What’s more important when starting a business? Making a pile of money quickly, or building a great reputation for the long haul? When we started Ternary Data in late 2018, we very quickly decided that while growing our revenues was vital, it was more important to grow our pile of reputational capital. It seems counter-intuitive, but as we celebrate our first year in business, we believe choosing reputation over revenue will continue to be the right decision.
Ternary Data’s primary goals have always been 1) help companies get more value from their data, 2) build our pile of reputational capital. Notice how we don’t have “quickly grow a giant pile of money”. This may seem odd, especially when starting a new business. Capital is obviously key to being an ongoing concern. We figure that if we can stay true to our mission of helping companies get more value from their data (the vertical), then our reputation will grow, and so will the money. Money follows a great reputation.
The opposite is never true in the medium to long term. Money doesn’t follow a poor reputation. A poor reputation usually leads to a downward spiral of ever worse reputation, crappier deals, and eventually going out of business. Bringing this sort of self-inflicted grief isn’t our forte. It’s much easier for us to do great work, be honest, and make customers happy.
How do you determine your business’s reputation? A lot of it is word of mouth, hearsay, and repeat business. We attempt to measure our reputation through means like Customer Satisfaction Score (CSAT) and Net Promoter Score (NPS). These should be taken at various points in the relationship with your client. But, by the time you’re getting the score, it can be a bit reactive and old as well. The best thing to do is simply ask, “how do you think this is going right now?”. This is a better real time gauge of the customer’s impression.
As Ternary Data grows, we intend to keep ground rules pretty simple. As you know, I follow a lot of how Warren Buffett operates, and with good reason. He’s world class at understanding how a business should run for the long term. His operating style is very decentralized, and got a terrific golden rule for the firms he invests in – reputation is everything.. During a Congressional Hearing about some misdeeds at Solomon Brothers, Buffett candidly gave a message to the employees of Solomon – “Lose money for the firm, and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless”. To this day, Buffett still plays a video clip of the hearing prior to the start of the Berkshire Hathaway shareholder meeting. It’s a warning and reminder that reputation is everything in business.
As Buffett also says, “it takes a lifetime to build a reputation, and only 15 minutes to destroy it”. We’ve all seen this happen. As long as people are greedy and short-sighted, it will happen again.
The business world (particularly data) is a small place. Ternary Data may or may not be around forever, but as long as my partner, our employees, and I are around, we’ll coexist with others in the business community for a very long time. People have long memories, and everything is permanent on the Internet. The best – and simplest approach – is to be honest and fair, do great work, and treat others with respect. Reputation is everything.