Do not build the Black Rifle Coffee or Warby of XYZ consumer product

Nobody cares that your company is veteran-owned. Nobody cares about your Wharton MBA.

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Introduction

This is a message directly to founders who are focused on a solution, an idea, and branding. I hope it helps you avoid some of the mistakes I have made along the way, and benefit from an alternative perspective.

In February of 2020, I helped launch a startup called Paintru.

We made many mistakes launching Paintru. One of our biggest mistakes was thinking our branding would differentiate us from our competitors.

I see founders make this mistake daily.

They launch a product that is functionally the same as an existing solution, but they use millennial branding or lead with the founders’ military veteran background.

I call this mistake the Black Rifle Coffee Company Epidemic in the military veteran entrepreneur community. In the MBA startup community, it’s the Warby Parker Plague.

First-time founders take the wrong lesson from these startups. We think consumers care about a brand story enough to patronize our business - they do not. Customers only care about the problem you solve for them.

Let’s look at Black Rifle Coffee Company and learn the wrong lessons from their success. But, before diving into BRCC’s story, let’s talk about marketing.

Marketing 101 - Impressions x Quality = Value

Parting people from their money is challenging. Growing sales is the primary goal for any new business.

Here are two basic facts to consider:

1. In a day, a typical American will view 4,000 advertisements.

2. It takes 8-10 interactions with a brand or person before you remember their name/company/schtick.

The sheer volume of people and companies competing for your attention is overwhelming. On social media, television, the news, billboards and restaurant signs - we see ads all day.

The primary challenge for any new business is increasing sales. We boost sales through marketing. Academics complicate marketing, but the basics of Marketing are simple:

1. Get more eyeballs on your message - the number of impressions your brand has with a customer and

2. Provide value to those customers through your marketing - the quality of those impressions

Impressions

An impression is an interaction with a brand.

If you hear the name “Paintru,” - that’s an impression (count 3x impressions in this article). When you see one of our advertisements, that’s an impression. When you get an email from us, see our Instagram post, hear about us from a friend, or see me wearing a branded jacket - those are impressions.

Impressions in isolation are meaningless, however, since the average American has 4,000 impressions with brands daily. So what we care about are quality impressions.

Quality Impressions

Marketing is both a quantity and a quality game, and quality always wins out over quantity.

If I teach you something new, entertain you, hold your attention for a minute while you watch a video - that provides value. Likewise, the best advertisements offer value to customers before asking for reciprocation.

Quality x volume of impressions = value of the marketing

I should probably hire a graphic designer at some point, but hopefully this gets at the point

Taking the wrong lesson from Black Rifle Coffee Company’s success.

In 2014 Evan Hafer, Mat Best, Jarred Taylor, and Richard Ryan launched BRCC.

In 2021, BRCC went public via a SPAC - the company trades at about $2 billion as of this writing. Building a company from $0 to $2 billion over seven years is an unbelievable accomplishment. There are tremendous lessons we can learn from these founders’ success.

BRCC’s founders are vocal about being veterans. Their content marketing machine features images and videos like this -

The military, patriotism, America, and veterans are core to BRCC’s identity.

This is where inexperienced founders make mistakes.

An inexperienced founder looks at BRCC and sees:

1. An undifferentiated product - coffee beans.

2. Those beans are wrapped in military veteran branding.

3. There is literally no other point of differentiation.

What is a commoditized product?

A commoditized product

Commodity: n. a raw material or primary agricultural product that can be bought and sold, such as copper or coffee.

When we refer to a commoditized product, we mean one with vendors who compete on price.

Alex Hormozi’s book “$100 million offers” explains the difference between a commodity product and a differentiated product very simply -

1. Commoditized product - price-driven purchases. A race to the bottom on price

2. Differentiated product - a value-driven purchase

There are differences between various types of coffee - different tastes, roasts, etc.

But in general, most coffee is the same - it's a commodity product.

A notable example of a differentiated coffee product is death wish coffee. They have higher caffeine content and charge a premium to buyers with that specific need.

Black Rifle Coffee Company does not differentiate on product features.

Their coffee does not solve a customer’s pain point in a way different from other coffee. They’re another choice in a saturated category.

The critical mistake - conflating branding as a point of differentiation

Let me walk you through the mindset of a founder who believes they will differentiate on brand -

Here’s the thought process:

1. BRCC is selling a commoditized product.

2. The product is only different because of the branding.

3. I can sell the same product as someone else wrapped in unique branding and capture market share.

Wrong.

Repeat after me, “Branding is not enough differentiation to move the needle when I’m launching.”

Military founders look at BRCC and think that the world needs a military veteran-owned XYZ company. People have to buy XYZ product anyway, so they might as well get it from my specific affinity group, right?

Wrong.

Let’s take a look at a consumer’s thought process when they see that you’re selling XYZ consumer products wrapped in veteran-owned branding:

1. Ok cool backstory from the founders

2. Neat product

3. Let me check Instagram or Twitter and see what my friends are up to

4. *Gets distracted and forgets you exist*

Nobody cares about your branding, backstory, etc. They care that you can solve their problems uniquely or differently.

Once you prove those things, you’ll still need to catch a consumer at just the right time in their lives to close a sale. I receive dozens of cold sales emails a week - I typically ignore them. Occasionally, I will think, “I wish XYZ problem could go away” and serendipitously the next email I check will be an offer to solve that problem - that’s luck and timing.

To get a customer to buy, you need to interact with them many times, prove your value, and make them an offer that shows the value you provide.

So why was BRCC successful?

BRCC was successful because of an audience, not because the founders are veterans.

Mat Best and his friends started creating content online in 2008.

Over the ensuing six years, he built a following of military veterans by providing value to them and asking for nothing in return. His videos were funny and entertaining. He was different from existing creators because he spoke on behalf of and directly to a specific group of people.

In 2013, Mat released “How to be an operator,” a YouTube video that garnered over 100k views in under a week. The tongue-in-cheek poke at the armed forces community went viral thereby expanding his audience.

The audience Mat and his team painstakingly built over the preceding years was the most valuable asset to BRCC’s launch.

The audience was a point of differentiation - they had a 6-year headstart.

The BRCC team were marketers first. They knew that growing an audience was valuable and sounded a dog whistle to attract a specific customer demographic. They ran this playbook with consistency over the course of years. They solved the need for entertainment better than anyone.

Would this approach have worked with any product?

In the years preceding BRCC’s launch, Mat and Jerred launched a T-shirt business to monetize their following.

Although Article 15 clothing is still in business, it has not had nearly the success of BRCC. This is due to the product and market - coffee is a better business. Caffeine is among the most addictive substances on the planet - their customer lifetime value must be exceptional.

I plan to focus large portions of this newsletter on discussions of business model in the future. Understanding how to monetize is an essential lesson for every entrepreneur. For now, let's stick to marketing.

The correct lesson to learn from BRCC

The founders of BRCC are brilliant marketers, and we can learn a lot from their business.

First, they have a core demographic, and they’re not afraid to anger people who are not in their core consumer group.

Most businesses fear angering groups of people. BRCC authentically stands with one group of people. They loudly and proudly wave the flag. They are not afraid of controversy and like to draw the ire of their mainstream competitor, Starbucks. BRCC uses controversy to propagate its message.

In 2018, when Starbucks pledged to hire 10,000 refugees, BRCC pledged to hire 10,000 veterans.

The BRCC founders deliberately drew this point of differentiation. They knew that it would piss off non-core customers but resonate with core customers.

Conclusion

The takeaway of this article is this -

1. To launch a company, you must understand marketing and sales.

2. Selling a product is the only thing that matters for a very early-stage company. Revenue is the almighty metric that keeps a business alive and attracts investors.

3. It is impossible to sell a product without an audience.

To excel at marketing, build an audience and provide them value. Launch a product that solves a real pain point for a specific group of people, and you will capture more value from that group.

Best,

Brendan