Grinding It Out (8 page)

I needed no further demonstration. It all fell into place in my mind. It was sensational for sure. Not many days later, we had a supply of metal sleeves at the Lily Tulip office in Chicago, and I demonstrated the idea for John Clark and the other company executives. They loved it, especially when I showed them how I intended to merchandise it to owners of dairy bars and soda fountains. I would go into a place and explain how I could save them some money with these metal sleeves for their Lily Tulip cups. I would buy ten milk shakes—ten metal cans full—and pour them out for people as I talked about how tasty and refreshing and wholesome this drink was. I'd make the waitress leave the metal cans standing on the counter while we finished off our drinks. All this time, of course, the residue was melting in the metal cans. When we finished, I'd grab a sixteen-ounce cup from my sample case and proceed to drain each metal can into it. The result was another full cup of milk shake! In practice that rarely failed to convince the owner. From then on, he used metal sleeves, and Lily Tulip cups—no more metal cans.

This new method stepped up Prince Castles' sales volume so much that their single-spindle Hamilton Beach mixers could no longer handle it. The “One-in-a-Million” was a heavier drink to begin with, and when the mixers were run continuously they simply burned out. That situation is what inspired Earl Prince to invent the Multimixer. At first this machine had six spindles arranged around the central pedestal stand and the top could be rotated to take the drinks off. But that resulted in too many dropped drinks and other minor disasters, so the top was made stationary and the spindles reduced to five. This machine was powered by a one-third horsepower, industrial-type electric motor with direct drive. There were no carbon brushes to wear out. You could mix concrete with the damn thing if you had to. This was the invention that really made big volume milk shake production possible, and it changed the course of my life.

After Earl had the Multimixer in production, I took one of the machines down to the Lily Tulip office and held another demonstration. John Clark was knocked cold by it, and we got busy and signed a contract that made Sanitary Cup and Service Corporation the exclusive distributor of the Multimixer. I felt like Lindbergh and Admiral Perry all rolled into one—a real hero.

Strangely enough, however, the Lily Tulip headquarters in New York wanted no part of it. In fact, they complained that they had been getting calls from customers in other parts of the country wanting to know about metal milk shake cup sleeves and “Multiple Mixers” or some such thing, and they declared that they were not about to become jobbers for some mixer maker in the Midwest. They were manufacturers of paper cups, and that is what they intended to remain. I could scarcely believe it. I knew we had barely dented the potential market for Multimixers.

Earl Prince proposed that I leave Lily Tulip and go into business with him. I would market the inventions he came up with, starting with the Multimixer. I'd be the sole agent for Multimixer in the country. He'd manufacture the things, I'd handle the accounts receivable, and we'd split the profits. It sounded very tempting. I was getting more and more fed up with Lily Tulip. I was about to lose one of my biggest accounts, Walgreens, the people I had created a tremendous amount of business for and to whom I was selling five million cups a year. Fred Stoll told me in strictest confidence that a former Walgreen executive who had a lot of pull in the top offices of the company had gone into the paper cup business with a competitor of mine, and he was going to be given all of the Walgreen trade. The rationale would be that this competitor was selling for five percent under my price. I explained this to John Clark and tried to get him to go along with offering Walgreens a price break—after all, they paid their bills on time and there was promotion value in having a big company like that use your product. But all I got was a tongue lashing. He said I was no longer a salesman; my customers were selling me! I was smoldering after that.

Ethel was incredulous at the idea that I would give up my position at Lily Tulip and go off on a flyer like this. We had just moved into a fine home in a project named Scarsdale in Arlington Heights, northwest of Chicago. We were extremely comfortable there. Ethel loved it, and she felt threatened by this proposal. “You are risking your whole future if you do this, Ray,” she said. “You are thirty-five years old, and you are going to start all over again as if you were twenty? This Multimixer seems good now, but what if it turns out to be just a fad and fails?”

“You just have to trust my instincts,” I said. “I am positive this is going to be a winner. Besides, Earl will come up with a lot of other marketable ideas. This is just the beginning. I want you to help me; come down and work in the office for me and together we will make it a terrific business.”

“I will do no such thing.”

“But Ethel. I need your help. You know I can't afford to hire someone, and it would be good for you, for both of us. Please?”

She absolutely refused to help. I'm sure she felt justified, but I felt betrayed. I just couldn't believe she'd let me down like that. She wouldn't even agree to work part-time or for a limited period, until I got the business going. That was when I began to understand the meaning of the word
estrangement
. It is a terrible feeling, and once it appears, it grows like dry rot.

My disappointment with Ethel did not deter me, though. When I have my mind made up about a business deal, that's it. I was going to move ahead regardless. However, I had not even considered the kind of problems I would encounter with Mr. John Clark when I tried to extricate myself from Lily Tulip Cup. This time, I closed the door to his office without being told. He looked at me owlishly and said, “Yes?”

“J.A., I am going to resign. I am going to be the exclusive sales agent for the Multimixer. That's good for you because it gets me out of your hair, and I am going to sell a hell of a lot of paper cups for you when I start putting Multimixers in stores all over the country.”

“You can't do that, Ray,” he said, as if he were talking to a child and patiently explaining some important but obvious thing. You
do not have
the Multimixer contract. Sanitary Cup and Service Corporation has it.”

“Well, what the hell, you can give it up. You've told me repeatedly that you are not going to get into Multimixer sales yourselves. And you know that what I said is true: I am going to sell a good many million paper cups for you.”

“You don't understand. The Coue brothers would never give it up. You don't know how they operate.”

“Listen, they have to!” I brought this thing in here in the first place out of loyalty to you and to the Coues and the company. I didn't have to do that. If you were using it, that would be one thing, but the company doesn't want it. Give it back to me. You can't put a thing like this on the shelf, it won't sit there, it's too big!”

I was controlling myself as well as I could, but Clark could see that I was getting ready to blow a gasket, so he said, “Well, let me talk to them and see what we can work out.”

What he worked out was a deal in which I got the Multimixer contract, and Sanitary Cup got sixty percent of my new company, which I named Prince Castle Sales. It was a satanic setup, but I didn't see that then. It was the only way out, it seemed, and I had to take it. And, at any rate, the corporation would put up $6,000 of the $10,000 capital I needed to get started, so it didn't seem such a big handicap. But it was soon to become an anchor chained around my neck.

 

5

There's almost nothing you can't accomplish if you set your mind to it.

I told that to a group of graduate students at Dartmouth College in March 1976. They had asked me to address them on the art of entrepreneurship—how to pioneer a business venture. “You're not going to get it free,” I said, “and you have to take risks. I don't mean to be a daredevil, that's crazy. But you have to take risks, and in some cases you must go for broke. If you believe in something, you've got to be in it to the ends of your toes. Taking reasonable risks is part of the challenge. It's the fun.”

I was having a lot of fun back in early 1938 when I struck off on my own with a brand-new Multimixer in a big sample case and the whole nation of soda fountain operators and restaurant owners quivering in anticipation for this product. At least I thought they were. It didn't take long for me to discover how wrong I was on that score.

A fellow who already had six single-spindle machines would look down his nose at my gleaming, thirty-pound metal mushroom and tell me that he couldn't see putting all his drinks on one mixer. If it burned out, he'd be out of business until it could be repaired. With six individual machines, on the other hand, chances of all of them burning out at once were slim. And even with three or five of them out of commission, he'd still be able to make a malt. That point of view was a mighty tough one to change. I butted heads with a lot of flinty operators. Some of them I was able to convince, others never saw the light. But there was enough evidence of interest to maintain my faith in the product. I believed it would be successful.

I was a one-man marching band. I had a tiny office in the LaSalle-Wacker Building in Chicago, but I was seldom there. My secretary ran the office while I traveled all over the country. Sales were not bad, considering the newness of the product. I could feel it beginning to catch on. But I was extremely unhappy with my financial setup. As sixty-percent partner, Sanitary Cup was able to restrict my salary, and John Clark kept it at the same level I'd been at when I left Lily Tulip Cup. I determined after a little over two years that I was going to have to get that sixty percent back somehow. So I went to Clark and broached it to him. It was then I learned how he'd misled me. The Coue brothers had given up their interest to him. They probably never cared about Multimixer at all, and he was going to take his pound of flesh from my heart. I was boiling mad, but there was not a damn thing I could do about it.

“I think this machine you're selling has a big future, Ray,” he said. “I was willing to discount the present to allow you to realize that future. But if you insist on getting my share back, then I must tell you that I want a handsome return on my capital investment.”

Never mind that I hadn't wanted his damned capital in the first place, and neither had Earl Prince.

“All right,” I said, “how much?”

I don't know how he kept from choking on his own bile as he mouthed the figure: “
Sixty-eight thousand dollars.
”

That's all I remember of our conversation. I'm sure I said something. But I was so benumbed by his outrageous demand that I couldn't think straight. To add acid to the irony, he wanted the whole thing in cash. Of course, I didn't have that kind of money. So what we worked out was the culmination of the devilish deal he had tied me to. I had to agree to pay him $12,000 cash. The balance was to be paid off over five years, plus interest. My salary had to remain at the same level and my expenses in the same range. So, in fact, what I was doing was paying him the profits of my company.

I didn't know where in the hell I was going to raise the money, but I had made up my mind to do it. In the end, most of the cash came from my new home in Arlington Heights. I managed to get an increase in the mortgage, much to Ethel's dismay. Her apprehensions about my becoming Mr. Multimixer had been laid to rest at this point, and I don't think she ever got over the shock of discovering that we were nearly $100,000 in debt. She couldn't seem to handle it.

For me, this was the first phase of grinding it out—building my personal monument to capitalism. I paid tribute, in the feudal sense, for many years before I was able to rise with McDonald's on the foundation I had laid. Perhaps without that adversity I might not have been able to persevere later on when my financial burdens were redoubled. I learned then how to keep problems from crushing me. I refused to worry about more than one thing at a time, and I would not let useless fretting about a problem, no matter how important, keep me from sleeping. This is easier said than done. I did it through my own brand of self-hypnosis. I may have read a book on the subject, I don't remember, but in any case I worked out a system that allowed me to turn off nervous tension and shut out nagging questions when I went to bed. I knew that if I didn't, I wouldn't be bright and fresh and able to deal with customers in the morning. I would think of my mind as being a blackboard full of messages, most of them urgent, and I practiced imagining a hand with an eraser wiping that blackboard clean. I made my mind completely blank. If a thought began to appear, zap! I'd wipe it out before it could form. Then I would relax my body, beginning at the back of my neck and continuing on down, shoulders, arms, torso, legs, to the tips of my toes. By this time, I would be asleep. I learned to do this procedure rather rapidly. Others marveled that I could work twelve or fourteen hours a day at a busy convention, then entertain potential customers until two or three o'clock in the morning, and still be out of bed early, ready to collar my next client. My secret was in getting the most out of every minute of rest. I guess I couldn't have averaged more than six hours of sleep a night. Many times I got four hours or less. But I slept as hard as I worked.

There was a lot of nervous tension at that time on all levels of society over the alarming developments in Europe and Asia. Magazines speculated grimly on whether war with Japan was inevitable. Then our attention was diverted from Japanese aggression in China to the Nazi conquests in Europe. On December 7, 1941, we were thrown into war by the Japanese sneak attack on Pearl Harbor, and I was thrown out of the Multimixer business. Supplies of copper, used in winding the motors for Multimixer, were restricted by the war effort.