Hedgehogs and the Importance of Experience

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What does a craft beer bar in Vegas have in common with a great IT service company?

A deep understanding that the most important thing you deliver is an “experience.”

One of the coolest lessons emerging from Jim Collins’s work is the Hedgehog concept.  According to ancient fables, “the fox knows many things, but the hedgehog knows one big thing.”  Unlike the fox who runs all around, eating everything he can, wandering and defending a wide territory, the hedgehog depends on one food source, defends a small territory, and doesn’t wander.

The hedgehog of your business is the nexus between what you love, what you’re awesome at doing, and what can make you money.

While traveling to a conference recently we came across a pretty cool SMB: The Sin City Brewing Company.  I love finding real life examples of a hedgehog in action.

The kernel of Collins’s wisdom is simple; find the thing you’re great at and stick to it –that’s one of the key ingredients to a great business.  When your hedgehog requires discipline, principled sacrifice, and a maniacal focus on quality and customer experience – that’s when you’ve probably got a story to tell.  Treat your team well too?  Now that’s a company worth learning about.

I’m not an extremely adventurous beer guy – Jay and other Wepz love exploring ales, lagers, and stouts. I learn from them. What I do know is that in an industry overrun with competition, brand positioning, and a growing base of connoisseurs who know stuff about beer – the craft beer standouts are gems.  Sin City is doing something right.

Their founder is a guy named Rich Johnson, he’s been brewing beer under the Sin City banner for about 10 years. They are only 13 people, and they only serve their beer in 3 boutique locations on the Las Vegas strip.  They are autonomous and courageous; they don’t piggyback on someone else’s branding. You can’t drink Sin City beer at someone else’s bar. They don’t even bottle their beer. They don’t distribute their beer.  They brew it, they bring it to their own spots, and their great people serve it to people who like beer.  Simple.  I love it.

Talk about a true hedgehog: they do one thing well – they provide a great beer experience.

Their staff is encouraged to give samples, chat with curious guests (not just transact), and let beer folks enjoy their beer.  We chatted with Heather and Rachel on the Sin City team for a while to learn about their business.   And to learn about how some bars and restaurants get it all wrong.  The lesson for our industry is obvious.

Heather spent 15 years working for a great restaurant and bar in Las Vegas – and then some big corporation took over.  They corroded the culture of a spot that had happy staff and loyal customers.  They shifted focus from quality of food and service to a focus on efficiency and revenue. Track everything.  No free samples. Waitresses don’t need benefits – that’s casual labour.  One night Heather got fed up with being treated like a servant rather than a server.  And now she’s happy again, working for Rich Johnson at Sin City Brewing.

We asked her frankly, what’s the biggest difference between the old crummy spot and Sin City?  Without hesitation she said “that’s easy … the focus on customer experience rather than numbers.”  What a great answer from great people working for a great little company. Keep it small and hands on. Their culture is simple and easy going.  Make good beer, let curious people try beer and make ‘em happy. The money will come.

Think about the big public cloud providers.

They achieve the economies of scale they do (and price cheaply) because they’ve built basic, homogenous, cookie-cutter systems that by their very nature are only about the numbers, not the experience. You have to adapt your business to fit their offering. Take it or leave it. There is a reason they call you a ‘customer’ and not a client.

What kind of business partner do you want?

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