Dottie (my wife) and I have just returned from a trip to California, highlighted by spending several days with Don and Susan Couch. (Don was my college roommate.) One of his hobbies is home winemaking—easy to understand since he lives near 10,000 or so wineries.
Instead of buying an expensive home wine-making kit, he decided to muster his own kit, only buying what he really needed. Impressed and interested, I asked how he got started and he replied, “I bought a garbage can.” Yes, a garbage can, followed by what looked like a Crystal Springs 5-gallon water bottle, then a small oak container, wine bottles, and so on. He spent about $300 and yielded several dozen bottles of wine, one of which I sampled. I don’t know if his wine would win any awards, but it tasted fine to me.
Now, like me, you may be thinking, “A garbage can? Can you make decent wine using a garbage can?” The answer is yes. Why? Because the first stage of wine making is called primary fermentation and it doesn’t much matter what kind of container you use as long as it is clean. The type of container used for primary fermentation wouldn’t make a list of the 20 most important things about wine making. Grapes, water, temperature, yeast, etc., are all much more important than the container you first dump them in to get fermentation started. So why spend hundreds on a container when $10-15 will do just as well?
There is a great lesson in this for businesses, churches, or organizations of any kind. Spend your money on what will really make a difference in the outcome. The next time you are tempted to spend time, money or energy on something, ask yourself, “Am I doing this because it will look good and feed my ego, or will it really make a difference in results?” If you aren’t sure, then try the garbage can first. You can always spend the big bucks later if you need to.
© Copyright 2011 by Dick Wells, The Hard Lessons Company
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If I ask you—“Should a Cadillac dealer try to sell Chevrolets?”—your answer would be emphatically “NO.”
But they tried it once. Wanting to compete in the small car market, Cadillac introduced in 1981 a Chevrolet disguised as a Cadillac called a Cimarron. But even with a Cadillac emblem and a leather interior, it was still essentially a Chevrolet with a Cadillac price. It was a disaster for Cadillac from both an image and profit standpoint and was discontinued with the 1988 model. (By the way, wanting a Cadillac, but unable to afford a real one, I bought a Cimarron in 1987. It was embarrassing when I realized it was really just a Chevrolet in fancy clothes.)
I made the same mistake in business back in the 90’s. We were a Cadillac company—building large (up to 100’ length) expensive ($0.5M and up) aircraft assemblies for Lockheed, Airbus, Gulfstream, etc. Having some open capacity on some equipment, we decided to get in the Chevrolet business by going after some low value machining business to utilize some of our open capacity and make a little “incremental’ profit. It was a disaster and a hard lesson.
We learned that if you have a Cadillac customer base, and a Cadillac cost structure, don’t try to compete with Chevrolet dealers.
There are many downsides:
So, when tempted, remember:
#1 If all that matters is price—it’s a commodity. It is hard to differentiate your business in a commodity market.
#2 Customers will not pay Cadillac prices for a Chevrolet. And you can’t fool them with a Cimarron.
#3 This almost never works as a “growth” strategy.
#4 The shallow end is always more crowded for a reason. (Think about it.)
By the way, the Cimarron was pretty good Chevrolet; not a very good Cadillac.
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