ANNOUNCER: This is NIGHTLY BUSINESS REPORT with Tyler Mathisen and Susie Gharib, brought to you by —
SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: Good evening, everyone.
And welcome to a special edition of NIGHTLY BUSINESS REPORT. I`m Susie Gharib. You`ll be hearing from Tyler Mathisen throughout the program.
Well, today is Labor Day and fittingly the biggest economic event this week will be the jobs report. And while the forecast is for tepid hiring, the U.S. unemployment rate is currently sitting at its lowest level in more than four years. That`s the good news.
The bad — there are still millions of Americans out of work, even year after the official end of the recession. So, it`s no wonder more and more people are trying their hand at starting their own business. After all, there are more than 28 million small businesses in the U.S., many starting from a simple thought.
Tonight, we want to highlight a few of these bright ideas and show you how some entrepreneurs followed different paths to get from concept to reality.
We`ll also be joined by an expert who will give us tips on how to get your business started and whether you can tell if your bright idea will be successful.
Now, the ideal way to start a business is to not worry about risk, to be able to dive in head first and follow your passion. We`re not that lucky but we begin tonight with someone who was able to chuck it all, quitting a lucrative job just to create games — word games. And he`s done so well making well into six figures these days that there is a good chance you`re familiar with his work.
In fact, it`s not too big of a stretch to call him America`s wordsmith.
DAVID HOYT, PUZZLE CREATOR: If that`s the way — if everyone agrees, everyone has to agree. OK.
DAVID MATHISEN, NIGHTLY BUSINESS REPORT ANCHOR (voice-over): Who looks more puzzled, David Hoyt or these fifth graders? If your answer is David, that`s OK. His specialty isn`t solving puzzles. It`s making them.
HOYT: I have become the most syndicated puzzle creator in the world.
Let`s see if I move the B.
MATHISEN: In the basement of his Chicago home, starting about 4:00 a.m. every day, he masterminds Jumble, that icon of word puzzles, syndicated in more than 600 newspapers, reaching about 32 million people every single day. When he`s done, there are about 13 others to piece together.
HOYT: I have Word Roundup, that`s in “USA Today”. Up and Down Words that`s in “USA Today.”
MATHISEN: Not bad for a high school dropout who never went to college. He`s started trading options in Chicago, and he did pretty well.
But it left him puzzled about his future.
He noticed a friend was inventing games and making money from it.
HOYT: I decided that I`m going to quit my job, I`m going to save up a little bit of money and I`m going to instantly become successful.
Well, that didn`t quite work out.
MATHISEN: He tried peddling this game and that in between part-time jobs for four long years. It was a struggle, but his “cup is half full”
attitude eventually paid off.
HOYT: If it I had been successful on my first run, I would have thought — I would have thought I was much smarter than I actually was. In fact, I needed no, and then why.
MATHISEN: In 1996, he brought a word game into Tribune Media Services, hoping to marry it to their Jumble brand. They bit and turned it into Jumble Plus. But that was just the beginning.
HOYT: My brain just thought, wow, if they`re willing to do this, maybe — how about Jumble crosswords, how about TV Jumble, how about Jumble brain busters?
MATHISEN: It`s no wonder “Tribune`s” V.P. of licensing, Steve Tippie, is one of Hoyt`s biggest fans.
STEVE TIPPIE, TRIBUNE MEDIA SERVICES V.P.: It`s a good point. I don`t know anyone out there who has made as many versions or iterations of a single word puzzle Jumble as he has.
MATHISEN: He kept at the various Jumbles for 15 years, until, in 2011, he took over the original when his predecessor retired — teaming with cartoonist, Jeff Kanurik (ph) to breathe new life into a brand around since the mid-`50s.
Hoyt also developed word games for Pat Sajak`s brand and now Word Winder, where players aim to string words all the way across the board.
Over beers at an English pub on Chicago`s north side, Hoyt and several friends polished a game they say has sold in the tens of thousands since it came out just last year, at about 20 bucks each.
HOYT: People have to work together.
MATHISEN: The classroom version? That bright idea belongs to an Illinois school teacher who saw their demo at the Chicago Toy and Game Fair last fall.
Now, Hoyt and his team are obsessed with finding a way to manufacture it at a cost schools can afford. It`s a puzzle yet to be solved.
HOYT: It cost $800 to make. Teachers have basically demanded that we do this, because they`re not taking no for an answer. And the kids just love it. So, now, we have to do this.
GHARIB: Well, on tests across the country, teachers have given them a big thumbs up. They have gone the Kickstarter route to raise money and now, they`re looking for private investors to get the giant Word Winder game made.
Sometimes, life causes you to take drastic measures. Take the story of Steve Richardson, born out necessity after he lost his job, he taught himself how to design and cut wooden jigsaw puzzles. Putting the pieces of his business together has meant finding new, ingenious and sometimes devilish ways to keep his fans guessing.
STEVE RICHARDSON, STAVE PUZZLES: Here is a 1-inch (ph). They fit side by side.
Man, do we get some nasty phone calls about that. It drives them nuts.
MATHISEN (voice-over): A customer complaints usually mean business is good for Steve Richardson.
RICHARDSON: They pay me to drive them crazy.
MATHISEN: He is the self-proclaimed tormenter-in-chief at Stave Puzzles in northeastern Vermont.
RICHARDSON: I can easily design a puzzle that they can`t do. Well, they won`t buy anymore. So I can`t totally crush them.
MATHISEN: Stave is Steve and Dave, Dave Tibbetts. They began designing games and puzzles after both were laid off by a computer programmer in 1969. For five years, they struggled, until one phone call changed things.
RICHARDSON: When we got the call from this wealthy Bostonian said, these guys are out of business. I need a fancy wooden puzzle.
MATHISEN: Richardson didn`t know how to cut wood, but he knew an opportunity when he saw one.
He took out an ad in “The New Yorker” magazine and got lucky, very lucky.
RICHARDSON: The very first customer from that ad averaged $50,000 a year with us for 20 years. Bingo. We hit the lottery.
MATHISEN: Richardson bought his partner out for all of $1 a few years later. They`re still good friends, and Richardson is still keeping his customers, well, puzzled.
RICHARDSON: All right. Color line cut. That also drives them nuts.
MATHISEN: By the 1980s, he became known for his trick puzzles.
RICHARDSON: Instead of getting a right angle piece to work with in the puzzle, we split it like that. So, there is the fake one right there.
We only do that when we got bored and the customer is getting bored.
It`s like the fox and the hound. So, we just have to keep one step ahead of them.
MATHISEN: Staying ahead of stave puzzlers is no easy trick. Among them, the Gates family, the Bush family, and the royal family.
RICHARDSON: Mrs. Bush was our carrier. We got a very nice note back from the queen who appreciated it.
MATHISEN: Designing, cutting and painting, labor intensive. No two puzzles are the same. It can take a year, sometimes even more to train the master wood cutters.
RICHARDSON: We sell about roughly 3,600 puzzles a year.
MATHISEN: Not bad when they go for anywhere from $750 to $7,500 a puzzle. Sometimes even more.
RICHARDSON: In the last set, it went for $20,000. A hundred sets of
$20,000 puzzle, that`s like whoa.
MATHISEN: Back in the day, Richardson couldn`t pay to print pictures on the box. Now, he jokes with a bit of a smirk that would be too much of a hint for his victims — or customers.
Instead, the box features the Stave logo, the clown. And each puzzle has one clown piece.
RICHARDSON: David came up with that. I thought it was brilliant.
We`re in the entertainment business. We are the court jesters in people`s lives.
MATHISEN: But sometimes that clown has been a wild card, a joker, bending the minds of puzzlers everywhere.
RICHARDSON: I`m thinking they`ll figure it out. It`s going to be obvious. But they didn`t. We got hammered.
So then we put a little sign under the clown that says, “Sometimes I just don`t fit in.”
GHARIB: Back in 1999, that $20,000 set of five puzzles was selling for a mere $14,500. That was good enough to put it in the Guinness Book of World Records as the most expensive jigsaw puzzle.
Now, a recent study by personal finance nerdwallet.com looked at which cities are the most welcoming for small businesses. Some of the factors the company looked at were local taxes, growth rates and of course, regulatory environment.
Here is the top 10: San Jose, Charlotte, Indianapolis, Jacksonville, and Phoenix came in numbers six through 10. San Antonio, Dallas-Forth Worth, Baltimore and Houston came in two through five.
And the top city is Austin, Texas, and it`s interesting that four of the top five are in Texas. Meanwhile, New York, L.A. and San Francisco were all near the bottom.
When we come back, we`ll introduce you to a man whose making money by making the point.
GHARIB: It`s been said, if you can dream it, you can do it. It`s also been said a pencil and a dream can take you anywhere.
Well, as Brian Shachtman tell us, one man is really taking this to heart and making it pay off.
DAVID REES, ARTISANAL PENCIL SHARPENER: You want to do it with the knife?
BRIAN SHACTMAN, NIGHTLY BUSINESS REPORT: It scares me a little bit.
REES: That`s good, that`s a good sign.
SHACTMAN (voice-over): Sharp wit and sharp pencils have been very good to David Rees.
REES: I made $20,000 sharpening pencils last year.
SHACTMAN: Lucrative hobby, part time job, run like a business. Sound crazy? Listen closely, there are methods and a little bit of madness.
REES: I was a professional cartoonist, which is like an amazing job, and I was really lucky to have it. But once it became my actual job it couldn`t become fun and then I kind of stop liking it and that`s why I quit it.
SHACTMAN: In 2010, he took a temp job knocking on doors for the U.S.
Census Bureau. His kit included a pencil and a little pink sharpener.
(on camera): You don`t use this anymore?
REES: No. That`s kind of like there for historical purposes.
SHACTMAN (voice-over): When Rees realized he liked sharpening pencils, he had an idea.
REESE: I thought that people would send me their pencils, I would sharpen them and they would use them and they would get dull again, and they`d send them back to me, I would re-sharpen them. You know, over the life of the pencil, I made like $200, $300.
SHACTMAN: Soon after, he launched Artisanalpencilsharpening.com.
Fifteen dollars per pencil, including shipping, the shavings, and a signed certificate.
But it wasn`t long before Rees had to erase his business plan.
(on camera): Don`t you find it oddly I guess ironic that most people buy these and don`t use them?
REES: Yes. I mean, frankly, it has been a — it was a complete refutation of my original business model. They just keep them in the display tube as like a novelty item or a little strange little art work.
SHACTMAN (voice-over): But he sold about 1,600 pencils in three years.
(on camera): Is it disappointing that that`s the case?
REES: It`s just a shift and it made sense to me. It wasn`t I did a really good job with sharpening the pencil or I made it really sharp. The real value that I added was, I was the guy that people paid to sharpen a pencil. It becomes like very conceptual. It`s like a snake eating its own tail.
You can see the scalloped edges.
SHACTMAN (voice-over): Rees is even particular about his pencils.
Remember these? Rees says Generals are the last number 2s made in America, Jersey City, New Jersey.
He`ll overanalyze the simple act of sharpening a pencil. A point he makes in his book and in his teachings.
(on camera): I am enjoying it. I don`t know really why.
REES: That`s what everyone always says, because you have to be mindful of this weird thing that you have done without thinking about it.
You`re trying to achieve some certain aesthetic ideal you have in mind, you know?
SHACTMAN (voice-over): Handmade simplicity, an idea Rees got at home in New York`s Hudson Valley where lots of people sell food and wine that they call artisanal.
REES: I felt, well, I have to — I have to call it artisanal because that`s like a marketing decision. Like that`s how you convince people now to spend $40 on a jar of pickles or whatever.
SHACTMAN: These days, Rees is charging almost as much, $35 a pencil.
(on camera): This is what I love about my job.
REES: You`re living in a dream land.
SHACTMAN: Seriously. This is my pencil.
(voice-over): For NIGHTLY BUSINESS REPORT, Brian Shactman, Beacon, New York.
GHARIB: This type of business seems like a fit for Reese. He`s a guy who studied psychology in college and then wrote political satire for a living.
Now, another entrepreneur making a different point and this one comes from the heart, following her life-long passion of dancing, one of New York City — one New York City woman is proving there is no business like shoe business.
MATHISEN (voice-over): For years, ballerinas have suffered the agony of the feet.
CLAIRE DAVISON, AMERICAN BALLET THEATRE APPRENTICE: There`s, I guess, the initial burning, blisters, and then just kind of throbs.
MATHISEN: Dancer Eliza Gaynor Minden remembers pirouetting in pain, as well.
ELIZA GAYNOR, GAYNOR MINDEN INC. OWNER: Coming down from a jump and all of a sudden, having it hurt and hearing a loud clamping noise really changed the experience of class for me.
MATHISEN: Minden was also shocked to see ballet companies spend thousands of dollars on shoes that wore out after just one performance.
So, Minden, who comes from dancers and inventors, decided to take matters into her own hands.
MINDEN: I bought a pair of every brand of point shoes that was available, and cut them all open with the bandsaw, and I couldn`t believe
what I found inside. None of them had modern materials, and one of them
even had a toe box made out of newspaper.
I was really outraged that dancers, who are serious athletes, were expected to perform in such antiquated equipment.
MATHISEN: Minden spent eight years developing a patented, high tech point shoe. She and husband John launched Gaynor Minden Footwear in 1993.
But despite the shoe`s comfort and durability, they were not an instant success.
MINDEN: Ballet is a very traditional art. There was a scandal the first time a ballerina wore a tutu on stage.
So, while some dancers embraced Gaynor Mindens right from the beginning, others needed to be convinced.
MATHISEN: Minden stuck to it and the shoes began to win over the hearts and the soles of prima ballerinas, like Julianne Murphy of the American Ballet Theatre, and Svetlana Zakharova of the Bolshoi. Soon, other ballerinas came calling.
Claire Davison is an apprentice at the American Ballet Theatre.
DAVISON: They are comfortable, consistent and they look really nice.
I feel like they really compliment my work and point work and feel really good in them.
MATHISEN: The shoes retail for $115 a pair. While some dancers still favor traditional brands like Capezio, ABT soloist Kristi Boone has been wearing Gaynor Mindens since she was 15.
KRISTI BOONE, AMERICAN BALLET THEATRE SOLOIST: You have a lot of choreography to remember when you`re walking out on stage, and the last thing you want to worry about, is your shoe going to break? Does it fit right? Does it look right? Is it going to last throughout the entire ballet?
So, to have that peace of mind for me has just always been key.
MATHISEN: The shoes are made in a solar powered factory in Lawrence, Massachusetts. Most of Minden sales staff is in New York City.
MINDEN: Almost everybody who works here is a former or current dancer. So we know how to speak to our customers and to dance teachers in their own terms, in their own language.
MATHISEN: Today, the shoes are shipped to 86 countries and more than
200 major dance companies and sales are growing by leaps and bounds, up double digits nearly every year. Two decades after launching her company, Eliza Minden measures her success, not just in dollars but in feet.
GHARIB: Minden is also courting a whole new generation of prima ballerinas. Recently, she introduced a mini Minden line for kids.
And coming up, we`re going to talk to a small business expert about what it takes to make your ideas come to fruition.
Still ahead, meet two entrepreneurs hungry to make it big. So, they got cooking and now, surrounded by the sweet smell of success. Their bright idea is next.
GHARIB: By now, you`re probably thinking about how you can make money by turning one of your own bright ideas into a business. Well, our guest tonight helps people to do just that.
John Jantsch is the founder of Duck Tape Marketing.
Hi, John. Welcome to the show.
You know, a lot of people watching these inspiring stories are probably thinking I got an idea and I can turn that into a business. And some work and some don`t work. What is the magic formula to turn an idea into reality?
JOHN JANTSCH, DUCK TAPE MARKETING: Well, I think one of the interesting things about really all four of these pieces was the people were really passionate about the idea. It was something they were interested in that they felt was fun and that they wanted to pursue. That part you really can`t overlook.
So, oftentimes people think here is a way to make a whole bunch of money. And I think almost every single one of these people said, here is a way I can make a difference or here`s a way I can pursue something I`m really interested in and that`s so key.
GHARIB: But they also want to make the money.
JANTSCH: You bet.
GHARIB: And you need money to turn an idea into a successful business. So how do you go about to get the money, to get the financing?
JANTSCH: Well, I think that today it`s gotten even harder in some ways to just say, here is my business plan, I want to — I want to be financed. I think the best way to really go about it and particularly if you don`t want to risk everything to start off is to really spend time discovering, is there a demand for what you do? Is there a customer? Do you need to tweak it or change it or alter it in someway so that you really get a little momentum to the point where you can actually demonstrate?
There are people that want this idea. There are people that are willing to pay for this idea and now I want to scale it. You mentioned Kickstarter or one of the programs mentioned kick starter. They are really today some pretty incredible ways to fund things.
So many people now are coming up with ideas where there is a small maybe kind of fringe community that loves that idea, and now, they have the ability to actually fund it $5 a person.
GHARIB: And that`s — even though you have no track record of running a business or starting a business, you can get the money?
JANTSCH: Well, certainly. I think it will be a little harder if you try to show up at a bank and say here is what I want. But now, some of the angel investors, the programs like Kickstarter, the crowd sourcing, or crowd funding options, really a lot of times you`re looking for people that are in love with your idea as much as you are. The pencil person is a great, great example.
Some angel investors, the programs like Kickstarter, the crowd sourcing, or crowd funding options, really a lot of times you`re looking for people in love with your idea as much as you are. The pencil person is a great, great example. There are some people out there that if you took that idea to a bank, they would laugh you out of the place, right? But there are some people out there that clearly love that fringe idea and now, because of everything that`s going online, you can reach those people.
GHARIB: You know, for all of the successes we`ve been talking about, there are thousands and thousands of failures that companies just don`t make it. What is the common mistake that people make and their business doesn`t make it.
JANTSCH: Well, the biggest thing is fall in love with the idea. They hatch the plan. They say here is what our business is going to be and they go out there and they just — they just try to force it, if you will, down people`s throats and you really have to be willing to discover what`s going to work.
Every single one of your examples or case studies that you shared, the theme that run through every single one of them is they went out with an initial idea, but their business didn`t turn out being what the initial idea was because they listened to the market. They figured out what would actually sell, what people wanted and they — the common term now is pivot.
They pivoted their business to really meet what the actual demand was.
GHARIB: John, is this a good time to start a business? We see so often that all the reports we do on our program about a weak economy, is this a good time?
JANTSCH: Well, I think if you wait for the economy to be certain, you may be waiting the rest of your life. I think it`s such a great time because the risk is so low in some ways because of everything that`s gone on — that is going on online. With all the tools that are low cost and free and the ability to access markets and networks globally really for no cost has really made it so easy for you to at least test an idea without really having to, you know, mortgage your house to do so.
So I think today right now is a brilliant, brilliant time to start a business.
GHARIB: Well, you gave us a lot to think about. Thank you so much, John.
JANTSCH: You bet.
GHARIB: John Jantsch, founder of Duck Tape Marketing.
And, finally tonight, when you run your own business, the goal is to bring home the bacon. Well, a couple of hungry entrepreneurs set out to do that, and now they are making a big impact in fancy foods.
UNIDENTIFIED FEMALE: It`s so good.
MATHISEN (voice-over): Impressing the big buyers is what it`s all about at New York`s Summer Fancy Food Show. More than 2,000 of those buyers, sampling 180,000 plus products from all over the world, some familiar, some not — all looking to catch the right wave.
UNIDENTIFIED MALE: You smoke it, we ground it.
STEVE BOARD: Organic, and non-GMO.
MIKE BABCOCK: Low sodium, gluten-free.
RAYMOND CHUNG, GREENWAVE FOODS PRESIDENT: USA grown (INAUDIBLE).
MATHISEN: Hungry for a shot at the big times? Make sure you have the stomach for it.
ALLISON HOOPER: We really didn`t have any idea what we were doing.
UNIDENTIFIED FEMALE: My first business failed.
DAVID ISRAEL: It wasn`t easy. I got (INAUDIBLE) with a lot of truck.
ANNIE CHUN, GIMME HEALTH FOODS CO-FOUNDER: The second job.
MATHISEN: Prior experience can help. But it`s no requirement.
ISRAEL: I was selecting locations for natural retailers.
REUBEN CANADA, CANADA ENTERPRISE FOUNDER & CEO: I was a patent attorney.
JENI BRITTON BAUER, JENI`S SPLENDID ICE CREAMS FOUNDER: I started making ice cream when I was in art school.
SIGGI HILMARSSON, ICELANDIC MILK & SKYR CORP. FOUNDER: I started making it in my kitchen.
UNIDENTIFIED MALE: It was pretty ghetto, as they say, to begin with.
MATHISEN: And Marietta DeAngelo?
MARIETA DEANGELO, CULINARY IMPORTS OWNER: We made exclusive baby bags for expectant mothers.
MATHISEN: Ready to go that is until a trip to Austria brought back memories of the pumpkin seed oil she first tried there as a visiting teenager.
DEANGELO: They use it on everything. They use it in lieu of butter.
They put it into their soup. And every single night, we`d have a pumpkin seed oil Sunday.
MATHISEN: So she had some shipped home to Massachusetts and started selling it out of her trunk, to gourmet food shops.
About seven months later, she met Ian Johnson at the fancy food show.
He saw a fit along side his Los Chilero`s chili pepper products. His bright idea, a full line of seed oils.
IAN JOHNSON, LOS CHILERO`S VP OF SALES & MARKETING: That`s been a kick to it.
MATHISEN: The rising star, cherry seed oil.
JOHNSON: You know, it was a risk, but we thought this is something unusual.
MATHISEN: Right after it hit the market in January, the Specialty Food Association called the oils a hot trend for summer. The cherry seed was named a SOFI Award finalist. That`s Specialty Outstanding Food Innovation.
JOHNSON: This is the Oscars of the food industry. It`s like being nominated for best actor and best picture.
MATHISEN: There are only l25 finalists, out of more than 2,500 entries. It`s a big deal because it can lead to big deals. There`s a consensus of sorts on this.
BAUER: It`s been validated by a whole bunch of retailers who voted on it.
HILMARSSON: It validates the product.
UNIDENTIFIED FEMALE: Just a great validation.
UNIDENTIFIED FEMALE: It`s really validating.
UNIDENTIFIED MALE: And the SOFI Award goes to Los Chilero`s Stoger cherry seed oil.
MATHISEN: Winning the award for best oil is the kind of Oscar level publicity that money can`t buy. And if there were an award for celebrating an award — DeAngelo and Johnson might win that, too.
DEANGELO: We did it.
JOHNSON: They got it.
MATHISEN: And you already know what else they might be thinking.
DEANGELO: It validates what we believe in and what we`ve been telling everyone.
JOHNSON: We`re on a roll.
DEANGELO: We`re already writing orders.
GHARIB: The sugars have certainly been able to cut the mustard with their seed oil. Since winning their SOFI Award in July, they are cutting Williams-Sonoma (NYSE:WSM) and whole foods among their customers these days.
Well, that`s going to do it for this Labor Day edition of NIGHTLY BUSINESS REPORT. I`m Susie Gharib, thanks so much for watching. Have a great evening, everyone. And Tyler and I will see you right back here tomorrow night.
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