Inactionable

It’s funny how spending a good portion of the week studying cases of businesses shades your perspective and allows you to see much of the world in terms of the entrepreneurial opportunities.  This is especially true when you actually see someone taking advantage of an opportunity that few would notice as existing.  Ironically, the innovative entrepreneur here wasn’t one of my classmates, but rather a homeless guy outside of Gypsy Bar, the club that was home to a huge collection of Harvard grad students last night.  Let me explain.

Charlie, Mike, and I had dinner with my mom (Steve, of course, left us after dinner to study his cases), played a few games of darts and then headed downtown to beat the crowds to the club.  As informal fellas, we were all dressed in jeans which, of course, I had paired with my Chuck Taylor All-Stars.  Everything pointed to a fun night until the Boston bouncer informed me (ever so gently) that I wasn’t allowed into the club with sneakers on.  Shoot.  That’s no good for business.  It would seem to be dead end.  But of course if it ended that quickly, it wouldn’t be much of story.

I stepped out of line and heard music to my ears: “Shoe man here!  Come get shoes!”  Standing in front of me was a disheveled guy yelling out to the line.  Of course I walked over.  ”You need shoes, big guy?”, he asked as I sauntered up. “You better believe it.  Let’s see ‘em.”, I responded.  He took me to the back of a Tahoe that was parked on the street and yelled at his friend to open the back of the truck.  Fascinated, I peered in.  No less than 10 pairs of shoes were in a tupperware crate in the back.  We searched through together and found no shoes larger than a pair of 10 1/2 loafers.  ”Wait!”, he exclaimed and took off his backpack and poured out 4 more pairs of shoes.  Again, no luck.  Now this guy was not one to lose a sale for the simple reason that he didn’t have the right product.  Thinking quickly, he said “Use this, but be careful, it’s sharp.”, and handed me a very sharp knife.  Apparently I was supposed to cut the side of the loafers and squeeze my feet in Akeem Olajuwon style*.  We’ll mark this up as things that sound like a good idea after the sun goes down.  I went to work.  As I cut the sides, my salesman had already turned away from me and was trying to fanagle a tip by flagging down a taxi for an older woman who had just finished dinner.  Always working!!!

Anyways, I cut the shoes, paid the man, and set off to squeeze my feet into the too small shoes and make it into Gypsy.  It was certainly the start of a great night!

The thing I’ve left out of the story so far is the pricing aspect, and it’s there that I believe you find who’s truly making money here.  When I asked him how much, the salesman quoted $20.  ”I’ll give you $10″, I responded.  At that point, through a mix of the alcohol and the need to make a sale, he let me know that the guy whose car he was using as storage took $10 out of every purchase so he would be losing money if he sold it that cheaply.  A couple of rounds of negotiation (and a little bit of yelling) later, the price was back at $20 (don’t negotiate too much with drunk men on the side of the street) and we went from there.  However, isn’ t it telling how high his cost of storage was? Beyond having to pay for the shoes, he was also losing half of his top-line revenue IMMEDIATELY to the guy who just gave him a trunk to put the product.  That’s the true entrepreneur and the job to have.

*- The story goes that when Akeem was growing up in Africa, they didn’t have shoes bigger than 13s so he had to squeeze his size 18 feet in them until he came to America.