The Biggest Factor That’s Going to Grow Your Business Is the Hardest Thing to Scale
While doing his MBA, Scott Belsky was frustrated by his creative friends just plain sucking at business. He set out to solve this problem a dozen years ago with Behance, a showcasing platform for creative professionals (later acquired by Adobe). In the process, he also built a vibrant creative community through the 99U conference. And recently he launched referral platform Prefer. What do they all have in common? High trust quotients.
Belsky understands that scaling trust is no easy feat. Key to his success is his audacity and commitment to caring for and catering to both existing and new users. Bringing value to users is a continuous process that requires an iterative feedback loop. And building a consumer’s trust requires time. Market researchers say it takes at least two years to build a brand and according to customer engagement firm SDL, it’s closer to five. At this stage, consumers can actually have a meaningful relationship with a brand.
Here are two tales of companies that took different approaches to scaling with varying results — you be the judge if they succeeded or not.
Kit and Ace
Their company name comes from fictitious muses; the athletic Kit and her counterpart surfer dude, Ace. Kit and Ace’s first mistake was placing all their chips on two personas that were bound to change. The second and more destructive error was expanding so rapidly; in just 2 years they set up shop in over 60 locations in four countries.
The company was due to double to 120 shops last year before they realized their big snafu; no one trusts a brand that they don’t know. In lieu of slumping sales, they quickly let go of a good chunk of staff and closed all shops in the U.S., Australia, and the U.K. To add insult to injury the company is floating at a measly 2.5/5 on Glassdoor. A former HR professional at the brand testifies, “They preach integrity all over the place. But integrity is the last thing this company has.”
Leadership seeps everywhere. And the brand’s bigger sister, Lululemon, is no stranger to controversy. They’ve had product recalls and quality issues, overpriced merchandise, artificially inflated stock prices, accusations of fraud, false advertising and obscene statements made by the founder. Oh yes, and let’s not forget the marketing efforts that excluded overweight customers.
Not all customers are created equal. In today’s economy fuelled by endless consumer choice; a given customers’ needs and wants change depending on the day of the week — heck even the time of day. Apple understands this, and their best advertising campaign ever is still the Apple store. They waited over a quarter of a century to open their first outlet, and when they did they spent over a year prototyping the perfect retail experience. Small wonder why their next generation of stores is logo-less.
Etsy was once a prime example of a business to emulate. The revolutionary marketplace stayed true to its original mission; reimagine commerce in ways that build a more fulfilling and lasting world. They were a registered B Corporation, had evangelic staff, and were loved by creatives, consumers and the general public alike. Earlier this year the company was ranked the second best place in America for new dads to work (just behind Netlfix).
But things change. They went terribly astray because the company took on a hefty sum of venture-backed funding — forcing them to scale at any and all costs. David Heinemeier Hansson, a founder at 37signals writes, “Experience deluded Etsy into thinking that they, uniquely, could ferry the scorpion across the river without getting stung. That a cool hundred million wouldn’t ever need to be paid back or corrupt its noble mission.”
Chad Dickerson, Etsy’s first CTO and later CEO was abruptly fired earlier this year and replaced by ex-eBay executive Josh Silverman. Immediately came a series of layoffs, killed projects, and resulting change in culture. This was a big departure from the sensitive leadership style of the original founder Robert Kalin, himself once an amateur furniture maker simply searching for a better way to market his craft.
According to a recording of Silverman’s first address to the company, an employee chimed in during the Q&A,”What is the new leadership planning to do to earn our trust and maintain the empathetic and human culture that is the entire reason that many of us chose to work here?” Silverman replied with, “Trust is earned, not granted.” Indeed.
The dance of trust between employees and their employer, between colleagues, and between brands and their customers is one of give and take. In everything he does, Belsky stays true to his original mission of organizing the creative world. Everything is for the benefit of the community. Today, it is the bold leaders that earn the respect of the masses, and it’s their courage that really makes the difference.
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