If Costco & Disneyland had a baby, you'd get Pinduoduo.
A discount online shopping experience littered with contests & coupons.
490 million MAUs.
$8.5 billion in 2020 revenue.
14% of China's e-commerce market.
Introducing The 50.
Where I share the story and lessons of a top 50 largest company in the world.
Time for #1.
This company went from 0 to $200bn in 5.5 years...
Let's dive in👇
If Costco & Disneyland had a baby, you'd get Pinduoduo.
A discount online shopping experience littered with contests & coupons.
490 million MAUs.
$8.5 billion in 2020 revenue.
14% of China's e-commerce market.
Pinduoduo was founded in 2015!
It IPOd in 2018.
The company 119x'ed its revenue in just 6 years.
This is where my fascination lies.
And to understand Pinduoduo, we must understand its fascinating founder.
Probably haven't heard of him, but absolutely worth knowing.
The 41-year-old internet entrepreneur is the Founder & CEO of Pinduoduo.
He's #28 on the world's richest list ($50bn).
He attended Wisconsin for college and joined a small tech co after graduation called...Google.
3 years after joining, he left Google to become an entrepreneur.
Let's pause.
It's important to acknowledge that Colin matched intelligence with grit & great networking early career.
In his first 25 years of life, he received direct mentorship from 6 billionaires(!)
Bill Gates - Microsoft
William Ding - NetEase
Larry Page - Google
Duan Yong Ping - BBK
Warren Buffett - Berkshire Hathaway
Pony Ma - Tencent
Colin decides to start an e-commerce business to ride two major Chinese trends:
1) rising consumption
2) rising income of the middle class
He starts Ouku, a consumer electronics and home appliance site. Within 3 years, he sells it for $2.2 million.
A pattern is developing.
Each of Colin’s experiences, while unique, is creating a perfect recipe to be the perfect founder of Pinduoduo.
So far, Colin has sold goods at scale and experienced the ins and outs of e-commerce platforms.
All that was left was bringing Disneyland (or fun & gamification) to e-commerce, which his next experience would give him.
It was this experience of building games on top of WeChat, one of China’s superapps, that Huang landed on the idea of social e-commerce.
In 2015, Colin launched PinHaoHuo, "real world Farmville."
He created a marketplace on WeChat, where users could buy produce from farmers and shoppers could snag discounts by referring friends to buy as well.
Gamification of shopping was the great unlock.
It was a marketplace where any merchant could list goods, hold inventory and fulfill orders.
This model was more sustainable and exposed the company to less risk.
How did they grow from 0 to $200 billion in 6 years?
Three lessons:
1) Audience
2) Product/Pricing
3) Marketing
Pinduoduo obsessed over the forgotten citizens of Tier 3 and 4 cities in China.
More specifically, women between the ages of 25 & 35.
These consumers account for 60% of spending growth in China and have proven to be incredibly engaged with the platform.
The platform focuses on essentials like perishables, clothing, and their best seller: tissues.
The product is also built for browsing not searching.
More TikTok, less Amazon.
This lets them get away with longer shipping times.
Built into Pinduoduo is the ability to earn up to 90% discounts on goods through group buying.
For every good, you see two prices.
The individual price could be $4.
The group price could be $1.90.
To get $1.90 you need to recruit others to buy.
In an effort to “win the game,” millions of Pinduoduo loyalists solicit friends & family to buy with them.
There’s even a feature called Price Chop. If you get enough people, you pay zero.
And that friends is the story of Colin Huang and Pinduoduo.
Listen on Apple: https://t.co/IYOrfkeuR1
Listen on Spotify: https://t.co/UdEBNxtr60
https://t.co/j3EFOe77gZ
More from Alex Lieberman ☕️
Introducing "The Balloon Effect"
Many businesses & creators have experienced a similar pattern of success.
From @MrBeastYT and @MorningBrew to @oatly and @Rovio.
Let's break down what "The Balloon Effect" is and examples of it in real life.
Keep reading 👇
1/ What is "The Balloon Effect"?
It is a particular pattern of growth.
It is not Instagram's growth trajectory.
It is not https://t.co/5axsTUKek6's growth trajectory.
"The Balloon Effect" is defined by several years of hard work & grit complemented by slow, linear growth.
2/ And then one day, one month, or one quarter...everything changes.
A business hits a tipping point and its trajectory shifts entirely.
Gradual growth turns to exponential growth & your brand and your size explode.
Like a step function.
3/ Now, you're probably wondering.
Why is it called "The Balloon Effect"?
Because filling/popping a water balloon follows the exact pattern I just described (and so many businesses experience).
Long unsexy slog 👉 Exponential tipping point.
4/ Initially, you turn on the faucet & water takes up space in the empty balloon.
Through effort you open the faucet, yet the results are unexciting.
But it's what must be done for water (or growth) to happen at all.
It's not sexy, but it's necessary.
Many businesses & creators have experienced a similar pattern of success.
From @MrBeastYT and @MorningBrew to @oatly and @Rovio.
Let's break down what "The Balloon Effect" is and examples of it in real life.
Keep reading 👇
1/ What is "The Balloon Effect"?
It is a particular pattern of growth.
It is not Instagram's growth trajectory.
It is not https://t.co/5axsTUKek6's growth trajectory.
"The Balloon Effect" is defined by several years of hard work & grit complemented by slow, linear growth.
2/ And then one day, one month, or one quarter...everything changes.
A business hits a tipping point and its trajectory shifts entirely.
Gradual growth turns to exponential growth & your brand and your size explode.
Like a step function.
3/ Now, you're probably wondering.
Why is it called "The Balloon Effect"?
Because filling/popping a water balloon follows the exact pattern I just described (and so many businesses experience).
Long unsexy slog 👉 Exponential tipping point.
4/ Initially, you turn on the faucet & water takes up space in the empty balloon.
Through effort you open the faucet, yet the results are unexciting.
But it's what must be done for water (or growth) to happen at all.
It's not sexy, but it's necessary.
