V-Water - from start up to exit

The market space for enhanced water is getting crowded! Sales of 'smoothies' are down by more than fifty per cent this year but the volume of enhanced water bottles being bought is proving more resilient to the recession. And the growing amount of shelf space in the supermarket aisles given over to the likes of Firefly, Vitamin-Water, Just-Juice, Vitsmart and V-Water is testimony to the high margins these products generate. Chris Coleridge, co-Founder of V-Water gave a relaxed, entertaining and thoughtful presentation on the growth of his business to the Entrepreneurship Society on Thursday night. A large audience - fortified by a generous sample of the six flavoured drinks on offer - grilled Mr Coleridge on his business after he had taken time out to explode five myths about start-ups.

So what are these myths?

(1) You need years of experience - not so - if you don't have it hire it

(2) You need tons of £££ - in act when raising funds, ask politely but use it wisely

(3) You need to be a born entrepreneur - in fact there's no such thing

(4) It takes years to start a business from scratch - another falsehood, the most successful start ups move at the speed of light and test their product in the market with tremendous rapidity

(5) You need an amazing idea - nonsense! Instead, you need an idea that keeps you going (especially during the difficult times)

There were a huge number of questions from the floor covering some of these issues:

Prestige pricing - premium drinks priced appropriately offer a high margin for investors and generate the profit needed to spend on marketing

Market tests - V-Water focused on testing consumer reaction to their product in a small number of geographical locations - flooding them with free samples and getting really useful feedback

Product range - if V-Water expanded their range of flavours would they sell less in total? Consumers like choice - but not too much. The range of products can be greater in the USA because US households have much bigger fridges and freezers!

Barriers to entry - there are natural entry barriers, but not high enough to prevent plenty of businesses trying to make a profit in this space. It is a surprise that the likes of Volvic and Highland Spring have yet to make a bid to win some of the market for enhanced waters. Perhaps they are worried about repeating the Dasani mistake of a few years ago?

Making an exit - Chris Coleridge's business has now been bought out by PepsiCo (V-Water still has to fight for space within Pepsi fridges in retail stores!) - and Mr Coleridge emphasised the importance of finding the right moment to exit and sell out, partly to reward the early investors but also to avoid becoming too emotionally tied to your start-up brand.