I can’t be sure, but I think we’ve just witnessed the most profitable use of the principles, strategies and tactics Jeff Walker teaches in Product Launch to make multi-millionaires or even billionaires of a group of company founders.
Overnight in the United States a new company called Snowflake was listed on the Nasdaq stock exchange. Nothing special or ground-breaking about that you might say. But the way the promoters attracted media attention and developed awareness in the community to the point where there was literally a feeding frenzy as shares went on sale today is a case study in what to do right and something we could all model on a smaller scale.
Here’s the back-story: Snowflake is a SaaS (Software as a Service) company that helps businesses move their brick and mortar and non-internet businesses to the ‘Cloud’. This is a mega-trend and any business in that space is being valued much more aggressively by the market than other types of businesses.
Bear in mind the company is apparently losing money hand-over-fist, has never made a profit, probably won’t make a profit for several years even if everything goes right for them, and according to some analysts was valued at around 100 times sales.
This is astonishingly expensive. Yes the company is growing strongly, but they also have huge competition from Amazon, Google, and many other behemoths with long track records of killing startup companies before they reach critical mass.
When the promoters issued the most recent batch of shares (which was just 10% of the company’s total available shares) they priced them at $120 each. Today as the stock listed they opened at $270 and traded as high as $316 before falling back to close at around $253.
Because the promoters and founders still hold 90% of the shares in the company, the high price of the shares listed on the market makes their shares much more valuable today than they were yesterday. I would imagine they are cracking the champaign corks at the moment.
I’m sure there were a lot of other things going on behind the scenes (just like any Product Launch) but here are some of the most obvious:
Their use of Mental Triggers
Jeff Walker discusses Mental Triggers at length in PLF. There are about a dozen of them that will move the needle in a launch. Here are the ones Snowflake used to create such wild success:
Social Proof – Commentators on CNBC have been excitedly discussing Snowflake for the last few weeks, talking about how many big and experienced investors the company already had on board and how these people wouldn’t have been interested if the company was a dud.
Authority – The company has the Worlds greatest value investor, Warren Buffet, as an early stage investor. By highlighting the fact Warren was a shareholder, they company use his authority to entice other investors to invest when the stock was listed today.
A Bargain – Warren Buffet is a ‘value investor’ which at it’s core means he doesn’t buy things that are overpriced. The fact he saw ‘value’ in Snowflake undoubtedly encouraged other big names to throw their hats into the ring. This is regardless of the fact the company is a Technology stock priced insanely high for anyone buying today. If Warren’s in, others want to be in too.
Scarcity – The fact that only 10% of the company’s shares were listed created immense scarcity. Most of the commentators on CNBC applied for shares but none of them were allocated any. This is additional proof of the scarcity of the shares. And everyone knows that when something is scarce it is more valuable.
Liking – The founders and senior promoters were regularly wheeled out by media organisations to discuss their plans for the company. The people interviewed kept saying all the right things and making all the right noises, so it was hard not to like them.
FOMO – Fear of missing out is a powerful motivator, especially when combined with genuine scarcity. The talking heads on the various media channels were relentlessly pushing the line that Snowflake was going to be the years biggest IPO (Initial Public Offering or Stock Market Listing) and it was the biggest software IPO EVER. The constant chatter whipped potential investors into a lather and their fear of missing out led the stock price to rocket right from the opening bell and say much higher than it might have without the help of those in the media.
These are just the obvious Mental Triggers Snowflake used with great effect to use the Product Launch Formula process to generate millions (billions?) of dollars in additional wealth for founders and employees overnight.
Of course there’s no guarantee any of us will ever do something like that, but the mental triggers combined with the other elements of the PLF process have worked for thousands of years, and will continue working in the future.
IF you’d like to see how the PLF process has worked for other entrepreneurs and business owners, you can do that by checking out these 60 Case Studies. By watching the ones that interest you, you’re probably going to have some ‘ah-ha’ moments of your own.
So check out the Product Launch Formula Case Studies page here and let me know what insights you had while watching other people using the process in their businesses.
P.S. As a PLF owner and user since 2008 and one of Jeff’s affiliate partners, I may receive a commission from Jeff if you invest in his program at the end of the Masterclass – but it won’t cost you anything extra.