Small Giants by Bo Burlingham

Jan 2016

Amazon Link

Kindle Notes:

  • What’s in the interest of shareholders depends on who the shareholders are.Location: 156
  • you launch a business, your job as the entrepreneur is to say, ‘Here’s a value proposition that I believe in. Here’s where I’m coming from. This is my point of view.’ At first, it’s a monologue. Gradually it becomes a dialogue and then a real conversation. Like breaking in a baseball glove. You can’t will a baseball glove to be broken in; you have to use it. Well, you have to use a new business, too. You have to break it in. If you move on to the next thing too quickly, it will never develop its soul. LookLocation: 317
  • Maytag had had to fly to Reno and explain in person why Anchor couldn’t accept the order. The general manager was not happy. Then again neither was Maytag.Location: 419
  • Today I never ever make a decision that will jeopardize anybody’s job, but that’s something I had to learn the hard way.”Location: 615
  • there’s no question that the single greatest challenge we have is to never ever lose soul in the restaurants. If that happens, I’m not going to be very interested in growing. That’s not of any interest to me.”Location: 737
  • He thinks he can pull it off—he can keep adding to the company without losing the soul. Yet he finds himself in that position only because he resisted the pressures to expand in the early years before he was prepared to handle the challenge without sacrificing the soul. By saying no, he kept his options open and preserved his ability to choose how far and how fast to grow.Location: 739
  • The concept is often called employee leasing. Within two months, he had quit his job and launched his own PEO, TriNet, Inc., on $5,000 in savings.Location: 759
  • If TriNet did a good job—and he had no doubt it would—it would start getting the referrals it needed. It was a counterintuitive plan and a heretical concept in the small world of PEOs. If you needed large numbers of customers to achieve the required economies of scale, why on earth would you adopt a strategy that excluded the majority of potential users, who would be priced out your market?Location: 785
  • Yes, he was the CEO, with all the perks of the office, but he was by no means a free agent. The responsibilities he’d taken on governed how he spent his time, whom he spent his time with, where he went, what he did, and when he did it.Location: 834
  • Given the nature of the industry he’d chosen, his need for outside investment, and the expectations of the people he’d hired, he had no choice but to grow his company as fast as possible, get it as big as possible, and then sell it or take it public.Location: 836
  • “For example, we’re in the wine business, and we need more wine. We’re selling a thousand cases of wine per year, and it’s not enough. Next year, we’ll need a hundred more cases to meet the demand. For that, we’ll need an extra ton and a half of grapes. You get about three tons per acre of vineyard. So we need half an acre more. Well, it costs $200,000 easy to plant an acre in Napa Valley. Depending on where you are, it might be a little more. But let’s say $200,000, meaning we’ll need $100,000 to make a hundred more cases. But we’re only making $10 a case, which gives us $10,000 in profit per year. Unless we get an additional $90,000 somewhere else, we won’t be able to meet next year’s demand. “The pointgreat simplistic calculation

    Location: 856

  • Union Square Hospitality Group began with family investors—Danny Meyer’s mother, his aunt, and his uncle. He has a more diverse group of outside investors now, but they, too, give him a free hand. “They understand that they’re investing in us as we do business,” he says. “I’ve been careful. I pick people who are friends and whose advice I welcome. When I meet with them, it’s an opportunity to surround myself with advisers who are a lot smarter than me.” Zingerman’s also has outside investors in its restaurant, Zingerman’s Roadhouse, but the rest of the company is owned internally.Location: 880
  • pay her $15 million up front, plus $42 million over the next five years and another $1 million a year under a noncompete agreement. Since he had very little cash of his own at the time, he had to borrow the first $15 million from a bank, paying a whopping 23-percent interest rate. Even then, he and his wife, Kit, had only 67-percent ownership until Thomas got all her money. Fortunately, the company did well enough in the next two years that he was able to refinance his debt and pay her off early.Location: 890
  • If you are not involved in helping to generate mojo, you have nothing to contribute except, perhaps, capital, and the capital comes at too high a price.Location: 905
  • One way or another, they have had to keep their best people engaged and challenged or run the risk of losing them. In most cases, the answer has been a kind of controlled growth that has preserved the company’s culture while creating new opportunities for employees.Location: 933
  • In fact, many people can’t say no—especially, I’ve found, entrepreneurs who happen to be men. Even if he knows in his heart of hearts that his company and his people aren’t ready to handle the growth, even if he realizes that the growth may transform the company in ways he can’t foresee and may not like, he still can’t bring himself to turn business away.Location: 953
  • “We wanted to raise the bar,” he said. “Instead of trying to do it all, we wanted to be the best at a few things. We physically gave up our licenses in other states so we couldn’t work there, and we went from taking every job to questioning every job.”Location: 981
  • Some entrepreneurs are more susceptible than others to the blandishments of the growth gods. Jay Goltz readily admits that he was one of those people. Now he refers to himself as “a recovering entrepreneuraholic.”Location: 1023
  • I’m twenty-something and I get written up in Forbes. I turn forty and I’m not so hot anymore. I hear about a guy worth $40 billion, and I think, How can that be? How much smarter is he than me?”Location: 1047
  • “It turns out there are three things you need to realize before you can get into recovery from entrepreneuraholism. First, you have to feel the pain. You need the experience of staying awake all night because you’re afraid you might lose your house. I was forty-one, out of cash, in an industry I didn’t have a handle on. I’d felt stress in the early days, when I was struggling to grow the business, but that was unavoidable. It went with the territory. This was self-imposed. I was going through it because I’d bought the building and decided to get into this business I knew nothing about. Was I out of my mind? “That led to a second realization: People who build giant companies from scratch are different from you. It’s not just brains; it’s composition. They have a stomach you don’t have. Then finally, it hits you, the third realization: Things are okay. You think, I can be happy. I can lead a good life, have a great business, make enough money, without going crazy. And you begin to notice all the unhappy rich people around, with unhappy families. When Donald Trump was asked whether he was a good father, he said, ‘I’m a good provider.’ That horrified me. “Anyway,Location: 1055
  • He would compare himself with the most famous entrepreneurs in the world and wonder what they had that he lacked. He was so focused on his shortcomings that he couldn’t see—or give himself credit for—the real contributions he had made to his community and the positive impact he had had on the lives of people around him. It was as though all that counted for nothing if he hadn’t achieved what the world considered the pinnacle of success as measured by the size of his company or his personal fortune.Location: 1067
  • The companies shape their respective communities, and the communities shape them.Location: 1155
  • When you mass-produce food, you strive to take the terroir out. The whole idea is remove any variations due to climate, or soil, or season, much as companies that are spread out geographically strive to reduce variation and develop a common culture.Location: 1171
  • The companies in this book are all deeply rooted in their communities, and it shows. Each has a distinctive personality that reflects the local environment, often in ways that may seem superficial or quirky on the surface but that actually play an important role in the business’s success.Location: 1177
  • Reell’s three founders made social responsibility the cornerstone of the business, pledging “to do what is ‘right’ even when it does not seem to be profitable, expedient, or conventional.” The company’s highest purpose, they said, was “to make worthy contributions to the common good.”Location: 1293
  • “That’s something we do a lot of—study food. We’re interested in learning about it, and so are our customers. If you come to work here and aren’t particularly interested in learning, you’ll have a really hard time in the culture.Location: 1324
  • “It’s a small town. If people go to a lot of fund-raisers and always see our name, they can connect the dots. But we don’t market around it, and I don’t trust companies that do—that use their charitable work as a blatant marketing ploy. We do it because it’s the right thing to do. We do it because it’s part of our mission.”Location: 1397
  • In Search of Excellence, coauthor Tom Peters once noted that great companies tend to be founded by people with “not totally stupid obsessions” around which they build their businesses.Location: 1490
  • The group concluded that, among other things, the companies “forgot about the emotional connection with the consumer…and concentrated on the process of business.”Location: 1535
  • As the box count approaches a major milestone, the company starts another game in which employees try to guess the date that the target will be reached, with a prize for the winner. The company also sponsors some games just for fun (which department can grow the largest Amaryllis) and for health (who can lose the most weight). On top of that, CitiStorage offers generous benefits, including health insurance, a 401(k) program to which it contributes $1.30 for every dollar an employee invests, and an education program that reimburses employees for any outside classes they take as long as they maintain a B average or better.Location: 1558
  • They argued that, to be really successful, a company had to focus on providing one of three types of value to its customers: the best price, the best product, or the best overall solution.Location: 1602
  • Then again, if you wanted to provide the best overall solution, you took yet another course, becoming “customer intimate,” that is, developing products flexible enough to serve a wide variety of customer needs and working closely and collaboratively with customers to give them what they wanted. To do that and still earn a profit, you had to structure the whole company around the customer-intimate discipline.Location: 1608
  • Now, every small giant is customer intimate, but it’s a bit more difficult for manufacturers than for others to create the intimacy, and they have to be a bit more deliberate about it, if only because it requires them to rethink so many aspects of their business, from the number of engineers they hire to the organization of work on the shop floor.Location: 1613
  • Not that there’s anything wrong with anonymous commercial transactions. We wouldn’t have much of an economy without them. But somehow making these connections contributes to a company’s mojo, perhaps because it touches on emotional, not simply material, needs.