""I mean, I guess there's the In-N-Out model where you just keep, you find what works and just keep doing it over and over again. Just get a couple of different SKUs and if it's working well and just hammer that away and be like In-N-Out Burger.""
""For commodity-adjacent categories where customers want reliability over novelty, my instinct was to limit the SKUs rather than burn capital expanding the catalog. Perfect the core product. Repeat.""
""First, repeat purchase rate. Raz pointed to a 30% repeat purchase rate as a healthy benchmark, noting Speroni was currently at 17% after 8 months.""
""Second, whether the business is consistently stocking out of inventory. Third, unsolicited customer requests for new products, which Raz called 'an important sign.'""
David Neeleman advises entrepreneurs to limit product variety and focus on perfecting core offerings, similar to the In-N-Out burger model. He emphasizes that for commodity-adjacent categories like underwear, reliability is more important than novelty. Entrepreneurs should track metrics such as repeat purchase rates, inventory stock-outs, and customer requests for new products before considering expansion. This approach promotes capital efficiency and sustainable growth, contrasting with the complexity often seen in industries like airlines.
Read at 24/7 Wall St.
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