A founder may never utter a single political statement at work, yet their worldview as liberal or conservative will permeate the organization. If a business were a living, breathing thing, the founder’s worldview would be embedded in its subconscious, expressing itself inside and outside the organization. That external expression then narrows the market to customers aligned with how the business thinks.
When I started thinking about this project almost two years ago, I had no idea how much influence the founder’s worldview had on business-market fit and, ultimately, financial results. But, over time, I came to realize that founder worldview is an x-factor in fueling success or not.
The idea of founders having a lasting impact on business culture is nothing new. What is new is looking at founder worldview as a dimension of culture that extends outside the business to shape market size and overall customer acquisition efficiency.
Wilbur Zelensky, a geography professor from Penn State, describes early settler impact on new territories as “The Doctrine of First Effective Settlement.” In his book, The Cultural Geography of the United States, he discusses how the first group to settle a remote territory “are of crucial significance for the later social and cultural geography of the area, no matter how tiny the initial band of settlers may have been.” He describes situations where original pioneers in parts of the U.S. may have only numbered a dozen or two. Yet, the culture they established is alive and well hundreds of years later. The same happens in business.
When I worked with the advertising agency Rain the Growth Agency, I had the opportunity to oversee the advertising of many early-stage, fast-growth direct-to-consumer (DTC) brands. This included Peloton in their early years, for example. Several times we profiled the customer databases of these clients to track changes once there was significant growth. To our surprise, the profiles were identical or near-identical whenever we compared the early customers to later-stage customers. The later, larger group of customers looked just like the pioneer customers at business launch. It’s like the customer profile was stuck. I now realize it was tied to the founder’s worldview.
A stuck customer profile can be a negative or positive sign for a business. Let’s say a more liberal founder from Seattle starts a business targeting aging Baby Boomers to sell health insurance. The founder hires a couple of like-minded people who come from the same local area, which is mostly liberal. The early customers may be from that same area. The problem arises when this founder wants to grow the business.
On the other hand, early customers can represent a strong growth opportunity if they represent the dominant worldview segment. I previously wrote about two such brands - Apartments.com and Weathertech.
Andrew Florance, the liberal founder of Apartments.com, sells to a predominantly liberal market. Apartment dwellers skew urban, which skews liberal. David MacNeil, the conservative founder of Weathertech, sells to larger car owners, a market that skews conservative. Both companies are successful and align with their markets well through all of their communications. At the same time, I’ll bet no one in the Apartments.com marketing department said in a meeting, “we need more liberal customers.” The alignment in both cases was natural and powerful, and possibly subconscious.
Target’s founding goes back even further to 1960. The Dayton family from Minneapolis founded Dayton’s department store, which later became Target. The family has a long history of supporting progressive causes, and family members have served as Governor and U.S. Senator as Democrats.
Target’s liberal worldview is reflected throughout the stores, all without making any political proclamations. Target’s Chief Creative Officer, Todd Waterbury, says on the website: “ . . . we see the space to go somewhere new and create something better. What began as a radical declaration—Design for All—has become an integral part of Target’s brand.” That’s about as progressive a brand statement as it gets without saying a word about politics. Conservatives don’t get mad when they go to a Target store, but it may not feel right.
Home Depot and Target could experiment with sub-brands if they wanted to tap more into the “other market.” For example, Home Depot could create a more modern version of itself for the inner suburbs and urban environments while retaining awareness of the primary brand. Maybe it’s called “Modern Home Depot” or “Connected Home Depot.” Target could do the same with a conservative market.
Many local retail businesses don’t have to worry about market worldview skew until they expand. For example, Peter Koshland, the founder and CEO of Koshland Pharmacy, can operate without giving worldview a second thought. He’s a liberal founder running a successful custom compound pharmacy in San Francisco. His worldview aligns well with his local market. When he expresses the business to his market, worldview alignment is automatic and a source of strength.
Let’s say Peter decides to open a new location. He may use typical market assessments, such as a lack of competitors, customer demographic profiles, and the presence of a local referring doctor base. Alamo, a town just thirty minutes east of San Francisco, might fit the bill. Yet Alamo skews far more conservative than San Francisco. As a result, the customers will have different values, prefer different brands, and buy different products. Fortunately, Peter will know what he’s getting into should he consider Alamo because he subscribes to this newsletter!
This article originally appeared in the newsletter, Red and Blue Customers.