IDEAS / POST
Your Founder Magic – Business Moat or Brand Seasoning?
Here’s how to know which one you’re building before your next growth decision kills it.
You hit $1M in revenue because customers didn’t just buy your product. They bought into what you stand for.
But here’s the million-dollar question you need to answer while you’re still building competitive advantage:
“Are my values woven into the fabric of my brand’s revenue engine, or do I just make a damn good product?”
This question changes everything about how you should scale.
The Two Types of Founder-Led Revenue Engines
Category 1: Values ARE the Competitive Advantage
Jaime Schmidt didn’t just create natural deodorant that works. She built Schmidt’s Naturals on her “Supermaker” philosophy: authentic, grassroots, community-driven. She personally emailed customers for feedback. The brand felt like it came from a farmer’s market because it literally did.
That authenticity commanded premium pricing and generated organic word-of-mouth that traditional marketing couldn’t buy.
Ben & Jerry’s activism differentiated them in a commodity ice cream market. Michael Dubin‘s irreverent honesty (“Our razors are f**king great!”) was literally what people were buying from Dollar Shave Club.
Category 2: Values Are Marketing Wrapper Around Superior Execution
Maybe you built superior logistics, perfected a formula, or identified an underserved market. Your personal story and community were marketing tools, not the core revenue drivers.
If you’re Category 2, optimize for operational excellence and scale. Your competitive advantage comes from execution, and that’s perfectly fine.
But if you’re Category 1, those values aren’t just nice-to-haves. They’re high-margin business assets that need systematic protection.
The Expensive Mistake: When Category 1 Founders Build Like Category 2
This is where I see the most potential wasted. Founders assume their personal values are just founder ego, not realizing those values could be the premium pricing engine separating them from every competitor.
Schmidt’s Naturals shows exactly how this plays out.
While building: Jaime’s “Supermaker” philosophy drove revenue. Community-driven, authentic, grassroots. Personal customer emails. Farmer’s market authenticity.
After Unilever acquisition: The messaging shifted to generic “Natural Deodorant That Works.” They replaced personal customer emails with an AI chatbot named “Alexander.” They launched a Justin Bieber collaboration. The visual identity went from farmer’s market authentic to clean minimalist.
Indistinguishable from any premium brand on Whole Foods shelves.
Unilever isn’t the villain here. They’re sharp and progressive. But in my humble opinion, Schmidt’s competitive advantage was never just being natural deodorant that works. It was being the authentic, community-driven natural deodorant founded by someone who embodied conscious living values.
That authenticity commanded premium pricing and generated organic word-of-mouth that traditional marketing couldn’t buy.
The Ben & Jerry’s Lesson: Why Values Need Systematic Protection
Even when founders recognize their values as business assets, those values can get optimized away without systematic protection.
Ben & Jerry’s negotiated explicit contractual protections to maintain their activist edge when Unilever acquired them in 2000. Twenty-five years later, co-founder Jerry Greenfield quit because Unilever hadn’t lived up to those social activism commitments.
The lesson: If your values drive competitive advantage, you need systems to protect and amplify them as you scale. You can’t just hope they survive growth.
Your Value Architecture Diagnostic
Before you make your next growth decision, honestly assess:
- Is your brand profitable because of your values, or despite them?
- Do customers pay premium prices specifically for what you stand for?
- Do they buy because they want to belong to your community?
- Would your brand lose pricing power if run by professional managers?
- Are your “quirky” founder traits actually core to customer loyalty and lifetime value?
If the answer is yes, your growth priorities should be completely different:
Instead of focusing primarily on operational optimization, prioritize systematic amplification of the values that drive your competitive advantage and premium pricing.
If the answer is no, congratulations. You’ve built something that can thrive through operational excellence. Focus on efficiency and scale.
It’s Not About Preservation, It’s About Amplification
The most successful scaling isn’t about founders versus systems. It’s about creating structures where founder values and operational capabilities amplify each other’s revenue potential.
But that only happens when founders recognize that their values aren’t just brand equity. They’re high-margin business assets that need systematic protection and amplification as you grow.
The question isn’t whether to scale. It’s whether you understand the true revenue value of what you’re building.