Betterment founder Jon Stein, who launched during the 2008 crisis, advises that uncertain economic times are ripe for new ventures. Fear reduces competition and can create unique market openings for founders willing to build while others are hesitant.
For CPG brands, a physical retail presence, even with lower margins, should be viewed as a customer acquisition strategy. It provides crucial visibility and trial, driving customers to your higher-margin direct-to-consumer website for subsequent purchases and retention.
When facing multiple promising growth opportunities, founders should avoid pursuing them all at once. Instead, sequence them by designating one channel as the primary "engine" for the next 6-18 months, treating others as mere proof points to maintain focus.
For a solo craftsman constrained by capacity, the first scaling lever isn't debt-fueled expansion. The safer, more effective approach is to significantly increase prices to manage demand, lengthen the waitlist, and boost margins, which can then fund slower, less risky growth.
When direct-to-consumer growth flattens and acquisition costs rise, B2B channels offer a scalable alternative. Betterment's founder notes their B2B expansion not only provided scale but also fed more users back into their retail product, creating a powerful growth flywheel.
The dog toy brand Floofball successfully taps into passionate sports fan communities by creating parody versions of team branding (e.g., "Liver Pooch"). This clever strategy allows them to leverage existing brand loyalty and recognition without navigating expensive and complex official licensing deals.
Instead of making a large, debt-heavy leap like buying a new property, founders facing a capacity bottleneck should identify the smallest possible step that meaningfully increases output. This could mean subletting space or a short-term lease to test new capacity before committing significant capital.
A skilled service provider's pricing should target an 80% profit margin, with only 20% allocated to cost of goods. This high margin is not just profit; it's the capital engine that allows the business to fund expansion, such as hiring staff and renting space, without taking on external debt.