Click to read the original text for details Source: New Consumption Insider (ID: cychuangye) Recently, I have spent a great deal of time organizing my thoughts on consumer brands, hoping to distill valuable insights from the past three years about new brands to help everyone.
-01- Rule 1: The simpler the truth, the more you need to revisit it Before starting a consumer goods venture, please read a classic: Philip Kotler's Marketing Management. In my personal opinion, this book is the only must-read for all consumer goods entrepreneurs, and it should be read countless times. Let me put it this way: your anxieties about product positioning, finding niche markets, public relations, responding to environmental changes, and dealing with external markets—this gentleman explains them all to you. You just need to follow his requirements and guidance step by step. If you do it honestly, you won't do too badly. But the real problem is that the consumer brands I often encounter always ask how they can go faster, whether there is a magic bullet. In the end, they discover that going slowly is actually faster. Because in this world, the more powerful the solution, the simpler it is. As the founder of Pinduoduo said, after meeting Uncle Buffett, he found that what the old man said was actually so simple. I have recently come to deeply admire a theory of the weak: suppose that when we enter an industry, we are the weakest in the market, whether in information or resource acquisition capability. We only have time as our capital. How should we make decisions? Only time can turn the tide for the weak. I will elaborate on this theory in a future article.
-02- Rule 2: Brand builders essentially need to align their personal worldview For consumers, a brand is a form of trust and intangible communication. For a founder, building a brand is a more efficient way to communicate with more people in the world. A good brand is actually an externalization of the founder's own philosophy and attitude towards life. If you are a lazy person, your brand's traits will be lazy. If you are diligent, your brand will be diligent. Creating a brand starts with sorting out the founder's worldview, starting from the founder's philosophical level. If you have too many distracting thoughts and are inconsistent internally and externally, it is difficult to make a good brand. A good brand is a high-quality spiritual resource. People's bodies are nourished by products, while their spiritual lives depend on the spiritual resources of the brand. How can spiritual resources be unified with products? The core is the founder's unity of knowledge and action. On one hand, you shout about changing society, but on the other hand, you secretly pass off inferior goods as superior, harming consumers. Such a split value system is doomed to prevent the brand from lasting. A brand is the externalization of the founder's personal commitment to customers. A brand without the founder's spirit poured into it will not last long.
-03- Rule 3: Whether you can build a big brand mainly depends on whether you hit the brand's Kondratiev cycle Many people ask whether they can build a Procter & Gamble or a big brand, and what the core factor is. I say the core is whether you hit the brand cycle. I believe that with 5 years as a medium term, brands will have small cyclical iterations, and with 10 years as a major cycle, there will be a major iteration. If your brand happens to be born at the beginning of a cycle, you can naturally become a big brand, or you have the luck to make it big. If you happen to be born in the middle of a brand iteration, no matter how hard you try or how capable you are, you may not succeed. I will also conduct in-depth research on this and systematically explain it through articles.
-04- Rule 4: If positioning and category are wrong, everything else becomes less important Here I am not talking about the positioning of positioning theory, but your product positioning. If your positioning is inaccurate, it determines that your resources are misallocated. Society cannot tolerate resource misallocation, so society will not reward you, and you cannot succeed. If you choose a category that is not growing or is small, no matter how capable you are, you cannot escape Sun Wukong's Five-Finger Mountain. So for brand entrepreneurship, remember the law of category. If this is wrong, even if you ask me to diagnose your business model, it will be useless.
-05- Rule 5: Superstition about live streaming cannot build a brand; a brand must have a long-term shelf scenario Is live streaming good? Of course it is very good, and I often watch it. But live streaming is more like a Juhuasuan model: selected products for a certain time, special prices for a certain time. The explosive product model cannot produce a brand; the sewer model can never incubate a brand. But it can incubate explosive products. A good brand must have a special position, just like your lover also has a special place. It is also like the convenience store downstairs from your home: as long as the lights are on, you know it is still there. Live streaming cannot achieve continuous communication with users. The business model of live streaming is certainly valuable, but it is not brand value. Those who are superstitious about live streaming may end up with a mess.
-06- Rule 6: Arrogant entrepreneurs inevitably create brands with a small vision Why did I think of writing this? Because I always see brand entrepreneurs who do not learn and do not listen to real voices. They cannot tolerate any correct questioning from anyone, and they only insist that their product is the best. Such products actually cannot get the nutrients to nourish their brand. A good brand is an open information system, not an autistic one. I particularly like to communicate with people who are open systems, because their hearts are open, and they humbly seek advice whether it is good or bad. Entrepreneurs with closed systems, like their brands, are autistic and emotionless. A good brand must be nourished by more users at all times.
-07- Rule 7: 1,000 loyal fans are far more important than 100,000 traffic I see many founders who cannot stop talking about traffic, as if brands mainly rely on traffic. If just having traffic could build a good brand, then BAT would have plenty of traffic. So in the early stage, be wary of seeking traffic; talk more about users. What is traffic? It is the amount that flows by. But users are real and visible. In B2B sales, I believe the magic formula for success is knowing where the customers are and being able to see them. This same approach applies to B2C: how can you see your users? Having 1,000 loyal, visible customers is far better than invisible traffic at any time. Today, the difference between goods and brands lies in whether what you have are users, fans, or traffic. If you have traffic, you will always be short of traffic. If you have loyal users, you will not lack users. Cherish every person you meet; this is the fate of the brand. Only when you have loyal fans, and you find the conversion ratio between traffic and users, and continuously seek reliable users, are you not far from success.
-08- Rule 8: Your team is your earliest and most loyal users In the new generation of brand companies, fans are employees, and employees are fans. Philip Kotler's book says that internal marketing is the beginning of external marketing. If internal marketing to employees is not completed, it is the founder's dereliction of duty. If the founder lacks passion, employees will lack passion. If your team members do not like your product, that is the beginning of your failure. When does your decline begin? It begins when your employees think you are a fraud.
-09- Rule 9: Doing repetitive things is often better than constantly innovating Some people always want to innovate, thinking that today there is something new and I want to learn it. Then tomorrow something new comes, and they learn it again. Essentially, they are too anxious and unsettled. Management guru Peter Drucker said that companies that are enthusiastic every day often have problems. Companies that are calm and follow routines may actually be performing well in management. When a brand can repeatedly do simple things, it is not far from success. If it is always doing complex things, the company may also be not far from failure due to constant upheaval.
-10- Rule 10: If you cannot find a place to spend money, then a consumer brand should not take money Many brands have good cash flow and are profitable, but they carelessly take investors' money. Actually, this is completely unnecessary. If you cannot find a place where you need money to expand, do not take a lot of money. Money is meant to accelerate you, to make you grow explosively, not for financial management. If you cannot even spend your own money, but you take a lot of money, in the end you waste social resources and will be punished by the laws of society. Consumer brands must be clear that money is not omnipotent. If you can use your own money to validate the model on a small scale, that is the best. Spending large amounts of money before validating the model is hooliganism. Therefore, consumer brand entrepreneurship cannot rely on capital to force maturity, unless you face a historic opportunity where you can use money to integrate the industry, then you can take more money.