nau company
September 11, 2008
Feature Story
Case Study: Nau
Innovating for Social Consciousness
By Alex Slawsby
Can a for-profit enterprise succeed if its main innovation is valuing social consciousness as much as shareholder returns? The question is particularly relevant in a time of high gas prices and a growing sense that our current consumption of natural resources is simply unsustainable. The founders of Nau, a fledgling retail outerwear company, believed the answer to this question to be a resounding “Yes.”
Built with an unprecedented level of environmental, social, and human-rights consciousness, by
April 2008 Nau was an underground success on the West Coast, opening five stores and a website selling critically acclaimed clothing collections. Then, at the beginning of May, Nau’s board of directors voted to shut down the company.
Viewed through Innosight’s lenses, Nau’s promise becomes clear—along with the perils that led to its downfall. Nau had a reasonable business model built around a well-defined job-to-be-done. But as will become clear, Nau didn’t follow an emergent strategy. And Nau’s management discovered that a business model that looks good on paper doesn’t always translate into immediate profits.
Ultimately, a lack of careful execution and a push for quick expansion doomed Nau‘s first incarnation. But the story of Nau is still unfolding. Nau 2.0 is currently underway, and that venture appears to have a better chance of success.
The Launch
Nau (Maori for “welcome”) began with the dream of Eric Reynolds, an outdoor enthusiast entrepreneur, co-founder (in 1974) of outerwear brand Marmot, and subscriber to the belief that a single individual can have an impact on the world. In the summer of 2003, Reynolds conceived of Nau, a sustainable clothing company that would donate a significant portion of its revenue to nonprofit organizations. Specifically, Reynolds envisioned customers presented with a unique question at point-of-sale:
“To
Feature Story
Case Study: Nau
Innovating for Social Consciousness
By Alex Slawsby
Can a for-profit enterprise succeed if its main innovation is valuing social consciousness as much as shareholder returns? The question is particularly relevant in a time of high gas prices and a growing sense that our current consumption of natural resources is simply unsustainable. The founders of Nau, a fledgling retail outerwear company, believed the answer to this question to be a resounding “Yes.”
Built with an unprecedented level of environmental, social, and human-rights consciousness, by
April 2008 Nau was an underground success on the West Coast, opening five stores and a website selling critically acclaimed clothing collections. Then, at the beginning of May, Nau’s board of directors voted to shut down the company.
Viewed through Innosight’s lenses, Nau’s promise becomes clear—along with the perils that led to its downfall. Nau had a reasonable business model built around a well-defined job-to-be-done. But as will become clear, Nau didn’t follow an emergent strategy. And Nau’s management discovered that a business model that looks good on paper doesn’t always translate into immediate profits.
Ultimately, a lack of careful execution and a push for quick expansion doomed Nau‘s first incarnation. But the story of Nau is still unfolding. Nau 2.0 is currently underway, and that venture appears to have a better chance of success.
The Launch
Nau (Maori for “welcome”) began with the dream of Eric Reynolds, an outdoor enthusiast entrepreneur, co-founder (in 1974) of outerwear brand Marmot, and subscriber to the belief that a single individual can have an impact on the world. In the summer of 2003, Reynolds conceived of Nau, a sustainable clothing company that would donate a significant portion of its revenue to nonprofit organizations. Specifically, Reynolds envisioned customers presented with a unique question at point-of-sale:
“To