Common pushback I hear regarding consumer investing with respect to my science-led approach: “consumers buy off brand”, “IP doesn’t matter” or “science isn’t a value driver for consumers”.
You are CORRECT! BUT, with significant caveats:
Building the foundation of a traditional consumer/tech business now is just too easy (eg, e-commerce solutions allow you to build an online business, accept payment, partner with influencers/buy ads, and set up custom products in a few clicks). For the sake of emphasizing this point, high school and college students can and are doing this, quite successfully, part-time!
For this reason (and more nuanced points depending on the category), there is a proliferation of consumer brands, in which you’re competing not just with richly funded venture-backed companies, but also the attention and products of influencers, celebrities, and solopreneurs, and increased digital spend from most players.
Your brand can quickly become brandless in a sea of red-hot competition pushing similar products, differentiated largely by name, influencer, and packaging vs. value.
Question: how is a consumer expected to compare, choose, and stay loyal? How can consumer companies stay relevant?
Solving for this problem becomes significantly more challenging when the value proposition is roughly equivalent across competitors, even with a nuanced understanding of consumer needs to finesse the product.
Communities and other clever marketing (yes community is a marketing tool) approaches are being leveraged, but the fundamental value prop will still often be an incremental gain vs. the breadth of options available for any specific problem.
The low-hanging fruit addressed by SaaS and low-tech CPG is simply becoming barren and easy to replicate, until the next major behavioral shift (to fiercely compete on).
For most purchases, indeed, people aren’t swayed by the sciences. It’s not something I prioritize either in my shopping.
So what does IP / a breakthrough do for you?
Consumers buy value. If your breakthrough leads to a 10x, or even 100x+, critical improvement, that’s what people buy.
Science-led or technically defensible consumer opportunities look and feel different.
More companies are emphasizing a science-led approach, not for the sake of blowing you away with technical mastery, but because it’s tied to enhanced efficacy, safety, reduced cost, etc, and these are important to consumers.
Even better when this effort is compounded with a significant behavioral shift that is more trend than fad.
Again: tech defensibility (tied to an important value prop) with a behavioral shift means you have a significant moat in consumerland, likely for a while. I’ve always loved the phrase “competition is for losers”.
Simply put: It’s harder than ever to compete on brand / winning eyeballs without a truly differentiated, defensible offering. Tech defensibility, tied to a strong why / customer value, not just brand, gives you a winning edge.
