Happy 2020! I’ve been hearing some debate on whether a new decade has started or not, so I turned to my friend the internet and came up with the following:
There are two main methods of counting decades. The first method, counting ordinally, counts decades starting with the first year 1 CE (For example, the years 1981–1990 is referred to as the 199th decade or the 9th decade of the 20th century), while the other, counting cardinally, groups years based on having the same digits (For example, the years 1980–1989 is referred to as the 1980s, or commonly known as the eighties).
A recent YouGov poll of 10,000+ Americans showed that 67% count cardinally, 17% count ordinally, and 16% aren’t sure what to do.
As for me? Bring on the new decade!
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Rowing Blazers 🚣🏻
One of my best friends growing up was on Oregon State’s crew team - I spent an afternoon training with him several summers ago and quickly learned that rowing is brutal. It’s like running a marathon sitting down in a cramped bucket while a short man screams at you.
But I also learned that regattas have a very distinct fashion scene, a lot like horse racing or polo. And the only brand I know of that is tapping into this scene is Rowing Blazers.
Rowing Blazers was founded in 2017 by Jack Carlson, a former member of the United States national rowing team. Their style is overtly preppy, with go-to-hell colored jackets and oversized sports coats.
While I won’t be jumping into a shell again anytime soon, I could definitely get on board with Rowing Blazers.
Otherland 🕯️
This holiday season I noticed a lot of my friends use scented candles in their apartments. Besides being another sign that I’m getting old, it’s also an indicator of a recent trend: mood-setting candles.
While candles have always been readily available in department stores, Otherland took the direct-to-consumer approach and is focusing on younger generations. Founded by Abigail Stone (Columbia MBA) in 2017, she recognized there was an opportunity for a modern candle brand that was not only pleasant to smell, but also beautiful to look at.
Otherland candles come in millennial-friendly scents such as Silk Pajamas and Mountain Lace. What do they smell like? I have no idea, but according to one buyer they’re “great and not too overpowering”.
Birdies 🦜
Just when I thought there couldn’t be another women’s flat-style shoe start-up, Birdies showed up on my feed. And I’m glad they did - unlike Rothy’s mission of recycling plastic bottles, Birdies differentiates by creating stylish flats that are as comfortable as bedtime slippers.
Founded in 2015 by Bianca Gates and Marisa Sharkey, they recently raised an $8 million Series A from Norwest Venture Partners.
Flats start at $95 and go up into the low hundreds, with on-brand names like The Starling and The Lovebird.
News I’m Following 👀
🥿 Creditors take over TOMS Shoes. Founder Blake Mycoskie sent a company letter last Friday detailing the transfer of ownership.
After being valued at over $625 million in 2014 (when Bain Capital took a 50% stake), the buy-one-give-one-to-charity shoe company couldn’t pay back almost $300 million it owes creditors - so they restructured the deal giving up a majority stake in the company.
The news isn’t all bad, however. The new owners (Jefferies Financial Group, Nexus Capital Management and Brookfield Asset Management) agreed to invest $35 million in future growth to show their commitment to company success.
👟 Over $470 million worth of fake Nike shoes were sold in the US last year. One of the largest counterfeit rings in NYC was busted last year - they smuggled 385,280 pairs of imitation Air Jordans into the country, which could have cost Nike more than $70 million in lost revenue.
This seems like a lot, but the total sales of knockoff goods exceeded $520 billion last year - which is 3.3% of total consumer goods consumption. Counterfeit goods production is at an all-time high, and isn’t showing any signs of slowing down.
Brand Study: Peloton 🚴
A lot of fitness brands made big splashes in 2019, but few garnered as many headlines as Peloton. But from their controversial holiday ad campaign to a tumultuous IPO, the attention hasn’t always been good. They’ve fallen victim to the same public schadenfreude that many other start-ups (ahem, WeWork) suffered from in 2019.
However, this isn’t a newsletter on business strategy; it’s about branding. And Peloton has crafted their brand extremely well. So well that consumers are willing to shell out $2,245 for one of their bikes. How’d they do it? Let’s dive in!
Peloton began as an idea for an at-home Spin class by John Foley. Foley was the founder and CEO of several tech companies (including head of e-commerce for Barnes and Noble) and didn’t have time to go to SoulCycle or Spin given his busy schedule. He wanted to be able to get the same communal workout he got in his classes from his living room - so he hatched a plan to build an internet-capable exercise bike.
After assembling a team of engineers to bring his idea to reality, he raised $4 million in seed funding from angel investors in his network. The next year he launched a Kickstarter in that secured $307,332 in pledged capital from friends, family, and fans who believed in his vision. As his team set about building the bikes, he focused his attention on the other portion of his business: the streamable classes.
Their first studio he set up wasn’t exactly luxurious. Foley recalls:
“We created this 10-by-10 busted, back-office studio with some black curtains and cut a hole in one for the camera lens. We put eight really cheap bikes in the audience and a nicer bike on a pedestal, propped up on some bricks.”
He then convinced several SoulCycle instructors he knew from his favorite studios to join his team and record sessions in the makeshift studio. Although the setting wasn’t ideal, some of the instructors recognized the potential in partnering early on and growing with the company (fast forward 6 years and these first instructors are quite literally famous, with over 200,000 followers on Instagram and brand partnerships of their own).
Over the next 5 years Peloton sold over 577,000 bikes and made fans out of Barack Obama, Richard Branson, Jimmy Fallon, and Kate Hudson. The company IPO’d this past September with shares priced at $29 for an $8 billion valuation. Revenue has doubled since 2018, and there are over 1.4 million users with Peloton accounts.
If you’ve ever seen a Peloton bike up close, it’s nothing special. It looks sleek, but most exercise equipment does. So how did they convince so many people to buy into the brand?
You can’t put a price on health: Actually you can, and it’s high. Equinox learned this a long time ago - people love spending money on what they perceive as their health. There’s psychology around spending money to be healthier (even though often this isn’t the case). Peloton is cashing in on this psychology.
Positioning: At $2,245, a Peloton bike is a luxury item. It’s a status symbol to have one in your home (which if your home is like the one in their ads, you can clearly afford it).
Virality: Embracing the “any press is good press” school of thought, I believe their controversial ad campaigns have been a huge success. Their “Gift That Gives Back” ad has almost 10 million views on Youtube (which they’re paying nothing for!).
Naming: Peloton comes from the french word for a group of cyclists in a race, which compliments the communal mentality of the brand. It also sounds exotic.
I’ve used a Peloton twice in my life - once after a night out with friends (which was a big mistake) and another time while on vacation. While I see the appeal of spending serious money on your health (and following through with exercising), I’m worried Peloton will end up like many other previous exercise manias: collecting dust in middle-class america’s garages.
But until then, crank that resistance knob up to 100.
Jobs 💼
Peloton - Product Manager, Product Insights (NYC)
Marine Layer - Operations Manager (SF)
Internships 🎓
Houzz - MBA Product Management Intern (SF)
Backcountry - MBA Marketing Intern (SLC)
Shareables 😏
🎭 The new Star Wars may have sucked but Adam Driver doesn’t: a TED talk on his transition from the Marines to acting.
⌚ What makes a fake a fake? Interesting deep-dive on fake Rolex watches.
👨🎤 Can you identify these celebrities? Interesting (and interactive!) article on generational celebrity awareness.
✨ Branding nerd alert! A useful website with links to big name brand guidelines.
😬 Hate awkward conversations? How to talk to teenagers, strangers, your doctor, and more.
🍟 Deep-fried: How fast-food jobs have become some of the hardest in America.
🎙️ One of my favorite Tim Ferris Podcasts - Episode 124 with Jamie Foxx.
💳 Serious retail therapy: Ebay’s most expensive and ridiculous items purchased in 2019.
👨🍳 An oldie but a goodie: Anthony Bourdain’s first article in the New Yorker.
Hey! I’m Sean, a first-year MBA at the University of Michigan. Know of a new brand I should feature? Holla at me! I’d also love your feedback - feel free to shoot me a note at seansky@umich.edu.
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