Many years ago I started and owned my own indie swimwear company. New to the clothing industry and unsure of how to do, well…nearly everything, I made a lot of mistakes. But I also made a lot of winning decisions because quite frankly, I didn’t know what I didn’t know…and I had nothing to lose. I believed every outlandish idea I had was brilliant; I had an overflow of energy and excitement to throw at every project; and I believed every risk I took was going to pay off. And you know what? Some bombed, but many of them worked. In fact, it was by taking those risks that helped me sell my small swimwear brand to a large, well-established clothing company earlier in the lifecycle of my business than is typical—and this experience taught me a very important lesson: even very early in their growth, it can make sense for some small businesses to be sold to a larger company even just a few years in, and here’s why.
They bring the dreams.
Sure, every brand and business has dreams, but is any as fresh, exciting, and invigorating as those of a young indie brand? Quite often, the founder is still down in the trenches, creating every aspect of the brand, and there is a certain ‘sky-is-the-limit’ attitude about everything because the brand is still in the dreaming stage of growth. And that’s a beautiful thing! Someone needs to be dreaming or new products don’t make it to market, new ideas don’t come along and smash old ways, and new innovations don’t set trends for the next ten years.
But as we all know, once a brand starts growing, it’s harder and harder for the CEO or founder to have time to dream because the unsexy, but critical, day-to-day grind of growing the business takes over. What a shame! And, this isn’t to say that well-established brands and businesses don’t also have dreams they want to follow, but I think at that stage, following those dreams becomes a harder task for a founder than it is for the little, independent guy or gal doing their thing. Indies have less red tape, less corporate friction…fewer roadblocks to just following an idea all the way down the rabbit hole. For big companies that see the value in this sort-of dreaming yet also need to follow corporate mandates, it makes perfect sense to snap up these young brands while they are still chasing that rabbit, as the big guy can give the indie the bandwidth, time, and support to bring fresh ideas to the table without having to worry about corporate rules and regulations.
They bring the excitement.
I’m just going to go ahead and say it: I one-hundred percent think entrepreneurs and small biz owners have a level of excitement that corporate CEO’s and leaders just don’t have the luxury of maintaining. When you are a small brand, everything is exciting because everything is still new and as funny as it sounds—small! Teams are small, overhead is (hopefully) small, corporate footprints are small…and it’s likely that corporate rules and red tape? They don’t really exist…yet. Brands and businesses that are young, and have only been in the market for a few years are still flush with the excitement of everything being new, and in turn, that gives established companies a portal through which to try new, perhaps risky ideas without impinging upon the brand equity of their existing company.
Whether it’s an excitement to try out a radical product idea, or feeling thrilled because testing and trying a unique SKU with consumers is proving a run-away success, or digging a crazy new product name—excitement is the guiding force of just about everything indies do. By incubating these indie brands inside a well-established corporate structure, you give these creative, excited folks a chance to ride this wave of excitement and productivity for as long as possible, while also giving them the support and structure they need to actually turn this excitement into a tangible thing that wins consumer support.
Finally, they bring the fearlessness.
And speaking of taking risks…once a brand or company starts to see success and make a name for themselves, a curious thing sometimes happens: they stop taking risks. Maybe it’s because there are corporate responsibilities to mind: boards, investors, and consumers, or maybe it’s because there is a reticence to rock the boat, or an overall ‘don’t fix it if it ain’t broke’ mentality. Whatever the reason, and I don’t think indies operate with that mindset. In fact, for most small brands I know (and have worked with); taking risks is part of their DNA.
I believe embracing this fearlessness can be a good thing. It’s a quality that will attract consumers to the brand/product in the first place (hello Glossier), and it’s also the kind of verve a small, independent brand needs if it hopes to make it in the health, wellness, and beauty category—which is rife with incredibly creative folks creating incredibly astonishing new brands and products. I know for my own brand, when I have a product development idea that really sings to me, I rarely (if ever) stop to be afraid of why it might not work, and instead just jump straight away into the details of how it will work: names, colors, and packaging; ingredients and scents; and trying and testing with consumers to make it as optimized for launch as possible. Fearlessness lets new, raw brands do what they do best: go for those crazy ideas with the right blend of grit and gumption that anything new requires, and succeed.
Now, having said all of that…I also know that as a small business owner, I need a partner that will help me temper my dreams, excitement, and fearlessness with experience, strategy, discipline, and capital support and that’s where a corporate partnership comes in.
What larger companies bring to the bargain.
When a small brand is folded into to a corporate portfolio early, both companies benefit. Even with all their innovative thinking and creativity, a brand that is one or two years old just doesn’t have the practical experience of a company that’s been around for several decades, and this is the critical link that big business provides indies. Once part of a corporate portfolio, the indie gets to incubate their ideas in a financially safe environment, and the corporation gets to chime in on that creativity while the indie brand is still fresh and moldable.
Plus, having a big parent company provides: stability so the indie can take those crazy risks and try those edgy ideas and products; discipline to make the new brand scalable and so there will actually be products to deliver to adoring beauty junkies; and the capital to bring all those glorious idea(s) to fruition. Because where small brands excel at the creative, fun side of branding, they often fail at the business, cash-flow side of business for one simple reason: they are small, they are still testing, and they are (typically) in need of a financial fairy godmother. Indies and big corporations working together are like a marriage where both partners bring the yin and yang to the equation, and where together the whole is better than the sum of its parts, and if done strategically—can be a win-win for everyone involved. Both businesses share the risk, sure…but both brands also share the reward when the indie becomes a consumer and industry darling.