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Avoid this ONE Common Mistake All Brands Make if You Want a F*CKING HUGE EXIT - Revealing Giles Brook’s Biggest Secret

Avoid this ONE Common Mistake All Brands Make if You Want a F*CKING HUGE EXIT - Revealing Giles Brook’s Biggest Secret

Dan Pope
December 06, 2024

Look. Sit down. Look at me. Oi. Right in the eye. You. Yes you. YES YOU!!!. Don’t go anywhere. Answer this one question.

Do you want to make a FUCK LOAD OF MONEY?

Why are we scared to say this in the UK?

Look, C’mon pal, let’s not beat around the bush.

Founders you. Yes YOU. YOU reading this. YOU want massive fucking exit.

For some turgidly perplexing reason it’s sordidly-uncouth, repugnantly-filthy, ICK-inducingly rank to say “I wanna make some COIN boiiiii”

Akin to letting out a Wasabi Katsu Curry guff on the 5.67pm Waterloo to Winchester train.

Let’s just say it.

Lets hold hands
All together now
J’adoreeeeeeeeeeeeeeeeeeeeee a pound coin.

Founders cloak their ambitions in it’s-about-the journey-not-the-destination-blankets.

Surreptitiously hide their $$$$ Dreams behind B-Corp Bollocks Botox

Today, it’s easier to get a B-Corp than a Lego Land driving licence (that’s for another newsletter)

Let’s just say you DO want a WHOPPA EXIT.

Pretty-pleaseeeeeeeeee AVOID this ONE common mistake pretty much every brand makes that Giles Brook taught me on our latest poddy.

The Multiples of Revenue Hidden Curse

The common way to exit a brand was a multiple of revenue.

Key Stage Three Moron Extra time set maths coming right up.

Say you make £30 million revenue.
You’ll get a multiple on that.
Say it’s 4x = approx £120 mill exit.

Ya wid me?
Sounds good right?

Alas, commonly, Brands innovate in other categories to unlock more revenue.

More revenue = Bigger exit.

Kapeeche?
Makes sense right?

Say I’ve got a brand called Popey’s Panoply of Pointless Wank

Popey’s Panoply of Pointless Wank revenue by category looks like this

Revenue from Dairy Alt Milk category £20 million
Revenue from Cereal business worth £5 million
Revenue from Snack business worth £4 million
Revenue from RTD drinks business worth £2 million
Revenue from Cooking sauces worth £2 million

Common Thinking:

Popey’s Panoply of Pointless Wank does £33 million in revenue (adding all those categories together: 20 + 5 + 4 + 2 + 2 million = £33 million revenue).

WHOOOP-WHOOP.
Amazing news.

If we EXIT 4x multiple of revenue on £33 million = EXIT = £132 million approx.

Wrong.
Wrong.
Wrong.

The Hidden Curse:

Buyers (the big VC firms) only want to buy ONE category.

They’ll wheel in a Data-Gimp-with-a-Lappy - who combs through your business with the same precision he picks Chinese Sweet & Sour pork out of his braces with a toothpick.

Data-Gimp-with-a-Lappy will analyse your business and say “right, we ONLY want to buy the Dairy Alt Milk business from Popey’s Panoply of Pointless Wank

The harsh reality:

You get an exit on a multiple of £20 million Dairy Alt revenue.
NOT an exit on £33 million TOTAL revenue.

Product-Market Fit is NOT the same as Brand-Exit fit

Brands MUST think about Product-Market Fit.
But as brands near the exit, you have to reverse engineer it.

You must THINK about

Brand-Exit fit
Brand-Exit fit
Brand-Exit fit

What is Brand-Exit fit ? (there’s TONNES more on this in our podcast that comes out in January)

Buyers don’t want a brand in lots of categories
What category are you going to flip?
Who are you going to flip it to?

When Giles sold Bear Snacks sold to Lotus.
Lotus didn’t give a monkeys about any part of Bear’s business other than the fruit rolls.

Giles exited Bear on a multiple of the Fruit Rolls revenue.
NOT Bear Fruit Rolls + the rest of the product portfolio.

The Product Range below lovely and nice to see, but Lotus didn’t care.

Fruit Rolls is what Lotus ACTUALLY cared about.

innocent drinks is another wondrous example

Circa 2014, Government policy was ramping up the 5 A Day Policy.

So, innocent created veg pots to help consumers get their 5-a-day i.e. buy an innocent juice and a veg pot. Bosh you’re done. Great example of Product-Market fit right?

hhhhhhmmm.

Brand-Exit Fit is where it gets messy.

innocent veg pots became a huge part of the business.

But, when innocent came to exit to Coke.

Coke didn’t give a fuck about the veg pots.
Coke wanted to buy a juice business.
Coke didn’t want to a buy a juice and a veg pot business.

innocent canned the veg pot business and doubled down on the juice business.

Product-market fit is NOT THE SAME Brand-Exit fit.

Brands have to reverse engineer the exit.

so many founders and brands go into so many different categories.

What’s the solution?

Giles taught me Strategics and VC’s usually only want ONE CATEGORY.

Be a Hero of One Category not a Jack of All Trades.

Giles says you have to innovate to keep growing your brand

Innovate close to the core.
Innovate close to the core.
Innovate close to the core.

Pip and Nut - Nut Butters and Stuffed Bars = close to the core.
Bold Bean Co. - Baked Beans = innovating close to the core.
Lucky Saint - IPA = innovating close to the core.
Perfect Ted - bulk matcha powders = innovating close to the core.

If you’re going to innovate.
Innovate close to the core.

Another way?

Innovation can be boring AF

We’re told innovation needs to be super fun and creative.
It can be fucking boring.

VITA COCO doubled the volume of the core by increasing format size and distribution.

Bigger Pack Size = More VitaCoco Cartons in Fridge = more consumption opportunities = great rate of sale.

Giles also talked at length about the importance of knowing your shopper and knowing your category.

If you wanna KNOW your shopper.
Know where the category opportunities.

You SIMPLY NEED North Star. They are ALL over this like a hot rash.
Drop the legend Kieran an email for a demo - it’ll change your life my G

[email protected]

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