At age 49, Bernie Marcus and his good friend Arthur Blank, were fired from their jobs with a Southern California hardware chain. Anyone reading this who has been in a similar situation knows that in our youth-oriented society, finding another job at this age is pretty tough.
That apparently was the case with Bernie as well, so he decided to team up with Arthur and they opened their own hardware store instead. In fact, they planned on having a chain of hardware stores someday, so they found an investor and opened two stores at once, in malls that had empty store buildings.
Unfortunately, they did not have enough money to stock both stores—one of the stores looked more like it was closing, instead of getting ready for a grand opening. So Bernie called on his experience in retailing and purchased empty paint cans and boxes, and filled all the upper shelves with them. By opening day, Bernie’s stores looked like real, well-stocked, hardware stores.
The Grand Opening, however, was still not a huge success—there were no customers. Bernie and Arthur even had their kids handing out $1 bills in the mall parking lot to entice people to come in. Fortunately the drought of customers was short lived as word of their great customer service spread.
Bernie’s experience taught him what customers really wanted and he capitalized on that. But, more than anything else, it was his determination and spirit that kept both he and Arthur going through the disappointments…and lack of customers.
It did not take long until their concept caught on and they began to expand. Two years after they opened their first two stores, Bernie and Arthur took their company public, and the rest is history.
Oh yeah, the name of their company was The Home Depot.
With companies like Facebook, Twitter, and a host of other high-tech companies trying to break into a profit after spending tens of millions of venture capital, it is interesting to see the tremendous financial successes of companies like Home Depot, Costco, and others like them.
What do you think about the relative successes of high-tech vs. mundane businesses like household hardware?