Redefining a category: our investment in Lick

I spent most of my 20s as a co-founder of a startup drinks brand, Firefly. We hoped the time was right (in 2003) for a new “category” of natural, functional beverages — a “healthy alternative to Red Bull”, if you will. The company was a modest success [sold to P.E. a decade ago so I should be clear I have no involvement today], but we had to admit that we failed to define or redefine a big category. I don’t hear people saying “I could really do with a natural energy drink / a Firefly”. Sadly.

There are thousands of brands born every year, but only a tiny fraction go on to be category-defining. In the drinks world, we saw a few — and when we saw them (and when you’re going to all the big food & drink events, you meet a lot) we knew it pretty much instantly. Something clicks. You “get it”. Innocent. Fever Tree. VitaminWater. Oatly. Pom. Bionade. LaCroix. Seedlip. You feel like an X and they just spring to mind. They “own” the category. Like Guinness, Tom’s, AirPods.

Take Fever Tree, whom I met in 2004. My dad had worked for Schweppes when I was a child, so I knew tonic water. But Schweppes had got lazy. They’d cheapened the product with sweeteners, giving it a metallic aftertaste. It looked dated, dull.
Fever Tree was perfectly executed from day one: great taste, clean ingredients, good name, aspirational design, and this memorable line, that if you’re spending all that money on expensive gin, don’t ruin it with cheap tonic. I remember feeling slightly sick and turning to my co-founder and saying “why didn’t we think of this?”.

Likewise, Oatly (way back since the days when Oatly still looked like this, I’ve always had enough Oatly at home to survive a minor apocalypse). All the other milk alternatives, if you bothered to read the ingredients, were full of stabilisers, thickeners, sweeteners, soy (ugh), or worse. Then along came Oatly, this funny little Swedish brand, where the ingredients were “Water, organic oats (10%), salt”. It was honest. It stood for something. I remember being chuffed when we were both critiqued in the same 2007 blog…

Fast-forward two decades, and Oatly and FeverTree are both £billion public companies: they’ve executed superbly and become category-defining brands in two enormous (and growing) markets.

And I’ve now been a tech investor for way longer than I was a drinks founder — and knowing how rare it is to build a category-defining drinks brand, I’ve mostly steered clear of the sector.

But I remain fascinated by the ingredients needed for a category-defining brand. And I’ve been fortunate to meet several in the last decade. Deliveroo. Spotify. Pure Gym. DuckDuckGo. Uber. Bulb. Headspace. Revolut. Monzo. Glossier. Charlotte Tilbury. Skyscanner. Gousto. MyProtein. (Transfer)wise.

They’re all wildly different, but there are some (mostly) common factors:

1. They’re going after big markets where the incumbents (if there are any) are complacent and/or out of touch with today’s customers
2. The products they’re replacing are so-so or deteriorating
3. The experiences they’re replacing are confusing, obfuscated or hard to use

Then along comes a product that’s…

1. Radically better on a dimension that matters
2. Refreshingly simple to use and understand
3. With solid values and an optimistic mission
4. A beautifully executed brand (and memorable name)
5. And a business model innovation that allows it to be good value too

It’s a rare combination.

Which brings me to Lick.

The paint market is weird. Paint is an incredibly personal thing — we live with the colours of our walls every day — and yes, more so today than ever, thank you Covid. It’s also a huge $90B market.

And yet, all the big paint companies are owned by chemicals giants…

Dulux is part of AkzoNobel, which dates back to the 1840s. Valspar is part of Sherwin-Williams, a coatings goliath founded in 1844 with revenues of $18B… Even much-loved Farrow & Ball was just acquired by Hempel, an industrial coatings manufacturer founded in 1915, whose latest annual report is shown here.

I’m sure they’re all great companies (any company that survives 180 years deserves enormous respect). But my suspicion is their priorities might be things like manufacturing plant efficiencies, raw materials costs and retailer rebates, rather than [I’ll come to that].
i.e., Big market dominated by out-of-touch incumbents. Tick.

Then there’s the experience of buying paint.

If you go to the paint section of a B&Q or a Home Depot (most paint is bought in big-box DIY stores), it’s rows and rows of giant paint pots, with confusing names; and a desk with some glossy brochures and colour wheels showing a mind-boggling selection of thousands of colours.

And when you do pick a colour, do you need Primer or top-coat? Gloss or satin or Eggshell? And what actually is “Emulsion”? And how much do you need? OMG! You feel stupid & inadequate. So you buy some samples, in cute little pots that are quite expensive and hard to open, and spillable, and by the time you’ve got round (weeks later) to painting them on the walls (and cleaning the brushes, and wiping up the drips), you’ve forgotten which is which. And what do you do with those cute nearly-full sample pots after? (answer, they sit in a cupboard until you realise they actually dried up years ago and throw them away and feel guilty about landfill).

Surely it doesn’t have to be this way?

That’s what Lucas & Sam at Lick thought…

Lick have understood that for today’s home-maker, the action of painting / decorating is as important as the finished outcome. People want to feel empowered to choose their own colours, inspired by influencers (“people like me”) and colour psychologists. They want to enjoy the process, be creative (not bewildered), and share their handiwork with friends and followers.

Just as Glossier or Charlotte Tilbury demystified beauty, and encouraged women to be more bold and experimental (and share their looks), Lick have understood that by demystifying colour-selection, and being the go-to place for advice, inspiration and products, they can win an ardent following, whilst disrupting the route-to-market of traditional paint brands.

The Lick customer doesn’t start at a DIY store. You probably come across Lick on Instagram (166k followers and counting) — but you won’t see a classic paint ad of perfectly polished rooms: you’ll see real people transforming their homes with simple, imaginative “I could do that” ideas.

You order samples that you stick to the wall (and can peel off just as easily). Still unsure about colours? Do an online colour consultation. Or read some inspiration or How To’s or an Instagram Story or two.
And the colours have names like Pink 04, rather than (say) Elephant’s Breath.

Then you order your paint, which is rich in colour, low in volatiles, and easy to apply — along with all the tools you need, which are made of eco-materials rather than single-use plastics. Lick take sustainability very seriously.

At every interaction, you can’t help feeling that someone has really thought about this — how to make it better, simpler, more helpful, kinder to the planet. And that, to me, is the essence of a great brand — every touch makes you love them a little more. The passion that Lucas, Sam and the team have for their customer is palpable. Even fundraising — opening it up to their customers (on Seedrs) was front and centre.

And yes, I love the name.

It doesn’t stop at paint: they’ve commissioned gorgeous wallpaper designs, transforming a dusty buying experience into a joy. Anything that brings colour to your home, Lick is figuring out how to demystify, empower and inspire.

I didn’t mention business model. Let’s just say that Lick is being as bold and innovative behind the scenes in how they make their products (less waste, faster turn-arounds, more quality control), as they are in how they talk to customers.

So… Can Lick come to define the entire paint category — so one day, when the world thinks about paint, it’s Lick that springs to mind?

Watch this space.

Thanks Lucas, Sam and the Lick team for having OMERS Ventures onboard for this colourful & inspirational journey.

“If you don’t listen to your customers, someone else will”
Sam Walton