Trader Joe's called. They want their business model back.

When you're in business for yourself, the lure to say Yes to any request is great. And it's even greater when your business is new, and when the persons receiving the requests are the co-founders / co-VPs of Sales / co-heads of Product Development / co-directors of Customer Service / co-beneficiaries of the company's modest profit sharing plan. Dave and I realized this early on. In fact, some of the earliest conversations we had were not about what we would sell, but about what we wouldn't sell. We're niche, which is the marketing department's way of saying that we're small and have to focus. The downside is that we can't offer a product line so bloated that even if you know exactly what you want, you still have three products to choose from (as is the case with some bike companies). But the downside to that downside is that it takes a hella infrastructure to to manage a 20 or 40 bikes with 2 or 4 permutations of each. When we decided that we wanted to compete on price against much bigger companies, we became niche by choice - focus is the only way to avoid all the infrastructure that adds expense and makes your bike cost a grand or two more.

We liken our roles to editors - our job is to strike whatever doesn't add value, leaving you with precisely what you need. But the "you" here isn't up to us. If we're small, we don't have to go after a swarming, teeming mass of Yous like the big brands. Instead, we can be consistent with our story and our strategy, and the Yous who share the same value proposition will find us. It's a lesson I learned from blogging - focus on what you are uniquely qualified to create, and an audience will find you. 

Some of my favorite companies outside of the bike business work the same way. A couple of years ago I was shopping in a Trader Joe's. It was winter and my sons wanted hot dogs and chili cheese fries for dinner. We chased down the necessary provisions at TJ's but I couldn't find hot dog buns. I asked someone in an aloha shirt where they were. "Oh it's winter. We only carry hot dog buns in the summer." My son - who was about 7 at the time - remarked to me, "that's dumb." I was inclined to agree with him because he's my son and if I don't have his back who does? But I realized I didn't agree with him, and if I wasn't going to instruct him on a valuable life lesson who was? I told him about niche and focus and strategy, and said that one of the things that makes TJ's so cool is that they have stuff nobody else does. The only way to do that is to also not have stuff everyone else does. We found a half-baked ficelle loaf and used that instead, which ultimately made a much better hot dog bun than hot dog buns.

I also ended up telling him that the other thing that makes TJ's so cool is that they're impossibly cheap. The focus helps of course. Fewer SKUs mean a much smaller store with all of the accompanying reductions in overhead and infrastructure. But the other way they're cheaper is that most of their stuff is private label. Why pay for a cereal (or mayonnaise, or dish soap, or frozen pizza) with a bloated cost to justify massive brand advertising expenses when you can go to the same exact supplier and have a comparable product made with your brand instead? 

Today I was in Trader Joe's again, stocking up on supplies before the Anemic Blizzard of '10, which now seems to be over after gently draping my deck with about 25mm of snow. I couldn't find the Quick Beer Bread Mix, which you make by pouring in a bottle of beer and putting in the oven. (I used Rogue Dead Guy Ale last time, and paired the fresh bread with, um, Rogue Dead Guy Ale.) I found a woman in an aloha shirt and asked her about it, half-knowing the answer already. "We don't have that anymore. It wasn't very good." Now I disagree, and that's fine with Trader Joe's. Because even though they've disappointed me through the loss of a product, they've still got me hooked with their focus on customers who appreciate their editing. 

Anybody got a recipe for quick beer bread, or a recommendation for a cheese to pair with a bottle of 2-Buck Chuck?

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I don't know which version of the Chuck it would pair with, but they have a hella-good Havarti with Dill right now…


Interesting. I'll see if they have it – I'm going back today.

Mike May

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