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GMT 263: Interview with Richard Thalheimer

On this episode, Richard Thalheimer, the founder of The Sharper Image joins me to share his marketing insights which helped him build a $750 million brand, and what he’s up to these days.

Richard Thalheimer is the founder of The Sharper Image. Richard led The Sharper Image to its peak as CEO with annual revenues of $750 million, 200 stores, catalogs, an online store, and 4000 employees. Richard now runs The Sharper Fund, a successful private fund.

In this episode, you’ll learn:

  • How The Sharper Image grew to a $750 million brand
  • Richard’s favorite marketing tips
  • and much more!

Tools and resources mentioned in this episode:

Full transcript:

Nicholas Scalice (00:01):

In this episode, Richard Thalheimer, the Founder of The Sharper Image joins me to share his marketing insights, which helped him build a $750 million brand and what he’s up to today. Welcome to episode 263 of Growth Marketing Toolbox. I’m your host, Nicholas Scalice, and today I’m joined by Richard Thalheimer, the Founder of The Sharper Image. Richard’s led The Sharper Image to its peak as CEO with annual revenues of over $750 million, 200 stores, catalogs, an online store, and 4,000 employees. Richard now runs The Sharper Fund, a successful private fund, and shares his wisdom at TheSharperInvestor.com.

I am really excited to have you here. As I was saying right before we started the interview, I’m a kid of the ’90s, I grew up going to The Sharper Image stores and it was just such an iconic part of my childhood. Absolutely loved it. I think if anyone listening grew up or remembers the ’80s or ’90s in any way, you obviously know about The Sharper Image.

Nicholas Scalice (02:33):

We’re going to dig into that, we’re going to cover some of your favorite marketing ideas and talk a little bit about what you’re doing now, but I guess just start us off with a little bit more information for those who may not be familiar with your story and The Sharper Image story.

Richard Thalheimer (02:47):

Well, it’s a simple story, actually. When I was 23 years old, I got out of college and went to San Francisco, because that was a cool city. I was a runner and everybody wanted a $300 Seiko running watch, but I had this idea, because I saw it on a whim when I went to the consumer electronics show to market a $69 version of the same watch. That full page ad in Runner’s World magazine launched me into a 35 year career selling innovative products and gadgets.

Nicholas Scalice (03:23):

Wow. Yeah, and you had an interesting partnership with that watch, there was an ad featuring Walt Stack. Tell us a little bit about that and the importance of having someone well-known in the industry who helped promote that product and the impact that it had.

Richard Thalheimer (03:37):

Well, since you’re interested in marketing, this will appeal to you, Nicholas. There was an old guy about 70 years old named Walt Stack, and every day he’d run across the Golden Gate Bridge in his shorts. He was the president of the Runners Club, even though he was 70 years old. He ran ultra marathons, like 50 mile races in the Sierra Nevada Mountains. So he was a very cult figure and I gave him the watch, because I was in the Runners Club and I said, “Walt, wear this watch.” After six months of his sweaty runs jumping in the San Francisco Bay every day, then jumping in the sauna every day, that watch was still running.

Nicholas Scalice (04:17):

Wow.

Richard Thalheimer (04:17):

So, I wrote this one-page ad. This is classic marketing. The ad was titled the only chronograph to keep up with the amazing Walt Stack. It showed a photo of him in his shorts and his tattoos all over his body, and you couldn’t pass up reading this page in Runner’s World magazine, let me tell you. It was an eye-grabber and a great story, which I wrote myself actually.

Nicholas Scalice (04:41):

So, you did a lot of the copywriting or all the copywriting early on yourself. Tell us about that process. Did you just sit down with a blank page or did you have any tips that you would share with others who are trying to write compelling copy?

Richard Thalheimer (04:56):

Yeah, well, a couple. One thought is that you have to move from an eye-grabbing headline to a story that intrigues the reader and keeps them involved till the end where you have to present them with an offer that seems pretty darn good. What I found was you have to read it over 10 or 20 or 30 times, because in general you want to eliminate every single word that’s not necessary. So, that’s what I would do. I would just keep reading it and reading it and reading it to get it down to the essentials.

Nicholas Scalice (05:33):

I feel like so much marketing these days is filler and buzzwords, and it’s missing the heart of the story. Which is something I always loved about The Sharper Image, it always got to the essence of what it is that you’re selling.

Nicholas Scalice (05:47):

Another cool thing. So I’m reading your book, Sharper Image Success, I encourage everyone to check it out, as well as Sharper Investor. We’ll have links in the show notes for anyone who wants to check out the books. There’s a quote on one of the pages here. I wanted to read that, because I think it speaks to this idea of being an innovator, finding new ideas. So you say, “Sometimes in life a wave comes along and you hope to have the instincts and the judgment to know when to get up on that wave and ride it. Some people might call it luck, I prefer to think of that luck as really preparation meeting opportunity.”

Nicholas Scalice (06:19):

I think that’s really cool, because a lot of times as marketers we sort of just hope and pray, we’ve got that hope and pray strategy of let’s put something out there and see if it works, but you put a lot of preparation into what you did, you really thought out the products that you wanted to promote. Tell us a little bit about that idea of preparation and what marketers can do to be more prepared.

Richard Thalheimer (06:41):

I would start, Nicholas, by pointing out that anytime you have a product or an idea, you want to see if it’s viable at the price that you want to sell it at with the margin that you’re going to make. How do you do that? Well, some people choose to pay a fancy outside consulting firm. I think that’s a big waste of money.

Richard Thalheimer (07:01):

I’ll be revolutionary here and say, look, ask 10 people. They could even be friends or they could be strangers. Say you go on vacation, you’re at lunch with them, ask 10 people what they think of this idea and what they’d pay for it, or this app or this product. I think what you’ll find is that after the seventh response, a pattern emerges and you’ll know the answer, and it’s free and it’s fun. So, now you know ahead of time if it’s going to work.

Richard Thalheimer (07:30):

I’ll never forget one of the products we sold was the gel sole for the inside of your shoes. It was a blue sort of inner sole for your shoes, and we called it getting a massage in your shoe or put a water bed in your shoe. So I didn’t know if this was going to really sell or not when I discovered the product, but I took it to The Sharper Image store, I put two chairs out in front of the store and I put a sign that says get a massage in your shoe, try it. People sat down, we put it in their shoe and they bought it. In these stores, pretty soon half the sales in the store were just this inner sole.

Richard Thalheimer (08:04):

I go back to The Sharper Image, we’re having a very difficult year. We have a company-wide meeting, everyone’s looking at me wrapped with attention wondering what the hell is Richard going to do to save the day? I pull this gel sole out of my coat pocket, I hold it up and I go, “Here it is. This is going to save The Sharper Image.” The room goes silent. Everyone thinks I have lost my mind, but I had already tested it, and I knew it was going to be a huge success. So ask people what they think or try it, you’ll find out very quickly.

Nicholas Scalice (08:38):

That’s an incredible story. It also just goes to show how you’ve been able to find these products, or back in the day you were always on top of the trends. For instance, in the book, I didn’t even know this, The Sharper Image was one of the first to really promote Nautilus fitness equipment, which everyone knows about, and then the Ionic Breeze.

Nicholas Scalice (08:55):

I remember seeing that in Sharper Image stores, or when Razor scooters were popular, that was the place to get them. So many more trends originally emerged from these Sharper Image stores. How did you find and source these products and how did you discover them? Because it’s one thing to test them, but first you have to be able to find the right products. Tell us a little bit about that process.

Richard Thalheimer (09:17):

Right. Some we found or I found and some we invented. The Razor scooter was the fun one. I’m walking through this giant toy fair in Hong Kong. The thing is ginormous, it’s like 100,000 square feet of booths, and here’s this little tiny booth with one man sitting in the booth and he’s got this shiny aluminum scooter with two little wheels like roller wheels. I’m thinking, “This is the cutest thing I’ve ever seen.”

Richard Thalheimer (09:44):

So, I bring it back to The Sharper Image and I say, “This is great. We got to sell this product.” Everyone goes, “No. Who wants that?” Well, sure enough, it sold like crazy. It sold a million units a year, and for two years The Sharper Image was the only place you could get was the Razor scooter. So that started a huge trend, and most importantly, it brought in tons of moms, mothers to The Sharper Image stores buying it for their kids. Which was great, because we were primarily male-oriented before then, and that really changed the nature of our business to be men and women.

Nicholas Scalice (10:18):

Interesting. I remember just going into Sharper Image stores in the ’90s was the sales people were always more than happy to help. You couldn’t say that about a lot of stores, especially in the mall where it was, “What do you want?” Right? It was very impersonal, but I always remember that walking to a Sharper Image, you were always greeted right away, people were more than happy to help, it never felt like you were just there. Even if you were looking around, you didn’t have the budget to buy anything, you always felt welcome. Was that an intentional part of the strategy? How did that tie into the success?

Richard Thalheimer (10:51):

Nicholas, I think you were so smart to mention that because we sometimes overlook it. Having fabulous people skills relating to the customer, greeting them warmly, having great customer service, handling their refunds or returns with pleasantry and happiness, all these things are so important. It’s not just the product or the service, it’s the customer service. For all of us who live in today’s world, we’re getting a customer service rep on the phone or to chat is sometimes difficult, sometimes not.

Richard Thalheimer (11:22):

I mean, I think chat’s great because it’s almost always there, but a lot of times you can’t get customer service, so I tend to want to gravitate toward the businesses that provide great customer service. So for example, Amazon. I’m a big Amazon customer. They do it perfectly. They answer right away, phone or chat, they’ll give you a refund if you want one, they’re really accommodating. So, let’s put that at the top of our list of priorities.

Nicholas Scalice (11:48):

Interesting. Yeah, what other priorities were always top of mind when you were working in the stores or working on the stores? Obviously, you needed to have the right products, and like you said, you needed to make sure that they were tested so that you knew these were going to be successful products. At least as best you could know, you needed to have great customer service. What else are we missing?

Richard Thalheimer (12:08):

Well, let me mention two things. One is in terms of knowing what the product will sell. I love the fact that Steve Jobs famously said, “I can’t ask people if they want this new product, because they don’t know what it is yet, they’ve never heard of it. I can’t show it to them yet, I’ve got to just figure out in my mind if it’s going to sell.” So I think once you’ve sold enough things or learned enough experiences, then you can sort of predict what’s going to work. Steve Jobs obviously predicted that very well.

Richard Thalheimer (12:39):

Secondly, I don’t want people to forget there is this thing called the cost of benefit relationship, which means that when you’re selling a service or a product, it’s got to have a benefit to the consumer that’s worth what you’re charging for it. People sometimes overlook that. I always start with the premise, okay, this is a great idea, but will it sell for that price? So, you got to check that.

Nicholas Scalice (13:03):

You mentioned Steve Jobs. This is something I actually didn’t know until I was reading the book and prepping for this interview, you actually had a partnership with Steve Jobs and it goes all the way back to 1996, and it involves eCommerce really at the starting point of the eCommerce revolution, I guess we could say. Tell us a little bit about that partnership.

Richard Thalheimer (13:23):

That was a fun, fun experiment for me. 1996, I was just learning about the internet, and I went to my CIO and my board of directors, even though I’m the majority owner of the company at the time, and I said, “I want to put The Sharper Image catalog online on this thing called the internet.” One of the directors, I’ll never forget, said to me, “No one will ever spend money over the internet.”

In ’96, they thought no one would ever spend money over the internet. Anyway, Steve Jobs had gotten pushed out of the Apple computer at the time, and he had founded a company called NeXT Computer. They had resorted to selling software, because their hardware wasn’t selling real well, and one of the first software platforms he created was an internet eCommerce platform and Sharper Image was his first customer.

Richard Thalheimer (14:15):

So we launched our website online in ’96 using NeXT objects software, and Steve and I had a little press conference at The Sharper Image store in San Francisco. It was such a treat to meet him, I just revere him. Steve Jobs and Elon Musk are my two favorite marketers of all times.

Nicholas Scalice (14:31):

Oh, wow, interesting.

Richard Thalheimer (14:33):

So, that was a great experience. The online computer part of our business turned out to be a huge part of our business. So we had the catalog, the online store and 200 retail stores, and we’re one of the first to combine that synergistic approach where you could buy something online, return it to the store, it’s easy. So, it worked really well for us.

Nicholas Scalice (14:55):

Interesting. You mentioned Elon Musk, a lot of people either love him or hate him. What is it about his style or his approach to business that you like in terms of marketing?

Richard Thalheimer (15:04):

Okay, so Elon knows in advance a lot of things that people might want in his Tesla cars, and he puts those into the cars. Sometimes you don’t even know if you need it. Sometimes you don’t need it so much. 

Richard Thalheimer (15:24):

Anyway, so here’s what he did that made him successful. He went almost bankrupt many times, they were struggling for money. What did he do that was so unique, and it worked for me too over 35 years? Be persistent. No matter how difficult things look, no matter how bleak or dark, be persistent and think of another way to get around the problem. So maybe it’s an obstacle that seems insurmountable, you have to be creative and think of another way to solve the problem. So, persistence is a keyword here.

Nicholas Scalice (15:58):

Obviously that certainly helped, because The Sharper Image, it’s had its ups and downs over the years. A lot of people probably don’t know the full story. I remember it from the iconic days of the ’90s. Maybe tell us a little bit more about what happened to the brand and where we are today and what you’re doing today.

Richard Thalheimer (16:17):

Well, one of the neat things about my experience at The Sharper Image was I had the privilege, the fun and the opportunity to sell new technology. So we introduced, for example, the first cordless telephone. Before cellular, there was cordless, which was a revolution at the time. We introduced all kinds of products like the first answering machine for your phone, the first car radar detector, the first pocket computer from Sharp that presaged the current iPhone was just a little handheld computer called The Wizard. We introduced so many products, the Nautilus home gym machines, and it was neat that it was over a wide range of products.

So finally in ’96, we got the online catalog and that made it even easier to launch new things, because you didn’t have the expense of having to mail out an expensive catalog to show people a new product, so you could actually test things and see what sold even more easily. That was great.

Okay, fast forward. 2006, some outside equity firm from New York, some private company buys 12% of the stock. I still own 21% at the time, because I’ve sold off stock over 35 years just to [inaudible 00:17:29] my net worth. Some of it’s cash, some of it’s stock. Anyway, they wanted to take over the balance of the company, buy me out and they had a vision of what to do. So in 2007, I was about 57 years old and I sold my remaining shares and left The Sharper Image.

They didn’t realize that the originality of the products and the originality of the sales pitch was what made The Sharper Image successful. So they thought they would just sell consumer electronics at a discount, like Best Buy or something, but that isn’t a formula for a mall store, the mall rents are too expensive. So anyway, so they eventually went bankrupt a year later. Only after paying me off a year later, they go bankrupt and close 200 stores and lay off 4,000 people.

Meanwhile, I take the money they gave me and I use the same principles that I did in choosing products to choose companies in the stock market. So my first and biggest investment was Tesla, because they had one of the greatest products I had ever seen. I’m buying the stock in 2012 at the equivalent of what would be a dollar a share today. Now the stock’s $1,000.

So I actually made more money since I left Sharper Image than I did while I was at The Sharper Image, because investing can be very profitable if you do it well. Anyway, it’s a long saga and a long career, but it’s interesting it was only one job running The Sharper Image. That’s interesting. Very few people have one job their whole life.

Nicholas Scalice (18:58):

That is very interesting. Yeah, especially these days with people jumping around from jobs. So yeah, and I love the parallels between picking a great product and then what you’re doing today in picking great companies to invest in. You talk about that in The Sharper Investor. I encourage everyone to check out the book, it’s going to be in the show notes.

Maybe tell us a little bit about those parallels and what you look for, and I guess the similarities for marketers who are trying to pick the right thing to promote or to apply the right marketing principles, versus picking the right characteristics to invest in a company.

Richard Thalheimer (19:31):

For me, they’re really pretty much the same. So my favorite stocks are companies, generally consumer companies, because that’s what I know best, that do the same thing that I did at Sharper Image. They deliver a great product with great customer service, they’re generally the market leader in their field. That makes for a successful stock investment, just like it did a successful retail business for me.

So that would be companies like Tesla, Apple of course, Amazon of course, and then some you don’t know quite as well, but I adore, RH, which is formerly Restoration Hardware. They’re on a fantastic retail trend right now, RH, as a stock. Chipotle Mexican Grill. Fast food, they do it great, they have great quality, they have great customer service, they have great advertising, they’re great digitally. So apply those same principles, market leadership, innovative products, good customer service, and you’ll do well in both fields, retail and stock investing.

Nicholas Scalice (20:30):

Interesting. Obviously, our listeners can learn about it in The Sharper Investor. Any other takeaways from The Sharper Investor you want to leave with our listeners?

Richard Thalheimer (20:39):

Well, one principle, we mentioned persistence. In your job or your career or your business, persistence. The ability to stay focused even during the darkest times is so important, and it happens to be the same in the stock market. When times are really tough and you’re feeling really beaten down, do not sell out. That would be a mistake, because in the stock market, you want to buy low and sell high. So if you get discouraged and sell out at the bottom, you’re doing the opposite. You’re not buying low and selling high, you’re selling at the bottom. That’s wrong.

So in your own business, your own career, your own job, your stock market investments, be persistent, have confidence that your long-term vision will work, and if you have an obstacle, think a way around it. Have persistence, and I promise you, you will do very well.

Nicholas Scalice (21:28):

Interesting. Amazing, amazing. I encourage everyone to check out the books. If our listeners want to follow up and see what else you’re working on and see what is Richard doing today, where can we go to get all that information?

Richard Thalheimer (21:40):

Well, two sites. RichardThalheimer.com is a really fun site that has lots of neat stuff from The Sharper Image days. Currently I keep my audience abreast with a biweekly blog about investments at TheSharperInvestor.com.

Nicholas Scalice (22:05):

Well, Richard, this has been an honor. Thank you so much for just showing us the similarities between business, marketing, investing. It’s all related when you focus on the principles, and obviously it’s worked very well for you and I thank you for sharing your wisdom with our listeners. I hope you have a fantastic rest of your day.

Richard Thalheimer (22:22):

Nicholas, thank you for being interested in The Sharper Image. It’s been my entire life, so it’s fun to share this story.

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GMT 263: Interview with Richard Thalheimer

On this episode, Richard Thalheimer, the founder of The Sharper Image joins me to share his marketing insights which helped him build a $750 million brand, and what he’s up to these days.

About the Podcast

Growth Marketing Toolbox is a weekly podcast by Nicholas Scalice exploring the best growth marketing tools and technology. You’ll hear candid interviews with the folks who make, market, and use these marketing tools.

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