Good Morning, Operators!

Happy Monday! I hope everyone had a relaxing weekend. I amused some friends on IG with some cooking content and took in a few games of football from my couch. We have some of the busiest weeks in retail ahead of us, so I’ll get straight to our content. Today' we’re going to focus on product launches since there have been a few high profile product launches in the last few weeks (Ridge Travel, Skims Men’s Line) and many brands consider launching new products during the holiday shopping season.

Product Launches: Look Before you Launch

While it may feel “Exciting” to launch a new product and expand into a new market or category, it isn’t always the best idea. Given the pervasiveness of flex posting on Twitter and LinkedIn, lots of founders and operators feel compelled to “keep up with the joneses” by showing off to their investors, industry peers and partners, which typically sounds like “Look at this cool new product I built, please come give me more money and buy my stuff!”.

This isn’t to say that one should never launch a new product, but if you have problems to take care of in your business, you need to consider whether taking on this intense, and new project is going to add real value or distract from more pressing priorities, which is why you should make the following considerations when weighing the possibility of a new launch.

Finding “Problem - Market Fit”: Does a Problem exist?

Step 1: Scan Social Proof: Within your category of interest, do a deep-dive on the major players. Go through their social media accounts and look not just at what the creators that they partner with say about them, but look at what real customers say about them.

• What problems do these products solve?

• What do people say about the product? What are the positive attributes + main selling points?

• What do people not say about the product? (this is how you find your potential fit!)

• How do people use the product? What does the experience of using it look like? (This is where taking the time to really do the research pays off)

• Case Study: Hexclad vs Caraway:

  • Caraway sells itself as a “clean cooking” solution with non-toxic pans and beautiful design. They consistently tout their superior product to teflon coated cookware.

    • What they do NOT say: In spite of talking about how easy they are to clean, they don’t go into detail about it (because despite being high quality cookware, their products are NOT dishwasher safe)

  • Hexclad sells itself as the ultimate hybrid cookware solution; “The rolls royce of pans” and leans heavily into their partnership with Gordon Ramsay to communicate that social proof.

    • For me, where they won me over was seeing that I could use ONE pan for several different cooking purposes and that their pans were dishwasher safe.

    • Compared to Caraway, Hexclad delivers more value because they show how an end consumer can get more use out of one of their product and has a lower cost of use (lasts longer, and is easier to clean!)

Step 2: Assess the Category & TAM: Do people actually want this product?

• Demand: Who wants this product ? How many people want it? (and how do they match up against the demo of our current customer base?)

  • Is there a seasonality to the demand in this category? E.g. Most people in the US aren’t buying snowboards in the summer time.

• Growth: Is demand in this category growing? If it is growing, do we have reason to believe that growth will continue? Why? What are the growth catalysts for this category.

• Competition: How many players are there in this category? How competitive are the supplier, 3PL and other partnerships? If you’re in CPG, you should also consider “how competitive is it to get on the shelf in big box retail?”

Feasibility: Can you launch this?

Once you’ve done your homework on the category and the problem you want to solve, you need to assess feasibility; i.e. How much time, money, effort, and resources is it going to take in order to launch this new product? In addition, how hard is it going to be to get potential customers to buy YOUR product vs someone else’s?

Feasibility: Product Portfolio Fit: How does this product fit in with the other products we sell? Is this a product that can be bought with others and used in a complimentary fashion? (e.g. someone who buys a T shirt from True Classic may also be thinking of buying a sweatshirt)

Feasibility: Product Economics + Operations:  

COGs: How much will it cost to produce and sell this product? Are there any efficiencies we can capture here ? (e.g. using materials from other products sold, scaling up existing production processes & resources, etc)

AoV & Pricing: How much is our consumer of interest willing to pay for a product like this? How strong are the margins?

LTV: Based on how the product is used/consumed, what does LTV look like? Is this a product a customer is going to purchase multiple times? Or is this going to allow us to sell that same customer additional products at a lower CAC?

Branding: What is our unique angle for this product vs others? Is it features? Product quality? Or is it a differentiated brand ? (E.g. Liquid Death)

Case Study: Ridge launches Travel line:

Some of you might be aware that Ridge Recently launched a Travel line. Here are a few observations from my end on why this is a GREAT case study for launching a new product line. See some additional notes from Sean here. 

• Problem statement: Everyone flies + travels, yet many of the leading luxury brands have a customer base that is >70% female.

• Competitive analysis: There isn’t a travel line that markets itself to men and is highly functional + lacks stuffiness.

• Strong Feasibility: Ridge’s travel line pairs well with its wallet products and offers significant opportunities to grow LTV via upselling from one item to another. E.g. Someone who buys a backpack, may also be a great customer for a roll-on luggage bag, and because they already made a purchase, Ridge can likely reaquire them at a much lower CAC than someone who is a net new customer to Ridge.

Sean has clearly done his homework and I cannot wait to be a customer of the Ridge travel line.

TLDR; Actions to take if you’re considering launching a product:

1) Assess “Problem-Market Fit”: What is the problem and what are other brands doing about it? How big is the TAM?

2) Assess Feasibility: How easy is it to make money in this category? Would it be easy for my brand ?

That’s all for today! Have a great week everyone 😄 

Zach

P.S. If you like this content and think it may be helpful for other operators in your network, feel free to forward this around and follow me on Twitter + LinkedIn!