Podcast
Spinbrush- John Osher. The Electric Toothbrush That Sold for $475M
How I Built This with Guy Raz
- Price For What Customers Will Pay
- Set your price based on what the market will pay, not on your cost basis or purchase price.
- Charge the optimum market price rather than trying to undercut commoditized sellers. Transcript: John Osher I went to New York with my mother. We went to these stores, these distributors on the second floors of these buildings. I would buy all these earrings for 19 cents. I bought a whole bunch. I went to this store I rented. I put black velvet on the walls. I hung the earrings up. It’s an interesting thing because I charged $4.99 for my 19 cent earrings. Now, next door to me was a store called Stop and Shop. And they had very much of the same earrings I had. And they bought them also for 19 cents, but they sold them for 39 cents, doubling their money. They sold nothing. Everyone bought my earrings at $4.99. First of all, people didn’t believe you could get safe wires for 39 cents to put in your ears. But the reason I bring it up is it was a great lesson that I used for the rest of my whole business career. (Time 0:09:02)
- Commune Years Built Practical Skills
- John lived six years in a Gurdjieff commune where he learned trades like plumbing and carpentry.
- Those hands-on skills later enabled him to invent and manufacture products across categories. Transcript: John Osher Yeah. You know, this was before everything became so expensive in life. It almost would seem as if I’m a courageous person because I’m so willing to open businesses and this and that. And it really does come back to the value of starting my first business at five years old and having businesses successful all through high school. And it became natural for one. And two is that by doing things, little things successfully, I had confidence. I never thought about how can I do this as opposed to somebody who’s got a wife and family has been working at Procter and Gamble at a big company and they see some opportunity and they get Mortgages they got to worry about in all of this. It was really natural. I’d go to flea markets and I go all over New England and I’d find these things for nothing and be able to sell them for quite a bit. Guy Raz This store, yeah, so you’re selling vintage clothing, the secondhand clothing, and you run this shop, I think, for, again, like not that long, maybe a year or so. (Time 0:12:18)
- Act Immediately When Panic Strikes
- When entrepreneurial terror hits, make a concrete action list and start executing immediately.
- Break paralysis by focusing on practical tasks like getting financing and customer meetings. Transcript: John Osher Well, first thing I want to do, and this is called entrepreneurial terror. And I think most successful ones included have gone through this at some point because the buck completely stops with you. There’s no group or committee or meeting to get together with others. It’s all in your head. And I remember I spent two or three days, I just wanted to hide under the bed. I mean, I didn’t want to get out of bed. And I was getting divorced at the time. And I was living in a city, Cleveland, where I moved with the baby company, where I didn’t really know many people. So I didn’t have a big support network. My investors, by the way, all quit investing. The bank dropped me. Everything happened all at once. And after three days of this, I just got up and said, I better do something. And I got up and I put down a piece of paper, what I have to do. Got to get a new bank. I got to get more money in the company. I have to deal with Toys R Us. And once I started that and I got over the fear, I went to work. (Time 0:24:30)
- Spinning Lollipops Led To A Breakout
- John bought a battery-powered spinning lollipop and turned it into Spin Pop, which sold massively.
- That candy success taught his team low-cost motor, battery, and China-manufacturing know-how. Transcript: John Osher Got into, somebody went to an inventor’s show in Pittsburgh and found a lollipop that lit up. You press a button, it was like a sword that would lit up. And I ended up bringing the inventors in. There were four male men, two couples. And shortly after this light, they had come up with another idea, which looked like a right-angle drill where you press a button, a lollipop would spin. And I looked at that and I said, now that’s an idea because I always a lollipop with my fingers in my mouth. I said, but this right angle thing’s crazy. I just wanted to come straight up. Guy Raz So let’s just back up a little bit. In the early 90s, you had a representative from your toy company at a trade show, and the story I read was there was these two couples from Virginia. John Osher Well, they basically had a lighted lollipop. It was a spear. And my guy calls me and tells me about it. And I said, that’s great. I’m looking for a category in this. And so I said, I want to fly them in. I want them here tomorrow. I flew them in from Pittsburgh. And I bought the rights to it. And the one person of the four was the inventor. And he had started inventing a whole lot of other candy items. And one I was interested in was this one that spun, which was maybe six months later. And I bought this thing thinking that if I’m ever going to sell this company, I’m going to need a category that Hasbro or Mattel or one of these companies need because they buy categories. They don’t need a product unless it’s a lifelong product. They need a category. So I decided to get into this category of interactive candy. Guy Raz And so like candy that was – had like a battery-operated feature. John Osher Right. Guy Raz So you acquire the rights to these spin candies. And I mean, presumably you knew that they could be made pretty cheaply because you’d already been making products in China. John Osher Yes. I knew we could make this very inexpensively. And I knew a lollipop. We went to all the lollipop factories, dum-dums and all this, and that we could buy lollipops very inexpensively. All right. Guy Raz These were released in 1993, and they were a massive hit. They would go on to sell $100 million in the first three years. That’s incredible. How did that happen? Did you have a huge marketing campaign? John Osher No. Sometimes you get an item, like a popular song that’s an instant. Everyone recognizes an instant hit. You know, when you have something on the shelf in a store where you have many products that will sell one piece a week per store and you sell eight a day or something, it becomes a hit so quickly That everybody wants to buy it. And the Spin Pop became one of the largest. We sold millions of them all over the world. I sold millions in Japan. And we were probably in the interactive candy back then. (Time 0:31:58)