If you think business is hard today – where you have an established product, established customers, and an established need – try building a business with a little used product that is required by another little used product.
This is how we got to the now world-renowned Michelin Star System for grading fine dining restaurants.
Huh?
Sometimes, in order for you to succeed, you need to help someone else create the need.
The brothers Michelin founded their tire company in 1889. Eleven years into their business, things weren’t going that great. Cars were considered a luxury item, even by those who could afford any luxury item they wished. When few cars are sold, fewer tires get moved.
At the time, there were just 2,200 cars in all of France, there was no real road system, and there were no petrol stations; one bought gas at select drug stores.
So the brothers Michelin decided they needed to help generate car sales. But as they couldn’t favor one brand over another (OE sales were important even in 1900), they decided to give the upper classes a reason to drive more – thus the birth of Michelin’s travel guide business.
Hotels, mechanics and gas stations were catalogued across France, the brothers Michelin literally gave away guidebooks to gin up interest; they even posted their own roadside signs to assist drivers looking for specific Michelin-recommended stops.
Boosted by expanding tire sales, Michelin’s guidebook business expanded into a series of country-specific editions across Europe, and the guides became so popular that in 1920 Michelin was able to begin charging for them. Six years later, the guides were expanded to include fine dining restaurant coverage – and a three-star grading system that exists to this day.
Michelin guides are now published for 24 countries; New York City – the first U.S. entry – was added just a decade ago.
Today, restaurant fortunes are made and lost on the basis of Michelin stars. Star-losing chefs are reduced to tears; some even quit the business just because their establishment was down-marked one year from the last.
Wouldn’t it be interesting if every business were under such intense scrutiny?
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Speaking of destinations, if you were making plans to hit Disneyland next year, be aware that Luigi’s Flying Tires in Cars Land will close Jan. 12, 2015, for an 11-month makeover. Observers say it is “unusual” for Disney to take a “functioning attraction” down for such a lengthy period.
But apparently, Luigi’s Flying Tires is, shall we say, functioning but very unpopular with guests, leading to speculation that the ride is not being repaired or retreaded, but rather headed for recycling.
Gasp!
