How do you turn it on and off without taking your hands off the device?

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Dave Young:
Welcome to the Empire Builders podcast. I’m Dave Young, alongside Steven Semple. Steven, when you told me today that we were going to talk about the company that we’re going to talk about. It hearkened me back to days when I considered myself a bit of a handyman, I still feel like I can do some things, but we’re talking power tools today. I believe you’re not much of a man if you don’t assemble your own flat pack furniture.

Stephen Semple:
So you’re an Allen Key man now?

Dave Young:
That’s right. Traded in my Black and Decker for an Allen key, but Black and Decker is what we’re going to talk about today.

Stephen Semple:
It’s an interesting story, because it was founded back in 1914 by Duncan Black and Alfonso Decker in Baltimore.

Dave Young:
Well, that’s all we need to know, I guess.

Stephen Semple:
That’s all we need to know. Today they are the largest manufacturer of power tools in America, and here’s the cool thing. They even have a drill on the moon.

Dave Young:
There’s a Black and Decker drill on the moon?

Stephen Semple:
The astronauts take up tools for doing the core samples. Black and Decker was the manufacturer of that. And of course, they left it behind.

Dave Young:
Are they still making things in the US?

Stephen Semple:
You know what? I didn’t look into where their manufacturing is. In 2010 Black and Decker merged with Stanley tools. Today, they’re part of that fortune 500 company estimated to be worth 30 billion dollars, they’re a big deal. Going back to the beginning, when it was just Duncan Black and Alfonso Decker, they met in Baltimore in 1910 while working for the Roland Telegraph company. They were both employed there and they became friends. The thing that’s interesting is they both had very, very different upbringings. Alfonso came from a very poor family. He had to drop out of school to take care of his family, but he was always a tinker and he made lots of inventions to get out of chores. You’d love this one, Dave, he didn’t want to get up early to feed the horses.

Dave Young:
Mm-hmm (affirmative).

Stephen Semple:
He rigged up this thing that when the alarm rang, so he’d set up a clock, and when the alarm rang, it would open up a feeder to feed the horses. So he didn’t have to get up to feed the horses.

Dave Young:
I like this guy already.

Stephen Semple:
Duncan Black came from a much more comfortable home. He actually didn’t have to work, but they met, and they became friends. In 1914, while at the telephone company, Decker suggested, Hey, he’s opening his own company, and he wanted Black to come with him. They decide to open their own business and do their own designs, but they don’t have any money. So, Duncan Black sells his car to Alfonso’s father-in-law for 600 bucks, and Alfonso mortgages his house for $600. Between them, they’ve got $1,200 to set up this machine shop.

Dave Young:
Okay. So, it’s a machine shop that they’re opening.

Stephen Semple:
That’s where they start.

Dave Young:
Okay.

Stephen Semple:
They focus on manufacturing existing designs and they got some jobs to manufacture candy mixers and pocket makers and things along those lines.

Dave Young:
Okay.

Stephen Semple:
But business is slow and they decide to take a look at the power drill. The electric power drill was invented in Germany in 1895. 15 or 20 years before this time.

Dave Young:
Okay.

Stephen Semple:
They think they can improve it. The drill’s hard to use. Think about it; it weighs 18 pounds.

Dave Young:
Yeah.

Stephen Semple:
It’s not much more powerful than a hand crank. You take two hands, and you press it against your chest, and you have to take one hand completely off the thing to find the off switch. It’s actually really dangerous. The first thing they want to do is figure out how can you turn it on and off without having to take your hand off of the device?

Dave Young:
Yeah. You need a guy who knows how to rig up an automatic horse feeder.

Stephen Semple:
That’s exactly what you need. At this time, they’re doing other work to make ends meet, and they took a job doing work on the colt 45 pistols.

Dave Young:
Oh wow, okay.

Stephen Semple:
They did some improvements on the pistol, but that’s when the idea hit them a drill with a trigger.

Dave Young:
A drill with a trigger. Gosh, what an American story

Stephen Semple:
Goes from a gun to a drill, to a drill with a trigger. Now, it took several months for them to figure this out and get the trigger working. The original drill was quite expensive. It was about $250 think about $5,000 today.

Dave Young:
Yeah.

Stephen Semple:
70% of Americans do not have electricity at this time. This is the early 19 hundreds. What was the market? But then, along comes 1917 and world war I and there’s an urgent need for manufacturing. It was this explosion in exports. During this time, United States exports increased 300%.

Dave Young:
Yeah. Well, and when you’re manufacturing things, you need to get holes in things. So you can put bolts and screws in to put them together.

Stephen Semple:
And when your manufacturing increases 300%, you need to figure out how to do it fast.

Dave Young:
Yeah.

Stephen Semple:
So, power tools enter the manufacturing process.

Dave Young:
Nice.

Stephen Semple:
The drills are snapped up by factories. And frankly, there’s very little competition at this point.

Dave Young:
Mm-hmm (affirmative).

Stephen Semple:
It’s a huge success. They’re doing a million dollars in sales, and there are lots of new tools. Grinders, electric screwdrivers, smaller, less expensive drills, and demand continue after the war in home construction.

Dave Young:
Sure.

Stephen Semple:
It suddenly makes it and starts making its way into home construction. Then, along comes 1929 and the stock market crash.

Dave Young:
Yeah.

Stephen Semple:
Home construction, and manufacturing, grind to a halt, and they have to lay off most of their staff, including Decker’s son.

Dave Young:
Oh wow.

Stephen Semple:
Now four years later, Alfonso Decker Jr is rehired as a janitor. He starts at the bottom. They bring him back as a janitor. Now along comes World War II. There’s a refocus on manufacturing. The World needs power tools. Men are overseas. Women are in the factory; demand for drills increases. At this point, Al Jr has worked his way back up to the executive level, and he notices something unusual. And this is the game changer, what he notices.

Dave Young:
Okay.

Stephen Semple:
This is the thing that changes everything for Black and Decker. Factories are reordering tools at a much faster rate than they would’ve anticipated. And Al Jr wonders, is there a problem? Are these things breaking down? So, he calls the factory. And what do you guess is happening, Dave?

Dave Young:
They’re ordering a drill for each size bit.

Stephen Semple:
No, but that would be interesting. No. What was happening is the workers were taking the tools home.

Dave Young:
Oh, man.

Stephen Semple:
Cause they wanted to take them home and do stuff around the home. People wanted to drill around the house, and he realized this was the next wave. The next wave will be the common man. What we need to do is make one that is cheaper and lighter.

Dave Young:
Mm-hmm (affirmative).

Stephen Semple:
Now, this is really important. So many companies would’ve said they’re not breaking down; you’re ordering more. Who cares? So many companies would’ve gone, oh, they’re taking it home. Who cares? So many businesses went out of business when the war ended because, all of a sudden, what they were manufacturing for was no longer needed.

Dave Young:
Yeah.

Stephen Semple:
And, what he recognized, he said, hold on a second. When all these guys come back from the war, they’re going to want drills at home. Let’s start right now, making a drill for the home market.

Dave Young:
Beautiful.

Stephen Semple:
They now had a path to the consumer. They released the first household tool, and they made 80,000 of these drills, and it sold out. It just goes gangbusters. They continue to do innovative things. 1961 is when they created the first cordless drill. I had no idea it was back in 1961 that there was a first cordless drill.

Dave Young:
Cordless drill in 1961.

Stephen Semple:
1961, yeah.

Dave Young:
I can’t imagine the battery.

Stephen Semple:
Yeah, crazy. The late 1960s, a drill goes up to the moon, and today, they’re the best-selling power tool in America. It really comes from two innovations. That first innovation of looking at a gun and going the trigger.

Dave Young:
Yeah.

Stephen Semple:
That’s the solution for the drill. If we could put a trigger in a drill, would this really work? The next one that really made them big was them noticing this problem and going, okay, people are taking the drill home, and what we’re doing right now will not last forever. This is the next innovation; let’s do that. Let’s do that. I think that’s an amazing observation.

Dave Young:
Mm-hmm (affirmative).

Stephen Semple:
The amazing looking outside of their business and seeing other things.

Dave Young:
It teaches you that you really need to talk to your customers, probably way more than any business owner is doing. Even if your customers are other businesses and you don’t control what they’re doing at the end of the day, with whatever it is you’re selling to them, you can learn something that you can probably pivot on and make more money on.

Stephen Semple:
Think about how well run their business was because when they were selling somebody a drill, they knew how long that drill was going to last. They actually noticed, wait a minute, it’s not lasting that long. They could have left it at that. Instead, they asked themselves questions, Jesus, is there a problem with our drill?

Dave Young:
Yeah. Well, again, that’s the only reason they talked to the customer. Cause they thought there was a problem with the drill.

Stephen Semple:
Yeah.

Dave Young:
But don’t wait for there to be a problem with your product to go talk to your customer. My final observation is that we have these guys to thank for that old marketing saw that piece of wisdom of nobody wants a drill, they want a hole. I think we’ve even talked on another episode where they don’t want a hole. They want a picture hanging on the wall.

Stephen Semple:
Dave, I’d even go one step further. It’s not that they want a hole, and it’s not that they want pictures hanging on the wall. They want a happy household.

Dave Young:
Exactly.

Stephen Semple:
And since we’re actually recording this in July, although it’ll air much later, what they actually want is the deck that they can stand out on with beers with their buddy and admire their handy work.

Dave Young:
That’s exactly right.

Stephen Semple:
You can’t do that with an Allen key, Dave.

Dave Young:
They need that Black and Decker drill so that they can get the admiration of their friends.

Stephen Semple:
That’s it, exactly. I thought it was a really interesting and really fun story.

Dave Young:
I love it. I love it. Thank you, Stephen, for sharing that one.

Stephen Semple:
Thanks David.

Dave Young:
Thanks for listening to the podcast. Please share with us. Subscribe to your favorite podcast app and leave us a big fat juicy five-star rating and review. And if you have any questions about this or any other podcast episode, email to questions at theempirebuilderspodcast.com

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