Interview Summary

The transcript contained two interviews. The first was with Simi Belo, the founder of the hair product Simiweave. She discussed the origins of her product, which was born from personal necessity, and her journey from creating prototypes to commercialising the idea through a licensing model. She detailed her strategic approach to finding partners, her unique sales pitch, and the significant emotional and financial challenges she faced with intellectual property infringement from larger companies. Ultimately, she highlighted the power of her loyal customer base in sustaining her business.

The second interview was with Uday Phadke, an entrepreneur in residence at the Cambridge Judge Business School. He spoke about his five-year research project that challenged traditional models of innovation diffusion, such as Everett Rogers' theory. He introduced his "triple chasm model," which identified that innovation is not constant and that there are significant discontinuities in a product's journey to market maturity. He also explained the business metaphors from his book: "Camels" (sustainable, steady businesses), "Tigers" (high-growth, resource-intensive firms), and "Unicorns" (high-valuation, high-risk ventures often lacking a sustainable model).

Interviewee Backgrounds

Simi Belo was the MD and founder of Simiweave. She had a professional background in marketing and public relations and noted that she came from a family of lawyers, which provided her with valuable insight into the legal and commercial aspects of launching and protecting her product.

Uday Phadke was an entrepreneur in residence at the Cambridge Judge Business School. He had 30 years of experience building technology companies and had conducted a formal, five-year research program into entrepreneurialism and innovation.

 

Key Points

Simi Belo

  • The idea for Simiweave came from her own personal need for a more realistic and convenient hair extension solution while at boarding school.
  • She opted for a licensing business model over manufacturing and distributing herself, aiming to earn royalties by "renting out" her intellectual property rights.
  • Her sales pitch to potential licensees was highly effective; she would demonstrate the product's realism by removing the one she was wearing, which consistently shocked and impressed decision-makers.
  • She faced significant challenges with larger companies copying her patented product and found the legal costs of enforcing her rights to be prohibitively expensive.
  • Despite infringement issues, her business was sustained by a loyal customer base and powerful word-of-mouth marketing, with each customer bringing in an average of seven new ones.

Uday Phadke

  • His research identified that innovation is not a constant force throughout a product's lifecycle, contrary to assumptions in earlier models.
  • He discovered three distinct "breaks" or "discontinuities" in the innovation diffusion curve, which he termed the "triple chasm model."
  • He found that the journey to market maturity took much longer than expected, noting that halfway through the time journey, a company may have only reached 10% of its potential customers.
  • He categorised companies using animal metaphors: Camels (most businesses, which grow sustainably on earned fuel), Tigers (high-promise firms that use significant resources for accelerated growth), and Unicorns (mythical, high-risk firms with high valuations but no sustainable business model).

 

Transcript

Transcripts are auto-generated.

 

Announcer (00:00):
The Marketing Review with Cambridge Marketing Colleges, visit marketingcollege.com to see our courses.

Kiran Kapur, host (00:10):
 Hello and welcome to The Marketing Review with Cambridge Marketing Colleges. I'm Kiran Kapur. We have a very practical show today. My first interviewee, Simi Belo, is truly inspirational and is a creator of an innovative hair product. And she talks to us about how she got the idea, how she then licenced the product, sold the product around the world, and touches a little bit on her fights to protect her own copyright.

Announcer (00:34):
The marketing review from Star Radio with Kiran Kapur.

Kiran Kapur, host (00:39):
Simi, you have a massive background and obviously a very successful background. Can you tell me a little bit about how you came up with the idea of Simiweave?

Simi Belo, SimiWeave (00:47):
Oh, goodness me. For me, it really was necessity as a mother of invention. It was a product I needed myself desperately. So I came up with the idea, I think really for selfish reasons. I was in boarding school in the middle of nowhere and I had to learn how to look after my hair myself, which wasn't a mean feat at all. So I learned how to plat my own hair. I learned to do all kinds of different things for my hair, but I was always struggling with doing my hair in such a way where it looked very realistic when it came to hair extension. So I experimented with wigs and weaves and all the different products out there. And they look great, they look real enough, but I wanted that sort of ultimate realistic looking hairline because you know with wigs, there's always something that gives a game away, I think, anyway. There's always something that you can spot a wig a mile away.

Kiran Kapur, host (01:38):
So you obviously came up with the idea and you presumably used it yourself. So how did that you go from using it yourself to launching it as a business?

Simi Belo, SimiWeave (01:45):
Well, that was the thing. When I came up with the idea, I actually created a few prototypes myself that I actually wore for about two to three years without telling anybody. And I didn't do anything about it. So many people, when I did tell people, actually I'm wearing hair extensions and they were shocked. I thought, hang on, I'm onto something. They do look really real. I am absolutely fooling everyone and I know how quickly they are, how quick and easy and convenient they are. I can do it myself at home and how cheap it is. Maybe I'm onto something here. So I did a little bit of research and realised that yes, I wasn't the only one who wanted something like my semi-weave that ticks all the boxes. So I sat down, sketched out the drawing and I did a lot of research. I found out where all the different factories or producers of hair products were as it were, mostly in the Far East.

(02:32):
So I contacted a whole load of them and just asked, could you make this product? I got them to sign NDAs. Could you make this product? How much would it cost? What's the quantity? And at the same time I started writing a business plan. But even all through that, I kept thinking, "shall I, shall I not?" It was kind of, "do I want to go down this route? Do I not?" Maybe I should just make a few for myself and that would be it. Do I actually want to make it into a business? But it just kind of picked up from there. After getting these factories in the Far East to sign NDAs, I literally did jump on a plane and I went out to see a few of them. And then when I saw how they made the products, I just got really excited about the whole thing and I really realised the potential and I thought, yeah, I'm going to do this as a business.

(03:17):
So I came back, finished off my business plan, got a proper prototype made. By then I was already applying for all the intellectual property rights and it just kind of really snowballed from there. It just all happened very, very quickly. But I mean that decision, it literally was an overnight decision. When I did all my market research and I saw the potential for the product and realised I wasn't the only one that wanted something like

Kiran Kapur, host (03:42):
This. So there's quite a few things though. One is, yes, you got on a plane in the Far East and you say chiefly, I got them to the sign for non-disclosure agreements, but actually that's something lots of people worry about is the idea that their ideas will be stolen. So how guaranteed were your non-disclosure agreements?

Simi Belo, SimiWeave (04:01):
Let me just go back a step. I had a marketing background anyway. I'd been working in PR, heading up PR departments and marketing departments. And luckily I also come from a family of lawyers. So when I say I did the research, I kind of researched across the board. I looked into the whole issue of intellectual property rights and so on. And also when I was writing my business plan, I weighed up all the different ways of commercialising the idea. Did I want to go down the licencing route? Did I not? Did I want to manufacture myself? Did I want to distribute myself? And I decided upon a licencing business model. And I knew for a licencing business model, I needed to have intellectual property rights. You need to have the rights to literally rent out to get your royalties.

(04:41):
So those, I've glossed over that a little bit, but all those decisions were going on with me conducting the market research, with my thought process, with me putting together the business plan. And I spoke to a few different law firms and everything indicated that yes, I needed to, if I wanted to make money from royalties, I did need to have the rights to rent out as it were. And a lot of people I spoke to thought I was mad and they were saying, "You're only going to get a percentage. Why only get a percentage when you can get the whole lot if you do the whole lot yourself." But I did a little bit of feasibility studies and all that kind of stuff. And I realised that, hang on a second, when you weigh up the risks and also, I did not necessarily want to set up my own hair extensions company.

(05:24):
I liked the idea of having my own line of hair extensions, but there was quite a lot involved. So I decided in the end, yes, a licencing model would suit me. I need to get the intellectual property right for that and I will only get a percentage of sales, but you know what, they're the ones that are going to be doing all the manufacturing and sales and distribution. So it was something that suited me.

Kiran Kapur, host (05:43):
You then approach companies and you licence your product, but your product is called Simiweave. So you presumably took it as the, here is the concept and here is the brand. Is that how it works?

Simi Belo, SimiWeave (05:54):
That's right. Once I had some prototypes made, I actually went into manufacturing. I produced a few to show people, these are the varieties. You can have the parting on the left, you can have the parking centre, right, different lengths, different curlyneir, straighteners, and so on. So I had a handful made and then the research continued. I narrowed down which companies I'd like to work for in an ideal world, work with rather, sorry, in ideal world. And that was all based on their prominence in the market, the strength of their brands, whether they had already had licencing agreements before and how they handle those, having sub products under their brands, their distribution cloud, their price points. I weighed up all the different elements and drew up my hit list of companies I would really, really want to work with. And I got on the phone and I got on emails and I got on the plane and I went around and I saw a few companies getting everybody to sign NDAs at every point, took the products along, demonstrated it.

(06:55):
I was my own target audience, so that helped a lot. It was a product I wanted desperately, and once I created my own prototypes, I was wearing it every day anyway. So going along and doing the demonstration really worked for me, I would go in and I would explain the product and describe the product. And because at the time it was so visionary, you didn't have all these U-park copies in the market and you didn't have the other products that you do now like the lace front wigs. So we're going back 13, 14 years here. So it was quite revolutionary. So I'd explain the product to my target audience and quite often that the decision makers in these hair extension companies were men, not women, which surprised me. I thought it'd be all women behind the scenes. So it was a lot of men who didn't wear hair extensions themselves.

(07:39):
I'd explain the product. They'd kind of sit there with their eyes glazed over as if "what she's talking about.?" I deliberately didn't show them any samples at that point. And then what I would do is actually remove mine off my head and that's when their jaws would drop to the ground because they just did not realise I was wearing one.

Kiran Kapur, host (07:54):
That's very clever. How did you come up with that as an idea? Did you sort of plan it beforehand or did it happen spontaneously the first time?

Simi Belo, SimiWeave (08:01):
It was just something ... It happened with my friends. As I said, when I created my own prototypes and ready-made wigs when I cut out the U-shaped gap and I wore them myself and then I started talking to a few friends and they were so surprised. I'd been wearing one for a few years without telling them. They really thought it had been my own hair. So that kind of reveal moment, it was just such an impact. I knew that I had to be part of my sales pitch where I actually just took it off and then people were like, "Oh my God, now I get it. Oh my God, now I see how it works. Now I see what you're talking about".

Kiran Kapur, host (08:35):
Having then persuaded the companies, the guess they wanted to work with you and you've done this great reveal and I've got a lovely mental image of you doing that now. What then happens? Because I think a lot of people listening to this would think, well, that's really exciting, but then what happens? How do you keep control over the licencing? You're now selling it to a bigger company. Do they try and buy you out? Do they try and take over? How does it work?

Simi Belo, SimiWeave (08:58):
Well, that's kind of part of the research beforehand. I went for companies where I would have a certain element of control. I went for companies that had already gone into licencing agreements with other sub brands and treated those brands well and those brands managed to have a profile within their overall portfolio. So for example, in the US, a company I signed with, they were a catalogue distribution company. They actually sold all their hair pieces through catalogues. They published catalogue every month and they sent it out in the mail and they had a huge website. So I went with them rather than go for a company that had distribution into the shops, which a lot of people thought, "That's crazy. Why don't you go straight into the shops?" And I thought, but hang on, I don't live in the US, so how do I keep an eye on that?

(09:39):
At least for the catalogue company, they're going to send me my pages of the catalogue to approve every month. So there is some degree of control. So I kind of did it that way in a very kind of cautious way. I chose the business partners very cautiously. I made sure there was some synergy between the way they worked and how they operated. And of course the legal aspect came in, again, coming from a family of lawyers helped a lot.

(10:03):
I was prepped on the questions to ask. I made sure the contracts we put in place covered all the areas I wanted it to cover in terms of having the rights to audit their books should I need to every quarter, all the different things. How often do you want your royalties to be paid, the advance, the approvals of the pages and all the different elements that I was aware that I wanted. I tried to make sure it was in the contract, but then of course, when it gets to the legal stage, there is negotiation. It wasn't straightforward at all. I did have to change law firms a couple of times. I did have some hiccups with one or two of the companies I wanted to work with. The deal didn't go ahead or they were taking too long. So it wasn't plain sailing by any stretch of the imagination at all.

(10:52):
It's just when I talk about it with hindsight now, it seems to have been at the time, it did seem to kind of drag on. It was painfully slow at points. It was like pulling teeth. I was very impatient. I just want to get on with it.

(11:06):
But when I look back, if you look at, it took a period of the whole signing up licensees. The first few I achieved within the first year, and then the next few, it took another three to four years to get a licensee in South Africa, in the Caribbean. Those took a bit longer. And then in some other places in the world, I actually went with agents rather than licensees and so on.

Kiran Kapur, host (11:30):
And I think one of the questions that people are going to wonder is, you said you've tied down the intellectual property and the patents and trademarks, but you also said that now there are a lot of copies around. So is that just flatteries and sincerest form of imitations most sincerest form of flattery? Or do you feel that people are stealing your marketplace?

Simi Belo, SimiWeave (11:49):
That's a really, really interesting one because I spent a fortune on my intellectual property rights and I spent a lot of time and energy on it and I spent a lot of time with lawyers and filling in forms and doing the descriptions and everything and graphic designers to really pinpoint it. And that was really a long kind of labour of love aspect. I don't regret going down that route because if I didn't have intellectual property rights, I wouldn't have had anything to rent out to get the royalties. Having said that, I was gutted to then discover that even if you have the rights, the onus are still on you to take the infringes to court to enforce your rights. So I found out, I mean, at first the copies, I mean the copies started very, very early on and luckily there were one or two individual stylists and a strong letter from a lawyer usually stopped them.

(12:41):
When it became the bigger brands who should have known better, especially the ones I had actually approached at some point for partnership, that's when it really became very painful, very upsetting. I really did feel like someone had stolen my baby. I had a lot of sleepless nights over it. I sat down with the lawyers to work out how to go about taking them to court and so on. And the figures involved were just so astronomical.

Kiran Kapur, host (13:07):
And of course the big brands, they've got deeper pockets. Yes.

Simi Belo, SimiWeave (13:09):
Yes, exactly. Also, you've got to be very careful exactly what case you're filing because they could counter through you. And I don't mind admitting I had quite a few months of complete meltdown where I was just absolutely gutted that so many people were copying my products and there was very little I could do about it. As I said, the smaller indiv"iduals are actually much more ethical. They will stop once they realise ... I mean, a lot of people copied it without realising someone owned the rights. They just saw it on the market and just thought, "Oh, what a great idea. Let me make my own version". And once you pointed out to them, the smaller companies were actually quite ethical. It was a bigger brand that shocked me. And I did have a meltdown stage where I just couldn't move forward. I was just absolutely gutted.

(13:52):
What am I going to do? I can't believe it. They're copying me. And then what actually happened, I realised that regardless of the copies, I still had a huge database of loyal customers.

(14:01):
After all the hard work I've done in the past, there's still a load of people who will pay a bit extra because all the copy versions tend to be cheaper than mine because they've not had to spend all that money on intellectual property rights, have they? It's a lot cheaper if you just copy someone else's product. So I found out that a lot of people will actually, they do appreciate the value in the original. They will pay a bit extra for the original. And I had my database of loyal customers and right from the beginning when we launched, we found that every single customer who buys this product and wears it, they bring at least seven other customers because when they show it to their friends, their cousins, their sisters, their colleagues, their mom, whatever, and everybody sees it in real life. I mean, it's still a bit hard to describe over the phone, on the radio, on the internet.

(14:49):
You still really have to see it in real life, but anybody that sees it in real life kind of generates seven new customers.

Kiran Kapur, host (14:55):
Yeah. Which is an amazing statistic in itself. Yes.

Simi Belo, SimiWeave (14:58):
Oh yes, yes. Because when I did launch, even before the copies, trying to get out there to every single exhibition was impossible,

(15:06):
Trying to demonstrate it to every single person was impossible. I had to rely on magazine articles. I had to rely on internet, even with videos on the internet, even with all of that, you still have to see it in real life. So I did find that thanks to my loyal database who were with me right from the beginning, they were still bringing on new customers. Word was still spreading. People still saw the value in the original people who went to my website and read the story and realised this is your original, the patented original. It's been a labour of love. I've put in so many hours and all my money and this has been my baby.

Kiran Kapur, host (15:45):
Sibi Bello, who's the MD and founder of Simiweave, and if you want to see a Simiweave, you can find it at Simi, that's S-I-M-I-Weave.com. The

Announcer (15:54):
Marketing Review. With Cambridge Marketing Colleges. The Marketing Review with Cambridge Marketing College, teaching marketing and PR around the world.

Kiran Kapur, host (16:04):
And now we turn to Uday Phadke who is an Entrepreneur in Residence at the Cambridge Judge Business School. And Uday has done a lot of research into entrepreneurialism and innovation. Uday talks to guest interviewer, Charles Nixon, and Charles began by asking Uday about innovation, and then they went on to discuss Uday's forthcoming book, 'Camels, Tigers, and Unicorns'.

Announcer (16:28):
The Marketing Review with Cambridge Marketing College, teaching marketing and PR around the world.

Charles Nixon, guest interviewer (16:37):
Your research has been going on for quite a while, hasn't it?

Uday Phadke, author of Camels, Tigers and Unicorns (16:38):
Yeah. So I suppose the number of different timescales you can look at this from. The first is to say this research has been going on for about 30 years, which is the length of time I've been working on building technology companies. But more formally, this particular focused period has been over the five-year period from 2011. That was the time I joined the Business School in Cambridge, the Judge Business School as an Entrepreneur in Residence,

(17:11):
And so that served as the impetus to try and bring together a group of people who would look at the whole challenge systematically. And so that's what we did. So this particular programme you could say is about five years old, and the last year and a half have been quite intense because the first two, three years were spent largely collecting a lot of data. And then there's been a period of analysis and testing of hypothesis and data processing, doing some diffusion maths on it and looking at previous literature to see how consistent it was with what we've previously known to be the facts.

Charles Nixon, guest interviewer (17:55):
And you've come up with a triple chasm model.

Uday Phadke, author of Camels, Tigers and Unicorns (17:58):
Yeah. So because this show is aimed for people who are interested in marketing, a little bit of history is probably in order.

Charles Nixon, guest interviewer (18:07):
Please do.

Uday Phadke, author of Camels, Tigers and Unicorns (18:08):
There was a man called Everett Rogers, who in 1960s wrote a very, very famous book about segmenting customers, and he was the man who invented the five categories of customers, which are referred to quite a lot in marketing literature. The idea of the people who were early adopters, so he had three categories. He had a number of categories. So his first category was the enthusiasts. I'm trying to think of the exact word for that. It'll come back to me. Innovators. Yeah, innovators. Thank you, because of course you're a marketing manager. So he identified innovators who were the early users of a product, followed by the early adopters, followed by the early majority. And of course, he was postulating a bell curve, and so then he had the late majority and the laggards, the other side, if you like, or the bell curve. And so that's a starting point was really what we were working with because one of his assumptions was that innovation stays constant across this journey.

(19:19):
And so when we started to analyse our data, we realised there were a number of important differences. One was that we became very clear to us that innovation wasn't a constant, and there were periods at which the rate of innovation increased before falling off again. So that was one key thing, which is a realisation that innovation couldn't be treated as a constant. The second thing was that all of the Rogers work and subsequent work by this falling in his wake looked at this process, this diffusion based innovation process as being continuous. And we, to our surprise, discovered there were actually three breaks in this curve, if you want to call it that. So the three discontinuities, which surprised us initially, and subsequently on detailed examination, we began to see the reason behind these three discontinuities. And so the second key point to make is there these discontinuities.

(20:17):
The third key discovery was that the rate of change of customers in between these discontinuities shifted significantly post-discontinuities. So in other words, it couldn't be modelled by a single diffusion curve equation. And in fact, we had segments of the curve with different diffusion parameters. And for those who are interested in this subject, the diffusion equation as subsequently developed by BAS had two key variables. One was the external diffusion curficient and the other's the internal difficient coefficient, normally referred to as P&Q. And what we discovered that P&Q actually changed as this journey progressed.

Charles Nixon, guest interviewer (20:59):
So is this the ability of the marketplace to absorb innovation?

Uday Phadke, author of Camels, Tigers and Unicorns (21:03):
Yeah. So it's two things. One is the ability of the marketplace to absorb innovation, and the other is the ability of the people pushing the product to influence the outcome, because there's this tension between these two things, which drives the shape of this curve. And so that was our understanding. So that's, if you like, going back to the beginning of this thing, really falling on from Rogers. And there were several other things which became quite interesting for us as well, which is that the Rogers curve had a certain set of assumptions about the rate of which the transitions happened in this journey. And what we discovered was that it takes much, much longer to make the first part of the journey than it does to make the second part the journey.

(21:53):
And that's quite important, the implications of this are very significant because it shows that halfway along in time, if you like, in your journey towards going to a full maturity, halfway along that journey in time, you've probably only reached 10% of your customers. So the book is called Camels, Tigers and Unicorns, and it was really an attempt to build on the popular zeitgeist at the moment for the using animals in order to describe various features, because the idea is that complex ideas can be presented more simply by using animal metaphors. And so I'll start with unicorns because everybody knows that unicorns are mythical creatures, but it's the term that's actually used by mainly large investors, venture capital investors, to refer to firms which have very high growth potential and therefore are firms that should be coveted by investors. But in our context, the reason we like to use the word unicorns is because unicorns are firms which consume huge amounts of resources in the absence of any sustainable business model.

(23:11):
So people basically are placing a very high risk bet which says, "I think this could be worth a lot in the future, but I have very little evidence to support."

Charles Nixon, guest interviewer (23:19):
These are many of the social media companies.

Uday Phadke, author of Camels, Tigers and Unicorns (23:22):
Yeah, many of them are like that and they have these ridiculous evaluations and people in fact run league tables saying, "Oh look, we created a hundred unicorns." The interesting thing, of course, is the unicorn's valuation is based on some private assessment of the net worth of the company by private investors. So there's no public justification or listing of a price. So it's completely arbitrary, but it's used as a measure by some people to say, "Aren't we doing great?"

Charles Nixon, guest interviewer (23:55):
The other two are actually not mythical.

Uday Phadke, author of Camels, Tigers and Unicorns (23:58):
No, and so camels, camels is what most firms and businesses are. Camels, as we all know, are creatures that are designed for the terrain they operate in. They take their time and they, as they travel across harsh terrain, they go from oasis to oasis where they refuel and make the journey. So the idea of a camel which is taking a patient approach based on very low relative resource consumption in order to reach a goal is one that resonates, will resonate for most people who build startup businesses and grow them, hence they use the word camels.

Charles Nixon, guest interviewer (24:37):
Go as far as we can on the resources that we've got.

Uday Phadke, author of Camels, Tigers and Unicorns (24:39):
Precisely. Yes, precisely. Tigers, on the other hand, are adapted for working in environments where they are generally ... They consume larger amounts of resource, so animal kingdom, tigers. So in our context, we see tigers as those firms which have high promise, but actually are able to attract significant financial resources and therefore other resources on the back of that in order to achieve accelerated growth. And so if you want to summarise in our view, camels are the steady businesses that largely make the journey under earned fuel and many of them may not be stellar successes, but most of them succeed in some shape or form. Tigers are businesses that consume large amounts of resources and there's a bigger prize in terms of achieving things. And when they're successful, they can be very successful. And as for unicorns, they're mythical creatures.

Charles Nixon, guest interviewer (25:37):
Thank you very much indeed, Uday. That was Uday Phadke from Cartesia. Thank you very much, indeed.

Announcer (25:43):
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