B2B Growth Insights: Mar 2021
MINI “GROWTH CASE STUDIES” OF THE MONTH
[1] Find reuse applications for a nascent technology to speed up its adoption
Battery storage has been slow to take hold in industrial markets. An Australian technology developer, Relectrify, has started selling units that repurpose expired Nissan Motor Co. Leaf batteries to create products that store renewable power at manufacturing facilities. The lower costs of reused battery systems will help spur adoption among industrial users. Relectrify can “deliver products that are as much as 50% cheaper than brand new systems while offering at least 75% of the life-span”.
[2] Adopt a ‘reverse franchise’ mindset to boost growth for small, independent businesses
Slice replicates the kind of value Domino’s offers to its franchisees for local pizzerias. Among other things, Slice aggregates buying power for local pizzerias to get better rates/lower costs on consumables (ex: pizza boxes), handles the back-office efforts (ex: managing orders, answering calls), increases the size of orders and order frequency by providing a marketplace for local pizzerias, offers 3rd party services (ex: delivery) at competitive prices.
[3] Set limits to your operations and pass ‘violations’ to your customers to improve profitability
The new CEO of UPS believes in the power of NO. UPS is moving away from its traditional strategy of chasing volume to fill its network. Few examples of this – (i) UPS canceled shipping contracts with certain corporate customers after evaluating them on value vs. volume. The company optimizes for more profitable deliveries (ex: heavy packages). (ii) The company adds surcharges on packages for big retailers to stick to its shipping limits and avoid overwhelming the UPS network.
[4] Insert yourself into a high-volume part of your customer’s business to reduce churn rate
Stripe became the “world's second most valuable venture-backed company”. The company offers online payment processing for internet businesses. The growth in the online economy is only going to drive more scaling opportunities in the future. Stripe joins several companies like Salesforce (customer support), AWS (cloud computing) that provide solutions that serve as the ‘plumbing’ for crucial company activities.
[5] Repurpose available networks to find alternate customers or recycle excess ‘produce’
About a year ago, the “closing of restaurants, hotels, and schools left some farmers with no buyers for more than half of their crops”. This meant that many farms had to destroy fresh goods they could no longer sell. One proposal of a “Farmers Post” suggests using the USPS to deliver local produce to your door. There are multiple benefits in this proposal – (i) low-income consumers can still afford it, (ii) the national reach of the post office will ensure availability anywhere in the country, (iii) this offers USPS another source of revenue.
[6] Pick ‘cultural influencers’ to target unconventional early adopter networks (for consumer tech)
The customer acquisition strategies of Cash App and Venmo make for an interesting case study. Venmo was recreating the growth model of many tech startups by focusing on Ivy League users. Cash App, on the other hand, aligned with hip-hop influencers who tend to engage in fan giveaways. This brought down their customer acquisition costs substantially compared to traditional banks. The user base also tells the story of this strategy: Cash App’s user base is stronger in the South and Midwest vs. coastal metro hubs (New York, San Francisco).
[7] Eliminate the long lead time for companies trying to comply with newer practices, regulations
ESG-focused investors are forcing companies to take a hard look at their decarbonization efforts. Companies must measure their footprint, take actions to reduce emissions, and report on the progress. Watershed offers a platform for companies across carbon-intense supply chains – think food logistics, electronics, healthcare, to name a few – to measure their footprint and build a carbon reduction plan (ex: buy clean power, fund carbon removal projects). Watershed solves the data problem behind reporting and offers an integrated decarbonization marketplace.
[8] Open up integration opportunities as your product matures beyond the initial use case
Zoom gained traction over last year for delivering incredibly well on its (base) use case of video communication. How can it build on this success? I talked about the strategic choices facing Zoom in one of my blog posts last year. It’s worth focusing on Zoom’s efforts around increasing user activity in its platform. The launch of Zoom Apps was a way to bring other apps (ex: Slack, Asana, Jira) into the Zoom experience. Recently, the company also introduced “a new SDK (software development kit) to help developers embed Zoom video services inside another application”.
INTERESTING BOOKS OF THE MONTH
[9] “Working Backwards: Insights, Stories, and Secrets from Inside Amazon” by Colin Bryar and Bill Carr
Key Takeaways: A lot of popular books about Amazon parrot the same talking points. Hence, my effort lately has been on learning more about the smaller details – ex: practices, processes, day-to-day behaviors. Following are the top 5 ‘behind the scenes’ insights that stood out to me –
Bar Raiser Hiring Process: Every new hire should “raise the bar,” that is, be better in one important way (or more) than the other members of the team they join.
Six-Page Narrative: Ban PowerPoints. Write short narratives (no more than 6 pages) to describe, review, or propose any type of idea, process, or business.
PR/FAQ: Before you build any product, start from the customer experience, and work backwards from that by writing a press release that announces the product as if it were ready to launch and an FAQ anticipating the tough questions.
Single-Threaded Leadership: A single person, unencumbered by competing responsibilities, owns a single major initiative and heads up a separable, largely autonomous team to deliver its goals.
Controllable Input Metrics: Identify and focus your efforts on (input) metrics you can directly control which can have the greatest impact on output metrics like share price, free cash flow per share.
[10] “The Data Detective: Ten Easy Rules to Make Sense of Statistics” by Tim Harford
Key Takeaways: Any knowledge worker gets a lot of numbers thrown at them. It’s only prudent to have a methodology of sorts to figure out what you can trust. Following are 10 rules of thumb that might be helpful in that effort.
Learn to stop and notice your emotional reaction to a claim, rather than accepting or rejecting it because of how it makes you feel.
Look for ways to combine the “bird’s eye” perspective with the “worm’s eye” view from personal experience.
Look at the labels on the data you’re being given and ask yourself if you understand what’s really being described.
Look for comparisons and context to put any claim into perspective.
Look behind the statistics at where they came from – and what other data might have vanished into obscurity.
Ask who is missing from the data being shown and whether your conclusions might differ if they were included.
Ask tough questions about algorithms and the big datasets that drive them, recognizing that without intelligent openness they cannot be trusted.
Pay more attention to the bedrock of official statistics (ex: CBO, Statistics Canada) – and the occasionally heroic statisticians who protect it.
Look under the surface of any beautiful graph or chart.
Keep an open mind, asking how you might be mistaken, and whether the facts have changed.
BONUS GENERAL BUSINESS READS
Clubhouse is recording your conversations. That’s not even its worst privacy problem.
Microsoft Mesh feels like the virtual future of Microsoft Teams meetings
An interesting look into megatrends that keep boosting the sales for the entire HVAC industry
The health insurance startup banking on the continued growth of the American gig economy
Citi: Bitcoin is at a tipping point and could become the ’currency of choice’ for global trade
A new platform to help influencers get jobs
Tesla is plugging a secret mega-battery into the Texas grid
FAO Food Price Index (FPPI) – “rising global food prices could presage social unrest”
In 2050, most vehicles on the road would still use gasoline – reason: slow fleet turnover
EIP Climate Tech Index – tracks public companies providing tech for global decarbonization
There’s an Airbnb (sharing marketplace) for swimming pools
Interesting think piece: What countries will fight over when green energy dominates
US e-commerce live streaming market will eclipse $25B in sales by 2023
Free Tool: calculate how bureaucratic your organization is
A beginner’s guide to voice marketing
Sequoia Capital to startups: get ready for an economic comeback
The environmental cost of “CryptoArt”
Paper – “seller reputation limits the extent of profitable price gouging”
Ark Invest launches a space exploration ETF
Keep Learning and Carry On!
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