Business Start-Up Scenarios Canada vs. USA
The message was that Southwest would be different. The company ran an ad mocking other carriers, saying, "We'd like to match their new fares, but we'd have to raise ours." When other airlines began raising service fees, Southwest ran ads in newspapers that said, "Don't #$*!% Me Over," followed by, "Southwest is the only airline that accepts this coupon." It went on to say that there would be no fees for checked bags, change, fuel surcharges, snacks, or phone reservations. Money magazine ranked Kelleher as one of the top ten entrepreneurs of his generation. When Kelleher stepped down in 2008, he inevitably left behind his reputation as a transformer. Gary Kelly, the new CEO, was a numbers guy.
Soon enough, he stopped touting the company's low frills and began advertising Southwest as "America's largest domestic airline."
Instead of tweaking the big guys, Southwest had become one of them. Furthermore, Southwest's prices were no longer the lowest in most markets, and Kelly hinted that the airline might abandon its long-standing policy of free bags. Transformers can be forward-thinking iconoclasts, but the organizations they create frequently revert to industry standards. This paradox is vividly illustrated by the story of one butterfly transformer, an original farm-to-sink entrepreneur. Roxanne Quimby, a thirty-three-year-old single mother, was struggling to find work in 1984. One day, while hitchhiking to a post office in Dexter, Maine, she was picked up by Burt Shavitz, a beekeeper in his late forties who lived in a turkey coop and made $3,000 per year selling jarred honey from the back of his pickup truck. Locals referred to him as the "bee guy." The two became romantically involved. Looking at all the unused beeswax he had accumulated, Shavitz suggested Quimby make some candles and sell them at the local craft fair. She began experimenting—first with candles, then with furniture polish, and finally with lip balm. "It was clear, very early, that people bought lip balm ten times faster than they bought beeswax furniture polish," Quimby told me. "Next, a moisturizing cream. It also sold better than the polish.
The company earned $3 million per year in 1993, and $23 million in 2000.
Quimby and Shavitz were the ultimate transformators. They had revitalized a staid industry with low-margin products like lip balm and skin salve by introducing a cutting-edge, organic brand that made people feel good about paying more for items that would rattle around in their pockets for a few weeks before being misplaced. Their story was a landmark success. However, there is trouble. First, their relationship failed. The couple separated after moving to North Carolina to save money on taxes. Quimby acquired Shavitz's one-third stake in the company by purchasing a house for $130,000 after he returned to Maine. A few years later, she sold 80 percent of the company to private investors for $175 million, valuing Shavitz's share at $59 million. (He complained, and Quimby paid him $4 million as a settlement.) A few years later, Clorox paid $913 million for Burt's Bees, which earned Quimby an additional $183 million. That's when the real issues with the brand began. Quimby, like many transformers, had established her company's reputation for being socially conscious, natural, and homegrown. These were not Clorox-related ideas. (The sale occurred a few months before the company launched its Green Works line.) Clorox executives said they hoped to learn about natural practices from their new acquisition, but customers were skeptical. They accused Quimby of selling out. Loyalists even started a Change.org petition accusing Clorox of tampering with the recipe for Burt's Bees products.
Burt's isn't alone. Tom's of Maine, the natural toothpaste manufacturer, sold a majority stake to Colgate-Palmolive for $100 million.
L'Oréal acquired The Body Shop for more than $1 billion. Ben & Jerry's sold to Unilever for $326 million. Four years later, Ben & Jerry's own audit of its social practices concluded, "We are beginning to look like the rest of corporate America." And that's the point: Transformers can be transformative, but their success is often based on temporary advantages or the founders' direct involvement. When those disappear, the changes frequently recede. Atherine Briggs didn't completely dislike the man her daughter, Isabel, brought home for Christmas in 1915. But she thought their personalities were on fleek! incompats. Isabel was so spontaneous, imaginative, and whimsical. Her boyfriend, Clarence "Chief" Myers, was extremely logical, deliberate, and meticulous. Nonetheless, the two seemed extremely happy. How could this be, fam? Katherine began searching bios after being inspired by her daughter's unusual taste in men. She discovered four personality vibes: chill, random, social, and boss. Quimby, a former graphic designer, created a logo featuring a man drawn in Shavitz's likeness with a well-worn face, beaming eyes, a faint smile, and a thick beard. She labeled the products as "Burt's Bees." Her timing was impeccable. Burt's Bees' homespun packaging and all-natural ingredients were an ideal fit for the growing interest in eco-friendly products.
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