How Liquid Death Turned Water into a $700 million business

The founder and CEO of Liquid Death, Mike Cessario, has successfully transformed the seemingly mundane product of water into a cool and desirable brand, now valued at $700 million.

I mean, if you can make water cool, then you can sell just about anything. But do you know what sparked this creative genius?

The Craziest Viral Story

You know how sometimes you're just hanging out and suddenly an idea just hits you? That's exactly what happened to Mike.

He was at the Warped Tour concert in 2009, and as he was scanning the crowd, he noticed that all the drinks being sold had edgy, irreverent marketing except for the water bottles. He thought, "Hey, why not make water cool too?" And with just $1,500, he made a commercial and put it online.

To his surprise, it went viral and caught the attention of investors. And the rest, as they say, is history. The company has raised $195 million in funding and is valued at over $700 million dollars.

The marketing strategy behind Liquid Death's success is similar to brands like Virgin, which position themselves as disruptors or the one cool product within a stale category. By standing out and being different, you can gain market share quickly. It's about breaking the mold and being memorable, that's what makes these brands like Virgin, and now Liquid Death so effective in their industry.

4 Lessons from Liquid Death on Creating Virality

#1: Go niche

When you take a closer look at Liquid Death, it's clear that the brand is specifically targeting punk music lovers. The founder, being a punk musician himself, created a brand that aligns with the values and culture of punk music. From the start, they didn't try to appeal to everyone - they knew their niche audience and tailored their branding and marketing to reach them.

Punk music fans value anti-establishment lyrics and attitude, and Liquid Death has embraced this by using slogans like "Sell Your Soul," "Deadly Water," and "Murder the Taste." They've built their content creation strategy around these values, appealing to a specific group of consumers who identify with the punk culture and want to support a brand that aligns with their values.

#2: Make it weird and interesting

If you want people to really love your product, you gotta make sure the whole shabang is unique and interesting. Not just the product itself, but the packaging, design, and how it's presented. Like, imagine if your product came in a really weird shaped box or had a crazy design on it, people would be like "whoa, what's this?". That's the kind of stuff that makes people early adopters and gets them talking about it online. Because at the end of the day, being different and catching people's curiosity is what makes something truly cool.

Believe it or not, there's actually a scientific explanation for why people are attracted to things that are weird and unique. There are several psychological theories that can explain why humans are drawn to these types of things.

One theory is the "von Restorff effect," which states that people are more likely to remember and pay attention to items that stand out as unusual or different in a group. So, when a product is presented in a unique or unconventional way, it is more likely to capture people's attention and be remembered.

Another theory is "novelty seeking" which is the tendency of some individuals to seek out new and exciting experiences and to avoid routine and familiarity. People who have high levels of novelty-seeking behavior have a greater inclination to explore new and unique things which can be fulfilled through weird and interesting products.

In general, people are naturally curious and attracted to things that are new and different. The unique and weird packaging, design, or presentation of a product can trigger people's curiosity and make them more likely to try it out and even share it with others.

#3: You don’t need a big budget

Mike actually didn’t even have the money to create the product, so he came up with a clever way to create buzz for a product that was not even released yet. He knew that he needed a unique and interesting commercial, but he didn't have any actual cans. So, he came up with an idea to create a 3D render of the can and a commercial using just $1,500. He then put some money behind paid advertising and pushed the video out over a few months. To his surprise, the video quickly gained traction, getting over 3 million views and 80,000 followers on the page in just four months. He received hundreds of messages and comments and used this interest to attract investors and get funding for his company.

The next time you're feeling constrained by your budget, remember that a smaller budget can actually work in your favor when it comes to creating a successful and viral campaign. This is because smaller budgets often lead to greater creativity, flexibility, and efficiency. By thinking outside the box, being resourceful and coming up with a unique approach, you can make the most of your budget. Additionally, smaller budgets can lead to less bureaucracy, more freedom to experiment and take risks, and a more streamlined execution, which can all contribute to a more innovative, effective, and polished final campaign.

#4: Tie to a bigger mission

Their motto "Death to Plastic" reflect their mission to not only produce a unique and delicious product, but also do it in an environmentally responsible way. Basically, Liquid Death is using something called the "Noble Edge Effect" to make their product seem even cooler. It's all about making the product feel special and important by connecting it to something bigger, like saving the planet. They do this by talking about how they use aluminum cans instead of plastic, and how they support environmental causes. By making the product feel like it's part of something bigger and important, it makes people want it more. And since they're doing it in a sustainable way, it also make people feel good about buying and drinking their water, like they're doing something good for the planet.

What Can The Brand Do Now to Achieve A Billion-Dollar Valuation?

To achieve a billion dollar valuation, Liquid Death should focus on their community and bring them to the forefront of the brand. There are multiple ways they can do it.

#1. Expand to new niches

Liquid Death is currently only available in the United States but has potential to expand into other markets where punk rock culture is popular, such as the United Kingdom, Japan, Australia, Brazil, Canada, and Germany. Expanding into these markets could open new opportunities for growth and revenue. Offering a wider range of products, such as different flavours of water or other beverage options, could increase revenue and reach new markets.

#2. Improve their website

The current website is not user-friendly, with slow loading times and poor design. One suggestion for improvement would be to create a community-oriented website that focuses on featuring the brand's community and its members, rather than just promotions. Additionally, the placement of call-to-action buttons could be moved to the center of the page, as people tend to read in a zig-zag pattern. Lastly, the overall navigation and organisation of the website could be improved to make it easier for users to find what they are looking for.

#3. Drop their CAC

Currently, their advertising strategy primarily focuses on promoting merchandise, while the sale of their drinks has been halted due to negative feedback regarding high shipping fees.

As the company's core strength is viral ads, I would recommend revising their advertising approach. Run a brand-awareness campaign without any direct call-to-action links (optimising for video views), and retarget the audience later with purchase ads for merchandise and drinks. This approach will significantly reduce the cost of acquiring a customer.

Additionally, the company could use their website for bulk purchase options with a minimum order value of $100, this would encourage higher average order value purchases which would make it more manageable.

#4. Grow their LTV

The current website sells a variety of items, such as plush toys, watches, and t-shirts, which seems like a diverse and unaligned approach. A better strategy would be to focus more on community-led merchandise. This could be achieved by giving the community a chance to submit designs and vote on them. This would not only drive brand advocacy but also validate ideas before they are manufactured, which is an efficient use of resources.

#5. Utilise their community

The brand has a dedicated fan base who are passionate about their mission and marketing. To continue growing, the company should make better use of this community. Instead of treating them as "randos" on the website, they should create a forum where the fans can share and connect with one another. This platform can be used to create content, design merchandise, organise events or concerts, share memes or slogans, and other activities that involve and empower the community in a way that enriches their experience and improves the bond with the brand.

#5. Sponsors, partners and placements

They have a unique opportunity to increase brand loyalty by hosting "water-only" concerts for their core audience of punk rockers. Additionally, by partnering with other brands that share a similar sustainability mission, they can amplify their impact and gain more visibility through PR. Furthermore, including their products in music videos with popular artists will expand their reach and resonate with millennial audiences.

Contrary to popular belief, taste or quality alone does not make a product or brand successful. Data suggests that creating an emotional connection to a brand is what drives customer loyalty and engagement over the long-term.

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