Afleveringen
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Taking a true look at where your business is taking you and working hard to give customers what they want. Bill Rosenberg, way to go.
Dave Young:
Welcome to the Empire Builders podcast, teaching business owners the not so secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector and storyteller. I'm Stephen's sidekick and business partner, Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us, but we're highlighting ads we've written and produced for our clients. So here's one of those.
[Colair Cooling & Heating Ad]
Dave Young:
Welcome to the Empire Builders podcast. Dave Young here, along with Stephen Semple, talking empires. And what better way to get an empire started in the morning than to have a donut?
Stephen Semple:
There you go.
Dave Young:
And a cup of coffee.
Stephen Semple:
That's it.
Dave Young:
So today's topic is Dunkin Donuts.
Stephen Semple:
Dunkin Donuts. There we are. America runs on Dunkin, right?
Dave Young:
I don't know a lot of history about them. I have childhood memories of Dunkin Donuts and then no memories for a long time, and then sort of rediscovered them when my daughter was going to school in Boston. I think they're a Boston or Massachusetts origin story.
Stephen Semple:
They are. Very good.
Dave Young:
But I feel like they've had some ups and downs maybe.
Stephen Semple:
Oh, they've had a bunch of ups and downs. There's no question. But they are. They're from Quincy, Mass, just outside of Boston.
Dave Young:
Okay.
Stephen Semple:
Yeah. So they were started by Bill Rosenberg in 1950, and today they have close to 13,000 stores. They're the second-largest restaurant chain in the US, they're worth about $9 billion. And if you're in New York City, they have an unbelievable concentration in New York. There's one every five blocks. And I'll tell you, it was weird when I was in New York last summer, and you're walking around, it felt like there was one every two blocks. It's more how it felt. But there's literally one every five blocks in New York City.
Dave Young:
Including the airports, right? They're everywhere.
Stephen Semple:
They really are. So the origin of Dunkin really goes back to the late 1930s because the US economy at that point had been struggling for close to a decade. With the Great Depression, unemployment peaked at 20% in an era where there was little in the way of safety nets. And this actually had a big impact on the food business because at this time, snacks have started to be reinvented as lunch. So we're seeing this movement towards these smaller packaged foods. People wanted something small that was a fun to eat item, that was not expensive, that really started to dominate the food market. And we've seen that in other podcasts that we've done with other foods. So Bill Rosenberg is from Boston, and he has a successful food truck business. And by 1946, he's starting to make enough to start a brick-and-mortar location. So when he launches the business, here's something Bill notices, is that in his food truck business, 40% of the sales were coffee and donuts.
Dave Young:
Wow. Okay.
Stephen Semple:
That was 40% of the sales from the food truck. So when he launches the business, he realizes that he wants to create a new idea centered around coffee and donuts. And you know what, it's interesting. When we go back to companies like Toys R Us and things like that, or even a Dollar Store, it's this observation of, "Hey, here's this thing that's selling." Or in Toys R Us cases, they looked at it and said, boy, toys are a big part of a department store. Maybe we should just do something along that lines. So this is similar to what he saw. He saw, look, coffee and donuts is a big part of the sales. Why don't I create something around that? -
Building trust is not easy, but when you are consistent, unique and true to yourself people take notice. No Bull RV has done this very well.
Dave Young:
Welcome to the Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector and storyteller. I'm Stephen's sidekick and business partner, Dave Young. Before we get into today's episode, a word from our sponsor, which is ... Well, it's us, but we're highlighting ads we've written and produced for our clients. So here's one of those.
[Tommy Cool Air Ad]
Matthew Burns:
This is not Stephen Semple or Dave Young. I've commandeered the entire podcast at the request of Stephen. So I am here for a reason. I've got with me a client of Stephen's, Rick Showers of No Bull RV in the Edmonton area of Alberta, and you guys have heard us talk about him before, he's been on the podcast before, but we've had a very specific topic that we want to talk about today, and we're talking about the amazing use of social media that him and his team, we have one of his team members here, her name is Natacha. Natacha, what's your role with No Bull?
Natacha:
Technically by title I'm HR.
Matthew Burns:
That'll be part of what we talk about. Great. And then what are some of the other things that you're doing there?
Natacha:
I'm doing anything I can to support Rick, I guess, and just build the business and making sure all our pieces are aligning together and that we're really approaching things from a whole business level, not just bits and pieces at a time.
Matthew Burns:
Okay, fantastic. And Rick, that's a very politically correct answer. What is Natacha to you? What does she do for you?
Rick Showers:
She does pretty much all the stuff I don't want to do.
Matthew Burns:
There we go. That's the answer. That's the answer we wanted.
Rick Showers:
She sees to it that it gets done. Let me put it that way.
Matthew Burns:
Exactly. Well, no, and her job is to support you and all the things that we're honestly, truly ... Business owners, especially entrepreneurs, we get caught up in doing everything at the beginning and then we realize I'm really not good at this list of 20 things, so I'm going to get somebody else who's much better at it than me. I'm going to concentrate on what I'm good at. And that's your Natacha. What we really want to talk about today is how you guys are using social media and its effect, the kind of the bonus effect it's had on your recruiting and the onboarding of new staff members. Rick, talk to me a little bit about your perception of this and how it's affected you guys there at No Bull.
Rick Showers:
The perception of the social component?
Matthew Burns:
You got it.
Rick Showers:
Well, as a user, I always thought it was a bit of a pain in the ass, frankly, because there's one more social channel coming after another. As a business owner, I was always skeptical and never really liked the fact that competitors, for example, or other business categories were actually using it to try and flog product, which to me always seemed a little bit counterintuitive because it's not really a social thing. They're looking at it as an advertising channel. So we approach it a little bit differently and wanted to stand out by just being different.
Matthew Burns:
You're highlighting your people on social media, you guys are spending time talking about the vulnerabilities of some of your units because you guys are in used RVs and you're pointing out the negatives and saying, "Hey guys, well, we take care of this for you." And you're very upfront. I remember one post where you were trying to do a video when a bird was squawking in the tree next to you and you're like, "Come on, man, we're doing a video." It was so funny. But yeah, I mean, social media really is meant to be social. -
Zijn er afleveringen die ontbreken?
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The marketing for Anacin was brilliant and studied. Creating emotion around how you make others feel was a master class of messaging.
Dave Young:
Welcome to The Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector and storyteller. I'm Stephen's sidekick and business partner, Dave Young. Before we get into today's episode, a word from our sponsor which is, well it's us. But we're highlighting ads we've written and produced for our clients, so here's one of those.
[Colair Cooling & Heating Ad]
Dave Young:
Welcome back to The Empire Builders Podcast. Dave Young here, along with Stephen Semple. I really don't have much for the topic that Stephen just whispered into my ear other than I know the brand name.
Stephen Semple:
Yeah.
Dave Young:
It's pain relief and it's Anacin.
Stephen Semple:
Anacin.
Dave Young:
Anacin. I'm trying to remember, there's one of those brands, it was either Anacin, or Beyer, or Excedrin, that combined a little Aspirin with a little caffeine maybe, or something like that, but I don't know if this is the one.
Stephen Semple:
You're actually really, as usual, David, very, very close. Pretty much on the money.
Dave Young:
All right. Okay.
Stephen Semple:
The first commercial painkiller created was Aspirin. That was created in 1897 by a German chemist and the product was branded Bayer, with Bayer being-
Dave Young:
Okay.
Stephen Semple:
If you remember on it, Bayer was done as a cross. It was Bayer, Bayer. It was Bayer left to right, Bayer vertical, the Ys meeting in the middle and it formed this little-
Dave Young:
Like the Red Cross.
Stephen Semple:
Yeah.
Dave Young:
All of that, yeah.
Stephen Semple:
Yeah. Now it first false started. In 1897, it was a powder, and it was in 1914 where it changed to a table and had that branding on it. Bayer was marketed by promoting the product to doctors who then told patients.
Dave Young:
Okay.
Stephen Semple:
It was all about inform the doctor, the doctor would inform patients. Anacin changed the rules and changed the rules for marketing of medicinal products forever because they came into the market and decided to advertise to the patient who would then go to the pharmacist and demand it.
Dave Young:
Okay.
Stephen Semple:
Up until this point, everything was marketed to the doctor, to the doctor, to the doctor, to the doctor. Instead, Anacin was the first to come along and say, "No, we're going to go direct to the consumer." We're going to market to the patient, and the patient is going to walk up to the pharmacist and say, 'Hey, I want some Anacin.
Dave Young:
Yeah.
Stephen Semple:
If that happens enough, guess what's going to happen? The pharmacist is going to carry Anacin.
Dave Young:
Yeah. It's like the Wrigley Spearmint Gum story all over again.
Stephen Semple:
Wrigley Spearmint Gum story, but done in the medical space.
Again, it's one of these things where, for so long, you could sit there and go, "Yeah, but that works for gum, yeah that works for this, that works for parcel services, that works for all this other stuff," but all of a sudden it's like, "But medicine is different." Medicine is not different. We're seeing it today. How many drugs do we see being advertised today, where it's advertised direct to the consumer or it's, "Ask your doctor. Talk to your doctor about this." Because what they know is if you walk into the doctor's office asking about it, the doctor will then make sure they know about it and likely prescribe it.
Anacin started advertising in the 1940s on the radio.
Dave Young:
Okay.
Stephen Semple:
Here's what the spot claimed. That, "Anacin is like a doctor's prescription, not just one but a combination of several medically active ingredien... -
California joins the union and messages need to be delivered. UPS had a solution and decided it needed to be luxury and efficient.
Dave Young:
Welcome to the Empire Builders podcast. Teaching business owners the not-so-secret techniques that took famous businesses from mom-and-pop, to major brands. Stephen Semple is a marketing consultant, story collector and storyteller. I'm Stephen's sidekick and business partner, Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us. But we're highlighting ads we've written and produced for our clients. So, here's one of those.
[Colair Cooling & Heating]
Dave Young:
Welcome back to the Empire Builders podcast. Dave Young here with Stephen Semple. And we're talking about empires and how they were built. Get it? That's the name of the pod... that's what we do here.
Stephen Semple:
I've never put that together before.
Dave Young:
Wow, I see. Aren't you glad I'm here?
Stephen Semple:
I'm so glad.
Dave Young:
You whispered the three letters, UPS, into my ears just as the countdown started. And I'm trying to think of a UPS story, and mostly what I think of when I think of UPS, think back years ago, I sort of remember, I think their start but I remember that being a UPS driver was a way better job back then than it is today. But that's probably not a big part of this story. So let's talk about how they started.
Stephen Semple:
Pretty sure it was UPS recently that actually just put through a new pay package and benefits, and things along that lines. That really ramped up what people are being paid at UPS, if I remember correctly. But you're right, this is not a big part. It's not a big part of the story.
Dave Young:
I think it started... how long have they been around, Stephen?
Stephen Semple:
They were founded on August 28th, 1907.
Dave Young:
I feel like probably I lived in a town so small that we didn't have one until maybe the sixties or seventies. They just didn't show up.
Stephen Semple:
Well, and this is an interesting part. There was a big challenge to them becoming nationwide. They were founded in August 1907 by James Casey and Claude Ryan in Seattle. I didn't realize that they had started in Seattle.
Dave Young:
Oh, okay.
Stephen Semple:
And they actually first started as their original name was the American Message Company. And today of course is known as UPS, United Parcel Service. They do like 90 billion in sales and have over 500,000 employees. Just what a monster they have become in this space. But basically they started around the time California joins the union. And you know what ends up happening now, I know Seattle's not and before people go nuts, I know Seattle's not in California, but I was just trying to, you know, Historic landmark.
Dave Young:
It's the West Coast, yeah.
Stephen Semple:
Exactly. But I get it, before people know-
Dave Young:
Didn't all join at once. Yeah.
Stephen Semple:
... So, California joins the union. There's this growth happening. In the west, there's this need to transport items and it's hard getting things to the new territories. And lots of delivery services pop up. Wells Fargo pops up for the transportation of money. The Pony Express is created for transporting of mail. Now, of course, the Pony Express only lasts 18 months because the telegraph wipes them out. Right?
Dave Young:
Right.
Stephen Semple:
But here's the interesting thing, with the telegraph, you still need a messenger service to run the last leg. To take it from the telegraph station to the person. So, Jim Casey's, 19 years old, he's in Seattle and he sets up this business for basically running the telegraphs. That's how they start.
Dave Young:
Okay. They're the last mile guy.
Stephen Semple:
That's the reason why they're the American message service. They start off as being the last mile guy. -
Stephen and Dave right a wrong from a previous episode and dive deep into the history of franchising. A system for making millionaires.
Dave Young:
Welcome to The Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I'm Stephen's sidekick and business partner Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us, but we're highlighting ads we've written and produced for our clients. So here's one of those.
[BWS Home Services Ad]
Dave Young:
Welcome back to The Empire Builders Podcast. I'm Dave Young, I'm with Stephen Semple. And Stephen just whispered the topic into my ear and I missed something. Stephen, you said franchise and I didn't quite catch what franchise we're going to be talking about.
Stephen Semple:
We're going to talk about a little bit of the history of franchising.
Dave Young:
The idea here is the idea of a franchise, the business model, if you will.
Stephen Semple:
Yeah, because if we think about the concept of this podcast as we're talking about empires, how many business empires today would not exist if it wasn't for the concept of a franchise where you create something and you license to that person the right to operate? And it's grown today into being the business model and all those other things. It has allowed numerous numbers of ordinary citizens to own successful businesses and generate wealth. It has also created a way for businesses to grow rapidly because of the fact that they're able to leverage the person's interest, hardworking expertise, and money in order to grow these businesses. Especially in the restaurant space, there's no way companies like McDonald's and Wendy's and all of these other businesses would've been able to grow at the rate that they grow if franchising had not been created, perfected, developed, and modernized. And those things have a journey that they went on as well.
Dave Young:
Those two key points you mentioned, it gives the average person an opportunity. If you can scrape up enough money to buy a franchise, you now own a business.
Stephen Semple:
Correct.
Dave Young:
And if you own a business, you created a business and you want to quickly expand to multiple markets, you can do it with other people's money by giving them their piece of their own little location as opposed to going and borrowing it all or doing some kind of a public offering, those kinds of things, an alternate way of growing fast.
Stephen Semple:
A really interesting Netflix show to watch, and it's not a documentary, but it's actually pretty accurate, is The Founder with Michael Keaton.
Dave Young:
Yeah, the Ray Kroc story.
Stephen Semple:
Yeah, the Ray Kroc story. And one of the things that Ray Kroc discovered was the best franchisees, so franchisees are the people purchasing the franchise were actually common, everyday hardworking folk who wanted to make a better life for themselves. And buying a McDonald's franchise was that avenue that actually made a better life for them. And they were the best source of franchisees, not rich folks who are looking for investments. And look, Chick-fil-A. Chick-fil-A today, it's very difficult to become a Chick-fil-A franchisee because they want to look at it and say, do you fit in? Are you that type of person? Will you actually be a great part of this family? And in Culver Restaurant, which I forget what episode Culver Restaurant is, we talked about how Culver, it's really, really important to them that basically franchisees really fit into what's being created.
I think it's worth exploring the history of franchising. And I have to right a wrong, because back in episode 94, we talked about Martha Harper, and I referred to the fact that Albert Singer was the first commercial franchise. -
The amazing rise of Kodak was due to innovation after innovation and you'll never guess why George Eastman called it Kodak.
Dave Young:
Welcome to the Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom-and-pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I'm Stephen's sidekick and business partner Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us, but we're highlighting ads we've written and produced for our clients. So here's one of those.
[Tommy Cool Air Ad]
Dave Young:
Hey, welcome back to the Empire Builders podcast. Dave Young here, and Stephen Semple's right there. Well, you probably can't see him, but I can see them. How you doing this morning? Because we record these in the morning. If you're listening in the evening, I felt the need to say that in case you were confused.
Stephen Semple:
Especially since before we started the recording, you were slurping your coffee.
Dave Young:
Right, in case you've never listened to a podcast before, and you didn't know they weren't live. So just before we started, yes, I was slurping my coffee, and yes, Stephen whispered into my ear today's topic. And I tell you, it is funny how words do this. This brand has sort of defined its own... It became the word for its product. It became the word for an industry almost. And when you told me the name, I had a Kodak moment.
Stephen Semple:
There you go. Yes.
Dave Young:
Right? But we're going to talk about Kodak, Eastman Kodak company, and when you said Kodak, I'm like, "Oh, man." I remember my first little Instamatic Kodak camera. And the pictures that, I think it was the 110 film that took a picture and-
Stephen Semple:
Oh yeah, the little film? Yeah.
Dave Young:
... when you developed it, you got a four-by-four picture and a little smaller version of the same picture, wallet sized, right next to it.
Stephen Semple:
Yes.
Dave Young:
I thought that was the coolest thing. I would carry those little photos around. And I had a picture, I don't know if I still have it. It's probably tucked away somewhere. It's probably in a box somewhere. But there was a picture of me on my grandfather's horse. He had passed away already, and I was like maybe four or five, and I'm on this horse, and the horse's name was Euchre Bill.
Stephen Semple:
Euchre Bill.
Dave Young:
I can't explain that. Grandpa was gone.
Stephen Semple:
Card-playing horse, Euchre Bill.
Dave Young:
Maybe. I don't know. So that was the Kodak moment. Instantly, as soon as you said Kodak, it took me to that picture, which was still attached with its little picture next to it.
Stephen Semple:
I think we forget how big Kodak was. And lots of things led... Well, we even did an episode, back episode 77, where we actually looked at what we felt was the decline of Kodak that I did with Gary Bernier. At its peak, in 1996, Kodak was two-thirds of the global film market. In '76, it was 90% of all film sales in the United States, 85% of camera sales. In '96, it was the fifth most valuable business in the world, which is really quite remarkable.
Dave Young:
We tell our local clients that, man, if you can get to 35%, 40% market share in your category, you're a rock star. Here these guys were worldwide.
Stephen Semple:
Worldwide, 66%. Yeah. So today we're going to talk about what made Kodak amazing, and then the decline. We've sort of done this backwards. The decline we talked about back in 77. They were founded on May 23rd, 1892 in Rochester, New York by George Eastman. And George became the breadwinner of his family at age 14 when his father died, and he took a job as a messenger boy at an insurance company, and he was making three bucks a week. And then he became an office boy at another insurance company. -
Martha had a great idea. Xavier had a bigger dream. Roger knew what to call them. The story of the Cabbage Patch Kids will surprise you.
Dave Young:
Welcome to The Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector and storyteller. I'm Stephen's sidekick and business partner, Dave Young.
Before we get into today's episode, a word from our sponsor, which is ... Well, it's us. But we're highlighting ads we've written and produced for our clients, so here's one of those.
[Colair Cooling & Heating Ad]
Dave Young:
Hey, welcome back to another edition of The Empire Builders Podcast. Dave Young here, alongside Stephen Semple. We're talking about empires being built, and people building fortunes and all these, I assume, serious business topics, until Stephen whispers in my ear just before we start that we're going to talk about Cabbage Patch Kids.
Stephen Semple:
That's right.
Dave Young:
I feel like this happened before my siblings and little sister's ... Between the time that I had sisters that would have had Cabbage Patch Kids or children that would have had Cabbage Patch Kids, because I think the whole thing was done by the time I had kids.
Stephen Semple:
You missed it?
Dave Young:
It happened in that liminal space between being a brother with sisters that had Cabbage Patch Kids, or being a dad. It was a big, big thing, and then it wasn't.
Stephen Semple:
You just missed it is what you're telling me.
Dave Young:
Yeah, yeah. When did they start?
Stephen Semple:
The big thing is when they got really big was really in the '80s is when they were massive.
Dave Young:
Yeah.
Stephen Semple:
They set ... There were three years there where they set every toy sale record known to mankind. They sold over 130 million units.
Dave Young:
Yeah.
Stephen Semple:
They're still around today, they're just not a really huge, massive thing. They're actually one of the longest running doll lines in the United States.
Dave Young:
Okay.
Stephen Semple:
But yeah, there was a period there where they were like, holy smokes, just crazy, crazy, crazy big.
Dave Young:
Just the fact that I know about them. I was a dumb kid in his 20s with no reason to know about them in the '80s. But I did. They were a cultural phenomenon.
Stephen Semple:
They were. I remember seeing on television, you would see shots of lineups at toy stores, and people going nuts trying to buy these things. It was really, really, really crazy.
Dave Young:
Cultural references, Tonight Show and all kinds of things. They were everywhere.
Stephen Semple:
Oh, yeah. They really were. They were created by a lady by the name of Martha Nelson Thomas. She was an art student. She went to the Louisville School of Art, she graduated there in '71. She wanted to create dolls that would touch people. They were handmade and they were each different. She was an artist. In art school, one of the things she did is this whole idea of what's called soft sculpture, which is about using sewing techniques and things along that lines, to create shapes, and soft items, and pillows, and things along that lines.
If we think back to the '60s and '70s, dolls were all mass-produced from plastic. In the '70s, we started getting this folk art movement rising and this return to more organic forms. What she started to do was creating this dolls where the features were created by stitching. This created something soft.
Dave Young:
Okay.
Stephen Semple:
And cuddly. She called them doll babies. When she was selling them, she included an adoption certificate, she named each baby and would write down some of the characteristics. Things that the baby liked and disliked, and things along that lines.
Dave Young:
Right.
Stephen Semple: -
How to build a tech company without being techy! No seriously, Rob Kalin, an artist, started Etsy and then polled more artists to make it awesome.
Dave Young:
Welcome to the Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I'm Stephen's sidekick and business partner, Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us, but we're highlighting ads we've written and produced for our clients. So here's one of those.
[No Bull RV Ad]
Dave Young:
Welcome back to the Empire Builders Podcast. I'm Dave Young. Stephen Semple is here with another fascinating story about building an empire, and we're looking at a tech empire today. We're going to talk about Etsy.
Stephen Semple:
Yes.
Dave Young:
And so all I know about Etsy is you can buy all kinds of weird stuff on Etsy.
Stephen Semple:
Etsy is very much a technology company. In other ways, Etsy is very much an arts and craft company when you really think about it, right?
Dave Young:
Yeah, yeah. A community of arts and crafts people.
Stephen Semple:
Yes, very much so. Etsy was started by Rob Kalin and it was founded on June 18th, 2005, and it went public 10 years later in March, 2015, raising 237 million and giving it an evaluation of 1.8 billion at that time. They do about two and a half billion in sales. They've got 2,800 employees. So you know what? A pretty big deal.
Dave Young:
Yeah.
Stephen Semple:
And Rob Kalin, he's like this artistic hands-on kind of guy. He's not involved with Etsy any longer, but the home he lives in today, he built the entire thing from the ground up, including all the furniture. Today he's got this thing where he makes these custom-made speakers that are these $50,000 speakers. And he's constantly looking at this whole idea of trying to match technology with old school tools and craftsmanship, and he really thinks about himself as being a creator. And Etsy started because of a need that he had. Like a lot of these empires we covered, it came from filling his own need, because he would make stuff and he'd want to try to find a place to sell it.
Dave Young:
And I just know from being in the art glass and that kind of world, before the internet, if you're a crafts person or an artist, however you want to put it, well, you got to find a show somewhere, right? You got to go to a craft show, you got to go to a fair, a Renaissance Fair or something and set up a booth, drag all your stuff there and hope that you sell some.
Stephen Semple:
Yeah,
Dave Young:
And Etsy became that online.
Stephen Semple:
It did, very much so. Very, very much so.
Dave Young:
Yeah.
Stephen Semple:
So he grew up outside of Boston. His mom was a teacher, his dad was an architect. Rob was one of those kids who couldn't sit still in school and he stopped going to school. He wouldn't go to school and he didn't tell his parents. He got a job at a camera store and he had to figure out what he wanted to do. And he graduated from high school, barely.
Dave Young:
Started wearing suits and carrying his lunch in a briefcase. Parents didn't notice.
Stephen Semple:
Exactly. So he graduates from high school, barely. He did the GED approach and he became a cashier at Marshalls, and he said it was a good learning experience, but not a lot of money in it. He decides he wants to go to art school and he had to get to New York City. So he gets to New York City and he is working at a bookstore, and he started to do construction at night to make money because what we know is not a lot of money in retail, right?
Eventually that construction at night turned in the full-time and he was then taking classes at night. It sort of flipped around, and he was doing classics and languages and things a... -
How does a serial entrepreneur turn into the owner of one of the largest shoe companies in the minimalist category? One shoe at a time...
Dave Young:
Welcome to the Empire Builders podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Simple is a marketing consultant, story collector and storyteller. I'm Stephen's sidekick and business partner, Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us, but we're highlighting ads we've written and produced for our clients. So here's one of those.
[Waukee Feet Ad]
Dave Young:
Welcome back to the Empire Builders podcast...
Stephen Semple:
Do I have you stumped this time?
Dave Young:
Well, I don't know. I'm thinking, I'm thinking, I'm thinking. I'm stalling... I was talking about the podcast. This is the Empire Builders podcast. Stephen Semple just interrupted me, got me off my train of thought because he just, just before I started yammering, you whispered the topic and it is...
Stephen Semple:
That's correct.
Dave Young:
Xero Shoes, but zero with an X. Zero with an X. There's something tickling my memory that says, maybe I know it, maybe I don't.
Stephen Semple:
Well, they are a private company. The best I could find as it's estimated that they probably do around $50 million a year in sales. They have 61,000 reviews on their site, and they were launched on November 23rd, 2009 by Steven Sashen and Lena Phoenix out of Boulder, Colorado. They're in a small space in the shoe market 'cause they are a minimalist shoe, and minimalist shoes are basically 1% of the shoe business, but is a growing part of the shoe area.
Dave Young:
Mm-hmm.
Stephen Semple:
And this shoe was, it was actually kind of a bit of an accidental business for them, and it was not their first business. They did a lot of different things, and Steven was, when he was in school, did a lot of running and things like that. And when he turned 45, he decided to get back into sprinting and he'd been reading the book Born to Run, and in the book Born to Run, the author of the book talks about this whole idea of minimalist shoes and really allowing the natural body to govern itself in terms of running and that you'd have fewer injuries and things along that line. So he decided to make his own sandals. But again, as I was saying, he did a lot of different things.
Dave Young:
Okay.
Stephen Semple:
Like he was an athlete in high school. He did magic shows to make money. He went to Duke University and he did stand-up comedy when he was at Duke. And when he graduated, he went on the road for 10 months doing comedy, and he moved to New York and did stand-up comedy there. And when he was doing his comedy, he created a software for helping write screenwriting because back in the day, auto-pagination was really, really hard to do. So he wrote the software that did that. Then he moved to Boulder, Colorado and he started another business there. So he did a whole pile of different things. In '92, '93, he got into internet marketing and he was doing this internet marketing-
Dave Young:
Okay.
Stephen Semple:
... and then he was doing this mortgage brokerage stuff on the side, and they were doing real estate investments, and he got back into running. When he got back into the running, he was getting a bunch of injuries. He read the book and started to run barefoot, let the body do what it does naturally. And he loved the experience of feeling his feet on the ground. And when you run wrong when you're barefoot, it hurts. When you run right, it feels good. And minimalist shoes at the time did not fit the shape of his feet and his wife, she did not like him doing the whole barefoot thing around the house because basically she was like, Lena was like, "You know, you come home after barefoot running and you walk around the house bare feet and... -
Fred Smith came up with the idea of hub based courier service in school and the teachers gave him a "C". Jokes on them!
Dave Young:
Welcome to the Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I'm Stephen's sidekick and business partner, Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us, but we're highlighting ads we've written and produced for our clients. So here's one of those.
[Irock Plumbing Ad]
Dave Young:
Welcome to the Empire Builders Podcast. I'm Dave Young alongside Stephen Semple, and we're talking about empires that were built, industries that were shaken up in the process. What better one to talk about than FedEx? Well, you mentioned FedEx, but if we're going back to the beginning, we're going to say Federal Express, right?
Stephen Semple:
True enough, true enough. That's right on the ball.
Dave Young:
Yeah.
Stephen Semple:
Absolutely.
Dave Young:
We're both old enough that we remember these things.
Stephen Semple:
I'm trying to be in denial around that.
Dave Young:
As these companies celebrate their 50th year in business, and I'm like, "Oh, yeah. Yeah, I remember them coming on board. Uh-huh, yeah, sure."
Stephen Semple:
Well, it's like the one that got me the other day is Sopranos 25th-
Dave Young:
Oh my God.
Stephen Semple:
It was 25 years ago, and I'm like, "No, no, please, God, no.
Dave Young:
Well, and for 20 years I've been thinking that the '80s was 20 years ago. Apparently, that's no longer the case.
Stephen Semple:
Should we talk about Federal Express?
Dave Young:
Federal Express, absolutely. The most memorable thing about them was, first, how disruptive they were, but their ad campaign was absolutely fabulous, the fast-talking dude.
Stephen Semple:
Yeah, we definitely want to talk about it. But here's the interesting thing. Fred Smith, who founded Federal Express, he came from a real transportation background. His father founded Greyhound.
Dave Young:
Well, there you go.
Stephen Semple:
So he came from some money. He created this idea of the hub delivery system. The whole idea with Federal Express is what they invented, and everybody does it today, was instead of something going from point A to point B, everything would go to a central hub, be sorted. It may actually travel further but is actually more efficient. Here's the crazy thing is he came up with this idea as a class project when he was in university, and his teacher gave him a C. Said it was a terrible idea.
Dave Young:
It's terrible. That'll never-
Stephen Semple:
Never, never, never going to work. Also at the time, you got to remember, both UPS and the post office did not own their own planes. They relied, if anything was being air freighted, on airlines, and at the time, carrying packages by air was a secondary business for airlines.
Dave Young:
Gotcha.
Stephen Semple:
So literally, if there was no room for a package, it didn't go, or packages got bumped for people.
Dave Young:
What year are we talking about? What year was it when he was in school and came up with this stupid idea?
Stephen Semple:
I'm not sure what year he was in school. But really, 1970 was a real turning point for UPS.
Dave Young:
Oh, wow.
Stephen Semple:
It would've been before that. Going back to Fred Smith, he inherits some money. His dad also had an aviation business, so he decides to sink the money into that aviation business. He's doing corporate aviation, private jets. What he's doing is he is buying them, fixing them up, and selling them. So he's constantly looking for refurbished parts and things along that line.
When he buys the business, he really grows it. -
Xerox had an innovation department that put out some of the tech that we use on a daily basis, but never truly capitalized on it.
Dave Young:
Welcome to The Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom-and-pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I'm Stephen's sidekick and business partner, Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us. But we're highlighting ads we've written and produced for our clients. So here's one of those.
[AirVantage Heating & Cooling Ad]
Stephen Semple:
Hey, everyone. We've given Dave a week off. He's been working pretty hard lately. I have with us today my partner and buddy, Gary Bernier. And the reason why I brought Gary on is, for what we're going to talk about today, Gary has a very, very unique perspective. Because, today, we're not going to talk about the building of an empire. It's one of these stories that I keep coming across and it keeps bouncing around in my head. Because there's a cautionary tale there, but I still think it's something interesting to talk about. And that is a little bit about Xerox, and especially some of the things Xerox did in the technology space. And the reason why I wanted Gary in on this is Gary was intimately involved with a number of things that were going on around the space when Xerox was doing some of the things that we're going to talk about today.
And to put it in perspective, here's a few things that Xerox invented. And I want you to think about how, if they had patented these things and developed it, how different a business Xerox would be today. So here's a couple of things. The mouse, think about that. Xerox invented the mouse. The thing that we all use every day. The graphical user interface, that whole visual way of how we interact with a computer. Apple didn't invent that. Microsoft didn't invent that. Xerox invented that. This whole concept of what you see, what you get, which type of network was it? Was it Token Ring?
Gary Bernier:
Ethernet. They had the first Ethernet network.
Stephen Semple:
The first fricking Ethernet network. Cornerstone stuff of what almost the entire computer industry is built off of was invented by Xerox.
Gary Bernier:
And, Steve, they had one more thing.
Stephen Semple:
Do I need to sit down?
Gary Bernier:
Yeah, you do. It's called email.
Stephen Semple:
I didn't know that. One of the things we talk about in the podcast and that is this whole idea... And, Gary, you and I have talked about this over the years as well, is this whole idea of get out of your space, don't look around your industry, all those other things, to innovate. Xerox had part of this right. So what Xerox did is they said, "Okay, sitting in this room amongst all these photocopier people, we can't innovate as a photocopier business. So what we're going to do is we're going to set up this separate lab." And they called it the Palo Alto Lab. "We're going to hire a bunch of really smart people. We're going to stick them over there. And we're going to let them innovate like crazy because we need to be outside of our environment to innovate." They got that part right. Because look at what they came up with, little things like email. Oh my God, I had no idea on the email one.
Gary Bernier:
They didn't actually invent email, but they demonstrated email.
Stephen Semple:
They're the ones that made it work and were working it. But they invented the most, they invented these other things. So they got that part right. The part that they got wrong was as soon as it moved out of that, as soon as somebody from Xerox, the photocopier company, came in and looked at it, they still ran into the same problem. Because the only lens they could look at it from is, "I don't see how you could use that on a photocopier. -
FedEx purchased Kinko's for 2+ Billion Dollars. Kinko's doesn't exist any more, but I think we can all agree that Paul Orfelea built an empire.
Dave Young:
Welcome to The Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I'm Stephen's sidekick and business partner, Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us, but we're highlighting ads we've written and produced for our clients. So here's one of those.
[Colair Cooling & Heating Ad]
Dave Young:
Welcome to The Empire Builders Podcast. Dave Young here with Stephen Semple. And we were talking about empires. We're talking about things that started small and ended up really darn big. And Stephen whispered today's topic into my ear just as we were counting down, and it's like, "Man, we've been on a run of nostalgic trips to our youthful times."
Stephen Semple:
That's kind of true, isn't it? I hadn't thought about that. But yeah, we kind of have been.
Dave Young:
So today we're talking about Kinko's. Kinko's, the copier place.
Stephen Semple:
Kinko's the copier place.
Dave Young:
If you didn't have a photocopier at your disposal, you had to find a Kinko's. That was it. That was your only other choice. Or find a print shop and wait a couple weeks.
Stephen Semple:
And it's easy because Kinko's sort of isn't around any longer. It'd be easy to go, oh, well, they failed, and no, they didn't. The reason why they disappeared was that in February of 2004, they were bought by FedEx for $2.4 billion. So when you look at all these FedEx stores, they were Kinko's that basically FedEx took over. When you sell something for 2.4 billion, I call that an empire.
Dave Young:
I think so. I think so. How did they get started, and when?
Stephen Semple:
They basically started back in 1969, 1970 is sort of the starting point. It was founded by Paul Orfalea, and he started literally with 100 square foot shop across street from the University of California. And you got to remember, back then, photocopiers were really large. So his 100 square foot store, customers couldn't come in.
Dave Young:
That's mostly a photocopier, in those days.
Stephen Semple:
Customers would come up to the window and they would basically hand the stuff and it'd be copied and it would hand it back out the window. There was no room for customers in 100 square foot shop.
Dave Young:
Young people right now thinking about the size of a photocopier. When you're talking 1970s, think of your deep freeze in the garage and add about a foot to the height of it, a chest type deep freezer. And I mean, this was serious technology, super expensive piece of equipment, but up until things like this, the only way to get a copy of anything was to run a piece of carbon paper through your typewriter with the original.
Stephen Semple:
Well, here's how innovative photocopying was. And it wasn't originally called photocopying. It was originally called Xerography. That's the actual technical name for it, which is the reason why. It also then became known as Xeroxing things, but-
Dave Young:
Making a Xerox.
Stephen Semple:
And then for a bunch of reasons evolved in the photocopying, but I wish I remember which Bond film it was, but there was one of the really old Bond films where 007 breaks into an office, they lift up a photocopier from a crane and put it over so that he can photocopy some of these secret documents. When it's being done in a Bond film, it's amazing technology. Today we find it almost laughable. But going back to Paul, so Paul grew up being very business-minded. His whole family were entrepreneurs. His dad made clothes, he had uncles with various businesses with restaurants and all sorts of things. He enjoyed college, -
We all think about the pop pop pop. But it works best when it doesn't make a sound. Here is the beginning of Bubble Wrap and the Sealed Air Corporation.
Dave Young:
Welcome to The Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom-and-pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I'm Stephen sidekick and business partner, Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us. But we're highlighting ads we've written and produced for our clients. So here's one of those.
[Tapper's Jewelry Ad]
Dave Young:
Welcome to The Empire Builders Podcast. I'm Dave Young, Steve Semple's right there. And today, we're going to talk about bubble wrap. I didn't even know it was a brand. Is it a brand or is it just an invention?
Stephen Semple:
Well, it's patented.
Dave Young:
Is it?
Stephen Semple:
Yeah, yeah, yeah. There's a company that owns the right to bubble wrap. Yep.
Dave Young:
I'm in. Let's pop, pop, pop. Pop, pop, pop. Tell me more.
Stephen Semple:
Yeah. Well, it was invented in 1957 by Alfred Fielding and Marc Chavannes, I'm probably butchering the name, in Hawthorne, New Jersey. And today, it's like a $10 billion industry.
Dave Young:
Gosh. I've got memories as a kid. I didn't know it was that early. In 1957, is that what you said?
Stephen Semple:
Yep, '57 is when they invented it. Yep.
Dave Young:
I remember my dad bringing bubble wrap home. We ran the radio station, if he got some fragile part in or something and it was wrapped in bubble wrap, he'd bring it home and give it to the kids.
Stephen Semple:
Early fidget toy.
Dave Young:
We'd fight over that stuff 'til it was all done. It was usually the big ones. I don't think they had the little baby bubbles for a while, but the big ones were fun.
Stephen Semple:
One of the first games I remember playing on my iPhone was actually one where you popped bubble. Where you popped it.
Dave Young:
Yes, I remember. I'm like, "That's why I got an iPhone."
Stephen Semple:
So the idea today is a trademark brand of the Sealed Air Corporation. So the Sealed Air Corporation-
Dave Young:
Sealed Air Corporation.
Stephen Semple:
... owns the trademark to bubble wrap. And it was first made by sealing together two shower curtains with bubbles in between, that's what they did.
Dave Young:
Nice.
Stephen Semple:
Yep. And there's a number of things that they tried to figure out how to use it for. At one point, they tried to market it as an insulator for greenhouses. Alfred was really interested in how machine shops worked, and Mark was a chemist from a very aristocratic family. And at the time, they were doing work with waterproof fabrics to try to make raincoats and that's kind of where this whole, "Oh, if we have a raincoat, we seal the air in between, it'll be insulated raincoat," and all this stuff going on. And there was a lot of work being done in plastics at that time because following World War II, what we started seeing was plastics being used in transportation and all sorts of different things. And in fact, over World War II, there was a 400% increase in manufacturing in plastics. So there was all sorts of stuff going on.
Dave Young:
Okay, yeah.
Stephen Semple:
So they laminated these two plastic sheets together to create this breathable but waterproof thing, and it would give it texture. And again, no one was interested in it, but somebody did approach them and say, "Hey, could you make a textured wallpaper?" So they started playing around with making this textured wallpaper, but didn't work out all that well. They couldn't control the shape of the bubbles, and different types of air got trapped and whatnot. But what they did do is they filed a patent on it and started to look for a market. -
Being willing to expose a weakness or a flaw or admitting a mistrake... uhm, sorry, A mistake allows people to know you are real. And real matters when building trust.
Dave Young:
Welcome to the Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I'm Stephen's sidekick and business partner, Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us, but we're highlighting ads we've written and produced for our clients, so here's one of those.
[Tommy Cool Air Ad]
Stephen Semple:
Hey, everyone. Well, we've given Dave the day off and I have with me a very, very special guest, Matthew Burns. Say hello, Matthew.
Matthew Burns:
Hello, everybody. Thanks for inviting me, Steve. This is great.
Stephen Semple:
Yeah, so here's the reason why I wanted to bring Matthew on and what we're going to talk about is Matthew and I had an awesome experience in the fall, and we traveled to Western Canada with Gary Bernier, and we did a number of presentations and met with about 50 business owners out in the Edmonton area. And we're talking about a number of different things around marketing and whatnot. And one of the areas that Matthew presented that people really had a lot of engagement around was this whole idea of building of trust and specifically the role that social media can do around building of trust. And the part that I love the most was how you started that whole conversation, that whole idea that we talk about in terms of the trust conundrum. So I think that's what you should start with in terms of talking about.
Matthew Burns:
It's this whole idea of when do you actually gain the trust of the target, whether it's a friend, whether it's a family member, whether it's a colleague or a client or a customer. We do a little thing where we trick our audience and we make them answer questions and we say, "Listen, so is trust important?" And we know trust is important, but we ask and everybody says, "Yeah, yeah, trust is important. It's a great thing. We need it." And it's important for the sale. And they'll say, "Yeah, it's important for the sale." Okay, perfect. So how do you build trust? What is it that you do with your business that builds trust? And inevitably we get the same answers. You get, oh, we show up on time and we do what we say we're going to do.
Stephen Semple:
Treat them with respect.
Matthew Burns:
Treat them with respect. So we're like, "Okay, that's awesome. And never stop doing those things. That's incredible." So you're doing all those things and you want them to trust you, but when do you do those things? When do those things happen? Before the sale or after the sale? Because remember, we're aiming for trust being really important for the sale itself. So when do those things happen? And they're always like, "Oh." And I said, "Because you said you wanted to be trusted before the sale, but to be trusted, you need to deliver on your promise. Well, that comes after the sale. You need trust for the sale." So this is a paradoxical loop. It's just going to keep feeding into itself. I need it beforehand, but we don't actually get it until afterwards.
So trust comes second. True, honest, trust comes second. It's once you've delivered on your promise. It's once you've engaged with the client and delivered what you said you're going to deliver, whether it was even just I'm going to call you back on Tuesday and you call back on Tuesday. Okay, I can trust now that he's going to do or she's going to do exactly what I'm asking for. That's the conundrum. I think the big thing is how do you circumvent the conundrum? How do you get to be trusted before the sale? I'll ask the listeners, if the client came in, the customer came in and they trusted you implicitly, -
A Canadian invention that sold for $80,000,000 to Hasbro in 1993. Now it is a worldwide sensation. Come on, you've played it.
Dave Young:
... welcome to The Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom-and-pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I'm Stephen's sidekick and business partner, Dave Young. Before we get into today's episode, a word from our sponsor, which is... Well, it's us. But we're highlighting ads we've written and produced for our clients, so here's one of those.
[AirVantage HVAC Ad]
Dave Young:
Welcome to The Empire Builders Podcast. I'm Dave Young, and Stephen Semple is alongside, and we're talking about empires, empires that got built up by people that started businesses with an idea and a dream. And Stephen just whispered today's topic into my head, and... Through these headphones, and I'm blown away because the topic is Trivial Pursuit, and he told me that it was a Canadian company that started Trivial Pursuit. Instantly, I have a million questions, like did they just steal U.S. state secrets to make all these questions?
Stephen Semple:
I wish I had the recording on earlier when you were like, "They're a Canadian company?"
Dave Young:
You Canadians are smart. Nothing gets past you.
Stephen Semple:
We've done... God, what number are we at? We're 130 or 140, and you've never reacted with that level of surprise. I was like, "Damn. I wish I had that recorded."
Dave Young:
I mean, you stop and think about it, it kind of makes sense. Up in the frozen north, you've got to spend a lot of time on board games.
Stephen Semple:
There you go.
Dave Young:
When it's too cold to snowboard.
Stephen Semple:
That's it. That's it. It's never too cold to snowboard, that's the only problem. So it was created by fellow Canadians, yes, Chris Haney and Scott Abbott in 1981, and in 2008, Hasbro bought the full rights for $80 million. As of the most recent data I could get was, 2014, they had broke through 100 million games sold, in 17 languages. 1993, it was named the at the Games Hall of Fame, and basically it's sold over two billion copies worldwide.
Dave Young:
Amazing. I haven't played it in years. It's still around though, right? I mean, you still...
Stephen Semple:
Oh, yeah. And there's lots of different versions now.
Dave Young:
Well, I remember clearly the original version, whatever that was called. It was just called Trivial Pursuit-
Stephen Semple:
That's right. Yes.
Dave Young:
That's what it was.
Stephen Semple:
Yeah.
Dave Young:
And it had enough questions that you could play it a bunch of times before you really needed to buy an expansion pack kind of thing.
Stephen Semple:
Yes.
Dave Young:
That was what was fun. But I think I played it so much with friends, and classmates, workmates eventually, that nobody would play against me on that original version.
Stephen Semple:
Right, 'cause [inaudible 00:04:08]
Dave Young:
Then you get in, like, "Oh, the sports version. Nah, I'm no good at that." I might remember the name Gordie Howe. Actually, that explains that it was a Canadian company, 'cause there were a lot of hockey stars in a lot of the question answers.
Stephen Semple:
Yeah, yeah, absolutely. So the origin goes back to 1970, it took them a while to get it going. So it's the '70s, and the market's dominated by games for kids, there's no adult games out there. And Chris Hanley's a photojournalist, super creative guy. Scott Abbott's a sportswriter-
Dave Young:
Yeah.
Stephen Semple:
That might be part of the sports part to it.
Dave Young:
Probably Gordie Howe's cousin?
Stephen Semple:
There you go. And so one night they're going to play Scrabble, and it's missing some tiles, and they decide instead to do trivia. -
Travelling is fun, but stressful. Is the destination going to look like the pictures on the website? Voila, Trip Advisor.
Dave Young:
Welcome to the Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I'm Stephen's sidekick and business partner, Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us. But we're highlighting ads we've written and produced for our clients, so here's one of those.
[Wyatt Works Plumbing Ad]
Dave Young:
Hey, welcome to the Empire Builders Podcast, that's where we're at, right? I'm Dave Young.
Stephen Semple:
That's where we're at for right now.
Dave Young:
Yeah, I don't know. And as we're recording this, it's early in the morning. Stephen has gone to the great trouble of researching empires, and people that built them, and how they did it. And just before he hits record, he whispers in my ear the topic of the day, and all I have to do is show up and do this kind of stuff. Hi, Stephen.
Stephen Semple:
Hey. You're really doing so well this morning.
Dave Young:
Look, it's early, I'm still waiting for the meds to kick in. I'm stalling because I'm trying to think of things that I know about the empire that you told me about. We're going to talk about TripAdvisor.
Stephen Semple:
Yes, sir. Big player in their space, man.
Dave Young:
They are. And my recollection is they're sort of travel agency-ish, but they're also just big search and ad, and you just find them when you're going to a place and you want to know stuff about things before you hit the ground.
Stephen Semple:
And that's literally the inspirational idea for TripAdvisor. So TripAdvisor was founded by Steve Kaufer in February of 2000, and today they get like 400 million visitors a month to the site.
Dave Young:
That's not nothing.
Stephen Semple:
That's not nothing, it's pretty significant. But here's the interesting thing, the thing that really drives them, user review was actually an afterthought when they started their business. It's not where it started. So, Steve has got a major in computer science, in 1985 he graduates, and he decides to start this software company, and he stayed there with a bunch of friends, and he stayed there for 10 years, and he worked at night. And in fact, what it was, he started off doing this productivity tool, which found errors in C code, and he grew it to 160 people, and doing 18 million in sales, and then the market changed and it contracted.
And by the time he sold it to Compuware in '98, they were down to a dozen people. But it was a learning lesson for him, because what he discovered when he reflected back on it is he had on these blinders, and the blinders was, as the business was contracting, he kept thinking, "All I need to do is invest a new product, all I need to do is make this thing better and it'll work." What he was not connecting with was what did the customer actually want?
Dave Young:
How is the market changing too, right?
Stephen Semple:
Correct.
Dave Young:
Man, if you think that you're the rock and you ignore the fact that the market is changing around you, you think you're doing something wrong, you just haven't opened your eyes.
Stephen Semple:
Yes. And he believed that business failed because he had this complete product first focus. Product, product, product, not looking at the market, not looking at the customer, and that shaped what happens next. So he basically walked out with nothing from that venture, and he goes on vacation in 1998 and he goes down to Mexico. He and his wife are going down there and he's planning the trip. So like, "Well, where should we go?" "Well, how about Mexico? How about [inaudible 00:04:43] of Cancun? They go into a travel agency. -
Labor shortages are affecting the hiring of good people. How does business change their recruiting practices to get the best workers?
Dave Young:
Welcome to the Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I'm Stephen's sidekick and business partner, Dave Yum. Before we get into today's episode, a Young from our sponsor, which is, well, it's us, but we're highlighting ads we've written and produced for our clients. So here's one of those
[No Bull RV Ad]
Dave Young:
Welcome back to the Empire Builders Podcast. Dave Young here along with Stephen Semple. And today, we're not even talking about a product. We're not talking about an empire. We're talking about something that empires and businesses of all shapes and sizes need, and that's good people. And we're going to talk about how to find them. Stephen, you've got some thoughts on recruiting.
Stephen Semple:
Yeah. And if people go back to episode 59, we did a whole talk on demographics. And one of the reasons why we talked about demographics is frankly the challenge that businesses are going to face going forward, finding people. And I really encourage people to go back and listen to it, but just to summarize, so basically for the 70 years following World War II, what happened consistently every decade was the labor force grew. More people were entering the labor force than leaving the labor force due to the baby boom, women entering the workforce, and immigration. In 2020, something happened. 2020, that became more balanced in terms of the labor force did not grow in North America. In fact, what's happening is our labor force is beginning to shrink. And when you look at demographics and you look forward, because we do not give birth to working age children, and birth rates are low, we're not replacing our population the workforce is going to continue to shrink for the foreseeable future.
Our workforce is going to get smaller and smaller. That's just the reality of it all. And that changes a lot of things, including recruiting. And here's the interesting thing. So right now, we're in a stage where people are worried about the economy and talking about a slow economy and whatnot. And what is our unemployment rate right now? 3.5%, which is a historic low. So even though we keep reading about, oh, there's layoffs here and layoffs here and layoffs here-
Dave Young:
And nobody wants to work.
Stephen Semple:
Right. And that's the fallacy. Nope, no, everyone's working. Everyone is working. When we think about growing an empire, there's a bunch of things you need. You need scalable marketing, you need to use scalable sales, but you also have got to be able to attract people. So I believe recruiting is going to become a really important part, and even a more critical part to growing a business in the future than today. Because in the past, there was always people available. They aren't any longer. And this is not just a North American phenomena. A few years ago when I was over speaking at the London Stock Exchange, I had a chance to meet business owners from all over Europe, France, and Sweden and whatnot, and they were all talking about the same thing. They're all talking about this shortage of labor. This is a worldwide phenomena. There's expectations that China's population by the end of the century is going to be cut in half.
Dave Young:
Wow.
Stephen Semple:
That is going to be 500 million people rather than the billion it is today. So this is a worldwide thing. So now getting back to it. So to me, I believe that this is going to change how we have to recruit. Our whole strategy for recruiting, and I'm doing this with some customers, has to change because... Everyone says to me, "Oh, it's not about the skill sets. Bring me somebody with the right traits and I w... -
The real liquid solid for adults turned into Silly Putty for the kid inside all of us. Natural rubber was hard to get and Silly Putty was the mistake that created an empire.
Dave Young:
Welcome to the Empire Builders podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I'm Stephen's sidekick and business partner Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us, but we're highlighting ads we've written and produced for our clients. So here's one of those.
[Irock Plumbing Ad]
Dave Young:
Welcome back to the Empire Builders podcast, Dave Young here alongside Stephen Simple. Stephen just whispered the name of today's topic into my ear, and it's one that I've certainly heard of. It's one that I have vast amounts of experience with as a child. We're going to find out if they're even still around because they must be, they built an empire. I think I know a little bit of the back story. It's sort of an accidental product called Silly Putty.
Stephen Semple:
Yes, Silly Putty. To give you an idea of how big Silly Putty is, there's been 350 million eggs sold, which would account to about 4,500 tons of Silly Putty in the world. It's in the National Toy Hall of Fame, and it's in the Smithsonian Institute.
Dave Young:
One of my favorite things to do with Silly Putty is probably not something that today's kids can do much with it because nobody buys newspapers anymore, but used to be able to smash the Silly Putty onto the comic strips. It would lift a little bit of the ink off, and that would be kind of fun.
Stephen Semple:
You could stretch it.
Dave Young:
Yeah. Kind of a goofy product. There's no legit purpose for it other than just to play with it in your hands.
Stephen Semple:
Invention of Silly Putty is disputed, actually. Some say Earl Warrick from Dow Corning, some say that was the inventor. Most including Crayola, who are now the owners of Silly Putty attribute it to James Wright at GE Labs in New Haven, Connecticut. So most say it was James Wright. So we're going to go with it being James Wright. Any case, whichever one was the inventor, it was invented in 1943 and today it's one of the best-selling toys in the world. As we're talking about, it's in the National Toy Hall of Fame, in the Smithsonian Institute.
Dave Young:
So 1943 puts it right in the middle of World War II, and we're fighting to stop the Axis and the Nazi powers. If I recall, if I heard a story once, it was like they were trying to invent something that was part of the war effort.
Stephen Semple:
Yes. In fact, that's exactly what it was. Again, just give you an idea of Peter Hodgson is the person who ran with Silly Putty and popularized it. In 1976, when he died, his estate was worth $140 million, which is probably in today's dollars 600 million. He did really well. He did really well by this. You're right. It was a year after he passed away that it was sold to Crayola. Back to GE Labs in 1941, Japan invades the rubber producing countries at the beginning of World War II creating all sorts of shortages.
If you take a look at the countries that they invaded at the beginning, they were all basically countries that were the source of natural rubber because at the time, rubber came from the sap of trees, rubber was used in tires and rafts and aircraft products, and they were all made from natural rubber. That was the only rubber that was around. So basically companies like GE with the war effort were looking for a substitute. They were trying to find a substitution for natural rubber. James Wright was working on the problem, and he came up with a compound that was soft, sticky, stretchable.
What made it unusual is that it can be compressed and it's a solid that can be cut, but when it's balled up, it bounces. -
Wouldn't it be cool if there was a better built backpack that cost the same? The beginning of Herschel. How to feel established from day one?
Dave Young:
Welcome to The Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector and storyteller. I'm Stephen's sidekick and business partner Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us, but we're highlighting ads we've written and produced for our clients. So here's one of those.
[BWS Ad]
Dave Young:
Welcome back to The Empire Builders Podcast. Dave Young here alongside Stephen Semple, as he usually does. Just before we start the countdown to record, he asked me if I'd heard of today's topic, which is Herschel what?
Stephen Semple:
It's called the Herschel Supply Company.
Dave Young:
Herschel Supply Company. They make backpacks. When you said backpacks, I immediately thought of the JanSport backpack that every kid in junior high ever owned. Business world seems to have in the last 20 years. Like the Swiss Army or whatever. There's a brand that you see those a lot, you see. There's some other brands, but I've not heard of this one.
Stephen Semple:
So first of all, warm them to my heart because they're a Canadian company.
Dave Young:
Oh, well, there we go. I'm guessing these are high-end backpacks that only really successful people can afford like you.
Stephen Semple:
They are, and I don't have one.
Dave Young:
Oh, well, never mind.
Stephen Semple:
But they are a really nice backpack and they are very high quality. And in fact, they were one of the companies that really led this charge in terms of backpacks becoming higher quality and higher design. And they were started in 2009, and today they're sold in 9,000 locations around the world.
Dave Young:
That's a lot of locations.
Stephen Semple:
Yeah. They are a massive success. And they were started by two brothers, Jamie and Lyndon Cormack. And again, as I like to point out, Canadians, and if you saw their backpacks, what's really interesting is if you saw them and took a look at it, given the way the logo is and the design and whatnot, you would feel like it was a really old company, not a company from 2009. And that was by design. That was very much intentional. They built this old and established feeling purposely. They both worked in apparel, and one of the things that they noticed was there was a gap in the marketplace. There were no stylish backpacks, and college students were using them and people were going to work with them, and there was nothing stylish. And today they also do duffels and suitcases and wallets and things along that line.
And how they came up with the name was an old prairie town near where they grew up in Saskatchewan, Herschel, this little town. And they would visit it as kids, and literally 18 people lived in this little town, and it was down in this little valley and it had this nice little hockey rink in curling rink and an old school that had been turned into a little local museum. And so they actually went and hung out there as kids. So Jamie moved away to Canmore and worked in mountaineering school, and he wanted to be a mountain guide. He studied this for four years. It takes a long time to be a mountain guide. And at one point his boss pulls him aside and says, "I'm not hiring you back." And he goes, "Well, why not?" He goes, "You're too young, you're too smart. I want you to be one of the people in the back of the helicopter coming up here on weekends, not working in the front."
Dave Young:
Wow. Okay.
Stephen Semple:
So he went back to the city, to school part-time and was doing graphics while working in a skateboard shop. And so he started a local skateboard magazine called Sequence, -
The Randolph brothers busted a hole in the wall of their bakery to accommodate factory worker's short break time. That was the first of 3 ways to create word of mouth.
Dave Young:
Welcome to the Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from Mom and Pop to major brands. Steven Semple is a marketing consultant, story collector, and storyteller. I'm Steven sidekick and business partner, Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us, but we're highlighting ads we've written and produced for our clients, so here's one of those.
[Travis Crawford Ad]
Dave Young:
Welcome to the Empire Builders Podcast. I'm Dave Young. I'm here with Steven Semple, and we're going to talk about an empire that was built, that's why we call it the Empire Builders, in case you hadn't caught onto that whole thing about why we're named what we are. Good morning, Steven. How are you?
Stephen Semple:
Wow, you're really on it this morning.
Dave Young:
I'm not on a... People ask, "Is that scripted?" Oh gosh, no. Isn't it obvious? You've whispered our subject for the day in my ear just as we started the countdown, and it instantly brought back memories of trips to Austin, Texas, with my children back in the early 2000s. Probably back around the turn of the century, young man, shortly after.
Stephen Semple:
Really?
Dave Young:
Mm-hmm. When Julie and I first traveled down to Wizard Academy, we had four kids at home. And this was when Wizard Academy was still down in Butte, at Roy's office. So the easiest way to get there was down I-35, if you're familiar with Austin.
Stephen Semple:
Right. Okay.
Dave Young:
Well, right at... I think it's at Slaughter and I-35. We had to make a stop every time as we headed south at a Krispy Kreme Donuts.
Stephen Semple:
At a Krispy Kreme. All right.
Dave Young:
Because we didn't have a Krispy Kreme donuts back in Western Nebraska. There probably still isn't one.
Stephen Semple:
There's no question. They're far more concentrated in the south of [inaudible 00:03:00] although another city that has a ton of them is New York City.
Dave Young:
Really?
Stephen Semple:
Yeah. When I was doing the speaking engagement this summer at NASDAQ... So first of all, there's a really neat one right off of Times Square. I swear, you couldn't go five minutes on Manhattan without bumping into a Krispy Kreme. They were everywhere.
Dave Young:
Really?
Stephen Semple:
Yeah, they were absolutely everywhere in New York.
Dave Young:
In case the listener hasn't figured it out, today's topic is Krispy Kreme donuts.
Stephen Semple:
I guess we never had [inaudible 00:03:30] announce that, did we?
Dave Young:
What we loved about it... I mean... Shoot, I'm raising kids, and everybody ate donuts, right? But we had a place in our hometown called Daylight Donuts, which I think was a small franchise. And you could get donuts at the grocery store. You could get the boxes of donuts, but man, there was just nothingness. And Dunkin was around, but there was just like the Krispy Kreme had the green light, red light thing on the drive-up. And if the green light was on, it means they're making donuts right now. And yours will still be hot from the grease when they hand it to you out the window. And it was like, "That was an amazing thing."
Stephen Semple:
Yeah, they've done incredible. They were founded by two brothers, Vernon and Louis Randolph, and Winston-Salem on July 13th, 1937. And today, they have 1400 locations. They got 21,000 employees, and they do a half a billion in revenues. So they've done real well.
Dave Young:
I think half a billion's empire sized.
Stephen Semple:
Well, yeah, it's a lot of donuts. That's a lot of donuts.
Dave Young:
It's a lot of donuts. The other thing that was really cool about what's go... - Laat meer zien
