Hello and good day!
The famous physicist Richard Feynman wrote something in his autobiography that has stuck with me since I read his book more than ten years ago.
He said that if a physics professor can't teach a concept, even an advanced concept, to a freshman physics class, then they don't understand the concept well enough themself.
That is not to say that a freshman class will understand all the technical details of a topic.
But a professor ought to be able to at least explain the basics of a concept, even a very complex concept, in a simple way. If they can't, according to Feynman, they need to go back and dig deeper so that they can tie the concept back to fundamentals.
One of my favorite books of all time is Wooden On Leadership: How To Create A Winning Organization.
I've read it probably twenty times.
I consider it part of my duty as a business owner to read the book over and over again.
I am by no means a natural leader. It is still strange for me to think of myself as anybody's boss.
I have to give myself a pep talk anytime I am required to give constructive criticism.
Wooden On Leadership has helped me quite a bit with my ability to uphold proper organizational standards.
John Wooden won 10 national college basketball championships as head coach of UCLA during a 12-year stretch from 1963 - 1975. That makes him the winningest national chamionship college basketball coach of all time, by a long shot.
The next person on the list is Mike Krzyzewski of Duke, who has won 5 national titles.
That is a pretty long spread between number one and number two.
Wooden was from a small town in Indiana and grew up on a farm. His leadership principles and writing style reflect his humble beginnings.
The basic formula that he used to win all those national championships was this.
Conditioning + Fundamentals + Unity = Success
Excellent physical conditioning allowed his teams to apply intense pressure on opponents for the entire duration of a game.
He didn't worry about drawing up fancy plays. Instead, his practices focused on mastering the fundamentals of the game.
And he preached that the star of the team is the team, not individual players.
Each teammate had to act in the best interest of the team as a whole.
If a player couldn't abide by this formula, he was off the team.
Here we have two masters of their respective fields stressing the importance of conceptual simplicity.
I'd like to put a pin in that line of thought for a moment.
Please take a look at the photos above.
They are of our first ever cacao processing facility in the city of Jaen in northern Peru. I've shared photos of this facility before, and I've looked at these photos a million times, but they still kindle fascination in me.
We rented this old parking lot.
My brother Brian and my brother-in-law Miguel slept in the tiny brick room together on bunk beds. Brian slept on bottom, Miguel on top.
In the morning, they rode motorcycles in the rain out to farms to buy cacao.
In the evening, they learned how to ferment and dry cacao, right there on the grass, in that small space enclosed by tall eroding brick walls.
The question I ask myself when I see these pictures is why.
Why in the world would my brother take a seventeen-hour bus ride to the jungle every two weeks from where he was living in the mountain city of Cajamarca with his wife and newborn daughter?
The full story is complex. There were a lot of factors.
However, a la Feynman and Wooden, those factors can be boiled down to something simple.
The fundamental answer is that we needed to know how to produce the base ingredient for delicious chocolate.
Truly delicious chocolate would allow us to pay our cacao farm partners more.
Truly delicious chocolate would allow us, as unknowns, to break into an industry dominated by 4 or 5 big players.
Deliciousness was the key, and it still is.
When we first started selling chocolate, our prices were far too high. We thought that deliciousness and a good story would justify extreme price premiums.
They didn't.
We learned that our price could be at the top of the market for our category, but not higher.
This added a second important variable to our formula.
Customer Price.
Finally, as my brother Brian became more enmeshed in the cacao growing community where he lived for a decade, we made the philosophical decision to pay our cacao farm partners the highest prices for their cacao that we could possibly swing.
This was necessary to convince farmers to sell cacao to us and it was also the right thing to do given the remoteness of their geography and the resulting poverty that comes with living so far off the beaten path.
This gave us the third factor in our formula.
Farm Price.
A couple of years ago, when I had just finished reading Wooden On Leadership for the fifteenth time, I decided to come up with my own formula for success.
Here is what I came up with for our company.
Deliciousness + Customer Price + Farm Price = Success
The products must be delicious.
The prices we charge customers must be fair and a good value.
And we must pay our cacao farm partners a very high price.
Right now, we are paying roughly ten times FairTrade premiums to the wonderful folks who sell us cacao.
To adhere to this formula, we needed to cut every single player out of the supply chain except the cacao farmers, us, and our customers.
This is how we can manage fair prices for both customers and farmers simultaneously.
We eliminate all the markups from the supply chain by buying and selling direct and we pass along the savings.
For deliciousness, we centralized post-harvest cacao processing out in the jungle so that every single cacao bean used in our chocolate is meticulously and exquisitely fermented and dried.
And we have made a genuine commitment to never put out products that we don't believe in whole heartedly.
Climbing a mountain is hard, but simple.
Put one foot in front of the other until you get to the top. Your thighs will burn, sweat will pour down, and you'll be breathing hard.
But there isn't any question about what you need to do to succeed.
Likewise, for us, D + CP + FP is simple, but not easy.
It is hard work doing what we do.
But it is much easier to proceed with a hard journey when you have confidence in the map.
Lastly, I think that coming up with a simple operating formula that helps you focus on fundamentals is a good tool for just about any endeavor.
Here is the formula that I preach to my three sons about how to succeed in life.
I know they are sick of hearing it, but I plan to bang them over the head with it until they move out.
Effort + Attitude = Success
Thank you so much for your time today.
I hope that you have a truly blessed day!
Adam
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