Everything I know — from empathy to the principles of making money — I learned by following in the footsteps of my late father, Ted Cohen. We spoke for hours every day. He was, and always will be, my best friend, advisor and biggest advocate. A successful glassware importer with an impeccable work ethic, my father never missed a day on the job. If he were here today, he’d be worried about the millions of unemployed and struggling businesses across the country. The warehouse workers, drivers, construction workers and small-business owners — those are the people he respected most. Looking back on his life and influence, the following five principles he showed me were critical to my success building Chewy.com and investing.
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Disciplined capital allocation is one of the most important skills for running a successful business. Thanks to my father, I had the privilege of learning this firsthand. He kept track of every expense —his power bills, daily gasoline prices that impacted transportation costs, the individual prices of hundreds of glassware products that he sold. My father also kept tabs on Chewy’s metrics. He memorized the key performance indicators in both of our businesses.
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At Chewy, we had maniacal discipline when it came to how we spent money. The company-wide culture of frugality came from his example. Free cash flow was our unwavering governor of growth. We grew Chewy from $200 million in sales in 2013 to $3.5 billion in 2018 while spending only $130 million in capital, all of which went into opening distribution centers across the country and acquiring new customers.
My father always repeated this quote from his own father: “If you take a carload of this (pointing to a pallet of glassware) you’ll make more money. But if you take a carload of that (pointing to a different pallet), you’ll make less money, but you’ll keep the customer. So, take a carload of that.”
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When we started Chewy in 2011, selling pet food online wasn’t a novel idea. The field was crowded with competitors, including Amazon. But our mission was to delight customers in a more personal way. We believed combining the experience of the neighborhood pet store with the convenience of shopping online was a key differentiator. The focus was fast shipping, competitive pricing and providing customers with a hyper-specialized experience. My father showed me how building lifelong relationships with customers was far more valuable than optimizing for short-term profits.
My father led by example, but not in a deliberate way. It’s who he was. He never patronized anyone. He admired the blue-collar worker. I watched him roll up his sleeves and help his employees move shipments of glassware from trucks into the warehouse, then put his suit jacket back on, shirt drenched in sweat, and do administrative work. I’ve never seen anyone work harder.
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I was fortunate to find employees at Chewy who worked relentlessly to grow the company from a three-person operation to a household brand with more than 10,000 employees. We didn’t disrupt the pet industry by accident. Our team made huge sacrifices. We opened our first fulfillment center in early 2014, and everything from the warehouse management system to the Wi-Fi would constantly break down. The team worked 16-hour days for weeks until our supply chain was humming. Everyone from the fulfillment staff to the directors and executives were committed to Chewy’s success. You don’t get that level of dedication by leading through fear. My father always said, “You catch more bees with honey than with vinegar.”
My father was never looking to make a quick buck. He had no interest in material possessions. Every year, through thick and thin, he invested his savings into the stock market. He believed the real money was made through time in the market, not timing the market. When I was 13, he gave me a chart comparing real estate to stock market returns since the 1920s. Real estate annualized returns were around 4 percent, and the stock market was around 9 percent. It didn’t take long for me to figure out which I preferred. I’ve been investing ever since. My father never invested in any fancy funds or paid management fees. He bought blue chip companies and held them forever. His 20-year annualized stock returns were over 10 percent. He never borrowed money or paid interest.
As we scaled Chewy, many advised us to slow down and raise prices. We disagreed. Key to our success was obsessing over customers and market leadership. Over the long term, customers and profits intersect.
Entrepreneurs don’t operate with a handbook. My father taught me how to be independent and trust my own moral compass. He encouraged me to separate myself from the herd and think critically. When I told him I had no desire to go to college, he shrugged. Whether he agreed with my decisions or not, he supported me unconditionally. Letting me make my own decisions sowed the seeds for me to become an entrepreneur. The confidence to never compromise my vision of building Chewy into the largest pet retailer came from knowing if I failed, he would always love me.
For 45 years, he was the first employee to open his office and last one to leave. He showed me how perseverance and discipline ultimately pay off. Not only was his work ethic unmatched, so was his commitment to family. He gave me unconditional love and showed me how to be a father. Above all, he taught me that the best decisions come from heart, instincts and empathy.
Dad, I will forever be grateful.
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