Kinko’s: Paul Orfalea

27:14Summer vacation. So every summer I was broke and I had to arrange lines of credit. Yeah. But you have to also remember Xerox was so screwed up in their billing that I'd never get an invoice. So I could open a store. From the day one, I would be cash flowing. I got to bank two weeks for the payroll. I got to bank my paper bill for 30 days. From day one, I would actually cash flow in a new location. Wow. All right. So, but from what I understand, Paul, after you opened that second location, which was in Irvine, just south of LA, I think you ran into some serious problems. I think because you had decided to branch out into like offset printing, like commercial printing, sort of like making posters and menus and stuff like that.

27:59yes what happened was i bought you know offset printing equipment and cameras and i figured and i i bought a blue printing machine and that business i didn't know what the hell i was doing i didn't know how to run the printing presses the printing press would break i'd call the printing press repair person he would say no it's not the printing press it's the camera i call the camera guy he would say it's not the camera it's the ammonia from the blue printing machine it's screwing up the plates for the printing press. This business, I didn't know what the hell I was doing. I have no mechanical ability whatsoever.

28:37And it was bleeding me dry. Yeah. So I was fortunate enough around 1973 to sell the print shop and focus on the copy shops. So it sounds like that it made you realize you really needed to focus on the core product offering or service, which was photocopies. Yes. it's sort of like when you go sailing and you notice you don't have any wind, but the guy over there has all the wind, but all my competitors were doing printing and incidentally they did copying. So I wanted to join their strategy, which was really wrong. I should have stayed with copying and not done the printing. And so I think sometimes we spend our time on the hardest thing, which was the print shop where the easy money, The low-hanging fruit was in the copy shops.

29:29But a good lesson to learn early in your career, right? Yes. And as you really started to expand the business on college campuses, I guess one of the things you started to do was work with professors to essentially to photocopy chapters from textbooks. And then you would sell that instead of making the students buy the whole book. Yeah. I like to wander. So I was wandering in the reserve book room at the university. In the reserve book room in those days, the professor would say, I'm going to give you an exam. I'd like you to read this. It's too expensive. I'll put it on reserve for you. So when do you think the students went to the reserve book room?

30:14The night before the test. Right. So I put out a flyer saying, from now on, professor, leave things on file with Kinko's as well as a reserve book room. Well, these professors went crazy for the program. I'll give you an example to jump forward. Say at Ohio State, we were doing 6 % of the textbook sales by photocopying. These professors loved the program. They could teach with original material, etc. That program really built our business on the college campuses. So let's talk about expanding the stores. You get the second location and then the third location. And those you own and you could kind of manage and oversee the employees.

30:57But at a certain point, you really started to expand much faster. And I want to talk to you a little bit about this model because you did not franchise Kinko's locations. I mean, certainly it first started in L.A., the L.A. area, San Fernando Valley, and then you went into the Pacific Northwest. But it wasn't a franchise model. It was a different kind of model. Explain how you got people to manage and co-own the shops but not be franchisees. Well, a lesson I had learned with employees is I had gone to the Irvine store at 1130 in the afternoon, and it just wasn't open. You can't rely on minimum wage people to have motivation.

31:42And so I always figured if I take in a partner, the fact that they have equity in that individual location would make a big difference in the outcome, which is true. So if I had a good store, say in downtown L.A., I took my cousin Denny in as a partner and he was there. He did a great job and ran the store. So I started with partners with equity in those individual locations. You started with equity because you figured if they were just employees of mine, they don't have any stake in the success of this shop. Absolutely. And in the company-owned stores, we also had profit sharing. I believed in profit sharing.

32:23I'm going to digress or change a little bit. I own a bowling alley up here. And so I was insisting as the owner, I want profit sharing in that bowling alley. So I just went in there and I announced profit sharing. That next month, our sales went up 7%. Profit sharing does pay off. So I had profit sharing in every one of our locations. Okay. So this model that you created was not a franchise model. It was a model where basically you would find somebody who wanted to operate the store, the Kinko's location, in another city, and they would own and also finance it, and you would have a stake in it?

33:05How did that work? I, let's say, I started with my partner, Brad Krause, up in Northern California. He put up$2 ,500. I put up$2 ,500 and would start a store. He was in charge of the store. And my responsibility was the bookkeeping in the back office, the reconcile the bank statement, doing the general ledger. And so that's how I expanded. I'd find people I liked, and how I could determine how I liked them is if they had acquired the ability to save some money. And so if they could write a check for$2 ,500, I had a feeling they were good business people. But why didn't you just do a franchise model, which would have required almost no cash on your part?

33:50Well, I didn't like the model. Franchisees and franchisors are two people flipping each other off all the time. In other words, if I told a franchisee to do something, they would say, well, his motivation isn't cured. He just wants more 6 % from the top. I like the idea of sharing in the bottom line with the people. Paul, between 1970, when you opened that first shop in Isla Vista, and 1980, in that 10-year period, you expanded to 80 stores across the United States, Kinko stores. So each one of those stores, I know that some of them were fully outright owned by you, but some of them were owned by these partners.

34:30How did you find them? How did you identify? I mean, this is – today you can go online and find there's hundreds of franchise opportunities. They're advertising everywhere. You just go on the internet. How did people find you or how did you find people to expand the business across the U.S.? Well, the people working in the stores knew how much money I was taking in. Yeah. And so they would approach me about going in business. Like Jim Warren, an example. He was a great guy. One of my very first partners. He would take a Volkswagen van and drive around the country signing leases. Finally, Jimmy decided to take the south, the Georgia, Alabama, South Carolina area.

35:13So we became partners. And tell me when somebody came to you, Paul, I mean this sounds – and I'm not criticizing you. I'm just – I'm fascinated by this. It sounds really casual and almost haphazard, like it was these informal agreements in which you entrusted the brand, the name Kinko's, to somebody somewhere in America to run it. And you kept a small piece of it, but there was no corporate structure. Is that right? Is that I mean, it just kind of sounds a little kind of fly by night. You're right. It was fly by night. uh it was haphazard but but how did you control the brand when you were you know it was just 80 stores by 1980 how did you control the brand i didn't really do a good job of that and i didn't realize i had a brand but i'll tell you the key to a field-based organization with partnerships is the bank statement.

36:19The fact that I was reconciling the bank statement under my auspices, I was in charge of the payroll for the locations. I was in charge of, ultimately we became in charge of all their accounts receivable. You only do three things in business and it's really simple. Motivate your workers, understand your customers and balance your checkbook. The best definition of management is management is to remove obstacles. And I wanted every obstacle from my partners and those store managers so they could be loving the customer. So I tried to take every impediment away from the easy flow of that relationship.

36:59So basically, these were investor operators, right? Essentially, you'd find people who were willing to put up half the cash or more. You would get – typically, what percentage ownership would you get of each Kinko's location? I put up generally 60 % of the money. They would put up 40 % of the money. I could easily go to the corporation, say in Virginia, and if I didn't like the partner, I'd have a special shareholders meeting and fire the manager. So I did have control. And you have to remember, just like myself, I'm in line seeing how much money was being made. I have all my workers know how much money I'm taking in.

37:36All my customers see the customers in line. And it's easy to get a copy machine. What baffled me is how, why I didn't have more competition. Because it was like, it was like printing money. Yeah. I mean, you knew that the cost of renting the machine was X dollars. And if you charged four cents a copy, you knew that within a couple of days, you could cover the cost of renting the machine. And then the rest of the month, it was just gravy. Yes. Yes. So essentially, as you expanded through the 70s, you were doing all of the accounting for every single one of these locations and doing payroll. I can't imagine you were doing this all yourself, Paul.

38:20No, no, no. I've got to be honest. There's not too many things I really did for myself. My motto has always been, anybody else can do it better. And in my case, they can. I supervised every job in that business I had at one time. I knew how to get out of. Most people will brag about how hard they work, this, that, and the other. What I think hard work is what keeps you up all night long when you're worrying. That's hard work. You were good at finding other people who could do the jobs. You were good at identifying talent, and then it would free you up to do other things or maybe less work. Yes.

38:54and in my entire career if I went to my office four straight days and I'm talking when I go to an office I'd have a nice breakfast I'd be in there and I'd leave at four o 'clock in the afternoon if I went four straight days by the fourth day I'm nervous my hands are shaking I'm nervous I don't have the temperament to be in an office and do all that or uh take interruptions yeah a funny thing happened along the way. I had seven stores and a manager called me up and he said, you know, Paul, I got a balanced check in the mail. What do I do? And I thought, what do you mean? What do you do? You go after the guy who reads the check.

39:33And I thought, now who's stupid, me or him? I shouldn't be available for those kinds of phone calls. So I became inaccessible and there better be a damn good reason for somebody to call me. And I noticed that the phone, I couldn't get anything accomplished by being so available for phone calls. You did not have an open door policy. Never. Which some people say, my door is always open and that's a badge of honor. No. There better be a reason for you to come in and interrupt me. Yeah. From what I understand, from what I've read about you, there were some challenges with partners. I mean, of course there are going to be challenges with partners who are running the stores.

40:11They have a vision for what they want their location to be. What was, I mean, tell me about some of these challenges that you had. In 1980, I had a business that anybody could come and compete with me on. Any of my workers, any of my customers, et cetera. I had to motivate, say, the person at Fort Collins, Colorado, to want to go to work every day and do a good job. And everybody understands the meaning of the work. The meaning of the work is there is, say, a lost little girl in Spokane, Washington. The family went to the police office first, and they came to us second to do the posters. Those are powerful connections that you're contributing to.

40:57You're helping somebody get a job, somebody communicate an idea. I saw that relationship was so perfect. All I had to do is get the hell out of the way of that relationship. was it easy to motivate people if you realize it was a self-motivated business. They enjoyed and they got fulfillment from their customers. When I noticed that, it was easy for me to get back away from that business. Secondly, I had to keep our people loyal. And I had a real problem. I recognized loyalty was a real problem for me. Why was loyalty a problem? Because it was too easy to go across the street and compete with me.

41:39It was just too easy. You know, in other words, it didn't make sense for people to partner with you when they could just get their own Xerox machine and open their own shop. Easily, yes. And was that happening? Yes, all the time. I had a guy in Lincoln, Nebraska. He went down to Florida and started opening his own stores. I had a woman in Virginia that went down to Florida once again and opened their own shops. And this was at a point where Kinko, you had 80 locations, but it still wasn't the ubiquitous brand it would eventually become. No, it wasn't. So it was vulnerable to competition. Yeah.

42:11That's exactly the problem I had. Yeah. The reason I didn't choose franchise-ing is if they viewed me as a parasite from the top, they would easily go across the street and do it. Right. But I shared in the profits, and they got a good salary. They had a car. We had a pension plan for the partners. Basically, as long as you kept them happy, you could keep them loyal. Yeah, and remove the obstacles. And then as we enlarged, as we got the trademark bigger and bigger, they understood the value of the trademark. But in this evolution, the company color blue, making that decision was the first move we had towards centralization.

42:56Blue, like walls inside, like painted blue? Yeah, blue, the logo in blue. Yeah. At that point, we did go towards standardization. and for them to give up the independent power and say in Texas A &M for being green in whatever color they were to go to company put color blue I had a real battle with the field to get the company color blue but some of them wouldn't do what we wanted them to do let's say yeah we said get this I'd say you know this binding machine really works I had a guy in Colorado that if I if I said to get these machines he would never buy the machine he would just so reluctant to do anything new, where the guy, Brad, in Northern California, I tell him to buy a machine, he'd buy 20 of them.

43:41So I had to manage them differently. One, I'd have to pull back. The other one, I'd have to push. And in your arsenal of leadership, you have the velvet glove and the steel fist. And I had to use the steel fist sometimes. Maybe I did it too much. Well, I mean, but if you use a steel fist, wouldn't you risk that person just saying, screw this guy, Paul, I'm going to go start my own competitive shop? Yeah, I did. I did. But at that point, Kinko's was getting a cachet and there was some value to the trademark. Yeah. When did that start? I mean, 1980, you got 80 stores. So you're, you know, but still, like, there are large parts of America that never heard of Kinko's.

44:21So at what point did you start to really – what was the shift? Because I guess I remember Kinko's when I was in high school, and this is in the 90s. I remember Kinko's as the place you'd go to at midnight when you had an assignment to do the next day. And you knew Kinko's was going to be open. It was 24 hours. And it was like, oh, my God, I go to Kinko's and just get this like report bound for school the next day. So was that because it wasn't 24 hours from the beginning, right? Yes. A major, major organizational transformation was 24 hours. When did that happen? 81, 82. OK. We had a big battle with the field in this one.

45:11And I talked to this guy. He owned these convenience markets called Sheetz's Market in Pennsylvania. Sheetz. Sheetz. They were like 7-Elevens. Oh, they're huge. Yeah. He said something that they would close their convenience market from midnight to six in the morning because they would only do$30 in business. Yeah. Yeah. During the daytime, they would do$6 ,000 in business. He said, for some strange reason, my daytime business dropped 50 % when we closed from midnight to six in the morning. He said they were 24 hours, then they shut from 12 to six. But as a result of that, their daytime business went down.

45:5050%. And I go to sleep. Two days later, I wake up like a bat out of hell. And I go, what did he tell me? If you go 24 hours a day, your daytime business doubles, which is absolutely correct. Wow. Can you explain why? Because people can always rely on you. So I went back to the organization and I tried to get people to go 24 hours. What do you think they said? No way. No way. I'm not going 24 hours. You want me to pay somebody for those hours where I'm closed? And they were saying, I can't work 24 hours a day. Yeah, right. Of course not. So I'm pressing. It takes me about a year. I finally get a guy out of Chicago.

46:31Chicago, he tried it. He got up in a meeting and said, this 24-hour thing works. His daytime business doubled. It just kicked ass. But what explains that? I know you said it's reliability, but is that it? It just sends a signal to the brain that this place is reliable? They're always there. Wow. Let's say somebody came in at 8 o 'clock at night, and they're closing at 9, and the person doesn't want to work on a job after nine. That work, I didn't get that job. But by opening 24 hours a day, they could rely on us doing it all night long for them. And people were generally, in my business, our customers were angry subconsciously at themselves for not doing their own work yesterday.

47:16Yeah. How many late nights did I have at Kinko's in high school and college? Because you wait to the last minute. And it's midnight and my mom's mad at me like you should have done this last week. I'm going to ground you. But there's Kinkos and it's open. And it's depressing because there's no cars, no people out. You're in the Kinkos, but it's open. It's there. Absolutely. And our daytime business doubled. It was a very successful endeavor to do. Okay. So the 24-hour Kinkos really kind of changed the game here. And now Kinko's is really, the local owners are starting to see their business growing.

47:56But I guess, you know, at the same time, there were still problems with the core business, right? I mean, more competitors, shrinking margins. So there was pressure on the business starting in the mid-1980s. Yeah. I'm always fantasizing what my competition will do to me. So we have these office superstores, the Office Maxes, the Office Depots. And I kept thinking they are going to get hit and open a copy shop 24 hours a day. Yeah. And this is already in like sort of the late 80s, but then you start to see those places. I'm starting to see them. And I kept thinking, well, they have a strategic advantage because they got the stationary, which I don't.

48:38And the laser printer was coming after me. I could see it coming after me at left field. The laser printer. How was that a threat? Well, why would you ever go to a, why would you take a piece of paper and take it to a copier when it could just come out the end of the laser printer? Well, but it still was more expensive and the toner was expensive. In the mid eighties, a laser printer was really expensive. But let's say you wanted to put a little bit of red on your document, a little bit of blue. Yeah. It would cost you a dollar a copy for our color copies. Right. I saw that laser printer is the biggest threat to my business.

49:12When we come back in just a moment, yet another threat to Kinkos, a major copyright lawsuit. And Paul explains why you should never fall in love with your own business. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

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51:39Hey, welcome back to How I Built This. I'm Guy Raz. So it's the late 1980s, and Paul has grown Kinko's from a single store near Santa Barbara into a nationwide chain. But he's still uneasy about the future, and he's worried about competition from Office Depot and things like the laser printer. I kept thinking, why do you need to take a piece of paper to a copier? It can collate for you better, the laser printer. I could put spot color on it. What do they need us for? Tell me a little bit about that insecurity because I'm thinking, wait a minute. This guy has got this business. It's Kinko's. It's the 80s.

52:20I mean you expanded from 0 to 80 through the 70s. In the 80s, you go from 80 in 1980 to 480 in 1990. I'm thinking this guy is a genius. He's figured out a way to expand a business with very little money down, high margins. In the meantime, you're telling me I was incredibly insecure and constantly self-doubting. Tell me about that, about what was going on in your head. Well, when I saw my relatives, I had an uncle. He had his own business and lost it. And he basically lost his will to live. So I took it very seriously. And with my background, I didn't have that many accolades. So I never was able to take myself seriously.

53:11And I've really still, to this day, don't take myself seriously. I mean, here I had a headquarters with five, 600 people. I had 30 ,000 workers. And everybody thinks, well, because he's big, I'm sure that that's going to be a safe job. I'm the only one there thinking, I don't think we've got a future. I'm really insecure here. Wow. But that's what employees are. Employees like the sense of security of somebody else. I'm the owner. You're an owner of a business. it isn't your job to be cocky and arrogant you gotta know every little weakness and pitfalls in that business and i'll tell you something that bothers me is when a business person says i love my business that's absolute bullshit you love your family you can enjoy your business but once that becomes a love affair you lose your objectivity i never loved my business i could enjoy it but man your business is an instrument to make you happy and you own it, it doesn't own you.

54:07And so I had a real detached view of that business. Yeah. I appreciate that. Everybody should. Well, there are people who are just supremely confident in their abilities. You know, you've run across those kinds of people. The arrogant people? Yeah, I realize there are arrogant people. And I believe that there's an arrogance of education. I was always with the normal people you look at the student they go to their special little reading group they go to their special math group they're always separated from people like me the woodshot majors and they always look at me like in school like well they're stupid they're not like me they go to their elitist universities or go to their elitist colleges and there's an arrogance in that an arrogance in education that they don't trust the average person yeah well I was always with the average person, and I always felt they were smarter than the executives.

55:03But that, Paul, that chip on your shoulder is what fueled your success. What you just said right now, that chip on your shoulder, which can be an Achilles heel too, but it can be a strength, it can be a source of energy, that drove you. Yes, it did. It did. Well, it drove me, I liked money and it was a good game. I used to tell people I worked with, you know, I didn't get married until I was 36 years old. And I'd go to my mother's house and she'd say, you know, honey, when are you going to get married? When are you going to get married? When are you going to have your children? And I'd say, you know, mom, I'm tired of you asking me when I'm going to get married.

55:43So she said, okay, Paul, I'll never ask you when you're going to get married. But when I look at you, you'll know what I'm thinking. I love that. And I told everybody that story and I'm saying, I'm into it for the money. I'm not a Xeroxing monk. I don't even like to read. This is a money-making enterprise. But we did have people that I can reconvince them. It's about making money here. And my very best stores had the most happy workers, most satisfied customers. they were the most profitable. Yeah. At the time you also, I mean, a lot of stuff's going on in your life. I mean, you got married and I think, you know, within a couple of years of your marriage, you had this horrible tragedy with your first child who I think died at seven months or something.

56:38Is your son Ryan? Yes. Tell me how, I mean, he had, I guess, a congenital heart defect. And as a baby, he passed seven months, man. That, I mean, how did you compartmentalize, how did you run the business and deal with that? Tell me about that time in your life. Oh, it was just hard. He was a real special little boy. And, you know, my dad had a good quote. You know, when somebody loses someone they love, he would say just because other people go through it doesn't make it easier it's a miserable time and just going to have to go through your own period of hell yeah and the saddest part of losing a loved one is you have to comfort the people that are there to comfort you yeah and i have to actually comfort them and say well i'm okay i'm okay that was the part that hurt the most and what we did which was really stupid it is we had a private funeral.

57:39And what's good about a funeral is everybody's there at once sharing the grief. What I had to do was I had to go through it one-on-one with just about every human being I met. And I had to comfort them, which is the best thing about a funeral is you get it all over with all the sadness and you can go on with your relationships. Well, the coolest thing I've ever been called is dad. Yeah. Agree. Yeah. You've got two kids, right? Yeah. Mason and Keenan. I'm lucky enough to go this weekend to my son's baby shower. Oh, amazing. And then the other one's going to get married and he's going to have an engagement party.

58:20So I got two in one month. Amazing. All right. So let me go back to the 80s, the late 80s, just for a moment. I mean, you are, you're dealing with the laser printer threat. You're dealing with more competition. And then in 1989, you get hit with a lawsuit. Some of the big textbook publishers wind up suing Kinkos over this program that you had where you would photocopy parts of textbooks and then college students would buy them instead of buying the book. And the publishers were saying this is copyright infringement. And I mean you fought that lawsuit, but ultimately you lost. you had to pay like$2 million to settle.

59:04Yeah. And the Congress tried to codify what you can and can't copy in the 1974 copyright law. And in the law, they said it's a de minimis portion of the book. So we had all these professors signing that they were in compliance with that. And we got annihilated. But at that time, we were noticing that the commercial locations, the one in the middle of town, were taking off, and more and more technology was coming in our direction. So I almost outgrew that publishing program. In other words, you're saying that that lawsuit and what happened as a result of it essentially killed your business with a significant number of college students, but as a result, it kind of forced you to pay attention to the other customers coming in, the non-students?

59:55Yeah, and repositioning to the commercial locations with good parking. Wow. And meantime, it seems like Kinko's was a self, it was like a self multiplying cellular organism. Like it was just growing and growing, but there were, I mean, you get through this kind of this, this, this rocky period in this lawsuit, you shift away from students. And I think really in the nineties, Kinko starts to become more of a, like your office away from the office. It was like you could come, you could use a PC, you could log on to AOL here, you could do your graphic design here. Like where did that idea come from to shift Kinko's towards like being your sort of office on the road?

1:00:40It just transformed ourselves into having computer workstations. And we called it your branch office. But what always frustrated me about Kinko's is we were an operating company that sold, and I wanted to transform us to a selling company that operated. You also have to remember at this time, I'm dealing with people that are 45 and 50. You're talking about the owners, the co-owners. The owners, executives. There's new technology that's obsoleting what we used to think about the world. They're just coming after us. Also, when you're dealing with people that are 45 and 50, they got a foot in and a foot out.

1:01:20Yeah. So I was dealing with that. Meantime, you also made a decision around, I think around this time in sort of the mid to late 80s, to bring on, let's say, more of a professional kind of leader to help you, a guy named John Davis, who was a USC professor. Why did you feel like you needed help or where did you need help? We had to change the philosophy of the company that John Davis helped create. And as you could tell, a business with not a lot of formal agreements, various partners, a lot of independent thinking, I had to get buy-in to the central organization. We were talking to people that were very good with things.

1:02:06We needed them to reorient themselves to managing people. We needed well-rounded leaders. and I needed to develop a company philosophy. Our first sentence in the philosophy is our primary objective is to take care of the customer. But some of our customers are so outlandishly rude, we had to have a mechanism in our values to fire a customer. So we added in the second paragraph, the co-workers are the foundation of our success. So a manager in contemplating firing a customer could look at the first sentence and the second sentence and weigh the ambiguity of how to handle that. And this was John's charge to basically create these structures, these - Philosophies.

1:02:53Philosophies, yeah. Yeah. All right. So 1996, by that year, you had 851 locations in every single state and four foreign countries or 20 ,000 people employed. You owned a hundred stores outright, and then you had a stake and pretty much every other one. But you knew already then you were looking for an out. You were looking for some type of exit. So you found an investment firm that they would buy a 30 % stake in Kinko's. They paid$200 million, according to Bloomberg. And they essentially make some changes. I mean, understandably, they're now in control. They rolled the partnerships into a single corporate entity.

1:03:38So they're looking at Kinko's and they're like, this is a mess. It's too disorganized. How did you feel about some of that? I mean, were you optimistic about some of those changes? Because it seems like it made sense. Yes, it made sense. And they took control. But I basically took six months off. When I came back, I think when you sell your business, they shouldn't keep the founder on. It's sort of like cutting the tail off an inch at a time. and everybody who was unhappy came to me and I didn't have any influence or power to do anything about it. And they kept you on like as a consultant? No, I was chairman of the board.

1:04:13Okay. Your conflicts with them got to a point where you just, you left or I guess you parted ways. And I guess in the end, you came to an agreement, they bought out the rest of your shares in 2002 and that was it. You were out of the picture. Yes. Done with Kinko's. It was not your business. You had no stake in it anymore. Nothing. About 18 months later, they sell it to FedEx. Yeah. For about$2.5 billion. When you found out about that sale, were you angry? No. Because I have to assume that you would have made a little bit more money had they not bought you out in 2002. I was happy for the company because when I had the business, our customer service was something I was so proud of.

1:05:07Yeah. Our customer service went under their auspices, wasn't as good. And I was really, I was just as happy to get FedEx so they could have their customer service there. Paul, I mean, you are now, you know, in your 50s at this point in the early 2000s, freed of this or divested, right? And wealthy. And what did you, I mean, were you happy? Were you like, ah, I don't have to go to an office anymore. I don't have to work anymore. Because sometimes I talk to founders and they actually get depressed. They feel like they don't have a sense of purpose anymore. Like they don't have anywhere to go and they're not busy.

1:05:46And how did you feel?

1:05:51elated and liberated. I have two, you know, you have two children. One child has to be entertained by others and the other one can entertain themselves. I've always been the kind of person that can entertain myself. So I found a new purpose in my life. I teach in school, I teach at Loyola now at USC. I love the philanthropy we're doing. I believe what Andrew Carnegie said is correct. He who dies with wealth dies in sin. I'm doing a pretty good job of giving all my money away. What did you decide to do with your money? Everything goes to children. What I'm real proud of is orthodonture. If you're a title one child, you have a pathway to orthodonture.

1:06:36We fixed over the years, maybe 20, 30 ,000 orthodontures. I believe that society gets It's a compounded rate of return from a good smile. Yeah. Self-esteem, better college graduation. I'm convinced of it. If my legacy would be that every child has a happy smile, every child knows enough about nutrition to eat nutritiously, that would really delight me. Paul, when you think about this, you know, your life story, I mean, you know, I appreciate the kind of self-deprecating part of you. I think that's very refreshing and lovely. But you built an incredibly successful business, you know. You were not the best student.

1:07:22You were not the star. But then you went on to build this very successful business that had a pretty significant cultural impact. I mean, anybody over the age of 30, let's say, 35 probably, knows Kinko's, used Kinko's. I remember 2008 I rushed to a Kinko's On deadline applying for a job To be the host of Weekend All Things Considered At NPR when I still work there And I put together a spiral bound proposal Of what I wanted to do to the show I mean I got that job because I made that presentation You know And you know you did that You enabled that And so when you think about your story What you've done, what you built Where you are now How much of that do you attribute to the grind, the hard work you put in?

1:08:11And how much do you think has to do with just getting lucky? More luck. Luck has a lot more to do with life than we might think. And it also followed my strong suit, which was, I can't sit still. I'm extremely restless. That went to my strong suit. And it goes to my outlook of life. Dan Fredrickson had a quote for me once that I really liked. No one goes to work to do a bad job. People go to work to do a good job. It's up to you as an owner to want that. I told you about our customers and our workers' relationship and how fulfilling that was. So I attribute a lot of what I have to luck, to a business that went to my strong suit, and my outlook on life.

1:08:57I think people are basically honorable and decent and trustworthy, and the world is a wonderful place to live in. and you're not going to make money with the sinister view of humanity. That's Paul Orfala, founder of Kinko's. By the way, you can actually visit that first Kinko's location. There's a plaque outside the building at 6521 Pardell Road in Isla Vista, California. It's no longer a copy shop, and the place has changed hands a lot since the 1970s. At one time, it was a beer and burger joint called McBurley's, And then a bunch of different restaurants, Espresso Roma, The Spot on the Side, Dirty's Barbecue, the South Coast Deli, and just recently opened a new place called Social Eats.

1:09:47Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show and it's totally free. This episode was produced by Chris Massini with music composed by Ramtin Arablui. It was edited by Neva Grant with research help from Catherine Seifer. Our audio engineer was James Willits. Our production staff also includes Alex Chung, Casey Herman, Elaine Coates, Carla Estevez, John Isabella, Liz Metzger, Sam Paulson, JC Howard, Kerry Thompson, and Ramel Wood. I'm Guy Raz, and you've been listening to How I Built This.

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