American companies are very well-known for their ability to create amazing brands.
Brands so strong that they are able to command huge financial margins for their products and services that they market under those brands.
But even with a fantastic brand, great products, a very high sales price and the endorsement of none other than Casey Neistat - Boosted Boards was put out of business earlier this year.
Even after attracting multiple rounds of dollar-based venture capital funding, the California-based urban mobility company just wasn't able to unlock any kind of financial sustainability and closed its doors in 2020.
So what happened? How was it that such a desired brand wasn't able to stay in business?
One of the primary reasons is that Boosted Boards just wasn't able to compete with far-cheaper versions of its products coming out of China.
Another very plausible reason was that the company employed over 150 American engineers, earning big American engineering salaries; with all the fancy 'lunchtime-Silicon Valley fringe benefits' that American engineers have become accustom to receiving. While workers at competing Chinese companies where paid far less and didn't demand tuna nicoise salad for lunch.
Sustainable businesses are the ones that are very good at understanding and leveraging a great business model.
Sustainable business models are ones in which the organisation is able to scale an in-demand value proposition by leveraging resources and processes that cost the company less than what it is able to sell it for.
Fancy offices in Mountain View, California and 150 well-paid engineers who eat lunch everyday for free are only sustainable if profitability is growing.
Take the engineer's lunch away from them — and they will leave, and you kiss your company good bye.
Forgetting that your people are a vital part in the sustainability of your organisation is an error that we see all too often. To get the most out of them they need very special attention and a delicate balance of coaching and stimulating work and benefits. Screw this up and you're on a hiding to nothing.
It's sad to see that Boosted failed in their mission, but hopefully the case study serves as a good one to learn from for the rest of us.