Monday, March 2, 2009

Reminiscing about Fedex and Kinko's

Well, as most of you (in the reprographics industry), if not all, are aware (or, should be aware), Fedex purchased Kinko's a few years ago, and, if I'm recalling this correctly, Fedex paid about $2.3 billion for Kinko's. Inasmuch as I'm a pauper, $2.3 billion is a lot of money to me. But, I guess it was a drop in the bucket for a company the size of Fedex. Kinko's is an interesting story itself, but that's not something I'll get into during this post. (If you want to know more about Kinko's history, I think there's information about that on Paul Orfalea's web-site (Paul was the founder of Kinko's.)

Funny story: Back in 1986, shortly after we took our first company public, I wrote a four page letter to Fred Smith (Chairman of Fedex.) In that letter, I explained to Fred that I felt there was a synergy between the "copy center" business and the "overnight courier" business - further explaining to Fred that quite a number of the customers who used our copy-center services would, right after we finished their jobs, run over to a Fedex store. I don't recall the exact details of my letter, but, the essence of that letter was an offer to Fred - if Fedex would make the space available to my company, my company would open mini-copy-centers in Fedex stores; I'd put up the money for the equipment and people, Fedex would provide the space, and we'd share the profits. (I did not say what the profit split would be.) I sent that letter to Fred via Fedex Overnight Letter. He did receive the letter, for, a couple of weeks later, I got a letter from a Fedex VP of Business Development (I don't recall the guy's name), and, after thanking me for my interest in Fedex, he tactfully explained that "they" reviewed my letter, but did not share my opinion that there was any synergy between the copy-center business and Fedex's overnight courier business. (Oh well, nothing ventured, nothing gained. Not every initiative is going to work the way you hope it will work.)

Fast forward many years (was it 17 years later?) ...... I saw a press release that announced Fedex's acquisition of Kinko's ...... and noticed the amount of money ($2.3 billion ???!!!) that Fedex had agreed to pay CDR for Kinko's (CDR = Clayton, Dubalier & Rice, the private equity group that purchased Kinko's from Paul a few years before CDR sold Kinko's to Fedex). So, me being me, I wrote a second letter to Fred Smith at Fedex. In that second letter (which I also Fedex'd to Fred), I (a) congratulated Fred on Fedex's purchase of Kinko's (wished him well, of course, since that's always the polite thing to do), and (b) reminded him that if he'd taken me up on my offer in 1986, Fedex might have been able to avoid having to spend $2.3 billion to get into the copy-center business. Well, I did not hear back from Fred (a guy like Fred, given his position, certainly cannot waste time corresponding with a crack-pot like me), but, I did, a few days after I sent my letter, get a phone call from Gary Kusin. (At that time, Gary was the CEO of Kinko's, the hired gun that CDR installed to prepare Kinko's for sale. It's my understanding that Gary remained with Kinko's for several months after Fedex purchased Kinko's, but then went on to more important things.) I had a nice chat with Gary; based on what he said on the phone, my letter was found to be at least somewhat amusing to Fred!

Anyway, there are a few morals to this story. (1) Set your goals very high; you will not always achieve your very high goals, but it is fun to pursue big goals (and during your later years in business, it will be fun to reminisce, just like I'm now doing), (2) If you want letters you send to important big-whigs to get read, send them via Fedex, and, (3) Take the time, occasionally, to think out of the box.

By the way, I've been a Fedex customer for as long as Fedex has been in business. To me, Fedex is one of the finest examples of a company that gives fantastic, very reliable, dependable service and one that makes its business extremely "customer friendly." I've used Fedex since the 1970's, Fedex has never lost any of my letters or packages (at least that I'm aware of), and, from the very first day Fedex started, Fedex has made it totally simple to use its services. This is not to say that I agree with all of Fedex's decisions. It is my humble opinion that Fedex's decision to discontinue the Kinko's name was absolutely stupid, Kinko's being one of the most well known brands in America. And, of course, I think Fedex was stupid for not taking me up on my offer in 1986 to open copy centers in Fedex stores. (You did expect me to day that, I'm sure!)

I had the opportunity to meet Paul Orfalea, founder of Kinko's, when he made a presentation, back in the early 1990's at a meeting of the L.A. Venture Capital club. Paul, one very smart fellow, is an absolutely wonderful speaker. And, a humble one at that. It is not often that you meet someone who achieved what Paul did who attributes part of his success to, well, "it was a fluke," kind of like, good things just seemed to happen. Even though I don't really know Paul (I only met him that one time), my impression of Paul is that his success was, in large part, very much attributable to his care and concern for the team members that he worked with. That brings to mind one of my ATF books, "The Servant" by James Hunter. Paul probably could have written that book.

Okay, that's enough rambling for this particular post!

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