Tom Nies: Entrepreneurial road map

Tom Nies, Founder & CEO, Cincom

“You’ve got to be daring! You’ve got to be first! You’ve got to be different!”

Ray Kroc, the man who made McDonald’s what it is today, once said that to an audience of entrepreneurs. It can be considered one of the unique value propositions of McDonald’s. Kroc took a small chain of drive-in restaurants and exploded the business into a highly successful national icon. Using his own quote as a road map, you can see his path to success.

Kroc’s McDonald’s began with hamburgers, then added french fries and a beverage to turn it into a meal. When imitators began to gain traction in the marketplace, McDonald’s introduced the sesame seed bun to differentiate its burger. In the 1980s, it dared its competitors to keep up by introducing the Egg McMuffin. McDonald’s also captured the children’s audience with Ronald McDonald, play places in stores and the Happy Meal with a toy.

In short, the 1.5-oz. hamburger that McDonald’s began with demanded a lot of superb marketing to generate preference and brand development.

A new competitor enters the market

McDonald’s isn’t the only fast-food brand specializing in hamburgers that can be first, daring and different, however. In 1969, 15 years after Kroc joined McDonald’s and began to position it as the market leader in the industry, Dave Thomas founded Wendy’s.

While similar to other fast-food restaurants in the market, Wendy’s dared to be different by offering a 4-oz. square hamburger patty instead of the standard 1.5-oz. round burger offered by McDonald’s and some other competitors.

Wendy’s also offered 11 different choices of toppings and sides instead of the standard french fries. It customized each hamburger as requested, with all additions — including the meat — being fresh daily.

It all came together beautifully and the upstart Wendy’s grew rapidly against much larger and already very well-entrenched competitors.

Why does it matter?

While the story of two fast-food giants seems irrelevant to many businesses outside the food industry, all of this information is 100 percent applicable to any industry.

Every entrepreneur strives to be first, daring and different with his or her business. Not all of us can be the first in an industry, but with a little creative thinking, we can all add a new first to an industry.

Reposition competitors so they work for you

Challengers in a marketplace can reposition dominant market leaders, but we must understand what we are trying to do. We must have a unique value proposition that is compelling, and we must do those things well if we are to be successful.

If Dave Thomas had decided to offer the same experience and choices as McDonald’s, Wendy’s might never have left Dublin, Ohio. Instead, he creatively repositioned Kroc’s offerings from the most popular burger to a small amount of meat with one phrase in an advertisement. Entrepreneurs need to always be thinking of how they can ask, “Where’s the beef?” of their competitors.

Focus on the customer

The Achilles ’ heel of most dominant providers is that with success, they inevitably move from an emphasis on trying to sell what the customer wants to buy to using their marketing muscle to try to sell the customer what they want to offer.

The fast-food world can try to throw its weight around when introducing a new product, but it seldom lasts if it is not something a consumer wants to buy. This is dangerous because customers have so many fast-food options that if a certain provider isn’t focused on what they want, someone else will be. <<

Thomas M. Nies is the founder and CEO of Cincom Systems Inc. Since its founding in 1968, Cincom has matured into one of the largest international, independent software companies in the world. Cincom’s client base spans communications, financial services, education, government, manufacturing, retail, healthcare and insurance. Reach him at tomnies.cincom.com/about/

Leave a Reply

Your email address will not be published. Required fields are marked *