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| James Gamble (l.) and William Procter (r.) formed a lasting partnership in 1837 to make soap and candles. |
Today, an entrepreneur who is launching her first business venture has to create a product that solves a problem. She must sense a need in the marketplace; perhaps a gap that others in the category have missed. Her solution may alleviate a pain point for a targeted segment for a few years. She might creates something that is easy to get, simple to use and everyone is talking about it. Her product can have a story built-in so that people want to share. Buyers may value what she has to offer and are willing to pay a top price. Her business is on its way.
But will it survive 1 year? How about 10? How about 100?
My wife started a business in 1975 and I joined forces with her about a year later. The business, Rachel’s Brownies and our brand existed for about 20 years. It disappeared around 1995 about six years after we sold the company to North Carolina based Goodmark Foods. I like to say that it prospered and stayed relevant as we nurtured it along like raising a child. But at some point, you have to let go and send the child out into the world.
Why do brand disappear?
Of the top 500 companies on Fortune 500 in 1955, only 71 are still on that list. Companies that have disappeared include Zenith, Rubbermaid, Scott Paper and many others. Some businesses get sold and others no longer are relevant to the market. Brands can erode their value over time by blurring into their category and not standing apart from competitors.
But some businesses have figured out a formula to make it work. Imagine a company that was started 20 years before the Civil War and is a leading company today. On October 31,1837, William Proctor and James Gamble started out making candles and soap. It is still on Fortunes Top 500 list (#28) and shows no sign of stopping. It is a business that understands how to adapt, change and focus on the future.
Our Purpose
We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders and the communities in which we live and work to prosper.
Sometimes a brand intersects with a moment in time where trends align. But that moment is fleeting. Often brands can be incredibly popular as they get discovered and then, when they get mountains of publicity, their ubiquity turns people off and consumers move on to the next new thing. Gap Stores may be the poster child for that problem.
Brands can disappear as they no longer meet a need in the marketplace as technology and innovation eliminate, replace and disrupt markets. The Yellow Pages, that I recently wrote about don’t really serve the same market that it did 25 years ago. Small point and shoot cameras seem out of focus when you carry an excellent camera within your iPhone. Retailers like Circuit City couldn’t keep up with innovation and lose out to challengers like Best Buy or Amazon. And as my mom likes to remind me, you used to call the RCA repair man and he’d come to the house to fix your TV. That world almost doesn’t exist anymore.
Universities are being threatened by less-expensive MOOCs.(Massive open online courses) that disrupt their business model. Taxis are being challenges by the Ubers of today and traditional hotels are threatened by AirBnB.
So how can you endure and stand the test of time?
Your business has to always be thinking beyond the products and services it delivers today. The challenge is that you can’t just make and ship today’s product without an eye toward what will eliminate it tomorrow. The key is that you build a culture that is curious, inquisitive and always trying to solve tomorrow’s problem before it arrives. The best companies compete against themselves and try to displace their own brands, technologies and services before a competitor does it for them.
What About Tomorrow?
Start ups and entrepreneurial ventures have enough of a challenge to make payroll this month let alone think about 10 years in to the future. But once a business is up and running and cash is pumping through the organization like blood in the veins, an eye past today is necessary. Become a competitor to yourself is the key where you are always striving to displace your products with something truly new and improved.
What is your company doing to stay one step ahead of today’s needs so that it can prosper in the decades to come?
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