First, a quick review:
- DTC 1.0: Customer acquisition is cheap. First-mover advantages across product categories are plentiful. The VC faucet is flowing. Times are good.
- DTC 2.0: Customer acquisition is expensive. First-mover advantages are gone, and market whitespace is disintegrating. The VC faucet is dripping. Times are challenging.
- DTC 3.0: Customer acquisition is too expensive. The market is saturated. The VC faucet is off.
The New(ish) DTC 3.0 Playbook (subject to change):
1. Start with PMF: It always does. Clearly define your hero product and give it the love it deserves for longer than you think.
2. Define Your Brand. Who you are and more importantly who you are NOT. Another holdover from DTC 1.0 and 2.0.
3. Be Content First: Think and maybe even build your team like a media company. Creators, influencers, UGC, company employees — everyone needs to contribute to keeping the brand fresh and top-of-mind for consumers. How do you deliver consistent and on-brand content? That’s a problem every DTC 3.0 needs to solve.
4. Invest in Your Brand: You can’t spend your way to the top anymore. I believe this is a good thing. Brand is back, baby!
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“It is better to have the philosophy of thinking more than your competitors than spending more than them.” — David Ogilvy
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5. Distribution Strategy: DTC 3.0 is a lunch strategy. Start thinking/planning for distribution sooner rather than later. Owned retail, 3rd party retail, wholesale, B2B deals. If you have serious ($100M+) aspirations, you can’t be a one-trick pony.
6. Bootstrap It: The well is dry. For now.
7. Build Slow. Build methodically.
8. Focus.
9. Execute