Matt Fischer's Profile

Nice write up Keith! I’m interested to see how Westland Distillery builds their presence in the whiskey scene in the coming years.
Evaluating the business model and operational approach of a distillery is an interesting exercise, due to the difficulty in answer “What does our customer value and want/need in their whiskey?” and then determining an appropriate customer promise for the firm to make. As you laid out, Westland Distillery has made several specific, and quite costly, choices in developing their unique whiskies (barley from Skagit Valley, where to place their distillery, harvesting Washington peat, etc.). At the end of the day however, people’s desired flavor profile in whiskey varies so greatly that it is incredibly difficult to know whether the specific choices they made result in a “superior” whiskey. However, what Westland Distillery has going in their favor, is the story behind their whiskies and the novelty of their chosen approach. For modern drinkers of whiskey, this is an incredible value-add, as whiskey is more of an experiential beverage than most, and the story and associations the customer has with the beverage are what set distilleries apart. In Westland’s case, they have the unique ability to resonate with a strong Pacific Northwest culture that is very much so a trend-setting demographic nationwide.

Great post, and thanks for introducing us (at least I hadn’t heard of them before) great sounding option for picking up new suits. Like Thomas, I may have to pick one up as well!
I like the concept that Combatatant Gentleman has utilized of cutting out intermediary steps (suppliers, resellers, etc.) in order to reduce the number of markups along the way, and thereby reducing the final cost to the customer. I am concerned (and I believe you alluded to this) that they will have trouble efficiently scaling and reacting to uneven demand, as each new level of demand fulfillment requires additional investments in very discrete assets (sheep, sheep shearers, yarn spinners, etc.) along their vertically integrated supply chain. As they make investments to meet new-found demand, they are then left with the risk of seasonality of suit purchases causing both over- and under-supply situations. This cost will eventually be passed to the consumer (or eat at their profit margins). Because of this, I question whether the savings they are generating for the raw material ($8 raw material cost in their current model), is worth the risk of owning this entire supply chain and the potential costs that could arrive, as described above. Additionally, as I think through their competitive advantages that will enable them to to ward off future competitors, I’m left without seeing much substance.

Intriguing business and operating model here, and a great write-up as well! A couple of thoughts:
1) I would be curious to see their flight utilization data thus far, as it seems as if the subscription, unlimited flights, on 6-10 passenger planes approach is in tension with ether A) Plane utilization B) Flight availability. There are several contributing factors here:
-1) The impact of being 1 passenger short on a 6-10 passenger plane is significant from a utilization percentage standpoint (especially when comparing to larger commercial jets). I’d be curious to see what their break-even passenger per plane level is.
-2) The subscription, unlimited flights model both reduces and increases variability in # of passengers vs. expected per month (once again,I’d be curious to see the actual figures). It reduces variability by giving you a baseline of travelers to expect, as you know the exact number of memberships you have. However, it increases variability by reducing the friction of booking a last minute (and potentially non-must-have) flight and incentivizing an increased usage of the service as the customer is paying a flat fee, so they might as well use it, right?
2) The airplane leasing concept is a pretty cool way to start up, and has allowed Beacon to focus on areas where they truly add value compared to competitors. However, their claim to gain efficiencies by utilizing excess flight capacity becomes reduced, or perhaps even eliminated as the number of flights they offer per month increases, up to the point where they become Dynamic Aviation’s largest, or sole client. At this point, Beacon will be bearing much of the risk and paying a premium to Dynamic Aviation. But, I suppose when that time comes, they can decide whether to buy Dynamic Aviation or take on those responsibilities on their own.