The Empire Builders Podcast Stephen Semple and David Young
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- Business
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Each week Stephen reverse engineers the keys to success that took little companies and built empires. We believe in building empires and learning from those that have already done it.
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#144: FedEx – When it has to be there the next day.
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. -
#143: Xerox – Oops, Just Missed.
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. -
#142: Kinko’s – Kinky Red Hair to Copy Company Empire
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, -
#141: Bubble Wrap – Fidget Toy or Packing Safety?
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. -
#140: Building Trust – Using Social Media
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, -
#139: Trivial Pursuit – Hard, But Not Too Hard
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.
Customer Reviews
Great listen
I just found this podcast (saw it mentioned on a friend’s Facebook) earlier this week and now I’m bingeing! It’s a great way to learn the history of businesses with lessons to apply. I really like the banter too. I’ve listened to about 20 episodes at this point. So far my favorites are Mary Matilda Harper (really how is it possible we all don’t know about her?????) and Smirnoff. I can’t wait to catch up more. Thanks for the great podcast.
For business owners
I love the Empire Builders Podcast because it is insightful, always has a valuable lesson, and is delivered in a short amount of time.
Empire Builders
They tell inspiring stories about successfully people and companies. Then they break down the stories to principals that you cam apply.