Takes 30+ years to win even if the market opportunity is huge
The real story of a delayed win on a huge market
Startup founders, even if you have a huge market opportunity, it might still take you many years (and effort) to get it to work. I want to share a story with you today:
It’s the history of laundry powder to laundry pod transition, a relatable and imaginable story because it’s a B2C product we all used.
Facts on paragraph and (My opinion in italic + bracket).
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Part 1
Mid-1970s laundry powder was discovered to have large quantities of surfactants and phosphates that are damaging to human health and the environment. Liquid detergent became the preferred product in the US and EU.
(A pleasant surprise for companies already working on liquid laundry products.)
But liquid detergent uses more water and containers of the detergent are typically heavier, thicker, and hence more expensive to transport. Colgate’s Dynamo came up with early concentrated versions of detergent.
(I imagine Colgate’s Dynamo thinks they catch the jackpot because who doesn’t want to save costs and protect the environment? HUGE potential. If not this, what will it be?)
Colgate’s Dynamo didn’t take off.
Part 2
In 2005, Unilever released a concentrated version called All Small & Mighty. The concentrated variant used half the packaging, one-quarter of the water use, and one-third less diesel fuel to transport.
This version was a hit with consumers. One reason is that it was paired with better consumer education and retail store features.
(The reason makes sense, but what other reasons do we not see? Why is it working this time but not 15 years ago?)
As the market began to shift towards the concentrated product, Walmart gave it a final push by requiring that suppliers deliver at least 2x concentration for all detergent products on Walmart’s shelves. The move essentially changed the face of the detergent market.
(Main distributors that have huge influence over the market gave a push.)
Part 3
In 2012, P&G released Tide pods which contain only 10% water as opposed to 50% in the 2x concentrate detergent product. Tide pods are packaged in a plastic bag instead of a large-format bottle which utilizes much less plastic.
That also didn’t take off immediately.
In 2018, Seventh Generation released an ultra-concentrated, bio-based detergent that uses recycled PET for its packaging. Their Ultra Concentrated detergent uses 60% less plastic, 50% less water, and weighs 75% less than its traditional format detergent, and is designed to avoid overuse of detergent.
It’s not enough to change best practices within companies; innovative products must also win consumer acceptance.
This requires innovative thinking throughout the supply chain from product design and manufacture to delivery.
Most contents written are taken from this article by Alexis Bateman on SupplyChain Management Review. It’s very well written and he’s made very good point to conclude that
“opportunities that can spur the industry-wide shifts exist, but companies must be willing to start the journey.”
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My thoughts
Despite the obvious cost-saving opportunity, even for companies like P&G and Unilever, which have tremendous resources and market share, took 30+ years for a sound & viable solution/product to come to fruition.
Therefore, regardless if it’s a solution for a huge market/niche community that you are working on, focus on the positive impact you bring to your target users. Keep working on it, and hope your patience rewards you.
Many times well-intentioned advice/tips for entrepreneurs, like “focus on the big market and get quick wins” don’t play out the way we imagine.
