Made In America and Sam Walton
Made in America, along with The Everything Store are two books that captivated me. These books are not only great business lessons, they show how the world and our society changed over the past 50 years. Walton changed the retail business with the creation of Wal-Mart and Amazon invented e-commerce. The lessons from Walton clearly inspired Bezos (and Bezos himself often quotes Walton).
Made in America is the biography of Sam Walton, the founder of Walmart. The book goes into how Walton started and expanded Walmart from his first variety store into the retail juggernaut Walmart is today. There are a few striking points in the book about either entrepreneurship or the status of our society and country.
Innovator Traits
Walton understood early on (in the 1950s) that discount stores (defined mostly by small margins and high volume) would take over variety stores. He was customer-obsessed since day one and relentlessly tried to innovate. Walton was not afraid to copy his competitors. Walton always visited stores everywhere in the country and took notes on his legal pad or using his microphone. There was no ego involved and Walton does not hesitate to credit Sol Price (the creator of FedMart and Costco) for many ideas.
Many ideas we see in tech today (e.g., customer obsession at Amazon or scaling laws) were already in place at Walmart, and they directly influenced companies like Amazon.
Status did not matter
Walton bought some expensive houses once he became a billionaire but never tried to impress anybody with a lavish lifestyle. He stayed true to some core values and principles. Many associates tell stories where he often shared hotel rooms with his employees on business trips or sometimes skipped paying the hotel and slept directly at an associate house.
Walton also reflects on his life and admits his mistakes, either professionally (e.g., when he was too late to open a new warehouse or when he was not giving enough recognition to his employees) or personally (e.g., not recognizing enough women in the retail industry - his wife changed his mind on this topic).
Build Stuff People Want
Walton success thesis is simple: build something customers want. For the Walmart case, variety stores had high margins, had limited opening hours, and some did not treat the customer well. Walton reduced prices, opened stores every day, and made sure the customer was treated properly (have you seen the greeters at Walmart?).
These are extremely elementary principles, and yet, the competition did not understand them and failed to execute.
The same principles guide many startups today. Even YCombinator had the motto “Make something people want”. Walton did not invent this concept, but he applied startup principles of today back in 1940, and it worked extremely well.
Keep Operating
Walton always stays true to some simple business principles and keeps operating according to them. For example, a key principle was to always pass any savings to the customers. Another one was to always treat associates right (at least, during his tenure as CEO). He never lowered his standards. He changed them sometimes when it made sense but never compromised.
Even when Wall-Street and other analysts were calling him done, he kept operating according to his plan and refused to change because of some trend or financial analysts called Walmart as done.
Walton weathered many storms in his career, and every time, what saved him was to stay true his fundamentals: listen to the people who cared about him since the beginning, focus on bringing value to the customers, and grow organically.
The same applies in startups: we may see many ups and downs and trends. But in the end, what matters is to build something users love and deliver value.