How to be unique in a booming niche like craft beer

This episode of Fractal Marketing is called “How to be unique in a booming niche like craft beer” and today’s guest is Richard Jeffares, founder of TWØBAYS Brewing Co, is a pioneer of gluten-free, vegan, and lactose-free craft beer in Australia.

Richard starts by laying the context for a gluten-free product, and for TWØBAYS, that is the niche of coeliacs. He then discusses the early successes of the brand and their plans for brand awareness and expansion in 2020, including social media and word of mouth marketing

QUOTES

05:19 “It’s just not the same as sitting there at the bar and you’re drinking the cider while everyone else is drinking beer, for me anyway. You feel different. And unless you love cider and don’t like beer, which I don’t, you want to fit in with everybody else. So that’s really been the crux of it is, just want to be inclusive.”

06:55 “So we then negotiated the exclusive rights to import millet, buckwheat, and rice from these gluten-free malt houses in the US and bring them in by the containerload. So we’ve got, I think it’s 11 or 12 different millet malts, 1 buckwheat and about 6 or 7 different rice malts that we can use to make the beers that we have at the tap or even in package.”

12:11 “So from April to December, we got to about 750 locations around Australia, so anywhere from Port Douglas, Hobart and Perth and probably of those, I’d say 250, probably 200 of them are the big guys and the other 550 are independents. And so we’ve really wanted to make sure we try and do both strategies.”

27:30 “We’re 100% dedicated brewery and no barley comes in, sort of a no gluten allowed setup. So if you then go to a contract brewer, which is what these big guys are doing and say hey, brew me a gluten-free beer, then that contract brewer is going to make sure that throughout their whole manufacturing process, they are doing everything to avoid gluten.”

28:19 “We do offer it to other breweries if they want to but when they realize the price of that malt compared to barley, they’re kind of go, uhh. Then we talk about how they’re going to clean their mill, which you can’t do, so how are you going to mill that barley to brew with it? How are you going to clean your tanks? All those sort of things. And I say, well, why don’t you just buy my beer?”

Background

TWØBAYS Brewing Co was born from the need to avoid gluten and a trip to America which opened the eyes of Founder, Richard Jeffares, to breweries in Portland, Seattle, Denver and Montreal who were crafting high quality, gluten-free beers, so he decided to bring high-quality craft beers to Australia.

HIGHLIGHTS

01:49 Introduction to TWØBAYS

05:41 Creating gluten-free beer in Australia

09:23 Marketing TWØBAYS

16:27 Expansion and markers of success

25:07 Competing with the big names

RESOURCES

https://www.twobays.beer/

https://www.instagram.com/twobaysbeer/

https://www.facebook.com/twobaysbeer

How the Sunk Cost Fallacy Causes You to Make Bad Decisions

 

  • Sunk costs are a necessary part of business and life. Embracing them helps you spend money wisely and make the best decisions for your professional and personal paths.
  • The “endowment effect” is an evolutionary concept that causes people to overvalue something just because they own it.
  • The “sunk cost fallacy” causes people to become committed to something they’ve already spent money on, even when continuing to pursue it is no longer a rational decision.

 

Often when people hear the term “sunk cost,” they think of losing money. That’s a mindset we need to change.

Sunk cost is actually a necessary and rational part of business and life. Trying to avoid it is what leads to irrational decisions and wasted money. Embracing the concept can help you spend money more wisely and keep yourself on the best personal or professional path.

I’ll show you how.

What is sunk cost?

“Sunk cost” is an expense you’ve already incurred and cannot recover. These are in contrast to prospective costs, which are future expenses you may avoid if you change course.

Sunk costs, for example, may be:

  • The $1,200 fee I paid to cancel my family’s trip to Japan to avoid coronavirus.
  • College tuition, especially for a field you don’t or can’t pursue after graduation.
  • The money a startup invests in creating a product before pivoting.

We face sunk costs like these in both our professional and personal lives every day, and they can be beneficial. They become a problem only if we approach them with the wrong mindset.

The sunk cost fallacy

The problem with sunk costs is their tendency to convince us we have to forge forward because we’ve already invested too much to quit or change direction.

Say, for example, you’ve gone to law school and earned a law degree. Once you graduate, you decide you don’t want to be a lawyer but instead write a novel or return to school for marketing.

That shouldn’t be a bad thing.

The sunk cost fallacy is the mindset that you’ve just got to take on the burden of being a lawyer for the rest of your life because of the time and money you’ve sunk into law school. But why would you spend the rest of your life in a career you don’t like just because of three years in a particular pursuit?

Businesses can fall into this same trap. You might spend months and thousands or millions of dollars pursuing a product or project, and then realize it’s no longer the best path forward for you or the business. 

At that point, you can accept the investment as sunk cost, but many people are compelled to continue pursuing something solely because they’ve already put so much into it. Even if it won’t pay off best in the long run — even if you could earn above and beyond your sunk cost — you feel the need to stick to what you’ve started.

The endowment effect

This mindset about sunk costs comes from a psychological concept called the endowment effect. This is our tendency to overvalue something just because we own it.

Business Insider illustrated the endowment effect with an experiment in its series “Why Are We All So Stupid?” where host Sara Silverstein offered to buy people’s lottery tickets for two or more times their purchase price.

In the experiment, 78 percent of people refused to sell their tickets, concerned they risked selling a winning ticket. One man even replied, “Do you have $700 million?” demonstrating how highly he valued his ticket, as opposed to about $5 he’d sunk into buying it or $10 he could earn selling it to Sara.

Psychologists believe humans are hard-wired to this kind of loss aversion due to evolutionary pressures on losses and gains.

Consider that, for a hunter-gatherer society, the loss of a day’s food or water could mean consequences as severe as death. Gaining an extra day’s food is not very useful — traveling around with extra food on your back is actually a burden for a nomadic community. 

Evolutionarily, we learn that loss is greater than potential gain, so we overvalue what we already have.

This innate loss aversion leads to the sunk cost fallacy: We don’t want to lose what we already invested, created, or own, even if it’s no longer a rational pursuit.

The rational sunk cost mindset

You might be hard-wired emotionally to avoid sunk costs, but economically rational thinking can help you accept and embrace them.

Here’s a great example of that rationality: I started to work with someone last year on a website build with a $12,000 budget. About halfway in, when we reviewed what he was getting and why, it no longer made sense for his business.

He realized all he really needed was a simple website he could probably create through Wix or Squarespace and maintain himself — after he’d already spent about $6,000.

The loss-averse human might think you absolutely need to finish this project; you’ve already spent $6,000 on it! But he decided to stop and accept that sunk cost.

Here’s why: The prospective costs of stopping then were much lower than if he continued with the website we were building. He would have spent another $6,000 on the project, plus future maintenance costs. Stopping meant a $6,000 sunk cost, plus maybe $30 or so to set up the website he actually needed.

An economically rational mindset doesn’t see a wasted $6,000 on an unused website. It sees this client spent $6,000 to end up with a website that was perfect for him, instead of spending $12,000 plus future costs on a website that didn’t serve him at all.

You can apply this mindset to any sunk cost:

  • For my $1,200 sunk cost on the Japan trip, I gained peace of mind and safety for my family, plus a Cavoodle puppy I could buy with the $5,000 I didn’t spend on the trip.
  • For the sunk cost of a law degree, you might gain unique expertise and potential greater earning opportunities for pursuing a career you’re passionate about.
  • For the sunk cost of pivoting, a company might gain millions of dollars in sales pursuing a more fitting line of business.

Where are your sunk costs? 

I challenge you to look at the decisions you make in your business, career, and personal life. 

Ask yourself whether there’s anything you’re doing now simply because you’ve sunk time or money into it.

Are you pursuing anything you no longer have a rational reason to pursue?

Try to approach that thing with an economically rational mindset. Can you change course now and accept the sunk cost as a victory?

This is based on an episode of Fractal Marketing, the podcast for entrepreneurs who want to grow their company through smarter marketing. Subscribe and leave a review through Apple, Google, or wherever you listen to podcasts.

Should You Build Distribution Channels or Sell Products Directly?

This episode of Fractal Marketing with Gerard Doyle is called “Should You Build Distribution Channels or Sell Products Directly?” and today’s guest is Damien Stone, Founder of Water3. Today, Damien shares the journey of his company and how direct sales to a niche market created early success for Water3.

He then shares the expansion of the business in recent times and the role of technology in the business model in their bid to scale up and go global. It is noteworthy that one of upsides to Water3 is the nature of their product allows them to have a greater negotiation position with business partners. At present, the company has no real competitors and is in a prime spot for massive growth.

HIGHLIGHTS

03:53 Branding: Water3’s unique product

06:54 Market timing

09:11 Referral marketing with a remarkable product

16:18 Expansion and technology over the past 18 months

20:39 Water3’s global trajectory

25:39 Reducing risk and convincing business partners

33:16 Damien’s advice

QUOTES

11:44 “You’ve got to be remarkable. And being remarkable doesn’t mean having a bright shiny glitter-covered shirt. It means having something that’s shareable that everyone wants to talk about. So it’s what’s remarking about. And they kind of love stories like that, show you this care in the likes of the brand. And this is such an interesting little aside that will actually stick inside someone’s mind.”

17:01 “We thought long and hard about talking to the beverage companies and then we encountered a path of what are we going to do? The hot points for these guys, a niche market, well, it’s going to make them go, yeah okay, we want more tech. And there’s a huge amount of… software that they built around just being operators ourselves that we’ve had to go through and make a lot of changes on.”

25:38 “And I guess what your story is telling me is, oh, get out there and prove that people will actually buy it, people will use it. Okay, maybe you haven’t done it to the scale that Walmart or someone could take you to but if you’ve proven it yourself, you remove the risk for them. And if you remove the risk for them, they’re more likely to do it and I’m guessing the other upside to it is it puts you on a stronger negotiation position, right? Because you’ve got some idea how profitable it could be.”

30:54 “Who on earth is using that machine at 2 am? Now it turned out, some of our best customers are security guards and the cleaners because they can’t get water anywhere. Nothing’s open at 2 am when they’re walking around. Isn’t that funny how just you often don’t know what your market’s going to be?”

34:22 “Everyone loves it, but no one wants to fund it. What the hell’s going on? So I probably would’ve gone down a couple of other projects if I’d known 8 years ago it was going to take 3 years for us to get started. Or if we do get stuck into another business ambush, made us enough money to get started in the end, but I would’ve probably done some of this stuff a bit sooner.”

The Sunk Cost Fallacy

A quick monologue podcast from me on ‘sunk cost’, A sunk cost is a cost that has already been incurred and cannot be recovered. Sunk costs are contrasted with prospective costs, which are future costs that may be avoided if action is taken. 

Business insider ‘lottery ticket video

Humans may be hardwired to be loss averse due to asymmetric evolutionary pressure on losses and gains: for an organism operating close to the edge of survival, the loss of a day’s food could cause death, whereas the gain of an extra day’s food would not cause an extra day of life (unless the food could be easily and effectively stored)

 

Winning Online Retail with Position & Purpose with Marty Cornish

This episode of Fractal Marketing with Gerard Doyle is called “Winning Online Retail with Position & Purpose” and today’s guest is Marty Cornish, Founder of Defence Sporting Apparel (DSA).

Marty starts the conversation with an introduction to DSA and his military roots. He then shares the marketing success he has enjoyed with Facebook ads, email marketing, and direct messaging. Marty also shares the difficulties he is having with Facebook political ads and his plans for 2020 to enter foreign markets, most notably the US, UK, New Zealand, and Canada.

QUOTES

13:44 “Now, we’ve had our last product launch which was really effective. The first day of the launch, we sent a message and then on the last day when we’re closing off the product launch or the campaign, we go, look, last chance. We’re closing up. And just two, start of the campaign and end of campaign. So you’re not overbearing a message. You’re not spamming them and you’re building that urgency at the end too which is quite effective for us.”

17:05 “So then, going after audience insights, I started really noticing that my community is really into the outdoors. Like a lot of the other brands up there, their following is very outdoors and that’s when I started testing. So we came up with the great outdoors collection. The interesting thing I learned, my expectation on what I thought would be my existing community would buy. We did the edm’s and we got zero dollar sales.”

23:25 “I think maybe the campaigns, we will have it there because I think it fits in but I think we’re going to reduce our skew codes and kind of be more focused. At the end of the day, my mission, this year, is to take DSA, really break into the US, UK, and New Zealand and Canada markets.”

35:54 “A big part of my focus this year is we’ll get some insiders breaking through the US market with DSA because it’s such a bigger market. It’s such a bigger market cap. It’s going to be a challenge which I’m excited about and I think that’s where it gets exciting, that B2C, tapping into that audience because they’re very patriotic.”

HIGHLIGHTS

06:49 Branding: How to appeal to the right target market

12:13 Extending into more niches

20:41 Creating a trusted brand and scaling

24:42 Market validation and supplying defence forces

29:14 Measuring referrals and exploring resellers

36:39 Facebook issues with political advertising in the US

——————————

RESOURCES

https://www.instagram.com/marty_madestatus/

 

 

Scaling Your Business Using A Remote Team – with Meryl Johnston

This episode of Fractal Marketing with Gerard Doyle is “Scaling Your Business Using A Remote Team – with Meryl Johnston”. Meryl is the Founder of Bean Ninjas, a bookkeeping and financial reporting firm, and today leads an in-depth discussion on how to achieve success using a remote team that works with members from anywhere in the world.

Meryl shares the birth of Bean Ninjas, her insights on making her first hire, and the sheer hustle it took to grow the company into a 20-person strong organization. She talks about how specializing in Xero was a huge step for the business and looks back on the masterminds that helped form the company into what it is now. Meryl is a Chartered Accountant who specialises in cloud accounting software “Xero”. The business is now 4 years old and has a distributed team of 15 based in 6 countries around the world. Bean Ninjas were recently awarded the prestigious Xero Bookkeeping Partner of the Year for Australia in 2019. Prior to Bean Ninjas Meryl worked at international accounting firm BDO, ran a consulting business and taught accounting at a local University.

HIGHLIGHTS

01:31 Bean Ninjas and their early adoption of remote teams

08:07 Making the first hire and its birthing pains

12:52 Marketing: finding and maintaining new clients

16:47 Bean Ninja’s creative courses

21:26 Gaining recognition and building the community

30:03 Discussion on masterminds

34:56 Marketing advice you wish you knew back then

QUOTES

07:41 “It’s just we want everyone to be productive and successful and so we have conversations with everyone about, do you need another monitor or are you happy with work from home or do you want us to pay for a coworking space? So it’s a bit more individualized at the moment.”

09:45 “And in hindsight, I probably would hire a VA much further down the track and hire the more senior people possible to help create the processes and take ownership of departments and hiring other people rather than getting the most junior person as, well, the cheapest person that you can as the first hire.”

13:16 “And so we followed that methodology and launched in a week and got our first customer in a week. And really, we got that customer from posting in a Facebook group about our story that we were launching this new business. We had created a web site in a day and we were just having a crack. And so people kind of liked the story behind that and that’s how we got our first customer. And then it was hustle.”

21:26 “We were really proud. In 2019, Xero selected us as their Australian bookkeeping firm of the year. So out of all the bookkeeping firms in Australia, we were number one. It would’ve been very difficult to do that if we were splitting our focus across multiple pieces of software.”

30:37 “The very first mastermind I was in was for accounting firm owners who wanted to think differently and that’s where I found my first co-founder was in that mastermind. We founded Bean Ninjas together. So that was a huge benefit that we found each other… And then built enough trust through those regular calls that we felt that we would be good business owners.”

35:02 “It would be to focus more on sales. So in our early days, it was direct sales that brought in customers and I probably spent a bit too much time on brand building and content which is a long term strategy. And so I’m glad I did because all of that work that I put into content really helped but it didn’t pay off until 2 or 3 years down the track. And really, we needed to be making sales.”

RESOURCES

BeanNinjas Website

The 7 Day Startup: You Don’t Learn Until You Launch” Book by Dan Norris

Connect with Meryl on Linkedin 

Dissecting a successful course and book business with Anthony Metivier, the creator of the Magnetic Memory Method

People with excellent memories and memory championship winners are not too different from you and I. 

They just use a combination of techniques to enable their minds to memorize things.

You might find it hard to remember names, facts, equations, lists, tasks you need to take care of, a new language and so on.

But if you follow the right techniques, you can remember almost anything you want.

On this episode, I’m talking with Anthony Metivier is the founder of the Magnetic Memory Method, a systematic, 21st Century approach to memorizing foreign language vocabulary, dreams, names, music, poetry in ways that are easy, elegant, effective and fun.
An author of over 10 bestselling books, Metivier holds a PhD in Humanities from York University, an MA in Media and Communications from the European Graduate School, and an MA and BA in English Literature from York University.

But we cover more than just memory, we talk about how Anthony has created a huge multi-channel content machine that funnels people into his memory course.
But more than that, Anthony explains why his purpose and altruistic goals are the secrets to his success.

Anthony’s YouTube is a great resource

Automating your business with Christopher Drake & Zapier

As an Entrepreneur who is as lazy as I am smart, I’ve always loved automating and sliming down my to-do list.

Out of all the automation apps, Zapier has always been my favourite. What I’m talking about here, is the automation of activities in your business.

If you like your ‘Out of Office’ messages pinging away when your on holiday’s, you’re going to love the idea of Zapier.

Which is why today I’m talking with Christopher Drake, who is an automation and Zapier expert. Christopher runs that Startup Company which specialises in this expact topicc.

You can follow Chris on Twitter here and here and read more about KanyeText.com here

 

 

 

 

How to grow your business through referrals with Joe Sova

With many new ways to advertise to potential customers, we often forget about the oldest and most trusted form. That is referral marketing.

A Nielsen study showed that consumers still thought of ‘word of mouth’ advertising as the most trustworthy. 83% of consumers say they either completely or somewhat trust recommendations from family, colleagues, and friends about different products.

However, even if you have happy and satisfied customers that love your service, they still might not recommend it to others.

On today’s episode, we’re going to be talking to a business owner who’s driven eight years of growth through referral marketing. I chat with Joseph Sova, Founder and President of Ideal Payroll Service.

Ideal Payroll Service is an Omaha based company that provides payroll processing & human capital management solutions. We are built on personalized service, open communication, and local accountability.

Joe is also a creator and local podcast host of Local Business Talk. Local Business Talk is a talk show that covers local entrepreneurship and business success. We cover topics in our community and learn what it takes to succeed in the world of small and mid-sized business.

Follow Joe’s journey on LinkedIn.

The journey from Practitioner to Product with Hassanatou Barry

If you’re a freelancer, contractor, agency or consultant, you know the pain of billable hours. I’m guessing you’ve also dreamt of productizing or knowledge in some way?

If you’ve tried to package up your advice, then you know how hard that can be.

In this episode, I’m talking with Hassanatou Barry, who is the Babysitter Guru. Hassanatou is taking her experience as a New York City babysitter, and servicing the Babysitting Community, with advice that’s often hard to find and often, not openly shared.

The Babysitter Guru empowers babysitters through informational content and resources to better their journey and experience in caring for children while also being an expert for parents to ease their transition into seeking quality childcare.

As a loving babysitter and dedicated advocate for the past 7 years, my goal was to create a platform to educate others on best practices and also provide guidance. Whether it’s making a difference for one babysitter or several, my dream is to create an impact within the childcare industry.

Follow her journey on Instagram, Facebook, LinkedIn, and YouTube.