The Secret of Success.
May 4, 2020 6 min read
Everything I know — from empathy to the principles of making money — I learned by following in the footsteps of my late father, Ted Cohen. We spoke for hours every day. He was, and always will be, my best friend, advisor and biggest advocate. A successful glassware importer with an impeccable work ethic, my father never missed a day on the job. If he were here today, he’d be worried about the millions of unemployed and struggling businesses across the country. The warehouse workers, drivers, construction workers and small-business owners — those are the people he respected most. Looking back on his life and influence, the following five principles he showed me were critical to my success building Chewy.com and investing.
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Watch your expenses
Disciplined capital allocation is one of the most important skills for running a successful business. Thanks to my father, I had the privilege of learning this firsthand. He kept track of every expense —his power bills, daily gasoline prices that impacted transportation costs, the individual prices of hundreds of glassware products that he sold. My father also kept tabs on Chewy’s metrics. He memorized the key performance indicators in both of our businesses.
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At Chewy, we had maniacal discipline when it came to how we spent money. The company-wide culture of frugality came from his example. Free cash flow was our unwavering governor of growth. We grew Chewy from $200 million in sales in 2013 to $3.5 billion in 2018 while spending only $130 million in capital, all of which went into opening distribution centers across the country and acquiring new customers.
Delight your customers
My father always repeated this quote from his own father: “If you take a carload of this (pointing to a pallet of glassware) you’ll make more money. But if you take a carload of that (pointing to a different pallet), you’ll make less money, but you’ll keep the customer. So, take a carload of that.”
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When we started Chewy in 2011, selling pet food online wasn’t a novel idea. The field was crowded with competitors, including Amazon. But our mission was to delight customers in a more personal way. We believed combining the experience of the neighborhood pet store with the convenience of shopping online was a key differentiator. The focus was fast shipping, competitive pricing and providing customers with a hyper-specialized experience. My father showed me how building lifelong relationships with customers was far more valuable than optimizing for short-term profits.
Be the person others want to follow
My father led by example, but not in a deliberate way. It’s who he was. He never patronized anyone. He admired the blue-collar worker. I watched him roll up his sleeves and help his employees move shipments of glassware from trucks into the warehouse, then put his suit jacket back on, shirt drenched in sweat, and do administrative work. I’ve never seen anyone work harder.
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I was fortunate to find employees at Chewy who worked relentlessly to grow the company from a three-person operation to a household brand with more than 10,000 employees. We didn’t disrupt the pet industry by accident. Our team made huge sacrifices. We opened our first fulfillment center in early 2014, and everything from the warehouse management system to the Wi-Fi would constantly break down. The team worked 16-hour days for weeks until our supply chain was humming. Everyone from the fulfillment staff to the directors and executives were committed to Chewy’s success. You don’t get that level of dedication by leading through fear. My father always said, “You catch more bees with honey than with vinegar.”
Take the long view
My father was never looking to make a quick buck. He had no interest in material possessions. Every year, through thick and thin, he invested his savings into the stock market. He believed the real money was made through time in the market, not timing the market. When I was 13, he gave me a chart comparing real estate to stock market returns since the 1920s. Real estate annualized returns were around 4 percent, and the stock market was around 9 percent. It didn’t take long for me to figure out which I preferred. I’ve been investing ever since. My father never invested in any fancy funds or paid management fees. He bought blue chip companies and held them forever. His 20-year annualized stock returns were over 10 percent. He never borrowed money or paid interest.
As we scaled Chewy, many advised us to slow down and raise prices. We disagreed. Key to our success was obsessing over customers and market leadership. Over the long term, customers and profits intersect.
Trust yourself
Entrepreneurs don’t operate with a handbook. My father taught me how to be independent and trust my own moral compass. He encouraged me to separate myself from the herd and think critically. When I told him I had no desire to go to college, he shrugged. Whether he agreed with my decisions or not, he supported me unconditionally. Letting me make my own decisions sowed the seeds for me to become an entrepreneur. The confidence to never compromise my vision of building Chewy into the largest pet retailer came from knowing if I failed, he would always love me.
For 45 years, he was the first employee to open his office and last one to leave. He showed me how perseverance and discipline ultimately pay off. Not only was his work ethic unmatched, so was his commitment to family. He gave me unconditional love and showed me how to be a father. Above all, he taught me that the best decisions come from heart, instincts and empathy.
Dad, I will forever be grateful.
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02
The secret to Don Shula's success? He regularly reinvented his coaching style to fit his players
You get the feeling that had Don Shula still been coaching in the 2010s, he’d have adopted the spread offense and his teams would have used run-pass options as well as anyone else.
Shula died at the age of 90, and at the heart of his legacy was longevity. He is still the NFL’s all-time leader in wins. He was a head coach for 33 years, and had just two losing seasons.
You’ll hear a coach talk about an identity. A coach’s ego is often tied to his system. Shula’s identity was his players.
You can’t last from 1963 to 1995 — with winning records in his first and last seasons — without reinventing yourself. And nobody reinvented himself more often, and with a more wide-ranging resume of success, than Shula.
Don Shula won in different ways
In 1972 and 1973, the Miami Dolphins went 6-0 in the playoffs and won two Super Bowls. Here were the passing attempts in each of those six games for Shula’s quarterbacks: 13, 16, 11, 18, 6, 7. In those games, the Dolphins had a quarterback pass for over 100 yards just once. In winning the AFC championship game and Super Bowl VIII, Bob Griese’s combined stats were 9-of-13 for 107 yards and no touchdowns.
Considering those were Shula’s two Super Bowl championship teams, you’d think he would coach that way the rest of his career. It’s human nature: You have great success with something, you stick with it.
Then Shula drafted Dan Marino in 1983. Under Shula’s watch, Marino threw for 5,084 yards and 48 touchdowns, setting records that stood for a long time. It’s still one of the most iconic seasons in NFL history. Miami won the AFC and moved on to Super Bowl XIX, losing to a great San Francisco 49ers team there.
The coach who won two Super Bowls with his teams averaging fewer than 12 passing attempts per game in the postseason was the same coach who oversaw the great Marino average 36.5 attempts per game from 1984-86. Marino was first-team All-Pro all three seasons.
“I've been accused of being a conservative, ‘grind'em-out’ kind of coach, because that was the style of my teams in 1972-73,” Shula told The New York Times Magazine in 1985. “But I point out that when I was at Baltimore, and Johnny Unitas was my quarterback, we used to have a wide-open, explosive passing attack.
“And when I came down to Miami, I didn't try to jam the Unitas style down the throat of Bob Griese, who was a different kind of quarterback, nor did I try to force the Griese style on Marino when he came along.”
That seems so simple. Get the most out of your best players. But there are plenty of coaches who are inflexible with their schemes. Shula wouldn’t have been great for more than three decades if he didn’t adjust.
Miami Dolphins quarterback Dan Marino confers with coach Don Shula on the sidelines during Super Bowl XIX. (AP Photo)
MoreShula kept changing his approach
Shula had a simple philosophy: Put players in the best position to succeed. He had that approach even when he was 33 years old, taking over the Baltimore Colts with an established star quarterback in Unitas.
“What he did in his first year,” Unitas told the Hartford Courant in 1993, “which was very smart of him, was not to come in with a new system and force everybody to change. [Shula] made the adjustment to the offense we had.”
In 1968, with Earl Morrall at quarterback, the Colts rode a great defense to a 13-1 record. That team was one of the most dominant in NFL history but is best known for being upset by the New York Jets in Super Bowl III.
In the early 1970s, with a trio of great running backs, the Dolphins won consecutive titles barely passing the ball. When the game was changing in the 1980s, Marino landed with Shula and became the NFL’s all-time leading passer. Marino and Shula were together for 13 seasons and had one losing record.
Shula was constantly evolving.
“To me, that's what coaching is all about,” Shula told the Hartford Courant. “It's getting the most out of the players you have, not trying to jam your system down their throat. The quarterbacks position is a perfect example. Unitas had his own style. Bob Griese was very different from Unitas, and Dan Marino, they were all different players and different personalities. You have to try to adjust to get the most out of their talents.”
Story continues
“Society changes and Don changed with it,” Griese told The Sporting News in 1996. “But I would have to think that things might have been a little more fun for him before life got more complex. One of his gifts, though, was he never looked back and worried about the past. He was always moving on, looking at the future and how he could win.”
Shula’s Hall of Fame legacy can be summed up in many ways: the record number of wins, two Super Bowl titles, having a winning season in his first and 33rd seasons as a head coach. But all of that can be traced back to Shula making sure his teams focused on the players, not his scheme or style. That’s the sign of a great coach, and not many were greater than Shula.
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03
The not-so-secret sauce of New Zealand's success
Unlike most other world leaders, New Zealand Prime Minister Jacinda Ardern has generally avoided war metaphors in uniting her country against COVID-19. She tends not to refer to the coronavirus as “the enemy” or her fellow citizens as “soldiers.” Instead, she speaks of a “team of 5 million,” the population of her nation. When asked if she was afraid of the virus, she responded, “No. Because we have a plan.”
On Monday, that “plan” resulted in Ms. Ardern announcing that New Zealand had effectively eliminated the virus, reducing the number of known cases to single digits. Instead of a war image, she used the language of a tsunami: “We have stopped a wave of devastation.” Her government, in fact, has relied on a phone alert system for tsunamis to send out messages during this crisis.
Early on, New Zealand took swift, strict, and decisive steps, such as closing its borders to foreigners by March 19. Perhaps just as effective was the tone of her language. The prime minister rarely framed the pandemic in military terms, which can cause fear and panic by evoking images of violence and “the other.”
Ms. Ardern focused on the mental well-being of her citizens as much as elimination of the virus. She encouraged people to contact new mothers, for example, to lessen their isolation. Special apps were provided to deal with mental health.
She asked people to “be kind” in uniting against COVID-19 as they were forced to stay at home. She cut government salaries to help create a closeness between officials and idled workers. She suggested people rely on the “creative, practical, country-minded” culture of New Zealand.
She brought humor to her role, such as telling children that the Easter Bunny and the tooth fairy were “essential workers.” She was open and transparent, not secretive like a military commander.
Her metaphors were those that inspired selflessness during the necessary self-isolation. The country’s efforts, wrote the Weekend Herald newspaper, will be remembered for “the acts of humanity which rose to the occasion.”
The “vicious virus has sparked a revival of kindness,” the paper added. “Watch out, it’s contagious.”
For sure, other leaders around the world have used a similar approach. For instance, Norwegian Prime Minister Erna Solberg went on television to talk directly to children, who perhaps easily pick up the fears of adults.
Something like this approach was made famous in the 19th century by Florence Nightingale. In her many reforms of the nursing profession, she advised that nurses deal as much with a patient’s feelings of apprehension and uncertainty as a disease. She wrote:
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“Remember, he is face to face with his enemy all the time, internally wrestling with him, having long imaginary conversations with him. You are thinking of something else. ‘Rid him of his adversary quickly’ is a first rule with the sick.”
When faced with biological threats, leaders must be careful in using metaphors of war, Lisa Keranen, a medical rhetorician, told Vox news. Such images make us “focus on fighting and not on caring.” New Zealand’s initial success against COVID-19 may prove the point. Kindness, starting at the top, can be a mental vaccine for an entire country.
