Tag: Entrepreneurship

Lessons from the ‘Founder’ of McDonald’s

Recently, I  caught a movie about a 52-year-old  diabetic man, who is suffering from incipient arthritis. He has lost his gall bladder & thyroid gland to previous business battles and is struggling to sell a multispindle milkshake mixer (Multimixer) to restaurant owners across America in the 1950’s.

His name was Ray Kroc and he was the creator of what we know today as the omnipresent McDonald’s.

Although the movie was not well-received it was really interesting to watch the not sugar coated biopic. The movie got me interested in knowing more about this ‘Founder’

There had to be more to the story of the Godfather of the fast food business. So, I got my hands on his autobiography “Grinding It Out” and without a doubt, it is one of the best books that I have read.

It is a must read for budding entrepreneurs and professionals alike.

Book Review - Grinding It Out

 

Here are 6 powerful lessons that you can learn from Ray Kroc’s  life and career :

Persistence

Ray Kroc always believed that it was sheer hardwork and unrelenting perseverance that leads to success.

There is a quote in the movie as well as the book that sums it up –

” Nothing in the world can take place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. “

Persistence also includes your unwavering faith in your moral belief system. Ray Kroc said that his philosophy was one helping his customers, and if he couldn’t sell them by helping them improve their own sales, then he wasn’t doing his job. This philosophy is was carried on by Kroc is what drove the symbiotic relationship between McDonald’s corporate and the franchisees.

Age doesn’t matter

A lot of budding entrepreneurs and professionals want instant success and get frustrated when things don’t turn out the way that they had planned. Ray Kroc was not highly educated, but Grinded it out in the field, juggling multiple jobs as a salesman and a piano player. He grabbed opportunity wherever he could and was happy working hard day and night. Each and every phase in his life prepared him for what was going to be a once a lifetime opportunity. Age didn’t matter to him. He kept on working even when McDonald’s had become a success story and he was finding it difficult to walk. He went on to buy a baseball team “San Diego Padres” at the age of 72 and became a philanthropist.

His success story is an example of how opportunity can come knocking at your door any time. All one has to do is to see it and be ready to take advantage. Life is a roller coaster ride. Success is not an end goal, but an eventuality of the journey itself.

Life is not fair

Ray Kroc had tried and failed on multiple occasions. He was a successful salesman, whether it was selling real estate, paper cups or a weird looking milkshake makers. But he never could really taste success. Whether it was because the collapse of the real estate market or the bad deals that he was forced to make. Ray Kroc’s first wife Ethel was supportive initially but was flabbergasted at his decision to go all in for McDonald’s. Sometimes in your life you will be the only person who believes in something and life will not be easy – Don’t loose sight of your goal.

Learn & Adapt to changes

In the world of business you rarely get ideal situation to work. Ray Kroc was saddled by a deal with the McDonald’s brothers which he thought was unfair. However, he adapted to change his business model into leasing of land for McDonald’s restaurants than just franchising. This idea gave him a distinct advantage when it came to negotiations with franchisees and later on with the McDonald’s brothers

As Ray Kroc shared with MBA students of university of Texas in 1974 –

” We are not in the Hamburger business, we are in the Real Estate business “

They also continuously adapted to changes. One unique thing was how Ray Kroc and his team took ideas from franchisees across the country to create new menu items. The famous Filet-O-Fish, the Big Mac, Egg McMuffin are ideas that came from the franchisees and are served in almost every McDonald’s  in the world.

Ruthless Pragmatism

Maurice “Mac” & Richard “Dick” McDonald’s where the original founders of McDonald’s. But they were content with their original restaurant and afraid of franchising. They were also very conservative in their approach to changes in business. Ray Kroc saw the potential of the speedy service and family-oriented model of the McDonald’s brothers.   But he was saddled with an unfair agreement. After years of negotiating with the brothers unsuccessfully, Kroc took a drastic step to outwit them by gaining control of leasing agreements of all McDonald’s franchises. The McDonald brothers lost control of their corporation and had to settle for $2.7 million.

Although this can be characterized as being nasty, after reading his book I felt that his moves were dictated by his previous unfair agreement with his boss at Lily Cup when Kroc was forced to share his profits on the Multimixer sales with him. This led to the downfall of his last business venture and Kroc never wanted to repeat the mistake. Also, $2.7 million in the 1960’s was a lot of money and I feel that he was fair in this deal. In the end it was best for the business. As Ray Kroc himself said –

” I believe in God, family, and McDonald’s – and in the office, that order is reversed “

Gut feeling matters

Ray Kroc once fired a member of his staff because he didn’t wear the right kind of hat and didn’t keep his shoes shined. He agreed that this kind of decision seemed arbitrary, but it was based on his years of experience in the field. He explains that an astute judgment can seem arbitrary to everyone  but the man who makes it. A lot of his big decisions including the one to go all out and mortgage his home for the McDonald’s franchisee business was based on Gut feeling about an idea. Random & unstructured they might be, but do not ignore your gut feelings.

For all those who missed the film, Check out the Trailer

This article was originally published on YourStory.

From the Dragon’s Heart: The Rise of Chinese Entrepreneurs

The rise of China as a Global power has become are more visible in India today, as Chinese Businesses have made increasing inroads into the Indian market in the past few years. With India becoming the world’s fastest growing economy and poised to continue this path for a decade, Chinese Entrepreneurs are looking to invest in India & bring along their own way of doing business.

In such a scenario, I revisit the book – China’s Disruptors written by Edward Tse in 2015.

The book not only talks about well-known players in India like Alibaba, Xiaomi, Lenevo, Baidu (Search Engine) & Tencent (WeChat) but also not so well known companies like online supermarket Yihaodian, Noah Wealth Management started by Wang Jingo, Real estate giants like Wanda Corporation & Broad Group and China’s very own YouTube – Youku.

A lot of what the author had said about China’s Entrepreneurial culture and Chinese Entrepreneurs is more relevant for the Desi Players today. The reasons are multi-fold:

1. Chinese manufacturers are looking to set-up shop in India: With increasing labor costs in China and anti-dumping duties, major manufacturers of smartphones, solar panels are getting attracted to India’s labor pool and domestic market.

2. Chinese Investors: As Chinese economy slows down, investors are looking for new opportunities in growth. India is right now where China was in 2004 and is the destination to invest for the coming decade.

3. Chinese Internationalisation: Chinese SOEs & Entrepreneurs have been making huge in-roads in the US markets through big-ticket acquisitions. Their strategies will be replicated in India too.

4. Experience of Chinese Counterparts: Lessons from Chinese entrepreneurs who successfully challenged their western counterparts.

What we can learn –

1. A policy focused Forum: India has multiple traditional business forums like NASSCOM, CII & FICCI but it is time, that the new age entrepreneurs of India get a voice of their own in shaping the direction India moving in. The China Entrepreneurs form (CEF) with its serious policy focus even in a restrictive political environment is something we should take inspiration from.

2. Sustainable manufacturing practices: As “Make in India” initiative tries to make us the next manufacturing hub, let’s just take a step back and analyse the mistakes done by China when it comes to the Environment. Polluted cities, un-breathable air and rising healthcare costs are things we can avoid

3. Ditch the Jugaad: The cutthroat competition among Chinese companies made continuous improvement and innovation a necessity to stay ahead of the curve. Sometimes entrepreneurs are even forced to find new opportunities in different areas, as they were never sure of a safe source of constant revenue, which won’t be challenged. Indian traditional businesses have not faced such a challenge before. With increasing Chinese inroads into the market its time to change our approach or perish.

4. Focus on local needs: The author emphasised that the Chinese counterparts were able to outwit their western counterparts because they focused on creation of products & services, which are more in line with local needs rather than just copying the business models of the west. This is how Alibaba was able to beat Ebay and Hengan international challenged the likes of P&G and Kimberly-Clark. However, their Indian counterparts haven’t been so successful in creating such kind of new value-added services and are facing tough competitions – Ola vs Uber, Flipkart & Snapdeal vs Amazon.

What the author missed –

1. IP Laws: The author did mention the lax IP laws in China. But, even giants like Apple are facing issues in getting required help from Chinese Judiciary as they are challenged by little-known startups making knock-offs. In time as Chinese entrepreneurs grow bigger, they will demand better IP Protection. How this shapes up is yet to be seen.

2. The Real-estate Bubble & Overcapacity: China has become infamous for its Ghost Towns. Even private investors are raising alarm bells as the extent of the debt bubble is becomes clearer with estimates saying that the Debt to GDP ratio has crossed 250%. How will this impact the Chinese startup world, is not yet known.

3. Solar Industry: The one sector that the author did not cover was China’s push into Renewable energy – mostly solar PV manufacturing and installations. Chinese giants like Trina, Jinko, Yingli & JA Solar dominate the world PV market. China also added a staggering 34 GW of solar installations in 2016 alone (compared with around 4.8 GW in India). With increasing domestic as well as global for PV Panels, these giants are poised to be major revenue centres of the future.

4. SOEs & the State remain the dominant players: The author’s focus was on the decreasing importance of SOEs in China’s economy. While this was true for the domestic economy, SOEs will play even greater role in China’s outreach to the world. The famous One Belt One Road initiative (OBOR) is primarily driven by SOEs. Almost all major overseas investments were done by SOEs. These include $46 billion in China-Pakistan Economic Corridor and $15 billion mostly in Hambantota & Colombo Ports in Srilanka.

Nonetheless, Edward Tse’s book remains extremely important for Businessman, Policy Makers, Entrepreneurs & Professionals who wish to learn about how China’s disruptors are shaping our future.

The article was originally published on YourStory.

Joy of Women Entrepreneurs

I recently watched the movie Joy on Hotstar. I had previously seen the trailer of the movie but didn’t pay any attention. I wasn’t really impressed by the trailer and knew nothing about the story. In addition, this movie was not that highly rated. Rotten Tomatoes gave this a review rating of 6.3/10 only.

Luckily I got some free time on a cold Sunday evening and decided to check this movie out. And I was in for a surprise.

The movie is based on the struggles of Joy Mangano, the inventor of the now famous Miracle Mop. A 33-year-old divorced mother of 2, working as a booking clerk in Eastern Airlines. She is in a dead-end job, living with her divorced parents and children. Her husband and thrice married father end up living in the basement with her. She is broke, frustrated and has almost given up on all her dreams. The only person is Joy’s grandmother who keeps her hopes up.

Inspite of a not so supportive family and no money, Joy gets unexpected help from her ex-husband, her longtime friend and a TV executive who places faith in her

Although parts of the movie has been changed, overall the story is very inspiring. It clearly deserved higher ratings than it got from reviewers

Joy Mangano

Joy Mangano

Here’s the original miracle mop infomercial with Joy Mangano on QVC :

This was a rare movie on a real woman entrepreneur. I think this might just be only movie of its kind.

There was a scene in the movie near the end, where Jennifer Lawrence as Joy Mangano is shown to have become a matriarch of the business and is investing in other women inventors/entrepreneurs. She says to a new mother who had come to show her invention, that she knows what its like to sit on the other side of the table. That scene stayed with me for a long time as it showed what is missing in the startup-world.

Apart from the western world, women are choosing the entrepreneurial struggles increasingly in China & India. But in India & to some extent in the west, there has always been a lack of existing women entrepreneurs acting as investors in other women entrepreneurs.

A bloomberg article, threw light on the changing dynamics in China where women are dominating the Venture Capital Industry. This includes the largest VC firmed with capital of over $500 million – H Capital founded by Chen Xiaohong

In the US, women make up about 10% of the investing partners and only half of the firms have any women as partners. China, on the other hand, has 17% female investing partners and more than 50% of the VC firms have at least one female partner. More than a quarter of all entrepreneurs in China are women, and 55% of new Internet companies are started up by them according to the Chinese Government. China is showing the example we should follow the lessons learnt from their experience. And this in country where sections of the society consider single women above the age of 27 as “Leftover women

The situation in India is extremely bad. All the major VC firms combined, I think there are only 2…..and I mean really, only 2 women investing partners. One is Vani Kola from Kalaari Capital and other is Bharati Jacob from Seedfund.

There are many reasons. There are fewer number of women in startups. women entrepreneurs who have exited successfully is also very low. Even women corporate executives with deeper pockets have shied away from entering into the VC world. Although, India is considered to be an entrepreneurial country, major women players have traditionally shied away from risk taking through Angel & VC investments in the startup world.

Powered by WordPress & Theme by Anders Norén