Liv-Ex Is Proof You're Not Condemned To Wall Street
Learn how the chairman of Liv-ex is striving to make the fine wine market more transparent and working to turn a small business in to a large one.
James Miles is the co-founder, chairman and managing director of Liv-ex / Photo courtesy of Liv-ex
James Miles is the co-founder, chairman and managing director of Liv-ex, a wine trading and data platform with $72 million (EUR 55 million) annual turnover and almost 100 employees in three countries.
The United States is now the fastest growing market for Liv-ex’s services.
The Early Days Miles, a former equity analyst, founded the business in 2000 with his colleague, Justin Gibbs, “on a shoestring” with the aim of “making the wine market more transparent, efficient and safe,” he says, “because their opposites—opacity, inefficiency and risk—are the three things that stop people from dealing with each other.”
Containing costs helped Liv-ex weather downturns like the dot-com crisis, while the arrival of broadband fundamentally changed their business.
The Big Idea Their ground-breaking idea was to create fungibility where previously there was none. Today, Liv-ex represents the “largest pool of professional fine wine buyers and sellers globally” and “the world’s most comprehensive database of fine wine prices.”
“We make money three ways,” Miles explains. “From trading commission, from logistics and from data. Our pricing is generally regarded as the benchmark. It doesn’t matter whether you’re an American merchant, a Bordeaux négociant or a private customer, Liv-ex data is the place to find the price of Romanée-Conti, of Lafite.”
Data is the Most Important “In the past about 75% of our business was commission-driven. Now that is less than half and we’ve built up a big logistics and data business,” says Miles.
“Most of the time I am not thinking about wine, I’ll be talking to our product-, logistics- or tech-team, [and] thinking how we can streamline our processes. I spend a lot of time looking at data, at customer activity [and] meddling in what other people are doing.”
James Miles’s Normal Day Miles’ typical day starts with an 8:30 am staff meeting “where everyone can ask questions. Someone always gives a presentation…Later, I [have] discussions about pricing, working out how to make that simpler, more transparent, and reflect more closely what people are actually consuming on our platform.”
“Over the past years we’ve built a very solid team around us of people who know what they’re doing. My role now is rather more high-level thinking about the direction of the business,” he says.
That includes adapting to the market. “The mix of our trades changed hugely from being very focused on expensive Bordeaux to being much more broadly based across a huge number of extra products,” says Miles. “In early 2011 this just stopped, that was quite tough going.”
This market shift is reflected in the Liv-ex indices, which cover the most traded wines. The company unveiled the Port 50 index last month.
He lunches with his partner Gibbs, who is responsible for the sales, at least once a month. “He’s always done the front-end stuff, I am the analyst, the backroom boy, that’s always worked very well,” Miles says.
Afternoons, he meets with new hires and senior staff, as well as job seekers.
“What is the challenge of being an entrepreneur in a small business?” asks Miles. “It’s trying to scale it up into to a big business.”