The way the thinking goes is that humans are wired to tell stories and there are certain stories we are predisposed to. We like to root for “the little guy” and love to cheer on startups, especially those with sympathetic stories, founders, high competence, etc.
We also tend to dislike entities at the very top and in extreme positions of power (eg billionaires, governments, large evil corporations) for a variety of reasons.
At some point in your company’s growth your narrative arc flips and you become the bad guy. The best thing you can do as the company is to try your best to postpone the flip as long as possible, but it is inevitable. When it happens, you are on the downslope and “in the dog house” as far as the media and public perception is concerned and there’s just not much you can do about it. Sometimes the harder you try to explain yourself and fight against it, the worse it gets.
You’ll also notice founders of these companies are often totally caught by surprise when this flip happens. They’ve gotten so used to a sympathetic public and a certain mode of behavior to maintain good public perception - transparent, relatable, “aww shucks” style - and when it flips it can be confusing because this doesn’t work anymore. The perception of them has shifted from “that smart/competent startup person I am rooting for” to “the powerful billionaire CEO that crushes the little people with the raise of a finger” and so the behaviors that come naturally to them take on a different tone entirely from a perception perspective.
When this happens it’s probably time to batten down the hatches and shift PR strategies. The old way isn’t likely to work anymore; the straw has finally broken the camel’s back.
I’m no expert at what it takes to reverse this. My best guess is that you need to spend your time in the penalty box while drawing minimum attention to let the steam blow off faster and not accelerate the roller coaster ride down. Then when you come back after 6-12 months or so, do so with a changed communications strategy that implicitly takes into account the changed public perceptions around power dynamics. You’re not a beloved startup anymore but you can still be “one of the good ones” as far as big companies and billionaire CEOs.
That psychological process is actually ever-present, except it just that we often do not notice it until it is explicitly pointed out, like when the older fish asks the younger fish: "how's the water?" in This is Water by DFW [1].
I remember encountering it a long time ago when I came across this pithy quote for the first time: "education can take a man to any height but character keeps him there".
It turns out that there's quite a few of these that have been codified into common English expressions:
"He fell to a new low"
"She was terminated at the peak of her career"
The reason why these sentences do not seem nonsensical to our brains is because we often equate reputation with ascending a (physical) height. When someone of high repute engages in questionable behavior, of course our brain naturally associates the consequence of such behavior as a fall--similar to any accidental descent from an elevated place.
There are a lot more eye-opening examples in Metaphors We Live By by George Lakoff et al [2].
A negative thing about a high reputation company gets published in "serious" outlets or upvoted on social media.
A negative thing about a middling reputation company is buried on page 7.
I'd say it's the "Wow, this was on the front page of the BBC" effect that triggers the brain response, moreso than the fact that it exists at all. (Coupled with the fact that you probably won't see much of what's on the proverbial page 7, ever)
Then why is it so brittle in big companies? Because the mishap mentioned here of Stripe rescinding the candidate and others we tend to hear about are pretty major and enough to erode trust significantly and in turn reputation.
When smaller negative things like Amazon not donating a large amount of money to curl but it was short lived and faded easily and probably nobody remembers it but bigger bad things we frequently hear about big companies such as poor work environment in Amazon is pretty hard to forget and no amount of good reputation unless something big enough shows that it is not true it will be on the back of mind for a long time.
In smaller businesses people expect negative things to happen more frequently and nobody remembers since it is normal for people and reputation is unaffected unless something extremely bad happens.
Hence even if you have a good reputation negative things will break it more often than in smaller companies because you have far higher standards to hold to maintain while small companies dont't and their reputation does not go down as much as bigger companies
You seem to think that very positive opinions can only be strongly held opinions, but GP had a generic positive opinion, weakly held due to lack of direct experience.
If the strength of your prior is held fixed, then a negative piece of news should change a highly positive opinion more.
There's an interesting psychological process here that I don't think I've seen described before.
You would expect that the higher the reputation something has, the more resilient that regard is. As if good reputation means the thing has a large number of "reputation points" and can thus afford to lose some while still retaining a large quantity of remaining rep points.
But the perceived effect is the opposite. The higher the reputation the more fragile it is to bad news. When a middling reputation thing gets some bad news, we consider it not particularly newsworthy and its reputation is unchanged. But when a highly regarded thing gets tainted, the pristine edifice comes tumbling down.
I can understand why our brains would work that way: we are incentivized through our evolutionary history to be highly attuned to detect deceipt—actors that are not what they appear to be. So bad news about a good person is read as vital information that causes us to re-evaluate everything we knew about them in that light.
But it's not clear to me that that model logically scales to an entire organization. Organizations are not monolithic entities and when an otherwise great org makes a misstep, that doesn't necessarily mean it's rotten to the core.