Welcome back, welcome back. Each of you have taken some time and come up with your own conclusion based on our conversation today, all right? And let me, let me focus on a couple of things. This picture, 'kay? When you're in unknown, uncertain situations. Don't bet the ranch. Or putting another way, don't bet your house. Don't bet your family's well being. Don't bet all your assets, small bets. Learning, we call that learning launches here. Now, what should Feller do? General principles, stay with me because I'm going to tell you what she actually did do, all right. Reject alternatives that are too risky and premature. You're saying, well how do I assess that? You assess that by what's, two ways. What's the likelihood of it succeeding, probability of success, probability of success, and how big is the financial risk compared to your, your net worth. Premature alternatives, what does that mean? Well, if you go back to the conversation we had, and what I'm trying to basically make the point, are you ready to grow? What does Susan have to do before she can grow? What are the preconditions to growth? Well, Susan needs to determine the cost of per unit production. She didn't know which of her products are profitable. Make-believe, okay, that she ends up selling 80% of her products, and Iâm making up an example, are blueberry tarts. But make-believe that once she did the numbers she makes profit on lemon tarts, profit on chocolate tarts but loses money on blueberry. If she doesn't know that and she's selling 80% of her products, her blueberry tarts, what happens? Loses money. She needs to dee, do this before she can decide what to do. She needs to make sure she's got control processes quality and financial in place before, she needs some software to help her manage the business, now I, these are not big things. And she needs more information from the customers about what they will buy. Now, she needs to formulate a plan, I said, with small bets. Forget this for a moment. Focus on this. Make small bets, not this, not this. Pace, growth, and prioritize. Now let me tell you what Susan did. Some things changed in her personal life. Also, her older son, Mike, that I taught, and told you, superstar NBA went and joined a big company, was in their big leadership type group, training program. And after about a year, year and a half, his mother's situation, the business situation, his personal situation, he decided to leave the big company. And moved back to Richmond to work in the business. So Mike came home. And Mike worked with his brother, and his mother, and became CEO of the company. And Mike was a process guy. Mike was a strategy guy. And Mike sat back, and the first thing he did was figure out, what were our per unit cost. He put in some accounting controls. He put in some inventory controls. He put in some quality controls. He went and talked to Whole Foods. He went and talked to wholesalers. He started exploring. And he decided the first thing we're going to do is expand throughout the mid-Atlantic states in Whole Foods. And then he thought about, hm, I can manufacture and expand manufacturing in the current facility. Fact, I can even add on. But how do I expand distribution? So then he basically found out who distributed food, who was the distribution company, who had the trucks, who had the delivery people, who made deliveries to Whole Foods, to Ukrop's, to people he was selling to and he hired them to deliver his products. So that just means that he and his people, his employees, had to focus on production and customer service, going to see the buyer, putting on displays in the stores, all right, getting new stores. So he basically outsourced, or had someone else do the actual delivery, okay, while he kept adding stores, he then looked at whether he should bake for other bakeries, and explored that option. In the meantime he got approved to, to basically sell products through the southeast Whole Food stores. So now he's in two big regions of Whole Foods, well on his way and he continues to explore the frozen cookie dough. He's priced out what the machinery would be for making enough of it, how to basically wrap it, freeze it, store it. And that's the next thing he's looking at. So he has moved deliberately, iteratively, and incrementally, has grown the business, has increased the number of employees, has put in more processes while keeping family control of the business. Not doing the joint venture while keeping the family brand, 3 Fellers, okay. And a couple of weeks ago I was in Whole Foods and I saw the little lemon tarts, the little chocolate tarts, the little pecan parts and everything. My wife loves lemon tarts and chocolate tarts so I took home each one of them. She saw the brand and she said that's Susan and Mike. I said yes it is. And as, when I tasted them years ago, they were delicious. But there they are. Right there on that shelf. Eye level at Whole Foods. Prime place. And Mike is working those relationships. So they are continuing to grow within their means while they are putting in place. People. Bear with me, people, processes, and controls. They've been thinking strategically, disciplined, focused thinking. They use the growth risk toolbox. They have focused on scaling, manufacturing, sales, service, but distribution they outsourced. With their employees they have outsourced HR-type processing. They now have software. They are going up the chain ladies and gentlemen. They are managing the money because now they know the capital they need and they have prioritized. Now, they prioritize based on strengths and weaknesses and end goal. And the most important end goal for Susan were two-fold: build a business for my sons, free me to do what I love, cakes, wedding cakes, birthday cakes for people with celiac disease. So this is the focus. Isn't it a great story? It is a great story. It is what entrepreneurship is all about. It is about what growing a business is all about. Growing a business is much more than just strategy. It's much more than just money. It's like helping Susan achieve her dreams. It's helping Mike. It's helping the customers have beautiful, tasty, wonderful food that doesn't cause their disease to act up. It's doing good, helping people achieve their dreams, and if you talk to entrepreneurs as to why they want to grow. What I found in my study is the following point. So many of them said to me money is not enough. There has to be more. because at some point, you have enough. But you still want to grow. And there's got to be a reason. Money's not enough. Remember our old gas pedal from week one? All right. Yup, that's the gas pedal. How can you tell? The little feets and the hand. All right. Now that's supposed to be a little humor. All right. But I can't hear you, so I don't know if you're laughing. That gas pedal there, that's what Mike did. Mike basically used the gas pedal approach, all right. Because Mike took this course when he was in our business school here. And he remembered a few points. And one of them was the gas pedal approach to growth. Now, we don't have a quiz this week. What I want to do is tee you up. Help you think about week three. Week three's a big week, big week. Four Ps: planning for growth, processes, prioritization, and pace. And we've talked about pace. So we'll really focus on the three. And you're going to have a wonderful case of defend or direct. Great story, a business that goes from the basement of the house to today, over $400 million of revenue international business, very profitable and successful. And a business that basically funds the lifestyles for lots of employees, the owner, but more importantly, the charitable work the owner now is doing for a substantial part of his time, trying to do good. Now, when you go look at the assignments, ladies and gentlemen, and you look at the PowerPoint, I've given you lots of CEO quotes in that group. Now, what do I want you to do with the CEO Quotes? I want you to take your time on the CEO quotes. Remember I talked the first day about how you learn? You give meaning to what you're reading. You try to rehearse it in your mind; verbalize it, visualize it. Somehow create some meaning for you and each one of you will do it differently. What I want you to do with those CEO quotes is to have a conversation with each one of them. Yes, I want you to talk to the quote. And I want the quote to talk to you, all right? Each quote, I want you to say, what does this mean, why did Ed put this in? What is the point? And I want you to write down your answers. Feel free to go on the class forum. Use the class forum, and have conversations between you, each other. Because that's how you learn. I'm really encouraging that. All right? I'm watching, I'm reading, I'm communicating with you, okay? We're trying to create ways, we're using technology to basically reach lots of people. But we have to basically also overcome technology to talk amongst each other, to communicate and learn from each other. What do those CEO quotes mean? Make sense of it. And then next week, okay, we're going to have Dave Lindsey and interview with Dave, wonderful man. Dave comes sometimes to my classes at, at Darden and talks, and everybody loves him. Dave has built a great company and he's got a great story with many learnings for you on prioritization and processes and planning, which is the key to next week. Thank you. Another great class. I've enjoyed it, hope you have. Look forward to seeing you next week. I'll be on my office hours and I'll be talking to you on the class forum. Take care, see you next week.
