http://www.youtube.com/watch?v=xBIVlM435Zg

This talk is based on the Purple Cow. The basic point is mass marketing and commodity goods are an incredibly expensive way to enter a market and has low margin to boot. In order to have a successful product you have to be remarkable. Instead of buying the lowest priced goods and building a product the cheapest, you find specialized artisans and build the highest quality product and build a market organically.

Some examples of companies that do this: Counter Culture Coffee, Raleigh Denim, Apple, etc.

You may not capture the largest market share, but you will have loyal followers and people will advertise for you. I think it's a good lesson for the new economy. There are lots of opportunity for people tired of commodity clothes, food, coffee, and software.

1/5/2012 12:58:55 PM

so market shit to hipsters?

1/5/2012 1:11:38 PM

Quote :

"Some examples of companies that do this: Counter Culture Coffee, Raleigh Denim, Apple, etc."

Never heard of "Raleigh Denim"
Google "Raleigh Denim"
See a pair of jeans for $285.
Laugh, close tab, post on TWW.

1/5/2012 1:12:39 PM

^

I know, but they use old seamstresses from the glory days of NC textiles--a story I can tell my dad who's retired and he gets it. They will stay in business no doubt. They may not grow to market size of Levis, but they will be able to independently provide for their family and employees. They sell for almost the same as Diesel jeans who is huge and they are selling them in Barney's in both NY and SF.

In the case of Counter Culture they send people to the farms in 3rd world countries and taste beans from specific regions. They have a story they can tell people about the coffee. It's why you pay the $12 a pound.

You could open a business and sell the same jeans Levis does from the sweatshop in India, but I guarantee you wouldn't get one sale unless you had a $100 million marketing budget. Or you could buy commodity coffee and try to out compete Starbucks on their terms, or you can do something completely different and try to turn coffee into wine. Or you can try to compete with Wal-mart grocery stores and sell the cheapest possible processed food, or you can be like Whole Foods and sell antibiotic free meat and high quality organic produce...



[Edited on January 5, 2012 at 1:21 PM. Reason : a]

[Edited on January 5, 2012 at 1:25 PM. Reason : a]

1/5/2012 1:20:40 PM

I would have serious issues spending almost $300 on a pair of jeans, when I can get something for $20 (or cheaper) from Target that fits just fine.

If you can afford to throw your money at $300 jeans, more power to you.

1/5/2012 1:23:08 PM

Quote :

"They have a story they can tell people about the coffee. It's why you pay the $12 a pound. "

1/5/2012 1:26:45 PM

^^

You're missing the entire point. When you run or start a business you have a choice to provide a commodity product, or a high quality product. If you open a restaurant and sell the same shit everyone else does from a ready made restaurant company there is no incentive for anyone to go to you're restaurant over another one with the same suppliers. If you instead use only ingredients from the farmers market you can charge a little more and give the patrons a chubby that they support the local farm movement.

In the case of Raleigh Denim they wanted to make jeans and start a business. You can target the same low end that everyone else does, but the barrier to entry is excessive and the margins low. Or you can hire seamstresses from the old south building a premium pair of jeans and charge $300 for them getting started in small batches and working up from there.



[Edited on January 5, 2012 at 1:35 PM. Reason : a]

1/5/2012 1:31:20 PM

is this really news to anyone? if you arent the cost leader (or close by) you better differentiate your product somehow. isn't that business 101?

[Edited on January 5, 2012 at 1:42 PM. Reason : and has been for ages]

1/5/2012 1:42:13 PM

^

He says you should do it in your business life not just for products. He's even arguing that the larger companies should do it because it's more efficient to get market share as opposed to polluting the airwaves with as much advertising as possible. A lot of advertisers, he says, are lost on this concept.

1/5/2012 1:49:53 PM

Quote :

"so market shit to hipsters?"

1/5/2012 1:50:02 PM

Quote :

"I would have serious issues spending almost $300 on a pair of jeans, when I can get something for $20 (or cheaper) from Target that fits just fine."

why buy a Mercedes when you can buy a Pinto?

they're both are on 4 wheels and drivable

1/5/2012 1:50:07 PM

^

Target also won't custom make a pair if they don't fit right, or hem them on the spot Sometimes you pay for more than just the product itself.

^^

Hipsters buy $300 jeans and $4 black coffee? I know some hipsters that work at the places, but not many that shop there.

[Edited on January 5, 2012 at 1:53 PM. Reason : a]

1/5/2012 1:52:29 PM

Why are you buying jeans from Target, man? At least buy Levis. They're not that expensive.

1/5/2012 1:55:33 PM

I take it CaelNCSU doesn't like stores like Dollar General and Family Dollar.

That racist fuck.

1/5/2012 1:58:28 PM

The basic message of this guy's talk: Market something to suckers with more money than brains.

Quote :

"Target also won't custom make a pair if they don't fit right, or hem them on the spot "

Right...that's what you put that pair back, and try on a different pair.

1/5/2012 2:00:31 PM

This thread is genius.

I just can't figure out why Walmart is the #1 employer on earth. It just doesn't make any sense.

1/5/2012 2:02:13 PM

People are willing to pay a premium for high quality and a positive reflection of their ego.

1/5/2012 2:04:34 PM

^^

Walmart is huge, they go after a majority of the pie. The point is that there are niche items that Walmart can never fulfill and there are huge opportunities for small businesses there. Not everyone needs to be the biggest in the game, but everyone needs to make a living. It doesn't have to be high quality goods, you can differentiate on service, by having a human being pick up when you call a customer support line, etc.

In the musician analogy, there are the Britney Spears acts and there are the Black Keys. Britney Spears got there from a huge record deal and companies paying to have her songs air. It was total marketing. The Black Keys by contrast toured locally and built an audience organically. They are big now but did it in a natural way on their own terms. There is a lot of room for smaller acts to make a living, not everyone needs to have a Gulfstream V.



[Edited on January 5, 2012 at 2:09 PM. Reason : a]

1/5/2012 2:08:20 PM

walmart has taken the economy of scale to a different level...if you're a startup producing goods, you basically have two main avenues of attack:

-Create/serve a niche like is suggested in the op
-find a way to produce a product at a price point that is low enough for walmart or like retailers to carry you while still allowing for some profit margin...Then hope either you can keep production costs low indefinitely or your product becomes popular enough for you to have some influence

1/5/2012 2:15:44 PM

$12 for a pound of coffee? That's cheap.

1/5/2012 2:55:37 PM

yeh no joke man, ^ i paid $12 for a cup of coffee today.

actually i didn't. the universe would explode before i ever paid $12 (2012 adjusted inflation) for a cup of coffee.

1/5/2012 4:30:24 PM

if you're using a pound of coffee to make a cup of coffee, you're doing it wrong

1/5/2012 6:10:06 PM

The Raleigh Denim case may not be a good example. The difference in quality is most likely not worth 10 times the cost.

And $12 a pound is cheap

[Edited on January 5, 2012 at 6:12 PM. Reason : .]

1/5/2012 6:11:43 PM

I've heard nothing but unanimous praise from people who own a pair of jeans from Raleigh Denim

and having seen many a pair/been in their shop a few times, the quality of the jeans/craftsmanship is insane

1/5/2012 6:24:33 PM

Why the fuck is Apple in there? The only they do that's special is they've figured out a way to make sheeple pay $600 for the same thing they bought a year ago only with a camera.

1/5/2012 6:35:20 PM

I don't see the difference between a quality pair of designer jeans that cost a couple of hundred dollars and a nice blazer or suit. Good denim is extremely versatile; it can be worn at any time of the year, and can be worn with many styles. They can also be used for years if you take care of them.

The thing about clothes is that, yes, part of the premium you pay is for aesthetics and brand. You're also paying for durability, fit, and comfort, and when you consider the price knowing all that, it's really not so unreasonable.

1/5/2012 6:50:38 PM

Quote :

"I've heard nothing but unanimous praise from people who own a pair of jeans from Raleigh Denim and having seen many a pair/been in their shop a few times, the quality of the jeans/craftsmanship is insane"

That's not in doubt. Is it 10 times better? Would you rather have 1 of those rather than 10 cheaper ones? Are you going to wear those 10 times longer than the cheaper ones? How about something that is $50 or $100 rather than $300?

[Edited on January 5, 2012 at 7:06 PM. Reason : .]

1/5/2012 7:05:58 PM

^ I like the idea of having 1 or 2 nice pairs of pants vs a bunch of cheap shit. I know people who also do that, but I haven't bought into it yet. I don't know who got the idea that you need 20 pairs of anything.

1/5/2012 7:31:00 PM

Quote :

"Why the fuck is Apple in there? The only they do that's special is they've figured out a way to make sheeple pay $600 for the same thing they bought a year ago only with a camera. "

I have an Android phone, and took a picture of this mushroom. A friend took the same picture, both were same megapixel. Mine looks washed out and awful. His looks like it was taken with a digital SLR.

They were the first to follow the Don Normal philosophy of usability and design of making things as simple as possible. Most software engineers used to give an excuse of you can't make X simple because it's technically this way or that, but they've shown that's only an excuse for lazy people. There are a lot of things they do I don't agree with but they make a hell of a product with a beautiful interface, that has a Unix terminal

1/5/2012 7:35:01 PM

Quote :

"I have an Android phone, and took a picture of this mushroom. A friend took the same picture, both were same megapixel. Mine looks washed out and awful. His looks like it was taken with a digital SLR."

congrats on anecdotal evidence!

1/5/2012 7:40:55 PM

^

Anecdotal doesn't make it wrong--I picked one of my favorite examples. I'm not going to sit here and annotate out every possible feature that makes Apple products superior to their competitors. Their products are beautiful and just work. Apple and Don Norman is the reason software as a whole has gotten simpler and easier to use for the masses and why engineers respect easy to use software--which makes it worthy of remark

http://en.wikipedia.org/wiki/Donald_Norman



[Edited on January 5, 2012 at 7:49 PM. Reason : a]

1/5/2012 7:45:33 PM

yes, it works so well that it's almost impossible to assign a specific downloaded/SMS ringtone to a contact, something that I can do in 3 clicks on every other phone I have used in the past 6 years.

1/5/2012 8:06:17 PM

Apple created, and still dominates, the modern smart phone market.

If you doubt apple's innovation, look at Windows Mobile, Palm, Android, Symian, etc. pre iPhone. Things were very sad back then.

lol @ Apple haters

/tangent

1/5/2012 8:13:39 PM

Quote :

"That's not in doubt. Is it 10 times better? Would you rather have 1 of those rather than 10 cheaper ones? Are you going to wear those 10 times longer than the cheaper ones? How about something that is $50 or $100 rather than $300?"

easily

why would you ever own ten pairs of jeans?

1/5/2012 8:43:07 PM

You may not be referring to this specifically but the high-end luxury market has been growing exponentially to keep up with the increasing demand of the ever rising 1%.

I would put any $300 pair of jeans in that category. Raleigh denim doesn't exactly clothe the local community--they move their stock via metro boutiques.

The quality of luxury items is debatable, but considering there is no longer a middle class in America we are facing a new era of consumerism and the money to be made in selling goods has shifted to the wealthy.

1/5/2012 8:43:12 PM

OP is correct that remarkable products build a small but devoted customer base, but I'm not sure that there's anything...remarkable...about that statement. People who can afford to frequently prefer non-commodity items. What Wal-Mart and Target know is that most of us can't afford that preference, and need to buy cheap shit.

A girl from my high school started a company that makes college apparel in some sustainable hippie fashion involving well-paid Sri Lankans...frankly, I'm hazy on the details, but the point is people who can afford her stuff love it and go on and on about it, such that even though she runs a small company she's gotten some fairly big recognition (even appearing in WSJ, if I recall). She's not gonna end up like Sam Walton with this model, but she's doing better than the rest of our graduating class. God, I hate her.

1/5/2012 8:47:45 PM

^ the thing is though is that she could sell-out and end up like Walton, and this is almost what society wants her to do. She's not being capitalist enough my not maximizing her profit. If she were a publicly traded company, she would be legally obligated to pursue a more exploitative model.

From a cultural level, our businesses and politicians don't really value being remarkable... just look at the people in this thread mocking these models as being hippie/hipster, the same thing that they say about the OWS movement. You can be very pro-capitalism and realize that our current system of capitalism is horribly broken.

1/5/2012 9:00:15 PM

Perhaps one day, if I ever get to the point that I am diving into my wealth like Scrooge McDuck, I will treat myself to a pair of $300 jeans.

I suppose my hangup with it is that they aren't any more functional than a pair of $20 jeans. Hell, they're probably less functional than the cheap stuff.

The last time I bought jeans was over a year ago. I was in Illinois on business and needed some jeans to go on a jobsite. Stopped by Target, found some jeans, made sure they fit, paid $20, walked out. I have no issues using them as work jeans. If they get dirty/torn/ripped, big deal, they were $20. If, on the other hand, I had paid $300 for them, I highly doubt I would use them a work jeans and likely wouldn't wear them if they had a chance of getting dirty, worn out, or ripped.

The more expensive ones might be slightly more comfortable or fit a bit better, but in the end...they're still jeans. Fit and comfort are certainly worth spending a little more money for a higher quality product, but there's a limit.

----------

I have zero issues paying much more for higher quality products that are functional and do more than the standard product. I've paid plenty of money for expensive scuba gear that is much more functional than the traditional product.

However, a $300 pair of jeans is still a pair of pants.


Clearly though, Raleigh Denim has convinced someone to buy their jeans since this place is still in business. Good on them, and I hope they continue to make money.

I suppose the whole point is this does make sense, especially with "the rich getting richer". Market something to rich people and watch the money flow in.

[Edited on January 5, 2012 at 9:30 PM. Reason : ]

1/5/2012 9:29:12 PM

^ the self help part of his message is would you rather be working a drone job or creating something you can pour your heart into? If its the latter then make it happen--interest rates are low and there are rich suckers as you point out.

There are markets that don't require a rich person that want non commodity goods. And there are a lot of people that would rather pay a little more for American made. Why support Bangladeshi exploitation if you don't have to?

[Edited on January 5, 2012 at 11:33 PM. Reason : a]

1/5/2012 11:31:44 PM

Quote :

"the thing is though is that she could sell-out and end up like Walton, and this is almost what society wants her to do. She's not being capitalist enough my not maximizing her profit. If she were a publicly traded company, she would be legally obligated to pursue a more exploitative model."

Profit is most easily measured in dollars but that is not the only measurement. Maximizing choices by minimizing opportunity costs is a more accurate definition for profit and the people who pay $300 for Raleigh Denim or the woman who refuses to sell her privately owned Sri Lank-an co-op are maximizing their own personal pleasure with the transaction. That is precisely what a truly free capitalist society should do.

You're right though, a more corporatist view would be the alternative scenario you proposed and while I doubt society gives a shit, there are plenty of industrialists for whom maximization of monetary profit trumps all else.

Quote :

"just look at the people in this thread mocking these models as being hippie/hipster"

Hang out in Richmond on a Friday night and you'll realize how utterly unoriginal and boring most hipsters are. It isn't that they refuse to conform that bugs me, it is the fact that their refusal to conform to a hypothetical monolithic culture is not derived from any individualistic stance or statement of personal taste, but an overwhelming and compelling desire to fit in and feel elevated.

1/6/2012 8:47:36 AM

Quote :

"Hang out in Richmond on a Friday night and you'll realize how utterly unoriginal and boring most hipsters are. It isn't that they refuse to conform that bugs me, it is the fact that their refusal to conform to a hypothetical monolithic culture is not derived from any individualistic stance or statement of personal taste, but an overwhelming and compelling desire to fit in and feel elevated."

You missed his point. He's saying people in this thread are calling high quality, stylish products "hipster".

Quote :

"However, a $300 pair of jeans is still a pair of pants."

Quality clothes last longer and fit better, generally (and look better, if that's what you're going for).

[Edited on January 6, 2012 at 8:53 AM. Reason : .]

1/6/2012 8:52:01 AM

Quality clothes DO last longer and fit better, but the marginal gain in functional quality is limited above a certain price point. I could easily buy a pair of Levis then take them to a good tailor and get literally custom fit jeans for under $100. Past a certain point, luxury goods cease to provide additional quality and become signaling instruments that demonstrate to others that you can afford to purchase said goods. This is the origin of the obnoxious repeating C design on Coach products or the oversized polo pony or Ralph Lauren's shirts.

The point about the shrinking middle class is valid. The OWS crowd may take to the streets to protest the 1% but a large portion of the ones I've seen are fairly safely ensconced in the upper 50% and the commidifiation of luxury is evidence that high-end retailers see a large, un-tapped, down market without the money to buy truly premium goods but who are able to skip Target and pick up designer label fairly within their perceived means.

Quote :

"You missed his point. He's saying people in this thread are calling high quality, stylish products "hipster"."

Oops, you're right, I did. I still loathe hipsters.

1/6/2012 9:08:21 AM

Quote :

"Quality clothes DO last longer and fit better, but the marginal gain in functional quality is limited above a certain price point. I could easily buy a pair of Levis then take them to a good tailor and get literally custom fit jeans for under $100. Past a certain point, luxury goods cease to provide additional quality and become signaling instruments that demonstrate to others that you can afford to purchase said goods. This is the origin of the obnoxious repeating C design on Coach products or the oversized polo pony or Ralph Lauren's shirts."

Agree.

Quote :

"The point about the shrinking middle class is valid. The OWS crowd may take to the streets to protest the 1% but a large portion of the ones I've seen are fairly safely ensconced in the upper 50%"

I would say that's because a majority of the people they are protesting for can't afford (or don't want to take the risk) to leave their jobs and/or families to go protest. Definitely agree that it's hypocritical to wear designer products (meaning unnecessarily expensive in relation to quality).

1/6/2012 9:19:40 AM

Quote :

"I would say that's because a majority of the people they are protesting for can't afford (or don't want to take the risk) to leave their jobs and/or families to go protest."

and I'd say it's because they are hypocritical idiots that are entrenched in their brainwashed philosophy. and neither of us has more or less evidence than the other

[Edited on January 6, 2012 at 10:22 AM. Reason : ]

1/6/2012 10:22:34 AM

i knew a dude that would love this thread. he would roll into work at 9:30 every day with a big $8 cup of coffee from some shop down the street. drove a minivan with flowers on the dashboard (like in a vw bug). guy dressed like he came straight out of a tim burton movie. absolutely hated anything that was 'traditional' or 'status quo' or 'average' [insert 100 other synonyms here] constantly about how different and new age and renaissance he was.

he had 0 friends and was the most hated guy in the entire place

1/6/2012 11:46:49 AM

id like to note that have a few pairs of 35 dollar jeans that have lasted consistent use for 10 years. or is that all the quality i got above the noted 20 dollar pairs?

i mean i get your point, but if i see one more point saying how the 300 dollar jeans are worth it (or because you don't need 20 pairs...talk about missing the point), I may just kill myself.

1/6/2012 2:09:34 PM

They're $225 in the store. That isn't the point of the thread, but by all means keep complaining about jobs going over seas and buying commodity shit

1/6/2012 2:17:31 PM

and that's still about $190 too much to be reasonable.

1/6/2012 2:22:44 PM

Quote :

"so market to hipsters?"

LOL hipsters love raleigh denim.

1/6/2012 2:36:47 PM

I think the thread's spot on. Develop niche exotic-level products, because everyone's got some certain passion or hobby for which there is no compromise.

I couldn't care less about fashion. I probably spend less than $100 a year on clothes.

I also enjoy hi-fi and music. I have never auditioned a pair of speakers at the under-$1000/pair-price point that I didn't conclude to be a total waste of money. Someone mentioned marginal gain earlier, and it applies here. And so, there are small shops out there for people like me.

1/6/2012 3:04:04 PM