136 Rivian IPO Through The Category Lens
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In Lochhead on Marketing episode 127, we talked with Al Ramadan, Co-founder of Play Bigger Advisors and co-author of Play Bigger, the book. On that episode, we unpacked the upcoming Rivian IPO.
Now that Rivian has gone public, we thought it would be cool to get together again, and unpack what happened through a category design lens. Specifically, how Rivian was able to use their IPO not just as a financing event, but a category-defining event.
Welcome to Lochhead on Marketing. The number one charting marketing podcast for marketers, category designers, and entrepreneurs with a different mind.
The Rivian IPO: An Update after the Launch
Al Ramadan recaps what Rivian IPO was during the public offering, which had a market cap of $60 billion at the time. This was already a very impressive number, considering that it was still an IPO.
What people didn’t anticipate is that after Rivian’s launch, they blew well past that and now sits over $100 billion in valuation. As a result, they are now the third largest automotive company behind Tesla and Toyota.
All in all, it is an incredible IPO, and one to observe in the future as it develops.
Betting on Potential vs Performance
Despite all that, there are those who are still skeptic of what had happen, and consider it as a fluke or a big risk. But it all boils down to betting on the potential of an idea, rather than just prior performance. Right now, some investors are seeing things in a new light.
“I think it’s hard for investors to understand because that’s been just been the way they are. They look at multiples of revenue or multiples of trucks shipped, or all of those other vital metrics within an organization. But the new investors I think, are starting to look past that.” – Al Ramadan
Paving the Way into a New Category
What Al finds interesting is that currently, 70% or more of the market cap for the electronic car category is cornered by Tesla. Yet Rivian might have to potential to great its own category within it, and be the category king for it.
Because Rivian is not just planning on the electronic cars and trucks. They are also including everything else that comes along with it. We’re talking charging networks and stations, dealerships, and the like. It’s taking into consideration the whole ecosystem, as supposed to just that one product.
“So if you go into this with the mindset of like, I’m going to value this as an automotive industry as it was over the last 125 years, you’re gonna miss big time.” – Al Ramadan
To hear more from Christopher and Al and their thoughts and updates on the Rivian IPO, download and listen to this episode.
Bio
Al Ramadan is a co-founding partner of Play Bigger Advisors and coauthor of the book, Play Bigger. He also co-founded Quokka Sports, which revolutionized the way people experience sport online.
Al then joined Macromedia and Adobe, where he spent almost ten years changing the way people think about great digital experiences. At Adobe, Al led teams that created the Rich Internet Applications category and helped develop the discipline of experience design.
In the early ‘90s he applied data science to Australia’s Americas Cup — an innovation in sports performance analytics. His work in sailing led directly to the idea for Quokka. He lives in Santa Cruz, California.
We hope you enjoyed this episode of Lochhead on Marketing™! Christopher loves hearing from his listeners. Feel free to email him, connect on Facebook, Twitter, Instagram, and subscribe on Apple Podcast! You may also subscribe to his newsletter, The Difference, for some amazing content.
