How I Turned $5,000 Into $2.6 Billon

Top Revenue Year

What was the top Revenue year you had while you were running the company three billion?

How Did You Spend All That Money

How do you spend all that money? I bought this goddamn airplane to be a big shot. The next day the entire publishing industry in the United States of America sued me.

Expectations

What was your expectation from the beginning? I was in there for the money. Business people, they say they love their business, but you can’t let that business own you; you own it. With that being the case, was it all worth it?

Introduction

Today we are at the house of billionaire founder Paul Orfila, who sold his company Kinkos for over a billion dollars. In this video, we dig deeper into his story, what it’s like living the billionaire lifestyle, and how did you take Kinkos from zero to billions in sales.

Paul Orfila’s Introduction

Hi, my name is Paul Orfila. I’m the founder of Kinkos that sold a company for not enough money. Not enough money, yeah, you never sold it for enough. In 1997, I sold it to a firm in New York, actually a bunch of dumps from New York. They ended up selling for 2.6 million billion, 2.6 billion dollars, yeah, the FedEx. And then did you own a part of that when they filmed? No, I kind of got out of it by that. They, I, they, I think if you sell your business, piece of advice is leave right away because it’s like selling the business, cutting the tail of a dog an inch at a time. You’re just there being tortured by having no authority but a lot of aggravation. And they’ve people, when you sell your business, they’re more concerned with loyalty than performance, and they fired really good people, the new ones from New York.

Sale Price

How much did you sell it for to help you? We sold for maybe a billion and a half.

Becoming a Billionaire

How was it to become a billionaire? And I don’t have that much now because I give it all away. I’m doing a good job of giving my money away. I don’t believe it. I, you know, there’s so much need out there. I kind of feel guilt-ridden hoarding and having much. And I don’t remember the possession freak contrary to what you might see here, but I’m not really a possession freak.

Background and Money-Making

Well, maybe taking a step back so we’ll get to the building and get to that part of the story. But, um, how did you make your money, the word, the Kinkos? How do I make? I was a saver my whole life. I’m not a very good reader, and I had a lot of problems at school. And I kind of figured out I’d have to do with my savings account with children. You have your children ought to be successful in either one of two ways. They had to be good in the school thing where they’re a doctor, lawyer, or something with their education, or they may be good with their money. And I was always saving my money and trying to figure out how Paul made his money.

Other Investments

What to do with my money. So I was a saver. And did you make the majority of your fortune through Kinkos? Oh yeah, if I’ve made other ways of making money too, but I did that. I’d love to hear.

Investment Strategies

Well, I’ve always vested in stocks, equities, and real estate. I think when you start your career, you have all your money in your business. Do you get a load or you have liquid instruments like stocks and bonds because the best way to destroy your business is not turning money into cash and not paying your bills? Then you get a little older, you have a third year business, a third in equities, and a third in real estate. Then when you want to retire, it’s paid off real estate, a little bit of stocks, stocks, and bonds. And if you want aggravation, you can still have employees.

Growing Kinkos

How did you take Kinkos from one store? Like how did you make it a billion-dollar business? We did. When I left, it was about three billion. Yeah. I guess, you know, what if people ask you that? How did you be when you’re four years old? How did you get to be 20 years old and so tall? You just do it. I mean, it just happened. Every day I’d go, and I’d try to make it better. One of the things I’ve always approached my job as, things went beautifully without me. But whatever I did every day, I made it better.

Building a System

So if I didn’t go to work, things ran. I had a system where it ran without me very well. Well, I think for you it may become a little more naturally. I think for there’s a lot of people out there that are like, “I’d like to explore entrepreneurship. I’d like to make a billion dollars, or I’d like to have.”

Distinguishing Kinkos

So the Kinko thing, like what was your expectation from the beginning? Like, for example, like when I started my company, I just wanted to make a few thousand dollars and be able to live and work the way I wanted. Well, when I started, I was in there for the money, and it was always for sale. You just, I sold it in 1997, but every day that business was out there was for sale. Your business is an instrument to make you happy; you own it, it doesn’t own you. And it’s a fundamental thing, I think a lot of businesses do, is they, business people, they say they love their business, you can enjoy your business, once you love it, you’re losing your objectivity. And you can’t let that business own you, you own it.

Competition and Experimentation

A lot of other people like, so my father sold copiers growing up, so we were like, you know, rabbits, yeah, yeah, he had a competitor around it, so as a kid, we’d always go to different stores, and everyone was around facsimile boards or those back in the day. But I guess how did you distinguish Kinkos to be able to become a billion-dollar business?

Like there’s a lot of other people competing against, well, every day, I think, you know, experimenting how to try it. My marginal cost was 17 cents, I sold for a dollar. I was throwing loose nickels at things. But what happens if you get a bigger business with like 25,000 employees, they become very defensive, and they do these stupid things called reviews, and it becomes very punitive. And I try to instill at risk-taking more and more in the culture, but it’s hard when you get kind of executive items in there.

Top Revenue Year

What was the top revenue year you had while you were running the company? Last year I was there about 3 billion in paper sales, and like copies and prints and posters, stationary film processing.

Successful Experiments

What were some of the experiments you enjoyed that worked that didn’t work? I’ll start with, I never gave myself too much to do, and I was wandering constantly in every store. My job was going toward a store, looking for what people are doing right. For an example, we went to San Diego, and they did a calendar. They took 12 pictures and put them on a calendar, a color copier. We sold $30, they sold for $30 in December, and December’s a lousy month. That was a great discovery; we exploited the calendars throughout the country.

One day, when I first started, I was in the reserve book room on a university, and most people don’t know what a reserve book room is anymore, but it’s where the professor leaves things on file at the Reserve book room and expects you to read it for the test. Well, most people go the night before the test to get the book, and it’s not there, and a flyer. And I told the professors they could leave things with Fi on file with us as well as a reserve book, and the professors went nuts with the program. And we expanded to all 50 states, and we were doing say six or seven percent of the textbooks at Ohio State.

Becoming a Billionaire

I guess I’m trying to think, do you think anyone could become a billionaire? Well, I’m not a billionaire. Did you become a billionaire? No, never. I’ve never been one. I’ve just given away all my money. But at the time, like, no, never. Remember, most people will brag about that. I think you’re just underplaying it. I don’t. I would say if somebody says that, I just think of my children’s security or being kidnapped or… If you need any more of the transcription or have further questions, please let me know.

Humility and Avoiding Boasting

And braggadocious, that’s just not my nature. Yeah, I don’t disagree. Yeah, because I, my parents had a saying, my dad made women’s clothes, and my dad would say, “Your business, if business is good, complain. If business is bad, boast.” So, I’ve always been leery of the boasters. And then, you know, also, if you’re boasting and you have all these “look at me” cars and all that, people are envious. They’re not really proud of your success. They’re a lot of times very envious. And you don’t want to, as a matter of intimacy, set yourself up for jealousy. And in the Jewish culture and the Arabic culture, they have the evil eye. Yeah, you don’t want to set up the evil eye.

Reaction to Selling the Business

How do you feel people reacted or how did you feel when that sale happened? I felt great. I got off my financial, all my financial problems. I’ll tell you a funny story, my wife over here, bought an ex-wife, it’s about a TV cabinet for $35,000, and it always pissed me off that cabinet was so goddamn expensive. I was very upset with the cabinet. I was on hawk banks. I had debt, debt, debt, debt, sold the business. I’m happy with the cabinet. I’m happy with the cabinet.

Relief from Responsibility

So you actually felt relief, it’s not like you felt relief from yourself, yeah, yes, having to… I didn’t like responsibility, you know, when you’re younger, responsibility is kind of cool. Then there’s a thing called burden, which… there’s a fine line. Responsibility is kind of cool. Then you get older, it becomes a burden. And I got to that point in my late 40s. I just didn’t enjoy all the responsibility. You know, people, they go to work with you or for you; you’re sort of responsible for, and you want to make sure they have health care and pension, and you care about your people. And not just the caring just got to me too much. Like I remember going to San Antonio, and a woman had four kids, and she was working in the store, and I kept thinking, how does she have it? She’s single. How does she have any sanity? So those are the kind of things that got to me.

Liquidity and Peace of Mind

But it sounds like selling made your life a lot easier. Oh, yeah, yeah. I think liquidity makes life a little bit easier, not worrying about paying your bills. That’s… I had 30 years of business where I was worried about paying my bills, and I got real tired of it. I think that’s… I’m kind of surprised because like Kinko’s is selling three billion dollars a year, we expanded every year with internal money. I never took outside money, and we were a subchapter S.

Avoiding Group Investors

I was always expanding with my internal capital. I never liked the group investors; I just don’t trust them. You know what an investor is? He’s like a hitchhiker. You pick up the next thing, you know, you run out of gas, you need something, and they take over the car.

Work-Life Balance

Do you wish you worked less? No, I worked enough. I didn’t… I actually, that’s a good question, okay. I worry if hard work is worried. I was a hard worker, but putting many, many hours at work, I wasn’t there. I was always wandering and worrying. That was my job.

Was It Worth It?

Was it worth it, all the work and the worrying? No, at the time, you could… it was in my 40s, I didn’t sleep right, my neck always hurt, and I had bad gas. Now, I don’t have any gas, I sleep like a baby, and my neck doesn’t hurt. Stress caused a little bit of problems.

Regrets

What regrets do you have in the time? Well, I was under so much pressure financially. I didn’t say enough thank you, so I worked with really wonderful people, and I didn’t say thank you enough to them. I see Deanna, Dan, and CeCe, I think you thank them, and they’re the president of the company, and CeCe works very closely with me in my personal life, but I never really thanked them enough.

Gratitude

What’d you say, I have to say thank you, but at the time, I was not… I just… you know, when you’re in the middle of it all, it’s just hard to be grateful. You’re just so… have so much pressure; you’re just like, “Hey, we’re focused on work, here’s things, our problems, we got no…” I was just internally focused on paying my bills and all that, and I… I was jovial and very convivial to the managers. Managers, they… they did like me because everything I did was to placate them, please the managers of the store, with the executives, they could feel my fury a little bit.

Was It Worth It?

I guess with that being the case, was it all worth it? Oh, yeah, yeah. I think I had two choices in life. I could have been right here I am now, or I would have been homeless. There’s no place in the middle for a guy like me.

Overcoming Challenges in Education

Why? Well, I can’t read very well. I… second grade, I flunked second grade, and I had the blue palette. My man… she paddled the hell out of me. Third grade, had to go to school with, uh, in Hollywood, eight kids in the class, two were 18 years old. I kept thinking, like, “Why? I’m eight years old. Why am I at school like this?” Then I had to go to reading, I had to go to an eye doctor three days a week, and finally, I learned how to read.

Graduating Despite Challenges

My parents said every word I have read cost $50, and I graduated from high school eighth from the bottom of my class of 1200. And the United States draft is the reason I’m a college graduate, plus I wanted to go to college. It was a great place to grow up, so I graduated.

Advice for Aspiring Entrepreneurs

What advice do you have for someone who’s starting out that wants to be an entrepreneur? I was thinking about that. Well, go to your soul and see if you really want it because it’s a lot of sleepless nights and a lot of uncertainty. Maybe you’re better off just having a job. But you’ve got to go to your rubber ducky in your bathtub and say, “Do I really want this aggravation?” It really is a lot of sleepless nights.

Dealing with Ambiguity

And how well do you deal with ambiguity? You found out that you enjoyed it. I had no choice.

Final Thoughts on Entrepreneurship

Oh, it would have been nice if I didn’t have so much uncertainty. It would have been nice if you just went there and it just worked real well, like a machine. It didn’t…

Perfection in Business

That’s always interesting in business because I think from the outside, we think it does. Like when you watch someone, you’re like, “Oh, that must be just perfect.” But I guess the inside, no, no, no, no, no. Business is an art form. If Da Vinci came back and said, “Wow, man, I think I could have done some more pink in that picture, a little more blue,” they’re artists. It’s always can be done better, then you’re never done, it’s never perfect, it can always be improved.

First Job and Entrepreneurship

What was your first job? What was the first, like, business you started? The first job I had, I went to the market and bought some strawberries and sold door-to-door. It’s about nine years old. I just bought them at the retail store and sold them. I always do door-to-door stuff. I respect personally, that’s my favorite, if anything I like the best of sales.

Learning Sales

How did you learn to sell? I don’t know, you just do it. Sell newspapers, you just… us, just I sold, you know, the Easter Seals, or the Christmas stamps. I used to hustle while I was in grade school. It just came easy to me, I don’t know how, I just sold. One thing I was thinking about for you is how many, because you did, you know, you sold Kinko’s for a billion and a half. You don’t like what I said? I do.

Balancing Pride and Arrogance

Alright. My parents, or my mother and father, would shake in their boots if they ever knew I was bragadocious about something like that. I guess I’ve always thought, like, what’s the line between bragadocious and like being proud of what you accomplished? Like, I think bragadocious is like, “I made all this money, and look at all these things.” Because I think for myself, I feel similar, where I’m self-conscious about it, but there’s probably a fine line between pride and arrogance.

Superstition and Not Taking Oneself Seriously

You’re right. But I’m superstitious about taking myself seriously. And when I do, I always get my ass kicked. You know, an investment, you think you’re dead, mistake, that’s when you get your ass kicked. When did that happen? Oh, one day I had to get back to school in January, and I had all the money I needed, and the money I needed to get me through the summer. And I’m driving back from L.A., I live in Santa Barbara, and think of myself, “God, I’m doing really well.” I’m just, myself the next day, the entire publishing industry in the United States of America sued me. And I thought, “Man, the next time you take yourself seriously, you better not.”

I thought it was just such a coincidence, foreign just a lot, every time in the stock market, I take myself seriously, and I think I’m gonna get my… I just get my ass every time, it’s too good to be true, I get my escape buying real estate. I bought a farm, it’s just too good to be true, it just always happens.

Unfortunate Farm Experience

Oh, five-star, how about some Farm avocado thing up here? I cannot imagine a damn avocado Orchard, and the people came in and stole all my avocados. I couldn’t do it; it was a horrible thing. And yeah, I had no business in that business. How much was the fine?

Balancing Confidence and Humility

At the time, it was about three million dollars. And then what did you end up selling it for? About three million, yeah. Not so bad, but it was a lot of aggravation. I think the part that you’re saying that I resonate with is being mindful of your… it’s not bravado, but having the balance of humility to being a beginner or being able to experiment and wonder and not thinking that we are so great. And it’s also good to have some confidence, though. What you’re also doing, way down deep, are you, and my soul back when I started, and I wasn’t too confident.

I was always insecure, and I was always paranoid about the guy across the street wiping me out. Always. And most of the people I worked with were in the business, and they loved it. I was always across the street looking at that. That was my vantage point, and I knew every strategic weakness we had. That’s where I spent my time, fixing those weaknesses or just understanding them, fantasizing what a competitor would do to kick my ass. My dad was in women’s made-with-dresses. If you’re in the fashion business, you understand, people knock you off. That’s a cutthroat business. You understand competition is out there to kick your ass.

Finding Your Business’ Weaknesses

So what do you do against them? What do you do against competition that’s more…? I thought of me. You have to remember in microeconomics, the definition of pure competition: easy entry and exit from the market, a homogeneous product, and price is the reason you bought. Well, when I started, the government up the street had a better contract for the Xerox machine. They had subsidized labor and free rent. How am I going to compete with a copy? A copy is a copy. It’s white paper and a bunch of crud on a black piece. How do I compete with this? So I had to outsmart the school. I would look down at longer hours, gave great customer service, had synergistic products like binding and stationery with the copying.

What Makes a Good Store

I grew up on Kinko’s, it was cool to be able to… that was awesome. Which store? San Jose. There’s also one in Austin. We have FedEx Kinko’s, it was good. Stores in Austin? Yeah, San Jose. We had good stores. Those were really good stores in Austin. What makes it a good store? That’s what I had to study all the time. I spent all my time in the good stores, understanding why. That’s interesting. I didn’t go to the past stores because if you have executives, they worry about the bottom 10, but I was always studying why someone was successful.

The Importance of Good Managers

And I… I was always studying. Houston, we had two stores in Houston. I had bad parking in both of them. They were so successful. What made a good store was the manager. The morale of the manager, man. It was a manager-centric business, and I could take a good manager and put up an ambassador and become a good store. I could take a bad manager, put him in a good store, and become a bad story. What made a good manager, it’s kind of an ethereal quality. I could tell when I walked in the stores. I could see it in the eyes of the workers. I could just tell if I’m going to have a good visit or a bad visit.

Balancing Pride and Humility

And then also I’d look in the little sun-text. Goddamn it, I got so many issues, I had that business. I was fighting them all the time. You’d walk in the store, my dad took me…

Paul’s Business Ventures

I did a lot of different businesses. I had coffee shops, espresso, cappuccino, before Starbucks. And I was going to try to put them co-located with us next to Kinko’s. And then we did a 24-hour dry cleaner. Now, wouldn’t you go to a dry cleaner where they spoke English and open 24 hours a day? So, I wanted to open up these trip centers where you had 24-hour businesses. But I did… oh, I started… here, I’ve been to Berkeley, yeah. Do you know Top Dog? Yeah. What do you notice in Top Dog? Small grills clothes. Did you notice how many people were in line? It’s always crowded. That might be an indication of success. So, I did… I tried to knock off Top Dog here in Santa Barbara. I screwed up because we did it in the middle of Skid Row.

Other Businesses Paul Started

I did data mining businesses. I did… I did so many businesses. Most… a lot of them failed. What are some of the other ones that didn’t work or did work? Just trying to think of them all.

How People Should Live Their Lives

If you had to describe how people should live their lives in decades, how would you think about that? Because I have a good answer for that. Yeah, my mother said, “Honey, in your 20s, try everything. In your 30s, figure out what you do best. And in your 40s, make money for what you do best and try not to do too much. In your 50s, and then another thing about your life is when you’re in your 20s, you really do care what people think about you. You get to be 40, you don’t really care what people think about you. Then you get to be 60, you realize, no one thought of you in the first place.” Bob Hope said that.

The Role of Luck

That’s interesting because I feel like you would have succeeded no matter what. And I guess it depends on how you define success too. No, I don’t think so. I was lucky. Luck has more to do with life than you might think. Luck has a lot more to do with it. What are some of the luck…? I’ve got… oh, I opened the first location that has a garage, and it happened to be in the main artery of the campus. Without luck, the publishers, when I lost the lawsuit with the publishers, they had an injunction that I was able to stay in business. They liked us. Oh, just one time I was lucky. I don’t know if this sounds really weird, but I was in the top of a 12-story building, and I was dropping Coke bottles on a…

Enjoying Wealth and the Pursuit of Happiness

So you sold your company for some number that we’re not going to talk about, and we’re not going to call… Oh, I thought that was you. You’re still looking for a billion and a half. How have you enjoyed the money? Oh, it’s easy. What I enjoy is… Oh, you don’t understand the luxury of waking up every morning and not worrying and thinking about what you want to think about. I like that part the best. I wake up every day with a clean slate of something I didn’t have to do yesterday or worry about yesterday’s problems. And I… It’s interesting. I… I’m going to talk about tenses. In your organization, the owners are in the future, managers are in the present, and accountants are in the past. So, I was always in the future, and worried about stuff tomorrow. I like that a lot.

Is Pursuing Billion-Dollar Wealth Worth It?

What are ways that you got to enjoy the money? Because a lot of our audience is younger people who aspire. They… I guess part of the question is they’re like, “Is it worth it to try to work my ass off to make a billion dollars? And is that the life that people should aspire to?” Is that a blue book because it was a billion dollars? You know, sooner or later, you’re going to wake up with yourself, figure it out. It comes from within. And what’s really sad is you wake up with all that same miserable person you started with. You look at these movie stars, they say to themselves, “God, I’ve got everything. It makes me happy. How come I’m still a miserable movie star?” That’s just kind of… And I’m being smug about it. I’ve got enough money to live a comfortable life.

Enjoying Wealth in Unconventional Ways

You think so? Well, I could be smug about it. What are some of those silly ways you spent your money? Or the most fun, or weirdest ways that you’ve enjoyed… or something like… I mean, you have a tank in your backyard. I love it. Taking a police car. But that police car out there cost me $5,500, and the tank cost me $8,000. I’m proud of that. I got a good deal on them. What… what other things like that… I bought this goddamn airplane to be a big shot, and that thing cost me more than the airplane because to be a big shot, I had to have projects around the country, flying constantly, you know?

Silly and Costly Expenses

Justify the big-shot airplane. No, that… that cost me a lot of money. More than the airplane. A lot more. Being a big shot. And when I sold the business, I became a big shot, and I did a lot of real estate developments I shouldn’t have gotten into. I started investing in equities, buying portions of companies I shouldn’t have been doing, yeah. So, I… big shot. I just didn’t… it just didn’t work.

Contentment and Wealth

That, overall, I would have been contented with just buying good old stocks and bonds. Being contented with the income property you have. What was the plan or how much was the plan that…? Oh, the plane wasn’t but $22 million. Do you want to hear a good story about that plane? No, I think we can cut… I think, yeah, of course, I think it’s so interesting because people dream like… it, yeah. You’re cutting right now. No, no, I’m joking. I’m joking, duh. Like, this is super interesting. These big damn companies are stupid. If you know their accounting procedures, you can take big-time advantage of them. I’m going to get back to the airplane. But I used to go to Xerox, and I’d say, “Oh, Xerox, you’ve got this fantastic new machine. I want to buy 400 of them, and I’ll pay you the list price. I’ll pay whatever you want, but all I want you to do is extend the service contract for four years.”

And they would… what’s a machine? A machine is just a damn bunch of metal. All I want to do is get the copies at the end I can sell. So, they would give me these machines, and I get four years, 24-hour free parts and maintenance, and I blast those things 24 hours a day. So, with the airplane, this is during the recession when… uh, the bad Bush wanted to get reelected. The warmonger in Bad Bush… uh, he had 2004, 50% depreciation. So if you buy something, you got to write off 50% of it. So, I went to the airplane company. I said, “Hey, you know, by the way, I’ll pay your list price. Just give me four years or three years of free service.”

Well, an airplane costs every time… an hour, it costs $300 an hour for parts and tires and all that. Or $400 an hour. I blasted the hell… I had to pay for as much gasoline, and I had a chartering business, so I made some good money in the chartering business. But, uh, that’s why I bought the airplane. But also, I was on the airplane a lot. Being a big shot, it should cost a lot of money. You still have the plane? No, no. I don’t want to go anywhere. I’m sort of done with hotel rooms. Get tired, try going to the bathroom and end up going to a closet in the middle of the night. I just got tired of it.

Happiness and Self-Acceptance

I guess when I’m at… This question might sound strange, but are you happy today? Oh, yeah. Happy. Super happy. Yeah, I… You work out your demons as you get older. You know, you’ve got a lot of internal demons. Everybody does in their 20s, 30s, and 40s. But now I’ve accepted myself. I think anxiety and ambition are the best of friends. So, I was very… I had a lot of anxiety and ambition, and the anxiety sometimes overwhelms you. It makes you sort of introspective and insecure. And I was rejected a lot in school. I couldn’t read. Oh, I had bad zits. I don’t think the girls particularly liked me. And so you come from that background as a kid. You still have that with you. You know what’s interesting? You always have the 13-year-old and the adult, and they’re always fighting. The 13-year-old is vulnerable, insecure, and the adult is always fighting with that 13-year-old, no matter what you do in life. And finally, after a period of time, you get older. You know how to put the 13-year-old in his proper place. I think about that a lot, just about accepting ourselves, like just accepting whatever way it is, across the board, for everyone. It’s hard. It comes with time and age.

Impact of Family and Money Management

We have… And then you get married, you’re… not children yet. After you’ve raised your children, you could… It’s a lot easier because you know you’ve done the sperm bank thing. Coming back on the plane because I do think there’s also some interesting pieces there. What other… other things that you… you maybe didn’t spend money well on? Liquor. I drank too much. Uh… My first wife was a good spender. She spent money for all of us. And, uh, my… my… Lord, am I married to now, I really admire because she’s frugal, and she manages her money. And I do expect frugality. How did your wife impact when you’re running the company? How did that impact positively or negatively? And then, having a family as well. Uh, I have to say it bluntly, but every time things got really bad, she was the most difficult. And I…

Paul’s Lowest Moments at Kinko’s

I knew I was going to get sued by the Publishers sooner or later. I didn’t want them in the Ninth Circuit because they considered Californians in the courthouse kind of like not more like carefree. The Second Circuit is New York, and I never wanted to give the damn Publishers jurisdiction in the Second Circuit. But we had that publishing program, and we did the Second Circuit, and they got me in their backyard. And the judge just… he just gave us a verdict. It was an injunction that she told the Publishers, “You can write the injunction.” And, you know, you remember regarding Bill… Oh, I forget the guy’s name. He saved my business. His name was Chimler. He saved my business.

Paul’s Advice on Becoming a Millionaire

Use your eyes and your intuition, but unfortunately, we’re too damn rational a lot of times. It’s intuitive, and we don’t trust our instincts. Why does a customer want to buy something? I think a lot of people aren’t cut out for their own business. My biggest problem at Kinko’s was we had two or three workers in the store, and the leader of that store knew everything about things. I left a business with 40, 50 workers in the location, and the leader of that business knew a lot about people, not things. Some people feel comfortable managing things, and some people feel comfortable managing people. Don’t try to do it. If you’re a “thing” person, don’t try to be a “people” person.

Introduction and Background

McNeill their report on TV, oh what happened? Well, he, I went to a, uh, I was, it sounds like a break, I was at the White House getting a word for being a lousy student, and Jim Lair was there waiting to see the president. I went up to him, I said, you know I really liked your TV show about your heart attack and the pastrami sandwiches, and he said, you know that’s of all the things I’ve done on TV that’s the one people remember the most. So, years later, I got the publishing, the Publishers sued me, and they invited me to be given an address to all the textbook manufacturers, and Jim Lair was there the night before giving the Keynote, and he gave a plug for us, and that’s what I think saved my business because the next day I gave a speech, said I’m so sorry, forgive me, I didn’t know that Maricopa, Maricopa, Maricopa, and they wrote an injunction I could stay in business but I did have criminal sanctions if we screwed up again I could have gone to jail.

Business Endeavors

So what were you saying you’re doing like copying textbooks or we were taking, you know let’s say I teach you on a little bit of this book, this book, this book, it was called anthologies or they wanted to teach you or like in the case of New York, we try to argue that one-third of Doris Kearns Goodwin book was fair use which was like that is legitimate taking of a book, a copyright well we obviously lost that for what do you think what do most people not know when you become very wealthy, what because I guess I was wondering do people contact you a lot like hey Paul let me get some money or like do people say hey you should buy a plane now like what happens when you become oh.

Wealth and Charity

So they ask you for charity or buggy a lot my favorite is do you care about the poor people, the starving people in Ethiopia, what most people don’t know about being wealthy, like what are you going to say no I don’t care about them or I care I don’t have the money for them I can’t cure that problem so uh that’s some of the stuff you get or just some will do you mind if I talk to you about a business opportunity so I’m pretty good at getting out of work and I’m getting at it I’m pretty good at getting out of those conversations but I think it’s a lot of nerve to ask me for charity some of these wealthy folks here ask me for charity I think come on you’ve got to give your own money and I have my own pet causes.

Charitable Causes

What are they my main is uh in California we have this horrible sales uh way of funding Public Schools the fancy one that is my neighborhood gets 37 000 per student per year two miles away is a school in a more impoverished area they get ten thousand five hundred dollars a year tell me that is in any way Fair so we try to equalize the the poorer schools we uh I have an ortho we have an orthodontist program where we help fix the children’s Title One children’s teeth and it seems to me that you have quality uh Orthodontia, you can have a happier life, better and carless incarceration, better college graduation, Etc so uh that’s one of my pet projects I think maybe if I before I die I’d like to make sure every child has a pathway to orthodontia especially in The Superficial California where you are engaged by your smile.

Teaching Money Skills to Kids

Yeah, how did you raise your kids with them like how did you that’s a good question yeah, how do I teach my kids money skills yeah okay when they’re six years old or five years old give them five dollars a week and they had to keep a log three dollars for spending a dollar for giving and a dollar for savings so if they would go like to some place and say Dad will you buy me the Coca-Cola I said yeah you got your own light why don’t you buy yourself one they’re selling no no I can’t afford that and then they my wife was ex-wife was into the school thing which I wasn’t they knew that I was about saving the money and what to do with your money as a child they would do a lemonade stand over here a lot of people do lemonade stands in front of their house they’re stupid I put it right in front of the supermarket Mike we sold 200 dollars of the cookie I saw some of the damn cookies lemonade I just went inside and bought the lemonade from the market and uh I take them right away to the bank and I don’t always asking about their savings I take it then when they were eight years old I haven’t worn a suit and tie and see a stockbroker and I’d left the room so the my kids fortunately have good money skills I think it’s very important and a lot of parents aren’t doing the thing about money skills they’re letting the stupid grade the schools dictate their children’s happiness 100. like I was raised very similarly where it was like we’re gonna give you a bank account we’re talking about money and it’s just it’s shocking how many people have no clue it’s unbelievable yeah and I don’t think they’re Street Smart like they’re you’re on the streets of LA I was right in the middle of LA and you understand Street smarts of money one thing I was curious like how do you think did Legacy impact your decision making in your career yeah like how you thought you wanted to be remembered no I didn’t care about that crossed my mind and I could remember anyway 100 years ago [Laughter] yeah I think sometimes it’s like we’re probably none of us are even remembered no I don’t think that’s what you live for and then you think of it all the universe and how insignificant we are on the universe I’d think about that sometimes.

Afterlife and Faith

What do you think uh what was it like before I was born and uh before I was born was there a god I don’t whoever was I and then where am I going to be after I’m dead I hope there’s somebody to go to but I think about that a lot of what Infinity is now Infinity could be one second in between one second is infinite so you could have Infinity of happiness or being with God in just one second I’ve been thinking about that lately I had like been I’ve I really admire people with a strong faith because it is a big comfort I get what do you want to happen or what do you think happened I’d like to go to financial heaven but uh and so if you get if you have the ability to go to like an expression it would be nice I I you know what Christ said once that it’s harder for a wealthy person to go to heaven than it is for a camel to fit in the eye of a needle so uh I kind of don’t think when I look at these fancy churches I don’t think Christ was in the fancy churches IQ is more like a down-home uh hang loose I’m a forgiving type person I just don’t recognize Christ and how the religious right review his presence I mean I just don’t get it I’m taking a step back

for someone.

Becoming a Millionaire

How do you think someone today can become a millionaire if that’s something that’s what they’re this is your eyes use your eyes and your intuition but unfortunately we’re too damn rational a lot of times it’s intuitive we don’t trust our Instinct why does a customer want to buy something and uh I think a lot of people aren’t cut out for their own business my biggest problem at Kinkos we had two or three workers in the store and the leader of that store knew everything about things I left a business with 40 50 workers in the location the leader of that business knew a lot about people not things some people feel comfortable managing things and some people feel comfortable managing people don’t try to do if you’re a thing person don’t try to be a people person and it reminds me of the Maytag repair person.

Responsibility and Business

the spouse will say why don’t you come become promoted manage the other repair people and they have a nervous breakdown some people aren’t cut out for it. I do office hours on YouTube for free. I’ll do like, uh, once a month.

Can someone ask my mom? My mom likes showing off, and they asked her, they said, “Do you think everyone should be an entrepreneur?” and it was the first time I realized that people shouldn’t actually be it, like it’s really not for everyone. Like there’s some people like honestly being an employee or working for someone else is actually a great thing. Yeah, I guess I was assuming that everyone has a chance. What I stuck a course at Harvard for three weeks for three years, and then they, uh, talk about like-mindedness. Entrepreneurs think everybody’s like them, but they aren’t. People like predictability, which that would have been nice in my career.

Generating Business Ideas

How do you use curiosity to come up with business ideas, and how did that help you come up with Kinkos? Well, I was at SC, and they were in line at SC making Xerox copies, and I figured, why? I want the same people, uh, be in line in Santa Barbara, so would that complicate it? They’re lined here, they’re lined here. I didn’t have to take a lot of LSD and ruminate over the damn idea. What are you observing in terms of business ideas in today’s economy? Oh, there’s so many, but the kids are too highfalutin.

They want to do all these highfalutin things. It’s just down and dirty stuff. Like every time you park your car, why isn’t somebody washing it for you? Why don’t you go to the place and say, “I’ll put a car wash for you, charge of forty dollars. You’re going to lunch two hours later you get a car wash.” I mean, why? What’s happening? What’s happening, all that little hustle. So, I’m, uh, yeah, I’m a hustler. I like to sell and I like to get down and dirty.

Injecting Fun into Business

One thing I noticed with you in business and just and how you live your life, it seems like you, I’m impression meeting for a few hours, you like to inject fun. And I also, when I hear you talk, what I admire is you talk about work-life balance as well as having fun with what you’re working on, not just like it always has to be a grind. Oh yeah, because to be successful you have to have three things in balance: work, love, and play. And here, it’s a tripod. If you work too hard, your tripod’s screwed up. But you have to have a balance, and I really did strive for a balance. I really enjoyed my children. I played a lot with them, and, uh, I didn’t worry when I was supposed to worry at night, but when I was there, I was there with my family.

Giving and Recognition

How did you inject fun in the Kinkos? Oh, it’s very important in the culture. Alcohol, um, [Laughter], no, because people loosen their lips, and alcohol, and that we would have a company picnic, or five people throughout the country to come into the picnic. And the theologians of the business woman making a convention. It’s a picnic, a celebration.

Every anthropological organization has a pig roast, you know, they do something to celebrate once a year. And so it was just a celebration. And, uh, most people don’t understand also, liquor is a great way to have intimacy and fun in a business. That was something you used in interviews. You said for job interviews, I would always interview somebody. I’d like to see, and I’d like to see what they were like. He’s taking to dinner. I’d like to see what they were like, what they, where they had a few drinks in. Latin, they call it in Vito Veritas, and wine, there is truth.

Traditions and Rules

What other traditions did you have at Kinkos? Oh, you have to have traditions. Um, a picnic, we would celebrate anniversaries, celebrate a lot of things. My the guy I worked with, Dan Fredericks, was really good about giving recognition. I wasn’t that good at it, and it one of my Machiavellian scenes was, give the glory, keep the money. People do a lot for glory, for recognition. Tell me, words, give the glory, keep the money. People look at the military. They give you a stupid little feather, and you can’t wait to go out and attack a machine gun. If you couldn’t offer anybody 50 billion dollars to attack a machine gun. How did you give glory at Kinkos? A lot of recognition pins and, uh, memorabilia and plaques and all that. They’re very important in the culture of a business. People really want to be recognized.

Challenging Rules and Responsibility

You also don’t seem like you’ve, and my person you don’t follow a lot of rules or you don’t want to be a part of rules as much. I hate the rules committee, yeah, so you had a human rules team or I guess HR. HR, that was a thing that got to be so big it ended up taking so many desks and I never understood what the hell that we needed HR for.

And one time they came to a group of us like a board meeting, and maybe there were 20 people in the room, and the HR department came in and said, “Oh, we had zero lawsuits last year for the HR, like firing people and stuff,” and everybody’s going, “That’s really good. That’s really good.” And I said, “I want to predict a bunch of lawsuits. That means you’re keeping a bunch of deadbeats in these stores. I don’t want that zero lawsuits.” But that’s how most businesses, they have edicts, and they don’t allow ambiguity. It’s, I want a few lawsuits. It tells me that we’re sticking our neck out enough.

Giving Back and Responsibility

What did you guys get some lawsuits? No, I think the next year we had, I don’t remember, but uh, we were we were kind of a nice one of the things I regret in the old business is candor wasn’t important, get along was too important. We all got along so well, and I don’t think we were as candid as we should have been with each other. Just more direct and more direct and candid. What the hell? I wasn’t, but the people I worked with seemed too finesseful and too want to be liked rather than candid.

Philanthropy and Giving Back

At the peak, how many people were working there? 25,000. It’s a lot around the world. How’s that for you? Responsible. You feel responsible when you just feel responsible. I had, I smoked a lot of pot in

college and I went and saw my finance professor, and I said, “You know, all you do is make money, make a bunch of for yourself.” And it just seems, and he gave me that look like he will understand the responsibility you have when you have your own business. It is so damn true. You have people really rely on you and your representations. You want to shake someone’s hand and honor your commitments. Everything is easy to the person who doesn’t have to do it. You should tell me that all the time at work. You don’t have to do it. How come it’s so easy for you? Yeah.

Memorable Stories

What were some of the memorable customer stories or people you worked with stories across either that 25,000 or across the millions of people that shot the Kinkos? Oh, my favorite story is I went to the Hawaii store. I went the lady who worked there just drove me out of my mind, and she had an affair with a guy at the downtown store, and the guy at downtown got they broke up and he got fired, and he moved to New Mexico and he works in a copy shop, man, he has an affair with the wife of the owner and they conspire to murder the father husband. So he buys a knife, she buys a knife, and put on her visa card mistake. So he comes out of the bushes in the park, kills the guy, knives himself with a groin, and the woman from Hawaii calls me up and says, “David’s been in some trouble in Albuquerque, can you help him out?” Murder one. I’m gonna help out this guy. Yeah, that was my favorite story.

Philanthropy and Giving Back

How do you, one thing I’m noticing is that people, you know, there’s this, this pattern of life, like you work hard if you’re an entrepreneur or not, you can make a lot of money, and then there’s like the giving period, like when you’re giving away all my money. Yeah, how do you? Okay, so take a step using Brewster’s Million. What do you remember the movie Brewster’s Million? It’s with Eddie Murphy. He’s got, he’s got one day to spend 24 out of, uh, one day to spend a million bucks or 30 million dollars, but he can’t have anything to show. How do you spend all that money? Like, how do you give it away?

Like, how do you even think about, oh, that’s so easy. There’s so many charities they’re worthwhile. How do you spend all the money? Um, but how do you vet it? How do you think? No, I get involved with elementary schools, and when we get involved, we say every child should know how to swim. 50% of the Latino community in my, Latinos in my community don’t know how to swim. That’s a sin. They can go through grade school not know how to swim. They know how to ride a bike, uh, they have it, what school is so horrible about. Imagine you graduate from high school, you have no clue of, uh, financial management.

You don’t have a, they eat garbage. They don’t have a good appreciation of nutrition, uh, they don’t have conflict resolution in school. Are you going to get married? You’re going to have a conflict. Do you think you might take a course in it? You should have a parenting course at school, but yet the Pythagorean theorem is important.

Philanthropy and Giving Back

How did you decide which ones to give money to? Well, I go to the Title One schools, so there’s a lot of impoverished people, and you could tell by how many are on free, free and reduced lunch. And so, uh, you’ll find them. There’s poor.

Top Revenue Year

What was the top Revenue year you had while you were running the company three billion?

How Did You Spend All That Money

How do you spend all that money? I bought this goddamn airplane to be a big shot. The next day the entire publishing industry in the United States of America sued me.

Expectations

What was your expectation from the beginning? I was in there for the money. Business people, they say they love their business, but you can’t let that business own you; you own it. With that being the case, was it all worth it?

Introduction

Today we are at the house of billionaire founder Paul Orfila, who sold his company Kinkos for over a billion dollars. In this video, we dig deeper into his story, what it’s like living the billionaire lifestyle, and how did you take Kinkos from zero to billions in sales.

Paul Orfila’s Introduction

Hi, my name is Paul Orfila. I’m the founder of Kinkos that sold a company for not enough money. Not enough money, yeah, you never sold it for enough. In 1997, I sold it to a firm in New York, actually a bunch of dumps from New York. They ended up selling for 2.6 million billion, 2.6 billion dollars, yeah, the FedEx.

And then did you own a part of that when they filmed? No, I kind of got out of it by that. They, I, they, I think if you sell your business, piece of advice is leave right away because it’s like selling the business, cutting the tail of a dog an inch at a time. You’re just there being tortured by having no authority but a lot of aggravation. And they’ve people, when you sell your business, they’re more concerned with loyalty than performance, and they fired really good people, the new ones from New York.

Sale Price

How much did you sell it for to help you? We sold for maybe a billion and a half.

Becoming a Billionaire

How was it to become a billionaire? And I don’t have that much now because I give it all away. I’m doing a good job of giving my money away. I don’t believe it. I, you know, there’s so much need out there. I kind of feel guilt-ridden hoarding and having much. And I don’t remember the possession freak contrary to what you might see here, but I’m not really a possession freak.

Background and Money-Making

Well, maybe taking a step back so we’ll get to the building and get to that part of the story. But, um, how did you make your money, the word, the Kinkos? How do I make? I was a saver my whole life. I’m not a very good reader, and I had a lot of problems at school. And I kind of figured out I’d have to do with my savings account with children. You have your children ought to be successful in either one of two ways. They had to be good in the school thing where they’re a doctor, lawyer, or something with their education, or they may be good with their money. And I was always saving my money and trying to figure out how Paul made his money.

Other Investments

What to do with my money. So I was a saver. And did you make the majority of your fortune through Kinkos? Oh yeah, if I’ve made other ways of making money too, but I did that. I’d love to hear.

Investment Strategies

Well, I’ve always vested in stocks, equities, and real estate. I think when you start your career, you have all your money in your business. Do you get a load or you have liquid instruments like stocks and bonds because the best way to destroy your business is not turning money into cash and not paying your bills? Then you get a little older, you have a third year business, a third in equities, and a third in real estate. Then when you want to retire, it’s paid off real estate, a little bit of stocks, stocks, and bonds. And if you want aggravation, you can still have employees.

Growing Kinkos

How did you take Kinkos from one store? Like how did you make it a billion-dollar business? We did. When I left, it was about three billion. Yeah. I guess, you know, what if people ask you that? How did you be when you’re four years old? How did you get to be 20 years old and so tall? You just do it. I mean, it just happened. Every day I’d go, and I’d try to make it better. One of the things I’ve always approached my job as, things went beautifully without me. But whatever I did every day, I made it better.

Building a System

So if I didn’t go to work, things ran. I had a system where it ran without me very well. Well, I think for you it may become a little more naturally. I think for there’s a lot of people out there that are like, “I’d like to explore entrepreneurship. I’d like to make a billion dollars, or I’d like to have.”

Distinguishing Kinkos

So the Kinko thing, like what was your expectation from the beginning? Like, for example, like when I started my company, I just wanted to make a few thousand dollars and be able to live and work the way I wanted. Well, when I started, I was in there for the money, and it was always for sale. You just, I sold it in 1997, but every day that business was out there was for sale. Your business is an instrument to make you happy; you own it, it doesn’t own you. And it’s a fundamental thing, I think a lot of businesses do, is they, business people, they say they love their business, you can enjoy your business, once you love it, you’re losing your objectivity. And you can’t let that business own you, you own it.

Competition and Experimentation

A lot of other people like, so my father sold copiers growing up, so we were like, you know, rabbits, yeah, yeah, he had a competitor around it, so as a kid, we’d always go to different stores, and everyone was around facsimile boards or those back in the day. But I guess how did you distinguish Kinkos to be able to become a billion-dollar business?

Like there’s a lot of other people competing against, well, every day, I think, you know, experimenting how to try it. My marginal cost was 17 cents, I sold for a dollar. I was throwing loose nickels at things. But what happens if you get a bigger business with like 25,000 employees, they become very defensive, and they do these stupid things called reviews, and it becomes very punitive. And I try to instill at risk-taking more and more in the culture, but it’s hard when you get kind of executive items in there.

Top Revenue Year

What was the top revenue year you had while you were running the company? Last year I was there about 3 billion in paper sales, and like copies and prints and posters, stationary film processing.

Successful Experiments

What were some of the experiments you enjoyed that worked that didn’t work? I’ll start with, I never gave myself too much to do, and I was wandering constantly in every store. My job was going toward a store, looking for what people are doing right. For an example, we went to San Diego, and they did a calendar. They took 12 pictures and put them on a calendar, a color copier. We sold $30, they sold for $30 in December, and December’s a lousy month. That was a great discovery; we exploited the calendars throughout the country.

One day, when I first started, I was in the reserve book room on a university, and most people don’t know what a reserve book room is anymore, but it’s where the professor leaves things on file at the Reserve book room and expects you to read it for the test. Well, most people go the night before the test to get the book, and it’s not there, and a flyer. And I told the professors they could leave things with Fi on file with us as well as a reserve book, and the professors went nuts with the program. And we expanded to all 50 states, and we were doing say six or seven percent of the textbooks at Ohio State.

Becoming a Billionaire

I guess I’m trying to think, do you think anyone could become a billionaire? Well, I’m not a billionaire. Did you become a billionaire? No, never. I’ve never been one. I’ve just given away all my money. But at the time, like, no, never. Remember, most people will brag about that. I think you’re just underplaying it. I don’t. I would say if somebody says that, I just think of my children’s security or being kidnapped or…

Humility and Avoiding Boasting

And braggadocious, that’s just not my nature. Yeah, I don’t disagree. Yeah, because I, my parents had a saying, my dad made women’s clothes, and my dad would say, “Your business, if business is good, complain. If business is bad, boast.” So, I’ve always been leery of the boasters. And then, you know, also, if you’re boasting and you have all these “look at me” cars and all that, people are envious. They’re not really proud of your success. They’re a lot of times very envious. And you don’t want to, as a matter of intimacy, set yourself up for jealousy. And in the Jewish culture and the Arabic culture, they have the evil eye. Yeah, you don’t want to set up the evil eye.

Reaction to Selling the Business

How do you feel people reacted or how did you feel when that sale happened? I felt great. I got off my financial, all my financial problems. I’ll tell you a funny story, my wife over here, bought an ex-wife, it’s about a TV cabinet for $35,000, and it always pissed me off that cabinet was so goddamn expensive. I was very upset with the cabinet. I was on hawk banks. I had debt, debt, debt, debt, sold the business. I’m happy with the cabinet. I’m happy with the cabinet.

Relief from Responsibility

So you actually felt relief, it’s not like you felt relief from yourself, yeah, yes, having to… I didn’t like responsibility, you know, when you’re younger, responsibility is kind of cool. Then there’s a thing called burden, which… there’s a fine line. Responsibility is kind of cool.

Then you get older, it becomes a burden. And I got to that point in my late 40s. I just didn’t enjoy all the responsibility. You know, people, they go to work with you or for you; you’re sort of responsible for, and you want to make sure they have health care and pension, and you care about your people. And not just the caring just got to me too much. Like I remember going to San Antonio, and a woman had four kids, and she was working in the store, and I kept thinking, how does she have it? She’s single. How does she have any sanity? So those are the kind of things that got to me.

Liquidity and Peace of Mind

But it sounds like selling made your life a lot easier. Oh, yeah, yeah. I think liquidity makes life a little bit easier, not worrying about paying your bills. That’s… I had 30 years of business where I was worried about paying my bills, and I got real tired of it. I think that’s… I’m kind of surprised because like Kinko’s is selling three billion dollars a year, we expanded every year with internal money. I never took outside money, and we were a subchapter S.

Avoiding Group Investors

I was always expanding with my internal capital. I never liked the group investors; I just don’t trust them. You know what an investor is? He’s like a hitchhiker. You pick up the next thing, you know, you run out of gas, you need something, and they take over the car.

Work-Life Balance

Do you wish you worked less? No, I worked enough. I didn’t… I actually, that’s a good question, okay. I worry if hard work is worried. I was a hard worker, but putting many, many hours at work, I wasn’t there. I was always wandering and worrying. That was my job.

Was It Worth It?

Was it worth it, all the work and the worrying? No, at the time, you could… it was in my 40s, I didn’t sleep right, my neck always hurt, and I had bad gas. Now, I don’t have any gas, I sleep like a baby, and my neck doesn’t hurt. Stress caused a little bit of problems.

Regrets

What regrets do you have in the time? Well, I was under so much pressure financially. I didn’t say enough thank you, so I worked with really wonderful people, and I didn’t say thank you enough to them. I see Deanna, Dan, and CeCe, I think you thank them, and they’re the president of the company, and CeCe works very closely with me in my personal life, but I never really thanked them enough.

Gratitude

What’d you say, I have to say thank you, but at the time, I was not… I just… you know, when you’re in the middle of it all, it’s just hard to be grateful. You’re just so… have so much pressure; you’re just like, “Hey, we’re focused on work, here’s things, our problems, we got no…” I was just internally focused on paying my bills and all that, and I… I was jovial and very convivial to the managers. Managers, they… they did like me because everything I did was to placate them, please the managers of the store, with the executives, they could feel my fury a little bit.

Was It Worth It?

I guess with that being the case, was it all worth it? Oh, yeah, yeah. I think I had two choices in life. I could have been right here I am now, or I would have been homeless. There’s no place in the middle for a guy like me.

Overcoming Challenges in Education

Why? Well, I can’t read very well. I… second grade, I flunked second grade, and I had the blue palette. My man… she paddled the hell out of me. Third grade, had to go to school with, uh, in Hollywood, eight kids in the class, two were 18 years old. I kept thinking, like, “Why? I’m eight years old. Why am I at school like this?” Then I had to go to reading, I had to go to an eye doctor three days a week, and finally, I learned how to read.

Graduating Despite Challenges

My parents said every word I have read cost $50, and I graduated from high school eighth from the bottom of my class of 1200. And the United States draft is the reason I’m a college graduate, plus I wanted to go to college. It was a great place to grow up, so I graduated.

Advice for Aspiring Entrepreneurs

What advice do you have for someone who’s starting out that wants to be an entrepreneur? I was thinking about that. Well, go to your soul and see if you really want it because it’s a lot of sleepless nights and a lot of uncertainty. Maybe you’re better off just having a job. But you’ve got to go to your rubber ducky in your bathtub and say, “Do I really want this aggravation?” It really is a lot of sleepless nights.

Dealing with Ambiguity

And how well do you deal with ambiguity? You found out that you enjoyed it. I had no choice.

Final Thoughts on Entrepreneurship

Oh, it would have been nice if I didn’t have so much uncertainty. It would have been nice if you just went there and it just worked real well, like a machine. It didn’t…

Perfection in Business

That’s always interesting in business because I think from the outside, we think it does. Like when you watch someone, you’re like, “Oh, that must be just perfect.” But I guess the inside, no, no, no, no, no. Business is an art form. If Da Vinci came back and said, “Wow, man, I think I could have done some more pink in that picture, a little more blue,” they’re artists. It’s always can be done better, then you’re never done, it’s never perfect, it can always be improved.

First Job and Entrepreneurship

What was your first job? What was the first, like, business you started? The first job I had, I went to the market and bought some strawberries and sold door-to-door. It’s about nine years old. I just bought them at the retail store and sold them. I always do door-to-door stuff. I respect personally, that’s my favorite, if anything I like the best of sales.

Learning Sales

How did you learn to sell? I don’t know, you just do it. Sell newspapers, you just… us, just I sold, you know, the Easter Seals, or the Christmas stamps. I used to hustle while I was in grade school. It just came easy to me, I don’t know how, I just sold. One thing I was thinking about for you is how many, because you did, you know, you sold Kinko’s for a billion and a half. You don’t like what I said? I do.

Balancing Pride and Arrogance

Alright. My parents, or my mother and father, would shake in their boots if they ever knew I was bragadocious about something like that. I guess I’ve always thought, like, what’s the line between bragadocious and like being proud of what you accomplished? Like, I think bragadocious is like, “I made all this money, and look at all these things.” Because I think for myself, I feel similar, where I’m self-conscious about it, but there’s probably a fine line between pride and arrogance.

Superstition and Not Taking Oneself Seriously

You’re right. But I’m superstitious about taking myself seriously. And when I do, I always get my ass kicked. You know, an investment, you think you’re dead, mistake, that’s when you get your ass kicked. When did that happen? Oh, one day I had to get back to school in January, and I had all the money I needed, and the money I needed to get me through the summer.

And I’m driving back from L.A., I live in Santa Barbara, and think of myself, “God, I’m doing really well.” I’m just, myself the next day, the entire publishing industry in the United States of America sued me. And I thought, “Man, the next time you take yourself seriously, you better not.” I thought it was just such a coincidence, foreign just a lot, every time in the stock market, I take myself seriously, and I think I’m gonna get my… I just get my ass every time, it’s too good to be true, I get my escape buying real estate. I bought a farm, it’s just too good to be true, it just always happens.

Unfortunate Farm Experience

Oh, five-star, how about some Farm avocado thing up here? I cannot imagine a damn avocado Orchard, and the people came in and stole all my avocados. I couldn’t do it; it was a horrible thing. And yeah, I had no business in that business. How much was the fine?

Balancing Confidence and Humility

At the time, it was about three million dollars. And then what did you end up selling it for? About three million, yeah. Not so bad, but it was a lot of aggravation. I think the part that you’re saying that I resonate with is being mindful of your… it’s not bravado, but having the balance of humility to being a beginner or being able to experiment and wonder and not thinking that we are so great. And it’s also good to have some confidence, though. What you’re also doing, way down deep, are you, and my soul back when I started, and I wasn’t too confident.

I was always insecure, and I was always paranoid about the guy across the street wiping me out. Always. And most of the people I worked with were in the business, and they loved it. I was always across the street looking at that. That was my vantage point, and I knew every strategic weakness we had. That’s where I spent my time, fixing those weaknesses or just understanding them, fantasizing what a competitor would do to kick my ass. My dad was in women’s made-with-dresses. If you’re in the fashion business, you understand, people knock you off. That’s a cutthroat business. You understand competition is out there to kick your ass.

Finding Your Business’ Weaknesses

So what do you do against them? What do you do against competition that’s more…? I thought of me. You have to remember in microeconomics, the definition of pure competition: easy entry and exit from the market, a homogeneous product, and price is the reason you bought. Well, when I started, the government up the street had a better contract for the Xerox machine. They had subsidized labor and free rent. How am I going to compete with a copy? A copy is a copy. It’s white paper and a bunch of crud on a black piece. How do I compete with this? So I had to outsmart the school. I would look down at longer hours, gave great customer service, had synergistic products like binding and stationery with the copying.

What Makes a Good Store

I grew up on Kinko’s, it was cool to be able to… that was awesome. Which store? San Jose. There’s also one in Austin. We have FedEx Kinko’s, it was good. Stores in Austin? Yeah, San Jose. We had good stores. Those were really good stores in Austin. What makes it a good store? That’s what I had to study all the time. I spent all my time in the good stores, understanding why. That’s interesting. I didn’t go to the past stores because if you have executives, they worry about the bottom 10, but I was always studying why someone was successful.

The Importance of Good Managers

And I… I was always studying. Houston, we had two stores in Houston. I had bad parking in both of them. They were so successful. What made a good store was the manager. The morale of the manager, man. It was a manager-centric business, and I could take a good manager and put up an ambassador and become a good store. I could take a bad manager, put him in a good store, and become a bad story. What made a good manager, it’s kind of an ethereal quality. I could tell when I walked in the stores. I could see it in the eyes of the workers. I could just tell if I’m going to have a good visit or a bad visit.

Balancing Pride and Humility

And then also I’d look in the little sun-text. Goddamn it, I got so many issues, I had that business. I was fighting them all the time. You’d walk in the store, my dad took me…

Paul’s Business Ventures

I did a lot of different businesses. I had coffee shops, espresso, cappuccino, before Starbucks. And I was going to try to put them co-located with us next to Kinko’s. And then we did a 24-hour dry cleaner. Now, wouldn’t you go to a dry cleaner where they spoke English and open 24 hours a day? So, I wanted to open up these trip centers where you had 24-hour businesses. But I did… oh, I started… here, I’ve been to Berkeley, yeah. Do you know Top Dog? Yeah. What do you notice in Top Dog? Small grills clothes. Did you notice how many people were in line? It’s always crowded. That might be an indication of success. So, I did… I tried to knock off Top Dog here in Santa Barbara. I screwed up because we did it in the middle of Skid Row.

Other Businesses Paul Started

I did data mining businesses. I did… I did so many businesses. Most… a lot of them failed. What are some of the other ones that didn’t work or did work? Just trying to think of them all.

How People Should Live Their Lives

If you had to describe how people should live their lives in decades, how would you think about that? Because I have a good answer for that. Yeah, my mother said, “Honey, in your 20s, try everything. In your 30s, figure out what you do best. And in your 40s, make money for what you do best and try not to do too much. In your 50s, and then another thing about your life is when you’re in your 20s, you really do care what people think about you. You get to be 40, you don’t really care what people think about you. Then you get to be 60, you realize, no one thought of you in the first place.” Bob Hope said that.

The Role of Luck

That’s interesting because I feel like you

would have succeeded no matter what. And I guess it depends on how you define success too. No, I don’t think so. I was lucky. Luck has more to do with life than you might think. Luck has a lot more to do with it. What are some of the luck…? I’ve got… oh, I opened the first location that has a garage, and it happened to be in the main artery of the campus. Without luck, the publishers, when I lost the lawsuit with the publishers, they had an injunction that I was able to stay in business. They liked us. Oh, just one time I was lucky. I don’t know if this sounds really weird, but I was in the top of a 12-story building, and I was dropping Coke bottles on a…

Enjoying Wealth and the Pursuit of Happiness

So you sold your company for some number that we’re not going to talk about, and we’re not going to call… Oh, I thought that was you. You’re still looking for a billion and a half. How have you enjoyed the money? Oh, it’s easy. What I enjoy is… Oh, you don’t understand the luxury of waking up every morning and not worrying and thinking about what you want to think about. I like that part the best. I wake up every day with a clean slate of something I didn’t have to do yesterday or worry about yesterday’s problems. And I… It’s interesting. I… I’m going to talk about tenses. In your organization, the owners are in the future, managers are in the present, and accountants are in the past. So, I was always in the future, and worried about stuff tomorrow. I like that a lot.

Is Pursuing Billion-Dollar Wealth Worth It?

What are ways that you got to enjoy the money? Because a lot of our audience is younger people who aspire. They… I guess part of the question is they’re like, “Is it worth it to try to work my ass off to make a billion dollars? And is that the life that people should aspire to?” Is that a blue book because it was a billion dollars? You know, sooner or later, you’re going to wake up with yourself, figure it out. It comes from within. And what’s really sad is you wake up with all that same miserable person you started with. You look at these movie stars, they say to themselves, “God, I’ve got everything. It makes me happy. How come I’m still a miserable movie star?” That’s just kind of… And I’m being smug about it. I’ve got enough money to live a comfortable life.

Enjoying Wealth in Unconventional Ways

You think so? Well, I could be smug about it. What are some of those silly ways you spent your money? Or the most fun, or weirdest ways that you’ve enjoyed… or something like… I mean, you have a tank in your backyard. I love it. Taking a police car. But that police car out there cost me $5,500, and the tank cost me $8,000. I’m proud of that. I got a good deal on them. What… what other things like that… I bought this goddamn airplane to be a big shot, and that thing cost me more than the airplane because to be a big shot, I had to have projects around the country, flying constantly, you know?

Silly and Costly Expenses

Justify the big-shot airplane. No, that… that cost me a lot of money. More than the airplane. A lot more. Being a big shot. And when I sold the business, I became a big shot, and I did a lot of real estate developments I shouldn’t have gotten into. I started investing in equities, buying portions of companies I shouldn’t have been doing, yeah. So, I… big shot. I just didn’t… it just didn’t work.

Contentment and Wealth

That, overall, I would have been contented with just buying good old stocks and bonds. Being contented with the income property you have. What was the plan or how much was the plan that…? Oh, the plane wasn’t but $22 million. Do you want to hear a good story about that plane? No, I think we can cut… I think, yeah, of course, I think it’s so interesting because people dream like… it, yeah. You’re cutting right now.

No, no, I’m joking. I’m joking, duh. Like, this is super interesting. These big damn companies are stupid. If you know their accounting procedures, you can take big-time advantage of them. I’m going to get back to the airplane. But I used to go to Xerox, and I’d say, “Oh, Xerox, you’ve got this fantastic new machine. I want to buy 400 of them, and I’ll pay you the list price. I’ll pay whatever you want, but all I want you to do is extend the service contract for four years.” And they would… what’s a machine?

A machine is just a damn bunch of metal. All I want to do is get the copies at the end I can sell. So, they would give me these machines, and I get four years, 24-hour free parts and maintenance, and I blast those things 24 hours a day. So, with the airplane, this is during the recession when… uh, the bad Bush wanted to get reelected. The warmonger in Bad Bush… uh, he had 2004, 50% depreciation. So if you buy something, you got to write off 50% of it. So, I went to the airplane company. I said, “Hey, you know, by the way, I’ll pay your list price. Just give me four years or three years of free service.” Well, an airplane costs every time… an hour, it costs $300 an hour for parts and tires and all that. Or $400 an hour.

I blasted the hell… I had to pay for as much gasoline, and I had a chartering business, so I made some good money in the chartering business. But, uh, that’s why I bought the airplane. But also, I was on the airplane a lot. Being a big shot, it should cost a lot of money. You still have the plane? No, no. I don’t want to go anywhere. I’m sort of done with hotel rooms. Get tired, try going to the bathroom and end up going to a closet in the middle of the night. I just got tired of it.

Happiness and Self-Acceptance

I guess when I’m at… This question might sound strange, but are you happy today? Oh, yeah. Happy. Super happy. Yeah, I… You work out your demons as you get older. You know, you’ve got a lot of internal demons. Everybody does in their 20s, 30s, and 40s. But now I’ve accepted myself. I think anxiety and ambition are the best of friends. So, I was very… I had a lot of anxiety and ambition, and the anxiety sometimes overwhelms you. It makes you sort of introspective and insecure. And I was rejected a lot in school. I couldn’t read. Oh, I had bad zits. I don’t think the girls particularly liked me. And so you come from that background as a kid. You still have that with you. You know what’s interesting? You always have the 13-year-old and the adult, and they’re always fighting. The 13-year-old is vulnerable, insecure, and the adult is always fighting with that 13-year-old, no matter what you do in life. And finally, after a period of time, you get older. You know how to put the 13-year-old in his proper place. I think about that a lot, just about accepting ourselves, like just accepting whatever way it is, across the board, for everyone. It’s hard. It comes with time and age.

Impact of Family and Money Management

We have… And then you get married, you’re… not children yet. After you’ve raised your children, you could… It’s a lot easier because you know you’ve done the sperm bank thing. Coming back on the plane because I do think there’s also some interesting pieces there. What other… other things that you… you maybe didn’t spend money well on? Liquor. I drank too much. Uh… My first wife was a good spender. She spent money for all of us. And, uh, my… my… Lord, am I married to now, I really admire because she’s frugal, and she manages her money. And I do expect frugality. How did your wife impact when you’re running the company? How did that impact positively or negatively? And then, having a family as well. Uh, I have to say it bluntly, but every time things got really bad, she was the most difficult. And I…

Paul’s Lowest Moments at Kinko’s

I knew I was going to get sued by the Publishers sooner or later. I didn’t want them in the Ninth Circuit because they considered Californians in the courthouse kind of like not more like carefree. The Second Circuit is New York, and I never wanted to give the damn Publishers jurisdiction in the Second Circuit. But we had that publishing program, and we did the Second Circuit, and they got me in their backyard. And the judge just… he just gave us a verdict. It was an injunction that she told the Publishers, “You can write the injunction.” And, you know, you remember regarding Bill… Oh, I forget the guy’s name. He saved my business. His name was Chimler. He saved my business.

How to Become a Millionaire Today

Use your eyes and your intuition, but unfortunately, we’re too damn rational a lot of times. It’s intuitive; we don’t trust our instinct. Why does a customer want to buy something? I think a lot of people aren’t cut out for their own business. My biggest problem at Kinkos was that we had two or three workers in the store, and the leader of that store knew everything about things. I left a business with 40 or 50 workers in the location, and the leader of that business knew a lot about people, not things. Some people feel comfortable managing things, and some people feel comfortable managing people. Don’t try to do it if you’re a “thing” person; don’t try to be a “people” person.