Carving Your Product Niche
Carving Your Product Niche
Excerpts from a conversation with Greco Gum's founder
Note: This is a series of posts pulled from an interview session with Logan, the founder of Greco Gum (a sap-based mastic gum priced in the premium/superpremium range).
Check out their website to get an idea of their product and branding before reading on.
The Q&A section is edited for clarity and reordered for flow. Words and phrasings were retained wherever possible.
The posts in this series will cover the following topics:
Brand Identity Maturation & Growth Strategies
Struggles & Challenges
Company Future & What is Success?
Introduction
One summer, a father and his young son were driving through town when they came upon a traffic jam. Up ahead they could see that a semi trailer with a high load had become wedged under a railway overpass.
There were police and fire trucks, a crane, and even a train that was forced to stop at the approach to the bridge.
Getting out of the car to get a better look, the father and son overheard a group of emergency workers discussing the best approach to move the blockage.
“We’ll need to jack up the bridge a few inches and pull the truck out” said one
“But that’ll weaken the train tracks too much. We should get a welder out here to lop off the top of the truck” said another
His father unable to hold him back, the son ran towards the assembly.
“I know how to get the truck out!” he cried out.
The men were more concerned for the boy’s safety and shooed him away. The young man persisted until he found someone who would listen – all the time dragging an exhausted dad behind him.
“What do you think we should do?” asked the fireman
“If you want to get the truck out all you have to do is let the air out of the tires!”
Creating a Product
Experts can be great.
Sometimes, when you need to know what kind of compressive strength you can expect from a partially-cured concrete slab that was loaded prematurely, asking a person who has seen the same kinds of problems for years is exactly what you need (thanks Will!).
Other times, being around an established group or practice blinds you to the possibilities of what else is out there.
Innovation comes from people who look at the world differently.
In this post, we’re going to walk through the process of starting a company with Logan, seeing the steps he took to get Greco Gum off of the ground as a new product in a new market.
“Hmm, the big brands of gum out there sell for about $0.75 per pack and they’re pretty successful. What if I tried to sell some at 50x the cost and price with a challenging supply chain that kept me from getting them into grocery stores?”
--No MBA Ever
"Sounds good to me”
—Logan, founder of Greco Gum
Q&A
I started my questions at the reasonable place to begin: the inception of the company. Where did this tree-sap-gum idea come from?
Q: How did you get started with mastic gum?
Logan: [I spent a lot of time on Twitter and in the past]…I’d seen a couple of accounts talking about chewing this tree resin because it was a great way to strengthen your jaw muscles.
As a weightlifter myself, that was pretty intriguing, and that was what initially piqued my interest.
So I went through the process of trying to source it.
That was pretty painful.
At the time you could really only buy it from vendors in Greece…They weren't really treating the product with any sort of care.
They were selling it for culinary or cosmetic purposes.
The idea that somebody would buy it to chew it as gum was pretty foreign outside of the circle that I was involved in.
So right away I knew that there was a lane for me because I could position it in a way that nobody else was.
Q: Did you personally try it out before making the company?
Logan: I tried it myself for probably about a year. And it’s something that I became hooked on right away.
People tend to have an oral fixation, whether that's vaping or smoking or nicotine pouches or biting their nails, whatever. This [gum] fills that void of having something in your mouth.
What have we learned from the first two questions?
There’s already purported benefits anecdotally from weightlifters
It was interesting enough to capture Logan’s attention
A supply chain already exists for the raw materials
No one else had considered using it for that purpose
The total addressable market is huge: anyone who wants to have something to occupy their mouth
Great! If you’re considering putting a company together around a product, a good way to validate the idea is by evaluating it against Porters 5 Forces1
🟢 Competition in the industry:
None
🟢 Potential of new entrants into the industry:
Low: Getting set up with vendors in Greece is difficult & slow
🔴 Power of suppliers
High: Very geographically concentrated & at the mercy of nature
🟢 Power of customers:
Low: No alternative products for the niche
🟡 Threat of substitute products:
Medium: Fulfilling an oral fixation can be done in various ways
Overall, a good place to be for a potential new product. The power of suppliers is a sticking point that would (and is2) make the company harder to run.
Otherwise this is a fertile area for growth.
Now, lets sell some gum and see who makes up the customer base.
Who are your customers?
The group of people would be interested chewing a not-sweet, very difficult to chew gum seems like a completely different market than any gum you'd buy at a gas station.
Logan: 100%. I'm constantly surprised at who our customers [actually are].
You could probably guess that the majority are younger guys who are into health and fitness, who are already consuming things off the beaten path, like drinking raw eggs or raw milk or eating tons of ground beef. Maybe they’re the kind already taking some esoteric supplements—People who are into the holistic [health] or biohacking space.
For them, the appeal is that it's not some sweet and enjoyable thing.
That's the charm.
It is something like that for a lot of people.
[The gum] is an acquired taste. If you're expecting it to taste like bubble gum, you're in the wrong place.
There's a lot of women who use our product.
There are a lot of people who I wouldn't expect, like doctors, lawyers—people who I wouldn't expect to even know who we are, people who are in very high up positions in the world, who I know are our customers.
After selling for a trial period we know:
The customer base is larger than just weightlifting men
Despite initially, and primarily, selling to a very specific subset of men (men into unusual health practices willing to purchase a superpremium gum), others naturally found the product as well
People will self-disqualify (good) and that keeps the customer base full of promoters instead of detractors, strengthening the brand image3
We now have an idea of if the business is viable and who would purchase the product.
Next, lets find out how the physical product should be designed to match the brand placement
Q: What’s your strategy around physical product design?
Logan: It's a very arduous, time-heavy process to just do one [package] from start to finish.
There's not really a way to fast track it unless you sacrifice some of the overall presentation and experience. That was the whole ethos behind [the product].
When I was buying it online from random vendors, it arrives in a paper or plastic bag like just just garbage. There was nothing premium about it.
I had to do the exact opposite of that, which is why I was so deliberate with everything else as far as the presentation goes.
The best part of buying a new phone is the unboxing, right?
Peeling off the stickers and removing the top of the box; it's very satisfying in that regard.
I was trying to mimic some of that.
Again, if you're going to call yourself a premium product, you need to offer a premium experience. So I was doing all that [design and packing] by myself.
Surprisingly, like it took off right away.
I wasn't expecting it because I had no audience.
I wasn't doing any outbound marketing. It was all word of mouth.
[I’m the kind of guy who would rather] kill it myself than to do it half baked or any sort of compromise.
Greco Gum differentiates itself across multiple dimensions from the existing competition—traditional gums.
Instead of a Race to the Bottom where a newcomer tries to undercut the prices of the incumbents4, Greco Gum instead effectively created a new category of chewing gum that it alone dominated.
Taking over a new (or lower profit margin) market segment first is a common method for disruptive innovators to get a foothold.5
Not intent with simply creating a new market by approaching pricing differently, Greco Gum entirely reimagined what the customer experience could be.
I’ve chewed a lot of gum in my life, and I can never specifically recall the experience of opening a new box of traditional gum—no one thinks about how a customer opens a pack of gum.6
It’s not a meaningful part of the process.
Not so here.
The box design, the tactile feeling of the tighter metal tolerances, and the carefully placed stickers make the Greco Gum experience meaningfully different than the competition.
Conclusion
Interviewing a creator of a profitable company is a good example of Survivorship Bias, but hearing about the creation of Greco Gum as a product illustrates good foundational business principles.
Logan found an unmet customer need (oral fixation)
He approached the problem with a new view (chewing mastic gum) of an existing product (mastic gum stock)
He determined who his customers were (one primary group, but an overall larger net than expected)
He differentiated the product from potential substitutes
Tailored the product experience to the new product (designed a box, etc)
Priced the product differently
Keep an eye out for more about Greco Gum!
In the future posts, I’ll be discussing how the Brand Identity came about and how it matured over time as well as various struggles .
A formulaic way to determine how easy or hard a business in a certain area will be to run
See the upcoming article on struggles and challenges to read more into the power of suppliers
Check out this article on Net Promoter Score to read more into the customer base and how it affects companies
Usually resulting in all parties losing
See point 2 in this article for more detail about new market creation
As one of my former coworkers Nathan Lowenthal used to say, “All experiences are either intentionally designed or they’re not”. Often the ones that aren’t even considered are the ones where competitive moats appear.