The Knife Fight

Edition #6

August 16th, 2019


Here at Adventur.es, we're in the business of helping small to mid-sized business owners run, grow, and transition ownership of their business more effectively. With that goal in mind, enjoy this issue of The Knife Fight, a weekly newsletter for operators in the trenches.


FOOD FOR THOUGHT

The billionaires behind the secret tech mecca in America's heartland (Forbes)
+ All technology roads lead to... St. Louis? Technology is expanding at an ever-increasing rate and businesses simply can't keep up with all of the parts needed to run their operations. Enter World Wide Technology - the multi-billion dollar tech service company that helps businesses combine their hardware and software needs into one seamless package. One would think, given most news coverage, that the tech industry lives in Silicon Valley, New York, or Seattle. But the economy is much larger than we know, and there are great businesses prospering right down the road from us in the heartland of America.

How Chick-Fil-A took over America (Business Insider)
+ This is the story behind the Cathy family's adherence to a set of servant-based principles and how it helped build a fried chicken empire. Success emanates from:

1. Principles. While not every business will choose the same faith-based principles as Chick-Fil-A, the founder chose a set of guiding principles early on in the business's history and stuck to them.

2. Culture. Regardless of religious origin, the universal basic principles of kindness and service, when institutionalized in a culture, go a long way in creating a brand.

3. Quality. High quality, reliable products build trust with consumers. No matter what location or what time of the day, they can depend on Chick-Fil-A to satisfy cravings.

4. Systems. If you have ever experienced the efficiency of a Chick-Fil-A drive-through at rush hour, you understand how incredibly efficient this franchise is. The best way to meet increasing same-store demand is by increasing efficiency. The best way to increase efficiency is to be selective in your franchise selection process and to train operators rigorously in best practices.

5. Selectivity. Despite the low capital requirements, Chick-Fil-A's franchise acceptance rate is less than Harvard's admissions rate due to the need for highly motivated, highly skilled, and highly principled operators.

OPERATIONS

California is cracking down on the gig economy (Vox)
+ This represents a near-existential threat to the Uber-like business models of contractor-based service companies. The outcome of this potential legislation will be important to monitor for small businesses employing independent contractors.

Amazon wants to become a book publishing powerhouse (The Hustle)
+ "Amazon uses its dominant position as a bookseller — it sold 25% of the 25.5m books bought by Americans last month — to push its own titles, which often come from lesser-known authors but still appear near the top of Amazon’s charts."

Amazon's ambitions in the alcohol category are growing (Modern Retail)
+ "The e-commerce giant appears to be strategically expanding to take on a new and untapped market."

MONEY

Small business economic trends report - July 2019 (NFIB)
+ “The Optimism Index rose 1.4 points to 104.7, an exceptional reading. Seven of the 10 components advanced, two fell, and one was unchanged. This is confirmation that small business owners remain very optimistic about the economy despite all the talk about “slowing.””

Packaging Solutions Industry Spotlight (McKinsey & Company)
+ "After years of losing value, packaging-solutions (PS) companies in all segments have been generating economic profit since 2013. The next decade could be even more promising. As e-commerce grows and consumer preferences shift, packaging companies will have a chance to move to the forefront of innovation."

10% tariffs were manageable, but at 25%, businesses are squirming (WSJ)
+ US and Chinese companies are being forced to the negotiation table to discuss how they will bear the increased cost of goods. Naturally, the biggest questions relate to how much of the cost to eat and how much of it should be passed on to consumers.

DEMAND

The worst sales promotion in history (The Hustle)
+ "27 years ago, Hoover offered two free international flights with any £100 purchase. Today, it’s remembered as the worst sales promotion in history." Bad risk management and poor planning resulted in a disastrous marketing ploy.

Nike's new membership model for kids' sneakers shows bigger shift to direct sales (Modern Retail)
+ Nike's strategic move illustrates the importance of creating a customer while they are young to encourage purchasing habits and increase brand familiarity.

HUMAN RESOURCES

6 must-reads for cutting through conflict and tough conversations (First Round)
+ Wisdom on dealing with personalities and problems in the workplace.

WEIRD

What I learned from making hot sauce at scale (Jenny Gao)
+ "I hated not being able to take things into my own hands, especially as promises to deliver on projects regularly ballooned from days into weeks and sometimes deflated altogether."


We'd love your help.

If you stumble across something great, send it to knifefight@adventur.es.

If you know an owner, operator, or someone who works with SMB's, please give us the highest compliment and send them our way. You can find previous Knife Fight issues here.