Luxury & Conspicuous Consumption, Brand vs. Performance Startup Marketers, Premium Lifestyle vs. Features vs. Referral & Luxury Marketing Narrative (One Championship vs. Nike vs. Patek Philippe) - E250

· Singapore,Founder,Southeast Asia,Podcast Episodes,Thought Leaders

 

“Marketing is often seen as the company communicating to the consumers and the market is the consumers’ feedback on product features and campaigns. At an early stage of a startup, there are so many adjustments based on market feedback and it can be a bit of a shock for marketers. Both performance and brand marketers can fail if they don't use the time to really understand what a consumer wants, so a great marketing officer is also a great communicator, both on brand and performance. ” Jeremy Au

 

“Luxury is special because it’s limited and not everyone can have it. The economies of scale come in terms of talent and supply chain. Supply chain is easier to think about but talent is really interesting. If you are working inside a single family-owned brand, you can't advance unless your boss leaves, but if you own a family of brands, you can have opportunities to move laterally and learn from lots of different brands. You can disproportionately attract better talent, both on the creative side and on the managerial side, which you both need for a luxury business.” - Shiyan Koh


In this episode of BRAVE, Jeremy Au and Shiyan Koh discuss luxury, startup marketing, and the three types of human stories. Shiyan explains how talent and supply chain management drive economies of scale in the luxury industry. Jeremy emphasizes the importance of understanding consumers and being a great communicator to succeed in marketing. The discussion also touches on how the three types of human stories relate to branding and marketing strategies.

 

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Jeremy Au: (01:35)

Hey, Shiyan, really excited. We've been brainstorming lots of different topics and I think that what we were excited to explore was less about what we know and more about what we're curious about, right? And you mentioned that you're curious about luxury. So love to hear your thoughts this wonderful morning.

 

Shiyan Koh: (01:54)

As you can see, I'm really into luxury. I was listening to the Acquired podcast, which if you haven't listened to the other stuff, it's great. They basically tell the history of iconic businesses. And so they were telling the story of LVMH, the luxury conglomerate. And I learned so much from it.

And so I was just thinking about first one thing is, LVMH is a sort of European luxury conglomerate. It is founded by Bernard Arnault, which he is not, he wasn't the original founder of any of these brands, right? He basically acquired them and I think now they have like 70 hot five luxury brands under the LVMH flag. But I think there are a couple of interesting ideas there around like, he believed and allowed him to assemble that, I don't know if at the face of it people necessarily all thought about, and one was just that you can get economies of scale by assembling luxury brands. And so I think normally you think of luxury as something that is limited. That's what makes it special. Not everyone can have it. And the idea that the economies of scale actually come in terms of talent and supply chain. So supply chain is an easier one to think about, right? Where you're like, okay, I buy lots of leather, I buy lots of jewels, or whatever it is. But the talent piece I thought was really interesting, is that if you are working inside a single family-owned brand, you can't really advance unless your boss leaves. But if you own a family of brands, you can have opportunities to move laterally and learn from lots of different brands. And so you can disproportionately attract better talent, both on the creative side and on the managerial talent side, which you kind of need both of for a luxury business.

And then the third thing that I learned, which I thought was pretty interesting was that most luxury brands didn't really advertise until relatively recently.

Because what, it was the nature of luxury. Like if you think about LV, they start out making suitcases for royalty. You don't need to advertise to royalty, there are only so many of them. They know each other but with the rise of basically global income and internet advertising actually becoming so luxurious, if you look at luxury as a percent spend, I think LVMH groups spend like 20 billion a year on marketing, which blows my mind. And so you also get economies of scale from that, right? Because you are an ad buyer, you're a media buyer across all these different channels. And then of course I mentioned this to Jeremy and Jeremy's like, actually I have lots of thoughts about luxury, which is also shocking because he always wears the same black t-shirt. So I find it very amusing that the two of us are going to talk about luxury. But yes, Jeremy, over to you.

 

Jeremy Au: (04:42)

I've always worn Uniqlo. And I think the interesting part is that when we think about luxury, it's such an interesting topic because luxury is such a billion-dollar category, billion dollar industry, and there are great folks, really smart folks that are doing it, and they do all these things in marketing that totally contrary to what most marketers in startup land does, right? I mean, for example, like you said earlier, right? Which is for marketing, we need to make it as easy as possible. When they click the button, they see the ad, they click on it, and they buy it.

And then we're going to measure the whole attribution of that. And we want that transaction to happen. Like five minutes, no one minute, no 30 seconds in a one-click checkout, right? And then, next thing I know, I'm like watching this line at the Hermes bag store, right? And then you see this gate, it like 20 people in a row all waiting in line for their Hermes bags and obviously the store has plenty of space for 20 folks to be in it, but it's like the slowing down experience, the making it line there's interesting dynamics right there that's just very contrary to what startup marketing's all about. And I think that makes me always very excited because obviously, it's working otherwise not a billion-dollar category.

So what the not it's necessarily tactics, right, but what's the deeper psychology, I think of luxury and perhaps mainstream goods. But what does it show about marketing and the human psyche, right?

 

Shiyan Koh: (06:03)

The thing is that it's not something that you like instantly decide to buy, right? It's a considered purchase, but it's also that you're not buying it for the features you're buying it for like, the lifestyle they painted to you like that, oh, if I have this, like I am part of this lifestyle idea and what it says to other people about you when you have that good, which I think is I don't know.

You can argue that maybe Apple starts to do that, right? Like, hey, you could buy the same Android phone with like similar features for much cheaper, but you're an Apple user, it's still kind of feature-driven, I think, in technology and most startup products versus luxury, which is like, do you need a $20,000 handbag? I mean, you could get a $20 handbag from Walmart that does the same thing, which is like carrying goods around, but you're not, it's like function is almost irrelevant to it.

 

Jeremy Au: (07:00)

One thing I've learned and I want to say this is not from me. This was due to a wonderful class on luxury marketing at Harvard that I got to visit was really about different types of luxury, right? So different attributes and people use different parts of that piano keyboard, right? So for example, material is an attribute. So for example, natural materials or synthetic materials, and so on and so forth. There's technological performance. So it's like the most technology, the most cutting edge so and so, right? Then the other one is really about the story, right?

The narrative helps drive that dynamic. Then limited excess is another version of that, which is not everybody gets to have it. Some people get to have it. The fewer people who have it, the better. Then there's the rarity dynamic, which is not really like you can limit it, but it's pretty common. But it's really like it's the rare material, the rare this, the rare that, right? So some sort of implied scarcity dynamic of it. And then like you said, there's a signalling effect, right? What does it mean to other people? What does it project in terms of lifestyle? I'm sure there are a couple more that they shared last time, but I thought it was an interesting piece, which is like, luxury brands kind of play a little bit of a symphony in different ads, right?

Oh, another one is legacy, which is like, it's not for you, it's for the next generation, right? So this, and the last one is environmental, actually environmental. Health sustainability is actually a form of conspicuous consumption. Yeah, because I thought it was a really interesting thing because it basically is saying I can afford to be carbon neutral. Because I'm not the kind of person who buys the cheapest electricitym I buy twice expensive electricity, less just because it's renewable. So I thought it was interesting. And that actually made me broaden my view because I think when we think luxury, we think of LVMH, right?

We think of champagne but I think luxury is not just a category which we define in industry puzzles. So the attributes that people are trying to inject into the products, and the truth is like you say, you can buy a $10,000 phone now, right? There are $10,000 microphones, there are $10,000 lots of things that are just like really, I think they're not necessarily luxury because they serve a very strong technological piece. But I think the core of luxury is that, as you said, it's not just a lifestyle, but it says it's like, this is for performance, right?

If you're a socialite, you know a handbag is a performance. You are being compared mark to mark across everybody else. I remember I went to a party with and wonderful lady, a great time and I had a wonderful chat with her about school and daycare and so on, and so forth. It was the first day of school, right? And then my wife came by to get me and then she's like, Jeremy, we have to go and I walked out and then I was walking out and she was like, wow, she's wearing a hundred thousand dollars on her, right? She's rich. I was like, oh, I had no idea because I just, I thought she was this well put together just a normal parent.

But my wife just clocked her immediately on the brands and the signals and the symbols, and it's kind of the same way sometimes when I see someone with like an iPhone, right? Then you can tell like, oh, it's like now it's like they have the latest iPhone 14, right?

With the little dynamic island, it doesn't have to notch anymore. Mine is an ugly notch. I can, the more I see it, I can clock it and I'll be like, wow, that's iPhone 14, Pro Max. What's that like? And they're like, oh, let me show you the dynamic island and how the low notification works. And I'm like, oh, that's cool. I think luxury is luxury when you're not in it. But I think when you're in the category when you're in the vertical.

 

Shiyan Koh: (10:16)

Are you just saying we're too poor to appreciate luxury?

 

Jeremy Au: (10:20)

Too poor in that vertical, right? We don't care about it. But, I think that luxury attributes I like. Right? I mean, Harvard, you know that business school, that's a luxury school. I mean, the joke that we have is, why pay half a million dollars effectively? In terms of salary fees, school fees and opportunity costs when you could go to a local university for a business school that buys a lot of Harvard Business School cases, for the underlying curriculum.

Or for an example of itself, right? You could do a DIY or you can do online costs, right? And one thing I noticed, for example, online when we do LinkedIn and we looked at different, we're looking at different degrees of different folks and yeah, it's just there aren't a lot of people who did online certificates at a local university, right? They do online certificates in business school, right? In Harvard or Stanford. Those are the top two. Their online courses and their courses cost about $2,000 for an online video course as a professor. But of course, you get a certificate. So, yes, the certificate is like 10 to a hundred x more expensive than what's available for other online courses.

I mean, that's a form of luxury, right? It's like there's a signal effect, right? It's saying like, hey, I learned online marketing from Harvard instead of learning it from a great professional marketer on site. So I just think there's an interesting dynamic where like luxury is performance, but you have to belong, you have to have that signal acquisition slash vertical, right? Anyway, that's my random thoughts here.

 

Shiyan Koh: (12:16)

I guess maybe to tie back to the sort of themes of the podcast, right? What do you think we can learn from luxury or how is luxury relevant to Southeast Asian founders? Cause like another thing that was interesting was that there are no real Asian luxury brands. Just like, there aren't really any American luxury brands.

I mean, outside Tiffany, which LVMH also acquired, partially it's like for the US like the history is shorter. You just didn't have time to like to have a 500-year-old leather goods house or something. And then I think in Asia, we don't have like that long, we have a long history, but it hasn't been around brands, maybe outside of Japan where they have certain artisanal products that have been, I don't know, like the guy's been making mochi since like the 10 hundreds or something like that.

It's not really like the good that you wear. Who do you think has the potential to build an iconic Asian luxury brand? Does that exist today? Or is there no point, like we're too practical of people? We don't need luxury. We're content to buy European luxury. We don't need our own.

 

Jeremy Au (12.58)

Well, I think there are brands obviously that are Asian, right? I mean, the biggest one I can think of is SK-II, right? Isn't that a Japanese story?

 

Shiyan Koh: (13:07)

It's a P&G brand.

 

Jeremy Au: (13:09)

It is a P&G company now owned brand. So P&G spotted a brand and they were like, okay, everybody loves Japanese cosmetics. So I'm just saying that there's a Japanese story.

There's a Japanese brand, but yes, it's owned by the mothership P&G. I think a lot of people don't know that actually. So this is actually a fun fact for a lot of folks, but, P&G owns it, Procter and Gamble, and I actually met the brand owners and marketers.

 

Shiyan Koh: (13:33)

Yeah, it's like the Sake Leed hands, right?

 

Jeremy Au: (13:37)

Yeah, exactly. Then they discovered that their hands are super soft because they're massaging sake. And I was like, that's a beautiful story, right? I mean I'm a sucker for this kind of Japanese craftsmanship. But, I think Japanese cosmetics, for example, is a form of Asian brand.

 

Shiyan Koh: (13:53)

But I think that's premium. I don't think that's a luxury.

 

Jeremy Au: (13:57)

Luxury attributes that make it premium, but not yet true ultra lux. Yes, I agree. Well, okay, I think about it in two ways, right? I think it applies very much to Southeast Asia, direct-to-consumer startups that are often thinking about consumers, they are standing concerning a consumer. And actually, I think there are some other lessons that are generalizable to folks who are not direct to consumers. They may be B2B, they may be platform, et cetera. But I think direct-to-consumer is the most obvious, right? I think for the direct consumer the tricky part when you do D2C is that you have bits and atoms, right?

So basically you can be shipping furniture, which is direct to the consumer, right? And you can be shipping cosmetics, right? Which is the other end of the scale. And obviously, in direct consumer, you have to probably sell, mostly a lot of that stuff would be physical, but I think what's interesting is that as the good becomes a higher value, smaller, fewer logistics, then it becomes much more about the marketing, the story, all the various aspects about it that makes it more technology startup, like to some extent. Whereas if you're doing furniture, it's hard to get past the warehouse, the logistics, the in-person visitation and the experience. And so you end up looking more like a conventional business. So what I do think a little bit about is that as we grow up the premium scale, I think you start to see like, people start to build different types of approaches, right?

I'll give you an example. That would be like snacks, right? Salted egg fish snacks, are very popular in Southeast Asia, right? And like they start out this way, salted egg fish. And then fish skins, right? And it's crispy. It's just like potato chips. And then now they're making all kinds of various versions. I was like going to the store and they're seaweed-flavored, they're truffles. And yeah you're right to say it's not a luxury. But I think there's.

 

Shiyan Koh: (15:41)

$8 for a bag of chips is a little bit ridiculous.

 

Jeremy Au: (15:44)

That's true, it is luxury. I think I've seen more explicit than that as well. I think the more fancy ones. And I was just thinking to myself like, wow, that's a really interesting march, right? I think to create that SKU breathes, right from normal sort of fish to premium truffle flavour. I wouldn't recommend it of its taste, and flavor profile. I tried it cause I was a sucker. I paid for it. But it’s not a good combo.

But I think there's an interesting, I'm just saying like underlying lessons and marketing, right? How do you make it more premium? Truffles are the common premium thing, right? So what do you think about luxury? How do you think it applies to Southeast Asia startups and how do they approach it?

 

Shiyan Koh: (16:24)

Well, I mean, I think this idea that like what does it say about you versus the actual features of something? I think there is something about that in software or B2B. And maybe this is a bit of a stretch, but it's like why does everyone use, I don't know, Salesforce or as this old phrase like no one gets fired for buying IBM type of things?

So to what extent can you give people the feeling like, this is the bar, this is the standard, this is what great looks like, that is kind of separate from like the actual underlying features? I think that's an interesting idea of how you want to be perceived. And also like, how do we get that idea out into the marketplace. Is it through working with trade groups or certifying organizations or things like that to give you that aura of officialness and like being the standard? I think those are interesting ideas for convincing people like it isn't just about feature parodies or feature comparisons.

And then I guess the way they use spokespeople, so like, luxury is about evoking lifestyle, right? So it's like, I mean, in the newest Tiffany ads, right? It's like Jay-Z and Beyonce or whatever. I think that's an interesting thing too, right? Which is like, this isn't just yet another ring or earrings or whatever it is.

It's like communicating with people that you recognize. And so how do you communicate some of these ideas in a way that is instantly recognizable to people, who embodies your brand or who you'd want to be associated with? And I think we don't really think about marketing that much.

To your point, Jeremy, we get very focused on like, what's the conversion? Did they click the button end? But sort of taking a step back to be like, hey, what's the story we're telling? Why do people use it? How do they grow, and what's being sort of communicated to them versus the literal funnel progression steps?

 

Jeremy Au: (18:46)

A hundred percent, right. Which is I think the closest we get into it is a little bit like, how do we think about word of mouth? How do we think about referral marketing, right? And in order for someone to say, I refer you, they have to be proud of using you, right? I mean, and if you are like I don't know your utility, a nail clipper, but I love that nail clippers, super, but it's at home, nobody uses it. It's never going to come up in everyday conversation and be like, please go to Lazada and look for the lowest price nail clipper that has these two features, and that's the one I recommend.

You wouldn't say that, and it wouldn't be referral marketing, it wouldn't be attributed. I think the closest we get to it is maybe we talk about net promoter score, right? We talk about how likely are you as a customer to refer this brand to a friend or colleague, right? And for you to do that, you have to be proud. You have to be conspicuous consumption. You have to show it off and you gotta be like, yeah and I think we started seeing that a little bit, right? I think we see that, for example, like your Zenyum, right? A little bit. They're like, okay they're trying to make like a premium toothbrush.

Now I think it's a little bit hard to talk about a premium toothbrush. I don't really go to your bathroom and be like, wow, that's a cool toothbrush you have. And then what do you have? But I think there's that piece where you have that marketing to be like, this is the toothbrush that you feel happy using while you are in the mirror.

And what's interesting is that Zenyum was invested in by L Catterton, which is a venture capital fund that was funded by like you mentioned earlier, LVMH. So there is actually a direct link, not just of course of ideas, but also capital, right? From luxury goods to VC funds, right?

L Catterton to startups. I think they also did Sociala in Southeast Asia. They've also previously done CÉ LA VI as well, that's the club at Tower MBS. So you see the spread, right? Sociala to Zenyum to the club on top of Marina Bay Sands. So I think there's an interesting dynamic here, and I think there's always that debate, right?

It's like brand marketing versus performance marketers. In fact, I actually saw a job description last night and it was like here marketing, which is an important executive role and it must be very strong on performance marketing. And I was like, it was quite interesting.

It was like brand marketing is obviously secondary in this job description, and I think there's that decision that every founder has to make, which is like how do you divide, right? I think performance marketing is always the most invoked because it's measurable and attributable.

 

Shiyan Koh: (21:03)

Yeah. So I do have thoughts on this, which is, I would say heads of marketing at startups are the hardest people to hire because of this divide. So if you look at people who are more traditionally trained like they came up in a Unilever or a P&G, they're more brand people and they manage big budgets, but it's done via an agency.

So your brand manager at P&G has like, not literally done a Google AdWords-like ad themselves. They don't actually know how to do that. They've outsourced a lot of that to agencies. And then on the other side, you have performance, right? Which is very mathematical and quantitative and pretty tactical.

And so as a startup, you're like, okay, well which background person do I want to hire? And I think in the early days you end up with more performance people because what is the point of spending on brand when like nobody knows who, like you don't even have one working channel, so you spend on brand for what? It's like literally setting money on fire and you're still actually also trying to figure out who your customer is. So I think the other part of marketing is, can you narrow the definition of your customer enough that you can find good channels for them? You can't be like, my customer is everyone because then, your marketing gets really diffused and isn't very effective. But then I think over time, as you build either organic or performance channels, brand investments make sense and you actually will see a lift across all your channels if the brand is working. But you need to have a working channel, I believe, before you invest in the brand. And the problem is that performance people tend to be very quantity and brand people tend to be really fuzzy, and you actually need both, right? Because marketing is still evoking some emotion in your consumer. And so it isn't just like I've A/B-tested 100 versions of copy and image and this thing converts best. That's one way to approach it, right? But part of that equation or that conversation is also like, who's my customer? What do they care about? What are they reading? What else have they considered in my space? Like, why is this an interesting offer to them? So I think you need kind of both those skill sets. But historically what I've seen is that in both small and large startups, the head of marketing is a really hard role to hire from.

The turnover is super high because the other complicating factor is that the founder may or may not have a marketing background. And so the founder might be like, okay, I hired you to be in charge of this thing, and let's say they come from more a brand background, they start running campaigns and spending money, but you don't see any impact.

Then the founder's like, what the heck? We spent all this money, I see no impact. What's going on? They kind of get canned or whatever. Or you have a performance program, it's working well, but your cap is out. You can't push that channel anymore and that person doesn't necessarily have the background to like do the brand stuff on top.

So that's why I think this is a really hard role and you need both the left brain and the right brain types of people to get it right. And honestly, like I would say, even at our startup, the first time we hired brand people, it was like they were speaking a different language. I was like, what are you talking about?

They're like, our voice, our story. I was like, numbers, how much money do you want to spend, what is it going to deliver? It was a big mental shift, but then like when you actually see the ads and the campaigns and you measure like we did basically like we tested brand campaigns in like 10 matched markets. We ran the brand in 10 markets and then we looked at lift between those and 10 markets we didn't run brand ads in. And you can definitely see the lift, right? Which was amazing but also there is this learning process where you're just trying to understand what are these people saying, and why does it sound googley, it sounds like hand wavy. And they still want to spend money? Sorry, I'll get off my marketing soapbox rant.

 

Jeremy Au: (25:02)

Well, I think you're right, it is very hard to hire for this role, and I think I've definitely seen a lot of folks who get fired from this role and so there's a lot of turnovers because it's a very hard conversation, especially because, as you said, there isn't necessarily a marketing function beforehand.

What I would add to that is that actually, as you said, the founder is the first marketer in the company, right? Because if they actually got to the point where they're able to raise money enough to be able to hire a head of marketing, they probably have gotten very used to selling to consumers directly.

Figuring out their conscious-slash-subconscious driving lever for sales. They often do maybe the first ads, the marketing copy of the headline, and the landing page, like the founders are the first marketers, right? And so I think they have actually a lot of clear thoughts about what they have, but they also have a large subconscious awareness implicitly about the brand.

And I think the founder, when they hire this person, has been very aware of all of these things because if not, they end up making a decision, which is, do I want to trust this person is the whole thing? Or do I want them to act as a subset of my knowledge and provide me action and leverage on things I don't want to do? And I think that thing, that drive has to be very clear. Otherwise, I think I've noticed some founders can find someone who's really good, but there's this clash because of the visions of how the brand has evolved. And the founder thought they wanted to hire that person, but it just turned out no I'm still a person who's the guardian of this brand right now for this early stage versus like you said, it's like I have a big vision, I want to push it off, but this person's a performance marketer and it’s too low level, too tactical for me to really trust this person.

So I think that's really, I think a big discussion. One thing I'll think about and often talk about is like the core word of marketing is market, right? And what I mean by that is that marketing is often seen as the company communicating to the consumer, right? But I also think about the market, which is what a consumer tells the team in terms of changing the product features campaigns. And I think one thing I've noticed talking about your divide between performance and brand marketers is that both can fail if they don't use the time to really understand what a consumer wants, right? And because at an early stage of a startup, there's so much tweaking that needs to change, persona, customer journey, buying map even just like what the features they want, right? All of that keeps changing. I think marketers can get a bit of a shock when the product is changing underneath them because of the response to the feedback that's happening. So I think a great marketing officer is a great communicator, like you said, both on brand and performance, but also great at product-market fit iteration, which is so hard to do. Like you're like a mini founder. Because you have an understanding of consumers so well.

 

Shiyan Koh: (27:51)

So maybe a different question, Jeremy, is like, what brands do you think are doing a good job? What early emergent brands where you're like, hey, when you say this name to me, I instantly am like, I know what they stand for. I know who the customer set is. I have a really strong sense of what they represent. Like Uniqlo your favourite?

 

Jeremy Au: (28:20)

Yeah, well they've been growing like crazy all across Asia because I think for them what they realize is that people want great clothes, high performance. But I mean, I wouldn't say it's a luxury good. I mean, is this?

 

Shiyan Koh: (28:33)

No, it's not. It's not. This is I think we're off of luxury altogether. Right? But brands that communicate their value proposition, pretty clearly, right? It's like, I think of Uniqlo and Decathlon kind of similarly. It's like ubiquitous. You're probably going to find the thing you want. It's not going to be like break the bank expensive, is it going to be like the highest quality thing? Probably not, but it's okay. It does the job that you want it to.

 

Jeremy Au: (29:02)

I think, I mean this is a weird one, but I don’t know if you've seen Don Don Donki, which is just the Japanese market, and then the joke is like, how many Don Don Donki's can Southeast Asia absorb, right?

 

Shiyan Koh: (29:15)

More than one could have ever imagined.

 

Jeremy Au: (29:18)

I was just like, yeah. And I was just mind-blown about not only how fast they've grown, but actually, the revenue numbers are amazing. If you look at their top-line numbers, they're reporting, they're like, I know better than a lot of startups honestly, in terms of GMV, the profitability is just off the charts. We would have been a great startup to invest in as an angel investor, maybe not as a series A. I think they're making millions and millions and I think every time they do, there's this profitable, pretty much from year one to some of the basic numbers.

I'll have to pull it up and hyperlink them later in the report. But I think they do a good job of it. For example, on that side, they allow people to try the space multiple ways, right? I think they target, for example, the obviously the shopper who wants to buy Japanese goods, the Japanese person who wants that local authentic item that's obviously, most Japanese specialized markets go for that.

But then they're also going after like the lunch crowd, people who want quick takeout, right? They're on Grab and they're selling online food as well to allow people to try different items. They have snacks. I think they allow for a lot of different experiences that basically have kind of like, I don't know, scaled this category way more.

If you asked me five years ago how many Japanese supermarkets can there be, I'll be like one in every neighbourhood. They're kind of crushing it. So that's a very weird company that I think of that's doing well. How about startups? Any startups that you think of that are doing well? I'll do a quick one. I'll do a shout-out to the Ordinary Folk portfolio company. There we go, shout out to Projjal last week.

 

Shiyan Koh: (30:48)

Oh my God. We forgot about David, he listens to us when jogging and so David? Run faster.

 

Jeremy Au: (30:53)

Yes. Run faster. Go crush those legal cases and run faster. There you go. You're probably like wrapping up the workout already. Ordinary Folk, I think they're targeting a very difficult conversation, right, which is obviously erectile dysfunction and premature ejaculation and obesity, hair loss.

These are very difficult conversations. There are lots of pharmaceutical compounds to help solve them. And the truth of the matter is that at the end of the day, nobody has really tried to market to the Asian consumer, right? Especially for folks who are 50, 60, or 70 years old. And this is a very interesting category because this category is not on Instagram, this category is probably on WhatsApp and is probably walking around. I think there's a very interesting online and offline channel mix that has to be done. So I'd really respect the founder for, I think, cracking the code in the various markets and localizing the campaigns using local celebrities and influencers to kind of like get there. So yeah that's one brand I think of.

 

Shiyan Koh: (31:51)

I don't know. They're not really a startup, but I mean, One Championship, I think it's interesting, this Asian martial arts idea, right? So it is pretty distinctive from WWF or the more American types of leagues. And so you kind of have the feel of it, that sort of Gen Z eSports slash mixed martial arts audience.

 

Jeremy Au: (32:15)

Yeah. I think One Championship's really interesting, right? They're obviously fighting with mixed martial arts, right? And I think that's a really interesting dynamic where they're trying to bring Asian athletes, but also the Asian audiences and they've actually kind of like divide the world into a little bit one, there's one for the west and one for the east, right? Quite interesting.

 

Shiyan Koh: (32:33)

Yeah. But I think it's also in terms of like understanding your audience, which is they really try to emphasize hard work, discipline, like all these sorts of traditional Asian values in the athletes versus the spectacle or the controversy. So I think that's like an interesting tactic that they've taken to try to push their brand.

 

Jeremy Au: (32:57)

Yeah, because Ultimate Fighting Championship, UFC, hasn't cracked Asia. But I think One Championship is also trying to crack America. So it's an interesting duality, right, in those two sports leagues, kind of like trying to bring in. And it's interesting cause it's a meta brand, right? It's a promoter. It's an organizer. But their job is also, they need to bring out these rivalries, right? These matches, these families, these lineages. These are the things that, I think it's an interesting mix of like obviously startup in a sense of growing very quickly as sports and organizers and promoters. But it's also a very interesting marketing way. They bring up the human story, right?

 

Shiyan Koh: (33:31)

Oh, I mean, that's the best part. But like the Burmese champion, so when he was fighting, there's this crazy stat that like 70% of all TVs in Burma were tuned into the fight so like, the narrative works, right? It's sort of like these national champions that then are going to do, battle on these regional and global stages. So it's more of a collective than just Conor McGregor or whoever. I know nothing about fighting clearly.

 

Jeremy Au: (34:01)

Yeah, I mean obviously we talk about this, we have to mention Manny Pacquiao, right? Obviously in the Philippines. He probably was the first OG boxer, what politician? Humanitarian? I mean this guy has like really done it all. And I remember like as a kid, I was watching him a little bit. Cause people just tuned in, right? He was one of the first Asian folks who actually hold in his weight class. And I think it goes back to that story, right? The marketing story, right? It's like there's a very human story, which is a very luxurious form of marketing.

I think every athlete has that when he becomes a celebrity, right? It's like they came from nothing. And I think it was interesting, oh, I remember I was reading about Robert Heinlein. He says like, there are three stories in the world. The first is boy meets girl. And then the second one is the better tailor and the man who learns better, right? and so the first one's very obvious. Romance is like, boy meets girl, boy doesn't meet girl, boy meets girl too late, boy meets one, but for romance, right? I'll mention the last one, pretty much the man who learns better. He's basically like, he starts out one point of view then due to a whole bunch of different experiences at the end of the story, the person has a different point of view, right? That's it. So it's more like a reflection or journal. It's very like Japanese actually.

And then the better tailor is the one like the classic hero's journey, right? Which is the person who starts out, overcomes a whole bunch of adversity, comes, starts from nowhere, get something, loses it all again, and then eventually crushes it. The Count of Monte Cristo and so, so forth. And I was like, oh, that's a really good thing. And I think you look at Nike as a good example, right, an athlete story. There's this great book I read and this guy's the founder, right? I mean, the founder of Nike, he built it from nothing. I was just listening to the story. I was just so pumped listening to that story. I remember how he hit, he kind of localized the Japanese brand, and then he got Japanese money to be his first VC slash funders. I think Nike was a startup once upon a time, right? Even though we didn't.

 

Shiyan Koh: (35:54)

Of course, my business partner, Elizabeth, really wants to have a theme park and her theme park is like an entrepreneurial theme park where you like learn the stories of all these founders and get inspired. And I was like, I don't want to be part of this theme park. And she's like, no, no, no. I was like, this sounds very CapEx heavy. I'm not sure I would invest in this. And she's like, no, no. With VR, we could bring everyone in these VR journeys where they're like you can be there in the garage with Hewlett and Packard, you could be there with Steve Jobs and Steve Wozniak when they put out the Apple 2C and things like that.

But I do think stories are so important to inspire us, to give us ideas, to make us think that there is an alternate version of reality that we can create, especially for founders. You need to see stories of success to believe that you can do it when things seem really, really shitty.

 

Jeremy Au: (36:45)

Yeah. And to tie it all the way back again, we started out with luxury and cons consumption. I think luxury brands have that narrative, right? They always have that narrative on point and then, and they also help you by purchasing it. Tell that story about who you are, right? I mean, I always remember like a big sucker for Philippe Patek, right?

And they were like you don't own a Philippe Patek watch, you just take care of it for the next generation. And I'm like, okay, I'm not into like all these other bags, but I love this like legacy and parenthood. And I keep telling myself like, come on, I don't wear a normal watch.

 

Shiyan Koh: (37:16)

Take note. He wants a Philippe Patek.

 

Jeremy Au: (37:19)

No, well, I kind of secretly do, but I keep telling myself I shouldn't. There's no point in having it. I'm happy to wear my normal Apple Watch and so, so forth. All the functionality and so, so forth but yeah, I think there's something to it, right? It's like, it's got a cheat code, right? It's like, yeah, I like that, right? And I think humans, we've tried to pretend we're rational bias, but we're not. We're just like barely there hanging onto this giant, the limbic system of hormones and feelings, right? And identity is like that big piece, right?

 

Shiyan Koh: (37:47)

For sure, for sure. A hundred percent.

 

Jeremy Au: (37.52)

See you next week.

 

Shiyan Koh: (37.58)

See you next week. Take it easy, man.