Graphos Project

Episode transcript:

Andreas: A little research into product marketing, and the name Justin Jackson will show up a lot. Whether he’s running his podcasting platform, Transistor.fm, his bootstrapper community, Mega Maker, his blog, multiple podcasts or Twitter, Justin Jackson is prolific. Justin thinks a lot about product launches and marketing. He doesn’t accept conventional wisdom. He’s a keen observer of both business and consumer behaviors. He says rather than trying to get the market to find your product, you need to take your product to the market.

Andreas: This is the second of two parts of our conversation with Justin Jackson. It covers a lot of ground but it’s always focused on finding the market for your product, talking about the dynamics and elements in and out of your control that can affect the visibility and adoption of a product. In this episode, Justin picks up where he left off talking about how entering a massive established market can actually work in your favour.

Justin: I think for most folks you want to target a big market. My friend Ruben, for example, just launched a company and I thought he was crazy. He launched a software product in the digital signing niche. You’ve heard of-

Laurier: Digital signatures. Like Verisign, or is this—

Justin: DocuSign, Verisign. Well, actually I’m not sure if Verisign’s one, but DocuSign is the biggest one. They have two—

Laurier: Verisign’s authentication, so, yeah.

Justin: DocuSign has over 200 million users. Real estate agents use it when they’re selling a house. To me, I go, “Don’t go into that market. That’s like they’ve got it all wrapped up.”

Laurier: It’s sown up.

Justin: He goes, “No. That’s a big market.” There was billions of dollars done in that market last year. If I introduce a product where there’s all of this demand, there’s just a rushing river of demand and I say, “Well, I’m just going to try to capture a little bit of it.” He has a good chance of building a really good business, because it’s not just a gentle stream that he has to capture. There’s plenty of water in this river. It is rushing. There is lots of opportunity.

Justin: I think in retrospect the mistakes I’ve made are thinking too small, as opposed to thinking what’s the biggest possible market I could target? Not in the sense of I want people to go too general, and say their product is for everybody, but certainly-

Laurier: Well, I would suggest that that’s when you need market segmentation though. You can’t target unless you’re huge, unless you’re Apple you can’t target all of a massive market. Being able to divide that up into little niche groups that you can target and you can satisfy and delight. That’s when that minimal market seems to make the most sense to me. You’re not thinking so small …

Justin: That’s a good point.

Laurier: … that you can never go big. You’re not limited right out of the gate. It’s taking a big market and going after small bits of that, that are manageable, so you can create success for your early customers and get them to go out and sing the praises of your product. To me that makes a lot of sense.

Justin: You just want to make sure that the total addressable market is bigger than this little group you’re starting with.

Laurier: Unless you’re planning to just stay small and you just want to sustain yourself. If you were creating a podcast platform for people who do podcasts just for a very narrow group of people, then you better be satisfied with maybe you can capture almost 100% of those, but once you’re there you either have to change your overall plan or be happy with that small group.

Justin: The only thing is in my experience whenever I’ve tried that, it’s like you said before, if the total market worldwide is 1,000, it just becomes you’re expending way more energy going out and trying to find those thousand people, as opposed to if the global market is a million, and you can capture them just, I’m looking for another metaphor. You know like when the salmon are going doing the salmon run? If the bear is too early, he’s really hunting hard to get that salmon. There’s no one there. If he comes during the salmon run, he can eat fish all day long.

Laurier: He’s got more than he needs.

Justin: There’s just so many there.

Laurier: He can pick the fattest ones.

Justin: That’s right. That’s right. Starting Transistor, it’s the most successful business I’ve ever been a part of.

Laurier: Congratulations actually. I read the blog post you put out recently saying that you’ve gone into that full-time now.

Justin: Yeah. We just both went full-time on it. We’re still a small business, but the feeling, the difference in feeling of other things I’ve been involved with including other products I’ve consulted for and other companies I’ve worked for as an employee, the feeling is different. It feels right now that we’re in a rushing river. This could change. Markets change all the time. This could be here today and gone tomorrow. That is possible.

Justin: What I’m trying to capture is the feeling of what we have right now is different than what I’ve experienced in the past, which is you’re really hunting for those customers. You’re really working hard for every sale. As opposed to opening your door each day, opening up shop and there’s a line …

Laurier: You got a lineup of people out there.

Justin: … of a thousand people.

Laurier: You’re having that organic growth where you know that you’re doing something right, because you’re not doing something that’s totally unique. That’s an amazing thing. We talk about coming in and trying to replace Slack. Well, you’re coming in and trying to replace all kinds of different platforms that are available to people, that are better known. To me that’s a huge victory. It’s not easy to do.

Justin: Well, except it is easy to do when there’s a lot of people. It’s just like we opened another ice cream stand on the same beach. We have competitor, like Libsyn has been here forever. They had their ice cream stand. People were used to lining up for Libsyn. Just think about any lineup. You’re in the lineup for Libsyn ice cream at the beach. All of a sudden Justin and John come along. They’ve got a tiny little ice cream bike, and they open up Transistor Ice Cream.

Justin: You’re in that long Libsyn line, and you’re not getting very good service. You’re just waiting forever. You look at our line and you go, “Oh, well that one’s way shorter. I’m going to go over there.” It’s because the demand is so high, you can show up as a newcomer and people will go, “Oh, well instead of waiting for Libsyn ice cream, I’m just going to go here and get this right away.” I’m not saying the product doesn’t matter. I think product does matter, but all of this is built on the foundation of market and what the potential is within the market.

Justin: You’re right. Libsyn’s serving the same old ice cream all the time. We show up and we’re smaller. People can tell we’re smaller. We’ve just got a little bicycle cart or whatever. They, “Oh, they serve vanilla and they serve rocky road.” Well, all of a sudden we have something different. We’re new. There’s enough demand. There’s enough people that just want ice cream in the first place that they might come by us on the way. They might give us a shot. “Hey, what do you have?” We have vanilla and rocky road. I’ve never had rocky road. I’ll line up here.

Justin: Product does matter. I’m really excited about this idea of market first, because I think it sounds intuitive, but it seems to be what most folks miss when they’re launching something new.

Andreas: I think about something like Nestle which is a huge food and chocolate company. When you go to Germany there’s a lot of dark chocolate. It’s very particular. It’s 65%, 70%. When you go to Switzerland, it’s a lower but it’s still darker than North America. North America is almost universally milk chocolate. That’s the number one thing that sells. Then when you go to Asia it’s actually really bitter and it’s different than dark chocolate. They understand each of their markets to the point where they modify their products.

Andreas: Chocolate does chocolate everywhere. Everyone has chocolate for the same reasons, but what they prefer, they’re so attentive that they actually customize their product to do the job for the tastes in that market.

Justin: Yes. That’s a great example, actually, because the overall market is chocolate. If you asked people on the street, “Hey, do you like chocolate?” You might get eight out of ten people will say they like chocolate. Well, that’s already a pretty good sign. You might go to Germany and you might ask them and get the same results. Now, in terms of taste they have different taste, but if we’re just talking about the market itself, the market itself is chocolate. Now, Nestle could have decided to do anything else. They could have decided to-

Laurier: You name it, they’re probably in it anyway, they’re such a big company.

Justin: They’re probably in it anyway.

Speaker 4: You’re listening to Product Knowledge, the podcast about creating and marketing products that improve people’s lives.

Justin: You understand what I’m saying. There’s definitely certain food commodities that are more popular than others. If we’re talking about the market for Vegemite. There’s a market for Vegemite.

Laurier: Outside of Australia, not very many people, right?

Andreas: Well, I think about things like Maggi. Maggi is known in every culture. I mean, I swear, as a kid, every German kid knows Maggi, and then I have an Indian friend, and he’s like, “Oh no. We have Maggi. That’s Indian.” It’s in Italy. It’s everywhere.

Justin: Demand can be uncapped in markets. That bottle of Maggi could show up in an episode of Stranger Things, and all of a sudden uncap demand for that in North America. What influences markets is a little bit more tricky to forecast. There’s a bunch of small nudges or sometimes big nudges that happen and they’re hard to plan for. Sometimes you can go, “Okay. Well, what are the big things that are going on right now that might influence what we do tomorrow?”

Justin: It’s harder to read the tea leaves in those senses. For most entrepreneurs especially if you’re going to bootstrap and especially if you’re not raising millions or billions of dollars, it’s best not to do something new. It’s best to go and look at where does demand already exist, and let’s serve that market. Let’s do something different.

Justin: Maybe it would be something like if the immigration profile of North America changed in a substantial way and you noticed that, now might be the time to start importing Maggi or get the North American distribution license, or whatever. Thinking about it in these ways is so interesting to me. Having now experienced it in podcasting, I’m seeing these things happen more and more.

Justin: Here’s another example actually. We’ll see if this plays out. I don’t know if it plays out, but let’s look at a bunch of different touchstones in the alcohol industry. Millennials are drinking way less than other generations, just way, way less. When they do drink, if they drink, they are buying higher quality stuff less frequently. That’s one touchstone. There’s also movements of, I don’t know what generation I am. I’m probably a young Gen X.

Justin: Gen X now, we’re almost in our 40s, and a lot of us including me are deciding, “You know what, I’m just done drinking. Drinking, it’s slowing me down. It’s affecting my sleep. I’m tapping out too.” There’s this big sober movement with Gen X folks. This is interesting, right? If you keep reading all the touchstones, you go, “Wow, there might be a movement here.” Then you start reading the media pieces. Now, you got to be careful because sometimes the media is just writing about something because it’s interesting.

Justin: I think there’s been 10 New York Times pieces now on this whole sober-curious movement. They call it sober-curious because it’s folks that are not, they’re not like maybe committing to being sober …

Laurier: I wonder what being sober is like …

Andreas: They’re not teetotalers, but…

Justin: Yeah. Exactly. They’re committed to being sober most of the time. Now we have sober bars opening up. This is kind of version two. I don’t know if you remember the whole smart drinks thing that happened, especially actually in Edmonton and Calgary, when there was raves and electronic dance parties. They wanted to open all night. They wanted to dance all night but you can’t serve alcohol all night. The regular bar would be open until a certain time, and then two in the morning the smart drinks bar would open up. This is in the 90s this happened.

Justin: Now, we’re having a second wave of this, but it feels different. It’s more folks exploring this sober options. Now, in San Francisco if you’re a funded startup, there’s actually three or four startups that are pursuing creating drinks that have the emotional feel of alcohol but have no alcohol in them. These are expensive drinks that are-

Laurier: You can spend just as much but you don’t get the alcohol.

Justin: Yes.

Laurier: You have the feeling in your hand of having a drink with alcohol in it, but you don’t get drunk. No buzz.

Justin: Exactly. Exactly. Actually what you just described is exactly the emotional job to be done when you’re sober. What do you really want when you’re out for drinks with friends? Emotionally you want to fit in and you just want a drink in your hand. It doesn’t really matter what the drink is, as long as you fit in, in the group. These folks have noticed this and they’re going, “Oh, what if we could give the sober folks a drink in their hand that made them feel fancy, that made them feel like they’re having a night out, that made them feel like they’re a part of the group but without the alcohol?”

Justin: We’ll see if this works out, but I think that’s a good B to C example of how this can play out. Maybe this is a rising wave that actually goes a long way.

Laurier: It’ll be definitely interesting to see. Justin, you’ve been a fantastic guest. I want to thank you again for coming and joining us. Where can the listener go to find out more about you?

Justin: I write every week on justinjackson.ca. You can sign up for the newsletter there. I send it out Saturday mornings. If you want to see me work out my material, I do that on Twitter. I’m the letter M, the letter I, Justin, mijustin.

Laurier: Awesome. Thank you again Justin. It’s been really fantastic.

Andreas: That’s it for this episode of Product:Knowledge and our conversation with Justin Jackson of Transistor.fm. Check out the episode notes for links to Justin and his favorite coffee shop. Visit graphosproduct.com, where you can find more about Graphos, our services, ideas, or more podcasts or our blog. All of our podcasts are transcribed for the deaf and hard of hearing. Reach out on Twitter @graphosproduct, or email us through the forum on graphosproduct.com. Thanks for listening. I’m Andreas Schwabe.