The Real McCoy

This article was originally published on LinkedIn

Bill McCoy spent his early career building and navigating yachts on the East Coast, a trade built on precision and trust with wealthy clients who expected exactly what they paid for. When Prohibition arrived and the economy went sideways, McCoy looked at that same coastline and saw a business opportunity.

He started running liquor into a country that had just made it illegal to drink. Whiskey, rum, and gin were purchased legally overseas and brought toward the United States for resale. Plenty of others did the same thing. McCoy distinguished himself with a pretty simple decision: he refused to cut his product.

Watering down liquor was common among rum-runners. It was cheap, easy, and increased the profit on every bottle. McCoy sold exactly what he claimed to be selling at a fair price. In a business with little regulation, no contracts, and very little recourse for a customer who got cheated, his reputation became his guarantee.

That reputation earned him the nickname Bill “the Real” McCoy. That alone is a pretty good business lesson. The part that interests me more is what he did with the reputation once he had it.

Earning a great reputation is one thing. What you do with it is another.

A Good Product Still Needs a Good Strategy

McCoy knew the East Coast and its waters extremely well from his years building and navigating yachts. He understood exactly where U.S. jurisdiction ended, so he anchored his ships just outside American waters, registered vessels overseas, and let smaller, faster boats ferry the liquor to shore.

He had found a way to combine a good product with a very good distribution strategy.

It worked. Other rum-runners began copying the model, and the stretches of ocean where liquor ships gathered became known as Rum Row. McCoy had figured out an approach that worked well enough for competitors to imitate it.

That happens in perfectly legitimate businesses every day.

A company develops a better product. Someone finds a more efficient distribution model. A competitor introduces a new pricing strategy. Someone discovers a better way to reach customers. If it works, other people notice.

Success has a way of attracting a crowd.

McCoy’s success also attracted plenty of attention from authorities. His visibility made him increasingly difficult to ignore, and he was eventually arrested, convicted, and sent to prison for a short time.

The same strategy that helped make him successful had changed the environment around him. Competitors were copying it and authorities were responding to it. The advantage was becoming less of an advantage.

The Little Things Matter Too

One of my favorite details about McCoy has nothing to do with international waters or outrunning the Coast Guard.

It involves packing bottles.

McCoy figured out how to bundle bottles in a triangular pattern and pad them with straw. The arrangement allowed his ships to carry more cargo in less space.

That’s a small detail in a much bigger story, but I think it says a lot about how he approached business. He paid attention to the things that could make the operation a little better. A few more bottles on a ship meant more product on every trip. Multiply a small improvement across enough trips and it starts to matter.

I’ve seen the same thing throughout my career. Big ideas get most of the attention, while execution usually comes down to hundreds of smaller decisions. The organizations that keep improving tend to be the ones that keep looking for those details.

McCoy did that particularly well.

The Advantage Keeps Moving

McCoy is one of the characters I profile in Against the Grain because his story offers several lessons that translate surprisingly well to business a century later.

Quality matters. McCoy built his reputation by delivering what he promised.

Strategy matters. He understood the environment in which he operated and found an approach his competitors hadn’t yet figured out.

Execution matters. He paid attention to details as small as how bottles were packed aboard a ship.

And then there is the lesson I find most interesting.

Competitive advantage moves.

The better your idea works, the more likely someone else is to notice it. Competitors copy products, pricing, processes, marketing, technology, and business models. Customers adjust their expectations. Markets change. What made a company different yesterday can become standard practice surprisingly quickly.

A hundred years later, people still ask for “the real McCoy.” Bill McCoy earned a reputation for giving his customers the genuine article. That reputation helped create his advantage, and his strategy helped him capitalize on it.

Then everyone started watching.

That’s how competitive advantage usually works. Do something well enough, and eventually someone will copy it.

Your job is to make sure you’ve already moved on to what’s next.

What’s an advantage you once had that soon became standard? Please share in the comments.