Business models and model businesses
“A small business, growing only as far as it should, has much more capacity to be a model business. Being obliged to create value for the customer, since without it, it cannot survive, it is also subject to very direct scrutiny and immediate impact. I work fundamentally with design and creative businesses. For them, the value is in the cocktail that combines different things: the sold product, its function, durability, responsibility in the choice of materials, provenance and ethics in the manufacturing process, history, aesthetics, artistic value, and service. All are easily noticeable and valued by those who leave their money there.”
They are not necessarily antagonistic things, big companies and model companies. But I follow the example of Paul Jarvis and his "Company of One" and prefer the small things. Not because of the partiality of those who spent their careers working with children. But they mistrust the ability and willingness to continue to be ethically exemplary when things take on a proportion with too many variables to control. A company should not be able to grow to the point where, when change is imperative; it can only correct its course if it leaves a trail of destruction along the way.
Suppose this may be true in some traditional companies that have grown more than necessary. In that case, it is even more so in businesses with the Silicon Valley model. In some cases, good intentions were behind their creation, which quickly became aimed at accelerated growth and value creation for the investor. Unfortunately, this model takes them from round to round until the final blowout, which usually happens in the hands of the last person who realizes that this method will never be profitable. These entrepreneurs are often just out-of-the-oven engineers without any management or ethics training. Treating them and this culture and these businesses as a "model" seems as intelligent and sustainable as entrusting the planet's future to the hedge fund manager only because he dresses like Patagonia (or Ted Cruz).
A small business, growing only as far as it should, has much more capacity to be a model business. Being obliged to create value for the customer, since without it, it cannot survive, it is also subject to very direct scrutiny and immediate impact. I work fundamentally with design and creative businesses. For them, the value is in the cocktail that combines different things: the sold product, its function, durability, responsibility in the choice of materials, provenance and ethics in the manufacturing process, history, aesthetics, artistic value, and service. All are easily noticeable and valued by those who leave their money there.
Returning to Jarvis, sometimes it takes time to turn around and realize what makes a business work better. It's more enjoyable for those who run it when there is a controlled scale, a responsible attitude along the value chain and a healthy relationship with customers. Not forgetting the many good deals that exist, there are recent examples that I admire.
Such as Isto.pt, which has been increasing its offer in a coherent and structured way without losing transparency. Ghome herself, who starts from a less successful experience common to many late achievers, who need a more conventional experience first to build a sustainable path later.
Saber Fazer, without support, can have a profitable business around research, education, production and sale of raw materials for those who want to produce more responsibly. Iguaneye and its founder have been developing a highly innovative product for ten years. He never gave in to the temptation to sell the brand because he could not aspire to produce a shoe that the customer could throw into the middle of the forest at the end of its use. Cru Creative Hub, which spent years creating a local community and restructured its entire offering to become a great asset to everyone, including the company's financial health and sustainability. They are not all Companies of One, but their business models are close. A healthy love of work drives its promoters. They focus on the purpose and importance of what they do for everyone along the value chain.
The downside is that the charm of these small businesses is very appealing to those who want to sell millennial snake oil, such as the countless new brands. They fill our feeds with superficially beautiful things, managing to overshadow those who are doing things well. By communicating a value that doesn't exist, these brands sell Scandinavian designs made in Bangladesh, well-photographed and at sub-IKEA prices. This content is easily digested on Instagram by those who don't care much about what they buy. It is common for designers and artisans to see their designs copied into poor-quality products sold for a fraction of the original price.
There is also the opposite extreme. Such as those who follow Seth Goddin's First Law of Pizza and create that value without worrying about any other component of value other than the quality of the final product. I can see this every week on the street where I live. So many customers and I face the epic lousy mood of the owner of an unpretty restaurant, hardly a business we call a 'model', to buy the best pizza in town. A delicious thing that comes home at the same time as the outburst, "I don't know how I can give this guy so much money".
