Re-reading Malcolm Gladwell’s “The Tipping Point” and just finished the chapter on “Rumors, Sneakers, and the Power of Translation.” The chapter focuses on the shoe company “Airwalk” and how their popularity exploded. From 1993 to 1996 they went from $16 million in sales to $44 to to $150 and then to $175 million annually. As Gladwell points out, at their peak they were ranked by a major marketing research company as the thirteenth “coolest” brand among teenagers in the world – as well as the number three footwear brand behind Nike and Adidas. Impressive stats for a small company.
A large reason for their success was their marketing campaigns – they took risks that some of the larger companies wouldn’t take. As a small company they were able to move on ideas quicker. Gladwell calls these “Innovators and Early Adopters” – they are visionaries. “They want revolutionary change, something that sets them apart qualitatively from their competitors… they are willing to take enormous risks.” On the other hand, “The Early Majority” are big companies and thus “they have to worry about any change fitting into their complex arrangement of suppliers and distributors.”
This made me think of the music business and the difference between independent and major record companies.
The indie company does not have the resources of the major so they are forced to be creative. They have smaller staff so they don’t have to go through a chain of command to make their decisions.
At their height, Airwalkers realized that their core consumers didn’t want to go to the chain stores for their product. They didn’t want the generic shoe. So the company was smart, they created a generic shoe for the Footlockers of the world, but they made a unique type for boutiques. In this way, “the Innovators always got to wear a different, more exclusive shoe than everyone else. The mainstream customer had the satisfaction of wearing the same brand as the cool kids.”
This reminds me of a Hip-Hop artist releasing a mixtape before their album. The mixtape is a free product that the customer will seek out on blogs or will hear songs leaked by DJ’s. The material is often more rugged, the sound recording a little dirtier – the artist is creating the type of music they were known for before they became successful. Once the mix tape is out, then the artist will release an album that appeals to the mainstream – a broader demographic of listeners – to the innovator the sound is watered down, so they will gravitate to the more underground material. The key is – the innovator will continue to support the artist.
The problem is when the successful artist forgets to do the mixtape – they alienate the core fans – the cool trendsetting fans – and as a result they not only lose popularity but damage their brand as a whole as well.
This is what happened to Airwalk when they switched strategies – they stopped giving the speciality shops their own shoes. Sales went down across the board – from speciality to chain. “The epidemic was over,” Gladwell writes.
The realization is “When we became bigger, that’s when we should have paid more attention to the details and kept a good buzz going, so when people said you guys are sellouts, you guys went mainstream, you suck, we could have said, you know what, we don’t. We had this little jewel of a brand, and little by little we sold that off into the mainstream, and once we had sold it all [we realizes] so what? You buy a pair of our shoes. Why would you ever buy another?”
In other words, when you start gaining popularity and your business is increasing don’t forget to pay attention to detail. Focus on the areas that made you successful in the beginning, because when you lose your core audience and core customer your business will move on a downward spiral.