Walmart: the bootstrapped journey From 0 to billions

Jan 9, 2020 Mountain View / CA/ USA – People shopping at a Walmart store in south San Francisco bay area

Walmart expanded using a customer-first approach. They wanted to bring the lowest possible to their customer. – Jessi Pujji

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 👇🏽👇🏽👇🏽
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…
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…
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…
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…
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…
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…
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…
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.
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!
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.
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!
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…
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…
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.
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

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