Excerpt: 'The Wisdom of Ginsu'

March 31, 2005 -- -- Ed Valenti and Barry Becher are the guys who created the first infomercials with their commercials for products like the "Ginsu knife." But wait there's more! Now the Ginsu guys have written a motivational book called "The Wisdom of Ginsu."

The two draw on their experiences building a business on their wits and breaking all the rules to find lessons for work and life.

And for those who were always wondering, "ginsu" doesn't mean anything, in Japanese or any other language. The two made the word up. And the product was not made in Japan but in Ohio.

To find out more about these two ginsu guys, visit their Web site, www.ginsuguys.com.

Read two chapter excerpts from the book below:

I'm not sure where the word zig comes from but I think our English partners used it often. It was meant to imply "good move." In business and in life we are all faced with decisions. Forks in the road, so to speak. Just as we always do, you should try to train your mind to look for the zig, the alternate way of doing something. Whether overcoming obstacles or making a decision, many times there are options. You just have to look for them. Our entire careers were, and continue to be, based on looking for the zig. I seriously doubt that if we followed the traditional way of doing business we would have ever come up with Ginsu, let alone be in this business at all. Logic dictated that the television direct response business was all about record offers, not products. Therefore, we should have avoided selling products entirely, especially products such as cookware and painters.

As Mr. Spock of Star Trek said repeatedly, "Logic dictates." Logic dictated that we should have stayed out of the knife business. With so many knife offers on TV and with everyone having a drawerful, how could we make money? We did all of these things and more because we zigged when everyone else said we should have zagged. If you think about your life and the decisions you have made, perhaps there was an opportunity for you that you may have passed up because your thinking was one-dimensional. I believe there arealways alternatives. They are, however, not always visible. Learning to think differently will make them appear. It's truly amazing. Try it, it works.

Here's a simplistic story, but the point is well made. I remember my first trip to Disney World. Because I had never been there before, naturally I was intimidated by its vastness and worried about the lines. I remember reading in a book from an expert on the park that the shortest times in lines were possible if you always pick the lines on the right (many rides have two or more lines feeding into a ride). Why? He wrote that for some unknown reason people tend to always go to the left when given a choice of two lines. Therefore, the right line moves faster into the ride. I tried it, and it works. Wow, I thought, what a zig! Here's another really good one.

We were nearing the end of our first year in business and we had pumped up Miracle Painter sales to 20,000 sets per week. We felt enormously successful taking in $200,000 a week. We were on top of the world and only foreseeing better things to come. Then disaster struck: United Parcel Service went on strike!

Now, back in the 1970s, things were a little different than they are today. Actually, they were a lot different. You see, the credit card and 800-number system we are so accustomed to using today were just in their infancy back then. The use of 800 numbers had just started, and most people didn't believe that the call was really free. How could monopoly AT&T (at that time it was the only telephone company in the country) not charge you for a call? "They must be sneaking it into your phone bill somewhere," said my friends. I must admit that I was suspicious, too, until I found out that the call was paid for by the receiving party. However, a great portion of America was suspicious of 800 numbers and wouldn't call one. What's more, most people felt more comfortable calling a local number to order. It gave them the confidence that they would indeed receive the product and that the offer was legitimate. Life sure would have been easier for us if everyone trusted the phone company, but because they didn't, we had to set up local answering services with local phone numbers in every city that we ran our commercials in.

Furthermore, because there was no method of taking credit card orders over the phone, if a person wanted to order a Miracle Painter, he would either have to mail a check or order it COD. In the beginning about 90 percent of the people ordered COD, so our method ofshipping was with UPS. United Parcel would (and so would we) add a fee for handling a COD order and attempt delivery of the product three times. If UPS could not deliver it and get the money, the company would return the product to us. Of course, we had to pay UPS for shipping and COD charges even if UPS didn't deliver the product and collect the money. This occurred about 10 percent of the time with the Miracle Painter. After UPS collected the money it still took about three weeks to forward it to us. You can start to see that a lot of our money was constantly held up in transit. We were getting about 20,000 orders a week, so 18,000 were probably CODs, and after three weeks, UPS owed us about $600,000. That's a lot of money now, but back in the 1970s you could practically buy a new Learjet for that kind of money.

So there we were, shipping 90 percent of our orders through UPS and wham, the drivers go on strike with hundreds of thousands of dollars of our product and money stuck in their system. What was even worse was the fact that we no longer had a method of shipping 90percent of our orders. If the strike went on too long, we would be in serious trouble, perhaps out of business.

Now, you have to remember there was no low-cost alternative to UPS at that time. There was Railway Express and the post office. Oh yes, I think it was about that time some company named FedEx was starting an overnight delivery service, but it was expensive. FedEx charged more to deliver a letter over night than we did for the whole Miracle Painter. Anyway, we had a serious problem on our hands and it was time to look for a zig.

It seemed as though our only alternative was to use the post office. The problem with the post office was that it charged more than UPS for a 1-pound package and postal carriers couldn't accept cash on CODs. The package recipient would have to go get a money order and wait for the postman to show up a second time with his package. If the post office was at an inconvenient location or the person didn't have the time to go and get a money order, we would lose the sale.

Well, it seemed as if we didn't have any choice. We could hold off shipping for a week or two, but then we would have to use the good old U.S. government post office.

Now, in my research to find an alternative method of shipping our product, I understood that I absolutely needed to zig. After many meetings with the post office officials, I determined a number of things. One was that our product weighed 1 pound 3 ounces in its heavy cardboard sleeve. Two, if it weighed less than a pound and we could put together 100 units to the same zip codes, it would qualify for bulk rate shipping. The post office's normal rate was $1.09 per pound. We were paying 90 cents with UPS. If the product weighed 15.99 ounces, it would cost us only 18 cents to ship at the bulk mail rate. This was shaping up to be a good zig!

If there was any way to get our product down to 15.99 ounces, I was going to find it! I immediately called Mickey and Phil (the manufacturers) in England and told them we had to get rid of the sleeve on the product and find something lighter. Realizing that the phenomenal sales of their product could be coming to an end because of the strike, they jumped on a plane and flew over. They tried thinner cardboard. It didn't work! It was too heavy! So they tried even thinner cardboard. Didn't work! Too heavy! So they figured what the hell, let's try paper. Two problems: the paper ripped easily and everything fell out—also, too heavy! We were in serious trouble.