Counter
In the last few weeks, a memoir (“Little Black Stretchy Pants”) and a documentary (“Untold: The Rise and Fall of AND1”) have put the process of building counterculture brands into the forefront of our media consumption.
Though the long-term trajectories of Lululemon and AND1 couldn’t be more different, their early traction is pretty similar.
And since we usually look at brand-building lessons through the lens of survivor bias, it’s perhaps instructive to look at where the paths of Lululemon and AND1 perhaps diverged: One is a $6B brand. The other is mostly nostalgia.
So, what happened?
The high-level answer is that both succeeded in helping bring their respective countercultures into the mainstream, but only one (Lululemon) succeeded in hanging on for the ride.
Perhaps most instructive is exploring why one succeeded and why one failed. And, from our viewpoint, the answer mostly has to do with assessing the most likely competitive threats in the market.
This, we think, is the difference (and the lesson for CPG brands): Lululemon, arguably, didn’t have as much of a natural competitive threat as AND1. It had an open shot at the market, because no one else really had a vested interest in winning the space.
You might first consider Nike or Adidas to be the largest competitors to both these brands, given their crossovers into fitness, sports, and apparel. Perhaps. (Though it should be noted that SB Dunks aside, Nike has repeatedly failed to enter the counterculture markets of skateboarding and surfing; it has also tried of late to enter yoga…)
But AND1 had a natural competitor in the NBA.
The league has a vested interest in the overall popularity of basketball, regardless of its form, because the more popular the sport, the more the league stands to benefit from it.
For years, though, it pushed back on urban, hip hop and street ball culture from entering the league’s core product. It even introduced a dress code in 2005 that required players to wear suits in arenas when not playing. At the same time, however, it was simultaneously trying to tap the culture in other ways—video games like NBA Street, for instance.
For AND1, this posed a threat.
Like Lululemon, it stood to grow the fastest from bringing the counterculture into the mainstream, but, by aiming to accelerate that development, also introduced risk to the business: grow a counterculture fast enough and others with larger interests (and more to lose) are sure to try to steal your share from you.
Though the market dynamics here may skew more “winner take all” than most in CPG, it’s still a lesson worth thinking about. You could argue, in fact, that “organic” was a counterculture that followed this same path.
If you’re building in a counterculture, he question to ask, it seems, is who those with the potential vested interest are and whether you’re better off pushing to accelerate the culture or stoke the flames more slowly so that you can continue to grow your share.