Friday, September 28, 2012

Startups, Is It Better To Be Loved Or Needed?

Written by Tyler Prochnow, co-founder of Think Big Partners.

Written by Tyler Prochnow,
co-founder of Think Big Partners.
I’ve just recently finished reading "The Business of Happiness" by Ted Leonsis.  I submit that for all of the acclaim that he has received, Leonsis is still one of the most underrated entrepreneurs in history.  Based on his pioneering views of the role of technology in our business and personal lives alone, he should be a household name like Jobs and Gates.  Never mind that he coined the phrase “new media.”  The fact that he doesn’t roll off the tip of most people’s tongues when naming the most influential innovators of all time is a testament to his lack of ego and his laser-like focus on building successful teams.  But enough of my editorial.
In his book, Leonsis raises the question of whether, as a company, it is better to be loved or needed.  He raises the question in regards to his vision for AOL.  When he ran the company and led it to its highest of highs, he constantly urged his employees to create features and content that would be loved.  Even as the Internet grew and it became something that most people “needed”, his unending focus was on creating a company people loved.  Companies that are loved, he argues, provide an emotional connection with their customers that is invaluable.  Like a family member who lets us down, he states, that love can overcome numerous mistakes the company may make, keeping loyal customers for life.

I am such an admirer of Leonsis that I would never imagine arguing or disagreeing with his core principles.  And while I am not saying he is “wrong” by any stretch of the imagination, it has been a long time since I’ve had a question elicit such a conflicting range of emotions.  He cites as his example, your electrical utility.  You need electricity, but you don’t love the company.  Every time there is an outage, consumers curse the company, not the circumstances that created such an outage.  And while that is all well and good, the last time I looked, my electric company generated a pretty decent amount of cash and a profit margin that would make most companies jealous.  Likewise, companies such as Cisco and AT&T, which I would argue are more needed than loved, have obviously been very successful. 

I’m not kidding you, this question is driving me crazy and making my already gray hair even grayer.  My own personal business experiences suggest that Leonsis is right.  I’ve had businesses that were needed by my customers and some of them have done quite well, but my most successful ventures were those that were loved by our customers.  No one “needed” to buy tickets for an Arena Football game, but our fans “loved” our game, our team, and our organization.  They came out week after week and gave a piece of their hearts to the team.  It was as simple as that.  The two years I owned the Brigade, we finished at or near the top in attendance and overall revenue, because our fans loved us.  

So naturally, I thought I would fall firmly in the love camp.  But as I’ve pondered the question, I can’t get this nagging thought out of my head, that being “needed” is pretty great.  If my customers need me, how are they going to leave me?  If they need me, don’t they have to live with my mistakes, not just tolerate them to a point?  Isn’t the entrepreneur graveyard filled with the tombstones of companies that people loved, that never figured out a profitable business model?

It’s been a couple of months since I read the chapter on love versus need.  After walking all the way around this question and looking at it from every angle, it is quite clear to me that there is no “correct” answer.  Obviously in a perfect world, it would be great to be loved and needed.  But since only a very small handful of companies are in fact loved and needed (see Apple and Facebook [post IPO stockprice notwithstanding]), most entrepreneurs are not that lucky.  No, the bottom line here, I believe, is that it doesn’t have to be a zero sum game.  You should strive to create that emotional connection with your customers, but if your company produces a product or service that is needed, your chances of success are substantially greater.

I apologize for going in circles with this article.  I fully intended to quit being a fence straddler, take a position, and make the case for it.  But as I kept writing, I kept coming back to the virtues of the other side.  So rather than take a stand, I’m going to wimp out and go all Dear Abby on you.  I want you the reader to let me know what you think.  Is it better to be loved or needed?

                                                                        Signed, Confused in KC

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