Scaling a Golden Shadow

Imagine you are about to open a bakery. You rented a location you feel will work well. You try out a set of products you think people will like. You do a dry run and invite family and friends over. The day comes, you open to the public, and some products sell well. Some products are devoured early in the day. Some are left behind. Weeks pass, and the trend continues. You are able to learn what your clientele wants and adapt the menu to their interests. You become identified with this and develop what Jung called a “Golden Shadow” or what organization theorists call reaching product-market fit.

This example gives us an idea of a process that happens all the time. Thousands of entrepreneurs start up and conquer a niche in their market. We have a myriad of ideas on how to help them do just that. However, scaling to a broader and bigger market is hard, as we will see.

Time has passed. Your bakery runs great; you are bored most of the day. So much so that you wonder what to do next. You find out that a location 30 minutes away is up for rent, and a friend of yours would be interested in working with you. You choose to rent this place, bake everything in your first location, and deliver baked goods to the second one. To your dismay, the staples of your first bakery are not all well-liked. You try out new ideas and eventually, you make it so that some market fit is reached in the second location as well.

Time goes on, and you find an empty warehouse in the center of the city. You go to the bank, get a loan that enables you to open up a series of bakeries all over the city, and have a truck to deliver fresh bread every few hours. The menu no longer fits very well in every location. Turns out salespeople are not so adept at understanding the taste of the customers, nor what you and your chefs can provide. But revenue has been growing steadily.

Years pass, and you discover a warehouse that allows you to expand your central kitchen. It is around an hour away from your first location. But it enables you to start opening bakeries in multiple neighboring cities. You find an investor who buys the warehouse for a share of your company. Now you have a board of directors, a pool of bakers, and location managers. You realize you have not baked in ages. But you still consider yourself a baker.

Jung’s Golden Shadow concept is the idea that we all have hidden parts of ourselves that can shine if the conditions for it are met (Miller, 1992). It differs from the normal shadow, which is composed of the errors we make and whatever keeps us from achieving our one and only goal. I find this concept mirrors a key characteristic of the scaling process described. Namely, the emergence of new strategic bets the organization could make as it grows: market fit, partner selection, delivery, loans, freeze-friendly menu, outside investors, managerial role…

Literature in organization design has studied in detail how to help an organization achieve better decisions and fewer errors toward a single goal. This form of efficiency is important for getting to the stage of making growth decisions. However, as in the example, if the baker focused ONLY on improving its initial market fit, they would never have realize that they could be running a chain of bakeries in the future.