Supported by Greenhaven Road Capital, finding value off the beaten path.
“We finally decided in 2007 that we would entertain an offer if we felt like it was the right company because we didn’t have to sell. We were a financially stable company. But I was starting to get really tired and worn down.”
Her comments demonstrate the difference between a business and a hustle. Brent Beshore told Ted Seides that there can be some pretty big hustles, and that’s what Lärabar probably was. Brent said:
“We looked at a business recently, it was doing nine million dollars of free cash flow, that is definitely a hustle, right? It’s one person, they’re the lynchpin in this thing, everyone is an extension of them, there are no systems, the repeatability of revenue is not there, and if that person gets hit by a bus, I mean the entire company implodes within a short period of time, right? So we call that a hustle, right? That’s not a business.”
Merriken was probably tired because Lärabar lacked systems. Which makes total sense. She started with a pizza cutter and a rolling pin using store-bought supplies. However, the same environment that encourages innovation discourages processes. General Mills didn’t create raw fruit and nut bars, Lara did. She explored new lands and created new lines. Yet, once the operation was up and running she needed someone to ‘make the trains run on time.’
Michael Ovitz’s career offers this contrast too. Ovitz co-founded Creative Artists Agency in 1975 and one early innovation was ‘packages’. Actors A and B, with director C, Producer D, and script E. One such project was 1988’s Rain Man. Reflecting on the project, Ovitz wrote, “Nothing in Hollywood is anything until it’s something, and the only way to make it something is with a profound display of belief.”
However, what made Michael successful as an agent and leader of an agency failed him as a leader of a company. Reflecting on their time together at Disney, Bob Iger wrote: “I think of him (Ovitz), not as a bad guy but as a participant in a big mistake.”
Ovitz and Merriken succeeded in systems where flexibility and exploration were the most important characteristics and both needed help in systems where repeatability and optimization took the stage.
Every business and every person exists within these and other systems. Bull markets, tailwinds, ‘booms’ and ‘busts’, expansions and contractions, and so on. Every business and every person has agency and the ability to change too–though that takes time and time introduces the TiVo problem. If Merriken took too long to built systems, General Mills would have built bars.
Thanks for reading.