How Influencer Creators Fail At Entrepreneurship Due To Product Mismatch

Alex Hormozi recently went on Karat's show and gave a valuable insight on how influencer creators have a product mismatch that often results in failed business.

Graham Stephan’s Flop Coffee Brand Business

Graham Stephan launched a coffee business, but it struggled due to a fundamental mismatch between his brand and his audience’s mindset.

Stephan is a financial YouTuber who built an audience primarily composed of frugal followers conditioned to save money rather than spend it.

This demographic, gathered through years of content promoting financial prudence, proved unwilling to purchase a product considered non-essential.

Coffee, even when pitched as a budget-friendly alternative to Starbucks, still represented spending rather than saving. The core issue was that Stephan’s audience was generally unwilling to spend money.

The failure of the coffee venture is an example of a broader problem many creators face.

Stephan’s primary audience is people who are dedicated to saving and investing. Attempting to market a luxury product, like coffee, to a group accustomed to cutting costs was a fundamental misstep.

Instead, his audience might have responded better to financial tools or services aimed at saving money or optimizing investments.

Discount Services Fit Graham’s Brand Better

Stephan’s attempt to sell coffee clashed with his established brand identity.

A product like coffee, seen as a commodity or even a luxury by his penny-pinching audience, was a poor match.

He would have found more success with a service like Honey (before its privacy scandal), which directly aligns with the savings-focused mentality of his followers.

Products offering clear discounts or financial benefits would have been more suitable for Stephan’s audience.

The broader lesson is that creators must deeply understand their audience’s values and motivations.

In Stephan’s case, promoting financial tools or services that provide tangible savings or benefits could have been more profitable and on-brand.

Graham’s ethos of “don’t buy this stuff as it comes off the same factory floor as this stuff but with an added markup on it” didn't align with its money-saving audience but it would have aligned perfectly with Honey’s positioning as a money-saving tool.

Creators Misjudge Products Despite Influence

Most creators’ have a poor track record with product choices.

They often attempt to launch new, unproven products or try to create monopolies within industries where their influence doesn’t easily translate.

Most creators often misunderstand their true leverage. Instead of trying to dominate new categories, creators should focus on leveraging their existing audience to sell simpler, proven products.

For instance, Emma Chamberlain’s coffee brand, Chamberlain Coffee, was another misstep in a saturated market where influence did not easily convert to sales.

Creators often make the mistake of trying to build entirely new products rather than partnering with established companies to leverage their existing audience effectively.

For example, Logan Paul’s Prime brand relied heavily on existing infrastructure from Congo Brands rather than attempting to build something from scratch.

Creators frequently fall into the trap of trying to create monopolies from scratch as they often mistakenly latch onto Peter Thiel’s Zero to One mantra, believing that success lies in building entirely new categories.

Attention Should Sell Commodities, Not Innovations

Creators’ real power lies in their ability to command attention, not necessarily to innovate.

Rather than reinventing the wheel, creators should sell familiar products that align with their personal brands.

Attempting to create a monopoly from scratch rarely works and often backfires.

Creators already have a monopoly — it’s their audience's attention. Aligning their efforts with what their audience already expects from them is far more effective.

Andrew Huberman is the perfect example of using his influence to sell Athletic Greens.

Hormozi’s own approach with Acquisition.com also exemplifies this strategy. By focusing on businesses that are already successful but require operational and marketing improvements, Hormozi positions himself as a multiplier of growth rather than an originator of new categories.

He suggests white-labeling as a practical way to monetize attention, rather than attempting to build something from scratch. For instance, Mr.Beast’s Feastables brand began as a white-label product before scaling into a fully-fledged business.

Retention Trumps Churn for Creator Success

Revenue retention is the core of Hormozi’s strategy for building successful businesses.

His main focus is on keeping customers, not merely acquiring them.

Companies with strong retention naturally grow over time.

The concept of retention goes beyond basic customer loyalty. It involves creating business models that are inherently sticky.

Low-Churn Products Beat Churn Fixes

Rather than trying to solve churn through patches and improvements, Hormozi advocates for choosing products that inherently have low churn rates.

Products like internet services or insurance have high retention because people rarely cancel them. By applying this insight to creator-driven businesses, most creators can build much stronger, more durable revenue streams.

Creators often struggle with churn because they attempt to build loyalty for products that do not naturally retain customers. By focusing on commodities that people are unlikely to abandon, creators can create consistent revenue streams without constantly fighting churn. Internet services or cell phone bills illustrates this point effectively.

Elon Musk is a good example of such services. He built a car company (Tesla) and a internet service company (Starlink) as people don't naturally churn out of cars or internet services once they are setup for atleast 5-10 years.

Mukesh Ambani, India's richest billionaire, did the same with Jio (internet service) which he only launched in 2016 and he monopolized the entire 1.4 billion population.

Ryan Reynolds also partnered up with Mint Mobile, which has natural retention built-in.

Creators Can Shift Users From Unloved Commodities

Hormozi’s recommendation for creators is to identify commoditized products their audiences are already using and improve upon them.

The theory is simple: people don’t love their internet or cell plans, but they keep paying for them.

If a creator can use their influence to shift users away from these generic services to something more engaging or aligned with their brand, the business potential is enormous.

Many celebrities often launch alcohol brands (Conor Mcgregor with Proper 12, George Clooney with Casamigos, The Rock with Teremana Tequila), energy drinks (Prime Energy with Logan Paul and KSI), or make-up brands (Kylie Jenner with Kylie Cosmetics, Katrina Kaif with Kay Beauty) as they are commodity products that have re-occurring part attached to it.

Best businesses are either re-occurring businesses (toothpaste, make-up, doctor) or recurring business (SaaS, gym memberships, Netflix, Starlink).

This strategy allows creators to leverage their influence in a way that feels natural to their audience. Rather than trying to innovate with a groundbreaking product, creators should consider selling commodities their followers already use, but with an added value proposition that differentiates them from competitors.

Top Tweets of the day

1/

Using hidden APIs is a double-edged sword.

You can build a massive business but you take a lot of risk because if you get caught, your entire effort goes back to zero and you have to restart again.

Its like being retired at 60 and having to go work again because your life-savings went back to zero. Not recommended but successful products do exist like Teller, Comma, Plaid, Mint, Drippi, and a lot of LinkedIn scraping bots. There is a reason LinkedIn is one of the hardest sites to scrape (still doable but much harder than other sites) due to valuable data.

2/

At one point, Lemlist (entire Lempire if I'm not wrong) was worth ~$30 million but they went downhill. This was a year ago at $50k MRR. This is what I mean when I said above don't build business on top of quicksand.

Build businesses that grow and only grow and never stop growing. And have little to no risk for the peace of mind.

For example, don't build on top of social media platforms (high-risk APIs) as its capped by growth of the platform. Like social media schedulers (hard to grow after a certain point and requires too much effort to sustain forever... Buffer made $100m in total but its profits are way down at $202k for 10+ years of effort and much of its obviously overbloated team of 73 employees for a scheduler app)

But best case is to build on top of AI APIs (like ChatGPT, Claude, Gemini, Grok) since AI isn't growing anywhere and you have no cap anymore as humans aren't the constraint (a big company can spin up 1000s of AI Agents now when they become reliable) so you can grow extremely fast and effort compounds.

3/

Supabase is a database platform that is a cheaper and easier alternative to Firebase. And it has the best in-class documentation plus integrations with top AI companies.

As such, it is growing extremely well due to just integrations.

One of the best examples of cloning a billion-dollar company to make another billion-dollar company. Shaan Puri (host of My First Million podcast) often says the best time to clone a business is 7-10 years after its launch as that's the time when the product becomes bloated due to too many features. Example would be PayPal (1999) vs Stripe (2011) or Plenty of Fish (2003) vs Tinder (2012) or Buffer (2011) vs Typefully (2020).

Rabbit Holes

1. How to scrape Reddit in 5 mins to build a SaaS like ReplyGuy by Mike Rubini

2. Apple does AI as Microsoft did mobile by DHH

3. How I Used GPT-4.5 to Create an AI Cat Meme Generator for Fun and Profit by Thomas Smith

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