Ramanan Krishnamoorthy launched Australia's first tea-infused vodka and his start-up business, NovelTea Pty Ltd, has gone from strength to strength since he quit an investment job at UBS, the Swiss banking giant.
NovelTea produces LongLeaf; hand-crafted premium vodka that is enjoyed by yuppies in more than 30 bars and clubs in Sydney and Melbourne. Ram launched the company in 2010 and now three years into business, wants to market his product in Brisbane and has ambitious plans to strike deals with hundreds’ more venues in Australia – and eventually into nightlife hot-spots worldwide.
So you can imagine my surprise when Ram, who co-founded the business with two MBA classmates, tells me that they flunked their original business plan assignment while in their first semester at AGSM.
“We thought: if we can’t even ace the class, how can we expect to run a business?,” he says. One of his classmates originally approached him with the idea and one day after class they sat down in a bar (appropriately, you might agree) to iron out the finer details.
“I immediately thought it was a good idea. We took a class called International Entrepreneurship [at AGSM] and convinced two other classmates to join the team, help us position the drink and write a business plan. But we got a B in the mid-term,” Ram continues, bashfully.
“We realised there was little differentiation between other brands, and lots of competition. So we sat down, really worked on it, and re-positioned it. We ended up with an A. That’s how it all started.”
How it really started, though, was when Ram developed an ambition to take over his family’s business back in Sri Lanka, his home country. They manufacture and sell tea – the traditional kind, without the added vodka – and he had worked in the company since he graduated from high school in 2001, mostly in a part-time capacity.
After graduating from college in the US, Ram stayed in the country to work for UBS and later at a branch of the firm in Singapore.
“I was brought up in a very entrepreneurial environment. My father started the business from scratch,” he says. “Banking can be a cut-throat industry and I eventually got sick of making money for somebody else.
“I thought, why not do something I’m passionate about?"
A passion for the beverage industry comes naturally to Ram and his main motivation to begin an MBA was to one day take over his family’s Sri Lankan business.
AGSM’s entrepreneurial focus was an incentive and he liked the option of doing an exchange to similar top MBA ranking schools (he later spent time at London Business School in the UK as part of the program).
Many people with family business backgrounds chose business school to get leadership experience, which is necessary to run large operations. But Ram already harboured thoughts of creating a start-up, or a separate spin-off of his family’s firm.
He admits an MBA can be considered a strange choice for entrepreneurs – “most successful people in the world didn’t even graduate from college” – but he has always wanted the degree. “I wanted to learn more about how to be a business manager,” he says. “And I figured the global network [you develop] would help.”
There is no doubt, however, that he has developed that network. It was how he found his business partners and they have since leveraged MBA contacts to explore placing their product in different cities around the world.
On the face of it, this is quite a linear narrative, and something of a success story. Enter the family’s business, get an MBA and launch a company; a three-point plan to entrepreneurial independence.
They eventually found a second supplier but, after a year and a half, disaster struck again. “I got into work one morning and found out, through Google, that my manufacturer had gone bankrupt. My entire company was in jeopardy,” Ram says.
“But we decided not to let it set us back. We leveraged our contacts and network, and penned a deal with a new manufacturer the following week. They now make a fantastic product for us.”
Sydney is the start-ups’ stronghold, but their strategy now is to acquire as many pubs, bars and clubs as they can – and eventually get into stores. “We want to create that hype,” Ram says. “We’re also trying to expand our portfolio with different flavors.”
LongLeaf is already sold in one bar in Singapore, but after the brand is established in Australia, the founders hope to ship their drinks to many more countries.
Ram may not have aced his initial business plan assignment, but the MBA has been “immensely” helpful in getting his start-up off the ground. It gave him the confidence to pitch to investors and provided a network of like-minded, skilled business leaders.
“But more than that, the MBA teaches you to never stop learning,” he adds. “It has been an immense help and, would I be here without it? Probably not.”
It has been a long and arduous journey, but there is a light at the end of the tunnel. And the next time you ask a barman for vodka, you might just think of Ram’s new brand.
Many MBAs would stick with UBS investment banking after graduation; a safe option that certainly pays the tuition fees.
But you shouldn’t stay on a career path you’re not passionate about, says Ram. “That was the reason I decided to move and fulfil my real dreams – and not just make lots of money.”
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