Story by Ethan Chung, Lauren Foster, Jenny Lynn Zappala, Lisa Patterson, Julie Arnan, Dana Neuts and Jack Todd; Illustrations by Chris Britt
From multi-million dollar companies to tiny startups, everything begins with an “ah-ha” moment — a desire to improve on something that already exists, or to create something new. Big or small, bad or good, everything begins the same way — with an …
Here are some ideas that have made a huge impact on the Eastside, the Northwest and the world — and some more ideas that are beginning to make an impression.
The Idea: That Changed Bellevue
People thought it was a bad idea when Kemper Freeman Jr.’s family purchased 10 empty acres in the heart of Bellevue for a whopping 10 cents a square foot — or about $4,000 an acre. His father had a dream of building a so-called shopping center there. A headline in the local paper called it “Freeman’s Folly.” It goes to show that sometimes the well-researched and smart ideas are hard for non-dreamers to wrap their minds around. “They thought he was nuts,” Freeman said. Freeman’s earliest childhood memories are the big yellow bulldozers clearing the way for Bellevue Square — which in 1946 was a 16-shop, open-air mall with anchor tenant Frederick & Nelson. Today, the Bellevue Collection welcomes more than 18 million visitors a year and boasts 50 acres of retail space with more than 250 stores, 45 restaurants, two hotels and plenty of free parking. About 60,000 to 120,000 people make the trip to the Collection every day.
The Kemper Development Company plans to expand, adding even more restaurants, parking, hotels and residences, creating one of the largest mixed-use complexes in the Pacific Northwest. “We picked up the permits four years ago and were smart enough to stop with the recession,” he said. “Now the plan is to start this year.” He says the caliber of retail tenants that will call the Collection home is stellar. He won’t say who because, “They like to make those announcements.”
The next riddle he’d like to conquer is how to solve Bellevue’s growing traffic problem that is forecast to get worse. It’s no secret that he’s not a fan of the light rail proposal that would connect Bellevue to Seattle. He says the numbers don’t add up. Light rail would accommodate 2,500 riders a day. Currently, 300,000 people come in and out of Bellevue. In the next 20 years, that number is expected to double. “You don’t have to do math very well to realize that doesn’t add up.”
The next big idea? Something that his fellow members of the Bellevue Development Association have been talking about for a couple decades — to drill an underground tunnel though some of the best zoning areas and densest parts of downtown Bellevue. During peak times it would accommodate HOV travelers — busses, van pools, etc. — and during off times it would alleviate traffic, too. He says the idea would accommodate at least 42,000 trips per day — and it would cost a lot less than building a light rail system. “We need to quit fooling around. I see our future as unbelievably bright; but we have to solve these riddles with newer ideas.”
The Idea: That Changed Grocery Shopping
After hearing the story of Costco’s simple — and incredibly successful — business strategy for the first time many people are left with just one question:
Why didn’t I think of that?
“We have one mission,” Costco co-founder Jim Sinegal has said on more than one occasion, “to sell top-quality merchandise to our customers at the best possible prices.”
The Issaquah-headquartered Fortune 500 company has managed to do as its founder said for more than three decades by employing a number of strategies to keep overhead as low as possible. Foremost among those strategies is the concept of housing company stores in no-frills warehouses.
The warehouse idea wasn’t unique to Sinegal and his partner, Jeff Brotman, when they founded Costco in Kirkland — and opened their first store in Seattle — in 1983. The warehouse-store concept had been pioneered less than a decade earlier by Sol Price, who in 1976 had opened up his first Price Club store in San Diego in a former airplane hangar once owned by billionaire Howard Hughes. But Sinegal — who once had worked for Price — and Brotman took the concept and added their own twists. In less than six years, Costco was doing $3 billion in sales.
Costco merged with Price Club in 1993, became PriceCostco, grew to more than 200 locations in the United States and other countries, selling $16 billion worth of goods annually. The company changed its name back to Costco in 1997. Today, Costco employs some 150,000 people in its more than 600 warehouses in the U.S., Canada, Mexico, the United Kingdom, Taiwan, Korea, Japan and Australia.
There have been a few small bumps in Costco’s road to success, but not many. Costco has a reputation for excellence that includes treating its employees better than most other retail employers. Costco workers earn relatively high wages, and 85 percent of them — including many part-timers — receive health benefits. “We remember what it was like to be employees,” Sinegal said at the 2012 Democratic National Convention.
Each Costco shopper is charged a small annual membership fee, allowing them entrance to the unadorned warehouses. The stores are a one-stop shopper’s paradise. There are jewelry, tires, electronics, garden supplies, books and appliances. On the grocery side, bulk food is the standard, which also helps keep prices low. Meat, dairy, canned foods, baked goods, produce, beer, wine — and as of 2012, liquor — are available in large quantities. Many items also are available in Costco’s signature Kirkland brand, which the company says compares favorably in quality to the most popular name brands. Costco has a strong online presence, too.
The products lining Costco’s shelves often change, but one thing never has. Just as they could in the earliest days, warehouse shoppers still can get a hot dog and a soda for the now-throwback price of $1.50.
Costco has transformed the way we on the Eastside, and others across the world, shop. Having retired as Costco’s CEO but still serving on its board of directors, Sinegal still believes in his store’s basic concept of low prices and high quality.
The Idea: That Changed Travel
Based in Bellevue, Expedia is an icon in the travel industry, leading the charge in online travel since 1996. We caught up with CEO Dara Khosrowshahi shortly after the birth of his twins to find out what Expedia’s working on next. In a word: mobile!
Expedia revolutionized how people research and book travel. What’s the next big thing?
Unequivocally, the next big thing is mobile. Not since the advent of the Internet — and online travel companies like Expedia — has the industry experienced such a major shift in the way consumers are choosing to research, book and experience travel, which is happening on smartphones and tablets more than ever before. We are seeing 20 percent of our bookings coming from the mobile channel on many of our brands and those percentages are increasing. Mobile offers consumers a level of spontaneity and flexibility that other channels just can’t match, particularly for last-minute bookings. Close to 70 percent of our mobile hotel bookings occur within 24 hours of arrival, a total departure from the way consumers have historically booked hotel rooms on desktop sites.
Is Expedia initiating these changes or is it responding to the marketplace?
I’d say that we were reactive early on — I had no idea that mobile would come on this fast, but many of our product people and engineers did. I think we’ve done a great job catching up and now leading the vanguard. Expedia, Hotels.com and Hotwire have all built apps that are intuitive, engaging and a pleasure to use. We have product teams that are increasingly thinking mobile first. The little brother is growing up real fast.
With platforms and tech tools changing so quickly, how does Expedia adapt while also satisfying consumer demands?
The key here for us is two-fold. First, we are incredibly focused on speed. We move quickly and with intent. Ours is a culture of testing and learning, and constantly making improvements based on customer behavior. Secondly, if you want to move fast, you have to be willing to fail. Failure is part of a start-up culture — it allows entrepreneurs to bet big, to move boldly and quickly. We have to be willing to take shots and for some of those shots to fail. We’ll get right back up, dust ourselves off, and take more shots.
How can consumers participate in making research and booking travel online a better experience?
Traveler reviews have become incredibly influential in helping other travelers make confident booking decisions. Consumers like that they can read an authentic travel experience from a like-minded person; it gives them a better idea what they can expect from a hotel.
– Dana Neuts
Read about more ideas big and small in the March/April issue of 425.
First, second and fourth photos by Jeff Hobson; Third photo courtesy Costco Wholesale