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

Transcript from https://podmenti.com/t/60732d45918453b3

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The first hundred thousand pieces were defective that we shipped.
Or defective.
the water will run right through the toothbrush and out the bottom.
It would break in a month.
I 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 um
We had four hundred thousand 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 Roz, and on the show today, how John Osher went from selling spinning lollipops to inventing the world's cheapest electric toothbrush.
The spin brush.
Sold it for hundreds of millions of dollars.
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.
My guest 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 Procter 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 the 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
And finally, in 1999, John introduced what's probably his best known invention.
an electric toothbrush called Spin Brush. 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 lollipop he sold years before.
When it came out, sales took off almost immediately.
And two years after launch.
John sold Spinbrush to Procter Gamble for$475 million. A year after that sale, Spinbrus 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 Spin Brush.
John Osher 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 of all things
to go into the earring business.
It started in the
probably sixty three or sixty four with the hippie movement, and they all started getting their ears pierced. It became
Um very quickly a fad and a hip thing to do. And um
My thinking was
The hip schools are all doing these everyone's getting their ears pierced. It'll come to Cincinnati.
So when I transferred there I decided to open an earring store. Now I knew nothing about earr myself.
But I found a little tiny shoe shine parlor.
on the uh perimeter of the University of Cincinnati. It was probably ten feet by
Eighteen feet.
And um I rented it.
And um I went to New York with my mother.
And uh we went to these uh
stores of these distributors like ab on the second floors of these
uh buildings and I would buy all these earrings for nineteen 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 it's an interesting thing because I charge four ninety nine for my nineteen cent Eriks. Wow.
Now next door to me was a store called Stopin Shop and they had
Very much of the same earrings I had.
And they bought'em also for nineteen cents, but they sold'em for thirty nine cents.
You know, doubling their money.
They sold nothing.
Everyone bought my earrings at four ninety nine. First of all
People didn't believe you could get safe wires.
Sure.
Thirty nine cents to put in your ears.
But the the 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
uh will pay what's the optimum price for a market
As opposed to what you paid for it.
Yeah. So you have this earring store, you're selling earr and and you're
A student and it sounds like it's doing pretty well.
Yeah, so I only had the 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 and bought an M G B at the factory.
Bought a bunch of bell bottom pants. This was the summer do you remember what year that was? Probably sixty seven, I'm guessing.
So you took the money from selling that shop and you go to Europe.
And I maybe I made maybe I I had six thousand dollars, but that was a ton of money for a nineteen or
My God.
So
One of the things I tried to do with every business was to become rich
within the context of my life.
Mm-hmm.
So six thousand dollars as a college student at that point in my life, I was that was wealthy and it
I was able to do things I wanted to do that I couldn't do.
Otherwise.
I read that you actually did not you
kinda dropped out of the University of Cincinnati.
early in that when you were taking that trip. So you did not
Graduate.
Um but you did
Eventually somehow
And a year later, I guess nineteen sixty nine, end up in Boston and you continued your studies at Boston University. And while you're in
Boston.
you open another business, you had an earring business, of course, in Cincinnati
Th this is actually amazing to me that you opened a sec another business, another store.
that you could actually do that. Like I'm thinking about'cause 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 oh you could get a lease in Boston to open a shop. You need to like sign a lease ten year term. It would the rent costs would be astronomical. Like nobody no
mortal could afford to do that. But this was
realistically possible, clearly.
In nineteen sixty nine you you opened a second hand clothes shop in Boston. How did you do that? Yeah. You know, this was before the
Everything became so expensive in life.
It almost would seem as if um I'm I'm a courageous person because I'm so willing to open businesses and this and that.
And it 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 w I never thought about
How can I do this?
As opposed to somebody who's got a wife and family has been working at Procter and Gamble at a big company and they see some opportunity and they got mortgages they gotta worry about.
And all of this.
It was really natural.
I'd go to flea markets and I go all over New England and I'd
Find these things for nothing.
And be able to sell'em.
For quite a bit.
This store uh and yeah, so 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 s you sort of close the shop up. And and now this is where sort of the very
eccentric part of your life.
begins you f from what I read, and I'd I really want to dive into this, for roughly six years you moved to a commune
In upstate New York.
And tell me the story. How did what was it? How did that happen? What's going on?
Well
Since I was younger in in the hippie days from the LSD and
And that type of uh lifestyle.
We started to develop an an interest in
Something greater, more than meets the eye.
And um I got involved with the teachings of a uh a spiritual
Philosopher named Gurjeef.
This is George Ivanovich Kurjiv.
What what what does he teach?
The the basic concept was uh that
We as humans are asleep.
We're basically given a name, we're trained. I mean, I became a uh
A democrat or liberal because my parents voted for Adelaide Stevenson.
The neighbors across the street voted for Ike and they became Republicans. You know, w that we were we become basically trained and we live our lives and we wake up and we go do things and
And his philosophy was more about waking up.
About waking up to a deeper truth about ourselves.
Okay.
You join this group and you're you're part of this group for
six or five or six years, and what were you doing for for work, for a living?
Well, so that that became interesting and important part of my life, and that is that when I grew up
As a doctor's son and you know, that's you know, for the light bulbs you hire somebody to screw it in.
And so
I grew up with virtually no
skills or thoughts of uh that I would have uh any
aptitude for things like this.
But the g the group there had to make a living.
A lot of the people came in were PhD, you know, all different
walks of life uh join this community.
And to w to make a living we either got inv generally got involved with some form of construction
Or we got into the arts and pottery and
And the likes.
So I
did a lot of the trades. I I mean I forget w I think the first thing I saw off with was a record pair we player man.
That's when they had record players. And then I became a landscaper.
Uh I got a job for a builder as a
Carpenter's helper.
And eventually the
Group's construction company needed a plumber.
Hm.
So I went to become the the new plumber.
It turned out I was good at this stuff.
Alright, so
You're this is like
A of pretty long period of your life.
Five or six years.
Uh and
You had
spent a bunch of years learning how to do plumbing and carpentry and which is super w 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.
Yeah.
I think a lot of young people get really stressed out about not, you know, having achieved something of w notable by the time they're thirty, and that's nonsense.
Yeah,
And it was just never the case. Even when I was a plumber in this gurjiv group.
I was rich.
You know, within the context of my life
Right.
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 gonna do next or how am I gonna make a living.
And see, I can look back at it and say, Well, why didn't I? I should have been afraid.
But I just didn't.
Yeah. Okay, so you were
You were part of this group.
Uh, and then you wind up moving back.
to Cincinnati, I think right around uh nineteen seventy eight.
Uh, which is also around the time of of the energy crisis in the US. And I guess you had this w obviously you had this background in plumbing and construction.
Uh, so you actually started a business that made I guess like like
what energy saving devices like for
For homes?
Yeah, so I remember staying up all night.
One night.
And this was my curr beginning of a career as a semi inventor.
in inventing products. And uh coming up with a list of products, hot water heater insulation jacket was one. We made
Special fans.
A lot of people were getting kerosene heaters and
Heating up one room to one hundred and twenty while the rest of the house was cold. So I made these fans that would hang in a doorway to bring the
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 until you actually do it successfully and sell a product.
Yeah.
I guess, you know, by the early eighties, this is now the Reagan era.
Energy prices start to drop significantly.
And I imagine it's having an impact on your business'cause it's designed to to save people money.
And I read that this around this time you start to think about
pivoting into a new category, which has nothing to do
With
These
Energy conservation products.
Right.
I saw that the energy.
Prices were dropping, which were not ever expected. We thought it was gonna
Forever.
Growth.
And I saw that the products were slowing down.
And um
At the same time, I was in this apartment.
And I had a six month old son
Who would crawl around the kitchen and bang his head against the kitchen cabinets and this and that.
And um I came up with an idea.
Uh called Crawl Space, which is a little portable corral that opens up any eight sided configuration.
And it was at a time when the scissors the wooden scissors gates and corrals were being outlawed because of danger.
And so I went back to my partners and I had investors and and I said, I think I want to start this baby product business.
And I remember one of'em was really furious.
And uh said, No, we've committed to this energy, and I said no, and I
stuck by my guns and I and so while we still had the energy diminishing energy business, I developed this baby product

And this was a just to clarify, this was a play pen, but it was mo it was m it was mobile. You could move it around. No. It was portable, was it? Portable. It weighed eight pounds. It folded up like a suitcase in two seconds. He had ratcheted hinges, no bottom.
And you could make it into any eight sided configuration.
It was an octagon shaped
But it was o literally on the ground, right? So the and and a baby even a crawling baby couldn't push it. No. It had rubber feet on the bottom, so it made it very hard to slide. And it wouldn't be necessarily an octagon. It might be many angles. You could angle it and it w the ratchet would hold it in whatever shape you
Configuration.
Cool idea, but the name was really
Helped a lot. Crawl space was a terrific name for that. And and w and where did you s you sold the product like
Toys R Us? Wh where were they sold?
Oh, we sold it uh yeah, Toys are Us, Child World.
And that product I think led to another
thing that you created call the Rainbow
Toy bar?
It was called Rainbow Toy Bars. Now that's one of there's two products in my life that were
A difference maker in the world.
Yeah.
Back then when my uh baby was uh I forget it was the same bab probably the same baby
Uh between zero and six months old we put him in the little uh seat that he'd sit on the floor or we put on a blanket on the floor.
And in five minutes he 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'cause he was too young to
Hold on to it.
I came up with the idea, I said, Why don't I create a little swing
That I could hang the toys down to the baby over his
Blanket?
And he could have visual stimulation. He could play with them when he lets go, they're still there.
And I bought a bunch of white PVC to me and we actually made special fittings that would fit the angle and we and we made it so you push it together and uh
And it came with little plastic uh rings and hang rattles and toys like that.
So this is the first
I mean this is a very common toy. You put a baby. Every baby in the world uses some form of this now. But back then it did not exist. And it's it's like a a an arch that sits over the baby with toys that hang and the baby can just s you know, grab'em. How did the crawl space in in the
Rainbow Toy Bar Do.
Well they both sold well.
Really well.
Yeah, and I've read that like
pretty soon after you introduced us, you got on
the radar of Gerber the the the baby company.
Yeah.
like came to you with an acquisition offer, I think.
Like two million bucks.
Uh and you sold it, the company.
And I guess you worked there for a little while, but but then pretty soon after you left, uh, to start a new company
And this time was gonna be toys for uh older kids.
uh it's called Cap Toys. Tell me about
about that company and what what you were
Gonna gonna 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 uh Howard Wexler in New York.
And he was famous for inventing connect four.
And
Uh I developed a what's called a
Blooming dolls, which was a doll that would was a flower pot and it would turn into a puppet and then into a full doll.
And it was really cute. And uh and a ball called Crunch Balls, which had little foam pellets and uh
that tent material and it was real it was in between a
Um
A balloon and a ball.
J I just try to p picture the blooming 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 has arms and it works as a puppet.
And um
What happened was that um
Our our first year we were Toys for Us was buying it and they bought a nice ordered a nice amount.
And before we shipped it, before I could ship it, they canceled the order.
Because they were overstocked that year.
'Cause this t item wasn't selling, right? This just wasn't taking off.
Nobody was buying the It it didn't really have time to. It was the season was just starting.
Right. And any pre sales were
Okay. They were not terrible, but um
Basically he put it we were gonna be put out of business. Um I had all this inventory and
They canceled and did the same with the crunch balls.
And I 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 they wanna do, and this is uh it's called entrepreneurial terror.
And I think most
Successful ones included.

The buck completely stops with you. There's no
There's no group or committee or
uh meeting to get together with others it's all on your head and
And I I remember I spent two or three days, I just wanted to hide under the bed. I mean
I I didn't want to get out of bed.
And uh I was getting divorced at the time, and I was living in a city, Cleveland, that
Uh where I moved with the uh
a 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.
Gotta get a new bank, I gotta get more money in the company, I have to deal with Toys R us.
And um
I once I started
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 Toy with the boss in Toys R 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 says, You know
This was when Toys R Us was in their heyday. I mean they were really powerful. And uh 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 him some kind 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
Uh I said I got a second chance. And and then I went back to my investors.
And I
said I got toys of 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.
It was when Papa Shot was real popular where you pay fifty cents at the carnivals and bars and everywhere to see how many baskets.
And I made a home version of it that hung on a door with a net
I I've seen it. I remember it actually'cause I was a kid at the time. It it had e it was a yeah, a little
Backdoor.
uh door basketball hoop, but it had a uh an electronic scoreboard and I guess every time you
Got the ball went at the hoop, it would click the
Censor or something and then you would get a point. It would show up on the scoreboard. Right. Well and it had it scored it. And it even could have two people playing against each other.
By the way, this is in the early nineties. Were these
being made in China at the time or not not yet. Yes. Yes.
So our our budget next year
We got this chance and everyone bought R K basketball. We did six million dollars and made a million and a half dollar profit.
And we were on our way. So and you were able to do that because you got this order.
On those the flower pot dolls.
Because he took the deal.
Because as a result of that order, my investors agree to stay in the business, and as a result of that, we were able to get a new bank.
So that product the the arcade
That's why hoop.
really saved the company. Saved the save I'm saved you guys.
Mm-hmm.
And um
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 its feet.
And he's looking around for another good idea, which actually
Turns out to be a little bit more than a little bit.
A lollipop.
I got into
Somebody went to a a
An inventor show in Pittsburgh.
and found a lollipop that lit up.
Well you press a button, it was like a a sword that would lit up and
I ended up bringing the inventors in. There were four male men, two couples.
And shortly after this light.
They had come up with another idea which was a it looked like a right angle drill where you press a button and a lollipop would spin.
And um
I looked at that and I said, Now that's an idea'cause I always spun a lollipop with my fingers in my mouth.
I said, but this right angle thing's crazy. I just want it to come straight up.
So let's just back up a little bit. You know, you in the early nineties you had a representative from your toy company at a trade show.
And there was from the story I read was there's this uh the these two couples from Virginia
Well, they we they basically had a light at lollipop. It was a spear.
And and and my guy calls me and tells me about it, and I said, That's great. I'm looking for a category and this

I wanna fly them in. I want'em here tomorrow. I flew'em in from Pittsburgh.
And I bought the rights to it.
And the one person of the four was the inventor.
And he had started inventing a whole lot of other
candy items. Right. 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 gonna sell this company
I'm gonna need a category that Hasbro or Mattel or one of these companies need.
Because they buy categories. That's what they
They don't need a product unless it's a lifelong product.
In a category.
I decided to get into this category of interactive candy.
And so like candy that was uh had like a battery operated
Feature.
Right.
So
You acquire
the right to

Candies.
And and
I mean you presumably you knew that they could be made
pretty cheaply in because you'd already been making
Products in China.
Yes, I uh I I knew we could make make this very inexpensively.
And I knew a lollipop you know, we went to all the lollipop factories, dum dums and all that.
And uh that we could buy lollipop very inexpensively.
Alright, these were released in in nineteen ninety three.
And they were a massive hit.
They would go on to sell.
A hundred million in the first three years. That's incredible. How how did that happen? Was it did you have a huge marketing campaign?
No, it's just sometimes you get an item like a popular song that's an instant everyone recognizes an instant hit.
You know, when you have something on a s on the shelf in a store where we have many products that'll sell one piece a week per store.
And you sell eight a day or something, it becomes a hit so quickly.
that um everybody wants to buy it.
And the spin pop became one of the largest
We sold millions of them.
Um in all over the world.
I told millions in Japan and
We were probably in the interactive candy back then, we're probably doing forty, fifty million dollars.

That's cr that's crazy. Fifty million dollars. Yeah.

Take off, obviously.
And once again you get onto the radar of a bigger company.
Uh and this time it's Hasbro, which I think is is
one of the biggest toy companies in the world.
and basically in naй naйді сеven
Captoys your company is sold to Hasbro for like
over a hundred and sixty million dollars, so
Obviously a very nice exit.
Yeah, so I I negotiated a good deal.
And I retired.
I was about fifty.
And I was retired I retired and
uh move to Florida for a year or something or so.
But that didn't
That that didn't suit you.
Well it didn't sweep me. I took up golf
And uh
I did that for a year or two and once I got bad at golf I had to go do something else. Did you what you mean once you got bad, did you start good and then get bad? I at golf, yeah. Nobody
Very few people get good at golf. But um after after being r so called retired for a year, maybe two, I don't remember
I I had an uh idea.
So I got together with guys that had done design work for me in Cleveland.
And who done a lot of uh great designs for products.
And I had a list of a hundred ideas, the first one being the spin battery operated toothbrush.
I I knew we had made millions of these spinning lollipops
And that
Uh we became experts in small batteries, motors, and gears.
In China.
And I I said, Well I wonder if it's possible that I can make an electric toothbrush
That would sell at Walmart for five dollars.
Just to put this in context, it makes sense because you had
Experience with a spinning lollipop.
For this is nineteen ninety eight and I l from what I understand, you have I mean, like electric toothbrushes existed, Oral B and they had Sonic Care or whatever. They were around. You could but they were very expensive.
How did you
start to think about a toothbrush. I mean,'cause you knew you want to start a new business.
Tell me what you did to
get the idea for tooth did 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 wanted to make?
Well, first of all, I always went to stores and looked on Miles all the time. It's just part of a
product idea process.
Um, 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.
No.
It wasn't I I'm not that
Uh altruistic, but
The reality is is that we ended up buying such large quantities of little motors

where we're buying in the millions of batteries from Ever Ready alkaline batteries where we're paying twelve cents a battery rather than seventy eight cents or thirty nine cents for high volume
And and same with the motors. It cost uh ninety cents and we're paying a eight and eight cents or something because I was buying a million at a time.
And um 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

If we could actually
Achieve it. And um we wanted to sell it for five dollars or less at Walmart. And you saw the opportunity there.
Well basically there was the super high end electric toothbrushes. Th this was a growing segment of the 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 eighty bucks.
Well it it we really never considered
Or worried or about or competed with the high end, which was some of them were fifty 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 B toothbrush that was selling for three bucks, and you figured, hey, if we can make an electric version, hand like a battery powdered 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 that 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
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.
Alright.
If these existing models were selling for fifty or eighty dollars, I know that wasn't your competition.
You were trying to make a toothbrush for five or six dollars.
There's it it couldn't have the same features as the eighty dollar 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
The most expensive electric tooth thrust was a hundred and ten.
Um
Owned by Phillips.
And um you know, they practically use a Vol Volkswagen motor and thing, you know.
And we had been used to motors that are much smaller and and that
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'cause everyone will take'em back.
Yeah. We didn't need that. We actually went out and said this lasts the last six months.
So you so by you by using a less powerful motor
you you were able to f you knew that you could probably make a cheaper
A less expensive, much less expensive version.
I didn't know.
I knew that we were gonna 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?
'Cause I mean
What were some of the chall I've seen the design
um schemes of blueprints.
trying to create this thing.
Well, I 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'em cheap non alcohol alkaline batteries
they would die in a month, and if they're gonna have to buy batteries every month, it's not ultimately a good deal. So I had defined it the batteries that'll last three months.
So we had to design the 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 PG would, but we ran all kinds of tests.
Two
Make sure that we got the battery life we needed. Then even more important is we needed the torque.
Then when you brush your teeth
It's really working and it's working great. So it had to satisfy that. And 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 splayed and real ugly.
And uh I said, You can't do that. It's a ugly you know, nobody wants this after two weeks, it's too ugly. And so we decided to make it oscillate rather than rotate. So the name Spin Brush actually came when it was still spinning.
Uh we never changed the name'cause it was a good name.
But um
Then I I realized that I 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 fit 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 no not only
gave us a major advantage, but it opened the door to our great patent.
Because we say okay, we're gonna make a toothbrush that moves
Part of it moves and part of it's fixed. Well nobody ever thought of doing that because there's no reason to think that.
In the y few years that followed we made even much better ones than that. But at the time that's what we need to
We needed 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 is interesting to me about this is as you're working on it
Your
you 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
It if it was packaged.
Right.
Then it would
pop out of the shelves. And one of the things that you
I guess was critical even before you had the first
Product.
done was that it had a try me button. Like it was packaged in such a way where on the shelves you could push the button
in the s in the in the gr in the store and see the sp the the
Bristles oscillate.
That it was critical to what we're doing.
Uh, for a few reasons. One, we sold'em just like we did spin pops in a twelve pack.

And a case.
And that uh had a button that you could press and you could have a to the retailer, not to the
Consumer.
To the retailer.
Yeah.
But th what was um so important is that when you're selling a toothbrush, electric toothbrush for four
Ninety five or four eighty nine, whatever Walmart price was.
Yeah.
It's almost not credible.
So if a consumer looks at it, is it a toy? I don't believe this. So having the Try me where you could press the button and it does feel like you're running a Volkswagen motor. I mean
It it really
look great when you press a button on the shelf. So we took that from our toy experience.
And we made'em in twelve packs that
Everything we did to start this business was to get'em on N caps at a retailer. That means at the end of the aisle.
If I had just stuck two of these on the on the uh long wall that had eighty 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 a hundred and forty of'em rather than six.
But um the try me was a very important thing that we learned.
That was never in the health and beauty.
It was a new thing.
For that department.
But we learned it from the toy industry how how useful it is. And people love to press buttons.
Yeah.
So all right, so you finally, after a year of working on this, you get and you patent this, right? You you you file for patent protection, which makes sense because you two patents. Two patents, okay.
Um
And
You get the prototypes in nineteen ninety nine.
And I read that you attend a a trade show or and and um
You
Because of your track record and your connections, I'm sure you already had some interest in I think you initially had deals with
Myers uh which is mainly in the upper uh put you know, Michigan area, and Albertson's
You know, with these
sort of trial runs, how how how are you able to measure how well they were doing?
Well

from my other businesses friends with one of the owners of one of the Myers.
And um so he was he agreed'cause we were so new and nobody knew we were and it's hard to get appointments.
And and didn't know this. But um
He agreed to uh do a 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 Meyer stores in Cleveland.
So we all left went one dur I went to Detroit, somebody went to Toledo.
Columbus.
Setting'em up, putting them out.
On that w as the test was supposed to be.
And then going back each day.
And that's when we found out
That
We put'em out and we were selling seven a day per store, which was just in a different realm.

toothbrush in the world.
You knew they were selling the store how?
We uh back then we
Counted'em.
We d we each of us went to there and we go to the stores and we count'em. Then they 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 though we've still had trouble getting appointments anywhere.
So you could see right away that the I mean oral B was
still the the the big the manual toothbrush was still the big seller.
But you could see that the spin brush brushes.
At least
at you know, these individual Meyer stores you were going to were actually selling
Quite a few per day.
They're selling Oral B was selling the best selling toothbrush the in the world at the time was their cross-section.
Which was three ninety five expensive toothbrush manual.
And they were selling twelve a week per store.
twelve toothbrushes a week per store. And we were selling like that much. We were selling seven per day.
And
The buyers uh everyone involved knew right away what this was.
Um
But um
We did have though our first
Our first hundred thousand pieces were defective that we shipped.
Or defective.
That was another great lesson.
And so what you should throw them away?
So what happened was the first hundred thousand pieces we we had the water, when you brush your teeth, the water will run right through the toothbrush and out the bottom.
Which we thought we'd be fine.
But what happened was over a month
I'm using it for about a month.
It would uh electrolysis or whatever would cause uh
It build up at the
connections and it would stop working.
It would break in a month.
And we had four hundred thousand 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.
I went back to my partners uh in it, my investors, and I said
I'm gonna scrap these four hundred thousand.
We're all gonna put in another half a million dollars or something.
Um
And we're gonna
We design it, which we did.
Working day and night with the factory online on the phone.
And a week or two.
Wait.
redesigned it so the water ha it was all handled different. Became waterproof. But the decision to throw those out
Was a hard decision, especially for a new company.
And um
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 Roz, and you're listening to How I Built This.
Hey, welcome back to how I built this.
I'm Guy Roz. So it's the year 2000, and Spinbrush is rolling out in selected stores like Albertson's and Walmart.
And already the numbers are looking really good.
Like almost surprisingly good.
And in the first year
We did forty four million with a twenty one million dollar profit. Forty million dollars in sales.
Yeah, it wasn't even a full year. It was probably closer to eight months.
And and as I say, we made a twenty one million dollar 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 Gamble.
Proctor 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 good tr particular strong in mechanical
You know, they had Swifer.
But for the most part they were a uh food and chemical company.
They were the company that needed this product.
Uh, they didn't have an electric toothbrush. Their toothbrush business was way down. So they and their stock was down. Their whole company was in a down mode.
So they were our target when we started the company.

had had lost market share
And PG stock price had had fallen by fifty percent.
There's something else. There's a t totally different story, but th but we'll turn it around. Well spin brush is part of it, eventu eventually we'll get there. But
What were crust white strips.
Which they had invented internally.
Right, that turned into a massive multi million hundred m s of dollars worth of uh business within a year or two.
So 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 they were definitely, you know, taking their lumps at this time.
And you
you thought that they might be
and acquire of this product that you guys had had put out.
Well I
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 Gamble and say, Hey, we're we're for sale.
Never.
Because any time you try to sell something, you get about one tenth of what you get when they want to buy you.
Lower.
In fact they may not even been interested. 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'd agree to
to license the crest name for our product.
Well, even when I went there they never heard of us.
You wanted to slap crest onto the spin brush. Yeah, we wanted to license their thing, which I I Which I didn't want to do, but I I just wanted to show'em 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 um agreed to uh do a t uh test.
So you pitch them, basically you you show them the product, you pitch them the product without really pitching it. Just
It's this it's a ruse. Yeah. We wanted to sell the company to them, but I had to find a door and I d I wanted them to want to buy it and send it the other way. So they brought the the brand people in from Crest and everybody and they
Um
Um
They agreed to test it.
So they we sent him 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 finally got to point I said, Well, I might as well call'em because I got nothing to lose at this time.
And you guys were selling
Tons of toothbrushes. Yeah, we're yeah, we're doing great. We're doing great. You can do forty four million dollars in that brush. In the next year we probably would have done
Eighty to a hundred with a great profit, but
So I finally called um the guy and I said well I
Never heard from you guys.
Heard from us, I thought you guys were gonna call us back. Don't worry and it turned out and we didn't know this till later, that it was the highest testing product they ever did in the history of Procter Gamble with consumers.
But I didn't know that till actually a few years later.
But um
So they came back and they said, You know?
We decided
We'll license you the name.
Yeah, I don't want their name. He said, Well ice you the crest name and Oh, I said that's so exciting, but
But
I I just want you to know that we can't pay more than three percent. You know, most companies w like that with that brand want twelve or fifteen percent. Yeah. I said we have to keep this has 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 later and says
Yeah, it's okay. Three percent's okay. We'll do it. And 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, and the back in those days you always claimed to have a board.
Right. And um uh I gotta bring it to my board and then I
I call him back to you today and 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 the board the investors all did this to eventually sell and they said that they would never be able to sell it to anybody, but
But Proctor and Dammo and Creston you would have all the leverage'cause we couldn't do anything else.
So
That's
Despite that w this is such an opportunity we're gonna have to pass.
And um
He says well
Why don't we buy the company?
And I said.
Shit.
What an idea. That's God, that's a 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 that well as this. This this was one of these things where Murphy did not come into the business.
Everything work 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
Um as on entrepreneurship.
It's it's such a difference when you're trying to sell something and when somebody wants to buy it.
Yeah. And um any time you can get in a situation where they wanna buy it, you'll get way more money.
So they
start you start to hold talks on an acquisition and I think in January of two thousand one they formally offer to buy it.
And it was gonna be one hundred sixty five million dollars up front and then earn out over three years.
And you would get a percentage of that.
Earn out. And you would you would join Procter Gabble. You would basically continue to run spin.
Okay, so
You guys agree to this.
And now you're a proctor.
Which is amazing, right? One year in
you get a hundred sixty five million plus an earnout. So you could get you can make more.
Tell me what
like now that it's a Procter and Gamble brand, I imagine they could supercharge 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 to you have a three year deal.
We want you to run it, and we'll give you the people, and we'll give all this stuff, and we'll even let you override some of our rules.
Um
And so we did that and and we got on the phone and we started doing the first thing the the lawyers wanted to do was have us stop selling the product.
And I said, Why? and he said, because
We have a rule in our company that you have to have enough goods in all our warehouses
Before you can sell the product.
And you're 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's just no.
You've got the right to override it. You w you keep doing what you're doing.
So
We and and they were hoping to open it up to two different two or three different comp countries
That that same year.
And expand the s the production.
And we ran it and we got our production up from eighty eight thousand
to uh f four hundred and something thousand a day.
Uh manufacturing.
We were buying close to a million uh batteries from uh Everett.
A day.
We were second only to Walmart in battery purchases at the time.
And um
And we got it into something like forty countries. I flew around, I did presentations in Japan. I mean, they were c all good stories.
Um
And um
But after a year, so they had told their board that they thought they could do as much a hundred and ten or one hundred and twenty million dollars with this product.
And I think after a year they were doing over three hundred.
Wow. A million with the product. And 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 a hundred and twenty
million dollars.
They had no concept of it going to three or four hundred million dollars or five hundred.
And
I the the head of the department, I forget who he was, maybe it was the vice president of the company, I don't remember. He called me and says we're gonna have to uh
Stop advertising.
We're gonna have to pull the product for a while and give it let it cool off. And I said, Why? He says, The earn house gonna 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'em 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 it's insane.
Because when they also came out with our product, they came out almost simultaneously with the uh white strips.
So the addition of the spin brush and the white strips
Just supercharged.
Proctor and Gamble. Yeah. Crest w toothpaste became number one again. Their 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 mainly on the phone for
A period, it may a week or two, I don't remember.
And came up with uh
Yeah.
A settlement number.
It was supposed to be a three year earnout, but they they basically I think you negotiated an agreement twenty one months early and they ended up
paying three hundred ten million dollars. So the total total amount of money they spent
on the spin brush would be four hundred and seventy five million dollars. This is amazing. I mean
you get this just a few years after you release this product and it became I mean they they managed to turn it also turn into the b biggest selling
Toothbrush.
In the United States, I think even outsold the It was the biggest selling in the world for a period of time.
For a window.
Uh it was it was a wonderful uh grand slam experience that everything went right and
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 Wright or so I think who is who
Church and Dwight, yeah.
But they and they ha they sold it. Do you m do you know why they sold it?
But what happened is they three years into it, they were trying to buy Gillette.
And Gillette owned Oral B.
And Bron.
And um the deal was being held up because the the two throttle the Oral B and uh the spinbrush were a monopoly. It was well over
fifty percent of all the uh toothbrushes.
And so
They they decided they have to sell the spin brush off. So he
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 ten million dollars for it, the whole thing.
But I'll close next week.
Um
Yeah, everything else was
They're always waiting six months
You know, and then there would be due diligence. I said, I'll close next week.
But they w took they went back to Church and Dwight who they had been negotiating with and they said, Oh shirt made a big offer and you guys
And they force them into closing the deal. You know.
Yeah.
Seventy five million plus inventory plus you know, it was a Wow. They had bought it for four hundred and seventy five million. They sold it for seventy five million. Yeah.
Yeah. What happened? Were the sails just tanking or would they just need to get rid of it quickly?
No. They had to get rid of it and they
Um
And and and they had the crest name, so they had to make a deal somehow
And well, Protestant Gamble did eventu acquire Gillette, which which I'm you know, made them. Right. So they yeah, they once they got rid of the spin butt, they closed the deal.
Fifty five billion dollar deal.
And um they transitioned for three years with Church and Dwight to use the crest name.
And then it had to be just a spin spin brush.
Right.
But Church and D White did a 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 fifteen different variations of spinbrus on the shelves now.
Like like knockoffs.
Yeah, including their own. Oral B's got tremendous yeah.
They're probably the leader in it.
And w when did you decide
To
I don't know. I mean to kind of
Retire, so to speak.
Well, I in a way I retired after each venture.
Yeah. Because the venture was was was the project was over.
If I never in and I lived in a mode of looking for ideas.
That's my m my moat. I'm not so much anymore as I'm
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

So
After I sell a company or a project
I I was open to f do something else.
Financially I didn't need to.
But I love the creative challenge.
To this day I do. I don't want to
But I
I'd get just as excited over a new idea.
Wha when you think about the the journey you took, right, and and you know she spent six years and
This
this group of studying 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

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.
And they all went my way.
I I live in a really much more of a state of gratitude than pride.
Because uh so many things could have gone the other way.
On the other hand, Gary Plair says the reason he putts so well
And that he gets so lucky when he putts 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 as an entrepreneur, 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 a c always had a 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.
And a hundred percent of the time.
I always got the answer. A hundred percent I got the answer and was right, to the point that I started calling it the magic.
And when we'd have a serious problem, people work for me 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's serial entrepreneur John Osher.
Creator.
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 the 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 gyros.com or on Substack.
This episode was produced by Catherine Cypher with music composed by Ramtina Rabli.
It was edited by Neva Grant with research help from Ramel Wood. Our engineers were Patrick Murray and Quaisey Lee. Our production staff also includes Casey Herman, Chris Massini, John Isabella, Sam Paulson, Alex Chung, Carrie Thompson, Nora Gill, and Elaine Coates.
I'm Guy Raz and you've been listening.
to how I built this.