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Thread on Junk to Gold - the Copart story
First, proof that entrepreneurs are a different breed
First, proof that entrepreneurs are a different breed
Willis, founder of Copart, started in the wrecking business
He started working for his father, but ultimately had a falling out with him.
a little overview on what a dismantling yard does
Copart innovated on the retail experience and raised the standards
Also, they were an innovator in adopting technology to improve inventory control, even though people thought they were crazy for doing it
They also innovated on the format of the auctions
They also changed the relationship with their sellers (the insurers) to better align incentives and become a true partner
Amazingly, Copart only began the process of going public because their biggest competitor (IAA) was. Not that the leadership of the company had any idea how the process works
IAA chose not to integrate the technology systems of the companies they acquired, whereas Copart took a very different approach
Another important difference was that IAA targeted urban areas, whereas Copart went for cheaper rural locations
CPRT also approached valuing acquisitions differently
The dense network of locations that CPRT assembled creates a barrier for competitors since less density means higher towing costs
Probably the most important innovation was when they decided to move exclusively to online auctions, which fundamentally changed the cost structure of the business
CPRT was surprised that the online model was also a huge benefit to sellers of cars, as opposed to just benefiting buyers
This is just a great example of unintended consequences...
The move to outsource trucking was a big win for the company
In the wake of Hurricane Katrina, CPRT incurred all kinds of extra costs to be able to serve their insurance partners, and didn& #39;t pass any of these costs on. From a ST point of view this is -ve but how important do you think this is in showing insurers that they& #39;re a true partner
Sorry this was such a long thread, but there are some good lessons here that go beyond CPRT. The main thing is the need to continuously innovate - on business model, on technology, etc. I think this might be an important reason why they have done better than IAA
