Raising the Bar
We've got a fun assignment this week: Reading Raising the Bar, by Gary Erickson, founder of Clif Bar and Co. And it's an assignment for my finance class. Is that cool or what?
The book is subtitled "Integrity and Passion in Life and Business," and is a mix of Gary's personal story and the company story of Clif Bar. He's a fascinating guy-- one of those hard-core adventure enthusiasts who has climbed mountains the world over, done bike treks through Europe, and generally sucked the marrow from life. He loves food, wine, good company, living light, and trying new things. Like starting an energy bar company, for instance.
It's a very old theme, but Erickson employs it pretty well: Using the "path" and "sports" analogies for business. He devotes much time to explaining the difference between the "Red Road"-- the straight-line, profit-focused behavior of average companies-- and the "White Road"-- the more whimsical path of companies like Clif Bar. It's about enjoying the journey, not just driving for the destination. You get the picture. He also gives sports analogies like not training too hard, but still staying in shape as a reference to companies' alternation of expansion and internal reflection. Go all out, but take a break now and then.
A central theme is his decision NOT to sell the company in 2000, just moments before he signed the dotted line. We don't find out the mystery suitor, but we find out lots about Gary's personal vision for Clif Bar and why he just couldn't sell it despite the reward of $60 million for doing so. This, by the way, is why the book is appropriate for our finance class-- there is lots of information (presented in plain English) about Gary's options for financing the company, and why he made the choices he did. It's not an easy game getting the funds needed to run a company: Debt or equity are the only options and both have a bitter side. Gary has actually managed to keep Clif Bar 100% private and nearly self-financed, starting with a few thousand of his own money. That alone is worth a deep bow of respect.
The book has a wandering, blog-like style, very much the "white road" that Erickson glorifies (and personifies). I'd love to meet him, actually.
On a personal note, my buying behavior matches well with the book. I loved Clif Bars when they came out in the mid-90s exactly because they were a tastier alternative to PowerBars (the poor taste of which were Gary's "epiphany" that led him to start the company). But something happened around 1999-2000, and I thought Clif Bars didn't taste very good. Many alternatives were available then, and I barely bothered with Clif (I think I mostly ate Balance Bars). Then things got better a few years ago, and I especially noticed that Clif bars contained organic ingredients and NO high-fructose corn syrup or sugar. Plus, the taste was improved! I am now a devoted Clif and Luna consumer.
This parallels the company's path. 1999-2000 was around the time everything was blowing up. Gary thought he would sell, and then when he didn't, he had problems with his partner and had to seek emergency funding to be able to buy her out. He neglected running the company, and it took a couple years to straighten things out. Finally, in 2003, the company switched to organic ingredients and started to get its act together again. This is about the time I started buying again. It's as if I somehow sensed the "mojo" of Clif and was repelled during those dark years.
One more note: When Clif Bar was about to launch the Luna product line (bars targeted specifically to the preferences of women), they were told that they were insane to forgo half their market (men). Clif projected sales of $1.5 million for the first year of Luna. In reality, they did $10 million, and it wasn't long before Luna bars brought in MORE revenue than standard Clif bars. Notice that no one criticizes companies for forgoing half their market (women) when they explicitly make products for 18-29-year-old men. When will people realize that women control a LOT of money in this economy, and we are not a "niche market"?
Rock on, Clif. I am a loyal customer.
The book is subtitled "Integrity and Passion in Life and Business," and is a mix of Gary's personal story and the company story of Clif Bar. He's a fascinating guy-- one of those hard-core adventure enthusiasts who has climbed mountains the world over, done bike treks through Europe, and generally sucked the marrow from life. He loves food, wine, good company, living light, and trying new things. Like starting an energy bar company, for instance.
It's a very old theme, but Erickson employs it pretty well: Using the "path" and "sports" analogies for business. He devotes much time to explaining the difference between the "Red Road"-- the straight-line, profit-focused behavior of average companies-- and the "White Road"-- the more whimsical path of companies like Clif Bar. It's about enjoying the journey, not just driving for the destination. You get the picture. He also gives sports analogies like not training too hard, but still staying in shape as a reference to companies' alternation of expansion and internal reflection. Go all out, but take a break now and then.
A central theme is his decision NOT to sell the company in 2000, just moments before he signed the dotted line. We don't find out the mystery suitor, but we find out lots about Gary's personal vision for Clif Bar and why he just couldn't sell it despite the reward of $60 million for doing so. This, by the way, is why the book is appropriate for our finance class-- there is lots of information (presented in plain English) about Gary's options for financing the company, and why he made the choices he did. It's not an easy game getting the funds needed to run a company: Debt or equity are the only options and both have a bitter side. Gary has actually managed to keep Clif Bar 100% private and nearly self-financed, starting with a few thousand of his own money. That alone is worth a deep bow of respect.
The book has a wandering, blog-like style, very much the "white road" that Erickson glorifies (and personifies). I'd love to meet him, actually.
On a personal note, my buying behavior matches well with the book. I loved Clif Bars when they came out in the mid-90s exactly because they were a tastier alternative to PowerBars (the poor taste of which were Gary's "epiphany" that led him to start the company). But something happened around 1999-2000, and I thought Clif Bars didn't taste very good. Many alternatives were available then, and I barely bothered with Clif (I think I mostly ate Balance Bars). Then things got better a few years ago, and I especially noticed that Clif bars contained organic ingredients and NO high-fructose corn syrup or sugar. Plus, the taste was improved! I am now a devoted Clif and Luna consumer.
This parallels the company's path. 1999-2000 was around the time everything was blowing up. Gary thought he would sell, and then when he didn't, he had problems with his partner and had to seek emergency funding to be able to buy her out. He neglected running the company, and it took a couple years to straighten things out. Finally, in 2003, the company switched to organic ingredients and started to get its act together again. This is about the time I started buying again. It's as if I somehow sensed the "mojo" of Clif and was repelled during those dark years.
One more note: When Clif Bar was about to launch the Luna product line (bars targeted specifically to the preferences of women), they were told that they were insane to forgo half their market (men). Clif projected sales of $1.5 million for the first year of Luna. In reality, they did $10 million, and it wasn't long before Luna bars brought in MORE revenue than standard Clif bars. Notice that no one criticizes companies for forgoing half their market (women) when they explicitly make products for 18-29-year-old men. When will people realize that women control a LOT of money in this economy, and we are not a "niche market"?
Rock on, Clif. I am a loyal customer.
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