Breaking down Rihanna’s Company (Real Tactics You Can Use)

Rihanna is worth $1.7 billion, but the majority of that money is not from music. It's from this. And it's because of her companies. And so today I'm gonna analyze Rihanna's lingerie company, Savage X Fenty. And my name's Alex Hormozi. I invest in companies. I own acquisition.com, which is a portfolio that makes unreasonable amounts of money. So be very, very impressed. And at the very end, I'm gonna be wearing all of this. And so there's 5 things that her company specifically, Savage X Fenty, does different that I think any business owner can model independent of whether or not you're a celebrity. And if you watch nothing else about this video, make sure to stay for the breakdown of her actual membership offer. She has like 9 different bonuses that she figured out how to combine to make what would otherwise not be a recurring product into a recurring purchase that I thought was really clever, that I think every business owner who sells stuff, even on any kind of subscription, can use. So helping me out today will be my lovely assistant Savage and Fenty. And let's pull up Rihanna's website. Okay, so here we are. So Rihanna looks great. This is awesome. And she's obviously selling tons of product through the site. But the real question is, how could she go from zero to global distribution overnight when she has no experience in manufacturing, no experience in brick-and-mortar distribution, and arguably probably not that much experience even in online shopping? And so she did 5 things that I want to dial in on. So the first thing she did was she partnered for her deficiencies, right? And so she has 3 core deficiencies around this business. So the first one is going to be distribution, but I mean physical distribution. She already has the media distribution, she already has the brand, so she has the eyeballs. But how does she get the stuff? How does she get the stuff into people's hands, right? The second is how do we create the stuff? How do we actually do the manufacturing? And then thirdly, the internet sales side is also a completely different game from making music or, you know, social media, or even to a degree design. 'Cause I would argue that she probably has a much stronger hand in the design of the products, which we'll get to in a minute. The first is that she partnered with someone with an existing distribution base, LVMH. And so if you don't know what LVMH is, LVMH is the holding company of Bernard Arnault, who is one of the top, whatever, 15 wealthiest people in the world. He's a centibillionaire. So if you haven't heard of LVMH, you've certainly heard of their companies like Christian Dior, Louis Vuitton, Givenchy, Hennessy, and Tiffany Co. And they own a ton more beyond that. So the first thing she did was she partnered for herd efficiency. Now, what does LVMH bring to the table that she could not otherwise have done on her own? Now, to be clear, I'm not saying that Rihanna doesn't have the ability to do this. It's just that she would have to learn a ton of skills. That's probably not core to what she's really good at, right? And so what things did LVMH bring to the table? So first and foremost, they have distribution. So as much as she has the media distribution, that's a U, there you go, maybe I can spell. She has the media distribution, she can get the eyeball, she can get the attention, she has the brand association, which we will talk about. But if people wanna buy from her, the vast majority of people still buy lingerie in person. And so even though she has an online store where she can drive people to, they have physical retail retail experience finding locations, building them out, and basically helping people build a retail model when she has no retail experience. The second thing that they could help her on is manufacturing, right? It's one thing to, uh, you know, make a product to do some dropshipping, you know, connect with some, some little manufacturer. The thing that happens is the bigger you get, the more difficult supply chain becomes. And the more you need to have partners who can handle that kind of scale and volume. And here's the hard part, day one, right? Like it's more common for you to sometimes you partner with someone and they kind of grow with you with their business as your business grows. But she's a super mega A-list celebrity day one. And so she has access to almost like a global audience day one. And so she needs someone with global manufacturing and global distribution day one. And so just put some numbers on this. They have 118 factories globally and over 6,000 retail stores. So they have the experience. So zooming back out, if you're a business owner, you're like, okay, well, what— I mean, that's great for Rihanna, what can I do with this? Well, number one is distribution is one of those key things that you can make partnerships for that makes sense, right? Like, for example, when I, uh, invested in Skool, I brought media distribution, right? I had a lot of people who wanted to start businesses or had businesses and wanted to build communities online. And so that something that I brought to the table. And so building distribution, either retail physical stores, that is something that, that, that's an asset. It makes something very valuable that you can bring to a partnership. For example, again, when we had GymWatch, which was the company that I started and sold, we had a distribution base of brick-and-mortar gyms. And so when I started Prestige Labs, which was our supplement company, I could sell through that brick-and-mortar distribution base day one, which is why that company within the first month that it's $1.7 million in sales in the first month of really being in business. And so I bring that up to say that like there are few things more valuable than building distribution. And so the third one to tie this off is that they had retail and online sales experience, right? So they know how to build out the online presence for all, all the brands they have under LVMH. And they probably have teams upon teams of specialists who know how to run direct response ads, who know how to run branding campaigns, that have PR specialists that can go and get her in the right places at the right times, all of that stuff. And so the big takeaway for me and potentially you, and this is something that took me too long to learn, is that I think in the earlier part of my career I wanted to learn everything. I think that's very valuable, but at some point I believe that businesses are limited by the collective brainpower. So these are my little brains there that are inside of an organization. And so if you're the only brain in the organization because you have taught everything you know to every other person, then it means that a business is limited on one person's lifetime. And I don't care how smart you are. I mean, if you're Elon, then you, you know, congratulations, you're an alien and have beat everyone. But for us mere mortals, we usually need to get other people in their lifetime of learning and put it all together so that overall we can create a bigger enterprise. And the best people in the world don't do it for free. And to give you some scale here, her laundry brand alone did over $100 million in sales. Now it's like, how do we know what numbers? They're not super public about the numbers. And so, but I think big picture we can just say they make lots of money. What can we learn? So number 2 is she picked a good market. Now, if you've read the book $100 Million Offers, I talk about this before I even get into the offer because your market is more important than anything else. To give you an extreme example, if you were selling toilet paper during COVID you didn't need to have an amazing offer. If you just had toilet paper, you had what? A starving crowd, right? On the flip side, if you were trying to sell marketing services and you're the best marketing services in the world, you're trying to sell it to newspapers that are paper newspapers. Those things are going down no matter what, right? And so the first thing that's going to be the biggest lever on the success of the business is who you actually serve to. Now, the vast majority of markets are neither of those extremes. They're not dying every day, 25% compounded annually in the wrong direction, or absolute supply-demand discrepancy between the entire world trying to buy toilet paper, right? Most markets I would just consider are normal markets. Now, what she did that was unique— and so I'll put it in here, I'll pull this up from the book— is that there are 4 components to a market that I like: are they in pain, do they have the purchasing power, are they easy to target, and are they growing? And so let's run through the market that Rihanna selected for her avatar through this framework. So first and foremost, were they in pain? The answer is yes. And she actually followed a rule that I really love when it comes to product, is that you want to have lived with the pain of what you're solving, typically for a long period of time. Now, Rihanna's a— she comes from mixed ethnicity, she has mixed parents, she has a very diverse background. And I think as a result of that, she also has a very diverse audience. And so one of the issues that she found is that lingerie and undergarments, uh, the nude colors were not actually matching the vast majority of skin tones. So they had a hand— they had one nude, but it didn't match basically anyone. And so she had a novel idea, which is number one, is that she offered 40 different shades of nude underwear. And so to quote her, she said, there needs to be something for a dark-skinned girl, there needs to be something for a really pale girl, and there needs to be something in between, right? And so that became the foundation of Savage X Fenty's entire business model. And so this then laddered up to their overall brand approach, which is aligned with Rihanna, which was about inclusivity and body positivity. Now, part of that is because this was a unique carve-out from the traditional industry standards. Not to say that those are right or wrong, it's just they were different, right? And the other piece of this is that her personally, we've seen her kind of weight journey over time. And so there's been like thicker Rihanna and then there's been thinner Rihanna. And so in either of the situations, and obviously there's people who are, you know, like, I like thick Rihanna, I like skinny Rihanna. Whatever. The point is, is that she has gone through this experience. She resonates with the pain, and her audience knows that it's authentic when she tries to solve that problem. And so the second thing that you want is purchasing power. Now, she had a very difficult decision to make here, right? LVMH is a luxury brand. So this is a, this is a company that's known for selling bags for $5,000, $10,000, $50,000. And sometimes they don't even put the price on their sites because it's so expensive. And they ship out 1 or 2 products 2 physical locations, which just to keep the scarcity so high. Now, meanwhile, let's pull up her site. Let's see if we can make sure that we don't get banned from YouTube for, for softcore. Look at the prices on these. These are super reasonable prices. $5 for G-strings. I mean, actually, I'm not really a purchaser of G-strings, but I imagine that's not super expensive. $25, 12 for 2 for $30, you know, $5 accessories, $10 bras, $15 sports styles. $20 lounge styles, $3 underwear, right? So there's, there's a lot of very affordable stuff on her site. And so for that, what she saw for the purchasing power for a very large audience, but she just made it affordable, right? And I think that was a good brand move for her given her upbringing, where she came from, and kind of like, I think it was on brand. It was the right move for her. So first off, did she have pain? Yes. And she lived with that pain and she knew her audience did too. So she made the 40 colors. Next is, did she make it priced so that the vast majority of audience could buy it? Yes. Her audience was everyone, so she had to make it affordable for everyone. Now the next thing is, was it easy to find? Now this is one of the big things that she brought to the table with her distribution. She was able to overnight have the world find out about this brand, which is an advantage that most people don't have. And so she just, she just did a casual overnight 20-year career to build her brand. So yeah, it was overnight, naturally., but she was able to easily find the audience because she already had them within her community. And then finally, is this a growing market, right? And so this is a company that is serving an audience of people that's very diverse. They have positive body positivity, at least in the US. People are getting more overweight every year. And so there's lots of people who feel disenfranchised with the beauty industry. Now there's a little bit of a pendulum swing back there. Fine.. But by and large, I think that, uh, we can just look at the projected value of her market segment and it's growing at a 5% CAGR, right? Which is basically compounded annual growth rate. And so not like she has a lot of market to go after and the market itself is growing because she's a smart businesswoman. Lingerie is maybe an $80 billion market, right? At least in 2025 or projected to be. But activewear is just under $600 billion.. All right. And that has a 23% annualized growth rate compounded. All right. So like this thing, so at 23.5%, just to give you context, that's doubling every 4-ish years. All right. Like very fast. So like that means that if you stayed in the same exact percentage of the market that you have, that means that your company would double automatically in that same period of time. And so this shows the advantage of having a tailwind versus a headwind, like just keeping up with the growth of the marketplace. Your business doubles. Not a bad gig. And so for her, boom, she checks off the having a growing market. And so when we're picking what industries we're going to go in, what avatars we're going to serve, it's like, cool, let's make sure that we're going after a clear pain point that's not being served. Do they have the ability to pay for what we have? Can we find them easily? And are they likely to continue to get bigger or smaller over time? Whenever you have a kind of a significant innovation, then you're going to have people who follow, right? And I'll give you a completely different example. Sarah Blakely recently just launched Sneaks, which is basically like high heels that are sneakers. And so her whole thing has been, how do I exploit industries that have not made comfort a standard but are still in beauty? There's going to be a large increase in these high heel sneakers because women want to be comfortable but also want the inches. And right now it's underserved. And so finding that pain— and this is also, again, like Sarah, like just like Rihanna, a pain that she had lived with for years. So the third big thing that she did exceptionally well was her brand. Now you're like, okay, well, what, what does that mean with regards to this? Well, she is a mom. She's had the change in weight. She has different body types and different skin color, kind of like herself. She's kind of mixed. And so because of that, it made sense for her to kind of do this brand. Now, big picture, What I want to highlight here is why would someone care about buying her stuff versus what they already are currently purchasing? So she has this massive audience of people that have positive affinity towards her, positive sentiment. They like her songs, they like her lifestyle, they identify with her, she's aspirational. So if you've got two bras that you're looking at, right, two products, and one of them is just from a brand that you have no real affinity towards, and the other is one where you have this you're a fan of the person and they're, and they're priced the same and the quality is the same, which one are you going to go with? You're going to switch from the one that you have no real affinity towards to the one that you do. And so she capitalized on that. And so one of what's happening in a lot of, a lot of markets is that there are a lot of old corporate brands that don't have personality or have lacked personality, lacked champions. And so they've made room for people to come in with a large audience and who have stronger affinity to then create their own brands with equivalent products in terms of quality and design and upset the market really quickly. Like you're seeing this with MrBeast and his chocolate bars versus Hershey. And I'll say, let me give you an example of a brand that's doing this really well. In my opinion, Nike has been able to stay iconic because they actually leverage personal brands better than almost anyone else. And so it's like, well, who's like— if LeBron wanted to start his own, you know, line, it's like he could, but he just went straight to Nike because if you want to compete with Nike, You're not just competing with Nike, you're competing with LeBron, you're competing with Tiger for the peak of his career. You're competing with, you know, huge teams. I should probably name more people that are associated with Nike, but all the greats, many of them have signed with Nike. So it's like you're not just competing with Nike, you're competing with all of their legacies. So Rihanna came up with this, this, this bra that because she's a mother and she wanted to make it easier for nursing, she wanted to have a bra that helped her do that. And so she made a bra that did that. And that bra she made cheaper with a membership, which I'll talk about in a second. But I think the underlying thought process here is what can I do to make my product faster for people, easier for people, or more risk-free, right? And so these are the vectors of value creation, right? And I talk about this in the Offers book at length. It's probably one of the core concepts within the book, which I refer to as the value equation. Which is the dream outcome for them is that they want to look sexy, they want to feel confident, and maybe even relate, maybe just a fraction of how Rihanna feels. They're like, she's cool, she's amazing, she's savage, she's ferocious, right? I want to feel like a baddie like her, right? And then perceived likelihood of achievement. Well, you know what? This actually fits me. It's actually my skin color. This decreases the risk around feeling dumb, feeling stupid when you put something on and it's way too small or whatever. Right? And then time delay and effort and sacrifice. These are the things like how do we make it easier? So she made the clasp easier and then she made them more comfortable. And then time delay, that's going to be more in the logistics of shipping for this type of product compared to maybe a service or something like that. And I'm going to talk about how she hammered the value equation in her membership model, which she did a number of unique things that I think a lot of people could copy who are watching this right now. Bad Girl Riri made her launch campaign and she followed the clear textbook Whisper, tease, shout method. And so she did a whisper campaign, which was where she had this kind of mysterious post, right, where she had Savage X Venti, which was at that time a mysterious account that she followed. It was the only thing she followed. And then overnight it got all of this press because it was the only thing she followed. And it got all of these followers virtually overnight, like 17,000 followers in 24 hours with zero content on the page. Think about what, what the whisper phase is, right? So It's like an ad. The key phase here is curiosity, right? And so this is keep the product itself mysterious and hint at how big of a deal it is, but keep whispers short. And bonus points if you can show behind the scenes. Now, this then transitions into where she's going for tease, right? So this is where she then teases the upcoming launch and she starts to fuel excitement. So people are starting to guess, what is this about? Now, I think people had a decent idea of what this what this launch was going to be when she made the tease. Right. And so now people like the anticipation begins to build. And then finally she transitions to the shout phase, which is basically giving people the call to action. Yes, it's live. Go buy it now. Savage X Fenty. And she made it available to her, you know, hundreds of millions of followers across all platforms. And I want to, I want to talk about something else that she did really, really well that I think a lot of us business owners can model. So one of the things that Rihanna does exceptionally well is she makes organic content. Right? And one of the key parts is that she makes her organic content contextual to the platform. So if you look here, one of the steps in making content that I have inside of the book, $100 Million Leads, right, is that like, this is, you know, the old LinkedIn, Facebook, Instagram, Tinder meme is that you can't walk into a party. I think Gary Vee has a great analogy. You can't walk into a party dressed in a tuxedo when you're going to a club. Like, it looks weird. It's out of place. Even though that tux, there's nothing wrong. You look like James Bond. You look great. It might be out of place there. Now, nowadays, maybe you'd be, you know, people would think it looks really cool because I think it would look kind of cool, but you get the idea, right? Now, she has, uh, a huge following on Instagram, huge following on TikTok, huge following on YouTube, and she makes the, the content, uh, platform-specific. And so there's very little crossover between her Instagram content or TikTok content, her YouTube content or TikTok content, YouTube and Instagram. And so she makes it platform-specific. So she's very clever marketer because she understands how the platforms work and makes platform-native content. And so here's more or less how she breaks down on Instagram. She does a lot more hi-fi stuff. It's a lot more aesthetic. And so she'll do more image-based stuff and she'll share photos and, you know, models kind of showcasing the lingerie. Now, the only behind-the-scenes material is probably going to just be her stories. All right. Now, TikTok is short-form videos, right? And so there she's showcasing products a little bit more. And she kind of hops on more trending sounds and challenges and she's a lot more collaborations with other creators. And because of TikTok Shop, it's easier for her to have direct purchases right on platform. And then finally with YouTube, she's using more long-form strategy, some more try-on hauls, reviews, promotes her VIP membership, which I'll talk about in a second, which I think is one of the more clever things that she's done here that I think a lot of businesses will copy that you can too. And so if you're curious, all of this is branding. All right. So with the exception of her making, you know, direct asks, letting people know about the products that they can buy, if you just demonstrate the use of the product, if you demonstrate expertise, if you're in a B2B or services business, demonstration in a lot of ways makes the association between you and the positive sentiment that you want. And if you do that over and over again, that is what can take a high information buyer, somebody who needs a lot of information before making a decision, which is the vast majority of the marketplace, and then convert them into a customer. Customer. Now, number 4, the next thing she did is she doubled down on affiliates really hard. And I'm a huge fan of affiliates. Uh, Allen, my software company, was built entirely off of affiliates. Prestige Labs was built off of a distribution base of affiliates of gym owners. And so I'm a huge advocate for affiliates. School is 65% affiliate traffic in terms of the, the percentage of the people who are on school. It's people from school who refer other people to school, right? And so I'm a huge, huge advocate of this because fundamentally affiliates compound, right? And they become these permanent nodes of distribution for you. And so obviously there's basically two levels of leverage that she was able to achieve with this business. First, she was able to leverage LVMH's retail distribution base. So that's the physical presence. And then layered on top of that, she was able to leverage the aggregated following of many mega stars. And what I think is really unique about her affiliate strategy is that you'll notice the different look and feel of the affiliates. I'll name them in a second. But like, they represent different beauty ideals. And so I think they were very deliberate about who they chose. So they have people like the Hadid sisters, Gigi and Bella Hadid. They had Emily Ratajkowski. I don't know how to say her name, but it's like very pretty lady, but different look. They had Normani, right? Again, different look. Lizzo, different body type, right? Vanessa Hudgens, Cindy Crawford, Demi Moore. And so lots of different look and feels to attract a wider audience and I think the common theme between all of those is that they're considered beautiful. This is something that's actually taken me a long time to learn, is that the affiliates that you choose have a huge influence. And the reason I put this on the same page is a huge influence on your brand. It's a bidirectional relationship. Your brand influences who's attracted to the brand, who wants to affiliate it, and then those affiliates then reinforce the brand itself of what are we about? Right. What are the associations people make with our products and services and the things they know, like, and trust? All right. She followed the affiliate playbook. This chapter inside of $100 Million Leads to a T. So she found her ideal affiliates. We just covered that. Now she made them an offer. Now, some of them is sponsorship, some of them to get a sponsorship and a percentage of revenue. I would imagine that for the vast majority of these types of deals, they're probably almost all just cash sponsorships, that they, they make a certain amount of posts every year. Where they're repping it and they're wearing it. And I think at this level, I would hope the vast majority of them, it was on brand for them as personal influencers to make the association with Rihanna and LVMH. LVMH has an amazing brand too, right? Now, obviously the qualification, they were already superstars. We already covered how to pay them, get them to advertise. That's what posting cadence, what things we want them to wear. Right. And so we have to think about the value equation also for a affiliates. And I think this is one of the most misunderstood parts. People think they're like, oh, I'm gonna have an affiliate program, people just automatically promote my stuff. It just basically never happens. Affiliates basically become another tier of customer for you, and you have to make an offer so good they feel stupid saying no, just like you would for a customer. And so it's like, how do I make it easier for them? So she sent them banners, links, promotional materials, so that it kind of made it turnkey for them so they didn't have to, you know, take a lot of time to think about how they're gonna promote it. And she could actually make sure that their promotions were still on brand. And so to reinforce her affiliates' positions as premier, right, in terms of aspirational, Savage X Fenty has a fashion show that actually won an Emmy that was on Amazon Prime. And she invited some of those men