Friday, January 3, 2014

The Two Shoe Salesmen

One of the most famous motivational stories on the lecture circuit is that of the two salesmen from competing companies who are sent to a foreign country to assess the market for shoes.

Salesman One scouts around for a few days and then goes to the telegraph office to contact company headquarters.  He writes:  "Research complete.  Unmitigated disaster.  Nobody here wears shoes."

Likewise, Salesman Two does his research and heads for the same telegraph office.  Once there, he composes the following: "Research complete.  Glorious opportunity!  Nobody here wears shoes."  

How motivating is that?  Doesn't it make you feel like you can see the possibility in any business situation?  Think way outside the box?  Aren't you feelingentrepreneurial?!

What you probably don’t know is that late last year, a librarian at the BritishMuseum found, in a forgotten file buried in the basement archives, a short manuscript.  It turns out—if you can believe it—that the story of the two shoe salesman was more than myth. 

Last week I had a chance to read a copy of the manuscript that a friend who works at the Museum sent me.  Here is a quick summary of part two to this classic story, as written by a daughter of one of the salesmen.
Salesman One returned on the next steamer to London.  He was an aggressive young man who had saved the company from a disastrous venture in a terrible market.  His reward was to oversee the newly-formed sales territory in France, a large territory that included Paris.  Salesman One went on to build a wonderful, booming business in ladies’ dress shoes.  He became wealthy and comfortable.  A fixture on the Parisian social circuit, he met and married a French heiress.  Though he might have retired then, he never lost his love of selling shoes, only concluding his career well into his 70s shortly after the start of WWII. 
Salesman Two built an office and warehouse, ordered a boatload of shoes from his home office, and hired a team of hard-charging salesmen.  He estimated the sale of 15,000 pairs of shoes in his first year of business.  The home office was ecstatic.
The end of the first year came and Salesman Two and his team had sold less than 100 pairs of shoes.  The home office ordered layoffs.  Funding for payroll was cut.  Threats of abandoning the market were made.  The staff was often anxious and sometimes depressed.  Aggressive, optimistic Salesman Two could but conclude one thing: He had made a serious mistake.  This was, indeed, the worst market in the world for shoes.
Wait, I'm thinking?!  This is supposed to be a story about hope and seeing the possibility and being entrepreneurial.  This is supposed to be motivational.  Instead, it's more like the conference room of a venture capital firm.  What the heck happened?

Since the time of these two salesmen, of course, we have learned two important things about successful entrepreneurs: They innovate, and they persevere.  And when they don’t innovate, they still persevere.  That’s the reason that investors will tell you they’d rather back an average business plan with a great team than vice versa.

So, in the immortal words of Paul Harvey, here comes the rest of the story:
Salesman Two had not met his first year forecast, but, after a year of intensive selling, he knew more about the market than any person alive.  For example, he knew that some of his potential buyers liked the idea of shoes (protecting their feet) but felt claustrophobic in them, and did not want to have to stop and dump sand out of them all the time.  So he imported a small number of sandals to test.
Salesman Two had also concluded that some large part of his market would likely never wear shoes, at least in his lifetime.  But they all still hurt their feet occasionally on rocks and debris.  So, he found a lotion made by a German firm that, applied to the soles at night, toughened them up.  He imported cases of it.
Finally, Salesman Two discovered that most everyone, shoes or not, walked long distances during the day.  All got hot and many got sunburned.  So, he imported a line of wide-brimmed straw hats and walking sticks. 
Meanwhile, he continued to send encouraging messages to the home office, never giving up, and managed to secure (just barely) the funds for year two.
The hats became an immediate sensation.  The sandals did less well, but gained a niche following.  He could not keep enough of the lotion in stock.  And, in year 2, he sold 1,000 pairs of shoes—still a small number, but much better than the 100 pair in year one. 
Year 2 was breakeven.  Year 3 better.  After seven long years of hard work, trial and error, sleepness nights and one ulcer, Salesman Two became a millionaire, buying the business from his company.  In fact, he became so famous throughout his adopted country that a song was written about him.
Now we’re back to having a pretty good story, right?  Just not quite what you expected.  None of that doe-eyed optimism and happily ever after stuff.  In the entrepreneurial world, of course, there rarely is.  Not never--just rarely.  More often than not the right product in the perfect market is a seven-year (plus) odyssey of trail and error, constant adjustment--and endless perseverance.

But wait--there was an Epilogue:

Sometime in the mid-1950s the two salesmen met, quite by accident, in London.  Both in their eighties, they were introduced, somehow made the connection to that long ago time and place, and chuckled about it over a pint at a club just off Berkeley Square.
Salesman Two asked, “After you left the country and returned to Europe, did you enjoy your career?”
“Very much,” exclaimed Salesman One.  “Life in Paris suited me well.  Of course, I never could have become as rich as you selling shoes, so I had to do it the old fashioned way!”
They both laughed.
“How about you,” asked Salesman One.  “Did you enjoy your career?  You must have—you became famous, and a multimillionaire.”
Salesman Two smiled.  “I did enjoy it,” he said, “though not quite in the way you mean.  Funny thing, I became so famous they even wrote a song about me.”
“Did they,” chuckled Salesman One.  “Was it called ‘The Shoe King?’”
“No,” said a wistful Salesman Two.  “It was called ‘Straw Hats and Walking Sticks.”
“Hmmm.”  Salesman One looked puzzled.  “An aria?  A show tune?”
Salesman Two stared off into space.  “More like a blues.”  Then he looked at the barkeep and said, “Another pint for me, and one for my friend.”

I always did enjoy a story that ends with a beer.