How to take a niche product mainstream

How the DivaCup got consumers over the “ick factor”, Google sort of buys part of HTC, and the future of the battery business

This is our daily morning management briefing, Kickstart. Sign up to get it directly to your inbox each day at 6 AM Eastern.

Good morning! Here’s what’s on our radar at the moment:

How to take a niche product mainstream

The reusable menstrual cup is a technology that’s been around for nearly a hundred years, but it languished in obscurity for much of that time, stuck on high shelves in the back corners of health food stores. It took a mother-daughter duo from Kitchener, Ont., to see that women were ready for an alternative to tampons and pads. Today, DivaCup leads the category, having grown revenues more than 700% in the last five years and landing at No. 103 on the PROFIT 500, our ranking of Canada’s Fastest-Growing Companies. It’s a textbook study in how the right marketing approach can take a product from marginal to mainstream:

With DivaCups on chain shelves, the company focused on consumer awareness to keep them selling, lest it face the potentially brand-sinking setback of being delisted. Word of mouth remained a key marketing tactic, but the team worked to buttress it by urging medical professionals and educators to help to spread the word. They also prepared coupons, staged giveaways and developed a robust social media presence to drive would-be DivaCup users to stores. […] Finally, they made the decision to shutter their direct-to-consumer online store to maximize in-store demand. “That was a major turning point for our business,” says Carinne [Chambers-Saini, the CEO].

Link: Canadian Business

Google and HTC got perma-engaged

Google and Taiwanese hardware maker HTC have long been collaborators. For example, last year they introduced Google’s flagship smartphone, the Pixel, while Google’s virtual-reality efforts have long made extensive use of HTC’s Vive VR headset. So when rumours started swirling over the last week or so that Google was going to buy HTC, it wasn’t a huge shock. But the actual deal, announced late yesterday, is a bit odd: Google is paying US$1.1 billion for a chunk of HTC’s mobile phone business, but not the rest of the company, nor its intellectual property portfolio. Less a corporate marriage; more like corporate cohabitation. Google’s official announcement is pretty vague about the whole thing:

Creating beautiful products that people rely on every single day is a journey, and we are investing for the long run. That’s why we’ve signed an agreement with HTC, a leader in consumer electronics, that will fuel even more product innovation in the years ahead. With this agreement, a team of HTC talent will join Google as part of the hardware organization. These future fellow Googlers are amazing folks we’ve already been working with closely on the Pixel smartphone line, and we’re excited to see what we can do together as one team.

Link: Google Blog

Why is entrepreneurship declining?

Over the last 30 years or so, the number of people starting new businesses has been in serious decline. New U.S. data released yesterday confirms the trend, which is equally prevalent in Canada. Given the way the business press covers Silicon Valley, it feels like we’re in an explosive time for startups—but the actual figures show we’re in a real and prolonged slump. Even worse, no one knows why:

What is behind the decline in entrepreneurship is less clear. Economists and other experts have pointed to a range of possible explanations: The aging of the baby-boom generation has left fewer Americans in their prime business-starting years. The decline of community banks and the collapse of the market for home-equity loans may have made it harder for would-be entrepreneurs to get access to capital. Increased regulation, at both the state and federal levels, may be particularly burdensome for new businesses that lack well-staffed compliance departments. Those and other factors could well play a role, but none can fully explain the decline.

Link: The New York Times

WATCH: Our battery-powered future

Solar power recently crossed the threshold to become the cheapest energy source, and other renewable sources are quickly dropping in price, putting them close to par or better compared to conventional fossil-fuels. So the biggest hurdle for solar or wind power today isn’t necessarily cost; it’s the intermittent nature of the sources themselves. If you want a steady supply of power after the sun sets or when the wind isn’t blowing you’ll need a battery to store electricty. A big one. Until recently, that wasn’t really practical, but there’s reason to believe that’s changing. The nascent boom in electric cars is increasing the supply of big batteries—and, even more important, the supply of expertise the field. This quick video runs through how this battery evolution might happen over the next couple decades.

Link: Bloomberg

Earnings reports today

Canadian publicly traded companies of note scheduled to report quarterly earnings today:

The Intertain Group (ITX), Khan Resources (KRI), Student Transportation (STB)

Thanks for reading! Have a truly excellent day.