Do You Have a Stay Strategy?
Starting a business is one thing—sticking with it is quite another.(originally published by Booz & Company)
A few years ago, in my creative director days, I was asked to write copy for an entrepreneurship business simulation program. Aimed at business school students, it helped would-be start-up wizards understand how to write a business plan, build a team, make the big funding pitch, and then navigate an exit strategy: IPO or sale to a private equity firm.
It struck me as odd then that there was no stay strategy. What ever happened to hanging around and running the business? Of course, at the time, it was all the rage to be a serial entrepreneur: the prized skill was to be able to work hard and fast and then flip your baby for a gigantic payday—and then do it all over again. Successful business starters got to ski in Aspen, but business runners… well, I guess they’d be too busy slogging through the mundane to take much time off for jet-setting fun.
This experience recently came to mind when I read that a number of independent bookstore owners have turned to crowd funding platforms like Kickstarter to stay afloat. Theirs is very much a stay strategy: stay afloat in the midst of the turbulence of book publishing and sales; stay in the neighborhood they call home; stay in business to do what they love doing day in and day out. There are no fancy PowerPoint decks, no trips to Sand Hill Road to pitch nervously in front of Silicon-cool venture capitalists. Instead, they have made a plea that is central, indeed fundamental, to all businesses: Dear customers, if you value us, support us.
And customers have—sometimes to the tune of tens of thousands of dollars and from thousands of miles away. It is heartening to see that one can forge deep connections with customers without fancy analytics or a CEO. Filling a human need for community and connection as well as goods is what great local businesses do so well.
This is distinctly different from the struggles of bookselling behemoth Barnes & Noble. I was recently in one of the mall-encrusted Boston suburbs, looking to kill time before a meeting with a Wi-Fi connection and a cup of coffee. My quest took me to a Barnes & Noble store.
First, Wi-Fi and coffee are two things that B&N does well. But as I walked around in search of a restroom, I felt like a stranger in a strange land. This store was so unlike Brookline Booksmith or the Harvard Bookstore, my two favorite local haunts. The space was cavernous—I’d need a map just to find the right section. And I would have to navigate around the brightly lit Nook station. (The Nook, it appears, is B&N’s strategy for putting itself out of business: Sell a device that makes the bookstore obsolete as part of their last-man-standing duel with Amazon.) The aisles were too wide. The staff was concentrated behind the registers. There were no dogs sitting at the feet of casual readers.
B&N is a public company and it must appeal first to investors, not customers. Investors don’t much care what the company sells as long as the cash registers ring. Actually, many investors don’t care whether a company lives or dies so long as they’ve placed their money on the right side of the bet.
And that’s why B&N is looking for an exit strategy. After mounting losses, the CEO recently resigned. The company is on its way to possibly splitting the digital business from the bricks-and-mortar operation, and there’s talk of selling major assets or attracting third-party investors.
This story is all about the battle with a competitor, not the love of the customers. The stay strategy versus the exit strategy: It’s why I think that indie bookstores will survive while B&N may ultimately fall. I am both an admitted romantic and fierce advocate when it comes to local businesses in general and bookstores in particular. They are fundamental to local economies if not Wall Street fortunes. I am also an author and know that 70 percent of the sales of my next book will be online, principally through Amazon. That’s the reality and I accept that. I’m an occasional Amazon customer, too.
But I see so many booksellers—and indie distillers, food truck operators, and other retailers—who are so deeply committed to what they do and the customers they do it for that they are not interested in going where financial backers want them to go. They get up early and stay open late. They battle in the face of the sales tax advantage that benefits their online competitors. They adapt and try new offerings. They support each other. They weave themselves into the fabric of their communities.
In the places where there are devoted customers and committed sellers, independent businesses will hang on because their strategy is to stay and we want them to stay, too. This is a lesson every business person should learn.