Pix – What Went Wrong? What Went Right? The Paul Mabray Interview

In the middle of 2021, US wine professionals learned of the launch of a new digital platform to stand alongside Vivino, WineSearcher and CellarTracker. A year after its launch, following the failure to raise a third round of funding, after the earlier investment of $7m, despite recurring revenue of $600,000 that apparently exceeded initial projections, the Drop has effectively closed and Mabray is looking for partners to enable his business to achieve its objectives.

In this exclusive, lengthy interview, he answers some tough questions.

Reading time: 12m 38s

Paul Mabray
Paul Mabray

The brainchild of wine-tech entrepreneur Paul Mabray, its aim was to help consumers find wines they already knew about, and to discover new ones. Part of the model involved the creation of high quality journalism in the shape of a platform called the Drop. Edited by Erica Duecy, previously of Vinepair and Felicity Carter, former editor of this publication, and with a range of illustrious contributors, it rapidly won recognition and praise from those who were aware of it. 


Meininger’s: What was the original idea behind launching Pix, and how did it differ from Vivino and Wine Searcher?

Mabray: We were always built to be a discovery platform - helping consumers discover the wines they want to buy, ways to buy those wines, and other wines to buy. A discovery platform has both search tools and curation. Search is a very broad utility. You need to be able to search by so many factors - the name of the wine, a region, the variety, the winemaker, vineyard name, to dog on the label, or flavour descriptors in the wine.

We never "hoped to perfect the art of the flavour search algorithm." What some critics have tried to push against were the reductive three meta-tags we added to wines to help consumers have an abbreviated version of the wine to help them decide if they wanted to explore more about the wine. The three terms were the style, the flavour and the context. And we were testing them and finding out immense understanding of what stimulated consumer interest from a browser to a shopper. A search engine is about answering questions, no matter what the vector. Assuming we were singular would be like saying that Google only answers searches of a specific type.

Unlike Vivino, which is a marketplace, Pix never wanted to participate in the transaction and never intended to sell wine. And unlike WineSearcher, we never intended to be pay-to-play for the retailers or the consumers, and only about the ‘lowest price’.

Also, unlike WineSearcher, we wanted to help consumer discover new wines or substitutes if they couldn't find the wine they were searching. We also felt that our job was not only for ‘fine wine’ but for consumers looking for Bota Box to Petrus. The irony is that represents all consumers. Somedays I want a next-level wine experience, other days (especially lately) I'm happy with a quaffable glass of fermented grape juice that delivers a good buzz.

We don't only feature the retailers that have the cheapest price or the retailers that pay us to be shown on the home page. We help the local retailer, the producer, the retailer that delivers.  This is a healthier platform that better serves first the consumer but also the market in a better way. It doesn't only help the big players, but boutique retailers and producers. It helps the consumer looking for discount or who wants it down the street. We had a long way to go and we have challenges for sure, but in record time and minimal dollars we have built a serious competitor to the major players.

We know our three user-interface, user-experience challenges and were working on them this quarter but, for those who wonder why sone search results had the same offers, we were learning from the consumers and trying to build a search results that allowed the amazing retailers down the street from me (Back Room Wines, Compline, Massican, Mathiassan) to partipate as well as those who could afford bare bone margins.

Meininger’s: Is/was Pix primarily in the business of wine retailing, publishing or data?

Mabray: We are a data company whose primary function is to optimizing the customer experience and helping them find the way to buy wines the way they want, how they want, when they want. Just like you go to Expedia.com for travel, or OpenTable for restaurants, or Etsy for crafts, our specialty was to be a destination for wine buyers of ALL types and help them not only find what they were looking for, but other serendipitous discoveries. Moreover, if they were lost (which is incredibly easy in the only Consumer Packaged Goods – CPG - category with a really long tail), how to find something that satisfied their needs. We know that most people don't understand the complexity of wine, so we were focusing on building lenses that made it easy for them to make a decision. Price, scores, styles, exploration, experts, etc. Despite what some commentators say, buying wine online is NOT easy. 

We are NOT nor would we ever be a retailer nor were we a traditional publisher. 

Our publication aim was to create advertisement-free, editorially-independent journalism to inspire Pix users about wine, in between the other great wine journals out there (Wine Advocate, Jancis Robinson, Club Oenologique, Trink, Tim Atkin, Wine Enthusiast, SF Chronicle, Vinography, and so many more). But even more importantly, to be the sandbox to demonstrate to those publications that Pix can help consumers find the wines they write about. It is a fundamental challenge for the whole world of wine-publishing from publications, critics and awards to bloggers and influencers.

Pix was built around a few core principles.

It is a platform for all wine lovers. Collectors, experts, weekend drinkers, people buying gifts, people looking for something to go with lasagne.

It needs to be human. Pix isn’t a set of clever algorithms. It uses real people, building in tools and information to the system to answer users’ questions in human ways

It is more than just 'a better version' of existing platforms. It might be tempting to look at this as 'A wins, B loses', or some binary like that. But that’s not how innovation works. It’s not enough - or ultimately helpful - to build slightly better versions of what’s out there. The market, the future, technology, and our understanding of people who buy and sell wine means that innovations need to do something different

Meininger’s: However clearly you explain it here, isn’t it fair to say that few in the industry have understood the problem Pix was trying to address, and its business model?

Mabray: In the Twitterati glasshouse that was true, and our future model of selling keywords was not yet live, so it was so hard for outsiders to guess/grasp how we operated.

And to be fair, it wasn't incumbent on us to explain the model because we've been so busy making it real vs trying to get the doubters of the wine industry to understand or to convince zealots why commercial wine is as important to consumers as boutique wine.

It wasn't our job/battle/story to rationalize and so we ignored that vocal minority and focused on our customers. That made our job solely about good execution and to do that in spades. We were proving that when our funding fell through.

But post-pandemic most wineries, importers, and associations understood that we represent the new reality: the digital shelf for wine. The emergence of ‘ecommerce specialists’ at every major supplier made it easier and easier for us to find partners and customers. $600K in Annual Recurring Revenue (ARR) in the first six months of launch is unprecedented and a bargain for the services we provide. But we were and will forever be the digital merchandisers of the digital shelf. Imagine the world's largest shelf of wine. Who cleans, stocks, puts on shelf talkers, end stacks, white wine in the cold box, and Pinot next to the turkey when it's Thanksgiving? Merchandisers. And like any shelf, a winery could do their own job for free or they could pay us to help. We made it flexible and easy for all to participate. 

But just being organized on the digital shelf was incredibly useful. You run a wine brand. When a consumer asks you where you are available it's often a challenging answer. But if you either did you own work with Pix or paid us, you could say, find our wines on Pix and we'd ensure the customer found a way to buy your product the way they wanted, how they wanted, where they wanted. One of my favorite stories is meeting Jocelyn Hogan Wilson from https://hoganwines.co.za/ when I was in South Africa. I loved her story and her passion for wine. She also is imported by one of my heroes in the industry, Broadbent Imports. I asked her where she was for sale in the US and she was unable to tell me with any certainty. But with Pix we can and will always help, for free, without limiting our efforts to the retailers that pay us.

Meininger’s: Who were the original investors? How many had experience of the wine sector? And how much have they lost if no more cash is injected into the company?

Mabray: The majority of our investors are angel investors that are winery owners, retailer owners and two family funds. We never achieved institutional funding. Pix has raised approximately $7m from angels.

Meininger’s: How and why did Pix’s performance fall short of initial projections?

Mabray: Our performance did not fall short, in fact we exceeded operational expectations. One of the top venture capitalists I presented to on January 2021 and then again in January 2022 said, "Paul, I wish all our founders were like you. Not only did you keep your promises, but you exceeded them, but we can't look at your deal unless you are asking a minimum of $35m." To ask for that much capital I'd have to justify that our company was already worth over $100m when we had barely launched and pre-revenue,

What failed was my ability to convince institutional investors about the potential of wine online, and that we had a model perfect for alcoholic beverages that a) did not put us in the middle of the transaction and b) was not traffic-dependent.  The litany of wine companies ahead of me and the fact that our model is alcoholic beverage specific and doesn't fit into a nice venture capital box made it virtually impossible.

Our lead investor in this last round that I couldn't fill was one of the world's top alcoholic beverage specialists. They fully understood that we uniquely solved the challenges of wine online [and that this] was proof that we've solved the wine online mystery. But because they were a participant in the three-tier system, they couldn't own a majority of the company and when I couldn't fill the round, they had to recuse from investing. 

Meininger’s: Other businesses credibly blame the pandemic for recent poor performance, but surely a startup  based on digital had an advantage at a time when people were stuck at home and discovering online shopping?

Mabray: We had not yet activated our model. Please remember that in RECORD time (13 months) we lifted up a competitor to WineSearcher where other companies have raised tens of millions (or more) of funding or have built their business over decades. Only three companies in history prior to Pix have lifted up a system of this size: WineSearcher, Vivino, and Cellartracker. We went from Nov 2020 to open a beta version in January 2022 to location-aware and the largest free selection of wine online by June 2022. But we had not yet fully implemented our full model.

Meininger’s: You invested heavily in creating and providing very high quality editorial content. How big an audience did it attract? And which types of content did best?

Mabray: Twenty-five thousand recurring monthly active users. Emphasis on the ‘recurring’ meant we had a loyal audience. But that was never the focus of The Drop, it was to create amazing stories about wine to inspire consumers between the awesome content from the publishers I mentioned above. It was to search out the magic of wine and explore ways to inspire wine lovers to try wine and make it part of their lives.

Meininger’s: Getting people to read free online content is one thing. Converting that into verifiable wine purchases (which is what matters to producers and distributors after all) is another matter. How well did this work?

Mabray: Perfectly. We actually can, for the first time ever, measure attribution for content. We were and are willing to give this to anyone that partners with Pix. Why, because we want more advertising revenue to go to publications without it interfering with their journalism. The slow attrition of marketing dollars to wine publications is not good for the consumer or the industry, and without any attribution, those dollars continue to recede.

The [US] wine industry spends, on average 5% of our gross revenue on advertising. Compare that against most other industries and we are 10%-15% deficient. But to be fair, where do you as a wine company effectively spend those dollars where they are efficient and measurable? It's almost virtually non-existent or someone is selling vanity metrics that don't matter to your bottom line. (Look at Facebook who sold us a variety of vanity metrics until we all got proficient).

I want to prove the value of Wine Advocate's scores so that more wineries submit wines to them and  for every one of the https://iwsc.net/ awards to be measurable so more wineries submit. I want Food and Wine magazine’s amazing articles from Ray Isle to be shoppable (https://www.foodandwine.com/wine/white-wine/whats-your-chardonnay) to show conversion so that more dollars unlock for their advertising that will fund more wine storytelling, I want Trink's specialist content to demonstrate success so that more wineries subscribe. And I want to prove it in a way that keeps their content clean, objective, and not driven by score inflation or advertisers. Based on our attribution tools and our operational success I know we can make that a reality. The alternative is either a deficient platform that only focuses on a minority of customers and ignores independents or a marketplace (marketplaces eat markets) that also limits consumer choice.

Meininger’s: The Drop, while eclectic in its choice of subject matter, was wine-focused. Vinepair – for which Erica Duecy worked before joining Pix - has shifted to give increasing coverage to other beverages. Doe this say something about the audience?

Mabray: Being opportunistic at chasing every available dollar is very different than being focused on creating a publication with journalistic integrity. We could have written about whisky and cannabis but our job was to build a wine publication, not a ‘content for sale’ site. Sadly publications (not just wine) make it hard to determine what is sponsored content, what is puff pieces to satisfy advertisers, and what is journalism.

Wine Club companies are already capitalizing on this the same way the mattress industry did in the past - https://www.fastcompany.com/3065928/sleepopolis-casper-bloggers-lawsuits-underside-of-the-mattress-wars. That's one of the reasons I enjoy Wirecutter's brief dive into the murky waters of so many brand mills - https://www.nytimes.com/wirecutter/blog/wine-club-white-label-overpriced-wines/ 

Meininger’s: Your business was launched in the US where online wine buying is still a small part of retail. Do you think you might have had an easier start in another market and/or that you were simply ahead of your time.

Mabray: We chose the hardest market for a reason. Solve it here you solve it anywhere. But to be fair, every market has its idiosyncratic behavior. The UK is focused on ‘fine wine’ and, at the risk of generalizing, everyone sells to everyone without the inventory ever moving, EU countries with a high domestic production are protectionist and have very little import action, EU to UK challenges are beyond problematic, Winery Direct-to-Consumer - DTC - is negligible in the EU market. There are negociants creating another tier, futures/en primeur, and on and on. We chose a challenging market but one that, once solved, would be a powerful stepping-stone to the world. 

Meininger’s: Compared to other sectors such as tech, wine – in production and sales - can be frustratingly slow to grow revenue. How compatible is this with the kind of investors looking for start-ups today?

Mabray: Wine-tech has been a graveyard of failures and mediocre successes. Some of the best successes are only a result the fortitude to keep a small business going. But there is no $100m software company in wine. There are barely $300-$400m companies that sell wine. Compare that to Zappos who was $2B in GMV – Gross Merchandise Value - by 2009. Moreover the top online wine sales companies (Wine.com, etc) are barely a rounding error compared to the wine revenue of Costco or TotalWine.

Meininger’s: Outsiders looking at the US (and many professionals there) blame three-tier rules for much that is wrong with wine distribution. How big a factor has this been?

Mabray: That's the challenge and opportunity. I don't blame the three-tier system or the challenging US regulatory environment. I think the problem is more how wine-tech leaders don't see wine as a spectrum. Either they approach it as an devotee and a lover of wine, enamoured by the romantic part of the industry (the majority of startups who want the most complexity in the product), as a discounter trying to scrape the bottom, or as a charlatan trying to sell ‘clean wine’ or manufacture brands that fool the consumer. Each of these models only serves a niche and the latter two are unsustainable (hence their high customer turnover - churn).

Meininger’s: While social media has seen a certain amount of discussion of Pix’s and the Drop’s apparent demise, isn’t it true that awareness of the brand was very limited, both in the industry and wine drinkers.

Mabray: We had yet to target consumers and we've barely been in open beta for six months so that's an unfair statement. As it relates to the trade and based on the Twitter conversations and messages to me and the team, the industry knows and respect Pix and our vision. There's a small cohort of grumpy old haters who are either zealots or idealists who have no idea how to build a wine-tech platform, and are the main critics. Also, a portion of oenophile industry veterans hold any wine-tech platform to impossible standards in the short timetable.

Propping up a platform of this size is a nearly impossible feat. That's why no one has seriously attempted to compete with WineSearcher in decades. There is so much work to organize and enrich the world of wine. The expectations that anyone would be able to prop up every tasting note, the perfect acidity and elevage of every product in history is absurd. Most wineries don't even have records of their wines from a few years ago. If we were lucky to spend a dollar per offer to flesh out every offer in our system it would cost $2.4m today, and tomorrow we'd have to pay for all the new offers in the system going forwards and backwards in time. It's like lighting cash on fire and we chose a different round because, in reality, the cost would be so much more. As a results we focused FIRST on the minimal need for the consumer and continued, in beta, to test to see what satisfies most of the customers most of the time. ‘Perfect is the enemy of good and good is the engine of better.’ Everyone who has watched us has seen us improve day over day and month over month. It's a forever problem and we can provide a forever service that helps wine sellers of all sizes.

We weren't building an algorithm or a taste matching platform (those are misrepresentations and misconceptions), but a window into the world's inventory to serve a consumer's need. Our job was to take the world’s sellers and inventory and make it discoverable. That's the reason that the perfect wine solution is not an algorithm nor is it a human, it's a combination of both. As I often to say, about wine ‘in the wine industry the exception is the rule.’

Meininger’s: You are hoping for a white knight to rescue the company. What’s your pitch to them?

Mabray: There is no white knight, just a synergistic partner. We are hoping to find an investor who sees that we are on the path to be the world's first wine-tech platform that serves the entirety of the industry. Our business model has the best value exchange for customer of all sizes with measurable results and true metrics. 

So let’s start with the current situation. Which is a simple one. You have to look at Pix in-the-round. 

Pix went from a piece of paper to a fully-functioning platform in 18 months. From 0 to 3,800 retailers listing millions of wines in under a year. From a launch to an ARR of $600,000 from the industry’s most respected companies in a quarter. That’s unprecedented. And even Venture Capital firms were astonished.

And the business raised $7M of investment from angels in wine, and outside. It had the next stage of its funding largely tied up too. From the biggest names in wine, who could understand and immediately see Pix’s value.

But the three-tier system demanded non-wine funding. And remember that this is the toughest climate for people approaching venture capital in a generation. It was a hard sell - but it became clear that based on wine’s previous track record it was going to be impossibly hard.

I think that should give our industry pause for thought. Pix had a proven thesis. It had growing revenue from wine companies looking for a solution to wine online. And 28 women and men in the company who represent - I believe - the best team in the industry to develop and grow this. But across over 80 VC’s and PE firms, it was clear that the industry’s track record made them fearful of investing. We need to work together to tackle that or the wine business will find it impossible to innovate.

And the industry wanted this. Social Media isn’t always a nice place to be in situations like this. But the majority of comments were that people thought it was a real pity and a shame that Pix couldn’t get further than it has (so far). There was an incredible amount of goodwill for what we were doing. And we’ve been in touch with thousands of wine producers, importers, and retailers, and had hundreds of meetings. Across the board we found that same goodwill and eagerness for us to succeed.


Look at what wine lovers and the wine industry face. Consumption patterns are changing. There’s consolidation in retailer ranges. There are regulatory changes, shipping challenges, climate change… this is an industry in flux. And it’s unquestionably lagging behind sectors like spirits, no and low-alcohol, soft drinks, hard seltzers in adopting e-commerce. And far behind other CPG sectors.

As an industry we haven’t really solved for some of the basic problems of finding and buying wine online yet. Let alone creating solutions for Social Commerce and the growth of Digital Shelf models. That should worry us all. Because these things make it easier and more attractive for people to buy what we make, sell, and love. But if we’re not involved, other product categories will take over.



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