E-News - Which Are You, the Tortoise or the Hare?
Which Are You, Twenty-three years ago, I started McAfee Heating and Air Conditioning Co., Inc. with $274 in my pocket and a used truck.
the Tortoise or the Hare?
Early on, my business could have been seen as a tortoise. We worked for the first eight years out of my humble garage, and we spent the first fifteen years in the proverbial far right lane of the highway, hiring only one employee a year.
As I slowly but purposefully ran the race in our industry, I watched other companies, the hares, come up on my left and quickly pass me by. Many came into the market with a need for speed, a mentality that they needed to take the fast track to success. Right away, they purchased new trucks, leased nice facilities, slapped their logos all over everything, and had thousands of business cards printed to pass out to everyone and anyone they ran into. Honestly, they looked good, and even I envied their shiny, new company vehicles and immaculate facilities. All the while, we kept on running the race at our own pace, growing little by little along the way.
Today, McAfee is here and stronger than ever, and all those hares who gave us a run for our money in the beginning are somewhere back along the sidelines, out of breath and out of steam. Turtle power is sorely underrated, especially considering there are so many examples of tortoise companies that have proved Aesop’s sage advice, “Slow and steady wins the race.” Among these tortoise companies are some names you probably recognize: Kraft Foods was started by James Lewis Kraft, who used his horse and wagon to sell wholesale cheese to local merchants in Chicago. These days, seven million of those familiar blue boxes of mac-and-cheese sell every week around the globe, not to mention all the other foods produced by Kraft!
Hewlett Packard launched when Bill Hewlett and Dave Packard hunkered down in a rented Palo Alto garage. These days, 120 HP computers sell every minute of every day.
Ben & Jerry's was conceived by Ben Cohen and Jerry Greenfield, who turned a rundown gas station into an ice cream shop. The friends spent a mere ten dollars to learn how to make ice cream, and today, the company boasts annual sales and revenue as Chubby as their Hubby and as Chunky as their Monkey—over $132 million a year!
On the contrary, there are some companies who have gone the way of the rowdy rabbits. You might remember these, but they never quite made it to the finish line.
Pets.com began its operations in August 1998 and closed in November 2000. They over expanded by opening a nationwide network of warehouses too quickly (trying to mimic Starbucks). Unfortunately, their profit margin was not enough to accommodate their media expenditures for commercials. Simply put, their bark in advertising was much bigger than their bite in the market. It’s good to let everyone know who you are, but it is fruitless to spend so much to introduce yourself if no one wants what you have to offer. Now, widely recognized as the poster child for dot-com failure, Pets.com stock took a dive from over $11 in early 2000 to just $.19 on Election Day that same year, and the company closed its doors.
In 1958, Burger Chef opened, a technological wonder of a chain restaurant with the know-how and capacity to pump out burgers faster than their main competitor, McDonald’s. Via their conveyer broiler, they gave the Golden Arches a bit of a scare with their 800-burgers-an-hour capability. It seemed like the perfect formula for success, and Burger Chef’s optimistic parent company, General Equipment, opened 1,200 outposts by 1972, making it second only to McDonald’s, which was serving their millions in 1,600 locations. In 1973, they also pioneered the “Fun Meal” concept, which McDonald’s borrowed for their Happy Meals six years later, something that has become part of our American culture. In spite of their technology and their vision for a child-oriented meal that changed fast food to family dining, company supersizing became the company’s ultimate downfall. In 1981, the company was sold to Hardee’s, never to be heard from again.
Slow growth is healthy growth. Yes, it’s wise to take risks now and then and to push for growth, but you must calculate what you can afford and sustain over the long-term. If you don’t rush into the race, you might just win it!
HVAC Business Consultant