“The Founder” is a biopic about Ray Kroc’s path to becoming “The Founder” of McDonalds. I found it to be quite illuminating (assuming it to be factually correct)! It is a must watch for anybody who is looking to startup!
I’ll leave the movie reviewing to others, and focus only on what I thought were 7 key takeaways from the movie (spoilers ahead):
The McDonalds brothers arrived at their game-changing innovation and became an over-night success after 30 years of toiling at the business. Ray was only able to see the genius of the McDonalds brothers because he had been on the road for a number of years as a milkshake maker salesman, and he knew the problems of those all diners firsthand. Even after their agreement, they took a number of years of hard toiling before their business started to take off.
It usually takes several years of being engaged in a particular domain to become an expert and to start having those insights that lead to innovation. The trope of the teenage whiz kid that we’ve all been encouraging over the last decade or so, encouraging kids to drop out of school / college and start companies to get-rich-quick, is probably a short-lived one, and deservedly so.
One particular scene stayed with me long after the movie was over. In a hotel room alone and defeated, Ray puts on a record of a motivational speaker who talks about how persistence alone can create winners. I’m sure many a founder would empathize with that man alone in the cheap motel room listening to motivational speeches, except maybe now they would turn to their favorite podcast instead of a record.
Even something as hardware and service based as a restaurant kitchen can be prototyped cheaply on a tennis court. This was a revelation to me, as I’d never considered how something like that could be prototyped. As it stands now, if ever I am faced with an “unprototypable” situation, I would probably think of this scene and try to come up with another method.
3. Working hard to avoid risk only blinds you to a different type of risk
When the McDonalds tried to limit their risk by controlling almost everything, it only served to frustrate Ray Kroc and incentivized him to search for innovative ways get out of their agreement. The movie does a good job of showing how Ray started off with only admiration for the McDonalds brothers, but slowly over time lost that and finally led him to screw them out of even their deserved shares. But it also makes you wonder what might have been, if the McDonalds hadn’t been as risk averse.
The most amazing example of leveraging other peoples’ values to get others to follow you is when Ray stands in front of the McDonalds brothers and says “Do it for your country”. And then sells them on how across every town, there is a church and a courtroom, and how the golden arches would bridge them. That is an amazingly powerful narrative! This is the only point when everyone’s values were aligned completely.
But Ray Kroc was a misfit with the culture that the McDonalds wanted to have, and didn’t value the same things as they did. The physical distance didn’t help their motivational distance either. The one common value that kept them together was their attention to their product’s quality, but even that was actually a derivative of two different values for them. Whereas the brothers definition of “quality” flowed from how much they valued the authenticity of the McDonalds experience, Ray’s definition stemmed from how much he actually valued the “McDonalds” brand. A subtle difference, but key to how they perceived the Instamix and co-branding with Coca Cola.
When Ray he himself started hiring, he ensured that he hired the right culture – by bringing in both the husband and the wife as partners. He divorced his own 1st wife and married Joan, because he probably respected her business acumen and her own dreams for McDonalds. This insight into “husband-wife” pairs working better together was probably one of the most important reasons why McDonalds was able to scale their franchisee network so rapidly without losing quality.
3. Product matters. But so does brand.
The McDonald brothers never truly understood what their brand meant, and what the value of those “golden arches” was. They thought their product was their only asset. Even in the bathroom scene after their final settlement is done, Ray had to explain to Dick why he never stole the idea, and instead worked to acquire the name.
Today, when software engineers are heralded for their ability to build products, most startups still don’t truly grasp the meaning and value of their brand and take it too lightly, or leave it till too late. Branding isn’t something you tack on after you’ve built everything and are ready to launch – it often is at the heart of the product itself.
6. Be aware of your true assets
The McDonalds brothers thought their only asset was their technology. And when they signed the original franchise agreement with Kroc, it probably was their single most important asset. However, what they failed to account for were the new assets that were generated through the course of executing the contract. The two new assets – the brand McDonalds (the name as well as the Golden Arches) as well as the real estate on which the franchises were being developed, kept growing in value while the technology itself remained constant. This isn’t the first story of someone being unaware of a company’s true assets (see Skype / JoltID / eBay), and it definitely won’t be the last. Auditing your assets is probably something that most engineers would roll their eyes at, but it could very well make the difference between a Kroc and a McDonald.
7. Business is “dog eat dog, rat eat rat”…
… and if your competition is drowning, you have to be willing to put a hose in their mouth.
Did you find other lessons in the movie? I would love to learn what you learnt! Please leave a comment below.