Joseph Wilson was loosing the battle to Kodak when he discovered the xerography machine. Then he made it sellable.

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 Simple 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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Dave Young:

Welcome to the Empire Builders Podcast. I’m Dave Young and that’s Stephen Semple. Welcome to the Empire Builders Podcast. I’m Dave Young and there’s Steve Semple. Welcome. Oh wait, I got stuck making copies of copies. See what I did there?

Stephen Semple:

You’re so clever.

Dave Young:

You know what I did there, right? Yeah.

Stephen Semple:

I saw it, yeah.

Dave Young:

Today we’re talking about Xerox.

Stephen Semple:

Talking about copies of copies.

Dave Young:

Copies of copies of copies.

Stephen Semple:

Oh, and back in the day there were a lot of copies. A lot of copies.

Dave Young:

Oh man. I have copier stories. Yeah.

Stephen Semple:

I bet. I think those of us of our genre-

Dave Young:

Honestly, so Xerox, and we’re going to learn the story of the Xerox corporation and we’re going to… I don’t know their whole story, but I can tell you this, the photocopier or before there was something else before that. There was carbon paper.

Stephen Semple:

Yes, yes.

Dave Young:

But nobody owned a printing press.

Stephen Semple:

Correct, yeah.

Dave Young:

And so I would make the case that a photocopier was the first social media meme sharing engine.

Stephen Semple:

Oh, because we could photocopy our butts and share it the office.

Dave Young:

No, no, no, no, not your butt. I mean, I don’t know what you do in Canada. Here, I remember as a kid going to coffee, but my dad, small town, small town America, and he went to coffee twice a day with his buddies, 10 o’clock and three o’clock. They’d go down to the local cafe and they’d sit around a table and have coffee, eight or 10 of them. And somebody would always have a copy of a copy of a copy of a copy of a joke.

Stephen Semple:

Right.

Dave Young:

A cartoon, a usually off color story and they’d pass it around and then somebody would take it and make another copy of it and share it somewhere else. But you couldn’t do that if you didn’t have a copier.

Stephen Semple:

Well, that’s true.

Dave Young:

So thank you, Xerox.

Stephen Semple:

For making our lives richer.

Dave Young:

And now we can just electronically copy stuff and shoot it off as a text and a meme.

Stephen Semple:

One of the things you’re going to love about this story is it involves a fire extinguisher. So I’ve got your attention.

Dave Young:

Oh, I am all in.

Stephen Semple:

You’re all in. And Xerox is still pretty big. They do 7 billion in sales, but back in the early ’70s, Xerox was a monster. It’s estimated that over 10 billion copies a year were being done.

Dave Young:

10 billion.

Stephen Semple:

That’s a lot of copies of copies of copies-

Dave Young:

Yeah. Once people had it, they were like, “I’m a printer.”

Stephen Semple:

Of copies. Yeah.

Dave Young:

I’m a publisher now.

Stephen Semple:

Yeah. In 1973, they did 3 billion in sales, which would equate to about 20 billion today. And they were close to 90% of the copier market with profit margins close to 20%. That’s just huge. It was one of the most valuable companies in the world.

Dave Young:

Until there started to be some competitors, Xerox became the generic word for a photocopy.

Stephen Semple:

Correct.

Dave Young:

“Give me a Xerox of this.”

Stephen Semple:

Yeah. So our story starts back with Joseph Wilson in Rochester, New York, which as we also know, is the home of Kodak. And Joseph was the new president of a company called Haloid, which was a Rochester based company doing photographic paper that was founded in 1906. And frankly, they were getting killed by Kodak, which at that point was 90% of the industry. And so Joseph’s trying to make headway in the photography paper business and basically is just like get nowhere. No matter what he does, he just cannot seem to create traction.

Dave Young:

One of his problems, Stephen?

Stephen Semple:

Yeah.

Dave Young:

Haloid.

Stephen Semple:

Yeah, maybe.

Dave Young:

That’s not a good name.

Stephen Semple:

Yeah, maybe. But what he decides to do is look for new opportunities. He’s actively searching through the National Patent Archive. So meanwhile, we got to think about this. It’s the mid ’40s. World War II has recently ended and the GI Bill is out there and it’s really fueling the growth of service-based industries. Banking, insurance is exploding. White collar is becoming now the thing to do. The American office is now basically the new engine of the US economy, but it’s still pretty primitive and labor-intensive. You think about going back to your whole thing, how did you copy and share information? Things were typically retyped or it was typed with a carbon paper, which meant you had one copy or a...