Psychographics of Hipsters

Psychographics explains Pabst Blue Ribbon's popularity with hipsters — Hipster and Pabst Blue Ribbon

Psychographics of hipsters explains how Pabst Blue Ribbon’s (or PBR) rise and fall is a story of a market finding a product. PBR has been around for 170 years but only in 2008, enjoyed a 6-year boom in popularity (outside of a brief moment in the 1970s).

It is better to find an under-served market and create a product/service for them than wait for a market to find your product/service.

Q: How to Find an Under-Served Market? A: Market Research

There are many sources at your disposal to gain a deeper insight into who your customers are and segments within that market.

Ask potential customers: Surveying is a form of primary market research. Ask them how they use their product, and what they like/dislike about it. How long have they used it, is it expensive, how does it make them feel, etc. These questions will give you valuable insight into the psychology of the user.
Pose as a customer and visit your competitor’s store/website. Learn how they do what they do. See what they do well, and what they can improve on. Sometimes employees are very happy to share details you cannot find anywhere else.
Industry and market research companies such as IBISWorld, Pew Research Center, Audience Overlap Tool, and Statista are loaded with great information. The downside is that they can be expensive. Less expensive options include the SBA’s Office of Entrepreneurship, US Census data, and older reports/white papers.
Industry and trade publications for your particular sector are also great sources of information. Some are free, while some require memberships.

So, going back to Hipsters:

Hipsters are known for following the latest trends and fashions while eschewing things regarded as being within the cultural mainstream. Hence the term, “I was into __________ before it was cool.”

So why did hipsters like PBR? To put it simply, it was “retro chic,” and anti-mainstream, and with many people still trying to recover from an economic recession, Pabst Blue Ribbon’s low price point was an attractive option. This brings us to a tool in marketing used to find customer groups: psychographics.

What are Psychographics?

Psychographics are metrics used in market research as a way to divide consumers into sub-groups based on shared psychological characteristics, including subconscious or conscious beliefs, motivations, and priorities, to explain and predict consumer behavior. Any dimension can be used to segment a group of consumers, such as style, variety, availability, price, etc.

Hipsters avoided things that were popular, and some of them were not price-sensitive, so they were willing to consider a range of beers that occupied a certain psychographic zone.

Psychographics of hipster beer consumption - Your Startup Guru — *Psychographic of hipster beer consumption*

As PBR’s popularity grew, it was departing from the zone of consideration – the region of price and popularity where hipsters were willing to purchase from. Also, as hipsterism became more mainstream, the association of PBR with hipsters caused a self-fueling downward cycle.

A shift in Pabst Blue Ribbon's popularity caused hipster abandonment due to the psychology of the hipster — *An increase in Pabst Blue Ribbon’s popularity caused hipster abandonment*

PBR sales increase by volume from 2005 to 2013 — *Slumping PBR sales. Images property of their respective publishers*

PBR case sales growth rate in convenience stores leveling off and decreasing from 2011 to 2014 — *Slumping PBR sales. Images property of their respective publishers*

How to Use Psychographics for Business?

It is better to find an under-served market and create a product/service for them than wait for a market to find your product/service since you don’t have over one hundred fifty years for your product or service to be found by a market. You can read about more businesses that found a need and filled that need.

Your Startup Guru used psychographic analysis to differentiate our client’s brand from that of their competitors yet stay true to their envisioned identity. Psychographics are used in market research as a way to divide consumers into sub-groups based on shared psychological characteristics. Age (Young vs. Established), Popularity (Unique vs. Mainstream), Price (Expensive vs. Inexpensive), and Style (Function vs. Fashion) was used to find the spaces their competitors occupy, and there might be an opportunity for our client to find an under-served market. In the case of our client, they wanted to stay within a fairly competitive zone of youthful, unique, pricey, and fashionable. However, if a brand wants to target an older, fashion-forward market, then research into the type of prints they like, how and where they wear the product, how the product makes them feel, etc., through surveys, focus groups, and informational interviews will be invaluable.

Swimsuit brand psychographics

Launch and Grow Your Business

October 20, 2020

Make the right choice

Money is extraordinarily tight for most people right now so starting a business is a pipe dream that has been put on hold indefinitely. However, you can make the choice and do the many things you can do with little or no money to continue to make incremental progress.

One of the most important yet least expensive things you can do is gain knowledge. Research into who your customers are, who your competitors are, what it costs to launch, who can supply raw materials for your product, etc. is relatively inexpensive with a simple online search but a critical. Research is an important task because it also tells you if your idea is feasible. A feasibility study is done to consider the various aspects of a business to see if it is a viable undertaking. Very briefly, feasibility studies are curtailed business plan-like documents where you outline your product/service, the business model, your competitors and your customers, expected revenues/expenses/startup costs. A well done feasibility study can save hundreds of hours and thousands of dollars in sunk costs.

Your Startup Guru offers price matching, discounted fees, and revenue sharing options to work with tight budgets. Contact us to get started on your feasibility study.

Make the right choice — do not go back to sleep and just dream.

August 31, 2020

A Rough Start but the End is Yet to be Determined

March 31, 2020

A great episode from a great podcast

NPR’s How I Built This is a fantastic podcast that brings the stories behind some of the world’s best-known companies. How I Built This interviews innovators, entrepreneurs and idealists about the movements they built.

Peloton co-founder: John Foley

In this episode, they interview John Foley, one of the co-founders of Peloton; the fitness and media company that you’ve probably seen commercials for.

In the interview, they greatly undervalued John Foley’s network and experience but nonetheless, this episode touched on several relevant topics my clients often face. I picked this episode because it was a little more in-depth and enlightening than other episodes in that Foley he talks about:

having the discussion with this wife about moving in with her parents if the company fails,
how everyone is similarly able including Harvard MBAs,
the CEO being the janitor when starting out; something I discussed in a previous post about bootstrapping
how VCs are not very adventurous,
how Peloton is only recently profitable after 7 years

There are also great questions asked by interviewer that touches on market trends such as arcades no longer thriving due to user experience-to-price dynamics (i.e. video game consoles vs arcades due to quality of experience), penetration/awareness strategy which led to their distribution model given that malls are making an industry correction, and lastly the trademark question: “How much of this was because of your intelligence and hard work, and how much of this was just luck?”

FYI, I always discuss market and industry trends, launch and penetration strategy, as well as bootstrapping in all my business plans.

The entire podcast can be heard here

May 7, 2019

See a need, fill a need

Entrepreneurs often see a need through their own personal experiences and fill that need with their business idea. This is a great strategy but sometimes doesn’t tap into a market large enough.

In episode #850 of Planet Money, The Fake Review Hunter, the host interviews Tommy Noonan, creator of SupplementReviews.com. SupplementReviews.com is a highly popular website that provides unbiased user reviews of health supplements. However, Tommy soon found that there were suspiciously positive reviews. Because Tommy’s entire website was based on authentic user reviews, fake reviews became an existential threat. After a lot of research, he found that some of these reviews were written by supplement companies. He uncovered so many fake reviews that he started noticing a pattern, almost like a modus operandi. They were often single product/brand reviews, used fake pictures, had lots of reviews in a short period of time, and/or only had one review. Sometimes the “reviewer” would give positive reviews for one brand and negative ones to competing brands.

This is when Tommy had his a-ha moment. If his website had fake reviews, others would also probably have them. So he created another business that aligned with one of the juggernauts of the internet, Amazon. Tommy’s site, which uncovers fake reviews, is called ReviewMeta.com.

How to find a need

As mentioned at the top of the post, most rely only on their personal experiences or that within their network. Sometimes the need is obvious. For example, at a 7-Eleven in Shirley, New York, one 7-Eleven sells more coffees than any other franchise in the US, all because of one store manager who knows virtually every customer’s name and greats them. No special location mojo or customer flow algorithm, just old-fashioned customer service. You can read more about it in my post Competitive Advantage and Coffee.

Other times it is not that obvious. In that case, you have to hustle differently. How do you do more “work” when you’re already working to the bone? Find efficiencies: know your customers, know your competitors, and lower your expenses by working on learning more doing more research in episode #700 of Planet Money, Peanuts, and Cracker Jack. In Boston’s Fenway Park, Jose Magrass is the top seller. One year, on opening day, he sold 500 hot dogs, $2750 worth of hot dogs in a single game. In fact, Jose has been the top seller for over five years. Part of his secret? He has a spreadsheet where he analyzes many factors beyond just the weather, such as what his competing vendors are selling and what fans are likely to purchase depending on the price of their seats. For example, behind home plate diet coke sold better because possibly that is where the “vain people” sit. That kind of analysis is impressive.

August 10, 2018

Sober Bar Financial Projections

Your Startup Guru created financial projections for Sans Bar, a one-of-a-kind sober bar in Austin, TX. Sans Bar’s mission is to provide a safe, sober environment for adults to celebrate life while promoting personal and social wellness.

With the help of our financial projections, entrepreneurs can see how much they need to make and save in order to meet their financial needs; in addition to many many other uses. You can read more about the importance of a financial plan.

May 1, 2018

The Importance of Planning

Excess inventory, cost management, and other issues are a reality for most businesses. When uncontrolled, a business can face inadequate cash reserves and even bankruptcy.

To mitigate these issues, proper industry and market research coupled with financial planning for contingencies is crucial for any business. Whether you’re in the ideation phase or are already up and running, knowing how much to allocate to the various activities a business engages in is difficult so contact me and let’s create a strategy that works for your business.

November 7, 2017

Festivals, Farmer’s Markets, Conventions, oh my!

It’s summer and festival season is here. Events are big business with over 87 million people attending trade shows, conventions, & conferences; while 32 million people attend music festival. Some annual industry and market stats:

Trade shows, conventions, conferences
- Number: 284,600 annually
  - There are 248 convention centers in the US with a total of 56.29M prime exhibit space.
  - The majority of conventions (21%) have 1,000 – 2,499 attendees
- Participants: 87,728,000
  - Average attendee spends 8.3 hours viewing trade show exhibits
  - 81% of trade show attendees have buying authority
Music festivals, fairs, and other festivals
- Number: 1,413 annually. Music festivals alone total over 800 annually
- Attendees: Over 102 million people annually. 32 million people go to at least one music festival annually.
  - Attendees spend on average, $207 a year on live music events and digital music/streaming
  - 1/3 of all festival fans go to more than one festival per year
Farmers’ Markets
- Number: +8,400 markets that convene regularly
- Attendees: 310,800,000
  - Farmers’ market shoppers spend a mean dollars/week was $25.38
  - Shopper visit an average of 6.12 times/month

What It Means To You

Events are targeted. So attendees are in your market, many in your target market. Renting a booth, depending on the event, can be fairly inexpensive. This is an economical means of raising awareness for your product/service for the following reasons:

You are not locked into a commercial lease contract
Can test the viability of your product/service
Get targeted market feedback

Some of what you may need depending on the event:

Mobile merchant services such as Square
Email collection method
Banners and booth appeal
Ready-for-market product/service
- Or compelling marketing materials (videos, images, samples) of your product/service.

Read more about festivals and marketing.

June 30, 2017

The Hard Thing About Being The Boss

I was chatting with my buddy who is the VP of Product at MomentFeed, an online customer experience management platform for multi-location brands, and we talked about The Hard Thing About Hard Things a book by mega-investor and venture capitalist Ben Horowitz.

Entrepreneurship is not for everyone. There are many very tough decisions with no “right” answer. As such, I tell a lot of my clients that entrepreneurship isn’t for everyone. To the many up-sides, there are many down-sides that unless entrepreneurship is a calling, can be too much.

In The Hard Thing About Hard Things, Ben Horowitz, cofounder of Andreessen Horowitz and one of Silicon Valley’s most respected and experienced entrepreneurs, draws on his own story of founding, running, selling, buying, managing, and investing in technology companies to offer essential advice and practical wisdom for navigating the toughest problems business schools don’t cover.

His advice is grounded in anecdotes from his own hard-earned rise—from cofounding the early cloud service provider Loudcloud to building the phenomenally successful Andreessen Horowitz venture capital firm, both with fellow tech superstar Marc Andreessen (inventor of Mosaic, the Internet’s first popular Web browser). This is no polished victory lap; he analyzes issues with no easy answers through his trials, including demoting (or firing) a loyal friend;
whether you should incorporate titles and promotions, and how to handle them;
if it’s OK to hire people from your friend’s company;
how to manage your own psychology, while the whole company is relying on you;
what to do when smart people are bad employees;
why Andreessen Horowitz prefers founder CEOs, and how to become one;
whether you should sell your company, and how to do it.
Filled with Horowitz’s trademark humor and straight talk, and drawing from his personal and often humbling experiences, The Hard Thing About Hard Things is invaluable for veteran entrepreneurs as well as those aspiring to their own new ventures.

An eye-opening, sobering, and inspiring read. Recommended for anyone interested in business.

April 24, 2017

Live by the sales projection, die by the sales projection

Creators of the board game The Contender: The Game of Presidential Debate raised $140k on Kickstarter but ended up $40k in debt due to inaccurately predicting future sales. This caused them to order more games than they could sell and ultimately caused them to go into the red for some time.

So how do you predict sales? Forecasting is as much art as it is science, finding a right method that is accurate will greatly enhance the efficiency and profitability of any business: over-ordering materials, under-allocating resources, etc. all undermine a company’s operations.

The selection of a method depends on many factors—the context of the forecast, the relevance and availability of historical data, the degree of accuracy desirable, the time period to be forecast, the cost/ benefit (or value) of the forecast to the company, and the time available for making the analysis.

When a company forecasts for a particular product, it must consider the stage of the product’s life cycle for which it is forecasting. The availability of data and the possibility of establishing relationships between the factors depend directly on the maturity of a product, and hence the life-cycle stage is a prime determinant of the forecasting method to be used.

All Your Startup Guru business plans come with projected financial statements. We use a combination of industry growth data, historical sales data (if the client has any), seasonal adjustments, advertising expenditures, and other factors pertinent to the specific client.

Which method is right for you? Contact us here and let’s figure out how to plan for your company’s future.

December 6, 2016

Category: startup