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Lola 🧪

Lola 🧪

January 5, 2022

Liquid Death and the 3 stages of markets

I read an article yesterday on how a water brand for partygoers called Liquid Death just raised $73 million 🤯. It got me thinking about all the upstarts that generate serious revenues with style and identity. I've talked about this idea on my podcast and also think product categories go through three main stages. Once a categories solution is well-understood and the options in the market are sufficiently good, we'll see more companies like Liquid Death.

Stage 1: Finally! A solution to the core problem

In this stage, the product solves a core problem. It's massively more effective than its predecessor.
Examples are:

  • light bulb vs. candles

  • printing press vs. handwriting

  • telephone vs. telegram

In this stage, the core problem or predecessor was so ineffectively solved that all these products need to do is solve the problem in some basic way.

Stage 2: Better, faster, cheaper

In this stage, there are solutions that solve the core problem but plenty of opportunities to be better, faster, and cheaper.

Examples are:

  • Cars didn’t solve the problem of distance transport but were faster than trains, boats, or horses.

  • Mobile phones didn’t solve the problem of connecting on the go but were better than a pager, or phone booth.

Stage 3: Do it with style

In this stage, the solutions on the market sufficiently solve the core problem and are sufficiently good on the dimensions most consumers care about but lots of opportunities to speak to an identity/style.

Examples are:

  • Liquid death is water for partygoers

  • Black Rifle Coffee is coffee for gun lovers

  • Happy socks are socks for quirky people

In the past few years, we've seen this stage 3 on a lot of consumer D2C companies but there is a whole world of products, services, and software that are now entering into the third stage.