This is my conviction: that businesses that are driven by beliefs, by a sense of purpose, do better than vanilla businesses because they touch something deep in the hearts of the individual employees and customers to give our lives the meaning we crave.
I buy into this, big time. Note that I am not saying that only belief based businesses can be successful (that is manifestly not the case) but rather that belief based businesses have a better chance. I think this is particularly true for small companies.
Herd gives several examples, of which my favourite is Jamie Oliver. His life (and business) is all about making Britain eat better – making good food more accessible. That desire permeates everything he does, from his personal style, to choice of recipes, to school dinners campaign, and so on. And he has made a difference – my little girl starts primary school next week and as is the case up and down the UK now she will get a high quality lunch cooked on site. Plus he has made a ton of money for himself.
For this to work the belief or mission needs to be real and deeply held. Like Jamie’s is, or like Google’s ‘do no evil’ was (in the beginning at least), or like (UK supermarket) Waitrose’s uncompromising commitment to food quality. This sort of deeply held belief starts somewhere long before the company is born and isn’t the stuff you can workshop out in an away day.
To borrow another quote from Earls:
please don’t … try on beliefs like off-the-peg suits – ‘No, this 0nes a little tight around the shoulders’, etc
Ultimately it is the actions which the belief produces which count, and if the belief isn’t genuine the actions won’t come, at least not for long.
Many companies are working in sectors of industries where the sorts of world changing beliefs I listed above simply aren’t appropriate. That’s OK, a belief that is related to your segment works fine.
Tribold is the company in my portfolio that most stands out as being a belief business – and their aim in life, and their passion, is to make telcos more efficient and faster to market with new products by bringing FMCG product life cycle management disciplines into the telecoms industry. And boy, are they passionate about it, to the point that the old wasteful approaches almost make them angry – with the result that they are successfully creating a market for their software.
Another example is Moo – where a passion for product quality and helping people express their individuality makes them one of the most talked about small companies out of the UK.
And the final example I’m going to give is buy.at – our former portfolio company where their original mission was all about bringing high ethical standards into an industry that was riddled with spyware and dubious practice. That got them noticed and helped them punch above their weight. But is also meant that the temptation to increase revenues by stepping into the grey areas had to be resisted.
The takeaway for me from all this is that belief based businesses will score a bit higher than before when I am evaluating companies for investment and that in general I will encourage companies that have some element of belief in their DNA to bring it out explicitly and foster it like an asset.
Once again, having this kind of belief and passion in your business is neither a necesary nor sufficient condition for success, but I really think it helps, particularly in the early days.