By Dom Serafini
This is the story of a small grocery store owner in Boston who prospered enough to send his firstborn to an elite business school. The old man, a Greek immigrant, started as a street vendor, opening his first store with enormous sacrifices, using street smarts, pragmatism (a fancy word for his down-to-earth nature) and life experience. He knew that in order to make a profit, he had to buy wholesale merchandise at $1 and sell it for $5, in order to cover all his expenses. He learned that if a competitor across the street was selling the same product for $4, the secret was to keep his store clean, comfortable and welcoming, in order to maintain his profit margin.
When his competitor (the one across the street) added to the lower price the same service and cleanliness, he started to advertise; first by having his wife embroider a sales sign (it looked better than a hand-painted sign), with offers of a gadget costing 50¢. This way, by keeping the price at $5, he’d still be making 50¢ more than the competitor.
Through ingenuity and hard work, the grocer was able to grow and expand his business into a small supermarket. Meanwhile his son was ready to go to school for something that his father always wanted for him: a Masters in Business Administration (MBA
His son’s conception could be a story unto itself: He was born after the grocer opened his store. The grocer had met a local girl while he was peddling his goods with a cart. The girl didn’t see much prospect in that line of business and tried to persuade him to accept a much more secure job with the local post office that her father, a deputy sheriff, could get for him
But the young and resourceful street vendor had other expectations in life and was willing to risk security for success in another field, for which he had more passion
The girl, however, did not share his passion and eagerness to take risks and, most importantly, was not willing to sacrifice her youth to help him build something she considered a dream. So they parted ways
It was only once the street vendor became a grocer with clear prospects for growth that the girl, fresh from some dull experiences with “more secure suitors,” came back to him with the promise of embracing his dreams. And one of his dreams was to send their first-born to B-school
And so, after stellar years at high school and four years at a state university, the firstborn was sent, without a scholarship — with a bank loan taken out by his father — to one of the country’s best business schools: Stanford University (in 2005 tuition reached $41,340 per year!).
Throughout the university years, the son would explain to his father some of the business techniques in which he was being trained. For example, he would tell him about the entertainment business: “The MBAs’ traditional modus operandi in that field is to load a company with debt, slash costs, and squeeze as much money out of it as they can, then sell it.”
Not yet fully trained, he would candidly admit, though, that, “Yes, this is short-term thinking being applied to a business with long-term challenges, considering that it takes at least five years just to get a movie onto screens,” but the goal here is to make money as an end unto itself.
Not once, however, during his MBA courses would he criticize or negatively comment on his father’s business practices, even though it was clearly his father’s innermost wish to hear his comments –– hoping to bring new ideas into his business (the so-called “thinking outside the box”) and to validate the old man’s business instincts.
It was only when the son graduated with a job already waiting in the wings, that he began lecturing his father about his “outdated” (i.e. old-fashioned) business practices. At first, to play devil’s advocate more than to show contempt, the old man would point out that, after all, busy as he was with school, his son had never learned about the grocery business. At which point the son would quickly reply that: “The world’s best minds trained us to run any business. We don’t have to know or understand how they work. We use formulas, models, charts… . And I can tell you, if you don’t start cutting costs by reducing your workforce, slashing advertising, finding cheaper outsourced services –– like cleaning services –– and looking for better wholesale deals, you’ll be out of business in six months.”
So the grocer took the free advice from his son, who, in the meanwhile, became one of the studios’ top-level executives. After a year, the grocer was interviewed by a local paper –– eager to report on a native son’s successes in Hollywood –– and he was quoted as saying: “My son, an MBA, told me to do certain things or I would not be in business within six months. I followed his advice and, as he originally predicted, I went out of business in exactly six months.”