This is Rob Hassett with Tell Me Something I Don’t Already Know.com. Today I am going to be interviewing Udaiyan Jatar, CEO of Blue Earth Network, who is most often referred to as “U.J.” U.J. is an acknowledged authority on what it takes to develop an “iconic” brand. U.J. are you on?
U.J. Yes, I am.
ROB U.J., what can you tell us that most of us don’t already know about iconic brands?
U.J. The thing that the average business person doesn’t know about iconic branding is that the world’s greatest iconic brands were all created by small entrepreneurs, who came from outside the industry and had virtually no experience in that industry. It is amazing that iconic brands like Coca-Cola, Nike, Apple, Harley Davidson, and Gatorade were launched, not by big corporations, but by small entrepreneurs with no money and no industry expertise!
ROB What is the difference between a “great” brand and an “iconic” brand?
U.J. Whether a brand is iconic, or “merely” great, is determined by the depth of the loyalty it commands from its customers. If some of a brand’s customers demonstrate their loyalty to the brand by using the brand in contexts unrelated to the product, like tattoos on their skin, it is iconic. Harley Davidson is a great example of that. You’ll find athletes have tattoos of the Gatorade lightning bolt or the Nike swoosh. I’ve even found Apple logos on people’s Dell Computer covers and on minivan bumper stickers! Great brands like Tide or Folgers don’t get this level of loyalty. How many Folgers’ customers have that brand tattooed on their skins or stickers on their car bumper?
ROB What does it take – what is involved in creating an iconic brand?
U.J. The key to unraveling the secrets of how iconic brands actually get created, lies in truly comprehending that small entrepreneurs, because they had no money and no industry “mental models,” did things exactly the opposite of what a well-resourced business would do.
- Possibly because these folks were by and large not business school educated, they did not follow the norms of what traditional business education would teach you to do. The first question I see most entrepreneurship programs in different business schools asking is, “what is your market?” That is the worst place to start. Iconic Entrepreneurs focus on identifying and satisfying unmet human needs. This creates new markets where previously there were none. Business school programs ask you to substantiate demand for your product/service by conducting consumer research. Unfortunately, there is a profound difference between satisfying a “human need” and satisfying a “consumer need.” By definition, a consumer is a consumer of an existing product. Someone looking for a human need is identifying needs that are not adequately met by any existing product. So this “human centric” thinking forces you to develop a new product altogether to solve needs not met by current products. There is a massive advantage in learning how to see things from a perspective that is not filtered by your industry!
- Also, because Iconic Entrepreneurs were small and had no money, they weren’t able to sell these products to big retailers, so they had no choice but to start small. Phil Knight, the founder of Nike, sold his shoes from the back of a pickup truck at universities’ athletic fields. Coca-Cola was an elixir sold to pharmacies long before it became available in large retail chains. You look at Apple – one of the first, most important areas of distribution for them were public schools in California. If you look at Red Bull, an energy drink, it wasn’t sold at Wal-Mart and 7-11 here or in Europe, but rather it began to be successful once it got into nightclubs. Alternative channels not only helped iconic brands win loyal consumers, but also kept them under the radar long enough until it was too late.
- Another key factor is the “innovation process.” When you have a strong passion, but little to no money, you innovate in a totally different way. You might Think Big, but you are forced to “Start Tiny,” get rapid feedback and evolve versus stage-gate your product innovation. This prevents the biggest reasons for new product failure – scaling too big too fast, or killing an idea before it has been developed through adequate trial and error. There is an optimal pace for product evolution, and ironically, it actually gets results faster than the usual process which only gives the illusion of speed.
- There are a bunch of other things that you need to do, of course, if you want to create an iconic brand. This includes learning the principles of communicating what your brand stands for, as opposed to merely touting its features and benefits. This is unintuitive and opposite to conventional wisdom! Again, remember, these Iconic Entrepreneurs had virtually no money, so why was their advertising so effective?
- The decision-making processes of an iconic organization are critical. How the founder infuses the essence of the brand into every single thing the company does is vastly different than most organizations that operate in functional silos in the best of cases. Steve Jobs was notorious as a micro manager who even designed the buses that ferried Apple employees around Cupertino. Jobs, a college dropout, intuitively understood that everything communicates. Iconic Entrepreneurs make sure that the brand remains true to the purpose behind which they invented the brand in the first place. This is usually not done with as much integrity, dedication and vision by even great, but non-iconic, organizations. And especially not by most large corporations, which tend to be governed more by quarterly targets rather than achieving the brand’s vision. Steve Jobs exemplified the principles of Iconic EntrepreneurshipSM right to the end. He always told his employees that Apple was not about selling computers or gaining market share or making money. Jobs’ focus was to help people be as creative as they can be without the stress of dealing with technology. And that truly is a human need and not just a context of how to sell more computers.
ROB Would you consider the iPhone to be iconic or is that just based on the Apple brand?
U.J. To my mind, the real brand is Apple. All of these products that he launched under the Apple brand are brand extensions. Even though, to be honest, they are transformational products in many ways, but to me, it’s still the Apple brand that defines the experience you have with each one of these products.
ROB If something is iconic starting out, is it harder to access? Is that part of what leads to the brand becoming iconic since it’s not in the big retailers? Is that part of the charm: that the less the majority of people know about it, the more that those who do know about it feel more privileged?
U.J. You’re absolutely right. It is indeed one of the phenomena that we stress a lot on when we build iconic business plans for our clients. The key is to understand and leverage the innovation adoption curve. The curve for iconic brands is similar to how social movements form and how transformational ideas gain adoption by the masses. Now there are two ways to gain market share. One is to distribute the product in every single outlet that you can get into. What that does is, it instantly makes the brand ubiquitous and at the same time removes any charm of someone discovering it because obviously we can’t be the first to discover something that is available everywhere. You get sales and large volumes quickly, but you also attract the competition before the brand has gained real traction, and commoditization ensues. What happened, serendipitously, with iconic brands is because they didn’t have the power or resources to attain wide distribution as quickly as brands launched by corporations or VC backed entrepreneurs, iconic brands ended up being distributed only where the brand had the most salience or resonance in their early life! This is the leading edge of the Innovation Adoption Curve (IAC). Innovators and early adopters like discovering things for themselves and telling other people about what they’ve discovered. It gives them a sense of pride and a sense of being able to help others. Also because innovators in the IAC tend to be expert consumers, they’re trusted by other people in a peer-to-peer network. If you know someone who is an innovator or an early adopter of a certain kind of solution, whether they’re an artist who likes to paint with new kinds of brushes or techniques or if it’s a sportsman or an athlete who uses all kinds of different gear, and who tells you he or she has used a product and likes it, it is very convincing – much more so than any ad or even celebrity endorsement could ever be.
ROB How does that compare to celebrity endorsements?
U.J. Everyone who sees a celebrity endorsement knows that the celebrity is being paid to say what he or she says. A recommendation by someone you know who is not being paid is likely to have a much stronger impact. So that leads to what we call Evangelical MarketingSM, which gains brand loyalists at the start of the IAC (innovators) who are tenacious and love to help other people discover what they have discovered. They tell people that they know about a product or service that they really like and that news spreads from person to person to person, creating a far more loyal consumer base than would otherwise be possible. After a tipping point is reached, conventional marketing can be used.
ROB As far as being an iconic brand, would the Beatles rank as an iconic brand?
U.J. Indeed, the Beatles are an iconic brand. Some of the greatest movements and leaders in history have become iconic like Martin Luther King or Mahatma Gandhi. The Occupy Wall Street movement could learn a lot from how iconic brands and personalities become iconic. If you see the history of how movements form and how iconic brands form, it is not too different. They all had humble beginnings, a higher True PurposeSM, engaged in a lot of trial and error initially, gained traction through a small group of early “evangelists,” and gradually built purpose driven organizations that were globally scalable in terms of ideas. In the modern world, Muhammad Yunus’ Social Business concept is similarly gaining traction not only in Bangladesh and developing countries, but even here in the United States! It usually starts with an individual with great vision who tries to make change happen in the world. The social reform folks were trying to change society and the business reform folks were trying to help people do better things with their lives. Phil Knight wanted to help people run and exercise and be healthier. So he started a movement – the fitness movement. Pemberton wanted people to feel a little better about themselves and developed Coca-Cola, the ultimate affordable luxury providing moments of joy to paupers and princes alike for the last 120 years. It starts with that vision and purpose, it moves towards establishing a core group of people, who are the innovators and earlier adopters to that idea and that vision, who then embrace it and spread the movement on their own so you’re harnessing the energy of evangelists to move the brand forward. Music is kind of the same thing. The Beatles in the early days in Liverpool used to play in little pubs and clubs and the movement started from there for them.
ROB I suppose you’d say that there are companies that have done extremely well that are not iconic – like maybe Facebook and MicroSoft or (as a brand of a product) Tide?
U.J. Yes. We deliberately try to make a big difference between brands that became truly iconic and brands that are merely great. I joke when I say they’re merely great because a lot of people would give their right arms to have been the founders or the owners of businesses like MicroSoft of course. But, the downside of a great brand versus one that is iconic is that merely great brands keep their growth coming not so much because of deeply loyal customers but through having to continuously earn their leadership every year through sheer hard work. It is much easier for iconic brands to maintain their edge. And the greatest advantage of being an iconic brand is that occasionally when a competitor outperforms you (which is inevitable) you don’t lose your loyal customers and margins. You have a much longer rope, better margin protection and, ultimately, more breathing room to innovate and make mistakes. Take Coca-Cola for example. The one time they actually tried to re-invent the formula, it backfired on them. So the product’s not had to fundamentally change for 120 years. How many non-iconic brands can claim that? Almost everybody else has to continuously innovate and keep changing. Just think about Tide — how many innovations has it had and how many other reformulations has it had to take to be able to maintain its leadership? Not that innovation is bad. It is great, especially when it is driven by human need and not merely because of decreasing margins or competitive threat. People could argue that Apple has had to innovate too. But, the truth is, they usually take existing technologies and package them better. And when they make mistakes, like with the iPhone 4 antenna fiasco, consumers forgive them – a luxury Microsoft doesn’t have. Take the case of Harley Davidson – it is probably one of the most iconic brands on the planet, but one doesn’t refer to Harley as the most innovative motorcycle technology out there. And they don’t need to be. Many motorcycle brands out there can claim to have better technology or ride etc., but Harley is the talismanic icon. The sad thing is their target audience is aging out of the market, and Harley is struggling to figure out how to tap the next few generations. The answer for them lies not in consumer research or clever innovation, but in looking deep within themselves to their iconic True PurposeSM.
To summarize, we help our clients replicate the Iconic EntrepreneurshipSM code, what we call the Six Disciplines of Iconic EntrepreneurshipSM so that they can invest less, and get a bigger bang for their buck. This model requires lower investments and has higher returns. It doesn’t mean that you shouldn’t innovate and you shouldn’t have a big organization like some of the great brands and obtain investments into the business. You can continue to do what Apple did – and maintain a massive lead versus competition. But you could also be like Harley. Sometimes it is better to be a relatively small business – a small but iconic brand and be able to sustain your competitive advantage for a much longer time. To quote Steve Jobs again, Apple was never about market share – it was always about creating tools that unleash people’s creativity and doing it better than anyone else. Ultimately Apple Inc. has higher market capitalization than others that were market share focused.
ROB U.J., this has been very interesting. I would like to let the audience know where they can get in touch with you. Your company is Blue Earth Network.
ROB Very good. Thank you very much U.J. Is there anything else you wanted to say?
U.J. I’d like to say that if one of your readers is a true change maker who wants to transform the world, or they have an idea in the non-profit or for profit world, that is truly game changing, or they believe that they might have found a human need that they have a solution for or want to develop a solution for, we’d love to work with them. We work with organizations that range from startups all the way to Fortune 100 companies, from NGOs to Governments. Our mission is not driven by a category or sector. The 6 Disciplines of Iconic EntrepreneurshipSM apply to anyone that has a transformational idea. We’d love to hear from folks like that.
ROB Thanks, U.J.
U.J. My pleasure, Rob.
Iconic EntrepreneurshipSM, Iconic EntrepreneursSM, True PurposeSM, The Six Disciplines of Iconic EntrepreneurshipSM are service marks of Blue Earth Network Inc.