It’s a phenomenon and seems inevitable. A story played time and time again. A small business is built, grows with wild success, and then loses its tarnish. Every big business we consider bad was once a Mom and Pop.
When I mean bad, I don’t mean they necessarily are poorly run, or are bad to the environment, their employees, or otherwise. We just stop liking them.
(1) New Business, Single Location
An entrepreneur starts a business with hopes of being successful. It does well and is considered special… “a destination.” Customers LOVE it. They drive for miles and wait for hours to get in. Locals add it to their list of “must visit” places when friends and family come to visit. Reviewers laud it.
(2) Simple Expansion
It does so well, the owners open a second location on the other side of town just to keep up with customer demand. Everyone is happy. The third and forth location open… still busy. Word of mouth continues to pack ‘em in.
(3) New Markets!
They open a single location in Chicago, New York City, San Francisco, Boston, Seattle and Miami… Rave reviews. Lines outside the door. They open a few more in each city. Success!
Sometimes this growth can span 50 years (Krispy Kreme Doughnuts started in the 1930s, In-N-Out Burger the late 40s), or a decade (Starbucks grew incredibly in a 15-year period).
Then something starts to happen…
(4) A Shift
A few more locations open… and while they’re providing the same great service and the same great product… sentiment begins to change.
The initial customer group, come less frequently, and eventually… not at all. Their secret place has become too mainstream. Now that this business is in every city, it’s no longer special.
This shift is hard to notice since sales continue to climb as a result of the new wave of customers discovering the business.
(5) Then Big Becomes Bad
Slight shifts in the way the business operates. Slight automation here. Expansion of offerings there. A few things designed to keep quality and service up with customer volume. These work, but tarnish the brand. Mom and Pop long gone, replaced by “factory.”
This has happened, among others, to McDonald’s, Wal*Mart and more recently Krispy Kreme and Starbucks.
What is to come of our still darling Whole Foods Market and In-N-Out Burger? Whole Foods is in expansion mode…newly opened in the UK. In-N-Out has grown as well, but so far only regionally in the southwest U.S.
- Is something only special when there is scarcity? I know, if Christmas were everyday, it wouldn’t be special.
- Should a company create an artificial cap on its growth to prevent it from being considered common?
- Is the problem going public? Does being driven by shareholders require constant growth even if it means company demise?
What do you think?
What would you do? (Honestly? Would you have the discipline to stop your own growth?)