Rolando Rosas 5:12
we’ll we’ll we’ll have to see time is going to tell because we’re certainly in a different era. They’re obviously making a comeback through retail in other ways, but it’s a digital first economy, you gotta have a good digital strategy, you gotta be able to manage the inventory, because anybody that sells physical goods in this world, and in whatever world you’re in, it ties up cash like this nobody’s business. And managing that, as we highlighted in our previous episode, that mismanagement of inventory was one of the reasons that they you know, they failed, you know, among other things, the fact that they were a little bit slow on the E commerce side, but navigating this new space, this new territory when it comes to digital first, as well as if you’re going to have a retail presence in their case, they’re trying to mitigate that risk by renting out space inside of Macy’s really watching where they put their retail footprint should pay dividends, they have a name hopefully it’s not just all parents that are walking into the stores like like us, because the kid may not have grown up like you said, Dave, with you know, Jeffrey Wright trying to remember with Jeffrey and watching those commercials. The kids today don’t watch TV they TVs are made for people like you and me. Right?
Dave Kelly 6:22
Yeah, yeah, those commercials were so misleading. I, I was always under the impression. I was always under the impression that I was going to see Jeffrey when you
Rolando Rosas 6:32
walked in. She made it feel like any moment now Geoffrey’s gonna come out the door somewhere he’s gonna pop around. Well, you know what, in today’s episode, we’re going to highlight companies that tried to make a comeback, and it did not work out so well. And specifically, we’re going to highlight companies like sunbeam what happened is sun beam. If you’re of my age, and you iron your own clothes, or you used a toaster, you’ll know what some beans and for those youngsters that are listening, we’re going to let you know what happened to sunbeam. The other company that we’re highlighting is Compaq. What happened to Compaq and the mix of competitors along with Digital Equipment Corporation, what happened to digital? It’s a very fascinating story, when it comes to trying to make a comeback. And then what are those three common elements when it comes to some of these companies that tried to make a comeback and didn’t work out? Why. And we dove in deep into the research machine into the internet machine. Trying to uncover some things as we were getting ready for this episode. Yeah,
Dave Kelly 7:39
and the research, I’d say it’s always interesting to kind of look back at some of these brands, remember the good old days, but also realize that there were there were things that were changing in the market. And some of these brands, you know, that we learned, they, they didn’t keep up with the times their competitors were coming in, they were finding more efficient ways to go to market and if you didn’t change direction with your go to market models, you know, like, compact, we’ll talk about them. You know, they got they got left, they certainly got left behind. But hey, listen, the Harvard Business Review study revealed a sobering fact employees, employees in this desk, desktop or keyboard economy that we talked about sometimes, did you know that employees can switch between 22 different apps nearly 1200 times daily, like oof, that is ridiculous. So get your get your eyes, get your mind around that the more you’re moving around, your focus is shifting, it takes a little while to kind of get back up to speed, it certainly takes a toll on productivity. So now enter Global Teck Worldwide over two decades of experience within business communications, now they’ve mastered the art of unifying communication tools for easy deployment that will cut through the clutter and reduce the effects from context switching, unleashing a more efficient and more productive workforce. So in this age of optimization, efficiency isn’t just a dream. It’s your reality with Global Teck Worldwide. So book an appointment, talk with Global Teck about your needs, find them at global-teck.com we spell tech T c k, or of course check out the link, you can click on that in the description below. So getting to some of these failed brands, Rolando, where where should we start today?
Rolando Rosas 9:26
You know, the times have changed. And as we’re getting jumping into this brands, you know, I was thinking about how quickly things change. You know, we were looking at if you just look at before we jump into, you know, you take apple, is there a classic comeback story. They didn’t fail. They are right now at the top of the heap one of the biggest, most profitable companies in the world. But you know, it took 12 years for Steve Jobs essentially to be recalled back into the position of CEO. You look at Starbucks and Howard Schultz it took about seven or eight years. And in the case of some of the others like sunbeam, which we’re going to highlight, it took less than three years to bring a CEO back, but one that they thought would turn around the company. And I believe that if social media were around back during Steve Jobs day, that he they may have brought him back in sooner, because they were they were near near financial ruin. And so it’s going to be interesting, especially look at what happened with Sam Altman recently, it only took them five days to be reinstalled. So the sales cycle for bringing back the second the second time around, or the second tour is getting shorter, and shorter and shorter, five days is not as quick as it gets. Yeah,
Dave Kelly 10:48
you know, that happens so fast. And Rolando, you and I were recording a podcast, we were talking about chat GPT and Sam Altman. And I believe by the time we were done recording that episode, news had already come out that he had been reinstated as the CEO happens so fast, it
Rolando Rosas 11:06
happened. So who knows? Right? If they were lining him up to be this, the CEO of the new innovation labs at Microsoft, and that, apparently, you know, he’s back at his old job. But I think that’s, that’s what’s happening today. It things are moving so fast, I was just looking at something else this morning, where they were talking about Facebook’s mantra of or Facebook popularizing the mantra, move fast and break things. Yep. And this article is talking about how a lot of companies in Silicon Valley as well as outside Silicon Valley, are looking at the new mode, or the default mode being something like that, or something strim extremely move extremely fast. But cautiously or something, something to that effect. So the ultimate has read coined that phrase into something similar, but the fact that now we’re in the default mode of moving fast the speed of moving making decisions, understanding the environment, and then quickly executing on that is what gets those companies out in front. Look at how many companies are were caught off guard when Chet GPD came out just over a year ago. And now it’s been a literal race. From about three months after the launch of that product, to where all the big companies that were out there, like Amazon, they’re back. They’re also in the game with AI. Now, Google also got their product, Microsoft align themselves. There’s several, there’s several others out there. But innovation is quickly redeveloping itself, it used to be that you had money, you had capital, it took a lot of money to build things and products, and you could sit for five, six years, cell phones were the same way. You didn’t have one every year, you didn’t have a new iPhone every year, that was not the case. In the early 2000s, you know, one phone could be on the market multiple years before the next version came out and replaced it. We’re now to one year, a year and a half between releases, which is a really different thing. And when you’re talking software, and development and software, AI and other things, the cycle of innovation is much shorter. So let’s jump into our case study Dave, of our of our companies that tried to make a comeback, and didn’t work out so well. So we looked into some of these, these companies, and we started looking at what were some of the common denominators when it came to it. And all three, that the ones that we looked at when we’re talking about a digital Corporation, Compaq, Toys R Us and sunbeam those are the ones that we were lining up for today, we found that at the center of it we were just talking about is a lack of innovation. And what I mean by that if we’re talking now specifically, when it comes to the digital or the Digital Equipment Corporation, like what happened to digital, well, digital failed to shift from the mainframe, which at the time was the way of the future. Right? You had IBM with their mainframe, you have digital as well. And the world was in and we’re looking at it for those that are not watching us on video and listening to us on audio. We’ve got commercial, highlighting digital and very, very Madison Avenue type of commercial in back in those days. Dave, the hardware manufacturer held all the power no because they had The resources, they had the money, they had the people, they had the technology. So you went into work where the mainframe was at, right. And undoubtedly those folks thought, you know, this is where all the actions at, but things don’t stay like that for long. And that’s what happened to digital.
Dave Kelly 15:18
Well, what’s interesting about digital as being that they were using these proprietary systems, you know, it seemed maybe like it was a strength at the time, but that ended up biting them in the butt. Digital, so I, I grew up in the Northeast 85% of the people that I knew that their parents worked for digital, and it was based in I think it was based in Cambridge, or it was right. It was based in Massachusetts, I think at their height they had hunt ethic was like 130,000 employees. But my mother was part of that organization. They, it was a huge community. Every year they do this annual, like an annual cookout, they rented an entire amusement park, everything was open. It was a big meal. That is it. Maynard. Sorry. Yes, Maynard Maynard, Massachusetts was the was their US headquarters. And then they had larger offices kind of scattered throughout New England, and probably even, probably even more, I think that’s actually when I first experienced or first time I had seen work from home taking place. I don’t know exactly how my mother was able to connect into everything. I’d like to ask her someday. But yeah, that was a very prominent organization. Look
Rolando Rosas 16:37
at look at those for those that are able to watch this on video with us. Just the, it’s just seems like this was like 100 years ago. 7719, Ethernet control interfaces are like, all of these things that are now in the cloud. And now miniaturized, right, we carry in our pocket. Dave, you and I were joking. Before we came on air. Imagine if you told your kid, the cellphone you have in your hand, I want you to plug a cable at the bottom, make sure that cable is plugged to the wall like power, but it’s not power, it’s your connection to the outside world. Oh, and by the way, make sure that nobody gets on their landline at home and picks it up. Because if they do, the internet connection is going to be disrupted. Imagine what your kid would say to that craziness. Maybe
Dave Kelly 17:30
it wouldn’t make hanging out on your phone so darn entertaining for some of these generations. A lot of people there’s a you know, there’s a brand I know we didn’t chat about this, there’s there’s a phone manufacturer called I want I think it’s I think they’re called Simple,
Rolando Rosas 17:50
simple, simple, like simple or complex, simple.
Dave Kelly 17:55
It’s like the like instead of a smartphone, they make a a simple phone, simple phone, I think that’s the name of the brand, I’d love to break into it. But what this what they’re trying to do is give you the ability to have a phone. And that’s it, you know, a phone for voice, maybe text, but not surfing around on the internet, not the power of a mainframe in your pocket. Just a simple tool for voice communications. It’s an inexpensive device, it’s not trying, it’s trying to disconnect people. That’s funny. You know, we’re in a world where we’ve been trying to innovate, to be connected into the internet, which a lot of us, it’s what we love to hate it or you hate to love it. You know, we have Elon Musk that’s trying to put the neural link in your head so that you’re connected even faster to it. So at one, you know, over here we have, we have devices that are trying to connect us quicker. And then there’s other brands that are coming out that are trying to take that away on purpose for the people that are trying to minimize, you know, being connected into the digital world. It’s kind of interesting that we have two brands offering two different products within the same market that could both potentially be successful doing that.
Rolando Rosas 19:10
Again, it’s an innovation race, especially when you’re talking about physical products now and that’s evolving to software and platforms as well. And I think that, for me is the gonna be the next revolution. And that’s that’s where we get back to digital. Digital had a great percentage of the market share. But as PCs became more popular, the clones as they were known because there was an IBM that was the first commercialized computer and everything else was a clone because they were like IBM, and that there was no other word for PC at the time, except for colognes something that started slipping under the radar as we were doing this research, you know, Dave, I was too young in the 70s or at least to know what the heck was going on with the economy and competition. But one thing that kept coming up as we were doing the research was the early days of the modem. The modem was the key, or one of the keys that unlocked an unchained the knowledge stored in mainframes and allowed it to move from the corporate desk, to somebody’s house, to another remote office, to a satellite office. And the that modem was an external modem, it was Slow as hell it was, if I’m looking at this back, in my notes, it says, In the early days of the modems, early modems fueled the fire because they they went from being slow modems at 2400 bits per second in the 80s, all the way up to 56k 90s. Wow, a whopping 56k day. Like if we were to start going back to 50, to K, or if roll it back, all you could really do is text message, I mean, just send a string of text. And I believe in the early days, that’s primarily what it was right when they started using modems was to just have kind of information move in just a string of text. And as that started getting more popular, and becoming built in to the computer, now you could know you didn’t have to carry this external modem with you or have the office. And I remember, in my early careers, there were modems, a bank of modems for a lot of folks that had computers in the office. And as then the modems were moved into what we now know as laptops, or we call laptops. That was a game changer, because now you could take your laptop home with you. You didn’t have to carry two devices. Hotels used to Dave, do you remember when hotels? They had ports for you to connect your computer over dial up?
Dave Kelly 22:05
Yeah, absolutely. In pretty much it cost a pretty penny to Yes.
Rolando Rosas 22:09
Yes, indeed. And so the ability to now send information to the office as if you were in sales and you’re traveling, you’re able to do that you didn’t have to hang out basically and work from the office the entire time. You could take your laptop go with albeit slow, you could do that. And this innovation that was happening right under Digital’s foot, you know, they had the mainframe, but they could not move fast enough to start adapting to PCs. PCs were also revolutionized by the Microsoft Software because everything was proprietary back then. And that proprietary nature is what I think one of those things that locked them into, you know, their box, we’re boxed in by our proprietary we got the mainframe, the best frame in the world. There is no way these PCs are going to take over. Oh, Microsoft, that’s what are you talking about? That’s not that’s never going to happen. But that’s what happened. Yeah, modems are getting faster, Dave. getting cheaper. Internet started getting better. And then went from the old slow days of string text to 56k. You have AOL. You have deployment of of the service available in multiple locations. And all the while digital is still there holding on to their core business of mainframes.
Dave Kelly 23:41
Well, and then what happened so digital, Digital’s holding on to their proprietary systems with product development. Their stock prices are plummeting, they’re bleeding and it was comp was a compact
Rolando Rosas 23:55
that scoop school they did do their business that Dave before that before Compaq took them in the early 2000s The modems now became faster, right so that you had DSL, DSL, nobody knows what DSL is anymore. But broadband essentially became available. But like you would set your saying yes, this started this revolution of the way business people and people were communicating at the time for work and moving information around made the necessity I would imagine they started seeing some of this but yes, they started feeling the grip they became Dave a little fish that was injured or hurt in the shark started swirl like you were talking about a compact take it over. You want to talk about compact
Dave Kelly 24:47
well you know so with digital you know they were having a hard time with their manufacturing costs. It was extremely expensive when you’re when you’re creating proprietary systems right like today. A lot of them microchips come from Taiwan, they don’t have to create these things, we can get lower cost products that will work on any platform kind of open. And if you’re a manufacturer, for like digital, for example, their manufacturing costs are going through the roof. So you have other players that are coming in, they’re embedding their modems, they’re working with open systems, they’re able to keep their manufacturing costs, forget about their go to market strategy, but just their manufacturing costs. Being lower, it was really, it was really putting digital into a world of unattainable goods and probably unattractive to your everyday consumer, you know, the flexibility of use was no longer there, with the introduction of the new technology and new products.
Rolando Rosas 25:47
Right, and, and and nipping and developing other technologies in parallel were companies like Cisco, and Oracle, so big companies, big enterprises, no longer needed to have a mainframe. If you could separate the data from the hardware, right, you can have the hardware over here, you can then take a bunch of computers and network them, which is essentially what Cisco worked on. And I think you had in the, in the in the B roll there that you were showing us Ori something that had an Ethernet card, this is now kind of the leap that then I think, was gonna be a difficult pill to swallow for companies like like a digital that really held onto the mainframe, because now networking was the thing because now you didn’t have to have these big massive computers everywhere and invest big dollars you could decentralize which is the word you could decentralize and now have many parts of the pie moved around into different offices you could move things offshore which is kind of what started also happening the early 2000 Unfortunately folks started losing their jobs because they said Well geez we can get guys with master’s degrees and gals with master’s degrees in India in other parts of the world and so you had all these factors all coming together one right after another and needless to say they were swallowed up they were us became a smaller fish got swallowed up there were a not just a smaller fish day they were an injured piece of fish or chum just like a shark going up right a shark goes after the little ones right they go after the injured ones because it’s much easier right to go and acquire or in this case a shark and go swallow up an injured seal
Dave Kelly 27:46
right well if you picture this lug the scenario where a smaller fish gets eaten by a larger fish there’s always a nother larger fish within the next frame you know you don’t see it so I thought what was somewhat interesting with the story about digital so they parts of their business were sold off and Compaq came in and my family my my mother luckily for us my mother was now an employee with compact compact had its struggles you know what I thought was interesting about compact as a kind of relates to our electronics marketplace is compact is now competing against Dell. But they had different go to market strategies compact relied on the distribution channel. They relied on the distribution channel, you know, there’s a middleman I really you know, there’s there’s a ton of value that distributors bring to a marketplace, right they into
Rolando Rosas 28:55
the into the big companies themselves, you know, yeah do because if you have, let’s, let’s say four or five big massive wholesalers or distributors selling your product, you could funnel your your essentially your cash flow comes from them. And you don’t need a huge accounting department or a Salesforce. If the distributor, on the other hand or distributors are out there with their sales team, hitting the streets, going to businesses, pitching your products selling your products, right. It’s kind of a form of outsourcing to show people call it the middleman. But companies in the 70s and 80s. And probably even earlier than that used these companies to distribute products because they didn’t have the Salesforce or the team or the infrastructure or the accounting or wanted to invest in that. So distribution allows you to forego those investments until you were talking about Dell. They change the game.
Dave Kelly 29:55
Yeah, so Dell So Dell comes in. They’re competing directly against Compaq, and they decide that their district that they’re not going to work with distribution, they are direct to consumer. And that’s low that had they were successful with that. So they were able to bring products to the consumer at a lower cost minimizing the middleman. And they did a good job with the I don’t want to say distribution, but being able to manage all of these customers, they did it successfully. They did it successfully for a long time. And
Rolando Rosas 30:35
what have gateway, that will be a gateway, right? That was the other direct to consumer. And what I can recall about gateway was that they had very quirky commercials. And they only knew what it was
Dave Kelly 30:47
that no one knew what they were selling.
Rolando Rosas 30:51
They were out of Iowa, right. There aren’t a lot of big companies that come out of Iowa. And they’ve did rise to be the third largest manufacturer at one point at the height beyond just behind Compaq. And HP. So gateway did make a lot of noise that there we go. And they were Yeah, who was gateway? You know, I don’t know who was behind those ads. But boy, they, they should look at that Dave Oh, that is a throwback. So if you’re watching this on video, or if you’re listening to us right now and the audio, we’ve got a commercial of Gateway and the kind of the quirkiness of the product. And it really made for distinguishing themselves, they could deliver customized solution to the customer, right? I want a computer because there’s a lot of people that were into I want it built this way with this modem. I want it with this software. And I want these specs and that was unheard of. And so gateway was leading the charge along with Dell in this effort. But things don’t stay the same forever. Dave, like you said, where there are big fish, then there are usually bigger fish and sometimes they have bigger teeth.
Dave Kelly 32:08
are bigger wallets right.
Rolando Rosas 32:10
In the case of business, bigger wallets. That’s true. That’s true. And so, you know, with Compaq, having issues in it’s having issues with like you’re talking about the distribution channel becoming challenged. Dell pushing the envelope gateway pushing the envelope, it put them in a position of weakness when we’re talking about, you know, their strength, their their strength was who they are. And now they became weak. Their stock started plummeting, their market share started eroding, their profits are eroding. And now Compaq. HP comes in and acquires Compaq. And it’s interesting, Dave, that when you look at what Dell and Gateway were pushing, which was direct to consumer, I mean, we it’s a buzzword now, right d to c, we take it for granted. But it was groundbreaking at the time, you know, mail order, think about that. For us, there was tons of little catalogs millions and millions of catalogs being sent through the mail from Dell, and from Gateway. And it was reaching the consumer. And they were responding. And compact took a long time. And they didn’t get there eventually got there. But they just it just wasn’t the same. The others, if we were to have used the Zuckerberg approach of move fast and break things, that’s kind of what was happening at the time with Dell, and gateway. And then another disruption came that really, really, really put the screws to all of this, Dave, if we’re talking about the compact issues, and innovation was the rise of Microsoft, Microsoft in I gotta read this to you, Dave, because this is crazy. In 1995, and this is not so much a manufacturing thing that you’re talking about. It’s part of the mix, because it’s part of the associated cost of manufacturing. In 1995. Windows arrived with massive marketing, enterprise support an integration acceleration from hardware vendors, so their products were being put inside the PCs, and they had between 80 to 90% of all PCs. pre loaded live Steve Ballmer in this commercial that we’re looking at. I don’t want to make any comments about their dance moves here. I’ll leave that up to you. They just I’ll just say that they needed some lessons before they went on stage would have served them better. Right.
Dave Kelly 34:53
The unscripted the unscripted dance. Yeah, that was kind of bad. But
Rolando Rosas 34:59
um I could not sunscreen on Sandra brothers. But think about this Dave well shouldn’t
Dave Kelly 35:03
be dancing. No shouldn’t be dancing.
Rolando Rosas 35:07
Those okay, you said it not me. I’m gonna give him a oh, there we go. And look, we’re looking at another one here of Bill Gates, man, look at Bill Gates. Holy smokes was this ad or when did where did you fish this commercial out of? What year was this that we’re looking at? He’ll tell us a little bit 1995 Oh my goodness, that seems air was gonna say 85. So in 1995 was when Microsoft’s Windows nine, obviously, Windows 95. At the 90% of of all PCs came preloaded with Windows. So the power, the power, and we see this today, there’s some parallels today, the power away from hardware into software, essentially, if we were to break it down that way, hardware, they were the kings, they were the Emperor’s, they were the dictators. They had the mainframes, they had the money, they had the power, they had the recognition, they had the prestige, they had the research, they had all the resources, right? That all changed, and started shifting to software. And Microsoft’s system allowed that transition. And so now people wanted things with a graphical user interface or GUI that looked okay, it allowed you to do some sheets and new things that you couldn’t do before everything was on, you know, typewriter than it was a microprocessor, then you know, all these things, you could go on the internet, all of this was enabled by software. It allowed you to get these pictures and images and search the internet. Did we call it Internet back then? I don’t know if we called it internet. When I was in college, late 90s. Sir, I think I think worldwide web that was the word we use back then. Right? Does that does that ring true with you? Yeah.
Dave Kelly 37:01
You know, I, I guess there was the extranet internet,
Rolando Rosas 37:06
intranet, and the World Wide Web, right? Something like that. Well, if you’re watching this, and you were around like we were old farts and dinosaurs, go ahead, drop a comment, let us know what you call the Internet in the late 90s. Because I’d love to see those comments. So Dave, so that acceleration from hardware, to software, to databases, like the ones oracle was building out, also put pressure on those manufacturers squeezed their margins. So now if your margins are squeezed, the power is moving away to software, the money’s moving into software. And you don’t keep up with the times the clock is ticking. The where’s my clock? The clock is ticking. Because the software folks eventually start winning the game. And along the way, there were manufacturing innovations and things that changed as well as a distribution channel. Right, Dave? That’s where we left off.
Dave Kelly 38:07
That’s right. You know, and what what Microsoft was also doing here is that they were creating these loyal users, it was becoming the Office Standard, you know, I’m imagining 20 years ago, looking at looking at a resume. And it would say fluent in Microsoft, this, that and the other thing, and now no one would put that on a resume because everyone is fluent in a Microsoft platforms, Windows platform, you better be fluent within that. They were they were kind of setting the stage for the future workers for sure.
Rolando Rosas 38:43
No doubt, and manufacturing would would change, you know, it used to be today. With 20 $30,000, you could make a thing, right? In enough Far East or some other country. Back in the 80s. Imagine making a modem all the time and infrastructure, all the people you need, you know, all of them usually in the same office working around the clock. That’s all decentralized. Now people can work around the world in an instant, boom, boom, boom, an engineer in Israel, a designer in the UK, you know, a support team or product management team in the Philippines, all these people can work instantly. Put that information into the cloud, spit that back out to a manufacturer in a in a short window of time. And now you’re off to the races cranking out widgets, right? That did not exist in the 80s that did not exist in the 70s that was starting to come because of the internet and then late 90s. So it took time to develop things. It took time to get things out to market it took time do all these things in time was on their in their back pocket, but not really. It was a what do you call it was a false flag. What do you call it? Blue herring error or something. Anyways, time is a double edged sword, I’ll just say that time was a double edged sword. Because eventually manufacturing got much cheaper for everybody.
Dave Kelly 40:12
And consumer demand changed people. My family had two computers growing up like two different lifespans of of a computer. But today people are calling your phone call to your computer, but people are upgrading so, so quickly. So it gives them an opportunity to switch their brand. It’s like, oh, I had it come back last time. Maybe I’ll go with Adele, Adele this this time around. So yeah, so it’s taking away some of that control, where time is no longer on that manufacturers side because they have, they have a change in in demand. And then of course, they have change of competitors that are in there.
Rolando Rosas 40:54
So I’m going to I’m going to jump off from where you’re at. So the landscape for, for for the manufacturing side, and all the costs associated was the second factor that we identified. And then the number three in every single instance in every single instance that we were looking at when we looked at both toys or we looked at Toys R Us. We met I’m going to mention sunbeam him in a second. And the likes of Compaq and Dell. That was the the third factor also played a big role, which is competitors. Competition. Dave, what happened to sunbeam? I would ask you Did you have an iron or a toaster? That had the name sunbeam on?
Dave Kelly 41:44
It absolutely did. A lot of Yeah, I remember back in the day growing up if you went into the kitchen, you’d probably see a batter mixer and definitely a sunbeam toaster oven.
Rolando Rosas 42:00
And if you’re watching later on on the audio, we have that on video. So I invite you to watch the video we have some commercials and video archive of sunbeam and all the products. They’re in the kitchen. Go ahead, Dave.
Dave Kelly 42:14
I remember going into the kitchen as a kid my mother would be making a brownies or a cake with one of those McMasters mix masters. And who wants to let you know who what is that thing even called? Who wants to lick that? What’s the name of that thing?
Rolando Rosas 42:31
piece? The piece? Is it? Is it a ladle? Is it a swirly today you go there it is look wow. But the piece that was the there’s a name for though that the mixer the attorney thing the the widget that turns their wrist, like
Dave Kelly 42:47
the West. Maybe it’s the whisk you know, but that piece of wood. Yes. I grew up in a big family. And it was you know, you fought for who got to lick that thing.
Rolando Rosas 42:58
That was our form of entertainment Dave That was for the whisk of the of the batter. I
Dave Kelly 43:05
was the least favorite child, my mother would leave it plugged in and hope that maybe I’d hit the wrong button while my face was too close to it. But she’d unplug it and take them out for some of the other children in my my household.
Rolando Rosas 43:17
I must admit, I gotta tell you, I’m not the baker in the house. I’m not I look like eating the baked good. But I’m a huge fan of huge fan of the Great British Bake Off show. I love their brand of humor. And and just, it’s just all around just like it just gets to me. I love I love watching and hearing their commentary of the judges. It’s a little bit different than our brand of reality show at the end. If you’re not familiar with this show on Netflix. At the end, there is no monetary prize, Dave. They don’t get $100,000 So winning or 50,000 they don’t they get $0 but they get as a freakin plate. That’s
Dave Kelly 44:00
where price is their drama. I think I think I tried to watch a little bit of it. You just said it’s a little different than our flavor of reality shows. And I know what I liked about it. They were just cordial friendly. Nice.
Rolando Rosas 44:15
They’re very friendly. They’re very, very funny about the whole thing and you know, you have the hosts all up in the people’s faces and cracking jokes and, and talking Brit humor and it’s funny every now and then they crack into American humor because they’ll make or bake something that’s an American version or something. And so they’ll talk about us, us Americans a little differently than then how we talk about the Brits but no, I digress. Dave I say that only for those people that love baking shows. If you haven’t checked it out, I get nothing for this but I just get pleasure in saying you know, check out the Great, Great British Bake Off. Right? I love I love I love the accent I love all the love and love that they film it out Doors Dave, I know that we’re talking about business but sharing a little bit of a window of what I like to watch when I am able to sit down at the tube when things are quiet around the house, no kids screaming or anything else. All right. All right. We got to get back to business here. We’re talking about sun beam. So in sunbeams case, just like everybody else, Dave, the competition was nipping at their heels. Competitors, like Black and Decker, like hematol, Hamilton Beach, wheezing, RT KitchenAid. You know, they tried to come back, they had a lot of problems, they faced a lot of problems. They brought in our chainsaw, Dunlap right, to revive the brand. And his approach worked for a short period of time, meaning that they were able to resume some profitability, but during the process of of cost cutting and cost cutting, and every company has to do this at some point another they have to trim some fat. It just happens. You overspent here, are you you’re looking this way. And then things are happening over here. You do. But he went very far, maybe too far and cut too much of the development too much of the innovation. It allowed their competitors to close the gap, like Black and Decker and Hamilton that were focused on the low side, and Cuisinart and KitchenAid that had a little more investment in they kept innovating in the kitchen space. Yeah. So sunbeam today still exists as a brand. They closed and filed for bankruptcy I want to say was 2011 notes in my notes here. They were then the the assets and the name was purchased by another company. And now that that company purchased that one now it’s called Newell brands, again, another one of those fish eating of fish around fish. No,
Dave Kelly 47:04
but sunbeam was sort of interesting, because I had read outside of some quality, some quality control issues and some product recalls that they had later in the brand’s existence. But they had they had kind of lost some of the consumers trust their public organization, they need to report their earnings. And I think I had read that they hadn’t. They hadn’t reported some earnings on time. Or when they did finally report some earnings. They were taking some numbers from the that the following quarter. They done some stuff to McAllen
Rolando Rosas 47:39
and kind of and against Sherman quite possibly shenanigans. So
Dave Kelly 47:41
you know, when you take that away when your product is kind of having some quality issues, and then your brand is in the news about not being fully honest with your numbers. That’s a recipe for disaster. I was joking, I wasn’t trying to make a recipe joke there. But
Rolando Rosas 47:59
Oh, hold on a second, I guess I’m for that, I give you a clap for that. Baking you know, I have in my notes about sunbeam, that their brand value deteriorated over time due to product defects and safety issues. And that that’s a killer. I mean that the PR nightmare that a safety recall as well. Whether it’s a peanut recall, or, or something electrical, or you have, like a couple years ago, you had batteries that were floating in some of the hovercraft, it’s hard to recover from something like that. And when you have like you said you lose the consumer confidence, you instantly are going to have to go on the defensive mode. And nobody wants to be in defense when it comes to PR nightmares. And that deterioration will help their rivals because they are rivals had products that they’d been working on and they filled the void and part of the cost cutting led a talent drain and it’s interesting because companies today are facing some of those issues with remote work about talent you know cost cutting and you know, you know come back in mandates for work and so we’re gonna have to see how that all shakes out. But they hemorrhage talent. And all of that was stem from this ruthless cost cutting. And eventually, sunbeam was no more even with their second stint with Al Dunlap they get the name chainsaw, actually because of his extreme cost cutting. We’ll see something Dave. No,
Dave Kelly 49:41
that’s, that’s I’ve heard of a lot of nicknames but man if you’re walking around and your nickname is chainsaw, it’s tough to want to come into the office with the chainsaw around
Rolando Rosas 49:52
the chainsaw his You don’t ever want to be called into chainsaws office.
Dave Kelly 49:58
That’s a supervillain for Sure, that’s
Rolando Rosas 50:00
right. So the other, the other, the other companies that we were taking a look at, which include compacts if we circle back the landscape and the competitive landscape for the, in the case of Compaq, Dell, and Gateway, we’re leading the way with direct to consumer, which was a game changer. Who’d heard of calling, no Support Center to talk to a specialist to talk about how you wanted your computer to be shipped out to you, that was game changing. And so, if you didn’t have just think about this for a second, Dave, back in the 90s, you’re struggling to stand up a call center, right, because you got to take calls, right, you’re gonna go to direct to consumer, that means you need a call center, right? You need a call center to be set up or call centers, plural, you need scripts, you need computers to all talk to each other to talk to the warehouses to execute on the orders to be shipped. There’s a lot of planning to make this happen, right? Because if you don’t do it, right, it goes wrong. And it goes wrong badly. What if you have a flood of customer orders, and this happens, you know, we talk to clients, where, you know, they may have a call center, but clients are waiting 10 minutes on hold, hold on, the next available rep will be on the digital or in it doesn’t even have to be a call center, it could be a doctor’s office, and they don’t have the latest and greatest when it comes to communications or unified communications to really, you know, cut around the wait times, there’s a number of ways to do that. But essentially, think about it back then. So you had you have to have hundreds of people today, you could probably do some of this with AI and stand those processes up so that you can execute on being direct to consumer can imagine, imagine if they had understaffed a call center and people are just waiting hours and hours and hours. People not gonna wait that long, right? All right, right in order in order to get that done. So Dell, and Gateway lead the way for that direct to consumer that helped contribute to compacts demise at the time. And as they were getting squeezed and started seeing that those two competitors were eating into their lunch, they became a hurt little fish. And they were swallowed up by HP. At the point where, you know, everything got absorbed. And I actually lived in Houston when that happened. And I remember a number of friends of mine that worked at Compaq. Some of them were relocated to other offices, as they started consolidating and moving departments from one part of the country to another. So that’s on the on the digital side and the compact side. So Dave, yes, the the competition is something to always be aware of. Because no body no company has a moat forever. You know, the biggest of the biggest companies have failed because they thought they had an an impenetrable moat. Technology can disrupt that the political environment, geopolitical things, new innovation, can interrupt a moat, which seemed completely impenetrable. Just think about what’s happening right now with AI. The job landscape is changing because of that, you know, there used to be, there used to not be anything in terms of job markets for folks that specialized in Google, and Google ads. Later, Amazon and Amazon ads. Ai, I think is that next frontier, most companies will implemented at one way or another, to save be more efficient be leading edge. So the changes in all three areas were common for all of these companies that tried to make a second attempt, manufacturing challenges and the cost of soldiers associated with manufacturing, distribution innovation thinks the costs associated with manufacturing the change in manufacturing so that goods can be produced at a lower cost more quickly, an innovation and knowledge spread around the world to collaborate on goods that change the game. You have competition, in the form of fish, eating smaller, wounded fish, albeit, as well as competitors that were innovating and changing the game in new technologies, new ways of communicating new ways of networking and connecting, change the game and preferences, consumer preferences along the way. So Dave did I leave any of those three, manufacturing, innovation and competition. All three of these really made it so difficult for these companies that we highlighted today that it was there was that they threw in the towel, and someone went bankrupt. And then some of them became smaller parts of, of the like gateway. They were purchased by Acer a Taiwanese company. And the Acer then phased out the gateway name, and then it no longer existed. And Acer still remains today a viable company?
Dave Kelly 55:38
Well, you know, it’s we’re dealing with very competitive markets here. And these brands, they tend to watch their competitors to kind of see the moves that they’re making. You know, what we’re seeing in our place in our space here is, you know, hp, hp made a huge move with acquiring Paulie, whom had taken over the plant tronics brand. And I don’t, you know, I think no one knows how this will shake out. But for, for certain Polly’s competitors, or HPs competitors are kind of, they’re evaluating the market, and they’re evaluating their partnerships. And it’ll be interesting to see how things shake out here. But HP is a monster that’s just become larger. And now they’re more invested than ever within this future worker, connecting people with the right device in the right. But then the right infrastructure or network, and making it easier and being more competitive. And you know, to find a hardware manufacturer like HP, pick up a whole new market of devices, you know, we’ll call it CC, you know, call center and office devices, I would never have predicted that this would happen. But watching some of the other brands that compete against them, trying to secure similar partnerships. Yeah, it’s very interesting. You know, it’s like your cut. Are you copying someone else’s playbook? Or, you know, what trends are they following?
Rolando Rosas 57:19
What times, PC makers to take note, right? Because HP went out and got Paulie, which was a combination of Polycom and Plantronics. Right. So they acquired a bunch of technology in Ohio. And now, if we go back to the gold standard, which I would say Apple is the gold standard, they are an ecosystem unlike any other. And the other week, we had another episode where we did talk about ecosystems. So if you’re chasing Apple, which in my humble opinion, HP is chasing Apple, you have an ecosystem of devices and peripherals that are all, they can all work, they can all communicate, they can all be used seamlessly, especially with all the services they have. HP now puts themselves in the position of creating an ecosystem because not just computers and laptops and other things, but they have now acquired some of those peripherals that in some ways challenges what Apple is doing. They don’t have the watch in some obvious things, right. But it does eat into that ecosystem play. And then so what does Lenovo do? They go out and partner with E POS, formerly Sennheiser and that then leaves a couple of the other PC makers that are still there. What is Dell gonna do? We don’t know. And then we’ll have to see what is job we’re going to do. We don’t know what is Logitech going to do another large company in this space, we don’t know. But what’s interesting is that the PC space Dave doesn’t stay the same. As a matter of fact, when I think about a Compaq, they were one of the first to launch a smartphone. It was big. It was very big, very clunky, you needed to use a stylus, and we had a guest on former he was a former president of blackberry, who worked at Ericsson, which later spawned out Sony Ericsson and talking about how they had an iPhone like device. Six years prior to Steve Jobs, launching it in 2006. Compaq came out and launched their version of a touchscreen but you needed to really hit the stylus hard in the operating system, which was a Windows mobile system at the time. It work. Some of the times it was a little bit buggy than it was, I would say like as big from a screen profile like the bigger samsung galaxy. So we went from small to large smartphones. Compaq had that they lost the Mojo, they lost momentum. They got bought up at HP they did transfer they changed the Name to HP on those smartphones, and is one of those things where, you know, maybe they didn’t see the the, we don’t know. I would love if you’re from HP and you were from that era and you worked on the mobile phone invite you to come on, I would love to learn more about that decision making because the business decision within Ericsson was what drove Ericsson to not execute on something like an iPhone. Six years before that, I would love to find out what drove the calculus behind, not investing on the smartphone side, which HP inherited from Compaq and then essentially ceding that to BlackBerry and then BlackBerry obviously, you know, getting hit with the iPhone. And every the whole world became different at that point. So anybody who was still out there that worked on that, hit us up on socials, we’d love to bring you in and talk more about business regarding that move. Dave, did I miss something in there that you wanted to add? Not
Dave Kelly 1:01:01
today, you know, I’m looking forward to exploring some other brands, you know, I think we could have a conversation about brands that we would like to see, you know, kind of make a comeback. We’re in a different world right now with influencers, you know, I think about some of these direct to market strategies with infomercials and things like that, and like the influencers. You know, we still have, you know, the Tony, who is the guy that did the exercise equipment, Tony, Tony, stronger, Tony Little, you know, but, you know, we live in a world where there’s more influencers, there’s more people that have these, you know, it’s
Rolando Rosas 1:01:36
an ISIS in their prime the is that Logan Paul, Paul Logan, or who’s the he’s the YouTuber turned Voxer. Yeah. Logan, Paul, Logan, Paul, look at Mr. Beast, he’s got his line of Beast burgers, festivals and his chocolate bars. And he is really the bit like the name, he is a beast. He’s taking on some real big brands. And then in the chocolate space, for sure. He’s taken on big brands and in the burger space, big brands, I think there’s room there. For those that are brave. And those that are again, we’re talking about innovation. He’s in a lot of places. And there was some big kerfuffle because he had these kind of shared kitchens that could deliver because now GrubHub, you go pick up from these kind of shared or CO shared spaces where they would cook for several brands, and they would deliver, well, who woulda thought you would not need a kitchen that has the golden arches? To deliver your brand of burgers, imagine that they’ve that’s exactly what beast burger is about trying to get some of these some they have some retail locations, but the vast majority are going to come from the ability for GrubHub and others to just take the food from these places and deliver it to your house. So you don’t need to go into the golden arches, right? Or to Burger King or some of these others, which is wild. We’re in a wild wild time right now.
Dave Kelly 1:03:09
We are in a wild time, I haven’t had breakfast or lunch. And now we’re talking about hamburgers.
Rolando Rosas 1:03:14
So knockabout wild. I love it. I love I love me some good burgers, I do. I’m not gonna lie. I do. Good burger. I’m a sucker for that. So. So today, we broke down the three common areas when it comes to businesses, and what happens when companies make a second or a second turn, or are trying to do it the second time around, even with the founder, or bringing back an old CEO, sometimes it doesn’t work out. But like you said, Dave, we’ll see what happens with Toys R Us, I’m keeping my eye on it, maybe keeping my weight my kid away from it for now, because who knows how much will spin if we walk into one of those. But he gets lots of love. So he has no shortage of of what he needs here at home from us. So we’ll have to see the jury is out there having some early success. And you know, like you said, maybe we need to take a look at some other brands, I know that we’re looking at some other brands for future episodes that did come out for the better the second time around. And so if you have a brand that you would like for us to look at and do some deep dive research as to what allowed it to thrive or somehow implode, drop us a comment. We’d love to have read that Dave and I look at these comments. We look at all of them. We read them, and we actually respond to them. So I want to thank you for joining us today. And if you’ve enjoyed this episode, I invite you to go check out our other episodes available wherever you consume your podcasts and you may want to check out the last podcast we had with Nick Bloom, Stanford economist and professor that broke down In the state of work, and remote work, and what the future holds for those companies that embrace hybrid and flexible work, Dave and I will join you in that episode. All right, and for those that are on YouTube, I’ve got a couple of extra episodes right here. If you want to nerd out some more on remote work, maybe you want to listen to Steve Cadigan, former CHRO of LinkedIn, he’s got valuable knowledge and why he’s been brought in multiple times to pitch remote work to the C suite by middle managers. Go ahead and check out that episode, as well as the others and David I will join you in those episodes. See you there.
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