Built from Scratch: How a Couple of Regular Guys Grew the Home Depot from Nothing to $30 Billion by Bernie Marcus, Arthur Blank

From the Publisher

When a friend told Bernie Marcus and Arthur Blank that, "You've just been hit in the ass by a golden horseshoe," they thought he was crazy. After all, both had just been fired. What the friend, Ken Langone, meant was that they now had the opportunity to create the kind of wide-open warehouse store that would help spark a consumer revolution through low prices, excellent customer service, and wide availability of products.

Built from Scratch is the story of how two incredibly determined and creative people-and their associates-built a business from nothing to 761 stores and $30 billion in sales in a mere twenty years.

Built from Scratch tells many colorful stories associated with The Home Depot's founding and meteoric rise; shows that a company can be a tough, growth-oriented competitor and still maintain a high sense of responsibility to the community; and provides great lessons useful to people in any business, from start-ups to the Fortune 500.

Great Stories

• "Ming the Merciless": The inside account of the man who fired Arthur Blank and Bernie Marcus
• "My people don't drive Cadillacs!" How Ross Perot almost got involved with The Home Depot
• "Take this job and shove it!" The banker who put his career on the line to get The Home Depot the loan that enabled it to survive
• "Folks, I tell ya, if these Atlanta stores were any bigger, we'd be paying Alabama sales tax." Home Depot's first good ol' southern advertising campaign

A Company with a Conscience

• When disasters like the Oklahoma City bombing or Hurricane Andrew happen, Home Depot associates don't ask for permission to respond. They react from their hearts-whether that means keeping their store open all night or being on the scene with volunteers and relief supplies.
• The Home Depot doesn't just contribute money to organizations like Habitat for Humanity and Christmas in April, but also provides its people to help lead and grow these community efforts.

Great Lessons

• Know your customer: In The Home Depot's case, customers don't pay for wider aisles and a pretty store, but for a wide assortment and low prices
• Why everyday low prices mean more sales overall: The marketing philosophy The Home Depot learned from talking with Sam Walton
• Market leadership: Why The Home Depot never goes to a major new market with plans to open just a few stores
• The strategy for profitable growth: How The Home Depot redefined its U.S. market from its $135 billion traditional "do-it-yourself" base to a much larger pond of $365 billion
• How to change the rules of the game: How The Home Depot bypassed almost all middlemen, allowing it to pass on huge savings to customers

Bernie Marcus is a cofounder of The Home Depot and currently serves as chairman of the board. From the company's inception until 1997, he served as CEO. With his wife, Billie Marcus, he founded the Marcus Developmental Resource Center, which provides support services for mentally impaired children and their parents. He sits on many boards of directors, including the New York Stock Exchange, and participates in many civic organizations, including the City of Hope, a cancer research center.

Arthur Blank is a cofounder of The Home Depot and is the company's president and CEO. He serves on the board of trustees of several organizations, including the North Carolina Outward Bound School, the Carter Center, Emory University, and the National Conference of Christians and Jews. He was inducted into the Babson College Academy of Distinguished Entrepreneurs and was honored by the City of Hope for his fund-raising leadership.

Bob Andelman lives with his wife and daughter in St. Petersburg, Florida, and has collaborated on many bestselling business books, including Mean Business and The Profit Zone.

The Wall Street Journal - James R. Hagerty

Built From Scratch, the founders own account, is far more fun to read than Inside Home Depot, written by Chris Roush, a journalist who was denied access to many of the insiders. The founders' book gives only their viewpoint. It was ghost-written by Bob Andelman, who isn't known for restraining the vanities of his subjects.

Publishers Weekly

There was a time when you could ask American consumers to choose between good service and low prices. As a countless number of retailers who are now bankrupt learned the hard way, those days are gone. Today, shoppers expect both, having found them at places such as Wal-Mart and the Home Depot. Here, the founders of the Home Depot, the countrys largest home improvement chain, stress that coming up with a good ideaand the Home Depot was the first of the oversized do-it-yourself chainsis not enough. Would-be moguls not only have to execute well but also have to recognize that competition is inevitable. Thats why Marcus and Blank say they built the company on more than just buying in volume and passing along the savings. They contend that the real keys are making sure employees know what the company stands for so that they go out of their way to serve customers. They also preach a no-mercy attitude toward the competition. Blank once asked a rival if he had seen the movie Jaws. He then said to the man: Imagine we are in the back yard swimming pool together. Now imagine that the Home Depot is Jaws. Stories about the founders early days working at other companies are not always clear, and characters zip by with little explanation. Still, the authors manage to explain the Home Depots success and do an excellent job of explaining the 14 principles that guide the company in a chapter called, appropriately, How We Manage.

Library Journal

When Chris Roush approached Marcus and Blank about his book on Home Depot (Inside Home Depot, LJ 1/99), they denied him access, preferring to tell their own story. While it is more folksy and humorous, it essentially covers the same information, with the addition of intimate details of many business relationships and dealings. Blank, the company's president, chief operating officer, and chief executive officer, and Marcus, the chairman of the board, began Home Depot in Atlanta with little backing. But their shrewd merchandising ideas and ability to work with key players not only surprised many in the industry but created a corporate culture that competitors are now trying to emulate. The authors candidly discuss setbacks, including a multimillion dollar discrimination settlement, as well as ideas gone awry. Most libraries should have at least one of these books on Home Depot, and larger public libraries and business collections should consider both.--Steven J. Mayover, Free Lib. of Philadelphia Copyright 1999 Cahners Business Information.

Kirkus Reviews

A pair of hardware merchandising buddies chat about how they built one of the most successful big-box retailers ever. These moguls of do-it-yourself did it themselves: they built the Home Depot. In two decades, they built their business from the ground up to employ 200,000 "associates" in nearly 1,000 locations. It's a kick-ass company, they are proud to announce, and indeed, it is. It has eliminated distributors and wholesalers from its network. It browbeats manufacturers for uncommon price concessions and rebates while great quantities of inventory are drop-shipped directly to their outlets. Founders Bernie and Arthur and their cohorts are fierce competitors, and they tell you so with broad grins. They allow managers much latitude, they say, even as they stress the tight reins on merchandise, distribution, finances, and infrastructure. The story is in the words of Arthur and Bernie, and their words are interchangeable. It's all colloquial lumberyard schmoozing, and the scurrying metaphors are pleasantly mixed: "I opened the door and [he] ran with it," and "sometimes they run with a red herring and get burned with it." Some words are jerry-built to fit: associates are "inculturated" with Home Depot values—but you get the idea. The inculturation stresses care for the customer in particular and corporate decency in general. (It seems to work.) Bernie and Arthur thrive on merchandising and playing with the big boys, like Ross Perot and the late Sam Walton, but they don't neglect the details. They acknowledge that many mom-and-pop stores haven't been able to survive the Home Depot's thorough competition. The message is that the day of mom and pop has passed (though Bernieand Arthur are now considering opening small neighborhood shops now that the old folks are gone). A garrulous handyman chronicle of a ubiquitous corporation, this text is constructed of plain pine, without a coat of writer's varnish, by a couple of guys in orange aprons. (8 pages b&w photos, not seen)

Product Details

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Table of Contents

Read an Excerpt

Opening the First Store

"What the hell happened? Who screwed up the store? Whatever time remained before the doors were scheduled to open for the first time, we sped around in forklifts, stomping on the brakes, scuffing up the flooring so it would once more look like a warehouse."

Customer Service

"If ever I saw an associate point a customer toward what they needed three aisles over, I would threaten to bite their finger. I would say, 'Don't ever let me see you point. You take the customer by the hand, and you bring them right where they need to be and you help them.'"

Expansion

"When we expanded into the Northeast, everyone told us, 'Business is going to be a lot different in the Northeast. You just don't understand the people there. They are rougher, short-tempered, intense, aggressive, etc.' All of which is more or less true. But, we said, we do understand them. We've been serving their parents in Miami for years."

Giving Back

"When The Home Depot went public we realized that we had the financial capacity and wherewithal to give back to the communities where we did business. There is a concept in Judaism called tzedaka, which means 'to give back.' It is considered a mitzvah, a good deed, to give to someone who doesn't have, and we believe strongly in giving back to the community."

Selling the Vision

"We had to be psychologists, lovers, romancers, and con artists to get vendors aboard. Our ability to paint a picture of how that would take place-lowest prices, widest selection, and great customer service-was what convinced skeptical manufacturers to sell merchandise to us during the early years."

The Importance of Values

"I have never had anybody work for me in retailing who didn't work for me out of love, as opposed to fear. We carried this approach into building The Home Depot. We care about each other and we care about the customer. The things that we do for customers inside and outside the stores demonstrate our commitment to them. And then when something happens within the company, we circle the wagons. We help each other."