Remember that high school English teacher who scared the hell out of you for the first few months, then became the coolest teacher ever for the next four years?
You probably ended up liking her more than you liked the teacher who tried too hard to be liked, then became a tyrant when “niceness” failed.
This is a common phenomenon in relationships between leaders and followers, and it happens in business, too.
The “cool startup” which starts out offering a lot of free features and eschewing controls tends to eventually find itself out of cash or out of compliance. Then it has to start ratcheting up prices or restricting who uses its product or how users engaged with it. These are hard choices every company has to make at some point. But regardless of necessity, these choices tend to turn love into dislike in a customer base. There’s a general feeling of betrayed expectations and fear that more price hikes or restrictions will come.
On the other hand, the companies that start out fierce about pricing and/or standards (this is my impression of Microsoft under Bill Gates) and then start to liberalize and do cool pro bono stuff (e.g. Microsoft and its move to open source and other cool stuff since the reign of Satya Nadella) tend to do better with perception in the long term. They set out sternly, so they set expectations of “nice things” low. Then they proceed to surprise everybody and exceed expectations.
There’s a classic bit of wisdom that explains why beginning with sternness (then proceeding softly) tends to work better. And it comes from the guy everyone loves to hate, Niccolo Machiavelli:
“. . . in seizing a state, the usurper out to examine closely into all those injuries which it is necessary for him to inflict, and to do them all at one stroke so as not to have to repeat them daily; and thus by not unsettling men he will be able to reassure them, and win them to himself by benefits. He who does otherwise, either from timidity or evil advice, is always compelled to keep the knife in his hand; neither can he rely on his subjects, nor can they attach themselves to him, owing to their continued and repeated wrongs. For injuries ought to be done all at one time, so that, being tasted less, they offend less; benefits ought to be given little by little, so that the flavour of them may last longer.– The Prince, Niccolo Machiavelli
Now, you may not be “seizing a state,” but if you building a company (or starting a new job), don’t wait until later to make difficult and unpopular decisions. Maybe that means starting with higher prices. Maybe it means rolling back a product. Maybe it means creating a high barrier to entry.
People’s perception and relationship is shaped more by trajectory than just by individual moments. If you set a trajectory starting at peak sternness and then start liberalizing over time, you’re going to have a better time than if you put off the hard choices until later.