Starting Over After a Crash

Starting over after a crash
17 Apr 2020

Morning team huddle: Can you start over again after losing everything in your business? History says, “YES!”

In this chat we talk about Sylvan Goldman, an entrepreneur who invented the shopping trolley after the 1929 stock market crash took everything he had, and transformed how we shop forever.

Show notes for those who prefer to read:

Today I’m going to tell you about my favourite entrepreneur. Now to me, this guy is the epitome of a business turnaround.

He started again from nothing after an absolute crash – the biggest crash you could possibly imagine. And he turned things around and created something that we use every day. A symbol of his invention is something that we see every day online.

To me, he’s more influential than Steve Jobs and Bill Gates. Who is this guy? This is a gentleman by the name of Sylvan Goldman, and he lived at the turn of the century in America.

He and his brother had a chain of very successful supermarkets in a place called Tucson, Arizona.  They went really, really well, and he sold this chain of supermarkets for an absolute fortune about three or four months just before the big stock market crash in 1929.

The money from the sale had just landed in his account,  and he and his brother were looking forward to a wealthy retirement where they could just relax and enjoy the money. Unfortunately, then the stock market crash happened and took the lot.

He and his brother had to figure out what they were going to do. So, they decided that all they knew and all they thought they were good for was running supermarkets.

But the problem was that they had signed a non-compete clause with the new owners of their previous business. So, they had to move from Tucson to Oklahoma where they started five new supermarket stores under the brand Humpty Dumpty.

Could you imagine doing that? Starting a new business at the time of the stock market crash? You’ve got no money. You’re in a totally different location. You don’t know any of the suppliers. You have to start from scratch with only what you know.

That’s what he and his brother did. Now the trouble was that things didn’t go so well. The stores struggled for business, and they barely covered wages each week.

Sylvan Goldman decided to sit and watch his customers to try to figure out how he could make them buy more. How could he increase the spend of their shopping?

At that time when people shopped, they only had cane baskets or metal shopping baskets. What would happen is they’d fill the basket, and when the basket was full, they would just go straight to the checkout and get processed because the basket limited how much they could buy.

Sylvan watched this, and he thought, “Well hang on. I’ve got an idea”.

So, he hired more staff, and he bought more baskets, and stationed these staff around the store as runners. When people’s baskets got full, the runner would go out, hand them a new basket, and run the heavy basket off to the registers to see if that could make people buy more.

Well, that was an abject failure. It created a massive logistical challenge, and it wasn’t covering the additional wages.

One evening Sylvan was sitting on his desk and was despondent. He was just kicking his office chair while he was thinking.

The office chair had wheels on it, and he was just kicking his chair backwards and forwards, trying to figure out how to get his supermarkets to make money.

Now, the office chair that he was kicking around happened to have a metal shopping basket on it, and just like Newton and the Apple, Sylvan looked at it and had a brainwave.

“Why can’t we have baskets with wheels? Why don’t we create a shopping trolley to make it easier for people to shop?”

He was so excited! He raced to get his local handyman. Fred Young was that guy’s name. That night they tinkered and tinkered and tinkered with creating the first shopping trolleys.

Then they found someone else to manufacture the shopping trolleys.

Sylvan was so excited with his invention that he launched it with a big ad campaign saying, “Come to our supermarkets. You won’t have to carry baskets anymore. You can shop with these new things called shopping trolleys.”

Everybody hated them. The men thought that if they pushed a trolley, it looked too feminine. It made them feel that they were not strong enough or manly enough to carry baskets. So, they thought, “I don’t want to use a trolley”.

Women thought, “It looks like a baby carriage, and I’m done with babies. I don’t want to push a trolley.”

Old people thought, “Pushing a trolley makes me look feeble. I don’t want that! I’m fit and fabulous.”

So Sylvan Goldman thought, “Well, if I can’t use it, I’ll sell the idea on to other retailers”.

He went to other retailers and showed them his trolley, and they all said, “We don’t want these trolleys. Kids are going to go running around with these trolleys. They’re going to smash into all our displays and they’re going to make a mess. We don’t want the trolleys!”

A lesser man would have just given up at that point. But not Sylvan.

He was a bit of an amateur psychologist, and he knew that people followed what other people did. So, he thought, “Well, I’ll give it one more shot. Just one more go”.

So Sylvan Goldman hired a whole pile of actors, good looking men and women and he had them pretend to shop and to take groceries to and from their cars. He had them go around the shop just to show that using trolleys was great and easy.

He also hired pretty girls to stand at the front entries and hand out the trolleys to everyone who entered. These pretty girls would make comments about how manly each man looked with the trolley, and how fabulous the trolleys were.

If a person said, “No, I’m fine. I don’t need a trolley”, the girl would look into the store and say, “Well, everybody’s using one. Don’t you want one too?”

He then ran ads showing all these people enjoying the trolleys.

He got his staff who had kids, and he filmed the staff with their kids happily shopping, and the kids were beautifully behaved. He showed that film to other retailers, and it worked.

It worked a treat!

Sales per basket went through the roof. He made an absolute Motsa.

All of the other retailers wanted shopping trolleys. It got to the point where there was a seven-year wait on manufacturing.

Sylvan Goldman ended up dying a very, very wealthy man from the royalties of the shopping trolley patent, (not from his supermarket). He was a highly respected philanthropist and donated to many different charities.

We still use his invention today – nearly a century later. We look at eCommerce stores, and we see the little shopping trolley icon as we talk about putting things into your cart

His invention has become a core part of who we are.

So, what are the lessons?

The key thing is that you can start from nothing. You can get wiped out and start again from nothing.

Sometimes you have to pivot from what you think you are created to do to what you actually are meant to do. Sometimes that can take a strange form, and the idea just takes a life of its own.

Sylvan thought he was supposed to be a supermarket retailer, but it ended up he invented this iconic product that we use every day.

And he did it because he questioned things. He tried to figure out, “How can I better serve other people? How can I figure out a solution to customer problems and make their lives easier and simpler?”

Yes, there was a side benefit of increasing their spend, but the focus was on making things easier for people.

He also tapped into psychology. He knew people look to others to work out how to act. He shared positive images of what people were doing and used that as a lever to help people understand and to take part in a change in behaviour.

The thing is he also had knockback after knockback after knockback. But knockbacks do not have to be fatal, and they do not have to be final.

Sometimes it’s about thinking creatively and finding a new way through a problem.

But the biggest thing for yourself is to be careful of who you follow.

Right now, everybody is feeling flat. And right now, a lot of people are doing the poor me stuff, which is understandable. It’s a stage of grief. But you don’t have to follow them!

You can choose to be a bit like Sylvan Goldman. You can choose to believe that if even if you fall over and everything is flat, it’s not final and it’s not fatal, and you can find another way through.

About the Author

Ingrid Moyle

Ingrid Moyle (BA - Psych/Industrial Relations) is the Chief Web Wizard at Heart Harmony Communications. A self-confessed multipotentialite, Ingrid shamelessly blends her passions of human resources, psychology, web design and copywriting. When not hardwired to her computer, she quests for the perfect coffee while chasing virtual reality creatures across the backstreets of Brisbane.
Bowler hat with lightbulb.

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