The biggest asset for B2C startups
Startups spend a lot of effort & money on marketing. But I think B2C startups globally that have IPO’d in the last few years have ignored one of their biggest assets—an opportunity to turn millions of retail shareholders with influence on social media into brand ambassadors.
From the time a founder raises money from VCs and PE, they are primed to think about maximizing valuations. This means building a narrative that can price in the best-case outcome for the business. But what’s needed to do well as a listed business is different.
To do well is to create wealth with the least volatility. Sharp falls tend to spook retail investors; they panic and exit at lows. So, slow compounding for the long term, not max valuation in the short term. That means underselling and overdelivering, not the other way around.
Setting right expectations, being transparent, & not overselling are great ways to reduce the volatility of the stock price pre & post-IPO.
Doing this well can make shareholders feel like owners & help reduce customer acquisition costs, the biggest cost for B2C businesses.