Ja­son Fried Safe­guard­ing your brand in a time of po­lar­ized pol­i­tics

In the new po­lit­i­cal cli­mate, CEOs need to pre­pare for a dark mo­ment in the spot­light

Inc. (USA) - - CONTENTS - Ja­son Fried

IUSED TO BE a po­lit­i­cal junkie. Like a sports fan who can name any bas­ket­ball player, I knew who ev­ery sen­a­tor, con­gressper­son, and pun­dit was. Then, a few years ago, pol­i­tics started to com­pletely dis­gust me. I stopped watch­ing the Sun­day-morn­ing talk shows, stopped read­ing po­lit­i­cal news, stopped pay­ing at­ten­tion. And I felt bet­ter than ever.

But with the re­cent pres­i­den­tial elec­tion, things have changed. I don’t mean my per­sonal in­ter­est in pol­i­tics, which is still at an all-time low. I mean that now, ev­ery­thing is get­ting tainted by pol­i­tics.

As a CEO who’d rather not mix busi­ness and pol­i­tics, I’ve re­cently re­al­ized that’s not al­ways pos­si­ble. Be­cause even if you want to keep them sep­a­rate, your cus­tomers, your em­ploy­ees, and the pub­lic at large may not.

For ex­am­ple, there’s a Cana­dian com­pany called Shopify, which pro­vides a plat­form that pow­ers hun­dreds of thou­sands of on­line stores around the world. Shopify was re­cently sucked into a ma­jor PR tor­nado be­cause one of the stores it hosts be­longs to the news site Bre­it­bart, which many peo­ple be­lieve spreads hate and an un­sa­vory agenda.

When this be­came widely known, Tobi Lütke, Shopify’s CEO, got more than 10,000 emails, tweets, and mes­sages de­mand­ing that Shopify kick Bre­it­bart off its plat­form. Tobi wrote up a pub­lic let­ter de­fend­ing the com­pany’s de­ci­sion to al­low it to con­tinue on Shopify (his ar­gu­ment: free­dom of speech). That let­ter was also met by op­po­si­tion.

The con­tro­versy woke me up to how hard it can be for com­pa­nies to avoid pol­i­tics these days. What if that hap­pened to us?

I be­gan to think about it. My busi­ness part­ner, David Heine­meier Hans­son, and I had a lengthy con­ver­sa­tion on the sub­ject. We also con­vened a meet­ing of our top man­agers and team leads. We wanted to talk about what we’d do if we were con­fronted by a large num­ber of users de­mand­ing ac­tion be­cause of some­thing on our site that they deemed un­rea­son­able or hurt­ful.

Un­like Shopify, peo­ple use Base­camp pri­vately, so we don’t see what they’re do­ing with it. But let’s say we weren’t dif­fer­ent. Where would we draw the line? If we and the pub­lic knew that a cer­tain cus­tomer was do­ing some­thing un­to­ward with Base­camp, how would we re­spond?

This is an on­go­ing de­bate in­ter­nally. Per­son­ally, I’m a live-and-let-live sort. Oth­ers are quicker on the kick-them-off trig­ger. Some are zero-tol­er­ance for any­thing even bor­der­line offensive.

Some hy­po­thet­i­cals were easy to agree on. For ex­am­ple, if we found out some­one was us­ing Base­camp to or­ga­nize a neo-Nazi rally, that per­son would be gone. No ques­tion.

But that’s an easy call. Many are not so clear-cut. Even pornog­ra­phy was de­bated. To some, all porn is hor­ri­ble and ex­ploita­tive, but oth­ers are not com­fort­able telling con­sent­ing adults what they can or can’t do on film. When you re­ally have the de­bate, you be­gin to see all the nu­ance.

Ul­ti­mately, we agreed to draw the line at hate. Hate crimes, hate speech. And while even the lines defin­ing hate can be blurry, we played out a va­ri­ety of sit­u­a­tions and ev­ery­one came down on the same side on those. So we feel good about that line in the sand.

The de­bate will con­tinue, and of course ev­ery­thing will be han­dled on a case-by-case ba­sis. And while I still ab­hor the state of pol­i­tics, I found the dis­cus­sion in­vig­o­rat­ing and en­light­en­ing. I’d rec­om­mend all CEOs bring this topic up to their ex­ec­u­tive and man­age­ment teams. Get it out in the open. As a com­pany, you’re much bet­ter off hav­ing these dis­cus­sions in rel­a­tive safety be­fore you wake up one morn­ing to dis­cover you’re at the cen­ter of the po­lit­i­cal storm.

its own thicket of red tape, and ex­pan­sion is a stop-and-start game: In Ore­gon, for ex­am­ple, Wana and its li­cens­ing part­ner had its prod­ucts on the shelves of more than 160 dis­pen­saries by the end of last year. Then, the state de­cided that a dif­fer­ent reg­u­la­tor should over­see the in­dus­try—forc­ing dis­pen­saries and prod­uct man­u­fac­tur­ers to redo their le­gal pa­per­work and their qual­ity-test­ing pro­ce­dures, and ef­fec­tively halt­ing most sales of mar­i­juana prod­ucts for weeks. “This is the kind of thing that just adds a lot of com­plex­ity to these out-of-state sit­u­a­tions. It’s just very messy,” White­man says. “I don’t know whether we were ge­niuses or id­iots for de­cid­ing to launch in Ore­gon when we did. De­pends on the day.”

It’s a land grab among Wana and its com­peti­tors, all rac­ing to gain loyal cus­tomers out­side of their home ter­ri­tory to be­come a na­tional con­sumer brand. As Wana pushes into Ne­vada and Ore­gon and pos­si­bly soon Ari­zona, White­man’s hop­ing to build a rep­u­ta­tion for “pro­fes­sional, great prod­ucts—we’re safe, you can count on us, we’re con­sis­tent.” Es­tab­lish that sort of brand in ev­ery state Wana can, her think­ing goes, and when mar­i­juana is fi­nally le­gal on the fed­eral level, the flood­gates will open.

But Wana’s en­tire in­dus­try faces an un­ex­pected, if deeply un­cer­tain, fed­eral threat. Since Don­ald Trump was elected pres­i­dent—on the same day that eight more states de­cided to le­gal­ize or ex­pand le­gal mar­i­juana—en­trepreneurs have swung between blithe op­ti­mism and near panic. Repub­li­cans of­ten in­voke states’ rights, and do­ing any­thing to limit the le­gal- cannabis in­dus­try’s growth would hurt busi­ness own­ers and the es­ti­mated 100,000-plus jobs they have cre­ated. But Trump is un­pre­dictable; in late win­ter, At­tor­ney Gen­eral Jeff Ses­sions and White House spokesman Sean Spicer made com­ments about crack­ing down on the le­gal-weed in­dus­try by en­forc­ing fed­eral pro­hi­bi­tions de­spite state laws le­gal­iz­ing it.

In Wana’s best-case (if most un­likely) sce­nario, Trump will sup­port full fed­eral le­gal­iza­tion; worst case, he’ll try to block both med­i­cal and adult-use sales. As of press time, White­man and other legal­mar­i­juana en­trepreneurs said they were brac­ing for some­thing in between, with the med­i­cal-use mar­ket be­ing al­lowed to re­main un­changed, while recre­ational mar­i­juana is banned. “It’s ob­vi­ously some­thing we take se­ri­ously and are watch­ing closely, but I don’t think panic is called for at this point in time,” White­man said in mid-March. “Most peo­ple I’m talk­ing to are watch­ing it, but they’re mov­ing for­ward.”

Ed­i­bles are par­tic­u­larly vul­ner­a­ble on both the state and fed­eral lev­els, be­cause what makes them so great— they are the most dis­creet, odor­less way to get high—is also what makes them dan­ger­ous: They can eas­ily be mis­taken for reg­u­lar food. “For most peo­ple who have had a bad ex­pe­ri­ence with cannabis, it’s be­cause of ed­i­bles,” says Stahura, the BDS an­a­lyst. Some le­gal mar­i­juana states have al­ready banned them out­right; Colorado re­sponded to these con­cerns by man­dat­ing child­proof pack­ag­ing and stamps on ev­ery in­di­vid­ual unit of mar­i­juana-in­fused food. White­man claims to wel­come more reg­u­la­tion— par­tic­u­larly na­tional rules— cit­ing the typ­i­cal pro-le­gal­iza­tion pitch. “Peo­ple are go­ing to con­tinue to make ed­i­bles and use them. The scary and un­safe part comes from peo­ple mak­ing them at home, not test­ing them,” she says.

Be­ing a leader of the pack in the early days of a new in­dus­try doesn’t mean there’s any guar­an­tee Wana will re­main there. As it saw with its pre­de­ces­sor, EdiPure, these young com­pa­nies are frag­ile. Com­pe­ti­tion for na­tional suc­cess could come from un­ex­pected places, like Cal­i­for­nia: The huge, so-far med­i­cal- only state will start al­low­ing recre­ational sales next year.

So Wana is try­ing to do ev­ery­thing it can to adapt and ma­ture, quickly. It has cre­ated a sys­tem to send food sci­en­tists and qual­ity-as­sur­ance per­son­nel to its part­ners’ fa­cil­i­ties to en­sure that the out- of-state ver­sions of Wana gum­mies have the same tangy sweet­ness and le­gal THC ra­tio. Prod­uct de­vel­op­ment has led to hard can­dies called Jew­els, a new ver­sion of one of Wana’s first prod­ucts, as well as ex­tended-re­lease cap­sules. White­man is also ex­plor­ing mi­cro­dose lozenges, with smaller amounts of THC per item.

While John over­sees the day-to- day pro­duc­tion, most of Nancy’s time is spent out of the kitchen. This week alone, she’s tak­ing a day trip to Ari­zona, try­ing to sign up an­other li­cens­ing part­ner. In com­ing days, she’ll meet with her ac­coun­tant to dis­cuss the pos­si­bil­ity of tran­si­tion­ing Wana from an LLC to a C-corp. Soon she could be trav­el­ing to Mary­land and Mas­sachusetts and Illi­nois and Penn­syl­va­nia, dis­cussing more li­cens­ing deals and help­ing her new part­ners set up op­er­a­tions.

In short, White­man will con­tinue to do ev­ery­thing she can to make her sug­ary, weed-in­fused can­dies as le­git­i­mate and com­pli­ant and reg­u­lated and bor­ing as pos­si­ble—while barely tak­ing a mo­ment to kick back and sam­ple the fruits of her la­bor. “I’m such a light­weight when it comes to ed­i­bles,” she ad­mits. “I’m very busy—and I have to fo­cus.”

Ja­son Fried is a co-founder of Base­camp (formerly 37sig­nals), a Chicago-based soft­ware com­pany.

FLY­ING HIGH CON­TIN­UED FROM PAGE 102

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