Be Irreverent to Convention

👋 Hi friends,

I hope you all had a wonderful Thanksgiving. This year was my first Thanksgiving as an uncle, and I was very grateful to spend the holiday visiting my brother, his wife, and their new baby.

Since my new niece can't talk, the jury is still out on whether I won the "weird uncle at Thanksgiving" award—but I put up a good fight for it.

One night, while her parents caught up on some much-needed sleep, I read aloud to her the latest book I've been reading: In Pursuit of the Common Good—a history of Newman's Own salad dressing.

Paul Newman and Aaron Hotchner were almost the antithesis of the modern startup founder. They weren't young, ambitious, or particularly business-minded. Newman was a famous actor. Hotchner (Hotch) was a prolific screenwriter, novelist, and biographer. Newman was in his mid-50s; Hotch, his mid-60s. They were not the type of people you'd bet on to start a packaged food empire.

To his credit, Paul Newman was quite obsessed with salad dressing. He was notorious for bringing his own dressing to restaurants and gifting bottles to neighbors during the holidays.

One Christmas, while Newman and Hotch stirred a large vat of salad dressing in the basement of a barn on Newman's property, an idea came to them "as a lark." They decided to manufacture and sell Newman's dressing simply so they wouldn't have to make it themselves every year.

Thus, the company was born—created by two nearly retired, wealthy gentlemen in a mucky old horse barn out of sheer laziness and boredom.

Over the next year, operating out of an office furnished with Newman's poolhouse furniture, Newman and Hotch developed one of the most unconventional businesses in the packaged food industry.

They refused to use anything except whole, mostly organic ingredients in their manufacturing—something unheard of in the industry. Rather than spending money on paid marketing, they put on variety shows twice a year with famous guests and invited the press to generate buzz for their products. They required distributors to pre-order cases before manufacturing runs so they never had to manage inventory.

Newman summed up all of this unconventional thinking during an interview:

There are three rules for running a business; fortunately, we don't know any of them.

And fortunate it was. In their first year, operating with a $40,000 initial investment by Newman himself, Newman's Own generated $300,000 in profits. That's nearly $1,000,000 adjusted for inflation today.

What's even more remarkable, however, is what Newman and Hotch decided to do with the money.

"Let's give it all away," Newman said, and Hotch agreed.

Neither of them needed the money. They had more than enough to continue operations, expand the business, and pay their five employees well. To Newman and Hotch, it would have been a shame to turn their lark into anything but a way to "pursue the common good."

Starting that first year, Newman and Hotch donated all their profits to various charities. Over the next 40 years, Newman's Own would generate hundreds of millions of dollars to support communities in need—including a multinational organization started by Newman and Hotch that gives children with cancer and other terminal illnesses the opportunity to attend summer camp.

In a book published in 2003, Newman and Hotch called this way of doing business—this lark of theirs—shameless exploitation.

The story of Newman's Own highlights what happens when entrepreneurs embrace irreverence toward conventional wisdom.

At every step of their journey, Newman and Hotch were told they were doing things "wrong." Making packaged products with all-organic ingredients was "wrong." Opting out of paid marketing was "wrong." Donating all your profits to charity was "wrong."

But Newman and Hotch rejected the established ways of doing business. Instead of doing what they were told was "right," they opted to pursue what felt good.

If you enjoyed this story, please consider sharing it with the last person you shared some Newman's Own salad dressing with.