Punk Rock HR Episode 106:
How are brands like Warby Parker or Casper Mattress re-shaping the way we make purchases in the 21st century? Well, Larry Ingrassia, my guest this week, is going to tell us. Larry is a former journalist, and editor turned author of the book, Billion Dollar Brand Club: How Dollar Shave Club, Warby Parker, and Other Disruptors Are Remaking What We Buy. Together we discuss the online brands you know, with billion-dollar valuations. We also talk about customer experience as a critical differentiator for many of these brands. And finally, we talk about COVID-19 and how it may or may not change our shopping habits.
In this episode you’ll hear:
- How the questions, “How did this happen?” And “How did what I thought was impossible become possible?” were the inspiration for writing the book, Billion Dollar Brand Club.
- Consumers shop differently today than they were even a decade ago. Larry shares some of the changes that have taken place in our shopping habits, even before COVID-19.
- What it takes to create a product and a brand that will be around for the long term and have value.
- What makes a billion-dollar brand, a billion-dollar company.
- Today’s economy and what the fallout will be due to COVID-19.
- We discuss brands as disruptors and how they affect the marketplace.
- A reminder for entrepreneurs: what might seem impossible to a lot of people, you have to say, I’m going to make possible.
WHAT MAKES A BILLION-DOLLAR BRAND, A BILLION-DOLLAR COMPANY?
Billion-dollar companies have a valuation of a billion dollars or more, it’s not that they have a billion dollars in sales. They also have longevity. To be a billion-dollar company, they have to have a product that is good, or at least good enough given the price. The company must have a product that people are going to recommend to other people. They like the product, the experience is good, the price-value equation is good, and the convenience is excellent. So they’ll keep going back to it. If a company doesn’t have one of those things, and they aren’t solving a problem, it’s going to be hard for them to be around the long term to become a billion-dollar company.
HOW WILL COVID-19 AFFECT THE ECONOMY?
Here are some thoughts and predictions from Larry, “I think that there are two thoughts. First of all, a lot of companies would be categorized as startups, they’re young companies or almost all young companies in America are under stress. It’s hard enough to succeed when the economy is growing, and things are going well for people. And it’s extremely difficult in a time like this, especially if you’re still ramping up, and you’re still trying to build your business. And so I think there is a risk, some of these brands that might otherwise be successful, just like other startups, whether they’re restaurants or dry cleaners or whatever that otherwise might be successful, are gonna have a hard time surviving. And I think that is unfortunate. Now, the one that offsets that here is I do think the long term trend toward ecommerce is going to be accelerated. So right now, depending on the category, roughly 15% to 25% of sales might be online. And some categories would be lower, some categories that would be higher, but 85% of sales traditionally had been done in retail stores. Now, my expectation is that in the next five years, that would steadily decline, and you’d have people buy more and more online, which is good for these companies, because they are experts at selling stuff online. I anticipate that it will accelerate.”
WHAT’S LARRY’S LASTING MESSAGE TO LISTENERS OF THIS EPISODE AND THOSE WHO READ HIS BOOK?
Larry would like everyone to know this, “Dream big. If you’re an entrepreneur, what might seem impossible to a lot of people, you have to say, ‘I’m going to make it possible.’ Even if you aren’t an entrepreneur, there are lessons to be learned from the successes of these entrepreneurs. If you are working for any company, and say to your boss, ‘I think I’ve seen a problem. And I think I have a way that we can address that problem or get around that problem or solve that problem.’ Your boss is going to love you. That’s especially true now in the current environment. Even if you’re a big company, kind of think like an entrepreneur to address problems and fix problems. You’re going to be much more valuable to your company.”.
Resources from this episode:
Billion Dollar Brand Club: How Dollar Shave Club, Warby Parker, and Other Disruptors Are Remaking What We Buy
Buying a Mattress in an Actual Store? That’s So 2010.
Store Traffic Limits At Walmart And Target Are Good, But Kroger’s Pick-Up Only Idea Is Even Better
Inside the Success of Dollar Shave Club and Why DTC Changed the Retail Landscape