in our programming announces when the newspapers have arrived.

Because of the relevance of the information and entertainment we're providing, we get a lot of viewers. We reach a certain demographic—people who are on vacation and whose minds are relaxed. It's a perfect environment for brands to reach people. The business logic is that we reach a special demographic at a special time.

BizTech: So is all your revenue from advertising?

Scott: It is currently. We believe in our content. Jonathan Tisch, CEO of Loews Hotels, does a show for us where he interviews CEOs. He interviewed [Alan C.] Ace Greenberg, [chairman of the executive committee of Bear Stearns]. He just did Clive Davis [founder of Arista Records]. He's doing [NBC Vice Chairman and CEO Robert C.] "Bob" Wright. He's doing Robert Johnson [founder of Black Entertainment Television]. He's interviewing these interesting people. He's interviewing them in their vacation homes. It's almost like you're eavesdropping on a really interesting conversation between two CEOs. That's something that we produce and own, and the question is, What other purposes could that content have, and do we have opportunities to sell it and market it elsewhere?

BizTech: It must be interesting going from a position where you did a lot of marketing for the mass market to one where it's really segmented.

Scott: Yes, it is. It's very different. With Nantucket Nectars, when we did a radio buy, we knew we were reaching people who would never drink our drink, maybe never even see our drink. There's something very frustrating about that as a marketer.

Now if you're Mercedes, and you're advertising on Plum TV, the likelihood of reaching potential buyers is really high. I like being able to provide that for somebody. It's something that I always wanted. It just so happens that our demographic is a very high-end demographic and therefore, they buy products with high margins. There's enough money in it to make a business that works for everybody.

BizTech: Was that part of what attracted you to this company—that you got to do a little bit of the reverse of what you were doing with your first company?

Scott: Yes, a little bit. I know what it's like to be on the other side of that table. But more than anything else I thought this was an opportunity to make great content. I want to make stuff that's smart, and I don't care who's watching it—whether it's a high-end demographic on vacation or somebody in Duluth, Minn. I didn't know any other business model around which to build this concept, and for now this is the one that works. Where we're going to take it, I don't know. The broader goal for me is to make great content that teaches people things and opens opportunities to make a positive impact on the world.

BizTech: How important is technology to Plum TV's business model?

Scott: It's huge. The big surprise about technology was the ability to create content and the democratization of video content. Seven years ago, editing machines were slow; the process was very laborious. But each year and each day there are more people who can use editing software on fast computers, create a great product and do it very efficiently and quickly. We've built the business model around what we call Predators. A Predator can do it all—produce, write, edit, shoot.

Then there's sharing and playing our content, such as FTP'ing programs around the country and programming our tickers for each market. That's all manned out of one location, currently in the Hamptons. We've got people in Aspen with a Blackberry who can send out a message that there's been a car crash on a certain road or that a particular ski trail is closed. Thirty seconds later that shows up at someone's desk in the Hamptons. They go into the ticker, they change the data and all of a sudden every television in Aspen has new information.

BizTech: In your business, what's the relationship between IT and the CEO?

Scott: The IT position is always a challenging one. At Plum TV, I hired Lee Gordon as my chief technology officer. He was my first hire. I worked with Lee at Nantucket Nectars. Lee's a great communicator and can-do guy. He and I work together to figure out how to make it happen. It's a very important part of our business.

BizTech: How does IT differ at your new company from Nantucket Nectars?

Scott: It's more important here. We're a content company, but the bottom line is, everything you see on Plum TV is being played out of a computer, was put into a computer, was created in a digital form—be it video, sound, data or whatever. We constantly have special requirements where we ask a lot of our technology.

BizTech: When you bought Nantucket TV, was IT a part of your strategy from day one?

Scott: Yes. It was very early. We sat down to begin the business plan around Sept. 1, 2003, and I guess it was done by Oct. 15, 2003. Lee was hired then. We knew that IT was going to be critical.

I argued early on against hiring a TV expert to be our IT guy. I said, Listen, with technology changing so fast, we have to have a can-do person. It's not that complicated. Data is data, and folders are folders. It's not that different. A person who has a good grasp of that, and I think looks at it on that basic of a level, has an advantage. I knew it was a risk, but my experience has taught me that people with good attitudes, who are willing to get in there and learn, and willing to make mistakes but not let them keep happening, are going to be the best kind of people to work with. And Lee is like that. He was the first guy I said we've got to have.

BizTech: When hiring, do you look for outside talent or bring someone off the bench?

Scott: I've always had my best luck in developing employees. You've got to mix it up. You can't just bring in someone with a complete lack of experience and expect it to work. But some of our best people had nothing to do with television before this company started. Particularly in a startup, if you're going down the road less traveled, and you bring a bunch of people who think they know how to travel the road perfectly, well, then you're not going down a road less traveled. Attitude can very often overcome inexperience, and I believe in developing employees.

BizTech: Do you have a mentor? Where do you go when you need advice?

Scott: Well, I'm fortunate enough to have a wife who ran her own business for a long time. [Emily Scott, nee Cinader, who co-founded J.Crew.] I've learned a lot from her. And I keep in touch with Tom First, my co-founder at Nantucket Nectars. We went through a serious war together, so I'll share stories with him now and again. And I'm on the board at J. Crew. I get to watch Mickey Drexler in action. I learn a lot from just being around him.

BizTech: A lot of small businesses are often strapped for cash, so they can't give employees bonuses. In this situation, how can small business owners give their employees incentives?

Scott: Well, you do as much as you can. I believe in constantly improving the life of employees. There are certainly benefits that are financial, be it health or dental or 401(k) or stock. Then there are atmosphere issues—the way that people treat each other when they're at work, the fun that you allow versus the tenacity that you ask for. I think you need to create an environment that is fun and rewarding, while at the same time creating a business that is profitable.

And layering the benefits or bonuses in one by one is critical. Always take the next step when you can. We just added dental at Plum TV. It took us a couple of years to get to that point. Also, we give all employees the holiday week off.

BizTech: The entire week?

Scott: Yes, the entire week. We have a good vacation policy, and in addition we give them that week off. People love that. They appreciate that. I would argue that it's one of the least productive weeks of the year. Nobody gets anything done anyway, so all of a sudden you take what is a time of huge inefficiency and turn it into a benefit. At Nantucket Nectars, we gave off half-days on Fridays all summer long. Particularly when you are at a young company, no one is getting much done on that day anyway. Just take the reality of the situation and turn what could be a negative and turn it into a positive.

BizTech: How do you use your experience from Nantucket Nectars at Plum TV? How do you keep the passion going when you're doing something the second time around?

Scott: It's not always easy. It's definitely a different situation. But for me the requirements are fun and passion. I was always passionate about our product at Nantucket Nectars. I really wanted to have the best juice out there. At Plum TV, it's about content. I believe that we can make content that can make people's lives better. That may sound goofy, but I believe that. That's a really fun thing to strive for. You can make the world a better place by putting a great experience onto a television. That's what drives me right now. Of course I want to succeed as a business, and I do love the learning process.

BizTech: What's the most important advice that you can pass along to budding entrepreneurs -- people who are starting up their own small businesses?

 

Scott: Do what you love. That's the most important thing. We all make money. There's nothing wrong with making money, but if you get into something only to make money—well, that doesn't work for me.

BizTech: As a small business, how do you decide which projects to invest in, when you might have dozens of good projects you want to do as well?

Scott: I think you've got to spend a lot of time figuring out what your customer wants. And I believe that very often, in order to do that, you have to figure out what you want. What is the thing you want most? Write it down. Rank it. In the case of Nantucket Nectars, I want high-quality, 100 percent juice. I want a unique bottle. I want a cap that is unique, with its own color. You literally break every single one of those things down and consider how to get it done. At some point you're going to write it all down on a piece of paper, and you're going to say, Well, we also have to market it. And we have to ship it. We have to manufacture it. We have to do all of this other different stuff. There's probably some stuff on that list you're going to have to cross off. You're just not going to have it right away.

Last year we had this issue with our Web site. We got all tangled up in discussions over what we'd have on the site—like we've got to have ads and we've got to have this and we've got to have that. Well, in the beginning you've got to have something on TV that someone actually wants to watch. So that's got to be your highest priority, right? So start there. Understand exactly what your customer wants. Add in the business need. There are business needs that are going to surround that. But the real challenge is in deciding which things you're not going to have. That's one of the things that my wife articulates so well—in the catalog business, the clothing business, it's what you leave out that's the hard part. You've got to have the courage to do it.

BizTech: So what's the next step for Plum TV?

Scott: Technologically, I want to see things accelerate. I want to be able to transfer data quickly across the world. I read the other day that one of the cell carriers is going to provide high-speed Internet access to 150 million Americans via wireless networks. I look at something like that and I ask myself, Does that mean that we're going to be able to do a live camera feed from anywhere within that footprint and be able to deliver live content via that network? Technology can do so much to make that possible. We're constantly looking at how we can use technology to do great work.

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