For Businesses, Small Is the New Big

[marmar]

from Ode, via AlterNet:


For Businesses, Small Is the New Big

By Jay Walljasper, Ode. Posted July 24, 2007.



A growing number of businesses are discovering that getting big is not the best measure of accomplishment. Which are the ones setting the trend?

In April 17, 2000, Gary Erickson was about to fulfill the wildest hopes of any business entrepreneur. That morning he drove to the Berkeley office of Clif Bar, a company he'd founded eight years earlier, and got ready to sign papers selling it to food giant Quaker Oats for $120 million. Erickson would take home half that: a cool $60 million.

It was a remarkable rags-to-riches story for a guy who at age 33 was living in his parents' garage and making less than $10,000 a year when he envisioned a more wholesome energy snack. An avid outdoors enthusiast, he hit upon the idea on the last stretch of a one-day, 175-mile bike ride as he realized he couldn't stomach another bite of energy bars that tasted like cardboard. His initial investment was $1,000, and R&D was done in his mom's kitchen. He named the product for his dad. But rather than feeling on top of the world about this dream deal, Erickson was uneasy. "I stood in the office waiting to go out and sign the contract," he recounts in his book Raising the Bar. "Out of nowhere, I started to shake and couldn't breathe." He told his business partner that he needed to get some air. Outside in the parking lot, he broke down in tears. And then it hit him as he began to walk around the block: "I don't have to do this.

"I began to laugh, feeling free," he writes. "I turned around, went back to the office and told my partner, 'Send them home. I can't sell the company.'"

What possessed Gary Erickson to turn his back on millions of dollars and throw away a golden opportunity for his company to get big? He was bucking all the business trends. Many of the outspoken champions of socially responsible business, such as Ben & Jerry's, The Body Shop, Stonyfield Farms, Green and Black's chocolate, Tom's of Maine and Aveda eventually sold to corporate conglomerates. And even the brash young Internet companies, which trumpet their independence as a badge of hipness, are conceived with the intention of being gobbled up soon by Google or another huge firm. ........(more)

The complete piece is at: http://www.alternet.org/story/57470/

[Warpy]

1. The problem a small company refusing to sell out faces is when it

starts to branch out beyond its small niche buyers and affect the market share enjoyed by the big guys. That's when the big guys turn dirty and there is no one in a GOP government who is prepared to enforce the law and stop them. Erickson is going to find a few key ingredients hard to get--organic or not--and Facebook is going to start to find itself having access problems.

It's why we used to have well enforced antitrust laws.

[TygrBright]

2. The key words there being "used to." Oddly, the person...

...who took the most effective, decisive steps to end the last wave of corporate dominance of America's political and economic life was a Republican, Teddy Roosevelt. By no stretch of the imagination was TR a bleeding heart social activist, in fact, he was an unreconstructed manifest destiny imperialist who had plenty of connections and pals among the Wall Street powerful.

But Teddy had the wit to see, not just the short-term effects of consolidating economic control into a few hands, but the LONG TERM effects-- and they are disastrous. An economy controlled by a small number of mega-corporations getting fat on selling business as usual couldn't adapt quickly to changing geopolitical and social realities. And in TR's day, the tide of social and geopolitical change was gathering steam and hitting the fast track. He could see it coming, hell, he helped it happen, with his determination to open the Panama Canal and extend America's sphere of influence. If America's economy was to be able to capitalize on those changes, it had to have mobility, creativity, decentralization, and real competition to weed out the deadwood. The trusts had to go.

Now here we are again, with the tide of technology-driven change eroding the shores of business as usual, and no where is our visionary to tell the Halliburtons and the Archer Daniels Midlands and the Duponts and the Pfizers "sorry, you don't get it all your way anymore"? Where? Breaking up the megagloms isn't creeping socialist deconstruction, it's sound capitalist theory. The Holy and Inviolable Free Market isn't free when it's at the mercy of a few giants who can buy government, flip the bird to consumers, and go their vertically integrated way.

We never learn.

wearily,
Bright

[JDPriestly]

3. Great post. Thanks.

[R_M]

5. K & R!

:hi:

[applegrove]

4. Deregulations destroys mid sized companies. It leaves big huge ones who dominate

the market and tiny little ones that compete in a different field. This is just the natural outcome of deregulation.