by Candide McDonald, editor
You’ve generated dozens of ideas for products, brands and businesses because that’s how you’re wired as a creative. They’re all still inside your head because you have a day job. But never mind, 97% of start-ups fail anyway. Nonetheless, ideas are fascinating and brilliant ideas even more so to you (and me) – again because that’s how you’re (we’re) wired.
I’ve just been exposed to the ideas behind five successful start-ups, in a presentation called ONEtalks by One Centre, an ideas and innovation company for brands. If you’re a Sydneysider, there’s another talk in November, and they’re free. (Contact details for the One Centre are on the website.) I’m taking off one point for using the most annoying word ever to enter the business lexicon, disruption. Otherwise, I’ll score today’s talk a 99 out of 100.
The first brand to be discussed was Kickstarter, the funding facility that set out to “democratise entrepreneurship”, or in plain speak, to offer a friendly, accessible – and completely transparent – alternative to the hostile, impersonal “Shark Tank” (traditional) investor model. Oculus and the first ever smartwatch, by Pebble Technology, were funded on Kickstarter. So have been scores of films and videos, music and publishing ventures. In case you have one of those waiting in the wings, these three categories are Kickstarter’s top funded ventures – by a very big margin. And in 2016, Kickstarter helped 8,800 ideas to get financed.
The second start-up may not be so familiar. But if you like to think you’re in the in-crowd, you won’t admit to that. It’s Mahabis, the brand that reinvented the slipper, taking it from daggy to downtime, adding designer flair and awesome functionality (the slippers have a removable sole so you can wear them outside) and presenting it as a lifestyle accessory for feeling comfortable wherever – including working from home, travelling home from work and vice versa, working at work and “chilling out” – otherwise put, for 75% of our lives (sleep excepted). Mahabis was launched entirely on social, and globally from day one. Facebook and Instagram are still its primary marketing media. It is sold online at a rate of 500 orders per day in 100 countries and is now a lifestyle brand, including downtime wear and homewares. Note: The basic Mahabis slippers costs AU$122. This brand had to overcome price resistance in a major way.
The third is Lemonade, an insurance brand that turned “a necessary evil into a nice guy” and whose service is built using AI and whose promise includes a fair whack of social good – it takes a fixed fee plus business costs and donates the rest of members’ unclaimed premiums to the charities of their choice. You can probably see why it’s a winner with millennials. 87% of its business is made up of first time insurers – the market it saw as an opportunity and seized. 142 policies were created on day one of business. The company, that was begun by two tech entrepreneurs, uses two bots – one for signing on and one for claiming, streamlining both processes down to seconds. At launch, a claim amount could be “in the bank” in minutes. Now that the company is significantly larger, a claim amount is deposited within one day.
The fourth is West Elm Hotels, which saw a gap between luxury boutique hotels and Airbnb for the prize target market of frequent business travellers. It also saw that experiencing West Elm products would lead to sales. West Elm is a rapidly growing furniture retailer, an oddball in a category that’s in crisis. The hotels are living catalogues. They are also curated local community experiences – filled with goods from local producers. And they are networking sites. The brand nurtures friendships between frequent visitors.
Last, but by no means least – One Centre saved the most spectacular start-up for its finale – MedMen. MedMen is a recreational cannabis brand. Why is this start-up spectacular? Firstly, it’s going up against three massive market “institutions” – alcohol, wine and coffee. Secondly, if you’ve ever worked on a health supplement, gaming or alcohol band, you have some idea of what it’s like to navigate your creative ideas around legislation. Selling and marketing marijuana in accordance with the rules is like navigating a cruise ship through a canal. Add to that the fact that to even get a foot in the door with a majority of new customers you have to overcome the boulder-like obstacle of negative perceptions about your product (actually, products – the range is diverse from chewing gum to bath bombs and includes about 1,000 products). MedMen has taken on both of these challenges and more. It aims to “make it OK for soccer moms and middle-aged professionals to use cannabis products”. So it turned to Apple for its retail model. Apple, almost exactly. The stores look like Apple stores, are outfitted like Apple stores, allow try-outs of products displayed on benches like Apple stores, and even have friendly staff in t-shirts and lanyards like Apple stores. The stores are in trendy upmarket retail locations like 5th Avenue New York and Lincoln Blvd in Venice Beach, Los Angeles.
Advertising is hogtied, so advertising creativity as you and I know it, is off the agenda. MedMen’s first round of advertising reimagined marijuana as legal. A job it had to do.
Round two was a US$2m drive in April to overcome the stigma associated with marijuana – to normalise marijuana. This is supported by the products which offer “something for everyone”.
The third wave of marketing, which launched last week, attaches the brand to influencers and trendsetters. The US$4m campaign features the pop culture clichés from California’s in-crowd – a Rolls Royce in Beverly Hills, a shirtless weightlifter at Muscle Beach, a hipster with a guitar on the Sunset Strip.
Read the One Centre’s MedMen case study here.
Here’s the ONEtalks’ promo: