Todd Graves and His $10 Billion Chicken Finger Dream

1. 0:00 – 3:19

   Why Todd Graves and the Pat Riley "personal" mindset

   1. DSDavid Senra0:00

      Since I study dead entrepreneurs for a living, I get the question, like, out of the living entrepreneurs, who do you most admire? And a lot of the people on the list would be familiar to you. But I found when I mentioned that one of the living entrepreneurs that I most admire is this guy named Todd Graves, people, first of all, haven't heard of him, and they're even more surprised when I said, "Well, Todd Graves founded this quick service restaurant that serves only chicken fingers over 30 years ago. He owns over 90% of it, and the business, his business is worth at least $10 billion." And I think Todd is a great example of one of my favorite ideas I hear from Charlie Munger of find a simple idea and take it seriously. And so I didn't know who Todd Graves was, 'cause there's no books written about him, uh, until I saw a clip a few years ago, and then I watched every interview I could find with him. And so for this episode, what I did is there's two main interviews that he, he gave. I transcribed them, and then I went through the transcri- t- the transcripts, just like I do for the books. But there is... My, my fascination with this person is sometimes you can find... You, you hear somebody say, express an idea or a perspective or a philosophy, and it could be, like, in a sentence or two, and you're immediately like, "Yes, I feel that way, too." Uh, this happened with Pat Riley, you know, the legendary coach and, a- an NBA executive. And I was listening to, uh, an interview with him many years ago, and he was asked, "Why is winning insatiable?" You know, Pat is in his 70s, and he's still pushing it every day. He's still working very hard. He's still determined to win. And he said, "I hated to lose. I always thought that there'd be severe consequences if I lost. It was personal to me." I'm gonna pause there. Remember that line, "It was personal to me." Todd's gonna repeat that over and over and over again. I like how serious he takes his business. I feel the same way, just like I feel exactly, identify exactly with the way Todd is building Raising Cane's, with the way that Pat Riley's still approaching his career, you know, five decades into it. And then he cont- and then, uh, the follow-up question in this interview with Pat Riley was, "But how could you feel that way?" And as soon as I heard this, this is how I know I'm eventually gonna do an episode on Pat, too, 'cause it's like I felt, I feel this way, too. He goes, "I just did. I felt that way since the day I came out of my mother's womb. I felt that I wasn't going to let anybody take anything from me that I worked hard to get." You are gonna see a lot of similarities between that short excerpt from an interview with Pat Riley for the, what we're gonna go through with Todd Graves. I'm gonna start, I'm gonna go kind of in, in order, uh, Todd's career, but I do wanna start with the one clip that I saw that made, that piqued my interest. As soon as I heard that, I sat up. I was like, "Wait, wait, wait." I- I've seen this before once. Todd has a lot in common, as we'll see, with a lot of history's greatest founders. But also, you see this idea over and over again, where you can have a lot of success. Charlie Munger has this great line, something to the effect of, uh, oftentimes in the winning, uh, we find the winning system in business goes ridiculously far, minimizing and/or maximizing one or a few variables, and he used Costco as, as an example. And so the clip that I saw was Todd saying, you know, he has this very simple menu, the same menu that he's had since day one. He had all these people tell him before he started the business, in the early years of the business to this day, "What you're doing is not gonna work. Your menu's too simple. You need to follow the trends. You need to do what your competitors are doing." And he just so stubbornly believes in doing one thing and doing it the best you can.

2. 3:19 – 10:03

   One Simple Menu, Speed, and Rockefeller's Drops of Solder

   1. DSDavid Senra3:19

      So he says, "I've always believed in doing one thing and doing it better than anybody else. If you do what you do well and consistently do it great, your customers will come back. And so if I added different things," meaning to the menu, if I overcomplicated things, if I made things... He, he believes in this, like, w- this beautiful simplicity that I identify with. "So if I add different things, I wouldn't be as quick in the drive-through. If I added all these things, my quality would go down, my speed would go down, and it wouldn't be our concept. Adding different things and losing focus would lose why we're special." And so it's not just, hey, if I narrow the focus, if I limit the amount of details that my business has and then perfect every single detail, I will create the greatest product in my category, which he has obviously done. But it's also he understands how everything he does relates to the entire system. So this idea, it's like, well, if I have a more simple menu, one, that makes my product better, 'cause I can really focus on that, right? But it means that people come through the drive-through or come into the store, and because they're... You have four things. You go into Raising Cane's, right? You're like, "Do you want three chicken fingers? Do you want four, or do you want six?" It makes... You can order faster. And so why is that important? May not make a difference when you have one or two stores if you save 15, 30 seconds e- for each order. But it makes a hell of a difference, right, when you have 800 stores like he does today. And so he continues this, and I didn't see this. That's where the clip ended, and then he, he continues adding to this. He goes, "So we even try to limit distracting things in the drive-through." So he does a lot of, like, charity work. There's a lot of celebrities. He has this, like... Raising Cane's has a cult-like following. It's very much like In-N-Out, and I'm gonna draw the analogy of In-N-Out over and over again today, 'cause it's just like, oh, this is like Harry Snyder, the founder of In-N-I- In-N-Out, is reincarnated, and his name is Todd Graves. And so there's this, this show that he was doing that was helping restaurants with Snoop Dogg. And so he's like, "Oh, let's, let's advertise the show. We'll put it in the drive-through, and so there's a picture of me and Snoop Dogg." He's like, "Wait a minute." That the problem was even putting that poster, people sit there for, like, an extra five or 10 seconds and look at this. And he's like, "Wait, wait, we gotta rethink this, because we got 20 cars behind that guy that is sitting there taking an extra 10 or 15 seconds and delaying his order because he's looking at this picture of Snoop Dogg. That actually is not serving my goal, which is to get the best food, the highest quality meals unbelievably fast." There's a couple things that immediately, you know, popped to my mind, because anytime I'm reading about anybody, as you already know, it's like I'm not thinking about just what Todd Graves is telling us or what he's trying to teach you and I. I'm thinking is like, who else, who, how, who else does this relate to? And so there's this great exchange that happens in this biography of Rockefeller called Titan, which is the most famous biography of Rockefeller, right? And it, it's a perfect example of this. And so Rockefeller was, uh, as obsessed with With the efficiency of every single aspect of his business, just like Todd Graves is. And so he's going, walking around, uh, at th- this refinery, and he's seeing that one of his employees, they're soldering the, like, closing these cans of one of the byproducts that, that they're, they're, they're selling from refining oil. And so he goes up to him, Rockefeller goes up to him, he goes, "Hey, how many drops of solder do you use on each can?" And the guy says, "40." And Rockefeller goes, "Have you ever tried 38?" And the guy said no. He goes, "Would you mind having some sealed with 38 and let me know?" When 38 drops were applied, a small percentage of cans leaked. So they try again. They try 39. At 39 drops of solder, none leaked. Hence, 39 drops of solder became the new standard instituted at all Standard Oil refineries. Now, this is where Rockefeller, Rockefeller's smiling. He's talking about this in his retirement. He's telling the story after he retired. That one drop of solder saved $2,500 in the first year, but the export business kept on increasing after that, and doubled, and quadrupled, and became immensely greater than it was. And that savings has gone steadily along, one drop on each can, and has amounted since to many hundreds of thousands of dollars of savings. I feel the same way about Todd Graves. If he's clipping 15, 30 sec- 30 seconds off of each order when he has one store, that's, you know, not as important, but it's very important. Think about the time saved when he has 800 stores. This guy's gonna have thousands of stores. I do the same thing. So I'm one of the very few podcasters, because I go out and, and, and talk to all these other podcasters that still insist on editing his own podcast. And you, I... Th- the idea and the reason I think this is important is because I'm completely obsessed about save- not wa- not wasting a second of your time. So I will go back through, and I will literally clip a second, and people think this is a, a, a bit, a bit ridiculous. My point is, like, let's say a million people listen to that episode over the life of that episode, okay? I didn't... That means I didn't take out a second. I did the math the other day. I think it's like I took, for every second I c- I'm able to cut that's a waste of time, I save 244 hours. It's the same exact thinking that Todd Graves is applying to the speed of his drive-thru, that Rockefeller is applying to how many drops of solder on an individual can in one of the... He had like a thousand byproducts [laughs] that he was selling. And then the second thing that came to my mind when he talks about, you know, "This isn't our concept. I'm just gonna do one thing, I'm gonna do it great, I'm gonna do that, that same thing forever." And the guy's had the same menu for 30 years. If you go and look at In-N-Out's menu, it's barely changed. In-N-Out was founded, like, 1948. And so I think of what David Ogilvy said, because he noticed this, not, uh... People, uh, they're so... It's ca- it's hu- in human nature to, like, constantly wanna jump around and be distracted. And in David Ogilvy's case, he's watching all of these businesses have, like, these great ads that they pull. And so he noticed, he's like, the, the, the people that had the most success is they'd find a winning promise for their product, right? And they would run that same ad and build ads around that same pro- promise for decades. And this is what David Ogilvy said about this, which I feel, you know, David died. He, he didn't know what Raising Cane's was. But I feel like he would describe exactly what Todd is doing with his business. This is what David Ogilvy said: "What guts it takes, what obstinate determination to stick to one coherent, creative policy year after year in the face of all the pressure to come up with something new every six months." That is David, David Ogilvy talking about a winning idea could work for decades. So that's what really drew my attention to him. I've been studying this guy for a few years, and I realized the reason I needed to do this episode for you, because it comes up in conversation, like, every week. And I was like, now I just wanna be like, "Hey, you wanna know what this guy's about? Go listen to, you know, episode 383," or whatever episode number it's gonna be. So I'm gonna go through, I organized all my notes and highlights, and I try to put it in a chronological order as much as I can. So he's gonna talk about the fact that this early experience he had before he started Raising Cane's.

3. 10:03 – 16:11

   A Bad Grade and a Chicken Finger Dream

   1. DSDavid Senra10:03

      He says, "I grew up working in restaurants and bars in high school and college, and before that, I was the kid that did the lemonade stand in the neighborhood. I was always entrepreneurial." Another thing that I identify and I love about Todd Graves, he loves founders. He talks about it over and over again, "We need more founders. Stop selling your goddamn business. We need more founders to retain control of their business and to actually give a damn about what they're doing." I absolutely love this. He says, "Raising Cane's was a college business plan, and so for business planning class, me and my partner wrote a paper," and they wrote a paper about [laughs] starting a quick service restaurant that only sells chicken fingers, and he was doing this at LSU. The first Raising Cane's was actually opened, uh, around, at I think, the northern gates of LSU. Writes the paper. What happens? We get the worst grade in the class. Okay, we've seen this over and over again. It's amazing. There is a rather big indictment, right? Where you get a bad grade for this idea that winds up being worth, you know, 10, $10 billion. Well, this is not the first time we saw this. Fred Smith, I don't know how much FedEx is worth today, but it's a lot, right? He writes a paper that he's gonna start FedEx. He wrote the paper in college. His business professor gave him a C. Phil Knight, founder of Nike, same thing. He talks about this in his great autobiography, in Shoe Dog. He says, "Being a business buff, I knew that Japanese cameras had made deep cuts into the camera market, which had once been dominated by the Germans." At the time that, that Phil Knight starts Nike, the Germans are dominating running shoes. So he takes that idea, that one idea that happened in another industry, it's like, "I wonder if that would work in this industry. So I argued in this paper that I made, uh, that Japanese running shoes might do the same thing. That idea interested me, and it inspired me, and then it captivated me. It seemed so obvious to me, so simple, so potentially huge." And so he gives this presentation. He talks about, "They greeted my passion and intensity with labored sighs and vacant stares." So again, from Graves and Cane's, FedEx, Nike, I would not be discouraged at all if you're telling p- other people or you're writing [laughs] you're in business school and you're writing papers about this, this business you want to start, and people are like, "This sucks. This idea is terrible." Just like, well, that's what they said to Todd Graves, they said it to Fred Smith, and they said it to Phil Knight, and they were wrong. Now, this is what I al- also absolutely love about Todd Graves is everybody's telling him that this is a stupid idea, and he goes, "If you tell me I can't do something," his immediate reaction is, "Let me show you I'm going to do it." And so he t- he hinted there the fact that when he started Raising Cane's, he had a co-founder. He had a partner, and this partner is going to actually leave after the second store, and that's one thing that Todd repeats a, a bunch. The fact that, you know, he's just... You should set up your business to actually the activity of your business you actually love to do. The co-founder did not love the business like Todd. He did not have a chicken finger dream. This is, again, I think some people would even think, you know, this is a bit ridiculous. You're saying you're living a chicken finger dream. This guy's completely obsessed with chicken fingers. It's not ridiculous to me, because it make-- I see it over and over and over again, because I went through this, like, when I said I wanted to start a podcast on the books I read. You know, I had some of my closest friends saying, "This is the stupidest idea. Like, no one's gonna listen. This isn't gonna work." And so the partner sells out after a second one, okay? And Todd explains this. It makes perfect sense to Todd why his partner quit and he didn't. He goes, "He wasn't a fry cook cashier." So to this day, that's the way Todd describes himself. He says his business card says, "Founder, CEO, fry cook, cashier." He likes working drive-throughs. He likes making chicken fingers. He likes working the fry line. He goes, "It didn't make my partner happy, but I love working drive-throughs. I like working fry lines. It's what I love," which is important. I tell all these young entrepreneurs, I tell these students now, "Whatever you get into, make sure it's something you like to do. Make sure it's something you're passionate about, because if not, you won't be successful at it. Work comes down to a grind. But if you love it, then you'll always be happy doing it." And more importantly, what he doesn't say but is implied, you'll do it for a long time. Okay? So Raising Cane's is growing faster now, 30 years into the business, than it has ever grown before, and I've seen this over and over again because it's in all these biographies over and over again. In fact, uh, there's a great line in Peter Thiel's book, "Zero to One," where he talks about this. And he mentioned this phenomenon, the fact that, you know, you can... I- if a concept's working, it actually will grow faster many decades into the future than it will at the beginning, which is surprising to a lot of people. Peter mentions this, that, you know, with respect to technology companies, but I've seen it in all kinds of businesses. And so Peter said, "The vast majority of a tech company's value will come from profits it'll generate in the future, 10, 20, or 30 years out." That is also true with Raising Cane's, and that's why, a- again, I think the implication there is, like, if you love to do it, like, you're never gonna stop doing it, therefore you'll never interrupt the compounding. Steve Jobs had a great line about this. He says, you know, "People say you have a lot of passion for what you're doing, and it's totally true. And the reason is because it's so hard that if you don't love it, any rational person would give up because they're sane." That is exactly what... Todd Graves expressed the exact same opinion of St- as Steve Jobs in this interview. And this is something that Todd repeats over and over again, that giving up was never an option. Selling was never an option. This guy has turned down billions and billions of dollars, and says later on that he never even thought about taking the money for a second. So I wanna get into, he writes this, this paper, okay? So how do you go from writing the paper to getting the money? Uh, he- he's a 23-year-old kid when he has this, this idea. He's like, "I'm actually gonna do this for real." This is really important because you're gonna see a lot of parallels between him and Harry Snyder, which I'll get to, the founder of In-N-Out. So he's like, "Okay, I, I need money to open up my first spot. I thought, you know, I was, I was turning into a businessman, so I go and I buy some cheap suit. I go to Office Depot. I buy a briefcase, okay? I br- [chuckles] I put the business plan that I got a bad grade on in the, in the briefcase, and I come down and I talk to these bankers, because I'm gonna get a... Obviously, I'm gonna get a loan about this chicken finger dream I had." He repeats that line over and over again, "I'm living a chicken finger dream." He says, "The banks were nice enough, but every one of them was like, 'Hey, man, you might wanna work in the industry for 10 years. You might wanna do this. You might wanna do that. You're not in a position for us to lend you money.' Once again, I'm hearing 'No, no, no,' and that made me wanna do it even more."

4. 16:11 – 21:17

   Rejected by Bankers and the In-N-Out Parallel

   1. DSDavid Senra16:11

      And so what... One thing that Todd is, shares in common with a lot of the great founders that you and I study is, like, they know their, their business from A to Z. They know their business cold. And he was telling them, "Listen, I knew how much, I knew down to how much, like, each apron was gonna cost me. I had done my research." And the problem is he had all these people saying that he hadn't done his research because you just came up with a chicken finger only concept. And they said, "You didn't do your research because McDonald's is adding all this variety and all these different things, and you're doing the opposite." But I knew doing one thing and doing it better than anybody else would always pay off. And so, uh, it might be a little ridiculous, but I was kind of induced into a state of rage when I'm hearing this because first of all, I hate other people going around telling young entrepreneurs that your idea won't work. Like, you don't know. You have no idea. How the hell could you even think that you would be able to predict what would work, right? But they're like, "Oh, you know, you didn't do your research. Uh, obviously you don't know anything about this industry you're gonna wanna work in. We're not gonna lend you money because look what McDonald's is doing." Okay? So there was a, there's a historical equivalent. At the time that Todd Graves is trying to raise money for Raising Cane's, there's already a historical equivalent on the West Coast dominating, creating a cult-like following. The exact approach that, that Todd Graves was using is the one that Harry Snyder started back in the '40s with In-N-Out. So I, I pulled all this, uh, I have an AI assistant that reads all of my notes, highlights, and, and transcripts, and I use it constantly to, like, remind myself of the stuff, you know, that we're learning on this podcast, because I'm eight years in. I'm gonna be, like, 400 biographies written or read by the end of the year. Like, it's impossible to remember all this. And so I just pulled, I was like, "Give me all the best ideas from Harry Snyder of In-N-Out," because I know I've seen this before. And so I'm just gonna pull out some chunks that I'm reading to you about Harry Snyder. This is not about Harry Snyder. It is about Todd Graves and, and, and implied in that is it could also be about me and you. And so it says, uh, "While other chains constantly expanded their menus, Harry maintained a famously limited menu. This menu has been barely changed since the company's founding in 1948." That is exactly... That, this sounds like Todd Graves. Harry was fanatical about quality. Todd is the same way, refusing to follow industry trends. This is exactly what the bankers are getting wrong. They didn't even understand that Todd was right, and you could just point to In-N-Out. It's like, well, I don't know, this guy did the same thing. Why wouldn't that work? Uh, Harry was fanatical about quality, refusing to follow industry trends towards cheaper ingredients and mass production techniques. When competitors switched to frozen beef patties, right, the, the trend in Harry's industry, Harry hired In-N-Out's first butcher to maintain control over product quality. While other chains adopted fro- frozen french fries, In-N-Out continued making theirs by hand from fresh potatoes that were often picked in the morning and delivered in the same evening. Harry's leadership was hands-on to the extreme degree. Dude, [laughs] I'm, I'm, I'm like, I got tears in my eyes, sorry. Later on, because I hear the same thing, the, uh, the, remember this later on when, um, when, when Todd, everybody tells him, he's like, "You need to delegate." And Todd is, one of my favorite parts of any interview he's ever done, he goes, "Delegate? What kind of word is that?" He is so obsessed with details. I feel the same way. So it says, "Harry's leadership was hands-on to an extreme degree. He was described as a micromanager before the term existed, keeping scrupulous records of daily operation. His work ethic was relentless." Every single one of these lines I went through and made sure that if I'm talking to you about Harry Snyder, that it's also true for Todd Graves. He was always the first person in the shop in the morning, inspecting ingredients and ensuring everything ran to his exacting specifications. Even when at home, he would watch the restaurant through his living room window and sprint across the street to pitch in when needed. Todd lived in an apartment behind the first Raising Canes. Harry also believed in treating employees well. This is something Todd's gonna repeat over and over again. We're, me and you, me and you were gonna talk about this a bunch today. When California's minimum wage was 65 cents an hour, Harry paid a dollar an hour plus a free hamburger per shift. This approach fostered remarkable loyalty. Many employees who started as potato peelers stayed at the company for decades. That is pretty incredible. All of this sounds exactly like Todd Graves' approach to building Raising Cane's. So again, if you want to learn more about, uh, Harry Snyder, the, it's, the episode I did on him is episode 244. It's one of my favorite stories because again, it's like find a simple idea and take it very seriously. So this is where I get, you know, this is what kind of m-made me upset. You know, I'm glad, it, I don't think you could stop Todd. Todd is like the Terminator anyways. This guy's, you know, has superhuman levels of determination. But this just like arrogance of these like older bankers telling this kid like, "Oh yeah, you know, obviously, like it can't work because McDonald's isn't doing this." It just really pisses me off. And so good thing is Todd talks about, he's like, you know, he was born determined. He's like, uh, that determination was always there. The determination he always had, it was there since he was a kid, and he says, "And it really paid off later in a big way when I wanted to start this dream." So think about where we are in the story. People telling him, "Your plan sucks. We're not gonna lend you money. Your menu is wrong." And then shortly after, you know, he gets going, his co-founder quits on him. So he's like, "All right, they're not gonna lend me money. I, I'm on a dream. I'm determined. How am I gonna raise money?"

5. 21:17 – 25:29

   Boilermaking, Alaska Fishing, and Funding the First Store

   1. DSDavid Senra21:17

      So he hears the jo- about two different jobs. The first job is a boilermaker, and so these refineries will pay you insane amount of money because let's say one of their refineries go down, they need maintenance work or repair work, they need that back every day that that refinery's not up. You know, they're losing a ton of money. So these boilermakers go and they travel around, and then they just do shift work, and he says, you know, "You're working 95 hours a week. You work for five or six weeks straight, but you make so much money because they want that job done fast." And he's around like a bunch of roughnecks. You know, imagine who are boilermakers. And his, they, they notice his work ethic. He was, he wouldn't shut up about this chicken finger dream. And so h-his fellow boilermakers, a guy named Wild Bill, [chuckles] told him, he's like, "Hey, in the summer, you can make money commercial fishing in Alaska." And so like, you know, probably a decade and a half ago, I used to, I watched a few episodes of this show called, uh, I think it's called Deadliest Catch. So I didn't know that [laughs] this is what Todd Graves was doing. And so they're like, "Go up to Alaska and, you know, you work on a boat for 30 days, for 60 days, and you can just make $25,000 or $50,000." And there's also a funny thing that, you know, he never raised, uh, outside equity after this, and some of the boilermakers, like Wild Bill, one of the few like angel investors that would put in money to Raising Canes, and then he also said that he raised money from his bookie. [laughs] And he goes, "'Cause his bookie could pay him in cash." And it was just originally for, he says, "It was just originally for the investment in the first restaurant, but then I rolled them into a small percentage into the overall company." So he doesn't talk about the percentages that Wild Bill has or his bookie has, but it just brought a smile to my face, and I just love the idea, like what if, what if like his bookie or Wild Bill, this boilermaker, somehow fig- you know, had 5% of Raising Canes, which would be worth [chuckles] like a couple hundred million. I just love the idea, like this boilermaker or his book- or Todd's bookie could have like, you know, $100 million of Raising Cane stock just 'cause he believed in his chicken finger dream. So he saves up a bunch of money from boilermaking. He's like, "Okay, I'm gonna listen to Wild Bill. I'm gonna go up to Alaska." And he says, "I was doing this when I was 23 years old, so I could live very cheaply. So literally, before I got my job in Alaska, I spent a month living in a tent on the tundra," because you got to w- talk your way into getting on a boat. And so I'd be eating pork and beans and ramen noodles every day and just spending as little as you can. This is a great example of this thing that you and I see over and over again in these biographies of these great entrepreneurs. How bad do you want it? They will do, just to get their dream going, they will go to great lengths to do that. The idea that you're willing to work 95-hour weeks in a, in a, you know, very tough environment as a boilermaker. Now, you're literally risking your life on a boat, uh, you know, o-off the coast of Alaska. So he spends the summer commercial fishing in Alaska, and he says, "People were dying out there. You're working 20-hour days. You're sleeping an hour here or there." So imagine a kid on a chicken finger dream on the back of this boat. National Geographic's going out here to film this madness. Medical hel-helicopters are taking people out. You're hearing so and so boat just had a death, and you're filling up the boat with fish. Waves are crashing over the side. You're scared. "But I was there for that chicken finger dream." Dream. So he saved up, uh, I think about $50,000. I loved how honest he was. He's like, "Listen, I did a lot of things that were really stupid and really risky, and just because it worked out for me, I would not recommend you do it, you do it." And so he says, "This is something I would not recommend, but I was young and dumb, and back then you could get a bunch of credit cards. I got as many credit cards as I could, and they were like 18, 23%, and I lived off credit cards. I was young, and I had nothing to lose, but I don't think that's a great strategy." So he's got credit cards backing him up. He's got the money he saved, then he goes and gets an SBA loan. He says, "I used all these people and these services that are set up by our government, SBA, small business development center, Service Corps of Retired Executives. I talked to everybody that I thought was smart in business to get advice on how to raise money for this. So I raised my own money. I got the preferred shareholder money," that's what he's talking about, the, the money Wild Bill gave him, the Wild- the money that his bookie gave him, and then he got a $50,000 SBA loan, "And that was the seed capital that I needed to start the first restaurant."

6. 25:29 – 28:55

   Owning Your Business: Founders, Equity, and No Exit Strategy

   1. DSDavid Senra25:29

      So in... While he's telling this story, one of the people interviewing him, uh, asked him, "You know, we have a lot of different entrepreneurs on the show. Some say you should use, you should always do OPM, which is other people's money. Some founders say, 'No, no, no, use as much of your own money as possible.'" And so it's like, "How do you think about this?" And I think by now y- you're gonna know how Todd thinks about it. And, uh, he goes, "I'm the latter. I put all of my own money in, uh, and go full speed. So I own over 90% of my business. It is a multi-billion dollar business, and we're continuing to grow over 30%. It is very rare that I meet someone that owns that large a percentage of a business when you talk about businesses that are worth multi-billions of dollars. Uh, and I think some of these private equity people come in, and they tell these entrepreneurs, 'This is what you need to do. You could take money off the table now because you never know if someone's gonna stop coming and buying your product.' And then these entrepreneurs get whittled down so low, they get diluted so much. And for me, that takes a lot of your own spirit out because you're making money for people that just put cash in. But that's the easy part. You making your brand successful is hard, man. You live it every day. You do this stuff, and then these people get bewildered." He's talking about these entrepreneurs. "They eventually just sell out. We have a lack of founders in big businesses, especially in the restaurant business. When I was a kid, these businesses were run by their founders. Founders care about their people. They care about their customers. They care, they care, they care." And then I also think this is why, if you just look at the product he's putting out, the marketing that he does, the financial performance he has, he's smoking everybody because he's competing against non-founders. They're just... And he'll talk about, like, you know, later on, he's asked, like, "What is the biggest threat to your business?" Like, "Who are you worried about?" And I promise you, his answer when we get there is not, "Oh, I'm worried about McDonald's," where the founder's been dead for decades. He's just not worried about that. And so that's another thing he pr- pr- he preaches, like, we need more founders. Founder-led businesses are just better businesses. Um, and so this leads to the idea, you know, something I always talk about, it's like, if you truly love what you do and you're working on your best ideas, like, your exit strategy should be death. That is your exit strategy. Steve Jobs worked until he died. Charlie Munger worked till he died. Coco Chanel till she died. Enzo Ferrari. All these people over and over again, their, their w- the exit strategy was death. And so his whole thing was, "People are always asking me, 'Hey, man, what's your exit strategy?' I don't have one. This is a multi-generation business. I wouldn't sell. People need to have a higher risk tolerance because if you're an entrepreneur, that's just what you do. My risk tolerance was very, very high. But try to keep as much equity as you can because this is yours." So when I get to that section, remind me of Dietrich Mateschitz, founder of Red Bull. Reminds me of James Dyson, founder of Dyson, still owns 100% of his business. Reminds me of Michael Bloomberg, still owns 100% of Bloomberg. If you think of the, the founder of Red Bull, who just passed away recently, that's one of my favorite episodes I've ever done, episode 333. There was no biographies in English about Dietrich Mateschitz, so we, we had to translate one from German, uh, to do that episode. But he owned f- uh, him and his partner, so he owned 49%, and his other, his partner owned 49%. They were paying themselves, like, five... The dividends every year were between 500 and 800 million a year, and then they were turning down offers. His 49% would be worth at least $20 billion he could've taken off the table if he sold, and he just absolutely refused. He's like, "I don't wanna take the company public. I'm never selling it." And now, um, just like Todd, Todd wants to pass the business on to his, his kids. It's exactly what Dietrich did. Dietrich's so- passed his part of the business on to his son.

7. 28:55 – 33:22

   Growing from One Store to Seven with Creative Financing

   1. DSDavid Senra28:55

      Go, let's go back to he's got the money. The first one takes a while to get it up, but it's starting to cash flow. A lot of the businesses think you're, it's right next to a college. You're going out on a Friday or T- a Thursday or a Saturday, having a little drink. So he, the main business for Raising Cane's at the very beginning was that, like, late night business, and I think they'd stay o- open till, like, 3:00 in the morning, and Todd wouldn't get out of there till, like, 5:00 in the morning. But he was talking about the hardest part of growing the business is not going from, you know, 700 to 800. It was going from one to two, because he didn't know what he was doing, and he didn't have any help. "The hardest growth for me was from one store to two, the first restaurant to the second restaurant. I didn't do it the right way because I didn't have a lot of bench strength or management in my business. I lived at that restaurant. We were open seven days a week, most nights until 3:00 AM after th- we had to stay open till after the bars closed. I would get out of there at 5:00 AM, then I would turn right around the next morning and do it all over again. I, I didn't really know how to develop other leaders." And so this is the time when they open the second restaurant, that's when his partner's like, "Hey, I gotta get out of here." And so the way that Todd describes this part, making a lot of mistakes, he's like, "I was trying to build a plane while I was flying it." And his whole point, the advice that he gives to other entrepreneurs, is like, "You're gonna make a lot of mistakes. You've gotta go in with the mindset that you're gonna ma- make a lot of mistakes and be okay with it. You wanna make mistakes fast but fix them even faster." And so, you know, this guy's, he says he has a very high risk tolerance. I think it's been obvious so far for what you and I have talked about. And so he's got two, you know, they're starting to cash flow, uh, but they have a lot of mistakes. He doesn't have a lot of talent. But there's a bunch of these, like, double drive-through burger joints- ... in Louisiana that go out of business. And he's like, "I gotta take an opportunity because I can expand from two..." I think he adds another five stores really rapidly, so from two to seven, by taking over these double drive-thru burger joints. So you can't even walk inside. There is no walking inside, right? And what he realized is like, "I could convert them for about $100,000." And the way he could do that rather cheaply is because they had a bunch of equipment that he could utilize, and he, he's like, "I had to do this the cheapest way I could, uh, and I need to get open up as fast as possible," because he's gotta get to the cash flow as f- as possible, and he'll, he'll talk about how he finances all this growth in a minute. And so the way to do that is like, okay, just repurpose, use their equipment. Instead of making burgers, I'm making chicken fingers. And so the landlords were just sitting on these because all these double, uh, drive-thru burger joints had just went out of business. And so he goes to the landlord, he says, "Hey, uh, I can get in really fast. I wanna lease this from you, but I wanna utilize all the equipment. Can we do, like, a package deal?" And so they could turn them around fast, and they could turn each around for $100,000. And so he does four of these, and I think he does one in, um, he does one in, like, a food court in a mall. He comes up with a, a very unique way to finance all this, okay? Because remember, it's really not investable. There were really no venture capital at the time. He's gotta figure out a way to, to make him, you know, somebody that the banks would want to loan to. And he goes, "This is how I financed this, and I do not recommend this. But what I would go, I would go to an angel investor and I'd say, 'Hey, invest $250,000 in a subordinated, subordinated debt note. I will give you a 15...'" This is what he's telling the angel investor. "'I will give you a, I will guarantee you a 15% return, and I will personally sign. I will personally obligate myself to this.'" We-- He goes, "I want it on a one-page contract, nothing bigger than a one page. We have a proven concept. We're cash flowing, but I personally signed for this. Then I would take this and bring it down to the local community bank. They would look at this and say, 'Oh, you have $250,000.' They would consider this equity, and I could borrow up to a million dollars off that deal." And so this is how he did it. And he goes, uh, he's on a, operating on a nice edge when he's doing this, okay? So has to, he, he, he has to open up as fast as possible, okay? If he opens up day one, people are gonna come in. They're gonna, he's gonna have some amount of revenue coming in day one, okay? And what he realized is like, okay, we opened a restaurant, so we got some revenue day one. The crew members, we have two weeks to pay them. The food, my suppliers, I don't have to pay for 30 days. The rent, I can pay 30 days later. So I'm making cash flow, and he has to make sure that he is making enough that he can make his payroll in two weeks, and then two weeks after that, that he can start paying for the food that he sold 30 days earlier. Now, this winds up working and he goes, "I did this..." This, this is how he financed growth up to his first 28 restaurants. And he said, "We were just rolling and rolling and rolling, but I was leveraging myself horribly."

8. 33:22 – 38:12

   Hurricane Katrina and the Pandemic

   1. DSDavid Senra33:22

      And, and this is when he almost goes out of business. I'm gonna stop there, though, because these creative, you know, these creative ways to finance things when you're starting out and you don't have a lot of money. The, one of my favorite b- biographies that I've ever read for the podcast, I discovered this guy named Daniel Ludwig. It's episode 292. The name of the biography is called The Invisible Billionaire, and the reason it's called that is because in the '80s, I think, Daniel Ludwig was the richest American, and no one knew who he was. And he started out, I mean, he had a, he winds up building this huge conglomerate that he owned a hund- that he owned completely. He had no partners. He had 200 companies in 50 countries. But he started out by, uh, shipping, by transporting oil for Standard Oil because the government had broken them up. And he came up, but he had no money, but not enough money to do what he wanted to do. So he came up with this idea called the two paper, two-name paper arrangement, which was the foundation of his incredible wealth. And the genius of Ludwig's financing method worked like this. He would approach an oil company, secure a long-term charter agreement to ship their petroleum. Then, using that charter as collateral, he'd go to a bank and obtain a loan to either build or renovate a ship specifically to fulfill that charter. The oil company would then make payments directly to the bank, which w- and then the bank would deduct the loan payment and deposit any remainder into Ludwig's account. So the financing innovation was particularly brilliant because, number one, it used other people's credit, which is the oil companies', uh, which had obviously better credit, credit ratings at the time than Ludwig did. Two, it required minimum personal investment on Ludwig's part. And three, it resulted in Ludwig owning valuable assets free and clear after the contracts inspired. So I thought that was very interesting. For some reason, that popped in my mind, uh, when I was thinking about, uh, you know, him doing the subordinated debt loan. So he's like, "I'm rolling. We're adding restaurant after restaurant. We have 28 restaurants. I'm, but I'm leveraged horribly, very nervous." And then he's in Louisiana. Hurricane Katrina hits, and 21 out of his 28 restaurants go dark. He says, "My cash flow stops. I'm in a bind." And so there's a, there's several examples, especially if you have a better product than all your competitors, how he's, he turns Hurricane Katrina into a tragedy, into an asset, and he does the same thing in the pandemic, and I'll explain both of these to you right now. So Hurricane Katrina hits, everything's flooded. He rallies his team together. He's like, "Listen, we need to get open as quickly as possible for two reasons. One, our crew needs to come back. They need to make money, and our communities need food. And two, if we don't, we're out of business. We're done." So he was the very first restaurant to open back up in these communities that got destroyed by Hurricane Katrina. Now, why does that matter? Because he had a 90-day window when he was the only restaurant open in the area, and he says, "We crushed it. We absolutely crushed it." And so think about all the new customers who may have never tried Raising Cane's before. They try it because there's literally nothing else open, and they're like, "Oh, this is really good," and they're state customers for life. They recommend it to all these other people. But that's not the lesson that he wanted us to learn from this. He says, "But the lesson out of all this is what I tell entrepreneurs, don't do that because my dream almost died. My dream almost went away. I was over-leveraged and stupid." And so Hurricane Katrina wind up being an opportunity, uh, unintended. The pandemic actually turned into an opportunity as well. So in 2020 The Raising Cane's was doing 1.5 billion in revenue. Four years later, that 4.5 billion. And Todd's reaction to both crisis was that he says, "This entrepreneurial thing just kicks in in you." And he says, "We ain't gonna stop, man. We're gonna get open, and we're gonna make this work." And the pandemic wind up being, you know, a, a blessing in disguise because we had a great format because we could do all the dri- If you remember, during the pandemic, drive-throughs were open, but you couldn't, like, go and sit inside of a restaurant. And the government said that, you know, you have to stay open because people need to eat. And so this is... He was labeled an essential business. And same thing, it was like o- one of the few areas that had all these drive-throughs, uh, open, and they stayed open through the entire pandemic, and he says sales were insane. And as a result, that, that huge growth from 1.5 billion to 4.5 billion in three years, like, we had to learn to get better and we had to learn to get better and quicker. And it's very fascinating. He talks about both, both examples, uh, was the fact that he's the ultimate decision-maker. Like, he doesn't have partners, he doesn't have board directors, he doesn't have shareholders, so he can just say, "Hey, we're gonna do this," and it's going to happen. And so he says, "I don't have to answer to anybody my, but my crew members and my customers. I can make decisions and immediately we can do all this stuff. I didn't have to go through shareholders. I didn't have to go through a board that might say, 'Hey, I don't know if it's safe to do that. Should we wait another two weeks? What are our competitors doing?' I don't have to answer to anybody but my crew and my customers, so I can get out there and make things happen right away." And, uh, there's a line that Michael Bloomberg says in his autobiography, which I covered all the way back on episode 228, that I think Todd Graves would agree with. And Michael Bloomberg said, "Answering to no one is the ultimate situation."

9. 38:12 – 44:55

   Cane's Love, Culture, and Crafty Marketing

   1. DSDavid Senra38:12

      So, in the middle of this interview, I wanna pull something out because he's constantly talking about the fact that, like, he cares, he cares, he cares, founders care. We need more founder-read, f- founder-led businesses. And, you know, this is when he has 800 locations. It's worth all this money. It's growing like crazy. And he's doing this interview, and right before the interview started, Todd's crew comes in, and they're literally showing him the reel, the Instagram reel, the video that they're about to post. And the guy interviewing him is like, "In my head, I'm thinking, Todd, you're one of the 350 richest people in the world running this giant company, and you're checking the reels to make sure that everything aligns with the brand." Again, I don't think of Todd Graves in that situation. I think of how it relates to every single other person you and I talk about. 'Cause if you have this idea that's used by all these people that didn't know each other, were alive at different times, worked in different industries, obvious, what is that telling you? It's a good idea. You should use it in your business. Ste- I did this episode called "How Steve Jobs Kept Things Simple." It's episode 349. Said Steve d- I, I pulled it, uh, a line from the transcript, uh, when I got to this section. "Steve did not believe in delegating marketing and advertising decisions at all. This is not an exaggeration. He approved every single image that was used in an ad. He would approve every single word. He would deliberate over the copy. He is calling Ken," who's running his ads, the guy writing the book. "He's calling Ken at midnight to talk about a single word." Another idea that Todd repeats over and over again, "You have to make your s- your people feel appreciated." He says... He has this great line. He says, "Communicate the appreciation you have with your people and with them constantly." So he actually has an entire department dedicated to this, and he, he talks about this later, but he learned the right way to do something by seeing it done the wrong way first. So he says, "In high school and college, I worked in all these restaurants, and they would yell at you and say you're doing it wrong. Negative reinforcement doesn't work in my business. If you go through a Raising Cane's, you're gonna see a bunch of happy, smiling people, but they're gonna crank out food as quickly and as high quality as they can. Good quality comes from positive motivational management. I go through all my kitchens and see all my crews all over the country. I go through the kitchen, and I'll say, 'Hey, man, nice toast. Hey, thanks for the hard work. I appreciate it.' Positive, positive, positive. They know I care about them, and they work even harder." And so he has this thing called the Cane's Love Department. "I created a department in the business actually called Cane's Love," and it talks about respecting, rewarding, and recognizing crew members. So some th- some things as simple as you come in and cover a ship, uh, a shift, and you went out and you cleaned the dumpster. You're like, "Hey, here's a gift card, man. Thank you so much for doing this." And these men and women work so hard, so they know it's all about Cane's love. And he'll do, like, fun things for them, too. He's really great at marketing. And so there was... I guess there was, like, this huge lottery. It was, like, 800, worth, like, $800 million or something. I think this might've been in Louisiana. And he's like, "Well, we have 50,000 crew members at the time. Let's buy lottery tickets. You know, it'd just be fun. Each ticket's, like, two bucks, costs us 100 grand, and we'll agree that if any one of the 50,000 people win this $810 million prize, we're gonna, we're gonna share the winnings." And the reason he said this is 'cause he's like, "The crew members were all talking about the lottery. They were, like, fascinated by it." He's like, "Okay, well, you know, let's just everybody buy in the company a ticket. We'll have some fun." And we pulled this all, all together. And the point was, you know, he, this was really just a fun deal, but then it went viral. And he di- he didn't do this to go viral, but he's like, "Okay." He does a lot of these things out of his marketing budget. He's got a big marketing budget, and his whole point was just like, "Well, you know, I got millions and millions of impressions. It's on, like, to- the Today Show, it's on the news, it's in, like, local media, and it cost $100,000." And so it wind up being a great recruiting tool because people were like, "Hey, I wanna go work at a company that literally has a founder that wants to do fun stuff." So great for recruiting, great for marketing, and then wind up being a, a great return on $100,000 marketing spent. And there's a lot of similarities between, like, Todd Graves and, and Sam Walton, where Todd just, just really focuses on a simple idea, you know, taking it very seriously, but also in the way he thinks about the people that work inside of his company. Sam Walton said that, "If you're not serving the customer or supporting the folks who do, then we don't need you inside of Walmart." And Todd Graves' version of that is, "My crew is my number one focus. The company's leadership should serve our crew members who are serving our customers." Again, I, I would go after th- go after this and compare, you know, the, the marketing of fast food, other fast food competitors. Compare what Raising Cane's is doing and compare them to, you know, hi- his competitors. They're just a lot better at this. And so he talks about learning social media As a grown man. So he says, "Being an entrepreneur and starting out without a budget, you have to be really crafty at marketing your business. This started for me all the way back in 1996. I would go and hand out flyers and say, 'Come try this new place, Raising Canes.' Back then, we didn't have social media, but for me, I'm always a student in b- of my business. I'm learning constantly. I want to stay on the edge, and I want to keep getting better and better. And so when social media came out," he says, "Look, I'm an older guy. I'm 52, okay? So I didn't naturally gravitate towards Facebook and Instagram and the things like that, but I watched the marketing value behind it." And one of the most interesting things is launching collaborations. So there's a, like I said before, a lot of, like, huge celebrities that are obsessed with Raising Canes. They kind of grew up on it. Over time, Todd Graves has f- become friends with, with this musician named Post Malone, and when he starts becoming friends with Todd, he's like, "Man, how can I own a Cane's? Like, I want to own a Cane's." Todd's telling him, he's like, "Well, you know, that's not our model. We don't do franchises. I like to do open company restaurants because, you know, I want control. I'm obsessed with, with keeping control and keeping the quality." And Post Malone's like, "Come on, man, we got to figure something out. I want to, I want to own a Cane's. I want to own a Cane's." And so Todd goes, "Okay, let me, let me think about this for a little bit." And so he turn- a couple days later, he's like, "Hey, what if we do, uh, like, a Post Malone version of Raising Canes? You know? You design, we're gonna call it, like, Posty Canes or something like that. Same menu, but, like, you design, like, y- you can design what it looks like, and I think the first one's, like, bright pink, and it's, like, kind of crazy, and I think some of the decor is, like, tattoos that Post Malone has. Just go have fun. Like, make something super special, and then what we'll do is we'll just share in the profits." And what was fascinating is the way that Todd thought about this. He's like, "I'm not setting up another entity," right? This is not a separate company. We're operating a, a, on a corporate level. The Post Malone Raising Cane's, this is just part of our marketing budget. So I think there's, like, two of them now, and they're just... They get ton of coverage, you know, outside of Raising Cane's posting about it or marketing about it, because people are so, like, they're so weird, and so they're covered by other people, and so like, oh, this is just a marketing expense. And then we'll just say, "Hey, these two stores, this is how much revenue they brought in, this is how much expenses, and we'll just share the profits." And those profits that they, they send to Post Malone, they just consider that a marketing expense.

10. 44:55 – 48:01

    Company-Owned Stores, Mission, and Unused Assets

    1. DSDavid Senra44:55

       Now, he, uh, there's something that he said to Post Malone where he's like, "Hey, you know, I, I don't, this isn't our model. I, I, I don't do franchises." And so this is why he does a franchise, and this is why he wants corporate-owned stores. He says, "Most quick service restaurants are franchise models. You lose a lot of control when you do that. I would rather open company restaurants because I can control them. I want these things run exceptionally well. It's personal to me." Remember what I said about Pat Riley using, "It's personal to me"? He says it's easier to compete against these big corporate non-founder led companies because they just don't care. And so he says, "In big corporate America, it's not a personal decision. It's a financial decision that they're doing. It's different for people that care." He repeats over and over again, you know, the fact that it's a, like, Raising Canes is a founder-led company, that everything is personal to him, and he's got a great way to describe this. He says, "I believe God made me good at this for a reason." Todd Graves is a missionary, and just like Jeff Bezos says, "Missionaries make better products." And so he'll push that idea, he'll preach that idea, the fact that we need more founder companies. It's the exact... When, when a young founder comes to him and asks him for advice about what he should do, it's the exact opposite of what the gu- the guys in the bank did when he was young. He says, "When I talk to entrepreneurs and they have an idea, I encourage them, if you have your own concept, to start that, open that." And the reason is, by having entrepreneurs open more stuff, it gets diversity of thought, diversity of ideas, diversity of different ways to do things, and as a result, everybody gets better from more founders trying new things. And so the follow-up question to that was you've been approached with these big dollar amounts, these big checks. What was the most enticing time or dollar amount that you were approached with? You know, keep in mind, he's been offered billions of dollars. And he goes, "It's ne- it was never enticing at all, and the reason why is I believe God made me good at chicken fingers to help people. I think God makes us all good at what we're doing, ultimately, to help people." And h- one of the other things that he says for, like, for entrepreneurs, it's like, there's, there's actually two, um, essentially the, the way, uh, the note I left myself on this was what assets do you have that you're not currently using? Okay, so on my computer monitor on my desk, I have two Post-It notes that are reminders to myself that I think are both exactly how Todd, uh, Graves thinks. Number one, do one thi- it says, "Do one thing relentlessly." And the second one says, "What assets do I have that I'm not currently using?" And, you know, that doesn't mean financial assets necessarily. And so Todd's point is like, yeah, okay, well, maybe you're young and you're starting out and you have no money, but you have assets that older, richer people don't have, and it's the fact that, you know, you have a ton of energy. And he says, "Todd didn't have a lot of money or experience when he started, but he had youthful energy and determination. I was 23 when I opened up. I was 24. I could just outwork everybody. I didn't have to sleep much. I was a young man." And so it's like, you know, I might not have a lot of money, but at tw- you know how it was when you're 23 or 24. You c- I could sleep for a few hours, get up the next day and feel fine. [laughs] Where you can't do that when you're, it's very, it's much harder, uh, to do that when you're, you're much older. And I, I think, uh,

11. 48:01 – 52:27

    Your Last Business, Location, and Patient Growth

    1. DSDavid Senra48:01

       one of the most important things about, like, you know, I, I give a lot of these talks or, you know, these interviews or whatever, and something I, I repeat is it's like I'm just not really interested in, like, your first business. I'm interested in your last business. I'm interested in the business that, like, you, you know, to me, a large part of life is, like, understanding yourself and then having all these experiences. In many cases, it's gonna require you to start many, you know, multiple businesses. It's very rare for Todd, for a person like Todd Graves to start his first business that's going to be his last business. But I, I'm always obsessed, like, and I ask this question to the founders I meet is, like, is this your last business? Like, is this the end for you? Like, Sa- the, like, I'm about to quote Sam Walton in a minute. Same thing. It's like once Sam Walton found Walmart, he was like, he wasn't gonna do anything else, and he was gonna keep doing that. One of the reasons I think that is important is because things grow over time in mysterious ways that you could have never possibly predicted, and I see this over and over again in the books. And he's talking about... I, I had this idea where it's like, oh, actually, like, location matters. So, the average Raising Cane's does about 6.5 million a year in sales. Uh, that puts him in, in, uh, on an average store basis in his industry, he's in second behind Chick-fil-A for QSRs. And so the average Raising Cane's will do six and a half million, but they opened up one in Times Square, and that one, uh, did 22 million its first year. So the, the... If you pause and actually think about that, it's like, okay, where can you go that you, what you offer is the exact same product, but you actually sell, like, 4X more? That's an interesting thought to, to, to sit and think about. And then I was also thinking, I was like, I am positive that when Todd had that first store, he wasn't thinking, you know, outside the north gates of LSU, that one day I'm gonna have a Raising Cane's that does 22 million in sales. It took him 30 years to get to that point, and that's the important part, is it's like, get to... You should be in a rush to get to your last business because the longer that goes on, things grow in mysterious and unpredictable ways, and you see that over and over again. Now, I also thought it was interesting. There's a, there's a idea that really popped to my mind. You know, I've read every single thing I could find about Sam Walton. He's one of the, the founders I most admire. I think it was on, like, the fourth podcast I made about him before I really, it really clicked. Uh, this idea of, like, go slow now to, so you can go faster later on. In one of the interviews, he's saying, "Hey, we're, we're pushing over 600 locations after almost 25 years of business." And I think that interview was three years ago, and so now they have over 800 years, or 800, uh, stores, rather. And he goes, "It blows me away. We're, we're about to start cranking about 100 a year." So it seems like he's right on that trajectory that, that he set a few years ago. He talks about another thing I need to... Before I get to the Sam Walton part, Todd says, "I approve every site, every location, every one." Remember with Walt Disney, the advice that he gave to you and I from the grave. If we lose the details, we lose everything. I bet you, Todd, if I asked him, and if you know Todd Graves, please send him this episode because I'd love to meet him. I bet you if I asked him, "Did you agree with Walt, Walt Disney's advice?" If we lose the details, we lose everything. If we lose the details, we lose everything. So, what's fascinating to me is, okay, took him 25 years to get to 600 locations, and in two years, three years, he had another 200. There's this book called Sam Walton, Richest Man in America. It's episode 354. This is when it clicked for me after reading about him multiple, multiple times, and again, I think it was the fourth episode I'd done on him. It's like, wait a minute, back up. Sam Walton, when he started a retail career, the first five years of his retail career, he had one store. So in the, in the beginning of his career, he could only able to make to, to... He was still learning. He could make five years, he could make one store in five years. Then you get to, what is this? I think 30 years into his career, he opens The Sam Club. He goes from zero to one billion in sales in three years. He goes from zero stores the f- uh, on day one to seven years in, having 105 stores. So if you think about that, that's a slightly longer timeframe. The first five years career, he has one store. Three decades into his career, he goes from zero to 105 in seven years. I, I pulled this quote from the transcript, uh, of this episode, "Extreme patience coupled with an extreme intolerance for slowness." That is the career of Sam Walton. Something else that appears over and over again when you hear Todd Graves speak. Again, people are like, "I love what you do. Why don't you change the thing?" [laughs] And, and he is so relentlessly stubborn about this that I love, and he says,

12. 52:27 – 1:01:32

    Ignoring Experts, Staying in the Details, and Family

    1. DSDavid Senra52:27

       "Our number one strategy for growth is staying true to who we are. That means staying true to our one love, and that's quality chicken finger meals. Never losing that focus. That's our concept. Doing one thing and doing it better than anybody else. It is important for leaders to retain a singular focus. I would encourage anybody in the business, anybody in business, to find your one true love. My one love is chicken fingers, and I strive to be the best at that. Lock in on what you do exceptionally well, and then execute it every day, day in and day out. That is how you win. Not trying to be all things to all people is so important because if you try to be all things to all people, you're not anything to anybody." Goes back to this founder mentality that he has. He says, "Every box that goes out to every customer matters to me." This is a personal business to him. This is a family business to him. He was asked what lessons that he learned from his father, and he says, "My father taught me about hard work. He taught me about, about the importance of being polite to people. He was teaching me values. I do the same thing with my kids now. I tell them the most important thing you could ever do is to be kind, to be kind, be kind. Be kind to people, man." And so while he's giving this interview, some of these interviews, his kids are, like, sitting. He brings his kids with him. It's very similar to, like, what you and I have been talking about over and over and over again about these wildly successful businesses, and what, what they all do is they bring their kids into the business. They expose them to the business really early. I'm talking about the Wallenbergs, we talked about them. Hetty Green, Jerry Jones, Leon Hess. Just go back and li- listen to the la- last, like, six or seven episodes. This thing comes up over and over again. And so he, and Todd Graves talks about this. "I like to bring my son with me when I'm doing business and be exposed to it. He's just 17, but it's good to, good to get that stuff into his head." He involves his daughter as well. Why? Because he wants to give, he wants to pass this down to his kids. "I want my kids in the business to be able to carry on the values after their mom and I are gone. They can turn this, this business into a worldwide business and continue to grow it." And then he's constantly repeating the importance of, like, you know, the experts. What experts? Like, don't listen to experts. Listen to your gut. Listen to your intuition. In fact, one time he, he... I loved it because when he said the word experts, I was watching the podcast too, and he, like, put it in quotation marks. He's like, "Experts, sure." It re- really reminds me of Henry Ford, and like Todd, the way Todd thinks about experts and how big of a detriment they can be to an entrepreneur is the exact same way that Henry Ford thought about it, you know, 120 years ago. And so he says, "The experts are always like, 'Hey, you guys really need to add a chicken finger salad. You know, you need to jump on the health trends.' And when I was younger, I listened a little more because I'm like, wait, maybe these people are smarter than me." Maybe they know more than me, but my gut said no. Staying true to what I've done, not listening. I know who I am, and I'm not trying to be all things to all people. So there's a great line in Henry Ford's, uh, auto- autobiography where he's talking about, you know... I know it sounds crazy if you, if you have never studied this part of, of entrepreneurial history. When Henry Ford starts making automobiles, you know, he, he was a big believer in the internal combustion engine. At the time, there wasn't many cars in the world, uh, on the road, but the ones that were on the road, they were all either steam-powered or electric cars. And, you know, you have this young, mechanically inclined, gifted, gifted, mechanically inclined kid saying, "Actually, you know what? I'm gonna try to build in a different way. I'm gonna try to u- the power source is gonna stay with the car, and I think this internal combustion engine actually has a future." And everybody told Henry Ford, "No, you cannot do that," just like they told Todd Graves, "You cannot, you cannot build a $10 billion business doing one thing relentlessly and just serving chicken fingers." I love... There's another thing I always say. [laughs] Oh my God. So people told... I forgot to say this because this is too funny, and this, uh, like I, I've recruited so many people to go to Raising Cane's because they, they, they haven't had it, because I just love his approach to, to what he does. And so people were telling Todd Graves, "Okay, you sell chicken fingers, but you need a chicken sandwich." He goes, "Oh, you want a chicken sandwich? I'm gonna take, take three of my chicken fingers and put them in between, in between two slices of bread. There's your freaking chicken fi- chicken sandwich." [laughs] And that's literally, if you order a chicken sandwich at Raising Cane's, it's just three of the chicken fingers between two slices of bread. It's hilarious. But I wanna go back to Henry Ford, okay? He says, "I do not recall anyone who thought that the internal combustion engine could ever have more than a limited use. All these wise people demonstrated conclusively that the engine could not compete with steam. They never thought that it might carve out a career for itself. That is the way with wise people. They are so wise and practical that they know, they always know down to a dot just why something cannot be done. They always know the limitations. That's why I never employ an expert in full bloom. If I ever wanted to kill opposition, my opposition by unfair means, I would endow the opposition with experts. They would have so much good advice that I could be sure that they would do little work." And so he goes back to this idea, hey, my gut said no, staying true to what I've done, not listening, knowing who I am, and not trying to be all things to all people is very important. He says, "I have stuck with that one love, brother. Same menu since day one. That has been a big key to my success. Stay focused. Everything on my menu has to be exceptional." So one of the thing they, they offer is you can get freshly brewed tea. He goes, "I sourced that tea. I know the tea leaves, the quality of the tea leaves that are coming in for our freshly squ- for the freshly squeezed tea. I can..." This is the important part, the idea of, a really powerful idea of limiting the amount of details to perfect and then making every detail perfect. Limit the amount of details to perfect and then make every detail perfect. He goes, "I can laser focus on all these items being great." And then this is where one of my favorite parts that I just burst out laughing, and he talks about, you know, bring in people that are smarter than you in their own respective ways. That does not mean when you do that, that you stop being detail-oriented. It doesn't mean that you're not into the details. People will just say delegate, and he says, "Delegate? What kind of word is that?" [laughs] That's where I bust out laughing. It's one of my favorite things he said. People will say just delegate. "Delegate? What kind of word is that? Work with great leaders, but still be in the details. You should be in the details. People used to tell me," the experts again, "You won't always know that these things are going on in your business. You can't do these things when you get big. Well, I'm bigger than all of them now." And then he brings up the fact that this is not unique to him. This is a business I didn't even know. I'm constantly discovering all these, like, family-run businesses I absolutely love. A lot of these people listen to the podcast and that's how I meet them. But he goes... He was asking the person interviewing him. He goes, He goes, "You know Edison, Edison Quest?" I thought he was saying quest, so I couldn't... I had to Google and I finally found this guy. It's C-H-O-U-E-S-T. "You know Edison Quest? He built a huge company, multi-billion dollar company." He, they build like ships and these... It's funny, you go to the website, it's like, looks like it was made in like 1997, but they have this wildly successful business. So he's a huge shipbuilder, massive company. He goes, "He built a huge company, multi-billion dollar company. He got, he even got down to the details in his business to know how much the, how much they were spending on bottled waters, because there was this rampant spending and waste on bottled waters. No one was looking at it." And he said, "Look," this is what Edison said. He said, "Look, it's not just about bottled waters. Our company makes billions of dollars. This carries over to everything else." It was him staying in the details. The most successful people I know stay in the details, and it is easier to stay in the details if you truly love it. Like last night, you know, uh, it was funny 'cause, you know, everybody, uh, a lot of people gave me that same advice, like you shouldn't edit your podcast, you shouldn't do all this. Uh, I don't, maybe you don't know this, maybe you do know this, like, you know, I know a, a bunch of other podcasters. Founders is literally the only podcast that is made by one, a single person. A single person. I do all the reading, the research, the recording, the editing, social media posts, everything. And it's just like, it's what I wanna do. You don't work your entire life to get to, to, to be able to do what you love, to not do it. And so, like, I was chuckling to myself last night because I was going over, and what I've been doing is, like, after I'm done with all my reading, I, I feel, I feel there's been, like, a lot of value spending a day or two with the material and keep rereading it and most, mostly just, like, eliminating things that, that I don't think I need to talk about anymore and really, like, focusing. And so I was laughing, like, last night, Saturday. I just happened... Saturday night, I happened to glance at, um, at the clock. It was 9:05. 9:05 p.m. on a Saturday night and what I'm doing? I'm, I'm working on the podcast 'cause it's fun to me, it's what I wanna do. And so all the advice that Todd is giving us is a lot easier to do if you love what you do, because he says, like, "This is my chicken finger dream. My business card says founder, chairman, CEO, fry cook, cashier. I like working fry lines. I like working drive-thru. I love the pace of the b- business. I like cooking." And guess what? Say you wanted to jump in and you're like, "I'm gonna make a chicken finger QSR chain too." Good luck competing with someone like that. The guy likes to work the line. [chuckles] Good luck.

13. 1:01:32 – 1:05:25

    Fear, Purpose, and Never Giving Up

    1. DSDavid Senra1:01:32

       And so this leads to another question I loved. Who do you fear most in the chicken game? You know by now there's no way he's gonna answer, you know, it- some giant non-founder led, you know, corporate chain. And he says, "The thing that gets me, that worries me the most, is the young person that has the fire of Todd Graves going that wants to come and compete directly. They say, "Hey, I'm gonna go head-to-head with Cane's. I'm gonna do the same thing they do." And this is what I lo- I love his response, because remember, there's a reason why I started our conversation with that Pat Riley quote, that it's personal to me. And so he says, "I'm gonna do the same thing they do." He goes, it... This is Todd Graves. "It's so personal to me." And he's like, "If you wanna compete with me, that's fine. You better get up early in the morning, and you better work late at night, man, because this is what we do. This is part of my DNA. This is a representation of my family. So you better come with all your guns if you're gonna compete with Raising Cane's because this is my world." And so if he's speaking about his business like that, you know, the question, he gets this question over and over again. Sometimes it's from the people interviewing, sometimes it's people calling in. It's like, why did you never sell off part of the business after being offered billions? He goes, "I didn't want private equity partners. I wanted to own and control it. I wanted to work hard for that vision because I know this is my purpose." When you... This is one of my favorite lines too. "When you create and do, you're never gonna stop creating and doing because it's part of what you are. It's part of your DNA." And then again, he's always at- asked like, "What is your advice? You know, you're one of the most successful people on the planet. You've done it your way. Uh, you know, you're still doing it. What is your advice to other entrepreneurs?" And he says, "Why are you here? What is your purpose? You need to answer that honestly. I think sometimes it can be scary even to hear what the answer is. It can be a little scary because when you lock into something and you do it, it becomes your life's work." I'm so glad he said that because one of my favorite things, you remind me what Kobe Bryant said. Kobe Bryant was giving a talk in front of a bunch of young people shortly before he died. And remember what, what Todd Graves just said, You, you gotta like, you gotta answer that honestly, man. Like, you can't lie to yourself. Really ask yourself, what is your purpose? Why are you here? And it's gonna be a little scary because that means you're gonna have to lock into that. That means you are foreclosing all the other opportunities, and you're making that your life's work, is not-- very few humans ever get, ever do that. And so Kobe says, "The greatest fear we face is ourselves. It's not anything that's external. It's not anything that's superficial. I think the greatest fa- fear you face is yourself because we all have dreams, and it's very scary sometimes to accept that dream that you have. And it's scarier still to say, 'Okay, I want that.' It's scary because you're afraid that if you put your heart and soul into it and you fail, then how are you gonna feel about yourself? So being fearless means putting yourself out there and going for it. No matter what, go for it, not for anybody else, but for yourself." And I think that's a perfect lead in to the final question, the final piece of advice that Todd Graves has for you and I. He's asked, "What is one secret you could leave us with?" "If you're committed, if you're really committed, then tell yourself you're not gonna give up because I've seen so many entrepreneurs give up because it's so hard. It's so hard to get finance. It's so hard to get a location. It's so hard to do these things, so they give up. So never, ever give up and be fanatical. You've got to be fanatical. You've got to be fanatical about what you're doing. Nothing ever happens unless someone pursues a vision fanatically." And that is where I'll leave it. I will leave the two links down below if you wanna watch the full interviews. Highly recommend that you do so. I will also leave a link down below. Make sure you're on my personal email list. I email the, my top 10 highlights from every book that I read, and so from every episode as well. You can do that. The link's down below, but it's also at davidsenra.com. That is 383 books down, 1,000 to go, and I'll talk to you again soon.

Episode duration: 1:05:25