This is my two-hundred-eighth weekly reflection. Here are my takeaways from this week:

• Entrepreneurship – Some of the most successful companies are built by people who experience a problem firsthand and set out to solve it. Living the pain of the problem gives them unique insights and passion that increase their chances of success.
• Investing – Just because something is cheap, that doesn’t make it a good buy. Quality still matters more.
• Reddit – This IPO was completed yesterday. I’m curious to see how the stock performs in the next week or so. Its performance will likely have a significant impact on technology companies’ decisions about whether to pursue an IPO this year.

Week two hundred eight was another week of learning. Looking forward to next week!

I’m enjoying reading Built from Scratch: How a Couple of Regular Guys Grew The Home Depot from Nothing to $30 Billion, a book about Home Depot’s founding. It was published in 1999, and initially I was worried because it missed the last 25 years of the company’s history, but I realized I was looking at it the wrong way. Because the book covers a shorter period, it goes into more detail about things I care about most—mainly the actions taken in the early days and the wisdom gained from them. If the book covered 25 more years, it would have to be twice as long or less detailed.

I’m a fan of founders thinking about the market for their products or solutions. It’s hard to build a big business in a small market—there just aren’t enough people willing to pay for what you’re selling. Given the importance of markets, I’m always curious about how founders who achieved outsize success thought about their market in the early days and how that shaped their strategy.

This book detailed how the Home Depot founders thought about their market and how their thought process and strategy evolved. Again, this book was published in 1999, so the data reflect that period. Here’s what they realized:

• In 1996, the do-it-yourself industry was thought to be $135 billion in annual sales. Home Depot had sales of $20 billion that year, so 15% of the market. That left 85% of the market for it to go after—$135 billion is a big market, and 15% leaves a lot of room for growth.
• The founders realized their market wasn’t the do-it-yourself market; it was the home improvement market. The home improvement market included consumers (do-it-yourselfers) and businesses doing home improvements (i.e., contractors). This expanded market included anything needed to maintain and improve homes and was more fragmented, which equaled more opportunity.
• The home improvement market in 1996 was $365 billion, not $135 billion, meaning Home Depot had only 5% of the market.
• Selling to smaller contractors was a huge opportunity. The company retooled its stores and operations to cater to smaller contractors in addition to consumers.

Home Depot redefined “the pond in which we fish,” as they put it in the book. The realization that its market was much bigger than consumers doing weekend projects led to an adjustment of their growth strategy.

Over 25 years have passed since this strategy was implemented. I was curious how it played out, so I checked Home Depot’s SEC filings and found its 2023 10K (annual report). The company reported annual revenue for 2023 of $152 billion.

Markets matter a lot. Founders should understand their market and formulate their growth plan accordingly. Home Depot found a large and growing market that helped propel the company to levels of success the founders never dreamed of.

I’m reading Built from Scratch: How a Couple of Regular Guys Grew the Home Depot from Nothing to $30 Billion. It’s about the founding of Home Depot and its growth until 1999, the year the book was published.

One thing that stood out to me was how Bernie Marcus and Arthur Blank identified another cofounder, Pat Farrah. Farrah was a merchandising and marketing genius who started a home improvement superstore called Homeco in California in 1978. Farrah’s store was packed with customers because of his innovative approaches to marketing and merchandising. Marcus and Blank heard about Homeco and went to visit. They were blown away by what Farrah had created and how he’d built the business. It was exactly what Marcus had envisioned for the yet-to-be-named start-up, but Farrah had beaten them to the launch.

Farrah’s skills helped get Homeco’s stores full of customers and sales growing straight out of the gate. But his weaknesses ended up sinking his company. Farrah didn’t understand accounting, processes, or controls. Homeco was doing brisk business. Stores were packed and money was coming in. But Farrah didn’t know whether Homeco was making money. Vendors were sending products but weren’t being paid. It turned out that Homeco was losing money rapidly. Farrah had no idea until Blank brought some things to his attention. Homeco closed a few months after Blank warned Farrah about the issues, and Farrah filed for personal and business bankruptcy.

Farrah had failed as an entrepreneur, but Blank and Marcus looked past that. They recognized that his talents in merchandising were unlike anything they’d seen in anyone else. They wanted those skills at Home Depot, so just two days after Homeco folded, they mounted a full-court press to convince Farrah to help them launch Home Depot. They reasoned that Homeco had failed because Farrah had skills gaps that made the business vulnerable. They also noticed that where Farrah’s skills were weak, Marcus’s and Blank’s were strong. And vice versa. Marcus and Blank figured the three of them could be a complementary unit with exceptional skills in all the key areas needed for Home Depot to survive. Failure or not, Farrah had to be part of the team. Farrah eventually agreed to join as a cofounder, and the first Home Depot store opened in June 1979.

I like the approach Blank and Marcus took to identifying a cofounder: find an entrepreneur who has failed but has skills that complement those of the founding team, filling the gaps. The failed entrepreneur likely has learned a lot from his (or her) failure, has free time, and wants another shot to prove he (or she) can succeed as an entrepreneur.

A failed founder joining the right cofounders at another company can be a win-win for everyone. It worked out pretty well for the Home Depot founders.

Today I had a chat with the founder of an early-stage company. He’s done discovery and built an MVP. People are using his mobile app, but he’s noticed something odd. Users are telling him one thing, but in the app they’re doing something different. The founder has been leaning into what users have said they want, but the features built to satisfy them haven’t resonated with them. He’s frustrated.

Building a company that sold products to consumers taught me something: for many reasons, consumers don’t always say what they mean. Sometimes they act without thinking about or understanding what’s driving them. They don’t have clarity on their motives, so it’s not realistic to expect them to clearly articulate them to me.

When I found myself in situations where consumer actions and words didn’t align, I followed a simple rule: actions trump words. What people do is likely an accurate reflection of what they’re thinking or feeling, so lean into their actions. It’s easy to say something but not mean it—the energy and time required are minimal. It takes more energy to act. People usually act when they’re driven by a belief or feeling that warrants exerting energy.

I suggested that this founder consider diving deeper into what users are doing by asking clarifying questions about what’s driving their actions—I suspect something is. This may get the founder one step closer to product–market fit.

I read a quote today that I like:

"Every morning in Africa, a gazelle wakes up, it knows it must outrun the fastest lion or it will be killed. Every morning in Africa, a lion wakes up. It knows it must run faster than the slowest gazelle, or it will starve. It doesn’t matter whether you’re the lion or a gazelle—when the sun comes up, you’d better be running."

~ Christopher McDougall

I like this quote because it does a good job of illustrating how complacency can negatively affect anyone, regardless of their advantage or lack thereof.

A few weeks back, I shared that I want to practice storytelling publicly. My storytelling is something I’ve always wanted to improve, but I’ve never taken consistent steps toward this goal. Since that post, I’ve been working on a project that I hope will move the needle.

Today I had some downtime to work on this project. I had to get some equipment to make this storytelling project work as I envisioned it. Today I set up some of it and tested it by recording samples, which were fictitious stories. I realized that I have a long way to go with my storytelling and just how hard it is. I’ve got my work cut out for me.

Even though this storytelling goal will be a lot harder than I planned, I’m looking forward to the challenge and to improving my skills.

This month I challenged myself to start writing about my reading. My goal was to write down—after I finished reading a book—the main concepts and new insights I formed. I’ve completed three books and started a fourth since that post. Here’s what I’ve learned so far:

• Waiting until I’ve finished a book to begin writing posts isn’t optimal. The books are usually in the range of 200–400 pages, and I read them in multiple sessions. Waiting until the end to write a post increases the likelihood that I’ll miss something valuable. That didn’t feel like the right rhythm. It felt more organic for me to reflect more frequently on a smaller amount of content. I naturally ended up doing this with the books on Ken Langone (here and here) and Bernie Marcus (here and here). I wrote more than one post on each book. Every 100 or so pages felt like a good reflection rhythm. I think I’ll replicate and refine this rhythm going forward.
• Some books I read are a historical recount of a period or business event. With this type of book, which is an author’s interpretation of what happened and why, I’m looking to understand what happened and whether similar things are occurring today. I read a book about the dot-com bubble and shared a post about a similarity I noticed between that period and today. Biographies and historical books are different. What I seek from each type of book is different. My expectations for my posts should reflect these differences.
• Now, I’m reading the autobiography of a well-known, seasoned entrepreneur. So far, no concepts have caught my attention, and it hasn’t sparked me to form any new insights. Hopefully, this will change by the time I finish the book. I failed to consider that some books I read may not provide much value to me and hadn’t thought about how I’d handle posts in this situation. I’ve decided that I want my posts to be positive and bring value to others. If I don’t get value from a book, I won’t write a post about it.
• I need to take notes and highlight important concepts as I read. Reviewing these is a key step in the process of reflecting and writing.

I’m enjoying the challenge so far. Looking forward to continuing next week and iterating as I learn more.

This is my two-hundred-seventh weekly reflection. Here are my takeaways from this week:

• Sharing ideas – I shared an idea with a few people over the last few weeks. The idea is unconventional. I figured it would be received with skepticism. The exact opposite happened. Several people have been thinking about the topic that my idea’s about for years; they just haven’t talked about it publicly. One person considered starting a company. Another did start a company, but it didn’t last. Instead of having to defend my idea, l heard about lessons learned and was pointed to helpful resources that I wasn’t aware of. Just a reminder that there’s more upside than downside in sharing ideas.
• Commerce gateway– I thought more about this. Commerce (i.e., retail) has been the historical gateway to entrepreneurship for many. This will likely continue. I’m noticing another trend with aspiring entrepreneurs, which could be an indication of another gateway starting to emerge. I'm seeing more people try entrepreneurship by renting things to others.  Could rentals be the new gateway?
• Four years of posts – This week marked my fourth year of doing daily posts. I’m proud of sticking with this for so long. I want to reflect a bit on the last year of posting and think about what the next year of posts will look like.

Week two hundred seven was another week of learning. Looking forward to next week!

Today I finished reading Kick Up Some Dust: Lessons on Thinking Big, Giving Back, and Doing It Yourself by Bernie Marcus, cofounder and longtime CEO of Home Depot. The book is about Marcus’s life. It describes his upbringing, career in corporate America, transition to entrepreneur, and transition to philanthropist. Marcus is almost 95 and has accomplished (and failed at) many things over the years. I was eager to hear about his experiences and the lessons he learned from them.

Marcus shares what he calls “core lessons in business and life.” He makes it clear that lessons are easy to grasp but hard to put into action. Here are the lessons:

• Confidence – You won’t get anywhere if you don’t believe that you can “do it yourself.” You must be confident that you have the skills and abilities to accomplish any task or solve any problem. If you don’t have the skills, you can learn most of them without going to school.
• Teamwork – On the other hand, you don’t have to do hard things by yourself. Some people will help if you give them the opportunity.
• Full-time – You must be committed and determined to make whatever you’re pursuing work. Marcus says “[t]here is no such thing as part-time passion.”
• Risk taking – If you find a problem or need that isn’t being met, you must take big risks to meet the need or solve the problem. Consider taking the biggest risks when you’re young; there’s less downside.
• Failure – “Failure is the price you pay on your way to success.” Marcus describes his ninety-plus-year journey through life as "stumbling" fueled by optimism.
• Storytelling – Marcus considers this the most important lesson. You must be able to articulate what you’re doing and why it adds value in a compelling story that’s easy to understand.

I’m glad I found this book. I learned a lot about Marcus that I wasn’t aware of. He’s a driven person who’s had a significant impact as both an entrepreneur and a philanthropist.

After reading the book by Home Depot cofounder Ken Langone, I decided to go deeper on the other cofounders. Bernie Marcus was the CEO for many years, and I discovered that within the last few years, he wrote Kick Up Some Dust: Lessons on Thinking Big, Giving Back, and Doing It Yourself. Bernie is almost 95 years old, so I was curious about the wisdom he’d accumulated after almost a century. I ordered his book.

I’m not finished with the book yet, but so far as I can tell, Bernie has a strong personality and entrepreneurial fire inside him.

Bernie shared his thoughts on failure, and they got me thinking:

"I think how you respond to failure comes down to whether your fear is stronger than your passion. People driven by passion see setbacks as unpleasant, but inevitable challenges. What they know that quitters do not is that failure can be eaten in small pieces."

I never enjoyed failing when I was younger, but my mindset shifted when I started being entrepreneurial. I was passionate about what I was doing and driven to see it succeed. This meant I was trying a bunch of things and a lot of it didn’t work. But I noticed a pattern. Going through the things that didn’t work led me to the things that did work. Instead of looking at things via a success-or-failure construct, I began looking at them as either a success or a lesson that got me closer to success. Failures became expected. Many were still painful, but I focused on what I could learn from each failure instead of the pain.

Failure is part of life. As they say in baseball, nobody bats a thousand. Even the best players strike out at the plate. But a single strikeout doesn’t stop them from winning the World Series as long as they don’t give up and keep playing the game to the best of their ability.