#181 Paul Orfalea (Kinkos)
Founders
Understanding Incentive Structures Through Successful Business Models
This chapter explores the critical role of incentive structures in business, featuring insights from leading investors. It underscores the lessons learned from Les Schwab's successful compensation system, advocating for clear practices, employee respect, and outstanding customer service.
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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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work. Get access to Founders Notes here.
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