Showing people what you value IS selling your value, even to investors
They are one and the same
There was a public company that built agricultural businesses for the future. They were a start-up and looking for early adopters to invest.
But like many companies that have multiple audiences and stakeholders and a complicated offering, they didn’t know how to communicate to their various audiences and so they were communicating to no one.
In the company, most people, chiefly the Directors, believed whole-heartedly that, at the end of the day, they were there for the investors, which is arguably true. They provided the capital that allowed the company to do what they do. Without investors, there was no business.
In turn, a lot of the company’s messaging was built around driving value for shareholders and, in turn, they weren’t really communicating with farmers, communities, local government, and the horde of other stakeholders who couldn’t give a crap about making money for investors.
The farmers cared about growing their business. The communities cared about the social and environmental well-being of their province. And local government cared about pleasing the community.
On the surface, these goals seemed conflicting. But as it turned out, they weren’t. I helped them carry out a survey of the audiences and interestingly here’s what we found.
The presumption was, investors care solely about financial returns. But here’s the thing. Agricultural businesses can provide stable long-term returns (from an investment perspective), but there’s a HUGE caveat.
Of course, Agriculture is at the behest of the unpredictable environment. But what savvy agricultural investors know is that if you use best practices — financially, environmentally, socially — you can build a robust business.
Say, you are using innovative ways to maximize yield, minimize land use, water, and other input costs (like fertilizers, to name one), as well as building relationships with the local community and government bodies, if you do these things, you will most likely bring about financial returns.
So, the big insight was this, the company was communicating their value to their niche group of investors by showing that they valued the community, the environment, and everything else. (After all, they did value these things). Sure, they weren’t going to impress the investment banker. But, given their product, they never were anyway.
So instead of writing an investment pitch that resembled a 70s salesman, promising strong financial returns next year (just like every other Joe-blow on the ASX), they needed to explain the various innovative things they were doing that would SHOW, not tell, these investors that they were going to get a good financial return.
After all, in today’s world, if people are going to invest in our company long-term — publicly listed or not — we can’t just focus on the now, or two years from now. We have to show them why our business — or our idea — is going to be here 30 years from now.
What’s the takeaway? Everyone is in a commodity market, including the listed company that wants investors. If we merely focus on the product, like financial returns or a refreshing beer, we’ve chosen to become another commodity product and, in turn, swallowed up by the market. To stand out, to get people to invest in us when there are a million other options, we have to get them to believe in what we’re doing.
This is about participating in an economy that’s about creating a world we want to be a part of in the future, not just today.
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