Get your wings, pour your heart and ride!September 25, 2020 2020-09-25 15:13
Get your wings, pour your heart and ride!
Get your wings, pour your heart and ride!
“Let’s replace Coca-Cola as the largest non-alcobev company in the world; do you have suggestions?” muses Rory Sutherland, Vice Chairman of one of the largest ad agencies in the world, Ogilvy, in his book Alchemy. If not in a particularly mischievous mood, an acceptable answer to him would be along these lines, “we need a drink that tastes nicer than Coke, costs less than Coke and comes in a really big bottle so people get great value for money.”
The right answer, nevertheless, was, “hey, let’s try marketing a really expensive drink that comes in a tiny can and tastes kind of disgusting?” And ‘disgusting’ was not his opinion; the response to a market survey for this product was near unanimous anger; one of the participants said, “I wouldn’t drink this piss if you paid me to.” And yet, Red Bull managed to sell 7.5b cans in 2019 and generates enough money to fund F1 & NASCAR racing teams on the side! And, of course, it has given ‘wings’ to millions of people.
Rory, in his fabulous book, goes on to explain how a bunch of ideas, that no sane person would have invested a penny in, have gone to change the world. Imagine someone pitching the following ideas to you:
1: What people really need is a cool vacuum cleaner; it doesn’t matter if it costs four times its competition. (Dyson)
2: … and the best part of all this is that people will write the entire thing for free. (Wikipedia)
3: I confidently predict that the great enduring fashion of the next century will be a coarse, uncomfortable fabric which fades unpleasantly and which takes ages to dry. As of now, however, it is only popular with labourers. (Levis)
4: We will force people to choose between only three or four items. (McDonalds)
Pour your heart: Speaking of doing things the illogical way, think of this almost USD100b market-cap corporation that was built on the premise that people will buy this product from its stores by paying multiple times of what it costs them to make it at home, almost every single day.
Starbucks was a ground coffee merchant for a decade before it began serving coffee as a drink. Howard Schultz writes in his book Pour your heart into it that he tramped the streets of Seattle for a year giving presentation s to investors; of the 242 people he approached, 217 rejected his proposition outright, “coffee is not a growth industry,” he was told.
Schultz struggled to raise the USD4m he paid to buy Starbucks from its previous owners. He then changed the way people drank coffee – ‘one person, one cup, one neighbourhood at a time’ as the company’s mission statement says. For a dollar to two more, they could have a real sensory experience; his aim was to ‘blend coffee with romance’, creating a warm and enjoyable environment where along with coffee, you could listen to a bit of jazz or ponder life’s questions, thereby creating ‘a third place’ that was neither work nor home. Today, Starbucks operates at over 30,000 locations worldwide in more than 70 countries.
The opposite of a good idea: The human brain finds it difficult to comprehend (as to why such ideas succeed), in part because it is conditioned to look at a problem from a logical standpoint. Highly educated people don’t merely use logic; it is ingrained in their identity—it’s who they become.
A product is likely to sell because either not many people own it, so it must be good or lots of people own it, so it must be good—and both can co-exist. While in physics, the opposite of a good idea is generally a bad idea, in life the opposite of a good idea can be a very good idea, and both opposites often work.
Bikes: Now for an inspirational story that’s home grown and this one is as cultish as it gets—bikes! The brand Bullet was initially manufactured by Royal Enfield (before it dissolved in 1971) and is now owned by Eicher Motors. It has outlived peers such as Jawa Motors’ Yezdi and Escorts’ Rajdoot.
A series of bad decisions in the 1970s and 1980s had riddled the company with lots of debt with business es spanning across trucks, busses, tractors, footwear and garments. This went on until 2006, when the current CEO Siddhartha Lal initiated an apocalyptic fire sale that saw Eicher divest all but the motorcycle and truck divisions.
The motorcycle initially appealed to buyers because one could endlessly tinker with it (yes, that was the charm!). Nevertheless, Eicher started investing real money into its bikes; the electric start grew more reliable and fuel injection & transmission were revamped. This has started to pay off over the past five years as Eicher has generated operating margin of close to 30%—miles ahead of the competition. It hasn’t come without its fair share of mistakes, but from selling mere ~300,000 units in 2015, the company sold over 800,000 units in 2019 (pre-covid year), and now Jay Leno owns one and so does Billy Joel.
We started with a bunch of ideas that changed the way business was always done; let us end with ideas that changed the world (especially given that November 3 is so close). Irrational people can often be more powerful than the rational ones, arguably because their threats appear more convincing. “I will build the wall and make Mexico pay for it,” was a far more compelling argument (well, at least to voters) compared to the four years of congressional infighting to bring jobs back to the United States. They say, if you are totally predictable, people will find a way to hack you; but a little bit illogical and you end up giving ‘wings’ to the world while owning a F1 team, building USD100b corporation , promoting the best performing auto business or living in the White House.
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