Founders
Episode 181 #181 Paul Orfalea (Kinkos)
Founders

Episode 181: #181 Paul Orfalea (Kinkos)

Founders

Episode 181

#181 Paul Orfalea (Kinkos)

David Senra is the host of Founders, where he studies history's greatest entrepreneurs. This is what he learned from reading Copy This!: How I turned Dyslexia, ADHD, and 100 square feet into a company called Kinkos by Paul Orfalea.

What I learned from reading Copy This!: How I turned Dyslexia, ADHD, and 100 square feet into a company called Kinkos by Paul Orfalea.

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[4:23] I've never met a more circular, out-of-the-box thinker. It's often exhausting trying to keep up with him.

[5:21] I graduated from high school eighth from the bottom of my class of 1,200. Frankly, I still have no idea how those seven kids managed to do worse than I did.

[8:29] I also have no mechanical ability to speak of. There isn't a machine at Kinko's I can operate. I could barely run the first copier we leased back in 1970. It didn't matter. All I knew was that was I could sell what came out of it.

[10:24] Building an entirely new sort of business from a single Xerox copy machine gave me the life the world seemed determined to deny me when I was younger.

[13:04] The A students work for the B students, the C students run the companies, and the D students dedicate the buildings.

[23:02] I learned to turn a lot of busywork over to other people. That's an important skill. If you don't develop it, you'll be so busy, busy, busy that you can't get a free hour, not to mention a free week or month, to sit back and think creatively about where you want to be heading and how you are going to get there.

[24:07] There's no better way to stay "on" your business than to think creatively and constantly about your marketing: how you are marketing, who you are marketing to, and, always, how you could be doing a better job at it. You'd be amazed what kind of business you can generate by a seemingly simple thing like handing out flyers.

[26:18] The phone rang. It was one of our store managers calling to ask me how to handle a bounced check. I held the receiver away from my face and looked at it, flabbergasted. If every store manager needed my help to deal with a bounced check, then we really had problems.

[39:55] I never walked in the back door used by coworkers. I walked in the front door so I could see things from the customer's perspective.

[48:06] You had to remember he'd been picking up the best ideas from all around the country. (Founders is doing the same thing from the history of entrepreneurship) 

[54:14] I believe in getting out of as much work as I possibly can.

[54:45] By now, you’d have to be as bad a reader as I am not to figure out that I have a dark side. You rarely hear people talk about their dark sides, especially business leaders, which is a shame because successful businesses aren't usually started by laid-back personalities. I don't hide the fact that I have a problem with anger.

[1:03:37] I'll give you an example of a corporate view of money. We used to sell passport photos at Kinko's and we advertised the service in the local Yellow Pages. It would cost us 75 cents to make a passport photo. I calculated that price jumped by $1 to $1.75 when you added in the cost of the Yellow Pages ads. We'd sell those photos for $13 a piece. You think this is a nice business? Shortly after we sold a controlling stake in Kinko's, the new budget people came in and, to make their numbers, they got rid of the Yellow Pages ads. They saw it as an advertising expense and didn't take into account how it affected the rest of our business. I used to go to the office and think, "Are they deliberately trying to be idiots?" These straight-A types drove me nuts. Then, like a self-fulfilling prophecy, we abandoned our passport business. That is corporate dyslexia. There is a lot of corporate dyslexia going on out there.

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#181 Paul Orfalea (Kinkos)

Introduction

"Paul says to me, 'Hey, do you want to come out with me? I need some local information about rental rates.' He grabbed me because I was a student and can give him some feedback about the student perspective on renting near UCSB. So I'm driving with him, and Paul is just a terrible driver. There are two sets of realtors trying to follow us. Suddenly, he sees this black cat about 300 yards ahead of us. He screeches on the brakes, pulls a U-turn, and goes the other way. He will not let a black cat cross his path. Then we're driving along, and he sees Pardall Road, the site of the original Kinko's, which he sold to his partner. Because of that, he won't drive down Pardall Road anymore. We screeched up in front of these apartment buildings. I followed Paul as he runs inside. In each one, he turns on a faucet, lets it run for a minute while he watches it and then asks me, 'How much rent do you think I can get for this place?' I'd say something, and he'd say, 'Nah,' and then he'd give me a number 25% above my estimate. We saw eight properties in what had to be under an hour. The realtors are running behind us."

"We get back in the car. He puts offers on six of them and ends up buying four. Basically, he ends up buying about $2 million of real estate in 45 minutes. As we drive back to the office, we stop at a kiosk where, at that time, you had to pay a $0.50 fee to cross the university campus. Paul accidentally drops a dime between the seat and the door. It must have taken him at least two minutes to fish out that dime. By this time, cars are honking behind us. Paul finds the dime, jumps out of the car, puts it on the concrete and then stomps his heel on it several times before he gets back in the car. I'm 19, and I'm silent. I'm completely silent. He knew I was mulling that over. I'm looking at him. I'm thinking, this guy just bought $2 million in property, and he can't drive down Pardall Road or let a black cat cross the road in front of him. Now what does this thing with the dime mean? He says to me, 'You know what the lesson in there is, never lose money.'"

All the way back, I tried to figure that one out. I don't know if he was pulling my leg or if he was extremely superstitious or just plain psychotic. Paul had some unusual ways of attracting talent, but it worked. He got my attention, so did the company's financial performance. I was the shipping manager, and my job was to send out all the profit and loss statements to each of the stores every month. I mailed them to the approximately 80 stores we had at the time. So I saw how well the company was doing. I became a partner in the organization with five stores in the Bay Area, and I eventually sat on the Board of Directors. I was with the company for 20 years."

"That was an excerpt from the book that I'm going to talk to you about today, which is, Copy This!: How I Turned Dyslexia, ADHD, and 100 Square Feet into a Company Called Kinko's, and it was written by the founder, Paul Orfalea, and his co-author, Ann Marsh. And this is another book that I wasn't aware of. More than half of the books that I'm covering on the podcasts are coming from listeners. So please keep the book recommendations coming. I read this book, and then the second recommendation was another book written by Paul. That was -- it's like -- almost like a 100-page like cliff notes version of this book, I would describe it as. It's called Two Billion Dollars in Nickels. That's a fantastic title. And the reason it's called that is because Kinko's would sell copies for $0.05 each, and Paul winds up selling the business for about $2 billion.

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