Ben & Jerry's Complete Rejection Of Conventional Wisdom

    by Brian Halligan

    Date

    November 29, 2010 at 12:08 PM

    I was at a conference recently where Ben Greenfield from Ben & Jerry's was the lunchtime keynote speaker.  The thing that struck me about the talk was how a very unlikely duo became very successful by ignoring conventional wisdom at every turn.  Here are some of the ways they ignored conventional wisdom that I liked a lot:

    1.   Ben & Jerry's started in Burlington, Vermont, selling ice cream cones.  The problem they quickly ran into was that no one bought ice cream cones in the winter in Vermont!!  To try to stimulate sales in the winter, they offered a penny off for each degree below 32 degrees it was that day.  In other words, if it was 2 degrees out, you got 30 cents off your cone.  Brilliant!  [Does this spur any creative packaging ideas for your business?]

    Screen shot 2010 11 29 at 11.49.48 AM resized 600

    2.   They had a heck of a time getting merchants to buy their ice cream from them since they already stocked Haagen Dazs and other flavors.  In order to break the logjam, they offered to BUY BACK any unsold ice cream from the stores.  This turned out to be the difference maker for them in the early days!  [How about you try doing a money back guarantee for your product as a test -- might it work better than all traditional marketing stuff combined?]

    3.   Once they started to get momentum in Vermont, they convinced some larger distributors to carry their products alongside Haagen Dazs.  Once Pillsbury (Haagen Dazs parent company) found out about their distributors carrying both products, they threatened to pull out of their arrangements with them.  Ben & Jerry's went on a "What's The Doughboy Afraid Of" offensive against Pillsbury.  They took out ads in the Wall Street Journal, Jerry picketed in front of Pillbury headquarters, they put a call to action about this issue on their ice cream containers asking customers to write to Pillsbury's ceo, etc.  Guess what -- it worked! [Is there a clever way to upset the distribution model in your industry?]

    4.   When they were about $3million in annual revenue, they wanted to expand.  All of their advisors told them to talk with venture capitalists and private equity folks.  They didn't like that idea, so they did their own version of an IPO.  They sold shares in Ben & Jerry's for $126 each door-to-door and store-to-store in Vermont and raised $750k -- one in every 100 households in Vermont bought a share in the company.  They later did a national offering in the same style to raise more money.  Fascinating!  [Could you leverage your fundraising process to build more fans of your company and get more customers?]

    5.   When they were well down the path and quite successful, Jerry went to one of his advisors and said he wasn't happy and was thinking of selling the business.  His advisor said, "If you don't like it, change it -- your the CEO."  Ben never thought about it that way and set about making some radical changes to the company to align it with the way he thought a business should be run.  The most glaring of these changes was that 7.5% of the company's pre-tax profits was put it into a foundation that supported organizations that the employees thought helped social and environmental issues.  He didn't comment on this in his keynote and I don't think he did it for this reason, but I betcha this more than paid for itself in profits because everytime someone eats their ice cream, they know that some of the profits are going to a good cause.  [Could you spin up a similar program that would help your bottom line at the same time as it helped a good cause:  1+1=3?]

    HubSpot is the first company I have ever started (if you don't count Stroker Ace Painting Co in college -- smile) and I have found myself having an interesting relationship with conventional wisdom.  Here at HubSpot we tend to question conventional wisdom every step of the way.  In some cases, that questioning turns into our spending a lot of cycles on something that turns out to work just fine if you follow conventional wisdom -- uugghh!  In other cases, that questioning turns out to be just right because conventional wisdom is out of date and dead wrong.

    Our biggest "win" as a company is our complete rejection of traditional marketing conventional wisdom.  As you all know by now, we believe that traditional, outbound marketing (advertisements, email spam, cold calls, etc) is dying as people are getting sick of the interruptions and getting better at blocking them out (dvr's, pop-up blockers, Pandora, spam protection, CallerID, etc).  It is this complete rejection of marketing conventional wisdom upon which we have built our company and it is working out pretty well so far (3600 customers today -- up from about 1600 customers a year ago).

    Probably our second biggest "win" as a company is our near complete rejection of how "work" should happen and how the relationship between a company and its employees should operate .  This rethinking of the work structure and culture has provided big benefits for us in that we have attracted really great employees who are highly motivated...the company was named the #1 Place To Work by The Boston Business Journal and the #4 Place To Work by the Boston Globe.

    What do you all think?  Do you have an complicated relationship with conventional wisdom like I do?  Do you tend to go with the flow or try to rethink the flow like Ben & Jerry's did? 

    What companies do you really admire?  Do those companies win because they follow conventional wisdom or ignore it? 


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