Should I get my haircut at the new barber in town, or stick with my existing bloke, who’s done a decent job for the last twenty years? Tried and tested, traditional barber’s shop, good chat and always a decent brew, or time to switch and see if there’s something new and different on offer?
How can the new barber attract me away from my long-time relationship? This is the challenge all startups face, how to attract those early customers.
The new place has opened in the old fruit & veg shop on the high street. Nice job they’ve done on the refit, polished wooden floors, modern sinks, trendy lighting and décor. It looks like the kind of place where they might give you a choice of herbal teas, massage your scalp vigorously beforehand with spicy unguents, and soothe your face afterwards with a hot towel.
It’s about loyalty, though. I always use the little place fifteen minutes walk down the hill from my house. It smells faintly of damp dog – because you can bring your dog in – and charges £6 for a standard trim. I took my son there for his first cut, and now we continue to go independently. I wouldn’t think of getting my hair cut anywhere else, until now.
The new barber is part of a resurgence in our high street, an uplift to C21st retailing with a vibrant new artisan café, a decent pizza restaurant and as of this week, a new barber. All startups, entrepreneurs pushing themselves with passion, creativity and expertise.
My wife thinks I should try it. But then my wife thinks I should go almost anywhere other than my usual place. Though she agrees with me that £6 for a haircut does indeed represent great value for money, her feeling is that the quality of the work that my £6 buys is variable and can range from what she might merely describe as a bad haircut, all the way through to something more closely resembling a full-blown act of self-harm.
Whilst sometimes she may well have a point, they’re both haircuts, aren’t they? It’s just that one is shorter than the other and gives me a few more weeks before having to visit again. My wife thinks I should go to her hairdresser, who does blokes and ladies. I scoffed the first time she suggested this. Why would I spend £15 on a haircut? I asked. There was a slightly awkward pause. Apparently, £25 would barely get your hair combed, let alone cut, at my wife’s hairdresser.
But it’s about allegiance, as well as convenience and familiarity. At the barbershop favoured by my son and I, our hair gets cut by two men, known to us after more than two decades of custom, as ‘our bloke’ and ‘the other one’. We’re on first name terms with Dave and Ken, but we have our own routine: if ‘our bloke’ is busy when you go in, ‘the other one’ does it. Hence the typical exchange when one of us comes back with a haircut: Who did you get? Our bloke? No, the other one.
And the finale of each performance – because that what a haircut is – I always look forward to the pointless ceremony with the mirror, showing me how the back of my head now looks. This is my opportunity to comment critically, but I think both of us know that’s not going to happen. In twenty years of the ritual of being shown the back of my head by our bloke or the other one, I have only ever said: Smashing, just the job, that’s great. Thank you. You don’t want to appear difficult, especially if you don’t really have an opinion in any case.
If, during the mirror inspection, it emerged that the barber had, say, removed a portion of my ear, I might just be motivated to ask him if he would have another look at it. In the main, though, as long as I’m not actually bleeding afterwards, I tend to be perfectly happy with the haircut as given. Then I pay £6 and leave. See you next time.
But maybe it could all be different in this bright new emporium, a new pair of scissors and groomer with whom I would have to cultivate a new relationship, and potentially, a whole new experience of lights and music and herbal tea. On the other hand, it would cost a lot more than £6 a throw – starting at £15 looking at his price board. For a haircut! And wouldn’t I miss our bloke? Not to mention the other one.
If I switched, then maybe the first few cuts would impress, then start to get a bit sloppy until weird bits of hair are sprouting in all the wrong places? Why would I change? £15 for someone to attend my personal (reducing) follicular assets; just set it at number two to avoid the Humpty Dumpty look.
The challenge for the new barber in town is winning new customers and early adopters, the goal of any startup. He has to provide a gesture that he has a different value proposition for them, to connect with them – customer attraction and retention is what turns a start-up into a high-growth business.
Have you noticed that the really big startup wins in the last couple of decades have come from creating and dominating their market with compellingly different value propositions? Steve Jobs was a master of this, preaching the need for new thinking as he introduced the iPad, iPhone, and Apple Watch. Uber and Airbnb have subsequently done the same.
Many entrepreneurs tout their new technology and solutions as disruptive, implying that the change is so dramatic as to open new markets and win hordes of existing customers, switching from the incumbent providers. In many cases, this approach fails by confusing customers. The goal of a startup is to orchestrate major change without disruption, by making it seem natural and even the customer’s idea, a progression or evolution to a new provider.
Related to my barber scenario, Michael Dubin, founder of Dollar Shave Club, is a great example. The disposable razor blades market was dominated by a couple of companies, mostly Procter & Gamble’s Gillette brand. Dubin launched the business of selling razors because he was fed up of paying for expensive disposable products, and was always running out of them. His new business would offer customers easy access to good-quality razors via a subscription service.
Dubin tapped into this pool of consumer resentment with an amusing commercial video on YouTube. He touched a collective funny bone while generating demand for his razors. His pitch – the video’s title was Our Blades Are F***ing Great – played well to men annoyed by the rising cost and myriad features of disposable blades, and mocked the established brands while claiming to offer better value. The video has so far had 24m views.
Though not the first personal care subscription service, Dollar Shave sent exactly what was ordered. Initially, customers receive a razor handle and pack of cartridges. Each month thereafter, replacement cartridges arrive at their regular price of $1, $6 or $9. In addition, the company sells so-called ‘premium’ products, such as shave butter and post-shave cream.
Dollar Shave Club has not been the only underdog in its sector. In the UK, King of Shaves, a male style and grooming range, started out as a challenger to the status quo. The impact on the industry leaders from both became noticeable as online sales took off.
They attracted plenty of attention, with a $1bn valuation after raising $90m in 2015 Eventually Unilever, showed an interest and bought Dollar Shave Club for $1bn – hardly a steal at x5 2016 revenues. From nothing, Dollar Shave Club had a 1% market share in just three years, building on what Dubin seems to do almost effortlessly: connecting directly to the consumer with irreverent marketing and a sense of purpose, with a back-to-basics approach.
Dubin’s gamble was that people would be prepared to pay for his blades in advance, and that a delivery service would add value and convenience for his customers with his “SAAS” (‘shaving as a subscription’) model.
Some brave and bold moves saw Dollar Shave Club elbow in to a mature, existing market, dominated by strong brands. Figuring out a go-to-market approach is no trivial exercise for a startup. Start by identifying a small number of very specific customers, put yourself in their shoes by thinking about their issues and by talking to them not about your product but about their challenges and pain points (this is Steve Blank’s ‘customer development” process’.)
Once you’ve taken these steps, you can experiment with a go-to-market approach with the expectation that you’ll continue to refine and change it based on experience and further insights, but without understanding the customer’s issues, it’s almost impossible to get right.
So what are the key elements in the ‘go-to-market’ strategy for a startup? Here are some thoughts on things that can set you on your way for rapid early customer attraction and becoming a high growth business.
Make thinking differently part of the company culture If your vision is building a new offering, then product innovation and design needs to be in the culture of everything you say and do. Being disruptive means getting customers to respond ‘I didn’t know you did that!’ and show them significant added value they didn’t expect.
Create a powerful and provocative story of a new view Better solutions may be cheaper or faster, but they are not always different. Different requires a new view with logic or an emotional appeal that stretches a customer’s brain, allowing people to see themselves benefitting from the solution, outside the normal justification parameters.
Condition the market to expect something new A startup is about changing people’s consumption, usage, and buying decisions. Why would they switch from one trusted barber to a new one? What will impact their thinking, their emotions and stir their curiosity? You need to build momentum as this helps people move away from the way they used to think, to a new frame of reference.
Know your customers Sounds obvious, but listen to your audience and understand the issues that your product or service must address. Work out who needs you most and what you have to do to get on their radar, and keep in touch with them regularly so you know what’s going on at ground level.
Make it personal Be clear about your personality and purpose, be memorable, and give customers a reason to believe in you – and to talk about you, advocacy is a great sales asset. Word-of-mouth recommendations are great for business growth. Incentivise customers to stay with you and reward them for referrals.
So, will I stick or twist with my choice of barber for my next haircut? Dollar Shave Club shows how you can reinvent an existing business model in a traditional, stable sector, so I’m curious about the new shop to see if they can out do our bloke or the other one. When I sit in the chair, will they start at the front or back? Top or bottom? Swivel the chair or walk around? One thing for sure, he won’t greet me with Our Blades Are F***ing Great!