#181 Paul Orfalea Kinkos

Summary Notes


In the episode featuring Paul Orfalea, co-author Anne Marsh, and the book "Copy This," the discussion delves into Orfalea's unconventional journey as the founder of Kinko's. Despite his dyslexia, ADHD, and a non-linear thought process, Orfalea's entrepreneurial spirit enabled him to build a $2 billion empire from a 100-square-foot copy shop, challenging the stigma associated with learning disabilities. The episode highlights Orfalea's unique management style, his superstitious nature, and his cost-conscious approach to business, which included high-margin, simple operations without inventory like Kinko's. Orfalea's story is a testament to turning perceived deficits into opportunities, as he joins a historical lineage of innovators who thrived despite educational systems that undervalued their potential. The conversation also touches on the emotional toll of selling Kinko's and Orfalea's subsequent efforts to repurpose his life post-sale, emphasizing the importance of asking questions and dreaming big.

Summary Notes

Paul's Invitation and Real Estate Adventure

  • Paul invited Speaker A to provide local information about rental rates due to his student perspective.
  • They encountered two realtors trying to follow them and Paul's superstitious behavior regarding a black cat and Pardell Road.
  • Paul assessed rental properties quickly, making offers on six and buying four, totaling $2 million in real estate within 45 minutes.
  • Paul demonstrated frugality by retrieving a dropped dime, despite holding up traffic, illustrating his principle of never losing money.

"Paul says to me, hey, do you want to come out with me? I need some local information about rental rates." "He will not let a black cat cross his path." "We saw eight properties in what had to be under an hour." "Never lose money all the way back." "He puts offers on six of them and ends up buying four."

These quotes highlight Paul's approach to business, showcasing his decisiveness in real estate, attention to detail, and superstitious nature.

Speaker A's Career with Kinkos

  • Speaker A's role as shipping manager allowed him to see the company's financial success.
  • Became a partner and sat on the board of directors, staying with the company for 20 years.
  • The story is part of the book "Copy This," which describes the founder's journey with Kinkos.

"I was the shipping manager and my job was to send out all the profit and loss statements to each of the stores every month." "I became a partner in the organization with five stores in the Bay Area, and I eventually sat on the board of directors."

These quotes summarize Speaker A's progression within Kinkos, from shipping manager to partner and board member, emphasizing the company's growth and success.

Book Recommendations and Paul's Story

  • The podcast receives book recommendations from listeners.
  • "Copy This" is about turning dyslexia, ADHD, and a small space into the Kinkos company.
  • Paul Orfalea, the founder, is described as a misfit with a unique story.

"More than half the books that I'm covering on the podcast are coming from listeners." "How I turned dyslexia, ADHD and 100 sqft into a company called Kinkos." "We're not dealing with a normal person. He's a crazy misfit."

These quotes discuss the podcast's sourcing of content and introduce the book "Copy This," highlighting Paul's atypical background and the founding of Kinkos.

Paul's Educational Struggles and Success

  • Paul's educational challenges, including expulsion and poor grades, contrast with his business achievements.
  • Emphasizes the difference between school performance and real-life success.
  • Paul's story is meant to inspire those with learning disabilities and entrepreneurs.

"Of the eight schools my parents enrolled me in, four expelled me." "I graduated from high school 8th from the bottom of my class of 1200." "Today there are more than 1200 Kinko locations across the globe, and revenues from those stores topped $2 billion annually."

These quotes contrast Paul's difficult educational background with his remarkable business accomplishments, offering hope to individuals with similar challenges.

Paul's Philosophy on Learning Disabilities

  • Paul reframes learning disorders as learning opportunities.
  • Encourages focusing on a child's strengths and interests.
  • Criticizes the education system for trying to make everyone the same.

"When tearful parents come up to me to talk about their child's learning disorder, I ask them, oh, you mean his learning opportunity." "I didn't know it at the time that I opened my first kinkos, but there's a long history of innovators and achievers who owe their particular brilliance, at least in part, to their deficits."

Paul offers a positive perspective on learning disabilities, suggesting that they can be a source of unique strengths and contribute to success.

Management Style and Sales Focus

  • Paul's management style involved being on the front lines rather than in an office.
  • He valued sales and marketing, identifying as a peddler.
  • Emphasized the importance of customer feedback and real-time market response.

"Anybody can sit in an office thinking about what people are doing wrong. My job was to get out and find what people were doing right and then exploit it." "All I knew was that I could sell what came out of it."

These quotes reflect Paul's hands-on management approach and his belief in the fundamental role of sales in business success.

Embracing Flaws and Emotional Extremes

  • Paul admits to his temper and emotional extremes, which were part of Kinkos' culture.
  • He sought professional help and medication to manage his emotions.
  • His story emphasizes the human aspect of entrepreneurship and the acceptance of personal flaws.

"I'm extremely human. I struggle with my temper." "The dark side of the Kinko story, is that the company was built, at least in part, on emotional extremes, most of them my own."

Paul's openness about his emotional challenges shows the human side of building a business and the importance of managing one's flaws.

Entrepreneurship as a Path for the "Unemployable"

  • Paul's numerous job failures led him to conclude that entrepreneurship was his only viable path.
  • He emphasizes the accessibility of entrepreneurship to anyone willing to provide value and service.
  • His mother's support played a crucial role in his self-belief and perseverance.

"It didn't take long for me to conclude that I was basically unemployable. The only hope for me was to go into business for myself." "My mom dreamed her own dreams... She never relied on the bleak assessment of others."

These quotes highlight the transformative power of entrepreneurship for individuals who struggle in traditional employment and the importance of self-belief and family support.

Early Entrepreneurial Insight

  • Paul, the subject of the story, experienced a moment of inspiration when he realized the potential for starting his own copy shop.
  • He identified a market need for copy services at the University of California at Santa Barbara, where there were no copy centers for students or faculty.
  • Without a formal business plan or market study, Paul trusted his intuition that there was money to be made in providing copy services.
  • Paul acted quickly on his idea, setting up a shop near the university with low overhead costs.

"Paul was shaking all over. He told me, Danny, I've got this great idea. I realized I could start a copy shop myself. And I knew a place that needed one. My girlfriend at the time was a student 2 hours north of Los Angeles, up on the coast at the University of California at Santa Barbara." "The place was so small, by the time we needed a second machine, we had to lug it out on the sidewalk."

The quotes demonstrate Paul's realization of a business opportunity and his immediate action to capitalize on it, despite limited resources and knowledge of the machinery.

Customer Anxiety as a Business Opportunity

  • Paul understood that his business was not just about selling copies, but also about relieving customer anxiety related to technology.
  • This insight is compared to how Steve Jobs approached personal computing and Johnny Ive's approach to designing user-friendly computers.
  • Paul's recognition of customer stress as a key factor in business resonated with the experiences of millions of customers over the following decades.
  • The story emphasizes the importance of understanding the underlying needs of customers, beyond the surface-level product or service offered.

"I'm selling a way to relieve your anxiety." "He was stressed out and in a hurry. It was a state of mind. All of us at Kinkos would come to be immediately, or, excuse me, intimately familiar with."

The quotes highlight Paul's strategic insight into the true value proposition of his business—alleviating customer stress—and how this understanding shaped the company's service approach.

Business Philosophy and Work-Life Balance

  • Paul's business philosophy included the concept of working on the business rather than in it, which involves strategic thinking and decision-making rather than getting bogged down in day-to-day operations.
  • He valued work-life balance, making sure to spend time with family and not overworking himself.
  • This philosophy extended to the idea of delegating tedious tasks and empowering others to handle them.
  • Paul's father's experience served as a cautionary tale, influencing his approach to avoid getting mired in busy work.

"You need to think harder before you can work hard." "Staying relatively inaccessible was the only way to stay on my business."

These quotes encapsulate Paul's philosophy of maintaining a strategic focus and ensuring that one's business activities align with long-term goals rather than short-term tasks.

Marketing and Business Expansion

  • Paul enjoyed marketing and sought creative ways to promote his business, such as handing out flyers and selling pens and pencils.
  • He recognized the effectiveness of simple actions and the potential for growth through grassroots marketing strategies.
  • The business expanded by targeting faculty members, which later drove significant revenue.
  • Paul's approach to business growth was experimental, trying out various business lines and focusing on those that generated the most revenue.

"I went around campus handing out flyers." "We also targeted the faculty by going into their departments and pretending we were supposed to be there."

These quotes illustrate Paul's hands-on approach to marketing and his innovative tactics for expanding his business's customer base.

Organizational Structure and Continuous Improvement

  • Kinko's had a unique organizational structure, with numerous individual partnerships rather than a traditional corporate or franchise model.
  • Paul valued the diversity of ideas and allowed for experimentation across different store locations, which led to a constant exchange of best practices.
  • He encouraged autonomy within the stores, believing that mandating uniformity would stifle innovation and improvement.

"It's almost like it's very analogous to what nature does, right? There's no top-down hierarchical systems in nature."

The quote reflects Paul's belief in decentralized experimentation and organic growth, drawing parallels between his business model and natural processes.

Perspective and Incentives

  • Paul gained perspective and renewed ambition by taking time off to travel, which led to the vision of opening a second store.
  • He believed in the importance of incentives, sharing profits with coworkers to foster a sense of entrepreneurship and shared success.
  • Paul's management philosophy centered on removing obstacles and empowering individuals rather than using them.

"I became ambitious again." "I wanted coworkers who would be empowered, entrepreneurs who tried to instill a sense. We tried to instill a sense of entrepreneurship in all of our workers."

The quotes emphasize the transformative power of perspective and the significance of incentive structures in motivating and empowering workers, which were central to Paul's management style.

Simple Business Philosophy

  • Emphasis on simplicity in business operations.
  • Focus on employee care and customer service.
  • Avoidance of overcomplicating business processes.

"He reminds me very much of like Paul. It's just like this no frills business. Just take care of your employees, focus." "On the service you provide to your." "Customers, and don't overcomplicate things."

The quotes highlight the speaker's admiration for a straightforward business approach that prioritizes employee welfare and customer service without unnecessary complexity. This philosophy is likened to that of Paul, suggesting a successful model to emulate.

Learning from Games

  • Business strategies inspired by board games like Risk.
  • Utilization of lessons from games in real-life business scenarios.
  • Expansion strategies not restricted by geographic progression.

"Our plan for expansion was a pretty simple one. I got the idea for how to grow by playing the board game risk when I was a kid."

This quote explains how the speaker's childhood experience with the game Risk influenced their strategic approach to business expansion, teaching them that geographic boundaries need not limit growth.

Importance of Frugality

  • Saving money and being frugal as key business principles.
  • Refusal to partner with individuals who are not cautious with money.
  • Frugality as a recurring theme throughout Paul's book.

"Being frugal, he says, we were really frugal. I would me, we talking about his partners at the time and him. We'd sleep in our cars to save on hotel rooms." "Spenders won't be cautious with their store profits."

These quotes convey the speaker's strong belief in frugality as a fundamental business practice, extending to the point of personal sacrifice and careful selection of partners based on their financial prudence.

Overcoming Personal Challenges

  • Paul's openness about his struggles with ADHD and dyslexia.
  • His resilience in the face of personal tragedies, such as the loss of his child.

"Paul also, in addition to putting all his warts and ugliness of him out in the book, talks about, I have adhd, I have dyslexia."

This quote reveals Paul's candidness about his personal difficulties, which is presented as a testament to his character and the challenges he has overcome in his life and business career.

Customer-Centric Approach

  • Emphasis on viewing business from the customer's perspective.
  • The importance of small details in creating a customer-friendly environment.
  • Avoiding actions that could create a hostile atmosphere for customers.

"The only perspective that matters is the customers. So he says, I never walked in the back door that was used by my coworkers. I always walked in the front door so I could see things from the customer's perspective."

This quote underscores the importance of always considering the customer's viewpoint in business operations, suggesting that even the route taken into the store can impact understanding and empathy for the customer experience.

Learning from Customer Feedback

  • The value of customer and employee suggestions for improving business practices.
  • Voicemail systems as a tool for sharing innovative ideas across the company.
  • The significance of listening to customer concerns and suggestions.

"Some of our partners created an inhospitable climate for customers. Some posted negative signs."

This quote illustrates the negative impact of not considering the customer's perspective, highlighting the importance of a welcoming environment and the detrimental effects of seemingly small negative actions.

Enjoying Work and Life

  • Balancing work seriousness with enjoyment of life.
  • The importance of not taking non-essential aspects of work too seriously.
  • Encouraging a positive work culture that still prioritizes customer service.

"Take the service you provide your customers seriously, but have fun with everything else."

The quote encapsulates the philosophy of maintaining a serious attitude towards customer service while also ensuring that work remains enjoyable and fulfilling for employees, fostering a healthy work-life balance.

Diversity of Business Practices

  • Different management styles among partners.
  • The lack of a single formula for business success.
  • The adoption of effective practices on a voluntary basis across different stores.

"And this is why we all did business differently. Dave, one of his partners, admired and sought to emulate big blue chip companies like General Electric."

This quote demonstrates the diversity of business approaches among partners and the understanding that there is no one-size-fits-all strategy for business, with each partner bringing their unique perspective to the table.

Importance of Skin in the Game

  • The desire for business owners to be aware of internal problems.
  • Contrast between salaried corporate executives and stakeholders in terms of problem awareness.
  • The notion that business is inherently about problem-solving.

"But if it's your own money on the line, you have a completely different attitude. You want to find out all the dirt."

This quote emphasizes the difference in mindset between those who have a personal financial stake in a business and those who do not, with the former being more invested in uncovering and addressing issues within the company.

Disinterest in Power

  • Speaker A expresses a lack of interest in power due to the associated workload.
  • Prefers having time for creativity, social interactions, and a focus on the business from a broader perspective.

"Not interested in power, but in the deepest sense, I'm really not. Power to me, means having to do a lot of work."

The quote highlights Speaker A's view on power as being synonymous with excessive work, which they wish to avoid in favor of other activities.

Admitting Imperfections

  • Speaker A discusses the rarity of business leaders talking about their dark sides.
  • Acknowledges personal anger issues and apologizes for past outbursts.
  • Emphasizes the importance of self-control over emotions.

"You rarely hear people talk about their dark sides, especially business leaders, which is a shame, because successful businesses aren't usually started by laidback personalities."

This quote underlines the notion that business leaders often have intense personalities, which can include a "dark side" that is seldom discussed publicly.

Philosophy and Aspirations

  • Speaker A admits to not always meeting personal expectations.
  • Discusses seeking treatment and the aspiration to improve personal behavior.

"No one's perfect. I failed to reach up to meet my own expectations."

The quote reflects Speaker A's self-awareness and acknowledgement of personal shortcomings, as well as a desire to improve.

Financial Liability and Fear

  • Speaker A describes the significant financial risks and liabilities taken on in business.
  • Despite projecting confidence, they experienced fear of failure and financial ruin.
  • Emphasizes the emotional toll of such fears on personal well-being.

"By 1990, when we had about 450 stores, I remember discovering my liability was many times greater than my net worth."

This quote illustrates the immense financial pressures and risks associated with business expansion.

Managing Emotions and Seeking Help

  • Speaker A discusses the struggle with emotional management and the impact on personal and professional life.
  • Shares the experience of taking medication for better mental health and the positive changes it brought.

"After I retired, I started taking Prozac. And believe me, it's a much more pleasant experience living in my own skin."

The quote reveals Speaker A's personal journey towards better mental health and the benefits of seeking medical help.

Dealing with Difficult Personalities

  • Speaker A and B discuss the challenge of working with difficult but talented individuals.
  • The importance of standing up to bullies and respecting passion is highlighted.

"As long as a person had passion and gumption, I could forgive a lot."

This quote suggests that Speaker A values passion and courage in others, even if it comes with difficult behavior.

Business Philosophy and Simple Operations

  • Speaker A favors businesses with simple operations, high margins, and no inventory.
  • Discusses the appeal of the copy business and its straightforward nature.

"The copy business appealed to me because it fell perfectly within my circle of competence."

The quote conveys Speaker A's preference for businesses that are easy to understand and manage.

Humility and Low Profile

  • Speaker A practiced humility and kept a low profile during business growth.
  • Believes in focusing on financial gains rather than seeking public glory.

"I always told my partners to give the glory and take the money."

This quote emphasizes the philosophy of prioritizing financial success over public recognition.

Knowing When to Walk Away

  • Speaker A reflects on the difficulty of leaving a business after years of investment.
  • Discusses the emotional toll of selling a business and the identity crisis that can follow.

"No matter what anyone says, walking away from something you spent 30 years nurturing is going to take a toll."

The quote captures the emotional challenge of detaching from a long-term business venture.

Life After Selling the Business

  • Speaker A describes the changes and challenges faced after selling the business.
  • Discusses the need to repurpose oneself and find new missions in life.

"For emotional reasons, I just can't go inside the stores anymore. I don't know if I ever will again. It's too difficult for me."

The quote expresses the lingering emotional attachment and difficulty in moving on from a business once sold.

Definition of Success and Family

  • Speaker A shares a personal definition of success centered around family relationships.
  • Stresses the importance of maintaining family time despite business demands.

"I always believe that the definition of success in life is when your kids want to spend time with you after they've grown up."

This quote reveals Speaker A's belief that true success is measured by the quality of one's relationships with family, particularly children.

Continuous Learning and Curiosity

  • Speaker A advocates for lifelong learning and maintaining a sense of curiosity.
  • Encourages asking questions and embracing a youthful mindset.

"Learn to be immature at least some of the time. It's taken me my whole life to figure out that I don't have all the answers."

The quote suggests that maintaining a curious and open-minded approach to life is valuable, even into adulthood.

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