Business growth is no easy task. Everyone wants growth, but too many business owners think that scaling a company requires compromising your initial values. Sure, your business will change as it grows, but that change shouldn’t include sacrificing what you believe. In fact, sticking to your guns can prove crucial for sustainable growth. If you’re looking for a real-world example of this trend, look no further than outdoor-goods retailer REI.
A Humble Origin
Many entrepreneurs experience what’s called a lightbulb moment — that moment when they recognize a gap in the market. This realization often comes about when they experience trouble finding something they want, and they know others must share a similar need. That was certainly the case for Lloyd and Mary Anderson, the couple who founded Recreational Equipment Inc., better known as REI.
In 1936, the Andersons, who are both avid climbers, bought an ice ax from a Seattle ski shop. It was $12 — more than a day’s wages for Lloyd — and it broke the first time they used it. The Andersons realized the tool wasn’t the Austrian ax it was marketed as, but rather it was a cheap imitation. There had to be a better way, they thought, and so they went about finding it. With the help of Mary’s German translation skills, Lloyd realized he could order axes directly from Austria at the cost of only $3.50 per unit.
The Move to Retail
Mary and Lloyd quickly ordered axes for their friends, and two years later, they founded REI as a consumer cooperative to help lower costs for fellow climbers. By the end of 1938, REI had 82 members who were sharing profits equally. Their goal wasn’t to become one of America’s largest retailers, but that’s what eventually happened. And it all started with one crummy ax.
REI opened its first retail store in 1944. As of 2017, there were 154 stores, generating over $2 billion in revenue. Though it started as a specialty store for climbers, the brand grew to meet the needs of outdoor adventurers of all stripes. Whether you’re a hardcore kayaker or simply someone who enjoys a casual hike, REI has you covered. While their scope has widened since their humble beginning, the values of the company have stayed remarkably consistent.
Staying True in Business Growth
REI still holds firm to the ideals of its founders. The company is now the nation’s largest consumer cooperative, with over 2 million members. In addition, REI wears its values on its sleeve, contributing millions of dollars each year to wilderness conservation. Every year since 1998, Fortune magazine has named REI one of the 100 Best Companies to Work For in America. Their focus on offering the utmost quality hasn’t gone anywhere, either. REI backs all of its products with a 100-percent-satisfaction guarantee.
There are two lessons that every business owner can take from this incredible story: Meet a need and stick to your values. A company culture without values isn’t much of a culture at all. As the popularity of REI exploded, it would’ve been easy for the company to transition to a shareholder model or to sell budget gear alongside their high-quality offerings. Instead, they remain steadfast to the Andersons’ vision, and it’s paid off. Today, people identify REI based on their sterling values as much as they do for their sterling axes. And it’s not a trend limited to just one business; there’s an entire book, Small Giants by Bo Burlingham, devoted to stories of companies that grew on their own terms.
As a business gets off the ground, it can be easy to chase the next big thing. Many entrepreneurs suffer from “shiny-object syndrome,” losing sight of their original mission in the process. This strategy may work for a while, but odds are it will catch up with you. Sure, your goals will expand over time, but they should align with your original lightbulb moment.
There’s an old saying in business that goes, “Niches make riches.” It’s as true today as it ever was. Like a climber scaling a tricky mountain, you need to find your foothold in business. From there, the sky’s the limit.