The natural state of a business is to become known to its target market, but keep its secrets and success hidden to avoid competition. Growing up in an entrepreneurial family for the first 15 years of my life I learned to never brag about my successes, but to show vulnerability and connect/help the vulnerability shown by fellow founders, because your network is a lot more likely to help you that way. In silicon valley that impetus is reversed. Desire for investors flips the publicity of most SV companies in an unnatural way. You see a market, you lift it like a big juicy steak in the air and you announce to everyone how much money you have to go after it. That instantly gets everyone else interested in the game and everyone has a big public race to burn as much money as possible until the last one or two standing get to public offering. Consumer startups are the exception as they inherently need the exposure. Hidden Champions pick niche, perfect a product that wins it, and own it quietly.
I think this also applies to nice, affordable towns. I’ve googled “best places to live” a couple times, but every time I do I can’t help but think all the places that show up are either trying to engineer a revitalization/aren’t as nice as advertised or must be at least somewhat swamped and overpriced. Any true gems with affordable prices and great atmosphere/people are only that way while they’re still hidden. If people widely advertise the quality of their neighborhood, they’ll get more money when they sell, but they’ll ruin the atmosphere and affordable entry prices. So any neighborhoods out there that still actually care about the quality and affordability of the town will advertise themselves very quietly and remain mostly hidden.
Maybe that’s just wishful thinking on my part, idk. I’d like to think there are really nice, affordable small towns with a real sense of community out there somewhere.
Definitely an A-Ha in my life was visiting a friends family business many years ago in a nondescript industrial park on the way out to the desert. They're in the Pet supplement space. Family owned for over twenty years old. Legacy customers. Millions a year in revenue with a healthy margin. Barely any signage amongst two dozen units yet luxury cars lined the parking lot. The A-Ha was the idea of "unglamorous businesses" having all the benefits of success without having to maintain the shine. At the time, I only saw the opposite; chase buzz, etc. so this was a paradigm shift on the nature of how businesses operate.
I'd heard of Bobcat, De La Rue, Embraer, McIlhenny, Petzl, Tandberg (famous for reel-to-reel tape-recorders). I do think it's wonderful that the list includes a company known for "wristwatch hands".
Molex is a pretty well-known name because of the eponymous connector, but I'd never considered whether it might be a company.
I'm not sure I would consider Embraer a hidden champion. It's a fairly large aerospace conglomerate in Brazil with very high level of public awareness (especially among the global flying crowd).
It has a revenue of R$20m, which falls within the arbirary hidden-champion revenue cut-off of US$5b only due to the poor BRL-USD exchange rate right now.
I think Germany success with hidden champions is correlated with their banking system, there are a lot of smaller regional banks in Germany that are focused on smaller businesses and allow for a market where there is a 'middle class' of companies.
That sounds like a great system. I am very pro-markets and capitalism but I have no problem saying there are very unhealthy examples in capitalism where huge corporations grow too much at the expense of humanity. A 'middle class' of companies seems much more sustainable, healthy, and fair. It could make buying local the norm again.
What are some examples of this phenomenon in the tech space? I'd guess this category would include lots of niche shareware products or legacy tools with no modern successors. Would any of them be considered "champions" rather than just profitable small businesses?
Indie Hackers website was similarly eye-opening experience for me: it basically lists various hidden champions of internet. Companies you won't find on Techcrunch or in YCombinator, yet they generate nice seven-figure profits per year to their owners.
