Ever wondered how renowned restaurateur Danny Meyer's concept of enlightened hospitality transformed customer service? How did his approach to empathy and kindness turn Gramercy Tavern into one of New York City's favorite restaurants? Or how Marilyn Rubin's experience at Meyer's restaurant Tabla went beyond impeccable service and left a lasting impression on her? What role did Bernard A. Goldhirsh, founder of Inc. magazine, play in transforming the perception of entrepreneurship in America? Let's dive into these fascinating stories of businesses that have built their success on creating personal, meaningful connections with their customers and suppliers.

Small Giants: Companies That Choose to Be Great Instead of Big

At the Anchor Brewery in San Francisco, Fritz Maytag stood in his cluttered office, immersed in the joy of a newly arrived Lakeside Classics book. Despite being the great-grandson of the founder of Maytag appliances, Fritz cherished small, beautiful things. 

Over his forty years as the owner of Anchor Brewing, he faced moments where the brewery's future seemed uncertain. In the early 1990s, as demand soared beyond his production capacity, he pondered a public offering to fund expansion. Yet, after much deliberation with his team, he chose not to grow, realizing that staying small and true to his values was more rewarding.

Similarly, Gary Erickson of Clif Bar had a moment of reckoning in 2000. On the verge of selling his company for $120 million, Erickson experienced a panic attack and realized he couldn't go through with the sale. Despite dire warnings from financial advisors, Erickson decided to keep Clif Bar independent. He rethought his business approach, focusing on natural growth and sustainability, which led to doubling sales over five years without compromising his principles.

Ari Weinzweig and Paul Saginaw of Zingerman’s Deli faced a similar crossroad. Instead of franchising their successful deli, they created the Zingerman’s Community of Businesses, a collection of small, local operations. This strategy allowed them to maintain the quality and intimacy of their original business while fostering innovation and growth.

Not all entrepreneurs have such epiphanies without hardship. Norm Brodsky, founder of CitiStorage, learned the hard way after a risky acquisition led his company to bankruptcy. This experience forced him to re-evaluate his priorities, ultimately choosing to build a smaller, more profitable business that valued employee stability and community reputation over rapid growth.

Danny Meyer of Union Square Hospitality Group also exemplified thoughtful growth. Meyer resisted offers to expand beyond New York, adhering to his "five-minute rule" of proximity. His restaurants thrived by maintaining a unique identity and exceptional service, proving that measured growth can preserve a company’s soul and values.

These stories illustrate that business owners often face a critical choice about growth. While the pressure to expand is immense, the decision to grow should align with personal values and long-term goals. As these entrepreneurs demonstrate, choosing the less-traveled path can lead to fulfilling and sustainable success.

Can Staying Small Lead to Big Success? Insights from Fritz Maytag, Gary Erickson, and Danny Meyer!

When Martin Babinec launched TriNet, Inc. in 1988, he envisioned a small lifestyle business that would free him from corporate bureaucracy. Instead, he found himself on a high-speed roller-coaster ride through the world of entrepreneurship. 

Babinec had spent twelve years as a human resources manager for Navy Exchanges, moving around the globe. Tired of corporate life and eager to settle down with his wife, Krista, and their newborn in San Leandro, California, he stumbled upon the concept of a professional employer organization (PEO) at a national conference. With $5,000 in savings, he took the plunge.

The early years were a struggle. By 1990, TriNet was teetering on the brink of bankruptcy, with only one employee and six clients. Babinec, who admitted he knew little about sales and marketing, faced the daunting task of educating a market unfamiliar with PEOs. Deep in debt and expecting a second child, he hit rock bottom, feeling like a failure at his kitchen table. His last hope was to raise money from outside investors, even though it seemed like a long shot.

With Krista's encouragement, Babinec crafted a business plan targeting fast-growing tech companies in Silicon Valley—a risky but strategic move. He organized a presentation at a local restaurant, where 40 potential investors gathered. Despite TriNet’s dire financial state, six people invested a total of $50,000, helping Babinec reach positive cash flow. This infusion of capital, however, came with expectations for growth.

TriNet’s new strategy worked brilliantly, attracting tech start-ups and gaining referrals. By 1994, the company was thriving, but Babinec realized scale was essential for survival. To compete, he needed significant financing and experienced managers. Eventually, he sold a controlling interest to a European PEO for $3.9 million and expanded nationwide.

Though successful, Babinec’s dream of a small, controllable business was gone. He now had less personal freedom and more responsibilities, driven by the need to grow the company aggressively. Despite the intense pressures, Babinec found satisfaction in his work and valued his team. In 1999, he even managed to move his family to upstate New York, balancing a grueling commute with his desire for a better life for his children.

Babinec’s journey underscores a common entrepreneurial dilemma: the tension between maintaining control and the pressures to grow. Like Babinec, many entrepreneurs face the challenge of financing growth in capital-intensive businesses. Fritz Maytag of Anchor Steam Beer had a similar revelation about the inescapable need for capital to sustain growth. Entrepreneurs must confront the reality that growth demands resources, often pushing them toward external investors and the loss of independence.

Yet, some, like Gary Erickson of Clif Bar, fight to keep control, even at great personal and financial cost. Erickson rejected a lucrative buyout offer and endured years of struggle to maintain ownership. His perseverance paid off, and he remains grateful for the decision to keep Clif Bar independent.

Other entrepreneurs, like Bill Butler of W. L. Butler Construction, navigate growth pressures by making tough choices. Butler scaled back his operations, focusing on quality and manageable growth, even if it meant turning down lucrative opportunities. This approach allowed him to maintain control and preserve the company’s culture.

Ultimately, the story of Martin Babinec and others like him illustrates the complex dance between ambition and control. Entrepreneurs must balance the desire for growth with their personal values and vision, often making difficult decisions to stay true to their goals.

From Kitchen Table to Silicon Valley: The Roller-Coaster Journey of TriNet’s Martin Babinec

The Asbury Delaware Methodist Church in Buffalo, New York, stands as a testament to the city's rich architectural history and its modern-day resilience. Once a thriving hub of commerce, Buffalo experienced a steep decline in the mid-20th century. 

Despite this, hope revived through the efforts of locals like Ani DiFranco, a renowned singer-songwriter who founded Righteous Babe, a music company housed in the church. DiFranco's commitment to Buffalo, using local suppliers and creating jobs, breathed new life into the community, especially when she and her partner, Scot Fisher, saved the crumbling church and transformed it into a vibrant cultural center.

Buffalo's story is a vivid example of how businesses can be deeply intertwined with their communities. Companies like Righteous Babe, Zingerman’s in Ann Arbor, and Anchor Brewing in San Francisco are so rooted in their locales that they shape and are shaped by them. This symbiotic relationship fosters a unique identity and resilience, much like the concept of "terroir" in French winemaking, where the local environment deeply influences the product's character.

In Buffalo, DiFranco's decision to stay and invest locally, despite the allure of bigger markets, mirrored the city's underdog spirit. Her efforts not only saved a historic building but also instilled a sense of communal uplift. This phenomenon isn't isolated; businesses like Clif Bar in Berkeley and Reell Precision Manufacturing in St. Paul thrive by embracing their local ethos, contributing to their communities' social, cultural, and economic fabric.

These companies illustrate that being deeply connected to a community can drive success and foster a unique business environment. Whether it’s Zingerman’s enhancing Ann Arbor’s culinary scene or Anchor Brewing preserving San Francisco’s brewing heritage, these businesses show that local roots can be a powerful force for resilience and growth. Their stories remind us that success isn't just about profits but also about making a meaningful impact on the communities they call home.

How Did Ani DiFranco's Righteous Babe Music Company Revitalize Buffalo's Asbury Delaware Methodist Church?

Marilyn McDevitt Rubin, columnist for the Pittsburgh Post-Gazette, was familiar with Danny Meyer’s restaurants, having enjoyed impeccable service at Union Square Café, Gramercy Tavern, and Eleven Madison Park. So, she had high expectations when she visited Meyer’s Tabla, known for its fusion of Indian and American cuisine. However, Rubin’s experience at Tabla went beyond impeccable service—it introduced her to Meyer’s concept of "enlightened hospitality."

During her meal, Rubin accidentally knocked over a tray of water glasses held by a server. The restaurant staff responded swiftly, cleaning up and offering complimentary champagne to smooth things over. But what stood out was Meyer himself reassuring Rubin that the mishap wasn’t her fault, and the server graciously taking the blame. This act of empathy and kindness left a lasting impression on Rubin, who shared her experience with nearly a million readers.

Meyer believes extraordinary customer service is crucial, ensuring that even when mistakes happen, the story ends on a positive note. Enlightened hospitality, for Meyer, goes beyond technical service skills; it’s about making customers feel genuinely cared for. This philosophy is rooted in five core values: caring for each other, guests, community, suppliers, and investors—in that order. This approach has turned Meyer’s Gramercy Tavern into one of New York City’s favorite restaurants.

Other companies, like Clif Bar, also emphasize creating emotional connections with customers. Clif Bar invests heavily in grassroots marketing and direct consumer engagement through events and sponsorships, fostering a personal relationship with its audience.

At CitiStorage, owner Norm Brodsky and his team follow a similar ethos. They send handwritten welcome letters to new customers, host annual events, and involve all employees in customer service training. This effort has led to a significant increase in customer compliments and loyalty.

ECCO, a manufacturer of backup alarms and warning lights, restructured its business to focus on customer intimacy, tailoring products to individual needs. This transformation required revamping their engineering department and fostering close relationships with customers, leading to innovative solutions and increased productivity.

Righteous Babe Records, founded by musician Ani DiFranco, exemplifies this approach in the music industry. The company maintains personal connections with fans and suppliers, responding to every letter and email individually. This dedication has earned them a fiercely loyal customer base.

In essence, these companies have built their success on creating personal, meaningful connections with their customers and suppliers. By prioritizing empathy, integrity, and professionalism, they have fostered a sense of community that goes beyond traditional business relationships.

Enlightened Hospitality: Danny Meyer's Recipe for Extraordinary Customer Service

Michelle Howard, a vibrant and dedicated employee at ECCO in Boise, Idaho, has an inspiring story that exemplifies the essence of a company culture rooted in intimacy and support. Starting in 1994 as a single mother with three young children, Michelle faced tremendous challenges. Her husband's abrupt departure left her relying on food stamps and her mother's limited help.

A turning point came when Michelle landed a temporary job at ECCO, labeling strobe lights. The company soon offered her a full-time position, and by February 1995, she moved into customer service—a role she initially feared but quickly mastered with support from colleagues and supervisors who believed in her potential.

ECCO, majority-owned by its employees through an Employee Stock Ownership Plan (ESOP), fostered a sense of belonging and safety for Michelle. She appreciated the direct contact with CEO Ed Zimmer, who regularly engaged with employees through monthly lunches and company-wide meetings. This transparency made Michelle feel secure and valued, knowing that ECCO would always have her back.

The company's culture of care extended beyond the workplace. When Michelle's son fell seriously ill, ECCO's head of human resources brought food and flowers to her home. Michelle's journey at ECCO saw her rise through the ranks, buy her own house, and secure a stable future for her children, highlighting the profound impact of a supportive work environment.

This intimate culture isn't unique to ECCO. Fritz Maytag at Anchor Brewing kept his staff small to maintain close, personal connections, fostering a cooperative, quality-focused environment. Similarly, O. C. Tanner's founder, Obert Tanner, created a workplace where employees felt individually valued and supported, even with a large workforce.

These companies demonstrate that beyond competitive pay and benefits, creating a culture of intimacy—where employees feel genuinely cared for and connected—leads to extraordinary loyalty and dedication. Their success stories show that when companies invest in their people, they build not just businesses, but communities where everyone thrives together.

How Did ECCO's Unique Culture Transform Michelle Howard's Life?

In 2002, Reell Precision Manufacturing faced an ethical dilemma when engineer Joe Arnold was asked to develop a hinge for a cigarette display box. Joe's conscience clashed with his professional excitement for the project, knowing the hinge would ultimately promote cigarette sales. 

After seeking advice from his wife and colleagues, and despite the company's financial struggles, the matter was escalated to the senior management team. They ultimately decided to forgo the contract, prioritizing ethical integrity over potential revenue. This decision underscored Reell's unique approach to trust and employee empowerment, deeply rooted in its founders' values.

Reell's story mirrors the ethos of other remarkable companies that prioritize values and culture over conventional business metrics. For instance, The Goltz Group, led by Jay Goltz, emphasizes quality, employee satisfaction, and customer service. Goltz's management philosophy involves open communication, systems for accountability, and a relentless fight against mediocrity, cultivating loyalty and pride among his staff.

Similarly, Hammerhead Productions, a visual effects company, maintains a flexible and creative work environment. Founded by industry veterans who sought freedom from corporate constraints, Hammerhead thrives on project-based work, hiring freelancers to scale as needed, and fostering a non-hierarchical culture.

Conversely, Rhythm & Hues, another visual effects company, exemplifies a different challenge. Despite its critical acclaim and a work environment that prioritizes employee well-being, it struggles with profitability. Founder John Hughes invests heavily in generous health benefits and an egalitarian workplace, reflecting his belief that taking care of employees is paramount, even at the expense of financial stability.

These companies, each unique in their approach, share a commitment to core values that shape their operations and cultures. Whether it’s Reell’s ethical steadfastness, Goltz’s systems of excellence, Hammerhead’s creative flexibility, or Rhythm & Hues’ employee-centric policies, they all illustrate that success can be measured by more than just the bottom line.

Ethics Over Profits: The Inspiring Stories of Reell, Goltz, Hammerhead, and Rhythm & Hues

In 1991, Inc. magazine profiled University National Bank & Trust Co. (UNBT) of Palo Alto, California, as a bank that believed in "limited growth offers more opportunities than fast growth." This unusual philosophy was championed by its founder, Carl Schmitt, who had a knack for innovative management and customer service that defied banking norms.

UNBT's zany corporate culture was legendary. Their trademark featured an alien in a flying saucer crashing through a wall, and their trucks sported caricatures of executives in humorous, rebellious scenarios. Schmitt even shipped ten tons of sweet onions from Walla Walla, Washington, annually, giving them to customers in ten-pound bags—an offbeat but beloved tradition.

Tom Peters spotlighted UNBT in his work, impressed by their customer-first approach. Schmitt's tellers would spend time talking customers out of bounced-check fees, assuming they were of good will. This remarkable service wasn't just a gimmick; it was part of Schmitt's strategy of measured growth, believing that growing too fast would compromise service quality, employee satisfaction, and shareholder returns.

Schmitt's philosophy stemmed from his experience as California’s superintendent of banks, where he noticed smaller banks outperformed larger ones by keeping operations efficient and focused. He aimed for UNBT to capture just a 15-percent market share in Palo Alto and its surroundings, no more, letting the market dictate the pace. This strategy worked wonders, attracting top talent from major competitors and maintaining an almost non-existent employee turnover rate.

However, Schmitt’s health took a turn in 1993, and regulatory pressures increased, leading to the bank's sale to Comerica in 1995. The sale was bittersweet, as the bank's unique culture faded under its new corporate identity, though the tradition of giving away onions persisted.

Carl Schmitt’s journey with UNBT encapsulates the challenge small giants face: maintaining their unique mojo amidst growth and change. His story illustrates that preserving a company’s special qualities often involves significant sacrifices, like accepting a lower sale price to ensure the right successor. Succession planning remains a critical yet complex task for many business owners, who must navigate the emotional and financial intricacies to ensure their legacy endures.

Could Carl Schmitt’s UNBT Model Be the Key to Revolutionizing Modern Banking?

Bernard A. Goldhirsh, founder of Inc. magazine, played a pivotal role in transforming the perception of entrepreneurship in America. Before the 1980s, entrepreneurs were often seen as dubious characters, overshadowed by large corporations. Bernie changed that narrative with Inc., a magazine that catered specifically to small business owners and celebrated the entrepreneurial spirit.

Bernie's journey to business was serendipitous. An MIT graduate and passionate sailor, he initially dabbled in publishing to fund his dream of owning a boat. This hobby evolved into Sail magazine, which became the world’s largest circulation sailing magazine by 1970. But his true calling emerged with the birth of Inc. magazine in 1979, which he launched despite industry skepticism. The magazine quickly became a success, reaching a paid circulation of 650,000 within six years.

Working for Bernie was unique. He was a curious, informal, and deeply thoughtful leader, likened to a Woody Allen-esque figure with a passion for sailing and a knack for drawing unexpected connections. He believed in the artistic side of entrepreneurship, often likening business creation to art, where the entrepreneur is akin to an artist working from a blank canvas.

This philosophy resonated with many successful entrepreneurs. Fritz Maytag of Anchor Brewing, for example, spoke passionately about the traditional methods his brewery used, from whole hops to air-cooled fermentation, emphasizing the joy and authenticity in their craft. Similarly, Selima Stavola, a clothing designer, found immense joy in her work, viewing each piece as unique and personal.

Jay Goltz, a home and garden store owner, and Ari Weinzweig of Zingerman’s, a deli in Ann Arbor, Michigan, also exemplified this passion. They focused on creating memorable experiences for their customers, whether through meticulous store design or educating employees about the food they sold.

Norm Brodsky of CitiStorage, a records storage business, demonstrated that even the most mundane enterprises could be approached with creativity. By rethinking storage strategies, he revolutionized his industry, proving that passion and innovative thinking could lead to success.

Ani DiFranco and Scot Fisher of Righteous Babe Records highlighted the delicate balance between art and business. Their company thrived by respecting artistic integrity while maintaining business acumen, supporting independent artists without compromising their vision.

These stories illustrate that true entrepreneurial success is often driven by passion and creativity. The small giants—companies that prioritize relationships, community, and the joy of their craft—serve as a testament to this philosophy. They remind us that businesses can be more than just economic engines; they can be expressions of the human spirit, contributing uniquely and positively to the world.

Bernard Goldhirsh: The Visionary Who Revolutionized American Entrepreneurship

Reflecting on the stories of various entrepreneurs reveals a consistent theme: the tension between growth and staying true to one's values. Fritz Maytag at Anchor Brewing, Gary Erickson of Clif Bar, and Ari Weinzweig and Paul Saginaw of Zingerman’s Deli all faced pivotal moments where they chose to prioritize their principles over rapid expansion. This decision to remain small and value-driven often led to richer, more sustainable success.

Similarly, the tale of Martin Babinec and TriNet underscores the challenges of balancing control with the demands of growth. Despite the pressures, Babinec found satisfaction in his work and valued his team, illustrating that passion and perseverance can lead to fulfillment.

Danny Meyer’s concept of enlightened hospitality and the intimate, caring company cultures at places like ECCO and Righteous Babe Records further demonstrate that personal connections and empathy are key to both customer satisfaction and employee loyalty. These businesses show that focusing on relationships rather than just profits can foster a resilient and thriving enterprise.

The ethical dilemmas faced by companies like Reell Precision Manufacturing highlight the importance of maintaining integrity, even at the cost of potential revenue. This commitment to values over profit is echoed in the unique management philosophies of leaders like Carl Schmitt of University National Bank & Trust Co., who believed in measured growth to preserve service quality and employee satisfaction.

Overall, these narratives emphasize that true entrepreneurial success often comes from maintaining a deep connection to one’s values, community, and the joy of the craft. This approach not only nurtures sustainable growth but also enriches the human spirit, proving that business can be both profitable and profoundly meaningful.

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Small Giants: Companies That Choose to Be Great Instead of Big

Bo Burlingham

Ever wondered how renowned restaurateur Danny Meyer's concept of enlightened hospitality transformed customer service?

How did his approach to empathy and kindness turn Gramercy Tavern into one of New York City's favorite restaurants?

Or how Marilyn Rubin's experience at Meyer's restaurant Tabla went beyond impeccable service and left a lasting impression on her?

What role did Bernard A. Goldhirsh, founder of Inc. magazine, play in transforming the perception of entrepreneurship in America?

Let's dive into these fascinating stories of businesses that have built their success on creating personal, meaningful connections with their customers and suppliers.

Key Ideas

#1