The Super Users and the tech

The relevance of the Pareto principle

You’ve probably heard of the Pareto Principle, which is based on the observation that roughly 80% of the consequences come from 20% of the causes for many outcomes.

The 80/20 rule has applications in computing and social behavior but has also been observed in economics and business. When applying this principle to business, the common observation is that 20% of the activities in a business lead to 80% of the results.

Around 90% of startups fail within the first 3 years of operation. The biggest reasons, according to a CBInsights report, are:
1) running out of funds
2) no market need, and
3) got out-competed.

This means that to avoid falling, startups need to develop a strategy that balances resource allocation on the one hand and market validation, growth and competitiveness on the other hand. And there seems to be a useful idea for those in B2C tech businesses. Although, it seems that it also applies to those in the B2B segment to some extent.

Why Super Users are important for tech businesses

Super Users account for a disproportionately large share of time and spend across all major media and technology verticals. This includes video, gaming, music, podcasts, messaging and social media, eCommerce, the Metaverse, live events, mobile data, and more.

The key challenge and opportunity for technology companies will be to successfully target these consumers, and capture their time and spend, through personalized experiences.

Representing 22% of the U.S. population, Super Users spend more than double the amount of time consuming media as all other users (18:55 hours vs 9:21 hours, multitasking not accounted for).

Let me give you some examples. First number is time spent by Super Users on average, second is the difference with other users, third number is an average of time spent by other users.

1. Video (7:01h – 1.5x – 4:47h),
2. Gaming (4:02h – 3.5x – 1:09h),
3. Music (3:35h – 2.1x – 1:41h),
4. Podcasts (1:48h – 4.1x – 0:27h),
5. Messaging and Social Media (2:29h – 1.9x – 1:18h).

The reason the difference emerges is that across all major media activities, Super Users are almost twice as likely to multitask. This allows them to spend more time engaging with media.

Consistent with the amount of time they spend with media, Super Users account for a disproportionately high share of dollar revenue across video, gaming, and music.

First number is dollar spent by Super Users on average, second is an average dollar spent by other users:

1. Video ($76 vs $27),
2. Gaming ($49 vs $4),
3. Music ($1 vs $21).

About 80% of gaming and music spending is attributed to Super Users. While the number for video is lower, just 44%, it’s still exceptionally high. Within eCommerce, Super Users account for 60% of total spend and also over-index on emerging eCommerce behaviors.

Getting enough Super Users can easily be the 20% factor that produces 80% of results for an early stage startup.

Super Users’ traits

What are the traits of these Super Users?

Most of them are aged 18-34, are sole or primary earners, and hold an associate degree or higher. 85% of Superusers have an unlimited data plan, which is curious, but not enough to be a predictor by itself.

A second obvious characteristic is that they are most likely to be early adopters.

1. 75% of Super Users value keeping informed about trends and news about the latest technology and media products/services.
2. 70% of them enjoy buying/using new technology and media products/services before anyone else they know.
3. 71% enjoy recommending technology and media products/services to others.

Third trait is that they are digital first kind of people.

1. 68% feel that they can better express themselves online.
2. 69% feel that it is easier to socialize and make new friends online.
3. 63% feel comfortable sharing data with technology and media companies in exchange for more personalized/relevant recommendations and ads. (Side note: honestly, I don’t think it’s a good thing)

Super Users and NFTs

Super Users are much more interested than other users in both cryptocurrency (60% vs 12%) and NFTs (49% vs 9%).

It’s worth mentioning that big-name brands are already incorporating NFTs into their marketing strategies. It’s becoming increasingly relevant for brands to leverage NFTs to reach consumers, many of whom believe that NFTs are here to stay. There are many ways for businesses to participate in the trend, from subscription services to games to exclusive communities.

According to a June 2022 study, the global NFT market size is expected to grow ~680% from $16B in 2021 to $122B in 2028. 80% of NFT owners believe that NFTs are not just hype. That said, most of these NFT owners are crypto-enthusiasts and tend to discount the level of hype significantly, so it could also be a self-serving bias. But it shouldn’t matter much for tech businesses as long as NFT is not at the center of their business model. It gives access to Super Users and at least for now it’s a growing market.

One of the most common ways that brands use NFTs is for exclusive community access. NFT owners often gain access to Discord communities, virtual events, merch, and real-life physical collectibles. Examples include Cameo, Liquid Death, and Wrangler. Companies like Adidas, Burberry, Gucci, Nike, Samsung, HSBC, and JPMorgan are buying up permanent retail space in the metaverse. Others have been experimenting with temporary retail, or pop-up shops.

Hogan recently took part in Decentraland’s Fashion Week with a virtual pop-up store, and Pandora launched an in-game virtual pop-up called “Pandora Island.”

Virtual pop-up stores gained popularity as an alternative to the real deal during national lockdowns. Despite a dip in 2021, interest is picking up again. A virtual pop-up store is anything that creates a unique online shopping experience for your customers, separate from a brand’s existing website. A virtual pop-up shop can be an event or even a landing page dedicated to a new product line.

B2B influencers.

Earlier I mentioned that this discussion about Super Users might be somewhat relevant to B2B businesses as well. The reason is simple – these Super Users work, and in many cases they hold high-ranking positions. And one of Super Users’ traits is that they are used to buying via influencers.

80% of B2B brands surveyed in 2020 said they planned to either maintain or increase their influencer spend. B2B clients find co-branded or sponsored third-party content more trustworthy than content straight from a vendor. 96% of B2B marketers that use influencers consider their program to be successful.

Of the B2B marketers surveyed, 79% felt influencer strategies would become more popular. Despite this, 60% of B2B marketers felt that they didn’t have the right skills in house to take advantage of this trend and cash in on the benefits. This could be both expertise you would want developed internally or a service you would build and offer externally.

Going forward

If you want some inspiration, below are some activities that Super Users expressed extreme interest in using the Metaverse for during the next 12 months:

1. Creating/personalizing a virtual character/avatar or virtual items.
2. Creating/personalizing virtual places or maps,
3. Attending live performances, sporting events, or esports events,
4. Socializing with friends/family or meeting new people.
5. Travel to virtual versions of real-world locations.
6. Attending educational classes, work-related meetings, or networking events.
7. Purchasing or selling goods (both virtual and physical).
8. Investing, lending, or borrowing money.

References

List of Major Brands in Web3

Adidas https://lnkd.in/e6YAa3fv
Starbucks https://lnkd.in/e9FxsZ5B
Tiffany & Co https://nft.tiffany.com
Louis Vuttion https://lnkd.in/epsJWZCc
Hennessey (LVMH) https://lnkd.in/evFSq_zf
Nike https://lnkd.in/ejcAHPR4
Puma https://lnkd.in/ez7GhnyM
Nivea https://lnkd.in/eVZQSHqu
Trix (Nestle) https://lnkd.in/eEdtNAUG
Porsche (VW Group) https://nft.porsche.com
Rimowa https://lnkd.in/eCQNGzm3
Pepsi https://lnkd.in/e2gq4geM
Hublot (LVMH) https://lnkd.in/eAJ-DhHD
Panerai https://lnkd.in/eMxcpdgV
Tag Heuer https://lnkd.in/eAv-6ZpN
Timex https://lnkd.in/evFYmwxb
Jacob & Co. https://jacobandco.com/nft
IWC https://nft.iwc.com
McDonalds https://lnkd.in/eTg4c5cZ
KFC https://lnkd.in/eDvmb6rw
Disney https://lnkd.in/efAHFSRs
Netflix https://lnkd.in/ebNqRUga
H&M https://lnkd.in/eU8YiH9x
Gucci (Kering) https://lnkd.in/estudKCw
Philipp Plein https://lnkd.in/efn8QEKg
Dolce & Gabbana https://lnkd.in/embgKiNj
Prada https://lnkd.in/euK6iqKy
Yves Saint Laurent Beauté (L’Oréal) https://lnkd.in/e567h8eu
Ralph Lauren https://lnkd.in/etm5N2ge
Hugo Boss https://lnkd.in/eB4-gW-B
Burberry https://lnkd.in/ewshTs5x
Hermes https://lnkd.in/e97uxyWB
Givenchy (LVMH) https://nft.givenchy.com/
Marc Jacobs (LVMH) https://lnkd.in/es5Qtzk2
Lacoste https://undw3.lacoste.com/
Zara https://lnkd.in/enDpmW2q
Heineken https://lnkd.in/eyQX9x8X
Red Bull https://lnkd.in/eWM7Urkt
Jack Danielshttps://lnkd.in/eFT2M758
Cartier https://nftcartier.online/
Estée Lauder https://lnkd.in/eyNpCt8b
Balmain https://lnkd.in/eb8aSvzc
GAP https://nft.gap.com/
L’Oréal https://lnkd.in/egFnCZfD
Ray-Ban https://lnkd.in/ebCgvJif
Hello Kitty https://lnkd.in/ey44MMjF
Hyundai Motor https://lnkd.in/e464kjFy
BMW https://lnkd.in/eqa3x2Pe
Skoda (VW Group) https://lnkd.in/eFVFJRQ8
Audi (VW Group) https://lnkd.in/ez_qQVVw
Lamborghini (VW Group) https://lnkd.in/eq2dTM_Z
Nissan https://lnkd.in/eRfhtfMF
Ford https://lnkd.in/eXJZc7vK
Youtube https://lnkd.in/e_nz8Nz7
Mastercard https://lnkd.in/ezmBT4-Q
Visa https://lnkd.in/epPYXn5z
Time Magazine https://nft.time.com/
Budweiser (AB InBev) https://nft.budweiser.com/
Bud Light (AB InBev) https://lnkd.in/ezBmK9_g
Australian Open https://lnkd.in/e-nj_jUZ
McLaren https://nft.mclaren.com/
NFL https://nflallday.com/
NBA https://nbatopshot.com/
New York Knicks https://nyknft.com/
Charles & Keith https://lnkd.in/e7ZRH5Me
LimeWire https://limewire.com/
Instagram https://lnkd.in/ei9Crt4v
(non exhaustive)

At least 1/3 of Interbrand’s top 100 global brands have already entered Web3.

Kudos to Marc Baumann for creating the list.

Also used

Activate analysis, Activate 2022 Consumer Technology & Media Research Study (n = 4,001), Activate Technology and Media Outlook 2023, CB Insights Game Changers 2022, Company filings, Comscore, Conviva, Deloitte, eMarketer, GWI, Music Biz, Newzoo, Nielsen, NPD Group, Pew Research Center, U.S. Bureau of Labor Statistics, Goldman Sachs, Grand View Research, IFPI, Newzoo, Omdia, PwC, Recording Industry Association of America, SiriusXM, Statista.