Sometime around 1964 I was managing an aerospace job shop machine shop. A job shop is a company that bids on work for various customers; in our case, it was for high-precision parts for the missile and aerospace industries. The trick is to bid low enough to get the job but still make money on it.
Bid too low and you get the job but you lose money; bid too high and you never get the work.
One day a young man — I’ll call him “Mr. C” — walked into our office. He was a short, stocky guy dressed in lederhosen (short leather pants usually worn in European countries) and he had a small aluminum part in his hand. He asked if we were interested in bidding on making the part for him. As usual, my first question was, “How many do you want?”
In cases like this, in which an unknown customer walks in off the street, the answer was usually some minimum quantity like five or 10 pieces with vague promises of “millions” in the future. In this case though, the answer was, “Ten thousand.” That got my interest to be sure because we were used to getting orders in range of 100 to 200 pieces.
I told Mr. C that I would need a few days to work up a bid. He said he’d return later in the week. I spent the next few days working on material costs, tooling costs and planning the steps we would use to make the parts.
When Mr. C. returned, I knew exactly what it would take to do the job, and I had a price ready for him. I told him the price for each would be 26.5 cents. (Remember, this was way back in 1964. I’ll let you figure out how much that would be in 2009 dollars. In any case, it was a pretty big job for us in those days).
Mr C. was very quiet for a few minutes after I gave him our bid. Then he said, “This is amazing. This is the exact same price I got from a machine shop in San Francisco. You must have been looking over their shoulder.” Then he added, “You’ve got the job.”
About 10 days later the job was finished and I called Mr.C. The next day he came by to pick up the work and to pay us for it. He took out a huge roll of twenties and paid us cash — another unusual part of this whole experience. We did several other jobs for him after that and then we never heard from him again until years later when I was living in Ventura.
And now for the rest of the story. His name — Mr. Yvon Chouinard. His company? Patagonia, the manufacturer and seller of high-quality outdoor clothing and equipment.
[Author’s note: After seeing my Aug. 31 column, “Hiring ‘Dummy’ Workers,” some of my readers accused me of fraud and worse. They are surely entitled to their opinions, but I feel the need to point out that exactly no one was defrauded in this incident. The workers were paid, my business associate got a day’s free labor and our customer was pleased with the work that we subsequently did for him, including the numerous follow-on jobs he placed with us.]
— Paul Burri is an entrepreneur, inventor, columnist, engineer and iconoclast. He is not in the advertising business, but he is a small-business counselor with the Santa Barbara chapter of Counselors to America’s Small Business-SCORE. He can be reached at pburri@west.net.