1: “Screw them. We could run a better convenience store than these folks!”
Twenty-one-year-old college student Ron Shaich was mad. He and his friends had been “escorted” out of the Store 24 convenience store directly across from Clark University, which they attended.
The “beefy security guard . . . had taken one look at the trio of scruffy kids lingering over the ice-cream freezer and decided we were intent on shoplifting,” Ron writes in his book Know What Matters: Lessons from a Lifetime of Transformations.
The three college students agreed they would never shop there again.
“Those jerks don’t respect us,” Ron declared. “Their prices are inflated, and they insult us even while they take our money. We don’t need that damn store.”
The only problem? It was the only convenience store within blocks of campus.
Ron then had an idea: “Why don’t we create our own nonprofit convenience store, right here on campus, for the students?” he suggested to his friends.
“It seemed like a great idea,” he writes. “Never mind that I didn’t know the first thing about creating a business. Indeed, the last thing I wanted was to join the stodgy ranks of gray-suited corporate types.”
Yet, this vision took root in his mind, “fueled by a sense of possibility,” Ron notes.
“I had stumbled on the thing that all successful entrepreneurs search for: An opportunity to create a better alternative,” he notes. “Or, as the late Harvard Business School professor Clay Christensen put it, to do a better job for someone.”
Promising innovations address a “job” that a customer is trying to get done and do it better.
“People aren’t just buying your product or service,” Ron explains. “They’re ‘hiring’ us to solve a problem. Theodore Levitt famously put it this way: ‘People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.'”
At the moment Ron and his buddies got tossed out of the convenience store, he wasn’t yet a student of business, but he knew he had an opportunity to make a difference. “I could see a better way to help students get what they needed, at a fair price, on campus, in an environment that respected them. Plus, we could provide jobs.
“And yes, we could stick it to the folks at Store 24 in the process,” he writes.
2: Ron and his friends got to work. “We started with our vision and then worked backward through all the steps it would take to create our store,” he writes. Ron now refers to this exercise as a “future back” planning process.
“We mapped out our proposal and pitched it to the people in the administration,” he writes. “They were unimpressed. In that view, our chutzpah did not compensate for our lack of resources and near-zero know-how.
“Once lit, however, the spark in my mind was not easily extinguished, so I persevered. As student council treasurer, I successfully campaigned to fund the store through a tax on the student body, effectively making Clark students our angel investors. The administration grudgingly gave us a space on campus, the previous home of the Faculty Wives Thrift Store. I spent the summer fitting it out.”
There were many challenges along the way. One obstacle was that no wholesalers would work with the fledgling enterprise.
“Instead, we had to wake up early Saturday and drive to a local deep-discount grocer, where we’d fill ten carts with goods to resell,” Ron recalls. “I told the bemused store staff that I lived in a commune—a believable explanation, since I looked the part, with my long hair and my peace button. Had they known the truth, they might not have believed it anyway.”
They called their new business The General Store. It quickly “became my passion and my education,” he writes, “far more important to me than classrooms, professors, or grades. I loved it. Figuring out what customers wanted, changing the mix of stock, settling on the right price, hiring the proper staff.”
One night, as the on-campus movie was about to let out, Ron hurried to open the store in time for the late-night rush.
“To some, all of this might sound mundane,” Ron reflects, “but to me it was a profoundly creative experience. For a kid from New Jersey who couldn’t dance or sing, this was the closest I’d ever come to being an artist. As our customers moved through the aisles, I realized that we were orchestrating live performance art. And I was learning. Not from a textbook or a professor, but from living.
“From that day forward,” he writes, “I’ve always said: I go to work to learn about life.”
Ron likens a business to a political primary. Voters choose from multiple candidates. You win “by being the singularly best choice for a slice of the total voting population,” he notes.
“Being the best choice for a small niche is the key to success, both in business and in politics,” Ron writes. “Indeed, in a primary election, we can win with 15 percent of the vote.
“In the same way, a pizza joint doesn’t have to be the best among local restaurants, but it does need to be the best pizza place in the neighborhood. We don’t need to be everything to everyone, but we need to be number one for someone.”
In its first year of business, the General Store made a $60,000 profit. “No one was more surprised than me since I hadn’t set out to make money at all,” he remembers. “I just saw a way to do a better job for the students.
“We were technically a nonprofit, so there was some consternation over what to do with this unexpected cash. My idea was to throw a Grateful Dead concert on the college green as a thank-you to the students.
“Unfortunately,” Ron writes, “the administration had other ideas, and the money ended up in the scholarship fund.”
3: What is it that makes a business succeed?
“Simply put, being a better competitive alternative,” Ron writes. “Having our target customer choose to walk past our competitors to reach our establishment or product.
“Being a better alternative ain’t complicated,” he observes. “It’s just really hard to do.”
When businesses “rely on market share, on an average distribution of customers, we’ll operate a low-margin, grind-it-out business,” Ron writes. “I call that ‘dirt farming.'”
“That’s not worth spending our energy on. To grow our sales volumes and have a successful business, we need to stand out in the eyes of some group of customers—or, in the parlance of MBAs and business consultants, be differentiated.”
Ron believes competitive advantage is the ultimate secret to business success.
“Seems obvious, but most people in corporate America ignore it every day, judging by their actions,” he notes. “They ignore it by focusing on cost-cutting or short-term risk avoidance, while avoiding the much greater risk that comes from losing competitive advantage.
“They ignore it by focusing endlessly on the results of last quarter and the next, when competitive position must be built over the long term.
“They ignore it by copying their competitors,” Ron writes, “rather than looking ahead into the future and asking, ‘What will matter?’
“In all these ways and more, leaders destroy competitive advantage, often with disastrous consequences.
“The world doesn’t pay any of us to do what everyone else is doing,” he observes. “It pays us to figure out where the world is headed and to be there when the future arrives. Those rare businesses that can keep their focus on building what will matter—that future they envisioned in a pre-mortem or future-back process–thrive over the long term.”
There is one trait all successful businesses share. “Whether they’re Amazon or the General Store,” he notes, “they know the jobs they’re doing for their customers, and they’ve figured out how to do those jobs better than anyone else.”
It’s a two-step process. First, we ask: “What matters?”
Then, second, we are “disciplined in bringing the answers to life. And I’m not just talking about what matters today; I’m talking about what will matter tomorrow,” Ron declares. We “think future back. We’re able to look down the road and see where the market is going.”
What happened to the General Store? It became a mainstay on the Clark campus for more than thirty years, employing hundreds of students and serving thousands of customers.
Looking back, Ron writes: “For me personally, the most valuable outcome of that enterprise was not the unexpected profits. It was what it revealed to me about myself. The General Store showed a kid who had a dream to change the world that he could do it, through business.
“It gave me the opportunity to discover firsthand that building a business is emotionally and intellectually challenging, a highly creative activity that could perhaps sustain and satisfy me for the rest of my life.
“And it revealed to me my own competitive advantage,” he writes, “my knack for seeing opportunities and figuring out how to deliver a better solution.”
More tomorrow.
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Reflection: Am I treating my work as just a job, or as a daily opportunity to learn, grow, and discover how I can truly make a difference?
Action: Identify the real “job to be done” for our customers or team this week—then brainstorm one way to deliver a solution that’s noticeably better than the alternatives.
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