Bootstrapping Lessons: Master of Bootstrapping Administration (MBA)

Doris Christopher, founder and owner of The Pampered Chef, built a $200-million business from scratch -- and built a curriculum for the capital-poor along the way

Brush peddler Alfred Fuller discovered its appeal a century ago. Doris K. Christopher affirms it today: "Direct selling is a wonderful way to start a business." To bootstrappers, the attractions of in-home retailing are its scant capital requirements, its few fixed costs, and the rapid cash flow it generates. And its risklessness: "You can test it; if it tests no-go, you don't go," Christopher instructs.

Fifteen years ago Christopher tested and went. The proof is in the pudding. The cooking-utensil business she started on someone else's money will book some $200 million in 1995 sales.

At the time a 35-year-old housewife with two young children in school, Christopher borrowed $3,000 to "find something to do to get back into a career." She had been a home-economics teacher and remained an accomplished cook, and she intended to combine both skills by retailing kitchen tools. But, she recalls, "everything I heard from anybody who ran a store was, 'Agh, the overhead!" You had to find a location, then you had to pay for it, then you had to staff it. Then "you had to sit there and wait for customers to walk in."

The direct seller's response: why wait?

Especially since Christopher knew how to get a foot in the door. "As a woman in American society," she observes, "you can't avoid home parties." Christopher studied the modus operandi of home-party retailers and chose the high road, scorning "silly games" in favor of an instruction-oriented approach with "an inherently interesting message to deliver.

"My dream was for the business to be successful, but I had no idea what it would look like. If I'd foreseen the amount of time I give it today, I'd have thought, 'This isn't what I want.'" What she did want was an uncomplicated 20-hour week that would balance a little business with a lot of family. She named the endeavor the Pampered Chef (TPC), printed up cards and letterhead, took out licenses, and invested the remaining money in a dozen each of parers, cutters, shakers, dicers, whippers, scrapers, and other culinary-ers. Those she piled in the cellar of her suburban Chicago home. "I'm not a businessperson," she reminded herself. "If I don't sell a one, it won't be the end of my life."

The Pampered Chef's first "kitchen show" -- the term Christopher assigned to her demonstrations to distinguish them from the generic home party -- was in October 1980. The company's first "kitchen consultant" -- the title she bestowed on her field people to distinguish them from common vendors -- was none other than Doris Christopher herself. As TPC's sole proprietor, she functioned as buyer, warehouse worker, shipper, and bookkeeper.

Christopher's technique was to prove to a gathering how easy cooking dinner can be. Over a hot stove (someone else's, of course), she executed recipes that showcased her implements, then offered the gadgets at whatever prices seemed right. "I kept telling myself, if Williams-Sonoma can be profitable," she says, "I ought to be able to figure out how."

Today "The Kitchen Store That Comes to Your Door" occupies a modern 220,000-square-foot brick warehouse and office in an industrial park outside Chicago, employs more than 400 full-time workers, and fills orders for a sales force of 20,000 part-timers. Behind an everyday desk in an unassuming second-floor office -- cost-constraint remnants from her bootstrapping years -- chief executive Christopher remains TPC's master chef. And, never having financed growth beyond the company's $3,000 beginnings, she (together with her husband) owns every spoonful of the still-rising soufflÉ.

In the midst of posting growth, Christopher acquired an M.B.A. -- not the master of business administration you pay $21,000 a year for at Harvard, but the master of bootstrapping administration you get free on Main Street. Here are some entries from Christopher's curriculum:

1. Market Concept
101: "People I knew didn't like to cook, because it wasn't easy for them. Part of me said, 'Maybe I can never convert them.' But another part said, 'They're using knives that aren't sharp and forks with missing tines. If they had the right tools, it would be fun."

Advanced: "We've become good at examining a product," Christopher explains. "We go to a manufacturer and say, 'We'll take your product, but we want it to have a longer handle, or we want it cheaper, or we want it to do three things."

In Christopher's research-and-development pride and joy, an in-house kitchen plucked from Middle America, staffers devise recipes to support field sales. Christopher maintains that potential buyers link products used in hands-on demonstrations with "irresistible" smells and flavors.

At first, like other in-home direct sellers, Christopher awarded hostesses 10% of a show's total in merchandise. But she amended the standard with a plan that credits a hostess with points in several additional categories, such as the number of guests and the number of shows booked for the future.

Although telemarketing is a fruitful adjunct to direct selling, the strong-minded Christopher rejects it out of hand. That's because she abhors dinnertime disturbances herself. "Telemarketing is so important these days that it's terrible to admit that it's not something you'll ever see this company do."

2. Corporate Image

101: From a half dozen names proposed in July 1980, Christopher selected the Pampered Chef. "A friend did some drawings, and we chose one for the logo. It was all very frugal, very basic."