Fred and Pete Go To Market
Originally published in Flourishing March 2012
I received an unsolicited email recently from the self-described marketing genius, Dan Kennedy. Dan is a serial entrepreneur and a self-made multimillionaire. Dan doesn’t have a college degree; in fact, he never attended college. He inherited nothing from his family, but a strong work ethic. However, this isn’t about Dan; or not just about Dan.
In his email, Dan tells the story of a seventeen year old kid named Fred, who was scouting for a way to make some money beyond his minimum wage job. It was 1965, and the minimum wage was about $.75 an hour. Fred went to see a family friend for advice. The friend’s name was Pete.
Pete suggested that Fred open a little sandwich shop, and offer food that was less fattening and more healthy than the sandwiches at McDonald’s and other fast food stores. Pete and Fred formed a partnership, with Pete investing $1,000 and Fred investing his time. The first store opened in Bridgeport, Connecticut to very limited success.
Fred and Pete were sure they had a good product, so they attributed their limited success to the store’s location, and they opened a second store. But, the second store also produced mediocre results. At that point, most people would have given up, but not Fred and Pete.
Fred enjoyed the business so much—and was so confident in his product—that he convinced Pete that they should try a third location, one with more visibility. And, they agreed that they should spend more money on marketing and advertising.
As you may have guessed, Dan is trying to sell me some marketing ideas, but that’s not really the point of his story. I’ll get to that in a minute.
First, you need to know that the Fred in this little story is Fred de Luca, and Pete is Dr. Peter Buck.
The name that they gave their little sandwich shop back in 1965—Subway.
In case you haven’t been counting, there are now more Subway stores (33,749 as of May 2011) than there are McDonald’s. Fred and Pete went to market and became billionaires. Both are now on the Forbes 400 list of wealthiest Americans.
So here, according to Dan, are the business lessons this story teaches:
Don’t be afraid to collaborate.
Look for ways to do the opposite of what almost everyone else is doing.
Focus relentlessly on your goal.
Don’t let your own lack of money stop you.
There is, I think, one more lesson; and that is that America still offers boundless opportunity to everyone with a well-defined purpose to fulfill. mh