Two start-ups a couple of years apart became the inspiration for each other to get better and better and better.

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 Steven’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.

[AirVantage Heating & Cooling Ad]

Dave Young:

Welcome back to the … Wait, what? Gosh, you told me the title, and I have some thoughts, and I forgot the name of the podcast there for a second. Welcome back to the Empire Builders Podcast.

Stephen Semple:

We’re doing two together here, Dave, Firestone and Goodyear.

Dave Young:

Stephen Semple’s over there. I’m Dave Young. And this morning we’re talking about Goodyear and Firestone, both?

Stephen Semple:

Yes, together.

Dave Young:

Because it’s kind of one thing now, right?

Stephen Semple:

No, they are separate.

Dave Young:

Was it?

Stephen Semple:

They’re separate.

Dave Young:

No, they’re separate.

Stephen Semple:

The story is so intertwined between the two of them. I couldn’t figure out a way to break it. But it’s almost kind of like when we did Hertz Avis, like they’re so interlinked.

Dave Young:

Yeah, yeah, yeah.

Stephen Semple:

Yeah. So we’re doing it as a single podcast, the two of them.

Dave Young:

All right. Where do we start?

Stephen Semple:

Well, what’s interesting is they were both started within two years of each other, both in Akron, Ohio. So Goodyear was founded on August 28th, 1898 in Akron, Ohio by Frank Seiberling. And today they’re the third-largest tire maker in the world with about 18 billion in sales.

And Firestone was founded in August, two years later by Harvey Firestone in Akron, Ohio. And in 1988, Firestone was purchased by Bridgestone for $2.6 billion.

Dave Young:

That’s the one. That’s the one I was [inaudible 00:02:51] yeah.

Stephen Semple:

Yeah, and Bridgestone today is number two behind Michelin with Goodyear being number three. So both really, really big, really big companies.

Dave Young:

And in 18 when?

Stephen Semple:

So 1898 was Goodyear, and 1900 was Firestone.

Dave Young:

And this is before, this is before mass production of automobiles.

Stephen Semple:

Yes. Yes. Because if you go back to Episode 35 where we talk about Ford, 1908 is the Model T. So it’s pre-model T.

Dave Young:

Yeah. So which came first, the tire or the car?

Stephen Semple:

Well, because there were tires on carriages.

Dave Young:

No, that’s true. All right.

Stephen Semple:

And today Michelin is the largest in the world. So if you want to learn about Michelin, go back to Episode 27, because it’s also really interesting how Michelin grew their business. But so we’re dealing with Goodyear and Firestone.

Dave Young:

All right. So Goodyear-

Stephen Semple:

And if you think about it, you’re right. Most of the transportation at this time when these companies started were either horse-and-carriage or bicycles. That’s what basically people were using.

And Harvey Firestone, he grew up on a farm and went to a business school and was a carriage salesman in Detroit. And at this time, the use of natural rubber is expanding due to vulcanization being created.

Because before vulcanization, natural rubber was not very durable. It would crack and all these other things. And carriage wheels were basically a wood wheel with a metal rim around it, no give, a hard ride.

Dave Young:

Right. Yeah, yeah. I mean, even a rim made of rubber would be better than a rim made of steel.

Stephen Semple:

Right. So basically he’s a carriage salesman. What he realizes is that what we should do is we should put rubber, instead of steel around the wheel, and that would make a smoother ride.

So he leaves Detroit, moves to Akron, Ohio, because Akron, Ohio at the time is the center of the rubber industry.

Dave Young:

Okay. Why is that?

Stephen Semple:

I think it had to do with just the fact there was a couple of companies that sprung up in the area. There was the resources in terms of water and a few things along that lines.

Dave Young:

And the rubber barons came in [inaudible 00:04:56].

Stephen Semple:

But there was a lot of that that was happening with … Look, you see it in technology. A couple of companies happen and then …

Dave Young:

Yeah, there’s this-

Stephen Semple:

It attracts the talent, it attracts the people, it attracts the investment.

Dave Young:

There’s this synergy that happens. It was before the word existed.

Stephen Semple:

Yeah, basically.

So he creates and starts selling a wagon wheel that has a solid rubber tire. And so he’s doing these solid tires, and he starts seeing the market shifting to a pneumatic tire. So a tire with a tube in it.

Dave Young:

With the air inside it. Yeah.

Stephen Semple:

And he’s also starting to see car sales increasing so he decides to do that. Because even though it’s a niche, he’s seeing it as growing, and he didn’t really get great traction on the wagon ti...

#246: Firestone & Goodyear – Innovation By Competition