Frank Thoughts: The Malaise
Frank Boland
October 21, 2013

The other night I entered a Cheesecake Factory restaurant and found myself smiling to no one in particular as my mind drifted back to over twenty years ago.  I recalled sitting at the Prime Rib in Baltimore with David Overton, founder of The Cheesecake Factory restaurant chain, and his Chief Financial Officer Bill Kling.  We had a large round table that would probably have seated eight people.  The reason for the large table was that we were about to sample eight to ten dinners ... plus desserts. 

At the time David had seven restaurants.  He now has 162.  The menu then, as now, had over 200 items.  Each one was tracked.  Every six months the bottom five percent were cut and new ones added.  And that was why we sat in Baltimore that night and ordered eight or … maybe ten dinners.  David was looking for inspiration.  He was, after all, an entrepreneur.   Entrepreneurs embrace change … and create from it.

David had opened his first restaurant in Beverly Hills in 1978.  The period from the end of 1972 to 1982 was a time of great social and economic malaise.   Much as exists in the country now.   The circumstances were different but the social, economic and political malaises were not. 

It was a time of two bad recessions; the worst in the post World War II era.  Inflation was rampant.   Labor unions were strident.  Gas lines existed everywhere.  Interest rates were going up.  Wives joined the workforce to try to maintain middle-class existence.  Richard Nixon was a president who was far from beloved.  And then we had Jerry Ford … and Jimmy Carter.   

Interestingly, I never heard David Overton complain about the economic, social or political uncertainty that he faced in 1978.  But I do know now that he created a nearly two-billion dollar business the past 35 years employing over 32,000 people!  And now his concept is going global.

While David may have been unique in the restaurant business, he was not unique in that difficult time frame of 1972-1982.  Consider that Phil Knight started NIKE in 1972.  NIKE now employs 48,000 people.  Bill Gates started Microsoft in 1975.  Microsoft today employs 93,000.  Steve Jobs created Apple Computer also in 1975.  Apple now employs over 35,000.  Larry Ellison founded Oracle in 1977.  Oracle has 84,233 employees.  And, of course, David created his first restaurant in 1978. I could name many other entrepreneurs who were also highly successful in the same time frame.  But just these five entrepreneurs alone created over 292,000 high paying jobs.  A ratio of 58,400 to each one of them!  And, again, this was in a period of tremendous social, political and economic malaise.  Not unlike today.

These entrepreneurs demonstrated the true meaning of American exceptionalism.  They ignored the malaise of the world around them and showed what creativity and hard work can really accomplish.

Francis Patrick Boland


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