Effectuation Stories

          Case studies, lessons and stories about Effectuation!

          Pie in the Sky

          Sweet Passion
          Kenny Burts is a man devoted to key lime pie. Introduced to this regional specialty by his grandfather at the age of 9, he refined his own key lime pie recipe in the mid-1980s and nearly everyone who tasted his pies told Burts he should sell them. Burts was working as a bartender, and began making pies part time in his apartment. He did marketing, sales, manufacturing and delivery to individuals and restaurants who raved about his product and kept coming back for seconds.

          "I was making pies, I was delivering pies and I was tending bar. I was getting two hours sleep a night, setting three alarms and keeping the lights on so that when I woke up I wouldn't go back to sleep. I knew at that time that nobody in their right mind was willing to do this but that was my competitive edge. I used to make deliveries as far west as Birmingham Alabama, 150 miles away, with 1-2 cases of pies. Nobody would have done that ? nobody."รน

          Ice or Oven
          Working like that, Burts had to make a decision. Should he quit his bartending job and commit to squeezing the most out of the key lime pie business? One a stable income, the other his passion. Relief came in the form of a phone call. Through a friend, Burts had been introduced to executives with California Pizza Kitchen, a hip national restaurant chain. They liked his pie so much that they wanted to offer it in all their restaurants.

          "I knew right then I was ready to take the plunge. I ran down the street to my dads place and he said 'son you've got to be careful with big customers ? they can make you or break you'. He was right. With strong commitment on their part and strong delivery on our part, they made us".

          Taste for Investment
          Prior to the call, the venture had been completely self-funded. But to serve California Pizza Kitchen, Burts began to consider raising capital for a more professional facility than his apartment. Almost immediately, he faced another decision more difficult than the operational aspects of selling or making pies:

          "I did not have the luxury of not having financial backing, which forced me to be sure I had a market (and income) before I could do anything. Now I needed to be crystal clear ? what was I willing to part with for an investor? If I make a mistake ? I had to make sure it would not wipe me out."

          Burts ultimately built a partnership with an angel investor. An individual who shared (and invested in) his vision, his time horizon, his plans for growth, and his taste for key lime pie. Based on shared objectives, the relationship has remained sweet for 18 years.

          Expanding the Pie
          Kenny's recipe has worked. In addition to California Pizza Kitchen, Burts was able to build an early partnership with Longhorn Steakhouse before they went public, and grow with them as they expanded across the country. Burts' pies are now available on both sides of the Atlantic and he has the capacity to produce 6,000 pies a day. Not to worry, though. In spite of the success, Burts assures us that the firm, now called Kenny's Great Pies and which celebrated its 20th anniversary in 2009, is still making key lime pies according to exactly the same recipe and using the same fresh-squeezed key lime juice which earned his early rave reviews.


          Written by Stuart Read, professor of marketing at IMD and Saras Sarasvathy, associate professor of business administration at the University of Virgina's Darden School.

          British Airways Business Life
          Stuart Read
          PDF 50X50-1BABL Kenny


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