When you walk down any street with a touch of history, you’ll see storefronts marked with dates. Est. 1856. Est. 1912.
There’s a sobering clash of the modern way of viewing business success — immediate scale and ultimately acquisition — and the older idea of generational dynastic family businesses, carrying with them the histories and the DNA of their founders, employees and customers, dating back hundreds of years.
Storied companies that hold a long, rich past at their core and remain true to their original values and traditions are remarkable, not only for their ability to remain in business over staggering periods of time, but also for their ability to adapt and change while remaining true to themselves and their purpose.
Founded in 1141 and run by the 55th generation of the Sudo family, Sudo Honke is one of these businesses. For 879 years, the oldest Sake brewery in Japan has thrived and survived through massive social, technological and economic change. Most recently it has weathered the threat of radioactive contamination from the Fukushima Nuclear Power Plant, with its products remaining pure to their original recipes.
Sudo Honke’s president, Mr. Gen-uemon Sudo, is conscious of the solidity and strength of their family’s commitment.
“Fashion changes all the time, but it does not last. For us, we will continue to make our traditional products which have appealed to many throughout these years.”
Sudo Honke have created something that is deeply rooted in their own culture, their local produce and their identity; and in doing so, they have developed a product that is loved and celebrated throughout the world. They have stayed true to who they are and what they do, eschewing the growth, scale and commoditization that has destroyed many young startups. There is a lesson here about the lasting opportunities of companies that are not designed to burn bright and burn out overnight.
Shifting the paradigm
When we talk about successful founders now, we’re rarely talking about the people who have built long term businesses, and made the successful transition from being a startup, to being an established, healthy and thriving company. For the most part, we’re talking about pump and dump high growth, media and VC darlings. The ideal is no longer the driven creator, whose dedication to her craft enabled her to design and sell a product. It’s the founder as a personality who has sold their product, their company, and ultimately themselves.
We have developed a “growth as a good” mentality. There is nothing, in our modern viewpoint, that is noble, beautiful or memorable about things that are built to stand the test of time; if they’re found to be in the way of constant growth, they should be destroyed, whether they’re traditions, values or heritage sites. It’s a way of thinking that is both ancient and entirely new. Paul Jarvis puts it quite succinctly;
“From an evolutionary point of view it is explainable why we wanted to gather more and more: with more food, more water, more protection against predators, we may be less likely to die. But today, growth feeds our ego and social standing.”
Growth, where it no longer serves a purpose beyond the accumulation of more growth — in the form of investors’ returns, company coffers and the personal wealth of founders — is worshipped. And the cost is astronomical. The endless growth goals of fossil fuel companies has for all intents and purposes doomed our entire planet. The endless growth of software and platform giants like Google and Facebook has destroyed lives and damaged democracy itself. On a smaller scale, growth as a god-value has turned promising founders into burned out shells, chasing impossible goals and sacrificing their time and their lives and their health in the process.
Jurgen Appelo is the author of Managing for Happiness. His view is that growth unchecked becomes not only healthy, it becomes destructive.
“Why do many business leaders want bigger organizations? If the purpose of a company is merely growth, it is similar to cancer. Your business should try to be the best, not the biggest.”
There is a world outside of this paradigm. It is possible to build a million dollar company with just a handful of people, or even one single founder. There are companies with growth scale and exits are not the measures of success. They’re companies with the founders’ passion, values and ideas are kept at the heart of every decision, and every action.
There are technology companies who live this paradigm as a reality
Basecamp, the creators of the leading productivity suite, multiple bestselling books and my preferred email client Hey, are an example of this approach to business success.
“It all started back in 2003. Back then we were a web design firm. Companies hired us to re-design and simplify their website. Business was great and we were busy. But we were disorganized. With so many concurrent projects, things began to slip through the cracks.
Projects dragged on too long. We dropped the ball on key deliverables. We had some major miscommunication (“Wait, who said that? We did? When? Where?”).
Back then, we relied on email for everything. Email’s great for many things. But it’s not great for long-running projects. Things get lost, people get left out of conversations, there’s nowhere to go to see what’s left to do. Know what I mean?
So we started looking for a project management tool. We needed something to help us communicate ideas, organize the work to be done, and present work to stakeholders. Simple as that.
We tried a few tools, but they were complicated and too hard to use. So we slowly slipped back to using our old standby — email. Our problems continued.
Frustrated, we decided to build our own simple project management app. A few months later we had something ready. We started using this tool with our existing clients.
Immediately projects ran better! We regained the sense of order and calmness we’d been craving. And clients noticed — they really appreciated the improved communication and organization.
Then our clients started asking us what software we were using to run these projects. Turns out they wanted to use it for their own in-house projects!
Hey, maybe we’ve got a product here! So we polished it up, priced it fairly, and put it on the market. On February 5th, 2004, Basecamp was born.
We announced it on our blog. Within a month, we had about a hundred paying customers. Hundreds more followed. Within a year, Basecamp was generating more income for us than our web design business. We had a hit! So we stopped designing web sites and went all-in on our software business.
Soon we started hearing stories of Basecamp being used in schools, governments, churches, consulting firms, publishers, and just about every other industry on earth. The stories keep coming and we keep growing.
Today, 22 years after Basecamp first hit the market, over 20,000,000 people have worked on a project with Basecamp! And every week, thousands of companies sign up to use Basecamp.”
The company has been built, grown and run at its founders’ own pace. They have never IPO’d. They have never expressed any interest in doing so. They remain a profitable company with their sights set firmly on culture, capacity and purpose. The potential to become a billion dollar company has always been there; but it’s never become Basecamp’s goal, and as far as they’re concerned, it never will.
In doing so, they have an incredibly low turnover rate, low overheads, high revenues, high profits and an ongoing pursuit of excellence that sets them apart from their competitors and peers, by sheer weight of their dedicated customer and employee focus. Growth happens. But growth is not the god-value. Growth happens, but growth does not require blood sacrifice.
As an angel investor, the prospect of companies avoiding hyper growth doesn’t scare me. I’m interested in teams, products and platforms that seek out revenue and profitability, and I’m interested in companies that can provide returns and gains organically, over an extended period of time, and through their longevity. I want to build relationships with founders that have a solid foundation — relationships that are built to last, without conflicts of interest, while treating them as human beings.
I’m reminded of this quote from Karma Ura, the director of the Center for Bhutan Studies, in the New York Times.
“Growth is not a goal by itself, everyone would agree. The real goal is happiness and well-being and all those things that they represent like vitality and health, socially empathetic relations, pure and vibrant nature, and meaning and freedom. There is no necessary causal or correlational link between growth and most of these goals. So it is surprising that growth as a topic has had such a hold on leaders all around the world. The “short-termism” of growth neither encourages us to look beyond our lifetimes to the distant future generations nor to pay our respect to the tremendous works of past generations on whose inheritance we live.”
Joan Westenberg is an award winning Australian contemporary writer, designer and creative director. She is the founder of branding and advertising firm Studio Self. Her approach to messaging, communication and semiotics has built her reputation as a writer, and she has been named as one of the leading startup voices in Australia by SmartCompany.
Her writing has appeared in The SF Chronicle, Wired, The AFR, The Observer, ABC, Junkee, SBS, Crikey and over 40+ publications. Her regular work can be found on Pizza Party, a blog about creativity, culture and technology. Joan is the creator Transgenderinclusion.com, an open-source workplace inclusion hack, and the author of the book #DIY, a manifesto for indie creativity.