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The taboo around menstruation made it hard to innovate in the feminine hygiene market. It also made marketing these products difficult. But feminine hygiene brand Thinx turned that taboo into a strategic advantage with provocative marketing that generated buzz around their innovative product:.
Harvard Business School Professor Rembrand Koning wrote a case about the brand’s innovation and marketing strategies titled, “Thinx, Inc. Breaking Barriers in Feminine Care.” He talked about it with Brian Kenny on Cold Call in 2021.
BRIAN KENNY: Thinx is a really interesting study in innovation by a female entrepreneur. Can you start by telling us what your cold call is when you walk into the classroom?
REMBRAND KONING: So the cold call for this one’s fun. You walk into the classroom, look around, you’ve got 90 students there. And I generally like to lock eyes with a man in the class. Because this can be a little awkward to talk about. People are a little nervous. No matter your gender orientation, it can be something that’s difficult. And I’ll look at them and I’ll say, “Historically, why has there been so little innovation in the feminine hygiene market?” In general, the response I get, is a little bit of white comes over the face, you see the sweat bead come down the forehead. And a stutter. And they say, “Well, there’s tampons and there’s pads.” And I pause and say, “Hey, everyone, this subject can be hard to talk about,” and get a laugh out of the room, step back and say, “I myself, don’t have a lot of experience with it personally, but I’ve learned a lot from the case we are going to learn from the discussion.” And then we opened it up from there and explore exactly how taboos have really shaped the economics of this industry. I think we think of taboos and social norms, as something that sociologists study or something that’s important for social movements. But it shapes a lot of economic action. And I think there’s no better case than the feminine hygiene market. Where it’s really shaped things like switching costs, right? If nobody wants to talk about it, it’s very hard to learn about what the other options are. As you mentioned, there were no television ads until the 1970s. How are you going to get consumers to switch and do innovations and tell them about the innovations? And then a bunch of other factors start playing a role too. So you look at who runs companies like Procter & Gamble, it tends to be men. And so, are they just more likely to overlook the problem, maybe dismiss it? Perhaps. You think about entrepreneurs entering, we know female entrepreneurs were likely to see these problems, they have the experience, notice them, maybe less likely to overlook them. They have a hard time raising capital because essentially all venture capitalists are men up to the last decade. And so there’s all these forces that compound, revolving around this idea of the social norms and the uncomfortableness that lead to a market where people are really sticky in their purchase patterns. You don’t get a lot of innovation coming in. And you don’t get much competition. And for companies like Kimberly-Clark or Procter & Gamble, it’s an amazing place to be. I mean, their margins are like 50% on these products. It’s a really big market. Something like a quarter of the world’s population is your customer. It’s a great place to be. And so that’s where we start the conversation for the Thinx case.
BRIAN KENNY: That’s awesome. That’s a great way to start it. So how did you hear about Thinx? How did you decide to write this case? How does it relate to the things you think about as a scholar?
REMBRAND KONING: This one came from me looking around and being interested in how diversity impacts strategy. When we think strategy, we normally don’t think diversity. We’re like, “Oh, that’s something for organizational behavior or people studying HR.” And my contention, that’s not the case. A lack of diversity isn’t just a problem for who works at your firm, it’s a problem for the strategies you develop. And in particular, for the products that end up in markets. So if we don’t have women, if we don’t have African-Americans inventing. They’re often the people who are most likely to see opportunities to invent for people like themselves. And so I was looking for a case along this. And one of the coauthors on the case, Elie, had a friend who had gone to HBS, Maria Molland, who took over as the CEO of Thinx. And so we got connected to them and it just seemed like this amazing roller coaster of a story. We could probably do three or four classes just unpacking this case. And so that’s where it really came from was, how can we take this idea of diversity, and explore it in the context of strategic decision making in terms of marketing, places where sometimes it gets overlooked.
BRIAN KENNY: And we’re going to talk more about Maria Molland, she’s the protagonist in the case. So some great insights into her leadership and what she’s been doing since she went to Thinx. And I should say for our listeners, by the way, Thinx is spelled T-H-I-N-X, even though it sounds like thinks, with a K-S. So let’s talk a little bit… We’ve already teased a little bit about the size of the industry. 35 billion globally. You mentioned a third of the world is your potential customer base. Who are the big players in this space? And what does the market landscape look like?
REMBRAND KONING: The market landscape is highly concentrated. So these are classic consumer goods. You’ve got your big players, your Proctors & Gambles, your Johnsons & Johnsons, your Kimberly-Clarks. And then a lot of really tiny firms. So it’s super highly concentrated. And the way these firms compete is brilliant. It’s not competing by trying to lower prices or out innovate the other person. It’s a little bit about marketing. And in a lot of cases, it’s a little bit about just getting your product on the shelf at a Target or at a Walmart or at a CVS. And people are going to come in, they’re going to buy it. Historically, it’s something people have felt awkward about buying, so they want to just pick the one on the shelf, put it in their bag, get out of the store as quickly as possible. There’s some great history around this one. When pads were first invented, you’d go into the store in the 19th century, you wouldn’t even say the name of the product. You’d walk in if you were a woman, you’d put your money in the slot, they would hand it under in a secret bag. And you’d walk out as if the transaction never happened. So that’s the history that you’re facing. And what these companies, right? Brilliantly from a business perspective, I’m not so sure from a societal perspective, right? Is that they were able to take the fact that when nobody wants to talk about something it’s very hard to compete, it’s very hard to steal customer share. And so they’ve been in this very happy equilibrium for a number of decades, up to around 2010, right? Printing money, not really have to worry about it. Doing minor process improvements, but nothing fundamentally disruptive.
BRIAN KENNY: So I was going to ask if there’s brand loyalty, but it doesn’t sound like it’s brand loyalty, as much as it’s just too much trouble to change brands. I mean, you start with something and I would have guessed it’s generational too. Moms recommend something to their daughters and so on. Is that safe to say?
REMBRAND KONING: That’s what, from talking to Thinx who comes in and starts innovating, that was the research that they did. Is that mom passes it down to daughter. There’s a conversation that happens. And then the conversation never happens again. And so you stick with that brand you know. And to be clear, there are real risks of potentially trying new products. As soon as you get something that you trust and you know works, there’s a lot of reticence to switch to a new products.
BRIAN KENNY: Yeah. And the case does a good job of describing some of the dire consequences of this taboo, right? Because it’s one thing to have it be kept on the down low in the transaction in the store, but there are some real serious implications in some cultures about the taboos surrounding menstruation. Can you talk a little bit about that?
REMBRAND KONING: Oh, yeah. I mean, so if you look in India, for example, you see as soon as women start menstruating, what you find is that, they’re 12, 13 years old, they’re much more likely to stop going to school. They miss days of school, they’ll just drop out of school. You see similar patterns in parts of West Africa and Sub-Saharan Africa. And you end up with the taboo fundamentally shaping people’s opportunity even to go outside the home or get an education. So those are the most extreme cases that we see around the world. So this isn’t just an issue of, “I feel a little bit embarrassed,” but in a lot of cases, changes people’s opportunity in life. And so, that’s something that I think is lurking in the background here, when we think about these norms and taboos shaping the market.
BRIAN KENNY: We’re going to get to Thinx in a minute, but before we do that, I wonder if you could talk a little bit about the lack of innovation for decades, centuries, I don’t know how long. It hasn’t changed a whole lot going back for many, many years. Why is that?
REMBRAND KONING: Yes. So, you see an explosion of innovation in the early 20th century. A combination of women’s rights, changes in material science and technology, so you get more absorbent pads invented in the early late 19th century, really the early 20th century. The tampon comes on the scene out of innovations where nurses were treating wounds during both world wars. They see this super absorbent material, they put two and two together, the tampon gets invented. The big invention is the plastic applicator. After that, and then there’s nothing. And I think that goes back to what we were talking about in terms of that cold call. Which is that you couldn’t advertise. So if you invented something really cool and new, how do you tell people about it? People are uncomfortable talking about it. So word of mouth isn’t going to solve your problem. Further, these firms are making really good money. This is classic innovator’s dilemma. If I’ve got a product that’s got 50% margins and people are buying on a monthly basis. And I know that thing is going to sell and get turns in the pharmacies where they’re being sold. I have very little incentive to try to disrupt myself. I’m happy sitting on this stream of income that I know is going to be coming into the future. And so you essentially get no innovation for a long time. And then essentially when Thinx gets going in the 2000s, you start seeing an explosion of different products to address these sorts of issues. And suddenly the market becomes a lot more vibrant.
BRIAN KENNY: Yeah. So what was the problem that Thinx was trying to solve? What makes them different? And how did they establish themselves in a market that is pretty much dominated by these huge players?
REMBRAND KONING: So when you go back to the original founding story of Thinx it was, why are there so few options, a concern about the environment as well. So there’s a lot of plastic that comes off tampons. They have to be thrown away. They can be uncomfortable, you have to replace them, you can’t wear them for a long time. So the founder comes up with this idea for a period underwear. You can think of it as absorbent material, locked into this underwear, you put it on. You can wear it for a long period of time. It’s absorbent. It’s comfortable. You can sleep in it. You can move around in it. You can exercise in it. And so has this great idea, Thinx it’s going to revolutionize women’s empowerment, has trouble raising capital. So where’s she go? Well to this new website called Kickstarter at the time. So I believe it’s 2013. They go on Kickstarter raises $65,000, uses that to get a prototype of the product, get some funding from the manufacturer in Sri Lanka. And it’s off to the races in terms of really intense grassroots interest, particularly in New York City, where they started. And so, they drive that interest by doing something that’s super clever. And I think a really nice strategy, a really nice marketing tactic as well. When you’re confronting these taboo or uncomfortable industries, is you turn it around and you break that taboo. You break those social norms deliberately to drive interest and show people, in some sense, how absurd they are. So they do this amazing campaign, I actually remember seeing this in the subways in New York City, and the MTA in New York City, the subway agency pulls the ads… And the controversy from the MTA pulling these ads, got them enough free to exposure in newspapers and discussion online that I think they’re probably 10X, if not 100X the eyeballs they saw for the amount of money they spent. And so that was a great grace to get to that grassroots movement and show people that we’re at the forefront of innovating, of changing the norms in this space. So that there’ll be more innovation. So there’ll be more entry. They do a similar thing. And this one blew my mind. They go to Selfridges in London, and Selfridges wouldn’t let them use the word period in their display in the store. Boom! Gets covered by The London Press. Lots of great interest. Drives that growth.
BRIAN KENNY: Let’s talk about Maria Molland then. She comes in after Thinx has already been around for a few years. She’s stepping into us to a difficult situation because the founder and CEO has left the company under shadowy circumstances.
REMBRAND KONING: There’s a sexual harassment allegation, things get complicated, the culture’s coming off the wheels at the company, the founder leaves and Maria gets to come in. Graduate from Harvard Business School, worked at eBay, worked at Yahoo, has experience in consumer tech. And is really interested in working in women’s health. And is a little nervous about coming into this company, it’s around 30 some odd people at the time, and trying to right the ship. But decides to take on the challenge and come in as CEO. And there’s a lot going on. They’ve got really strong loyal customers, but a lot of the rest of the company is a mess. There’s some amazing talent there, but there’s no process. And so she has to come in and work out, how are we going to build a company that can’t just be a couple million dollars a year in revenue, but could potentially be half a billion dollars a year in revenue. She wants to grow to the next great consumer product here. And that’s the challenge she faces when she enters and takes over things.
BRIAN KENNY: So how do you even begin? It sounds daunting to even figure out where to start in a situation like that, where does she place her bets?
REMBRAND KONING: So I think she does one thing just to start, that’s 100% right and it’s any turnaround situation, is like take a deep breath, right? Calm yourself down. And look around at what’s working and what’s not. And what she found is that they had an amazing product, that people… There was a lot of demand for. They had amazingly loyal customers. But internally, they weren’t ready to scale. They had built a company around a purpose, and it was really very focused on changing the world and changing gender norms and thinking about a very liberal view of women’s rights. And though she was very much for it and wanted to support these employees, she also knew that if this product was going to make a difference in the world, they couldn’t just focus on the message and the purpose internally, they needed to make sure they put routines so that they can actually scale that innovation. Because otherwise the company would end there and you wouldn’t see the Thinx product being used in places like Omaha or Canada or Japan. Would only be used in Greenwich Village in Brooklyn. That’s not an outcome that really changes the world and makes women across the world better off. So she decides that she’s going to really focus on the business needs of the company, along with the larger social purpose of the company. Puts in metrics to incentivize those business needs, makes sure that they’re putting in a better cultural routines. Things like maternity leave. You wouldn’t think of this, but the company had no maternity leave policy. Which is remarkable, right? Serving women, but it gets lost in the mission because they were so focused on one particular problem. And didn’t think about it a little bit more holistically. And really sets up, from a strategic point of view, sets the groundwork so that they can think about how they’re going to scale this innovation that they have, scale this product they have. And so it retreats from growth for a year or two, sets up the team, hires some really great talent, and after a year or two was then ready again, to think about how do we actually turn this into… Maintain and even grow our position as the market leader.
BRIAN KENNY: The case also describes, if I’m not mistaken, that as she looked across the social purposes that were driving a lot of the company’s activities, she had to pull back from some of those. They weren’t all consistent with what Thinx needed to focus on. And she lost some people as a result of that. I mean, we’re dealing with a millennial generation who cares very much about the purpose-driven aspects of the organizations that they work for. And here people might’ve signed up for something and then got soured on the fact that a new leader comes in and is turning away from those things.
REMBRAND KONING: And I think this is one of the things where going back to this idea that we need diversity in our companies and the markets where we’re serving. They were having trouble in terms of their employee base of
