With a vision to democratize wine for every wine drinker in the US, Underground Cellar’s founder and CEO Jeffrey Shaw and COO Jeff Hardy are focused on building a unique and disruptive platform for buying wine.  Leveraging gamification principles, Underground Cellar gives you upgrades to the wines you buy, giving customers access to more expensive and rare wines.  This has expanded into free wine storage in their Cloud Cellar, which they hope to build more community and a trading platform around.  Dig into how it got started, the value proposition for wineries, and where they are going in this episode of XChateau!  Underground Cellar offers listeners a discount code for $100 off your first purchase of $150 or more with promo code: XChateau at undergroundcellar.com. Like what you hear?  If you’d like to support us in bringing you the best content on the wine business, become a patron at Patreon.  Detailed Show Notes: Jeffrey Shaw’s backgroundFell in love with wine in college, wine tasting, etc.Had a small exit with his first company and wanted to do something in wineStarted 6 companies simultaneously (based on a statistic that 5 out of 6 companies fail in the 1st year) to find 1 to focus on, dropped the rest after 90 days except for Underground CellarThe goal is to “democratize” the wine experience and convert wine drinkers to wine collectors for lifeJeff Hardy’s backgroundTech background, worked at Google and Yahoo!, building smaller startups focused on small and medium-sized businessesUnderground Cellar’s modelCurate wines into collections (e.g., Napa Valley Cabernet)People don’t buy specific bottles, but into a collection with different price point wines50% or more of the bottles you buy are upgraded to more expensive bottlesCollections can include rare wines (e.g., a Heidi Barrett signed bottle of Screaming Eagle)Cloud Cellar - everyone can store up to 500 bottles for freeUpgrade determinationan algorithm helps determine the number of upgradesFocus on lifetime value received as a customerGoal to “democratize” wineThree elements of wine that can be democratized - knowledge, money, and relationships/accessUnderground Cellar tries to educate in easy to understand, more approachable waysUpgrading allows customers to experience higher levels of wineAbility to source some scarce, valuable, and hard to find wines enables access to these winesTarget market = everyoneWine aficionados - enticed by the rare wines available (e.g., the signed bottle of Screaming Eagle)New wine drinkers - want great value, like the process of being upgradedWine lovers building collections - want variety for their collections, which is inherent in the collectionsSupplier benefitsWines are never discountedUnderground Cellar can buy small lots of wineCan buy less popular varietals, etc.Promotes the brand and story on social media (~12k followers on Instagram) and email (~250,000 email subscribers) => wineries have said that foot traffic and sales spike after being featuredCloud CellarGet unlimited duration storage for 500 bottles for freeLet’s people buy wine when they usually couldn’t due to weather/shipping constraints or for space/storage constraints85% of customers use Cloud Cellar, most storing ~1 case - most customers use it to buy wine at any timeFuture: people can start to trade with one another on the platformMarketing channelsUse social media, direct mail, radio#1 channel has been direct referrals - people like to share their upgrade storiesOffers a “Give $50, get $50” referral programFuture: the potential to add wine as a reward in Cloud Cellar, similar to Robinhood referrals where you get one share of stockBarbara Corcoran is an investorInitially approached Mark Cuban via email, but he doesn’t invest in alcoholApproached Barbara afterward to prove Mark Cuban wrongTechnology platformBuilt from scratch in-houseThe new upgrade model was not supported by other platformsNeeded to de-couple wine buying from wine-shipping60 employees currently, includi