Some recordings of rock music I composed when I get a little free time here and there. 🙂
The most successful companies in the world all have one thing in common: a great product (or products). Some companies get moderately successful with great marketing or sales and an OK product. However, the truly massive successes such as Google, Facebook, Amazon, Netflix, Tesla and Apple all reached escape velocity with very little marketing because their products were so great they marketed themselves through word of mouth and organic publicity.
There is no single, perfect way to approach product. It depends on a lot of things such as industry, the type of problem you’re solving, and the type benefit the product provides. There are few axioms (universal truths) though.
In this article we will cover the universal truths first and then we’ll cover the nuances.
1) Great products solve a significant pain or provide significant pleasure.
“Take a human desire, preferably one that has been around for a really long time, identify that desire and use modern technology to take out steps.”
— Ev Williams, Founder of Twitter
In the case of pain (quantitative benefits), it can usually be quantified and should provide an order of magnitude benefit. For example, Uber made it 10 times easier to get a taxi and made it 10 times faster for the cab to arrive. Before that, you had to make a phone call, spend 5 minutes talking to a dispatcher, and a cab would arrive maybe within the hour. Now you can hail an Uber in seconds and they’ll usually be there in 5 minutes.
In the case of pleasure (qualitative benefits), it’s harder to quantify, such as how Facebook improved the lives of billions of people by making them “feel” more connected. How much better you feel is much harder to quantify. But the magnitude of pleasure people get can be measured by how fast the service explodes due to networks effects, word of mouth, and organic publicity.
2) Great products are intuitive and delightful to use.
“Any product that needs a manual to work is broken”– Elon Musk
This sounds obvious, but it’s a lot harder to do in practice. Examples of very intuitive interfaces are Google Search and the iPhone. Google revolutionized finding information with the simplest possible interface: a white page with a giant search box in the middle and one button. Just type what you want to know about and within milliseconds they have millions of results ranked by relevance and authority. The iPhone is so intuitive that toddlers can learn how to use them before they can even speak.
How do you create intuitive products that solve a major problem or create significant pleasure?
There are many models for how to approach this and it often depends on the industry, the stage the product is in, and what problem you’re solving. But here are some general guidelines.
1) Identify a need.
A need can be a problem, a desire, a better way to do something, an inefficiency, something people will want, but don’t even know they want. The need can be mental, emotional, or biological. It can be a business need or a personal need. I think the biggest difference in how to approach product is whether or not you’re solving a problem for consumers or businesses. The benefit is the same at a high level: make people happier by making something in their life better. But the implementation and decision making process is vastly different.
Businesses only have 1 need: Increase shareholder value. This manifests in two ways: increase revenue and profits or decrease costs. And there are many ways to do that such as increasing customer loyalty and referrals, increasing customer value, decreasing customer churn, or increasing new customers.Now, where it gets more nuanced is that people within businesses don’t always act perfectly rationally. There is emotion, fear, elation, and personal gain involved at the personal level of the decision maker. The psychology of enterprise sales is a whole topic on its own that we won’t get into here. But at the end of the day, in general, businesses make decisions that will increase shareholder value in the long term. So products need to address how they help with that single goal.
Consumers also only have 1 need: Maximize pleasure. This also manifests in myriad ways. It’s a lot more complicated than business transactions where a return on investment can be measured. The fastest way to increase pleasure is to remove pain. This can be mental, emotional, or physical pain. The removal of pain, the relief that you feel, is a form of pleasure in my view. The pain can be a nuisance such as having to wait an hour to get a taxi. Or it can be acute like a migraine. Anything that we don’t like, I consider a form of pain.
Increasing pleasure while related to the removal of pain, can also just be taking you from a normal state to an elated state. It doesn’t have to be something you even notice as pleasurable, such as using Facebook. When using Facebook — although some are starting to debate this — people feel happier, more connected, and this is a form of pleasure. Both approaches can result in great products.
The way to identify a need is pretty straightforward. It’s the execution that gets complicated.
Finding a need usually starts with an idea for a better way to do things. Often it’s based on our own experiences: “I hate having to call for a taxi” or “I can’t find jeans that fit my thick legs” or “Doing my taxes is a nightmare.”
There has to be a better way.
Then you start to think about how it could be better. This involves analyzing the problem very deeply.
You can start by talking it through with friends, family or colleagues to see if they agree with your premise and any ideas you have for a solution. Look online to see who else is trying to solve this problem. You will very, very rarely be the first person to have an idea. It will be the execution of the idea that wins the day. So first see what other people are doing to solve this problem and see if your ideas are even better. If they aren’t better, you need to keep digging or find a new problem.
Never build a product that isn’t better than everything else out there.
Otherwise, what’s the point? Me too products or marginally better products never reach hypergrowth. Be honest with yourself and truly reflect on whether or not your idea will blow the incumbents out of the water. If not, get back to work. Being better can be very simple. Often times the incumbents got lazy and stopped innovating and just making a much better user experience, removing steps, or taking a more novel approach is all that’s needed.
The products that truly disrupt make something at least 10 times better. Whether it’s 10 times faster, 10 times cheaper, 10 times easier, 10 times more fun, you have to have a major, game changing benefit to get people to switch. Otherwise it’s too much effort for people and isn’t worth the hassle to switch. If you can’t determine if you’re product makes something 10X better, you’re not ready. You need to keep researching, brainstorming, and digging to find a way to make whatever problem you’re solving that much better. Or do something else.
2) Test your hypothesis by talking with your potential customers / users.
Once you’ve determined a way to make something 10X better, then you need to test your hypothesis. This involves getting to know your target customer or user. Often this involves identifying your users’ “personas” which is just a fancy way of saying target users. Google the word “personas” to find lots of guides on this.
Start by talking with friends and family to validate your thinking. If you can’t convince your wife, dad, friend or sibling — people who love you — that your idea has merit, how are you going to convince millions of people who don’t know you?
Now, I’m oversimplifying something on purpose: your family and friends might not know the industry. So how could they evaluate, for example, self-driving truck software? Well, you should be able to educate them on the problem, how you solve it, and ask them to assume you’re accurately portraying the situation in just a few minutes. The question isn’t: “Does my software solve this problem?” The question is: “Assuming this is a true problem and my software could solve it, saving trucking companies billions of dollars, do you think this is a good idea?”
Next, you need to talk with real potential buyers or users in the case of a free app like Uber. Ideally, you can provide some mock ups of what the product will look like that will help them visualize it. If you’re not a designer, draw it on a notepad or mock it up in Word or Google Docs and use a site like Fiverr to hire a designer for $25 to design it for you.
Get in touch with the executives of some trucking companies (to use the self-driving truck software example above). Doesn’t have to a billion dollar company. Find a local small trucking business. Start running the idea by them and getting their feedback. Ask lots of questions, be a good listener, and don’t get defensive when they don’t understand your idea or challenge its assumptions. This is part of the learning process.
Most of the time, when I come up with an idea that I think might be interesting, after talking with a few industry insiders, I quickly learn that it’s not going to work for some reason. There’s often some barrier such as a regulation, high entry costs, or an industry standard that has a monopoly that would be almost impossible to topple.
Talk to as many industry insiders as you can. At least 10-20 is a good start. LinkedIn makes it easy to find these people.
If after talking with insiders, you get unanimous positive feedback, then you can move to the next step. If the feedback is lukewarm, you have a major issue. If your idea is that good, the insiders will be giddy with excitement. If they say, “Meh, it’s sounds interesting. Not sure I would use it…” then your idea isn’t good enough. You can either move on to the next idea, or go back to the drawing board to figure out how to make your idea better.
The best way to do this is to ask penetrating questions to the insiders who gave you lukewarm feedback. “OK, so it’s just a nice to have, how could I make this something critical to your business? What would make this a game changer for you? What other major problems do you have”? You’ll get great answers that you didn’t consider.
3) Determine that the business model will work
Before taking the leap of investing your time, money, and energy into building a new disruptive product, you need to — at least at a high level — have a path for the business to eventually be profitable. This comes down to your cost to provide the product being less than your revenue.
Sounds simple, but many business models can’t even pass this test.
For example, let’s say you want to start a new TV brand that undercuts the Samsung’s and LG’s of the world, but with the same quality. Well, you might learn that there is not a way to get the costs down lower than theirs. So the business doesn’t work.
Or maybe you want to launch a direct to consumer wine company, but you find out that shipping is $25 per case and that wipes out your margins.
So put some thought into the metrics of your business. At scale, can you make a profit? No business is profitable right away, but the business model has to work once you’re at scale. The simplest way to do this is with something called “unit economics.” My cost will be X and my revenue will be Y per customer. If you aren’t good at this stuff, that’s fine. Maybe you’re a creative person and not a math person. Find a friend who can help. Everyone has a friend who is good at finance.
4) Build a Prototype
So you’ve come up with a product idea that makes some activity 10X better, you’ve validated your idea with potential customers who are giddy with excitement about your idea, and you’ve modeled the business and the numbers will work. Now it’s time to start building your product!
The most important part of building a new product is getting something out quickly that the market can react to and give you feedback. This is called many things such as “lean,” “agile,” “continuous innovation,” or “iterative development.” Let’s call it “lean” for now.
The product for your grand vision has lots of features, bells, whistles, and buttons. But you don’t have the time or resources to build all that now. So what you need to do is create something we call a “minimum viable product” (MVP).
An MVP is the simplest version of your product that delivers a benefit to the user. Unless you’re building hardware or something that puts lives at risk, you should be able to get an MVP out in 4-8 weeks. It doesn’t even have to fully work. Maybe it just simulates the product. But you have to as rapidly as possible create something that potential customers can experience and give you feedback. This is critical to making sure you’re on the right track.
In order to achieve such rapid prototyping, you have to get scrappy, creative, and efficient. Maybe you outsource different things. And you make a ton of concessions. You strip down all the eventual features you want to the bare minimum. The goal here is make sure you’re on the right track, even though maybe it doesn’t do all the things you eventually want it to.
And the design can be minimalist. What I will say though is that you shouldn’t compromise on aesthetic. Never give your early adopters an MVP that looks like crap. Design doesn’t take that long and it should only take you about 10% longer to make an MVP that looks nice versus a hacked together, plain text, 1990s looking web page. So make it look nice. Presentation matters.
The time consuming part is the programming of the back end. So that’s where you’ll need to compromise: the actual functionality. But you should be able to have the product look and feel the way it will eventually work.
5) Get Feedback on Your Prototype
Once you have a working prototype, have some friends and family try to use it. You’ll immediately find clunky things that you didn’t think of. Do this before getting it in front of real potential customers.
Once you’ve ironed out those kinks, go back to your insiders that you interviewed and get the product in front of them. You want to be there in person, if possible, to watch them use it. Pay attention to their facial expressions and body language, record their feedback and questions, and ask lots of “what do you think” questions about the various features. You’ll get great feedback and you’ll probably have a lot of work to do based on that feedback.
The primary goal is to make sure the feedback you get tells you whether or not you’re headed in the right direction. “If I keep building this product, will it delight my users?” If not, find out why. Hopefully there are some things you can do to make it right. If not, this is where the product journey ends.
Thousands and thousands of prototypes get discarded by companies every year because they just didn’t get positive feedback from the market. That’s OK. Move on.
If you did get great feedback, then it’s time to scale your product.
6) Scale Your Product
Building a business around a product is a whole new article unto itself. So we won’t cover that here. However, here are some of the basic building blocks.
Now that you have confidence that your product will delight your users and offer real tangible value, you can start building the real thing. Do this in constant contact with your early adopters.
For enterprise, you want at least 5, but 10 is preferable. For consumer, you need at least several thousand, but tens of thousands is preferred.
Create a roadmap of features you want to launch, the benefits of those features, and put them in order or priority of your customers’ needs based on their feedback. Work with them to refine this list. With each major new feature, repeat the steps of involving your customers, creating rapid prototypes, and getting feedback before rolling out new features to everyone.
Most important, measure everything. Use measurement and analytics tools such as Google Analytics, Google Optimize, and Google Tag Manager to measure every single event in your app. You want to measure anything that can be clicked, viewed, input, output, or interacted with. You want to be looking at how often people use it, what they do, what they don’t do, time in the app, engagement, etc. And what’s important to measure will be different for every product.
Once your product is live, your decisions become more and more data-driven. At critical mass, you don’t have to talk with your users as much. The data speaks for itself. If you roll out a new feature and no one uses it, it’s a dud. Or if they just use part of it or don’t use it very long, you have vital feedback in the data to tell you how to fix it. You can create experiments and split test your ideas to determine which approach to a new feature resonates best with your users.
I’m not saying don’t talk with your users. Always do that. But as time goes on, you’ll need more quantitative data because there will be too many users and talking with just a few of them isn’t a statistically significant sample size.
Use your early adopters as evangelists as well. For enterprise, offer them incentives to be a reference for potential future customers. Get testimonials. Get them to agree to talk to the press. Get them to be available to talk with your prospects. Not all of them will be comfortable with this, but your product and your relationship with your customers should be good enough that many of them would be happy to help. It’s in their best interests that you stay in business because they are benefiting from your product.
On the consumer side, you want to keep your users engaged and make it easy for them to invite and share with friends. There are lots of ways to do this and it depends on the type of product you have. But focus on turning these early users into a network of spokespeople for your business. “Have you tried Uber? It’s amazing. You have to start using it.” “I love Instacart. Do you use it? I haven’t had to go to the grocery store all year!”
If the product is amazing, people will naturally tell their friends. That’s why a great product trumps great marketing by a landslide. Both are clearly better. But start with a great product and you’ll be on your way to hypergrowth.
This is an interesting move by Unilever. I have to say I’m proud of them. I think of them as a conservative company and this impressed me.
Unilever, who spends over $2.5B per year on digital marketing, is sick of their trusted brands showing up next to fake news or even worse, hate news, content through the Google and Facebook platforms.
Taking $2B straight off of Google and Facebook’s bottom lines would be a painful blow for the GOOGL and FB tickers.
Google and Facebook make up 80-90% of the digital advertising spend due to their massive scale, reach, and incredible targeting capabilities. They charge a premium for advertising due to the high quality of the traffic they can drive.
The advertising revenues have resulted in a combined $1.25 trillion, yes, trillion, in shareholder value.
However, the past few years, crap content such as fake news sites, click bait, tabloid “news from around the web” articles, and hate speech, they’ve really fallen from grace.
And because these crap content producers spend so much money, Google and Facebook didn’t put much effort into remedying the situation because it would hurt revenues. And now we have Trump, whether you like him or not, 70% not.
Here’s the story by CNN: http://money.cnn.com/2018/02/12/media/unilever-advertising-facebook-google-swamp/index.html
I am pretty sure Google and Facebook were already taking this swamp of fake news seriously, but I applaud Unilever helping to nudge them along. Hopefully more brands will “techlash” against Google and Facebook until they really clean up their act.
However, if you are an investor in Google or Facebook, this will hurt the value of your stock at least for the next few years. I imagine they’d have to pull billions of dollars worth of ads to really clean up the swamp. And that’ll be a painful blow to both revenue and earnings.
There are many formulas for angel investing. This one is very similar to other ones you’ve seen. The only difference is that I came up with a way for each of the 4 pillars to start with the letter T so they are easier to remember.
This is not a complete guide to Angel Investing. There’s a lot more to it. But these 4 things I think are most important.
This is very similar to Jason Calacanis’ 4 questions outlined in his book Angel, which I loved and highly recommend. Although it’s not perfect so I’d combine it with other research.
1. TAM (Total Addressable Market)
There are lots of ways to approach this pillar and there are some inherent components. First, the product has to be great in order to have a large addressable market. Ideally it’s highly innovative, disruptive, or game-changing. Second, the market has to be huge.
It’s important to note that the market doesn’t have to exist yet. You can be creating a new market or adding on to existing market. Or you can just be disrupting an existing market. Either way, the problem you’re solving has to be huge.
You’ll hear different opinions about a huge market. On the low end it’s $1B. On the high end it’s $1T. Personally, I’m only interested in companies that have a TAM of over $100B. My preference though are trillion dollar industries.
Trillion dollar industries are the space where you can get a 100X or 1000X return on your investment. Many of these investments will be moonshot opportunities. Binary. They either kill it and change the world or they completely fail (most fail). That’s why you need to carefully pick up to 50 bets and then there’s a good chance one will hit the moon while the rest fail.
Here’s something else I think is important with TAM. Founders will try to calculate the largest possible TAM in their investor presentations. Here are some tips to cut through the noise and figure out what the real TAM is.
The entire industry in which they play is not the TAM, but many investors and founders will use that as TAM. That’s misleading because it can make it sound like a company has a lot more sales potential than it really does.
Example: Let’s say travel accommodation is a $600B industry. And let’s say I’m starting a hotel price comparison website like Trivago. The TAM for Trivago is not $600B. That’s all hotels, which includes the revenue of the hotels and vacation rentals. Hotels get most of that money. The true TAM for Trivago that I would look at is the total amount of commissions hotels will pay a referral source. That TAM is probably more like 10% of the total hotel TAM.
True TAM in my opinion is total number of potential customers * annual revenue per customer. That is usually much, much smaller than the TAM of a total category.
When I’m evaluating a business, I ask myself whether I believe this team has the right combination of personality, skills, intelligence, and drive to take this business all the way. All… the… way.
First, keyword, “TEAM.” If there’s only one person in the company, it’s a little early for me. I like for there to be at least 2 cofounders. One person just isn’t enough to get a business off the ground. Also, one of the founders have to be technical and can code or do the engineering required themselves. The other can be good at operations and execution of other things. I don’t like teams that are outsourcing engineering. In tech, that is a core function and needs to be in house.
Second, the technical team members need to have a background in the field in which the company plays. For example, if it’s a software business heavily dependent on AI, I want that cofounder to have a computer science degree and many years of programming experience with AI. If it’s, say, a hardware business, I want one of the founders to be an electrical engineer or whatever is needed to be expert in that hardware. I also prefer founders who came out of an industry frustrated with legacy solutions and see a way to disrupt it.
Third, the team members need to be at a stage in their lives where they can dedicate the next 5-10 years to this venture. By stage, I don’t mean age. I mean do they have the energy, resources, and time to be fully dedicated? That can be at any age. This can’t be a side gig or a 9-6. They have to live and breath it every moment. I can usually determine this by the way they talk about the business. I can sense when someone has fire in the gut just by the energy and passion they exude when discussing their business.
Fourth, I like to invest in founders that have the rare combination of humility and ambition. People who are arrogant can succeed, but they also can be closed minded because they think they know it all. I like self-aware founders who know there is still so much for them to learn and are open-minded. And who know their strengths and where they need to hire to fill in the gaps.
Fifth, do they know their business down cold? Every metric across every aspect of the business. This can get hard once you have hundreds of people. But early on, they should know everything off the top of their heads. This shows that the founders are detail oriented, meticulous, they are doers, and they really get into the weeds. No professional managers in start ups. Everyone is either coding / building or selling. No bosses, supervisors, or middle managers are needed at this stage.
Six, resourceful and scrappy. In order to get a tech start up off the ground, you have to overcome near impossible and insurmountable odds. As Elon Musk said, being an entrepreneur is “like eating glass and staring into the abyss of death.” So in order for a founder to succeed, they have to be able to do more with less. This involves being very resourceful and scrappy, finding ways to get things done with limited resources, time, and money. And being able to break through walls and jump hurdles that would trip up the average person. And not ever getting discouraged when things don’t go smoothly, because they won’t. It’s always a bumpy ride… always.
Seven, I like missionary versus mercenary founders. I like founders that believe they are going to change the world and aren’t just in it for the money or being opportunistic. Mercenaries can be successful, but missionaries change the world. And only businesses that change the world provide the outsized returns an angel investor needs to make it worth the risk.
The market has to be ready for this type of product or service. And the technology has to be there. Timing is a primary driver of a business’ success.
You’ll want to ask questions like, why hasn’t this been done before? And why is now the right time? What’s the perfect storm of market and technological readiness that makes now the right time?
Here’s an example: Netflix could never have succeed with its video streaming business ten years ago. The IT infrastructure and bandwidth just weren’t there. But now they are and that’s why almost no one gets their DVDs mailed anymore and their streaming videos are a staple in every home.
The market was not ready for messengers like Snap, Instagram, and WhatsApp 10-15 years ago. The generation that adopted those technologies were in diapers at that time. The adults 10-15 years ago were fine with email and not likely to adopt messengers. Now you have every millennial and teenager communicating almost exclusively through messengers.
In hardware, it’s often the case that a core technology required to pull it off simply didn’t exist until fairly recently, like 3D printing. Now that you can 3D print components, XYZ business makes sense, where it wouldn’t have 10 years ago.
Another example can be regulatory. For example, the FCC just made military grade high resolution radar frequencies available to private businesses. In the past, it was only allowed to be used by the military. A business making high def radar for self driving cars could not have existed 10 years ago. Also, there were no self-driving cars 10 years ago.
For me to invest, the company has to have some early traction. I don’t invest in ideas, PowerPoints or business plans. I invest in companies that have a working prototype and early customers or users.
This is what Angel Investor Jason Calacanis calls the “Goldilocks Zone.” Just before they’ve started to take off, but after they’ve gotten a product to market. Not too hot, not too cold.
For B2B businesses, I look for a product in the market with paying beta customers. And there needs to be metrics on how much money it saved or made the customers. If they haven’t proven that the product adds value, it’s too early for me.
There’s a concept called “Product Market Fit” that is commonly used in Silicon Valley. It means customers love it so much they’d be angry if it went away. And it solves a pain so acute, that they’re willing to bear with the bugs and issues with an early product. And they are willing to pay money for it.
Basically, from a product standpoint, you have to have found your footing, have a product that meets the needs of your customers, and have reference customers and performance metrics to demonstrate the value your product provides.
We’re not talking a lot of customers here. For a large sale, it would be 5-10 fortune 500 companies. For a lower cost product, I’d want to see several hundred businesses using it. In today’s low cost start up environment, scrappy and resourceful founders should be able to drum up this early business themselves without much capital. Otherwise they probably don’t have the scrappy qualities I’d look for in a founding team.
For consumer, I like to see thousands of paying customers or tens of thousands of users if the product is free. And I like to see retention and engagement metrics. If they don’t have any metrics on things like cost to acquire a customer (CAC), retention rates, engagement rates, and revenue per customer (if relevant), then they are too early and not in the Goldilocks Zone.
And again, in today’s low cost start up environment, scrappy and resourceful founders should be able to generate thousands of customers themselves without much capital. Otherwise they probably don’t have the qualities I’d look for in a founding team like I said above.
There are some exceptions I will make on the paying customers front. For software, it’s a must. For physical products, whether it’s agricultural drones, delivery robots, synthetic food, satellite technology, there is usually a longer time-frame for being able to have a product that is customer ready. For these businesses I look for 3 criteria. 1) They have to have a working proof of concept that just requires some refining to get to market and 2) if they do get to market, the opportunity is absolutely game changing to the trillion dollar scale and 3) LOIs or pilot customers lined up for when the tech is really ready. Lining up pilot customers validates that the product or technology is truly novel.
Hardware and physical world businesses are much more binary than software. With software you can be more nimble, pivot, and solve problems much more quickly. With hardware, it either works or it doesn’t. So, to overcome the low likelihood of success, the upside has to be huge.
For example, I recently invested in a 3D metal printing business. They have all the things I want to see: engineers as the founders, scrappy, smart, working prototype, ambitious, yet humble. They have some technical hurdles to overcome that will take a while to work out. But they should work in theory. If it works out, it’s world changing. Metal 3D printing will be 10X cheaper, faster, and more reliable than ever before. And they’ll have patents and IP to protect it.
Every manufacturer in the world from auto, space, electronics, and computing will want to become a customer. It’s a truly $1T category and the company could quickly become a $100B business.
This is what we call a moonshot opportunity. But the opportunity is so big, and the tech is far enough along that it’s not just a concept, that I think it’s worth making a bet because of the outsized upside if it works.
Also, while they don’t have paying customers, they do have pilot clients lined up waiting to do beta tests when they are ready. That’s a really good sign and I’d want to at least have that for this type of start up.
Most marketing content sucks. It’s either too long, doesn’t specify a clear, compelling benefit, or doesn’t address the right audience. Here’s how to make sure that doesn’t happen to you. This applies to B2B, B2C, your own site, or a product listing on another merchant’s site.
1. Know Your Audience.
- This should be easy for marketers, but for some reason they often miss the mark.
- You get 1 second to grab someone’s attention.
- Make sure you are really, really speaking to the audience and what’s important to them.
- Pause before writing anything and think very hard about how they view the world, what it feels like to be them, and what’s likely to be important to them.
2. Keep it Short and Simple (K.I.S.S.).
- No one reads anymore.
- A Tweet is about the longest any marketing copy should be.
- If it’s any longer, put it into one sentence bullets. Also, rather than just skipping lines, use numbers or bullets.
- It makes it easier for the brain to process for some reason.
3. Focus on Benefits.
- Many marketers assume the benefits of their products are obvious.
- But that’s because they are already educated about it.
- Never assume the benefits of your product are obvious.
- A benefit is always increasing something good or decreasing something bad.
- Whether it’s happiness, costs, revenue, or pain, tell your audience what the benefit is and then briefly how your product brings them that benefit.
4. Use Simple Graphics.
- A picture is worth a thousand words.
- It’s much easier for people who process a simple graphic that gets the message across.
- If chosen well, it can also elicit emotions in the audience which can inspire them to want to do business with you.
5. Write & Design for Mobile.
- Most Internet browsing is now done on smartphones.
- This is especially the case for busy people with money, who are generally your target customer.
- People’s attention spans are even SHORTER on their phones. Content needs to be short sound bites like little Tweets.
6. AB Test EVERYTHING
- If you’re not AB testing, you’re leaving money on the table… period.
- Also, have someone senior periodically review the content. They typically will be able to see things and make suggestions that more junior marketers aren’t able to see (yet).
It occurred to me that this could be a part of a rare phenomenon where an unlikely and unpredictable product line just goes viral, like the pet rock or beanie babies (if we you were alive back then).
As a leader in e-commerce measurement, we’re in the unique position to actually quantify the volume happening with such trends. It’s a use case of our e-commerce insights suite that I think manufacturers should be using a lot more: identify new product trends before your competition.
Our e-commerce data confirms that fidget spinners are going viral right now. Over 30 million (projected) searches in our data last month! On Google Trends, there is almost as much search volume for ‘fidget spinner’ as there is for ‘Trump’.
In fact, based on search volume across major retailers like Amazon, fidget spinners are the fastest growing, high volume product line ever. Well, at least since we’ve been measuring e-commerce, which goes back to early 2014. The term ‘fidget spinner’ reached 1 million searches in the least amount of time. Between January and February 2017, search volume for ‘fidget spinner’ quadrupled. By the end of April, ‘fidget spinner’ had more than 25 million searches. We excluded smaller volume search terms from the analysis.
This massive growth in searches matches the trend of units sold and total sales of fidget spinners over time. The total number of fidget spinners sold online in April is 127 times greater than the number sold in January 2017. The amount of sales generated from fidget spinners in April online is 55 times greater than the total sales were in January 2017. No matter how you spin it, this product is experiencing massive growth!
For frame of reference, Fidget Spinner beat out top search terms by 300% including staples like laptops and the new Nintendo Switch.
Incidentally, I think I’ll start a “curtain” business. I had no idea people were searching so much for curtains online. I would not have guessed that to be a top 10 search.
In July of 2016 we predicted based on 1H 2016 sales that consumer packaged goods (CPG) e-commerce sales would surpass $10 billion in the U.S. with 40% YOY growth. We were correct.
View our detailed CPG E-Commerce 2016 report here.
Here’s a copy of the press release and a summary:
1010data Releases Industry Report: Consumer Packaged Goods Online Sales Surge 36% and Hit $10 Billion in 2016 Across Key Categories
Health Supplements, Pet Care and Cosmetics Drove the Growth in 2016
NEW YORK – March 2, 2017 – 1010data, Inc., the only integrated platform that combines self-service data management and analytics at scale with ready-to-use data, today announced the results of its 2016 Online Consumer Packaged Goods (CPG) Industry Report. For the first time since 1010data began tracking this market, online CPG sales across key categories surpassed $10 billion. Of the CPG categories tracked by 1010data, the largest ones were health supplements, pet care and cosmetics, each of which generated more than $1 billion in sales.
Total revenue for key CPG categories in 2016 was $10.4 billion, up from $7.6 billion in 2015. The 2016 data showed a nearly even split in revenue between the first and second halves of the year, implying that consumers are buying CPG products online year-round and not just during the holiday season. Key findings from 1010data’s report include:
- Health Supplements Was the Biggest Online CPG Category – With $2.6 billion in sales, health supplements represented 25 percent of total key CPG category sales and exceeded the size of the next biggest category by $1 billion.
- Pet Care Grew 67 Percent Year Over Year – Pet care was the fastest-growing category among categories with at least $500 million in sales. Driven by specialty pet care sites with brands like Chewy and Drs. Foster & Smith, “natural” products experienced the most growth.
- Laundry & Dish and Cleaners Continued Growing Due to Pantry Box and Subscription Models – Of categories with less than $500M in sales, laundry & dish and cleaners experienced the most growth, because pantry box and subscription options from companies like Amazon, Boxed and Jet have enabled customers to conveniently order and re-order products.
1010data’s report also notes that online CPG sales across key categories grew twice as fast as total ecommerce sales, which had a 16 percent year over year growth rate in 2016. Increasingly, more online retailers are offering two-day shipping and subscription services, which is driving the acceleration in CPG sales growth.
By analyzing top search terms, 1010data found that most consumers who buy CPG products online started their search on Amazon. The top search term on-site across all CPG ecommerce sites was “prime pantry,” powerfully demonstrating the mass appeal of subscription services online.
“With CPG sales hitting $10 billion in sales online across key categories, online ecommerce is clearly no longer an afterthought for brands,” said Jed Alpert, Senior Vice President of Marketing at 1010data. “All CPG brands need to understand how consumers are shopping in their categories and consider how ecommerce can help deliver a better experience and complement in-store sales.”
For a free download of the full report, please click here.
About the Study
Throughout 2016, 1010data tracked numerous sources of spending data, representing millions of consumers, to provide an accurate assessment of online and offline retail sales and market share. 1010data focused its research on key CPG categories: health supplements, pet care, facial care, cosmetics, drinks, snacks, baby, hair care, health over-the-counter (OTC), oral care, cleaners, shaving, hand body, laundry & dish, and sun care.
Amazing time in Tibet and China with the lovely Maggie and friends Andrew & Nicole, David, Dan, and all our dads Scott (mine), Bruce (Andrew’s), and Sheldon (David’s and Dan’s). Man what an adventure. Totally different world over there. Such a shame more of both Eastern and Western cultures can’t mingle more and know so little about each other.
Man, this was an unexpected and wildly entertaining Uber drive to the San Diego airport. After about 5 minutes, he launched right into it. I spent the whole time trying to steer him toward a rational argument that I could actually understand. It never happened. This happened instead.
I have come away thinking that certain religious people are so brainwashed that they are incapable if even hearing a rational argument to the contrary. It’s like the critical thinking part of their brain is completely turned off.
I respect that people should worship however they want. But when they preach, I think they should be better listeners and pay more attention to their audience.
Below is my recount of the conversation based on memory.
Al (Uber Driver): That would spread the gospel in that nation of Israel, but because they turned and did not recognize the Messiah, they continued in their evil ways, he has put them aside for a period of time, but he always has a remnant of believers as he says to Elijah, I have 7,000. There’s always been a remnant of Jewish believers that have faith in Yeshua and his words. Until the fullness of the Gentiles comes in, in the end, then all Israel will be saved. The Gentiles are to make the Jews jealous for their own God.
Me: Here’s an important question in my opinion. I think in order to have the conversation that we’re having, talking about the Scriptures is really cool, but you’re using Scriptures to-
Al (Uber Driver): I’m using the Hebrew.
Me: You’re using things that were written thousands of years ago as your arguments. What I’m asking for is something outside of Scriptures, something that’s more recent or some kind of evidence that-
Al (Uber Driver): The Jews always look for signs and wonders, is what they ask. Jesus did all the miracles and everything and they still don’t.
Me: We don’t know that. That was 2,000 years ago. The most recent Scripture that they found was 300 years after that.
Al (Uber Driver): My friend has 1 BC papyra with Isaiah on it. My friend has the world’s largest-
Me: The stories of Jesus were written down probably 50-100 years after he died, at a time that they didn’t even know that the world was round and what caused disease or what caused lightning and thunder and didn’t know what stars were. We’re expecting these people to have recorded properly-
Al (Uber Driver): They were eye witnesses and they were all Jewish.
Me: You don’t know that.
Al (Uber Driver): It says that in Scriptures.
Me: That was 2,000 years ago. Why don’t you trust the Egyptian books from 2,000 years ago. They have a totally different story.
Al (Uber Driver): They worshiped a pagan God.
Me: How do you know that your Scripture is the right one.
I don’t support any political parties. Tribalism is the primary cause of violence and injustice. I dislike the D and R platforms, but for different reasons. This short video by John Oliver explains one of the reasons why I think Republican politicians are evil, corrupt, liars and idiots.
They basically admit that facts don’t matter and they are OK playing to peoples’ feelings regardless of what is actually true.
Amazon’s second annual Prime Day came back with a vengeance. Last year, customers complained about a lack of enticing deals and limited availability on hot products to such a degree that the hashtag #PrimeDayFail started trending. As a result, Amazon promised to not disappoint their beloved Prime customers this time.
That promise paid off: Amazon announced that this was their biggest day ever; Prime Day sales increased 300% since last year. Amazon, however, left out specific information about which products, brands and categories won the day. Using 1010data’s Market Insights, we’re going to fill you in on everything that was not released by Amazon. We looked at the top 1000 items based on units sold and here’s what we uncovered.
View full post here: linkedin.com/pulse/what-amazons-press-release-didnt-tell-you-prime-day-aaron-mendes