Today I’m going to quickly deep-dive on something that’s always fascinated me…
Specifically, I’m going to focus on why some of the most notable success stories in entrepreneurship at large directly contradict the age-old ‘better mousetrap’ philosophy… by succeeding wildly in spite of their average, ho-hum products.
And no, I’m not just talking about the obvious factors like smart marketing tactics, optimizing conversions, etc. Even if we assume that these companies had unlimited funding & marketing prowess – it still becomes painfully obvious how little the product itself actually matters… at least under certain circumstances.
In fact, I think this is the most critical piece of business building that most people tend to miss.
So if you aspire to go beyond the hobby level – here’s my take on what the most critical puzzle-piece in that process actually is.
Let’s dig in…
Does ‘Good Product’ Matter?
It’s obviously true that brands like Apple, Porsche, Dom Perignon and Rolex are only successful because they each sell fundamentally great products. That is the core of their business model.
It goes without saying that the vast majority of people would be thrilled to own any product released by the aforementioned, and I’m not going to argue that – conventionally speaking – good product doesn’t matter. It usually does.
Instead, I’m going to argue that what people actually buy vs. what they actually receive are often two different things.
And while it’s true that someone who buys a Porsche might actually be buying status, when what they actually receive is a rear-engine, 6-cylinder sports car that needs $500 oil changes… my argument doesn’t center around the “steak vs. sizzle” approach to offer-framing, either.
No, instead – my argument is that some of the most successful brands in recent history have purposely & proudly offered mediocre products. And their customers happily spend money with these brands with the full understanding that their products aren’t stellar.
But that’s because the products themselves are secondary to the actual unit of value…
All Aboard the Lazy Train
What started out as a corny Youtube video quickly became one of the most successful startups of the decade: Dollar Shave Club.
They were recently purchased for $1 BILLION (in cash), by multinational consumer-goods conglomerate, Unilever.
This is a company that specifically marketed simple, mediocre razors that the average dude knew full well was all he really needed. They did this with shoestring video production and a super basic membership model.
And – here’s the crucial bit – Dollar Shave Club wasn’t really offering razors. What it was really selling was the ability to automate an ongoing process for the customer. Instead of John Q. Shaver driving to the grocery store every damn week to buy some needlessly fancy razors (at a 1200% markup), he could instead simply receive slightly shittier razors in the mail, for a fair bit less.
This isn’t a money savings, really. This is about identifying an action in your life that’s annoying (shaving with dull blades and then having to spend an hour going down to the store to get new ones), and replacing it with a convenient process that runs on autopilot.
DSC truly succeeded because their product was mediocre in comparison to the “market leaders”. And that’s because they were competing against the big boys with a better model… not a better product.
Read that last sentence again.
The Unsurprising Success of Surprises
My wife loves surprises. (Good ones).
As a result, I wasn’t surprised when she signed up for one of those “monthly box” offers – specifically, the pet treat box (BarkBox).
And up until our beloved dog Charlee ascended the rainbow bridge, we always looked forward to each new month’s shipment of funny treats, hilarious chew toys (on theme with the nearest holiday), and various other endearing crap that we knew full well was produced for pennies in some bleak Chinese factory.
Every month, there was also something unexpected – at least one “mystery item” with each shipment. And this element of surprise was the actual product. Not the contents of the box, but rather the fact that we didn’t know what the box would contain.
Make no mistake – this is all low quality crap. But it’s fun crap – because you don’t know what kind of crap you’ll get next. (Yay!)
As a result, brands like Fab Fit Fun, BarkBox, Nature Box and the plethora of other “monthly surprise” clubs out there have achieved astonishing levels of success.
Because apparently it’s fun to get mystery crap.
The takeaway? If what you’re actually selling is “fun” in a box – quality doesn’t matter.
The only thing that matters is keeping your customers amused long enough for your average retention rate to produce an LTV that exceeds your CAC.
In essence, that’s all it takes to turn a box full of cheap knick-knacks (that would probably flop with conventional ecommerce) into a 9 figure behemoth.
It’s just a matter of math & modelling.
Your $5,000 Espresso Machine Can Go Puck Itself
I love great coffee.
Where we live on Canada’s West Coast, you can be assured of death, taxes & rain. LOTS of rain.
As such, this makes for a thriving cafe culture, and our little city of Victoria is no exception. With one of the highest concentrations of coffee shops in the country, per capita, all the residents here have become quite the coffee snobs, myself included.
In fact, BigPixure’s downtown office (my software startup) literally has FOUR local artisan coffee shops & roasteries within a 200 meter radius – no exaggeration. This was a large part of why I snapped the lease up on the spot a while back.
Now – as much as I love my “office arrival routine” of getting a freshly roasted, organic coffee grown on some remote Peruvian cliffside with a bunch of majestic llamas running around – know what I love even more?
Someone else making it all for me. Or alternatively, something else.
For this reason, when I’m not downtown, the only coffee machine I’ll ever have in our house is a Keurig. (“Keurig” is to coffee snobs what bacon is to a vegan).
Why the hypocrisy?
Well, it wasn’t always this way. I’ve tried owning fancy espresso machines, various grinders, and a few other higher-end alternatives to the infamous Puck Machine. But at the end of the day, the process of making a good coffee (on my own) is simply too arduous.
I hate the 2-step (grind & roast), I hate washing out all the various parts after each use, and in general I just hate the process of it all.
When I’m at home, it makes me so happy to stick an overpriced puck of condensed coffee powder into a soulless robot and watch it dispense a perfectly measured stream of mediocre coffee into my unwashed “World’s Greatest Dad” cup.
In fact, I even bring the damn thing with us on road trips. It’s my guilty pleasure – the proverbial “Nickelback” of coffee.
Apparently I’m not the only one who thinks so – consumer goods conglomerate ‘JAB’ is also quite the fan. They recently acquired Keurig for 13.9 BILLION.
That’s a lot to pay for a “sub-premium” coffee brand… but my guess is the bean counters (pun intended) are a lot more focused on the intuitive, widely-popular distribution platform that the Keurig actually offers than they are about the quality of its end-product.
And they’re obviously pretty confident that the world’s laziest solution for making a perfectly mediocre coffee will only continue absorbing the home brew marketshare like a black hole.
Not because it makes the best coffee.
Instead, they took a $13.9B gamble on the Keurig because they realize that it’s the best WAY to make a coffee.
(There’s a big difference.)
My Favourite Service is Literally Redundant And Probably Useless
Lastly, let me tell you about my longest-ever monthly expense that I’m sure is probably unnecessary, and I’m also sure there’s a plethora of free alternatives out there that I could use instead.
And I don’t even care, because I already set it up years ago and I have no plans on unsetting it up.
It’s a redundancy cloud backup service called Mover.
I pay something like $12/mo, for it to do the following every night:
– It copies all of my Dropbox files/folders to my G Drive, and
– It copies all of my G Drive files/folders to MS OneDrive
And that’s it.
This, in addition to my local external backups (which are also passively cycled), means that my entire digital life is backed up on FOUR locations at any given time: Dropbox, G Drive, OneDrive, my external drives, and each of my actual computers.
Yes, I know that I could just do this myself every so often. And yes, I know that tons of people reading this probably use free alternatives that do the same thing. And finally – yes, I know that the odds of one of the major cloud providers ever “going down” or my files becoming unretrievable from them is remote to the point of obscurity. (Especially considering that I also have local backups)
But the benefits that this possibly completely useless “service” are actually great!
No matter what device I’m using, and depending on which app works best with a given device – I’m only a click or a tap away from my entire digital life. Which is nice.
And aside from the convenience, it’s basically a digital insurance policy. I love it.
In contrast, I pay LESS per month for Adobe’s impressive Creative Cloud Suite (including Photoshop, Illustrator, etc.). If push came to shove… I would totally pick Mover over Adobe.
Re-stated: A scripted process that I could probably build on Upwork for a grand has more intrinsic value to me than the world’s leading software suite for design professionals.
(What does that tell you about the dollar value of automatic convenience?)
You Just Need a Great Model
So how important is a good product, in the end?
Hopefully at this point, you can see that the question is too narrow. The better question is as follows:
Is your actual product a deliverable? Or is your actual product a benefit involving a deliverable?
There’s nothing wrong with a business where your product is the deliverable. Lots of millionaires & billionaires have hitched their ride to the “top” on the back of a great, quality deliverable.
But the truth is – it’s not necessary. And I’d even argue that for lean, self-funded startups… the absolute best product to be selling is convenience.
So, what does that look like, in your industry? And is there room for a “convenience spinoff” with your current business?
Really give this some thought.
By only focusing on “selling the best ___________”, you could be totally missing out on a substantially better and easier roadmap to stratospheric growth – simply by pivoting to a lower-effort model of convenience.
Anyway… I think that’s it for this one folks.
Time for a mediocre, push-button coffee 🙂
P.S. Wanna see me try & come up with some “convenience product ideas” in my next blog post?
If so – let me know in the comments.