#060: Leatherman – Is it a tool?  Is it a knife?  That was the problem.

Why did it take ten years to make the first sale? How did they grow to sell over three million tools a year? I'm not sure I could have done what Tim Leatherman did. Dave Young: Welcome to The Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom-and-pop to major brands. Steven Semple is a marketing consultant, story collector and storyteller. I'm Stephen's sidekick and business partner, Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us, but we're highlighting ads we've written and produced for our clients, so here's one of those. [Jim's Razorback Pizza Ad] Dave Young: Hey, welcome back to the Empire Builders Podcast. Dave Young, along with Steve Semple here, and we're talking about the Leatherman tool, which is, man, I'm going to let you just run with this because it's like somebody that finally made a Swiss Army knife useful. Stephen Semple: Leatherman was founded by Tim Leatherman, hence the name. Dave Young: Wait, that's his name? Stephen Semple: That's his name. I know, when I first saw the Leatherman, I thought, oh, this was made by some guy who worked with leather and things along that lines, but no, Leatherman is his last name. Dave Young: Oh, how cool is that? Stephen Semple: Yeah, it was founded by Tim Leatherman. In 1982, they made their first sale of $175. The next year they sold 200 tools, the following year, 30,000 tools, and two years after that, so basically in 1986, 4 years after that first sale, they were doing 160,000 tools. Dave Young: Amazing. Stephen Semple: Then in 1993, basically 10 years after that first sale, they hit the one million tool mark. They had been basically growing at a 50% a year growth. Today, they do about three million tools a year and the business is estimated to be worth $100 million, and it's still 100% owned by the founders. Dave Young: Oh, no kidding. We're recording, we can see each other on camera, but I have this Leatherman. I don't know, I've had this sense probably their early days. I don't know if it's got a date on it. Stephen Semple: Yeah, they're cool tools. Dave Young: Yeah. Stephen Semple: In many ways, they feel like this real overnight success, where they go from one tool to 200 tools, to 30,000 to 160, to three million. That first sale that they did, it took them seven years to make that first sale happen, seven years of zero sales. Here's what ends up happening. Tim grew up in Portland, Oregon, and he got a degree in mechanical engineering from Oregon State. At university, he met the love of his life, Chau. After graduating, he moved with her back to Vietnam, because she was Vietnamese. While in Vietnam, he noticed that there was all these kids that had these roadside stands that could repair just about anything. He realized he couldn't repair things, and so he looked and he goes, "My degree's really not practical. I really need to figure out some practicality," so he started taking things apart and fixing them. Stephen Semple: Now, just before Vietnam fell, he managed to get himself and his wife and their family out and they returned to Oregon, but once they settled in Oregon, they decided, he and his wife, he and Chau decided they wanted to travel Europe. In 1975, they decided to travel around Europe, especially Eastern Europe. They had heard the best place to buy a really cheap ass car was Amsterdam, so they went to Amsterdam and they paid $300 for this Fiat. The way he describes his Fiat, he says, "Think about a Volkswagen van and reduce it down by two thirds, and that's your Fiat." It's this little, tiny vehicle. Stephen Semple: They do this 10-month trip traveling around 17 countries. He had this little, like you were saying, Swiss Army knife, this little Boy Scout pocket knife, Swiss Army style. He used it for everything, for fixing things,