- 🧠The New Era of Brand Building
🧠The New Era of Brand Building
Welcome back to the 19th edition of Brandish
Your guide to crafting an iconic brand
I hope you all had a great thanksgiving & Black Friday.
In today’s newsletter, we’ll talk about a topic that a lot of brand builders are trying to study and investigate how they can get in to.
… and that is; Creator-led brands.
What are they, how do they work, and when do they not work.
Let’s talk about it!
The New Era of Brand Building
Prime was launched last year & made $250 million in revenue in it’s first year.
There’s tons and tons of examples of brands that have seen rapid growth since inception, in recent times.
… All these brands I am talking about have something in common.
They are all creator-led brands.
A creator-led brand is any brand that is known for the creator associated with it.
Now, you might wonder why all these creators get such high valuations without necessarily having tons of experience and business acumen (for the most part)
Let me explain…
You see, you don’t need business acumen to run a DTC brand.
Wait, let me actually TAKE that back.
You of course need business acumen, but you can hire people that are good operators and have great business acumen.
To run a successful brand, one of the most important things you need is customers who trust you and who refer their friends and family to you.
Once you have this piece figured out - the rest takes care of itself.
Now, the people who have business acumen, but are not creators, of course, have to rely on other methods like paid media, affiliates, etc to bring them customers.
But, in both cases, the businesses try to solve the exact same problem:
1). Do the customers trust you and adore you as a brand?
2). Do they refer their friends and family to you - without any incentives? (fancy term for this “viral coefficient”)
Now, creator-led brands already have the first question figured out because they’ve been investing in their audiences for quite a long time.
They do that via their content which is just aimed at giving the best value and entertainment to their audiences without asking anything in return.
For example, Mr Beast created the craziest videos for 10 years and invested millions into his content to entertain his audience.
Only after that did he launch his brand and ask for something from them. But by then, his audience already adored him to the point they sold out everything in less than a month.
These creators build the foundations - deep connections with their audience - to launch a successful brand later.
Besides that, these audiences are of course way more loyal than customers you get through Meta.
Now, as far as the second question goes, they get some part of that referral just due to the content they put out but a large part depends on how the product is.
If they have a great product they will get more referrals and it will keep compounding.
… if they have a sh** product they will not only get bad word of mouth but also lose the trust and goodwill of their audience.
So, as a creator-led brand, you need to ensure you have a great product.
The best part about creator-led brands is they don’t have to spend any money on marketing since their own content is marketing itself.
That’s why they get such huge multiples:
1). They have a compounding audience that already trusts them
2). Their name and brand itself are enough to get onto retail shelves
3). They don’t need any marketing dollars to promote them
You can’t just create a random brand…
As a creator, you just can’t create any random brand and expect your audience to buy from you.
Now, in the short term, just because of all the goodwill you have with them they will buy but in the long term, it won’t be a sustainable brand.
What you need is relevancy.
Let me explain with an example…
Mr Beast didn’t just launch a random merch brand, but he launched a product he knew would be relevant for his audience - primarily kids.
The same goes with KSI and Logan Paul - whose audiences mainly consisted of young teenagers into fitness.
So, both of them understood that having a product that their audience could tie themselves into would have a much bigger impact than just a generic product.
The key takeaway here is, that just having an audience won’t give you those crazy multiple that you’re hoping for.
There have been many creators in the past with huge audiences whose brands or product launches have failed.
Adidas projected the sales to be over $250M but it just ended up being around $40M.
The reason why i’m giving this example is to show that it’s also not always a fairy-tale story.
Tool of The Week
In this week’s tool of the week - we want to highlight a company that we’re not personally using at Obvi, but which we’re looking into using for some of our upcoming brands in our DTC Venture Studio
Shipping from China has always been A) very expensive and B) a big mess when it comes to shipping times.
A handful of our close advisors have been recommending us to use a company like Portless that ship directly from a 3PL in China to our US customers in 6-8 days with a 40% reduction in the cargo shipping cost (due to Section 321)
Now - as said; We’re not actively using this company right now in any of our companies - but we’re investigating the possibilities of working with them.
And since their offerings look lucrative and we’ve heard great things about them - we wanted to share them with you in today’s “Tool of The Week”
You can check them out here, and see if they can be a good fit for your business
Thanks for reading along
As always, thanks for reading along.
I appreciate you and look forward to serving you again next week!