Prescription for a Successful Small Business
How growing up and working in Maiman’s Pharmacy taught me the most important skills needed to run a high-tech product engineering and design company.
What could working in an old school neighborhood pharmacy teach anyone about running a cutting edge tech firm? On the surface, these two wildly different businesses have nothing in common. Their inherent natures could not be more dissimilar. A neighborhood pharmacy sells direct to those in the local community seldom reaching a customer more than a mile or two from the store. This was the norm for local pharmacies in urban environments. Contrast this with even a relatively small, successful product development firm deals with clients of all sizes with a global reach. Over the years I’ve come to realize that many of the rules for growing a successful business were those I learned working in that drug store as a young person.
The Local Pharmacy
My family owned a neighborhood pharmacy in Brooklyn. For fans of Brooklyn, Maiman’s Pharmacy was on Eastern Parkway in Crown Heights on Franklin Avenue. The pharmacy was a neighborhood fixture. To this day, when I run across another “boomer” from Brooklyn, I am amazed to find people who still remember Maiman’s Pharmacy (some even remember my father and uncle). My father and uncle were business partners and were known by virtually everyone in the neighborhood. Back when Maiman’s was founded, it was along the well-trodden path between the IRT 2–3–4–5 Franklin Avenue station on Eastern Parkway (yes, subway lines had branch names…. IRT, BMT, IND, etc.) and Ebbets Field, home to the Brooklyn Dodgers. Even in the era of growing chain pharmacies, Maiman’s Pharmacy not only survived but also thrived in the local community. I vividly recall customers from the neighborhood coming into the store during the holidays to give my father and uncle fresh baked cakes and cookies. Customers treated my father and uncle like they were extensions of their doctors’ offices. They spent a lot of time chatting with the clients, often about things unrelated to their prescriptions. They knew their customers personally and enjoyed (most) of their interactions. When was the last time you had a pleasant conversation with the pharmacist at your local CVS? Do you even know their name?
Working at Maiman’s Pharmacy from the time I was in Junior High School through part of my time in college. I did every entry-level job… stocking shelves, receiving deliveries, working as a cashier, making deliveries — even wrapping gifts at holiday time! At home, I became immersed in the language and reality of small business ownership. And I learned the subtle keys that made it successful. One of them was having the keen desire to own your own company. I can still hear my grandfather telling me, “You have to own your own business… otherwise, you are just another sucker making someone else rich!” But for most of my youth and young adulthood, those words rang hollow. How was the gruff perspective from my grandfather (he was, after all, an old school Brooklyn guy), who may not have even graduated from high school, relevant to me and my situation — someone college educated and looking forward to a career as an employee in some great technology company?
My father and uncle never studied business management. My father was educated as a pharmacist (thanks to the post-war GI bill). There was no structure around brand strategy, brand engagement, client retention, sophisticated pricing strategies or profound marketing communications. Despite the lack of formality, anyone doing a case study on Maiman’s would have found that there were practices going on that lead to long term customer loyalty despite the encroachment of bigger brands with more aggressive marketing and pricing models. There was something special going on at Maiman’s Pharmacy of broad relevance to any entrepreneur running a small or even large business.
The Product Development Consultancy
Fast forward. In 2008, my business partner (Paul Severino) and I founded Intelligent Product Solutions (IPS). IPS is a services company that helps clients of all sizes create and launch all sorts of new technology products. We’re a tight knit team of designers and engineers that has achieved a high level of success, by most measures. This was the first endeavor where I was not an employee of a big company. How, in heaven’s name, could one leverage anything from years-past employment at a pharmacy into this highly tech-oriented services business?
Engineers, who comprise the majority of our staff, tend to be fact based and objective individuals. Many of our clients are current or former engineers as well. Our direct client discussions tend, then to be either with engineers, managers or executives who came up through the engineering ranks. This group (pardon the generalization), tends to not be emotionally driven and can score low in the socialization skills. It is almost impossible to relate the “culture” of the staff at our consulting firm with the one at Maiman’s Pharmacy. Likewise, our clientele looks nothing like the diverse community of individuals and families in the neighborhood Maiman’s Pharmacy served for so many decades.
But as bizarre as it may sound, there is much common ground. IPS also has a large body of loyal repeat clients who have been with us for many years. When we meet with our clients, our casual and mealtime discussions are mostly conversational and personal. Exchanging notes about family, friends, sports and the workplace (OK… sometimes we discuss politics, too) dominate the conversation with only a modicum of discussion about “hard business” related matters. We celebrate the accomplishments of family members and offer a sympathetic ear to personal problems. Our casual discussions don’t differ much from the banter I would hear between my father, uncle and their clients at Maiman’s.
The Lessons Learned
I was fortunate to have grown up in a small business family. I never knew how fortunate I was, nor what I may have internalized from my early life and affiliation with Maiman’s Pharmacy. By watching and listening, I learned about the rewarding side of a small business (and a startup, for that matter). As importantly, I learned about the pain of building and running a business… the stressful underside of entrepreneurship that inspirational/aspirational articles rarely touch upon.
Here are some of the things I learned at that neighborhood pharmacy that we apply every day at IPS while serving our clients and developing their products:
Build and sustain your relationships
Today, even with all our advanced, sophisticated communications and collaboration tools, a good part of building a business is still about building close personal client relationships. Certainly, to have ongoing business with any client, one has to perform and strive to exceed expectations. However, as the old saying goes, “People still buy from people” — at least in the services world.
Just as with the pharmacy business, customers always have options. They will take their business elsewhere if you underperform but are likely to come back to your company if pleased (preferably thrilled!) with your work. The favorable personal relationship is also a key reason clients come back. As with a neighborhood pharmacy, the customer always has other options and will find reasons to go elsewhere if the person-to-person interactions are not favorable.As the adage goes, “The easiest sale to make is to a satisfied past customer.” It is orders of magnitude easier to generate repeat business than to landing new customers/clients.
A small company can thrive in the face of big competitors
It is tough to beat big competitors at their game, so you need to find new paradigms where you can thrive. In the case of Maiman’s Pharmacy, it was hard to win using pricing as the differentiator. There was no way that a small, family-owned business had the economic buying power of a major pharmacy chain to win and sustain clients. The winning strategy, was the relationships built in the community. People came to Maiman’s because they could speak directly with “Dr. Henry” (my father’s first name was Henry) for as long as they wanted. My father and uncle always made time for these conversations. They were “trusted advisors” and not just a a place that filled orders.
IPS also has competitors far larger than we are. Some of them are based in Asia and may have thousands of engineers and designers. We have a team of 100–200 members. Overseas companies often pay their labor far less than we do in the U.S. and this is often reflected in pricing strategies (i.e. win on price advantages). Despite this, if a smaller, local company can do the job while also providing a high level of personalized, face-to-face service combined with a winning value proposition (e.g.finds the right gap to fill), that smaller company can survive and even thrive — and that is what we have achieved at IPS
It’s a marathon and not a sprint
Some startups go from “zero to 60” in 2 seconds after launch, but those are the extreme rarities. The dirty little secret of small business, whether a small family owned pharmacy or a boutique consulting firm like IPS, is that most of us have had a long hard slog in the trenches to achieve success. Success rarely comes overnight so best be prepared to run hard and to pace oneself for the long haul.
Not everyone gets rich
Because of Maiman’s Pharmacy, my family and that of my uncle became successful and made a bit more than “a good living” from the business. So too, for our current business, IPS. We make a nice living but when we sold the company recently, it wasn’t quite like hitting it big in the lottery. Most small businesses do not evolve into some huge cash out event. Success can be defined as generating a nice income for the family with some recognizable monetary value for the business. In starting IPS, I was introduced by a close friend to the term “lifestyle business.” That is, it will generate a very nice means of earning a living but it will not be a monumental “get rich quick” scenario. Drawing from the lessons learned at both Maiman’s Pharmacy and IPS, I had reasonable expectations in how to define and measure success. It’s a great, fun place to work, I get to put my stamp on how things work and I make a nice living. Most of us in small businesses measure success in this way.
You must be “all in”
In a family owned business or most entrepreneurial enterprises, more often than not it means you have to bet all your chips on your dream. You have to be prepared to do anything and everything necessary to become successful. When the chips are down, do you “belly up to the bar” to do whatever is needed or do you panic and fold? The difference is commitment.
I remember one night when Maiman’s Pharmacy received a call regarding the burglary alarm going off. My father and uncle had to drive into Brooklyn in the middle of the night. Who wants to do that and who else would have done this but them? At IPS, when times were tough and cash was short, my partner and I had to dig into our own home equity lines of credit and 401K’s to free up cash for payroll. If you are not prepared to be 100% committed, your probability of success is radically reduced and, by the way, you may have extreme difficulty getting investors to back you.
A good partnership is made in heaven
My father and uncle were brothers-in-law. They new each other for several years prior to starting Maiman’s Pharmacy. This “marriage” was something akin to a “shotgun wedding.” My grandparents funded there startup and put the two of them together. Because of the intertwined familial relationships, there was a “forcing function” that kept them together despite their very different personalities, lifestyle preferences and work habits. Though there we occasional conflicts, as in any marriage, mutual respect, complementary personalities and family ties kept things together as business partners for more than 30 years.
In IPS, my business partner and I had known each other for more than 20 years before starting the firm. We had been co-workers and close friends for that entire time. We too have different personalities, capabilities and work styles. As the case with my father and uncle, our differences are respected and complementary and we have learned to work effectively together for many years prior to starting IPS.
We know of many partnerships that do not work out as well at that of my father and uncle and my business partner and me. When it does work out, it is a thing of beauty and a key to success. It can be lonely at the top. Having a partner is a great way to share the load and to have an equal participant creating a strong, highly competent leadership team. My partner and I often say that, between the two of us, we have one whole executive. The key here is that partners with very similar in capability, style and temperament may have inherent conflicts. I my situation, and I am pretty sure that of my father, there was a natural “division of labor” along with respect and trust that the partner filled gaps.
In summary…
The two radically different small businesses — a family-owned pharmacy and a product development consultancy, certainly share similarities in the formula for success. Owning and running virtually any business, while always keeping the human connection to your customers in mind, has value that translates across markets and industries. And companies of all sizes.
Mitch Maiman is the co-founder and CEO of Intelligent Product Solutions, a premier product development consultancy, with a speciality in IOT product development. He enjoys writing on diverse subjects but does have a particular “bent” towards technology and technology management. He claims to probably be the oldest person contributing to Medium but is happy that there is a place where individuals with something interesting to say have a home, regardless of age or demographic.
