My guest on this episode is Eric Friend. I reached out to Eric after seeing him talking on Twitter about his family’s printing business Friend Paper, which was founded in 1908 in Zion, Illinois, by Eric’s great grandfather. As a print publisher through our quarterly publication called the Operator’s Handbook, I was curious to hear what ideas he had on using print as a content medium. It turns out he’s an even bigger print publishing nerd than I am, and we hit it off immediately. I forgot to hit the record button during our first phone call, but Eric agreed to be on the podcast to share more about his family business and print as an under-loved medium.
Eric shares his journey from investment banking to his fourth-generation family printing business, challenges inherent in family businesses, the rebranding effort, and how companies today can use print to stand out from their competitors with customers and create unique experiences. We also spend quite some time nerding out about print publishing and the business cards from the movie American Psycho. Enjoy.
Live Oak Bank — Live Oak Bank is a seasoned SMB lender providing SBA and conventional financing for search funds, independent sponsors, private equity firms, and individuals looking to acquire lower middle-market companies. Live Oak has closed billions of dollars in SBA financing and is actively looking to help more small company investors across the country. If you are in the process of acquiring a company or thinking about starting a search, contact Lisa Forrest or Heather Endresen directly to start a conversation or go to www.liveoakbank.com/think.
Hood & Strong, LLP — Hood & Strong is a CPA firm with a long history of working with search funds and private equity firms on diligence, assurance, tax services, and more. Hood & Strong is highly skilled in working with search funds, providing quality of earnings and due diligence services during the search, along with assurance and tax services post-acquisition. They offer a unique way to approach acquisition diligence and manage costs effectively. To learn more about how Hood & Strong can help your search, acquisition, and beyond, please email one of their partners Jerry Zhou at [email protected].
Oberle Risk Strategies– Oberle is the leading specialty insurance brokerage catering to search funds and the broader ETA community, providing complimentary due diligence assessments of the target company’s commercial insurance and employee benefits programs. Over the past decade, August Felker and his team have engaged with hundreds of searchers to provide due diligence and ultimately place the most competitive insurance program at closing. Given August’s experience as a searcher himself, he and his team understand all that goes into buying a business and pride themselves on making the insurance portion of closing seamless and hassle-free.
(4:02) – The Catholic Church Story
(10:14) – The timelessness of print media
(13:36) – Eric’s background, his career in Investment Banking, and moving into the family business
(31:36) – What are some ways you want to see other companies use high quality print products?
(39:14) – What are some ways to communicate luxury through print?
(42:49) – Challenges in the business across generations
(49:31) – What are you most excited for over the next 12 months in the business?
(52:27) – What college class would you teach if it could be anything?
(54:20) – What’s a strongly held belief you’ve changed your mind on?
(55:31) – What’s the best business you’ve ever seen?
(59:27) – Wrap up
Alex Bridgeman: Thanks, Eric, for coming on the show. It’s exciting to have you. Do you want to start with your background or the Catholic church story? There’s tons of print nerding out on both ends that we can do. I’d love to start with whichever one you think is most interesting.
Eric Friend: I think I’d start with the Catholic church story because it’s a good story, and honestly it shows that this was really the fundamental origin of the printing business. And I think as a business, it’s easy to say now in email, text message, Discord world, that it’s easy to forget how fundamentally world changing print technology was. So going all the way back to the beginning, Gutenberg in the 1500s, basically he saw the wine press. He saw two things – he saw, one, the wine press, and then he also saw monks handwriting the Bible over and over again, spending multiple years to get a single copy. And his idea was that he could get all of the letter pressing done in that same amount of time, but instead of producing one text, he could produce over a hundred of them or over 500 of them. But of course, the Catholic church at the time, depending on your views, it was either a good thing or a bad thing, they held a tight grip on the information dissemination, particularly around the text of Bible. So, Gutenberg, as an entrepreneurial print man, the first of his kind but definitely not the last, he went to the Catholic church and said allow me to print the Bible, and the original response was no. And then he said, okay, let me prove to you this print technology by printing fundraising pamphlets for you. And then that quickly turned into a yes. So, he printed out fundraising pamphlets that got handed out at mass, and then he got the mandate to print the Bible. And that was really the origin of the printing business. He saw the wine press, and he basically used- it’s a corkscrew type of press. So, if you can imagine how a corkscrew goes into a cork as you twist it, that was the exact same technology that a wine press was using as well. So, he would twist his basically hacked wine press turned to printing press, and it would push down this heavy rectangle weight, and that would then make the impression. So, when they started, it was all male component type, which would then leave a female impression on the paper. And he was able to produce things that the monks would have taken literally hundreds of years to do. So that was the beginning of the Great Information Revolution. And if you notice that the timing was right before the Renaissance era or the Enlightenment, that was no coincidence. So once information had better legs to spread, then there was a higher demand for writers, and the printing technology was actually the horse that led potentially you could say the Renaissance cart, which is pretty cool.
Alex Bridgeman: That is pretty cool. And so, the impression piece, that’s literally the tablet that has the letters and writing on it, that’s dipped in ink and pressed onto the paper. Is that what you mean? Or is impression, is that a different tool you’re referring to?
Eric Friend: Yes. So what he would do is he would set up a rectangle that was the size of one of the sheets and he would go and he would find all of this type setting and he would make all these individual letters, and he would recycle letters of course, but the guy was such a freak about the kerning and the placement of all of these letters and even like the stylized nature of the printing, that if you look at some of the originals, I think there’s a dozen left, it’s beautiful. The whole thing is beautiful. And he spent hours building out each and every individual page. And he would go and he would basically take these blocks that had a male component, which was the letter, and it was wrong reading because once you pressed it into the paper, then that was going to make it right reading, so that he was doing this all backwards essentially. So, when the impression is coming down onto the paper, if you wanted to write out T H E, you would have to actually do E H T on the male component, because as that comes down, it’s going to create a mirrored image on the paper. So, when he was setting up what we now call plates, he was setting these all up backwards. So, it was a tremendous effort from him. And he spent a lot of time doing each and every single one of these pages because it was really the first time that he had a chance to prove this technology out. And he really wanted to seize the opportunity. So, it was really world changing stuff. And it’s a common answer when people say what technology changed the world the most, outside of some of these digital connections and the internet and satellite beaming information, the printing press allowed people to spread ideas and to find truth together and put truth or information or ideas on trial in the town square without being in the town square. And that was fundamentally different than what all of history has had. So instead of wise men, now you had wise books, and that was a really fundamental change. So, Gutenberg was the first of many in the printing industry, but that was some of the background there. And actually, this summer, I went and spent a night at a monastery to see how the monks lived, and they fed me, and they had a vow of silence and I just sat and just listened to some of their chant prayers and spent the night there. And it was a really cool experience. I felt like I was really connected to the heritage of this business that I’m undertaking. So that’s the story about Gutenberg.
Alex Bridgeman: I love that. One of the coin concepts I’ve really enjoyed chatting with you about is this sense of timelessness or permanence that print media has over digital, where if you send out an email newsletter, it’s really easy to just hit delete on your computer and it’s pretty much gone. Whereas print, I showed you earlier the car and aviation magazines from the forties and fifties that I’ve been starting to collect and how they’re still there. I still have them; they are on my shelf. They haven’t been deleted from anywhere. And that’s just so cool. And it’s been fun to chat with you about the nerdiness of print publishing and its timelessness.
Eric Friend: I keep notes in my phone about stories, but say there was this moment in my life, this epic happening to me, and I wanted to tell my kids about it, I don’t know if I would want to save that down on a hard drive exclusively because that’s going to require an intermediary in order to read that information, and who knows how long it is until my grandchildren are listening to my stories, and who knows if we have the technology to access some of this old data. But I’ll tell you that if I was to write something down on an archival quality, which just means pH neutral because if you have an acidic paper or basic paper, it’s going to return to neutral, so that can sometimes create discoloring or brittle paper. So, pH neutral is essentially archival quality because it’s going to last. If I write down those stories on a notebook that has good construction, and then I put it into one of my safety deposit boxes, I’m pretty sure that I’m going to be able to read that story to my kids or my kids can read it for me. There’s a serious value that might glazed over in a digital world. And we’re not trying to be a paper utility company. And in fact, we’re taking a lot of direction from how the candle went from a necessity in every town to being more of a luxury item that provides individual character and is essentially something that allows you to be unique and to reflect your personality. I think paper’s going to do that same thing where you don’t need paper around your business anymore necessarily. Maybe some of the lawyers do for some of these documents and executions, but you don’t need it per se. There’s a lot of technological solutions that can substitute. But instead, it can be something that provides a moment of joy. And this is something that my designer now creative director and I have talked a lot about is that good construction, simple but beautiful design, and having your name written on something in a beautiful way that you can take pride in, that’s going to create a moment of joy. And we’re testing out this market, which it’s an old market, of course. But I think that if you just take a different lens to it and we do a little bit of customer education around why paper could still be relevant today and take that with some of the history and nest that as to why we’re the best, we’ve been doing this for over a hundred years, why the Friend family is the best to bring this to market, then I think we can at least find a niche that is willing to explore this with us. And that’s really what I want to do, just a community forward, more art than business, but using some of the skills that I learned in investment banking to make it profitable and then live a rather simple life. That’s what I want to do for me.
Alex Bridgeman: Well, introduce yourself. Tell us about your time in investment banking and then your Friend’s family business.
Eric Friend: Sure. So, my name is Eric Friend. I grew up in Northern Illinois right next to a Six Flags. First of all, I’ve been starting little businesses, there’s entrepreneurship in my blood, and I’ve been starting little businesses since I was- I guess that was second grade. Me and my friend Cameron, we started making these little finger snowboards out of paper clips, and we would cut pencil grips in half, and then we would cut a slit through the pencil grip, so you could stick your two fingers into these pencil grips. And then you would have like this little finger snowboard that you could do some sick tricks on your desk with. And we started making those. And then a couple of friends of ours asked if they could have one, and we gave them a couple, and then people were asking for more of these things, and eventually we were selling them. And I’ve told this story on Twitter once before, but we started selling these things and they got so popular that they got banned from our elementary school. And we basically had a bunch of copycats; there were other kids in the school that started to make their own. And there was just this moment when I was like, wait a minute, I just got paid $2 for 10 minutes of work. And then the light bulb was on, and it hasn’t been shut off since. I went to school to study math, just because I just wanted a basic education with some good fundamental skills, learning how to solve hard problems that when I look at it at first, I don’t know how it’s going to end, but then using the tools from my education in order to solve it. So, I think that was a good background for eventually going into investment banking where I spent four years in New York City working at Barclays. And I spent two years working in debt origination, which basically meant I was doing investment grade, so debt capital markets we called it, where we were helping companies raise truly astronomical amounts of money. If a deal was less than 300 million, then it was too small for us. And we were working with the GEs, the Honeywells, the big industrial companies, big real estate REITs, Simon Property Group, Unibuyer[RD1] , and just helping them essentially keep a leveraged balance sheet. So, there wasn’t necessarily a lot of strategic debt placing that happened when I was doing debt capital markets. Instead, I was learning a lot about the macro world, because for those big guys, for example, the auto companies, they have these arms underneath of them called the credit- Ford Credit Company and then GM Finance, I think, is the two for Ford and GM, but they basically, their business is wonderful. They have these financing arms that will write a check to the motor company, the parent company, for the whole price of the car so that GM and Ford can recognize the revenue right away in full for the sale of a car. And then all of the liability is put on the subsidiary’s books underneath the motor company. And then that just really greases their wheels for the motor company and for growth. And working with them, for a high yield company, you might care if it’s like you told me, banker guy, you told me that we could print this deal at 5.5%, and now you’re telling me it’s 6%, so like this 50-basis point change, which still not a huge deal but would at least raise questions in the high yield land. These guys were so tuned into the markets and these guys hit the market so often that they would yell at us if it was a couple pips, we’re talking about a tenth of a basis point off of what we predicted that they would be able to land in the market. And that’s because their business was essentially lending money at 5 to 6% to these car buyers and then borrowing money at 3 to 4% from the public markets and then clipping that spread in between the two, six minus four minus three. And the level of scrutiny and detail taught me a lot about the macro world, but maybe didn’t teach me a lot about skills for running a small business. You go to a place like that and you’re learning a lot of skills. Like you can obviously take in a lot of data when you go and you can learn about bond math and do all of this or that, but really the value is the metadata, learning how to control yourself in an environment like that, learning how to pitch an idea at a meeting, learning the anatomy of a good idea versus a bad idea, learning how to execute, those skills were highly transferable. But after a couple of years doing this super academic finance, I decided that it was time to make a change. I liked it, and I thought that maybe I was going to do like a buy-side hedge fund route, but I wanted eventually to see a little bit more of the cap structure instead of just the debt. So, I made a move internally to join the real estate M&A team. And I spent two years in that group. And that was when I really started to see the world and how things worked and like how these fundamental dynamics repeat themselves across the country and how if you look at the American mall, you’re going to see the classes that develop directly- the classes and personalities develop directly from what stores are available in your hometown. And that was when my mind really opened up to what does business mean in America? And what am I playing for? Am I playing for dominance here, or am I playing for something different? And I think I’ve come to a really cool place on that. And during this time, that was my four years at Barclays I was doing that, and I worked on, finally, the last six months I was in the real estate team still, but I was working on prop tech companies, so companies that were trading on revenue multiples instead of cap rates. Those companies also taught me a lot about the different side. We had the trad five, but then you also have some of the new tech financing. So, I feel like I really got a fulsome experience with my time at Barclays. It was actually right around that transition from going from the debt capital markets team to the M&A team that my now creative director came to visit. He was doing his birthright trip and he was stopping through New York, and he spent a couple of nights with me both before and after. And that was when we first had this conversation about the value of what he does, which is design. And he’s like, he’s really plugged in to design. Like this guy is all over the blogs. He knows what the high design world is thinking and doing and the trends that are going on in high design and academic design. And we had a conversation about how design can drive real returns in business in ways that seem like dumb obvious to us but are these hidden secrets apparently to other people, that if you make a consumer or business to business product, and you spend a few thousand dollars up front on design, that can drive astronomical difference in the result. And I think that’s something that he and I totally aligned on when we were having an initial conversation about my family’s business, which I’ll get into in a second. So that was my time in New York. That ended pretty much right at the beginning of the pandemic. I left New York. I was pretty tired of some of the cultural things in New York, the workload especially, that was the exasperating factor across all of these other funny little New York things that were excruciating and exhausting, just some of the ways that you had to move around that city. If you’re not down with the culture of New York, then there’s a saying that New York will tell you when it’s time for you to leave. And when I left New York, New York was like, “Hey, it might be time for you to get out of here.”
Alex Bridgeman: How did New York tell you that you had to leave?
Eric Friend: I was on the back of five 100-hour work weeks. And it was a conversation when my pops came to visit, and he and I were talking about the business, and he had been preparing the business for either a sale or a wind down. He was pretty sure that I wasn’t interested in coming back to the business because he himself was thinking about the business in terms of the old utility and in fact lost utility of the paper business. So then when he came to visit me, this was like about six months before I left the firm, before I left Barclays, we had a conversation about what the paper business could be. And that was when we first discussed the arc of the candle industry and how they went from a candle maker in every town to having still a pretty dominant presence in market. And we thought about ways that maybe we could do that for our business. And it awakened my entrepreneurial spirit, which was developed in first grade. And once I got that bug in me that I can go and work for myself and I can go and hire people that I want to hire and I can make products that I think are beautiful and I can work with people who also appreciate this stuff and set my own hours and travel for work and try to do collabs and just post content, even if it’s bad, like once that bug bit me, it was done. It was just a matter of time until I was out of New York. And I never really had a plan to stay in New York for a long time. I think that my advice, when college students ask about investment banking, I always tell them the same advice, especially if you come from a small school like I did, going and working at one of these big firms is like getting your passport stamped into this sophisticated business world. And once you have that stamp, you really are free to roam around in the country. And that four-year experience, the two years in debt capital markets I thought left me a little unsatisfied with some of the learning that I had done because I felt like it was a mile deep but only an inch wide. So then once I went to M&A and I got that mile wide, a couple inches deep, that was when I felt confident that my passport was stamped, and I was ready to go out and see what I could do on my own. That was about a year and a half ago, November. How long have we been in the pandemic? Like a hundred years? So that was about a year and a half ago. And for six months, I think I would do it all over again. For six months, I spent maybe 20 hours a week thinking about this paper business, and that was it. And then mostly it was just recovery. Like my body was burnt out. I had very little will to put myself through that amount of like excruciating labor again at that time. And I was reconnecting with things that I like to do. I did some painting. I was doing some birdwatching. I was just like floundering and enjoying it. And then once Jeremy, my now creative director, he actually was working at this place down in Nashville, and once he left that job and he moved back here, that’s when we really started to pick up some of the thinking in earnest, and we started to work on the branding and talk about what the voice means and what we want to do with this business and what we think is possible. So, he came in and we did a bunch of exercises. It was awesome. We did a bunch of exercises where he would give me like a minute, he would give me a pad of sticky notes and a minute. And he was like, “Okay, write down every word that you think should be associated with this company.” And I’m talking about authors or musicians or colors or font styles or scenes from nature, just anything that would speak to the voice of this company. And I would do that for a minute, and then he read through those, and then he took that and then he asked a little bit more pointed questions and I did the same exercise again. And then we put those up on the window of my office, all of those, there’s probably like 40 or 50 of these words. It was like gritty, innovative, creative, geometric, Wes Anderson, these types of things. And we put those all up on the windows of my office and then organized them. And then we picked out one word that represented each one of those. And that was how we kind of built the voice of our brand. And this is where we get to really geek out. My great grandfather, Harley Alfred Friend started H. A. Friend and Company in 1908 in Zion, Illinois. And he first started off by selling office products door to door. And this was the beginning of the Industrial Revolution, or a couple of decades into the Industrial Revolution when the office man was starting to be developed, and he saw that opportunity and he was selling pens and paper door to door. And that was the birth of H. A. Friend over 110 years ago. And from there, it transitioned into a print shop. Once the Industrial Revolution industrialized the printing press, that opportunity was very obvious to him as well. And for the last 110 years, 113 years, we’ve been doing basically high stationary where we have relationships with the best mills in the country. And in fact, we’re in a very privileged group, very small, privileged group of buyers for those mills and that speaks to some of the relationships that my great grandfather and grandfather made. So, I do think that there’s opportunity on a cost basis perspective. But those mills are producing papers that most people have never even had the chance to experience. There are these textured papers, there’s bonds, there’s watermarks. And I’m speaking about the modern person. There’s this rich history there that’s been pretty much forgotten. And I grew up with my dad coming home, smelling like ink, and going and making forts out of paper boxes that were filled with reams of paper. So, I have always understood that it was a cool thing, like that paper had a certain tactile value to it that has been completely lost with the digital era. So, I was always enamored with the topic, but I didn’t think that there was maybe a business there. And it was only when I came back and visited the shop, it must’ve been like right at the time of my graduating from college, right before I went into investment banking, that this seed of coming and working for the paper business was really planted because I saw these foils, these gold foils, these raised printing, these engraving, these embossing, debossing, all of these different textured papers and results that came out of it as something that the world actually could use right now, not because they need it, but because it’s different, and we’re a little oversaturated with the convenience economy. And perhaps it would be nice to go back to some of these, for some people – we’re not trying to sell to every person that crosses our path – but for the people who are looking for something to take pride in, something to have a little uniqueness, this is a product that I fully believe in. And we’re taking these old machines that put tons and tons of pressure down to make a single impression and break because they’re like these old clunky machines, but they still produce like these just deep and gorgeous impressions, and I want to bring that to the market. And this paper business went from selling almost exclusively to lawyers for the better part of the mid to late 1900s to I want to open it up to anybody who wants to participate. And I basically want to take some of these high stationery concepts. There’re two types of work that we encounter. There’s obviously the custom stuff where Alex Bridgeman would be printed on a business card and on a letterhead or on the bottom of a note card for you to keep like a stack next to your bed. That’s all the custom stuff. But those concepts, I think, make it very- or that process makes it very expensive. So instead, I want to do higher runs of non-custom stuff that still bring that texture and that quality but does it with the economies of scale, because we don’t need to print only 500 for Alex and then 500 for Steve. We can print 25,000 sheets and then make 500 notebooks out of that and bring these quality papers, this printing technique that people have literally never experienced because the only printing technique they’ve experienced is toner, flat toner that prints and dots out of a CMYK color wheel. And I think that would be something that we don’t need a lot of volume for this to work. And with the scale of the internet, my father can’t even imagine like some of the number of impressions that when I get retweeted by an account like yours, Alex, he’s like, “Are you serious? Like 8,000 people saw that tweet?” If we convert 5% of these, then we’re at capacity. Okay, don’t worry about the sales. We need to focus on building beautiful products that have a good workable production line, because that is where we’re going to get tricked up in my opinion is if we build either shoddy construction because we are just trying to figure it out live, which I know that we won’t do, or if we let too much water in and then we get flooded.
Alex Bridgeman: Even after two hours of chatting, there’s always more that I would love to know. One question for you though, I think it’d be a fun place to start, is what are some ways that either you’ve seen other companies do or you think a lot of companies could try in regard to using high quality print products with ink stamping and really high-end stuff within their business that maybe folks are using other means to accomplish today? Like to me, print, because I run a publishing business, a print publishing business, like print newsletters, to me, are an example of that. I love the print business card example that you referenced, the American Psycho that I watched where Christian Bale is holding up these different business cards that these folks are sharing with him. I love that. Yeah, that was great. What are interesting products in regard to print that companies could use?
Eric Friend: I have a bunch actually. But the one that I really want to do, and I think this it’s going to be tied into our tagline, which I’ve talked with my creative director and we’re not going to share it yet because we just want to make sure that we don’t get painted into a corner, but essentially, it’s going to be playing off the fact that we’re raise printing people’s names. And with that, we think that this is – and this is the real tagline here – is that you have very few opportunities to leave something on the desk of one of your potential customers. And if you- and there’s a bunch of examples that underscore this, but of course, the Apple packaging is one of them, is that if you bring high quality construction with good materials, even to innocuous products, they will be held onto. And if you do that with a to-do list pad, it brings you just this even small moment of joy because it’s got this textured paper, it’s got this raised ink line at the top that you can put your finger on and feel the weight of the ink. And then it’s got this beautiful design element to it. If you have that, then it’s like it’s a personal thing for a lot of reasons, and you can see the pride that would maybe develop in somebody when they’re like your work is important and your name is important. I think one thing that we’ve talked about, my designer and I, now creative director and I, is that your first name represents your possibilities as an individual, and your last name represents either the challenges or the opportunities that you have because of where you sit in history. And the combination of those is who you are as a person. And if we can empower people to be the best version of themselves, even if it’s a small group of people that just buy into what we’re selling here and what we’re doing, like we have a small print shop, we have few pressmen, like we’re doing these things in small batches. It’s the old school way. The machines look like they are from – I mean, they are – from the middle of the century. All of those things can take this modern person a little bit further away from the really unique era that we’re in right now and nest that person more into the historical, into where they sit in history. And I think that provides a value that can’t be understated, at least for me and I know for you as well. When you take these things and these traditions and you bring them into this modern life and you breathe into them, that’s really cool. And we have a few different products. We want to be able to streamline the business card process. I won’t throw shade at the other printing company that you’ve probably heard of, but they’re doing everything in toner basically. They’ve lost the decorum is what Jeremy and I say, that print media right now has lost decorum. And we want to bring that back. And business cards are one. Letterheads, if you have a letterhead with engraving on the top where it’s like Alex Bridgeman, Think like an Owner and the Operator’s Handbook, and it’s got your phone number and your email address, and that’s like the letterhead that you just jot quick notes on, and then you send handwritten notes to people, that’s a lasting impression. That could be a lifetime impression that you make on a person that both gets them to say, where did you get this? And two, why are you the most thoughtful person I’ve ever met? And then the other thing is that, because we have this on my whiteboard right here, I’m looking right at it, it says paper knowledge and printing technique, and that’s circled and then all of these lines are coming out of that with various product ideas, because our core is that we know paper inside and out. We know how it’s made. We know how it breaks when you fold it. We know how you need to have certain different papers if you’re going to do different printing processes because of the impression that it’s going to leave if it’s too textured and that’s going to make it have this like halo that’s not going to look good around your printing. We know paper really well. We also have a printing technique that only a handful of shops left in the country are still doing. And if we combine those, then we can make products, even like these tokens, like these QR codes that are on thick paper with a raised ink QR. You could drop four of those into your consumer products package and then have them be referral cards where it takes you directly to a website, then is a portal that credits both sides of the referral process. And it’s a token that has enough quality in and of itself that it will get handed out or at least it has a higher probability of getting handed out than another thin piece of paper with digitally printed QR code on it would have. That’s an idea. But the real product that I think we’re really excited about is we’re making a flagship notebook, and we’re going to call it an American notebook because all the way from the seeds that were planted in American soil to the paper coming from the American mill to being printed in our American shop to being converted by an American bindery, this thing is truly an American notebook. And there’s some motifs that the Japanese have done in paper that are absolutely stunning, and America is just, we are so digital that we just missed it. We just never had an artisanal moment for paper. And I think that there’s such a value to that. And you go into one of these little stationary shops and you’re filled with wonder. It’s cool. And imagine if you could order in a quick process something that has your name raised printed on it, like that is going to absolutely inspire you, and it’s going to show that you have a level of sophistication that maybe the other person who’s sending out advertising or was trying to make a cold connection with somebody at a networking event is simply not going to be able to compete with. And the subtlety of the metadata to high quality but well-designed products I think is a truly powerful driver. So those types of products where we can use the economies of scale that are best for printing, where we can print off 25,000 sheets at one time, that’s going to allow us to get a really nice cost basis on some of these products that’ll allow us to do a lot of different flexibilities, whether it’s collaborations with other people or doing short run batches, where we’re going art forward and we’re taking certain artists and doing the cover sheet inside of the cover, the first page of the notebook that has certain design elements, there’s so many different possibilities. So, it all starts with the construction and the feel. But then from where that goes, it’s going to be fun to find out. I don’t know.
Alex Bridgeman: What are some ways you can communicate luxury through print? You’ve mentioned a few times embossing or paper quality, of course, but what are some ways that folks can use luxury or use print to demonstrate luxury?
Eric Friend: One, I think that the education piece really speaks loudly here. And that’s if you have business card, like let’s go back to the American Psycho scene, and they’re talking about the subtle off-white coloring, the tasteful thickness of the card, if you can have like this sales pitch about something that you’re handing somebody that’s not like salesy but rather is like confidently sophisticated, then I think that’s a real serious luxury right there. And I’m reading a book right now, The Luxury Strategy, and actually the difference, and I’d be curious if you know this – do you know, Alex, the difference between a premium product and a luxury product? There is one very specific difference.
Alex Bridgeman: I don’t know, but I do need to read that book.
Eric Friend: It is really interesting. I’m not super far into it. But the difference is luxury is produced in the same place it was invented, and premium isn’t constrained by that. So, when you think about the Swiss watches, they are a luxury because they are still being produced, these automatic movements are still being produced in Switzerland and they haven’t left from their country of origin. Instead of invented, it’s more of where the company’s origin was at first, and if that company leaves that origin, the production, then it moves from a luxury space into a premium space. So, we’re actually on the fence right now if we want to pitch ourselves as luxury or if we want to pitch ourselves as premium. But essentially, we do feel like we check a lot of the luxury boxes because we’ve been doing this in the same place for over a hundred years. And we’re still using a lot of the same vendors that my great-grandfather was using. For those reasons, I think, and also, I’m a big believer in I wouldn’t call it like flexing luxury where it’s about dunking on your competitors, I’d call it more of this individual luxury where these products show like the value of thought. The philosopher Hume, he talks about moderate luxury, and the reason I’m just so attracted to this is because when you have better per unit economics, then you can pay employees better, you can deliver better, you can execute better. And if you put time and capex into design such that people are willing to pay more for your products then you can produce it for, then that speaks to how you’re bringing together these components in a beautiful way and adding value to the world. And then you’re just taking a piece of that value for yourself in the form of per unit margin, but you’re also leaving value on the table for your customers because they still think that the price that you’re charging is a right price. And that I think is a good path forward for a world that is just getting cheapened right now. I’ll answer the best business I’ve ever seen, I’ll go into a little bit more detail about this idea of moderate luxury. But instead of luxury for luxury’s sake, it’s luxury for individualism’s sake. And I think that is a way more sustainable thought process on why luxury matters and why we shouldn’t balk at luxury. It’s your luxury. It’s not anyone else’s. It’s something that you take pride in, and it’s something that your group of friends put value on. That’s how I think about that.
Alex Bridgeman: I love that. And this business has also been in your family for a very long time and it sounds like survived several generations. I’d love to hear some of the challenges and just the ways the business has moved from one generation to the next and hearing also about the different marks that each generation leaves on the business, because everyone wants to- every generation seems to naturally want to improve from the last one. So, a lot of family businesses seem to have a similar mindset. So, I’d just love to hear about what does each family generation leave on the business? And then what have been some challenges with keeping it in the family?
Eric Friend: Sure. My great grandfather was the entrepreneur. So, he was the one that had the bold risk of starting a business and saw an opportunity and seized it. So that was really what he brought to the table, of course. My grandfather, he was the one who grew the business. He was a really charismatic person who put a lot of time into his relationship with the salesman and put a lot of time into a relationship with core customers. And he was the one that took the business from a small local office supply company to a nationwide company that actually I’m looking we have this list of accolades here. We were the number one cotton paper sale seller in the United States for a couple of decades there in the middle of the century. And that was with our own legal watermarked paper. We have trademarks on our own watermarks. And that was, in fact, a majority of the legal documents in this country were being printed on our paper for a lot of the midcentury. And that was due to just the charisma and the style of my grandfather. And then my father, and this is where a lot of headbutting comes in, my father was active in the seventies is when he started with the business, in the late seventies, and he was essentially the one who took this business through the Information Revolution. And that led him to think less about growth and more about cost savings. So, my father is an optimizer, and he is looking for ways to reduce the fat pretty much at every turn because his job underneath his father, and my grandfather worked here until he was in his eighties. So, my dad’s job underneath him was to basically clean up the mess that reckless sales was creating. And he learned a style of running a business that, unfortunately, is challenging to do an overhaul with because he has a lot of these systems that he’s created that are absolutely dynamite systems, but we still have customers that are faxing us orders, and it’s hard for him to move away from it because it works. The loss rate is really pretty low. But we could grow and scale at a much different rate and in a much easier way if we were to let go of some of these golden calf type of systems. And I think that one of the challenges that I’ve had is I’m in the move fast and break things mentality. So, I really have to see my father not as a contrarian or an opposition to me but rather as a counterweight. And that is something that, when I shifted my mindset to him being somebody that balanced me instead of somebody that opposed me, that was when my father and I were really able to start working well together. And I’ve had a number of conversations with folks on Twitter, which by the way, has been a huge driver of a lot of the trust that my father has given me, just seeing the way that I can talk about this business in a way that generates excitement about it and bringing people into this narrative marketing, instead of just this we do cool stuff and have products that are cool marketing. Showing them the history of the family just by nature of me talking about the business a lot online, that has given him a little bit more freedom to trust me when I say, “Hey, I think that we need to have a landing page that’s collecting emails that is going to give us an easy pathway to marketing our notebooks when they come out next year.” And it’s actually been really cool to see how he’s grown. And this actually gets into just one of the general points that I have on the world right now is that the world is changing so quickly that parents and children are living two different lives for the first time ever. The acceleration of technologies development over the last 20 years has turned the children into a class of capability and of knowledge and information that their parents are completely unfamiliar with if you’re about my age. I think probably the parents that are 35 to 40 right now are able to keep up a little bit better. But my parents at 55 and 60, they’re a little bit more stretched because the world that they grew up in and then spent 20 years working in is completely gone. And that’s crazy. And I think that finding a way to work with my father has been extremely challenging because if you think about most work environments, you probably have a 10-to-15-year age gap between the boss and the entry-level employee. You might have a chairman that’s like this old guy that’s like forever disconnected, and he’s just like commenting on a PDF every quarter. But from an operator’s perspective, having a father who’s 35 years senior to me, that is a really interesting dynamic, particularly given that I know so much about this information era and he knows so much about this macroeconomic era that we’re spending a lot of time, unfortunately, doing convincing of the other person. He’s convincing me why these old systems are good or why certain characteristics of the old system are necessary. And I’m convincing him why certain new systems would be better, and doing that without even having any sales yet has been a challenge. So, I’ve changed my approach to let’s focus on getting sales in the door first so that he can see that there’s money to play with, instead of trying to convince him to build an asset without proof of concept first.
Alex Bridgeman: And by the way, I love that you post pictures of your to-do list on paper with that really fancy pen. I think that works great with building a family printing business. I like the picture of the printed to-do list. That’s awesome.
Eric Friend: That’s our bond. That’s got our watermark on it.
Alex Bridgeman: I love it. Yeah. What are you most excited for the next 12 months with the business? Can you share a little bit more about broader product plans or types of customers, different features that you’re excited about?
Eric Friend: What I’m really excited about is that our branding is almost done. And my creative director and I have spent coming up on 200 hours just talking on the phone about the voice of this, and the brand package that we’ve really landed on is this word mark that pulls directly from this 1970s or 1980s letterhead that we used to use. And it takes that font, which has this like really- it’s such an interesting and unique voice, I can’t wait to show people, but it takes that almost directly from a piece that my grandfather created and modernizes it a little bit just around the corners but really keeps the same voice and then applies that to our new word mark. So, I can’t wait to show people that. But then the logo and the icon that we’re using to lock up with that is this really multiple layered icon that’s this deep red flag. And we think that this paper can serve almost in the same way that a flag or a banner would serve as like a marker of protection or as a marker of community. It can serve in that same way. And it can be almost this, the paper product, this physical product, in a lot of ways, can be your flag when you go out into the world. So, bringing those two items to light is going to be so rewarding because it’s going to be fun to see how my designer, now creative director, how he is received and the work that we’ve both put in, but then he’s going to be taking this and really running with the visuals for this company. And it’s just almost emotional about it, like just thinking about my late grandfather and about how this is the fulfillment of so many of his visions really, and how we get to take that to such a bigger audience than he would’ve ever been able to back in the midcentury. That is what really excites me is just building a strong asset that is beautiful and finds the intersection of art and business and bringing that to the world. And then from a more practical side of things, watching the numbers come in is going to be awesome. I can’t wait to watch numbers come in, even if they’re not good, it’s like, okay, that didn’t work, let’s see what’s next. Having that instant feedback and then going out and just like being able to pick up the phone and make per unit margin on products, like what? That’s crazy. So, I’m really excited about that.
Alex Bridgeman: Yeah, absolutely. Moving into closing questions. What college class would you teach if it could be about any subject you wanted? You mentioned the real estate piece earlier, I’d love to hear more.
Eric Friend: So, if I was to teach a college class, I would teach a class called the American Mall, and it would be a class that tries to illuminate how economies get developed over time. And it would show how basically the mall that we were all familiar with as kids was this boiler plate type of model for shoppers that was then copy and pasted all across the country and how that turned all of the American youth into a handful of motifs. You either had the Abercrombie motif or you had the Hot Topic guy or you had the Pac Sun guy. And those really were the drivers of a lot of movie culture. And then as we’ve gotten older, a lot of how people have disseminated into the workforce. So, the American Mall would be the name of my college class. And that was on the back of working for mall companies for the first time, working on like Simon Property Group, man, it’s both interesting because I think it’s a call for individualism once you see how much standard product there is in this world and how people who are the unique kid in school are actually in extremely large company across the country. And then by using this kind of top-down view of the American mall, I would then teach the kids about how economies get developed and then also a call towards individualism. So that would be my college class. It would be called the American Mall. And then also how that globally was distributed and the American empire is now like taking over the world. But that’s totally- that’s the 201 class.
Alex Bridgeman: That would be a fun one to take. What’s a strongly held belief you’ve changed your mind on?
Eric Friend: I used to think that people could be described in binary ways – smart, not smart, charismatic or shy. And I realized that was a very limiting approach. There is so much nuance that if you just try to do like this operational approach where you just try to put people in a box and then forget about them, or at least use them only for what you think that they are best at, you’re missing out on the intersection of so much knowledge. And I think that is something that I used to, particularly when I was in a new environment, like when I first got to New York, I was like, oh okay, this guy is smart, this guy’s not smart, this guy is somebody I need to go to for this, this is somebody I need to go to for that. And I think that was really limiting in hindsight. And now being able to discuss with somebody like yourself about the paper business or your print media or how small businesses fit into the global economy at large, like those are the conversations and those are the intersections that real interesting work gets done. And I think that I used to think people were too binary.
Alex Bridgeman: I love that. That’s a good answer. What’s the best business you’ve ever seen?
Eric Friend: I see that you have 90 podcasts. I listened to a handful of them. So I wonder if Costco has come up before.
Alex Bridgeman: No, I don’t think so.
Eric Friend: Costco is I think the future of commodities. And what makes me say that is the fact that their meat section is like a really phenomenal choice meat section, but then also their golf balls are rivaling Pro V1s. So essentially what I see the Costco management team doing is saying, okay, anything that doesn’t need to have personality we can do. And because we’re basically charging people a convenience tax for them to come here and buy in bulk, we can lower our prices, which is kind of their marketing value proposition anyway. And some people would argue that that’s not as valuable as they claim it to be. But you’re not paying for last mile shipping when you go to Costco like you would at Amazon. So that’s going to save some money and they can essentially, in my opinion, steamroll the entire market on commodities if they have just like the mental acumen at the management level to create the best, like literally like the highest spin rate wedge golf ball but the lowest spin rate drive golf ball, like that’s competing with the Pro V1, and then also being able to be smart enough about choice meat selection. That is a really well-run business. So, from a commodity side, I would say Costco, but then from an individual side, which I have a bias towards, there was a company that got bought by Duluth Trading Company called the Best Made Company. And I’d recommend anybody listening to this, go and check it out. They sell camp gear, home gear, and workshop stuff. And it proves, this is like almost one of like three or four companies that drove a lot of the inspiration and the belief in my company and in myself with this paper company, that the value of their design literally turned them into an eight figure business, just by the value of their design. They’re not competitive on their costs. They’re charging high prices because their design is so powerfully driving sales. So that is- I love that. And then they got bought by Duluth. So those are the two companies, the individual and then also just the basic necessities. I think that checks both boxes.
Alex Bridgeman: That’s fantastic. I had never gone to Costco much as a kid. My grandma had a Costco membership, so every so often I’d go with her to get a rotisserie chicken or something like that and then some poppy seed muffins. I made the mistake of telling her that I love poppy seed muffins, and then she bought me a new like rack of muffins every time I saw her. So, like every month or two, I’d get a new rack, and I started freezing them. And then I ended up not liking them because I had so many, and so now it’s gone forever. But I went recently with my wife because we got a membership for the first time with our own money and all that, and it was exciting. I walked in like as a customer, rather than as the child or grandchild of a customer, and it was mind blowing. Like you couldsee how much cashews do you want? Eight years of cashews? Like it’s right here. Or do you want the biggest thing of rice you’ve ever seen? It was mind blowing to see that amount of stuff. And it was marveling because there’s only like a few skews for basic stuff. Like there’s three kinds of toilet paper. There’s one type of Andros cashew. It’s very simple as a business model, which I thought was really cool. I love that they do things like they don’t offer bags. Like you just put your stuff in your cart, and you just take it to your car because everything’s just so big, but they also don’t have to buy bags for people. And they do tires, mortgages, hot dogs. The number of stuff that they sell is incredible, travel packs. It’s amazing.
Eric Friend: It is, it’s amazing. And I hope they don’t get too far over their skis. GE did, that thinks that they can do everything. But if it’s a consumer product that you don’t need to have a special version of it to make yourself feel good, then just buy it at Costco. It’s simple.
Alex Bridgeman: Yeah, it’s incredible. It’s an amazing business. Thank you so much, Eric, for sharing some time. I love hearing about paper and nerding out about print publishing. There’s many more hours that we have to chat about all this, but thanks so much for sharing a little bit on the podcast. It has been really fun.
Eric Friend: This has been really fun, man. I look forward to being in your network and just the small business community at large on Twitter. It’s like a hive-mind approaching just really all of us are able to learn top class education from each other. And how cool is that? So, thanks for what you do.
Join small company investors, search funds, private equity firms, business owners, and entrepreneurs in reading the Think Like An Owner Newsletter.
As a print publisher through our quarterly publication called the Operator’s Handbook, I was curious to hear what ideas Eric had on using print as a content medium.