10 business lessons that entrepreneurs can learn from the movie ‘The Founder’

“One word... PERSISTENCE. Nothing in this world can take the place of good old persistence. Talent won't. Nothing's more common than unsuccessful men with talent. Genius won't. Unrecognized genius is practically a clich. Education won't. Why the world is full of educated fools. Persistence and determination alone are all powerful."

Not only this dialogue by Ray Kroc, but the entire movie intrigued me more than any other movies that I saw recently. I mean, movies like Wolf Of Wall Street, War Dogs, Bazaar, Guru, etc. were awesome movies too for entrepreneurs to watch. But this was like going through an old text book on entrepreneurship and finding some magic tricks that were almost forgotten in today’s times. Thus, rather than mulling over about it myself, I thought to jot down the takeaways from the movie.

Also, there couldn’t be a more clichéd title for this article. I know, right? But anyways, that’s not important. The important thing is movie in discussion here: The Founder (2017). I just saw it yesterday and since then I’ve been thinking about it. The rise & success of the business of McDonald’s is a great story. I’m wondering why did it take so long for Hollywood to make a movie about it.

Maybe its because the genre of entrepreneurship isn’t as rewarding as other genres in movie making business. But regardless, I’m glad this one got made and it stayed honest to the subject with not much of over-the-top jazz. I recommend not only the entrepreneurs but all the people should watch this movie at least once as it has many takeaways.

#1 Deconstruct & reinvent​

Have the ability to deconstruct your business and reinvent it again. If you can do so; you can succeed even in a failed industry. The McDonald brothers were able to create a diner that delivers super fast service, with high-quality food, because they were able to deconstruct the entire concept of a traditional diner. They went to a tennis court and redrew the layout of their entire kitchen. Not once, but multiple times, until they got it right. This assignment took at least 6-8hours.

They didn’t stop there. Once they had got the process model perfected, they went ahead and created specially designed utensils that allows them to cook food that’s of unmatched quality. The entire kitchen and everything in it were custom-made. No restaurant in the country was doing that, and this was way back in 1950s. That’s what it takes to build a great business. If you can do that, then you’ll be able to pull off a grand success even in the most saturated industries.

#2 Foresee the future​

When you try to do what’s mentioned in the point above, you deconstruct your business and reinvent it with a revolutionary idea, it isn’t going to be enough. One needs to anticipate how that idea is going to pan out in the real world. Then work on determining how the customers will adopt that new idea and how difficult will the learning curve be for them.

In the movie you can see that even after rebuilding their restaurant completely from scratch, the McDonald brothers aren’t able to bring in customers to their restaurant because the customers are used to the old ways of ordering food at the restaurants. They try everything from explaining the new concept to the customers, to throwing a huge party to invite the town and spread the word. But nothing helped. They were almost on the verge of giving up when a few customers drive in and that’s how a brilliant idea was saved from becoming obsolete in the world. So, don’t make the mistake that the brothers did.

Whenever you’re introducing something new in the market, think about how the customers are going to react to it and how long will it take for the users to comfortably adopt it. This exercise would save you a considerable amount of pain post the launch of the product/service.

#3 Be courageous enough to fight a lost battle once again.​

This is where your madness as an entrepreneur gets tested. Are you brave enough to venture into an idea that had already failed earlier? If you’ve got the balls to do it and come out victorious, glory will be yours!

When Ray Kroc meets the McDonald brothers and suggests them to franchise their restaurant, the brothers say that they had already tried and failed, so they weren’t too keen to do it again. However, Kroc wasn’t fazed one-bit due to that. He went ahead, partnered with the brothers and took it upon himself to spread the franchises across the nation. The rest, as you know, is history.

We know how many times J K Rowling had to find a new publisher to submit her first Harry Potter book. If you believe in something, even though the current of the entire world is against that belief, you’ll find the strength to fight it and come out victorious in the end.

#4 Find the right talent and work with him.

After taking over the franchising operations, and expanding the franchises all over the nation, Ray Kroc was suffering from the cash crunch problems and business model problems. Just at that time he meets a young entrepreneur named Harry J Sonneborn. Harry helps Ray in solving his problems by introducing a new business model. Later Ray attributed the company’s success greatly to Harry, who later went on to be the company’s Chief Executive & President.

There was also another guy named Fred Turner, who began his career as a cook frying hamburgers in an early franchise. He too went on to be the CEO of the company McDonald’s Corporation. So, you don’t always have to be the founding CEO yourself to be a grand success. You can definitely reach any height you want by committing to a company that you truly believe in, and giving the best years of your career to it.

You don’t always have to be the founder of a company yourself. This has turned into a very misguided notion these days. Everyone wants to be the founder; everyone wants to be the CEO and rush for the throne, even when there barely anything there. Get this thing straight, not everyone has management abilities and leadership abilities in them that it takes to be able to run an entire company.

#5 Manage cash flow efficiently.

Several businesses face cash crunch during their early stages of operations. There may be several reasons for that: the cash flow cycle hasn’t begun properly yet, expenses are rising exponentially, bootstrapping strategy isn’t working out, etc. Your cash movement patterns haven’t stabilised yet, so even the excel sheets and graphs cannot help you with it. This is when one needs to pay extra attention to the cash flow and manage it efficiently. Regardless of whether you’re self-funded or if you’ve got an investor by your side, if you don’t keep a close watch on the in-flow and out-flow of cash, it’s going to seriously affect the survival of your business.

Ray Kroc had a deal with McDonald brothers that he’d receive 1.4% of cut on all the franchises that he created. So, in order to create more franchises he’d travel all across the country, meet several people, arrange seminars, do promotions, and hire people. All these activities increased is costs to the extent that he was barely making any money out of it. In the excitement of building his empire, he had ignored his cash flow problem completely. Since there were no other means to increase his cash flow to match his rising expenses, he had to overhaul his entire business model in order to solve the problem.

#6 Get the business model right.

Sonneborn’s first advise to Ray Kroc was an amazing punch line. He said, ‘you cannot build an empire with a 1.4% cut.’ This meant that Kroc had to revise his business model in order to resolve his cash flow problem and have better control over the franchises. Thus, he pivots his company from selling franchises for McDonald’s restaurants, to becoming a real-estate owner leasing land to those franchises. What a thought. Applaudable.

This fact clearly showed how crucial your business model can be. It is perhaps the most under estimated but the most crucial block for establishing your business. Screw it up and your business would never reach its true potential. With a wrong business model, you will never make profits.

A right business model is very much necessary for any business as a business model is a plan for earning a profit — the money left over from sales revenue after paying all expenses. Business models, also referred to as profit models, can help to ensure that your company always operates in the black, and investors are impressed with innovative and reliable business models.

Most entrepreneurs decide on their business model by seeing someone else’s. If it works for them, then it’d work for me as well. You’ve got to be aware about factors like, the shifts in the industry, the behaviour of your business, consumer trends, etc. in order to figure out the right business model for your company. During the early stages of your business, you’ve got to be very agile and flexible so that you can respond to the first sign of any major shift in the market. Early stage evolution is going to help you shape up the perfect business model.

​#7 Recruit unconventionally.

Getting a killer team is the ultimate mantra that decides on what kind of company you’re going to have in times to come. But its easier said than done. Team building is a messy process. But you plunged into this mission to do something unique and to make your mark. You cannot do that with a bunch of sheep. To achieve something that you’ve never achieved before, you’ll have to do something that you’ve never done before, i.e. recruit your team unconventionally.

Kroc faced the same challenge when he began opening up franchises. As the McDonald brothers had anticipated, maintaining the same quality of food across all franchises was a huge problem. Thus, rather than recruiting a restaurant manager through traditional means, he started looking for one in Jewish community, veteran clubs, etc. where he could find people who could commit fully to their job. Follow the human quality that you’re looking for and the faces shall emerge soon.

#8 Never compromise on your standards & principles.

During the early days, the ice cream used for making milkshakes was haemorrhaging the McDonald’s franchises in the refrigeration costs since it required a huge refrigerators. So, they introduced powdered milkshakes. The McDonald brothers opposed the idea furiously. But Kroc slammed it down their throats and they couldn’t do anything about it. But later on, the decision was reversed and McDonald’s brought back the ice cream in milkshakes. That little phone call between Ray Kroc and Dick McDonald in the movie is a brilliant business lesson in itself. Try to push the envelope as much as you can in saving costs and earning more money, but never at the cost of your principles.

This instance shows its very much necessary to set some quality standards and company principles and never turn your face on them. No matter what! Never do that. There would be times when these principles would definitely be tested to your limit, and you’ll not see any tangible value in abiding by them. But hold onto yourself stronger during those times and stand by those principles. It’s these principles and standards that will make our break your business in a longer run.

#9 It’s never too late to pursue your dreams.

We’ve heard this cliché countless times. But what we don’t hear more often is that perhaps the price tag on those dreams increases exponentially during the later stages of life. Ask yourself the question whether you’re still willing to pay that price. If yes, dive in by all means!

There is no greater joy than the one that you get when you’re pursuing your dreams. Your heart pumps blood faster, your mind can think at speeds you didn’t knew, sleep suddenly becomes a boring activity, and you forget what was the difference between a work life and a social life. You love the grind like an addiction.

Ray Kroc believed in McDonald’s. So, even at the age of 52, he mortgaged his own house to build a business. That’s what a business can do to an individual. Once you’re smitten by an idea, all of a sudden no risk is big enough. But always remember, you’re paying a price to live your dreams. Be prepared to pay that price.

#10 Be ruthless.

Be ruthless enough to reach the maximum velocity that propels your company’s growth through stratosphere. Being hungry isn’t enough. A lot of people die of hunger. You’ve got to do something about that hunger. Ruthlessness might just be the catalyst that you need to get your growth rate in the supersonic range. If you’re good at your job, but if you’re not fast enough, if you’re not aggressive enough, if you’re not ruthless enough, someone else is going to overtake you and you’ll be left a sitting duck.

The CEO of Nokia ended his last speech saying, ‘we didn’t do anything wrong, yet we lost.’ The McDonald brothers felt the same thing perhaps when they were forced to change the name of their own restaurant. They didn’t do anything wrong, yet they lost. You don’t ever want to be in that position. You’ve started your business after going through hell and back. You don’t want all that to end up in vain. That’s a regret no one can process. The world of business isn’t for the kind-hearted. Keep hunting or get hunted!