What an $85 Watermelon Taught Me About Building a Billion-Dollar Business

The day it arrived, the store put it out on the shelf at a price of $85. At the end of the day, the store would still make just as much money (if not more), and everyone could afford to try a piece. No one was willing to pay for the whole watermelon. And the store wasn’t backing down. I first heard this years ago, and it’s stuck with me as a perfect cautionary tale for so many entrepreneurs. We refused to slice up our watermelon, so to speak, to meet customer demand. They got in early, had a huge head start on technology and had secured contracts with every big business out there. Fear: the invisible business bogeyman But maybe I’m being too hard on this Yukon grocery store. Inertia and ego aside, a big part of the reason the store wouldn’t slice up the watermelon was probably simple risk-aversion. The melon fiasco was actually the beginning of the end for the grocery store in that town: an entrepreneurial cautionary tale, if I’ve ever heard one.

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What an $85 Watermelon Taught Me About Building a Billion-Dollar Business | Hootsuite Blog

This post was originally published on Observer.
This story sounds like a tall tale from Canada’s Far North, but it’s completely true. It involves a watermelon, some frustrated locals and one stubborn grocery store. And it reveals a few universal—but all-too-often overlooked—business truths.
Years ago, a friend of a friend of mine was living in the Yukon. He spent some time north of the Arctic Circle, in a tiny community that was only accessible by plane (except when the ice road was open in winter). One day, an unexpected delicacy showed up in the local store: a watermelon.
They don’t really grow much in the Yukon. Food has to travel a long way—by plane—to get there. As a result, everything is expensive. Eggs are $8 a dozen at the local grocery store. Apples are around $6 a pound. Soft drinks are a luxury. Everyone is used to these prices (though no one likes them). But this watermelon was in a class of its own.
The day it arrived, the store put it out on the shelf at a price of $85. Needless to say, this was out of reach for most residents. So community members came up with a logical fix: They asked the grocer to cut it up and sell the watermelon as slices. At the end of the day, the store would still make just as much money (if not more), and everyone could afford to try a piece.
The store wouldn’t budge. For whatever reason, it wouldn’t slice up the melon. Residents tried to convince the manager otherwise, but to no avail. One day went by. Then another…and another. No one was willing to pay for the whole watermelon. And the store wasn’t backing down.
So there it sat, day after day in the produce section. It was summer in the “land of the midnight sun,” with 24 hours a day of sunshine. Slices of juicy watermelon would have sold out in an instant. In the end, however, the rare and precious fruit was left to rot on the shelf—unbought and uneaten.
What does this story have to do with running a tech company (or any business, for that matter)? A lot, actually. I first heard this years ago, and it’s stuck with me as a perfect cautionary tale for so many entrepreneurs. In the saga of the Yukon watermelon, we see three of the worst entrepreneurial bad habits converge: inertia, ego and fear.

The deadly pull of inertia


I’m not exactly sure why the store wouldn’t slice the melon. But part of it had to be simple inertia. They had a system place and they were sticking with it. Their approach had worked up until then, so there was no reason to change course. Inertia is equal parts laziness and complacency…and in the end it’s a surefire way to kill your business.
The past is no predictor of the future, after all. Successful companies are constantly questioning their processes. They’re always gathering customer feedback and finding ways to tweak their offering to better meet demand. Yes, this requires more work and sometimes means going back to the drawing board—but that’s the nature of growing a business.
But this isn’t always easy. I’ve experienced the pull of inertia firsthand at Hootsuite. From the beginning, we offered an “enterprise-level” version of our social media management platform to large companies, with a price tag to match. For smaller companies, we offered a pro plan, with fewer features and a much lower price tag. The...

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