“We learned as we went along. We went from hard drinking cowboys of retail to instilling a quilt of families in our company.” – Arthur Blank
Can you imagine mapping out your future venture on a paper napkin? Till 1977, none of the ideas got floated from a paper napkin but in 1978, Arthur Blank and Bernie Marcus, the founders of ‘The Home Depot’ were able to transform a mere sketch into a major brand.
This biggest phenomenon of the retail home improvement brand in the US was not born yet; it only took Blank and Marcus to be unceremoniously fired from their previous company, Handy Dan (a chain of home improvement stores) to create this. Both of them together built up Handy Dan to over $155 million in sales. Arthur was the CFO for Handy Dan, and Marcus was going to replace Sanford Sigiloff as CEO. Sanford who had 81% stake in the store, in the wrath of professional jealousy fired both Marcus and Arthur.
The two naturally had lot of angst and talent, so they picked themselves up, as Blank recalled, “Bernie and I picked ourselves up, we mapped out Home Depot on a napkin in our favourite coffee shop. We had almost no capital.”
After receiving initial funding from the network of venture investors of $2 million; thanks to a close friend of Bernie, Ken Langone; the Home Depot journey started. Although Home Depot in their initial stage went undercapitalized, but now Home Depot brand as become a household name in America and Canada. One may find practically all the essentials and tools required at home from The Home Depot store.
However, when Blank and Marcus were planning, someone else had actually opened a warehouse home improvement store, which was almost identical to The Home Depot model. Pat Farrah opened that store in the greater Los Angeles area. What happened next could be conveniently called as a ‘Chatur Move!’ Blank and Marcus could easily perceive that Pat’s store would eventually run into losses due to inadequate financial control. So instead of eliminating the competition by competing, Blank and Marcus made a humble, but a nimble offer to Pat to join Home Depot. Within no time when Pat saw he was heading towards bankruptcy, he reasonably joined the Home Depot team. The trio later on roped in their fourth and final partner, freshly fired from Handy Dan’s financial management team, Ron Brill.
Finally, The Home Depot opened its first store in Atlanta in 1979. The Home Depot got recognition when J.C. Penney decided to close the Treasure Island stores, which were the direct competitors of the store. Not without some uncalled tremors, Home Depot opened three stores in the first year with 200 employees and sale of around $ 7 million.
More than thirty years down the line, Home Depot has opened more than 1500 stores pan America with over $50 billion in sales.
Blank and Marcus, created a company where employees mattered and where people were free to make mistakes. The formula of success is articulately summed up by Blank and Marcus, “You want a formula for success? Take two Jews who have just been fired, add an Irishman who just walked away from bankruptcy and an Italian running a no-name investment banking firm.”
If one visits the official website of The Home Depot, one would find a variety of home appliances they sell. From tools and hardware to doors and windows to holiday decoration, the home improvement store is a complete home package. The work culture is progressive at The Home Depot and the most impressive fact is that all the company executives, including lawyers were required to work in the stores when they first joined the company.
Blank and Marcus themselves periodically worked in the stores throughout their careers. Though both, Blank and Marcus came from humble backgrounds and struggled relentlessly, but today they have revolutionized the home improvement industry in America. They not only brought out the fresh ideas but had also executed their vision successfully.
If you too have entrepreneurial dreams or wish to have a venture like the ones listed above, you need to have faith in your Chatur Idea. You will always wonder who will fund this idea and from where will you find investors. In that case, you can participate in the #BeAChatur Contest and not only be mentored, but also stand a chance to win a whopping Rs.10 Lac funding for your dream startup idea.