October 17, 2017
McDonald’s, globally one of the most visible brands, has more than 36,000 restaurants in 120 countries and revenues of more than $24 billion. While we may ridicule the gastronomical sophistication of their menu and debate the nutritional value of their quarter pounder with cheese, there is no denying the fact that it is one of the world’s most popular fast food destinations. About 70 million people attest to that every single day.
One can only start to imagine the complexities involved in ensuring that something as trivial as what the Americans call French fries, or chips as the English prefer, can be made and served consistently to millions of hungry patrons. If that were not difficult enough, add the compounded complexity of doing this in Des Plaines, Helsinki, Moscow, Istanbul, Durban, Riyadh, Chennai, Shenzhen, Hobart, and Rio de Janeiro – every single day.
To ensure consistency in taste, which is what their customers care about, as well as maintaining the highest standards of quality and food safety, which is what regulators are more concerned about, McDonald’s has invested billions of dollars over the years to develop the necessary know-how, equipment, processes, logistics, training and support. In some countries, McDonald’s has had to get vertically integrated across their supply chain, setting up contract farms to ensure consistency in the quality of the produce they source on a daily basis.
As technocrats, we take tremendous pride in inventing things. Assuming we have truly stumbled upon the next best thing after sliced bread, the process of conceiving the idea, drawing it up on the whiteboard, filing a patent, building a prototype, and finding like-minded technocrats to try our gizmo out, is extremely satisfying.
In most instances, the extremely difficult next step of taking our prized gizmo to a broader audience, or going from prototype to pilot to launch, requires a larger ecosystem. At a bare minimum, it needs someone that is already operating at scale, with a captive audience that goes significantly further than the proverbial early adopters, and most importantly, can dictate some amount of trust so potential end users are relatively more comfortable taking the leap of faith. All the critical factors of success, when it comes to scaling a new product or service, can be distilled down to this leap of faith.
The faith in the technology, as in it will perform exactly the way it is touted, every single time and under all circumstances. The faith in its availability, as in it will perform exactly the way it is touted, once lots of people start using it, under all circumstances, and at the same time. The faith in its redundancy, as in it will perform exactly the way it is touted, once lots of people start using it, under all circumstances, at the same time, when something beyond its control goes wrong, and its backup kicks in seamlessly without making the switch obvious to the end-user in any way.
For disciples of scale, visiting Hamburger University on McDonald’s Oak Brook campus is like a pilgrimage.
So what does McDonald’s have to do with delivering sustainable secure m-transactions for consumers across diverse demographics and across disparate markets around the world?
Everything, if we want to start understanding the considerations and challenges associated with scale.
Check out Mehul Desai’s August of Money.