Thread by @magdalenakala

1/ Someone asked me today how I evaluate brands, esp in earlier stages. While it’s hard to boil down an investment approach to a simple framework, one of the imp things I consider is what I call (bc I’m a nerd🤓) „new TAM”:

Targeted
Analytical
Multichannel

Let me elaborate ⬇️

2/ Targeted: How specific the brand is in respect to whom it’s serving (& what are those customers’ needs). The whole point of challenger brands is to serve more niche customers/needs better than big corporates do (who need to build products that appeal to mass audiences).

3/ If you can’t clearly articulate who the target customer is and why your brand should serve their needs better than other ones do, you are dead to me (JK... kinda). If you have data on that target customer and your brand’s superior resonance, even better.

4/ Analytical: 2nd advantage that challenger brands should have is data, insights, & ability to adapt quickly based on those insights. The whole point of being DTC (imho) is that you get to own your relationship with the customer. How well are you using that & what’s your strat?

5/ If there is one thing I consistently see the more established companies struggle with, it’s building good consumer insights muscle that feeds into every aspect of the organization, from product to marketing. They never had to do it before. But many startups struggle w that too

6/ Multi-channel: I’m using multi-channel vs. omni-channel intentionally— it’s not just about distribution, but many other aspects of the relationship with customer, including education and customer service.

7/ Are you doing what’s convenient / cool for you, or are you actually serving the customer in the best, most convenient way for THEM, across the entire purchase journey?

8/ All three of these are reinforcing, too. The more targeted you are, the easier it is to understand your customers, the better you can serve them, generating further word of mouth in that consumer segment, and more customers, and more data.

9/ In general, I take extremely consumer-centric view as an investor, and „new TAM” is one manifestation of that. Your understanding of your audience & your ability to serve it better than anyone else in some way, in a sustainable fashion (biz model wise), is absolutely key. /Fin