• Grades: He studied hard to make the honor roll in high school,
• Athletics: He won the state championship as quarterback of the football team,
• Politics: He ran for multiple offices in college and was elected president of the student body,
• Finances: He also worked to make his own money throughout school, starting with a newspaper route and later having multiple jobs.

Sam Walton graduated college in 1945 and he began working at JC Penney as a management trainee. This experience got him excited about the retail business and he decided to open his own store. But before he could do that, he served in the US army and got married. He was also reading all the books he could find in the libraries about the retail business.

In 1945, Sam Walton opened his first store in a small town called Newport, Arkansas. It was under the franchise name of Ben Franklin. He was 27 years old at the time and borrowed most of the $25,000 he needed from his father in law.

Sam set big goals for himself. He wanted his little store to be the most profitable one in the area. Then he worked 6 or 7 days per week to achieve his goals. He usually came into the office before 5AM. In fact, he continued starting work this early even after Walmart became a big success. (However, he often did take time off to go hunting, play tennis or go on long summer road trips with his family.)

Basically every highly successful entrepreneur says they worked very very hard. This is not a guarantee that you will be successful, rather it’s the bare minimum. For example, Elon Musk often tells young ambitious people to “work twice as hard as others.” Musk often works 80-100 hours every week.

Sam Walton was always driven, ambitious and hard working. He was a leader in school and worked for his own money. After he opened his first store, he worked 6-7 days per week, starting before 5AM.

🧪 3. Daily Evolution: Keep trying new experiments

As we said, Sam Walton franchised his first store through a company called Ben Franklin. They provided the store branding, systems and training. Ben Franklin taught Sam the basics of running a retail store, but their rules soon began to feel restrictive.

Sam Walton quickly started to experiment with his own business ideas:

• He discovered cheaper suppliers in a different state and brought their merchandise into his store with car trailer that was homemade.
• He tried various attention grabbers to bring people inside his store, including a soft ice cream machine and a popcorn machine.
• He was always trying creative new ways of promoting specific products to increase their sales, including hanging items from the ceiling or putting them in a boat. And he encouraged his store managers to get creative too.

If we fast forward to the future, we see this experimentation continued on a larger scale. Sam’s Club started out as an experiment, it was a membership-based store similar to Costco that had far thinner profit margins than Walmart. It was a big success, so they quickly opened up many more locations of Sam’s Club. On the other hand, some big experiments failed including a chain of discount drug stores and a series of super-large Walmarts called Hypermarts.

Two things about Sam Walton distinguish him from almost everyone else I know. First, he gets up every day bound and determined to improve something. Second, he is less afraid of being wrong than anyone I’ve ever known. And once he sees he’s wrong, he just shakes it off and heads in another direction.

– David Glass, later CEO of Walmart

Experimenting and trying new things was always a key part of Sam Walton’s success. In his early days, he tried gimmicks like soft ice cream machines. Later there were much larger experiments like Sam’s Club, a new kind of retail store.

🕵️ 4. Competitive Intelligence: Always be learning from other businesses

A major key to Sam Walton’s success was studying his competition. In Made in America, there are many fascinating quotes from Sam’s family members and work associates. One thing they mention over and over again is how much time Sam spent inside his competitor’s stores. Walton read a lot of books and publications about the retail business, but a large part of his education came from this real world research.

Walton’s first major competitor in that small town was a store owner named John Dunham. Sam was always in Dunham’s store, observing how everything worked. He was trying to find any possible idea that he could borrow for his own business. When Sam and his family went on road trips, Sam would stop to look in almost every store they passed. His family just accepted it was something he had to do for their livelihood.

20 years later, people would still find Walton in his competitor’s stores. He would be seen at Kmart questioning an employee about how they did everything and writing it all down in a little notepad. And he was always telling his managers to do the same thing: check out the competition and find at least one good idea they could try in their own stores.

I have learned to do the same thing in my own business here at growthsummary.com. I’m always looking carefully at other websites and apps. I study their layouts, their marketing, their sales pages, etc. I’m trying to find a new idea that I can borrow to make my business 1% better. One of the best tips I’ve received for digital marketing is to keep a ‘swipe file’ or a collection of impressive things you see online, especially from your competitors.

Sam Walton spend a lot of time in his competitor’s stores. He was always studying what other businesses were doing, talking to their employees and taking notes. He wanted to find good ideas and borrow them for his own business.

🔭 5. Looking Ahead: Forget the past and focus on future goals

Sam Walton’s first store did incredibly well. The previous owner of the store had sales of $72,000 per year. Within a couple of years, Sam doubled those sales. And within 5 years he grew the sales to over $250,000 per year. It was one of the most successful variety stores in Arkansas. He paid off all his loans and was feeling great.

Then something really bad happened. After 5 years, Walton was kicked out of his own store building because he hadn’t read the fine print on the lease carefully enough. He tried not to obsess about how unfairly he was being treated. Instead, he focused on his future goals. The only thing he could do was start all over again in a new town. So that’s what he did.

At 32 years old, Sam moved with his family to another town called Bentonville and he opened up a new store. And he grew that store to be very successful too. So over the years he opened up more stores in nearby towns. 15 years later in 1960, Sam Walton had opened 15 little stores. Some of these were called “Walton’s Five and Dime.” Driving to visit all the locations was taking too much time, so he began flying between the towns in his small 2-person plane.

Sam grew his first store into a success, but he was kicked out of the building because of a real estate mistake. He was forced to start all over again and he eventually opened over a dozen variety stores.

📈 6. The Next Thing: Notice and adapt to rising trends

Sam was always looking for what was new in the retail industry. He quickly adapted to multiple trends that were rising in America including:

• Self-service stores. In the past, a store employee would find the items you want and bring them to you. Sam heard about the first self-service stores and rode an overnight bus to see them firsthand. Then he opened the 3rd self service store in the USA.
• Discounter stores. In the early 1960’s, a new type of retail store called a discounter store began popping up. The idea was to sell products at cheaper prices, but with a higher volume of sales they still made a lot of profit. Sam Walton saw discounter stores very successful in the northeast US and he knew they would come to Arkansas soon.

So in 1962, Sam Walton opened his first discounter store in a town called Rogers Arkansas. That was the birth of Wal-Mart. The first Wal-Mart was a big hit immediately, with almost a million dollars in sales per year. Sam Walton recognized these stores were the future of retail and he wanted to stay ahead of the trend by opening up more and more Wal-Marts. Some of the other big retail companies resisted the discounter trend, probably because they didn’t want to give up the 45% markup they were used to charging customers.

Small towns were a key part of Walmart’s winning strategy. At that time, most of the big retail companies believed a large discount store could only be successful in bigger cities. Sam Walton went against that conventional wisdom and he opened Walmarts in towns as small as 5,000 people. This turned out to be a great idea. People stopped driving to the big city discount stores and visited their local Walmart instead.

In 1962, Sam Walton adapted to the rising trend of discounter stores by opening the first Wal-Mart and it was an immediate hit. Discounter stores were bigger than traditional variety stores and they had cheaper prices.

🏷️ 7. Low Prices: Overcome competition with a strong singular focus

The first Walmart store had a sign with with their name and two slogans on either side. The slogans were: “We sell for less” and “Satisfaction guaranteed.” Sam Walton says this strong focus on selling for less has made them so successful. He was always determined to keep Walmart’s prices lower than all their competitors:

• He limited Walmart products to a 30% markup, even when they could have charged more for a product.
• He made sure their big competitors like Kmart never sold a product for a lower price than Walmart, not even by a penny.
• He was always looking for way to reduce expenses, through more efficient warehouses and computer-based systems.

Sam wanted people to immediately think of low prices when they thought of Walmart. Everything else was secondary. Sam admits many of their early stores did not look very good, but they always made sure to have the lowest prices. He opened up more and more Walmarts, but he was starting to stress about all the debt he was taking on. So in 1970, they made Walmart a public company by putting it on the stock market. This gave them the capital to unleash Walmart’s incredible growth for the next 20 years.

Walmart outcompeted other retail stores by always having the lowest prices. Everything else was less important than maintaining that strong focus on selling for less.

🤝 8. Shared Ownership: Give your people responsibility and recognition

Obviously, Sam Walton could not build Walmart alone. He did it with the cooperation of dozens of important executives, thousands of managers and millions of employees. The question is: How could he encourage them care about Walmart’s success as much as he did? Here are a few ways:

• Shared ownership. Early Walmart store managers always owned a small percentage of their stores. So the more successful the store became, the more they personally benefitted.
• Executive compensation. Walmart executives are rewarded more based on how the company performs. If Walmart doesn’t grow, they make a lot less income.
• Profit sharing. Walmart now has programs which help their everyday employees earn stock as a job benefit. Some employees who have worked at Walmart for decades have accumulated hundreds of thousands of dollars. Benefits like this also help them avoid unionization.
• Employee recognition. Every Saturday at 7:30AM in Walmart’s headquarters, there’s a big meeting in an auditorium. Hundreds of Walmart executives, managers and employees gather to share what’s working in stores around the country. It’s also used as a time to recognize people for their good work or good ideas.

Sam Walton encourages his people to care about Walmart by sharing the success. Early store managers, company executives and even regular employees are rewarded when Walmart does well.

Conclusion

At the end of this book, Sam Walton is very sick with cancer and he’s reflecting on his life. Would he do anything differently? Not really. He believes that he played an important role in the world and provided a valuable service to many people. Those of us who shop at Walmart have collectively saved billions of dollars because of the lower prices.

My favorite part of this biography was to see how much Sam Walton was always learning, experimenting and adapting to competition. I think that lesson is incredibly valuable to any of us who are in business.