Ty Montague - True Story: How to Combine Story and Action to Transform Your Business

TRUE STORY

TRUE STORY

How to Combine Story and Action to Transform Your Business

Ty Montague

Harvard Business Review Press,
Boston,
Massachusetts

Copyright 2013 Ty Montague

All rights reserved

Printed in the United States of America

10 9 8 7 6 5 4 3 2 1

No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to , or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163.

The web addresses referenced in this book were live and correct at the time of the books publication but may be subject to change.

Library of Congress Cataloging-in-Publication Data

Montague, Ty.

True story : how to combine story and action to transform your business / Ty Montague.

pages cm

ISBN 978-1-4221-7068-7 (alk. paper)

1. Branding (Marketing) 2. Customer relations. 3. Success in business. I. Title.

HF5415.1255.M655 2013

658.8dc23

2012051719

The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Publications and Documents in Libraries and Archives Z39.48-1992.

ISBN: 9781422170687

eISBN: 9781422187562

Id like to dedicate this book to the most inspiring people I knowmy partner in life, Dany Lennon-Montague, and my partners in business, Rosemarie Ryan, Neil Parker, Richard Schatzberger, Conrad Lisco, and Tiffany Rolfe.

CONTENTS

Introduction

Our story begins somewhat unremarkably in a European airport in 1982. Dietrich Mateschitz, a thirty-six-year-old Austrian toothpaste salesman, boards a plane for a routine business trip to Thailand. In fairness, Mateschitz was a fairly industrious and successful toothpaste salesman, having risen to the position of international marketing director for a German toothpaste manufacturer called Blendax. But there was nothing about Mateschitz at this moment that would have tipped you off to the fact that he was about to discover something that would make him one of the worlds wealthiest men and that he would create a company that, if you had to pick just one, is todays best example of a company built on the concepts explored in this book. Its a new kind of company that tells its story in a new waythrough actions and experiences.

The odd fact is that if Mateschitz hadnt arrived in Thailand suffering from terrible jet lag, he might still be a toothpaste salesman today. But as luck would have it, Mateschitz did arrive jet lagged. Some locals took pity on him and directed him to a store where he was told to ask for an exotic-sounding tonic called Krating Daeng. Mateschitz learned that in addition to being an excellent jet lag treatment, Krating Daeng was also prized by locals for its ability to increase physical endurance and mental concentration, making it popular with laborers and long-distance truck drivers. Now, by this time, hundreds of thousands of westerners had already passed through Thailand and presumably some of them had already discovered the restorative powers of Krating Daeng for themselves. There was really only one difference between them and Dietrich Mateschitz: where others had seen a drink for laborers and truck drivers, Mateschitz saw a gold mine. Are you still having trouble guessing the identity of this company? It might help to know that the Thai name Krating Daeng translates roughly in English to red bull.

Upon making his discovery, Mateschitz sought out the manufacturer of Krating Daeng, a Thai company called TC Pharmaceuticals, and with passion and persistence convinced the owner, Chaleo Yoovidhya, that there was a vast market outside Thailand for Red Bull. The two formed a joint venture, Red Bull GmbH, and set to work on a product formulation that would please the European palate and a marketing plan to pursue a very different target: young men aged eighteen to thirty-four who, like Mateschitz, were enthusiasts of a growing movementadventure sports. In 1987, the first can of Red Bull energy drink went on sale in Mateschitzs native Austria. The main difference in the European (and today global) formulation is that unlike its Thai forerunner, it is carbonated and contains the amino acid taurine.

This is where the story could have ended, of course. If Red Bull had been launched by a traditional packaged-goods company, it would probably have been treated like a traditional packaged good. Coca-Cola or Unilever, for example, would in all likelihood have assigned a marketing team who would have hired an ad agency, created a slogan, negotiated for some shelf space, and turned on the television advertising. But this is where the story of Red Bull actually starts to get interesting, because this is the point at which Dietrich Mateschitz reveals his one true superpower. It turns out that lurking inside the mild-mannered toothpaste salesman was an extraordinarily talented storyteller and experiential marketer. Mateschitz didnt have a massive TV budget. He had something much more importanta vision. He believed Red Bull could become something far greater than liquid in a can.

From the very beginning, Mateschitz viewed Red Bull as a lifestyle, a kind of belief system, a religion in which that can of liquid was necessary and functional. From the beginning, Red Bull, the belief system, and Red Bull, the product, were inextricably intertwined. In a rare interview with Fast Company magazine in 2011, Mateschitz was asked how this vision came to be. Mateschitz responded, This is similar to the question What was first, the chicken or the egg? When launching a product that stimulates body and mind, it is a short step to the roots where Red Bull came from... now its called adventure sports, extreme sports, and outdoor sports. Most of the national Austrian champions in those days were personal friends of mine and we spent all our leisure time mountain biking, windsurfing, snowboarding, etc. He explained, What Red Bull stands for is that it gives you wings... which means that it provides skills, abilities, power, etc., to achieve whatever you want

Mateschitz believed from the beginning that he needed to find ways to embed Red Bull in the lives and lifestyles of his audience. Like many entrepreneurs before him, he had the vision clearly in his head, but he didnt find the right execution on day one. The breakout moment for Red Bull came in 1990, when Mateschitz, dreaming of experiences that would engage and amuse his adrenalized friends, came up with an event he called the Red Bull Flugtag. Flugtag translates from German to roughly flight day or air show. It features homemade aircraft built by self-taught pilots who launch off a platform three stories above a body of water that serves as the landing surface. The main rule is that a craft must be powered by muscle, gravity, and imagination. Judging from the results, also apparently a large dose of insanity.

The first Red Bull Flugtag competition was held in 1991 in Vienna. It was an instant hit. Local newscasts picked it up, and videos of the event were passed from person to person around the world. Ripples from the first Flugtag spread globally, giving Red Bull its first taste of the power of story combined with the power of innovative action.

Flugtag was such a success that it has been held every year since in over thirty-five cities globally, from Dublin to San Francisco, attracting up to 300,000 spectators per event. The success of Flugtag was a seminal moment for the young company, and it codified a core philosophy: dont rent space at other peoples eventscreate (and own) your own. Thirty years later, Red Bull has become a company that is hard to describe in conventional terms. Is it a packaged-goods company? Yes. Is it a media company? Yes. Is it an events company? Yes. Is it an adventure sports lifestyle company? Yes. So what exactly is the business that Red Bull is in again?