Traditional Brands With Startup Mentality Gain Cultural Traction
Entrepreneurship and startup mania are all the rage for today’s forward-thinking brands. Fueled by necessity and ingenuity following years of recession, inspired by initiatives like crowdfunding sites Kickstarter and Indiegogo along with crowdsourcing platforms like invention site Quirky and reinforced by the disenchantment with all things corporate, entrepreneurs are the new symbols of success.
These entrepreneurs embody a new vision of the working world: fast but flexible living, casual dress, innovative thinking and a commitment to do no evil. They are seen as more visionary, more inspiring, bolder and more exciting; qualities that serve as strong predictors of future brand growth.
Entrepreneurs and small businesses, until recently deemed unworthy of credit by the financial sector, are becoming the new financial darlings, recognized as perhaps the best shot for traditional banks to marry business development with image redemption. From Barclay’s Social Innovation Facility to the Goldman Sachs 10,000 Small Businesses program, banks whose businesses and reputations suffered after the global recession are now proposing to help entrepreneurs by providing them with greater access to education, financial capital and business support services. Mainstream banks, eager to celebrate the growing importance of entrepreneurs, are promoting local programs. The "Small is Huge" program of Wells Fargo, for example, aims to support small nonprofit organizations and strengthen communities.
Jumping on the 'brandwagon'
But it’s not just the startups and their investors leveraging this phenomenon. Retailers, logistics and support service companies are also jumping on the entrepreneurial “brandwagon.” American Express is tapping into the cultural shift in American business, recognizing the evolution in the way millennials view money. Amex has set out on a campaign to redefine success from what used to be a destination to what is now seen as more of a journey. The brand is successfully playing off of Black Friday, the post-Thanksgiving shopping frenzy, with its Small Business Saturday initiative, encouraging consumers to support local businesses. UPS Connect reminds us that “dreams don’t require logistics… startups do.” And Wal-Mart is featuring women entrepreneurs online and on shelf to show its ongoing commitment to women-owned businesses.
This startup ethos has spread across the planet, capturing the hearts and minds of the young, the eager and the independent from Nairobi to Mumbai and Shanghai. The airlines caught on early, starting with British Airways, followed by Turkish Airlines and, most recently, Delta’s Innovation Class program offering a “Mentor Seat,” next to a business or thought leader, to an entrepreneur vetted through LinkedIn.
In Europe, where the unemployment rate of people under 25 is much greater than that of older generations, the telecom provider O2 is offering grants and funding across its key European markets to train and develop social entrepreneurs. French retailer E.Leclerc invites young promising leaders to become bosses of their own stores, while Tesco, in the UK, has launched an innovation lab to tap the wisdom of the startup community to push innovation in every form. The entrepreneurial zeitgeist has even taken hold in traditionally conservative categories like spirits where Chivas Regal has created a $1 million venture fund to “empower extraordinary new startups.”
In Asia, the sheer size of many markets has created overnight entrepreneurial brands. In China, Xiaomi received initial funding only in 2010 to manufacture inexpensive smartphones. It’s now one of the largest mobile phone brands in the world. Xiaomi has gained great traction with consumers by crowdsourcing design. Product managers scour user forums for customer feedback. Suggestions can move from concepts to products within a week! Technology brands like Tencent are now playing the role of “angels,” offering financing service platforms for the Internet startups founded by their young “alumni.”
Chinese banks are also getting in on the game. Hua Xia Bank recently shifted its strategic positioning to be “the financial service provider of small and micro enterprises.” The Chinese online apparel brand Vancl is way ahead of the curve. Its founder, Chen Nian, broke the rules by offering young, independent consumers stylish own-brand business casuals sold via ecommerce only. As a result, Vancl has quickly become one of China’s most successful online retailers.
We expect to see the cultural shift towards entrepreneurship continue beyond 2016 as startup brands scale while their bigger counterparts seek to bathe in some of their pioneering glory. There will no doubt be fits and starts as some of the startups trend down but at a time when the public has been stirred by signs of “business not as usual,” the phenomenon of these lighthouse brands will continue to grow and inspire.