The Blake Lively-Justin Baldoni legal fight is primarily a Hollywood “he said, she said” story, but as a founder, it should be read as a cautionary tale about what can happen to your company if you lose public favor.
Before their feud with Baldoni, Blake Lively and her husband, Ryan Reynolds, were well-liked A-listers thought of as “down-to-earth nice.” They were also hot brand ambassadors. Ryan built and sold Aviation Gin to Diageo for $610 million in 2020 and Mint Mobile to T-Mobile for $1.35 billion in 2023. Blake Brown beauty was slated to be Target’s biggest hair product launch ever in 2024.
But when accusations started flying, the internet went to work. Videos and text messages were discussed and dissected on social media, and the next thing you know, Blake and Ryan were disowned by fans who had adored them just days before.
The fallout was brutal. Rachel Strugatz at Puck reported that sales for Blake Brown plunged over 87 percent, and the brand became valued at $15 million instead of the forecasted $100 million. Aviation Gin and Mint Mobile saw weakened sales and pulled campaigns. Lively’s legal team claimed reputational damages of up to $300 million.
None of the products, the promotions, or the packaging had changed. The only thing that changed was what was said on social platforms.
And it’s not just a celebrity thing. One Instagram post from Dylan Mulvaney wiped out Bud Light’s two-decade run as America’s No. 1 beer. Sales dropped 25 to 30 percent and $27 billion in market value was lost. Three years later, the brand still hasn’t recovered.
Edelman’s 2024 Trust Barometer says that 71 percent of global consumers divide brands into “buy” or “boycott” categories. They either love you or hate you (and it can change in an hour).
Reputation used to be something you could manage with a Rolodex of journalists and a stash of tasteful gifts. Now it’s a load-bearing wall in a building that a random 22-year-old named Brayden can take a sledgehammer to between his second and third Red Bull. Here’s what to do:
1. Don’t bet the company on a single story
Robert Greene’s fifth law states that reputation is the cornerstone of power. If it slips, you can be hit from all sides. Warren Buffett says it takes 20 years to build a reputation but only five minutes to ruin it. James Clear warns, “If you’re a vegan and then develop a health condition that forces you to change your diet, you’ll have an identity crisis on your hands.”
The trick is not to stake everything on a single attribute or storyline. Patagonia and Costco absorb negative news because their reputations rely on what they make, how they treat workers, what they stand for, etc. They don’t depend on a founder’s identity.
2. Listen louder than you talk
Don’t livestream every moment and post every shower thought. Anything that can be misinterpreted will be misinterpreted (and will stay on the internet forever). As a founder, you need to assume that everything you say and do will be leaked to a public that is looking to be outraged, and anyone with a grudge will post negative things about you online.
Monitor what people are saying about you online and address negativity quickly. Silence can cost you deals, partners, and valuation. The best asset you can build is an online army of genuine fans who naturally defend you when something bad is said about your company.
3. Don’t feed the comment section
Never react to public attacks with defensiveness or self-righteousness. Online onlookers love to hate a leader’s reaction. During Nike’s sweatshop controversies, Phil Knight’s anger and petulance amplified the negative attention. Cracker Barrel’s logo change was defiantly defended until backlash caused a $94 million loss in market cap. DiGiorno’s #WhyIStayed tweet caused outrage and could have been disastrous, but immediate, humble apologies saved its reputation.
So, before you let your fingers fly, contemplate the fact that a $100 million brand is just one viral comment section away from being a $15 million brand if a guy named Brayden decides to livestream a reaction while eating his cereal.
The bottom line
Don’t think of building a brand as doing good PR or marketing. Imagine that 87 percent of your sales might evaporate if someone posts a “body language breakdown” of your blinking patterns. Then treat reputational resilience and responsiveness as if running a nuclear reactor in a strip mall, where the cooling system is “whether people currently find you likable.”
—Stephanie Davis
This article originally appeared on Fast Company’s sister website, Inc.com.
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