Ron Foxcroft launched his new business by blowing a whistle to get everyone’s attention. This quick demonstration showed he had solved the problem and understood his customer.

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Dave Young:
Well, this time on the Empire Building Podcast, we’re going to play Stump Dave. And Stephen, when you told me what the topic was, I was stumped from the start. Fox 40 Whistles?

Stephen Semple:
Whistles, yes. Whistle while you work, like blow on it. Why do we want to talk about Fox 40 whistles? Well, I’ll whet your whistle. They sell about 15,000 of these whistles a day in 140 countries.

Dave Young:
Holy cow.

Stephen Semple:
Holy cow. Right? So here’s where it all comes from. But before we get started, little trivia. Who invented basketball, Dave?

Dave Young:
Naismith.

Stephen Semple:
Naismith. Yeah. A Canadian, back in 1891 invented basketball. Why are we talking about basketball today? Because we’re talking about whistles and the origin of the Fox 40 Whistle has to do with both Canada and basketball.

Dave Young:
Okay.

Stephen Semple:
The whistle was invented by another fine Canadian and it was invented by a fellow by the name of Ron Foxcroft in 1987. Ron lives in Burlington, Ontario, couple of hours from where I am right now, so a local guy. As I said earlier today, they sell 15,000 of these whistles a day around the world. They are also the most expensive in their category.

Dave Young:
Are these the whistles, the referee whistles? That’s what we’re talking about, right?

Stephen Semple:
Yeah. They’re used in boating and all sorts of other things, but their origins started with basketball referees.

Dave Young:
Okay.

Stephen Semple:
As I was saying, they’re the most expensive in their category. They sell for about five bucks and most other whistles you can buy in bulk for like 50 cents apiece, they’re like 10 times-

Dave Young:
Yeah. Yeah.

Stephen Semple:
More expensive than their competitors and yet they sell amazing. Ron tells this great story about how he even had an opportunity to give one to the queen of England. He had this opportunity to meet the queen of England and she was pointing out her wonderful lawn and that there were geese on the lawn. He suggested to her that she could use his whistle for getting the geese off the lawn.

Dave Young:
How’d that go over?

Stephen Semple:
Seemingly they had a long chat about geese and whistles. They’ve also expanded to other products as well. But today we’re going to focus on the Fox 40 whistle. But before I do that, I wanted to share a little bit about Ron’s character, because he’s an interesting character.

Dave Young:
Okay.

Stephen Semple:
In his last year of high school, he was sent to detention. In those years, the teachers would write a question on the board so when you went to detention, they’d write this question on the board that you would have to answer and you’d have to stay there until you got the right answer. What Ron discovered was the answer was written on a board in the teacher’s lounge. He approached the janitor and he said, “You go in there and you find out the answer. You tell me, I will sell the answer to people who’ve been sent to detention, and we’ll split the profits.”

Dave Young:
Yeah. I like this guy.

Stephen Semple:
Eventually, there was one day when the principal caught on and he was called into the principal’s office he was sat down and the principal said to him, “Mr. Foxcroft, we have a problem.”

Foxcroft immediately agreed with him and decided to say this to him. “Look you to don’t want me to be here. I don’t want to be here. Why don’t you give me 50% for the rest of the year, I’ll walk out the doors and never return? This is a perfect deal because the system gets rid of a problem, me, and I get out of school.” And guess what? The principal took him up on the deal and he walked out the door.

Dave Young:
Oh my gosh.

Stephen Semple:
He leaves high school and he starts a landscaping business and he gets kind of this break when he meets a gentleman by the name of Frank Buchanan. Frank’s a local Burlington guy who’s heavily tied up in the sports scene, very, very influential in the sports scene in the Hamilton, Burlington area. He gives him a gig umpiring baseball. He starts umpiring baseball, but this put him into kind of the sports community and led him to be introduced to Kitch McPherson, who’s a legend in the area in basketball and he got him into refereeing basketball.

This led him to the moment that changed everything. But before we go there, there’s a sidebar story I just have to share because at this time Ron also bought a trucking company and the trucking company was called Fluke. You see these trucks all over Ontario and for years I wanted to know who was involved with this trucking company because the slogan painted on the truck is this. “If it arrives on time, it had to be a fluke,” F-L-U-K-E. If it arrives on time, had to be a fluke. I always laughed my guts out. I always wondered, “Who the hell owns this?” It turns out Ron from Fox 40 whistles.

Dave Young:
That guy.

Stephen Semple:
That was a sidebar, that guy, and when he bought the company, he wasn’t sure about the slogan. He surveyed the customers and what he found was, you’re going to love this, Dave. This is a story all on its own. 10% of customers hated it, half loved it, everyone remembered it. What do we find with good advertising? People hate it, a bunch love it, everyone remembers it and to Ron’s credit, he ignored the 10% who hated it and said, “You know what? Everyone remembers it. I’m sticking with it.” We have a picture in the show notes of a Fluke transportation truck. It’s hilarious.

Dave Young:
Love it.

Stephen Semple:
I love those trucks and they still have the trucking company and that’s just a sidebar, but I just had to talk about it because I love them so much.

Coming back to the moment that changed everything, Ron has become a pretty high-end referee in basketball and he’s in Brazil. The men’s team in is one win away from qualifying for the Olympics and they’re playing in Brazil. It’s the Brazilian team playing in Brazil, need a win to get to the Olympics, so like no pressure, right? There are nine seconds to go and Brazil is clearly fouled. Ron blows his whistle and here’s what happened.

Dave Young:
Oh no.

Stephen Semple:
You know how a lot of the whistles have that little pea in it? Well, the pea gets sweat and all this other stuff on it and sometimes jams. It jams. That little piece of cork is called a pea jams. The call doesn’t get made. Luckily for Ron, the game stays tied and Brazil wins in the overtime otherwise there would’ve been a lynch mob, right? But this problem wasn’t the only time it’s happened. It wasn’t the first time it happened to him and he decided, “I’m going to fix this problem. I’m going to fix this problem.”

He teamed up with a Canadian engineer, Chuck Shepherd, and they went out to solve this problem to make a pea-less whistle so in other words, using chambers instead. Now it had to be loud.

Dave Young:
Mm-hmm (affirmative).

Stephen Semple:
125 decibels is what it needs to hit for it to be good for referees and it had to work every time, which meant get rid of the pea and use these chambers. Now it took him three and a half years and Ron spent $150,000 on trying to solve this problem. He solved it, so now he’s got $150,000 in debt and a whistle. He completed this in the spring of 1987.

He had his first couple of prototypes of the whistle. He’s got called to referee at the PanAm games in Indianapolis so he takes a couple of whistles with him because guess what? Lots of referees there.

Dave Young:
Yeah.

Stephen Semple:
This is very stressful for him because in ’87, trucking was in a downturn plus he’d accumulated all this debt on creating this crazy whistle.

Dave Young:
It was a fluke.

Stephen Semple:
It was a fluke how it all came together. He’s nervous and stressed, but he decides here’s what he is going to do. “I’m in this hotel full of referees and nothing gets a referees attention like the sound of a whistle.” At 2:00 AM in the morning, he steps out of his room into the hallway and he blows his whistle, 400 referees immediately open their doors like “What the hell?”

They all go, “Can I buy one?” Now he doesn’t say, “Oh, I haven’t made it yet,” better to have scarcity.

Dave Young:
Yeah.

Stephen Semple:
We’ve learned this from lots of businesses, scarcity marketing. He says, “Nope, they’re on backorder, but I can take orders.” He walks out with orders for 20,000 whistles at five bucks apiece. When you build in the exchange rate, he’s now got his $150,000 back and the debt is taken care of. Today they’re not only being used by referees, they’re being used in the boating industry, there are all sorts of places where you find the Fox 40. They’re great on boats because they get wet and it still works. There are a lot of fun little lessons in this story about the whistle. To me, one of the first ones is he clearly understood the problem.

Dave Young:
Mm-hmm (affirmative). Well, yeah, he experienced it firsthand.

Stephen Semple:
He experienced it firsthand. This is like Doordash we often talk about. He experienced it firsthand, he knew the problem, and so many times we see with startups, they actually don’t clearly understand all the ins and outs of the problem.

But the other thing he also knew was the customers. He understood referees. He understood the blowing of the whistle to get their attention. He hung out with them. He had credibility with them. Not only did he understand the problem, he understood the customer. Referees are a tribe, they’re a community. They hang out together, they know each other. They see each other. There are these big events where they’re all together. He knew the problem, understood the customer, and had a tribe that he was a member of. He was not an outsider. He was an Olympic referee.

Dave Young:
When you blow that whistle, everybody’s going to want it because they know who you are and they trust you and they want what you have that works.

Stephen Semple:
Yeah. Instead of telling people, it was the power of demonstration. He blew that whistle in the middle of the night and the power of community tapping into that pride. I also liked the other thing he did was this whole idea of scarcity and popularity. He didn’t say, “Oh, well these are just prototypes.” Nope. Sold out on backorder. If he had said the other and said, “You know what? I’m going to be soon making them.” I think people have been like, “Well, let me know when they’re made.” When you say, “No, it’s on backorder,” it’s like, “Well, geez, I better get my order in now.”

Dave Young:
When you get 20,000 people that want one, it’s no longer a prototype. It’s time to just say, “You know what? This is good enough.”

Stephen Semple:
This is good enough, it’s on backorder. He walked out with the orders he needed and his debts covered and things just rolled from there.

But there’s a sidebar thing I want to share. One of the things that he shares, he’s got a great book that if you go to fox40.com, Secret of the Fox, and I’ll put a link to being able to purchase the book in our show notes. But when you read through his book, one of the things he also talks about is where your manufacturing costs should be. I found this interesting because I’ve had people who’ve approached us who are startups in manufacturing, and I’ve always felt like their numbers were not quite right. I haven’t worked with a manufacturer, so I’ve never been able to see how it played out. But what he said was your manufacturing costs need to be 10 to 15% of your sale price. You’ve got to be making 85 to a 90% margin over and above your manufacturing costs because you’ve got marketing, you’ve got administration, you’ve got all those other things. In fact, your marketing budget should be pretty much equal to your manufacturing costs.

SECRET OF THE FOX BOOK – Click Here

Dave Young:
Mm.

Stephen Semple:
You need to spend as much money on marketing as you spend on manufacturing.

Dave Young:
I think so many business owners err on the side of, “I’ll just sell this for as little as I can possibly sell it for.”

Stephen Semple:
Yeah or, “I’ll put so much into the manufacturing, making it perfect that if I make the best product, people will flock to it.”

It’s like, no, he has the best whistle, solved the problems, but still recognized he needed to put money and effort towards marketing of the product.

Dave Young:
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