YETI turned water coolers into a $5 billion brand.
How did they do it?
By changing a commodity into a status symbol.
Here are 4 lessons worth your timeπ
How did they do it?
By changing a commodity into a status symbol.
Here are 4 lessons worth your timeπ
The Seider brothers love fishing.
They eat it, drink it, and sleep it.
And in 2006 they are fishing off the Gulf Coast of Mexico and run into a problem.
They eat it, drink it, and sleep it.
And in 2006 they are fishing off the Gulf Coast of Mexico and run into a problem.
The Problem:
Every crappy water cooler breaks when you stand on it for a casting platform while fishing.
Every crappy water cooler breaks when you stand on it for a casting platform while fishing.
So the Seider brothers decide to make a better cooler that has...
β’ Lids that don't collapse
β’ Handles that don't break
β’ Latches that don't snap off
But they realize they are in trouble.
β’ Lids that don't collapse
β’ Handles that don't break
β’ Latches that don't snap off
But they realize they are in trouble.
The competition is all big companies like Igloo, Coleman and Rubbermaid.
And at the time, these big companies only sell through chains like Walmart and Target for cheap prices.
Coolers at Walmart sell for $39.99
And at the time, these big companies only sell through chains like Walmart and Target for cheap prices.
Coolers at Walmart sell for $39.99
The issue is that a premium cooler costs $100+ to make.
So YETI ends up selling coolers for $400 when the competition is selling for $40.
How could they compete?
They didn't.
Here's how:
So YETI ends up selling coolers for $400 when the competition is selling for $40.
How could they compete?
They didn't.
Here's how:
Lesson 1: Your Monopoly is my Opportunity
Back in 2006, there was 0 competition from smaller businesses making water coolers.
Why?
Selling coolers for $40 at Walmart made the money math only possible for big companies that can make a lot of stuff cheaply.
So no one tries.
Back in 2006, there was 0 competition from smaller businesses making water coolers.
Why?
Selling coolers for $40 at Walmart made the money math only possible for big companies that can make a lot of stuff cheaply.
So no one tries.
But it creates an opportunity for a 10x product for power users that costs 10x the price.
Another example is Canada Goose jackets.
Spend $1,000 on a coat but be warm enough for an Iditarod in Alaska (and look cool doing it):
Another example is Canada Goose jackets.
Spend $1,000 on a coat but be warm enough for an Iditarod in Alaska (and look cool doing it):
Lesson 2: Find your Believers
YETI purposely ignored the guy or gal who brought a cooler to the beach.
Because why would they ever spend $400 for a water cooler?
Instead, they focused on intense outdoorsmen who became the core early customers.
YETI purposely ignored the guy or gal who brought a cooler to the beach.
Because why would they ever spend $400 for a water cooler?
Instead, they focused on intense outdoorsmen who became the core early customers.
Even better, every customer became a walking billboard since every YETI cooler arrived with a t-shirt.
Lessons 3: Be Where Your Believers Are
Startups today spend 40% of every venture capital dollar on Google, Facebook or Amazon.
YETI originally ignored these traditional marketing channels.
Startups today spend 40% of every venture capital dollar on Google, Facebook or Amazon.
YETI originally ignored these traditional marketing channels.
They would send pro fishers and hunters free YETI and ask for honest reviews.
Eventually they would sponsor pro outdoorsmen on YouTube which creates credibility in the community.
Then sell in Mom-and-Pop outdoor shops and REI.
Go where your tribe is.
Eventually they would sponsor pro outdoorsmen on YouTube which creates credibility in the community.
Then sell in Mom-and-Pop outdoor shops and REI.
Go where your tribe is.
Lesson 4: Status as a Service (SaaS)
YETI turns a commodity like a cooler into an object of desire.
A status symbol built for the modern adventurer with the tech to match.
But even more importantly, YETI takes it beyond coolers...
YETI turns a commodity like a cooler into an object of desire.
A status symbol built for the modern adventurer with the tech to match.
But even more importantly, YETI takes it beyond coolers...
YETI now sells to people who WISH they were hunters and fishermen.
That 23 year old guy who probably has never hunted a day in his life?
He won't spend $400 on a cooler.
But he may buy your $50 tumbler to feel like that rugged outdoorsmen that he never will be.
That 23 year old guy who probably has never hunted a day in his life?
He won't spend $400 on a cooler.
But he may buy your $50 tumbler to feel like that rugged outdoorsmen that he never will be.
The Point:
YETI isn't a water cooler company.
They are a business that bottles up the feeling of adventure and sells it.
And now that includes bags, bottles, mugs and clothes.
YETI isn't a water cooler company.
They are a business that bottles up the feeling of adventure and sells it.
And now that includes bags, bottles, mugs and clothes.
The end result?
You hit $800 million in sales and people like me get YETI tumblers for Christmas.
You hit $800 million in sales and people like me get YETI tumblers for Christmas.
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