87 episodes

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.

The Empire Builders Podcast Stephen Semple and David Young

    • Business
    • 5.0 • 9 Ratings

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.

    #085: American Tobacco Company – The origin of the smoke break

    #085: American Tobacco Company – The origin of the smoke break

    Freemiums, Baseball trading cards, automatic cigarette machines, smoke breaks, Buck Duck and Duke University all in one podcast.



    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, 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.



    [Mother's Brewing Ad]







    Dave Young:



    Welcome to the Empire Builders Podcast. Stephen, when you told me today's topic, part of me is like, really? Are we going, and then part of me is like, which one of these guys is this? So you said American Tobacco Company?



    Stephen Semple:



    Yes.



    Dave Young:



    I'm just going to have to jump on and follow along because I'm not a smoker. Never have been. There's always been some interesting things prior to the 1970s, at least in tobacco advertising. So let's see what you got.



    Stephen Semple:



    We're going to talk about some of the things they did in the early stages, which is really amazing. But then they went on to do some really, really terrible business practices. They created this big conglomeration and they treat growers really terribly and did a lot of awful things and eventually got broken up because of the monopolistic nature that they were doing stuff. So there is a terrible history to American Tobacco Company, but the origin of the American Tobacco Company is really quite interesting and we can learn a lot. And look, this is what this podcast is about. This podcast is about how did the empire get built in the early stages, the innovative things that they did that was really cool and interesting, not the crappy things that they did later. And the tobacco industry is a lot.



    Dave Young:



    So how far back are we turning the meter on the way back machine?



    Stephen Semple:



    1870s.



    Dave Young:



    Oh, way back. And so we're in post-Civil War South where they're raising tobacco. Just trying to set the stage and see where we're, so post-civil war. Yeah, you're right. This is going to get messy and weird.



    Stephen Semple:



    Yeah, and this is the company that really revolutionized the tobacco industry. Because what they did is they popularized the cigarette. Because at one time, cigarettes were less than 1% of tobacco sales. Today they represent like 90% of tobacco sales.



    Dave Young:



    And so back prior to this it, I'm just trying to think of how tobacco use, it was a commodity crop and people what bought packaged tobacco and then did whatever it rolled their own...



    Stephen Semple:



    Well, pipes were popular, chewing tobacco was popular, snuff and cigars were all popular. And in terms of pipe and chewing tobacco, what would happen is a wholesaler would buy tobacco from the growers and then would basically sell it to the store. So there was really no brand beyond the local. And again, most of it was cigars. Pipes was the most popular and chewing tobacco and snuff and tobacco cigarettes at the time of the starting of this story was less than 1%. So basically a rounding error.



    Dave Young:



    Pre-rolled, pre-packaged cigarettes, you could probably buy.



    Stephen Semple:



    No, you would still be buying it and rolling it yourself. You'd be buying the paper and rolling it yourself. Yeah, yeah. There was probably some rolled around. But again, when it's such a small portion of the market, it was hard to kind of figure out what the breakdown of all those things were. And this company, American Tobacco Company, was created by Buck Duke, who at his peak, went on to become the fifth richest man on the planet.



    Dave Young:



    Buck Duke. Can you ask for a tougher name? Buck Duke.



    Stephen Semple:



    Buck Duke. Yep.



    Dave Young:

    • 17 min
    #084: Entenmann’s – Creates a packaging revolution

    #084: Entenmann’s – Creates a packaging revolution

    The next time you look at the white powdered donuts through the clear window in the box, pay a little homage to Martha Entenmann.



    Dave Young:



    Welcome to The Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I'm Stephen's sidekick and business partner, Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us, but we're highlighting ads we've written and produced for our clients. So here's one of those.



    [BWS Plumbing Heating & Air Conditioning Ad]







    Dave Young:



    So you hit me with this topic while I'm hungry and thinking about something else. Anyway, Steve Semple's a storyteller and marketing consultant. So am I, I'm one of Steve's business partners. And this is the Empire Builders Podcast. And we're talking about how they built this empire out of baked goods.



    Stephen Semple:



    When I came across this story, I really loved this. It's a story about the popularizing of snack cakes, and it's also a story of this really amazing female entrepreneur. It's a hard name to pronounce, Entenmann's.



    Dave Young:



    Yeah, there's that N in there.



    Stephen Semple:



    This business was founded back in 1898, but we're going to take up the story in 1950 when Martha, who's also known as Miss Eve, took over the business. Because under her leadership, it transformed from this sleepy little regional bakery into this powerhouse today that has a hundred products and zillions of dollars of baked goods. And in fact, in 1978, the business was sold to Warner-Lambert for $233 million, which would be about a billion in today's dollars. So they really became a powerhouse in the baked goods business.



    Dave Young:



    She had a nice exit.



    Stephen Semple:



    She sure did. But back to Martha or Miss Evie, she started in the business bookkeeper for the business and she fell in love with the boss. They got married and this brought her into the family business. But when he died, she's faced with a choice, keep the business or sell it. And in fact, she gets a really great offer and it's one where she would be well set up, but she decides to run the business. And remember, this is the 1950s when a woman running a business is really not the norm. It's a pretty big deal that she decides, nope, she's going to run the business.



    Dave Young:



    Good for her.



    Stephen Semple:



    Yeah. And it's also a time of big change, especially in the food business. Just after World War II and the suburbs are growing, they've already doubled in size from the end of the war, and there's this new way of shopping for food has emerged. The supermarket. Supermarket is a new idea that emerged after World War II, because before the emergence of the supermarket a person went to a baker and then the fish monger and then the butcher, et cetera. Now it's all under one roof. And this is a new idea, and it's growing. By 1950, 35% of all food sales are in grocery stores. And at this point there's 14,000 across the country, but by the end of the decade it will be 70% of food sales. So in 10 years it just exploded.



    Dave Young:



    Right. We think, oh, there's always been grocery stores. Not true, not true.



    Stephen Semple:



    Not true. They were a new idea. But boy, when they came along, they really took over quickly. It's incredible when you look in a 10 year period of time, something going from 35% of sales in a category to 70%. That's just explosive.



    Dave Young:



    And changes everything. Now, you've got to think about distribution and logistics and shelf life and shelf space and all of those things.



    Stephen Semple:



    In the background when she took over this business, all of those changes going on. And the other thing that's changing is taste. In the early 1900s, sweet snacks were an indulgence of the rich.

    • 16 min
    #083: Tempur-Pedic – Seeing an idea and being open to it.

    #083: Tempur-Pedic – Seeing an idea and being open to it.

    I just gotta sell ten thousand mattresses. How hard can that 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 us, but we're highlighting ads we've written and produced for our clients. Here's one of those.



    [Best Home Services]







    Dave Young:



    Welcome to the "Empire Builders Podcast," I'm Dave Young, alongside Steven Semple. Have you ever noticed how many mattress stores there are on every corner? I don't know if this brand is in all the stores, Tempur-Pedic mattresses. Are these the inventors of memory foam?



    Stephen Semple:



    Not the inventors of memory foam, but the first to use it in a mattress.



    Dave Young:



    Okay.



    Stephen Semple:



    Memory foam, the product is called Visco elastic technology, and it was actually developed by NASA, to keep astronauts safe. Basically, the technology was developed by NASA, and these guys licensed it, and were really the first to put it into a mattress. Tempur-Pedic was founded in 1992, and today, it's part of the Tempur Sealy Corporation, which does over $3 billion in sales of mattresses and pillows, and has over 7,000 employees. Usually, when we tell a story about a company like Tempur-Pedic coming together with Sealy, the automatic assumption was, Sealy came along with a big bag of cash and bought Tempur-Pedic.



    Dave Young:



    Yeah.



    Stephen Semple:



    No, Tempur-Pedic bought Sealy. Isn't that interesting?



    Dave Young:



    There's an interesting twist.



    Stephen Semple:



    Isn't that an interesting twist? Tempur-Pedic was started by Bobby Trussell, who, like many of the empire founders that we've studied, had no experience in the industry. In fact, his background was horse racing, not mattresses. He even had a couple of failed businesses in the horse racing industry. Here's a fun thing: he didn't invent the product or make the product. This was about seeing an idea and being open to it.



    Dave Young:



    Okay, I'm scratching my head. He's in horse racing, no experience in this, and he's going to get into the mattress biz.



    Stephen Semple:



    He's going to get in the mattress biz. How this whole Tempur-Pedic mattress started, as we were talking about earlier, it was developed by NASA, but it was licensed by Fagerdala, a Swedish firm, in 1989. They made the very first memory foam mattress. Now, back to Bobby and horse racing. It's interesting, we were just recently in Milwaukee, and Bobby grew up in Milwaukee. When he was 11 years old, his dad bought him a riding horse, and Bobby was hooked. By the mid-seventies, he's working at Belmont Racetrack, and what he really wanted to do is work up to being a trainer. His dad bought him what he calls a slow race horse, but it got him licensed as a trainer, and he eventually got a job at Gainesway Farm in Lexington, Kentucky. He started studying pedigrees, and this soon evolved into a really high level, and he was advising people on buying these $10 million racehorses.



    He went out on his own, started Stallion Management Services in 1986, and he's advising people on the horses to buy. It's basically a way for the smaller farms who couldn't afford someone in-house to be able to outsource this expertise. He also started Thoroughbred Advisor Group, which was really to advise people on horse transactions. There are a lot of legalities, and things like that around these transactions. As he puts it, it was a good idea with bad timing, because the horse business went into a recession, and he went broke. In 1991 he's got two kids, he's married, he had moved to a new house, could not sell the other house, so he now has two houses, and he's a million bucks in debt.



    Dave Young:



    Ouch.

    • 24 min
    #082: Budweiser – The King? of Beers

    #082: Budweiser – The King? of Beers

    What if I could sell beer where there is less competition? What if I could ship beer to the west?



    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.



    [Frank Gay Ad]







    Dave Young:



    Welcome to the Empire Builders Podcast. Dave Young alongside Stephen Semple. And there's a chance that this might just become a beer podcast.



    Stephen Semple:



    There you go. That would be kind of fun.



    Dave Young:



    There's so many people that have built beer empires, right?



    Stephen Semple:



    Yes.



    Dave Young:



    And so when you told me that we're going to be talking about the king of beers.



    Stephen Semple:



    The king of beers.



    Dave Young:



    I'm thinking, "Ah, no, we've already done Sleeman's. They're not the King of Beers. Colonel Pabst wasn't a king." So obviously we're talking about Budweiser.



    Stephen Semple:



    That's right. Is it?



    Dave Young:



    Is that right? Isn't that the king of beers?



    Stephen Semple:



    That's right. That is the king of beers.



    Dave Young:



    Okay.



    Stephen Semple:



    Isn't it amazing you can sit there and say, "King of Beers," and everybody understands it's Budweiser. Right?



    Dave Young:



    And I don't know that they've said that. Have they said that out loud? Anytime-



    Stephen Semple:



    Yeah. I believe-



    Dave Young:



    They still say-



    Stephen Semple:



    I think it's been a while since they've done it, but I remember they used to do the king of beer ads and they would take the cap and they would, remember, turned it around and-



    Dave Young:



    Oh, yeah.



    Stephen Semple:



    The top so it would look like a little crown. Remember how brilliant those were? Yeah. I don't think I've seen a king of beer add for a while, but in my heart, when I hear king of beers, I still think Budweiser.



    Dave Young:



    It's stuck. It's stuck.



    Stephen Semple:



    Yeah. Yeah.



    Dave Young:



    Then it's Clydesdales. All kinds of things. Boy, they've been a powerhouse. If we're going to talk about an empire, let's find out how this one was built.



    Stephen Semple:



    And if you think about it, the best selling beer in the United States is Bud Light and Budweiser's number three. So when you're number one and number three in a beer category in the US, that's big man. And what we know is they sell huge amounts of beer around the world. You go anywhere in the world, they're there. So they're massive. And Budweiser was introduced in 1876 and today there's 18,000 employees working for Budweiser. And in the 1800s, beer was actually a really big deal. Wells, the water was often bad. People drank beer because it was fermented and boiled and frankly, it was safer to drink beer than water.



    Dave Young:



    And not so full of alcohol that it would just mess up your day.



    Stephen Semple:



    Right. Right. Yeah. Absolutely. And at the time, beer was served just a few miles from where it was made. Was very local, it didn't have good shelf life, didn't travel far. And one of the biggest places for brewering was St. Louis. St. Louis had an enormous number of breweries. In fact, at the time, there was one brewery for every 600 people in St. Louis.



    Dave Young:



    That's all right.



    Stephen Semple:



    So it started off being owned by Eberhard Anheuser who had immigrated from Germany in 1857. And he owned several businesses including a really successful soap maker. And in fact, the beer business for him was a sideline and it was really struggling. It was not actually doing that great. Well, you think about it. How much competition did he have? A lot.



    Dave Young:

    • 18 min
    #81: Vice Media – Heroin, Failure, Grit… and Disney????

    #81: Vice Media – Heroin, Failure, Grit… and Disney????

    Luck favors the heroin addict that refuses to give up! Just ask Disney.



    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:



    Vice Media. So we've all seen Facebook articles and things that are shared from vice.com.



    Stephen Semple:



    Right. Yeah.



    Dave Young:



    And I'm assuming that this is a bigger thing than just that.



    Stephen Semple:



    It is. It is. Today they do over a billion dollars in sales, is what's estimated. They're a private company, so it's hard to know exactly. And they have 3,000 employees and 35 offices around the world. So they're a big deal. And they remain privately-owned. They're owned by Shane Smith, one of the founders. Disney, A&E, George Sorrows, James Murdoch, and TPG Capital. Disney is a surprising one, especially when you look at the type of content.



    And wait till you hear the story behind this. It's crazy. This one is crazy. So it was founded by Suroosh Alvi, Shane Smith and Gavin McInnes in 1994, right? This is when it started. This is sort of right at the beginning days of a lot of the online things going on. And today they're considered the largest independent youth media company in the world, is kind of how they build themselves. But as I said, it's a crazy story, especially when you consider this media company started in 1994, and when we think from 1994 today, how many media companies have died? The big growth in that time has been YouTube. YouTube went from nothing to... YouTube has 2.6 billion active users and there's 500 hours of video uploaded to YouTube every minute. This is the backdrop. So with this backdrop, it's amazing that they were able to create this media company. And as I said, story's nuts.



    And there's a Canadian tie-in. So I kind of like it. Suroosh, who's the main driver behind it, was born in Toronto and his parents were from Pakistan, and they're academics. But they moved around a fair bit and he did his high school in the United States. And growing up with Pakistani parents, to be respected in the community, you needed to do medicine or engineering. So he was very much the black sheep, because what he ended up doing when he went to school was a BA. He was the outlier there. And he went to University of Montreal and he got a degree in philosophy, McGill University of Montreal. And when he finished, not only did he finish with a degree, but he also finished as a full-blown heroin addict. He blamed the city. He said this has to do with the influence of Montreal and university and whatnot, so he moved around. And finally what he decided to do is, he went to Eastern Europe and he moved into this little tiny town in the middle of nowhere because he said, "If I go there, I can beat the heroin addiction." And basically what he discovered-



    Dave Young:



    Wow.



    Stephen Semple:



    ... was even in a little small town in the middle of Eastern Europe, you can still get strung out. You can still find it.



    Dave Young:



    You can still find it.



    Stephen Semple:



    So he returns to Toronto, he goes into grad school, takes psychology, drops out. Back to Montreal and he decides to do rehab. And at this time, he's living a double life. No one knew his problem. His family was this very conservative Muslim family. And when he finally shared with them about his addiction, it was really bad. It really hurt the family. And his mental state was not good. He went to rehab twice. In early '94, he's on a waiting list to get into another treatment center and life's not great.

    • 18 min
    #080: Warby Parker – Losing your glasses sucks! Replacing sucks more.

    #080: Warby Parker – Losing your glasses sucks! Replacing sucks more.

    Imagine these four MBAs sitting in class when their phones start blowing up with orders for eyeglasses after they lost the business idea competition at the Warton School of Business for the same idea.



    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 to the Empire Builders Podcast, Dave Young here, along with Stephen Semple, and we're talking about businesses and innovation and ideas that take a business from tiny to empire. There's usually something that they turn on, something that they come across, they figure out. And it makes all the difference. Today we're talking about, boy, this is another one of those that bridges the brick and mortar and online world and a bit of a disruptor, if I'm not mistaken. You said we're doing Warby Parker today, and I know that they're an online eyeglass company and I don't know much else.



    Stephen Semple:



    Well, they are an online glass company and they now have, gosh, I forgot to look up how many stores they have, but they now have a few hundred stores. So, they've started to open brick and mortar. But the part of the story we want to talk about is what they did when they were just strictly an online business because they went to the brick and mortar later. So again, the idea of these stories is to talk about the early days, what turned them into an empire. And that was when they were online. So we're going to focus today on the online part, but they were founded in 2010 is when they started by Neil Blumenthal, David Gilboa, Andy Hunt, and Jeff Raider. And in September 2021, they went public with an evaluation of almost $7 billion. But when they went public, yes, 7 billion.



    Dave Young:



    7 billion.



    Stephen Semple:



    That's a little bit of a payoff, eh?



    Dave Young:



    Yeah, no kidding.



    Stephen Semple:



    Yeah. So founded in 2010, 11 years later, $7 billion. So, the idea started in 2008. And basically what happened is the guys were together and they were sharing their frustration with losing glasses and the cost to replace them. And these guys all met at the Wharton School of Business. They were students there and they all had this common frustration of buying glasses and they kept losing them. And the example that got them started was Dave talking about leaving glasses on an airplane. He left his glasses on the airplane and they cost $800. And at the same time, now think about this, it's different today when we look at the price of an iPhone. But in 2010 you could buy an iPhone for $200 and he's standing there going, "This iPhone is 200 bucks and these plastic glasses are 800." This makes no sense to him.



    And Andy who liked buying things online was frustrated that he couldn't easily buy glasses online. And they felt like the technology of how glasses were made and sold, felt so antiquated. And when they got talking about it turns out, talk about this weird connection. They get talking about it. It turns out Neil had experience in the glasses space. He had spent a number of years working for an eyewear nonprofit. So, he had been going to factories and buying glasses as cheaply as possible to be giving away in these third world countries. And this started a conversation and Neil would even be involved in the designing of this stuff and taking it to the factory. So he knew the business. And it turns out what he shared with them, is that the business was dominated by a handful of players. Companies like Luxottica. Luxottica is a $30 billion business.



    They make Oakley's, they make Ray-Ban,

    • 22 min

Customer Reviews

5.0 out of 5
9 Ratings

9 Ratings

Luis Castaneda ,

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.

Wes Kronberg ,

Empire Builders

They tell inspiring stories about successfully people and companies. Then they break down the stories to principals that you cam apply.

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