Well this week was crazy! Thank god it wasnât #Trump. Stocks popped đŸ! Look at this great twitter thread on the prescience of r/DeepFuckingValue (aka Keith Gill). Power to the people! Screw hedge funds! Robinhood sucks! (okay okay, calm down olâ boy) đ€Ż
What lessons can we learn? Well at Unfold we think there are three:
Marketing doesnât equal business success
Social Commerce & Investing will only get BIGGERđ
The only thing that makes sense on the internet isâŠwellâŠthink you know! (maybe not, but⊠OnlyFans is a billion $$ company)
1. Great Marketing =/ Business Success
Long story short, GameStop and AMC may fail in a couple of years. Just like (our beloved) Blockbuster was a retail behemoth, the internet and streaming media made it obsolete.
Similarly, a video game retail store and dying movie chain canât - no matter what people believe - swim against the enormous tide of the Gen XYZ consumer behaviors (then again, Quibi wasnât exactly a roaring success either â see below). So how does this short investing bubble have anything to do with Marketing and Business Success? Let us reach for the stars and connect the far-off dotsđ€.
Great business fundamentals â a product that drives value, adaptable and innovative culture, efficient processes, being on the right of technology (super)cycles, market tailwinds, strong revenue cycle and probably more that you can think of â will determine your success. Great marketing, content and growth funnels are necessary for success, BUT not sufficient (remember your GMAT).
Will a beautiful, expensive restaurant that serves đ© survive? Do tech companies with a bad user experience scale? Do we drive âhorse and buggies đâ? Clearly not. You canât buy your way to success. You need to add value. Spending a massive amount on marketing, having great content, getting popular on media, wonât solve those pesky biz issues. We recently learned it with Quibi. Raised a few billion, big Superbowl commercial, very successful CEOs, huge plugs in media all resulted into a company shutdown after 6 months (wiki). Hereâs a big list from CB Insights about startups that raised $$$$$$$ and failed.
So just because there are hot companies, their stock or valuations are blowing up, they are the focus of our attention, they can easily end up in a graveyard â just like GameStop and AMC may.
Some of our other favorites in the graveyard đ, are: Juicero, Kodak, Theranos (great doc on HBO), Moviepass. Any favorites we missed? Let us know!
Next week, weâll walk through the 2nd lesson - Social Commerce & Investing is BIG BIG BIG. Talk about a suspenseful cliffhanger.