Disrupting Markets: The Walmart Story

Last weekend I had the pleasure of having dinner with Pitt Hyde, the Founder of AutoZone (NYSE:AZO) and just an overall impressive, humble, and great person.  Perhaps my favorite story of his was when he recounted his time serving on Sam Walton’s Walmart Board of Directors in the early days of his company.  According to Pitt, Sam would pick him up from the airport in a run-down car and take him back to the Walmart offices where they would prop up a fold out table and chairs to have their board meeting.

Apparently when Sam Walton was first starting his business, he had a unique vision where he could serve the underserved communities – areas in which larger store chains did not want to enter as they found it impossible to make profitable business cases for doing so.  Not only did Walton succeed in his strategy, he was able to make his business immensely profitable.

Walton’s First Walmart Store

“Once committed to discounting, Walton began a crusade that lasted the rest of his life: to drive costs out of the merchandising system wherever they lay—in stores, in the manufacturers’ profit margins and with the middleman—all in the service of driving prices down, down, down,”

–John Huey, 1998 Fortune Magazine(also co-authored Walton’s autobiography)

Walton started from humbling beginnings and was seen as an underdog with an unorthodox strategy, but through the years, Walton was not only able to apply his strategy effectively to underserved markets, but eventually would grow to dominate the whole country en route to becoming the largest revenue company in the entire World.

Today when people ask me to compare Ubiquiti Networks strategy, business model, and story to another company, I like to believe it’s most similar to Sam Walton and his early days in starting Walmart.  We have found a way to deliver powerful and sophisticated plug and play hi-tech connectivity solutions to underserved areas of the world while making a profitable business out of it.  Unlike other companies in our space competing for existing market share, Ubiquiti has created new markets and opportunities that didn’t exist before in places such as Africa, South America, Middle East, India, and China.  Although we are in the very early stages of the company and predominately represented in underserved areas of the world, I also aspire to drive Ubiquiti’s transformation from David to Goliath one day just as Walton did.

 

7 Responses to Disrupting Markets: The Walmart Story

  1. Chavez July 27, 2012 at 6:40 am #

    The Sam Walton of the internet world. I like it.

  2. Sandy July 30, 2012 at 12:41 pm #

    Hello Robert, not only will Ubiquiti Networks be as successful as Walmart but the Grizzlies will win a NBA championship within 3 years! 3 years! Have a safe trip & a blessed & prosperous week. Sandy, Marketing Executive.

  3. Jose Alves Jr September 2, 2012 at 6:59 pm #

    Robert, you’re enroute to the same successful destination as Walmart.

    When I visited Ubiquiti’s headquarters in late 2010 the most impressive thing I saw there was you and you team getting toguether on the caffeteria table for a flash meeting to discuss how to make the product more efficient, how to incorporate new features requested via UBNT’s forum and where prices could be lowered for the consumer without compromising quality.

    Whitnessing those moments (I was there for almost a week) made me realize that Ubiquiti had a soul different from most companies. Ubiquiti looked at the consumer for future movements and tried to provide a better experience to its most important asset, keeping the fire burning hot and keeping its products at consumer’s top of mind.

  4. Jose Alves Jr September 2, 2012 at 7:00 pm #

    Ubiquiti is enroute to the same successful destination as Walmart.

    When I visited Ubiquiti’s headquarters in late 2010 the most impressive thing I saw there was you and you team getting toguether on the caffeteria table for a flash meeting to discuss how to make the product more efficient, how to incorporate new features requested via UBNT’s forum and where prices could be lowered for the consumer without compromising quality.

    Whitnessing those moments (I was there for almost a week) made me realize that Ubiquiti had a soul different from most companies. Ubiquiti looked at the consumer for future movements and tried to provide a better experience to its most important asset, keeping the fire burning hot and keeping its products at consumer’s top of mind.

  5. Patricio September 6, 2012 at 1:22 pm #

    I love the story really believe what you say robert is reality in my country Argentina many districts and provinces with low income are excluded from technology now have wireless connections and ubiquiti thanks to you, we would never be possible if costs motorola canopy example speak from my own experience as director of a tiny connection provider in South America.
    worked hard to lower costs through ubiquiti to cope with such challenges, robert really admire you I might not get to be like you I have 31 years and I am very far from achieving your success, assessing your accomplishments I think you’re a millionaire but not by money but by your success many people should be attentive to the words of company directors like you, unfortunately we do not have many examples Argentina thank you very much for sharing this message with us, I apologize if my English is not understandable lamentablmente not I have a good foundation in your language but I think will understand my message.

    greetings:

    Patricio

    Buenos Aires – Argentina

  6. Eden J September 30, 2012 at 2:07 pm #

    and I wonder what makes this man a billionaire at a young age? So I look on your blog, and now I understan. You put your heart on what you do. You value the people you work with, and in return they work hard for you. Your point of views and ideas are very encouraging. Keep it up. And I will keep reading your blogs, so I can learn something from you.

  7. Mae March 29, 2013 at 10:27 pm #

    Looking forward to you blogging more. I guess we can see why you’ve earned success. You have good intentions and seem to have a great personality which is inspiring. Congratulations with everything.

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