Why Enthusiast Brands will Betray You

I have a theory that I like to call the enthusiast trap and according to this theory it is nearly impossible for a tech company to be a successful enthusiast brand on the long run let me explain why in the 14th episode of the story behind juries the last few months has been quite weird for independent or in BO or enthusiasts at bat whatever you call them cyanogen Inc pretty much declared that their plans to take over the world have failed my favorite tech brand pebble was bought by Fitbit and so was vector watch just before Fitbit itself announced that they too are in trouble and will therefore a lay off more than a hundred people and to top it off next bit the company who thought they had reinvented the smartphone was bought by razer i can shrug these office companies that just weren't i don't know competitive enough and i'm sure that there's some level of truth to that but i also think that there is a bigger more fundamental problem here and i think you guessed it it's the enthusiasts trap and like every good trap it starts with a kind of lure something that is just a little too good to be true so a bunch of people decide to launch a new company let's take pebble as an example they would start small because they don't have the money at first so instead of a big advertisement campaign and world wild retail ability they will decide to focus on early adopters you know people like you and me who actively go and look for cool new products we don't need expensive TV advertisements to be convinced we just need the product to be cool we're actually willing to give these companies money before their products even launch just think of pebble and their Kickstarter records right so if the company manages to create something that gets a big enough chunk of us excited then they don't have to approach us we'll approach them and then we will do the advertisement for them there are books written about this some call it inbound marketing others call it evangelism and whatever you call it half of Silicon Valley was wearing pebble watches and I too got like 10 friends of mine to bite and make video raving about how much I love mine it's the perfect strategy right well no because remember it's a trap and for a couple of reasons this is not a sustainable business the problem is that tech enthusiasts are a great group of customers to start with but on the long-term they are just the worst business class 101 how can a company make money it needs either scale so it can sell in large quantities or it needs high profit margins or at the very least low investment costs there is simply no other way as it turns out enthusiasts offer the exact opposite of this we make up a tiny percentage of the population so scale just isn't possible and yet we have the highest standards of them all that means you better invest and create the best possible product or we just won't care about you somebody else launched a new phone one week after you with slightly better specs you bet we will buy that one you cheap out on even a single component like say B NFC chip in the oneplus 2 well you're not getting our money that way so you need to invest like a lot and it used to be that being ahead of the curve meant that you could at least charge a premium but companies like oneplus have made even that impossible the only way to win our heart now is to be the best and at the same time have the lowest price all while tailoring your product specifically for our small group it's insane it's the opposite of a sustainable business model and no company can realistically expect this little bubble of ours to work for them on the long run so inevitably the company starts to want to go mainstream but that poses the next big challenge companies like pebble next bit 1 + + cyanogen Inc has built their entire businesses around the peeling to us and it turns out that the rest of the world wants fundamentally different things from their tech than we do pebble watches were all about being quirky and geeky and they never really appeal to regular people in the same way no non techie would have gotten excited about things like routing or flashing wrongs or having a great online forum where you can geek out with your community which we're cornerstones of companies like oneplus next bit and signage em and the opposite is true as well Opel for example has shown that things like taking good selfies are apparently fantastic selling points for many people around the world but they just don't resonate with enthusiasts so a company that started out as an enthusiast brand now has to make a really tough choice do they keep fighting for our cold mechanical heart or do they pivot to bigger and maybe more profitable markets but at the expense of losing us their core original audience what can they maybe please both counts now let me show you a few examples keV will try to find balances they continue to try to please their original customers like me but also introduced the time round that was meant for a more fashion conscious audience and again when they focus their third generation of watches on fitness to try to capture some of that skin bit crowd problem is they didn't want to upset us by going too far away from their roots of being quirky and geeky so they didn't actually end up appealing to their new audience but they also didn't spend their resources on developing things that we cared about anymore so they ended up with a lose-lose situation Flanagan tried to split off their enthusiasm at form and wanted to go mainstream with this commercial solution by branching out into working with phone manufacturers and allowing them to cell phone' with cyanogen out of the box but it turns out that running signage ins isn't something that most regular consumers care about and of course they also lost touch with their original community that felt left behind and betrayed by having signage and focus somewhere else loose loose again next bit well as much as I liked parts of them I think they never even got to the point of wanting to leave because they just never managed to make a dent in any market oneplus on the other hand is going back and forth trying really hard to find that middle ground it originally took the enthusiast market by storm with their first storm and sold over a million oneplus one their promise was a high-end smartphone for us geeks with no no superfluous spending on ads and so on but as soon as the two wasn't warmly received by the geeks they quickly decided to pivot with the X which was targeted at a much less tacky audience the X was supposed to be all about design and was marketed to women and lifestyle customers they collaborated with posh Parisian fashion retailers and according to my sources sold terribly I guess surprisingly enough fashion models don't want to buy phones from enthusiasts brand the community backlash that year was huge there were articles upon articles about how the company lost focus and how it will fail so they caved a little and return to their original audience with the 1+3 just as quickly as they left them after the two thankfully the three performed much better but they haven't given up on their pivot just yet check this video it's an ad with freaking Amelia Ratajkowski or whatever you call it signing her alone must have cost millions and then they started shooting professional commercials that they're spamming all of YouTube with and also made billboard attitude that my friends is the very definition of a company trying to appeal to a non tacky audience through very very traditional means oneplus has clearly done a good job with the three but they too know that they're playing with fire and that they'll eventually have to make a choice in a one last blog post from 2015 D themselves say that big marketing spending will upset their customers and the comments section agrees but they're clearly tempted to break their own rules and we can only wait and see how well it will work for them a much more drastic approach and my last one on this list will be that of Opel I have worked for the company so I know the situation very well when I join them in 2013 they were a great brand for enthusiasts high-end snacks great customer support strong community and all that and then one day they simply decided that this business model didn't make any sense for them and made a complete 180-degree turn they shifted all their attention to mid-range phones with locks boot loaders snacks clearly not aimed at enthusiasts and focused on selfies yes I think about as drastic as it gets the enthusiasts all left the company and yet it became incredibly successful growing from being an obscure brand to becoming the number four largest smartphone vendor in the world in just a few years because it aggressively built its new audience way faster than it lost its old one I guess it all comes down to this India it's called the product life cycle graph and it's pretty self-explanatory when a product is launched and if things go well it gets picked up by early adopters first and then by the masses the problem that enthusiast brands have is that the oh so much of their success to these early adopters that they often never get to go to the later stages they can feel and see that the other 80 something percent of the market is still there for them to address but making the choice of leaving the first bubble behind is neither a guarantee to success nor is it an easy choice poor next bit never even got to try pebble and cyanogen tried but failed oneplus is somewhere on the edge figuring out whether they can go on or not and opal made a drastic change and became incredibly successful because of it but in either case none of the outcomes usually end up being good for us the enthusiasts because if the brand decides to stay with us there's a good chance that they won't be able to have a healthy business and they'll eventually fail but if they leave then well they'll leave us behind right and this is what I call the enthusiasts trap and that's why I think every enthusiasts brand is sooner or later it's basically bound to betray us okay so that got pretty dark but it's something I've had on my mind for a very long time especially since I worked at opal and by the way I'm not here to tell you not to buy things from enthusiast brands if I buy them all the time and I think it's a great thing we just understand these companies can't always stay with us until forever and then just be successful with us and so when they decide to leave just let them go and hop onto the next thing all right I hope you guys enjoyed this video if you did hit that like button below and if you want to see more thought provoking videos from the story behind series then there's somewhere here at least the past episodes will so hit that subscribe button and don't forget to hit the Bell button next to the subscribe button so you can be double subscribed also follow me on all the social I'm tech out are pretty much everywhere and I'll see you in the next one alright

Channel: TechAltar

Views: 857,437

Rating: 4.8821054 out of 5

Keywords: enthusiast, Betray, Pebble, Nextbit, Robin, OnePlus, Cyanogen, CyanogenMod, OPPO, Micromax, Yu, Yureka, Liniage, ROM, Custom ROM, death, fall

Id: FJgTKx-rg18

Length: 10min 44sec (644 seconds)

Published: Wed Feb 08 2017

Reddit Comments

[u/pheymanss]

TL;DR:

The regular product cycle is: Innovators>early adopters>early majority>late majority>laggards.

Enthusiast brands shoot themselves on the foot by deciding to stay on the second stage, but that is not a sustainable business because they can't have high scale, high margins or low cost components and keep pleasing enthusiasts so you can't stay there and keep their ship afloat. But the next stage in the cycle has fundamentally different preferences regarding consumer electronics so they have to switch their approach and 'betray' their core audience to keep growing.

Nextbit and cyanogen couldn't get past the first stage, Pebble stuck to the second while second-guessing and failing at the broader audience with the Time Round, OnePlus is kinda thinking about how to make the jump and Oppo did the jump, locked their bootloaders and focused on selfies and are now the #4 OEM globally.

[u/pheymanss]

His videos are great and this one is no exception. The Story Behind is a series of high quality, highly thought out opinion pieces and this is one of the high points of the entire series.

It's infuriating to see all his videos get hate just because he doesn't blindly pander to what enthusiasts and circlejerker want to hear.

Tech enthusiasts are a great audience to start with, but in the long term they are just the worst.

[u/TechAltar]

I'm really glad that most of you seem to "get" what I was trying to convey, and that we have ended up with a fairly civil discussion even with a topic as sensitive as this. Just as we aren't obliged to stay loyal to a company when we think their products just don't cut it, they too don't have to stick with us if we don't prove to be the customers that they are looking for.

[u/oselth]

This just in:

Most businesses will prioritize their business over a small group of people. And appealing to the majority of people is Easiest way to do that

[u/altimax98]

I am on the fence. While the video makes a great and sound argument, I feel that the situation is two-fold; the brands betray us and we betray them.

Take the OnePlus 3 for instance. It is a great phone, I had one and loved it despite its flaws. Unfortunately, I also find it a terribly difficult phone to recommend to (normal) friends and family members for a host of reasons, even with its banging price tag.

But the brands that cater to us depend on that marketing and spreading by word of mouth, but we fail to do so for whatever reason. Also it comes down to what the author mentioned regarding the "next big thing". We know that the pipeline is upwards of 18 months and as low as 10 for a new device from conception to delivery. What percentage of us here have had a device for 18 months lately, I know for sure I haven't. For me the lifespan is ~6 months tops and a lot of others here fall somewhere under that 18 month time frame. The R&D that goes into each of those phones costs a fortune, and enthusiast catering brands simply cannot come out with a totally new device (because who cares about minor bumps /s) every 8-12 months so we jump brands. Most of this applies to OnePlus and other phone brands.

When it comes to things like Pebble, lets face it, Pebble was never going to make it. It was a niche device and they could never leave that market. They were too slow to adapt to the massive push towards more fitness oriented wearables and got stuck in a really bad middle ground where buyers were better off buying a last gen Apple Watch or Android Wear device for similar money (again, the enthusiasts abandoning the brand) and have a device that simply did not look like a toy. Cyanogen, I think they would have done well for themselves if they didn't have the moron at the helm of the ship. They burned a lot of bridges and did it to themselves.

So this went on a lot longer than I expected, but yes the Enthusiast brand will betray you, but we betray them just as much.

[u/Ottmarhitzfeld]

I know this guy from Oppo. Very cool type. Helped Oppo a lot in Europe. I like his videos and he deserves much more followers on YouTube!

[u/djh3mex]

Another thing was that even though Nextbit was bought out, it wasn't integrated into the Razor, and still a very much independent party

[u/Fendelsson]

He's wrong.

For evidence of this, he needs to look beyond the latest consumer electronics brands.

A successful enthusiast brand does not have to make a binary choice between abandoning their initial customer base and financial failure. There is a clear path to success.

That path? Avoid Greed.

Greed is the reason that each of the enthusiast brands he mentioned have failed. They were not satisfied with the small number of customers they had. In each case, the companies tried to move their products to the mass market, and failed.

They didn't have to do this. They didn't have to bet the entire company on a remote chance of expanding to a larger market. Had they stayed small, many would still be around.

There are a tremendous number of small, enthusiast product manufacturers in the world, making everything from automotive accessories to handbags. Many have been in existence over over a century. They don't try to grow the company at a pace so fast it risks the business. They're satisfied with their steady, but small market.

Pebble and the rest were not satisfied. They wanted all the money. They got greedy. They failed.

TLDR - The lesson isn't that enthusiast brands need to betray their customers or fail. That's not true. The lesson is that greed drives reckless over expansion. Over expansion is one of the easiest ways to kill a business.

[u/minusSeven]

I have 3 friends on oneplus 1 who don't know what rooting or custom roms are. So it is only always as simple as that.