Psychedelics are quickly becoming the hottest new sector. Companies are springing up from nothing only to be traded on public markets overnight, while existing public companies are moving away from their previous iterations in cannabis, e-sports or blockchain and taking a dive into psychedelics. I’ve covered these movements extensively at the Report on Psychedelics.
If a company’s goal is to pump and dump it really won’t matter if the companies strategy is nothing more than a sort of slick pitch deck. But if their goal is to build for the future, create value for investors and eventually bring competitive products to market, a well thought out and articulated strategy is the foundation of growth and success.
I’ve teamed up with Peter Drummond, founder and principle of PSD+G Strategy Group, a boutique strategy firm with experience in natural products, wellness, health and pharma to write a few tips on areas psychedelic companies should be thinking about when devising a strategy.
Generally speaking, the category defines what business you’re in and how you make money. For example, a psychedelic firm may be in the business of curing depression or improving every day creativity. Both perfectly valid approaches but either option has profound implications on their core competencies, competitive and go-to-market strategies. Although the core product, psilocybin, may be the same, the former company may approach their business by developing an FDA approved pharmaceutical treatment administered by healthcare professionals, while the latter company a once a day functional microdose product sold directly to consumers online.
Take a broad approach to thinking about your competition both direct and indirect and who could become a competitor tomorrow. Yes, there are many psychedelic businesses being launched, offering products and services ranging from clinic care to drug development but the competitive landscape is much more diverse. It’s Important to keep an eye on firms with activities in adjacent spaces that may quickly be able to position themselves as a direct competitor. Ask yourself what do competitors do and what assets do they own that could be leveraged to eat away at your market share.
Competition for the treatment of anxiety, for example, includes pharmaceutical medications, talk therapy, meditation, coaching etc. and each of these treatments have their own diverse set of competition. To take another example of functional mushroom supplements, these products are in competition with all sorts of natural supplements within a multitude of categories from sports to sleep.
By identifying your category and your competition you’ll be able to identify who is your biggest threat, as in who is most likely to earn your customers dollars over you, and how to position yourself against them.
Who are you customers? Don’t forget to make the distinction between customer and consumers, as in who buys the product from you as opposed to the end user. A drug development firm’s customer may be an enhanced therapy clinic or even an insurance company. In these cases their brand, messaging and overall strategy should be aligned to speak to their customers not just their end users.
Take the enhanced therapy clinic, and the healthcare practitioners (HCPs) who work there as an example. Ask yourself, or better, ask them, what are their needs and wants? What triggers them to make a decision or a recommendation to a patient? How do they get the information they need to make these decisions and who are the key influencers they look to?
In many cases, as the psychedelic sector is shaping up, customers may also be investors. Again, understanding their motivations for buying your product, as in your stock, can make a difference in public market success.
Your consumers are those who actually use your end product, perhaps a patient experiencing treatment resistant depression or a student who wants to improve their focus and is buying a functional mushroom blend online. Ultimately the value prop created by your product must deliver on an unmet consumer need in the marketplace in order to thrive.
First, think about what influences your consumer’s decision making. Maybe it’s a functional need such as form factor, packaging and design, a popular approach for DTC wellness mushrooms, or perhaps it’s the emotional need that you evoke, a microdose brand may want to sell on the promise of creativity. Your brand will want to own one or two of those needs.
Second, identify who influences your consumers’ decisions. When dealing with products that are intended to support conditions from general wellness to the most difficult to treat mental health disorders there will be a multitude of key influences in a consumer’s decision making journey. Ask your potential consumers from who or where they get the information to make a decision and what information they look for. Key influencers are likely to include social media influencers, friends and family, physicians, naturopaths, psychiatrist and psychologists. In order to make informed decisions on allocating your organizations resources it’s vital to understand who these influencers are to what extent your consumers rely on their approval, and, perhaps most importantly, what influences these influencers.
Therefore, spending time acquiring valuable insights and mapping out the decision making process of your consumers should be central to your strategy building process.
Putting It Into Action
The above points are a very basic jumping off point, if you’re serious about building value in your organization it’s worth taking the leap to begin building a strategy for long term competitive advantage. You can start simply by mapping out your category, review your competitors, and take the time to sit down with your customers, consumers and their key influencers, to better understand their decision making.
If you’re looking for experts to work collaboratively with your team to develop a meaningful strategic plan, drop me a note firstname.lastname@example.org