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April 27, 2018

Alo-Cody-Dana: Business lessons in the Yoga World.

Editor’s note: This is an updated take on the current situation, based on a previous article published on March 25, 2018. 

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The Alo-Cody-Dana situation had the full attention of the yoga community, and expectedly, things came to a peaceful resolution with an out-of-court settlement.

It had all started with the acquisition of Cody, a fitness app, by Alo, an athleisure brand. It created conflict for Cody teachers like Dana Falsetti, who stood for body positivity, as she felt the brand was against her values.

Even as she was in discussions with Cody to find a solution, customers received some marketing e-mails allegedly leading them to believe that Dana now endorsed Alo. To clarify this, Dana ended up disclosing the merger as well as her frustrations about it on Instagram, while she was still under confidentiality clauses.

For this, she was sued for libel and breach of contract.

While this episode has highlighted some suspected concerns and malpractices, there are some definite business lessons for us to learn. I have taken the liberty to share an update on my corporate perspective, revised in light of the latest events. My outlook comes from having spent over a decade in the corporate world, and based on the publicly available information on the matter.

Stakeholder management is key:

The relationship between teachers and Cody is deeply symbiotic, as both entities mutually benefit from each other. Teachers gain visibility and reach, build personal brands, and get compensation for putting up their content. Platforms such as Cody provide the technology, invest in marketing, and grow the overall business.

The whole debacle started with Alo contacting Cody customers before the teachers could say anything about it. The root cause for this would be an inadequate process and stakeholder management—this usually entails listing all people impacted by the project, creating an order of priority, connecting with them, and closing all loops and negotiations before contacting the end user.

The brand’s communication plan did not seem to factor this. Perhaps they did not consider Cody teachers as important enough stakeholders, or it was an inadvertent lapse. In either case, tighter, well-thought-out processes could’ve avoided this altogether.

Content, in general, belongs to the platform:

Legally, Cody would own the rights to all content on its website.

To bring it in perspective, when Elephant Journal publishes an article like this, it would carry my name as the author, but it is Elephant’s property. If ever the platform is acquired, the rights will go to the new buyer. It would, in fact, be naïve to claim that my article should be returned to me on the premise that I never entered into an agreement with the new owners (even if I hypothetically don’t like them). Such understanding of business deals is flawed, and we must read very carefully what we are signing before giving up our content.

It is also worthwhile to note that Alo has likely acquired Cody not just because it is a cool app, but because of the value generated by Team Cody in nurturing relationships, teachers, customers, and content. If we take away the popular content, which was a part of Cody’s purchase valuation, then Cody’s value goes down and it is an unfair request from that perspective.

Equally, Alo is a big company and existing content will not really make or break their strategy. But in terms of fairness, why would Cody now, having invested all these years in purchasing and promoting the content, return or remove it? That they even offered this option to some is generous.

Start-ups are not all pixie dust and easy success:

Cody has faced accusations of selling out for money and compromising its values. I would disagree, as running a start-up is no easy feat—this is close to my heart because I’ve been there.

Investors want quick returns and no one’s into business for charity, else they could do it directly and get some tax breaks in the bargain. Hence such accusations are unfair; in an ecosystem where the majority of start-ups die out, anyone can critique, but only a few can put in the extraordinary effort and hard work required to create an organization of value.

Given that start-ups rarely have a bevy of suitors to choose from, it is the decision of Cody’s owners, earned through years of hard work, as to who they sell their business to. We can have a wish for it, but not a say.

Protecting their interests:

The libel and defamation case against Dana has been questioned as an act of corporate bullying. In light of the latest available information, it does appear that Alo could have taken less severe measures, but technically, they’re not wrong.

Libel is making accusatory statements about anyone that damage their character and cannot be proven by law. There have been cases where a mere remark on a Facebook post led to a defamation settlement of $500,000. Many of these “social media” settlements tend to be in high figures because of the grapevine effect wherein information quickly goes viral. That is why brands will want to address it at the very beginning itself, and yes, it is indeed done to send a message to others—if they don’t, their character is at the mercy of anyone with a smartphone.

Large organizations generally don’t mind litigation, and it is always an unequal battle with them. Businesses have a whole lot more at stake than individuals—their risks are higher, and losses too can run into millions. These social media defamation cases are gradually on the rise, and they’re here to stay.

So, let us use this as a warning to be careful and wise. If we work on content-based platforms, it is an excellent habit to think twice before publishing anything, especially when we’re angry. There are always better ways to form our message.

The customer is the king:

Alo is successful because people want to buy its products; whatever they’re doing is working for a large number of customers. However, if we have the conviction that certain brands do not have a place in our world, then first, we should stop buying them, and second, we should invest in creating awareness about our beliefs and give people an alternative.

We cannot force our opinion on people or question their intelligence and choices—that is egoistic and unproductive behavior.

The best way to bring change is by building a community, and one example of such an initiative is Dana Falsetti. It takes years of consistency and passion for reiterating the same message over and over again. Anyone can show up to badmouth a brand, fight with their ambassadors, and create a ruckus, but what are the results?

Instead, we must focus our energy on doing what we do, spectacularly. And that is what the brands have been doing while we’ve been trolling their pages—they’re getting the products out, launching new plans, having teething issues, still keeping their heads focused. and delivering their targets. That’s why neither Cody nor Alo can be seen engaging in or reciprocating to the mudslinging that’s been going on against them.

Negotiations:

The right way to negotiate is to understand what the opposite party wants and how best we can help achieve it.

It does not mean screwing someone over and getting everything in our favor.

Everyone has goals or aspirations, and it is mutually beneficial to appreciate and respect others and find a solution that is win-win for both. If we can’t find such a solution, then the next best alternative should be explored. But if we assume that the opposing party is evil and approach them bursting with anger and righteousness, nothing good will ever come out of it.

Community interests:

Maybe companies like Alo are not following ethical advertising guidelines, or apps are making an unfair buck. In that case, we as the yoga community should be focused on those battles—having corporations do something better for the community, to change their strategy, to introduce transparency.

It would require the influencers who are serious to get together and initiate a formal and respectful dialogue with the companies, likely using the old-fashioned face-to-face or phone call communication methods. This may not be as exciting compared to the more comfortable option of sitting in an armchair, writing provocative comments, and having everyone follow that. Neither will the invisible drudgery of negotiations have the added benefit of millions of excited followers, increased engagement, and trending results. But there’s undoubtedly a better chance of getting some useful solutions out of our efforts.

Conclusion:

My whole intent to share this is to highlight how businesses think and act.

We do not have to like corporations, but if we are going to be interacting with them, it will be useful to appreciate their drivers so we can better negotiate and protect our interests. We can also concentrate any revolutionary efforts so that they bring about needed change rather than create a frenzy.

Therefore, this whole “vive la resistance” is as good as using a nuclear weapon to light a matchstick. There is so much power behind it, what can we not achieve with it? And yet, what have we done?

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For reference:

When one Big Company picks on one Yoga Teacher. ~ Kino MacGregor
> The Truth behind Kino’s letter. ~ Paul Javid
Alo, do the right thing—and we will all thank you. ~ Kino MacGregor
> Kino talks with Waylon about Alo and Dana & the Path of Yoga in an Instagram culture.
> From one non-famous Instagram Yogini to another.

Relephant:

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Author: Namita Chandra
Image: Stephen Sandian/Unsplash 
Editor: Catherine Monkman
Copy & Social Editor: Nicole Cameron

 

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