SOWPub Small Business Forums - How Joe Sugarman turned multiple-failure into success!

You may have heard of Joe Sugarman. He became well known in the 1970s and 80s through the full-page ads his company, JS&A, took out in magazines in newspapers for new electronic products. In the 1990s, his company BluBlocker became a household word through their infomercials for sunglasses.

What you may not know is that at first, Joe Sugarman had a history of failure. In the 1960s, he thought he could make a lot of money during the "Batman and Robin" craze with Batman credit cards. He lost a lot of money on that one, I think he still may have the quarter of million unsold Batman credit cards in a warehouse somewhere.

He promoted a paddle ball game called the "Teeny Bopper." I think he still has 10,000 of those in his warehouse, right next to the Batman credit cards.

He created car wash brochures for a company, who then refused to pay him. When he tried to sue them for his legitimate payments, they went bankrupt.

By 1971, Joe Sugarman was 33 years old, and had a small advertising agency, which was just keeping him, his wife and child fed. Then he spotted an article in the Wall Street Journal about the first pocket calculator, which retailed for $240. He thought here was an opportunity to make some money.

He needed a success. He had a history of failure, and he knew another failure could be a disaster for his young family.

Joe Sugarman called on some of his friends to invest in his new venture. His deal with them was they'd get double their money back before he took a cent. After they got double their money back, the rest of the money was his. If he sold the calculators through a mailing list, he had figured he only needed two-tenths of one percent to break even.

He managed to get his friends to invest $12,000 in his new venture. If his venture didn't succeed, to say the least his friends wouldn't be too happy. He badly needed a success!

The world's first pocket calculator was manufactured by Bowmar for the Craig Corporation, a car stereo manufacturer. He could buy the calculators at $141, the wholesale price, to sell them at $240.

He went to a list broker, to select ten lists to try. He thought accountants and engineers would be good, since he thought they would be the people who would want to buy a calculator. The list broker suggested presidents of major US corporations. "I don't think that will work," Joe Sugarman thought, but he decided to try that list anyway as well.

He prepared the mailing, and sent out 50,000 letters to the 10 lists.

He only got a trickle of orders in. When it was all done, he found out he didn't double the money like he thought. Instead, his investors had lost half of their money! This was a potential disaster! But....

Fortunately, he had keyed the lists, so he knew precisely which order came from which list. When he did the analysis, he noticed that none of the lists made money, EXCEPT for two of them. The most successful list was the list of presidents of major US corporations. He figured that if he sent mailings to just these two profitable lists, the promotion would be successful.

Joe Sugarman called up his friends, and convinced them to stay in the deal, so he could invest what was remaining of the money to sell to the two successful lists.

He eventually sent the mailing to about 400,000 names from the two lists, and they received an avalanche of orders. His investors doubled their money, and Joe Sugarman made himself about $50,000 in profit!

That's how Joe Sugarman went from a multiple-failure to a big success. He went on to build on this success to create his highly successful direct response company, JS&A.

The more information you have on your responses, the better your chances of success!

- Dien Rice

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