The GSA hadn’t turned out to be so tough because we found someone bigger whom they were afraid of to put them in their place. This is how the world works. Once you get really big, you become just a part of the pecking order. You’ve got to knuckle under to forces more powerful than you if you want to keep your position. The GSA was also one of the most incompetent competitors we’d ever faced. They were much too big and bureaucratic to respond to us. Years later, other private publishers moved into our market and gave us more of a run for our money. The GSA, though, was never able to respond.
Many people, years later, likened IDT’s fight with AT&T to the struggle of David versus Goliath. Everyone was surprised David won, but as in the original struggle, Goliath never had a chance. He was big and lumbering and had to do whatever his Philistine commander told him to do. David, on the other hand, was small, quick, smart, and had complete freedom of action. Goliath probably never saw the stone coming.
In our fight with AT&T we used everything we had against them. This time, we were able to get direct access to the White House. It was really like being up against the GSA all over again. We had a much superior product at a much lower price, and our competitor’s only recourse was to try to have our activities declared illegal. The amazing thing is that people went right on placing their bets with Goliath. Maybe if they read the Bible instead of the business pages, they could get a better return on their investments.
When I thought about it, the GSA did have a point, and it would be useful to us. Part of the reason our book was such a success is that it seemed “official.” Were there any other industries with large numbers of suppliers and the need for an “official” directory? Dozens of possibilities occurred to me. The most appealing was to start an official directory to cater to the Japanese tourism industry, which had suddenly sprung into prominence, sending close to ten million travelers a year overseas. Why, if I just opened a Tokyo “headquarters” office and put out a Japanese-language directory, tourism-oriented businesses around the world would soon be advertising with me. Sure enough, in no time at all the Japanese directory had surpassed our military book in revenues. What a great formula. I could hardly wait to start the next publication.
A key to success is not always having dozens of ideas, but always exploiting the few truly good ones you do have in every place they can be applied. Like McDonald’s, if you find a formula that works in one locale, try to apply it around the world. In order to do this you have to really examine your business and try to find the key ingredient that makes it work. In the mail-order business, for instance, it wasn’t that people wanted to buy Venus’s-flytraps; they liked the idea of a plant with a story. Realizing this enabled us to sell a whole variety of “pet plants” and bonsai trees for years rather than having just one hot item. Similarly, in the brochure business, we were always looking for new places like military bases to distribute, rather than just handling hotels.
Many businesses often contain successful formulas that, if exploited in other areas, would let them grow really large. Often, the very entrepreneurs who came up with the business don’t recognize these formulas as a template on which more can be built. Often, the entrepreneur is simply overwhelmed just taking care of what he’s already created. Sure, it’s a great idea to turn your single successful hamburger stand into the McDonald’s chain. But guess who didn’t? The McDonalds themselves. These two brothers were so overwhelmed flipping burgers and making shakes they couldn’t even think of expanding. To do so they’d have had to build an organization. Instead, they sold out to Ray Kroc. He built the organization and he made the fortune.
