The founder’s story has power. It’s the first and sometimes only story that a young business needs. It’s always very personal. It’s very pointed too: the founder often follows a calling to right a wrong, fill a gap, be of greater service. Founders are impressive people. They get listened to. Even when someone else is telling their story it can be compelling.
|Updated June 2022 |
What’s the purpose and value of a founder’s story, beyond the heated, frantic, early startup period. Is there one? For example it’s impressive that Jeff Bezos started in his shed, with almost nothing, and changed the face of retail forever. It’s less impressive that the world’s richest man now pays his 800,000 employees next to nothing and has clearly yet to get over the shed thing. And neither of those stories influences most people’s buying choices.
More seriously, we’re strong proponents of the ‘outside-in’ method of understanding and constructing a story. We’re usually much more interested in what your stakeholders care about and think. So where does the founder and their story fit?
Insights and archetypes
Sharon’s insight is that there are two story archetypes at least – David v. Goliath and The Quest – that weave together the needs of others with the passion of the founder. And it’s powerful medicine.
"Davids often spot an opportunity where big corporations are getting it wrong. They start businesses that aim to disrupt the status quo, to do things differently, and to make life better for people."
Whereas The Quest tells the story of a life’s mission. Of perseverance when others have lost faith:
"They’re the businesses with the 30 failed prototypes that paved the way for the one successful one."
And each prototype got them closer to understanding and finally delivering what the consumer desired.
The founder’s dilemma
In businesses that scale fast – and through venture funding in particular – founders struggle to remain as CEO. A study by Harvard business school in the early 2000s found that 50% of founders had relinquished control of their business by the 3 year point, and only 25% of businesses that made it to IPO were founder-led. You can understand that for the Davids and the Questers, it was never entirely about making the most money they could. The founder’s tale, if it’s going to be useful long term, probably has to outlive the founder themselves.
So we set about researching the history and fortunes of some businesses that seemed to still achieve value from their founder’s story. It’s difficult to sort the marketing spaff from reality in many cases and especially in larger, more mature organisations. The nice thing about traditions is that it seems you can always invent a better one. But as a proof of concept we think this holds water.
What we’ve found fits neatly into the metaphor of a river. The young river is noisy, and energetic enough to cut its own course, create waterfalls, be harnessed to wheels and turbines. The middle aged river is deep and measured. It’s more settled in its landscape and still irresistible in its movement. The mature river is broad, has wider horizons. It nurtures its landscape, and on its tides float whole industries.
First of all, every young business benefits from a founder’s story. Most will have created one on instinct but it’s one thing to know it and another to tell it well. Sharon’s blog outlined the building blocks of a successful story, and we’re just going to summarise them here:
- An inciting incident – the experience, encounter or revelation that makes you think: I could do better, more or different,
- A mission – whose world do you want to change, and why. This sense of purpose or cause, of contributing to a narrative that’s bigger than you are, is the mainspring of a young business.
- A villain – who or what are you fighting against?
- Who are you fighting for? It’s unlikely to be all of humanity (but kudos if that’s you) so where and who is your tribe?
The story behind the stories
We can start with one from our personal experience:
Successful entrepreneur Bart Hartman encountered fuel poverty at first hand while travelling the third world. Realising that philanthropy couldn’t scale to meet the challenge (he tried), and that NGOs had already failed to make an impact, Bart founded NOTS Solar Lamps specifically to bring affordable light and power to 125 million households in Sub Saharan Africa, starting in Rwanda.
NOTS now manufactures solar home systems in Africa, for Africans, funded by African investment. Every innovation and decision is geared towards making the systems affordable to the poorest households and – crucially – cheaper and cleaner to run than traditional kerosene lamps. It’s about choices, not charity.
We can unpick that a bit. Bart’s consumer – so poor that consumer can feel like a dirty word – is motivated by the sound financial offer in the second part of the story. The NOTS proposition is a solar home system for US 60¢ per week. That’s less money than the traditional household would spend on kerosene and mobile phone charging and the system will light three rooms for eight hours, charge the phone and power a radio as well. The fee is not a service charge: it’s a payment against a microloan and after 100 weeks the household owns the system outright – meaning their power is then free.
Bart’s investor – ranging from impact investment funds, through angels to governments – is motivated by the sustainable impact and a sustainable business model. A second read from that perspective feels like an investment pitch on a playing card. Once you realise that investment funds dwarf aid budgets, that’s important too.
It takes a lot of partnerships for Bart’s enterprise to achieve its potential – a mobile phone partner, a microloan partner, a specialised credit checking partner, local community networks – and they can all see the purpose, clarity and opportunity in his story.
So far so good
Let’s talk about a much bigger and considerably older concern – Patagonia. Not the country (Welsh-speaking in many parts – bet you didn’t know that) but the outdoor kit and clothing company.
Patagonia is the love and life of a founder, his biological family, and the thousands of workers that are so close to the business that they count themselves as family, blood ties notwithstanding. The founder’s story is so vast that it’s impossible to fit into this short article and do it justice, not least because 50 years on he’s still there and it’s still evolving. But here goes:
Yvon Chouinard, upstart Californian rock climber, taught himself to forge pitons as a way to fund his lifestyle and a business got its start. Between 1965 and 1970 Chouinard Equipment redesigned almost every element of rock climbing hardware, and a tribe of discerning customers made them the largest supplier in the US.
As one of the first to climb the big walls at Yosemite, Yvon was shocked at the damage that pitons caused to the rock face. But there was an alternative: aluminium chocks that could be wedged and removed by hand, without hammering. Alongside passion and technical excellence, responsibility (to people and the planet) was added as the third founding principle of his expanded enterprise – Patagonia.
Almost every innovation in outdoor kit that you can think of – the three layer clothing system of shell, insulation and base; the introduction of performance textiles at every layer; the drive towards sustainability through the use of recycled and non-toxic materials – has been led by Patagonia, and shaped by those three principles.
OK – so what can we learn? Maybe the first observation is that the founder’s story here has lasting value because it begins with a strong purpose and transforms into core principles and values that continue to resonate so strongly with the business and its customers down the years. After a while the actual founding story – the surfing, rock climbing, Yosemite and all – becomes the stuff of lovely, well thumbed photograph albums but those principles continue to successfully direct the business.
Venture capital likes its growth curves to be j-shaped. It wasn’t that way for Patagonia. They had their spurts, for sure, all self-funded. In 1991 they overstepped their resources and had to lay off 20% of their workforce-family. But rather than turn to venture funding they took a long look at what kind of company they wanted to be – those values again – and that meant growing within their means.
By the early 1970s the young Patagonia had decided that doing less harm to the planet was not enough. Instead it would be a force for positive good. You can easily trace this as an evolution of the founder’s story and principles. They began active environmental campaigning as well as supporting other campaigners. In 1986, the business committed 10% of profit to supporting environmental campaigning and later upped it to 1% of sales – regardless – and have steadfastly maintained that commitment ever since. And every time they amplified their environmental and social mission, they experienced growth.
As founder and sole owner, Yvon Chouinard was influential throughout but from 2008 until this year the business was led by CEO and President Rose Marcario – proof that the founder’s story can positively influence generational change within maturing businesses. This experience made Patagonia a leading light in the Benefit Corporation movement. If anything Rose has been more activist and more radical than the founder.
Under her leadership the business has actively pursued a living wage for all workers in their supply chain; invested in Regenerative Agriculture through Patagonia Provisions (and its Long Root Ale, for example) and created Tin Shed Ventures to fund other, mission-driven businesses that aim for sustainable growth. How has that benefited the company financially? A quadrupling of sales over the period, with revenues reaching $ 1 billion.
In 2018 Patagonia changed its own mission to: ‘We’re in business to save our home planet.’
Wide horizons, for sure. And a tide powerful enough to float many boats. Convinced yet? Here’s one more, for the road.
TOMS Shoes can sometimes split opinion. It burst onto the scene in 2006 as a poster child for impact commerce, putting the boot into traditional shoe companies in the process. Its promise to consumers was that for every pair of shoes it sold, it would give away a pair to a person who had none. That act of simple generosity galvanised the business’ reputation and powered remarkable growth. It’s Founder’s Story was full centre in that journey:
Founder Blake Mycoskie was on a trip to Argentina in 2006, where he witnessed at first hand the life challenges faced by children who had no shoes. Emblematic of pernicious poverty and wider societal failings, there were simple, practical challenges too – like not being able to walk to school. So the idea came to Blake of a for-profit business with giving as its raison d’etre. TOMS Shoes and its One for One model was born. Later, TOMS looked to have an impact in eye care and clean water through TOMS eye ware and coffee sales. Other shoe companies got in the game, some with their own buy-one-give-one schemes, arguably a manifestation of TOMS impact.
In 2021, TOMS moved away from its One for One giving model to a grants based system targeting broader issues. Over the previous 15 years it had given away 95 million pairs of shoes. From now on, the business will instead commit 1/3rd of net profit to established grass roots programs with the reach to create deeper impact. The issues it addresses – mental health, equal access to opportunity for BAME and LGBTQ+ people, and ending gun crime – have a broad resonance.
That’s the rose tinted view and edit. For sure TOMS purpose and story electrified its brand and early growth, but challenges there were aplenty. They had problems reaching out to shoe recipients in the volumes they’d envisaged. When they straightened that out, TOMS was criticised for undermining indigenous shoe industries. By 2014 they had addressed those issue too, just in time for the business to run into financial headwinds. Founder Mycoskie sold a 50% stake to Bain Capital and – right on trend – a new CEO and management team were appointed. The new team failed to turn things around however and in early 2019 the debt holders took control of the business, and appointed a new management team led by CEO Magnus Wedhammar.
Arguably Mycoskie’s founder’s story has became a footnote, and the man himself more totemic figurehead than business leader. But here’s the thing: through the rise, decline and now resurgence of TOMS the focus on positive impact – for people and the planet – has never waned. The business and its purpose are inseparable. And that’s the power of the founder’s story here. Mycoskie’s story is the thread running through the business, and it’s woven itself into something much greater and more disruptive. The 2021 Impact Report shows that TOMS donated more than $ 2,001,022 to 43 grass roots organisations, positively impacting 427, 197 people across 20 communities.
What’s your founder’s story going to be, and how can you use it?
For early startups and micro businesses, Sharon has this:
In website terms, a written version of your founder’s story sits fair and square in ‘about us.’ It’s the story of how and why you started. We’re always hearing ‘people do business with people’ and the founder story can be a place where you show the person behind your operation.
Being able to tell the story verbally is helpful too. Particularly in the early stages of a venture, if you’re looking for investment, and being asked ‘why this business?’ (When they’re actually asking, why should I believe in you?’)
Writing it down will help you get clear on your mission, and find a way of talking about it that connects with the people you want to serve.
Think about your inciting incident, let your imagination run free, and see where it takes you!
If you’re further along in your journey then you can also try this:
It’s a great exercise to create a manifesto, with your team, that clarifies your mission (why), your principles and your values (how). Its inspiration is of course your founder’s story, now with a good added dollop of you. Use it as you might a compass, for your business plan, hiring plan and content plan.
Weave the threads of your founder’s story around other people’s careabouts. People are still buying from people – but now because they see themselves reflected in the posture and principles of the business, not a single individual.
You could reflect that in an ‘about you’ for your website. Think of it as an outside-in view of your manifesto. For a business like Patagonia an ‘about you’ could go something like:
| The pull of the ocean, the mountain, the forest never goes away
| You know that just being there can damage those places you love
| Everyday you try harder to tread more lightly on our planet
- If your purpose is as crystallised and quantifiable as Patagonia and TOMS, then add a dedicated ‘Impact’ area to your website. Go take a look at those two (links below) for ideas for structure.
Create and share a wide range of content that honestly mirrors your story and manifesto (or whatever you created to capture your principles and value). Try to frame everything through the eyes of your tribe of customers, colleagues and collaborators.
Good luck with creating, refining and sharing your founder’s story. There are a few extra resources listed below and opposite.
Let my people go surfing: Yvon Chouinard
The education of a reluctant businessman
Tools for grassroots activists Nora Gallagher
The irresistible power of the founder’s story Sharon Tanton
Patagonia: Our company history In photography and words
Patagonia: Impact 1% for the Planet
TOMS: Impact and Purpose In infographic form