After launching and then closing Proteau just three years after it hit the market, John deBary has come to realize that sales aren’t the only way to measure success
Recently I’ve been thinking a lot about failure. At the end of 2022, I shut down Proteau, the nonalcoholic drinks company I started. I had dedicated the past five years of my life to it, and for just three of those years saw my bottles in the market. I can’t escape the feeling that I’ve failed, and I’d be lying if I said that seeing other, similar brands in the marketplace did not elicit a jittery tinge of envy, as if others’ success was paid for with my defeat. But I’ve also come to realize that it’s easy for us to see our efforts in a binary success-or-failure model — and that framing is completely inadequate for our lives and the projects we pursue.
My career in the beverage industry had an extremely auspicious start. In 2008 I began bartending at Please Don’t Tell. From there I went on to bartend at Momofuku Ssam Bar for a few years before pitching myself as the company’s first bar director. Along the way, I honed my skills in concocting elaborate nonalcoholic drinks that replicated the look and taste of many traditional cocktails.
In 2017 I was at an inflection point in my career. I’d opened 10 restaurants for Momofuku and I was about to write my first book when I learned about an accelerator program helping to launch nonalcoholic drink businesses. There are a lot of people who don’t drink alcohol, and I wanted to make something for those people — to include them in the fancy drinks conversation. It also seemed to me the natural evolution of a career as a bartender: to go from creating drinks for people in a bar setting to creating a cocktail that could be on a shelf anywhere.
I applied for the program, and I got in. This was the beginning of Proteau and the development of two botanical nonalcoholic aperitifs that I named Rivington Spritz and Ludlow Red. I worked with the team at the fund on the branding and the drinks themselves, and we eventually secured startup capital from the fund’s parent company, a huge spirits conglomerate. This was a few years before the nonalcoholic drinks industry exploded, and we were hoping to be one of the first to market.
Starting Proteau was the hardest I’ve ever worked on anything in my life. And it was exhilarating. I spent hundreds of hours refining recipes in my kitchen. I arranged dozens of slide decks and took day trips from my home in Manhattan to visit labs in California and bottle factories in Mexico City.
With the guidance of the team assigned to me by the accelerator fund, I spent the startup capital as quickly as I could, developing the liquid from a kitchen-made prototype to a commercial product that could be produced at massive scale. I designed a custom bottle and spent hundreds of thousands on art, branding, and communications. I won’t go so far as to say I was encouraged to spend as much money as possible as quickly as possible, but the people around me, people I thought were there to guide me towards long-term success, never really gave me any indication that I should be pinching pennies. Almost immediately after securing my initial funding, I began to plan a second funding request, which we ultimately got. It was like I had a money hose at my disposal.
My plan was to launch in New York City and Los Angeles (at one point, my team was discussing renting an entire house in Los Angeles for a month to support the launch there, just to give you a sense of scale). I also wanted Proteau to be available online as soon as possible and I spent tens of thousands of dollars on custom gift boxes, complete with metallic foil-stamped gift tubes for the bottles. And it wasn’t like I was sitting in my apartment packing these boxes up myself and hand-delivering them to UPS — I found what’s known in industry parlance as a “3PL” (third-party logistics), a facility that handles all the logistics of assembling online orders and getting them out to customers. All for a price, of course.
In October of 2019, I rented out the rooftop of a Lower East Side boutique hotel for the New York launch. That week I got my first restaurant account, Gramercy Tavern. I picked up a few more wholesale accounts. Meanwhile, online sales were modest, supported by a handful of high-profile media mentions. In January of 2020, I flew to Los Angeles to host a launch luncheon for a dozen key journalists and beverage professionals. My PR team got me a tasting at Goop HQ in Santa Monica and I crisscrossed the town pouring Proteau at bars and restaurants, a few of which went on to place my product on their menus. In January, I also began gearing up for another funding request, but the team at the accelerator fund called it off and postponed it until March. I thought nothing of the change at the time; they had told me that my investor was keenly following my progress and was excited to continue to support me.
I never thought about seeking additional funding elsewhere. The terms of my investment deal were unusually restrictive: I was essentially barred from obtaining money from any other source and my lawyers said I was a “glorified employee” of the company that was funding me. I was fine with this. All I wanted was to launch this product out into the world; it was delicious, and people needed it. I didn’t care about hockey stick growth or revenue multipliers or any other arcane startup jargon. My interest was in creating a mechanism for producing delicious drinks and getting them into as many glasses as possible.
But my investor’s interest in supporting me for the long haul was weaker than I thought — a lot weaker. I went in front of the investment board the morning of March 12, 2020. The mood was a bit shaky — the first COVID-19 wave was looming. I had spent the entire week rehearsing my pitch and it went flawlessly. But later that day, I got the call from one of my advisors that the board decided to discontinue support of the company. Not only were they rejecting my request, they were also saying that they were done with the brand forever and that I would be released to secure additional funding on my own. It turns out that over the few months prior, unbeknownst to me, my investor had become skeptical of Proteau’s format, which was more like wine — ready to drink straight from the bottle — and it didn’t fit into the company’s portfolio of mostly spirits.
I don’t know how many of you reading this have had the hopes and dreams you built up over years casually cast aside by a panel of strangers, but it fucking sucks. The whiplash was completely destabilizing. I went from being told that I would eventually sell my company for millions of dollars to not knowing if the company would last through the summer. I’m grateful for the fact that I had decided to take a year-long break from consuming alcohol in 2020 because I’m sure I would have self-medicated the pain and confusion.
I immediately scrambled to find new investors. I know that some people thrive off the process of pitching their business to potential investors with promises of explosive growth, but I found it humiliating. The stain of having been rejected by my initial investor was too much. I kept a massive spreadsheet of every investor I ever contacted. The ones I did get meetings with all had a similar refrain: “Everything looks great, but come back to me when you have more revenue.” And usually the revenue target was $1 million or more. To me this was absurd. Why would I want to sell off chunks of my company when I was pulling in a million dollars in sales per year? My conclusion is that most investors aren’t really looking to take big risks — they want to take small money machines and turn them into big money machines.
It wasn’t just me that was affected: In late 2019 I had hired a COO and a brand ambassador. My COO stayed on, unpaid but on the company’s health insurance plan for another year, while we had to let the brand ambassador go in the middle of the summer of 2020.
I never secured additional funding. I tried a crowdfunding campaign but the platform I chose was so slow and difficult to work with I canceled the campaign despite sinking time and money into regulatory prep work. Even though COVID decimated the restaurant industry, I had revenue from online sales (plus a forgiven PPP loan and multiple dimensions of spousal support) to keep the company going for a lot longer than I expected. I set up an export pipeline to retailers in Canada, racked up dozens of favorable press mentions, and even made an appearance in Neil Patrick Harris’s Instagram story about his favorite nonalcoholic drinks.
But that ended on December 31, 2022, when I ceased all operations for an unspectacular reason: I ran out of inventory.
It’s easy to characterize this as a failure. In a crucial way, it was. The company no longer exists and the product that I spent years developing is gone. And yet, I consider myself extraordinarily lucky that I was given this opportunity at all. I was given the power and resources and tools to bring an idea into reality — to create. I was allowed to problem-solve and make mistakes daily, whether it was with the label on the bottle or the shelf life of the liquid in it, and to fix them. And what is problem-solving but managing success and failure at the exact same time? I know I’m not a fuckup — I’m self-employed and making (just barely) six figures, I’ve written two successful cocktail books, and the nonprofit I founded, Restaurant Workers’ Community Foundation, has raised $11 million and counting. And I know that I’m also lucky in that I was born into a white, cisgender male body, grew up in one of the wealthiest zip codes in the country, and have the support of my husband whenever I needed it.
We are often told that small business is the core engine of our economy, but the privilege of entrepreneurship is offered to so few. Not only do we not provide nationalized health care like almost every other wealthy nation, we tie what little coverage we do get to employment, making the leap to entrepreneurship mortally risky. In this context, I can’t see the ending of my company as tragic — the real tragedy is that the chance to fail is afforded to far too few of us.
Now, I look at the demise of Proteau in the larger context of my overall career and for the enormous educational and career-advancing opportunity that it was. It established my credibility as an expert in the nonalcoholic drinks field, which is a big part of my ongoing consulting practice. And if anyone wants to write me a check for $2 million to start the whole thing back up again, you know how to find me.
John deBary is a semi-retired bartender turned drinks and hospitality expert who spends most of his time writing about drinks, including two cocktail books, Drink What You Want and Saved by the Bellini. When not writing he consults for private clients and hangs out with his husband and two cats. María Jesús Contreras is an illustrator based in Chile.
