Last week, Hey Tiger founder Cyan Ta’eed announced the ethical chocolate brand would be closing up shop after just three years (those fatal first three years that claim so many startup businesses). While Hey Tiger enjoyed strong brand love from its consumer base, it faced complexity across other parts of the business.
In her announcement letter, Ta’eed openly cited the challenges plaguing the brand, namely the ability to actually scale and start generating profit. But it’s easy to be a backseat driver in the face of a brand closure; nobody but those inside and at the top really know the depth of the issues that plagued the business and led to its unfortunate closure, so we can only really speculate.
Regardless of the detail behind Hey Tiger’s closure, its case highlights some important reminders for budding social entrepreneurs as well as SMEs, to strategically strike the balance between purpose and what is commercially sound.
Engage experts to fill your knowledge gaps
The first lesson is to seek out and connect with people who have the industry experience and skills necessary to help you overcome the difficulties you envisage — or perhaps more pertinently, couldn’t possibly envisage. Creating a trusted circle of advisors surrounding your business is critical, even more so when you’re in unfamiliar territory.
This idea brings together two key principles of the effectuation entrepreneurship theory, proposed by Dr Saras Sarasvathy. The first step is to understand your capabilities and what your limitations are. This then allows you to identify who to look at to form strategic partnerships and collaborations with to fill capability gaps.
And that’s more than just hiring a consultant or engaging a partner, it’s about being collaborative and weaving their skills together with yours, to then iterate together to increase the overall capability of the business.
Work through your values with your commercial reality
Having bold impact goals is admirable, but the commercial viability of the business needs to be part of that consideration for it to feel like you’re making progress towards that goal. There is absolutely nothing wrong with having a big audacious vision for your impact. In fact, it’s recommended!
Tempering that to align with what is achievable for where you’re at isn’t about making that vision any weaker, it’s about being financially pragmatic. When it comes to acting on your values, there are more methods than just financial contribution that equate to positive impact outside of your business.
This presents an opportunity to think creatively about the impact you want to have and how to scale that in line with your growth over time. It could also be a source of competitive advantage or another angle to explore your brand story from, all of which contributes back to building your brand equity.
Lessons from Hey Tiger: Make strategy a habit
Solidifying your strategic foundations at the outset is always recommended. Taking full stock of the conditions surrounding your bold entry into market forms the initial stage of that. What is easy to overlook, however, are regular opportunity and risk assessments to help scenario plan for changing conditions.
Sure, a pandemic isn’t going to threaten the economy all that frequently (hopefully), but certainly recessions and dips in consumer spending do. Planning ahead for what resources need to shift or actions need to be taken if certain conditions present themselves is savvy business.
Forming strategic partnerships to bolster your buying power or shore up resources throughout the supply chain can be clever ways to weather external forces that are outside of your control. They potentially align with disrupting the status quo in another way, if your big vision isn’t quite within reach yet.
Purpose-led businesses can find themselves stuck in a gooey centre, as Hey Tiger has, where impact is too great for the business side to keep up with sustainably. One way to avoid getting stuck here is to have strategic structures in place to form a tether, so that impact goals are more progressive and in line with commercial reality.
It’s quite bitter to see a disruptive, vibrant and conscious brand like Hey Tiger have to close its doors. It is, however, a stand out example of a brand not wanting to compromise its values and what it sought out to do. Closure is a difficult, gut-wrenching decision, but ultimately allows the brand’s integrity to remain intact.
It’s critical to learn from the real reasons behind brand failures, particularly social enterprises, so that future entrepreneurs can learn from the missteps.