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Updated August 14, 2024You’re reading an excerpt of Great Founders Write, by Ben Putano, writer, entrepreneur, and book publisher. He’s the founder of Damn Gravity Media, a publishing house that inspires and educates tomorrow’s great founders. Purchase now for lifetime access to the book and on-demand video course.
Ratan Tata—the president of India’s third-largest automaker, Tata Motors—was traveling home from work one day in 2003 when he noticed something that disturbed him.
It was a dark and rainy evening. While Mr. Tata was safe in his luxury vehicle, he saw a family of three dangerously riding through the muddy streets of Mumbai on a two-wheeler. In India, electric bikes and mopeds are three times more popular than automobiles, so this sight was not unusual. But it sparked an idea in Mr. Tata—an opportunity to help India’s burgeoning middle class … and mint a new fortune in the process.
What if Tata Motors created a car that was as affordable as a moped?
Mr. Tata became obsessed with the idea and made an impassioned pitch to his board. The company got to work soon after. Over five hundred engineers spent more than four years designing a vehicle that wasn’t just comfortable and safe, but extremely affordable. When the Tata Nano was unveiled in 2008, industry analysts hailed it as a miracle of business and engineering. Best of all, it cost just $3K USD. Pundits were already declaring victory for Tata.
Yet despite a massive marketing effort, sales of the Tata Nano never reached expectations. Its popularity fizzled quickly after the launch. By 2017, the company halted regular manufacturing and only made the vehicles to order. In 2018, they made just one unit—a single Tata Nano rolled off the manufacturing line.
Tata Motors only ever produced 300K Nanos. By comparison, one Toyota factory in Georgetown, Kentucky, makes over 550K Camrys every year. The Nano was an unmitigated failure.
How did things go so wrong?
The logic behind the project was sound. There were millions of Indian families who needed an affordable car, and the Nano had everything they could ever want. But no one bought it. Ironically, the Nano was most popular among rich businessmen. They bought it as a toy—a gimmick to show off to their friends. You can imagine Mr. Tata’s frustration. He built exactly what the people of India needed—or so he thought. Was it possible he missed something?
Turns out, the Tata Nano was doomed from the moment it was announced. When Mr. Tata unveiled the Nano at the Auto Expo in 2008, it was accompanied by a horrendously out-of-touch slogan:
“The World’s Cheapest Car.”
In rapidly developing India, buying a vehicle was a status symbol for upwardly mobile families. It wasn’t just a practical purchase, but a highly emotional one. With those four words, the Nano positioned itself as a car for poor people. Any self-respecting person would rather keep their moped than drive “the world’s cheapest car.”
Here’s a clip from the Economic Times about the Nano’s early advertising:
It wasn’t just for people who would have to stretch to get a car; it could also have been for the housewife or a youngster who’d just turned 18. But the advertising focused at a parity level. It was not aspirational to the one and not desirable to the other two.
Mr. Tata built the right car at the right moment, but he failed to build something much more important: empathy. Driven by ego, Tata couldn’t see the condescending tone of his slogan. He wasn’t empowering the people of India; he thought he was saving them. You’re too poor to afford something nice, he seemed to say, so here’s the world’s cheapest car. You’re welcome.
The market responded bitterly to this insult, and Tata Nano sales plummeted.
Could the Nano’s fate have been different? Luckily, we don’t have to imagine too hard. History gives us a near-perfect comparison—another small, affordable car built for the upwardly mobile masses:
The Volkswagen Beetle.
In the 1950s, Volkswagen aspired to break into the American market where big cars reigned supreme. They hired ad executive Bill Bernbach—one of the original “Mad Men” of Madison Avenue—to develop the Beetle’s first advertising campaign.
Bernbach was struck by the honesty of the Beetle. It wasn’t trying to be anything it wasn’t. It was small, well-built, affordable, and didn’t take itself too seriously. Bernbach’s first ad tried to capture this honesty and paired it with a bit of self-deprecating humor. It took America by storm:
Think small.
Bernbach’s approach was genius. He took the Beetle’s greatest potential weakness—its size—and made it its greatest strength. The ad lists all the benefits of “thinking small,” such as great gas mileage, small repair bills, long-lasting tires, and fitting into tight parking spots. Best of all, the Beetle had no ego. It poked fun at itself. It was quirky and a little rebellious, just like America’s freedom-loving youth.
The ad was an instant hit, and so was the Beetle. While American car manufacturers rolled out yacht-sized sedans, Volkwagen’s tiny Beetle won the heart of America’s fast-growing counterculture. The campaign ran for over a decade, with each ad highlighting a unique “benefit” of the Beetle:
“Lemon.”
“It’s ugly, but it gets you there.”
“And if you run out of gas, it’s easy to push.”
“Not to be confused with a cheetah.”
One thing you never saw in the Beetle ads?
“Cheap.”
Yes, the Beetle was affordable, but Bernbach knew it stood for so much more.
Tata Motors should have learned a lot from the Beetle’s success. Before the launch of the Nano, focus groups said they liked the car’s ability to park in tight spaces. Tata could have borrowed a few lines of copy directly from the “Think Small” ad—likely to great success.
In fact, the Beetle’s famous ad campaign was a perfect template for marketing the Nano. Bernbach brilliantly highlighted the feeling of owning a Volkswagen Beetle: The joy of finding a small parking space only you can fit in. The relief of seeing that small insurance bill that leaves money in your pocket.
Tata, on the other hand, made a purely rational pitch for the Nano: it’s cheap. No matter how tight your budget, no one wants to be seen as cheap. (Unless you’re already rich; in that case, you may wear cheap as a badge of honor, just like the businessmen who bought the Nano.)
Bernbach understood something that Mr. Tata failed to grasp: buying a car is a huge life moment for most people—even if the car is small and affordable. Volkswagen turned this moment into a movement. After the “Think Small” ad was released, teenagers ripped it out of magazines and pinned it up on their wall. The Nano became the butt of jokes.
In 2015, after a massive decline in demand, the Nano team rebranded.
They scrapped their price-aggressive language and positioned the Nano as a fast, fun, easy car for free-loving young people (sound familiar?) Commercials featured young adults, laughing and carrying guitars, driving out of their way for their favorite street food. They drove to the beach, to parties, and cruised with friends down beautiful coastal streets. The ads focused on the experience of owning a Nano. But did it work?
The new campaign was a success from a creative standpoint, but it didn’t help the Nano’s sales. In 2018, Tata discontinued the Nano for good.
Marketing consultant Nauby Gupta thinks the new campaign was too little, too late. “[The Nano] has been positioned as a price-aggressive product,” he said in an article from Economic Times, “You can’t get away from that.”
The Nano’s last gasp teaches us one final lesson: you rarely get a second chance to make the right first impression. Negative emotions are like a tattoo on the heart—they stay with your audience, even if you later change your tone.
The Nano could have been India’s most iconic vehicle. Instead, The World’s Cheapest Car is no more.
Great founders, like great writers, put aside their ego and work hard to build empathy with their audience. And that’s exactly what empathy is: emotional work. Being rational is easy. Understanding what your audience really wants—what they need—is hard.
As a founder, empathy starts with you. Let’s look at how to build deeper relationships with your customers and audience.
When Brian Chesky and Joe Gebbia, the founders of Airbnb, arrived at the YCombinator headquarters in San Francisco, they received a shocking piece of advice that would change their lives.
The co-founder of YC, Paul Graham, asked the founders a seemingly innocent question: “Where do your customers live?” There weren’t many at the time, but they said Airbnb had a cluster of early adopters in New York City.