Building a Company That Wins
In the days before the "tall-skim-half-caf latte," Arthur Rubinfeld lived in the same New York City apartment building as Starbucks' CEO Howard Schultz. He later became executive vice president of Starbucks and grew the business from 100 stores to 4,000 worldwide. Rubinfeld's pioneering approach to branding brought Starbucks and Barnes & Noble together as co-tenants and co-branded stores.
Today, he runs one of the hottest agencies in the world, AIRVISION with offices in Seattle and San Francisco, and clients like Adidas, Gateway, and Oakley. Part CEO, all teacher, Rubinfeld offers hard-won insights and plenty of hands-on advice to entrepreneurs seeking to fix, create, and grow their businesses rapidly in his new book, Built for Growth: Expanding Your Business Around the Corner or Across the Globe (Wharton School Publishing, 2005) now available in stores. He spoke with Inc. recently about how to build a company that wins, and endures.
Q: Not including those you have worked with, which company do you most admire in the U.S. today?
Rubinfeld:I admire Whole Foods, the way they've grown. I stop in Whole Foods stores when I'm crossing the country looking for new ideas. They consistently operate at a very high level. Rather creatively, they identified that prepared foods are both takeaway and eat-in. If you notice, their in-store seating areas are getting larger. They steadily and stealthily have become a major restaurant competitor in all three day-parts, offering everything from sushi to soup. That's brilliant! And it is in keeping with the spirit of their mission statement. Because they continue to innovate their stock value continues to grow.
Q: Of the many things that will shape markets in the next 10 years, what should Inc. readers be thinking about more?
Rubinfeld: There will always be changes in demographics, in business categories and the community at large that will need analysis year to year. But more conversation is being had about China than anywhere else. I say, look at Russia too! You have an emerging middle class there. They are fashion-oriented, starting to make more money, and starting to spend it. That's a huge opportunity.
Q: When an entrepreneur sits down to write a business plan, should he or she have an exit strategy in mind -- even from the start?
Rubinfeld: Thinking about the end game all the time is one really common mistake executives make. I think an entrepreneur should have an exit strategy in mind always, but I don't think they should talk about it often or focus on it. That would detract from the goal of gaining traction with your business. At the end of everyday of my 10 years at Starbucks, I said, "I put another brick in the wall today." It was my graphic reminder that I was building a structure and kept me focused on growth.
Q: In Built for Growth, you ask entrepreneurs to look at their lives and companies as one and the same thing and to always test themselves for their own weaknesses. Why look inwards for business ideas?
Rubinfeld: It is one thing to be incredibly bright and develop an idea that covers a unique niche. It is a totally different question to be able to look within yourself and be true about what you really want, what you're really good at and then deal with those areas of weakness in a secure, systematic way in order to help yourself improve a business.
Let me give you an example of how I have changed the way I work after learning something about myself. I have learned that I am the quintessential entrepreneur. I believe -- after hearing an idea -- in the "why not!" Going to the negative place and saying, "It'll never happen," is not me. Having an understanding of that part of my personality, I found two key individuals in AIRVISION and expressed this aspect of my personality, in order for them to save me from myself.
Now, we are advising a fascinating company called Shared Media Licensing. Their product, WeedShare, is a major answer to the music download, p2p-sharing controversy. We believe in it. But my colleagues also believe that this is a crowded competitive field right now. Balancing our love of music and this company, balancing our optimism with some smart conversations has helped to time our moves very, very well. We are happy and our client is happy as a result. If I had not known my own tendency to be so optimistic, and had not asked for checks and balances, I may have tried to push them to move too fast in some regard.
Q: Is there any case where an entrepreneur should try not to grow his or her company?
Rubinfeld: At some point, everyone is building for growth. Many people will say to the outside world, "We don't wanna grow." In fact, they have to grow to a certain size to have a financing event. That can range from a comfortable retirement to an IPO. In Built for Growth, co-author Collins Hemingway and I talk about developing the three-year operating plan (top line and bottom line) and that includes the growth plan by division, category, and profit contribution. Every company should have a solid operating plan, and if they do, they'll see that in fact there is now way for a successful company to get around the issue of growth.