Going Beyond Stuff - Part 2

“Hitting the trifecta” is when creator-centric companies combine a few core strategies that result in creator-product-market fit and remarkable growth.

Can we use the trifecta to move from snacks to changing systems?

Hey friends,

Last week we highlighted a few common mistakes we see creator-centric companies often make. This week we are sharing three core strategies that every company should incorporate when working closely with creators. When all three of these strategies are combined and companies find creator-product-market fit, growth can be remarkable. We call this, “hitting the trifecta”. The idea that a start-up selling a physical product can have $100+ million in annual revenue within the first few years of operations with little to no traditional marketing spend has never existed before. Let’s get to it!

Hitting the Trifecta

#1 - Creator has deep insight into the product category

Let’s use a simple example - if a creator makes soup, smoothie, and dip recipes on their channel using a countertop blender, that creator is probably well-positioned to be involved in launching a blender. The creator has worked with all of the top blenders on the market, understands the pros/cons of the different models, and has deep insight if a gap currently exists in the blender market.

As this creator also has direct interaction with his/her audience, the creator has a first-hand understanding of any meaningful pain points that exist for consumers in the blender market. They can also gather direct feedback on what their audience may be looking for in a next generation blender. Regardless if a creator has 10,000 or millions of followers, these insights are critical when it comes to truly understanding a market and any opportunities that exist.

#2 - Involvement in product development

Many creators use products within their respective categories on a weekly or even daily basis. If a creator does this work over the period of several years, they have deep, real-world insights that are difficult to find elsewhere. They are the true definition of specialists and can be highly valuable along the entire product development process. If a creator cuts trees for a living, they probably know a bit about chainsaws. A top-ranked professional tennis player probably knows a bit about what makes a great tennis shoe. You get the idea.

Beyond specialized knowledge, something deeper and important happens when the creator is involved in product development and see his/her input incorporated into the product. The creator feels a sense of ownership and becomes emotionally invested. It creates a deeper relationship with the product and company where they will go above and beyond any contractual obligations.

#3 - Aligns with the ethos of the creator

Creating a successful product and company takes an insane amount of time, focus, and sacrifice. In order to build something special, the founders and key management must have a deep connection to what they are doing to make it the distance. Creator-centric products and companies are no different. The company must be deeply aligned with who the creator is and what he/she cares about. This deep connection is required for talent to maintain their focus and involvement over a sustained period of time.

Despite not being extremely novel, we find most creator-centric companies do not incorporate these core strategies into their businesses. When we see companies incorporate all three strategies, they seem to have a much higher level of success. We don’t consider, “hitting the trifecta” a magic formula. We see it more like a base recipe that greatly increases the chance of making a dish that people will remember years after eating it.

More high profile examples of, “hitting the trifecta” include Skims founded by Kim Kardashian or Prime founded by Logan Paul and KSI. These talents have enormous audiences and platforms so the distribution leverage they can create is remarkable. We are excited to see more creator-centric companies with smaller audiences, “hit the trifecta.”

Below are a couple examples of companies that have incorporated some of these key strategies.

Fitness Influencer Selling Candy 🏃‍♂️ 🍬 

Maxx Chewning launched a candy company in 2019 that currently generates more than $20 million in annual revenue. He did this without any outside investment and a 385,000 YouTube subscriber base that followed him for his fitness content. WTF?!

🍿 Synopsis: Maxx Chewning is a YouTuber who gained his following through fitness content. However, in a somewhat paradoxical fashion, he is building wealth in an opposite category: candy. Max launched Sour Strips in 2019 by sending sample packs to other influencers and friends to generate buzz. The response was overwhelming - he sold out of his initial 20,000 units within one hour. Over the past four years the company has been on a tear securing nationwide distribution at retailers like Walmart, Target, and 7-Eleven. It has been reported 2023 annual revenue was more than $20 million and they have sold a total of 30 million bags of Sour Strips to date. The company recently expanded into a 63,000-square-foot building to build their production and distribution capabilities.

📚 Learnings: At the time of launching Sour Strips Maxx had a relatively small audience of 385,000 subscribers on YouTube that followed his fitness content. How does building a candy company make any sense??? Here’s the thing - Maxx was open about his obsession for candy and his fans knew he has been a fanatic ever since he was young. Being a candy lover himself, Maxx knew exactly what candy lovers wanted and set out to make the best sour candy on the market. He was intimately involved with every step of product development - from flavor formulation all the way through to package design. Sour Strips is a perfect example of how a creator with a highly engaged following can use their influence to launch a product in a different category as long as the product is deeply connected to who they are.

Having a direct relationship with their audience allows a creator to pre-sell products, test new ideas, and create momentum in a very capital efficient way. This is the approach Maxx used, which enabled him to launch and grow the business without outside investment. This is a powerful point that we see many companies miss. Most creator-centric companies use their brands and followings as a key selling point to raise money from outside investors at the outset vs using their platforms to design, build, and test their products. This is backwards thinking in our opinion. Sour Strips is a creator-centric brand that employs two of three themes of our trifecta framework - deep alignment with the creator’s ethos and involvement in the product development process. Maxx’s obsession with creating the best sour candy product in the market is what distinguishes him from many other creators and celebrities who often start or join a company to extend their brand and/or earn some extra cash. The major lesson here: there are no shortcuts.

👀 Learn More: check out this interview with UpFlip in which Maxx Chewning tells everything about Sour Strips (including numbers!) and shows you around the warehouses:

Vitamins Instead of Painkillers 💊 ❌ ☠️ 

Sarah Hyland’s Sourse is on a mission to improve human health with their daily supplement chocolate bites. This is different than most other celebrity-founded brands selling, ‘nice to have’ products that fuel our vices.

🍿 Synopsis: Sourse offers daily health supplements in the form of chocolate bites (think M&Ms). Their product formulations carry specific functional profiles for improving energy, mood, skin health, and more. The Sourse team found taking supplements was a nauseating experience for both them and millions of others. They wanted to create a more enjoyable and efficient way to enhance daily nutrition. When they read that 81% of Americans ate chocolate on a daily basis, the lightbulb went off. They thought, what if we create a line of supplements in the form of daily chocolate bites? So, they hired a team of researchers and biologists to create specific formulations delivered in a format that everyone loves, chocolate. Besides bringing an innovative format to the supplement space, Sourse has another X factor in one of their co-founders, Sarah Hyland.

Sarah is known for her role as Haley Dunphy in the hit series Modern Family. She currently serves as the company’s chief creative officer and is deeply involved in product development. Sarah has had health problems her entire life that stem from chronic kidney issues. Endless hospital visits, medications that leave her face swollen, and dialysis three times a week is her reality. Taking supplements and medicine was (and still is) in her daily routine. And although Sarah knows many supplements have helped her, she had to closely research each one before taking them. So, when the Sourse opportunity came along, it was something that Sarah felt deeply connected to. The idea of building a line of trustworthy, effective health supplements that people can enjoy and adopt in their daily lives was aligned with her ethos. This + her 11 million followers on instagram creates an interesting set up for creator-product-market fit.

📚 Learnings: Sarah’s personal experience with chronic illness creates a deep alignment between the company and her ethos. Her experience taking an endless number of supplements over the years also makes her input into product development highly valuable. Sourse pretty much hits all three themes of the trifecta mentioned above. The piece that’s missing a bit for us is the deep alignment with her audience. If you take a quick look at her instagram and other channels - she is not, “world building” around health and wellness. This may make her direct audience less relevant than if Sarah built her following in this category. But, as we saw above fitness influencers can sell candy when it is authentic and a superior product is developed.

There is not much data on Sourse’s market traction and the supplement space is very crowded. Only time will tell if the company’s approach of packaging supplements in a chocolate bite format and partnership with Sarah will drive long-term success. Regardless of outcome, we are much more excited about celebrities using their influence and life experience to help improve outcomes vs most other celebrity-backed brands that promote, ‘nice-to-have’ products that serve as modern-day painkillers. Liquor, energy drinks, and beauty products to name a few. 

👀 Learn More: Check out Sarah Hyland’s interview sharing her health journey and impact on her life.

Have a great week and remember to Go Direct!

Build with love,

Jordan & Scott