This book deserves a 5* because instead of reproducing success stories of the Dollar Shave Club and other D2C consumer startups, it also gives the failture/underplayed stories of the few others in the segments of luggage, matresses, as also the listed player who sells on Amazon. Some notes from the book which explains how the confluence of lean manufacturing(and small lot size), Alibaba, Ad-tech and 'Just good enough' helped wins, but why future will be hard
(a) It was so successful that it couldn’t fully comprehend the disruption that could be caused by a start-up with a “good enough” product using the internet to level the playing field and change the rules of the game. Gillette may offer the best shave, Pakman thought to himself, but Dollar Shave Club was offering the best value.
(b) Companies have outsourced production for decades, but in recent times, the global supply chain has become more diverse and sophisticated than ever. An abundance of potential manufacturing partners, many with excess capacity, can be found in Asia, the shop floor to the world. If anything, the challenge isn’t so much finding a supplier as it is sifting through dozens of possible suppliers to find the right one.
(c) As trade boomed and more competitors emerged to produce goods for just about every industry, ambitious suppliers looked for a way to stand out. Today, if you want help designing your product, Asian factories can do that. Because they have been manufacturing so many products for years, at times on contract for big brand names, the best offshore outsourcing companies have built up knowledge about materials and parts, learning over time what distinguishes a higher-quality widget from one of lower quality. They have also developed engineering expertise and can suggest ideas to improve the design of the products they make. That way they can charge more or get more business, or both.
(d) And as factories have become more automated, many suppliers have instituted lean manufacturing techniques that enable them to switch production lines in and out much more quickly and with less downtime. This means they can operate profitably on lower volumes—which means they are more willing to accommodate smaller orders while keeping their plants operating at a high capacity. Many Asian manufacturers that might have insisted on a minimum order of twenty thousand units will now accept an initial order of only a few thousand.
(e) Information on suppliers that once was available only to big companies because it was buried in raw customs import data that was hard to access and decipher has now been democratized. “Smaller companies didn’t used to have market intelligence,” says Rogers from Panjiva. “Now they do.”
(f) Most advertisers in Facebook’s early days were big corporations that treated the platform as just another advertising channel, much like TV, to increase brand awareness. It wasn’t yet recognized as an ideal venue for “performance marketing,” that is, funneling in new customers and driving sales growth. Facebook then began introducing a series of features to make it easier for advertisers to identify people who weren’t already customers but who demographically fit the profile of potential customers.
Both Google and Facebook require advertisers to place bids for keywords. The winning bid is based on a formula that includes the amount of the bid and the likelihood that someone will click on the ad. The critical difference when it comes to advertising, Shah says, is that Facebook is an audience platform, while Google is an “intent” platform. Google is great at identifying people who enter a search term—that is, those who actively express an intent or an interest in something. Facebook is better at identifying a target audience, people who might be interested in something but haven’t yet expressed that interest online.
“With Google, you can go find a thousand people who might be searching for a master’s in teaching today,” he explains. “But on Facebook you can find tens of thousands of people who identify themselves in their profiles as substitute teachers who might be thinking about getting an advanced degree but haven’t searched yet. That was the insight. You can target the right people, catch their eye, and sign them up.”