CHAPTER 13
ON THE SHOULDERS OF GIANTS
… In which we consider the danger of pioneering and consider the benefits of slipstreaming behind the big boys.
THE WIND BENEATH MY WINGS
A nice little short cut you can take is to let someone else do some of the work. Large companies spend literally millions on product research, customer attitude surveys, and psychological marketing profiles – and because of that they tend to get things right … well, right by the time we get to see them, at any rate. So if you steal their ideas, you let them make the expensive mistakes.
If you feel nervous about stealing anything, don’t worry yourself because our clever friends in marketing can gallop to our aid. No, it’s not stealing any more, it’s benchmarking or slipstreaming. These are slightly different. Benchmarking is about how your competitors – in our case, our huge competitors – set the standard. If you own a carnival, perhaps you could benchmark Disney – although it may be a dispiriting exercise, it would surely give you something to shoot for. The place is occupied by amusing, costumed characters that are recognizable from film and TV. Everyone is clean, cheery, knowledgeable and helpful. There is a wide choice of good, well-produced, wholesome food, and one single ticket lets you ride on everything as often as you like. That’s part of the benchmark that Disney sets; how far are you away from that?
If you are in management training or something similar, does your large competitor send out reports in logoed binders, do they have a professional-looking newsletter, and what does their website look like? There is nothing there that cannot be achieved at modest cost and, indeed, without it, you are not in the game.
STAND BEHIND THE BIG KID
Slipstreaming is different. For many years I drove a weird little French car called a 2CV that, on the motorway in a headwind, virtually went backwards, it was so slow. The only way to make progress was to lock in dangerously close to a huge truck which would use its power to punch a hole in the air for me to drive through. So I and the truck made excellent forward progress – in fact, the car was so light that behind the biggest trucks I was virtually towed along unnoticed by the driver.
We can do the same thing with our enterprise. I have already rambled on about travelling light, kayaks, guerrillas, agility and so on. This means that we can lock in behind our big competitors and let them punch through the resistance without us even being noticed. Whilst enjoying edgy, innovative, rebel personalities, I can also see there is a risk with ground-breaking ideas.
When I was a kid, you would never see anything like olives, mangoes, real mayonnaise or ciabatta for sale – all now everyday items – but I bet the first person to sell any of these items had a financial disaster. In Europe, the burger business didn’t exist until McDonald’s and Burger King punched their way through the resistance. It’s only because of them that you could now open a burger bar in Luxemburg and expect to survive. If you had been the first burger bar in Europe you wouldn’t have made it.
LIFE IN A GOLDFISH BOWL
What if you have got a new and innovative idea that isn’t already being done so there is no big player’s slipstream to fall in behind? Well, as I have said in previous chapters, new and innovative can be dangerous.
If you have discovered that there is no doubt whatsoever that it is more fun to watch TV with a goldfish bowl on your head, you will have an education job to do before others realize this too. OK, you have tried it on all your friends and there is no doubt, apart from the difficulty in breathing, that sitting in front of ‘Star Trek’ with a goldfish bowl on your head is better than sex. Tell me, a step at a time, where you go from there. Firstly, it is probably too late already, because your so-called friends who haven’t died of asphyxiation have blurted out the idea on the social media, and before you have done anything to protect yourself the whole world is into the goldfish bowl thing. Therefore, we must keep our idea secret until we can protect it with the power of the law – another dangerous, futile and horribly expensive route to take.
A brilliant idea?
Some years ago, I had a colleague who had effectively put his life on hold and when asked why, he would touch his nose in a conspiratorial way and give his little speech: “Things will be different when my idea has made me rich.” We would always ask what it was and were met with, “Ah ha! Wouldn’t you like to know!” To get the world patent and copyright protections for this thing ended up costing him his life savings and, if truth be known, a fair bit more. Finally, believing himself sufficiently protected and whilst receiving oaths of deepest secrecy from us (which I am just about to break), he led us to his shed where revelations and revealing would take place. He had spent hours and hours on this thing and it was fiendishly clever. Before I reveal all, it should be understood that he was a talented graphic designer – and there is an old cliché that warns that if the only tool you possess is a hammer then every problem will be seen as a nail. He designed lettering for companies which then had to be reproduced laboriously, expensively and, worst of all to him, inaccurately by sign writers. Lettering, to look good, has to be very carefully spaced so stencils and so on don’t work. He had created a device that could allow the painter perfect accuracy and speed. Brilliant … and totally useless because, before he could market the clunky complicated thing, cheap computers learned how to laser cut vinyl letters. Game over! Savings gone.
My point is that, depressing though this may be, there really is no easy answer to this problem and if you want to be a successful self-employed person, innovative, dazzling and new ideas may not initially be the way to go. If you want a good income, pay your mortgage, have a few weeks holiday every year and a bit of cash to spend on wild living, then may I suggest that you model yourself on an enterprise that is already clearly successful. Mad inventors just seem to get madder and poorer!
RIP OFF
Going back to the goldfish bowl, there is an even worse fate waiting for us. The idea clearly works and is well protected; you launch with the twee name, ‘Always Looking Through the Glass’ or ‘The World in a Goldfish Bowl’ or something else equally cringe-making, and now you have to get it out there. The big companies have R&D departments. This used to stand for Research & Development: they would spend a fortune on hundreds of new ideas and products and one or two may break through to profit. A cynic now describes these R&D departments as ‘Rip Off and Do the Same’ departments! If you succeed and cannot saturate the market, they will circle you like sharks looking for an opening. What have you protected? The goldfish bowl – but maybe it is the lack of oxygen that enhances the experience, therefore a bucket with eyeholes may work. Once you get the international corporations after you, trouble will follow. I am not saying that innovation is a bad thing, but it’s cheaper and more profitable if you apply your innovative juices to established ideas that just need to be made better with your talents.
Or, you could completely turn the tables and ‘Rip Off and Do the Same’ yourself. I am now on dangerous ground myself because I may be inciting you to an illegal act, so therefore the following has to be seen as a philosophical discussion to be entitled ‘Your luck and how far can you push it’.
Old Mcdonald
McDonald’s protect their brand ferociously. I believe that there was a restaurant owned by a Mr Macdonald that was, believe it or not, called ‘Macdonald’s’. McDonald’s (they of the golden arches) took exception to even that. The reason for their toughness is the value of their brand, but also, strangely enough, the vulnerability of it McDonald’s will sell you a McDonald’s franchise for many thousands of pounds, but if you just want to open a burger bar it costs a fraction of that. Why pay all that money to McDonald’s? Because the name and the specific quality and consistency of the product guarantees customers and, therefore, a good income.
I live in a medium sized town that has two McDonald’s – one in the town centre and the other a drive-through on the northern fringes. When I want a Big Mac, I have at least a fifteen minute journey each way, guaranteeing cold food. Answer: my part of town could support another McDonald’s. Then the simple solution is to open one. What you can’t afford to pay is the thousands in franchise fees and profit share. Then don’t! Just build a burger bar, call it McDonald’s, have the same menu, the same prices, the same uniforms, same opening hours, the same quality, and the same logo and colours. Within about thirty seconds of opening, McDonald’s lawyers will have shut you down, but for what? What could you get away with before they could get you?
Close to the Wind
Let’s examine supermarket own brands – boy, do they sail close to the wind. By the way, that’s a nice expression, ‘close to the wind’. When a sailboat is full out with every rope tight, the wind howling in the rigging and the crew driven to work perfectly by the fear of failure and a watery grave, at one moment the boat, in sheets of white spray, is at its fastest, the next (if the rudder is pushed the wrong way) it is at its upside down-est. You can run your enterprise like that, exciting, fast and rewarding, but that way is a little too nerve wracking for me.
Anyway, back to own brands: what the supermarkets have realized is that they can make far more money from their own brands than the global brand products. They also realized that the global brands have become instantly recognizable by shape, colour and size, without the customer needing to actually read the label. Take Kellogg’s Cornflakes. If Cheapo Supermarkets Inc wants to get the best price for their own cheapo cornflakes, then give the pack red lettering and a big green and red chicken on it. Of course, Kellogg’s hate this and take legal action – the crime is called ‘Trading Off’. OK, not a chicken, but maybe a green and red guinea fowl? Too close? Maybe a pattern of green and red shapes that could be arranged into a chicken. Take yourself to a supermarket and see how close they get – they are getting away with it and they consider it is worthwhile. I am not suggesting that you open up with your copy McDonald’s and wait to get sued, but surely you could work out, with a bit of research, what you could get away with. Perhaps two friends, Donald and Mack, could open a Mack and Donald’s. Perhaps you could have a golden W standing for World of Burgers, but that’s not the point. The reason I have picked on poor old McDonald’s is because it is a brilliant, successful and highly profitable company, and they spend a huge amount of their colossal wealth and power staying that way. You could never have access to those sorts of resources and you should trust that, on the whole, McDonald’s are completely right; therefore if you do exactly what they do (within the law), you can’t go wrong.
Has a McDonald’s ever gone bust or lost money? I should think that, on the whole, it is unlikely. Look at the menu: Big Mac, Quarter Pounder, chicken sandwich, fillet of fish, two sizes of fries, thick shakes and volcanically hot apple pies. To the uninitiated, the temptation before the appearance of the knobbly stick would be to say, “What this place needs is turkey burgers.” Oh really? I bet McDonald’s, at great expense, have already tried them and binned them. Legend has it that if McDonald’s try a certain product and it doesn’t make a prescribed level of profit, they bin it immediately. The truth is that at great expense they have done it right. Don’t change a thing: the menu, the opening hours, the prices, the uniform, the cleanliness, and the little speech at the till, “Would you like the meal deal? Go large with the fries?” The point is that you can let someone bigger and stronger than you do the dangerous work of punching a hole in the headwind.
An interesting exercise for you is to have a look at the small independent fast-food outlets that are not McDonald’s or any of the other prestige fast-food chains. Why do they look rubbish? No, really, this is useful, go with a pad and pen and write down everything they are doing wrong, why they are not McDonald’s, and why they will go bust. I bet you can see every detail – the grubbiness, the surly staff, the poor position, the nasty food – so here is a thing, you can see it all, but the owner can’t. Will this blindness affect your enterprise?
SETTING THE STANDARDS
Of course, I am not suggesting that you all rush out and open a burger bar, but this slipstreaming/benchmarking can be applied to any enterprise. Want to start a bed and breakfast? Have a look at Holiday Inn Express: plain, clean rooms, no ornaments, no smell of cabbage. OK, you may say you hate that, it’s not homely or welcoming, like you. Well, they spend millions getting it right – they get it right and they make money. You may have better, more profitable, ideas but it is like climbing Everest with experienced guides and Sherpas and saying, “I know a better way”, then untying the rope and setting off. Well, you may be right but you are SO on your own. You bet your house, your money, your future prosperity and your life.
Whatever enterprise you have chosen (unless you are a pioneer), there will be another enterprise somewhere that is at the top of that particular tree. You may have ideas of your own and want to work differently, but bear in mind that someone else has done a lot of hard work to get where they are and it would be foolish not to benefit from it and take what you can from looking at how they do it.
FRANCHISING
An example of how this works commercially is franchising. Someone else does all the hard work of establishing a business and then you pay them to, in effect, rent that idea.
I work with franchise organizations on their customer development strategies for franchisees. Therefore, so as not to risk annoying any of them, for this exercise we will invent an unlikely franchise – let’s say a tree pruning service called ‘Mr Tree’. There is a nice little cartoon figure who is winking and holding a sparkling pair of shears, it is a well established franchise with profitable members all over the country. There are only three areas left and the price for one is £50,000. If you do exactly what you are told (which you have to) you will make £50,000 a year. You also have to pay a percentage of your takings on top of the initial fee. The biggest problem I get is with franchisees whinging about the cost and how they feel some of the publicity material and vehicle liveries are unnecessary. Well, they are necessary! Again, the franchise operations with their uniforms, smart vehicles, clear menu prices, guarantees and professional leaflets and stationary have got it right.
What am I saying here? What I am suggesting is that people resist spending money on the things that give a feeling of professionalism and competence because they feel that it is not relevant to the core business. The problem is that the core business is less relevant than we think.
POINTS TO PONDER ON ‘ON THE SHOULDERS OF GIANTS’
- Big companies spend a fortune on getting it right so let them do the hard work of breaking new ground.
- Big companies set the standard that customers expect. Try not to offer anything less.
- Self-employed people fail because they get things wrong. In my opinion, McDonald’s don’t get anything wrong, therefore do exactly what they do and you won’t go wrong.
- It is possible that, as self-employed people, we simply cannot afford to innovate.
- If we have a great idea, a lot of people will work very hard to steal it.
- Let other people test the good ideas while you make the money.