The misplaced desire for start-up, independent businesses

As previously mentioned, while small businesses are relatively wasteful and inefficient, they have more character and brand loyalty than most big businesses. Big businesses know this and have tried to get in on the act, by either taking over start-up companies or setting up their own “independent” spin offs

This fact initially grated on me when first setting up Lashbrook Lassis; yet I soon began to sympathise with these businesses. Before getting into why, I’ll first give you some examples of what I mean.

There is the well-known story of when Coca Cola bought Innocent. Admittedly, Innocent were always a pretty big small business with a quarter of a million-pound investment from the outset, but relative to Coca Cola, they were small fry. Others examples include Ben & Jerry’s, who were bought by Unilever in 2000 and Green & Black’s chocolate, taken over by Cadbury in 2005. (I apologise for all the food and drink analogies, it’s just the industry I know best.)

There is also the growing phenomenon of big businesses deciding to bypass the option to buy out such small companies and just set up their own “independent start-ups” instead. This was evident in Tea Pigs, which was started by two former employees of Tetley’s who went to their bosses and asked them if they wanted to fund a new tea company. Tea Pigs is completely owned by Tetley’s and just pay the “owners” an annual salary. There was recently an example of Waterstones setting up independent-looking book stores in in Rye, Southwold and Harpenden with some backlash from consumers.

Yet I now feel fairly sanguine towards such businesses that either sell out to larger companies or are merely window-dressing to corporate backers. The fact is, once we started to appreciate the enormity of the task that faced us with Lashbrook Lassis, we desperately looked around for other businesses that would be willing to invest in us. I would’ve happily been taken over by Pepsico if it meant we could access their facilities and expertise.

Therefore, we only have ourselves to blame for the misplaced endorsement of small, independent businesses over much larger companies. Despite the fact that small businesses are relatively inefficient and wasteful, we ultimately just seem to feel better about ourselves if we’re seen buying their goods or using their services.

#advice #business #startup #startupdelusion

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