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Every entrepreneur wants to build the next big cult brand. But how do you get yourself on this path?
I spoke to Daniel Lubetzky, who is returning to Shark Tank for his second season. After starting and growing KIND from an out-of-the-box idea to an international brand valued at more than $ 4 billion – and now as a small business investor – he learned a thing or two about it what makes a brand magical and why.
I sat down to ask him – and his answer might surprise you. While many view great marketing, world-class sales, or outstanding design as the differentiator that emerging brands put on the map, the magic of a brand, according to Daniel, lies elsewhere – in its authenticity.
Here's what I learned from Daniel about the three main ways authenticity wins hearts and drives lasting brand equity.
1. Copycats don't stand out from the crowd
When evaluating a business, Daniel is put off by any product that appears to be copying an existing concept. If a product does not differentiate itself in its category – or, even worse, clearly demolishes a competitor – it will fail. In a highly saturated market, products have a clear competitive advantage if nobody else has thought of them.
These novel and innovative ideas are shaking the status quo, creating new categories and disrupting the broader industry. When KIND launched its first bar with whole nuts and fruits on the market in 2004, the category of bar made from emulsified pastes was dominated. KIND's suggestion to use ingredients that you can see and pronounce stood out and helped completely reinvent the idea of the “snack bar”.
See also: 5 Business Lessons from KIND founder and CEO Daniel Lubetzky
As Daniel likes to say, "A brand is a promise and a great brand is a promise that is well kept." A brand must remain authentic and true to its value proposition. He adds, "When a brand compromises its production process, it risks betraying consumer trust and sacrificing authenticity." In other words, while reducing costs at the expense of quality could improve your bottom line in the short term , this will ultimately decrease long-term brand equity.
2. Investors want to hear what is wrong, not just what is right
Daniel is wary of entrepreneurs who step into Shark Tank and deliver a seemingly over-tried story that lacks authenticity. In his experience, entrepreneurs who focus more on saying what they think the Sharks want to hear than delivering a serious pitch are rarely the ones to hit a deal.
More importantly, seasoned private equity investors want to know where their money is going (i.e., opportunities for improvement, gaps to fill, etc.), not just what's going well.
One of the tell-tale traits of an authentic leader is a willingness to admit their mistakes. This type of leader sets the tone for a corporate culture where team members are comfortable taking risks because they are not paralyzed by fear of failure. By celebrating people for being themselves, we let good ideas surface and create an environment where creativity can flourish.
A leader's actions speak volumes about a brand. If you are a business owner who is building a brand with a mission to make the world a better place, but not practicing kindness and empathy in your own daily life, your mission will be undermined.
3. Customers can smell gimmicks
Daniel is passionate about employing business people to sustainably scale the social impact. However, he believes that the most important qualification for a social enterprise is a social mission. Companies that make goods that won't necessarily change the world, but that deliver products and services that people want, are still great.
As long as these companies don't harm the world, Daniel believes that they will have a positive impact on society because they create jobs, boost the local economy, and improve the lives of millions of people. Daniel says, “Net-Net, if you don't do any harm through your business, I think you're already doing great. If you can scale it up, you can channel your business model to drive change. But don't do it if it's not authentic. "
Related: Gary Vaynerchuk starts a new type of counseling service
Consumers are demanding when it comes to spying on a gimmick. When consumers feel that a social mission is shallow or of no real depth, it hurts business, as modern consumers are already cynical about capitalism with no conscience. And according to Daniel, "If your brand is breached, your social mission will also be damaged because you do not have the capital to achieve your social goals."
Authenticity isn't just marketing – it's good business
If you stay true to yourself and your brand, not only will you ultimately feel better as an entrepreneur, but you will also shine outward and influence every aspect of your business, from motivating your employees to attracting genuinely interested customers.
While it may be tempting to take short cuts along the way, if you put extra effort into never sacrificing what you stand for, you'll stand out from the competition. It should always pay off in the long run.