The Top 10 Things FinTech Startups Can Learn From the Tooth Fairy
In many ways, the tooth fairy can be seen as one of the first successful startups. Created to fill a hole in the market and built up until her services circled the globe, the tooth fairy’s unique business is a lesson for every wannabe entrepreneur who dreams of being the next business savant. Here are 10 things we can learn from the brilliant business mastermind that is the tooth fairy.
- Have a monopoly, otherwise it’s a race to the bottom.
The tooth fairy very clearly understood the first-mover advantage and used it to build her brand. By uncovering a hole in the market and offering a service to meet that need, the tooth fairy created a new industry. Then, by being such a prominent and consistent presence in that industry, she overtook any potential competition. This is a vital lesson if you want to compete in today’s market. Be the trademarked and patented solution to box out the competition. - Have a clear purpose.
Consumers don’t like being unsure of what you are offering. At the same time, a business that is constantly changing its vision loses money in rebranding costs and stalled time in the marketplace. Know your product/service and make it very clear what you are bringing to the table. Look at the tooth fairy: In truth, the idea of a strange creature coming into your room at night could be very unsettling…until it is made very clear that her purpose is just to take your lost tooth and thank you for your service. Then, her beneficial nature is clearly seen and she becomes a treasured part of our society. This purpose has never changed or been corrupted, allowing her to remain a steady and much-loved presence in our lives. If you use this as your model you will bring in customers who will keep coming back for the product they enjoy. - Sell your story & connect on an emotional level.
Want people to remember you and keep coming back for your services? Create an identity and a story that sticks with people. Adults remember the joy of turning over the pillow and finding money where a tooth had been and want their children to experience that elation. This feeling and the memory of that feeling keeps the tooth fairy as the only player in the tooth-collecting business. If you can create a positive link with your customer base they will continue to use you and suggest you to other members of their social circle. - Develop a community.
Although fairy dust allows the tooth fairy to fly around and replace the teeth with a cash reward, there is a strong network working behind the scenes that keeps the entire operation running. From the mint that provides the coins to the dentists who check the teeth to the parents who learn about the missing teeth and put the word out, countless people play their part to keep the ecosystem running smoothly. The tooth fairy can keep making those kids smile with joy in the morning because she knows how the machine works and what her role is within it. Make sure that everyone in your corporation understands how important their part is in making the magic happen. - Target the younger B2C generation and growing population.
The tooth fairy’s market has never evolved beyond children. Why? They happen to be a profitable and consistent market base. In fact, today’s companies spend over $18 billion on advertising targeting children. The reality of the situation is that as one generation ages and you need to move onto new pillows, the route of access is not continuously changing thanks to the newest technology or trends. If you can find a way to access your market base that is not going to need a constant evolution to meet with the changing market then you are going to be ahead of the game. - Go after great profit margins.
Growing up, the tooth fairy traded 25 cents per tooth and the profit margins continue to increase faster than inflation. Having two kids of my own, I have experienced the market rate for a tooth at $5 per tooth, making the tooth trade one of the more profitable industries. If you can find a similar pocket in the market your business will continue to be a success. - Use a global distribution channel.
The greater your reach the greater your market (and profit potential) is. The tooth fairy, with her global distribution channel, has access to the 2 billion children currently living on the planet. Remember this when you are contemplating where to market your business. - Make sure you have great timing.
If the tooth fairy showed up in the middle of the day, the tooth wouldn’t be under the pillow and the magic and awe of how she snuck in while you were sleeping would be ruined. Similarly, if she showed up after all your teeth had been lost, her services wouldn’t be needed. This is like your presence in the market. Timing really is everything. If you get in before other businesses wake up, you will get the prize; meanwhile, if your product hits the shelves at the wrong time, the magic won’t be there and it won’t sell. - And great service.
Your product can be amazing, but if you give clients bad service they will find a different provider. You need to be reliable and—if you want to ensure they keep coming back—you need to give them that sense of thrill that comes from turning over your pillow and finding that monetary reward. The tooth fairy doesn’t let anyone down and neither should you. - Work with low overhead & strategic partnerships.
With a virtual office and cloud technology, the tooth fairy runs a tight ship with low to no-costs. With the right strategic partnerships with people who care (their parents) the eco-system works fluidly. Your startup will have a better chance of growing if you can use these examples to improve your business process.
The tooth fairy has been around for centuries and it is unlikely that we will see her retirement at any point in the near future. However, as money is changing, the reward future children receive will likely be very different from the coins of today. The question then becomes: Who will be the first innovative kid to receive an etransfer from the tooth fairy?