Business Lessons from Alton Brown

I decided to write a blog post about Alton Brown (“AB”) not just because he is interesting, but because he is an entrepreneur who built a business without venture capital. AB has on several occasions talked about how he needed to get bank loans to grow his business. Since bank loans, together with personal savings, loans from friends/family and cash flow from operations are the way most entrepreneurs finance a business, his story is a great example for aspiring entrepreneurs to learn from. AB is also interesting in that he was forced to deal with gatekeepers (cable channels) to get distribution for the product his business creates since his career began before the rise of streaming. The YouTube option was not available to AB when he was trying to build his business.

AB is a story teller who taught himself to be an entrepreneur so he can tell his stories. AB’s back story can be told with a few quotes from him and two sentences from a Wikipedia entry:

“I started off as a cameraman when I was still in college, and moved into shooting music videos in the ’80s, then became a full-time cinematographer and a director-cameraman for TV spots, which I did for about 10 years.”

“I shot commercials, many of which weren’t very good. I was unhappy and cooking made me feel better.”

“I remember I was watching food shows, and I was like, ‘God, these are boring. I’m not really learning anything.’ I got a recipe, OK, but I don’t know anything. I didn’t even learn a technique. To learn means to really understand. You never got those out of those shows. I remember writing down one day: ‘Julia Child / Mr. Wizard / Monty Python.’ That was the mission. I knew I had to quit my job and go to culinary school.”

“Two pilot episodes for Good Eats (“Steak Your Claim” and “This Spud’s For You”) aired on The Chicago PBS affiliate in 1998. The show was discovered by Food Network when an executive saw a clip of the show on the Kodak website.”

The usual quotes from the subject of this blog post (AB) are:

“Because I was executive producer, writing the show, directing, all this stuff, I was so busy doing the work that I didn’t think about getting famous. There was no social media. So there was no feedback.” “When I did my first season of 13 episodes I didn’t know if people were even watching until we got renewed.”

Feedback is fundamentally important in any healthy system, particularly if someone is trying to make it grow. What the internet and connected customers have done is enable businesses to create systems that harness feedback. These systems now overwhelmingly reside in the cloud and are more powerful interpreters of customer feedback than the world has ever seen before. The availability of cloud services enables businesses to create innovative products and services for a fraction of what it would have cost just ten years ago. By combining relatively inexpensive web services with modern data science it is now possible for businesses to run many thousands of experiments that utilize the scientific method. Most of these experiments will fail, but some will be spectacular successes. The people who can operate these cloud based systems (e.g., data scientists and artificial intelligence experts) have become the new high priests of the business world. The businesses that have the best systems which harness customer feedback and the most talented high priests are outperforming the business that don’t. It’s that simple. This phenomenon is just getting started and will become even more pronounced as the years pass.

When AB started making television, the primary feedback system was the Nielsen ratings. Businesses today like Netflix know vastly more about what their customer’s consume than businesses that rely on Nielsen as their primary source of feedback. One implication of the increased value of data is that providers are increasingly going direct to customers and cutting out distributors. For example, you see businesses like Disney deciding that they must directly stream their own content in order to capture the customer data. As I said above, control of the customer usage data is increasingly what gives businesses a competitive advantage. If a distributor sits between the creator and the end customer that data often can’t be captured.

Social media is obviously a big source of customer feedback. AB has mastered the transition to the social media era as well as anyone. One of the more interesting questions about this new “connected customer” era is whether AB would have been able to sell his show to a network today. How effectively would AB have been able to compete in today’s business world if he was just now starting out? There are so many people trying to get traction on streaming network would he ever have been able to get traction? The number of cooking shows YouTube is astounding. That number isn’t 24.5 million, but it is a lot. Even my neighbor’s dog has a cooking show on YouTube.

cooking shows

“It took over a year to sell the show because we didn’t know what we were doing. We couldn’t get anyone at Food Network to look at it, and we didn’t know the right people, so we were doubly doomed.” “We managed to get the show on the PBS show in Chicago [just for the Nielsen numbers].”

Even though AB’s show was able to outperform Martha Stewart in Chicago in the same time slot he had trouble selling the show to a cable network. The story AB tells about how he was discovered is a classic case of one thing lead to another and luck. AB has said about that time in his life: “I was so sure that it was so brilliant that people would be knocking down the door. We did not know anything about the television business.” Discovery wanted to make it a health show and he rejected that. AB has said that could not get a deal with PBS since he: “didn’t have enough steam to get the money. That’s a hard game to play when you are nobody.” He had to convince Food Network to commission their first outside show. Distribution is a highly underappreciated challenge for any business. It is easy to get on the Internet but hard to get customer traction. No one may know that you are a dog on the internet, but there are millions of dogs trying to get noticed and it is hard to stand out.

AB’s business was in essence a mom and pop operation at the start. AB and his now ex-wife were the founders. He ran production and she ran the business. Would it be possible to replicate the success of Good Eats today? AB created the right product at just the right time for the cable era. Has that window closed? Good Eats was the first show the Food Network bought that it did not make itself. How long will cable networks even be around in their current format since their bundle is disintegrating? Would AB have gone direct to consumer as an over the top (OTT) provider on YouTube if he was starting out today? That seems very likely. Would he have been as successful? Would the market for show like Good Eats be so crowded that it would be impossible to make a living in his profession since discovery is such a hard problem?

AB started his career when distribution was scarce, but that is not the case anymore as Ben Thompson points out: “The end of gatekeepers is inevitable: the Internet provides abundance, not scarcity, and power flows from discovery, not distribution. We can regret the change or relish it, but we cannot halt it: best to get on with making it work for far more people than gatekeepers ever helped — or harassed.”

Despite the fact that the latest digital tools are often available for any business, is it realistic that a mom and pop operation will be able to successfully go head-to-head in direct competition with national chains? I’m not referring to small innovative startups staffed with talented entrepreneurs often backed by venture capital but rather small businesses run by ordinary people who do not have a technical background. Businesses like these can easily adopt the latest technology and do not have legacy systems and code to worry about. But what about the hundreds of thousands of new mom and pop operations that are created each year? Does intense competition fueled by these cloud enabled systems make it much harder for a small mom and pop business like a video production company, a pharmacy or hardware store to compete successfully.

“I was lucky to get out of [negotiating creative rights] owning me. I own me and the recipes. I managed to retain book rights and I get a cut of DVD and international sales.”

Understanding who owns what rights to creative output is critically important in business. Very often it is terms and not price that are the most important part of a contract. The old saying about this principle in a negotiation setting is: “You set the price and I will set the terms.”

“Clever plots require locations. You want to make sure that they’re multi-tasking locations, meaning you can shoot a lot of different things there. You want to make sure that they’re close in to where you and your crew are. And above all, you want to make sure that they’re really, really cheap.” “Here’s a little tip for you novice producers out there. When you build your wacky sets, build them as cheaply as possible. Not only will you, of course, save money, but when you’re done shooting, the sets will probably just fall down by themselves and you won’t have to pay anybody to take them apart.” “I’ll admit sometimes skilled thespians are hard to come by, and that’s why we have a rule around here: He who works on Good Eats as a technician, you must appear on Good Eats.”

AB is frugal. Any business that does not have a frugal culture has a significant problem. Competition levels are just too high to support a high cost provider. As an example, frugality is a major part of Amazon’s leadership principles: “Accomplish more with less. Constraints breed resourcefulness, self-sufficiency and invention. There are no extra points for growing headcount, budget size or fixed expense.” People at Amazon have desks made of doors and two by fours to reinforce the frugal aspect into company culture. AB has a range of things he does as a producer to keep costs lost low. His “Behind the Eats” episode from the 2006 Good Eats season reveals some of the ways he saves money during production. As Chamath Palihapitiya has famously said: “It’s fine to fail. But if you fail because you didn’t have the courage to move to Oakland and instead you burned 30 percent of your cash on Kind bars and exposed brick walls in the office, you’re a f*cking moron.”

“You should always be reinventing yourself to push yourself forward. It’s easy to ride the coattails of a previous success, like Good Eats. I love that show, but I’ll never go back to that, exactly. It’s easy to go back to that, orbit around it. I don’t have a rear view mirror, I never look back.”

What AB says here reminds me of my blog post on Jimmy Iovine who made the same statement about “not having a rear view mirror.” Iovine describes his approach in this way: “I never celebrated a success. There are no victory laps. I’m always moving forward. The most important thing I ever learned: No matter how ugly it gets, keep moving. Going backwards is not an option.” Looking forward like AB and Iovine do helps you tune out noise. Nostalgia and self-congratulation can sometimes cause a nasty fall due to hubris.

“I get tired of hearing people tell me that the reason they should have their own show is that they love food so much. Well, so freaking what? I love food. We all love food. If we don’t, we die. That doesn’t make you special. People who want to be stars often make the mistake of thinking that it does, and that if they can just show you how much they love it, they will somehow become compelling. This is not the case. At best, love [for food] is the gasoline. It’s not the car.”

AB is a self-described a “terrible workaholic.” AB is also very talented. What is the source of that talent? How much of his talent is nature and how much is nurture? In his classic essay entitled “Is Justin Timberlake a Product of Cumulative Advantage?” Duncan Watts writes:

The reason is that when people tend to like what other people like, differences in popularity are subject to what is called “cumulative advantage,” or the “rich get richer” effect. This means that if one object happens to be slightly more popular than another at just the right point, it will tend to become more popular still. As a result, even tiny, random fluctuations can blow up, generating potentially enormous long-run differences among even indistinguishable competitors — a phenomenon that is similar in some ways to the famous “butterfly effect” from chaos theory.

I believe AB would agree that he was the recipient of some early luck when he had two pilot episodes for a cooking show just at the time the Food Network was about to gain popularity. My theory about the nurture side of talent is as follows: AB was funded to do work which increased his skills, which enabled him to get more work, which increased his skills [repeat indefinitely]. Both Justin Timberlake and AB became more talented the more work they obtained. But without some early luck that talent might never have been discovered and more importantly developed further.

“I’d rather be original than good. Good is fine, but in the end I want to find out the nooks and crannies of what culinary storytelling can do. That obsession with pushing myself into new areas, using new technologies, keeps me going. All of the shows that I’m creatively involved in, I do for me. I don’t worry about what the fans or market wants. I do it for me and I hope it’s what the audience wants. If not, then I won’t be doing it for that long.”

Being genuine sells better. It it is easier to be genuine when you are a missionary rather than a mercenary. I attended AB’s most recent live show when it came through Seattle and it was accurately described by my son as “a live version of Good Eats.” Alton was Alton in that show and the crowd loved it. If Alton would have tried to be Eric Ripert or Anthony Bourdain it would have flopped.

“I leaned in culinary school that am not a very good cook. I am not Eric Ripert.” “I wasn’t willing to do anything to the food that sacrificed story.” “The dishes are the story points.” “I did my time in kitchens, but I never worked a higher level than lead cook. I could have moved to sous chef positions, but I didn’t want to tell people I was going to stay that long, which would have been kind of mean to do. It’s very much a young person’s game. Let’s just say chefs have a very high rate of alcoholism, divorce, and suicide, and I am not interested in any of those things. No, I’ve got no desire. Maybe after I retire from this, I’ll open a little pizza place or coffee shop. Outside of that, it would have to be decidedly lowbrow. I have no high-end culinary ambitions.”

AB knows what business he is in: he is a story teller. A friend of mine said he particularly liked my recent post on the demise of post-breakup AT&T since it was a story. He said to me:

“One of the themes of Sapiens is that we are a story-telling species. That’s how we transmit the shared myths that bond us together in tribes (and that ability to act in a coordinated, collective manner is our great strength as a species). Story telling goes to the very core of what it means to be human. Religion, books, movies, TV, etc. We’re always telling stories. Fiction outsells non-fiction. Dramas outsell documentaries (even though a good documentary can have a story every bit as compelling as drama – we’ve come to view documentaries as boring lectures on some subject). As any good novelist knows, don’t tell your readers some fact or detail or lesson – show it to them.”

AB tells vivid stories that make you smarter. That is a good thing.

“When I was making Good Eats, we used to have a sign over our studio door that said, ‘Laughing brains are more absorbent.’” “I knew that I was competing with TV commercials. The most expensive form of television known to man. To keep the show visually arresting for the MTV generation we would have to come up with weird models that would not cost a lot of money… camera in the back of ovens, shoot with a single camera.”

AB’s wacky personality and the nutty props have a purpose. He has said about his show: “If Good Eats did anything worthwhile, it managed to entertain people and teach them without them realizing they were being taught anything.” AB is a curious person and that comes through in his story telling. I was surprised to hear him say in an interview that he was not a particularly avid or good science student in high school given the his emphasis on the science of cooking. His aptitude and interest in science now makes the point that it is never too late in life to get more technical, if you have a growth mindset.

“I’m not where I thought would be at this point in my life, but I’m wiser by a long shot.”

It is very hard to plan a career, but you can prepare. Most importantly you can show up and hustle. There was a great very recent New York Times essay written by Adam Bryant which is directly on point which contained these sentences:

My vote for career advice goes to something I heard from Joseph Plumeri…His biggest career inflection points, he told me, came from chance meetings, giving rise to his advice: “Play in traffic….It means that if you go push yourself out there and you see people and do things and participate and get involved, something happens,” he said. “Both of my great occasions in life happened by accident simply because I showed up.” “I tell people, just show up, get in the game, go play in traffic,” Mr. Plumeri said. “Something good will come of it, but you’ve got to show up.”

“You stare at a computer screen for a while and then you start typing.” “In the end just type. Don’t sit and wait for perfection. You are not going to poop a golden word on an empty page. Just type and sort it out.” “[Over time] I learned how to write faster.”

To maintain my streak of ~250 Saturday morning blog posts in a row I need to write fast. I’m not sure how much longer this writing streak can or will continue. I work without an editor, which is like working without a net as a tightrope walker. But things are going OK so far.

As an aside, many people do not notice the many links at the bottom of each post. In some ways they are the best part of the blog post. The many AB interviews in those links are both entertaining and insightful. Before writing a post I read and listen to all of them several times. I try to get a sense of who the person is in this way. Having said that I need to get the research and writing done in less than four hours each Saturday morning. Fortunately I am a fast reader and an excellent memory for words and ideas (but not numbers).

“There’s only two things that every people group on earth, no matter how cosmopolitan or how remote, want to do in groups. One is laugh, two is eat. It’s my belief that we keep gravitating around the campfire that is food because, as a species, we require connectivity to each other. Food is actually one of the last universal things that we’ve got to do that. We don’t have it in politics. We don’t have it in religion. We don’t have it in culture.”

AB has been described as “the philosopher king” of the food world. His remarks about food and comedy are right on the mark. Every region has its cultural icons and comfort foods. People who snark about something like In-N-Out Burger or Shake Shack invariably talk about some comfort food from their own region as if it was prepared by gods. There are also places where people like to eat when they have had too much to drink. Seattle many not have a Waffle House (which I wrote about last week), but it does Beth’s Cafe (famous for a twelve egg omelet on hash browns served all night).

Beths

and Dick’s:

Dicks

If you are in Seattle and a want a truly phenomenal meal I suggest Pho from many places at about $10 a bowl.

Another reason I have written about AB is that I love food. I love it a bit too much actually given my current weight. Cooking helps me connect with my mother who I love even more than food. Eating her food makes me happy beyond words. When I make something myself that she has made for me in the past (like raspberry freezer jam) she is there virtually as a tiny imaginary figure sitting on my shoulder smiling at me. She is the reason why all the royalties from my new book will go to the charity No Kid Hungry.

Notes:

http://www.emmytvlegends.org/interviews/people/alton-brown#

https://www.eater.com/2015/12/21/10633436/alton-brown-interview

http://www.foodnetwork.com/recipes/articles/good-eats-behind-the-scenes

http://www.seriouseats.com/2011/10/alton-brown-interview-good-eats-3-the-later-years-book-tour.html

https://www.nytimes.com/2016/09/28/dining/alton-brown-cookbook-everydaycook.html

https://en.wikipedia.org/wiki/Good_Eats

https://blog.williams-sonoma.com/alton-brown-interview-2016/

http://www.goodeatsfanpage.com/faq/faq100s.htm

http://amatranscripts.com/ama/alton_brown_2013-05-24.html

http://www.foodnetwork.com/recipes/articles/good-eats-behind-the-scenes

https://www.google.com/amp/amp.travelandleisure.com/travel-tips/travel-trends/alton-brown-interview%3Fsource=dam