Page 34 - The Bootstrapper Bible

ChangeThis IT’S COMPLETELY SELF-PRIMING. The brilliance of Ray Kroc was that he had other people fund his growth by paying up front for a franchise. The more he grew, the more funding he got. This is a much harder trick to pull off today, but itʼs not impossible. IT’S NOT ADJUSTABLE. The giant risk Kroc took was that once people bought into his fran- chise, they didnʼt want it to change. So as long as it was working for everyone, everyone was happy. But what do you do with a location that just doesnʼt click? How do you introduce new products when competition comes along? And what happens when you open franchises in different countries? Perhaps the biggest hassle in the franchisorʼs life is maintaining flexibility when you have thousands of licensees around the world. Without a business model, a company can get publicity, hire employees, and spend money —but it won’t make a profit. A recent episode is a perfect example of this lack of adjustability. Burger King, seemingly stranded in second place, reformulated its way of making french fries. With a huge national campaign, it attacked one of McDonaldʼs core products. But McDonaldʼs couldnʼt possibly respond with a new recipe quickly—the logistics are too cumbersome. The exit strategy was terrific. Ray Kroc took the company public and became a very, very rich man. Inventing a new business model is a very scary thing. The Internet is the home of scary business models, a place where new businesses open every day, many by people with no idea how theyʼre going to make a living. | iss. 6.01 | i | U | X | + | Be first in line to get our newest manifestos. SIGN UP for our newsletter. h 34/103 f