75
Are they building a brand?
Every retail market niche is dominated by a handful of brands by which their companies are known. This is very important because consumers tend to be creatures of habit, and will be repeat buyers of their favorite brand.
You can see what this means: Quality products = endless future sales and free word-of-mouth advertising. People tend to be gabby creatures, and when they like something, they’ll tell their friends and family about it, and rave if it’s something they really love. And if a product disappoints? You’ll never see that buyer again. And if they really hate it? Viral retribution can be brutal. And something else …
A couple of Business School studies have shown that when a brand reaches towards iconic status and dominates its market, the value of its company can increase by 20% - 40%. In other words, acquiring funds and other major-league entities will pay a premium for those retail companies with household name brands. Indeed, they’ll expect to see such brands — if retail — or they won’t give you a second look.
Significance for early-stage investors: Hundreds of new brands are being born, and most will go nowhere. (Deservedly.) But watch for those brands that are high-quality and being aggressively marketed, because their companies could make great investments.
And yes, somewhere out there, even as you read this, some future cannabis mini-Starbucks have been planted and are now quickly growing.
Serious over-promising = brand death = lost funding
Yes, medical cannabis has huge potential, and will be a future threat to the greedy bastards at Big Pharma. But no, medical cannabis will never cure cancer and add 20 years to your life-span.
I recently looked at a startup with little substance but huge pretensions. They were seeking $4 million for a piece of their rotten equity. Fat chance!
The founding entrepreneur was offering cannabinoid creams that could allegedly ease pain (including migraines), remove wrinkles, improve muscles’ and tendons’ range of motion, gets rid of cold sores, cure chest and sinus congestion — and yes, do even more!