A local craft brewer announced recently that they’re being bought out by Anheuser Busch and at first I thought, ‘Cool. Good for those guys.’ But then there was a fairly large customer backlash that got me thinking a bit more about it. Why does everyone get pissed when a company like this “sells out”?
The 10 Barrel guys say they sold because AB gives them opportunities they wouldn’t otherwise have. They obviously get better distribution but they also get access to used brewing equipment and ingredients that are hard to come by in today’s booming craft beer market.
That’s all fine and good but every company goes through these sort of growing pains. Surely Deschutes Brewery and Sam Adams went through these very same problems as they grew from small town craft brewers into two of the largest in the country. They managed to overcome these very same hurdles without selling out.
Ultimately, it’s easier to solve these problems by selling to a buyer like AB or even just to any buyer and then letting them figure it all out. But is it the right thing to do for your brand, for your customers, for the long-term health and vibrancy of your business?
I think the main reason people get pissed is because when a company sells out it sends a clear “show me the money” message. It tells people that profits are your top priority. And in the capitalism capitol of the world you’d think, ‘well, what’s wrong with that?’
What’s wrong is people want their companies to stand for something more than just profits. Look at the companies that have the greatest brand loyalty. Why do people love them so much? Apple, Twitter, Amazon. And smaller companies, like Ben & Jerry’s, In-N-Out Burger, Patagonia. What makes their customers so loyal?
It comes down to the company’s mission. Truly – don’t laugh. I know Twitter got some flack for the their mission statement last week but it’s precisely because the company puts their users first that they remain loyal. It’s simple, really. A company has to stand for something more than just profits for it to engender any sort of loyalty.
Apple has consistently told Wall Street that their top priority is creating amazing products. Period. Profits are an afterthought. Amazon clearly prioritizes their customers over profits. I don’t think they’ve made a dime of profit over the past decade. Ben & Jerry’s and Patagonia are both about doing social good while you sell top quality products. In-N-Out sells fresh, quality burgers at low prices.
Nowhere will you find any of these companies talking about how maximizing profits is their reason for being. Sure, they think about it but it’s not the reason they do what they do. They have a passion that goes totally above and beyond.
And I purposely left out Facebook in the list companies above because I believe they have a sellout problem similar to 10 Barrel. They sold out to Wall Street when they went public. They started prioritizing profits above their users and that’s why a little site like ello, with an inspiring “manifesto,” can come in and begin to steal Facebook’s users (whether they do on a grander scale is yet to be seen). I don’t have the data but I’d be willing to bet almost any amount that ello users are significantly happier with and more loyal to the site than Facebook’s. Because Facebook is a sellout.
So when you sell out, you’re effectively telling your customers that nothing really matters as much to you as making a buck and that’s just a bummer. It’s also why people hate Wall Street. Because Wall Street’s whole reason for being is to make a buck. There is no higher purpose.
Disclosure: I own Apple for myself and for clients. I’m short Facebook for myself and for clients.
UPDATE: My friend Lee notified me that Ben & Jerry’s sold to Unilever back in 2000. Looks like they setup the deal in a way that allowed them to maintain their mission (see: “Ben & Jerry’s to Unilever with Attitude“). Who knows? Maybe 10 Barrel will find a way to do the same.