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The health of small and medium businesses is a major factor of the economy. The SBA considers companies with less than 500 employees to be “small businesses,” which encompasses 99.7% of all businesses.
2020 has been devastating for businesses throughout the Nation. More than ever, Shop Small Saturday is vitally important.
Your Startup Guru client Corrio is applying to present by panel discussion at SXSW PanelPicker Online 2021. Your Startup Guru created a pitch deck for Corrio which allowed them to fundraise as well as enter into a private group of international members comprising an angel investor networks.
Corrio was accepted last year but with the pandemic, plans had to change.
Media streaming service Quibi shutting down six months after launching. Their closure is not surprising because Jeffrey Katzenberg, the former Disney studio head and DreamWorks co-founder missed one important lessons when selling something new: make it familiar.
In a previous post, we discussed how industrial designer and marketer Raymond Loewy created the concept of MAYA — Most Advanced Yet Acceptable. His firm designed mid-century icons like the Exxon logo, the Lucky Strike pack, the Greyhound bus, as well as Frigidaire ovens and Singer vacuum cleaners. Even the blue nose on Air Force One was his idea. Loewy had an uncanny sense of how to make things fashionable. He believed that a balance must be struck between two concepts: the curiosity about new things and a fear of anything too new. He said to sell something surprising, make it familiar; and to sell something novel, make it novel.
What is Quibi?
Quibi is a media streaming service that promised to reinvent television by streaming high-quality content in ten-minute-or-less episodes to “the TV in your pocket.” Quibi, is short for “quick bites.” Katzenberg believed enough mobile-phone users would use their spare minutes of downtime — while waiting in line for coffee, riding the bus or subway — to watch bite-sized episodes of premium, Hollywood-quality video.
The concept itself is great except all of their content was new and it cost $4.99 (with ads) or $7.99 (without ads) per month. People were not going to shell out $5 per month to watch something they’ve never heard of with commercials. Also, the short episodes might not be long enough to engage the audience. Ultimately, their revenue model did not match their pricing strategy (1, 2).
What Should Quibi Have Done?
Using Loewy’s lessons, in order to make the shows on Quibi familiar as well as its short format, they should have gone with the freemium model by giving one month free with an additional month if they get someone to join. This will give time for people to bond with the shows before introducing the paid no-commercial version. Hulu used this same pricing strategy and it worked out well for them.
Quibi was to launch in the spring of 2020 with 50 original shows, and another 125 were to be rolled out by the end of the first year. Recognizing the risk of making something for an unproven platform, Katzenberg typically offered to pay producers’ costs plus 20 percent. “People on Quibi have $100,000 a minute to make content,” Katzenberg tells me. “That doesn’t exist on other platforms.”
This production pace and cash burn is difficult to sustain and now, in a fire sale, they are giving out free 6 month trial memberships in an attempt to gain viewership but it was too little too late.
Pabst Blue Ribbon’s (or PBR) rise and fall is a story of a market finding a product — unfortunately, it 170 years for it to happen. 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). If hipsters were around 170 years ago, it wouldn’t have taken one hundred seventy years for PBR to find popularity.
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.
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”, 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 — psychographic segmentation.
What is Psychographic Segmentation for Business?
Psychographic segmentation is 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.
As PBR’s popularity grew, it was departing from the zone of consideration – the region of price and popularity where hipsters were willing purchase from. Also, as hipsterism became more mainstream, the association of PBR with hipsters caused a self-fueling downward cycle.
How to Use Psychographic Segmentation for Business?
Your Startup Guru used psychographic analysis to differentiate our client’s brand from that of their competitors yet stay true to their envisioned identity:
How to Do Market Research for Business?
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, what they like/dislike about it. How long they have used it, is it expensive, how does it make them feel, etc. These questions will give you valuable insight on 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, what they can improve on. Sometimes employees are very happy to share details you cannot find anywhere else.
Industry and trade publications for your particular sector are also a great source of information. Some are free while some require memberships.
So What Should Pabst Blue Ribbon Do?
Given that hipsterism is on the way out, a brand extension with Pabst [pick your color] Ribbon which is guerilla marketed to a new niche market segment such as Yuccies: Young Urban Creatives (that are a slice of Gen Y) with product placement on their YouTube channels is a viability…or wait another +100 years.
Contact us today to get started on market research that will help pinpoint your target market.