Mike Cessario was a punk-rock fan and a creative director at an ad agency in 2009 when he noticed something at a Warped Tour concert. Energy drinks had branding that fit the room, and their cans were part of the act. Water didn't fit at all: nobody wanted to be seen drinking sissy bottled water at a metal show.

That moment was the seed of Liquid Death, a brand that sells canned water in tallboy aluminum cans, branded like a heavy metal band. It launched in 2019. By 2023, shoppers were buying roughly $263 million of Liquid Death cans a year in stores[1], and the company was valued at around $1.4 billion[2] in 2024. All from canned water.

The story shows the main ways entrepreneurs and businesses generate new product ideas.

Observation: watch customers in their actual environment

An entrepreneur is someone who develops a new business and takes on the risk of it failing. The most reliable way to find a real product idea is to watch your future customers do their thing.

Cessario observed that hard-rock fans wanted water (the need) but hated looking soft holding a clear plastic bottle (the want). Standard market research wouldn't have surfaced this. Nobody fills out a survey saying "I want my water bottle to look like an energy drink." You only find it by being there.

Interviews and surveys: ask customers directly

After observation, entrepreneurs validate the idea by talking to potential customers. Cessario's earliest move was to film a fake commercial for the brand that didn't exist yet. He posted it online to see who would care. It went viral. The comments filled up with people asking where to buy it. That's a survey response disguised as a comment thread. He had product validation before he had a product.

Market and technical research: study what already exists

The third move is to study the market data and the technology available. Cessario knew the bottled water industry was large and growing. He knew aluminum can manufacturing was abundant and cheap. The idea was a brand-positioning gap nobody else had filled. Market research confirmed the market was big enough to support a niche brand.

Experimentation: build the cheap version first

The final move is to try things. Cessario tested early branding at concerts and skate parks before committing. The fake commercial was an experiment. The first run of cans was an experiment. Each cheap test gave him real customer signals to refine the idea.

Quick recap

  • An entrepreneur develops a new business and bears the risk if it fails.
  • Idea generation strategies: customer observation, interviews and surveys, market and technical research, and experimentation.
  • The strongest ideas usually come from observing customers doing the actual activity.
  • Cheap experiments (a fake commercial, a small batch) generate real customer signal before any big investment.

Try this week

Pick something you do regularly that's annoying (a bus commute, doing laundry, finding a parking spot at school). Watch how other people deal with it. Write down what they do, what they complain about, and what shortcut they invent. That's idea-generation in observation mode. The best ideas usually live in the gap between what people say and what they actually do.

References

  1. Liquid Death retail sales reached $263 million in 2023, measured as sales at store registers. That figure is what shoppers paid, which includes the store's markup, so Liquid Death's revenue is a percentage share of it. Data as of March 11, 2024 announcement. Source: Liquid Death company press release, "Liquid Death closes $67 million in strategic financing... at $1.4 billion valuation," Business Wire. businesswire.com/news/home/20240310837019/en/Liquid-Death-closes-67-million-in-strategic-financing
  2. Liquid Death valuation ~$1.4B following a $67 million strategic financing round. Data as of March 11, 2024. Source: Liquid Death company press release, Business Wire. businesswire.com/news/home/20240310837019/en/Liquid-Death-closes-67-million-in-strategic-financing

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