But how did they make their fortune? In the early 1950s, they observed the large number of big supermarkets and hypermarkets being built in America. The idea behind big supermarkets is breathtakingly simple. If you can become the biggest supermarket chain in a region or country, you can buy goods to stock the shelves at lower prices than is possible for any rival; and if you then pass on the savings to customers, they will make a bee-line for your stores. The same principle applies in any retail category–DIY, computers, carpets, shoes, fashion, you name it. The art is to become the biggest before anyone else.
Raymond, then an executive at Greatermans, a South African retailer, persuaded them to start the Checkers chain of supermarkets and, at the age of twenty-four, put him in charge. By 1966, he controlled eighty-five stores. Then he was fired. He used his severance pay (and a large bank loan) to buy four supermarkets in Cape Town called Pick ’n Pay. Then he took all the cash this business generated and opened new supermarkets faster than anyone else, creating the largest chain in South Africa. In the 1970s, Raymond also became famous–to the country’s rulers, notorious–for refusing to implement the colour bar and promoting and paying black people on the same terms as whites. He got away with it because he was so popular with the public.
Bangkok, Thailand, 1962
One steamy day in Bangkok, Dietrich Mateschitz, an Austrian executive who was in Thailand to market toothpaste, took a tuk-tuk (bicycle taxi). He noticed that his driver and others he saw were all drinking a particular brew to keep up their energy levels, and he asked the name. Initially none the wiser for being told it was Krating Daeng, his hotel later informed him it meant Red Bull in English. Mateschitz patented the brand in Western markets and started selling something similar, though not as sweet. Recalling Bangkok’s labouring cyclists, he dubbed it an ‘energy drink’ and sold it to bars and nightclubs. Today, Red Bull sells more than three billion cans a year and Mateschitz is the richest Austrian on the planet–Forbes magazine says he’s worth four billion dollars.
San Francisco, California, 1970
I arrived in San Francisco in 1969, a little late for the ‘summer of love’, but still a teenager. I was amazed at the concentration of stoned hippies driving Volkswagen camper vans, saying, ‘Peace, man!’ at every opportunity–and little else. It was a different world from the England I had left. Maybe a young British couple who arrived in California the following year had a similar experience. But a store on Berkeley’s Telegraph Avenue called the Body Shop made the biggest impression on Anita and Gordon Roddick. It didn’t sell bodies, but trendy creams, lotions and shampoos.
Back home in Brighton, Anita and Gordon tried their hand at running a restaurant and then a hotel, but neither was a success. Gordon returned to America while Anita remained in Britain, but she never forgot the sensual cosmetics store in Berkeley. In 1976, she opened a similar cosmetics and lotions store in Brighton. Unconcerned with originality, she called it the Body Shop. For a laugh, she wedged it between two funeral parlours.69 Eventually, Anita would run a global empire of 2400 stores, which she sold in 2006 for £652 million.
There are countless other examples of a good idea spawning another, bigger and better one. They tell us something important about ideas and networks. Anita Roddick did not just copy the Berkeley shop’s idea and name. She also positioned it six thousand miles away, where nobody would say, ‘Ah, yes, that’s just a rip-off of that store on Telegraph Avenue.’ Instead, ‘her’ idea seemed fresh and exciting. When Dietrich Mateschitz launched Red Bull in Europe and America, it was hailed as the world’s first energy drink, not as an adaptation of the tuk-tuk drivers’ favourite tipple.
Distance gives respectability; it makes copying resemble innovation. When I backed two unemployed young men to open Belgo, the moules-et-frites emporium serving Belgian beers, it was seen as London’s coolest new restaurant concept. Never mind that there was a long-established chain of such restaurants called Leon prospering in Paris and Brussels, not to mention a similar place in New York’s Greenwich Village.
This is the essence of a ‘weak link’–someone far away who has useful information. By talking to that person, or just observing what they do, we grasp that they have had a good idea–it’s attractive; and if it’s a business, it’s growing and profitable. The next step is to ask if that idea could be applied in a different place, or in a different type of market, or in a different way. Forming a weak link between a distant source of insight and a new idea becomes the germ of our new initiative.
Earlier in this book, we explored the potential value of a weak link to a person, a remote acquaintance. In this chapter, we are examining another way of enriching our lives, by linking to a distant idea and then reinventing it in another place or another context.
For example, Anita Roddick did not hire the proprietor of the Body Shop on Telegraph Avenue, Berkeley; nor did she spend much time with her. Anita took the idea and ran with it. Before my business partners and I started Belgo, we studied the Leon restaurants carefully. First, we wanted to know whether the chain made a lot of money. It did. What seemed to make Leon special was its menu and the way the food and beer were presented. But my partners added a lot of new ideas to the mix–the restaurant itself was made to look like a monastery eating hall, with long communal tables, and the waiters were dressed as monks. We didn’t spend much time chatting to the folks at Leon; nor did we offer them a share of our new venture. We took the concept and ran, reinventing their idea for our market. By linking into a far-flung idea, then adapting it closer to home, it is possible to create a new venture–a Body Shop in Brighton, not Berkeley; a moules-frites–Belgian beer hall in London’s Chalk Farm.
You can greatly reduce the probability of a new venture failing by forming a weak link to an idea that has already proved itself in another place or context. Ideas have heritage; they have track records. If you like, we can think about them genetically. A good idea has good genes, the elements that work together to give it integrity and appeal. Good genes are valuable. They make a venture work. A child is not a replica of its parents, but there is usually a strong resemblance. So strong parents tend to have strong offspring. Similarly, good ideas are the best sources of new good, or great, ideas.
In business, a profitable idea usually spawns another profitable firm. Most start-ups fail, but I believe that a start-up carefully modelled on a weak link to a distant good idea has a much greater chance of success. Unfortunately, there are no statistics to back up this claim–nobody has yet divided ventures according to the previous success of the ideas behind them and then looked at the success rate for ventures based on proven ideas compared with those founded in other ways. But from my own experience, I have helped to start five new ventures that were reinventions of previous profitable ideas and they all succeeded, making several times the cash that was invested. I have also helped to start four ventures not based on successful ideas; three of them failed, and one was only moderately successful.
In this chapter, we’ve seen several examples of super-successful ventures that were less original than they seemed to their target markets. As Albert Einstein modestly said, ‘The secret to originality is knowing how to conceal your sources.’ Sam Walton, the legendary founder of Wal-Mart, said something similar: ‘Most everything I’ve done I’ve copied from someone else.’