I think most comments are on point but I will be a little more blunt.
The instructor/ leader sets the pace and the culture of the group. Be it a karate school or in any business. If your group is not developing the desired culture look no further than the leader. While marketing is important its not the cause of poor culture. Incorrect marketing will cause a drop in sales due to a mis- match between what was advertised and what is actually presented.
I would guess there were a few first students and rather than setting the expectations and the culture of hard work the instructor gave in and let things be very laid back and soft, out of fear of losing those few students. This is very common. To set a serious culture you need to screen those first students for the ones that exhibit the desired work ethic and be willing to let all the others hit the pavement.
I would also add that when those serious students did show up, they saw the pace and lack of intensity and turned around and walked.
These are good points.
I've never run a school or business proper, but I have lead small practice groups and many online communities.
They've all been a mixture of emergent culture, as well as culture set by the people at the top. You'll learn a lot about yourself and the culture that your actions create or discourage, enable or disable, based on your actions or lack thereof.
Generally, I think the most serious martial artists will seek out instructors who also appear to be serious and make that approach, and their presence, known. I do a lot of research, and often rely on word of mouth as well to locate good instructors.
There are a lot of serious TMA guys out there, too. I find particularly good luck with people and groups involved in Chinese and Filipino Martial Arts, though I've certainly met serious Karate practitioners and the like. You might consider cross training in something along those lines to network with like minded martial artists, and get to know and train with them personally. Then, perhaps make and share videos of your serious, backyard training. That is the kind of thing that I like to find when I'm looking for a teacher.
My best teacher of all was a prominent FMA instructor who I trained with in his back yard. The training was intense, and I could only make it out there once a month or so, but it was exactly what I was looking for. I'd still be training with him if I had the time and money to travel to the U.S.
I think this is the sort of thing that serious martial artists and adults are looking for. Ranks, uniforms, none of that matters. Just get out there and find people to train with yourself, privately.
Go attend seminars, too. Seek out people who *you* want to train with and learn from, and you'll find like minded people. This is another thing that I look for: I like to learn from people who are, themselves, constantly learning and seeking out training themselves. If you want to add more value, import it locally! There are tons of people who want to train X system or with X instructor. If they can't, typically due to distance, but you can, that's another way you can create value.