How I Built This with Guy Raz – Kinko’s: Paul Orfalea

Intro

In this episode of “How I Built This with Guy Raz,” host Guy Raz interviews Paul Orfalea, the founder of Kinko’s. Paul shares the story of how he built Kinko’s from a small copy machine shop into a nationwide chain. He discusses the challenges he faced, his business philosophy, and the lessons he learned along the way.

Main Takeaways

Entrepreneurial Spirit and Early Ventures

• Paul Orfalea’s parents encouraged him to develop money skills or school skills.
• Paul had a history of starting his own businesses, including a vegetable stand.
• Paul knew from a young age that he wanted to start his own business.

Founding Kinko’s

• Kinko’s was founded by Paul Orfalea in the early 1970s after he saw a long line of people waiting for photocopies.
• Paul realized he could capture a large share of the market by opening his shops near colleges and universities.
• Kinko’s required very little startup capital and charged 4 cents a copy, which added up.

Expanding Kinko’s

• Kinko’s expanded to other locations, targeting college campuses as their market.
• Paul faced financial challenges and had to arrange lines of credit every summer.
• Kinko’s implemented profit sharing in every location, which motivated partners to work harder.

Challenges and Successes

• Kinko’s faced a major copyright lawsuit and had to adapt to changing technology and customer needs.
• Paul emphasized the importance of not falling in love with your own business and maintaining objectivity.
• Kinko’s was eventually acquired by FedEx for $2.4 billion.

Life After Kinko’s

• After leaving Kinko’s, Paul found a new purpose in life through teaching and philanthropy.
• Paul is proud of his philanthropic work, particularly in providing orthodonture for underprivileged children.
• Paul believes in the importance of fostering a positive relationship between customers and workers in a business.

Summary

Entrepreneurial Journey and Founding Kinko’s

Paul Orfalea’s entrepreneurial journey began at a young age, with his parents encouraging him to develop money skills. He had a history of starting his own businesses, including a vegetable stand. After noticing the popularity of photocopy machines in college, Paul founded Kinko’s in the early 1970s. He saw the opportunity to capture a large share of the market by opening shops near colleges and universities. Kinko’s required minimal startup capital and charged 4 cents a copy, which proved to be a successful business model.

Expansion and Challenges

Kinko’s expanded to other locations, targeting college campuses as their market. However, they faced financial challenges and had to arrange lines of credit every summer. Despite these challenges, Kinko’s implemented profit sharing in every location, motivating partners to work harder. The company also had to adapt to changing technology and customer needs, including facing a major copyright lawsuit. However, Kinko’s continued to grow and eventually caught the attention of FedEx, who acquired the company for $2.4 billion.

Life After Kinko’s

After leaving Kinko’s, Paul Orfalea found a new purpose in life through teaching and philanthropy. He is proud of his philanthropic work, particularly in providing orthodonture for underprivileged children. Paul believes in the importance of fostering a positive relationship between customers and workers in a business, emphasizing the value of customer service and employee satisfaction.

Conclusion

Paul Orfalea’s journey of building Kinko’s from a small copy machine shop to a nationwide chain is a testament to his entrepreneurial spirit and determination. Despite facing challenges along the way, Paul’s business philosophy and focus on customer service and employee satisfaction contributed to Kinko’s success. Today, Paul continues to make a positive impact through his philanthropic work and shares his insights with others through teaching.