There is a strange little economy built around looking successful.
A business gets a better office and people assume it is doing better. The team grows from five people to thirty and suddenly it appears to have capacity. The founder gets a blue tick, the company gets featured in the press, there is a new website, a very impressive deck, three industry awards and a company profile full of phrases like “market-leading solutions” and “transformative impact.”
None of this necessarily means the business is doing particularly well.
And yet, all of it can make people treat the business differently.
We’ve spent enough time in rooms with founders to see this from both sides. We’ve seen businesses where the presentation genuinely reflects a strong underlying operation, and we’ve also seen businesses where the presentation is doing considerably more work than the operation.
What interests us is not really why founders want to look successful. That’s fairly easy to understand.
What interests us is why the rest of us reward the signal.
We are constantly guessing
A customer deciding whether to hire you usually cannot inspect your finances, sit in on your operations or interview your employees before making a decision. An employee considering a job doesn’t know whether the company will still be around in three years. An investor certainly has more information than a customer, but even investors are making decisions with incomplete information.
So we look for clues.
An office can be a clue. A large team can be a clue. A polished website can be a clue. Recognisable clients, press coverage, awards, followers and even the founder’s personal presentation can all become clues about things we cannot immediately see: stability, competence, credibility, scale.
This is why signalling works.
It isn’t necessarily that people are gullible. It is that information is expensive, and signals are cheap to process.
If you are choosing between two companies you have never worked with, and one sends you a beautifully structured proposal while the other sends you a three-page document with inconsistent fonts and no clear scope of work, you are probably going to have a different first impression of the two businesses.
The interesting part is that the proposal tells you very little about whether the company can actually deliver.
But it tells you something.
Or at least, you think it does.
And that is enough to influence the decision.
Which is where the economics gets weird
Once businesses realise that certain signals influence decisions, they have an incentive to produce more of them.
A nicer office may help win bigger clients.
A bigger team may make the company appear more capable.
A rebrand may make a business feel ready for a new market.
Press coverage may make a relatively unknown company appear established.
An award may provide third-party validation.
A large social following may create the impression that the company has already been accepted by the market.
None of these things are inherently bad investments. In fact, some can be very good investments.
The problem is that the signal can become easier to improve than the underlying thing it is supposed to represent.
It is relatively easy to redesign the website.
It is harder to improve customer retention.
It is relatively easy to increase headcount.
It is harder to build a business capable of profitably supporting that headcount.
It is relatively easy to produce a beautiful pitch deck.
It is harder to build the operational capability that makes every promise in the deck true.
And we’ve seen this distinction matter in real businesses.
Sometimes the company profile says “robust systems” while everyone still asks the founder what to do. Sometimes the organisation chart has impressive titles while nobody is entirely sure who is accountable for what. Sometimes the business has a sophisticated-looking sales presentation but no reliable way of knowing which customers are profitable.
The signal is real.
The substance is still catching up.
But customers aren’t completely wrong to respond to it
This is the part that makes the conversation more interesting than simply telling founders to “stop trying to look successful.”
We don’t think that is the lesson.
Presentation matters.
Trust matters.
Perception matters.
If you are asking a customer to give you ₦20 million worth of business, they are going to care about whether you appear capable of handling it. If you are hiring someone into a senior role, they are going to look at the size and structure of the organisation. If you are entering a partnership, the other party will want some evidence that you can deliver what you are promising.
People use visible evidence because they don’t have perfect information.
The signal therefore has economic value.
The question is whether the signal is backed by something worth signalling.
That’s the bit founders sometimes miss.
A beautiful office can communicate stability. But if the business cannot comfortably afford the office, it is communicating something that isn’t actually true.
A large team can communicate capacity. But if half the team is underutilised, it may simply be communicating a very expensive payroll.
An award can communicate credibility. But if customers aren’t returning, the award hasn’t solved the underlying problem.
A blue tick can communicate legitimacy. It cannot manufacture a good business.
Even corporate language is a signal
We’ve always found this one funny.
A company starts with three people selling a very straightforward service. Then it decides it is ready to “reposition for the corporate market.”
Suddenly nobody sells anything anymore. They “deliver integrated solutions.”
Nobody manages people. They “drive stakeholder alignment.”
Nobody has customers. They have “strategic accounts.”
Nobody is trying to enter another country. They are “expanding their geographic footprint.”
Sometimes this is just branding. Sometimes it is a genuine attempt to communicate sophistication to a particular market.
But language is signalling too.
You are telling the market, this is the kind of organisation we are.
And again, that can work.
The danger is when the business spends so much energy communicating its intended identity that it forgets to build the capabilities required to sustain it.
So what should founders actually do?
We don’t think the answer is to reject the signals.
It is to understand what each one is supposed to accomplish.
If you are getting a bigger office, what economic problem is it solving?
If you are hiring ten people, what revenue or capacity problem are they solving?
If you are spending money on PR, what opportunity are you trying to create?
If you are investing in a rebrand, what has changed in the business that makes the new positioning necessary?
If you are chasing awards, what will the recognition actually unlock?
If you cannot answer those questions, there is a chance you are not investing in growth. You are investing in the appearance of growth.
And those are very different things.
The irony is that some of the strongest indicators of business health are the least visible ones.
Customers who return without being chased. A business that knows its numbers. Processes that don’t live entirely in the founder’s head. A team that understands what it owns. Healthy margins. Predictable revenue. Decisions that don’t require the founder to personally intervene in everything.
None of these things make particularly glamorous Instagram content.
They are still doing the heavy lifting.
The signal should never become the product
Looking successful isn’t a problem.
In business, perception has economic value. We should acknowledge that rather than pretending everyone makes decisions based purely on objective facts.
The problem starts when the business becomes better at producing evidence of success than at producing the conditions that create success.
At that point, the office is impressive, the deck is beautiful, the LinkedIn page is active, the team photo looks great and the founder has the vocabulary down perfectly.
But the numbers are quietly asking a different question.
What exactly are we signalling?
Because there is a very real difference between spending money to help people recognise the value you’ve created and spending money to convince them that value exists.
One is marketing.
The other can become theatre.
And theatre gets very expensive when you have to perform it every month.
Rooting for you!
—RGP.