When you need the chocolate you find creative ways to make the deal work. See the best of both worlds.

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.

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Stephen Semple:

Welcome to part two of the Mars episode. If you haven’t listened to the first part, I suggest you go back and give it a listen because those are really the early days of Mars. But the Mars story was so interesting we had to break it into two parts, and there’s some really fun and surprising things that are going to happen in Phase 2 of this story.

The Mars Bar was this big success. He’s now had a couple failures. He needs a success. It’s 1934. His father, Franklyn, passes away.

Dave Young:

Okay.

Stephen Semple:

At the age of 50, and the future of the company in the U.S. is now in doubt, and there’s a small number of shares go to Forrest. But most of the shares go to his stepmother who does not like Forrest.

Dave Young:

Ouch. Okay.

Stephen Semple:

Forrest is pissed. And basically he decides that what he needs to do is just go on a vacation and cool off. So he takes a vacation to Spain, and he saw these chocolate candies made by Rowntree that are called Smarties.

Dave Young:

Um, okay.

Stephen Semple:

That don’t melt, and he had never saw a candy coating on chocolate. So he decides to take Smarties to America. He returns to the U.S., leaves the UK company in the hands of the number two, but he needs a supply of milk chocolate. And where does he need to get that is Hershey’s.

Dave Young:

Okay.

Stephen Semple:

But he’s brand new. Hershey’s is not super interested in doing it. So what he does is he knows the president of Hershey’s. His son Murray, is never going to make it in the Hershey’s business. So he offers Murray. He says, “Hey, you guys, sell me this chocolate. I’ll make Murray, I’ll give him an executive position plus 20% of the company.”

Dave Young:

Wow. Okay.

Stephen Semple:

So they go, done. Murray’s now set up.

Dave Young:

Murray’s out of our hair.

Stephen Semple:

Murray’s out of our hair.

Dave Young:

Not our problem anymore.

Stephen Semple:

What they do is they create this candy based upon Smarties.

Dave Young:

Wait a minute, wait a minute. Murray?

Stephen Semple:

Murray.

Dave Young:

Mars.

Stephen Semple:

Mars.

Dave Young:

MM. And the candy-coated chocolate?

Stephen Semple:

Is M&M’s.

Dave Young:

M&M’s, yeah. Oh, wow. So it was the son of Mars and the son of Hershey’s.

Stephen Semple:

Yes.

Dave Young:

Who knew?

Stephen Semple:

Right.

Dave Young:

That’s amazing.

Stephen Semple:

So they need to build a factory and they want to make it stand out. So how they first package M&M’s is instead of in a little bag, remember where they used to always come in a tube?

Dave Young:

Oh, I remember them coming in a tube, but not in my childhood. That was sort of a theater thing later on.

Stephen Semple:

But that’s how they first came was in a cardboard tube. That was how they first came.

Dave Young:

Oh. You know, I kind of do remember that with like a folded wadded piece of paper at the end to hold it shut, yeah. Okay.

Stephen Semple:

Yeah, it was first in this… In Canada I remember them with a little plastic thing on the end, but yeah, they’re originally in the tube. So it’s 1941. War breaks out in the United States. Factories all across, all industries are dedicated to the war effort. And Hershey’s has a real problem here because their chocolate bar for the war effort is a horrible prop because it melts and all this other stuff. Mars proposes to the U.S. government M&M’s because it doesn’t melt, and they’re literally doing 200,000 pounds a week of M&M’s to the U.S. war effort.

Dave Young:

Wow.

Stephen Semple:

Now, I want to pause for a moment because there’s a couple of interesting things that I observed in all of this with Forrest. Not only was he a go-getter, he was really observant. And we’ve seen that over and over again with a lot of folks who’ve built empires. First of all, he looked at something familiar, the malted milk shake, and said, “Everybody loves this. We should make a bar that tastes like this.” Brilliant observation.

Dave Young:

Um-hum.

Stephen Semple:

Then he learns from Cadbury that they would do things for local markets slightly different.

Dave Young:

Modify it for the locals.

Stephen Semple:

So what he looked at was the Milky Way. He went, “Well, I should modify that for the UK market.”

Dave Young:

Um-hum.

Stephen Semple:

So not only that, he observed this idea from Cadbury and he observed that the UK market had a slightly different taste. Made a bar for that. Fantastic. Then when he tried to do a couple of things using his own ideas, they failed. And then he observed when in Spain, the Smarties and went, “Hey, I could make my own version of that.” But it’s this whole idea, and we’ve seen this so often with empires is this looking at the market, this observing these things going on. And in his case, it was things going on in other markets, right?

Dave Young:

Yeah.

Stephen Semple:

But nevertheless, just observing those things and then creating his version of it, which I think is just underappreciated.

Dave Young:

Do you think his instinct was… Boy, this is a weird one because I’m not sure of the mindset. Is the instinct to say, “You know what? I just got to get out of here for a while.” Or is the instinct, “I got to get out of here so I can see new horizons and find something new that I can take advantage of.”

Stephen Semple:

That’s really…

Dave Young:

I think they both end up kind of in the same place. And if you’re stuck, if you’re stuck and you can’t find the answer, get out of your own space.

Stephen Semple:

Yes.

Dave Young:

And be open.

Stephen Semple:

Yes.

Dave Young:

Not even necessarily looking, but just open.

Stephen Semple:

Just be open. We do this with our customer in reviews in the Bold Idea Day, because we make them travel to a different place.

Dave Young:

Can’t be at your place, yeah.

Stephen Semple:

When you travel into that different space, it puts you into a different headspace. How often have we seen things where somebody somewhere else and yes, it’s a combination of seeing those other things, but as you said, it’s that different headspace. So I think it’s a combination of the two. It’s really interesting. I’m in a coaching program called the Strategic Coach run by a guy by the name of Dan Sullivan, hugely successful program. And Dan tells a story of an early business that he had that predated Strategic Coach that went through all sorts of things that created this big challenge, and the business was failing. And I never believed this story when I first heard it, and I now believe it. I heard it. I was young. I was stupid. I was naive. Now a little wiser. The business is failing and one of the first things he did is he and his wife Babs, went on a two-week vacation.

Dave Young:

Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.

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Dave Young:

Let’s pick up our story where we left off and trust me, you haven’t missed a thing.

Stephen Semple:

One of the first things he did, the business is failing. And one of the first things he did is he and his wife, Babs, went on a two-week vacation. And when he came back from the vacation, he was like, “Here’s what I need to do.” With this instant clarity. Here’s what I need to do. But I just wanted to pause and recognize that, because that’s the early history of the Mars Corporation. So World War II comes to an end. Here’s the interesting thing. Mars kicked the crap out of Hershey’s during World War II. Hershey’s still sold a lot of chocolates to the Army.

Dave Young:

I’ve got to say Hershey’s probably did a better job at product placement in war movies, right? There’s always the GI giving a Hershey bar to some kid.

Stephen Semple:

Yes. Okay. So here’s one of the things I&...