The LARGEST BOOTSTRAPPED COMPANY ON THE PLANET grew from 0->$500+ Billion by breaking all the rules...
You know the brand, but you don't know their story 👇🏽👇🏽👇🏽
You know the brand, but you don't know their story 👇🏽👇🏽👇🏽
1/ Sam returned from the war in 1945 after 3 years in intelligence.
Taking a loan from his father-in-law, he bought his first store, a Ben Franklin 5 and dime in Newport Arkansas.
He didn't know it at the time, but he had one of the worst leases in retail history...
Taking a loan from his father-in-law, he bought his first store, a Ben Franklin 5 and dime in Newport Arkansas.
He didn't know it at the time, but he had one of the worst leases in retail history...
2/ His rent was 5% of sales.
No renewal clause. He had barely even read the contract.
His father-in-law was stunned by his mistake.
Most expected Sam to close shop within the first couple years. Instead, he started doing things his way...
No renewal clause. He had barely even read the contract.
His father-in-law was stunned by his mistake.
Most expected Sam to close shop within the first couple years. Instead, he started doing things his way...
3/ Breaking franchise rules, Sam started buying bulk from manufacturers whenever they were cheaper than from the home office to save money and boost his profits
He wanted to make sure his customers could stretch their dollars farther at his store than anywhere else...
He wanted to make sure his customers could stretch their dollars farther at his store than anywhere else...
4/ Thanks to that value focus, alongside low cost soft-serve and popcorn for shoppers - Sam's store started growing at a record pace.
Averaging ~28% per year!
Corporate was upset with the way he did business, but Sam was growing too fast for them to take away the franchise...
Averaging ~28% per year!
Corporate was upset with the way he did business, but Sam was growing too fast for them to take away the franchise...
5/ He began to open more Ben Franklin stores with his brother Bud, who had been a pilot during the war.
By 1950 Sam had become one of the leading variety store operators in Arkansas.
That same year, everything started to break down...
By 1950 Sam had become one of the leading variety store operators in Arkansas.
That same year, everything started to break down...
6/ That terrible lease on their flagship store? It wasn't going to be renewed.
The landlord wanted the store for his son and forced Sam to sell it to him for $50,000.
Sam accepted, used the money to pay back his father-in-law, and began looking for a new location...
The landlord wanted the store for his son and forced Sam to sell it to him for $50,000.
Sam accepted, used the money to pay back his father-in-law, and began looking for a new location...
7/ Walton's 5 and Dime opened in Bentonville, AR. It was still a Ben Franklin store, but now under Sam's name.
In 1952, Sam opened a second Waltons down the road in Fayetteville.
He was ready to start growing, fast!
In 1952, Sam opened a second Waltons down the road in Fayetteville.
He was ready to start growing, fast!
8/ Sam and Bud bought a used plane to scout stores and traffic flows from the air.
They began opening stores as quickly as they could, encouraging managers to become partial owners in each new location.
By 1962, they had 15 stores - 14 of which were Ben Franklin franchises.
They began opening stores as quickly as they could, encouraging managers to become partial owners in each new location.
By 1962, they had 15 stores - 14 of which were Ben Franklin franchises.
9/ 1962 was the year of discount department stores. K-mart and Target had already spun out of big city retailers.
Sam knew that smaller towns needed big discounts just as much as the big cities.
But the stores needed to be radically different...
Sam knew that smaller towns needed big discounts just as much as the big cities.
But the stores needed to be radically different...
10/ They needed to be embedded in the community, a gathering place for busy bargain hunters from across the county.
He pitched his rural discount store concept to the Ben Franklin management team, but they turned it down as a passing fad.
So he went at it alone...
He pitched his rural discount store concept to the Ben Franklin management team, but they turned it down as a passing fad.
So he went at it alone...
11/ At the age of 44, he opened "Wal-mart Discount City" in 1962, betting on a simple strategy:
1. One Stop Shopping
2. Lowest Prices
3. Small Towns without competition
4. Great Customer Service
5. Buy Direct From Manufacturers
And most importantly - #6 logistical expertise
1. One Stop Shopping
2. Lowest Prices
3. Small Towns without competition
4. Great Customer Service
5. Buy Direct From Manufacturers
And most importantly - #6 logistical expertise
12/ Walmart was built for expansion from the start.
Every store had to be within a day's drive of distribution, so they could buy more to keep prices low.
That allowed them to open many rural stores instead of focusing on high density locations.
That gave them room to grow...
Every store had to be within a day's drive of distribution, so they could buy more to keep prices low.
That allowed them to open many rural stores instead of focusing on high density locations.
That gave them room to grow...
13/ Managers were given enough leeway to operate in their markets and buy when opportunity arose.
Sam taught them visual merchandising to help make the stores look appealing and bountiful.
The goal was to save money, not avoid spending it.
Sam taught them visual merchandising to help make the stores look appealing and bountiful.
The goal was to save money, not avoid spending it.
14/ In one well-known example, a manager had the opportunity to buy a thousands of boxes of Tide detergent at over 75% off.
Nobody thought he could sell it all.
Stacking the Tide into a giant pyramid and featuring it for 50% off, they sold out in under a week!
Nobody thought he could sell it all.
Stacking the Tide into a giant pyramid and featuring it for 50% off, they sold out in under a week!
15/ Buying in bulk and selling at volume was a hit.
Stores were close to the customers and became important parts of the community.
Sam targeted locations just big enough to support a store but small enough it could control the market
Walmart spread like wildfire...
Stores were close to the customers and became important parts of the community.
Sam targeted locations just big enough to support a store but small enough it could control the market
Walmart spread like wildfire...
16/ Around this time, the "Walmart effect" became clear.
They were so big and so popular, other smaller retailers couldn't compete.
Prices, wages, and the number of other stores in the area all dropped when the big W moved in.
They were so big and so popular, other smaller retailers couldn't compete.
Prices, wages, and the number of other stores in the area all dropped when the big W moved in.
17/ In 1970 Walmart IPO’d to fuel expansion at $16.50 per share, avoiding outside capital in favor of public support
They had 38 stores with $44.2 million in sales that year
The IPO provided the financing for nationwide growth
By 1975 they had 125 stores with $340MM in sales!
They had 38 stores with $44.2 million in sales that year
The IPO provided the financing for nationwide growth
By 1975 they had 125 stores with $340MM in sales!
18/ Sam began looking outside the southern midwest, looking east and north to start. In 1977, Wal Mart bought 20 stores in Illinois.
1978 saw him expand on the one stop shopping format with new departments in pharmacy, auto service, and jewelry.
It was time to go bigger...
1978 saw him expand on the one stop shopping format with new departments in pharmacy, auto service, and jewelry.
It was time to go bigger...
19/ By 1985, Sam had 882 stores with $8.4Bn in sales and 104,000 associates!
They had spread all the way west to the Rockies and north to the Canadian border.
Seeing the need for new tech, Sam ordered a private satellite network for nationwide communication and coordination...
They had spread all the way west to the Rockies and north to the Canadian border.
Seeing the need for new tech, Sam ordered a private satellite network for nationwide communication and coordination...
20/ It was the first of its kind, and finished in 1988.
That same year, the first Supercenter opened in Washington, MO.
It was the culmination of the one stop shopping experience, but even bigger with a full supermarket, auto shop, hardware, and more...
That same year, the first Supercenter opened in Washington, MO.
It was the culmination of the one stop shopping experience, but even bigger with a full supermarket, auto shop, hardware, and more...
21/ Since then, Walmart has become the largest company in the world.
Their 2.2 million associates will help drive $559Bn+ in revenue across almost 12,000 stores.
The Walton family has a combined net worth of over $260Bn as a result.
Their 2.2 million associates will help drive $559Bn+ in revenue across almost 12,000 stores.
The Walton family has a combined net worth of over $260Bn as a result.
22/ Walmart expanded using a customer-first approach.
They wanted to bring the lowest possible to their customer.
Low prices meant they needed high sales volume.
More sales volume meant they could buy more and offer lower prices to their customers, sustaining the flywheel.
They wanted to bring the lowest possible to their customer.
Low prices meant they needed high sales volume.
More sales volume meant they could buy more and offer lower prices to their customers, sustaining the flywheel.
23/ As Sam put it "Help customers. Cut costs. Share profits."
If that sounds familiar, it’s because Amazon is an almost identical business - but with an ecommerce twist of an open marketplace for 3rd party sellers.
If that sounds familiar, it’s because Amazon is an almost identical business - but with an ecommerce twist of an open marketplace for 3rd party sellers.
24/ Sources
indexarticles.com/business/disco…
corporate.walmart.com
historicmissourians.shsmo.org/waltons
walmartmuseum.com
yahoo.com/entertainment/…
futureblind.com/2019/08/03/adv…
indexarticles.com/business/disco…
corporate.walmart.com
historicmissourians.shsmo.org/waltons
walmartmuseum.com
yahoo.com/entertainment/…
futureblind.com/2019/08/03/adv…
25/ Lessons Learned from Walmarts meteoric growth:
1) Stick to the strategy
2) Customers love a good bargain
3) Find the underserved market
4) Give your team the opportunity to lead
5) Innovation can come in many forms
1) Stick to the strategy
2) Customers love a good bargain
3) Find the underserved market
4) Give your team the opportunity to lead
5) Innovation can come in many forms
26/ If you enjoyed this thread, follow me @jspujji
I tweet a Bootstrapped Giants🧵 like this every week.
Like this one about Atlassian’s software hypergrowth:
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https://twitter.com/jspujji/status/1418641736788856832?s=20
27/ And don’t forget to subscribe to my newsletter: The 3-1-4. It comes up every other week with 3 links, 1 thought and 4 opportunities.
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