‘I bought a winery and it caused a US-French row’

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Carabello-Baum Family

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Michael Baum with a barrel of grapes

The BBC's The Boss weekly series features profiles of different business leaders from around the world. This week, we spoke with Michael Baum, a US software billionaire and vineyard owner.

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When American technology entrepreneur Michael Baum bought a prestigious winery in the French region of Burgundy, it caused a transatlantic scuffle.

"[French newspaper] Le Figaro covered the ad on its website and there were about 2,500 comments on the article, "says Michael, 57.

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"You can split the comments in half. Half of them were 'damn foreigners stealing our inheritance'. The other half was 'if it weren't for the Americans, you would all eat sauerkraut now'.

"So you can say it was very divisive."

That happened in 2014, when Michael bought the Chateau de Pommard and its 25 hectares of vines for an undisclosed amount in the millions.

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Chateau de Pommard

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Chateau de Pommard, one of the most prestigious vineyards in Burgundy

He could pay the price because he had made a fortune in Silicon Valley, mainly as the founder and former executive director of a software company that almost none of us have ever heard of – Splunk.

It's complicated, but in simple terms, its software allows companies to monitor their data and security systems. With annual revenue of $ 1.8 billion (£ 1.6 billion), Splunk's customers are many of the largest companies in the world. They include 92 of the Fortune 100 list of the top 100 US companies in annual sales.

Michael and his two co-founders launched Splunk in 2003, and today it is a listed company with a market capitalization (the combined value of all its shares) of more than $ 16 billion. While Michael retired from daily business involvement in 2009, he says he remains the largest individual shareholder.

Today, in addition to managing his French winery, or domaine, he is on the board of eight other companies in the US and Europe, and has several additional commercial investments. He is also the founder of a mentoring and financing scheme for young entrepreneurs called Founder.org.

"I like to keep myself busy," he says. "Certain people, called entrepreneurial or creative types, are connected in this way. For me, work is about creativity, it is about building things. This is what is exciting for me."

Born and raised in Philadelphia, Michael says he had little interest in computers until his sophomore year at the city's Drexel University in the early 1980s. Then, after a visit to college by the late Steve Jobs, everyone bought an Apple computer.

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Michael Baum

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Before entering the wine business, Michael Baum was the founder and CEO of data company Splunk

"Suddenly, my brain got & # 39; how does it work? & # 39;", says Michael. "So I went straight to the software."

Changing the university's main course from electrical engineering to computer science, he put him on a business career in the technology sector.

After graduating, Michael's first commercial venture was a software system for investors who studied past stock market conditions to try to predict future performance. Called Reality Online, it was bought by the commercial information company Reuters.

After armed with a master's degree in business qualification from the University of Pennsylvania's Wharton School, he moved to Silicon Valley.

Other companies that he grew up and successfully sold included a software system for old handheld devices, called Pensoft, and the online exchange company Dotbank.

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Chateau de Pommard

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Michael says that when he first tasted French wine, "it was a big revelation"

However, living in California, America's leading wine-growing state, he did not like American wine.

"I didn't think I liked wine when I was young, because I didn't like American things," he says. "It is often very heavy, very sweet, very alcoholic.

"So I went to Europe for the first time at the age of 28 and tried French wine for the first time. And it was a big revelation.

"French wine is much more elegant, much more mineral, much more traditional. It is night and day.

"So in 2012 we [my wife and I] I moved to Paris for a year, just to take a hiatus, and started looking more intensely to do something with wine in France. We went to Burgundy, and I was like 'that's it, it's ground zero, it's the reference'. I fell in love with Burgundy wines. "

Home to some of the most expensive and highly valued wines in the world, Burgundy produces predominantly white wines made with chardonnay grapes and red wines made with pinot noir. Wineries and vineyards are usually very small, with some producers having only a few rows or lots of vines here and there.

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Mike Linmcoln

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A bottle of Chateau de Pommard Simone

Located about 300 km southeast of Paris, the region has been closed informally to foreign investment until the last few years, because the existing French owners refuse neighboring wineries, vineyards and land for sale. And they are most often fitted.

For this reason, foreign investment in French wine has historically been focused on the much larger area of ​​Bordeaux, close to the Atlantic coast in the southwest of the country.

Michael managed to buy the Chateau de Pommard and became the first American to buy a winery in Burgundy, thanks to a bit of luck – the previous owner had based the company that controlled it in Luxembourg and not in France.

He now divides his time between Burgundy and Silicon Valley. "It's fun to go back and forth and experience two dramatically different worlds," he says.

Since Michael invested in Burgundy, another American has followed the suite – sports billionaire Stan Kroenke, owner of the LA Rams football team and Englishman Arsenal FC.

Tom Ashworth, chief executive of Yapp Brothers, a UK wine merchant, says there is growing international interest in buying Burgundy's top wineries because the wines they produce have increased in global popularity in recent years.

"It is not surprising that, as wine investors turned their attention from buying Bordeaux bottles to Burgundy bottles in the past decade, billionaires would pocket their own domaines," says Ashworth.

He adds that it also helps that the most prestigious sub-region in Burgundy – the Cote d & # 39; Or – is much more picturesque than the main wine area in Bordeaux.

But if Michael had to choose just one region – Silicon Valley or Burgundy – which would it be?

"They are like chocolate and peanut butter, I like them together," he says.

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