Thursday, May 15, 2014

Why some people can spot a huge opportunity from a mediocre opportunity - Beats Success

***Share your thoughts or why what you are working on is a great opportunity.
Who ever thought people would pay $100 for earphones?  Earphones have been around for years yet no thought to create a whole new category. Now headphone brand, beats by Dr. Dre, owns 70% of the premium headphones market.

Everyday as I try to dissect the beats success, I sometimes wonder why others never saw this 5years or 10years ago.

Some of the key secrets (original written: How Dr. Dre's Headphones Company Became a Billion-Dollar Business BY BURT H”:

#1. Find the Golden Niche

"You've got to be lucky enough to identify a problem where you think you can help," says Jimmy Iovine.

#2  Ignore the Critics 

"We got dumped on by audiophiles on Day One," says Iovine. Beats headphones weren't tuned evenly, like the usual high-end headphones. They were tuned to make the music sound more dramatic. Iovine adds: "We wanted to recreate that excitement of being in the studio. That's why people listen." But skeptics also wondered why anybody would pay $200 for headphones when you got the earbuds for nothing. "I was like, 'Bad audio is free,' " Iovine says. "When you believe in something, the last thing you say to yourself is, Well, no one's doing this, so there must be no good reason to do it."

#3 Assemble an All-Star Focus Group

When developing the first Beats headphones, Iovine would lay out various prototypes in his Interscope offices and then poll everyone who came to see him.

#4 What Are Consumers Thinking About? Make That

"When we look at marketing for our year ahead, we don't look at what products have the best margin or which ones sell best--that's detrimental to progress and innovation," says Wood.

#5 Trust Your Gut and Double Down

"I always go back to my experience in the music business," says Wood. Today, as then, Wood looks for the "tug"--the little sign that he has a hit. Then he trusts his gut, and doubles down. Back in the day, a tug could be an album that gets sudden critical acclaim or a band that suddenly sells a lot of merchandise at its gigs.

#6 Move Pop-Star Fast

When Iovine heard Robin Thicke's "Blurred Lines," he smelled a hit--for Beats Electronics. Iovine and Wood got the rights to use the song in an ad and then got Thicke to reshoot the music video--within five days of the original shoot.

#7 Stand on the Shoulders of Giants

Co-marketing deals with big brands are a big part of the Beats playbook. Since the beginning, they have put Beats audio in products ranging from HP laptops to Chrysler 300s to HTC cell phones--and Beats has enjoyed plenty of the big guys' marketing muscle along the way. "We sold half a billion worth of product before we paid for one ad," says Iovine.

#8 Hide the Gold Records in the Basement

"I'm always thinking about what Beats is not, about what's missing," says Iovine. "When you succeed, don't think you've done this incredible thing. Stay focused on the product. I

“In six years, Interscope records mogul Jimmy Iovine and hip-hop icon Dr. Dre have turned Beats By Dr. Dre headphones into a $1 billion-plus business. Now, together with new president and former Interscope executive Luke Wood, they're faced with a new challenge: taking a hot brand and making it, you might say, even hotter.”  - Burt H

“I should clarify that there seems to be little truly inspired about buying Beats. It’s not as if Apple will gain amazing technology or a chance to enter radical new markets. Instead, what it will gain is a company that dominates a market in a manner that can only be described as “Apple-esque.” Beats headphones are much like the original iPod:  a premium-priced product critics felt would have no chance of success, never mind dominant market share. (It is estimated Beats sells more than half of all premium headphones in the world; Apple once sold 70% of all MP3 players.) “ - Mark R

****Shared by BJ MANNYST Team + FOUNDERS UNDER 40 Team

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