Lesson #35
The Easiest Path to Hypergrowth Is with Other People's Money
There are many ways to build a company—organic growth through profits reinvested in the company; organic growth through capital injections from investors; and acquisition. But no matter which method you choose, the easiest path to accelerated growth is always on someone else's dime, which I call OPM, or other people's money.
Taking other people's money to fuel expansion doesn't always mean that you'll lose control of your company. A truly savvy entrepreneur can craft smart deals that inject capital, which can be used for rapid expansion, and at the same time maintain control of his or her company.
We knew we weren't finished with acquisitions after we'd expanded OfficeMax through the Office World acquisition. Six months later, in mid-1990, Kmart decided to start its own office supply chain, Office Square, and opened its first stores in our backyard—Canton, Ohio. Worse yet, Kmart CEO Joe Antonini committed tens of millions to getting the venture off the ground.
By this time, Staples and Office Depot were quickly becoming the big dogs in the office supply superstore industry and snapping up smaller competitors at a breakneck pace. I had a little nagging voice in my head that kept saying we needed to step up our efforts and do something about this potentially dangerous competitor. Office Square's presence was intimidating not because they were any good, but because their parent company provided them with much ...
