Building on Bedrock: What Sam Walton, Walt Disney, and Other Great Self-Made Entrepreneurs Can Teach Us about Building Valuable Companies

Walmart today is know for its size and ubiquity, But, on the day of its second store opening, it was known for watermelons, free donkey rides, and great deals. Derek Lidow begins his new book, Building on Bedrock, telling the story of that second location opening—complete with watermelons bursting in 90-degree heat, donkey dung, and throngs of people happily snapping up merchandise amidst it all. He uses the story to illustrate an essential truth about building a company:

Sam [Walton], like other entrepreneurs you will meet in these pages, provides a useful corrective to what we think we know about starting a business. Yes, Walmart is now one of the most valuable companies in the world, but it didn't get that way overnight, and its success didn't depend on "network effects" or venture capital. It depended on some hard and humble truths about entrepreneurship that have gotten lost amid all the publicity about a few young Silicon Valley billionaires—truths that would-be entrepreneurs and their loves ones ignore at their peril.

Walmart today relies on a sophisticated global supply chain. Leading up to that second opening, Sam Walton relied on local farmers, from whom he bought every watermelon within a day's drive and had them stack up four feet high in front of the store. 

Lidow focuses on what he calls bedrock entrepreneurs, because they are "the 99.5 percent of all entrepreneurs who create more than 90 percent of all new wealth." High-risk entrepreneurs may provide good fodder for the business press, but Lidow believes they are poor role models for most entrepreneurs, and the fact that they garner the most attention gives aspiring entrepreneurs an unrealistic view of how to create companies. 

Unfortunately, most of what is written about entrepreneurship is misleading or wrong. Worse, our fascination with high-risk entrepreneurs can lead us to make faulty decisions that result either in failure or missed opportunity. Our fascination has encouraged more entrepreneurs to undertake risks not commensurate with the economic or social value delivered—risks taken for the purpose of setting valuation records rather than bettering the lives of others. These risks can lead to behaviors that are unethical or asocial—their sole purpose can be to increase valuations at the expense of the public. Only by becoming better educated about entrepreneurship can our fascination be refocused on the bedrock entrepreneurs that are essential to our happiness and well-being.

Not only that, but "Entrepreneurship as measured by how many new companies are created each year and also by the number of people considering starting a company is in long-term decline." These numbers belie the idea that we are in a golden age of entrepreneurship, and Lidow lays the blame for that, in part, at the feet of the hype machine for high-risk, fast-growth entrepreneurship. And yet, statistics show that "Over 60 percent of working men and women in the US want to start their own business." What they need are more realistic role models for the kinds of businesses they want to build, and some guidance on whether doing so is the right decision for them. That is exactly what Lidow provides in Building on Bedrock, exploding myths about entrepreneurship like watermelons in the heat along the way. He opens a more honest conversation about what it takes and what it costs to start your own business, and points the way toward more ethical entrepreneurship in the process.

If you'd like to get a head start on exploring these topics, you can read about The Truth of Entrepreneurship—a piece Derek penned for ChangeThis.