The ModernMBA video is an excellent recap of Under Armour's missteps, but it glosses over a few challenges many WTE customers face:
In "David and Goliath: Underdogs, Misfits, and the Art of Battling Giants, Malcolm Gladwell's book tells of brands like Under Armour, young and bold, taking on titans like Nike and Addidas. It's a tale of the small and mighty and how the weak find strength. Power, he says, is only sometimes where you think it is. Sometimes, the one with less has more. Like a boxer in a ring, the underdog can land punches that the champion never saw coming.
Gladwell shares stories from the past, from fields and arenas, from boardrooms and battlefields. Gladwell speaks of students in grand institutions, feeling small amidst giants, even when their talent shines bright (I've been there and experienced that). Under Armour, with lean pockets, found strength in chosen allies, outpacing its expectations and getting close to those who loved them.
Life and business hardships Gladwell explains, like my dance with dyslexia, can be strange gifts. Dyslexia forced me to find new paths to craft new ways when the usual learning roads were closed.
Power, when wielded without care, turns on itself. Gladwell recalls the days of civil rights, where the heavy hand of authority only steeled the resolve of those it sought to suppress. Nike and Adidas, wise and patient, knew to tread lightly as Under Armour rose. A harsher stance would drive the restless to the young brand's embrace, so they kept their powder dry.
And then there's the tipping point where more becomes less—like a classroom that's too quiet or a company that grows too fast, losing sight of its roots. As Clayton Christensen wrote in The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail, there is a dance between what you have, where you're going, and staying true to what brought you there—Under Armour stumbled in that dance.
A scrappy upstart brand dedicated to short-run quality worn by a handful of famous, highly skilled athletes was Under Armour's why, a focus they lost to what I call "squirrel marketing" or chasing after ideas far away from their core. What does a sportswear company know about "connected fitness" and the Internet of Things (IoT)?
Connected fitness is too close to Apple for comfort. A mere glance, a few improvements and your Apple watch crushes all the connected fitness startups in a single blow. What Apple discards, sportswear brands might consider treasures.
Once, with M&M/Mars, we toyed with the idea of buying a trucking company. The allure of controlling it all, from start to finish, was tempting. But as we delved deeper, it became clear: buying a trucking company was a path away from what we knew, from our true north. We wanted (mandated) to uphold the Mars Five Principles, so we bought a Chicago ice cream company (Dove) instead.
M&M's heart was in candy, not on the roads. To drive trucks was to stray from the company's craft. A 'Why' isn't just words, but a compass helping to direct every step. Under Armour, with its costly ventures into connected fitness, lost its way. They drifted from their art of crafting sportswear. Use the link below to discover how their loyal followers felt the distance.
Eric's thoughts on borrowing wisdom from the great luxury brands - Hermes, Ferrari, and Rolex are relevant because moving from niche luxury to mass market acceptance is difficult (and I have a gift for understatement). Under Armour began as a "luxury" sportswear brand with higher costs and better quality. They stood apart, a different voice in sportswear. Rising from a "quality is king" niche to a bigger stage is a climb few master. Their strength was in their craft, and when the winds changed, they faced new storms:
Brands, like rivers, find their way to the sea. In time, they all touch fashion. Sportswear's dance with fashion quickened with Kanye West's Yeezy for Adidas. Those shoes, rare and distinct, are hunted.
Yeezy didn't stop at shoes. They showed their threads in New York, blending the simple with the bold. The streets met the runway.
People talk about Yeezy, not just for the craft but the chase. The sudden releases, the scarce numbers, they stir the crowd. Like Eric penned about drawing in your "non-customers in Digital-First Blue Ocean Masterclass, Yeezy lures fashionistas to buy sneakers.
Under Armour once stood tall, a beacon of quality. But times change. Now, every brand echoes "Just Do It." As the lines blur, fashion becomes the battleground. Yeezy changed the game with shoes that were more than just shoes. Under Armour, with its lackluster designs, needed to catch up.
There's a moment, a crossroads, when the old markers fade, and a new path is needed. Under Armour could've used that $700M spent on connected fitness to reclaim its edge to invite fresh minds to shape its future. Instead, they let others seize the mantle of fashion.
Tactics don't get set in stone. They must adapt. But looking back to what once worked is always a great place to start. What works and why is the hardest thing to know in our digital marketing world. When connected fitness flopped, Under Armour should have run back to its roots. It's not to say they should've clung unthinkingly to the past, but a nod to their origins, a touch of their initial spirit, might've kept them closer to those who loved them. Instead, they ventured into territories where giants like Apple loomed, ready to swat them down.
There are a few lessons every company and brand can learn from Under Armour's ugly fumble, including:
It's not just words on your About page. It's the heart of what you do, where you put your coin. Under Armour, straying from their true north of quality sportswear, spent $700M on a distant star called Connected Fitness. Connected Fitness bled cash and separated Under Armour from their customers, so that move hurt twice.
Like a river, every brand flows towards the vast ocean of fashion. When craftsmanship is assumed, and voices sound the same, style is the next stop for you're brands, company, and industry. Recognize the signs.
Know your ground, the terrain you stand on, and the looming giants. Don't challenge Apple on their turf. If you must face a behemoth, be swift, be different, and make sure there is a blue ocean between you and everyone else.
Innovator's Dilemma is a favorite read, and Under Armour illustrates Christensen's ideas, so let's go there next and think about how the one (book) illuminates the other (Under Armour's struggles).
Christensen's "The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail" speaks of the trap big firms fall into. Success, while a hard-won badge of honor, can become a chain that drags them down when new tech makes the winds of innovation blow.
Two kinds of innovation exist:
They refine what's already there, catering to the top tier. They don't rock the boat.
These are the game changers. They craft new markets, pushing old giants aside. They're often more straightforward, cheaper, and cater to those once ignored (the "non-customers mentioned in another great book, Blue Ocean Strategy by Kim).
The trap? Big firms, basking in their success, pour resources (money, time, people) into sustaining innovations because they are safe and profitable. But in doing so, they might miss disruptive market-defining changes, which, though modest at first, can change the game.
Money chases proven returns. Perfection makes it hard for disruptive ideas within a company to get the fuel needed to grow and thrive.
And then there's the allure of big markets. Giants chase them, leaving the smaller ones, the niches. But disruption brews in small, ignored places. "This is how we've always done things" can become a disruptor's invitation to harsh a big company's (or anyone's) mellow.
Christensen's advice? If you're big and established, carve out a space, a team, separate from the usual grind. I was part of this kind of skunkwork at M&M/Mars, and it worked. Trouble starts with statements like "Let them chase the disruptive," "Let them be nimble," and "Let them experiment." The future gets discovered away from the familiar, where tomorrow's money gets made.
Under Armour, once a beacon in sportswear, echoes Christensen's Dilemma. They carved a space with a simple idea: shirts that kept athletes dry. It was new and needed; people took notice and loved it.
But as they grew, they broadened, adding more to their shelves, trying to match Nike and Adidas. They poured money into battles, forgetting more minor wars and the fringes where they made their bones. Athleisure rose, a trend blending sport, fashion, and daily wear. Lululemon saw and seized it. Under Armour, anchored to their athletic core, missed it, illustrating the Innovator's Dilemma.
They decided to throw coins at big data and tech, buying apps like MyFitnessPal. It was bold, merging tech with sportswear, but tech bleeds cash fast. Resources, perhaps better used elsewhere, got tied up as the distance between Under Armour and customers grew.
Growth, while a sign of success, can also become a chain around a company's neck. The ways that once worked and the paths taken might not fit a changing world. Under Armour missed how their world was changing.
Under Armour's story is a lesson from Christensen's pages. They disrupted and soared, but their challenge was to stay aloft in changing winds.
What did you glean from the ModernMBA video or Under Armour's struggles? Which sportswear marks your stride? Nowadays, I pick up what REI offers. Shoes change fast unless you're deep in the game and I'm not a sneakerhead. Enjoy your weekend. If you need to talk, here's how to find me:
e: martin (at) wte.net
li: Martin Wescott Smith (on LinkedIn)