CHAPTERS
- 0:00 – 3:19
Why Todd Graves and the Pat Riley "personal" mindset
David Senra explains why he admires Todd Graves, who founded a chicken-fingers-only chain over 30 years ago, owns over 90% of it, and has built it into a business worth at least $10 billion. He ties the episode to Charlie Munger's idea of finding a simple idea and taking it seriously, and to Pat Riley's line "It was personal to me."
- •Senra transcribed two main Graves interviews and worked through them like books
- •Graves founded Raising Cane's over 30 years ago and owns over 90%
- •Munger's "find a simple idea and take it seriously" frames the episode
- •Pat Riley's "It was personal to me" recurs through Graves's story
- 3:19 – 10:03
One Simple Menu, Speed, and Rockefeller's Drops of Solder
Graves has kept the same simple menu since day one, believing in doing one thing better than anyone else. Senra links his drive-through speed focus to Rockefeller's 39 drops of solder, his own podcast editing, In-N-Out's unchanged menu, and David Ogilvy's praise of sticking to one policy.
- •Graves says adding items would slow the drive-through and lower quality
- •A simple menu makes ordering faster, which matters across 800 stores
- •Graves removed a Snoop Dogg poster from the drive-through because it delayed orders
- •Rockefeller's solder test saved hundreds of thousands of dollars
- •Ogilvy described the obstinate determination needed to stick with one winning idea
- 10:03 – 16:11
A Bad Grade and a Chicken Finger Dream
Graves wrote the Raising Cane's plan as a college paper at LSU and got the worst grade in the class. Senra compares this to Fred Smith and Phil Knight, and notes that Graves's co-founder left after the second store because he didn't love the work the way Graves did.
- •Graves loves founders and urges that more of them keep control of their businesses
- •The plan earned the worst grade in the class
- •Fred Smith and Phil Knight also had college papers that were doubted
- •The co-founder left after the second store; Graves's card reads founder, CEO, fry cook, cashier
- •Senra cites Thiel and Jobs on compounding and loving the work
- 16:11 – 21:17
Rejected by Bankers and the In-N-Out Parallel
Graves went to banks with his plan and was told to work in the industry for ten years, with McDonald's cited as proof his concept would fail. Senra compares Graves to Harry Snyder of In-N-Out, who also kept a limited menu, controlled quality, was hands-on, and treated employees well.
- •Bankers rejected Graves because McDonald's was adding variety while he was doing the opposite
- •Graves knew his costs down to the apron and had done his research
- •Harry Snyder kept In-N-Out's menu barely changed since 1948 and made fries from fresh potatoes
- •Snyder was a hands-on micromanager who paid employees well
- •Graves's reaction to "no" was to want it even more
- 21:17 – 25:29
Boilermaking, Alaska Fishing, and Funding the First Store
To raise seed money, Graves worked as a boilermaker and then commercial fishing in Alaska. He also used credit cards, an SBA loan, and preferred shareholders including a fellow boilermaker and his bookie, though he says he wouldn't recommend all of it.
- •Boilermaking meant 95-hour weeks
- •He lived in a tent on the tundra before getting a boat job and saved about $50,000
- •He used credit cards and an SBA loan, and says he wouldn't recommend the credit cards
- •Early investors included Wild Bill and his bookie
- •The seed capital came from preferred shareholders plus the $50,000 SBA loan
- 25:29 – 28:55
Owning Your Business: Founders, Equity, and No Exit Strategy
Asked about other people's money, Graves says he puts in his own money and owns over 90% of his business. He argues that private equity dilutes founders and that big businesses need more founders. Senra connects this to Steve Jobs, Dietrich Mateschitz of Red Bull, Dyson, and Bloomberg, whose exit strategy was working until death.
- •Graves puts in his own money and owns over 90%
- •He says dilution takes the spirit out of entrepreneurs
- •He says there is a lack of founders in big restaurant businesses
- •Graves has no exit strategy and sees Cane's as a multi-generation business
- •Senra compares him to Mateschitz, Dyson, and Bloomberg
- 28:55 – 33:22
Growing from One Store to Seven with Creative Financing
Graves calls growing from one store to two the hardest stage, since he had no bench strength. He then expanded by converting failed double drive-through burger joints for about $100,000 each and funded it with subordinated debt notes from angel investors, which Senra compares to Daniel Ludwig's financing.
- •The first store ran late nights to catch the bar crowd
- •His partner left as the second store opened, and Graves says he was building the plane while flying it
- •He converted bankrupt double drive-throughs for about $100,000 each, reusing equipment
- •Angel investors put in subordinated debt with a guaranteed 15% return, which banks treated as equity
- •Senra compares this to Daniel Ludwig's two-name paper arrangement
- 33:22 – 38:12
Hurricane Katrina and the Pandemic
Leveraged across 28 restaurants, Graves lost cash flow when Katrina darkened 21 of them. He reopened first in the area and gained customers, but warns against over-leveraging. The pandemic then boosted the drive-through model, and Senra ties his fast decisions to having no board or shareholders.
- •21 of 28 restaurants went dark after Katrina and Graves says his dream almost died
- •He was the only restaurant open in the area for about 90 days
- •Graves says the lesson is not to over-leverage
- •Revenue grew from $1.5 billion in 2020 to $4.5 billion four years later
- •He answers only to crew and customers, echoing Bloomberg's "answering to no one"
- 38:12 – 44:55
Cane's Love, Culture, and Crafty Marketing
Graves treats his crew as his top priority, using positive reinforcement and a Cane's Love department to recognize them. His marketing is hands-on and includes a viral lottery pool for crew members and Post Malone collaboration restaurants paid for from the marketing budget.
- •Senra compares Graves's involvement in reels to Steve Jobs's hands-on approach to ads
- •Graves rejects negative reinforcement and has a department focused on respecting and rewarding crew
- •The crew lottery ticket idea cost about $100,000 and generated huge media coverage
- •Graves learned social media at 52 after handing out flyers in 1996
- •Post Malone's restaurants share profits and are treated as a marketing expense
- 44:55 – 48:01
Company-Owned Stores, Mission, and Unused Assets
Graves prefers company-owned stores to franchises because he wants control, and says it's personal to him. He sees himself as a missionary, encourages new entrepreneurs, and says offers of billions were never enticing. Senra adds the idea of using assets you aren't using, like youthful energy.
- •Graves avoids franchising to keep control and quality
- •Big corporations make financial decisions while founders make personal ones
- •He believes God made him good at chicken fingers to help people
- •He encourages entrepreneurs to open their own concepts
- •Senra's reminder: what assets do I have that I'm not using, such as youthful energy
- 48:01 – 52:27
Your Last Business, Location, and Patient Growth
Senra says he cares most about a founder's last business, since things compound in unpredictable ways. He cites the Times Square store, which did $22 million in its first year against a $6.5 million average, and compares Graves's growth from 600 to 800 stores to Sam Walton's slow start followed by fast growth.
- •The average store does about $6.5 million, second in the industry to Chick-fil-A
- •The Times Square store did $22 million in its first year
- •Graves approves every site, echoing Walt Disney on details
- •Sam Walton had one store in five years, then 105 in seven years
- •Sam Walton: extreme patience coupled with extreme intolerance for slowness
- 52:27 – 1:01:32
Ignoring Experts, Staying in the Details, and Family
Graves says staying true to one love, quality chicken fingers, is his top growth strategy, and he ignores experts who push trends like salads. He rejects the idea of delegating away the details. Senra compares him to Henry Ford and notes that Graves brings his kids into the business.
- •Graves says trying to be all things to all people means being nothing to anybody
- •Graves jokes his chicken sandwich is three fingers between two slices of bread
- •Henry Ford similarly dismissed experts who said the internal combustion engine couldn't compete
- •"Delegate? What kind of word is that?"
- •He brings his kids into the business to carry on its values
- 1:01:32 – 1:05:25
Fear, Purpose, and Never Giving Up
Graves says his greatest threat is a young person with his own fire who competes head-on, and he explains why he never sold. His advice is to answer honestly why you are here, which Senra links to Kobe Bryant on fear. Graves closes by urging fanatical commitment and never giving up.
- •Graves fears a young competitor with the same fire more than big corporations
- •He turned down private equity because he wanted to own and control the vision
- •He asks entrepreneurs to honestly answer what their purpose is
- •Kobe Bryant said the greatest fear we face is ourselves
- •Graves says never give up and be fanatical
