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Dollar Shave Club and Unilever win big — what about the customers?

Everyone is talking about the $1 Billion dollar buyout of Dollar Shave Club by Unilever in terms of disruption and startup success. I can’t help but wonder what’s in it for customers.

DSC sells monthly subscriptions to inexpensive men’s razors, a rebel brand positioned against the trend of aggressively overpriced and over-featured razor blades. (Think $1 per blade vs. $3-5. Razors are such a racket!) The company has never turned a profit, so from their perspective a buyout worth 5x their revenue is a dream. While they hadn’t yet made it into the black, what they have done exceptionally well is attract an engaged, young demographic poised to buy their product monthly for decades to come. Access to this customer base — and the cheeky advertising that built it — is what Unilever is paying for. It’s a big number to DSC, a tiny one to Unilever. A win-win.

The analysts see disruption as the takeaway. That another upstart has undercut an established industry is indeed scary news to many businesses. Naturally, the press has put out a string of breathless warnings about new models and subscriptions coming for their market share. No one is safe! They’re right. They are also speculating how this affects competitors, particularly Gillette, owned by P&G, and if a pricing war on the horizon. All very interesting from an industry point of view.

Where are the customers in this conversation? I haven’t seen any mention by analysts of how this might be good (or even bad) for customers. How do they feel about their indie brand selling to a mega CPG company? How will this impact their dirt cheap razor prices? Will they stay loyal, or defect to one of DSC’s competitors, like Harry’s? Will Unilever maintain what they value about this brand?

Unilever is a good company, known for a sincere commitment to being an ethical, sustainable business. I have no reason to believe they are scooping up a competitor to wreck it. But they won’t maintain an unprofitable division for long. Reportedly, they hope to increase profitability by reducing marketing costs and scaling up. Who knows? Maybe they’ll pull it off. But if I were a customer, I’d be expecting a price hike. If not now, soon.

Regardless, I hope Unilever is truly listening to these new customers and keeping them front and center in their conversations.

ETA: This is a great article about how this disruption happened, and role the invisible juggernaut AWS plays.

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Lessons from Mad Men: Bigger is not always better

mad-men-time-and-life-partnersAs Mad Men winds down, we find our beloved anti-hero, Don Draper, losing his agency.

Over ten years in television time we’ve watched him pull rabbit after rabbit out of his fedora to stay ahead of mergers and takeovers. (Not to mention contracts.) Despite a last-ditch effort, this time there are no more rabbits. It appears Sterling Cooper & Partners will be assimilated by mega-agency McCann Erickson.

Why the SC&P partners would be dismayed at joining the fold does not compute to the McCann rep. He says to them: “You’re dying…and going to advertising heaven.” Where heaven is the biggest clients at the biggest agency. And it’s true, this is heaven for many folks.

But from Sterling Cooper’s point of view this means giving up their clients. The ones that stood with them while they built the agency. The ones they’ve built strong relationships with.

That hits home for me.

Their story is a little different than mine. In addition to clients, SC&P also faces a loss of autonomy, probably most of their staff, and the Sterling Cooper name. More than their name — their identity. If anything, I’ve been reaching beyond my old identity and giving away some of my independence! Where our stories intersect is valuing relationships over billings and not believing bigger is necessarily better.

There was a time in my career when I dreaded cocktail party questions about my work: “Who do you work with?” “Have you done anything I’ve seen?” Few people had heard of my clients, and this felt like the mark of being less-than. Just as the McCann guy assumes, I did expect to move on to bigger clients and bigger agencies. Even though I liked the values-driven, emerging businesses that gave me my start, it seemed inevitable to leave them.

I hadn’t yet grown into the wisdom that these clients were not stepping stones, they were my destination. Big or small, the size of the organization is irrelevant. What matters is finding people you trust and look forward to working with, towards a goal you can get behind. It’s especially sweet when they are small, though. The feeling you get from helping a founder bring her vision and legacy to life is incomparable.

Now I see those questions differently. Sure, we could talk about a company you’ve known for decades, or I could introduce you to one that’s breaking new ground or making the world a better place. Which conversation would you rather have?

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Are you ready for the design-led revolution?

Over the past year I’ve been fortunate to collaborate with the sustainability team at Autodesk to envision their support for the design-led revolution. Haven’t heard of it? You may not know the DLR moniker, but you’ve seen revolutionary design in action. From affordable prosthetics to solar robotics, high-impact solutions are emerging everywhere. And just in the nick of time!

The reinvention needed to make our planet livable for 9 billion is immense, and I love that Autodesk is committed to helping designers, architects, builders, engineers, and entrepreneurs reshape our world. We need more companies like this leading the way.

Their aim isn’t only to raise awareness about epic challenges and inspire people to do what’s right, although that’s certainly a big part of it. It’s also about helping designers and companies get ahead of  the inevitable resource shortages, urbanization, and climate change coming our way. To stay relevant — and profitable — in the future, you must start thinking differently now.

So, how will you design a better future?

Credit where credit’s due: The awesome folks at Free Range are the storytellers behind the design-led revolution video, manifesto, and hero case studies.

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Small Giants

smallgiantsThe book Small Giants resonated with me in a way few business books ever have. Author Bo Burlingham defines small giants as “companies that choose to be great instead of big”, an idea near and dear to my heart.

As a young designer in Chicago, my employers and clients were small companies. At the time I wasn’t aware how special those early experiences and relationships were. The work seemed, frankly, boring and limiting. I was antsy to move on to bigger agencies and brands.

After relocating and landing in a Silicon Valley agency, I found myself deeply conflicted. My heart wasn’t in working for mainstream, consumer brands. I missed the thoughtfulness and intimacy of the work I had done before. I missed the sense of purpose gained from helping good people realize their dream of owning a thriving business. Words of wisdom from a long-forgotten designer echoed in my head:  “There are no good projects, only good clients.”

After the agency collapsed, I struck out on my own. Eager to get back to “good clients”, I thought about what my favorites had in common. Here’s what I knew: They sold something of tangible value, and they did it honestly. They were fair to suppliers and partners. They were small and closely held, often family-owned. They treated employees with respect and generosity. They were local businesses — what defined that wasn’t clear, but I knew it when I saw it — and they supported community service and philanthropy. In short, the world was better with than without them.

This led me to a loose concept of social responsibility: doing business with integrity, giving back to the community, and treating people well. It also seemed being privately held was the key to being able to control everything else. Those became my four criteria for choosing clients ten years ago.

Finding Small Giants was inspiring and validating. Finally, a cogent description of what I’d intuitively understood but been unable to define! An entire book about the business unicorns I love! I now have a clearer sense of who the right clients for me are, and new insights into what to look for.

One idea that hadn’t previously gelled as part of my definition was limited growth — choosing to grow only when it serves strategic goals and doesn’t sacrifice culture or ideals. Growth has become such an unquestioned requirement of business that not growing is surprisingly radical.

Another insight was that “small” isn’t necessarily what makes my clients a good fit for me. It’s having a family culture, engaged leadership, and sense of purpose where I thrive. While it’s certainly easier to maintain those in a small company, there may be mid-sized companies that also fit this bill.

I also love the inclusion of soul, or mojo, that Burlingham cites as a secret ingredient. Running counter to management playbooks and belief in predictive data, it acknowledges there is a special magic that allows a company to be intimately, deeply great. That I couldn’t concretely define what I loved about my clients makes sense — there is simply a quality. They either have it or they don’t, and no logic model can predict it.

Finding small giants is no easy feat. But with renewed inspiration and clarity, I look forward to seeking more of them as clients and also to doing my part to help aspiring small giants find their mojo.

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Living economies

Friday I attended a talk by Hunter Lovins at California College of the Arts. She briefly touched on a point of view about globalization that struck me: You can’t have a living economy without a local economy — otherwise, you have an economy that is either killing or dying.

Think about that for a minute. In a global economy, your economy is either killing others or being killed. In order to thrive without destroying, you must have a robust local economy.

That’s not to say business shouldn’t benefit from global markets. But the foundation of economies should be rooted in creating sustainable value and resilience locally.

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On Being Unreasonable

Friday I gave a brief speech at a Designers Accord town hall event “Design Change, Change Design” hosted at California College of the Arts and organized by Design Strategy MBA students Ahmed Riaz, Elysa Soffer, and Mike Funk.

My talk was geared at designers who want to work towards social good but aren’t sure how, and it was inspired by The Power of Unreasonable People by John Elkington and Pamela Hartigan. A fellow speaker also brought the Unreasonable Institute to my attention, which is based on the same idea.

A short version of my speech follows.

My goal in life is to be an unreasonable person.

It’s true most of the time people need to be more reasonable, not less — but reasonable people don’t change the world.  A quote from George Bernard Shaw:

“The reasonable man adapts himself to the world around him, where the unreasonable man persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.”

To make a change in the world, we have to be unreasonable — we have to believe in things that most people think are pointless, or crazy, or impossible. At an event about “design for social good” it’s safe to assume many of you are already pretty good at this. But for those just getting started, here are 5 ways designers can be unreasonable:

1) Push back

The first step to being unreasonable is challenging the design parameters you are given. Even if they were written by a boss, client, or someone you think is smarter than you are doesn’t mean they’re right. Designers have a pivotal role as the gatekeepers to “stuff” — messages, products, processes — and they can use this to influence what is produced.

Ask basic questions: Is this the right solution, or even the right problem? Does it have to be done with this material or process? If you can, add your voice and improve the outcome. And even if you can’t, sneak in improvements. I had a client who didn’t like the idea of recycled paper even though he couldn’t tell the difference, so I simply didn’t tell him the paper he approved was recycled. Problem solved.

2) Just say No

Once you’re used to pushing back, stop working with clients or projects that are harmful. Tell your boss you won’t work on certain accounts, or turn down projects or clients if you have that power. Yes, it’s scary and risky. That’s why it’s unreasonable.

3) Believe you are the only one who will solve the problem

Reasonable people think others — people, governments, corporations — are working on the world’s problems. You may even be thinking that you aren’t business savvy, smart, or qualified enough to make a difference. But designers are, by definition, trained to solve problems. You’re exactly the right person to identify a need and find a way to meet it. Keep in mind you don’t have to have a big idea yet. Just keep your eyes open and needs will appear in your own backyard.

4) Find profit where others think there is none

Once you found your opportunity, become a social entrepreneur. Social entrepreneurs are the very definition of unreasonable, bucking common wisdom by finding creative ways to create economic gain alongside social good and refusing to accept they have to choose between doing good and making a good living. Just because no one else has figured out how to solve a particular problem and make money at the same time doesn’t mean you can’t. Figure it out!

5) Sell out

As a social entrepreneur you may have formed an entire community of unreasonable people working outside the system, and all of these ideas start seeming…very reasonable. In this group, perhaps the most unreasonable thing you can do is go back inside the belly of the beast and become a social intrapreneur instead. Going back to point #3, believe you are the person who can change  a mega-corp like Monsanto from the inside. I’ve taken a few potshots at Adam Werbach for working with Walmart and selling his agency to a media conglomerate, but he’s right that a micron of change by Walmart can create a larger measurable result than everything else combined.

For more about social entrepreneurship and what it means to be unreasonable, I highly recommend reading The Power of Unreasonable People.

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Tone Deaf

Recently I was astonished to see this Sherwin Williams logo, which I assumed old signage. Seriously, who in the world would think this logo is a good idea? I was wrong. This very old mark — which, to its credit, looks decades newer than its pre-1900 origins — is in fact still the approved Sherwin Williams logo. How have I never noticed this before?

It’s easy to imagine an ambitious young paint company loving the original idea: “Wouldn’t it be great if we could paint every building in the world with our revolutionary standardized paints?” But in the current context of environmental awareness, the intent is overshadowed. Even if you overlook the bloodiness of the paint they are still, quite literally, pouring toxic paint over the earth.

Paint that ends up down drains and in landfills is a hazard to environmental health and water supplies, and this image gives the worst possible impression of their attitudes towards corporate responsibility. I can hardly grasp what must be flat-out stubbornness behind the decision to stand by this logo. More companies should honor their brand history, but this is simply an absence of good sense.

In branding, your intentions don’t matter; what matters is what people perceive. Sherwin-Williams has a statement defending the mark and their sustainability initiatives, but refusing to acknowledge public perception is a colossal branding misstep.

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Do the Right Thing

I believe in supporting companies that make a commitment to doing good, both as a designer and a customer. Whether or not they always succeed, understanding that business should also be socially and environmentally responsible is a big step towards where we need to be. Although the real trick is you have to mean it.

For the past two weeks, I’ve been working on a great project for Levi Strauss & Co. While I have always avoided retail fashion, especially the mass-market kind, I’m pleased to be working with a company that embraces values. The photo above is from their lobby, and it is great to see what they stand for plastered up, bigger than life.

I was also very impressed at their attitude towards their customers; we discussed how important it was to talk to and about all of their customers in a respectful and positive way. It’s easy in this business to look down on those who are unfashionable, poor, or overweight, and I appreciate their desire to be inclusive.

As I look to move up in brand management (the purpose of getting the MBA), it would benefit me to work for larger organizations for a few years to gain credibility and learn more about the challenges of a large, multi-national company. However, I still want to work for a company I can believe. Levi’s is just the kind of company that could fit both bills, and now I’m motivated to push aside my assumptions and look more closely for other opportunities I might be overlooking.

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Defining Art

Last weekend there was a highly critical article about the Chihuly exhibit at the De Young that really got my back up. The money quote:

“The history of art is a history of ideas, not just of valuable property. Chihuly has no place in it, and the de Young disserves its public by pretending that he does.”

I have my own criticisms of Chihuly — primarily that his work can be overly gilded and that commercial success has led to excessive repetition — but there are ways to critique an artist without declaring his work isn’t art. The author’s main arguments seemed to be that the exhibit is a spectacle and not serious enough, and that Chihuly’s work is too flamboyant and decorative to be considered “art”.

The former is more than a little puzzling. Yes, the exhibit is a spectacle and the gift shop is indeed “barnacled” on. But this criticism could easily be made of much modern culture and art, and it is unfair to single Chihuly out. His work is flamboyant and showy, but that just makes a theatrical exhibit seem all the more authentic. On the other hand, despite the spectacle the author claims “educated viewers” will get bored because is not enough intellectual content to hold their interest. That must mean I’m not educated, because there were plenty of beautiful visuals to keep my attention.

It’s also seriously misguided to claim that art must be high-concept. We do have rough categories of fine art, decorative art, craft, and the like, but the lines are blurry at best. Going by the author’s yardstick, we’d have to disregard half of the “history of art”! Dutch and Flemish masters are a good example — the technique is remarkable, but in the end it’s often just a painting of of a dead rabbit, a rich patron, or a vase of flowers. Where’s the intellectual statement there? And yet we don’t question those paintings as art.

Perhaps more importantly than how he defines art is the arrogance of claiming to define art for others. As the resident creative in my family I spend a lot of time defending art, and I think it’s important to take a broad view of it. If it expresses something, even if I don’t like or understand it, it can still be considered art. You don’t have to like it or agree with it, but it’s generally not appropriate to define someone else’s experience. That’s not to say you can’t ever draw a line, but you should draw it as generously as possible.

The entire article felt like a thinly veiled assertion that if the masses like it, it can’t be art-with-a-capital-A. Enough people already question and dismiss art without elitism like this to alienate them further. It occurs to me artists complain art isn’t appreciated, but often they seem to work very hard at preserving image of the starving, misunderstood artist. After all, if the plebeians get it, it can’t be any good.

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Michelle Bachelet

Recently Michelle Bachelet, the first female president of Chile, visited California to sign an alternative energy pact and afterwards she spoke at UC Berkeley.

I was disappointed that we heard very little about the renewable energy agreement at the speech. Evidently that discussion happened up at the Berkeley Labs and not on campus as advertised. However, it was still exciting to hear her vision for Chile — despite my cynicism, I have to admit she said all the right things about equitable growth and social justice. There were a few times in the speech when I wondered if she might be persuaded to run our country, too! Her vision sounded more honest and insightful than anything I’ve heard from an American president in my lifetime. She may not be able to accomplish it all, but at least she is acknowledging some hard truths.

The ever-present crew of Berkeley protesters was outside, and they highlighted a particularly thorny issue: Bachelet is committed to pursuing clean, sustainable energy but she skirted around directly stating that developing energy independence may require unpleasant compromises. One of the more viable options for Chile involves building dams in Patagonia. While hydroelectric power is relatively clean and plentiful, damming destroys ecosystems and swallows up untold acres of land. In this case, the stakes are even higher: it will irreparably change a national environmental treasure.