Spinbrush: John Osher. The Electric Toothbrush That Sold for $475M

from the founder of Tart Cosmetics, or Airbnb or Mark Cuban. Well, you can get that advice. Every Thursday we drop an episode of the how I built this advice line. It's where I bring back a previous founder we featured on a past episode, and together, we help real entrepreneurs, people selling skincare, dog toys, pottery, food, whatever.

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Our first 100,000 pieces were defective, that we shipped.

We're defective. The water would run right through the toothbrush and out the bottom. It would break in a month, and went back to my partners and I said, "If I continue to sell this, it will die." But the decision to throw those out was a hard decision, especially for a new company.

And we had 400,000 of them in our warehouse. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and

“the stories behind the movements they built.”

I'm Guy Ros and I'm a show today how John Osher went from selling spinning lollipops to inventing the world's cheapest electric toothbrush, the spin brush, and sold it for hundreds of millions of dollars. And many founders, including ones we've had on this show, consider themselves lucky if they can eventually sell their idea or their business to a larger business and walk away

with a nice pile of cash. I guess today, pull that off, not once, not twice, but three times.

He sold his first company to the Baby Brand Gerber.

His second one, a toy business, was sold to Hasbro. And the third, he sold to Proctor and Gamble.

“John Osher isn't just a serial entrepreneur.”

He designed or invented several iconic products. For example, the first rainbow mobile. You lie a baby down on its back, and they can reach up and play with a different toys hanging right over them. John also came up with a bedroom basketball hoop with a digital scoreboard.

He discovered and then marketed a battery-powered lollipop that spun around at the press of a button, and finally, in 1999, John introduced to its probably his best known invention, an electric toothbrush called Spinbrush. It's a product that had such an insane, meteoric rise. It became a case study at Harvard Business School, and it was inspired by those spinning lollipops

he sold years before. When it came out sales took off almost immediately.

In two years after launch, John sold Spinbrush to Proctor and Gamble for $475 million,

a year after that sale, Spinbrush became the best selling toothbrush in the country. Now as I mentioned, prior to that PNG sale, John sold two previous businesses to two other major companies, and before that, he had even more businesses, even more ideas and inventions. Too many to get into in this conversation today, but each step along the way, all the way back to when John was a teenager, each step led to the eventual spectacular success of Spinbrush.

John O'Sure was born in the mid-1940s, and grew up in Cincinnati, where his dad was a neurosurgeon, and his mom was a writer. He attended the University of Wisconsin for a few years, but in the mid-1960s, he transferred to the University of Cincinnati and decided all things to go into the earring business. It started in the probably 63 or 64 with a hippie movement, and they all started getting

their ears pierced. It became very quickly a fad and a hip thing to do. And my thinking was, the hip schools are all doing these, everyone's getting their ears pierced. It will come to Cincinnati, so when I transferred there, I decided to open an earring store. Now, I knew nothing about earring's myself, but I found a little tiny shoe-shined parlor

It was probably 10 feet by 18 feet, and I rented it, and I went to New York with my mother,

and we went to these stores, these distributors, like on the second floors of these buildings,

and I would buy all these earrings for 19 cents. So I bought a whole bunch, and I took the, I went to this store, I rented, I put black velvet on the walls, and I hung the earrings up, and it's an interesting thing, because I have charged $4.99 for my 19 cent earrings. Wow.

The next store to me was a store called Stop and Shop, and they had very much of the same earrings I had, and they bought them also for 19 cents, but they sold them for 39 cents, you know, doubling their money. They sold nothing, everyone bought my earrings at $4.99, first of all, people didn't believe you could get safe wires for 39 cents to put in your ears, but the reason I bring it up

is it was a great lesson that I used for the rest of my whole business career, and that is that you set your price on what the market will pay, was the optimum price for a market as opposed to what you paid for it. Yeah. So you have this earrings store, you're selling earrings for an in your student, and it sounds

like it's doing pretty well. Yeah. So I only had this store probably for six months, and then I sold it to a friend of mine, the excitement of it wore off, but I took the money, and I went to Europe for the summer, bought an MGB at the factory, bought a bunch of bell bottom pants.

This was the summer. Do you remember what year that was? It's probably 67, I'm guessing. Nice.

“So you took the money from selling that shop, and you go to Europe for the summer?”

Yeah. And maybe I had $6,000, but that was a ton of money for a 19 year old, or 20 year old, and lived like a king in 1968. So one of the things I tried to do with every business was to become rich within the context of my life.

So $6,000 is a college student at that point in my life. I was wealthy, and I was able to do things I wanted to do that I couldn't do otherwise. I read that you actually did not drop out of the University of Cincinnati early, and that when you were taking that trip. You did not graduate, but you did eventually somehow, and a year later, I guess 1969 and

up in Boston, and you continued your studies at Boston University. And while you're in Boston, you open another business, you didn't earing business, of course, in Cincinnati.

This is actually amazing to me that you opened a second another business, another store,

that you could actually do that. I'm thinking about, because I want to ask about the store in a moment, but I'm thinking about today, if you're a student at Boston University, and you're just a middle class kid, there's no way in hell, you could get a lease in Boston to open a shop.

“You need to like sign a lease to 10-year term, the rent cost would be astronomical, like”

nobody, no mortal could afford to do that. But this was realistically possible, clearly, in 1969, you opened a second hand closed shop in Boston. How did you do that? You know, this was before that everything became so expensive in life.

It almost would seem as if I'm a courageous person, because I'm so willing to open businesses in this net, and it really does come back to the value of starting my first business at five years old, and having businesses successful all through high school, and it became natural for one, and two is that by doing things little things successfully, I had confidence.

I never thought about how can I do this?

As opposed to somebody who's got a wife and family and has been working at Procter and Gamble, a big company, and they see some opportunity, and they get mortgages, they got to worry about, and all of this. It was really natural. I'd go to flea markets, and I'd go all over New England, and I'd find these things

for nothing, and be able to sell them for quite a bit. The store, yes, you're selling vintage clothing, the second hand clothing, and you run

“this shop, I think, for again, like not that long, maybe a year or so.”

Maybe a year, I can't remember something like that. And you graduate, you sort of close this shop up, and now this is where the very eccentric part of your life begins. From what I read, and I really want to dive into this, for roughly six years, you move to a commune in upstate New York, and tell me this story, what was it, how did that happen?

What's going on? Well, since I was younger in the hippie days, from the LSD, and that type of lifestyle,

I got involved with the teachings of a spiritual philosopher named Gerjif.

“This is George Ivanovich, Gerjif, what did he teach?”

The basic concept was that we, as humans, are asleep, were basically given a name, were trained.

I mean, I became a Democrat or a liberal, because my parents voted for Adelaide Stephenson. And neighbors across street voted for Ike, and they became Republicans, you know, that we were, we become basically trained, and we live our lives, and we wake up, and we go do things, and his philosophy was more about waking up, about waking up to a deeper truth about ourselves.

Okay, so you, you join this group, and you're part of this group for six or five or six years, and what were you doing for, for work, for living? Well, so that, that became interesting in a important part of my life, and that is that when I grew up as a doctor's son, and, you know, for the light bulb breaks, you hire somebody to screw it in.

And so I grew up with virtually no skills or thoughts that I would have any aptitude for

things like this, but the group there had to make a living. So a lot of the people came in, were PhD, you know, all different walks of life, joined this community, and to, to make a living, we either got, and you generally got involved with some form of construction, or we got into the arts, pottery, and the likes.

“So I did a lot of the trades, I, I mean, I forget, I think the first thing I set off with”

was the record pair repair repairman, that's when they had record players, and then I became a landscaper, I got a job for a builder, was a carpenter's helper, and eventually the groups construction company needed a plumber. Hmm. So I went to become the new plumber, and it turned out I was good at this stuff.

Alright, so you're, this is like a pretty long period of your life, five or six years, and you had spent a bunch of years learning how to do plumbing and carpentry, and which is super, which would prove to be very handy and useful, but you were not settled in what you were going to do with the rest of your life at this point. Absolutely not, and I never, ever was.

Yeah. To this day. Yeah.

“I think a lot of young people get really stressed out about not, you know, having achieved”

something notable by the time they're 30, and that's nonsense. And it was just never the case, even when I was a plumber in this girjeef group, I was rich, you know, within the context of my life, I, you know, I had a house and a car and a wife, and I made much more money than everyone else in the group, because I was in a business that you could charge a lot of money for.

I never took a second to fear what am I going to do next or how am I going to make a living.

And I said, I can look back at it and say, well, why didn't I should have been afraid, but I just didn't. Yeah. Okay. So you were, you were part of this group, and then you wind up moving back to Cincinnati. I think right around, uh, 1978, uh, which is also around the time of, of the energy crisis

in the US. And I guess you had this, obviously, you had this background in plumbing and construction. Uh, so you actually started a business that made, I guess, like, like, like, what energy saving devices like for, for homes? Yeah.

So I remember staying up all night one night, and this was by, beginning of a career as a semi-inventor and inventing products and coming up with a list of products, hot water heater installation jacket was won. We made special fans, a lot of people were getting carousene heaters and heating up one room to 120 weather rest house was cold.

So I made these fans that would hang in a doorway to bring the heat from one room to the other, things like that, and it showed me that I could be an inventor. It, you know, it's hard to believe you can do that, and to actually do it successfully and sell a product. I guess, you know, by the early 80s, this is now the Reagan era, energy prices start to drop

significantly. Yeah. And I imagine it's having an impact on your business, because it's designed to, to save people money. And I read that around this time, you start to think about pivoting into a new category,

which is nothing to do with these energy conservation products. Right. I saw that the energy prices were dropping, which we're not ever expected. We thought it was going to forever grow. And I saw that the products were slowing down.

And at the same time, I was in this apartment, and I had a six-month-old son who would

I came up with an idea called Crawl Space, which is a little portable carallet opens up any outside-it configuration. And it was at a time when the scissors, the wooden scissors gates and caralls were being outlawed, because of danger.

“And so I went back to my partners, and I had investors, and I said, I think I want to start”

this baby product business. And I remember one, I'm was really furious. And I said, now we've committed to this energy, and I said, no, and I stuck by my guns. And so while we still had the energy diminishing energy business, I developed this baby product called Crawl Space.

And this was just to clarify, this was a playpan, but it was mobile, you could move it around. No, it was portable. It was portable. It weighed eight pounds.

It folded up like a suitcase in two seconds. We had ratcheted hinges, no bottom, and you could make it into any eight-sided configuration. It was an octagon shaped playpan, but it was literally on the ground, right? So the baby, even a crawling baby, couldn't push it, wasn't listening to the machine. No.

And had rubber feet on the bottom, so it made a very hard slide. And it wouldn't be necessary in octagon. It might be many angles. You could angle it. And the ratcheted would hold it in whatever shape you could raise a seal.

It was a cool idea, but the name was really helped a lot. Crawl Space was a terrific name for that.

“And where did you sold the product like, Toys R.S., where were they sold?”

Always sold it. Yeah, Toys R.S., child, world. And that product, I think, led to another thing that you created, called the Rainbow Toybar. It was called Rainbow Toybars. Now, that's one of the two products in my life that were a difference maker in the

world.

The first one was the Rainbow Toybars.

Back then, when my baby was, I figured it was the same baby, probably the same baby. Between zero and six months old, we put them in a little seat that he'd sit on the floor, or we put on a blanket on the floor, and in five minutes he'd start to cry. And if I gave him a rattle, he'd play with it for a few seconds, but then he would drop it because he was too young to hold onto it.

So I came up with the idea, said, why don't I create a little swing that I can hang the toys down to the baby over his blanket? And he could have visual stimulation, and he could play with him when he let's go, there's still there. And I bought a bunch of white PVC tubing, and we actually made special fittings that

would fit the angle, and we made it, so he'd push it together, and it came with little plastic rings and hang rattles and toys like that. So this is the first thing of its kind. I mean, this is a very common toy. You put a baby on the line.

Get everybody in the world, use some frame of this now, but back then it did not exist. And it's like an arch that sits over the baby with toys at hang, and the baby can just

“grab a, how did the crawl space in the ringboard toy bar do?”

Well, they both sold well, really well. Yeah, and I've read that pretty soon after you introduced those, you got on the radar of Gerber, the baby company, and they came to you with an acquisition offer, I think,

like two million bucks, and you sold it, the company.

And I guess you worked there for a little while, but pretty soon after you left to start a new company, and this time it was going to be toys for older kids, which was called Captois. Tell me about that company and what you are going to make. So most of the toy industry back then was toys came from inventors, toy inventors.

So I went to look at a bunch of toy inventions, and I found two inventions from a guy named Howard Waxler in New York, and he was famous for inventing Connect 4. And I developed what's called a blooming dolls, which was the doll that was a flower pot, and it would turn into a puppet, and then into a full doll. And it was really cute, and a ball called Crunchballs, which had little foam pellets in

a tent material, and it was in between a balloon and a ball. So I just tried to picture the blooming doll was a doll that was growing like a plant from a pot. It started off, it starts off as a plant with leaves and flowers. It's all fabric.

You put your hand in it, and the head pops up, and it has arms, and it works as a puppet.

And what happened was that our first year, we were toys or us was buying it, and they bought

an order and ice amount, and before we shipped it, before I could ship it, they canceled the order, because they were overstocked that year. Because this item wasn't selling, right? This just wasn't taking off. Nobody was buying that.

It didn't really have time to. The season was just starting, and any pre-sales were okay.

I had all this inventory, and they canceled, and did the same with the Crunchballs. And I really had no preparation for this type of thing. And I went through the toughest few months of my life. So what do you do?

“Well first thing I want to do, and this is called entrepreneurial terror, and I think most”

successful ones included have gone through this at some point, because the buck completely stops with you. There's no group or committee, or meeting to get together with others. It's all on your head, and I remember I spent two or three days, I just wanted to hide under the bed.

I mean, I didn't want to get out of bed, and I was getting divorced at the time, and I was living in a city, Cleveland, where I moved with the baby company, where I didn't really know many people, so I didn't have a big support network. My investors, by the way, all quit investing, the bank dropped me, everything happened all at once.

And after three days of this, I just got up and said, "I better do something." And I got up, and I put down a piece of paper, "What I have to do." I got to get a new bank, I got more money in the company, I have to deal with toys for us, and once I started that, and I got over the fear, I went to work, and I went

“got my rep, my sales rep in New York, and we got a point with the boss and toys for us,”

with my buyer's boss. And I said, "You're basically putting us out of business." And I wanted to find out if there's anything you can do to help me, and he looked at me, and he said, "You know, this was when toys for us was in her hayday."

I mean, they were really powerful.

And he said, "You know, we need new toy companies, and we don't want you to fail." And he said, "Let's see if we can make an arrangement, a deal, you know, I'll give them some content, something, and we'll buy your inventory." For the rest of my life, all through the toy industry, every time I see him, I practically break into tears, because it was so kind of him, and I took out a second chance.

Then I went back to my investors, and I said, "I got toys for us to take these." I had already developed a product for the next year, too. And the new toy I had was called Arcade Basketball. And it was when Papa Shot was real popular where you pay 50 cents, at the carnivals and bars and everywhere, and see how many baskets.

And I made a home version of it that hung on a door with a net. I've seen it. I remember it actually, because it was a kid at the time. It was a whole year, it was a little back door basketball hoop, but it had an electronic scoreboard.

And I guess every time you got the ball one at a hoop, it would click the sensor or something, and then you would get a point, which opens the scoreboard. Right. And it scored it. And it even would have two people playing against each other.

By the way, this isn't the early '90s.

“Were these being made in China at the time or not yet?”

Yes. They were made in China. So our budget, our next year, we got this chance in everyone by Arcade Basketball.

We did six million dollars and made a million and a half dollar profit.

But we were on our way. And you were able to do that because you got this order on those flower pot dolls. Because he took the deal, but I was also able to, because as a result of that order, my investors agreed to stay in the business and as a result of that, we were able to get a new bank.

So that product, the Arcade Basketball hoop, really saved the company, saved the safety guys. And it all started with me getting out of bed. Yeah. When I didn't want to.

When we come back in just a moment, John gets into the battery powered candy business, followed by its opposite, the battery powered toothbrush business. Stay with us, I'm Guy Raz, and you're listening to How I Built This. Hey, welcome back to How I Built This, I'm Guy Raz. So it's 1993, and John's business captoys is back on his feet, and he's looking around

for another good idea, which actually turns out to be a lollipop. I got into somebody who went to an inventor show in Pittsburgh and found a lollipop that lit up. Well, you press a button, it was like a sword that would lit up, and I ended up bringing the inventors in their four mailmen, two couples.

And shortly after this light, they had come up with another idea, which was, it looked like a right angle drill where you press a button, a lollipop would spin, and I looked

at that and I said, now that's an idea, because I always spun a lollipop with my fingers

in my mouth.

So let's just back up a little bit. You know, in the early '90s, you had a representative from your toy company at a trade show, and the story I read was there was these two couples from Virginia. Well, they basically had a light at lollipop. It was a spear, and my guy calls me and tells me about it, and I said, that's great.

I'm looking for a category in this, and so I said, I want to fly them in. I want them here tomorrow. I flew them in from Pittsburgh, and I bought the rights to it. And a one person of the four was the inventor, and he had started inventing a whole lot of other candy items, and one I was interested in was this one that spun, which was maybe

six months later. And I bought this thing, thinking that if I'm ever going to sell this company, I'm going to need a category that Hasbro or Mattella, one of these companies, need because they buy categories.

“That's what they don't need a product unless it's a lifelong product and a category.”

So I decided to get into this category of interactive candy. And so like candy that was, I had like a battery-operated feature. Right. So you acquire the rights to the spin candies, and presumably, you knew that they could be made pretty cheaply, because you'd already been making products in China.

Yes, I knew we could make this very inexpensively, and I knew a lollipop, you know, we went to all the lollipop factories, dumb domes, and all this, and that we could buy lollipop very inexpensively. These were released in 1993, and they were a massive hit.

They would go on to sell 100 million in the first three years.

That's incredible. How did that happen? Was it that you have a huge marketing campaign? No, it's just, sometimes you get an item like a popular song that's an incident, everyone recognizes an incident hit.

You know, when you have something on the shelf and a store where we have many products that will sell one piece a week per store, and you sell eight a day or something, it becomes a hit so quickly that everybody wants to buy it, and the spin pop became one of the largest, we sold millions of them. In all over the world, that's all millions in Japan, and we were probably in the interactive

candy bag, then we're probably doing $40-50 million of the candy.

That's crazy, $50 million.

Yeah. All right, so these spin pop's take off, obviously, and once again, you get onto the radar

“of a bigger company, and this time it's Hasbro, which I think is one of the biggest”

toy companies in the world, and basically, in 1997, captoys your company is sold to Hasbro for over $160 million, so obviously, very nice exit. Yeah, so I negotiated a good deal, and I retired. I was about 50, and I was retired and moved to Florida for a year or something or so. But that didn't suit you.

Well, it didn't suit. I took up golf, and I did that for a year or two, and once I got bad at golf, I had to go do some else. Did you, what, we mean, once you got bad, did you start good, and then get bad? I, at golf, yeah, nobody, very few people could go to golf, but after being so called

retired for a year, maybe two, I don't remember, I had an idea. So I got together with guys that had done design work for me in Cleveland, and I had done a lot of great designs for products, and I had a list of 100 ideas. The first one being the spin battery-operated toothbrush. I knew we had made millions of these spinning lollipops, and that we became experts in small

batteries, motors, and gears in China, and I said, well, I wonder if it's possible that I could make an electric toothbrush that would sell at Walmart for $5. Just to put this in context, it makes sense because you had experience with a spinning lollipop. This is 1998, and I, for what I understand, you have, I mean, like electric toothbrush is existed, or it will be, and they had sonic hairs, whatever.

They were around.

“But they were very expensive, how did you start to think about a toothbrush?”

I mean, because you knew you wanted to start a new business, tell me what you did to get the idea for a toothbrush. You like, go to grocery stores, did you look at what was on the aisles? What did you do to get an idea for what you want to make?

Well, first of all, I always went to stores and looked at my aisles.

All the time, it's just part of a product idea process, but the joke is that everyone says you sold all these lollipops and ruined all these kids' teeth, and then you felt guilty and invented a toothbrush. But that wasn't really the story.

I'm not that altruistic, but the reality is, is that we ended up buying such large quantities

“of little motors at batteries and gears, where we're buying in the millions of batteries”

from ever-ready alkaline batteries, where we're paying 12 cents a battery rather than 78 cents, or 39 cents for high volume, and same with the motors that cost 90 cents, and we're paying 8 cents or something, because I was buying a million at a time, and because of that, I thought that it's possible that we could take what we've learned, and we have factories that have been making these lollipops, that they would be great resources to make a battery

operated toothbrushes if we could actually achieve it, and we wanted to sell it for $5 or less at Walmart. And you saw the opportunity there, basically, there was a super high-end electric toothbrushes. This was a growing segment of the toothbrush market, and you saw an opportunity to make a really low-cost version for people who maybe wanted to try electric, but didn't want

to spend 80 bucks.

Well, we really never considered or worried or competed with the high-end, which was some

more 50 bucks, and we basically saw the manual market, that's where the numbers were. So you would, your competition was just the standard manual, like oral B2's brush, that was selling for three bucks, and you figured, hey, if we could make an electric version, like a battery-powered version for five bucks or six bucks, people would see that and say, wait a minute, I get more for just a couple bucks more.

“Yes, but the best thing about it was everything I've ever been involved with up to that”

point, from energy products, it was still limited to a certain size, the toys, even toys you're dealing with, boys that are three to eight. That's really a small market, but I love the idea that toothbrushes was everybody. Everybody in the world, man, woman, kid, age, it made no difference.

There was never a bigger market to go after.

All right, so now the, if these existing models are selling for $50 or $80, I know that was in your competition, you were trying to make a toothbrush for five or six dollars. It couldn't have the same features as the $80 brush, right? So what was the difference that you were creating that would make it possible to create these for two or three dollars in China?

First of all, they copy and work off themselves. So the most expensive electric toothbrush was 110 owned by Phillips, and they practically use of all Volkswagen motor and things, and we had been used to motors that are much smaller, and if they would work, we didn't need to have what they had. They were also had to have a quality for the price they were selling at.

You couldn't have it just break because I won't take them back. We didn't need that. We actually went out and said, this last the last six months. So by using a less powerful motor, you were able to, you knew that you could probably make a cheaper or less expensive, much less expensive version. I didn't know that we were going to, that it was, if we could, it would be so big.

I did not know if we could achieve it, and after six months, I almost quit because we just couldn't get it the way I wanted it. What was the challenge? Because I mean, what were some of the, I've seen the design schemes of blueprints.

“What were the challenges you guys had in trying to create this thing?”

Well, I was, it had to include batteries. I didn't want anyone to buy this and have to go buy batteries. Well, I had to give them good batteries, because if I gave them cheap non-alcohol, alkaline batteries, they would die in a month, and if they're going to have to buy batteries every month, that's not ultimately a good deal.

So I had to find that the batteries had to last three months. So we had to design a product, and it had to actually work, using two minutes of brushing, I think twice a day, and we ran all kinds of tests, not quite like PNG would, but we ran all kinds of tests to make sure that we got the battery life we needed. Then even more important is we needed the torque, that when you brush your teeth, it's

really working, and it's working great. So I had to satisfy that. In it took us a year before we got a product that I thought was well beyond the threshold of a far better product than any manual brush. And at first we actually came up with a rounded head, and it worked very well.

The problem was after two weeks it was played in real ugly, and I said you can't do that. It's ugly, you know, nobody wants this after two weeks, it's too ugly. And so we decided to make it oscillate rather than rotate.

We never changed the name because it was a good name.

But then I realized that I like to brush my teeth in the morning. I don't like to do what Oral B does where you walk around your mouth differently and have to learn a new method. So I said, well, why don't we take the oscillating round part and put bristles below it and make it look like a regular brush so you can brush your teeth normally and get the oscillation

at the same time. And that not only gave us a major advantage, but it opened the door for a great patent. Because we say, okay, we're going to make a tooth brush that moves part of it moves and part of its fix. Well, nobody ever thought of doing that because there's no reason to think that.

And a few years that followed, we made even much better ones than that.

“But at the time, that's what we need to get to a point that we were offering a product that”

was much better than they could get manually. One of the things that is interesting to me about this is as you're working on it, because you had come from the toy business and you had some experience with candy, you want to focus on the packaging of this, right? Because if it was packaged right, then it would pop out of the shelves.

And one of the things that I guess was critical, even before you had the first product done,

was that it had a trimy button, like it was packaged in such a way where on the shelves, you could push the button in the store and see the bristles oscillate. That was critical to what we were doing for a few reasons. One, we'd sold them just like with Despin Pops and it's 12 pack, them sticking in a case and that had a button that you could press and you could see the retail or not to the consumer.

To the retailer. Yes.

“But what was so important is that when you're selling a toothbrush, electric toothbrush”

for $0.95 or $0.89, whatever Walmart price was, it's almost not credible. So if a consumer looks at it, it's at a toy, I don't believe this. So having the trimy where you could press a button and it does feel like you're running a Volkswagen motor, I mean, it really looked great when you pressed a button on the shelf. So we took that from our toy experience and we made them in 12 packs that everything we did

to start this business was to get them on end caps at a retailer. That means at the end of the aisle. If I had just stuck two of these on the long wall that had 80 manual brushes, we would have sold some, but it would have been much more difficult. But our products sold so well so quickly we were able to get on the end of the aisle

at Walmart where they put in 140 of them rather than six, but the trimy was a very important

thing that we learned that was never in the health and beauty department.

It was a new thing for that department. But we learned it from the toy industry, how useful it is and people love the press buttons. Yeah. So all right.

“So you finally, after a year of working on this, you get any patent this, right?”

You file for patent protection which makes sense because you know, you know, you're on something, too mad. It's okay. And you get the prototypes in 1999 and I read that you attend a trade show or, and you because of your track record and your connections, I'm sure you already had some interest

and I think you initially had deals with Myers, which is mainly in the upper, you know, Michigan area and Albertsons, you know, with these sort of trail runs, how are you able to measure how well they were doing? Well, with Myers, I happen to be from my other businesses, friends with one of the owners at one of the Myers.

And so he agreed because we were so new and nobody knew we were and it's hard to get appointments and didn't know this. But he agreed to do a test, 24-pack test for us in a bunch of stores. And we were five of us at the time working for the company and we all, and they didn't have any Myers stores and Cleveland.

So we all left, I want the Detroit, somebody went to Delito, Columbus, setting them up, putting them out as the test was supposed to be, and then going back each day. And that's when we found out that we'd put them out and we were selling seven a day per store, which was just in a different realm of any other toothbrush in the world. And you knew they were selling this store, how?

We back then, we counted them, we each of us went to various, and we go to the stores and we counted them. Then we became friends with each of the store managers and he'd look it up on his computer to make sure that they were actually sold and not stolen. And once we knew that, that's when I called my factory and quadrupled the tooling, even

So you could see right away that the, I mean, oral B was still the big, the manual toothbrush

“was still the big seller, but you could see that the spin brush brushes at least, you know,”

these individual Myers stores you were going to were actually selling quite a few per day. Their sell, oral B was selling the best selling toothbrush in the world at the time was their cross-section, which was 395 expensive toothbrush manual and they were selling 12 a week per store, 12 toothbrushes a week per store, and we were selling it like that much. We were selling seven per day, and the buyers, everyone involved, knew right away what

this was, but we did have though, our first, our first 100,000 pieces were the effect of, that we shipped. We're defective. Effective. It was another great lesson.

And so, what you did throw away? So what happened was the first 100,000 pieces, we had the water, when you brushed teeth the water, and run right through the toothbrush and out the bottom, because we thought we'd be fine. But what happened was over a month, I'm using it for about a month, it would, I'll

let trial assist or whatever it would cause, it build up at the connections and it would stop working. It would break in a month. And we had 400,000 of them in our warehouse, and I had to make a decision, this is a consumable product, and this is potentially so big, and if I continue to sell this, it will die.

And I went back to my partners in it, my investors, and I said, I'm going to scrap these 400,000.

We're all going to put in another half a million dollars or something, and we're going

to redesign it, which we did, working day and night with the factory online on foam, and a week or two, we redesigned it, so the water, it was all handled different, became waterproof. But the decision to throw those out was a hard decision, especially for a new company. And if I didn't do it, it would have failed. Well we come back in just a moment.

John approach is one of the biggest companies in the world to orchestrate a buyout, and it starts with a major bluff. Stay with us, I'm Guy Rise, and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Rise.

So it's the year 2000, and Spinbrush is rolling out and selected stores like Albertsons and Walmart, and already the numbers are looking really good, like almost surprisingly good.

And in the first year, we did $44 million with a $21 million profit.

$40 million in sales. It wasn't even a full year, it was probably because there were eight months, and as said, we made a $21 million profit, but we did that on purpose.

“We really wanted to make the profit that was so important, because I wanted from day one,”

we wanted to sell the company to Procter and Gamble. Procter and Gamble was your target from the beginning you thought, but you had no idea that they were whether or not they were working on their own electric toothbrush. We didn't, but I've known that they're a chemical company, they were not particularly a strong company in China, and they were not particularly strong in mechanical, you know,

they had swiffer, but for the most part they were food and chemical company. They were the company that needed this product. They didn't have an electric toothbrush, their toothbrush business was way down, and their stock was down. Their whole company was in a downward, so they were our target when we started the company.

This is an interesting time for Procter and Gamble, because as you say, Chris had lost market share and PNG stock price had fallen by 50%, there's something else, there's a totally different story, but we'll turn it around, we'll spin brushes part of it, eventually

“we'll get there, but we're Chris White strips, which they had invented internally, right?”

That turned into a massive, multi-million, $100 worth of business within a year or two. And that would also turn the company around, but this was, it's interesting, they were Procter and Gamble was not on the ropes, but they were definitely, you know, taking their lumps at this time. And you thought that they might be an acquire of this product that you guys had put

out. Well, I knew that they needed us. It didn't mean that I would meet somebody who recognized that. How did you, how did you approach them?

I mean, did you go to Procter and Gamble and say, hey, we're, we're for sale, never.

they want to buy you.

“If you go to them and you say, hey, we want to, we want to sell, you're saying the price”

would have been lower. It way lower, in fact, and they meant an interest at what I did instead, and this was all part of the plan. I went to their licensing department with this crazy idea, which I didn't think in a million years, they had agreed to, to license the crest name for our product.

Well, even when I went there, they never heard of us, even though you want to slap crest

onto the spin brush. Yeah, we wanted to license their thing, which I really didn't want to do. I didn't want to do it. But I just wanted to show them who we were, and I wanted to use that as a door. So anyway, I gave, I passed out toothbrushes to everyone in the office, and they agreed

to do a test. So you pitch them basically, you show them the product, you pitch them the product without really pitching it. It's just, it's the, it's a ruse. Yeah, we wanted to sell the company to them, but I had to find a door, and I wanted them

“to want to buy it, and so the other way.”

So they brought the brand people in from pressed, and everybody, and they agreed to test it. So they, we sent them a bunch of pieces, and they tested it a month goes by. Two months goes by, three months, not a word. So you know, that's usually not a good sign.

Yeah. So I got to find a guy to find, I said, well, I'm not as well call them, because I got nothing to lose at this time. And you guys were selling tons of toothbrushes. Yeah, we're doing great.

We're doing great. You're going to do $44 million in that for sure. In the next year, we probably would have done 80 to 100 with a great profit, but so I finally

called the guy, and I said, well, I've never heard from you guys, it's heard from us.

I thought, you guys were going to call us back, don't worry. And it turned out, and we didn't know this, to later, that it was the highest testing product they ever did in the history of Proctor and Gamble with consumers. But I didn't know that until actually a few years later. But so they came back and they said, you know, we decided, well, I sent you the name.

Yeah, I don't want their name. He said, well, I should have the crest name, and I said, that's so exciting, but I just want you to know that we can't pay more than 3%, you know, most companies like that with that brand one, 12 or 15%. Yeah.

I said, we have to keep this head to stay at this price point at retail, and we can't do that. And so he says, well, let me check. He calls me back a couple of days and says, yeah, that's OK, 3% OK, well, and then I said, well, I'm so honored.

I don't know what to say. This is such a great thing. I have to bring this to my board.

You know, in the back of those days, you always claim to have a board, and I got to bring

this to my board. And then I call them back. I said, I hate to say this, but I said, the board was so enamored with this that you all made this offer. But they said, if we, if we do this licensing, the board investors all did this to eventually

sell, and they said that they would never be able to sell to anybody, but Proctor and Amon Crest, and you would have all the leverage, because we couldn't do anything else. So that despite that, this is such an opportunity we're going to have to pass. And he says, well, why don't we buy the company? And I said, shut, what a, what an idea, what a, that's, God, that's, that's, yeah, that's

something we'd think about, you know, and then it went from there. And, you know, usually things don't work that well, is this. This was one of these things where Murphy did not come into the business. Everything worked to clockwork, but I needed them to want to buy the company. And I say this, because as I say, when I do speak at different schools on entrepreneurship,

it's, it's such a difference when you're trying to sell something and when somebody wants to buy it. Yeah. Anytime you can get in a situation where they want to buy it, you'll get way more money.

“So they start, you start to hold talks on an acquisition, I think, in January of 2001,”

they formally offer to buy it. And that it was going to be $165 million upfront and then earn out over three years. And you would get a percentage of that, earn out. And you would, you would join Procter and Gamble. You would basically continue to run, spin, brush, okay.

So you guys agree to this. And now you're a proctor, which is amazing, right? So one year in, you get $165 million plus an earn out, so you can get, you can make more. Tell me what, like now that it's a proctor and Gamble brand, I imagine they could super charge this thing.

They could get it, it can make it even bigger. But more likely what they would do would have done was screw it up. That's more, more often than not what happens. But the president of the company, he met with me and he says, you know, we have bought three companies like yours in the last four years and we've ruined them all.

And we want you guys, you have a three-year deal.

even let you override some of our rules. And so we did that and we got on the phone, we started doing the first thing the lawyers want to do is have a stop selling the product. And I said, why?

“Because we have a rule in our company that you have to have enough goods and all our”

warehouses before you can sell the product and your selling as fast as you can make it. And we need to build the warehouses up, stop what you're doing. And I went back to the president and I told me, he says, no, you got the right to override it. You keep doing what you're doing.

So we, and they were hoping to open it up to two different, two or three different companies that that same year and expand the production. And we ran it and we got our production up from 88,000 to 400,000 a day manufacturing.

We were buying close to a million batteries from Everettie a day.

We were second only to Walmart and battery purchases at the time. And we got it into something like 40 countries. I flew around, I did presentations in Japan. I mean, they were all good stories. And but after a year, so they had told their board that they thought they could do as much

110 or 120 million dollars with this product.

“And I think after a year they were doing over 300,000,000,000 with the product.”

But what they didn't pay attention to is when they made the earnout arrangement. They did it based on it being a maximum of 120 million dollars. They had no concept of it going to three or four hundred million dollars or five hundred. And the head of the department, I forget who he was, maybe it was the Vice President of Company.

I remember he called me and said, "We're going to have to stop advertising. We're going to have to pull the product for a while and give it a little cool off." And I said, "Why?" He says, "The earnout is going to kill us. We just can't."

They, because of the earnout, they would have to pay you much more than they anticipated. They'd have to pay us probably five or six times that. I mean, it would have been unmanageable. So I said, "You know, you're right." I said, "You guys didn't expect it to be this big.

I did, but you didn't." Because I said, "For you guys to stop this isn't sane." Because when they also came out with our product, they came out almost simultaneously with the white strips. So the addition of the spin brush and the white strips just supercharged, proctor and

gamble. Yeah. Crest toothpaste became number one again. They're stock went up. So I said, you know, somewhere between zero and infinite, there's a number that we can both

live with. And we went back and forth really, actually on the phone for a period of a week or two, I don't remember. And came up with a settlement number.

“It was supposed to be a three-year turnout, but they basically, I think, negotiated agreement”

21 months early and they ended up paying $310 million.

So the total amount of money they spent on the spin brush would be $475 million. This is amazing. I mean, you get this just a few years after you release this product and it became a minute. They managed to turn it to also turn into the biggest selling toothbrush in the United

States. Even outsold. It was the biggest selling in the world for a period of time, for a window. It was a wonderful grand slam experience that everything went right only once in a lifetime. But you know they ended up having to sell it three years later.

Right. They sold it to church and rioters, so I think it was who told them. Church and Dwight. Yeah. But they sold it, do you know why they sold it?

But what happened is, the three years into it, they were trying to buy Gillette and Gillette owned Oral B and Braun. And the deal was being held up because the two, the Oral B and the spin brush were a monopoly. It was all over 50% of all the toothbrushes.

And so they decided they have to sell the spin brush off. So they called me and asked if I was interested in buying it back. And I said, I would, but I'm not willing to pay much money.

I'll give you $10 billion for the whole thing.

But I'll close next week. You know everything else was they were waiting six months and then they would be due diligence and I said, I'll close next week. But they went back to church and Dwight, who they had been negotiating with and they said, oh, she's made a big offer and you guys, and they forced them into closing the

deal. So for about 75 million plus inventory, wow, they had bought it for $475 million.

What happened were the sales just tanking or they just need to get rid of it quickly?

“No, they had to get rid of it and they, and they had the crests name.”

So they had to make a deal somehow and well, probably again, we did eventually acquire Gillette, which which I, you know, made them right.

So they, yeah, they once they got rid of spin, they closed the deal, $55 billion deal.

And they transitioned for three years with church and Dwight to use the crests name and then it had to be just spin, spin brush, right. But church and Dwight did it, has done and did and has still done a terrible job. They didn't really do anything with it and everyone else is in it. So when you go to the store, there's 15 different variations of spin brush on the shelves

now. It's like knockoffs. Yeah, including their own oral bees got tremendous, they're probably the leader in it. And what, when did you decide to, I don't know, I mean to kind of retire, so to speak. Well, in a way, I retired after each venture because the venture was, was, was the project

was over.

“If I never, and I lived in a mode of looking for ideas, that was my, that's my, my, my mode.”

I'm not too much anymore as I'm older retired. I still get ideas, but when I was in that mode, I would attract ideas, whether they came in my own head or people walked in the door with them or I get calls or the universities that I would speak at people had ideas. So after I fell up company or project, I was open to something else.

So financially, I didn't need to, but I love the creative challenge. To this day, I do. I don't want to do it at this age, but I get just as excited over a new idea. When you think about the journey you took, right, and you know, you two spent six years and this, this group was starting the philosophy of this Armenian monk and, you know, and

then you went and started the conservation products business and got into toys and it led to the next thing and the next thing and eventually, you know, some of these huge products, how much of, of where you got to and, and how much of, of this journey do you, do you attribute

“to the work and the hard work you put in and how much do you think had to do with, with”

luck and timing and good fortune? Well, first of all, luck is enters into everybody's success and I, and I don't think I had a business that didn't have a crossroad point, could have gone either way, in they all went my way. I, I live in a really much more of a state of gratitude than pride, because so many things

could have gone the other way. On the other hand, Gary Plair says the reason he puts so well and that he's so lucky when he puts is that he practices six hours a day and he says somehow he gets luckier that way. And I do think that, you know, the more businesses, the fact that I had, had a lot of businesses, a lot of experience, failures within the successes that you do get luckier.

Yeah. But there were many cases when I, I'd run into problems that were beyond my experience and intelligence, both and don't know what to do. And it's a notch for nor you're really on your own. You might find people who work for you who are very good, you can get their input, but

you're really on your own and, um, I learned to basically sit, I had to always that couch

in my office and I sit on the couch and I would just ask the universe. And this is, it's not about asking God, asking self and Buddhism, asking higher part of my brain. I had no idea, I would just say, what do I do? And then I'd be quiet in a hundred percent of the time, I always got the answer, a hundred

percent I got the answer was right, to the point that I started calling it the magic. And when we'd have a serious problem, people work for me and tell me to go in my office and ask the magic. And, um, what's wonderful about it, is that anybody can do the same. That serial entrepreneur, John Osher, creator of the Spin Brush.

By the way, over the years, John has had a pretty interesting side hustle, backing Broadway musicals. He's actually been listed as a producer on some pretty big hits, including at least two Tony winners for Best Musical, Jersey Boys and hairspray. Hey, thanks so much for listening to this show this week.

Please make sure to click the follow button on your podcast app so you never miss a new

episode of this show. And if you're interested in insights, ideas and lessons from some of the world's greatest entrepreneurs, sign up for my newsletter at gyras.com or on Substack. This episode is produced by Katherine Cypher with Music Composed by Ramtene Reblooy. He was edited by Neva Grant, with Research Help from Remell Wood.

Our engineers for Patrick Murray and Quaci Lee. Our production staff also includes Casey Herman, Chris Messini, John Isabella, Sam Palson, Alex Chung, Carrie Thompson, Norigil, and Elaine Coates.