Rebrands don’t solve trust problems

A trust problem is one of the hardest problems to solve in business. When people stop trusting your company, it forces you to dig deep inside your business and ask very hard questions. These questions are challenging for even the most hardened executives to ask and answer.

There is a silver lining, however: confronting a trust problem early and honestly invites a pivot, and a well-managed pivot is a valuable work of art. The learning it generates can unlock untold success down the line. Even better than making a pivot is sharing why you did it. We made a pivot recently at Sublimate, and when I was asked about it on a prospective investor call, I was up front about it. I told them we were going in a direction over the last nine months, and we learned the approach we were taking didn’t align to our vision for the business. We pivoted, and we’re really excited about the result, which ushered in an even bigger technological breakthrough than our last.

The investor came back and told us they were surprised and delighted by my honesty, and they went on to say they weren’t used to founders who readily admitted they had gone down the wrong path and made the hard decision to course correct, which shocked me. How are you supposed to build trust if you can’t admit when you’ve made a wrong turn? More importantly, how can you ask others to trust you when you won’t own up to it. Acknowledging you were going the wrong way and need to make a pivot is hard but, once you’ve made the choice to change course, you should take the time to celebrate.

I have never regretted honestly admitting to a mistake. Being up front about mistakes or bad calls helps me stay in alignment with my values while also helping reveal the true character of the people around me. Those who jump in with two feet to help or who, at the very least, show gratitude for the honesty are the people with whom I want to continue working. People who harp on the mistake or use it as an opening to take a cheap shot at me or my team – I believe those people when they tell me who they are.

One of the ways companies, as a whole, fail to acknowledge mistakes is through rebranding.

Tech stocks have been taking a hit since the election, with the NASDAQ shedding $2.3 trillion in one day last week as investors priced in data center delays among other drivers. Even though I am the CEO of an AI company, I believe voters were right to reject hastily-built data centers negatively impacting their communities. I am in favor of designing and building data centers to be a net benefit to communities, and they should always be built with community input. The long-term benefits are worth investing the time and collaboration up-front.

I grew up in Northern Virginia when many of the data centers people point their compute needs towards today were being built. I know data centers can be built responsibly, which is why it frustrates me when companies claim they can build highly sophisticated artificial generalized intelligence (AGI) while building data centers with crippling noise and water pollution combined with unsustainable and predatory energy consumption.

This is why rebranding data centers as “compute campuses” won’t work. The problem has nothing to do with the naming and everything to do with the underlying business practices. People aren’t looking for tech companies to find new names, they’re looking to them to find new solutions, and sustainable, net-positive data centers are a nest of technical problems worth solving. The problem, which voters made very clear this month, is a trust problem. Specifically, the public doesn’t trust tech companies to address the energy, water, and noise deficiencies (to name a few) in data center designs.

To be clear, I am the last person to claim these problems are easy to solve, but I will stand firmly in saying they are worth our collective time and attention. Data centers are a powerful component of the national infrastructure. They don’t just help big tech companies. They also help small, and medium-sized businesses emerge, scale, and open up new opportunities. Rebranding them doesn’t solve any problems though; it just makes the stickiest problem – trust – worse.

Ultimately, this entire episode serves as a reminder: if you feel the need to rename something because it is unpopular, it’s likely time to do a trust audit. Ask yourself and your team:

• Going back to the beginning, when did we start to earn trust from our customers? What were we doing? Why did it work?
• Which moment or decision damaged or broke trust with our customers, what was it? When did it happen?
• Are we prepared to make a material change to our business to regain trust beyond renaming a product or service? If not, what do we need to do to get prepared?
• Are we willing to acknowledge what’s not working and where we went astray openly with our customers and other stakeholders? If not, why not, and does our reason align with our values as a company?
• Will a rebrand incur renaming debt – the cost a company accrues when they change a label without changing the underlying behaviors? Is the debt more or less expensive than a material change?

The questions are not easy to ask and answer, especially when there are billions of dollars on the line. When you’re tempted to take a shortcut, keep in mind: acknowledging and fixing a mistake will never cost as much as your customers’ trust is worth.