We would love to talk about unicorns in the natural products industry. These brands experience rapid growth and get acquired for some crazy revenue multiple. It is the exalted “exit” to which many founders aspire.
Our obsession with the unicorn does us a disservice. It forces founders to jump onto the fundraising hamster wheel. We build brands that are hungry ghosts with big bellies and tiny mouths—brands that are insatiably hungry for more capital, and when you look closely at them, they may not even appear to be real businesses.
Granted, my personal bias may cloud me, but we place far too much emphasis on brands with hockey stick trajectories and adopt a “grow at all cost” mentality. There are times when this approach might make sense. For instance, when you have something genuinely revolutionary or disruptive, first to market means everything. For most, even though we might think what we’ve created is unique, it is unlikely that it’s so differentiated it warrants chasing unicorns.
What I find exciting are tardigrade brands. These are nimble, capital-efficient, resilient brands that can scale. A tardigrade, also known as a water bear, is a micro-animal that is one of the world’s most adaptive, resilient creatures. They can withstand temperatures as low as -328 degrees Fahrenheit and as high as 300 degrees. When things get tough, they can go into cryptobiosis, reducing their metabolic rate to 0.01% of normal, living up to 30 years without food or water. Needless to say, these little micro-dudes are tough. Those are the brands I want to celebrate!
This moment in time has pulled the veil from our eyes and accelerated changes that were long in coming. Brands need to plan on going further with less than ever before. They will need to get closer to where the problem being solved is most pronounced, or the need being filled is most acute. Brick-and-mortar retail can’t be the primary point for discovery and trial anymore. The economics won’t allow it.
A tardigrade brand is e-Comm enabled both direct-to-consumer and business-to-business. They have small, nimble teams, low overheads, and flexible supply chains. Tardigrade brands own the consumer journey, building a robust and evangelical tribe with whom they’ve established a real relationship. They take a curated approach to retail, only going into those locations where they can succeed. Alternative channels such as corporate campuses, colleges/universities, and airports are leveraged to drive discovery. Influencers become more than bloggers. They are physical locations such as yoga studios, naturopathic offices, etc., located in key target markets.
These highly adaptive and resilient companies put profit before growth and cash before everything. If necessary, when the sh$t hits the fan, they quickly curl into cryptobiosis to survive. For them, capital-efficiency is the new velocity. There is no hamster wheel, and they are beholden to no one. What tardigrade founders build are cool brands, innovative products, and sustainable businesses. The tardigrade, not the unicorn, is the future of this industry.