“The future ain’t what it used to be,” Yogi Berra once remarked. A perfect advertising tagline for the nascent companies profiled in this article. For them, there’s no staying the course because there’s no course to stay. Their executives can’t use tried and true marketing tactics, and they can’t depend on what’s worked before. Their most basic sales assumptions could spark contentious debate, and the outlook for success is unclear. To survive, these companies must innovate marketing and sales strategies as they progress.
If there were a Mission: Impossible movie about selling, these executives would hear, “Your mission, should you choose to accept it, is to make quota without guidance from past performance indicators, industry best practices and benchmarks, or sales playbooks. As always, should you or any of your biz-dev team get fired or laid off, the VC’s will disavow any knowledge of your actions. Your company might self-destruct within four planning periods. Good luck!”
Opportunity: “Beef cattle production requires an energy input to protein output ratio of 54:1,” according to researchers at Cornell University. I suppose if I wanted to extend this perverse sustainability model, I’d drive to my local Wendy’s in a Lamborghini Aventador Roadster (12 MPG combined city/highway) and buy a Quad Baconator. No need to shut off the engine while I’m inside eating. I want that A/C blowing cold when I get back to my car!
“More than half the U.S. grain and nearly 40 percent of world grain is being fed to livestock rather than being consumed directly by humans,” Cornell’s Professor David Pimentel said back in 1997. “Although grain production is increasing in total, the per capita supply has been decreasing for more than a decade. Clearly, there is reason for concern in the future.”
Here is where Memphis Meats smells opportunity. Instead of raising and slaughtering livestock, Memphis Meats creates food off the animal, by “growing real meat in small quantities using cells from cows, pigs, and chickens,” according to the company’s website. And unlike raising livestock for slaughter, the company claims it gets one calorie of “output” from just three calories of “input.” No “Concentrated-Animal-Feeding-Operations” fraught with pathogens, feces, and antibiotics. Think “clean meat” – the utopia that Upton Sinclair might have envisioned when he wrote The Jungle.
Audacious sales challenges: “First, consumers will have to be educated as the ‘ick’ factor will be tough barrier to overcome. And one study has suggested that lab-produced meat may actually require more energy than farmed meat, so those statistics need to be sorted,” Leon Kaye wrote in a 2016 article, Memphis Meats Bets Lab-grown Meat Can Disrupt the Global Food Supply.
Great quote from the website: “With our home-base in the San Francisco Bay Area, but strong roots in Memphis, Tennessee, we’re using the innovative spirit of Silicon Valley coupled with the rich culinary traditions of the American south to provide better meat for the entire world.” – Now that’s a cosmopolitan meatball!
My advice – no extra charge! “What has to come first is truth” regarding the benefits that come from the company’s products, Eric Stangarone of Foodthinking.co, told me in an interview for this article. “The moment consumers believe the company is pushing nutritional snake oil,” he said, “they will be turned off.”
Opportunity: A peleton is the main group of riders in a cycling race, the company’s website explains. That definition hints at Peleton’s big sales pitch: Athletes can improve results and increase performance when others are actively involved in the workout. Call it Exercise 2.0 – what you get when your bike has an IP address, and you can experience the camaraderie of friends pedaling in place at the exact same time you’re pedaling in place. There’s more. Peleton’s videos show moms and dads working out in gorgeous homes, conspicuously free from clutter, gnats and mosquitoes, oppressive humidity, mud and dirt, and the omnipresent stench that accompanies Pilates class with eighty or more sweating humans packed in a small room. Exercise, comfortably. A grand idea! Not a bratty kid or gym stalker in sight to disrupt a workout. With Peleton, once the kids are tucked in bed, dad can seize 30 minutes of quality time to work out with his cycling buddy three time zones away.
Audacious Sales Challenges: Price. And the ephemeral nature of The Best Exercise Intentions. Peleton cycling machines sell for nearly $2,000, plus $39/month for a subscription to video rides. And you must commit to one year of them. The company gives skittish buyers a prominent reassurance, Financing available, near the ‘add to cart’ button. Not surprisingly, the company’s showrooms are ensconced in some of America’s best neighborhoods, including Corte Madera CA, East Hampton NY, Manhasset NY, Newport Beach CA, Short Hills NJ, White Plains NY, and Tyson Corner VA. That says a lot about the company’s target buyer.
Great quote from website: “Ride now, pay later.” – No kidding!
My advice – no extra charge! Grow the community first – and fast! Consider offering customers a social media experience, but without having to buy the bike right away. As it stands now, Peleton is a premium exercise bike, with benefits. Namely, real-time access to friends and rock star coaches using the same apparatus.
Opportunity: “I want to start a Company that will re-invent semi-recent cars to embody the design esthetic of the cars of the 50s and 60s,” User marcuslaun posted on the Local Motors website in June, 2016. Marcuslaun doesn’t work for a car company – yet. But Local Motors takes his aspiration seriously, and they have developed a platform to help him produce a hydrogen-powered, snap-together simile of a 1954 Corvette – if that’s what he wants to do.
Local Motors is a technology company that designs, builds, and sells vehicles by combining global co-creation with local micro-manufacturing. It’s hard to describe what LocalMotors does without slipping in tech jargon, like Direct Digital Manufacturing, or DDM. If you don’t have time to bone up on the details, you should know that “DDM uses 3D computer-aided design files to drive the computer-controlled fabrication of parts,” according to Larry Schuette and Peter Singer (Direct Digital Manufacturing: The Industrial Game-Changer You’ve Never Heard Of, Armed Forces Journal, October 10, 2011). In June, 2016, Local Motors introduced Olli, the first self-driving vehicle to integrate the advanced cognitive computing capabilities of IBM Watson.
“At Local Motors, we are hell-bent on revolutionizing manufacturing,” said John B. Rogers, Jr., CEO and co-founder of Local Motors. “Car manufacturers have been stamping parts the same way for more than 100 years. We now have the technology to make the process and products better and faster by linking the online to the offline through DDM. This process will create better and safer products, and we are doing exactly that.”
Short time to market, low manufacturing overhead, and open-source design – three proprietary advantages that could leave larger manufacturers in the dust.
Audacious Sales Challenges: Capitalization to fund R&D, expanding university partnerships, and developing brand equity.
Great quote from website: “We are Local Motors. And the world is full of companies nothing like us.” – Wow. Most websites don’t get that existential.
My advice – no extra charge! Champion the Maker Movement. There are millions of people brimming with ideas and engineering talent who don’t work for the world’s car companies.
Opportunity: “Since the Bronze Age,” the company’s website tells us, “advances in metals technology have involved two things: modifying chemistry and modifying microstructure. In thousands of years, that hasn’t changed, until now . . . Modumetal is creating a revolutionary new class of nanolaminated materials that will change design and manufacturing forever by dramatically improving the structural, corrosion and high temperature performance of coatings, bulk materials and parts.” Translation: Modumetal’s technology makes it possible to grow metal using electricity – not heat – as the primary input. And those materials can have highly specialized characteristics compared to traditional metals.
While I’m not one to shriek “disruption!” before the fact, Modumetal’s innovation portends profound changes for the industry, including where metal can be manufactured, the sizes of production runs, and the serviceable life of parts deployed in the field.
Audacious Sales Challenges: Protection of Intellectual Property (for Modumetal, there’s no such thing as over-protecting engineering information); scaling production.
Great quote from website: “The company’s manufacturing process for nanolaminated metals – think metallic plywood with really thin layers – is also a breakthrough, able to deliver materials at a cost that is competitive with conventional alloys.” – That’s a shining example for how to make a complex technology approachable!
My advice – no extra charge! There are many opportunities for Modumetal to provide value and benefits, and it’s easy for Sales to get distracted. Especially now, stick to developing customers in the most profitable segments.
Opportunity: In 2015, 1,215 rhinos were poached in South Africa alone. In 2007, that number was just thirteen. The reason is the precious horn, which is “more valuable by weight than gold, diamonds or cocaine,” said William Ripple, an Oregon State University professor of ecology, who published a study. The current value: $60,000 per pound. Demand from Asia has contributed to the scarcity. “In a survey in Hanoi and Ho Chi Minh City in 2013, 37.5% of respondents said that rhino horn can help treat cancer,” according to The Economist (A Dilemma of Horns, August 8, 2015). For rhinos, the threat of extinction accompanies this explosive market demand. In addition, the poaching method is particularly cruel, involving tranquilizing the rhinos before the horns are harvested. Most of the animals die from blood loss or suffocation.
Pembient aims to replace the illegal wildlife trade, a $20B black market, and the company has tackled the problem from the supply side. “Next year it will begin selling synthetic rhino horn for $7,000 a kilo. This will undercut the market for the real stuff, says CEO Matthew Markus. Others, though, fear that advertising synthetics may boost sales of real horn,” according to The Economist. In 2015, Pembient was one of eleven companies admitted to the inaugural class of IndieBio, a San Francisco-based biotech accelerator (IndieBio also funds Memphis Meats, profiled earlier in this article).
Audacious Sales Challenges: Making sure the basic pricing assumptions play out in the market; convincing buyers that the fake product is better than the real thing (studying the history of faux fur might help).
Great quote from website: “Subscribe for updates on our progress.” – Clearly, Pembient does not anticipate that success will happen overnight.
My advice – no extra charge! I don’t sense that consumers of rhino horn are particularly concerned about conservation or animal cruelty. Success will come from positioning synthetic products as more potent. Is it ethical to pitch a product’s unproven benefits? No, but in this case, it seems so much better than the alternative . . .
Opportunity: “Get an extensive set of data from every run. The mobile app monitors your foot landing, contact time on the ground and cadence, and tracks other familiar parameters. Connect the app with heart rate monitors (HRMs) that communicates through Bluetooth Smart to also monitor your heart rate. Get detailed visualization of your activities right on the smartphone after your run,” Sensoria’s website tells me.
OK – I get it. Sensoria is for fitness enthusiasts and others who like their personal data big.
Audacious Sales Challenges: Convincing customers to trade in their prosaic shorts, socks, and wicking t-shirts and go electronic. Also, persuading consumers that the rechargeable ankle bracelets, left and right socks (it’s true!), and Bluetooth sensor monitoring haven’t sucked the simple joys out of running and walking, and made these activities into a self-indulgent data-mining extravaganza.
Great quote from website: “Each sock features magnetic contact points below the cuff so you can easily connect your anklet to activate the textile sensors.” – What? Wait a minute – I just wanted to go out for a jog . . .
My advice – no extra charge! Focus the sales effort on a) people who have medical concerns where activity monitoring is essential, and b) fitness enthusiasts who love gadgets. If I were selling this product, I’d stop every person I see wearing an Apple watch and running shoes, and encourage them to try Sensoria’s products.
“You can’t overlook the lack Jack/
of any other highway to ride/
It’s got no signs or dividing lines/
and very few rules to guide.”
– Words by Robert Hunter from the song, New Speedway Boogie.
We thrive on extrapolating the future from the past, and finding well-marked pathways to revenue success. But I most admire organizations that accept the challenge of blazing new trails, even when the effort seems borderline impossible. I wish all of these companies well. Stay tuned!