After 18 months in business, I started to identify core weaknesses in my business model that couldn’t be changed. I didn’t have an annuity-payment type business. I had a business that threw off cash, but I always felt incredibly uncomfortable investing in stock. It’s difficult to explain, but no matter how well the business did, I still had doubts that I was going to be able to sell through my stock when it came time to reorder. If an influencer stopped posting, I would have to find another influencer who had an equally engaged audience. That wasn’t so easy. I liked influencers because they allowed me to subvert the traditional restrictions on most forms of advertising. An influencer could say “the tea is great, it helped me lose so much weight!” but I could never place an advertisement on Facebook or Google making claims like that as a company. That’s a big part of the reason it is easier for instore sales staff to convince customers to purchase products. Someone at a cosmetics counter can tell a customer that a pore refining cream will make pores disappear and never return or lie about the ingredients or say that it was created using a patented process developed by the world’s leading anti-aging specialists. They can say anything and have confidence that there will never be any consequences for not telling the truth. There are far more restrictions in place about the claims that can be made about products on social media platforms. There is now a movement towards advertising on YouTube, Twitch, and podcasts because performance and video creators can say almost anything.
The problem I had, however, is that it felt very much transaction-based with influencers. If someone stopped posting about my products, I had no way of immediately finding another person to take over. It had a lot of do with the nature of my products. People didn’t like promoting weight loss and detox products and it was hard to blame them. It is much easier to find influencers who are willing to promote products that focus on external beauty or someone’s outward physical appearance, like skin, hair, and nail products, workout guides, and clothing. It is easier for influencers to get behind products that will change someone’s physical appearance. If I ever started another consumer product brand, I would have this lesson in the front of my mind and avoid ingestible products at all costs.
In my head, I wanted to get to a point where I had a formula for business success that I could roll out over and over. A franchise is a great example of this. The master franchise creator chooses a name, menu, and a standardised fitout and then sells this formula many times over. If I could sort out my marketing channels and fulfilment operations, I could roll out other business ideas using the same formula. That’s what a vast majority of successful business people do. They get to a point where they understand how to open a gym and before you know it, they have opened ten. They have the relationships in place to have products stocked in a supermarket and they are able to import or make anything they want. I was hoping to get to that point. I had so many ideas, but I could never gain traction on the marketing side of the business. Whenever I thought I was getting somewhere, Facebook would change its algorithm or Google would introduce new restrictions or an influencer would drop out. It was harder still because I didn’t have a defined market to target. If I had had a skincare brand, I would have been able to target thousands of popular YouTubers who run beauty tutorials. If I was selling leggings, I could have sent them to a huge number of female fitness influencers. Since I was selling a weight loss tea, there weren’t many weight loss gurus I could turn to. The ones that I did find were either heavily against shortcuts or were completely toxic human beings who promoted dangerous eating habits. The teatox companies that had come before me had poisoned the waters; it hard for me to adapt.
As a consumer, I didn’t quite realise the extent to which marketing and public relations control our thinking when it comes to commonly used products and services. I first started to become concerned when I came across a woman named Belle Gibson on Instagram in 2014. She claimed that she was able to fight off terminal brain cancer by adopting a wholefood vegan diet and forgoing conventional cancer treatment. As soon as I saw listened to her speak, I immediately knew that something was off. People don’t just recover from cancer — particularly the type of aggressive brain cancer she claimed to have. While I am certain that healthy eating wouldn’t have made the cancer any worse, it’s definitely not a cure. Yet, no-one else seemed to have any idea. Belle was documenting her struggles on her Instagram account and released an app called the Whole Food Pantry, which contained healthy vegan recipes. The app quickly became a best-seller. In fact, it became so popular, that Apple used it in the early promotional shots for the release of the Apple Watch. At about the same time, a woman named Jessica Ainscough, who was known as the Wellness Warrior, was also suffering from a cancer diagnosis and deteriorating fast. While Jessica eventually passed away, Belle made a miraculous recovery simply by consuming food prepared using the recipes from her app. It eventually surfaced that Belle didn’t have cancer. She made the whole thing up to promote the release of her app. As a result of the story, Belle made millions of dollars in app sales and put the lives of thousands of people at risk who were battling cancer and taking her advice. It was all one big marketing stunt. No-one, including Penguin who agreed to publish her book, bothered to look into her claims. Although, in many respects she was largely immune from criticism. Can you imagine the backlash someone would face if they questioned a cancer diagnosis? They just repeated whatever they were told. Australia Cosmopolitan magazine named Belle their ‘Fun Fearless Female’ of the year in 2014. Why? People like a good story. It’s the most important element in marketing.
I came to realise that there are two core drivers when it comes to successfully marketing a product or service: tell a story and sell a fantasy. While businesses don’t necessarily need to do both, it certainly helps. For marketing purposes, Belle had a great story. She managed to beat cancer by eating a vegan diet and chose to share her life-saving recipes with the world. A selfless act and a compelling sell. Now, imagine if she didn’t have that story behind her. Now, she’s just a girl who created a vegan recipe app. Without the cancer narrative, there’s nothing special about her or the app, which makes it significantly harder to market. The fantasy here is the idea that forgoing conventional treatment and focusing on a vegan diet can cure cancer. It gives hope to all the people around the world struggling with chemotherapy and other cancer treatments that there might be another way. If it worked for Belle, it could work for me. Why not?
Tell a story and sell a fantasy
The importance of stories in marketing is why there is such a push for female founders. It’s not actually to redress some sort of gender imbalance; it’s simply a better story to tell. A company with a female founder is going to get press and receive ongoing coverage from liberal media outlets. It’s a unique selling proposition that ties into a lot of open marketing opportunities. It would be hard to play up a male founder’s gender in the same way. There’s nothing special about it — there’s no story there. Instead, you can wheel out Elizabeth Holmes as the face of your company. Her story practically wrote itself: young, blonde, Stanford dropout. Wait, that’s not interesting. I’m missing something. Oh, did I mention that she also has a vagina? There we go. Now you’re listening. Put her on your magazine cover and do a write up for me, would you doll? Thanks a bunch.
Everyone in marketing knows this. It’s just how it works. Consumers are predictable and respond in predictable ways. When you start to pay attention to the products you buy on a daily basis, you see stories everywhere. The wine you buy isn’t just a regular pinot noir; oh no, it’s a pinot noir made by fourth generation vintners on a fertile family estate situated in the heart of the Marlborough region of New Zealand. Your headphones aren’t just headphones, they are state of the art noise-cancelling devices, designed by the world’s leading sound engineers, to offer unrivalled acoustic clarity and playback. Your t-shirt isn’t just a t-shirt, it’s a hyperflex training top designed by Olympic runners in California to boost athletic performance. Without a story, there is nothing to spin. Consumers need something to sink their teeth into. The easiest way to understand the importance of story-telling is to look at examples from the news. When you hear about a house burning down on the news, that’s not enough of a story to get people interested. Houses burn down all the time. It’s terrible, sure, but who really cares? The story is that a young girl died from smoke inhalation at the scene. It would be hard not to have an emotional reaction to something tragic like that. If, however, it was a middle aged male accountant who died, it wouldn’t garner any sympathy and the story wouldn’t invoke a lot of interest. Unless, of course, and I am just thinking out loud here, he left behind two twin boys whose mother had died during child birth. Now, we have a story.
How does it work in practice? You start with a product, let’s say coffee beans. Now, if you want to sell coffee beans as generic, unbranded coffee beans, you might be able to charge a few dollars for a 200g bag. Now, we add a brand and packaging, so we are able to sell them for a little bit more. We will call our coffee beans, “Pablo’s”. Now we add a story. The story here is that the beans were organically grown in Colombia by Pablo who relies on the sale of the coffee beans to feed his family in the remote village he lives in. Now we have a story. Now we can charge $12 for the same 200g bag of coffee. Now if we tell consumers that $1 from every bag sold will go towards curing a certain type of illness that is plaguing Colombia, we can charge $15 a bag. Story-telling is about building layers of value that connect with consumers.
Selling the fantasy is where a lot of companies go wrong. When you sell a fantasy, you are projecting an image of success into the minds of consumers. Consumers see a model wearing Calvin Klein underwear (the fantasy) and think that they will look the same wearing them. They see an attractive couple sunbathing poolside on a hotel’s website (the fantasy) and think that that will be them. They see fit and healthy models eating KFC in an advert and think that they can eat KFC each day and look exactly the same as the models. This is one of the main reasons that these “real women” campaigns don’t work. Sure, they might get a lot of press, but consumers don’t want to believe that they look like regular people. They want to believe that they can look at good as Heidi Klum wearing her branded underwear.
Here’s an example of what most companies do. Near my house there is a private Anglican all-girls school that has started putting up billboards to boost its enrolment. The billboards feature an image of a student with the caption, “Be more than you ever imagined”. The images show students involved in activities, like playing field hockey or playing a violin or running on a track. Every time I see a billboard, I can’t help but wonder how they got it so wrong. How much did they pay for a campaign where the message doesn’t line up with the image? The message is inspiring and is trying to invoke some sort of fantasy — that their students are able to accomplish more than they ever thought they could by going to the school. The image, however, just shows normal girls doing normal things. I know of several former students from that particular school who have gone onto study at Harvard. That’s the fantasy. An image of a former student holding a Harvard diploma or figures showing the number of students who have gone onto study at ivy league colleges in the United States. A parent doesn’t want to pay $30,000 a year to have their daughter play field hockey. They want to pay $30,000 a year on the off chance that their kid will get into Harvard. Personally, it makes me question the competency of the people making decisions at the school. I suspect they never stopped to think about what it takes to get someone’s attention who is hearing about the school for the first time. If you are unable to attract enough students based on reputation alone, you have to offer parents a fantasy that justifies the expense.
When it comes to story-telling and fantasy-selling, many businesses target the wrong markets. At times, it is not immediately obvious who the target market is. Continuing the example above, you would think that, when marketing a high school experience, you would target potential students. That would be incorrect. You should, first and foremost, target parents. While children will undoubtedly have some say over which school they attend, it is the parents who make the final decision and it is the parents who pay the fees. The idea that someone can “Be more than you ever imagined” uses language that is directed at students. A student reads that, sees the pronoun “you” and thinks about their own future. When a parent reads the by-line, they have to translate the text: “my child can be more than I ever imagined”. If correctly targeted, the text should be directed at parents and should probably have said something like this: “Five of our students got into Ivy League colleges last year. Is your daughter next?” Simple. No translation required. A parent would read that and do anything they could to get their daughter into the school. The school could run a “Is your daughter next?” campaign and change the opening sentence to say any number of things that would be equally as effective.
One of my favourite Charlie Munger stories touches on the importance of targeting the correct end-consumer. A man walks into a fishing shop and looks at the lures on display. They there are all sorts of different colours and varieties available. The man approaches the owner, “Do fish really like these lures?” The owner replies, “Mister, we don’t sell to fish.” If lures were designed solely to attract fish and were unattractive to the final buyer, they wouldn’t get purchased. If they don’t get purchased, they obviously can’t be used. If they don’t get used, they aren’t going to catch any fish. When you create and sell lures, you are not selling a product that fish will like; you are selling a product that a person thinks that fish will like. If you follow the money trail, you will always find the end consumer. That is the person who needs to be convinced through persuasive marketing and thoughtful product design.
If you follow the money trail, you will always find the end consumer
The story I used to market my own company was far from unique. I started by mixing tea at my kitchen table for my personal digestive issues and began selling it to family and friends before opening a stall at a local market. Before long, I couldn’t keep up with demand and was forced to expand the business by producing teabags. I probably should have been more creative but I wanted to keep the story believable. I should have just told the truth. The truth is that I went on a spiritual journey to Taiwan and made a pilgrimage to the Chung Tai Chan Monastery. After a decade of working as a corporate lawyer, I was yearning for simplicity and authenticity in my life. I had neglected my health for too long and my body was suffering. A chance encounter with a Buddhist monk changed my life. I spent the next three years at the monastery learning about the healing properties of green tea and other time-honoured herbs as I attempted to develop a holistic approach to living and wellness. I studied from an ancient bound text, widely considered to be one of the oldest books ever written about Chinese medicine. This text contains the recipes that have formed the basis for every tea blend we produced.
The story above was adapted from the brand story I recently came across from a company in the United States called Tatcha. Tatcha sells skincare products: think moisturisers, cleansers, face serums, etc. In the United States, it is stocked at Sephora, Barneys, and The Ritz Carlton. The story here is that the founder went to Japan and learned about the beauty routines Geishas have been using for centuries. Geishas are known for their timeless beauty and flawless complexion. Wouldn’t it be incredible to have access to their skin rituals? Better still, what if you could use the same beauty regimen to protect and heal your own skin? When the founder was six months pregnant with her first child, she got funding for the business and created her own line of Geisha-inspired skincare products. In the world of beauty, it is a unique and compelling sell. It doesn’t matter whether the story is true or not; what matters is that it is believable and compelling, which makes the brand much easier to market. Who wouldn’t want access to skincare products that Geishas have been using for hundreds of years? Tatcha’s products aren’t particularly amazing — they are just like every other overpriced skincare products on the market. The only difference is that they have a great brand story that makes the inflated price seem more justifiable.
All brand stories embellish the truth: consumers don’t want reality. They don’t want to know that someone saw a gap in the market that they were hoping to exploit. They want to believe that there was more to it, some higher purpose or reason for starting. Stories seem to fall in a grey area with regulators. While there are laws in place to protect consumers from false or misleading claims in relation to product performance, there are almost no restrictions on what someone can say when it comes to their brand story.
About a year and a half after I started the company, I received an email from a trademark registration company in the United Kingdom informing me that someone was trying register a trademark for “omgtea” in the United Kingdom. They wanted to bring it to my attention and give me a chance to register a trademark before the other application was submitted. At the time, I had trademarks registered in New Zealand, Australia, and the United States. I realised early on that trademarks are relatively useless, unless you have the money to take action against anyone who infringes upon a trademark. If I had registered a trademark in the UK at the time and another company had inappropriately used my mark, I wouldn’t have had the money to do anything about it. The legal system is great in that way.
I passed on the opportunity. I didn’t think much of it at the time because I owned almost every domain name connected to the trademark and had no plans of expanding into the United Kingdom. Perhaps it was just a coincidence. The name wasn’t so unique that other people couldn’t independently come up with it for their own business. A few months later, it became obvious that it wasn’t a coincidence; the woman behind the company used an almost identical logo and colour scheme and the same company registration name in the UK that I was using in New Zealand. For a long time, the only difference between the two companies was the fact that UK company was focused on selling powdered matcha, while I was focused on selling detox tea products. While it bothered me at first, there wasn’t much of a cross-over in our products or markets, so I quickly forgot about it. Fast forward a few years, I received a flurry of orders and customer emails from the United Kingdom one day in late 2017. I had never actively marketed to customers in the United Kingdom, so I had no idea what had prompted the unexpected uptick in sales. In fact, at the time, I didn’t even know that I was shipping to the United Kingdom. I didn’t want there to be any confusion; I thought I had removed it as an option from the website once I found out about the UK company.
I spent hours on social media trying to figure out what had happened. Someone must have posted about my tea, that much was obvious. However, I couldn’t, for the life of me, figure out who. A few days later, after sales had gone back to normal, I received an email asking if the article in the Daily Mail was true and that my tea could actually cure cancer. I sent a reply immediately: “Cure cancer? We have never made any claims like it and our tea is not a substitute for supervised cancer treatment.” I was flummoxed. After sending my reply, I reread her email. I hadn’t picked up Daily Mail reference the first time I had skimmed through the email. I quickly did a Google search and found the article. The woman behind the UK version of OMGTEA had placed a PR piece in the Daily Mail claiming that matcha could help in curing cancer. The Google headline for the article read: “Antioxidant-rich tea OMGTea could help beat cancer.” The article went onto profile the founder and talk about how her mother, who had recovered from breast cancer, drank matcha tea to aid the recovery process. Between you and me, I suspect the real cure was the double mastectomy she had; although, I am sure the antioxidants in the matcha didn’t hurt. I was so mad at myself. Why didn’t I think of that? That’s a much more interesting story. I could have connected with Belle Gibson and we could have done a whole thing about fake cancer cures and made a fortune. There are certain lines that should never be crossed, and making unfounded claims that a product can cure cancer is one of them.
What I found particularly interesting about the idea that matcha can help in curing cancer is that it reminded me of something I first noticed as a university student. In my thesis, I touched on a problem I termed the “global warming paradox”. It is the idea that if lawmakers enact changes to reduce emissions, and global warming slows or stops altogether as a result, there will be two conflicting sets of reactions. The deniers, who didn’t believe that global warming existed in the first place, will use the information to come out and say that it was clearly a waste of time and resources because there is no evidence of global warming. The believers, on the other hand, will say that the only reason global warming stopped is because of the efforts that were taken and the resources that were allocated to combatting climate change. Who is right? We quickly reach an impasse because neither side is willing to concede that they are wrong, no matter what supporting information is presented. It is an information paradox that a lot of businesses profit from. We can’t prove that matcha didn’t play a role in curing that woman’s cancer, so we can safely say that it may have. Consumers latch on to ambiguity and interpret information in a way that aligns with their belief systems. In this case, they want to read that matcha cures cancer. For me, it is reminiscent of the way the tertiary education system operates. It’s a business that falls into the unique category of selling dreams. If you go to a university and come out the other end with an amazing job opportunity, it’s because of the university. If you go to university and fail to get a job afterwards, it’s because of you. If you consume our matcha and your cancer goes into remission, it’s because of us. If you consume our matcha and your cancer spreads, it’s because of you.