3 Lessons For Scaling A Values-Based Business

It’s easy to be small and good, but how can you get a company large enough to make a difference while still maintaining your mission?

From cars to fashion to gadgets, it’s no secret that we live in an upgrade culture in which the "latest and greatest" isn’t the latest and greatest for very long. Regardless of whether or not what we own is still useful, if there’s a newer, shinier model available, we can’t wait to reach for our wallet.

This piece is part of a Collaborative Fund-curated series on creativity and values written by thought leaders in the for-profit, for-good business space.

Gazelle, the company I founded, was very much born out of a mission to end this cycle of consumption, by giving new life to perfectly useful and valuable consumer electronics that are no longer wanted by the original owner. Our goal, above all else, was to reward people for approaching consumption in a smart responsible way. But one thing we’ve come to understand is that a mission is only achievable if there is a sound business there to support it. Even companies that hope to "do well by doing good" cannot ignore the fundamentals of service, trust, transparency, and performance that are so critical to any success of any business, regardless of its mission. These are lessons we’ve taken from scaling a values-based company that I think many startups would be wise to pay attention to:

1: Serve

In any business, exceeding customer expectations pays incredible dividends. By focusing on the customers, listening to their preferences, and delivering great service, a company can develop a customer base that will do a lot of brand-building for you because word of mouth is incredibly powerful. The best public relations is customer service, as they say, and we learned early on that our commitment to customer service and establishment of trust with our users was a paramount priority as an Internet business.

2: Educate

Education is critical to the success of any company hoping to forge a new category. We realized early that it wasn’t enough to simply let consumers know about the availability of our service, we had to first educate consumers about the value of their used electronics. Changing consumer behavior is a challenging obstacle to overcome, but we’ve seen success in companies like Zappos (getting people out of the shoe store) or Netflix (same with the video store), which have taught us that constant communication and transparency are key to this education process. And while changing consumer behavior may be challenging, it also comes with a great reward: You can create an entirely new market.

3: Adapt

Consumer behavior isn’t the only thing we’ve had to change. We’ve also been forced to rethink our business models. In the world of startups things change, and in the world of technology startups sometimes they change very quickly. Here’s an example: The iPad didn’t even exist when our company was founded, and last year Gazelle had a record number of iPad trade-ins in one month alone. Apple has become the dominant force in the consumer electronics market, and we’ve seen the upgrade mentality evolve as its annual releases of new iPhones and iPads have changed the way consumers value technology and influenced how quickly they’re willing to upgrade.

As a result of this shift, we took a hard look at our business and realized that our service offerings were way too broad. Gazelle accepted more than 250,000 products across 22 categories. We realized we were spending too much time, money, and effort on our broad-based catalog to offer services that only a small number of people used. And a number of the devices we accepted were quickly becoming obsolete thanks to the versatility of the latest crop of smartphones and tablets.

It simply didn’t make sense to continue moving forward on that path. A rapidly increasing percentage of our business was coming from consumer tech "upgraders" who use Gazelle to trade-in their current smartphones, tablets, or laptops for new products once a new model becomes available. We decided to refocus our offerings around these high-value products. Today, we accept fewer than 1,000 devices.

Sometimes it can be painful to revisit a vision. I wanted Gazelle to be the solution for consumers looking to trade in any gadget that they no longer needed and I felt great about further supporting sustainability by offering free recycling. But I realized that these practices were adding incredible cost and complexity to our business, and it ultimately risked our ability to be profitable.

Simplifying our offering to focus on our core audience was a big step toward growing our business and scaling our efforts by responding to customer demand and the changing marketplace. In doing so, we’ve positioned ourselves to have a much greater environmental impact over time by creating a sustainable business model that promotes reuse of electronics on a much larger scale than we could have achieved before. These strategic shifts are often challenging in the short term, but in many cases they are essential to ensure a company’s long-term impact.

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