07 Nov Polarization is an opportunity for mission-driven brands
Record turnout for the midterms reflects an electorate that is more engaged and polarized than ever. The deep polarization extends to every sector of society–including businesses. In years past, company executives went to great pains to avoid publicly discussing politics for fear of alienating customers, but since 2016 the proceed-only-with-caution rule book has been tossed out the executive suite window. Increasingly, consumers expect brands and their leaders to take a stand. However, doing so carries risks for large public companies. Just look at Nike, which took on social injustice by hiring Colin Kaepernick for its high-profile ad campaign, or Dick’s Sporting Goods, which took on gun safety in the wake of the Parkland shootings. Taking a stand was brave for those companies’ executives who risked–and received–blowback for their decisions. Leaders at privately held startups and consumer brands, on the other hand, “unburdened” of large, diverse customer, partner, and employee populations, risk far less by acting in accordance with their conscience. They enjoy one clear advantage over their deep-pocketed competitors: political maneuverability. If Nike can just do it, certainly startups can, too.
Startups should never enter the culture wars purely for commercial gain, but if they’re already mission-driven, the polarized political climate presents a rare opportunity for differentiation. Much of the consumer retail battlefront is dominated by trillion-dollar Amazon and its well-resourced competitors like Walmart, both perpetually strengthening with hurricane-force tailwinds. Maneuverability may be the secret weapon startups can sling at their wealthy but apolitical Goliaths.
Today, more than ever, consumers want to purchase products from brands whose values match their own. Millennials, who indicated an intent to vote in record numbers this election, have long demonstrated an interest in using their purchasing power to propel social change. This holiday season, which kicks off in just over two weeks, millennials will be joined in force by other demographic cohorts seeking to nurse their wounds or fuel their momentum through the force of their wallets. Shoppers will be searching for mission-driven brands that support their beliefs. Here are tips for brands hoping to connect with those values-seeking consumers:
1: Causes should extend naturally from the business model
Customers can smell authenticity, just as they can smell the stench of opportunism. Social missions should be authentic to the business model and never forced. For example, thredUP and The RealReal, used apparel marketplaces, express their values in environmental terms, given the textile industry’s significant greenhouse-gas emissions and the potential positive emissions impact from clothing reuse. When thredUP criticized Burberry for burning $37 million worth of clothes, the argument extended naturally from their brand. Similarly, Impossible Foods, which makes plant-based “meat,” also extols the potential environmental impact of their work. For Airbnb, whose business model involves welcoming strangers into homes, taking a stand against housing discrimination was natural. Since Salesforce.com creates software, it’s logical that they donate software to schools and nonprofits. The opportunities here are endless. In fact, most clean energy, healthcare tech, and consumer-focused companies have opportunities to adopt causes that extend naturally from their business models.
2: Values should be consistent across all areas of the business
Corporate values can’t be hollow statements; they should permeate all business practices, from hiring and compensation to product development, customer support, distribution and manufacturing. For example, Everlane is molding itself as a millennial-focused Gap focused on ethical pricing and manufacturing processes. TOMS, which operates a “One for One” donation model for every product sold, is also transparent in their supply chain practices. Thrive Causemetics, which operates a similar donation model, advertises that its products are vegan and cruelty-free. In contrast, it would be pretty outrageous for a so-called socially focused startup to enable child labor through their suppliers or expose employees to unsafe chemicals or working conditions. The company’s stated values should be exercised consistentl, from every stakeholder to every worker, including those employed throughout the indirect supply chain.
3: It’s not enough to study customers’ demographics; brands must understand customers’ values, too
Patagonia and REI make outdoor clothes, so last year when they protested the Trump Administration’s decision to for shrink public monuments, they were taking a reasonable, calculated risk in assuming that most of their outdoor loving customers would be excited rather than angered by their political stance. Smart water cooler company Bevi has done such a good job of promoting themselves as the healthy, techie alternative to soft drinks that the sitcom Silicon Valley featured it in an episode and a fitness tech company threw a party (and invited a New Yorker journalist) to celebrate the installation of their first cooler.
All companies should study their customers’ demographic and purchase behavior, but mission-driven companies should also use that data to assess consumer values and interests. They should enhance those efforts by establishing a direct dialogue with customers though social media channels, blogs, newsletters or individual users like brand advocates. Bi-directional customer conversations can provide insight into customers’ values–and also positively influence the product roadmap.
4: It’s never too early to focus on values. However, it’s often too late
Strong corporate cultures help startups on multiple fronts, including innovation, recruiting, and productivity. Cultures should match the brands and, when possible, be established from the outset. Course-correcting on culture when a company is young is one thing; doing so once the company has grown is no easy feat. Just ask Uber.
Large or small, companies need to be perceived as supporting employees’ rights and values in order to attract and retain talent. That’s why companies as varied as Microsoft and Viacom have defended gay workers’ rights and why both Apple’s Tim Cook and Koch Industries’ Charles Koch have asked for a softer approach to immigration. In contrast, back when Intel’s CEO planned to organize a Trump fundraiser, and when Mozilla’s (now former) CEO supported a campaign opposing gay marriage, their actions contradicted many employees’ values. Backlash was both predictable and inevitable.
5: It’s worthwhile to perfect the humble brag
Mission-driven brands should let consumers know what they stand for and how they’re demonstrating their values through positive business practices. If consumers don’t know that the brand is socially responsible, it’s hard for consumers to choose it based on that factor. Values and mission should be explicitly stated so any consumer searching for them can find them. However, active self-promotion by socially responsible companies can be tough to do well. No one wants to be seen as either exploitative or inauthentic. For example, Uber faced criticism for spending up to $500 million in a global apology ad campaign before completing many of the policy and cultural changes necessary to guarantee that another apology won’t be necessary a year from now. The most authentic and effective PR for socially responsible companies comes not from the company itself, but from their ecstatic customers and employees eager to spread the positivity.
Founders who create socially conscious companies are passionate about their missions and eager to achieve them. While creating such companies can be fulfilling, competing against well-resourced competitors can be an uphill battle. For once, socially oriented startups can leverage a unique window of opportunity due to a highly galvanized consumer base looking to effect positive social change through their wallets. Polarization is awful for our democracy, but at least it creates an opportunity for mission-driven brands. For those companies, the season to amplify their values is now.
Patricia Nakache is a General Partner at Trinity Ventures investing in early-stage consumer and business tech startups. As one of the longest tenured female VCs in Silicon Valley, Patricia is a board member of the National Venture Capital Association and a Lecturer in Management at the Stanford Graduate School of Business.
Source: Fast Company