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- [00:00]
A
When we opened our first store, it was the first store in the world selling video game software and software for home computer entrepreneurial classes. We did not have a passion. He moved out to the Silicon Valley to start as Silicon Valley Race.
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B
Well, this is really special for me. I get to go back in time quite a bit to welcome Gary Hewson to my Look Back podcast. Gary just dropped a book called Always Learning Lessons on leveling up from GameStop to the famous cosmetics company Lauria Messier. And Gary also ran Kinko's for a while. So I'm going to try to get into all of these topics, plus a lot of the work you've done, both in private equity and coaching up entrepreneurship. But I got to say, I started reading the book. You and I both had an Opel gt, Gary.
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A
No way could you, could you unhook, could you hook the accelerator back to the drive shaft under the car? Did yours ever come off?
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B
Oh, we did have that problem once. How about the headlights where you had to push the bolt up and it would get stuck sometimes?
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A
Yeah. Yeah.
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B
Well, I guess we know why that company's not around anymore.
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A
But I was going to say, I now know the only other person I've ever known who had one of them. Although I did feel very cool when I was driving.
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B
It was cool for a while. I used to jam my buddies in the back. Way back. Anyways, I don't want to digress because there's too many other fun stories to get into, but you started Babbage's back in the day. It was only bricks and mortar. None of this bricks and clicks. Of course it was bricks and mortar. You had a lengthy role in. In brick and mortar department stores and things like that. And all of a sudden you had a partner and you guys decided, yeah, this thing is real. This whole gaming thing is real. And I believe in a retail concept. What made you stop what you were doing with, you know, Macy's and, and some of the other folks and say, okay, I'm ready to go for it as an entrepreneur.
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A
Sure. And, and that is obviously, that is the question. How did you come up with the idea? Because we were the. When we opened our first store, it was the first store in the world selling video game software and software for home computers or computers used in the home, as it was called of those days. And how did we jump the world to start that? And that's obviously a very fair question. What I tell entrepreneurial classes. We did not have a passion for video games either. Jim nor I, Jim McCurry was my co founder. Neither of us were gamers. Jim and I went to graduate school together. And because he finished at the top of our class, he got to go to place like Bain. You know, when you finish at the top of the class you get to go, you get to go to the top tier consulting firms. And then there's those of us who went into department store retailing and we were very close friends during our two years at grad school. Played poker every Friday night, were in the same section but really, really good friends. And so while he was, while he was growing as a consultant and becoming, becoming a partner at Bain, he, he moved out to the Silicon Valley. To start as Silicon Valley was emerging or Silicon Valley was emerging as the hotspot for technology. And pretty soon he had a couple of major video game publishing companies as clients. And of course the main way is to do a bunch of work on the history of the industry comparative comparing it to other industries in the same kind of sector which he called entertainment. And to pursue his business like that. I was in, as you know, the department store business. And I only got in that business because it was in San Francisco. And I was getting up the nerve task for woman who's still my wife all these years later to marry me. And I thought I might need something to hedge my bet. So I'd asked her if she could live anywhere, she's in law school down in Texas. If she could live anywhere she wanted in the U.S. where would that be? And she said San Francisco. So I went straight to the placement office, looked around. There were a couple of department stores interviewing in San Francisco. Once I got the job, I proposed to her and said no, by the way, I have a job in San Francisco. But I could barely spell department store. But as it is ended up I really, it was a great fit for me because my family had been in the retail furniture business. I was a little, I, I, I really enjoyed the department store business. But along the way when I would go visit our stores which were anchors in major regional malls, I would walk through the malls and I would see and this was when regional enclosed malls were exploding in size and I saw all these specialty stores emerging from nowhere. Stores named the Gap stores named the Limited, stores named Zales Jewelry where you could. Because I ended up being the senior merchant over an entire division of one of the name plates inside of Federated Department Stores. It became very clear to me that in any category of consumer goods that, that reached measurable size, a specialty store channel would emerge to become a dominant, if not most successful inside that channel. So I was trying to convince Federated Department stores that we had to go to one name nationally, we had to quit using a different name in every city in the country because we were getting our lunch taken by these growing rapidly specialty store chains. And, and we were feeling smart because we were growing at 10%. But these companies started going public and you saw the specialty stores were growing at 20, 30, 40%. So I was highly frustrated, let's call it that. When Jim McCurry came through town, he was doing, having a meeting in Dallas or something and he came to the house to eat dinner and I said, what are you doing? He said, let me give you my pitch for what I tell video game clients, potential clients. And so he literally said, he starts with people have been entertaining themselves since the dawn of time when they lived in caves, they ended up painting on the walls in the caves that humans are social. And he went all the way back to black and white TVs, color TVs, the introduction of hi fi record players, the video cassettes of movies. And in every single new category of consumer entertainment there was a hockey stick of growth. And the first thing that happens in any, in any of those categories, whether TV or anything else, content was needed. High fives were selling like crazy at Sears Pennies and other place. All of a sudden people wanted records. And guess what happened? The birth of rock and roll. And. And it was very clear as he was discussing, hey, there's this new and emerging channel of entertainment that's called video games and video game players. And he started talking about there would be an array of types of video game equipment, there would be different software that would be on each of them. The size, the number of titles that would proliferate would be too much for the department stores. And sooner or later a specialty store would emerge. And I said, jim, stop. Let me tell you what I have been preaching inside of Federated department stores. And I walked him through. Mine wasn't as intellectually pure as his was, but that was our background. And I said, you know what we ought to do? There is absolute, with absolute certainty a channel will emerge to sell video game software. And if home comp. And if computers sure enough penetrate homes for home computer software, which might be productivity software, but there will be a need for a channel that did nothing but sell software. And I said, and I, I said, jim, you know what you ought to do? You ought to quit your job at Bain. And you know what I ought to do? Ought to quit My job at Federated Department Stores and lets you and I tackle this thing as a real project that has real potential, raise real money, go at it in a very smart way. And that's what we did.
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B
Yeah.
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A
And the rest is history. But it was a foundation of understanding the history of consumer entertainment. The role, Moore's Law. I mean, we spent a ton of time just on speed and power for graphics and video gameplay in the future, as semiconductor capabilities would grow logarithmically while the prices would come down so dramatically, which would bring better gameplay, better graphics, better everything than you could get an upright arcade machine. So we knew technology was on our side. How consumers spend money was on our side. We had everything lined up and that's how we started it. Not like, I'm a gamer, you're a gamer, let's go sell games.
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B
That was the opposite side of it all, really. Um, so. So there was that one store in Dallas, then you popped the other seven, as I recall reading.
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A
Right.
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B
You got some funding, which by the way is an interesting thing. You had real PMF before you asked for funding versus asking for funding, then going out and trying to establish the market fit. So you had some validation. What was the key then in terms of the next step stage of growth? What were the key triggers?
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A
What we, what we did. Ross Perot was our backer. And in the book I go into great detail on how I met Ross and how he ended up back invest.
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B
Yeah.
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A
And our, our plan because we were so smart was we were going 200 stores in our very first year. And Ross looked at us like we were on Mars and he said, no, you're not. You're gonna open one store and you guys are going to run it until you understand the business inside and out. Then you'll open the second store. That was a wise man.
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B
Well, he did start eds, which was one of the hottest companies in the world back then.
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A
Absolutely. And so that's what we did. So we went from 1 to 7 to 23 to 50 and we started growing very rapidly from there.
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B
Yeah. Super retail math. Now we have to jump ahead a little bit because this is so. There's so many great details in the book, but the idea that Babbage is. Ran into all this crazy crosswinds too. What were the great decisions in terms of building that into such a formidable chain? Which by the way, everyone knows is Gamestop now. Not just, not just a meme stock, but a, a surviving, you know, retailer that still provides unique value in the market.
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A
Right.
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B
It's. It's a widely familiar name in that world. But what were some of those great decisions? And then what is one or two things you wish on a major level? Were there any major things you wish? Oh, I wish this or that.
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A
Oh absolutely.
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B
The infamous pivot. I know there's a million small ones right. Right on this side of the freeway or partner that. But I mean the key ones. Gary.
- [11:34]
A
Yeah, yeah. So great question. The biggest insight that we gained very quickly was that we had neither of us had ever seen a business that was both crazy seasonal and crazy cyclical. So there is a life cycle to the Atari 2600 and then the 7600, you know, the first generation, second generation, third. And, and so you had the, so you had the cyclicality of hardware types and the extreme seasonality of Christmas being the time when parents bought their kids video game systems. And, and our conclusion there, which ended up being the big difference when the company hit a wall after it bought Software Etc. We made, we made the decision as a company that we could sadly never have debt because debt's great until you're losing money for a year or two until the next hardware type comes out and then it kills you. And that is actually what ended up happening after we merged with Software Etc. Stores in the future. But, but so that, so those were the big insights that led us to understand. Yeah. How. How to manage the business now. Jumping to the big mistakes. And Jim and I still talk about this, by the way. Jim and I are still dear friends. We both had very interesting careers and, and we are like brothers. So we talk and we can be very honest with each other. And the fact is we got caught up in continuous improvement, which is all companies want to talk about that and there are books written about it. How can you do what you're doing better, faster, smarter to become more profitable. And don't get me wrong, that's important. However, that is not what you. How you brought it up. That is not the 50,000 foot insight. The 50,000 foot insight is with the rate of change in consumerism in technology, we instead of doing continuous improvement, we had to do continuous change. And we didn't. And let me give you a couple of examples of why that ended up hurting us. Yeah, in early days we. And then Software Etc Stores and then Electronics Boutique, all three came to the same conclusion. That our collective paths to glory were going to be in enclosed regional shopping malls because you get lost in strip centers and all that. Well, guess what? That was what we should have done sooner to get ourselves in a Better position as more and more people. As the penetration of video game systems accelerated, we needed to come closer to where our customers were and be able to operate the stores more profitably. So making the exit into power centers and strip centers earlier than we did was very much a flaw. The other flaw, the other lack of insight on our part which, which really was impactful video game prices. We expected them to come down. When we opened our first store they were 49.99. Well guess what, they were still 49.99 and 59. Five and ten years later we could have and should have had real conviction around the need for trade ins, refurbishing, taking the old hardware type because everyone's not rich by the way.
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B
By the way. That's still what you're remembered for in many circles.
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A
Yeah, but our first bite at that Apple with Funko Land we, we didn't. Here's, here's how soft our conviction was if you will. We had the thought, we went and sat down with the guy at Funko Land and he said he wanted $5 million for the company and we turned our nose up and said well are you kidding me? You'd have to be Insane to spend 5 million. Well guess what? Five years later he sold his company for $100 million to the combined software, etc. Babbage is which was now called GameStop and ultimately that business contributed $500 million of profitability a year to GameStop.
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B
Oh wow.
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A
We did not have the strength of conviction when he said 5 million. We just threw up and said well we're never going to buy them. And that was it as opposed to having real conviction. And, and that was, that was a really, really important missed opportunity for us. So those are a couple of examples of things that could have, should have, would have, should have done it sooner, faster and better and had a more of a mentality not of continuous improvement because that's table stakes, but continuous change. Always thinking about how's the market changing, how's the publishing side changing, how's the delivery side changing, how's consumer preferences changing, da da da. You know, all that stuff.
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B
Yeah. The odd question I want to tackle with you then is more of well we know how software is sold and consumed today more or less digitally right over the right the app stores and Google still plays and all that stuff. Well, how would you structure a third party company today to play in this age of AI and all these other things happening where we're buying software differently and the game industry is changing radically too. Do you ever have thoughts about what would, what would a new company be like that could serve that market?
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A
The only thing I can come up with. So GameStop hit 10,000 stores, they're down to 3,000, and that's still too many because they don't, they don't have any conviction about what business they're in. Yeah, I have a belief that the whole, that whole side of the business, the, the trade in the used, the swapping, the refurbished hardware, all of that will have a very long tail because there are lots of economic stratas in this country. They can't afford bandwidth, they can't afford the hardware, and everyone loves gaming. So a company that could build itself around not as an ancillary business or a business you stick in the back, but as a company that can throw your chest forward and say, we are headquarters for people who want to trade in games, who want to refurb by refurbish and be proud of that. I think that's probably could, could develop some legs, but they don't seem to.
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B
Be looking at it that way in a different footprint. It'd be fun to have some of that virtual reality and fun stuff going on within a store, too, to experience more things and let people play. It's hard. Yeah. But dollars per square foot, right?
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A
Yeah. And you. And it's a very different business and available everywhere, frankly, there. They don't need a store dedicated to that kind of experience because interactive virtual experiences are popping up everywhere, whether it's meow or, you know, I mean, there's a whole list of companies that have emerged that are in nothing but the immersive experience game.
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B
All right, Gary.
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A
What.
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B
Before I jump off to off GameStop and Babbage's, I gotta ask you two questions. One, what was a kind of an interesting story that you never shared about, oh, this software company or that hardware company or some interesting example of, of the times that we were living in and the, you know, how we were growing businesses back then.
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A
Yeah, there were, There were so many interesting people in interesting companies. So a Techmo bowl, what a great video game that was. And the owner would come to see us and he would say, And I'd say, we'll. We'll take as many as you can make. You know, if you could make 10,000, I'll take 10,000, I'll take a hundred thousand. Take whatever. No, I don't want to do that. You know, and he said, he literally said, you know, if we got that big, I'd have to hire people and I Don't want employees. I, you know, I, I, so, I mean, I had to deal with personalities like that.
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B
How about, how about you had Trip Hawkins. You've had so, so, so Scott Cook. You had, I mean, some of my favorite people. I had Philippe Khan. I had Mitch Kapoor on last month on the.
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A
Okay, well, so you can, you can definitely talk to Scott Cook. I'll give you a Scott Cook story. Okay. So Scott was in my class at business school. Well, so we knew. So we predated.
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B
Yeah.
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A
Babbages. Yeah. So Scott comes to see. And in fact, he and my partner Jim work together at Bain right out of business school.
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B
So we go into png, I think. Right.
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A
Yeah. Because Jim told him he would do. He'd crush it at png. So Scott comes to town. We're, we're selling Quicken already. You know, he's already got it out, but he wants, he's, he's hoping that we might invest in his company. We have just gone public. We were kind of flush.
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B
Yeah.
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A
And he, you know, let him tell you what the deal was, but he kind of offered us half the company if we, for a, for a 4 price, we could have paid out of the cash we had.
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B
I got to grab Scott. But for those on the pod, he's the former CEO. Really? Founder of Into.
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A
Yeah, yeah. And so he wanted, he wondered if we would have a press event so introducing him in Dallas, because he also wanted to tag along with the Junior League members and understand how they were using their checkbook and all. And so we put on press events for him. And Jim was magnificent in talking about him. And so we did that. So that was fun. So that's a Scott Cook story. The almost as good but maybe better story is Electronic Arts.
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B
Right.
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A
Electronic Arts. First day of shipping their product on their first day of real business was to a little software store in Dallas, Texas's first stores grand opening. So their product made it to our grand opening of store number one in Bing Gordon. Which product legend? Oh, it was all for a pinball construction set. You know, the original five. I love it. Arkon.
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B
Yeah.
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A
Yeah. And of course, because they were in little record sleeves instead of baggies, and we had software on our shelves in baggies on our opening day. Their products stood out and they didn't know who we were. We didn't know who they were, but we were the first store. And of course, obviously you put it in on the shelves and it looks that good. And people are used to buying records. They start snatching them up and, and that started a long, great relationship. And one little PS on that.
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B
Yeah.
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A
The day I walked out of Babbage's to leave and start my next company, I also at the same moment, walked onto the board of Electronic Arts, and I stayed there for 15 years.
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B
Yeah, that's great. And I know those are some Silicon Cowboys. Tripp is. Is promised to do the podcast at some point soon, too.
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A
Yeah, Trip. Trip's great. Larry Probst is great, too.
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B
I think they're writing something too.
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A
Yeah, they should be.
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B
Yeah. Fantastic. Okay, so the next question, Gary. While I was running Computer Retail Week, and as the editor of that publication, we tried to corner every top executive at every major retailer. And you guys had definitely, you know, hit the head to tier where we were. We were just incessantly hitting you up for interviews and comments about all the store growth and revenue growth. The most we could do is really report on your earnings because you would never talk to us. I finally quarter you after 40 years now or something. Why were you avoiding me? No. Okay. Computer Retail Week. And that it wasn't personal.
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A
And it was not personal, Keith and I. And half the time I felt bad and Jim would laugh at me and go, don't feel bad. So here's the truth.
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B
Yeah.
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A
The truth is we gained an incredible amount of competitive information by reading what all of our competitors told you. So we learned how to compete better, smarter, faster against them because they were very proud to give facts and figures and numbers. And we. And we decided that they had no idea something that what they felt was a throwaway line in an interview with you. They had no idea how important that nugget of information was to us. And we vowed to never speak with the trade press because we didn't want any of our numbers to get out. And in fact, we were selling as much as Toys R Us at one time. And we were leaving our competitors in the dust, but we didn't want them to know. And we were doing things very different, like, because we paid net 30. And when we got a new title, the are the publishers needed our cash. As Matt, like Electronics Boutique was known to be a slow payer. They paid in net 60 to net 90.
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B
That's retail for most of them.
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A
Yeah, but. But we had a slogan. Fast pay makes fast friends. So if you had. If you were a publisher and you had a hot title, I would come to you and say, hey, if you can get us 100,000 units at the launch, we'll pay you right then. And you know what? You needed the cash. You Go, well, Toys R Us won't, you know, let's do this. And it's like, okay, well, we won't give you that cash then. And I guess you don't need. Which is, by the way, gets into tens of millions of dollars. I guess you don't need the cash then. And then they'd come back like a day later and say, well, maybe we should talk about this. How would we do this? Would it be a wire? Then we would say, we need to be at the docks when the ships pull up with your product in them. We go straight from the ship. And we literally were doing that. No one else had even thought of that. We would go straight from the docks to a nearby warehouse. Depending on if the dock was in Seattle, Louisiana. Wherever the dock was, was. We would get space, we would break it up. And typically we would have. Two thirds of our stores would have that video game before midnight of the first day that hit the shores in the country. And so that's why customers loved us. We would take advance orders and we would have an idea based on how many advance orders we got, how many units we really could move on day one, minute one, especially if we had a jump. And I mean, Walmart went bonkers over this because Walmart couldn't move faster than two weeks. Took toys or us three days. They were bonked. You know, how is it they get it? You know, and it's like, well, you know, I guess they're just faster than you guys.
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B
You know, you could. You could have only shared with us what you wanted to share. You didn't have to give any of the good stuff, Gary.
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A
Well, that would have been disingenuous. And you would have, you know what? And I knew the book on you was, you're pretty smart guy. And that would have lasted. That would have lasted for about a nanosecond before you'd go, stop blowing smoke.
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B
Yeah, that's probably true. We had a good. We had a great team, actually. And I really.
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A
I loved your publication.
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B
Yeah, I think I owe you. I think I owe you an invoice or something for all the competitive research I did for you.
- [28:02]
A
You could have. You could have charged us for it.
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B
I should send you my Bain consulting rate. I tease, but it's great to connect now. And I think it's funny to look back on some of these things in hindsight. I know that, you know, I worked in an industry with Walmart and Fry's and Micro center, so they had very much the same philosophies about talking to media. But it would be fun. We had a lot of great back room conversations all off record and promise sure that I'd meet with Rocco if I wrote anything about him, you know, so there was just great times. And then we moved into the digital age, of course. And that kind of. Through everything from crazy or the frying pan into the fire kind of of a thing, you. At that point, I think we're moving over to Kinko's, right To. To step and run Kinko's. That was a. A crazy pivot in a way, because you had had an interim stop starting a cosmetics company. But what led you into that step, which I know eventually led to a great outcome.
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A
That's because I could see the outcome if. If we were able to turn it around. And it was a life for me. I regarded it as. I had been in training for that opportunity my entire career. When I went out in stores at Kinko's and got. Before I took the job, I probably visited 30 or 40 stores around the Southwest and I got a flavor for how their stores run, what the culture was and those sorts of things. And. And I learned a lot about the private equity firm that owned it. And I. I believe that based on my stint really at Babbage's and the culture that we built at Babbage's, that that culture was resident in Kinko's and that they would receive me. They were. They had one foot in the grave. It was. It was. I literally had a bonus if I told them within nine months to. To shut it down because they just didn't know whether to shut it down or not. And I had quite the opposite idea for what we should do going forward. I mean, to. Just some numbers for you. The prior 12 months before I started, they had a -11 million EBITDA. My first 12 months we had 120 million of EBITDA. Year two was 180 million of EBITDA. In year three, we were nine months towards 240 million when Fred Smith walked into my office.
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B
So. So fred Smith, the CEO of FedEx. But so what? I thought that they had a pretty strong brand name. Now I'm not. I'm not clear in terms of the time and place, but I've used Kinko's forever.
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A
Sure they did.
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B
So what was going on there at the time? And then what did you flip?
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A
What was going on prior was they had an incredible founder, a man named Paul Orfale, who built a company based on an entrepreneurial mindset where. And he would tell everyone in the company, you asked for forgiveness, not permission. That's how we do things around here. And he had 150 partners that if you were the Minneapolis partner, you own Minneapolis. He had a partner in Atlanta, Dallas, every major city in America. And they ran their groups as kind of fiefdoms, if you will. And that was great. But a PE firm bought them. That was a command and control oriented PE firm where every operator there, Jack Welch was one of the operating partners, the, the CEO of Emerson Electric, people out of IBM, and they believe in command and control. So they believe you walk in and you tell people, by gosh, this is how you're going to do it and if you don't want to do it, hit the road. Well, the organism rejected the CEO that they installed there, who had been the CEO of Sam's Club at Walmart and a terrific operator, but culturally very different. So yeah, my first thing I started doing was calling it the People's Republic of Kinkos proudly. But, but I would tell the PE guys and they would shake their heads, you know, they go, man. And it's like, no, we're going to run it like it's an entrepreneurial organization. And I spent my first six weeks going into 42 regions of the US and doing town halls on all three shifts because all stores were open 24 hours a day, seven days a week. And I every town hall the same way. What in the heck is going on, guys? And I gave them a little flavor for my style, which they could relate to because I was quite a bit like the original founder. And all of a sudden we started getting traction on some mega initiatives that they all agreed and that's getting into the weeds on exactly what they were. But you could understand in a heartbeat how it worked. And it ended up, it ended up being hugely, hugely successful.
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B
How's it been for FedEx?
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A
Best thing they ever did.
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B
Oh, good.
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A
It was their, their. Every package that walks into a FedEx office today tends to be a rack rate package.
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B
Yeah.
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A
Okay. If you've got an account with FedEx and you do a lot of shipping, they come by and pick up every day. Okay, you don't. So people who don't have a relationship with FedEx are going to FedEx offices and drop them off. So they paid the highest rate. So they're getting, you know, 3, 4% of their daily global in package acceptance comes through FedEx office and it's all at rack rates. So big deal for them. They didn't care if anything, they didn't care if One other copy was copied ever again because of how important it was to them for package acceptance and shipping in that sort stuff.
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B
A little bit of mixed margin portfolio management.
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A
Yeah.
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B
Well, this is great, Gary. So now you're doing a lot of work with mentoring, working with entrepreneurs, doing startup stuff, and I have a passion for that as well. So work with a lot of startups myself. I have them as my my followers here on this podcast. Give us some of your your thoughts about starting companies today as the as being a founder, what are the key the traits you have to be successful? What are some of the things that you can. You could share?
- [34:29]
A
Sure. So I am not a traditional mentor. I am an episodic mentor. That's how it has some people, friends, people I'd work with before would call and say, hey, I've got this sticky wicket. I'm trying to think how to think about it. You have some time. And it grew from there to where now I have over a thousand mentoring sessions under my belt over the last 20 years. And I guess there's a couple of things to know about me. First, especially I mean relative to mentoring first. I believe that every person in the world walks around carrying their own baggage. And inside that baggage is every good and every bad thing that has ever happened to them in their lives. And it colors their worldview. So much so that everyone views the world through a prism that is. That is the result of all the good and bad things. Prisms are as unique as fingerprints. I cannot know what your road has been in your life, Keith. So I the last thing I want to do is tell you what to do. I never my hallmark in my mentoring, I simply do not use the word should ever. And I taught I do it what I my work is very Socratic. So I'll listen to your story. And somewhere in my checkered past I've got an episode that maybe could help you think about your situation. And I literally tell you, gee, that reminds me of something I was faced with once. Let me tell you what the situation was. Let me tell you how I evaluated it, what it what was the outcome. And you can say not applicable to wow, great insight. I'll go. And then I tell stories. So I've always mentored through stories, which is how the book ended up being stories. But one. And then my only other big lesson I tell Rooms full of Entrepreneurs is whoever came up with the idea that people should pursue their passion needs to have their head examined. I mean, waste management. You think the founder of waste management cared about waste management? They, they saw an opportunity, did their work, analyze the data, put together a plan to address what they thought was a market opportunity, and they went and addressed it. And to. I see so many people, when they start talking about their business and issues they have, I try to get them to take a step back. Tell me why you did that.
- [37:12]
B
Yeah.
- [37:13]
A
Okay. I mean, what did you see that led you into that business? Because I want to try and understand it completely. And that's, that is. I don't think enough people do that. And, And I hear people say on Laura Mercier, my cosmetics company, I took the exact same approach to, to the concept in my hypothesis around a makeup artist line of cosmetics and its potential viability that Jim and I took on Babbage's. It was hardcore analysis, establishing hypotheses, testing them, and then getting to a point where I felt comfortable launching that activity. Not just, well, let's go to. In the garage and let's get to work. It's like, that's. That to me, is something that I, I just, I, I don't think is a high likelihood of success approach to starting a business.
- [38:10]
B
So you see a whole lot of startups in this day and age, and it feels like, having learned a lot about your background now with. In the book, it feels like a lot of people are taking shortcuts to launching businesses. They can still apply a certain amount of discipline to the idea of solving a problem and supporting it and analyzing it, but it still feels like it's missing a lot of the experiential layer that you put yourself through and, and would. Would take the rigors of really understanding the market.
- [38:41]
A
Yep. I agree with you. And, and, But I don't have to. I'm. I don't routinely mentor anyone. It's. I don't have something where we meet quarterly. I am the guy they call when they've got a problem.
- [38:54]
B
Yeah.
- [38:54]
A
And help me, Let me tell you what situation is. Here's how I'm thinking about it. Is that how you would think about, you know, and that. And I love that. That fills me up. And then the other part that really fills me up is leveling the playing field for people who have not had the advantages I've had in my career. I mean, I've had, you know, early days at Babbage's. I got a call one day. Guy says, hi, this is Bill Gates. I'm. I'm fascinated by what you guys are doing. Do you have time? I'd love to come down to Dallas. Maybe you and I go to dinner. Let's, let's talk. I want to understand what you're doing. And that's what we did and ended up. Not only did we become good friends over time at Kinko's, he and I did a joint skit at the Consumer Electronics show using Kinko's as the place that Bill used for his web services. Back in the early days of, you.
- [39:43]
B
Know, digitization, you had a bunch of these stories. Barry, why didn't we get those in the. Okay, I, I have taken too much of your time already. It's, it's wonderful catching up on your book tour. Are you going to come back out to Marin, your old, your old neighborhood?
- [39:58]
A
I don't know is the answer. I, I, my kids that lived there, I had one of my, my daughter's son in law and their family lived in Palo Alto for 18 years and they've now moved to DC. So I'm, I'm there in LA. I'm doing some stuff in LA. I've done some stuff here Texarkana, my homet and I'm starting to do, I've actually have some colleges and have M1 has already bought my book for all their entrepreneurial students. And what I'm doing is, I'm saying if you buy them for your students, I will come and spend a couple of days doing whatever you'd like on your campus. So that's how I'm developing kind of from here.
- [40:42]
B
We've still got a few good schools out here in Northern Cal, so if you come out, I was just gonna say be fun. Time for us to reminisce over a lunch or something too. But in the meantime, great luck with the book and all the work you're doing. It's so fun catching up here on the look back.
- [40:57]
A
Yeah. Thank you very much, Keith. Great, great time. Great questions and I am so when you reached out, I just, I think I might have even let out a. Whoa. So I'm really glad and I actually was really looking forward to this conversation. So I'm glad we've had this chance to talk.
- [41:14]
B
Oh, thanks a lot. That's why I do it. It's fun for me and I like sharing it with folks. So let's just make a point. I'll post this and share it with everybody and you do the same and see if we can't get together again.
- [41:27]
A
Perfect. Thank you very much.
- [41:29]
B
Thanks.
- [41:30]
A
Take care. Bye.