ImaginativePRO Blog

SHARK TANK WINNER SONNET JAMES ACHIEVES HUGE SUCCESS THROUGH NICHE POSITIONING, CRAFTY STORYTELLING AND PRODUCING DRESSES IN THE USA

On January 23, 2019, Whitney Lundeen, founder of Sonnet James, a maker of dresses for active mothers, appeared on the Shark Tank in hopes of securing a business partner and financial investor to contribute $350,000 in exchange for 25% equity in her company, a $1.4 million business valuation. 

Sara Blakely, a Shark Tank visiting judge and investor who likes to invest in female entrepreneurs, noted that Sonnet James produces dress designs similar to many other producers, but accepted Whitney's deal for $350,000 in exchange for 25% of her company because she liked Whitney very much.       

Kevin O’Leary, a regular Shark Tank judge complimented Whitney on a job well done and said that he felt her presentation was the best clothing presentation they have seen over 10 seasons of Shark Tank. 

Whitney is a single mom of two boys who developed the Sonnet James line of women’s dresses to allow moms to have one outfit for every occasion.  Whether they are in a business meeting, out to dinner, on the playground or riding bikes with their kids, women would have an option for clothing that is comfortable and fashionable for all occasions.  Not only has Sonnet James introduced a high-quality product into the mothers market, but they have also created a network of moms which is very important for brand awareness and advocacy.

Click To Enlarge

As Whitney explained to the Sharks, the idea for her company came about when she got tired of mom-look staples like yoga pants and wanted to come up with something fashionable, but easy to clean. Lundeen elaborated.

“I was going through a difficult time in my life, and so I had this idea of making a dress that my mom could have worn that could have reminded her to play with me when I was little.  And I said, ‘Alright, this year, I’m going to take the idea, and I’m going to teach myself how to sew, and I’m going to pattern draft.’ And every night, I would pretty much sit on the kitchen floor crying, trying to teach myself how to do two things I didn’t know how to do.”

The Sharks asked Lundeen to explain what she meant by the idea of the dress reminding her mom to play with her. Holding back tears, Lundeen says that she had a challenging childhood that included some abuse.  She explained. 

“My parents did the best they could with what they had.  I found when I became a mom, I couldn’t engage with my kids as much as I wanted to. And I wanted something that could help me be the mother that I had always wanted to be, and something that could remind me every day when I put it on what my priorities were.”

Whitney wanted something fashionable, yet durable enough for rough and tumble play. She made her own dresses out of four-way stretch modal spandex.  On New Year’s Day, 2013, Lundeen resolved to make her own dress line and she designed 12 different styles of what would become Sonnet James dresses.  Next she sourced fabrics and started making dresses for moms.

Click To Enlarge

She got her business going back in August 2013 with a successful Kickstarter campaign that raised $58,245 and provided proof of product-market fit.  That’s when Sonnet James became a real business. The dresses are playful and durable. They have the classic lines of designer dresses, but they’re safe for “play clothes.” Sonnet James designs cost between $100-$160 and come with a three-day, no hassle try-on guarantee. 

Click To Enlarge

Whitney developed the Sonnet James "playtime" dress line to remind her to be a mom who is present and plays with their kids while feeling confident and put together.  The dresses in the Sonnet James line are all washable and made of quality spandex fabric that has stretch and compression so that it retains its shape throughout washing cycles.  Whitney has designed all of the dresses in her line as well as taught herself how to sew and how to design and create a website.

Click To Enlarge

Sonnet James operates a direct-to-consumer (D2C) revenue model through their website (see below) and had $1.2 million in sales at the end of 2018 with a 75% product margin. The average order size is 2 dresses and their rate of return is 23% which is below the retail average of 30%. 

Click To Enlarge

Sonnet James dresses are made in San Francisco, from fabric produced in New York City and printed in Los Angeles. As part of a community of supportive women, it is important to Whitney that the fabric and the production house work environment are a healthy place for the seamstresses to work. As she told The Hive Magazine, even though she may pay more for the production and thereby make less profit, she wants to maintain a close, one-to-one relationship with the production end of her business. It is “important to me to feel good about where these dresses were being made.” And what is her advice for other mothers who might want to start their own business? Despite all the snags, fears, problems and long, hard hours of work, Whitney says simply: “Just do it!”

So how well has Sonnet James done since the Shark Tank investment by Sara Blakely?  Sonnet James is still in business and still designs out of Whitney's home in Palo Alto.  As of June 2021, Sonnet James is thriving and reported revenues of $6 million.       

COMMENTARY:  Sonnet James is a classic example of an entrepreneurial success story driven by incredible passion and drive and very little capital.  Sara Blakely, the Shark Tank investor who accepted Whitney Lundeen's offer of a 25% share of her young company, noted that Sonnet James dresses were not much different than those made by other garment manufacturers.  So what is the secret to Sonnet James success?  The answer: POSITIONING, STORYTELLING and MADE IN USA

Sonnet James does not owe its success to being first-to-market, product differentiation, lowest cost producer, or even great apparel designs.  Instead, Sonnet James has succeeded where others have failed in a very crowded women's apparel market through crafty storytelling, product positioning and manufacturing in the USA.  Whitney Lundeen has positioned Sonnet James as a designer of "playtime" dresses for moms -- a new women's apparel category.  Whitney's successful appearance on the Shark Tank is a marketing storyteller's dream.  A true "rags-to-riches" story.  Whitney's success post-Shark Tank has produced a lot of "free" publicity which is worth its weight in gold. 

I don't know how much Sonnet James spends on paid advertising, but going from $1.2 million in revenues at the end of 2018 to $6 million by June 2021 can't all be due to positioning, crafty storytelling or manufacturing in the USA.  The "Made in USA" label probably contributes to Sonnet James success for several reasons:

• Job Creation - Made in he USA means creating jobs right here in the good ole USA.
• Quality - Made in the USA has always stood for better quality compared to goods made in China, India or other Asian countries.  Economists at The Boston Consulting group found that 60 percent of Chinese consumers are willing to pay more for products labeled “Made in the USA” than for those labeled “Made in China.”
• Better For Families - Products made in America are better for consumers because they must follow American consumer protection laws and safety standards. Many foreign countries have far less extensive product safety standards than those in the United States, frequently leading to recalls and safety issues.  
• Addressing Poor Conditions - Many countries do not enforce the same worker safety and child protection controls of Western countries. It can be hard for companies to compete on cost with regimes willing to exploit their own people. You’re supporting a higher standard of working conditions when you buy American-made.

S0nnet James has identified or created a new category or "Blue Ocean" as described in the book Blue Ocean Strategy in the women's apparel market:  "playtime" apparel for women.  In 2020, there were 15.6 million single mothers living with young children in he USA.  There are presently 43.5 million mothers (ages 15 to 50) in the USA.  The COVID pandemic, inflation and the Ukraine war with Russia has put a brake on U.S. birth rates. Whether birth rates will continue to decline remains to be seen, but something that Sonnet James needs to keep a careful eye on going forward.               

Courtesy of an article dated February 14, 2019 appearing in Business2Community, a tweet dated January 23, 2019 appearing in Twitter, an article dated February 3, 2019 appearing in Tiny Beans, an article dated May 2019 appearing in the Shark Tank Blog, an article dated January 14, 2019 appearing in Shark Tank Products, an article dated April 21, 2021 appearing in Infoplease and an article dated August 28, 2017 appearing in Made In America Movement

A MANIFESTO ON NEUROMARKETING, OR HOW TO GET INSIDE THE MIND OF TODAY'S CONSUMERS AND WIN THEM OVER

 

It takes more than a fancy logo, fancy catch phrase or brand character to connect with today's consumers.  Today, what counts far more than a puma, a monkey, or a snarling aardvark is the cross-sensory experience your brand offers.  It's not just the emotion, beliefs, personality and desires your brand evokes, but its feeling, touch, view, sound and smell, of which the logo is just one small part. 

When marketing to today's Generation Y (a.k.a. Millennials) and Generation X consumers it's very important for marketer's to use a sensory marketing approach that appeals to the five senses:  sense: hearing, sight, touch, smell, and taste and fulfills their social needs or values.

The sensory marketing approach has given rise to the science of neuromarketing, a new field of marketing that studies consumers' sensorimotor, cognitive, and affective response to marketing stimuli.  In effect, getting inside the head of the consumer.  Neuromarketing has often been equated with brainwashing, an evil concept if there ever was one, which results in the forced modification of human behavior by repeatedly exposing individuals to the same stimuli over-and-over again.  

Neuromarketing has been used very successfuly in the political arena, where candidates for public office use "negative" advertisements that paint their opponent as "soft" on a popular political issue (e.g. national defense, crime enforcement, etal) or "for" an unpopular political issue (e.g. abortion, universal healthcare, etal).  If voter's are continually told that Barack Obama is not a legal American citizen or is a muslim, a lot of people will eventually believe that as true.  Both parties are guilty of using negative ads, but I won't get into political issues.

Without reallly realizing it, marketer's have been using neuromarketing for quite some time. When you come to think about it, a firm's brand equity, is really the sum of all the influences, both sensory, emotinal and social that consumer's connect with a brand.  No where is this more importan5t than when marketing to Generation X and Y.   This is based on my observance of human behaviors especially among Millennials and Gen-X because they are both sensory and social animals.  They are very susceptible to sensory stimulation and place very high value on social interaction and relationships.    In fact, I have developed a manifesto or marketing strategy built on two pillars:  

• Sensory Approach - A marketing approach that involves the five senses: sight, hearing, smell, taste and touch. 
• Social Approach - A marketing approach that involves the social needs of the individual.

It has been my experience that employing only a sensory approach will not prove as successful, and that marketer's must integrate a social approach into the equation.  Trust me, you do not want to get this part wrong.  

In developing my manifesto, I discuss the general marketing principle's I have employed in marketing to Gen-Y and Gen-X,  and the best and least successful advertising and promotions strategy's that should be used for both demographics.         

Marketing To Gen-Y and Gen-X 

GENERATION-Y MARKETING APPROACH
Gen-Y consumers are the most ethnically diverse of all demographics.  Gen-Y’s are interested in pop culture, being part of the latest fad, things or activities that are trendy, hip and cool, experiencing new tastes, listening to the latest music, wearing the trendiest clothes, playing the latest online games, interacting and communicating with their friends, expressing their opinions and showing off.  Their friends are very important and part of their social DNA.  They ignore traditional advertising and rely more on word-of-mouth.  Gen-Y’s are the “we want it now” generation and interested in immediate gratification.  Gen-Y’s work hard until they get bored.  Gen-Y’s are less brand loyal and always looking for a good value.  These qualities require a marketing approach that is both sensory and social.
The Sensory Approach	The Social Approach
The sensory  marketing approach involves the five senses: sight, hearing, smell, taste and touch.	The social  marketing approach involves satisfying a Gen-Y’s need for social interaction and being part of social groups or communities.
Marketers must be aware of the importance of the five senses in reaching Gen-Y’s.  Gen-Y’s must be sold on the great taste, texture, aroma, look and quality of a food product (taste, smell, sight and touch).  By the same token, Gen-Y’s would be attracted to a new electronic music gadget by its overall design, sound quality and features (sight, touch and hearing).  The Internet with its compelling digital imagery, video and sound is a natural media channel for Gen-Y’s as it offers elements of all five senses.  Gen-Y’s are among the heaviest users of the Internet for news, information, entertainment and interacting with others.	Gen-Y’s are social animals so marketers must incorporate social elements into the design of a business whether it is a website, retail or eating establishment.  Businesses are no longer solely for shopping, eating or drinking, but places to meet friends, hangout, read a book, surf the Net, socialize and exchange gossip.  Facebook, MySpace and YouTube are excellent examples of social networking sites that appeal to a Gen-Y’s need to network and interact with others.  Starbucks, Abercrombie & Fitch, Borders, Steve Madden, American Eagle and Best Buy are excellent examples of retail establishments that incorporate social design elements like cool and trendy store interiors, the latest in fashion and electronic gadget’s, piped in music, visual displays, and in-store food and beverage facilities.
In the case of a business establishment, whether brick-and-mortar or digital, Gen-Y’s must be sold on the convenience, product selection, atmosphere and total experience that the business establishment offers (sight, hearing, smell and touch).  The success of eBay, Starbucks, Facebook, Myspace and Borders are excellent examples of brands that have capitalized on the importance of the five senses in developing successful products and services.	Gen-Y’s are notorious multi-taskers who communicate with their friends and relatives by telephone, text messaging, instant messaging (IM) and mobile devices like smartphones and iPhones. They interact by sharing video’s and music, rating products, services and business establishments and posting comments over the Blogosphere. Gen-Y’s have an insatiable desire to interact with others and are the driving force behind online social networks like YouTube, MySpace and Facebook and Starbucks.
GENERATION-X MARKETING APPROACH
Gen-X marketing requires elements of high perceived value, quality, purity, less hype, more facts and a marketing message that is honest and straightforward.  Gen-Xers are cynical about advertising.  Less likely to be taken in by fads or product hype, and more likely to say, “show me”.  Their tastes and preferences overlap with both Gen-Y’s and Boomers, making them an elusive target.  They are less brand loyal that boomers, and more likely to experiment with other brands, new drinks and foods.  Gen-Xers are very technologically savvy.  They tend to be first adopters of the latest electronic gadgets like iPods and iPhones.  Gen-Xers support social causes like the environment and world hunger.  They enjoy social events, leisure activities and get-togethers with family and friends.  They are known as the “family-first” generation because they value their family over their jobs.  Success with Gen-Xers requires a marketing approach with less hype, more facts and a social approach centered around quality of life, social causes and importance of friends and family.
Less Hype, More Facts Approach	The Social Approach
Gen-Xers are interested in less hype and more facts and figures.  They are interested in knowing the nutritional value of a food product: How many calories, how much fat, cholesterol and nutrients a product contains.  Gen-Xers look for products with high perceived value and quality like the fuel-efficiency of Japanese cars and durability of German-made automobiles. Gen-Xers take delight in experiencing new foods, beverages, films and products.  It is best to deal with Gen-Xers in an honest, respectful and straight forward manner.  Gen-Xers seek products and services that are relevant, solve a problem or fill a real need in the marketplace and offer a high value-added component: Superior quality, design, durability, features and convenience.	Gen-X have a social need that is grounded in placing a premium on quality of life, leisure activities, social causes, strong parental and family values and spending time with family and friends. They enjoy family get-togethers, activities and socializing with their friends.    Marketers must incorporate social elements whether they are an online, retail, eating or entertainment establishment.  Businesses that have succeeded in doing this include McDonald’s (children’s playgrounds), Las Vegas Hotels & Casino’s (electronic games, rides and attractions), Disneyland (family-oriented rides and attractions), Gymboree (early childhood development programs), Target (family-oriented merchandise and refreshments), DisneyOnlineForFamily.com (Disney entertainment for the entire family) and BabyCenter.com (Young mothers with infants),    Advertising that works with Gen-Xers include ads depicting the crash safety of Volvo cars and high performance of Michelin tires fit in perfectly with Gen-X’s strong parental values.

Advertising & Promotions Strategy

Although there is some overlap between Gen-X and Gen-Y, they differ in lifestyle and are difficult to reach through traditional media channels, requiring: 1) commercial messages and content that is relevant to their social and psychological needs, 2) selecting the appropriate media channel for each group and 3) carefully targeting our advertising and promotions to insure we reach them most cost-effectively.   

REACHING GENERATION-Y

MOST EFFECTIVE MARKETING CHANNELS
Internet Advertising - Gen-Y’s spend more time online than watching television, reading publications or newspapers.  62% of Gen-Y’s watch TV programs episodes online. Gen-Y rank the highest in joining social networking communities, viewing and uploading online videos, downloading music, playing online games sending instant and text messages and reading online blogs.  Popular Gen-Y sites include: Online Social Communities:  MySpace , Facebook and Bebo Video Sharing: YouTube, Veoh, Break, ManiaTV, Hulu  and MetaCafe. Online News and Information: Diggs, Technorati and StumbleUpon. And a large broad array of Blogs.  Marketers can achieve success reaching Gen-Y’s by targeting websites where they are likely to congregate and socialize.	Viral Marketing - Gen-Y’s go online and rely on word-of-mouth to obtain product and information, so it is vital that firms have a great website that is fully-optimized for search engines and listed in all the major search engines. Firms should have a promotional page on popular social networking sites like MySpace, Facebook and Twitter and video sharing sites like YouTube. Street Marketing – Gen-Xers enjoy new experiences and street marketing is a great way to create marketing buzz and reach them face-to-face. Street marketing include neighborhood promotional stunts, free product samplings, and rollouts in specific venues (street fairs, music festivals, concerts, college campuses, bars and clubs, etc).  This is also a great way to pass out flyers, free offers and discount coupons.
Contests and Sweepstakes – Gen-Y’s are wild about winning a contest or receiving a gift, especially something meaningful like an iPod, concert tickets, vacations, cell phones and FREE sample servings.  This is a great way to increase store traffic, create brand awareness and get them to try a product.    Flyers and Discount Coupons – These should be incorporated into a firm’s street marketing as a way to create excitement, interest and additional traffic. “ONE FREE PIZZA” and “BUY-ONE, GET ONE FREE” coupons work the best.
Paid Search – Nearly 90% of Gen-Y’s use online search engines like Google, Yahoo and MSN Live Search  to find online information, news and entertainment sites.  Radio Advertising – Radio ranks third for Gen-Y’s in hours per week behind the Internet and TV as their preferred media.  Marketers should incorporate targeted radio into its media mix picking stations with the largest reach and most effective CPM’s.
Mobile Advertising – Gen-Y’s are the biggest users of iPhones, Smartphones and portable multimedia devices like iPods. Gen-Y’s prefer text message over email and this is a great way to reach them through one of their most preferred methods of communication.
LEAST EFFECTIVE MARKETING CHANNELS
Television, Direct Mail, Publications and Newspapers – Gen-Y’s cannot be reached effectively through traditional marketing channels.  Direct mail, magazine ads, newspaper ads and television advertising does not work well with Gen-Y’s.  They do not respond to he marketing messages that appeals to their parents and grandparents.  A Gen-Y’s favorite TV programs  include sitcoms Friends and Seinfeld, reality TV shows Survivor and Project Runway, Animated TV shows The Simpsons, Music contest shows like American Idol, music video programs like MTV and TV comedy shows like The Daily Show With Stewart., just to name a few.

REACHING GENERATION-X

MOST EFFECTIVE MARKETING CHANNELS
Internet Advertising - Gen-Xers are No 2 behind Gen-Y’s in spending time online than watching television and reading publications or newspapers.  57% of Gen-Xers watch TV programs episodes online. Gen-Xers are just behind Gen-Y’s in joining social networking communities, viewing and uploading online videos, downloading music, playing online games sending instant and text messages and reading online blogs. Gen-Xers over forty represent the largest segment online gambling. Popular Gen-X sites include: Online Social Communities:  MySpace , Facebook, Twitter and Bebo Video Sharing: YouTube, Hulu, Veoh, Break, ManiaTV  and MetaCafe. Online News and Information: Diggs, Technorati and StumbleUpon. And a large broad array of Blogs. Viral Marketing - Gen-Xers trust themselves and the opinion of their friends and rely testimonials and word-of-mouth on product and services. It is important that firms have a great website that is fully-optimized and listed in all the major search engines. Firms should have a promotional page on popular social networking sites like MySpace, Facebook and Twitter, and run online ads on popular video sharing sites like YouTube and Hulu.	Street Marketing – Gen-Xers enjoy new experiences and street marketing is a great way to create marketing buzz and reach them face-to-face. Street marketing include neighborhood promotional stunts, free product samplings, and rollouts in specific venues (street fairs, music festivals, concerts, college campuses, etc).  This is also a great way to pass out flyers and discount coupons.
Contests and Sweepstakes – Gen-Xers enjoy winning a contest or receiving a gift, especially something meaningful like an iPod, iPhone, concert tickets and FREE sample servings.  This is a great way to increase store traffic, create brand awareness and get them to try a firm’s products.    Flyers and Discount Coupons – These should be incorporated into a store’s grand opening and street marketing as a way to create excitement, interest and additional store traffic.  Women with children, in particular, are attracted to discount coupons if there is high perceived value in the offer. Offers that work most often include “ONE FREE DESSERT”, “BUY-ONE, GET ONE FREE” and “BUY-ONE-ADULT serving and receive ONE-FREE child serving.
Direct Mail – Direct mail works best for older Gen-X (Over 35) men and women, especially with children.  The offer must be compelling, without a lot of hype, and sold on the basis of high perceived value or in support of a social cause.  Some offers that work best include “FREE AIR FARE” or “10% OF PROFITS GOES TO SAVE-THE-WHALES”.                            Paid Search – Nearly 90% of Gen-Xers use online search engines like Google, Yahoo and MSN Live Search to find information, news and entertainment sites.  Paid search is an effective way to reach Gen-Xers and drive traffic to a firm’s website.
Radio Advertising – Older Gen-Xers (Over 30) rank the highest in listening to the radio for music, news and information.  Marketers should incorporate targeted radio into its media mix, selecting stations with the largest reach and most effective CPM’s. Mobile Advertising – Young Gen-Xers (25-30), like their Gen-Y counterparts, are the biggest users of iPhones, smartphones and portable multimedia devices like iPods. Younger Gen-Xers prefer text message over email and this is a great way to reach them through one of their preferred methods of communication. Marketers should incorporate mobile advertising into its media mix.
LEAST EFFECTIVE MARKETING CHANNELS
Television, Radio, Direct Mail, Publications and Newspapers – Gen-Xers are stuck in the middle between Gen-Y’s and Boomers so there are some overlaps with both generations, making them an elusive target.  Younger Gen-Xers cannot be reached effectively using traditional marketing channels like direct mail, print ads, newspapers, radio and television advertising.  Older Gen-Xers (over 35) can be reached through direct mail, radio and television as their media tastes are similar to Boomers in many respects. Gen-Xers are impervious to the marketing messages that appeals to Boomers, who they treat with some resentment.  Favorite TV shows of Gen-Xers include prime-time shows like ER, CSI, Friends, reality TV shows like Survivor and The Apprentice, animated shows likeThe Simpsons, music video shows like MTV  and TV comedy shows like The Daily Show. With Stewart., and late night talk shows like David Letterman and Conan O’brien just to name a few.

I first developed my manifesto for marketing to Gen-X and Gen-Y in 2006/2007, at about the time that social networking really began to take hold, and I realized then that in order to successfully market to these two generatioins, a social approach was also needed.   So far those observations have proven to be correct.   Although my manifesto is albeit a bit dated, the basic concepts of neuromarketing work for all demographics.     

If you are marketing to Millennials or Gen-Xers you might be interested in reading some of the following blog articles:

• 9/24/10 - "IN ORDER TO ENGAGE WITH TODAY'S GENERATION Y YOU MUST MAKE IT AN EVENT"
• 10/1/10 - "GENERATION-Y IS QUITE LITERALLY A "WIRED" GENERATION OF TECH SAVVY AND SOCIAL NERDS"
• 12/18/10 - "MARKETER'S NEED TO CUT THE CLUTTER TO ACHIEVE SUCCESS WITH TODAY'S COLLEGE STUDENTS"

Courtesy of Tommy Toy, PBT Consulting

WHAT IS THE TOTAL ADDRESSABLE MARKET (TAM) AND HOW TO CALCULATE IT

What separates a jaw-dropping unicorn business concept ready for seed funding injections from an amateur-hour startup pitch no one takes seriously?

It might not be your first guess, but for me it is definitely a clear and concise TAM formula.

The potential of a product or service can be a strong selling point to show investors and stakeholders, especially if you have an actionable business plan that will complete the vision and alignment you’ll establish for your growth.

Therefore, calculating the Total Addressable Market of your business is your first step in creating a successful business. Let’s find out how you can do that together:

What is Total Addressable Market?

Total Addressable Market or TAM refers to the total market demand for a product or service; the overall revenue opportunity available in a marketplace for a product or service. In other words, it’s the eagle-eye view of where any new product or service will be introduced. Regardless of what we’re talking about and in every context, TAM is arguably the single most important piece of information in terms of understanding market potential.

Here, have a look at this simple diagram:

Click To Enlarge

As you can see TAM is the overarching big picture – the TOTAL market potential. 

From here, you should have a firm grasp on why this calculation is THE calculation investors are going to inspect first. 

Why Are Proper TAM Calculations Invaluable? 

In reality, reaching a proper TAM calculation is a worthwhile team-enlightening process in itself.

Along the way, as you ‘Narrow the Tam Funnel’ you’re going to define a number of other critical metrics, such as:

• Fundamental market data you should have anyway – i.e. potential size.
• A formula to attract and convert investors. 
• Thorough competitor data, broken down in relation to your venture – market fit. 
• Data-driven and formalized target customer information.
• The spectrum of currently available similar products/services.
• The major upward and downward trends influencing your TAM.
• Establish a clear go-to-market strategy or roadmap. 

If your market, product, and service analysis is weak, your TAM will be weak. If your TAM is weak, so is your SAM and SOM. This is pretty much always going to lead to monstrous blunders across the board. 

Before jumping into that, let’s include our two new key terms and some definitions. 

• TAM – Upon reaching 100%, with every individual in your chosen geography using in your product or service, you become the proud owner of a market monopoly.  

• SAM – Serviceable Available Market: This is your slice(s) of the market. The total segment of TAM you can feasibly or reasonably target. For example, your New York pizza shop’s 1-10% of the pie-lover TAM within twenty miles of your prime real estate.

• SOM – Serviceable Obtainable Market: Out of that SAM, this is the more refined slice of the TAM you can hope to achieve within the first 1-3 years of opening your doors or trying a new form of pizza in the local market; app, etc. For example, if you don’t sell thick crust for some reason, your SAM and SOM will need to continue narrowing.

Another crude example could be the worldwide transportation market, which is gigantic – over $5 trillion. Imagine having a monopoly there… Fortunately, an unlikely scenario. Even for Uber, they were initially targeting the Taxi & Limo Sector (SAM), coming way down to a smidgen over $4 billion. Then the SOM they aimed for within the first 5 years was around $1 billion. 

From $5 trillion, to $1 billion. 

Click To Enlarge

Their TAM refinement didn’t stop there though, as in their original pitch deck they were only targeting a certain area of one city. If that went well, the next step was a second major city, and so on.

You can also take huge six and seven-figure TAMS and break them down into the different sub-sectors.

For example, clothing. Here are three TAM-SAM-SOM diagrams showing different pathways to approach along the supply chain.

Click To Enlarge

Right, with a basic foundation and core terms all laid out, let’s get to the soft gooey center in the middle of today’s subject. 

Your Goal

Your goal when ironing out the TAM for a product or service is to make this calculation the most educated, de-risked (as close to the truth), and data-driven estimation possible. And yes, it’s nearly always going to be an estimation rather than a fixed concrete number, because TAMs are often projections.

How to Calculate Total Addressable Market (3 Ways)

1. The Top-Down Approach: Not much calculating in this approach, other than coming to terms with the overall big-picture number without any real precision.

2. The Bottom-Up Approach: Using as many sources as possible to start with the smallest, most refined picture of the market you can hope to capture (ex: the Central SF area like Uber). So, starting with your highly-specific SOM and working your way up.

3. Value Theory Crafting: Using highly-educated, but nonetheless subjective or less reliable sources of data, to influence your calculation. Conjecture, opinions, base statistics, buyer WTP numbers (more on this below), etc. 

“The best TAM formulations are the result of using all three methods, combined with studious, prudent due diligence.”

Total Addressable Market (TAM) Formula

In all of its glory, this is as simple as it gets. 

[TAM = # of Customers x Pricing]

From leveraging distinguished industry and Wall Street-based analysts (paid and free), to using a huge assortment of publically available market and competitor data, there’s no excuse not to roll up your sleeves and do your homework – TAMwork. 

Let’s take a look at these two variables. 

Customers

• Geography: Where is the overall market (TAM), along with your SAM and SOM? Are we talking ecommerce? How many countries are we targeting, and where are your customers within them? Be specific, specific, specific! 

• Relevancy: Why are these your customers? And no, you can’t count a competitor’s customers or users as your own. 

• Testing?: How do you know these are your customers? Be sure you’re ‘showing your work’ and proving these assumptions as best you can. Show the logic. 

Your Pricing

• Pricing Basis: What is the basis for your pricing? How are you coming to these conclusions? Again, show how the math plays out step by step. 

• Units of Measurement: Depending on your situation, this can be a great number of things. The point is to be ultra-definitive with how your pricing is structured.

• Customer WTP: This is the basic number your customers or users are Willing To Pay. Typically WTP numbers are based on competitors so they aren’t really sources for YOUR pricing, since you are not your competitors. But, they can help paint a market picture. 

---

Congratulations, you’ve now swept through the pillars of TAM, why it’s important, and how to properly calculate it.

Let’s finish this off by looking at the most common mistakes inexperienced startups and entrepreneurs make as they set out to tackle the numbers.

Some of this will be repetitive, but that’s a good thing. Stamp these details into your business mind!

Common TAM Calculation Mistakes

Inexperienced startups in the pre-seed, seed, and Series A funding round are where to look for pricing metrics that are WAY off.

It’s so common, yet they NEED to nail these concepts.

How?

Why?

Most often it’s a mixture of being too swept up into the product or business concept itself without crunching numbers or having no one who is really considered a number cruncher on the team. 

For investors, the first thing they want to KNOW, is how de-risked the numbers are and what kind of feasible ROI they can expect in the short and medium-term. At the end of the day, that’s where the rubber meets the road. No matter how mind-shatteringly-insane your new product concept might seem, if these numbers:

1. Don’t exist, or, 
2. Do exist, but they’re obviously way off,

Then you’re going to be sent back to the drawing board, heads hung low.

Nobody wants that, so here are the big three mistakes to steer clear of. 

1) Not Proving the Math – Going Top Down Only

“Listen, it’s a no brainer. We’re going to waltz in and nab up at least 3% of this $375 BILLION Market. Yep, that’s right folks, grab your wallets because we’re talking $11.5 BILLION smackaroos. You’ve got to get in on the ground floor before this puppy REALLY takes off!”

That’s what a corny top down-only pitch sounds like. Experienced investor eyes begin glazing over instantly, waiting for you to dial things down and prove your TAM. 

• How EXACTLY do you plan to enter into and capture this 3% of the market?
• How EXACTLY do you figure these are all your customers when the new product or service doesn’t exist yet?

Investors will begin firing off questions, testing each and every assumption that comes baked into that $11.5 billion top-down number you threw out. If they have to do your math for you, that’s a bad sign, and it’s likely your TAM will fall… dramatically. 

What if your team is left standing there, realizing you were focusing on a product that had a TOTAL product-lifespan value of only $11.5 MILLION?

What if it’s only $1.5?

#2) Basing Your Math on Competitor TAMs

“We’ve created the absolute best accessory for jeep owners in the known universe, and the jeep owner market worldwide is…cosmic.” 

Those aren’t your jeeps and those aren’t your customers.

Don’t base any of your math on competitor numbers, because it’s sloppy and you end up with a horribly misleading formula. 

• What kinds of jeeps are ideal for your accessory?
• What country or countries will you choose to target first?
• What specific kind of jeep owner are you REALLY targeting?

Starting to see how powerful this calculating ability is and why shows like old school ‘Shark Tank’ or ‘The Apprentice’ have become so popular (and educational)?

#3) Mistaking ‘Market Pain’ for TAM

“Smoking is a gigantic problem that in total creates X trillion….”

“Too many bicyclists are getting hit in big cities because…”

Problems are not TAMs.

If you attempt to base your math on the size of a social pain, rather than the response to your solution within a specific marketplace impacted by the problem, you’re starting off on the wrong foot. 

By avoiding these three mistakes, you can stay on the right path and provide a FAR more de-risked formula to base decisions, time, and money on. 

Conclusion

Before you take any action on a new product or service venture, know the TAM… be the TAM.

Projecting revenue growth using huge numbers is fun, but to attract genuine investor interests, or get serious stakeholders on board, or really just have a real shot at success, you need to REALLY see what is possible. Let your TAM + SAM + SOM calculations serve as your guiding light, always keeping your financials firmly rooted in reality, not steeped in hyperbole or hype.

COMMENTARY:   This is one of the best discussion of how to calculate addressable market based on three market measures:  TAM, SAM AND SOM.   

I have had to make addressable market estimates based on using different variables and assumptions.  Keep in mind that you are not shooting for absolute accuracy when you conduct your calculations.  Addressable market is a moving target.  You could get three different people and you would obtain three different estimates for addressable market.

In calculating TAM, SAM and SOM you should include what stage in the market life cycle your firm presently occupies as depicted in he following graphic:

Click To Enlarge

I would recommend that you calculates three different addressable market estimates.   Most Likely, Least Likely and Average of Most Likely and Least Likely for TAM, SAM and SOM.  If you are a startup base your revenue projections on your Serviceable Obtainable Market (SOM) over the next three years.  SOM is the portion of your Serviceable Addressable Market (SAM) that you believe you can actually grab based on your estimated costs to acquire new customers, churn rates and financial resources available to attract new customers.

TIP:  In estimating SOM, aim for the "low hanging fruit" first and work up from there.  If you are launching a new product, your existing customers will be the easiest and least costly to convert to the new product.  Existing customers are your early adopters, and most likely to covert because of the brand loyalty and trust you have built over the years.           

Hope the above helps.

Courtesy of an article dated February 23, 2021 appearing in UserGuidingBlog

---

THE MARKETING TECHNOLOGY LANDSCAPE EXPLODES TO 9,932 SOLUTION PROVIDERS, INDUSTRY CONSOLIDATION SETS IN

According to ChiefMartech, the 2022 marketing technology landscape, the total estimated number of marketing technology solution providers increased from 8,000 in 2020 to 9,932 or +24% in May 2022.  Here are the key you want to know:

• The number of solutions is now 9,932 — up 24% from 2020
• Here is a slide version of the image you can use in decks and content
• Here is a high-res PDF you can use for printing and zooming in
• Here is an accompanying State of Martech 2022 report

The wild-and-crazy 11-year progression of the martech landscape looks like this:

Click To Enlarge

Or, if you prefer a more quantitative view of the 6,521% growth over those 11 years:

Click To Enlarge

The moniker “Martech 5000” is no longer appropriate because by 2022 the marketing technology landscape has grown to nearly 10,000 solution providers, so the new name is now the “Martech Map.” 

ChiefMartech has launched martechmap.com (beta version) a new interactive site that is free to use, but you must first register online to gain access.  This lets you search, sort, and filter the entire marketing technology landscape for 2022.   You can search by keyword.  You can filter by a vendor’s HQ country.  You can rearrange the display, zoom in, and even create a PDF of your own.

Click To Enlarge

ChiefMartech lets users contribute to the data set — and encourages users to do so.  Find something wrong in the data?  Missing vendor?  Vendor that’s changed categories or gone away?  Let ChiefMartech know.  MartechMap is a community project, and ChiefMartech gladly celebrates all of the contributors to the beta version.

The massive scale and rapid rate of change of the martech industry and the wealth of solutions within it was no longer well-served by a once-a-year, static graphic. It’s a point in time, which is interesting to see year-over-year. But we want this community resource to be something that is updated on a more continuous basis.

By now producing the graphic algorithmically, it’s easy to release updates in a matter of minutes — versus the dark ages of hand-placing little logos manually on a slide (hats off to you, Anand Thaker and Jeff Eckman, for all your prior help with that!). By using a vendor’s favicon from their website, which we can refresh at any time, we also save both ourselves and vendors from the angst of outdated logos.

The aesthetic is different with this grid of favicon logos, but the practical benefits of instant updates weigh heavily in its favor. Just as every other aspect of marketing and martech is evolving, so too should the martech landscape.

State of Martech 2022 Report

Of course, one of the perennial reactions to the martech landscape is: how can there be so many vendors? How has this market not consolidated yet? Surely it’s destined to collapse, any minute now, right?

These are good questions to ask. I ask them myself all the time.

It’s worth noting that 972 vendors from the 2020 landscape were removed for 2022, either due to being acquired or some less happy exit from the market. That’s 12% churn from two years ago! The martech landscape does consolidate.

But at the same time, new vendors keep entering the market (and more who have been in the market keep getting discovered in our ongoing research). While 972 vendors were removed, a whopping 2,904 vendors were added, which brought the net total from 8,000 to 9,932.

Frans and I have several models and theses that offer some explanation to these dynamics that we see in the market. This year, we’ve included them — along with a bunch of other great data about stack adoption patterns — in a State of Martech 2022 report.

It’s free for you to download (completely ungated):

Click To Display PDF File

(As a bonus, the report also includes all of the entries to The Stackies 2022: Marketing Tech Stack Awards, so you can review examples of how other companies have combined martech solutions in their marketing stacks.)

The research for this project and the accompanying report was generously supported by these six sponsors. We would kindly encourage you to check them out:

• Learning Experience Alliance (formerly MarTech Alliance)
• OfferFit
• Workato
• SAS Customer Intelligence
• Amplitude
• Goldcast

In addition, we’ve created a “gratitude graphic” that reflects the many contributors to the martech landscape data set. We hope you’ll join them for a future update that includes contributions you decide to make.

Click To Enlarge

Merry #MartechDay to you — I hope you enjoy this new graphic, report, and interactive site.

COMMENTARY:  The marketing technology solutions sector has reached nearly 10,000 service providers spread over 6 major categories and 49 sub-categories.  The US and UK combined represent over 50% of the total number of martech companies.  Due to the rapid rate of growth, the martech sector is now undergoing a shakeout and industry consolidation. 

The 2022 Martech Map, has identified 9,932 martech solution providers through May 2022.  An interactive version of the martech search engine is available at martechmap.com.  The interactive martech search engine enables you to slice and analyze the landscape in a variety of dimensions.

There’s been considerable consolidation over the last two years. 

• 972 new martech solution providers were either acquired, disbanded, or pivoted to something different. 
• 2,904 new entrants, from startups and more mature companies offering a better martech service were added.

So between 2020 and 2022, there was a net gain of 1,932 firms added to the list.   

We are steadily adapting to an abundance of apps in the martech market sector. Connected ecosystems are growing around the major martech platforms, and a new generation of “aggregation” systems are bringing greater cohesion to internal tech stacks.

Martech is a vibrant, rapidly changing industry that requires a once-a-year update.  ChiefMartech gives you a dynamic visualization online that is continually updated with fresh data. By signing up for free on martechmap.com, you can now explore the latest version of the landscape at any time.  Hovering over a logo will reveal the name of the company and a brief description from their website or Twitter profile. Clicking on a logo will take you to their website.

You can also search and filter the landscape, looking for specific terms that appear in their
description, or narrowing the result by the HQ country.

Courtesy of an article dated May 4, 2022 appearing in ChiefMartec and an article dated May 3, 2022 appearing in MarTech.org

HOW TO DETERMINE PRODUCT MARKET FIT IN YOUR INDUSTRY AND HOW TO MEASURE IT

The lack of market need is the main reason for startup failure. Product-market fit is one of the most crucial elements needed to create a successful business. It indicates that people are interested in the company’s product and are willing to pay for it because the offering is better than the other alternatives. Due to this reason, finding a product-market fit should be among the first and foremost objectives for your business.

Snapchat is an excellent example of a startup that managed to find product-market fit. This resulted in more than 293 million daily active users and $2.5 billion in annual revenue since its initial launch in 2011. In 2012 Snapchat users were sharing over 20 million images per day or about 231 per second. 10 million Instagram users, in contrast, were sharing only 25 photos every second. During the early stage, the target audience of the startup consisted of bloggers and students. Snapchat quickly became popular at colleges and high schools through word of mouth. The company was gathering customer feedback and constantly improving the application, which was important in reaching product-market fit. 

Let us take a closer look at the concept of the product-market fit and the practical steps required to achieve it.

Click To Enlarge

What is a product-market fit?

Product-market fit is the degree to which the product meets the target consumers’ needs and fulfills the market demand. PMF occurs when the business owner develops a solution that fills a certain market niche and evokes the desire to buy it. Product-market fit is not a constant state. Instead, it can be described as the continuous process of adjusting to changing client needs. 

The term was coined by the co-founder of Benchmark Capital, Andy Rachleff, and later popularized by entrepreneur Mark Andreessen, the co-founder of Andreessen Horowitz. Rachleff’s idea was based on the study of the investing approach of Dan Valentine, venture capitalist and founder of Sequoia Capital. Andy Rachleff explains product-market fit as a combination of “the feature set you need to build, the audience that’s likely to care, and the business model required to entice a customer to buy your product.” Marc Andreessen  defines it as “being in a good market with a product that can satisfy that market.”

The alternative definition by Dan Olsen, the author of “The Lean Product Playbook”, says that the product-market is “meeting the underserved needs of target customers better than the competition”. Thus, we can summarize that product-market fit refers to the situation when the company provides value for a substantial number of customers who perceive the value with the effective delivery method, and differentiates itself from the competing companies. 

How to find a product-market fit?

The process of achieving a product-market fit differs for each company. Therefore, to create an outstanding product, you need to understand the problems your solution addresses and the issues your clients are trying to overcome with its help. So, the goal of finding product-market fit should be number one on your company’s priority list as it would dramatically increase the chances of business success. Despite the fact that the path to product-market fit is unique for each business, you can find it by focusing on the key areas and following several simple steps we will discuss below.

Click To Enlarge

Step 1. Determine your target audience

The first step in developing your product-market fit is to determine the target customers. They will represent the users who decide how well the product aligns with market requirements. The next task is to use market segmentation to later target customers more effectively by relying on their unique features, improving marketing campaigns and discovering more opportunities. Then you need to create buyer personas to ensure that your team’s efforts are tailored to your customers’ needs. Therefore, the main objectives of this step are to analyze your product or service, conduct a competitive analysis, segment your target market into several types of customers, and perform research.

Step 2. Talk to your customers

Gather feedback from your customers to identify their underserved needs and discover a suitable market opportunity. Determine the common challenges they face and how much they are willing to pay for you to solve their problems. The competition plays a huge role in the degree to which the product fits customer demands as they evaluate the solution in comparison to the alternatives.

If you want to improve the existing product, collect data from your sales and marketing departments to understand the recurring complaints. Face-to-face interviews are more effective than online surveys as they provide more useful information. 

Step 3. Define your value proposition

The value proposition is the most crucial aspect of your marketing message. It explains why your customers should purchase your company’s products instead of the competitors. A great value proposition is clear and understandable. The statement should be relevant to the target audience. Describe how your solution addresses customer problems and provide the set of advantages. To define your value proposition, you need to determine customers’ pain points, identify your product’s benefits, describe what value your solution adds to the market, connect it with the problems and make it unique.

Step 4. Specify your MVP feature set

The following step is to define the features that your minimum viable product (MVP) will include. If you add sufficient functionality to your product, you will be able to demonstrate the value to your customers, save time and money and leave space for improvement. MVP will help you determine the features your solution lacks or what can be done better. Moreover, you might understand that the customers will not use the specific function, so you can remove it. The primary objective is to continue adjusting the minimum viable product feature set until the potential customers approve it.

Step 5. Design your MVP

Once you have determined the MVP feature set, it is time to create the test version of your product, so your customers can provide feedback and valuable insights. Building the MVP prototype usually takes less time and effort than producing the working version of the minimum viable product. The prototype will brilliantly represent your product without the need to build it.

Click To Enlarge

Step 6. Test your MVP with customers and analyze feedback

The last step is to test the MVP prototype with target customers. The goal of MVP testing is to receive feedback from the audience, make improvements to the product and determine whether the idea is valid or not. The most efficient method of MVP testing is user interviews. First, provide the list of the problems your solution aims to solve and put open-ended questions to your customers. Then ask them to rank the issues and analyze their level of interest. Finally, present the MVP as the solution to the problem and offer people to try it. The other way to test your minimum viable product is to create a landing page demonstrating its features or promote the solution through advertising. This will help you to understand whether your MVP interests the target market. You can also test the prototype on crowdsourcing platforms. If the users like your idea, they would be willing to invest in the development of your product, so this would be the perfect indicator of the product-market fit.

After conducting tests: 

1. analyze the received feedback, 
2. identify similar answers and pay attention to common patterns, 
3. use the information received from the customers to modify the initial prototype and address consumer issues.

You might learn that a majority of your audience consider themselves too young or too old for your product. Then you can ask the respondents who they assume the product is intended for. The feedback will reveal how your product is perceived in the market. You might understand that your solution is more niche-oriented than you expected. In this situation, you need to return to step 1, review your customer profiles, and proceed from there. 

If the product is not right, but the audience is a fit, return to step 2 and gather feedback to understand what adjustments your customers would apply to your product to make it more appealing. Then, move to steps 3 and 4 to review your value proposition and minimum viable product features.

Netflix is a company that constantly adapts to changes, monitors trends and shifts in the market, and takes advantage of them. Netflix changed its business model multiple times, adjusting to user demand. In the early 2000s, Netflix achieved the product-market fit when the company positioned itself as the alternative to traditional DVD rental stores. Netflix started shipping DVDs by mail as part of its membership services and allowed clients to keep videotapes for an unlimited period of time. Later, when the DVD trend faded, the company turned into a subscription-based streaming platform and reached product-market fit owing to cheaper and better services. 

Step 7. Build the product and take it to the market

Prepare a product launch plan and create a marketing strategy to take advantage of the opportunity to promote your offering. The product launch event has a significant influence on market acceptance. It helps inform the clients that the product is available for purchase and introduces the solution to the market. With product launch, you will gather valuable information from early users, build anticipation and brand awareness. Create content that will align with marketing activities, such as landing pages, blog posts, and product tutorials. 

Click To Enlarge

Step 8. Improve product-market fit as you scale

Keep reviewing your product after it is launched. Take small risks and redesign the product in accordance with the customer base, competition, and the new needs of target audiences. Remove the elements that do not work, experiment with new functionality, and test the features on a small scale. Analyze qualitative and quantitative metrics, conduct customer surveys to adapt to changing market conditions, and stay ahead of the competition.

Product-market fit metrics and measuring

There are several quantitative metrics that will determine the percentage of customers who consider your solution as a ‘must-have’. We will discuss them further in greater detail.

Click To Enlarge

Growth rate

The growth rate will provide you with crucial information about your company’s performance over time. It is one of the essential metrics the investors examine before deciding whether to fund the company or not. To measure the product-market fit, you can analyze the growth in the number of users or revenue. The formula for calculating the monthly or annual growth rates is as follows:

Growth rate = (Period 2 – Period 1) / Period 1 * 100 

It is important to note that a high growth rate does not necessarily mean that you have achieved product-market fit (as it can be followed by a similarly high churn rate). Thus, you need to pay attention to various factors that may have led to this and take into account other metrics. In some cases, high growth rates can result from marketing activities and do not represent product-market fit. 

Churn rate

The churn rate is the number of customers who stop using your product over a certain time frame. With this metric, you can understand whether people are interested in your product or not. The churn rate varies depending on the type of business and its specifics. Newly established companies usually have higher churn rates compared to organizations that have been on the market for a longer time. You should inspect your monthly and annual churn rates to have a clear picture of your progress. The churn rate formula is: 

Churn Rate = (Lost Customers ÷ Total Customers at the Start of Time Period) x 100

Net promoter score

The net promoter score is a scale that ranges from -100 to 100. With this metric, you can estimate customers’ willingness to recommend your company’s products to other people. To calculate the net promoter score, you need to ask your customers a key question: “On a scale of 0 to 10, how likely are you to recommend the product to a friend or a colleague?” Then the respondents are categorized into three main groups depending on the answer: promoters, passives, and detractors. Finally, you want to subtract the percentage of detractors from the percentage of promoters. The final number will show you whether customers generally enjoy using your product. You may compare it to similar metrics in your industry and review it regularly to see if the satisfaction rate is improving.

Product-market fit examples

Now we will look at three successful companies that began their journey as startups but turned into global enterprises with a multi-million customer audience. We will consider how these companies managed to find their product-market fit and adapted to evolving market needs.

Spotify

The idea to create Spotify appeared after Napster’s collapse, and the sales plunge in the music industry as the users started downloading albums from illegal sources. Spotify’s founder Daniel Ek suggested the listeners the opportunity to consume high-quality music legally for a small fee. Now the platform has over 365 million active users.

The startup was created at the most opportune time when the other elements of product-market fit already existed. There was a target market with music listeners, distribution channels, and a lot of content. The platform provided consumers a way to listen to music without addressing any legal issues, resulting in a 20-30% annual growth rate.

Slack

Slack is a well-known messaging platform for business communication. Despite the fact that now Slack’s target customers are mostly enterprises, the company paved the way to product-market fit by targeting individual users. Between March 2020 and April 2021, Slack generated $902 million in revenue, but it all began with a startup that did not even have a sales team. 

At first, Slack’s founders were developing a role-playing video game. The messaging app was originally intended as a tool for internal communication. However, the team later realized that the solution perfectly fits into a free niche, while there are already many role-playing games on the market. The decision to give up the original idea in favor of better opportunity has brought over 12 million users by the end of 2020.

Google

In the early years, Google had a lot of competitors in the market. At that time, the search engines were making a profit from selling the advertising space next to search results. In 2003, Google leaders decided to introduce AdSense. This was a totally new concept that allowed to display the advertisements beyond the search page results. The technology analyzed the web pages and automatically displayed the relevant advertisements. 

Google discovered a gap in the market that no other search engine could fill and satisfied that need. In 2017, the annual revenue from AdSense amounted to $95 billion.

COMMENTARY:   Don Valentine, from Sequoia Capital might have coined the term "product-market fit".  While Marc Andreessen, from A16z popularised it as “being in a good market with a product that can satisfy that market.” According to Andreessen, that is a moment when a product or service has its place in the market, thus enabling traction for the company offering that product or service.

 

Courtesy of an article dated April 4, 2019 appearing in CleverTap, an article dated Unknown appearing in Awware, an article dated June 16, 2021 appearing in HubSpot, an article dated February 18, 2017 appearing in Future.com,

 

RINGLING BROS CIRCUS TO RELAUNCH IN 2023 AS A MULTI-PLATFORM ENTERTAINMENT FRANCHISE AFTER 6-YEAR SHUTDOWN

Ringling Bros. and Barnum & Bailey will return in a little more than a year with a new variation of its traditional “The Greatest Show on Earth.”

Feld Entertainment, a family-owned company and owner of Ringling Bros, and Barnum & Bailey circus, announced Wednesday, May 18, 2022, that a new edition of its traditional show will debut in the fall of 2023 as a “multi-platform entertainment franchise” and that its creative team is now searching for acts around the world.  Last fall, the company said it would relaunch its touring shows after a six-year break but without animals.

There is no reference to the word “circus” in the Feld Entertainment’s press release.

Chairman and CEO Kenneth Feld (above) said in a statement:

“As passionate stewards of Ringling, we are committed to creating a lifestyle brand that connects with families and sparks real fun 365 days a year through live performances, digital content, consumer products, school curricula, youth circus arts programs and more. We are innovating all aspects of the live show and modernizing the franchise to create an engaging property that is built for today’s families and will last for another 150 years.”

Feld Entertainment's press release included a YouTube video titled, "Ringling: The American Icon Returns."

Feld shut down the three-ring circus in 2017 after a 146-year run. Observers suggested at the time that years of animal rights protests against Ringling Bros. had led to a decline in ticket sales and the closing of the touring circus. Ringling was long known for its popular lions, tigers, elephants and other animal acts. Elephants were dropped from its shows in 2016.

Billed as the ‘Greatest Show On Earth’ Ringling Bros. and Barnum & Bailey Circus originally ran from 1871 until 2017 when Feld, faced by high operating costs, declining ticket sales and growing pushback from animal rights activists, announced on January 15, 2017, that the circus would cease operation. What many thought would be the final performance of the circus took place at Nassau Veterans Memorial Coliseum on May 21, 2017.

A clown takes pictures with his cellphone during its last live show in 2017 (Click To Enlarge)

The company said it will expand its operations to include a variety of consumer products and a licensing program with toys, games, packaged goods, collectibles and more. It also will seek to extend its brand through theme park attractions and touring exhibitions. Ringling also is producing a documentary backstage in the making of a circus show.

Ringling Brothers eliminated the elephants from their show act in 2016 in order to reduce costs (Click To Enlarge)

The refreshed look of Ringling, as conceptualized in a new logo, has been designed to evoke the brand’s rich heritage while also creating feelings of wonder, discovery and joy.  The “R” in Ringling  combines the inquisitiveness of a question mark, along with the punctuated excitement of an exclamation point.  This unique design creates the Ringling interrobang, which is a perfect symbol to punctuate the “WOW” and curiosity of the brand.  

The cast and crew of Ringling Bros. who performed in the last-ever show in Providence, RI. (Click To Enlarge)

An emotional Juliette Feld Grossman, Chief Operating Officer of Feld Entertainment and Producer of The Greatest Show On Earth said. 

“The new Ringling logo illustrates the essence of the brand combined with modern simplicity.  The logo is designed to flex and adapt across any brand communication. The contemporary look will invite curiosity and captivate families as they discover more ways to become a part of the awe-inspiring world of Ringling.”

The new Ringling Bros and Barnum & Bailey logo (Click To Enlarge)

Old Ringling Bros and Barnum & Bailey logo (Click To Enlarge)

COMMENTARY:  The last time I attended a Ringling Bros. and Barnum & Bailey circus was back in the late 70's when I took my son and former ex to the Cow Palace in San Francisco.  I lost track of the Ringling Bros circus and was surprised to hear that it had been shutdown in 2017 due to a decline in attendance, high operating costs and criticisms from animal rights activists.

The announcement by Feld Entertainment to relaunch Ringling Bros in the fall of 2023 is destined to become a textbook case study of how a historic touring circus died, re-invented itself by adopting a multi-platform entertainment business model, then relaunched itself after a six-year hiatus.  I look forward to reviewing the progress of Ringling Bros' relaunch beginning with its Grand Opening in the fall of 2023 and evaluating whether their re-invention strategy is successful.  

Getting rid of the animals, reducing operating expenses, and adopting a new business model should've been done a lot sooner because circus acts were already losing audiences to other forms of live entertainment and ticket sales were experiencing a steep decline.   

Circustalk, the first online professional business-to-business social media platform that offers career resources and tools for the multidisciplinary performing arts from casting to training and recruitment of circus performers and supporting crews, made note of the challenges faced by circuses and said in a November 2017 press release:  

"To those outside of the industry, circus may seem like a dwindling business. But the opposite is actually true—there is enormous growth internationally in the variety of shows available, and the (circus) industry is simply transitioning into a sleeker, more modern and thriving phase. By embracing that knowledge and technology, Circus Talk is at the forefront of helping that transition along."   

Ringling Bros dropped "circus" from their name, but management must take full advantage of the huge nostalgia from the memorable acts that brought so much joy to families over the past 146 years that has been welded into the Ringling Bros brand.  Animals have always been such a huge part of every Ringling Bros circus and should not be completely eliminated.  Keep the horses and smaller animals. I hate to see the elephants, tigers and lions dropped from the show, but these animals cost a lot to house and maintain, and have been at the centerpiece of complaints from animal activists.  I also believe leaving out the motto "The Greatest Show on Earth" from the logo is a mistake because in a nutshell that captures the brand value in it entirety.   

I missed out when Ringling Bros shutdown the circus after its last show in New York in 2017.  Luckily for all circus fans, I was able to find a YouTube video of that last show, and it is fantastic.  I watched the entire show last night.  Here it is:  

  

Courtesy of an article dated May 18, 2022 appearing in The Guardian and a press release dated May 18, 2022 appearing in Ringling.com,