Built from Scratch

Marcus and Blank tell the story of Home Depot from their firing by Handy Dan Improvement Centers in 1978 through the company's growth to a national chain. The book is written with Bob Andelman and alternates between the two founders' accounts.

The business model is the substance. They built warehouse-format stores stocking far more items than conventional hardware retailers, priced low enough to change where customers shopped, and staffed with people who had trade experience and could advise customers on projects. Their argument is that the advice was the product, since a customer who could not complete a project would not return regardless of price, and that this is what distinguished them from other discount formats that competed only on price.

The operational material covers the early cash constraints, the decision to accept lower gross margins in exchange for volume, the inventory depth that made the format work, the training investment, and the deliberate policy of allowing store managers to overrule head office on local decisions. The founding story includes the firing that started it, the initial financing from Ken Langone, and the near-failure of the first Atlanta stores.

The book is a founders' account of their own success and reads as such. The subsequent period, including the Nardelli tenure that changed the staffing model substantially and damaged the customer proposition, is outside its scope. Marcus writes with strong political opinions in later sections. The argument that service capability rather than price was the actual differentiator in a discount format is the transferable point.