Book and show about how to succeed in tough times.

2. October 20, 2008

3. October 13, 2008

4. Depression

5. Today

6. Major companies hit by
Tough Times
• •
Bear Stearns Alcoa
• •
Lehman Brothers State Governments
• •
AIG Universities
• •
Merrill Lynch Circuit City
• •
GM Steel Companies

7. What’s the solution?

8. Nine Strategies for
Business Success
• Adaptability • Loyalty
• Collaboration • Niche Marketing
• Customer Service • Perseverance
• Diversification • Planning
• Growth

9. Marty Beattie
Don Gallegos Steve Swasey Marty’s First Stop
King Soopers Netflix
Supermarkets
Jack Cummings and Allyson Myers Stew Leonard, Jr.
Bernier Mayo Lake Champlain Stew Leonard’s
Chocolates
St. Johnsbury Academy Supermarkets

11. Bernier
Mayo
Headmaster Emeritus
St. Johnsbury Academy

12. Here’s the dilemma
St. Johnsbury Academy
faced

13. “The board had already closed
the girls’ half of our boarding
department. We had boys
remaining in one dorm. The
question was when I came in
1981: Should we close the
boarding school?”

14. “The board had already closed
the girls’ half of our boarding
department. We had boys
remaining in one dorm. The
question was when I came in
1981: Should we close the
boarding school?”

15. Making a decision to
look for students in a
new market

16. “We decided we would do what only one other
school at the time was doing, Cushing Academy,
and that was recruiting overseas, especially Asia.
We decided to do that and the board bought it.
The board has always been enormously
supportive. And they bought our proposal that we
try to crack the international market and frankly
our private school colleagues all over northern
New England looked down their noses at us
because nobody wanted to do that.”

17. “We decided we would do what only one other
school at the time was doing, Cushing Academy,
and that was recruiting overseas, especially Asia.
We decided to do that and the board bought it.
The board has always been enormously
supportive. And they bought our proposal that we
try to crack the international market and frankly
our private school colleagues all over northern
New England looked down their noses at us
because nobody wanted to do that.”

18. Jack Cummings
Special Assistant to
the Headmaster,
St. Johnsbury Academy

19. “The growth in the 80s was
actually very quick. We went
from about 30 students to 125
students in about five years.”

20. “The growth in the 80s was
actually very quick. We went
from about 30 students to 125
students in about five years.”

21. Village Grocery and Deli
Waitsfield,Vermont
Troy Kingsbury, owner

22. Troy Kingsbury decided
to start a deer weigh-in
to provide a reason for
people to come after
foliage season.

23. “We take a digital picture of every deer and we
post it on our computer and put in on a slide
show. I wouldn’t post it online because then the
hunters could be at home and they could look at
it. We only have it on our computer and the
hunters say, ‘Did you see that buck that Jim got?’
They come in here and you have it going on a five
or ten second delay and that keeps them in the
deli where the food’s cooking and usually they
buy a beer or a breakfast sandwich.”

24. “We take a digital picture of every deer and we
post it on our computer and put in on a slide
show. I wouldn’t post it online because then the
hunters could be at home and they could look at
it. We only have it on our computer and the
hunters say, ‘Did you see that buck that Jim got?’
They come in here and you have it going on a five
or ten second delay and that keeps them in the
deli where the food’s cooking and usually they
buy a beer or a breakfast sandwich.”

25. Troy also helped the
town start a program
to have free bicycle
transportation in town.

26. “By next year our goal is to have
25 bikes with bike racks
throughout the surrounding
village here where we provide
free bikes for people to use to
get around town.”

28. Jim Weddle
CEO
Edward Jones

29. Edward Jones has
more brokerage
offices than any other
brokerage firm

30. Edward Jones intends
to grow through the
current recession

31. How will
Edward Jones
do it?

32. “The stock market and bond markets are offering us a
tremendous opportunity right now. It’s not a reason to
panic or to be overly concerned. The activities of the
market over the last six months or so you could call it
a 20 percent off sale. Good heavens to Betsy. Quality
investments are available for a discount price and for
people who can be encouraged to think with their
heads instead of their hearts, they’re going to be able
to take advantage of this. And that’s what we try to do.
That’s what we always try to do. You are going to have
these opportunities from time to time.You are just
going to have to be ready to take advantage of them.”

33. “The stock market and bond markets are offering us a
tremendous opportunity right now. It’s not a reason to
panic or to be overly concerned. The activities of the
market over the last six months or so you could call it
a 20 percent off sale. Good heavens to Betsy. Quality
investments are available for a discount price and for
people who can be encouraged to think with their
heads instead of their hearts, they’re going to be able
to take advantage of this. And that’s what we try to do.
That’s what we always try to do. You are going to have
these opportunities from time to time.You are just
going to have to be ready to take advantage of them.”

34. Edward Jones’
Advantages
• Only one broker per office
• Don’t encourage customers to take on
risky investments such as options or
derivatives
• Existing brokers train new brokers

35. Marty Beattie
Owner
Marty’s First Stop
Danville, Vermont

36. Marty’s response to tough
times has been to adjust his
buying to respond to
customer demand.

37. “During the winter we try to run a lot of
in-store specials with different grocery
items. It depends on your wholesale
supplier that you buy from what they offer
to you. They’re all running quite a few
deals right now. They’re in the same boat.
They want to sell a lot of product also.”

38. “During the winter we try to run a lot of
in-store specials with different grocery
items. It depends on your wholesale
supplier that you buy from what they offer
to you. They’re all running quite a few
deals right now. They’re in the same boat.
They want to sell a lot of product also.”

39. Marty also tries to use
all his stores’ products
in a creative fashion.

40. “I grew up on a farm with a large family
and we were taught how to cook and how
to take advantage of a lot of things. I’ve
been very fortunate that way and know
how to make a lot of soups and lunch
specials. So, the consumer that comes in to
buy the tomato is getting the nice looking
tomato and the green peppers are in your
chili. If a steak has been around for a day it
looks great in beef stew.”

41. “I grew up on a farm with a large family
and we were taught how to cook and how
to take advantage of a lot of things. I’ve
been very fortunate that way and know
how to make a lot of soups and lunch
specials. So, the consumer that comes in to
buy the tomato is getting the nice looking
tomato and the green peppers are in your
chili. If a steak has been around for a day it
looks great in beef stew.”

43. Jay Parkinson, MD

44. Jay Parkinson doesn’t
accept insurance. He
sees people in their
home for the first
visit and then
communicates
through video visits
and email.

45. “I started my practice with
less than $1,500. I didn’t
have to be a slave to
anyone. I get to visit people
in their home. I get to have a
really good vibe. I have no
overhead, hardly
whatsoever. I charge $150
bucks and $140 of that is in
my pocket.”

46. “I started my practice with
less than $1,500. I didn’t
have to be a slave to
anyone. I get to visit people
in their home. I get to have a
really good vibe. I have no
overhead, hardly
whatsoever. I charge $150
bucks and $140 of that is in
my pocket.”

47. Parkinson foresees a
future in which most
patient care will
move out of the
doctor’s office.

48. “It’s just natural for my
generation and younger to
communicate via text or
video online. That’s
hopefully going to be the
wave of the future. ”

49. “It’s just natural for my
generation and younger to
communicate via text or
video online. That’s
hopefully going to be the
wave of the future. ”

51. Adam Burke
Senior Vice President
Customer Loyalty
Hilton Hotels Corporation

52. With 8 million active
customers, Hilton
HHonors program is
one of the most
successful loyalty
programs in the U.S.

53. “We’re the only ones that allow you to earn both
points and miles for the same stay among the major
programs. So you don’t have to trade off between one
currency or the other. And every time we research it
we find far and away that is the most compelling
earnings proposition you can give someone.”

54. “We’re the only ones that allow you to earn both
points and miles for the same stay among the major
programs. So you don’t have to trade off between one
currency or the other. And every time we research it
we find far and away that is the most compelling
earnings proposition you can give someone.”

55. “We may decide in a down market as we have in the
past to be more generous about how we retain
people in the VIP tiers because we recognize that they
may not be staying as frequently and if we apply the
same criteria we may lose some of that loyalty.”

56. “We may decide in a down market as we have in the
past to be more generous about how we retain
people in the VIP tiers because we recognize that they
may not be staying as frequently and if we apply the
same criteria we may lose some of that loyalty.”

58. Warren Buffet
Chairman,
Berkshire Hathaway Inc.

59. Umang Gupta
CEO
Keynote

60. After the Internet
bubble burst,
Keynote had two
choices: grow or go
out of business.

61. The company had a great
sales force and $40 million
in cash, but was losing
$20 million a year.

62. Gupta decided other Internet
companies in Keynote’s field
were cheap and decided to
grow by acquisition.

63. “Many of these younger dot-coms that were
funded well were now left to twist in the wind.
Their revenues were going down
and their prices were going down.
We ended up essentially buying about 15
companies over the last seven years and of
those 15 companies, 10 of those we bought
during the depths of the tech depression.”

64. “Many of these younger dot-coms that were
funded well were now left to twist in the wind.
Their revenues were going down
and their prices were going down.
We ended up essentially buying about 15
companies over the last seven years and of
those 15 companies, 10 of those we bought
during the depths of the tech depression.”

66. Classic Designs by
Matthew Burak, located
in St. Johnsbury,
Vermont,
has a niche product:
table legs

67. Mark Desrochers Matthew Burak
Which it sells
through a catalog
and on the Internet:

69. Allyson Myers
Director of Sales and
Marketing
Lake Champlain Chocolates

70. “Generally, we’ve found chocolate to be
fairly recession-proof because it makes
people feel better, makes them happy.
There’s even some scientific studies that
have show the health benefits of
chocolate which has been great in the last
couple of years. People feel good and feel
chocolate is a good part of their diet.”

71. “Generally, we’ve found chocolate to be
fairly recession-proof because it makes
people feel better, makes them happy.
There’s even some scientific studies that
have show the health benefits of
chocolate which has been great in the last
couple of years. People feel good and feel
chocolate is a good part of their diet.”

72. “They make cut back in other areas but
they will probably still make room for an
inexpensive piece of chocolate. We have
seen a shift away from people buying
bigger gift boxes of chocolates to smaller
package sizes. They are changing their
buying behavior but they still are buying.”

73. “They make cut back in other areas but
they will probably still make room for an
inexpensive piece of chocolate. We have
seen a shift away from people buying
bigger gift boxes of chocolates to smaller
package sizes. They are changing their
buying behavior but they still are buying.”

74. Steve Swasey
Director of Communications
Netflix

75. Netflix had to survive
challenges from
Wal-Mart and
Blockbuster

76. Here’s how Netflix was
able to compete with
Wal-Mart. . .

77. “Wal-Mart is a great sell-
through company but they’re
not a great rental company, so
they never put all the wind
behind their arrow and that was
our extraordinary good luck.”

78. “Wal-Mart is a great sell-
through company but they’re
not a great rental company, so
they never put all the wind
behind their arrow and that was
our extraordinary good luck.”

79. And here’s how Netflix
competed against
Blockbuster. . .

80. “We do one thing extraordinarily well and
that’s all we focus on. Netflix changed the
way Americans rent movies. Before Netflix
you had to go to a video store to rent the
movies, you had to pay late fees, which were
punitive, and you had pretty crummy service.”

81. “We do one thing extraordinarily well and
that’s all we focus on. Netflix changed the
way Americans rent movies. Before Netflix
you had to go to a video store to rent the
movies, you had to pay late fees, which were
punitive, and you had pretty crummy service.”

82. Reasons for Netflix
Success
• Netflix offers 90,000 titles online. A typical
video store has 3,000 titles
• Fast turnaround - return movies today,
receive new ones in two days. Or order
movies through your computer and view
them immediately on your television or
computer
• No late fees
• Netflix will recommend movies for you

84. Don Gallegos
President
King Soopers Supermarket
15,000 employees
Denver, Colorado

85. How do you compete
against a discounter like
Wal-Mart?

86. “Wal-Mart gets high marks for service. Quite frankly, I
don’t think it’s that good. Now, I’m probably jealous,
because they do a ton of business. But I got a store that I
live near, when Wal-Mart came in about a half-mile away,
our store was doing about $900,000 a week. We’re doing
$800,000 now, so we lost $100,000. But we’re still doing
$800,000. Don’t you think there’s a reason we’re still
doing $800,000? It isn’t price. But we do special orders,
we don’t ask questions on refunds, you don’t have to
show your receipt. Wal-Mart, try to take something back.
You got to show a picture of your first born, for god’s
sake. And people do it!”

87. “Wal-Mart gets high marks for service. Quite frankly, I
don’t think it’s that good. Now, I’m probably jealous,
because they do a ton of business. But I got a store that I
live near, when Wal-Mart came in about a half-mile away,
our store was doing about $900,000 a week. We’re doing
$800,000 now, so we lost $100,000. But we’re still doing
$800,000. Don’t you think there’s a reason we’re still
doing $800,000? It isn’t price. But we do special orders,
we don’t ask questions on refunds, you don’t have to
show your receipt. Wal-Mart, try to take something back.
You got to show a picture of your first born, for god’s
sake. And people do it!”

89. Paula Crowley Lou Sachs
CEO President
Anchor Health Properties

90. They persevered
through two years
when they took no
salary, trying to find
new opportunities.

91. “Their predominate clients were health
care, mostly hospitals, and almost by
osmosis, by being there and hanging out
with them we became introduced to the
hospital business. I can remember one day
just thinking that there is so little interesting
work being done in health care what if we
took what we had been doing for all of our
development years in retail and think about
how we might apply it to health care.”

92. “Their predominate clients were health
care, mostly hospitals, and almost by
osmosis, by being there and hanging out
with them we became introduced to the
hospital business. I can remember one day
just thinking that there is so little interesting
work being done in health care what if we
took what we had been doing for all of our
development years in retail and think about
how we might apply it to health care.”

93. Today, Anchor Health
Properties runs some of the
most progressive Wellness
Centers in the country
Pavilion at
Doylestown
Hospital

94. Stew Leonard, Jr.
Owner
Stew Leonard’s
Supermarkets

95. “In 1989 my son drowned in a pool
accident. He was two years old. And that
was a devastating thing for my wife and I
and our whole family. And we had to
work through that tough time. And then
in 1993 my father went away to prison
for tax evasion and it really rattled the
whole business. It was a terrible blow.
Not only a blow to our business but a
blow to our image and everything.”

96. “In 1989 my son drowned in a pool
accident. He was two years old. And that
was a devastating thing for my wife and I
and our whole family. And we had to
work through that tough time. And then
in 1993 my father went away to prison
for tax evasion and it really rattled the
whole business. It was a terrible blow.
Not only a blow to our business but a
blow to our image and everything.”

97. “I don’t think I could have gotten
through that if I hadn’t been
through the tragedy before that of
losing my son. Having a tough
situation in a business, there are
worse things. And I’ve experienced
those worse things.”

98. “I don’t think I could have gotten
through that if I hadn’t been
through the tragedy before that of
losing my son. Having a tough
situation in a business, there are
worse things. And I’ve experienced
those worse things.”

99. “I was able to keep my attitude up
and my energy up. I said, ‘We can get
through this thing. We can overcome
this thing.’ We are now number 26
in the Fortune Best 100 Companies
to Work For. I look back on those
days and say, ‘Boy, am I glad I didn’t
throw in the towel or quit or buckle
under that pressure.’”

100. “I was able to keep my attitude up
and my energy up. I said, ‘We can get
through this thing. We can overcome
this thing.’ We are now number 26
in the Fortune Best 100 Companies
to Work For. I look back on those
days and say, ‘Boy, am I glad I didn’t
throw in the towel or quit or buckle
under that pressure.’”

102. Joseph C.
Thompson
Director
MASS MoCA

103. North Adams,
Massachusetts was a
former mill town that had
fallen onto hard times by
the 1970s.

104. The town had several
hundred thousand square
feet of industrial space
with no tenants.

105. “It was not as if everybody were jumping
for joy at the idea of having
contemporary art in a proud, former mill
town. If you would have asked anybody
on the street what they wanted to
happen, they would have said ‘Give me a
paper clip manufacturing company.’ There
was a 150-year tradition of North Adams
as a single company mill town.”

106. “It was not as if everybody were jumping
for joy at the idea of having
contemporary art in a proud, former mill
town. If you would have asked anybody
on the street what they wanted to
happen, they would have said ‘Give me a
paper clip manufacturing company.’ There
was a 150-year tradition of North Adams
as a single company mill town.”

107. MASS MoCA received a pledge
of $35 million from
Massachusetts Governor
Michael Dukakis...

108. But the new Governor William
Weld rescinded the promise.

109. “When Weld took office his
quote to Time Magazine was
‘over his dead body’ would the
state of Massachusetts release
$35 million to the Museum of
Contemporary Art at a time of
economic challenge.”

110. “When Weld took office his
quote to Time Magazine was
‘over his dead body’ would the
state of Massachusetts release
$35 million to the Museum of
Contemporary Art at a time of
economic challenge.”

111. By recruiting almost 700 local
businesses to contribute to the
museum, MASS MoCA
eventually convinced Governor
Weld to release $18 million.

112. Today,
MASS MoCA is
one of the most
successful
museums in New
England.

113. Hardwick,
Vermont
Uniting around local food

114. Building an agricultural-
based economy
• Pete Johnson, Pete’s Greens
• Tom Stearns, High Mowing Seeds
• Mateo and Andy Kehler, Jasper Hill Farm
• Kristina Michelsen, Claire’s Restaurant
• Andrew Meyer,Vermont Soy

115. Tom Stearns
High Mowing Seeds and
Center for Agricultural
Economy
Hardwick, Vermont

116. “In the last ten years there’s been a big
wave, and especially the last three
years, a major increase in the number of
value-added agricultural processors and
farm-based operations. To the point
where there’s been about 100 new jobs
added in the last three years.”

117. “In the last ten years there’s been a big
wave, and especially the last three
years, a major increase in the number of
value-added agricultural processors and
farm-based operations. To the point
where there’s been about 100 new jobs
added in the last three years.”

118. “Don’t underestimate the power of
working together in whatever level of
formality, but working together with your
peers. It has been literally transformative
for what we are doing up here.”

119. “Don’t underestimate the power of
working together in whatever level of
formality, but working together with your
peers. It has been literally transformative
for what we are doing up here.”

120. “All of us have realized that by
working together we will be
more successful as businesses.”

121. Nine Strategies of
Business Success
• Adaptability • Loyalty
• Collaboration • Niche Marketing
• Customer Service • Perseverance
• Diversification • Planning
• Growth

122. Thanks to the
Vermont Grocers’
Association!

123. Thanks for coming!