The Prisoner & The Penguin

The notion of a brand having a noble purpose, something more than just profit or return on shareholders’ investment, is very much in vogue but as the story of FAO Schwarz shows it is nothing new.

In 1856, Frederick, the youngest of three Schwarz brothers, emigrated to the U.S. from Germany, joining his brothers in Baltimore, Maryland. A few years later in 1862, the brothers opened ”Toy Bazaar” a specialist toy retailer.

It was a success but wasn’t quite all what young Frederick had dreamed of. He had a bigger bolder vision of a magical toy emporium with one-of-a-kind toys from all over the world presented as a lavish theatrical experience.

So leaving his brothers to run separate stores in Baltimore and Boston, Frederick moved to New York City where in 1870 he opened ”Schwarz Brothers – Importers” which he stocked with beautiful toys and playthings from Europe. The business grew rapidly and became the destination for unique, high-quality toys in New York.

Frederick opened a second New York City location in 1876 to meet increased demand. He also moved into the catalogue business, creating one of the first mail order businesses in the country. Over the next 30 years, the store moved to larger, more prominent locations throughout New York City several times. By 1900, Frederick had renamed the stores ”FAO Schwarz.” They were considered by many to be the largest toy dealer in the world.

Sadly, Frederick August Otto Schwarz passed away in 1911, but his beloved brand lives on.

Towards the end of his life, he spoke about what drove him and not surprisingly, it wasn’t just money.

“I have made toys my life study … It is a splendid issue, and aside from the commercial question, there is more solid satisfaction in dealing with childhood playthings, and in knowing the joy one is sending out into the hearts of the little ones, than in selling any other commodity in the world.”

 

Footnote: In 1986 FAO Schwarz moved to its famous site at 767 Fifth Avenue at 58th Street, complete with its iconic greeters, the real life toy soldiers and the large floor piano that has featured in a number of Hollywood films. To the dismay of many New Yorkers, it has recently announced that this store will close in July 2015 due to the rising rents costs.

 

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Most companies don’t have a mission statement which explicitly states that their aim is to get you doing something other than what the brand is about all, but then Pinterest isn’t ‘most companies’.

Its origins however can be traced back to Des Monies in the early noughties when Ben Silbermann abandoned his long held plans to follow his parents and both of his sisters and become a doctor. Instead, inspired by entrepreneurs like George Eastman, Walt Disney, he decided he should to get into “business.”

By chance, he was put in the company’s IT group, simply because that’s where there were openings. Amongst the monotony of preparing spreadsheet after spreadsheet, he found himself reading TechCrunch and as he told the Alt Summit in a speech in 2012; “I remember [I] had this feeling that this was the story of my time and I was in the wrong place.”

No long after he saw the movie “Pirates of Silicon Valley,” about Steve Jobs and Bill Gates, and decided that he needed to go west as “being close to people that inspire you is a very good first step.”

Ben got a job at Google in customer support, because as he recalls it “I was more excited than the previous applicant.” However, the job wasn’t very different from his previous one; it involved analysing lots of data and making product design recommendations. It was basically preparing lots of spreadsheets all over again. Ben wanted to make products and build stiff but Google didn’t seem interested. He started complaining. Finally, his girlfriend paraphrasing Nike said, “Stop complaining and just go do it”. Looking back Ben sees this as a turning point and is eternally grateful to her: “If you’re really lucky in life you have someone to call you out on your own bullshit.”

Though at first it did seem that Ben’s timing was off; “A week later, the entire economy collapsed” and the friends who were going to join him were suddenly felt that maybe their jobs at Google weren’t so bad after all.

So Ben teamed up with a friend from college who was living in New York, Paul Sciarra and they came up with a product called Tote, which Ben describes as “a catalogue that was on the phone.”

While the concept was in many at the leading edge, “Everything seemed really hard. We couldn’t’ get money. Apps had just been released so the approval process was taking months.”

Finally, their luck changed and one investor came through with a cheque. Ben used it as an excuse to call all the investors who’d said no previously; “You’re going to miss out, this is the hot deal.” It worked and they got more investment.

While Tote was moderately successful Ben and Paul were developing another idea “I’d always thought that the things you collect say so much about who you are.” Ben says his childhood bug collection is really “Pinterest 1.0.”

 

Then on a visit to New York, Ben met a friend of a friend, Evan Sharp. They talked about the Pinterest concept. Ben remembers “It was like he was the only who understands what [I] was saying.”

Ben asked Evan to join them and he is now credited as the third a cofounder of Pinterest. It was Evan who came up with the grid layout for Pinterest.

The very first “pin” was put on the site, in January 2010.

It was picture of a Valentine’s day present that Ben was thinking of buying for his girlfriend.

Ben sent details of his new venture to all his friends in California but the reaction wasn’t quite what he had hoped for – “actually, no one got it.”

Well that wasn’t exactly true, users began to grow though Ben reckons that most early users came from Des Moines. “I suspect because my Mom was telling all her patients.”

Then in May 2010, a woman named Victoria helped organize a programme called “Pin It Forward” – a virtual “chain letter” where bloggers would exchange pinboards about what home meant to them. It was to prove a tipping point.

Suddenly people started using Pinterest in ways Ben, Paul and Evan 

Victoria, who is now the company’s community manager organised the first Pinterest meet-up and looking back Ben remembers thinking “That was the moment where I was like; ‘We’ve got it.'”hadn’t expected. One of the unexpected early boards was “Things That Look like the Deathstar” which included pictures of old teapots, puffball skirts and all manner of vaguely spherical things.

And indeed they had, the brand went from strength to strength

Nine months after the launch the website had 10,000 users.

The launch of an iPhone app in early March 2011, then brought in a more than expected number of downloads and on 16 August of that same year, Time magazine listed Pinterest in its “50 Best Websites of 2011” article.

According to Experian Hitwise, the site became the third largest social network in the United States in March 2012, behind Facebook and Twitter

And while the company sees itself as “the place to plan the most important projects in your life”, the brand’s mission “is not to keep you online, it’s to get you offline. Pinterest should inspire you to go out and do the things you love”

It is May 1970 and the classic pop song “Lola” by the Kinks is about to be released. A lot is riding on the song, the Kinks haven’t had a top ten hit for a number of years. 

It’s a great song and it begins…

I met her in a club down in old Soho

Where you drink champagne, and it tastes just like Coca-Cola

See-oh-el-aye cola

She walked up to me and she asked me to dance

I asked her her name and in a dark brown voice, she said Lola

El-oh-el-aye Lola la-la-la-la Lola

And ends…

Well I’m not the world’s most masculine man

But I know what I am and I’m glad I’m a man

And so is Lola

La-la-la-la Lola la-la-la-la Lola

Lola la-la-la-la Lola la-la-la-la Lola

But on the eve of its release, the band were informed that the BBC were going to ban it.

Given this was back in 1970 and the song is all about a romantic encounter between a young man and a transvestite you might well suspect that it was the storyline that was the cause of all the fuss.

 

However, the real reason was a completely different one. The BBC had decided that it wouldn’t play it because of the clear reference to “Coca-Cola”, which went against their “no product placement” policy.

Given that Davies had written the song to be a comeback hit for the band ; as he was to say in his autobiography, he wanted something that would “sell in the first five seconds”, he wasn’t about to let it be banned.

The problem was, back in those pre-internet, pre-sound-file days, the Kinks were on tour in the U.S. while the ‘Lola’ master tapes were back in U.K.

The only solution was for Ray to get on a plane back to London and record some new lyrics.

With a one-day gap in their schedule, Ray left after the band’s May 23^rd gig in Minnesota and flew back to the UK to record what was in the end a minimal change. The brand name “Coca-Cola” was replaced with the generic product descriptor “cherry cola”. Ray caught another flight back to the States re-joining the tour for their next gig in Chicago

The revised version, now brand-less, was approved and duly played on the BBC. It went on to be #2 in the U.K. and #9 in the US chart, the massive worldwide hit, Ray and the band so desperately wanted.

 

 

Footnotes:

Davies describes the piece as: “‘Lola’ was a love song, and the person they fall in love with is a transvestite. It’s not their fault – they didn’t know – but you know it’s not going to last. It was based on a story about my manager.” Supposedly one night, the Kinks’ manager got drunk at a club and started dancing with what he thought was a woman. Toward the end of the night, the transvestite’s stubble started showing, but their manager was too drunk to notice.

As for the champagne that was supposed to taste like Coca-Cola, Ray Davies insists it was real. Asked by a “Q” reader if he’d actually tried it, he replied “I have. I had a Californian champagne that tasted like it, in some kind of L.A. bordello tourist trap.”

Cherry Coke w though tested before was launched in 1985. 

 

The fact that D-P-R aren’t the initials of the three founders’ surnames is the first of many differences of the DPR brand. There are in fact the three initials of the founders’ first names – Doug Woods, Peter Nosler and Ron Davidowski – a more personable and accessible way to name your brand.

Doug, Peter and Ron set out to do things differently in an industry that has historically been very resistant to change.

As Doug says, “The industry hadn’t changed the way it does business a whole lot in the last 100 years. From the very beginning, we wanted to be quantifiably different and better. We wanted to be a truly great construction company … We wanted to create a new culture, a new way of doing business in this industry”

 “At the time, most people thought of construction as more like a manufacturing type business,” said Peter. “It’s not; it’s a service business.”

“We wanted to be a customer-focused organization,” continues Doug. “We’re not a hard bid general contractor; we’re a negotiating general contractor that takes care of our customers. To do that, we need great people, who are happy and willing to work hard. That’s one of the things that started us, making us different from the very beginning.”

DPR started in July 1990, with $750,000 of capital, and as well as the trio of founders, there were eight more people. Amazingly, in 2015, seven of them are still with the company.

The company is now a lot larger, it reached the $1 billion mark in less than 10 years  and in 2013, it reached $2.5 billion, but people are still central to their business success “There are many spectacular stories of individuals, who after coming to work here found out their true capabilities,” said Peter. “Several people have gone from pounding nails on a jobsite to becoming integral members of the management team. This represents success, as one underlying concept from the very beginning was to build an entrepreneurial organization, where people can continuously grow.”

Doug agrees. “One way we measure success, however, is by not letting employees down and keeping people within the company challenged and moving up.”

People are one of the pillars of DPR’s success but another is having a clear vision and sense of what they wanted to be as a brand

 Defining that philosophy really happened following a meeting in the spring of 1992 with Jim Collins, who was a Stanford professor at the time and now is a management consultant and best-selling author of “Built to Last” and “Good to Great.”

Collins helped to identify and articulate the purpose and core values that continue to drive the company today.

“We defined our purpose and established our first company mission during that meeting,” said Peter. Doug added that, “To say we wanted to become a truly great construction company by the year 2000 was like a three-year-old saying that I want to graduate from college by the time I’m 10. We do set high goals, but with the people we have in place, we know we can reach every one of them.”

The rest of their core ideology was agreed at that meeting and it is used and is true today as was then – the only change is a new stretching mission for 2030,

PURPOSE : We exist to build great things.

VALUES – DPR’S FUNDAMENTAL, INVIOLABLE VALUES AND BELIEFS:

·       Integrity. We conduct all business with the highest standards of honesty and fairness; we can be trusted.

·       Enjoyment. We believe work should be fun and intrinsically satisfying; if we are not enjoying ourselves, we are doing something wrong.

·       Uniqueness. We must be different from and more progressive than all other construction companies; we stand for something.

·       Ever forward. We believe in continual self-initiated change, improvement, learning and the advancement of standards for their own sake.

MISSION: To be one of the most admired companies by the year 2030.

As Ron has said “Our distinct purpose of building great things and the core values we dialled in on [integrity, enjoyment, uniqueness, ever forward] emulate the way we like to work and we like to live and transcend into the way we do business – Doing something different in an industry that has not always had a reputation for integrity and doing things right the first time.”

The final pillar was to ensure that they actually did do things differently

They recognised that the ‘elephant(s) in the room’ in their industry were unreliable price estimates, endless cost overruns, lawsuits, and recriminations between builders and clients and so set out to address them.

Three specific things they did were

·     The establishment of Project Mission Statements, developed by the whole team (Key members of DPR team, Representatives of client, Architects, Engineers, Sub-contractors, Vendors, Suppliers). This novel initiative is often a 3-4 day process delivering a statement of purpose, clear timetables, detailed metrics for evaluating success, team’s modus operandi and other team building initiatives

·       Then they introduced on-going, in-depth, in-person interviews during the project to evaluate performance against agreed metrics

·       Finally DPR asks its customers to rate its performance versus their ‘best-ever encounter with a construction company’

Today, DPR is one of the nation’s leading general contractors and ranks among the top general contractors in the U.S. in its five core markets of advanced technology, healthcare, higher education, life sciences and corporate office

 

It famously built the Pixar Animation Studios HQ, Charles Schwab’s data centre, Motorola state of the art semi-conductor plant and is widely regarded as the ‘best-in-class’ construction brand by industry experts.