Predicting a brand’s success: signals to look for

How to detect winners early on

A few weeks ago, Tayler Haney, the founder of Outdoor Voices, opened up about the things she learned. By now, these sort of confessionals have become a business genre that has more to do with specific VC-powered growth dynamics than with the founders themselves. The high failure rate and mediocre median returns of this growth dynamic ask for a new approach in decoding the signals of a company’s potential.

In this new approach, a rapid short-term success is a fake signal of a company’s long-term value and cultural relevance. The real signals are grouped into four categories: culture, consumer, category and company.

Culture

A brand has a cult object. iPhone, Tesla (and Tesla tequila, apparently), Birkin, Peloton, White Claw, original Vejas are all aesthetic totems. They elevate commodities to the level of ritual objects: “there ain’t no laws when you are drinking Claws” and nurture a taste regime around them. Tesla tequila, which started as a joke in 2018, recently launched as a very real $250-per-bottle premium spirit, already out of stock on Tesla’s website (the rumor is that the demand for it was such that people started selling their empty bottles).