I don’t have a TV. I don’t have Netflix. I don’t watch movies. I always say I’d rather do interesting things rather than watch others do interesting things.
However yesterday, I was on a 13 hour flight back home to Seattle after an incredibly relaxing vacation with my family, not quite ready to whip out the laptop and catch up on email yet. After I bothered everyone sitting around me to inquire what they were reading, I took to spying on my neighbor who was transfixed by a movie called The Founder on the in-flight entertainment system. I remembered that many of our Windows Insiders entrepreneurs had recommended this as an excellent movie for any business person so I broke my rule and plugged in headphones.
Our Insiders were absolutely right (they’re right a lot!).
The struggle. Toil. Hardship. Success. Drama. Intrigue. The entire entrepreneur’s journey was told through the origins story of the McDonalds franchise. This journey is one we have seen over and over during the course of the past year that we have been mentoring and coaching the 45 entrepreneurs who are turning their ideas into viable businesses as part of the #Insiders4Good Fellowship in Nigeria, Kenya, Tanzania, Rwanda and Uganda.
The gist of the movie (apparently based on a true story) is about two brothers, Mac and Dick McDonald who create a hamburger stand that has automated systems to serve up burgers in 30 seconds. Milkshake maker salesman Ray Kroc is fascinated by this model and hustles himself into becoming their business partner. After this, chaos ensues.
Apart from the crazy backstabbing and personal drama of the movie, some of the lessons that we have learned first-hand from working with our Insiders this year really resonated with me in the movie. Here were some questions that came to mind while I was above 10K feet:
- What business are you really in? It might not be the thing you are creating. You need to get ultra-clear your company’s vison and product mission and make sure all of the stakeholders agree. This was definitely NOT the case of the McDonalds situation. The founder brothers, Mac and Dick wanted to make a white-glove small business that sold time back to families. Salesman Ray on the other hand was far more ambitious and over the course of the movie, convinced the brothers to franchise and then turn the mission into something far more grandiose. In his eyes, McDonalds was not in the burger business, McDonalds was in the real-estate business.
- Where is the market abundant? The initial audience that you might be familiar with, the one your competition is playing in might not be the right space for you. For the McDonalds brothers, they initially started their hamburger stand in a small town. They had a few loyal customers, but still very few. They realized they needed a bigger market if their business was to be successful. They physically sawed the stand in half and drove it to San Bernardino. Then when Ray started franchising, he took the business to 50 states…the ONLY burger establishment in that many states.
- What do you do well? Figure out what are the three things you do very well and do them EXTRA good. Create the brand of excellence. It doesn’t matter what your competition is doing. What is YOUR differentiator for your customers and how can you be the best in the world at it. The McDonalds brothers made three things: burgers, soft-drinks and fries. They did them to perfection. And had these things ready in 30 seconds. Despite customers wanting beef ribs and fried chicken, they didn’t expand to those things until they knew they were really nailing their basics.
- What is your lowest cost MVP? Before you go committing to creating an actual product your life should be MVP creation and testing. My favorite scene in the movie is when the McDonalds brothers test their vision of a highly automated McDonald’s kitchen by drawing out each station in an empty tennis court and having their staff pretend to make burgers, drinks and fries in a careful orchestra–with zero food and only choreography. Once they understood exactly what the kitchen layout needed to be for max speed, they sent the specs to a custom kitchen just for them.
- What does your visual brand say to your customer? Think about your name and your logo from your customer’s point-of-view, not your own biased view. Have a few rounds of testing with your potential customers rather than making the decision in isolation. A word that means something to you may not mean that to other people without your history and experience. The reason that Ray decided to franchise “McDonalds” rather than just stealing the idea and creating his own automated kitchen was for the name To him, it symbolized America. He couldn’t imagine anyone eating in a restaurant called Kroc’s Burgers. In the movie, he insisted on using the golden arches because they were spotable miles away and were as easily seen as crosses on top of churches and flags on top of city hall.
- What is your quality control at scale plan? Once you get beyond providing excellent customer service to the initial set of customers, trying to serve people at scale is going to get hard. What is the feedback loop model you have in place to make sure you catch problems early? In the movie, Ray found the first set of restaurants he franchised to be challenging since the people who ran those franchises did not subscribe to the same meticulous quality. To prevent this from happening again, he stopped letting retired wealthy people franchise McDonalds since he felt they did not care enough or want it bad enough.
- Who should be your partners and employees? You want to build a team with people who have different skills than you that you can learn from AND who will call you out when you’re doing dumb things. You also want to find those who are hustling rather than those who are waiting for things to happen to them. In the movie, Ray hires an eavesdropping lawyer who points out where he was losing money in his restaurants (refrigeration) and what he could do about it (buy the most expensive real-estate and lease to the franchisers). To choose the franchisers, instead of going with wealthy people, Ray started attending community pot-lucks and empowering blue-collar workers to “put food on the table” by franchising their own McDonalds restaurants because they simply had more hustle.
- Do the numbers work? The numbers. Oh those numbers. Revenue streams. Costs. Cash reserves. You must test your product at a small scale to test your assumptions before trying to scale too fast. Ray did not do this and realized that he was losing money in every restaurant due to the high cost of refrigeration. Instead of trying to scale too fast to too many cities, he should have made sure his financial plan worked, not just in theory, but in execution.
- Are you persistent and gritty? Persistence is what sets apart an entrepreneur from the “every body”. More than smarts or experience. They are not afraid to look dumb. Entrepreneurs are crazy. No one understands why they’d rather obsess over their business rather than take vacations in Spain. Ray’s wife and friends didn’t understand his obsession. Other entrepreneurs though, they got it right away. They do this because they can’t not.
As far as a movie about the good, bad and seriously ugly side of business goes, I found this one to be pretty relatable. Definitely check it out if you get a chance! If there are hard lessons you have learned in your life as an entrepreneur, I’d love to hear your stories as well!