The Empire Builders Podcast Stephen Semple and David Young

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Dave Young:



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



[Colair Cooling & Heating Ad]







Dave Young:



Welcome to the Empire Builders podcast. Dave Young here, along with Stephen Semple, talking empires. And what better way to get an empire started in the morning than to have a donut?



Stephen Semple:



There you go.



Dave Young:



And a cup of coffee.



Stephen Semple:



That's it.



Dave Young:



So today's topic is Dunkin Donuts.



Stephen Semple:



Dunkin Donuts. There we are. America runs on Dunkin, right?



Dave Young:



I don't know a lot of history about them. I have childhood memories of Dunkin Donuts and then no memories for a long time, and then sort of rediscovered them when my daughter was going to school in Boston. I think they're a Boston or Massachusetts origin story.



Stephen Semple:



They are. Very good.



Dave Young:



But I feel like they've had some ups and downs maybe.



Stephen Semple:



Oh, they've had a bunch of ups and downs. There's no question. But they are. They're from Quincy, Mass, just outside of Boston.



Dave Young:



Okay.



Stephen Semple:



Yeah. So they were started by Bill Rosenberg in 1950, and today they have close to 13,000 stores. They're the second-largest restaurant chain in the US, they're worth about $9 billion. And if you're in New York City, they have an unbelievable concentration in New York. There's one every five blocks. And I'll tell you, it was weird when I was in New York last summer, and you're walking around, it felt like there was one every two blocks. It's more how it felt. But there's literally one every five blocks in New York City.



Dave Young:



Including the airports, right? They're everywhere.



Stephen Semple:



They really are. So the origin of Dunkin really goes back to the late 1930s because the US economy at that point had been struggling for close to a decade. With the Great Depression, unemployment peaked at 20% in an era where there was little in the way of safety nets. And this actually had a big impact on the food business because at this time, snacks have started to be reinvented as lunch. So we're seeing this movement towards these smaller packaged foods. People wanted something small that was a fun to eat item, that was not expensive, that really started to dominate the food market. And we've seen that in other podcasts that we've done with other foods. So Bill Rosenberg is from Boston, and he has a successful food truck business. And by 1946, he's starting to make enough to start a brick-and-mortar location. So when he launches the business, here's something Bill notices, is that in his food truck business, 40% of the sales were coffee and donuts.



Dave Young:



Wow. Okay.



Stephen Semple:



That was 40% of the sales from the food truck. So when he launches the business, he realizes that he wants to create a new idea centered around coffee and donuts. And you know what, it's interesting. When we go back to companies like Toys R Us and things like that, or even a Dollar Store, it's this observation of, "Hey, here's this thing that's selling." Or in Toys R Us cases, they looked at it and said, boy, toys are a big part of a department store. Maybe we should just do something along that lines. So this is similar to what he saw. He saw, look, coffee and donuts is a big part of the sales. Why don't I create something around that?



But here's the thing, coffee and donut shops didn't really exist. No one was just doing that. So Bill goes to start this,

Building trust is not easy, but when you are consistent, unique and true to yourself people take notice. No Bull RV has done this very well.



Dave Young:



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



[Tommy Cool Air Ad]







Matthew Burns:



This is not Stephen Semple or Dave Young. I've commandeered the entire podcast at the request of Stephen. So I am here for a reason. I've got with me a client of Stephen's, Rick Showers of No Bull RV in the Edmonton area of Alberta, and you guys have heard us talk about him before, he's been on the podcast before, but we've had a very specific topic that we want to talk about today, and we're talking about the amazing use of social media that him and his team, we have one of his team members here, her name is Natacha. Natacha, what's your role with No Bull?



Natacha:



Technically by title I'm HR.



Matthew Burns:



That'll be part of what we talk about. Great. And then what are some of the other things that you're doing there?



Natacha:



I'm doing anything I can to support Rick, I guess, and just build the business and making sure all our pieces are aligning together and that we're really approaching things from a whole business level, not just bits and pieces at a time.



Matthew Burns:



Okay, fantastic. And Rick, that's a very politically correct answer. What is Natacha to you? What does she do for you?



Rick Showers:



She does pretty much all the stuff I don't want to do.



Matthew Burns:



There we go. That's the answer. That's the answer we wanted.



Rick Showers:



She sees to it that it gets done. Let me put it that way.



Matthew Burns:



Exactly. Well, no, and her job is to support you and all the things that we're honestly, truly ... Business owners, especially entrepreneurs, we get caught up in doing everything at the beginning and then we realize I'm really not good at this list of 20 things, so I'm going to get somebody else who's much better at it than me. I'm going to concentrate on what I'm good at. And that's your Natacha. What we really want to talk about today is how you guys are using social media and its effect, the kind of the bonus effect it's had on your recruiting and the onboarding of new staff members. Rick, talk to me a little bit about your perception of this and how it's affected you guys there at No Bull.



Rick Showers:



The perception of the social component?



Matthew Burns:



You got it.



Rick Showers:



Well, as a user, I always thought it was a bit of a pain in the ass, frankly, because there's one more social channel coming after another. As a business owner, I was always skeptical and never really liked the fact that competitors, for example, or other business categories were actually using it to try and flog product, which to me always seemed a little bit counterintuitive because it's not really a social thing. They're looking at it as an advertising channel. So we approach it a little bit differently and wanted to stand out by just being different.



Matthew Burns:



You're highlighting your people on social media, you guys are spending time talking about the vulnerabilities of some of your units because you guys are in used RVs and you're pointing out the negatives and saying, "Hey guys, well, we take care of this for you." And you're very upfront. I remember one post where you were trying to do a video when a bird was squawking in the tree next to you and you're like, "Come on, man, we're doing a video." It was so funny. But yeah, I mean, social media really is meant to be social.

The marketing for Anacin was brilliant and studied. Creating emotion around how you make others feel was a master class of messaging.



Dave Young:



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



[Colair Cooling & Heating Ad]







Dave Young:



Welcome back to The Empire Builders Podcast. Dave Young here, along with Stephen Semple. I really don't have much for the topic that Stephen just whispered into my ear other than I know the brand name.



Stephen Semple:



Yeah.



Dave Young:



It's pain relief and it's Anacin.



Stephen Semple:



Anacin.



Dave Young:



Anacin. I'm trying to remember, there's one of those brands, it was either Anacin, or Beyer, or Excedrin, that combined a little Aspirin with a little caffeine maybe, or something like that, but I don't know if this is the one.



Stephen Semple:



You're actually really, as usual, David, very, very close. Pretty much on the money.



Dave Young:



All right. Okay.



Stephen Semple:



The first commercial painkiller created was Aspirin. That was created in 1897 by a German chemist and the product was branded Bayer, with Bayer being-



Dave Young:



Okay.



Stephen Semple:



If you remember on it, Bayer was done as a cross. It was Bayer, Bayer. It was Bayer left to right, Bayer vertical, the Ys meeting in the middle and it formed this little-



Dave Young:



Like the Red Cross.



Stephen Semple:



Yeah.



Dave Young:



All of that, yeah.



Stephen Semple:



Yeah. Now it first false started. In 1897, it was a powder, and it was in 1914 where it changed to a table and had that branding on it. Bayer was marketed by promoting the product to doctors who then told patients.



Dave Young:



Okay.



Stephen Semple:



It was all about inform the doctor, the doctor would inform patients. Anacin changed the rules and changed the rules for marketing of medicinal products forever because they came into the market and decided to advertise to the patient who would then go to the pharmacist and demand it.



Dave Young:



Okay.



Stephen Semple:



Up until this point, everything was marketed to the doctor, to the doctor, to the doctor, to the doctor. Instead, Anacin was the first to come along and say, "No, we're going to go direct to the consumer." We're going to market to the patient, and the patient is going to walk up to the pharmacist and say, 'Hey, I want some Anacin.



Dave Young:



Yeah.



Stephen Semple:



If that happens enough, guess what's going to happen? The pharmacist is going to carry Anacin.



Dave Young:



Yeah. It's like the Wrigley Spearmint Gum story all over again.



Stephen Semple:



Wrigley Spearmint Gum story, but done in the medical space.



Again, it's one of these things where, for so long, you could sit there and go, "Yeah, but that works for gum, yeah that works for this, that works for parcel services, that works for all this other stuff," but all of a sudden it's like, "But medicine is different." Medicine is not different. We're seeing it today. How many drugs do we see being advertised today, where it's advertised direct to the consumer or it's, "Ask your doctor. Talk to your doctor about this." Because what they know is if you walk into the doctor's office asking about it, the doctor will then make sure they know about it and likely prescribe it.



Anacin started advertising in the 1940s on the radio.



Dave Young:



Okay.



Stephen Semple:



Here's what the spot claimed. That, "Anacin is like a doctor's prescription, not just one but a combination of several medically active ingredien

California joins the union and messages need to be delivered. UPS had a solution and decided it needed to be luxury and efficient.



Dave Young:



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



[Colair Cooling & Heating]







Dave Young:



Welcome back to the Empire Builders podcast. Dave Young here with Stephen Semple. And we're talking about empires and how they were built. Get it? That's the name of the pod... that's what we do here.



Stephen Semple:



I've never put that together before.



Dave Young:



Wow, I see. Aren't you glad I'm here?



Stephen Semple:



I'm so glad.



Dave Young:



You whispered the three letters, UPS, into my ears just as the countdown started. And I'm trying to think of a UPS story, and mostly what I think of when I think of UPS, think back years ago, I sort of remember, I think their start but I remember that being a UPS driver was a way better job back then than it is today. But that's probably not a big part of this story. So let's talk about how they started.



Stephen Semple:



Pretty sure it was UPS recently that actually just put through a new pay package and benefits, and things along that lines. That really ramped up what people are being paid at UPS, if I remember correctly. But you're right, this is not a big part. It's not a big part of the story.



Dave Young:



I think it started... how long have they been around, Stephen?



Stephen Semple:



They were founded on August 28th, 1907.



Dave Young:



I feel like probably I lived in a town so small that we didn't have one until maybe the sixties or seventies. They just didn't show up.



Stephen Semple:



Well, and this is an interesting part. There was a big challenge to them becoming nationwide. They were founded in August 1907 by James Casey and Claude Ryan in Seattle. I didn't realize that they had started in Seattle.



Dave Young:



Oh, okay.



Stephen Semple:



And they actually first started as their original name was the American Message Company. And today of course is known as UPS, United Parcel Service. They do like 90 billion in sales and have over 500,000 employees. Just what a monster they have become in this space. But basically they started around the time California joins the union. And you know what ends up happening now, I know Seattle's not and before people go nuts, I know Seattle's not in California, but I was just trying to, you know, Historic landmark.



Dave Young:



It's the West Coast, yeah.



Stephen Semple:



Exactly. But I get it, before people know-



Dave Young:



Didn't all join at once. Yeah.



Stephen Semple:



... So, California joins the union. There's this growth happening. In the west, there's this need to transport items and it's hard getting things to the new territories. And lots of delivery services pop up. Wells Fargo pops up for the transportation of money. The Pony Express is created for transporting of mail. Now, of course, the Pony Express only lasts 18 months because the telegraph wipes them out. Right?



Dave Young:



Right.



Stephen Semple:



But here's the interesting thing, with the telegraph, you still need a messenger service to run the last leg. To take it from the telegraph station to the person. So, Jim Casey's, 19 years old, he's in Seattle and he sets up this business for basically running the telegraphs. That's how they start.



Dave Young:



Okay. They're the last mile guy.



Stephen Semple:



That's the reason why they're the American message service. They start off as being the last mile guy.

Stephen and Dave right a wrong from a previous episode and dive deep into the history of franchising. A system for making millionaires.



Dave Young:



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



[BWS Home Services Ad]







Dave Young:



Welcome back to The Empire Builders Podcast. I'm Dave Young, I'm with Stephen Semple. And Stephen just whispered the topic into my ear and I missed something. Stephen, you said franchise and I didn't quite catch what franchise we're going to be talking about.



Stephen Semple:



We're going to talk about a little bit of the history of franchising.



Dave Young:



The idea here is the idea of a franchise, the business model, if you will.



Stephen Semple:



Yeah, because if we think about the concept of this podcast as we're talking about empires, how many business empires today would not exist if it wasn't for the concept of a franchise where you create something and you license to that person the right to operate? And it's grown today into being the business model and all those other things. It has allowed numerous numbers of ordinary citizens to own successful businesses and generate wealth. It has also created a way for businesses to grow rapidly because of the fact that they're able to leverage the person's interest, hardworking expertise, and money in order to grow these businesses. Especially in the restaurant space, there's no way companies like McDonald's and Wendy's and all of these other businesses would've been able to grow at the rate that they grow if franchising had not been created, perfected, developed, and modernized. And those things have a journey that they went on as well.



Dave Young:



Those two key points you mentioned, it gives the average person an opportunity. If you can scrape up enough money to buy a franchise, you now own a business.



Stephen Semple:



Correct.



Dave Young:



And if you own a business, you created a business and you want to quickly expand to multiple markets, you can do it with other people's money by giving them their piece of their own little location as opposed to going and borrowing it all or doing some kind of a public offering, those kinds of things, an alternate way of growing fast.



Stephen Semple:



A really interesting Netflix show to watch, and it's not a documentary, but it's actually pretty accurate, is The Founder with Michael Keaton.



Dave Young:



Yeah, the Ray Kroc story.



Stephen Semple:



Yeah, the Ray Kroc story. And one of the things that Ray Kroc discovered was the best franchisees, so franchisees are the people purchasing the franchise were actually common, everyday hardworking folk who wanted to make a better life for themselves. And buying a McDonald's franchise was that avenue that actually made a better life for them. And they were the best source of franchisees, not rich folks who are looking for investments. And look, Chick-fil-A. Chick-fil-A today, it's very difficult to become a Chick-fil-A franchisee because they want to look at it and say, do you fit in? Are you that type of person? Will you actually be a great part of this family? And in Culver Restaurant, which I forget what episode Culver Restaurant is, we talked about how Culver, it's really, really important to them that basically franchisees really fit into what's being created.



I think it's worth exploring the history of franchising. And I have to right a wrong, because back in episode 94, we talked about Martha Harper, and I referred to the fact that Albert Singer was the first commercial franchise.

The amazing rise of Kodak was due to innovation after innovation and you'll never guess why George Eastman called it Kodak.



Dave Young:



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



[Tommy Cool Air Ad]







Dave Young:



Hey, welcome back to the Empire Builders podcast. Dave Young here, and Stephen Semple's right there. Well, you probably can't see him, but I can see them. How you doing this morning? Because we record these in the morning. If you're listening in the evening, I felt the need to say that in case you were confused.



Stephen Semple:



Especially since before we started the recording, you were slurping your coffee.



Dave Young:



Right, in case you've never listened to a podcast before, and you didn't know they weren't live. So just before we started, yes, I was slurping my coffee, and yes, Stephen whispered into my ear today's topic. And I tell you, it is funny how words do this. This brand has sort of defined its own... It became the word for its product. It became the word for an industry almost. And when you told me the name, I had a Kodak moment.



Stephen Semple:



There you go. Yes.



Dave Young:



Right? But we're going to talk about Kodak, Eastman Kodak company, and when you said Kodak, I'm like, "Oh, man." I remember my first little Instamatic Kodak camera. And the pictures that, I think it was the 110 film that took a picture and-



Stephen Semple:



Oh yeah, the little film? Yeah.



Dave Young:



... when you developed it, you got a four-by-four picture and a little smaller version of the same picture, wallet sized, right next to it.



Stephen Semple:



Yes.



Dave Young:



I thought that was the coolest thing. I would carry those little photos around. And I had a picture, I don't know if I still have it. It's probably tucked away somewhere. It's probably in a box somewhere. But there was a picture of me on my grandfather's horse. He had passed away already, and I was like maybe four or five, and I'm on this horse, and the horse's name was Euchre Bill.



Stephen Semple:



Euchre Bill.



Dave Young:



I can't explain that. Grandpa was gone.



Stephen Semple:



Card-playing horse, Euchre Bill.



Dave Young:



Maybe. I don't know. So that was the Kodak moment. Instantly, as soon as you said Kodak, it took me to that picture, which was still attached with its little picture next to it.



Stephen Semple:



I think we forget how big Kodak was. And lots of things led... Well, we even did an episode, back episode 77, where we actually looked at what we felt was the decline of Kodak that I did with Gary Bernier. At its peak, in 1996, Kodak was two-thirds of the global film market. In '76, it was 90% of all film sales in the United States, 85% of camera sales. In '96, it was the fifth most valuable business in the world, which is really quite remarkable.



Dave Young:



We tell our local clients that, man, if you can get to 35%, 40% market share in your category, you're a rock star. Here these guys were worldwide.



Stephen Semple:



Worldwide, 66%. Yeah. So today we're going to talk about what made Kodak amazing, and then the decline. We've sort of done this backwards. The decline we talked about back in 77. They were founded on May 23rd, 1892 in Rochester, New York by George Eastman. And George became the breadwinner of his family at age 14 when his father died, and he took a job as a messenger boy at an insurance company, and he was making three bucks a week. And then he became an office boy at another insurance company.