Trung Phan

In 1981, Absolut Vodka launched the longest-running ad campaign ever. 

The Swedish brand produced 2k ads over 25 years, all in the same format. Its success -- with help from Andy Warhol -- is a testament to simplicity and the persuasive power of repetition. 

Here's the story 🧵 https://t.co/nMky9TlS97

1/ Absolut Vodka was founded in 1879 by Lars Olsson Smith. 

The brand would become a Swedish staple but didn't venture outside the country's borders for a century.

In 1979, Absolut entered a crowded US vodka market with no brand equity and a plain-looking product. https://t.co/HC67Vq3OhW

2/ While vodka brands competed on taste, ad agency TBWA advised Absolut to market itself on the aesthetics of its bottle (designed as a 19th-century Swedish pharmacy vial). 

The first ad -- in 1981 -- was the bottle matched w/ a pun ("Absolut Perfection"). No models. No celebs. https://t.co/H8RD2UsHm8

3/ The idea took off in 1985, with the help of Andy Warhol. 

While Warhol wasn't a drinker, he was "enthralled by the artfulness" of the Absolut bottle.  

Absolut turned a Warhol painting into an ad ("Absolut Warhol"). It completely blew up. https://t.co/M529hM5HBt

4/ After Warhol's magic touch, other major artists and cultural figures wanted their version of the Absolut Ad:

◻️ Keith Haring (grafitti artist)
◻️ Kurt Vonnegut (writer)
◻️ Manolo Blahnik (fashion designer) https://t.co/hXBOUDzl0e

5/ With the wave of artist collaborations, the bottle's shape became iconic and instantly recognizable. 

The "bottle + pun" template could tackle any subject and would be rehashed 2000 times over a 25-year span. https://t.co/eD3zOM3Gml

6/ Once Absolut found a winning formula,  it made sense to ride the idea until the wheels fell off.

The brain seeks familiarity and repetition is a powerful persuasion tool. 

 "Any idea, plan, or purpose may be placed in the mind through repetition of thought." -- Napoleon Hill https://t.co/Z23luFwHGd

7/ The true marketing masterstroke came with geography-themed ads. 

Any locale that Absolut selected for its ad was instantly personable to a consumer, benefitting from nostalgia and relatability. https://t.co/IPeNs1Q0gO

8/ And the possibilities were endless (bruh, Texas!). https://t.co/ysMhBfV8SV

9/ When the print-only campaign started in 1981, Absolut sold 20k cases of the vodka.

By the time it ended in 2006, Absolut was selling 5m bottles a year (~50% of imported vodka bottles in the US). 

Absolut went from unknown to dominant with a simple idea...repeated 2k times.

10/ FINAL NOTE: A sure sign of cultural clout is a good parody. And there are some *gold* Absolut parodies LOL. https://t.co/hTJt7Kdq60

11/ Def follow @TrungTPhan for more baller business stories, including this one about someone that will NEVER pay for an ad: https://t.co/hVhIDx3G1n

12/ Sources

Smart Insights: https://t.co/mjU1MYhcIx

Fast Company: https://t.co/MTAQt5YKNE

Business Insider: 
https://t.co/fsmgxdlUiB

First Versions: https://t.co/cbIjSfDAY8

13/ More background on Absolut's ad campaign https://t.co/TZQy3TxsTp

Smart threads. Dumb memes. Write on tech @TheHustle. Sold comedy film to Fox. Not Investment Advice (NIA) podcast: https://t.co/NfjmiP41my

Trung Phan 🇨🇦

Stumbled into maybe the greatest Spotify playlist ever https://t.co/ZTyqf8MrtX

This playlist goes very very hard (“Sweet Caroline”, check) https://t.co/YaLus1zzq4

You’re welcome: https://t.co/90HRA1TwJr

Jack Dorsey doesn’t use a laptop or tablet. All work done on the phone, to avoid distractions. Kinda baller. https://t.co/7eHaz86bST

This might be the better productivity move: only 2 hours on Twitter a day LOL 

https://t.co/KVaAQmYwLc https://t.co/IOcDdG1UFw

Here’s his home screen from a few years back. 

He’s a *huge* fan of Notes (it’s in the home area) and has a work folder with Apple’s productivity and Google Workspace apps. 

Still the same @jack ? https://t.co/xJa09IN1mP

Either way, I prefer my set up: https://t.co/DT2oTuzR9K

Dorsey! Literally $200B of market cap from the NOTES app!! https://t.co/x9XTNSFsdt

Time to create $100 billion in market value:

Apple:           31 years
Microsoft:     21 years
Netflix:          20 years
Amazon:       17 years
Facebook:    8 years
Google:         7 years
Andy Jassy: 2 days

Andy Jassy: creates $100B in market value after 2 days yet is only comped $200m over 10 years. 

Lesson: You don’t get rich being an employee. https://t.co/ZdiCqqbZFz

It’s a tale as old as time https://t.co/ecoPrz91q1

1/ Amazon is well-known for its writing culture: 

◻️ "Mock press releases / FAQs" for new product pitches 
◻️ "6-page memos" instead of Powerpoint 

It force clear thinking and encodes a specific approach to innovation (especially for a post-Bezos world). 

Here's a breakdown 🧵

2/ The "Working Backwards" philosophy 

Instead of creating a product then finding customers, Amazon asks "What does the customer need?" and works *backwards* toward the product. 

✔️Customer need --> Create product
✖️Create product --> Find customer

3/ Write a mock press release 

To determine if the customer need makes biz sense, employees write a press release:

◻️ What problem is the new product solving
◻️ Why it's better than existing options 

To persuade a customer, the document has to be jargon-free and tell a story. https://t.co/S86NfsIY05

4/ Press releases force big thinking 

You don't write a press release for an incremental improvements.

Creating a product worthy of a press release means really solving a customer problem and going after markets with large total addressable markets (TAMs).

5/ Include an FAQ in each "press release" 

Addressing every potential customer question can help identify hurdles to getting something to market...and also uncover other potential opportunities.

6/ Why memos over Powerpoint?

Amazon famously has execs write 6-page narrative-driven memos instead of Powerpoint decks.

The practice began in 2004 when Jeff Bezos noticed nothing was being decided after 60-minute long meetings with his inner circle (AKA S-Team).

7/ Memos > Powerpoint #1: More info density

People read faster than people can talk meaning that -- for a 60 minute meeting -- reading a memo before discussing an issue conveys much more information (10x more per a former Amazon exec). 

Narratives are also much more memorable.

8/ Memos > Powerpoint #2: Ideas instead of charisma 

In Powerpoint presentations, a great presenter can sell a bad idea. Conversely, a poor presenter may be unable to sell a great idea. 

In a memo, the idea wins.

9/ Memos > Powerpoint #3: Better analysis 

Powerpoint's hierarchical (and sequential) structure is not ideal to address complex issues. 

Narrative-driven memos can be multi-causal and provide a 360-degree view on a topic.

10/ Memos > Powerpoint #4: Focusses a meeting 

If every meeting participant spends the first 1/3rd of a 60-minute meeting reading, there is a huge transfer of information. 

It's a forcing function to get everyone on the same page and makes the remaining 40-minutes high quality.

11/ Memos > Powerpoint #5: Shared understanding 

Whether or not one agrees with everything in a memo, focussed reading of a document provides a shared knowledge base with which to begin discussions. 

Further, someone can quickly "get up to speed" by reading past memos.

12/ Memos > Powerpoint #6: Decisions need narrative

Powerpoint and Excel are great at communicating data.

However, at the executive level, you are making complex decisions and leading. This requires a mastery of narrative (AKA memo writing) to persuade stakeholders.

13/ Writing is crucial for a company scale 

At 20 employees, Bezos could be in every meeting. At 1k+ employees, he needed a way to “inject his lens of thinking” into the organization. 

An archive of writing (e.g. annual letters) encodes thinking, especially now that he's gone.

14/  Here is the email from Bezos saying "No Powerpoint" (June 9th, 2004). 

In it, he emphasizes the importance of "narrative structure" and says Powerpoint "gives permission to...ignore the interconnectedness of ideas." https://t.co/LMU4iSqzq8

15/ Follow @TrungTPhan for other business breakdowns and really dumb memes, like the time I read all of Bezos' annual letters and summarized them in one tweet: https://t.co/1GpABCI1IU

16/ The insights are from "Working Backwards", a fantastic book written by 2 former Amazon execs (Colin Bryar, Bill Carr). 

Book link: https://t.co/qTzLMrCCYw

Great a16z pod w/ the authors: https://t.co/Gz876YZs1b

Background on Bezos' email: https://t.co/TS25xSwQNZ https://t.co/nKumeMwnBo

Microsoft just reached $2T, pushing Steve Ballmer's net worth to $80B. 

Interestingly: when Ballmer joined MSFT in 1980, he was employee #30 and received ZERO equity. By its IPO in 1986, he owned 8% of MSFT. 

How did Ballmer get that stake? A contract quirk.

Here's the story🧵 https://t.co/oX4fuzLE4V

1/ Ballmer's Microsoft tale begins in 1975, his sophomore year at Harvard. 

He lived down the hall from some dude named Bill Gates.

While Gates dropped out to start Microsoft, Ballmer was a total Harvard head -- playing on the Football team and writing for The Crimson. https://t.co/QVUZpXpDgx

2/ After graduating, Ballmer tried his hands at a few things:

◻️ Product Manager at P&G, where he worked with future GE CEO Jeff Immelt
◻️ A brief attempt at Hollywood screenwriting
◻️ Stanford Business School 

While at Stanford, Ballmer was convinced by Gates to drop out...

3/ ...and come join Microsoft. 

It was 1980 and the software co. was seeing explosive revenue growth: $16k in 1976 --> $8m in 1980.

Ballmer was to be Gates' first non-technical hire and the offer he gave reflects the fact that Gates' hadn't recruited a business person before. https://t.co/J01Jpv6vEy

4/ Ballmer's offer: 

◻️ the title of "business manager"
◻️ $50k base salary
◻️ZERO equity
◻️CRUCIALLY-- as Microsoft was so desperate for sales know-how -- Gates (and co-founder Paul Allen) gave Ballmer "10% of profit growth" he could generate. https://t.co/PoHhRAnnSC

5/ With Microsoft growing like a weed (it would 2x to $17m in 1981), Ballmer's "10% of profits" deal was not sustainable.

At the time, Microsoft was a partnership (Gates 64% / Allen 36%).

One early VC (Dave Marquardt) wanted to restructure the corp for wider stock ownership. https://t.co/WHofaZYCJ4

6/ Gates wanted nothing to do with the restructuring, so Ballmer and Marquardt took the lead. 

This was the corporate structure they drafted:
◻️ Gates and Allen own 84% 
◻️ 8% goes to investors 
◻️ 8% goes to Ballmer (in exchange for *waiving* his 10% profit share deal)

7/ Gates was OK with the deal but Allen was not.

He wanted Ballmer to own 5% max...so Gates agreed to drawdown the rest of the equity to give Ballmer from his own pool.  

By 1986, Ballmer owned 8% of $MSFT. It was worth ~$56m when Microsoft IPO'd at $700m. https://t.co/hsmtGEri2J

8/ In the decades since, Ballmer -- who was Microsoft's high-energy CEO from 2000-2014 -- has largely kept his stake in $MSFT.

Today, he owns ~4% of the tech giant while Gates owns ~1.4% (Allen died in 2018, and long ran down his stake). https://t.co/1PLmW78Oed

9/ Ballmer is currently the world's 14th richest person and very high-profile owner of the LA Clippers (which he bought for $2B in 2014). 

As far as "contract quirks" go, the one Ballmer had when he signed with Microsoft has to be one of the most outrageously lucrative ever. https://t.co/N259YGLxNS

10/ Follow @TrungTPhan for other baller business stories and -- also -- a steady drip of dumb memes: https://t.co/fGYOp3LrSA

11/ Sources

NYT: https://t.co/pqSiA3CGRO
Wiki: https://t.co/UdFuDeBatM
Forbes: https://t.co/S0ljcLVxaO

12/ Here’s a random video of Ballmer waiving his hands around like Dennis Rodman:  https://t.co/oNuslFC5D8

13/ This may or may not have been Ballmer when he signed the MSFT contract that gave him 8% of the company: https://t.co/0lhtC3hQRQ

In 2001, Larry Page and Sergey Brin were looking to hire a CEO. They picked Eric Schmidt in part because they all hung out at Burning Man. 

Schmidt'd package: $250k base + $300k bonus + 6% of Google. He's now worth $24B. 

Lesson: It's not what you know, it's who you party with. https://t.co/sc72J4hiiH

Follow @TrungTPhan for other MBA-caliber lessons in one tweet: https://t.co/AgK3thwfNW

More here: https://t.co/cF4Pe8oUE3 https://t.co/RK1IwsklEQ

Huy Fong's Sriracha hit revenue of $150m+ a year...with no sales team, no trademark and $0 in ad spend. 

Its creator is Vietnamese-American David Tran, making the sauce's success a tale of immigrant hustle and a product that literally sells itself. 

Here's the story🧵 https://t.co/siEoK6UeLs

1/ The Sriracha story traces back to the 1930s. 

In a Thai town called Sri Racha, a housewife named Thanom Chakkapak created a paste of chili peppers, distilled vinegar, garlic, sugar and salt. 

Variations of this recipe have travelled across the globes in the decades since. https://t.co/TEh52V7uqy

2/ One variation was created by David Tran, a major in the South Vietnamese army. 

In 1978, the Tran family joined 3k+ refugees and fled Communist Vietnam on a Taiwanese boat called the Huey Fong (means "Gathering Prosperity”). The boat inspired the business name Huy Fong Foods. https://t.co/BDtNsL6Gth

3/ Tran landed in the US and ended up in LA.

At the time, Sriracha was absent from California. So Tran brought his recipe, swapping out chilis for a local ingredient: jalapeños.

He filled recycled baby jars and sold product out of a Blue Chevy Van, making $2.3k the first month. https://t.co/cbpMHFrpWo

4/ To really make the product stand out, Tran slapped a Rooster logo on everything he sold. 

Why? He was born in 1945: The Year of the Rooster. 

He would later design the famous squeeze bottle and added a green cap as a sign of "freshness". https://t.co/L4WjNwcHNo

5/ The sauce's popularity took off in the early-1980s among Asian restaurants and grocers. He kept upgrading manufacturing to meet demand:

◻️ 1980: a 5k sq ft building in Chinatown LA
◻️ 1987: a 68k sq ft warehouse in Rosemand, CA
◻️ 2010: a 650k sq ft warehouse in Irwindale, CA https://t.co/0tDPwbdmW2

6/ Sriracha's success has come with:

◻️ No sales team (Tran has mostly maintained the same 10 distributors and wholesale pricing from the 80s)
◻️ No ads (Sriracha's cult-like status comes from "word of mouth")

In 2019, sales hit $150m (10% of the US hot sauce market). https://t.co/M65y0tYw5B

7/ With so few ingredients, Tran prioritizes the best ones to win the market. 

Timing fresh jalapeños is tough: the ripening window (green to red) leaves no room for error. 
 
Due to the harvesting seasons, Huy Fong may make a whole year's supply of Sriracha in a 10-week span. https://t.co/SUfdFuQQBt

8/ For 28 years, Huy Fong was able to maintain its exacting quality standards with one exclusive jalapeño supplier. 

In 2017, the partners had a falling out. Huy Fong now sources from 3 suppliers. 

Its factory runs 16hrs a day and it goes through 100m pounds of chilis a year. https://t.co/CNJfLeRASE

9/ Interestingly, Tran never trademarked "Sriracha" (he did trademark the green cap and rooster, though). 

This is the reason why so many competing brands -- from Heinz to Tabasco -- have a "Sriracha" sauce. https://t.co/rC5DajdCzn

10/ Tran doesn't care about competitors: 

"I never worry about [other brands] because we're too busy making it. I can't make enough of my product to meet the demand, so let them have it and work together for the consumer." 

Or brands using the name: 

"It's free advertising." https://t.co/PvPAAts2et

11/ One competitor is back in Thailand: The Winyarat family purchased the original recipe in 1984 and creates "Sriraja Panich".

It uses Thai cayenne peppers instead of jalapeños but has struggled to make in-roads in the US. https://t.co/LVll7lj82Y

12/ The universal appeal of Huy Fong's Sriracha is encoded in the label, which includes 5 languages. 

In the US, the sauce has clearly achieved cult status (and was even named Bon Appetit's "Ingredient of the Year" in 2009). https://t.co/Xc8RC4k6Lw

13/ Investors have been knocking on Tran's door for decades. 

In November 2020, Choulala hot sauce was acquired by spicemaker giant McCormick & Co. for $800m (on $92m sales). 

A similar price / sales multiple (~9x) for Huy Fong easily nets a $1B+ valuation. https://t.co/AdoTsnPxVL

14/ Tran doesn't need the money. His motto is "a rich man's sauce at a poor man's price" (he caps retailer selling price <$10). 

"My American Dream was never to become a billionaire. We started this b/c we like fresh, spicy chili sauce.”

His children will keep the legacy going. https://t.co/HVuM3g6vLf

15/ Follow @TrungTPhan for other glorious business stories. 

PS. I wrote this thread because my parents told my sister I need more "Viet" content. https://t.co/kynjWxoxLh

16/ Sources

Whale Bone Mag: https://t.co/bbg9kX9mob

Bloomberg: https://t.co/nQknvKhD43

TIFO:https://t.co/gQt1OGEAgz

"Siracha" Doc: https://t.co/TVNgZcuYXD https://t.co/of2PLVv3X2

17/ POSTSCRIPT

Here’s another Viet story for you, my great-grandfather was Vietnam’s leading nationalist at the turn of the 19th century and also sported a legendary beard: https://t.co/hUtQCImVtn https://t.co/EfqFGHUT3y

18/ Live footage of me with this thread popping https://t.co/DhQzNvb3Ba

19/ FINAL NOTE: When Huy Fong moved to Irwindale, the City of filed a lawsuit alleging that the sauce-making released "odors and eye-watering airborne irritants".

A judge threw out the case in 2014 and now Huy Fong lets people tour the factory to judge for themselves. https://t.co/Jb4i8KY1Qj

20/ We are def talking about Sriracha on the next episode of the Not Investment Advice (NIA) podcast. 

Throw me all your questions ("Is it OK to drink Sriracha?") and I'll answer them: 

🔗https://t.co/i17YvDihG5 https://t.co/rBnOQN6Hrf

When you go to a Vietnamese restaurant with your non-Vietnamese friends and order Vietnamese food food while speaking Vietnamese. https://t.co/atHz8WZ8bv

When Dr. Patel, CFA goes to an Indian restaurant with his non-Indian friends and order Indian food while speaking the restaurant-specific Indian language: https://t.co/hKjch4oIVe

When John W. Rich goes to Wendy’s with his McDonald’s-loving friends and orders every Wendy’s chicken item (spicy, home style, nuggets, fingers) from the Wendy’s menu: https://t.co/e4hBufeJ1S

In 1992, Southwest Airlines had the motto “Just Plane Smart”. Another aviation firm had the motto “Plane Smart”.

The CEOs resolved the trademark dispute w/ an arm-wrestling match.

Despite smoking a cig and rocking a headband, legendary Southwest CEO Herb Kelleher somehow lost. https://t.co/pmygoAFECi

I left out the best part...the arm-wrestling match was called: "Malice in Dallas" 😂 https://t.co/GwTWiUz7b9

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