MANAGEMENT SPECIAL ............................. GENERATION FLUX'S SECRET WEAPON (5)

GENERATION FLUX'S SECRET WEAPON (5)

In a world of rapid change and great uncertainty, the greatest competitive advantage of all may be at your very core.

DON'T FORGET THE FILTER

Shauna Mei is founder and CEO of Ahalife, a high-end luxury e-tailer and one of Fast Company's Most Innovative Companies in 2013. Born in northern China, Mei came to America as an 8-year-old, traveling alone and joining her parents in the town of Moscow, Idaho. She slept on a lawn chair set up beside her parents' bed and spoke no English; she was an object of curiosity at school in a community with limited diversity. In Moscow, even her excellence--she was a math whiz--made her stand out uncomfortably. Eventually, however, she found her way to MIT, where she got dual degrees in finance and computer science. She then headed to Goldman Sachs, where she was confronted with another new, and equally foreign, culture.

"At that time, lots of large companies were getting refinanced: rental car companies, mattress companies, older industries. I wanted these large deals, but my supervisor put me on women-connected companies. I did Tampax and then Playtex, and after that I implored him, 'Can I do an oil-and-gas deal, an auto-supply company?' The next deal I got was Neiman Marcus, a luxury retailer for women."

Mei took a hard look at her career. "Am I going to fight the battle to work on industries the boys work on?" she asked herself. "Or is there a competitive advantage to work on luxury fashion business that I actually understand and enjoy?" The questioning helped Mei recognize that her background had prepared her for a unique mission: helping luxury artisans and designers develop sustainable businesses. She left Goldman and ultimately launched Ahalife.

Finding her mission wasn't an end point. Now she had to live it. Ahalife debuted at a moment when Gilt was getting raves for using flash sales to introduce luxury items at a low price to a mass audience. It didn't take long for Mei's backers, and even her employees, to raise the question: Shouldn't Ahalife follow the Gilt model? But Mei held firm. It was certainly conceivable that Ahalife might get a short-term lift, during its vulnerable infancy, by going the discount route. But Mei knew that most of the companies on Ahalife couldn't afford to stay in business in the long run if they didn't sell their products at full price. Mei believed she needed to persuade high-end customers that her luxury products were worth paying for. In the three years since then, she has gradually added more vendors and more customers. "Now we have over 2,000 brands," Mei says, "and we're nearing break-even."

A clear mission has helped Naithan Jones, CEO of AgLocal, apply a similar filter to his business. Jones doesn't have the background you'd expect from the founder of a startup helping family farmers tap into local markets. He was born in England to a British mother and an American father who left when he was young. But he eventually married a woman from a farming family, had two kids, and, despite never attending college, landed a job at the prestigious Kauffman Foundation, which encourages entrepreneurship around the country. Listening to his in-laws talk about the challenges farmers faced competing in a digitized world, he came up with the idea for AgLocal. He quit Kauffman; he and his wife sold off everything they owned and soon moved to San Francisco. Once in the Bay Area, he persuaded VC Ben Horowitz of Andreessen Horowitz to back AgLocal.

The company worked hard to develop a compelling software platform that helps farmers sell directly to restaurants and to meat wholesalers. But earlier this year, right around the time AgLocal was included in Fast Company's Most Innovative Companies list, Jones was confronted with his toughest decision. AgLocal had not been able to sign as many customers as Jones had anticipated. "We reached an inflection point," he says. "Do we create better software for meat wholesalers and restaurants and become a software company? Or do we try to do something better for the farmers, get them better margins by going direct to consumers?" Like Mei, Jones found some investors and employees leaning toward resetting the mission. Like Mei, he resisted. "I said no," he declares. "This is why we started this business. One day maybe we'll build a software company, but not today." Last summer, Jones's vision was rewarded when AgLocal won a contract to supply meats to Amazon Fresh, the Seattle behemoth's growing local grocery business.

These kinds of decisions are what Jared Leto calls "employing the power of no." He knows that he can't take advantage of everything that comes his way. "I never wanted to make the most movies or to make the most albums," he explains. "We all want to say yes, because with yes comes so much opportunity, but the power of no brings focus and engagement. I've got a standing rule for a couple of years: no new projects. The list of creative projects I've got, I'm going to stick with them. What you're doing, you should be passionate about. If not, say no."

BY ROBERT SAFIAN