Episodit
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Tonka needed something to get them out of a $10,000,000 hole. The needed to transform their situation.
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.
[Pinpoint Ad]
Dave Young:
Welcome back to the Empire Builders Podcast, Dave Young here, along with Stephen Semple, and we're talking about empires. And the one you gave me now is I have to admit, I am familiar with the brand, but I'm not an active participant in the brand. I think I've mentioned on here before, I raised four daughters, and so today's topic is Transformers. And none of my daughters were ever into Transformers as a toy. I was beyond toys when Transformers, I think first came around. So I've never even really jumped into the movies. But big, big brand.
Stephen Semple:
Huge brand.
Dave Young:
Tell me how they got started.
Stephen Semple:
Well, and the interesting thing, I almost included my oldest daughter, Crystal, in the recording of this, and I decided that, no, we might do a follow-up episode with her because she is a massive Transformers fan.
Dave Young:
Wow. Okay.
Stephen Semple:
And the interesting thing is she never played with them as a kid, but she found herself into the fandom. And today there's a whole thing I want to do about fandoms because it really speaks to the role that social media plays with a lot of companies.
Dave Young:
I feel like as a kid, I would've loved them.
Stephen Semple:
Because there's this unbelievably rich storyline behind Transformers that is incredible. And then it's actually one that is fragmented into the Michael Bay Transformers storyline versus the historic ones, because Michael Bay is the one who made the movies. It's this crazy world when you dig into it. But, the story of Transformers is actually a story of a battle between two decent-sized companies. So it's not normally what we do, but it was so interesting, I thought we got to talk about this because it's a story about a battle between Tonka and Hasbro.
Dave Young:
Oh, man. Just like Wonka and the other guy. Yeah.
Stephen Semple:
Yeah. Exactly. Yeah, yeah. Today the Transformers franchise, I think is a $25 billion franchise between the movies and the toys. It is massive. And the story goes back to we're in July of 1983, and Tonka is struggling for a new hit. Tonka is being run by Steve Shank, and they're like $10 million in the hole, and they're known for trucks. And think back to the '80s, what's happening, video games are growing and the market is shifting away from things like playing with trucks. And Tonka did not shift with it. So they're really, really struggling. And Shank has hired a Mattel veteran, Pat Fellie. He's the guy who basically helped turn things around at Mattel with He-Man. So he was basically the really a key person with developing of He-Man.
And so they need something quick. And the shortcut is to license existing toys because the development and manufacturing is done. It's quicker and cheaper to market. So they go out everywhere looking around for something to market, and they come across this toy that Knickerbocker has. Knickerbocker is going out of business, and it's this interesting toy, which is a car and a robot, but it's a cheap knockoff. The real one is being done in Japan by Bandai, which is making this thing called a Machine Robo. And so Steve Shank heads to Tokyo to get the rights. And Bandai demands, okay, well, we can make this for you, but you got to buy 800,000 units as part of the deal, and Tonka has never sold that much, -
Mike Sinyard dropped out of school at 16, toured Europe on a bike and became the Specialist no one knew they needed.
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.
[ECO Office Ad]
Dave Young:
Welcome to the Empire Builders Podcast. I'm Dave Young, and that's Stephen Semple. We're talking about empires and business building and all of the things. And the subject that you whispered in my ear just as we started was Specialized mountain bikes. Mountain bikes is not my area of expertise. Specialized is a brand name or are we just talking about mountain bikes in general?
Stephen Semple:
No, Specialized is a brand name, but they do more than mountain bikes, but where they're really known is mountain bikes.
Dave Young:
I kind of thought that they were a-
Stephen Semple:
Yeah.
Dave Young:
Yeah, which is first of all, Specialized is a strange name for a brand.
Stephen Semple:
It is.
Dave Young:
Like calling yourself exclusive, okay. But I'm anxious to hear more. Like when you and I were kids, mountain bikes didn't exist. It just wasn't even a thing.
Stephen Semple:
They did not. No, they did not exist.
Dave Young:
There were bikes and there were road bikes, racing bikes, or you had a bike with just the usual kind of fat tires.
Stephen Semple:
Yes. And even before the mountain bike came along, you had a period of time there was the BMX bike actually predates the mountain bike.
Dave Young:
But more for kids and early teens.
Stephen Semple:
Yeah, exactly. So it was founded by Mike Sinyard in mid 1974 is when he started this business. So-
Dave Young:
It does go back a ways.
Stephen Semple:
Yes. And he didn't start right away building mountain bikes. That does give you an idea where the mountain bike trend happens. And today they have like 1,300 employees, they do half a billion in sales. And he started selling parts for bicycles. And it really wasn't until the mid 1980s that they became a big force in the mountain biking space. And the interesting thing that we're going to be talking about is they made some decisions along the way that almost put them out of business.
Dave Young:
Okay, love that kind of thing.
Stephen Semple:
That's the thing that really jumped out at me on their whole story. So Mike grew up in San Diego. His dad was a machinist in the Navy. His mom cleaned houses. They didn't have a lot of money. They didn't go out to eat, they didn't do all those sort of things. They were just a very basic household. He did poorly in school. He was in school in the '60s and had ADHD and really, again, not much known about that back in those days. And so he moved out of the house, dropped out of school at age of 16, and what he would start doing is he would go to flea markets and he would buy things, then resell them. And what he figured out was live cheap.
So he had lived in a house with lots of roommates, was doing this living cheap thing, going to flea markets, buying stuff, reselling it, and eventually he decides to go back to school and give school another go. And he attended San Jose State University. And one of the things that happened is remedial programs started coming out and that's what allowed him to go back to school. And he basically did remedial everything. Like every class, every class was a remedial class, gets out of school, gets a job at an airport refueling planes, and he decides to become a pilot and started in an aviation program, got his pilot's license. Which, -
Puuttuva jakso?
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Levi help Jacob patent the famous rivet on the Levis jeans that make the pockets so durable. That is how Levis starts to build the 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 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.
[OG Law Ad]
Dave Young:
Welcome to the Empire Builders Podcast, Dave Young, here alongside Stephen Semple. We're talking about empires, we're talking about things that people built, businesses, and you know what I mean, empires.
Stephen Semple:
That sort of thing.
Dave Young:
What don't you get about empires? Come on. Boy, the one you just whispered in my ear as the countdown started, I know a little bit about it just because it's like a classic business lesson. Right?
Stephen Semple:
Yeah.
Dave Young:
If you're going to follow the gold rush, man, don't dig for gold, sell to miners.
Stephen Semple:
Yeah. Oh yeah. Yeah. Big time.
Dave Young:
You said it's going to be Levi's, so I assume Levi Strauss and Company.
Stephen Semple:
Yep.
Dave Young:
This is the guy that started the little store to sell to the miners out in California.
Stephen Semple:
Yeah. We're going way back because Levi Strauss was founded May 1, 1853. So we're going way back. Today, it's trades on the stock exchange under L-E-V-I, Levi. They've got 3,400 company operated stores. They do like 6 billion in sales and almost 19,000 employees. It is the best selling five pocket gene out there.
Dave Young:
I don't even think about them as having stores for some reason. That must be outlet mall kind of things.
Stephen Semple:
Yeah, I think that's primarily what they are because, again, I was the same. I looked, I went 3,400 stores, boy. It's one of those ones you just don't think about it.
Dave Young:
Yeah. In high school, man, if you weren't wearing Levi, button-up five-pocket jeans, you weren't cool at all unless you had the Jordache back in the day designer jeans.
Stephen Semple:
There you go.
Dave Young:
You either go standard Levi's or full designer. God help if your mom bought you Lee.
Stephen Semple:
Yeah.
Dave Young:
Or some off-brand from Sears.
Stephen Semple:
Yep. Oh yeah. Then it was going to be a rough week at school.
Dave Young:
Well, take us back to 1853.
Stephen Semple:
The other thing that's interesting is they hold the original patent for the rivet in the jeans. They actually hold the original patent for that.
Dave Young:
Okay.
Stephen Semple:
You know the little rivet that you see in the jeans?
Dave Young:
Yeah.
Stephen Semple:
That's their original patent.
Dave Young:
Well, that's cool.
Stephen Semple:
Yeah. Now, jeans were not invented by Levi, so that's often a misconception. The company was started by Levi Strauss, and Levi was a Bavarian immigrant. He actually first had a business doing dry goods in New York City. He built that business basically selling these dry goods door-to-door.
Dave Young:
Okay.
Stephen Semple:
As you were talking about, Dave, he hears about this thing called the Gold Rush in California. The boom is amazing. I knew it was a boom, but I didn't realize this. In the two years from 1849 to 1850, the population in San Francisco grew from 1,000 people to 25,000 people in two years.
Dave Young:
I know the Oregon Trail, but man.
Stephen Semple:
That is just mind blowing.
Dave Young:
I think a fair number of them actually sailed around South America.
Stephen Semple:
When people talk about it being a boom and a rush, -
Making games better and getting them into the world seems like the thing to do when your dad passes and you need money. Sounds like Monopoly.
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.
[Tapper's Jewelry Ad]
Dave Young:
Welcome back to The Empire Builders Podcast. I'm Dave Young, and I'm here with Stephen Semple, who's been researching yet another empire for us to dissect and discuss. And today it's Parker Brothers, the game mogul. Were these guys on Game Row? Didn't we talk about it in another episode, the inventor of a game that was like he was over there in the part of town where all the games come from? I'm assuming.
Stephen Semple:
No, this kind of predates that. This sort of predates that. We're going way back.
Dave Young:
I mean, Parker Brothers, I know the name and I'm trying to even think of a game that's Parker Brothers. Parker Brothers. Who are these guys?
Stephen Semple:
We're going way back. The business was started by George Parker when he was 16 years old back in 1883.
Dave Young:
See, I was thinking you were going to go back farther than that.
Stephen Semple:
Really?
Dave Young:
These guys invented the stick. But 1883, that's okay. 1883 or 18...
Stephen Semple:
1883.
Dave Young:
1883. Okay.
Stephen Semple:
Yeah, so we're going back a little bit here, going back here a little bit. And one of the things that was happening around that time, because we're talking about the early stages of the Industrial Revolution, and one of the things that was being created was the eight-hour workday, which actually started to build leisure time for people.
Dave Young:
Because before that, the work day was waking hours. Wasn't it? It was just like...
Stephen Semple:
Basically. Pretty much. Yeah, pretty much. And so board games had started to come out, but most board games at that time were developed with an agenda. They were dealing with the moral decline of America is what a lot of them were. And they weren't really all that interesting or fun.
And basically, George Parker was the youngest of two older brothers, and his father was a successful merchant, but had passed away and he had to find a way to make money. And what he noticed was at this time, capitalism was really changing. It was becoming actually acceptable. So for example, in 1840, there were 60 millionaires in the United States. By 1880, there were 1,000.
Dave Young:
Wow!
Stephen Semple:
Wealth was exploding, and people were actually able to imagine being wealthy. It was not just the aristocracy. There were actually regular people breaking through. And the first game he creates is a game called Banking.
Dave Young:
Banking. I'm pretty sure he didn't invent banking.
Stephen Semple:
But he invented a game game called Banking. And it's rejected by several publishers, but he spends his life savings, prints 500 copies, takes a month off school to go and sell it. He does sell all the sets for a profit of 80 bucks, but it was a lot of work, but gives him kind of a taste of success. And this is in the era of tycoons, and they were being admired. And Parker wanted to create an idea that taps into this.
Dave Young:
The Vanderbilts and all the...
Stephen Semple:
Yeah, the Carnegies and all of that stuff. And he didn't like business, so he convinced his brother Charles to join, and they formed Parker Brothers. So basically, Charles is going to manage the business, and George is going to create the games. -
Sour Patch Kids were the result of paying attention to the industry and the wants and delights of the world at large. And delivering what the people wanted.
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.
[Waulkie Feet Ad]
Dave Young:
Welcome to Empire Builders Podcast. Dave Young here, along with Stephen Semple. All Stephen told me for this episode is that he's excited about doing it because it's got a Canadian tie-in, but he didn't whisper the name of the company or anything into my ear as we counted down.
Stephen Semple:
I forgot to.
Dave Young:
Yeah.
Stephen Semple:
Oh, I forgot to.
Dave Young:
He just stood there looking at me.
Stephen Semple:
I'll tell you now, Sour Patch Kids. You know the candy?
Dave Young:
Sour Patch Kids. Oh, gosh. Are they the origin of all the little sour candies that are out now?
Stephen Semple:
It's always hard to say if they're the exact origin, but they were certainly one of the first ones that went big, for sure.
Dave Young:
And the candy was after most of my candy-eating days. So let's dive in.
Stephen Semple:
So you're trying to tell me you eat no candy now? None?
Dave Young:
Well, that's what the doctor says should be happening. But as a child, I'm just too old to devour a lot of Sour Patch Kids, I think. Tell me when this started.
Stephen Semple:
So the Sour Patch Kids started basically in the early 1970s, is kind of when they came out. It was a Canadian company, but the other thing is it didn't, first of all, start as Sour Patch Kids. It was actually first called Mars Men. And in 1985, they renamed it Sour Patch.
Dave Young:
Okay. I was adulting by then. Where did this start? Wait, Mars Men?
Stephen Semple:
Mars Men.
Dave Young:
Yeah, that's not a good name.
Stephen Semple:
No. So today, it's part of a big conglomerate, it's part of the Mondelēz Group, and it's estimated that there's about $248 million worth of Sour Patch Kids sold every year. So that's a lot of little kids. And it was started by a little Canadian company. There was a guy by the name of Frank Galatolie who was working at Jaret International, and he was admiring the American candy revolution, and he was the sales and marketing manager for Jaret.
And what Jaret did was they were an importer of food that foreign transplants would like. So they would go out and they would find some sort of food that people from India would like and bring it in or from Poland and they would bring it in. So basically, they really specialized in this whole idea of finding foods that foreign transplants would like.
Dave Young:
Interesting. I like that idea.
Stephen Semple:
And he wanted to do a twist on gummy candy. So in 1920, Hans Riegel, in Germany, made the first gummy, and that was like a gummy bear. And they were really popular in Europe, but they weren't super popular here. And he didn't want to do a traditional sweet candy, and Halloween was really growing candy, and candy could now be found in different places, and all of this other stuff going on.
And he also started to notice that there was an emergence of a different type of candy, like the Atomic Fireball came out and sour Lemonheads came out. So he was noticing that there was this desire for stuff that was not just sweet, and they were really the first to do this whole idea of sour and sweet. So they combined two acids, so it would be super sour and that super sour would drop off and then would come back as being sweet. -
1000 fishing flies and an ad that failed turned a furniture store family into a sporting goods store empire. Way to go Cabela's.
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]
Stephen Semple:
Hey, David, we're going to do something different here.
Dave Young:
Okay. I'm all ears.
Stephen Semple:
Because you have a special history with this company. So we're going to talk about Cabela's.
Dave Young:
Okay. Okay.
Stephen Semple:
Because of the fact that Cabela's started in your little town in Nebraska.
Dave Young:
Kind of. Kind of.
Stephen Semple:
Kind of.
Dave Young:
Yeah.
Stephen Semple:
So we're going to do this completely unrehearsed, Dave running with things, and I'll fill in certain-
Dave Young:
You're going to Google dates and names in the background?
Stephen Semple:
Yeah, that's what we're going to do. So let's give that a roll. Cabela's is an interesting story.
Dave Young:
It really is, and it still is a brand, right? It's still around, but it's owned by the Bass Pro Shop guy, Johnny, whatever his name is. I didn't get to know him because that's a Missouri thing. So Sidney, Nebraska-
Stephen Semple:
We don't like talking about those people.
Dave Young:
Well, he came in and bought it up and saved the company. That's part of the story. But Sidney, Nebraska was the home of Cabela's, the family and the corporate headquarters for years and years. It started, though, in a town about 30 miles away, a town of Chappell, Nebraska.
Stephen Semple:
Right. Yes.
Dave Young:
1962.
Stephen Semple:
Well actually, you're really good. According to what I have here is December, 1961, but 1962 is a month later.
Dave Young:
Yeah. '62 is what was always on their logo.
Stephen Semple:
Okay, cool. Cool.
Dave Young:
And the shirts you could buy, like Cabela's EST 1962, but yeah, December '61. So Chappell, Nebraska, their dad is in the furniture business, and-
Stephen Semple:
I didn't realize he was in the furniture business. Okay, cool.
Dave Young:
Yeah, and the story. As I recall, is that two of the sons, Dick and Jim, well, at least it was Dick that went to the furniture show with dad in Chicago, where you see all the furniture that you're going to buy for your store and you make deals with the manufacturers and all that stuff arrives then over the course of the next year. Well, he found a company that he bought like a thousand Chinese-made fishing flies.
Stephen Semple:
Yeah.
Dave Young:
Little flies for fly fishing.
Stephen Semple:
Right. And what I have here is it cost him like 45 bucks.
Dave Young:
Oh, yeah. Yeah. Dirt cheap. Didn't know what he was going to do with them, but he bought a thousand of them and brought them home. Takes out a little ad in a Wyoming hunters' newspaper or newsletter. All right? And he-
Stephen Semple:
Sports Afield is the name of the-
Dave Young:
Sports Afield, and the ad, if... So yeah, gosh, now I feel like I'm doing this story and Stephen's fact checking me, live. So this is, I think, from an ad writing perspective and a business making an offer, this is actually the pivotal moment in the genesis of the Cabela's story is that they ran this ad in Sports Afield and nothing happened.
Stephen Semple:
Right. I think they got one response or something like that?
Dave Young:
Yeah, but it was the offer. The offer was buy, I think it was 12 hand-tied fishing flies for a dollar, -
Because of the Happy Meal McDonalds is the world's largest toy distributor. Larger than Hasbro or Mattel. This is 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.
[Out Of This World Plumbing Ad]
Dave Young:
Welcome back to The Empire Builders Podcast. Dave Young here, along with Stephen Semple, and I was ranting and raving about a new book I'm fascinated with and crazed about. And Stephen hit the record button and decided we were going to talk about Happy Meals instead of that. So here we are. Happy Meals, huh?
Stephen Semple:
Happy Meals, yeah.
Dave Young:
The McDonald Happy Meal. The precursor to the Playland. I've always enjoyed going through the McDonald's drive-through and ordering a happy meal, whether I had a kid in the car or not.
Stephen Semple:
I could see you doing that.
Dave Young:
And then sometimes they look and go, "Well, where's the kid?" I'm like, "Hey, mind your own business about the kid."
Stephen Semple:
They're in the trunk.
Dave Young:
There's a kid somewhere. Give me my damn toy.
Stephen Semple:
I was going to ask, what's your favorite part? Is it the toy?
Dave Young:
Absolutely. You can get a nugget, a few of them.
Stephen Semple:
Well, here's the crazy thing is it is the most sold meal in history. There's been like 35 billion happy meals sold.
Dave Young:
Is it, really? That's a lot of happy.
Stephen Semple:
Yeah. Yeah. Yeah.
Dave Young:
Sure.
Stephen Semple:
And it actually makes McDonald's one of the largest toy distributors in the world. They've given away billions of toys.
Dave Young:
Oh, sure they did.
Stephen Semple:
More toys than Hasbro or Mattel.
Dave Young:
And just controversy like when they were giving away Beanie Baby toys. Good Lord, people were losing their minds.
Stephen Semple:
Yeah. Yeah.
Dave Young:
I'm trying to think of who this is. It might be our mutual friend, Gordon. Somebody in our circle tells a story about their dad driving the family through McDonald's when they were kids and everybody getting really excited because like, "I'm going to get a Happy Meal." And their dad orders one cup of coffee and just keeps going. I'm like, "Oh, man, that would suck."
Stephen Semple:
That would be a very unhappy car.
Dave Young:
So when did the Happy Meal start?
Stephen Semple:
There's a bit of a debate about who actually created the Happy Meal. So we're going to explore a couple of the different stories, but it was basically 1974.
Dave Young:
Okay. Yeah.
Stephen Semple:
One of the stories is it was created in Guatemala by Dona Yoly and her husband who opened the first franchise in that country.
Dave Young:
Wow.
Stephen Semple:
And Dona wanted her restaurant to feel like a family restaurant. Look, she understood things had to be done the McDonald's way-
Dave Young:
Sure.
Stephen Semple:
... to the corporate standards because McDonald's even has a Hamburger University-
Dave Young:
Oh, yeah. Yeah.
Stephen Semple:
... which was a brainchild of Fred Turner, and it's a training program for franchisees. We could even do a thing on Hamburger University because it was the first of its type. It was the first training program of its type for franchisees. So there's always this thing that McDonald's is trying to set where there's this goal of a consistent experience, but they also want to give franchisees some freedom because what they have found is that franchisees oft... -
When a family friend is diagnosed with skin cancer, Holly Thaggard polls a bunch a skin care chemists and comes up with the Unseen Sunscreen.
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 in 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. Dave Young here with Stephen Semple, and we're talking about empires. And so Stephen said we're going to revisit one. And I think really, Stephen, what you're doing is just testing my ability to remember shit. Supergoop is what you told me, that it rings a bell, but help me out here.
Stephen Semple:
This is a rerecording because we did one recording, which didn't work out so well, and here I am in a hotel and you immediately informed me, "Boy, the microphone doesn't sound so good, so we might be recording it again in the future."
Dave Young:
It'll be Supergoop part three. Oh, dear. On the plus side, the listener doesn't remember this episode because it was never released.
Stephen Semple:
No, that's true.
Dave Young:
Okay, good.
Stephen Semple:
That's true because we had some real recording issues that we could not recover from.
Dave Young:
All right, we get another mulligan on Supergoop.
Stephen Semple:
Supergoop, for those who don't know, is a sunscreen and-
Dave Young:
Oh, that makes sense.
Stephen Semple:
... basically-
Dave Young:
Now it sort of rings a bell. I think probably.
Stephen Semple:
It sort of rings a bell, does it? And in 2022, Supergoop did $250 million in sales, so that's-
Dave Young:
That's a lot of goop.
Stephen Semple:
That's a lot of goop. It was started in 2007 by Holly Thaggard who's from Baton Rouge, Louisiana. And she has no background in cosmetics or sunscreens or any of those things, so again, another one of these empires that came from somebody completely from outside the industry.
Dave Young:
She wasn't a Nickelodeon child star or anything like that?
Stephen Semple:
No, she was none of those things.
Dave Young:
I'm looking for something goop related.
Stephen Semple:
Well, that'll come. That'll come.
Dave Young:
Okay.
Stephen Semple:
She started in 2007, and the inspiration started in 2005 when she had a close family friend who was diagnosed with skin cancer. And what she found out was that basically 70% of people don't wear sunscreen regularly, and you really need to be wearing it, it's not just about the beach, you really need to be wearing it all the time. And this whole issue with this skin cancer diagnosis sent her down this path of doing a lot of research. She had an entrepreneurial bent. Both of her parents were entrepreneurs, and she started a business when she was in high school.
Dave Young:
Oh, wow.
Stephen Semple:
She played the harp.
Dave Young:
That was a bigger reminder to me than the goop.
Stephen Semple:
She started Holly the Harp in high school, and she would go on weekends to country clubs and things along this lines, and she charged $100 an hour because there was no competition. Here she's this kid in high school charging a hundred bucks an hour going around playing the harp.
Dave Young:
Cool.
Stephen Semple:
Now, at one point she went into teaching and there was a bunch of things that fell apart on that. And there's a certain point where her brother moves to the Dallas area and she's helping her brother move. And she looks around and she's like, wow, this is a pretty swanky neighborhood and there's all these country clubs around,... -
From writing a regular article in Radio Ink magazine to a weekly outbound memo to free clinics, Roy H. Williams created a marketing school like no other.
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 in 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 back to the Empire Builders Podcast, Dave Young here alongside Stephen Semple. And Stephen has just told me what the topic for today's episode is and well, I have some thoughts.
Stephen Semple:
I sure hope so.
Dave Young:
So we're going to talk about Wizard Academy, we've mentioned it quite a few times on the podcast and I don't know that it falls into the pantheon of super empire type brands, but the things that Wizard Academy teaches have definitely helped some businesses achieve at least some local empire status in the growth of their business. Well, thank you for making this one of the topics.
Stephen Semple:
Yeah, and part of the reason why I wanted as one of the topics is first of all, we've referred to it a lot and so we might as well let people know what the heck this thing is that we refer to you work there, I'm a major donor there, taught there a few times, been a student there a lot of times.
And the thing I find incredible is, look, it's not a big school. When you go to do a class, it's not a hundred people, it's small classes it's like 18 people. But when I was there last, when I taught the course there with Matthew Burns and Gary Bernier, we had people from the Czech Republic, we had somebody from Australia. I've been there where there's been people from Central America and South America. When you go and there's people that are from around the world coming to this little place, it fits it to a degree because it tells us how special this place is. So let's talk a little bit about the specialness of it and the origin of it.
Dave Young:
I love it. Yeah. So origin-wise, man, I'll go back to my origin and my first exposure to Roy Williams who founded Wizard Academy. I was managing my family's small market radio stations in Nebraska starting in the mid eighties and in the radio broadcasting world, there are national groups like the National Association of Broadcasters, the Radio Advertising Bureau, and there's only ever been a handful of privately held industry publications that focused entirely on the radio broadcast industry.
One of those is a magazine called Radio Ink, and it's not INC like incorporated it's Radio Ink as in printers ink, I-N-K. And started by a guy named Eric Rhoades, and I'm not sure how he and Roy first met, and by the way, Roy's got a hilarious story about Eric Rhoades dad speaking of empire building. We'll save that for another time. But Roy started writing a column for Radio Ink in the nineties, and the column was just, Hey, here's some things that you ought to consider when you're writing ads for businesses and you're in the radio business, or here are some tips for radio salespeople to sell more long form kind of schedules. And so I'd been reading those, you'd go to the post office once a month and there'd be the Radio Ink in the mail and it was always exciting because it was great writing, it was one of the few pieces of industry focused Journalism that was really engaging if you were in the radio business and Roy's column was always the first thing I looked at.
And at some point he started doing the Monday morning memo and I think promoted it in the Radio Ink article. Hey, if you want, subscribe to The Monday Morning Memo send us a fax at this number. -
A feeling of authenticity is what really brought 007 to life and the Broccoli family brought it to the screen.
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. Dave Young with you, alongside Stephen Semple. We're talking about famous brands. This is, I guess it's a brand, sure. It's Bond, James Bond we're going to talk about.
Stephen Semple:
Yes.
Dave Young:
It's not a consumer product.
Stephen Semple:
Well-
Dave Young:
It's one of those things where there's a story and it fits the zeitgeist of marketing in the popular, I don't even know what I'm trying ... Save me, Stephen. What am I trying to say?
Stephen Semple:
Well, I look at it this way. How is it not a brand?
Dave Young:
Oh, it's a brand.
Stephen Semple:
The moment I say Bond.
Dave Young:
Yeah.
Stephen Semple:
Shaken not stirred.
Dave Young:
Sure.
Stephen Semple:
We all know who it is.
Dave Young:
Evil geniuses.
Stephen Semple:
The first movie came out in 1962.
Dave Young:
Yeah.
Stephen Semple:
And has generated billions and billions of dollars, both in a Hollywood, and spinoffs, and product placements. We all know about Aston Martin DB-whatevers because of Bond.
Dave Young:
Sure.
Stephen Semple:
To me, how is this not a brand?
Dave Young:
It's definitely a brand. I guess I'm thinking that most of what we've done have been consumer-facing products.
Stephen Semple:
Correct.
Dave Young:
Bond definitely is, in that selling seats to movies.
Stephen Semple:
Yeah.
Dave Young:
For sure, that's consumer-focused. I'm with you. I'm all for talking about Bond.
Stephen Semple:
Yeah.
Dave Young:
We just have to think differently, which I think like an evil genius.
Stephen Semple:
Well, the other part is it was the world's first blockbuster franchise. It's estimated that it's done seven billion in revenues.
Dave Young:
Yeah.
Stephen Semple:
Big, big, big, big, big, big bucks.
Dave Young:
We're always wondering, even when there's no Bond movie out, we're wondering who's the next Bond going to be?
Stephen Semple:
Who's the next Bond?
Dave Young:
Yeah.
Stephen Semple:
Who's the next Bond? Which is the controversy right now today.
Dave Young:
Sure.
Stephen Semple:
That we're going to come back and talk a little bit about.
One of the funniest things though, when I was researching this, one of the funniest things is how Ian Fleming ... Ian Fleming created the Bond character and wrote the James Bond books, of which, what is it, the original dozen movies or so were all based upon the books. But here's the interesting thing, how he came up with the name James Bond. He's sitting writing, and he looks up at this book, The Birds of the West Indies because he's living in Jamaica, and it's written by James Bond. He goes, "That's a really cool name. That's what I'm going to name my spy."
Dave Young:
I like that, yeah. People that have single-syllable names always roll off the tongue.
Stephen Semple:
Yeah. I'm not going to go into a lot of the history. We're going to talk about it a little bit. I want to talk about something different, and it's going to seem weird. Because part of the reason why I believe James Bond, the Bond franchise and the Bond movies, have become so big and so successful is there's actually a degree of authenticity in all of them. -
Japan's digital watches massively disrupted the Swiss watch market. So, an entry level fashion watch is created to save the day. Swatch!
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.
[Waukee Feet Ad]
Dave Young:
Welcome back to the Empire Realtors podcast. Dave Young here alongside Stephen Semple. And as usual, Stephen has whispered the topic into my ear as the five-second countdown commenced. So, I have three seconds to come up with my initial reaction to the brand is that we're going to discuss. And my recollection for this one is ... Let me tell you what it is first. It's Swatch. Remember the watches? And my recollection of it is they were just too damn cool for me.
Stephen Semple:
I mean, you're not a fashionista, Dave?
Dave Young:
I never have been. But here's the thing. I think by the time ... you'll have to fill in the dates here, but I think by the time I got out of college and was making my way in small market radio, the point of having fashionable timepieces on your wrist, which is ... was like, "That's just too cool for me. No." I recognize it as a cool idea that was going to make somebody a gazillion dollars.
Stephen Semple:
Yeah.
Dave Young:
But it wasn't going to be my dollars that got it done.
Stephen Semple:
Well, you're somewhat accurate, and somewhat aren't because I believe that we are around the same age. I might be a tick older, but it was fall of 82 when Swatch was launched, but they became really big, late eighties, early nineties.
Dave Young:
So, yeah, I graduated college in 84, and so, yeah, by the late eighties ... and remember, I was in Western Nebraska.
Stephen Semple:
And there was no Amazon.
Dave Young:
Dude, Gone With the Wind has just now arrived at theaters in Western Nebraska. When you think about the good old days, they haven't even hit Western Nebraska yet. They're still waiting. So, go ahead.
Stephen Semple:
As I got looking at Swatch, here's the thing that's really remarkable about Swatch is how much they changed the watch industry. It is an idea that was remarkable because not only did it change the watch industry, it saved the Swiss watch industry.
Dave Young:
Oh, I believe it. Yeah.
Stephen Semple:
The change that came about was incredible. If we go back pre-Swatch, the idea of a watch is it was a single purchase item.
Dave Young:
There's a time ... yeah.
Stephen Semple:
People own one wristwatch.
Dave Young:
Yeah, and you decided, do you want a leather watch band or one of those metal expandy ones?
Stephen Semple:
Yeah.
Dave Young:
Which watch guy are you?
Stephen Semple:
Right. And Rolex, for example, was not even a high-end luxury product at that time. It was an expensive watch, but it was not a luxury watch. It was not an aspirational one. And it's really interesting. Even if you take a look at Rolex's advertisements from the seventies versus the ones 2000 and on, they're a very, very different feel. One was it's rugged, and you can use it, and they aligned with certain sports such as diving and things along that lines. You look at how it's positioned today, and it's a fashion statement.
Dave Young:
Yeah, I see that.
Stephen Semple:
It's very, very different. In 10 years following the launch of Swatch, they became the largest watch brand on the planet.
Dave Young:
Well, I'm sure we're going to hear about tons of imitators. And they hit right in that slice of time. There's a couple of decades, -
How Steve Glue made 4 Million giving the people what they wanted by beating the system; and how Pez ran him out of the business.
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.
[ASAP Commercial Doors Ad]
Dave Young:
Welcome back to the Empire Builders Podcast, Dave Young here with Stephen Semple and part two of the PEZ story. We're going to talk about the PEZ collectibles, the whole frenzy. Stephen, I'm going to turn it over to you because I'm fascinated with this. I did just 30 seconds worth of Googling, and yeah, there are PEZ dispensers that are worth bucks out there.
Stephen Semple:
And the whole collectibles and the PEZ story is crazy. And as we know, the '90s is when this whole idea of collectibles just took off. You had Swatch watches come onto the market, and in fact, stay tuned, we're going to do an episode on Swatch. Swatch is probably going to end up becoming one of my favorite all time stories. So Swatch is going to be coming up. Because as I was going down this whole collectibles thing, it opens other doors. But you had Beanie Babies and you had Pokemon, and of course, PEZ. And PEZ is so popular that it ended up being on the cover of the Forbes magazine edition on collectibles. And people who collect PEZ dispensers call themselves PEZ heads. And one of the biggest people in the space is a guy whose name is Stephen Glew, who's also known as the PEZ Outlaw.
Dave Young:
The Pez Outlaw.
Stephen Semple:
The PEZ Outlaw. You're immediately intrigued, aren't you?
Dave Young:
Oh, sure.
Stephen Semple:
And Steve Glew is a machine operator from Michigan, and he started doing collectibles as a side hustle. And he started by collecting cereal boxes. So he would go to the local recycling plant and clip the coupons and ask for the toy to send them, things like those secret decoder rings. Have you ever noticed that there's a disclaimer now on those things that says only one per customer
Dave Young:
Because of him?
Stephen Semple:
It's because of him. Because at a certain point, Kellogg's notices that they're sending tons of toys to this one address-
Dave Young:
To one guy.
Stephen Semple:
... in rural Michigan, to this one guy. He's basically getting these things and then going to trade shows and selling them.
Dave Young:
Nice. That's smart.
Stephen Semple:
That's smart, hey.
Dave Young:
Yeah.
Stephen Semple:
It's funny, I bought a book a little while ago that is somebody had put together a book of all of the ads and the products that we saw in comics.
Dave Young:
Oh, sure.
Stephen Semple:
And in fact, the reason why I had got the book is when I did my comic, I was looking for ideas for fun, made-up placement.
Dave Young:
My dad had a story about when he was a kid, he sent off for something and it was a model airplane, a Balsa model airplane, send a dollar or whatever. I think this had to be a joke. Basically, he got back a big block of balsa wood and a knife. There you go.
Stephen Semple:
There you go, that's awesome. Yeah.
Dave Young:
Yeah, so Steve Glew.
Stephen Semple:
So we thank Steve Glew for the origin of the disclaimer of one per customer. So Steve's got a problem. He needs to find new things to sell because this side hustle is about to disappear because he's no longer able to scavenge these boxes and send in and get all these toys to sell. He's clearing out the last of his inventory and he notices a nearby vendor selling Pez dispensers. -
What do you do when you think cigarette smoke is disgusting and you are a bit of a germaphobe? Create a collectable candy empire, of course.
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.
[Waukee Feet Ad]
Dave Young:
Welcome back to the Empire Builders Podcast. And I'm Dave Young, alongside Stephen Semple, where we're talking about empires. And Stephen whispered the subject of today's episode into my ear, and immediately, immediately my thoughts went not to my childhood as usually happens.
Stephen Semple:
Well, this is a variation. Can I guess where your brain went?
Dave Young:
Go ahead.
Stephen Semple:
Seinfeld?
Dave Young:
No, not even se Seinfeld.
Stephen Semple:
Okay. All right.
Dave Young:
I think it's on Apple, the current, maybe it's not on Apple. Maybe it's Prime. I'm not sure. But it's a current series, sci-fi series going on called Silo.
Stephen Semple:
Oh, yes, yes. I've started watching it. Yes.
Dave Young:
And they have these artifacts and somebody has a Pez dispenser, this Silo, futuristic, that mankind's been living in these silos for 350 years. They can't come out, but there's some people have these trinkets from the past and there's a Pez dispenser amongst them.
Stephen Semple:
That's right.
Dave Young:
They have no idea what it is.
Stephen Semple:
Right, yeah. And then there's that famous Seinfeld episode with the Pez dispenser in it as well. That was super popular one, where Jerry basically is being pain in the neck with this Pez dispenser. Yeah, but they're huge. They sell about 75 million Pez dispensers a year, still, across 80 countries, as well as five billion individual Pez candies. There's like 900 employees working for Pez.
Dave Young:
Wow. Okay. And the candy's nothing special, other than it's all uniform, like little bricks. It's almost like eating a Lego and almost as flavorful.
Stephen Semple:
Yeah, there you go. Well, I can't comment, because I've never eaten a Lego, but...
Dave Young:
Well, you didn't have my childhood, Stephen.
Stephen Semple:
So, the Pez company starts in 1927. I didn't realize how old it was. And it was started by Edward Haas III, and he lived in Vienna, and he couldn't stand the smell of smoke. And he's running this family, this successful family business, making a special kind of baking powder that was invented by his grandfather. So he was already a business person making this baking powder. And Edwin took the business in a new direction when he created the world's first ready mix cake mixture during World War I.
Dave Young:
Oh, wow. Okay.
Stephen Semple:
Yeah. And so, by the late 1920s, they have a number of factories in Europe, and at this time, smoking booms with the invention of the rolling machine, the automated rolling machine, which suddenly makes cigarettes cheap and plentiful. And if you want to learn more about this trend, go back to episode 85 for American tobacco. So first, Dave, can you believe that was like a year and a half ago that we recorded that?
Dave Young:
No kidding, yeah, the automatic rolling machines.
Stephen Semple:
Yeah. So there's a whole episode really on that. Go back and check it out. It's actually quite a fascinating story.
Dave Young:
But this guy, he doesn't like smoke.
Stephen Semple:
He does not like it. And one of the other things that happened is during World War I, soldiers are provided cigarettes as rations. And it's really interesting. -
The Jacuzzi Seven were obsessed with flight and engineered better propellers. What is the difference between propellers of air or water???
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.
[Tapper's Jewelry Ad]
Dave Young:
Welcome back to the Empire Builders Podcast, Dave Young here, alongside Stephen Semple, discussing empires, entrepreneurial empires that started from just somebody's crazy idea and became something huge. And today, Jacuzzi.
Stephen Semple:
Jacuzzi.
Dave Young:
We're not talking about a hot tub, we're talking about a Jacuzzi.
Stephen Semple:
Correct.
Dave Young:
Which, sort of became the generic name for hot tubs, but I'm fascinated to hear the story. I'm guessing we're headed to the 70s, baby. Is that ring true or no?
Stephen Semple:
The business was founded in 1915.
Dave Young:
All right, so we're not headed to the 70s, but we'll still be around. Was it founded as Jacuzzi?
Stephen Semple:
Well, here's the interesting thing, here's the really fun part.
Dave Young:
Oh wait.
Stephen Semple:
Guess what their first business was?
Dave Young:
Wait, I'm thinking. These might be like therapeutic Whirlpool things too, no? I don't know. I'm getting ahead, I don't know what their first business was.
Stephen Semple:
Their first business was in the airplane business.
Dave Young:
Okay. The 1915 three engine Jacuzzi. No, I don't know.
Stephen Semple:
No, they started by making props for airplanes, that was their first business.
Dave Young:
Really?
Stephen Semple:
Yes. How crazy is that?
Dave Young:
That's nuts. Okay.
Stephen Semple:
Isn't that nuts? Yeah. So, they were founded in 1915 in Berkeley, California by seven siblings, there were seven kids in the Jacuzzi family.
Dave Young:
Holy.
Stephen Semple:
And they were-
Dave Young:
Was Jacuzzi their name?
Stephen Semple:
Well, actually, it was Iacuzzi, and when they immigrated, the classic.
Dave Young:
Yeah.
Stephen Semple:
Yeah, the classic mistake of being written down wrong, and that's the new spelling is what stuck. They were immigrants from Casarsa della Delizia in Italy, and I'm sure I'm completely butchering that.
Dave Young:
Yeah, just say Italy.
Stephen Semple:
Yeah. And as said, the original family name was Iacuzzi.
Dave Young:
Okay.
Stephen Semple:
And it became Jacuzzi, and of course, it defined the hot tub business, which today is a $6 billion global market.
Dave Young:
But airplane propellers.
Stephen Semple:
Airplane propellers.
Dave Young:
Seven siblings had the bright idea of making airplane propellers.
Stephen Semple:
Yeah.
Dave Young:
But this is shortly after Orville and Wilbur-
Stephen Semple:
Oh yeah. This is-
Dave Young:
Had invented airplane propellers.
Stephen Semple:
Well, this is the day of biplanes, right? So, it's 1915, and Rachele Jacuzzi, who's the youngest of the seven, is visiting the San Francisco Fair, and he sees biplanes. And one of the sons is working as an engineer for the founder of McDonnell Douglas, and they're obsessed with flight, and they see these stunt plane props, and they look at them and go, these are really inefficient. So, they invented propeller that is curved and smaller and more efficient, and it's called the toothpick propeller. Got these little tiny blades. And they open up a machine shop to start making these propellers, -
What happens when you are in the polarization film business and your daughter asks why she can't see the picture right away? You invent Polaroid.
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, Dave Young here alongside Stephen Semple. And today's topic, man, you keep picking topics that take me back to my childhood, Stephen. And for this one, it's the camera my dad had. It's the Polaroid.
Stephen Semple:
Is that right? Your dad had one?
Dave Young:
Oh, yeah. Oh, yeah. And it was a great camera. He used to let me take pictures. And he'd set the timer and I'd peel the backing off. These were the old kind, not the SX-70, modern day seventies.
Stephen Semple:
You were old school. You had the little backing you had to peel off. Right?
Dave Young:
Uh-huh. Uh-huh.
Stephen Semple:
Awesome.
Dave Young:
And he had extra doodads and things like a little timer that would snap onto the button so we could do a family pic.
Stephen Semple:
Oh, is that right?
Dave Young:
Oh, yeah.
Stephen Semple:
Wow.
Dave Young:
All the fun stuff.
Stephen Semple:
Well, when I got talking about this with my oldest daughter, Crystal, what I was surprised to learn, and I learned this when I said to her I was going to do this and then discovered more about it. Polaroid is still around. She is a camp counselor in the summertime. Little kids show up at camp with a Polaroid camera. And it's still the point it and comes out, and you've got to wait for a minute for it to it develop. But yeah, it's still a thing.
Dave Young:
And honestly, the nice part is the algorithm doesn't get ahold of that image.
Stephen Semple:
That's true. That's true
Dave Young:
Big data doesn't have a picture of your kid If you use a Polaroid.
Stephen Semple:
Well, that's maybe why they're giving these little kids to do that. It's estimated that they do around $770 million in business.
Dave Young:
Wow. Wow.
Stephen Semple:
So it's not insignificant. Yeah. Yeah.
Dave Young:
I'd say that's not insignificant, I think.
Stephen Semple:
Yeah. But as we know, it was revolutionary at the time, this whole instant picture. And at their peak, which was 1991, they were doing about $3 billion in business.
Dave Young:
Yeah.
Stephen Semple:
So that's-
Dave Young:
Man, I would've thought their peak was way earlier than that for some reason.
Stephen Semple:
Yeah, that was the peak, '91. Yeah.
Dave Young:
Just before digital kind of came in.
Stephen Semple:
And kind of messed with a bunch of things. Yeah. The company was founded by Edwin Land and George Wheelwright in 1937 in Cambridge, Massachusetts. But didn't start off as a camera company. Edwin Land was in Harvard, and he dropped out of Harvard to pursue business. But what he had invented was the coating that polarizes lenses.
Dave Young:
Oh, okay.
Stephen Semple:
So hence the name Polaroid.
Dave Young:
Polaroid. Yeah.
Stephen Semple:
Yeah. And I've always wondered about that. Why Polaroid? And it came from that. And the business became huge in 1941 when the US entered World War II, because it was being used for flight goggles. It was massive. Sales went from $760,000 pre-war to like $16 million in 1943.
Dave Young:
Wow.
Stephen Semple:
Selling this polarizing technology. But 90% of the contracts were military. There was no Sunglass Hut yet. Right? -
Stephen has been studying and learning how to use and explain trust for Organizations. Let's just say, you need to get vulnerable for this 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.
[Out Of This World Plumbing Ad]
Dave Young:
Welcome back to the Empire Builders Podcast, Dave Young, alongside Stephen Semple, and Stephen, you're supposed to whisper-
Stephen Semple:
We're going off the reservation, I know. Yes.
Dave Young:
You were supposed to whisper in my ear today's business that we're going to discuss, and you just mentioned trust, and I'm thinking, this is not like a bank and trust. This is not like a trust fund.
Stephen Semple:
In God, we trust, money.
Dave Young:
No, not that. Basically, this is like trust. This is like consumer trust, people trusting each other, people trusting businesses, people trusting, I don't know, government. Are we living in a post-trust age? Is that the question?
Stephen Semple:
Well, Gallup and other organizations that measure basically people's trust in institutions and organizations and businesses and things like that across the board all agree, it's at an all-time low. Across the board, our trust in organizations, businesses, other people, things like that has declined to a level not seen before. And what's disturbing on this is if you're coming up with an innovative idea, if you're wanting to create a movement, if you're wanting to get support from something, if you're wanting to sell a product or service, everyone agreed. I had the opportunity to run lots of workshops and speak at lots of places, and I'll ask people, is trust important to what you do? Everyone agrees, trust is super important.
Dave Young:
Sure.
Stephen Semple:
We all agree on that. Studies show trust is way down. So we all agree it's really important, all the studies show its way down, so it got me to thinking and really studying, how do we establish and build trust as organizations? And what I found was there's actually three levels of trust, and one of the things we're going to dive into here in a little bit, the highest level is this concept of parasocial relationships, which we'll dig into. But I just thought, if you're wanting to build something big and large and grand, there's a point where what you've got to recognize is you've got to get people to trust this new idea that you're doing. So when I get talking to folks about trust, I'll often ask, "What are the things that you do to build trust?" And we did this in the workshop that I did with Matthew Burns and Gary Bernier.
Dave Young:
Selling professional services.
Stephen Semple:
On the selling professional services, one of the questions was that, and people talked about how, well, you do what you say you're going to do and be on time and be polite and be transparent and all those things build trust, and it's true, but those are like level one trust things. They will form a basic level of trust. And the other challenge with it is, for the most part, they were things that you had to have an interaction with the client or the prospective client in order to even establish that.
Dave Young:
Man, this is a Gordian knot. [inaudible 00:04:46] This is a tough nut you want to crack.
Stephen Semple:
Yeah.
Dave Young:
I think of a lot of things. When do you want to dive into the parasocial effect? It happens to me, oh, I don't know, three, four times a month. Somebody will show up at Wizard Academy at a class and they'll go, "Wow, -
Sergei Kaminskiy started his empire by taking jobs that he didn't know how to do and then hiring a professional to learn from. Wow.
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.
[Tapper's Jewelry Ad]
Stephen Semple:
Hey, it's Stephen Semple here, and yes, it's unusual, I'm opening the episode. We've given Dave Young the week off because he's been working really hard lately. And I managed to meet Sergei Kaminskiy. We had a bit of a brief conversation and I was immediately, "Dude, I got to get you onto the podcast." There were so many things we talked about that were just really, really great lessons and he's in the home services business. We're going to be talking about handyman, but this is applicable to all sorts of different businesses. But the first thing that fascinated me was really how you got started in the handyman business before creating the franchise model. Tell me about the start, that was just a cool story.
Sergei Kaminskiy:
Yeah, I got married. I was really young, I was just 19 years old.
Stephen Semple:
Right there tells us you're a little nuts, but...
Sergei Kaminskiy:
I look at 19 year olds now and I'm like, "You're not ready to get married." But anyhow, we got married and then about three months into it, we look at the bank account, there's about $70 in the bank account. And here I am, I'm working as a framing contractor, I mean as a framer for a framing contractor and making $17 an hour. I went to the owner of the business and I said, "Hey, Jim, can I get a raise? I bought a truck, I bought the tools." And he goes, "Sergei, you are already making pretty much at the top of what framers make." And he was right, they were already compensating me fairly, but yet, it was not enough for us to make ends meet. My wife brought in a nice BMW into the marriage that we had to make payments on, and by the time we did all the things we had to do, we were running out of money.
So I told my wife, I said, "Listen, what I do know is that I can do a business on a small scale. I can do some handyman work, I can take on some side jobs." Going to my parents and asking them for money was not an option. I said, "I have to figure out a way to make this thing work." And so literally it was raining outside that day, and we went to the club room of our apartment complex. There was a little room with a computer and a printer. We didn't even have a computer or a printer in our apartment, so we started our business with no computer, no printer, nothing. Literally went to the complex and printed out 25 flyers. I designed them on Microsoft Word and I had little palm trees around the piece of paper, and it says San Diego County.
Stephen Semple:
I bet you wish now that you had some old copies of those.
Sergei Kaminskiy:
I have a photo actually.
Stephen Semple:
Do you really?
Sergei Kaminskiy:
Yes.
Stephen Semple:
Oh my God, you've got to send that to me. You have to send that to me.
Sergei Kaminskiy:
It's amazing, so literally printed out these flyers. It's raining outside, we wrapped them real nice with the bow. And I'm running door to door as Elena's driving in the rain, and she's kind of following me as I'm running door to door. I pass out about 25 flyers and I'm like, "Oh, great, we passed out some flyers. Let's wait for the phone to ring." And sure enough, one guy called me. One guy called me and he said, "I need some service done on one of the rental units that I own. -
You know you have a great idea when you start having competitors copy you. Well, Dr. Scholl's copied the foot bed from Birkenstock.
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.
[Out Of This World Plumbing Ad]
Dave Young:
Welcome back to the Empire Builders Podcast. Dave Young, here with Stephen Semple. And today, man, today is the day, man. Dude, we're going to rap about Birkenstocks. It's the crunchy granola shoe from the seventies. That's what I think of with Birkenstocks, and I want to like Birkenstocks. I tried them on many times in my life and I don't know that I could get through the learning curve or whatever it is. They just didn't. Anyway, I'm anxious to hear the story, because I think we're headed to Europe.
Stephen Semple:
So the average, so people who own Birkenstocks on average own Fortair.
Dave Young:
Yeah, I get it.
Stephen Semple:
In 2023, Birkenstock went public.
Dave Young:
Oh, did they?
Stephen Semple:
At a $7 billion valuation.
Dave Young:
Dang. Why? Why would they need to?
Stephen Semple:
A lot of times, I think when things like this happen, it's to free up money for the family.
Dave Young:
Yeah, they're cashing out.
Stephen Semple:
It's the give ability for key employees to have ownership. Often, there's a lot of reasons for doing an IPO, and in future, we're going to do one on Jacuzzi where it'll really highlight that really well because it's a crazy story.
Dave Young:
Cool. Well, take me back to the beginning of Birkenstock, man.
Stephen Semple:
Yeah. The model that Birkenstock is really known for is that classic one with the strap and whatnot.
Dave Young:
Yeah.
Stephen Semple:
And it's called the Arizona. And it has been growing, sales on the Arizona have been growing like 24% a year. It just
Dave Young:
Just year over year?
Stephen Semple:
It's just growing, and growing, and growing, and growing year over year. But Birkenstock is a really old company. It was founded in 1774 by Johann.
Dave Young:
Well, that's pretty old.
Stephen Semple:
Yeah, Johann Adam Birkenstock in Germany. And the original idea was to create shoes that gave support and contour to the foot. And in 1896, the Fußbett, which is footbed, was designed. And by 1925, Birkenstocks were being sold all over Europe. And in 1966 is when they were brought to America. And literally the first documented mention of Birkenstock was basically March 25th, 1774 as a vassal and shoemaker in some local church archives is where it was first mentioned.
Dave Young:
Wow.
Stephen Semple:
Right. I mean, holy crap. We're talking generation, after generation, after generation of master shoemakers or part-time shoemakers, all called Birkenstock. This is a business that's gone from Birkenstock to Birkenstock to Birkenstock to Birkenstock.
Dave Young:
Wow.
Stephen Semple:
It's been really quite incredible.
Dave Young:
That is amazing. Yeah.
Stephen Semple:
Yeah. And so basically where they really had their big breakthrough was following World War I, because shoes were now starting to be mass-produced. It started to become cheap. But here's the crazy thing is the early mass-produced shoes, there were no arch support. And in a lot of cases there was not even a left or right.
Dave Young:
Yeah.
Stephen Semple:
And so this is when they created this whole idea of a footbed being able to be put in the shoe to create better comfort and whatnot. -
Sam Walton left JC Penny and realized that people in rural America had to travel to shop in department stores. He changed all that.
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]
Dave Young:
Welcome back to the Empire Builders Podcast, Dave Young here alongside Stephen Semple. And Stephen just told me the topic for today's podcast, and it's Walmart.
Stephen Semple:
That's it. You're so excited.
Dave Young:
Oh my gosh. We're finally going to talk about Walmart.
Stephen Semple:
Walmart's just one of those companies that they've been unbelievably successful, and I'm going to defend Walmart here, but they're hard to love.
Dave Young:
They're hard to love, but man, if you live in a small town, they're hard to avoid too.
Stephen Semple:
Yes.
Dave Young:
And you got to hand it to Sam Walton.
Stephen Semple:
Yep.
Dave Young:
I've read his book. It is actually the one that was ghostwritten while he was dying in the hospital. And it's a really good read and it's got some great lessons, so I'm anxious to hear what you found out.
Stephen Semple:
It's a great read. It has some fantastic lessons in it. I think there are a few things that Walmart as a corporation has started to deviate from those ideas that if they had kept closer to them, Walmart is a company that would be deeply loved. There's a few things I think they've moved away from, but here's one of the things that I'm going to say I admire about Walmart is that if we did not have a Walmart in the marketplace, I think it would be far easier for prices to increase for consumers on certain products, groceries, and things along that lines, Walmart being in there, to a degree, has managed to keep prices for certain commodities at a certain level because Walmart is dedicated to that, keeping prices down. And I think having somebody in that space is good. And this was stats from a couple of years ago was over 10,500 stores in 24 countries, that number surprised me. I didn't realize it was 24 countries, and it was started in 1945 by a former JCPenney employee.
I didn't realize that Sam Walton had worked for JCPenney, and the first thing he did when he left JCPenney is he bought a branch of Ben Franklin stores from the Butler brothers. So he started with those stores, and what Sam saw was retailers were putting a few large stores in big cities, but those big stores in big cities was inconvenient for rural shoppers. And what he decided to do was open a large department store in Rogers, Arkansas. Now, here's the crazy thing is, this was a place with a population of 6,000 people. So one would go, "This is nuts. Why would you open a store in a town of that size?" So it's 1962, and he opens basically the first Walmart.
And his primary focus was to sell products at low prices, higher volume sales, lower profit margin, and really do this crusading for the consumer. And the funny part is the name Walmart was derived from Fed Mart, which was, if we remember when we did the episode on Costco, was the first version of Costco that was done by Saul Price, was Fed Mart. And Walton has also stated he liked the idea of calling the chain Walmart because he really liked Saul's name, Fed Mart. He even talks about how a lot of his really good ideas came from studying Saul. So it's really, really interesting. But within its first five years, the company expanded to 18 stores in Arkansas and was 9 million in sales. So it really did this... Really, really, really, -
Stephen and Dave stroll down memory lane to discover just how the Willy Wonka bar came to be. Dave was a little disappointed. But you won't be.
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.
[Waukee Feet Ad]
Dave Young:
Welcome back to the Empire Builders Podcast. Dave Young here alongside Stephen Semple. And the topic whispered in my ear this morning was one that Stephen reminded me that I requested because we've-
Stephen Semple:
And you've remembered so well.
Dave Young:
That's the fun part of being me is I like to hide my own Easter eggs. We have talked about so many brands of chocolate, and I think I mentioned that sometime we need to talk about Wonka.
Stephen Semple:
Yes.
Dave Young:
And I kind of wish you'd told me beforehand because I'd go back and watch the movie just for the fun of it. I haven't watched the latest one, the Timothée Chalamet or whatever.
Stephen Semple:
I watched it on a flight recently because it was one of those ones where I didn't want to run the risk of spending the money and going to the theater for it.
Dave Young:
Sure. Yeah.
Stephen Semple:
So I was on a flight and it was one of the movies, and I thought, "Oh, I'll watch this." And it was actually a good rendition. It's the prequel, is how it's set.
Dave Young:
Oh, it's the origin story.
Stephen Semple:
It's the origin story, and it's good.
Dave Young:
Oh, cool.
Stephen Semple:
It's good. I enjoyed it.
Dave Young:
I'm going to have to watch it.
Stephen Semple:
I thought they did a nice job of it. Yeah.
Dave Young:
Well, we're actually recording these on a Saturday morning. Maybe I'll talk to Julie and see if we can watch Wonka this afternoon.
Stephen Semple:
I think you'd enjoy it.
Dave Young:
It might be kind of fun.
Stephen Semple:
I think you'd enjoy it.
Dave Young:
So what'd you find out? I'm dying to know. Was there really a golden ticket?
Stephen Semple:
Well, you're just going to have to wait and see.
Dave Young:
Did he really dress that way?
Stephen Semple:
It's the late 1960s, and the candy business is in a bit of a slump. There hasn't been really much innovation. It's completely controlled by Mars and Hershey at this point.
Dave Young:
Probably the American Dental Association had just formed.
Stephen Semple:
And what we've got is we've got this food executive, Kenneth Mason, who's looking to shake things up at Quaker Oats. He's an executive at Quaker Oats. And Quaker Oats is famous for oatmeal and Cap'n Crunch cereal.
Dave Young:
And the old Quaker dude in the hat staring at you from the box. Sure.
Stephen Semple:
Yeah, that's it. And Kenneth Mason sees a bigger opportunity. Now, he graduated with a degree in English from Yale before going into the food business, and he has aspirations to become president of Quaker. And he's about to head into candy. So he goes, "You know what? I really want to make a big splash in this division." Because in the 1960s, candy is boring, there's no new innovation, there's no advertising going on. Mason believes, "This is my opportunity to create the next new thing, make my mark, and become president of the company."
But he needs a launching pad to create that splash. And he's read the book, Charlie and the Chocolate Factory, and it inspires him what to do. And this idea went on to become a $2.8 billion business. Wonka is a big deal. But it starts with this book that's about to become a film, - Näytä enemmän
