Issue 001
You're gonna need a bigger book.
Welcome to Hold the Fort.
This is a collection of ideas stolen from industries, companies, and people who figured out how to grow. Some of them sell software. Some sell pet food. None of them sell insurance.
That's the point.
Let's get into it.
The Play
In 2018, Costco sold roughly 3,800 products per warehouse. Walmart sold over 100,000.
Costco's revenue per square foot? About $1,900. Walmart's? Around $600. Three times less.
Here's why: Costco doesn't ask customers to choose. They choose for them. One ketchup. One mustard. One dishwasher. The buyer walks in knowing that if Costco carries it, it's the one to buy.
The entire model is built on a single idea: curation is a service.
Most businesses add options because they're afraid of losing a customer who wants something they don't carry. Costco realized you gain more customers by making the decision for them. People don't want 40 choices. They want someone they trust to say "this one."
The Kirkland brand isn't a discount play. It's a trust play. "We looked at everything on the market and this is what we'd buy." That sentence is worth a $400 billion market cap.
Every business has a version of this available to them. Most are too afraid to cut the menu.
The Pipeline
In 2011, Ryan Cohen started Chewy out of a failed jewelry business idea. By 2017, PetSmart bought it for $3.35 billion. At the time, it was the largest e-commerce acquisition in history. By 2018, revenue hit $3.5 billion.
His competitive advantage against Amazon, Petco, and every big-box retailer on the planet? Handwritten cards.
Chewy hired a team to write holiday cards to customers. By hand. They painted portraits of customers' pets and mailed them. When a pet died, they sent flowers. Their 24/7 customer service line promised to answer every call within six seconds. Cohen dedicated nearly one-sixth of his entire workforce to customer service.
None of this scales in the way a Silicon Valley investor wants it to. All of it scaled Chewy to a $3.5 billion exit.
Here's the part that matters: 70% of Chewy's revenue came from Autoship, their automatic recurring delivery program. The handwritten cards didn't generate direct revenue. They generated the kind of trust that makes someone hand over their credit card on autopilot.
The cards were the strategy. The subscription was the business model. Most companies get this backwards. They build the subscription and then wonder why nobody stays.
Cohen's line: "I don't know too many businesses that ended up not being successful when they did a really good job at delighting their customers."
Simple. Boring. True. Worth $3.35 billion.
The Numbers
$0 — What Sriracha's parent company Huy Fong Foods spent on advertising for over 30 years while becoming the most popular hot sauce in America. No salespeople either. Founder David Tran figured if the product was in every restaurant, the restaurant was the ad. Revenue hit $150 million a year.
60-70% — Probability of selling to an existing customer. The probability of selling to a new prospect? 5-20%. (Marketing Metrics) The most expensive customer is always the next one. The most profitable one is the one you already have.
100 milliseconds — The amount of page load delay that costs Amazon 1% of sales. That's not a second. That's a tenth of a second. At today's revenue, a one-second delay would cost them roughly $3.8 billion a year. The insight isn't about websites. It's about friction. Every extra step, every extra click, every moment of hesitation you put between your buyer and the yes costs you money you'll never see.
The Fort
This is issue one. We're just getting started.
Hold the Fort is a newsletter, a podcast, and a series of competitions where you can show up and try to take the fort. First event: a poker tournament in Vegas.
NetVu Accelerate? email me at caleb@1fort.ai to get in the poker game
If you know someone who should be reading this, send it to them.
Hope you steal these.