‘The Founder’ is a lesson in entrepreneurship
How does a film show a business problem and innovation? What lessons can entrepreneurs learn from The Founder?
There are many unfortunate consequences of the fast-food revolution, but there is also a thrill to watching an origin story of a company this large.
In The Founder, Michael Keaton plays Ray Kroc. Kroc is a traveling salesman destined to have a Willie Loman ending. In his fifties, he has spent most of his life hawking paper cups, pianos, and now milkshake machines. The machine is clunky, expensive, and he is running out of sales leads.
The movie in its early stages makes it obvious something is happening, as the camera focuses on a recurring image. Could it be innovation? First there needs to be a problem to solve.
Kroc spends his days travelling on an interstate highway stopping at one drive-in restaurant after another with poor service. He parks his car, observes the teenagers who throw their trash on the ground, and waits for a burger for 30 minutes, and when it finally arrives, he gets fried chicken. The film is hitting us across the head with the message — he is somewhat frustrated with the status quo.
When he calls his office to check his messages (by using a pay phone), he hears his secretary when she says someone in San Bernadino, California has ordered six. It must be a misunderstanding . There is no way someone needs two, let alone six.
He makes the call and discovers that Mr. Mcdonald does not want six, he actually wants eight.
At this moment, we are supposed to recollect the last ten minute, which included Kroc slamming his car door, enduring frustrating meals, sales rejections, and lonely nights on the road. We feel Ray’s pain. He needs a change, and there is only one inevitable solution.
Kroc wants to know why Mr. Mcdonald needs so many milkshake machines, so he drives half-way across the country to find out.
When he arrives during the lunch-time rush, he observes a family friendly crowd waiting in a line that stretches around the corner, but is told, “don’t worry, the lines moves quickly.” When he orders his burger and drink, less than a minute later, he is handed his meal. “What do you mean it is ready already?” He asks the teller. “Where do I eat it? Are there utensils?” Krock inquires, not understanding how he could get something back so quickly. We laugh at first at Kroc’s inability to grasp the fast food concept, but then put ourselves in his shoes at the time. How could he comprehend this innovation?
“You can eat it anywhere” the teller instructs, and Kroc discovers the innovation.
It is price and convenience that jumps out at him. Kroc’s years on the road made him see something different. All of the obstacles from his past allowed him to see something others missed, and it was his persistence that would now make him a visionary.
The operators of the original McDonald’s detail to Kroc over dinner the next night how they stumbled upon the innovation that would change America.
They came to Hollywood from New Hampshire to get in the motion picture business at the worst possible time. It was the crash of 1929, and nobody had money for a flick. Then they opened a hot dog stand that started to do well that allowed them to open a restaurant in San Bernadino, and noticed the same problems observed as Kroc in the traditional drive-in model. There had to be a better way.
They closed down the original burger joint and worked with their staff to design the ideal work space for optimal cooking and preparing. The McDonald brothers acted as the conductor in order to orchestrate staff around their “test kitchen” which was designed on a tennis court with chalk.
The chalk outline was the minimum viable product, and the “users” were his employees.
After six hours of scratching, erasing, and starting over, they found the perfect design, and had an architect custom build their idea for their restaurant.
The McDonald brothers identified the problem, and did not make the classic start-up mistake of letting some traction lead them down the wrong path. Eric Ries wrote about how many start-ups go down the wrong path because they read the wrong data from their business. They may get a few orders, or acquire some users, but it is not the kind of traction to build a business around. The McDonald brothers scratched mediocrity to strive for excellence.
When they launched their speedier operations with no waiters, customers rebelled. It was a nightmare. People would not get out of their car, they honked their horns, voiced their complaints, and drove off before ordering. Change can be hard. At the end of the day, they thought they had created something customers would ultimately reject. Maybe it was time to go back to the old, slower model, they thought.
The next day, a young boy walked to the counter and asked for three burgers. They gave it to him for free, expecting it to be the last burger they would ever “sell” at the counter. As the boy walked off, cars started to pull up one after the other. The word had spread, and what they were selling worked. People left their cars, and walked to the counter to order because price and wait time trumped the old way of doing things.
It was this story and seeing the demand in person that convinced Kroc he needed to franchise this idea. It was bigger than one store in San Bernardino.
The filmmakers did an excellent job of capturing this story of their entrepreneurial arc with flashbacks, and real footage. It was something all entrepreneurs can relate to and find parallels with their own story. There was bad timing, a change of fortune, trying something new, and persistence and execution that ultimately made them succeed over good ideas.
There are many other lessons as the film progressed of building a business and the perils of growth, and the lawsuits that can sometimes accompany it, but the first twenty minutes is a perfect case study in solving a problem for customers that they may not even know they are having.
Sometimes new business ideas can not be discovered simply by asking the customer exactly what they want, and it is inspiring to see an idea the founders thought initially failed, eventually find overwhelming market fit.
