I had just finished my climb down from Mount Kilimanjaro’s summit, still processing the experience on the 4hr bus drive back to Arusha; the city centre. I started reading this book and couldn’t stop. I was reading and frantically highlighting every page.
As we were driving, the day was getting darker and I couldn’t read anymore. Undeterred, I pulled out my iPad where I had an eBook copy and kept reading, until I finished. At the hotel, my friend Gloria wanted to know what I was reading and highlighting so much.
Today, I would tell you about one of the greatest entrepreneurship books ever, written by one of the greatest entrepreneurs of the last century.
The book is Sam Walton Made in America My Story. It’s about the founding of the famous Walmart retail conglomerate and its eccentric founder Sam Walton, who was the richest man in the World. At the time of writing, Walmart was the biggest company globally with $50 billion in revenue and 400,000 employees. Today in 2024, Walmart has annual revenue of $642.6 billion and 2.2 million employees.
Diagnosed with bone cancer, aware of his impending mortality, Sam Walton captures his story in this book, painfully, and with urgency.
This book is set across 18 chapters, on 327 pages. It also features contribution from family members and Walmart management (highlighted in “”). I’ll highlight my takeaway from selected chapters.
Chapter 1 – Learning to Value a Dollar
In this chapter, Sam Walton focuses on his early years, and how he got into retail. He expands on how he learnt about the value of a dollar, and teaches his children these values by getting them involved in the business. Finally, he shows how this value is translated to Walmart and the need to save money for the customer.
Here are my key quotes:
I learned from a very early age that it was important for us kids to help provide for the home, to be contributors rather than just takers. In the process of course, we learned how much hard work it took to get your hands on a dollar, and that when you did, it was worth something.
What little we had at the time, we put into a partnership with our kids, which was later incorporated into Walton Enterprises. Over the years our Wal-mart stock has gone into that partnership. Then the board of Walton Enterprises, which is us the family, makes decisions on a consensus basis.
“It was great moneywise, but there was another aspect of it: the relationship that was established among the children and with the family. It developed their sense of responsibility toward one another. You just can’t beat that”.
So along comes Forbes in 1985 and says I’m the richest man in America. If you multiply the Wal-Mart stock price by how much we own, then maybe we are worth $20 or $25 billion, or whatever they say.
Helen and I own only 20 percent of our family’s total interest in Wal-Mart. For another, as long as I have anything to do with it – and I’m confident this attitude will last at least another generation – most of that Wal-Mart stock is staying right where it is. We don’t need the money. We don’t need to buy a yacht.
One of the real reasons I’m writing this book is so my grandchildren and great-grandchildren will read it years from now and know this: If you start any of that foolishness, I’ll come back and haunt you. So don’t even think about it.
Because we believe in the value of the dollar. We exist to provide value to our customers, which means that in addition to quality and service, we have to save them money. Every time Wal-Mart spends one dollar foolishly, it comes right out of our customers’ pockets. Every time we save them a dollar, that puts us one more step ahead of the competition – which is where we always plan to be.
Chapter 2 – Starting on a Dime
In this chapter, Sam Walton talks about the source of his drive, his self-belief to win, getting into retail, and how he founded Walmart.
Here are my key quotes:
Mother must have been a pretty special motivator, because I took her seriously when she told me I should always try to be the best I could at whatever I took on. So, I have always pursued everything I was interested in with a true passion – some would say obsession - to win. I’ve always held the bar pretty high for myself: I’ve set extremely high personal goals.
I’ve always had a strong bias for action – a trait that had been a big part of the Wal-Mart Story… It never occurred to me that I might lose; to me it was almost as if I had a right to win. Thinking like that often seems to turn into sort of a self-fulfilling prophecy.
I was about to become a college graduate. I was … really eager to get out in the world and make something of myself in a real job.
So I decided to cash in what chips I already had, and I was visited with two company recruiters who had come to the Missouri campus. Both of them made me job offers. I accepted the one from JC Penney; I turned down the one form Sears Roebuck. Now I realize the simple truth: I got into retailing because I was tired and I wanted a real job.
I found a champion in my store manager, Duncan Majors, a great motivator, who was proudest of having trained more Penney managers than anybody else in the country. He had his own techniques and was a very successful manager. His secret was that he worked us from six-thirty in the morning until seven or eight o’clock at night. All of us wanted to become managers like him. On Sunday when we weren’t working, we would go out to his house…and we would talk about retailing of course.... It was a seven-day job.
So, he bought his first store; a Ben Franklin franchise store.
I’ve always believed in goals, so I set myself one: I wanted my little Newport store to be the best, most profitable variety store in Arkansas within five years. I felt I had the talent to do it, that it could be done, and why not go for it?
It was a real blessing for me to be so green and ignorant, because it was from that experience that I learned a lesson which has stuck with me all through the years: you can learn from everybody. I didn’t just learn from reading every retail publication I could get my hands on, I probably learned the most from studying what John Dunham was doing across the street.
I learned a tremendous amount from running a store in the Ben Franklin franchise program. They had an excellent operating program for their independent stores, sort of a canned course in how to run a store…. At the very beginning, I went along and ran my store by their book because I really didn’t know any better. But it didn’t take me long to start experimenting.
By now, my five years in Newport were about up, and I had met my goal. That little Ben Franklin store was doing $250,000 in sales a year, and turning $30,000 to $40,000 a year in profit. It was the number-one Ben Franklin store – for sales or profit – not only in Arkansas, but in the whole six-state region.
Source: Walmart Museum
But Sam Walton made one crucial mistake:
In all my excitement at becoming Sam Walton, merchant, I had neglected to include a clause in my lease which gave me an option to renew after the first five years. My landlord, the department store owner, was so impressed with our Ben Franklin’s success that he decided not to renew our lease- at any price-knowing full well that we had nowhere else in town to move the store. He did offer to buy the franchise, fixtures, and inventory at a fair price; he wanted to give the store to his son. I had no alternative but to give it up.
It was the low point of my business life. I felt sick to my stomach…It really was like a nightmare. I had built the best variety store in the whole region and worked hard in the community – done everything right – and now I was being kicked out of town.
I’ve never been one to dwell on reverses, and I didn’t do so then…I’ve always thought of problems as challenges, and this one wasn’t any different…. But I didn’t dwell on my disappointment. The challenge at hand was simple enough to figure out: I had to pick myself up and get on with it, do it all over again, only even better this time. Helen and I started looking for a new town.
Chapter 3 – Bouncing Back
In this chapter, Sam Walton talks about starting his next store, growing by opening new stores, and searching for the next idea that would give him an advantage. It was discounting. He then proceeded to learn everything about it, and once he was ready, he opened the first Walmart store, at the age of 44.
There were so many insights in this chapter, but here are my key quotes:
I came out of that Newport experience with my pride a little damaged, but I had made money on the sale of the Ben Franklin – more than $50,000. The whole thing was probably a blessing. I had a chance for a brand-new start, and this time I knew what I was doing. Now, at the age of thirty-two, I was a full-fledged merchant; all I needed was a store… So, one day Helen’s father and I drove into Bentonville and had a look around the square. It was the smallest of the towns we considered, and it already had three variety stores, when one would have been enough. Still, I love competition, and it just struck me as the right place to prove I could do it all over again.
We found an old store willing to sell-Harrison’s Variety Store – but we needed to double its size, and to do that we had to get a ninety-nine-year leases for me… So, when Charlie and I laid out that store in Bentonville it became only the third self-service variety store in the whole country and the first in our eight-state area… The folks turned out, and they kept coming. Although we called it Walton’s Five and Dime, it was a Ben Franklin franchise, and that store took off just like Newport had and turned into a good business right away. It really was an A-1 store for these parts back then.
Right away I started looking around for store opportunities in other towns. Maybe it was just my itch to do more business, and maybe too, I didn’t want all my eggs in one basket again. By 1952 I had driven down to Fayetteville and found an old grocery store that Kroger was abandoning because it was falling apart.
“Two things about Sam Walton distinguish him from almost everyone else I know. First, he gets up every day bound and determined to improve something. Second, he is less afraid of being wrong than anyone I’ve ever known. And once he sees he’s wrong, he just shakes it off and heads in another direction.”
That whole period … was really very, very successful. In fifteen years’, time, we had become the largest independent variety store operator in the United States. But the business itself seemed a little limited. The volume was so little per store that it really didn’t amount to that much. I mean, after fifteen years – in 1960 we were only doing $1.4 million in fifteen stores. By now, you know me. I began looking around for whatever new idea would break us over into something with a little better payoff for all our efforts.
I began to hear talk of the early discounters – companies like Ann & Hope, whose founder, Marty Chase, is generally considered the father of discounting… So I started running all over the country, studying the concept from the mill stores in the East to California, where Sol Price started his FedMart in 1955.
By then, I knew the discount idea was the future. But I was used to franchising, and I liked the mind-set. I generally liked my experience with Ben Franklin, and I didn’t want to get involved in having to build a company with all that support apparatus. So first I went up to Butler Brothers in Chicago armed with my usual yellow legal pad full on notes and made a big pitch for them to back me in a discounting venture. I wanted them to be our wholesale arm, our merchandiser…But they weren’t interested.
We really had only two choices left: stay in the variety store business, which I knew was going to be hit hard by the discounting wave of the future, or open a discount store. Of course, I wasn’t about to sit there and become a target… Nobody wanted to gamble on that first Wal-Mart. I think Bud put in 3 percent, and Don Whitaker – whom I had hired to manage the store from a TG&Y store - put in 2 percent and I had to put up 95 percent of the dollars.
After years and years of studying the discount business and experimenting with it sort of half-heartedly, we were finally getting ready to jump into it, whole hog. On July 2, 1962, we finally opened Walmart No. 1, and not everybody was happy about it.
It’s true that I was forty-four when we opened our first Wal-Mart in 1962 but the store was totally an outgrowth of everything we’d been doing since Newport – another case of me being unable to leave well enough alone, another experiment. And like most other overnight successes, it was about twenty years in the making.
In every entrepreneurial story, it always seems like there is a moment where the entrepreneur can stick to the norm, or bet on themselves and take a different path. This was Sam Walton’s moment.
Chapter 4 – Swimming Upstream
In this chapter, Sam Walton expands on his journey on improving and experiment on his discounting store concept.
Here are my key quotes:
I knew we were on to something. I knew in my bones it was going to work. But at the time most folks – including my own brother, Bud - were pretty sceptical of the whole concept. They thought Wal-Mart was just another one of Sam Walton’s crazy ideas. It was totally unproven at the time, but it was really what we’d been doing all along: experimenting, trying to do something different, educating ourselves as to what was going on in the retail industry and trying to stay ahead of those trends.
I have always been driven to buck the system, to innovate, to take things beyond where they’ve been.
“I first met Sam in 1964, when I was in charge of data processing at Ben Franklin, and he was our biggest franchisee. He had already opened the Rogers Wal-Mart and he was up in Chicago trying to convince our officers to franchise his discount stores in small towns. They gave him a flat no. After the meeting he came back to see me and moved right on to the subject of computers. He wanted to know all about how we were using them, and how we were planning to use them. And he took everything I said down on this yellow legal pad”.
I can tell you this though: after a lifetime of swimming upstream, I am convinced that one of the real secrets to Wal-Mart’s phenomenal success has been that very tendency. Many of our best opportunities were created out of necessity. The things that we are forced to learn and do, because we started out underfinanced and undercapitalized in these remote, small communities, contributed mightily to the way we’ve grown as a company.
The first lesson we learned was that there was much, much more business out there in small-town America than anybody, including me, has ever dreamed of… We stuck with what we had learned in the variety store business about customer service and satisfaction guaranteed, but I have to admit that in those days we did not have anywhere near the emphasis on quality that we have today.
This first lesson is subtle but significant. In small-town America where the big retailers had neglected because the population was not big enough, Walmart found its opportunity.
This insight reminds me of Blue Oceans (developing uncontested market space) from Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne (read more here).
“Every great business is built around a secret that’s hidden from the outside.” – Zero to One by Peter Thiel.
Food for thought: What insight/blue ocean/secret is your business or product building upon?
Chapter 5 – Recruiting the Team
In this chapter, Sam contemplates on why several competitors have gone out of business, and how to better supply his stores through better distribution and communication.
Here are my key quotes:
I read in some trade publication not long ago that of the top 100 discounters who were in business in 1976, 76 of them have disappeared. Many of these started with more capital and visibility than we did, in larger cities with much greater opportunities. They were bright stars for a moment, and then they faded. I started thinking about what really brought them down, and why we kept going. It all boils down to not taking care of their customers, not minding their stores, not having folks in their stores with good attitudes, and that was because they never really even tried to take care of their own people. If you want the people in the stores to take care of the customers, you have to make sure you’re taking care of the people in the stores. That’s the most important single ingredient of Wal-Mart’s success.
“What we helped him with in the early days was really logistics. It’s like in the Army. You can move troops all over the world, but unless you have the capacity to supply them with ammunition and food, there’s no sense putting them out there. Sam understood that”. So, to service these store you have to have timely information: How much merchandise is in the store? What is it? What’s selling and what’s not? What is to be ordered, marked down, or replaced?”
“To get more technical, that helps you control what we call turn, or inventory turnover – the ratio of sales to inventory. That’s a key. The more you turn your inventory, the less capital is required. And all this involves getting the merchandise to the store at the right time, communicating how it’s being priced and how it’s being marked down… Without the computer, Sam Walton could not have done what he’s done”.
But I had another problem on my mind when I went up there: distribution. All these other guys, like Abe Marks, were in larger urban markets, and their stores were being supplied by big distributors…So here we were out in the sticks with nobody to distribute to our stores, which meant basically that our managers would order from salesmen and then some day or other a truck from somewhere would come along and drop off the merchandise.
A lot of our stores weren’t big enough to order from salesmen so we rented that old garage in downtown Bentonville as our warehouse. We would have big shipments delivered there, then unpack them and repack them into smaller quantities. Then we’d call the trucklines to come get them and take them to the stores.
We were forced to be ahead of our time in distribution and in communication because our stores were sitting out there in tiny little towns and we had to stay in touch and keep them supplied… Ron also took over distribution and began to build systems that would enable us to grow as fast as we could come up with the money.
By the late sixties, we were really well positioned for serious growth. We had a retail concept we believed it, the core of a professional management team, and the foundations of systems which would support growth.
Their necessity forced Walmart to be innovative, putting in place the required system for rapid growth in the future.
Chapter 9 – Meeting the Competition
In this chapter, Sam talks about how proactively meeting the competition made Walmart a better and more efficient company.
Here are my key quotes:
We decided that instead of avoiding our competitors, or waiting for them to come to us, we would meet them head-on. It was one of the smartest strategic decisions we ever made…Our competitors have honed and sharpened us to an edge we wouldn’t have without them. We wouldn’t be nearly as good as we are today without Kmart, and they would admit that we’ve made them a better retailer. One reason Sears fell so far off the pace is that they wouldn’t admit for the longest time that Wal-Mart and Kmart were their real competition. They ignored both of us, and we both blew right by them.
Our fifty-plus Wal-Marts and eleven variety stores were doing about $80 million a year in sales compared to Kmart’s five hundred stores doing more than $3 billion a year. But Kmart had interested me ever since the first store went up in 1962. I was in their stores constantly because they were the laboratory, and they were better than we were. I spent a heck of a lot of my time wandering through their stores talking to their people and trying to figure out how they did things.
The more efficient Kmart, Target, Wal-Mart, and some of the regionals became, and the more we bumped into each other in competitive situations, the more we were able to lower prices.
Two years later, in 1979, with about 230 stores on the street, we hit a billion dollars in sales for the first time. Of all the milestones we ever reached that one probably impressed me the most … But I couldn’t see any logic in stopping there, and right about then another acquisition opportunity came our way.
But once we figured out how to handle it, the acquisition put us in a great position for growth. We exploded from that point on, almost always opening 100 new stores a year, and more than 150 in some years. I think the Kuhn’s deal gave us a new confidence that we could conquer anything
A lot of folks in my position would have been perfectly content with the situation as it stood in 1984. Our 640 Wal-marts were earning almost $200 million a year on sales of more than $4.5 billion. We were still growing like wildfire.
Chapter 15 – Thinking Small
In this chapter, Sam talks about how Walmart has grown to become the biggest retailer by thinking small (e.g. thinking one store at a time, communicating constantly, keeping an ear to the ground etc.), and applying all the lessons learnt from each store across the company.
Here are my key quotes:
An awful lot of water has washed over the dam since 1945, when we bought that little Front Street store in Newport, but almost every single thing we learned, every basic principle we applied in building that store up into a respectable business, still applies to our company today.
I always wanted to be the best retailer in the world, not necessarily the biggest…. Here’s the point: the bigger Wal-Mart gets, the more essential it is that we think small. Because that’s exactly how we have become a huge corporation – by not acting like one.
Chapter 17 – Running a successful company: Ten Rules that worked for me
In this chapter, Sam talks about the ten rules that he applied to build his company. I like the final rule that advises you to ignore all these rules and swim upstream.
Here are my favourite ones:
Rule 1: Commit to your business. Believe in it more than anybody else. If you love your work, you’ll be out there every day trying to do it the best you possibly can, and pretty soon everybody around will catch the passion form you – like a fever.
Rule 4: COMMUNICATE everything you possibly can to your partners. The more they know, the more they’ll understand. The more they understand, the more they’ll care. Once they care, there’s no stopping them. … Information is power, and the gain you get from empowering your associates more than offsets the risk of informing your competitors.
Rule 7: LISTEN to everybody in your company. And figure out ways to get them talking. The folks on the front lines - the ones who actually talk to the customer - are the only ones who really know what’s going on out there. You’d better find out what they know. This really is what total quality is all about. To push responsibility down in your organization, and to force good ideas to bubble up within it, you must listen to what your associates are trying to tell you.
Rule 8: EXCEED your customer’s expectations. If you do, they’ll come back over and over. Give them what they want - and a little more. Let them know you appreciate them. Make good on all your mistakes, and don’t make excuses – apologize.
Rule 9: CONTROL your expenses better than your competition. This is where you can always find the competitive advantage. For twenty-five years running – long before Wal-Mart was known as the nation’s largest retailer - we ranked number one in our industry for the lowest ratio of expenses to sales. You can make a lot of different mistakes and still recover if you run an efficient operation.
Rule 10: Swim upstream. Go the other way. Ignore the conventional wisdom. If everybody else is doing it one way, there’s a good chance you can find your niche by going in exactly the opposite direction. But be prepared for a lot of folks to wave you down and tell you you’re headed the wrong way.
Those are some pretty ordinary rules, some would say even simplistic. The hard part, the real challenge, is to constantly figure out ways to execute them. You can’t just keep doing what works one time, because everything around you is always changing. To succeed, you have to stay out in front of that change.
Chapter 18 – Wanting to leave a Legacy
In this concluding chapter, Sam reflects on his life, career choice, and leaving a legacy.
Here are my key quotes:
I’m really sick these days, and I guess when you get older, and illness catches up with you, you naturally turn just a little bit philosophical – especially late at night when you can’t sleep and your mind is turning everything over and over trying to take stock of where you’ve been and what you’ve done. The truth is that if I hadn’t gotten sick, I doubt I would have written this book, or taken the time to try to sort my life out… Temperamentally, I’m much too biased toward action to undertake such a sedentary project. But since I have, I’m going to go all the way and try to share with you how I feel about some things that seem important to me.
By now, it’s probably clear to you that I’ve devoted most of my life to Wal-Mart - starting it, growing it, and always refining the concept of this whole phenomenon…. While a lot of people were working away at jobs they might not have particularly enjoyed, I was having the time of my life.
Lately I’ve wondered if I should feel bad about having been so wholly committed to Wal-Mart… Am I really leaving behind something on this earth that I can be proud of having accomplished or does it somehow lack meaning to me now that I’m facing the ultimate challenge?
Here’s how I look at it: my life has been a trade-off. If I wanted to reach the goals, I set for myself, I had to get at it and stay at it every day. I had to think about it all the time.
Everybody has their role to play. The thing is, I am absolutely convinced that the only way we can improve one another’s quality of life … is through what we call free enterprise – practiced correctly and morally.
A lot of folks ask me two related questions all the time. The first one is could a Wal-Mart-type story still occur in this day and age? My answer is of course it could happen again. Somewhere out there right now there’s someone – probably hundreds of thousands of someone’s – with good enough ideas to go all the way. It will be done again, over and over, providing that someone wants it badly enough do what it takes to get there. It’s all matter of attitude and the capacity to constantly study and question the management of the business.
How prophetic this final statement would be. One of those who would study this book and go on to found a Walmart type company was Jeff Bezos; founder of Amazon.
Today in 2024, Amazon is worth over $1.88 trillion. In his later competition with Walmart, Jeff Bezos would show up to meetings with his highlighted copy of this book.
Presidential Medal of Freedom
On March 17,1992, Sam Walton received America’s highest civilian honour: the Presidential Medal of Freedom. Less than three weeks later, Sam Walton died on April 5, 1992.
Closing Thoughts
I recommend Sam Walton Made in America My Story. In 327 pages, it captures the entrepreneur’s journey - from a vision, to a company, and then to a successful global company. But it also shows much more.
It is also the story of everyone – finding a career path after school, working and making the best of it every day, and having fun along the way. It is about self-development, and chasing a dream.
I hope this review inspires you to read the book, but also to find something you care about and go after it every day. Good luck and bye for now.
“With the possible exception of Henry Ford, Sam Walton is the entrepreneur of the century” - Tom Peters, Author, In Search of Excellence
Bonus
Still reading? Here is a 6-part dramatized podcast series on Walmart vs Target, from one of my favourite podcasts: Business Wars.
Enjoy!
Nero
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