The Genius Way Liquid Death Sells Canned Water and the Red Flags and Magic Numbers Investors Look for in Startup Metrics

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Jul 26, 2023

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The Genius Way Liquid Death Sells Canned Water and the Red Flags and Magic Numbers Investors Look for in Startup Metrics

The Power of Branding and Metrics: How Liquid Death and Startup Metrics Drive Success

Introduction:

In the world of business and entrepreneurship, success is often driven by a combination of innovative ideas, effective marketing strategies, and a deep understanding of key metrics. Two examples that showcase the power of branding and metrics are Liquid Death, a canned water company, and the insights shared by Andrew Chen on startup metrics. Let's explore how these two seemingly different topics connect and provide valuable lessons for businesses.

Liquid Death: The Genius Way of Selling Canned Water

Liquid Death, a company that sells canned water, was born out of a simple observation made by its founder, Mike. He noticed that rock bands preferred drinking water while performing but had to settle for putting it in energy drink cans due to sponsorship deals. This sparked an idea: why not create water that bands would actually want to be seen drinking? Liquid Death's strategy was to give a seemingly boring product awesome branding. Instead of focusing on listing features, they aimed to create a "human brand" that people could relate to and laugh with.

This approach proved successful, as within three months of launching a commercial and paid Facebook ads, Liquid Death gained more Facebook followers than Aquafina, a well-established water brand. Despite launching during the pandemic, Liquid Death became the fastest-growing water brand in Whole Foods. The company's ability to capture attention and generate interest through unique marketing tactics contributed to its success.

Connecting Liquid Death to Startup Metrics:

While Liquid Death's success can be attributed to its branding and marketing efforts, it's essential to understand how metrics play a role in evaluating a startup's potential. Andrew Chen's insights on startup metrics shed light on the importance of network density, content creation, and acquisition loops.

One key aspect of Liquid Death's success lies in its ability to create engaging content and circulate it within its network. Chen emphasizes that content creation is the foundation of a successful social feedback loop. If content creation is not easy, the loop will not work effectively. Liquid Death's focus on creating captivating content that resonated with its target audience contributed to its rapid growth.

Furthermore, Chen highlights the significance of network density. Liquid Death understood the importance of building relevant connections within its network and utilized tactics like "Find Friends" and "People You May Know" features. By increasing network density, Liquid Death was able to expand its reach and attract more customers.

Actionable Advice:

  • 1. Focus on branding and content creation: Like Liquid Death, invest in creating a "human brand" that people can relate to and laugh with. Develop engaging content that resonates with your target audience and encourages them to share it within their networks.
  • 2. Build relevant connections: Prioritize building a network with relevant connections. Utilize features and tactics that allow users to find friends or people they may know. This will help increase network density and expand your reach.
  • 3. Understand your acquisition loop: Pay attention to how a cohort of new users leads to another set of new users. This understanding will enable you to scale your business effectively. Additionally, explore the potential of viral loops, which rely on users sharing your product with their friends and colleagues.

Conclusion:

The success of Liquid Death and the insights shared by Andrew Chen on startup metrics highlight the importance of branding, content creation, and understanding key metrics for business growth. By focusing on creating a compelling brand, developing engaging content, building relevant connections, and understanding acquisition loops, businesses can set themselves up for success in today's competitive landscape. Remember, marketing is day trading attention, and metrics provide valuable insights for driving growth and sustainability.

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