Under The Radar - The role of neuro-transmitters in trends and brand-building

Looking at dopamine and endorphin and how you can apply it for your business

Contents

• Looking at the role of dopamine and endorphin in creating addictive products.

• Please note, this letter is best viewed in web format! As email may cut off parts from the bottom. Click on the title at the top and it will take you to the web version.

TRENDS DROP 📈

Click HERE for 30+ growing search trends in B2C!

If you click on the link above you can see all 30+ of the search charts. There is some discussion of selected ones below:

• Alcohol Free Gin - HEALTH CONSCIOUSNESS - Has played out in alcohol in multiple ways in the past few years (e.g. hard seltzers, ‘keto’ wine, ‘vegan’ wine, vegan beer, Dry January/Sober October, non-alcoholic beers and IPAs), no surprise to see it continuing. With more online ordering in Winter 2020/2021 driving the search interest up too.

• Always In Colour - Exeter-based premium menswear and heritage workwear.

• Butt Lifting Leggings - QUICK FIXES - ‘Scrunch butt’ trend from TikTok (Lauren Wolfe sent them viral). Anti-cellulite leggings that give your butt a lift. Its the same old situation of looking for convenient and quick-fix solutions in fitness and aesthetics (desk bikes, under desk treadmills, mewing, face yoga, BBL surgery, so on and so forth).

• Citrine Crystal - SPIRITUALITY (spirituality tends to increase in times of distress - along with vices) - Citrine is a yellow quartz that has been associated for centuries as possessing the healing properties of the sun, but it can also be greenish-yellow, brownish-yellow, or orange. Its purported healing powers—dates back centuries, to the time of the ancient Greeks. We mentioned the increase of ‘rising sign’ from horoscopes & astrology as well.

• CPS Counter - Clicks per second counter - usually designed to measure reflexes and speed with PC gaming.

• English to Somali - By 2001, the UK census reported 43,532 Somali-born residents, making the Somali community in Britain the largest Somali expatriate population in Europe. The Office for National Statistics (ONS) estimate of 2018 indicates that 108,000 Somalis live in the UK (>2x increase from 2001).

• Functional Strength Training - ALTERNATIVE FITNESS - With gyms shut, as occurred in March 2020 and November 2020 in the UK (and now January 2021), many less conventional exercise types have gained traction e.g. calisthenics/bodyweight resistance training. This has been covered extensively, everything from cycling to open water swimming (Dryrobe was a trend we covered a few months back) to jump rope and resistance bands as well as the development of home gyms.

• Hyperpigmentation Treatment - Hyperpigmentation results in flat, darkened patches of skin that can vary in size and colour. Treatment has been steadily increasing in search interest over the past 5 years. Sun exposure and UV rays as well as skin ageing are usually a big factor in dark spots.

• Is Rawhide Bad For Dogs - PET PARENTS - Rawhide bones and other edible chews can pose a choking and blockage risk. It is actually a bigger risk than contamination or digestive irritation. If your dog swallows large pieces of rawhide, the rawhide can get stuck in the oesophagus or other parts of the digestive tract.

• Karma Assassination Classroom (manga and anime series) - ANIME MACRO - If you look in Google Trends in the US and UK, anime, manga and manhwa interest has been booming for a while. We discussed this quite extensively HERE and HERE. Pinterest Trends’ tool shows some of the fanatic interest in anime and specific characters too. Part of the broader trend of the West adopting more elements of Far Eastern culture (has happened with K-beauty, K-pop, movies, Chinese medicine, TikTok/Musical.ly, Mukbang etc.)

• Reverse Holo Charizard - COLLECTIBLES/NOSTALGIA - Pokemon has been trending on the playground again and as an investible asset after Logan Paul dropped $216k on a sealed first edition 1999 base set and sold them all on a live stream @ $11k each. A few months back I mentioned the rapid growth of PSA grading. Nostalgia and remixing continues to be a powerful force across the spectrum, everything from movies to fashion. And it wouldn’t be surprising to see other influencers drive new nostalgia-led frenzies as well as introducing them to new generations.

  

• Signal Messenger - PRIVACY - Elon tweeted and people listened. In response to WhatsApp changing its privacy policy on February the 8th, many have flocked to Signal which has been getting north of 800,000 downloads a day.

  Elon Musk @elonmusk

  Use Signal

• Tik Tok Counter - Live TikTok follower counter.

• YouTube Automation - OUTSOURCING/DROP-SERVICING - ‘Instead of using videos specifically as a marketing tool, the automation business model focuses on creating viral videos that generate passive income for the channel’s owner. Essentially, it’s outsourcing (to various freelancers), where brands and personalities can hire someone else to handle developing video concepts, creating the videos, and optimising, uploading, and distributing them.’ Good interview @ Forbes with Caleb Boxx in the link above. ☝️ We discussed drop-servicing in one of the first letters back HERE.

Neuro-transmitters and addictive products

In prior weeks for Under The Radar subscribers, I’ve discussed how to use principles to become better at spotting trends and for thinking through what elements can make brands grow very quickly. Anyone who follows the letter knows I like looking at addictive products, brands and communities.

This was really crystallised somewhat with a discussion around The Seven Deadly Sins.

If you have a brand/movement that taps into one of these, everything else holding equal, it can grow very quickly, with limited ad spend + strong LTV users…because the sentiment or feeling they get from it is addictive.

We mentioned Parler (which has gained recent infamy) to subscribers last July - Parler tapped into WRATH (anger at perceived censorship and bias against conservatives), Parler was adding 1 million new users a week in mid-2020 largely due to this sentiment tapped into against Twitter and other platforms (augmented by influential right-wing voices like Trump’s son).

Credit Suisse and UBS conducted studies over the course of the 20th century and the past 30-40 years showing the robustness of ‘sin stocks’ (tobacco and alcohol were top performing industries). And, it should be noted, Domino’s was the 2nd top performing >$10 billion market cap stock of the 2010s (leveraging tech in the pizza delivery business - GLUTTONY).

Increase % is indexed against the stock price in late January 2010

Another framework to look at addictive things is the triggering of ‘happiness chemicals’/neuro-transmitters which are released in the brain when doing certain activities. TLDR - We get addicted to that release 👇

Many of the activities that trigger the release of some of these happiness chemicals are very similar for each one (or are produced at the same time), so I don’t cover serotonin or oxytocin here as I feel it will get repetitive. The principles are more important to understand vs. specific activities.

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Dopamine

Dopamine is an important chemical messenger in the brain that has many functions.

It’s involved in reward, motivation, memory, attention and even regulating body movements.

When dopamine is released in large amounts, it creates feelings of pleasure and reward, which motivates you to repeat a specific behaviour.

So how this applies in B2C 👇

A lot of us are not necessarily addicted to the things we buy, but rather to the thrill of the hunt.

MRI studies of brain activity suggest that surges in dopamine levels are linked much more with anticipation of an experience, rather than the actual experience.

We don’t need to delve too deeply into the science for how this can be a useful framework for thinking about what kind of brands, products, marketing activities can take off.

Click on the image to make it larger!

Consequently, feelings of wellbeing begin when a shopper just thinks about shopping.

This can occur days or even weeks before they even head to the store.

This influence of dopamine helps to explain the fascination with many massive mainstream phenomena including:

• Streetwear drops (anticipation of a new piece of gear/apparel) - this amongst other factors helped propel the likes of Supreme to be acquired by VF Corp (Vans, North Face and Timbaland) for $2.1 billion.

• Instagram - Not the whole story but became a $100 billion arm of Facebook (Bloomberg Intelligence Report 2018 valuation - hovering around 1/5th of FB’s market cap at one point) propelled by anticipation to enjoy a product (IRL or vicariously) an influencer is using, a destination someone has gone to, activity they are doing, restaurant they eat at.

• Apple - People await Apple’s keynote presentation weeks and months in advance. Think of other tech channels that build hype like Unbox Therapy. Apple’s 2020 WWDC had 22 million viewers. It should be noted - Apple’s trailers are homage to some of the best in the business at anticipation-led consumption (blockbuster movies).

And so on and so forth…

How you can take advantage of this? ⬇️

What are some tactics you can use to create that dopamine spike with less certainty of reward?

1. Drops - Drop culture has been mainstream a long time but there are constantly new iterations of it that can give you creative ideas for your own brand or

   • Byredo’s collaboration with Travis Scott on its Space Rage fragrance and candle launched on November 30th 2020, was released with no announcement beforehand and sold out immediately (obviously Scott’s star power).

   • Can be location specific or hidden on site/product - treasure-hunts using AR filters (Snapchat/IG). Time-sensitive for the filters (e.g. only work for 24 hours). e.g. ‘we hid a code on these old products’ - people rush to site to buy those too to get the chance to use code to compete for a product about to drop. AR filter for unboxing, reveals a game to play for a new drop?

   • Rothy’s, pre-pandemic, was doing exclusive drops for its San Francisco location, providing products people couldn’t get online.

   • Members only events or digital memberships required to access luxury products or rare collectibles for example. NTWRK app is an example of this.

2. Gamified elements - make people work for an item in a way that builds up anticipation, like playing a game.

   • Fred Perry promoted its collection in partnership with designer Raf Simons using a Google street view-like gamified experience. By exploring a virtual map of a seaside suburban town, customers can spot and click people wearing the collection of apparel to access the purchase link—as well as stumble upon secret surprises.

   • Zortee's platform - works by offering access to exclusive discounts that are obtained by spinning a roulette wheel on the bottom of the page to try your luck for the highest amount of money to be taken off. Users can keep spinning to try their luck or purchase the item when they feel ready, but must do so before someone else buys it to increase the game-oriented nature of the experience.

     

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Endorphin

‘The Pain Killer’

Endorphins are chemical messengers in your body, released by both your central nervous system and your pituitary gland.

2010 research suggests endorphins play an important part in your body’s ability to manage pain and experience pleasure.

Endorphin release generally happens when you:

• are injured and try to alleviate an injury

• experience and try to alleviate stress

• activate your natural reward system with activities like eating, exercising, or sex

Endorphin plays a role in many big trends that have played out in search interest over the past 5 years for example:

Fitness communities in particular are a good format to deploy as a brand.

I’ve discussed the role of community with fitness extensively before, it is a constantly repeating pattern. And was on the list of maxims for the start of 2021. If you layer on the community aspect the network effects increase the impact of the endorphin release vs. solo exercise (e.g. ‘Cara’ in a running group vs. Cara running on her own every day).

One example loop for triggering endorphin releases is:

1. Build a community in fitness. An early stage example of this I like at the moment is Iron Wolf, a US marine, who started a high rep burpee and calisthenics channel on YouTube. It has hit 90k followers recently (major growth during lockdown in early part of 2020). More importantly, he has a FB Group with 1.8k members where they complete challenges in a very dedicated manner (they all did a December challenge together @ different fitness levels). There’s also a cult-like figure at the top (always helps for something to take off).

2. Once a community is there (1k members or so is usually a good starting point but it can be less depending on the niche) it starts to become self-perpetuating. Members interact with each other, get more invested in doing workouts and finishing challenges to better themselves (show off and compete against each other - PRIDE). In Iron Wolf’s case, people were completing workouts outside as well (sunlight exposure) - which furthers the neuro-transmitter effects.

3. The feeling of completing tough workouts produces endorphins and loops back into part 2 in a continuous cycle.

How you can take advantage of this? ⬇️

1. Applying tech for a problem in a space that either taps into a neuro-transmitter or the seven sins is a good approach. There are many ways to come up with ideas for this, it can be layering on a proven business model (e.g. Tinder/AirBnB/Uber - good list of B2C models from Fred Wilson HERE), look at issues in relevant forums (e.g. r/massage sub-reddit), search in Google News, Twitter.

   • e.g. Uber applied to the massage space. 👇

     The Soothe app combines my love of luxury with my quest for convenience. Here's how it works: You download the app for free, and choose which type of massage you want: Swedish, deep tissue, sports, or prenatal, any of which you can book as a couples' massage. Then you select the time and location (Soothe is available in 45 different cities around the U.S.). You can book a massage well in advance or have someone show up in as little as an hour. Then, just like Uber, the app matches you with one of Soothe's 7000 certified massage therapists, and they turn up wherever you are: your home, hotel room, office, anywhere. 

     

2. Limited editions - aromatherapy and baths help with endorphin production - e.g. Lush have introduced their Valentine’s collection for February 2021 with a focus on bath bombs, massage bars and shower gels.

3. Portability OR comfort - not everyone has time to go and get a deep tissue massage for 30/60/90 minutes after completing a tough workout. Theragun/Hypervolt and players in the massage gun space recognised the shortcomings of foam rollers and time savings from handheld devices. Solution was more portable AND time-saving. Alternatively you can go the other way and introduce an endorphin-boosting solution into the home or where you spend a lot of time e.g. X-HMT Heat and Massage Chair.

4. Applying tech to an offline dynamic - OnlyFans partially leveraged the dynamic of tipping a stripper at the club/’simping’ IRL and moved it online. There are many legacy or offline businesses where this can happen. Peloton helped connect hundreds of thousands of stationary bikes + other equipment worldwide in a COMMUNITY. Mirror Workout (acquired by Lululemon for $500m back in mid-2020) is trying to do the same for at-home workouts more generally. What about tech for other areas of fitness e.g. powerlifting/bodybuilding where people compare goals or workout and compete together?

5. Applying a health or ethical twist to chocolate or wine? Whatever is big in the Zeitgeist (a couple years back, perhaps vegan or keto copy on the front), some kind of wellness or mental health support message now on the front? (Considering the macro trends for the 2020s if I was interested in the chocolate space, I would strongly consider starting a brand with mental health support as the key messaging).

   • Ethics is an interesting one. Chocolate -> Tony’s Chocolonely is the obvious player here outside of traditional ones like Green & Black. If you look through indie chocolate players, the space is dominated by commitments to pay 2-3x Fairtrade prices, work directly with farmers or use recycled packaging. What else in the supply chain can be improved? Giving back to local community type of initiatives? Other kinds of re-use? - Chocolate box and biscuit trays (e.g. Ferrero Rocher) might be a good target for example.

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