That Time a Guy Cornered the Liquid Soap Market by Sneakily Buying Nearly Every Hand Soap Pump Available in the World
Robert R. Taylor is a name you’ve probably never heard before. But this serial entrepreneur made his mark on the world of business by coming up with several products you are almost certainly very familiar with. Today we’re going to talk about, on the surface, the most boring of those- liquid hand soap. Something you can thank Mr. Taylor and his freshly smelling balls of solid steel for being a thing.
But first, a little background on the man. Born in 1935, Taylor was destined to one day grace the cover of books with titles like “The Greatest Business Decisions of All Time”, consistently proving himself to be not only a shrewd businessman, but a natural entrepreneur. For example, as a young man Taylor is known to have made quite a few dollars by training a homing pigeon to fly to his home and then selling it to pet stores repeatedly.
Education wise, Taylor studied at both Miami university in Ohio and then Stanford Graduate School of Business, graduating from the latter with an MBA in 1959. Following this, he briefly worked as a salesmen for Johnson & Johnson.
Seemingly every great entrepreneur starts by failing and Taylor was no different, in 1963 starting a marketing company with a friend. This endeavour ultimately flopped and Taylor decided to go it alone just a year later in 1964.
And so it was that at the age of 28, he starting a company, initially run out of his garage, called Village Bath Products with a $3000 investment (about $24,000 today) he’d scraped together from the contacts he’d made in his short tenure working for the man.
Not exactly successful right off the bat, when he first tried to sell his hand made soap to a couple dozen companies he had previous business relationships with from his days with Johnson & Johnson, they all turned him down. Undeterred, he then got the idea to match his hand rolled and cloth wrapped soap to towel sets, color scheme and all. That got some companies interested and they started selling his product along with their bath towel sets.
Village Bath Products, which was later rebranded as “Minnetonka” after a town near Taylor’s home in Minnesota, continued to be extremely innovative in the soap market. While product commonly seen today, his various machinations were far more out there in his day, which perhaps shouldn’t come as a surprise coming from a man who purchased a hot air balloon so he could fly it around on the weekends to advertise his product. Product that saw the New York Times describe his rapidly growing business as “an off-beat company geared to hippies and people with luxury bathrooms”.
So what kind of things did he come up with that would appeal to the otherwise seemingly diametrically opposed groups of hippies and the Daddy Warbucks’ of the world?
Notable soap products included soap designed to look and smell like candy bars and pieces of fruit, soap paint that kids could use to draw on themselves and the bathtub, and hand-rolled scented “upscale” soap balls packaged in decorative glass jars. Think the type of product that lines the shelves of Bath and Body Works before that type of product was common.
His decision to go with offbeat soap product was primarily based on that Taylor knew his company could never compete selling ordinary bathroom products, since established companies like Procter & Gamble, American Home Products and even his former employer, Johnson & Johnson, basically dominated the entire market. As a result, his best hope for making money would be to sell products they wouldn’t dare to risk putting on the shelves, capitalizing on a niche demand they weren’t satisfying. As Taylor himself would later state in an interview, “The best way for an entrepreneur to compete in today’s marketplace, is to avoid competition — or at least find ways to circumvent it.”
Of course, if a given product line took off, the larger companies would inevitably copy the crap out of it, such as happened in the mid-1980s when he introduced Check-Up anti-plaque toothpaste and later bubble gum to the market, seeing them become wildly successful before ultimately the big boys swooped in and dominated, with their version of the same basic twist on the product forcing his into obscurity.
This saw Taylor having to stay extremely nimble and push for constant and very rapid innovation. In keeping with this idea, Taylor often enlisted the help of his family. As one of his daughters, Lori Lawrence, noted, “It was normal for us to do brainstorming sessions at the dinner table, to come up with product names, to give him our evaluation of scents, consistencies and colors… My dad and I did all different kinds of formulations in the kitchen night after night.”
They’d then test the product during the kids’ bath time to see how it worked. Said Lori of a time when they were trying to make puffy soap balls meant to be dropped in a bath, “Some days they’d be too flat or they’d get too big and explode like popovers.” Undeterred when things didn’t work out, she states he’d simply say, “Tomorrow’s a new day. There’s always a new formula.”
One idea from his family that Taylor apparently found particularly amusing was calling his company’s brand of vintage style soaps “Prof Taylor’s soap”. Taylor committed fully to the Professor Taylor guise, in the early days of the company hand-delivering these soaps to department stores in a vintage Ford pickup truck to give his product an extra authentic feel.
While Taylor was essentially a machine at producing mildly amusing business anecdotes from his various exploits, his real marketing masterstroke was the now ubiquitous SoftSoap.
The product was conceived in the late 1970s by Taylor while driving to work and contemplating why anybody put up with bar soap. Said Taylor, “I thought how ugly bar soap is, and how it usually messes up the bathroom.”
There had to be a better way to wash your hands. While liquid soap products were a thing going all the way back to at least 1865, first patented by a guy called William Shepphard (though in the patent noting his was an “improved liquid soap” implying a similar product was already a thing), this wasn’t something you’d typically find in people’s homes. For home use, people just stuck with classic bar soap for washing hands.
Why? Because despite the fact that forms of liquid soap dispensers had been around since at least 1919 when one G.H. Hohnsbeen patented a wall mounted version, no company had thought to put liquid hand soap in a container that would make it convenient for use domestically.
Enter Taylor and his SoftSoap, which was essentially the first mass-produced liquid hand soap ever sold to the public, all packaged in a convenient bottle featuring a pump.
Of course, a key problem with this idea is that, while it was revolutionary in some ways, no part of it was original enough to patent.
From his previous experience having bigger companies copy his ideas not long after he made them successful and then taking over the market, Taylor knew that if this one worked out, they’d once again swoop in and use their economic clout to bully his product off store shelves.
While all well and good for some products- he’d make a quick buck and then just move on to his next idea once he was forced out of the market- this one he saw as being something that could take his fledgling company to the next level. But how to keep it for himself?
His one advantage was these lumbering large companies were always a little slow to come out with their own copy-cat product, needing to do all sorts of market testing and run everything through the various chains of command. As Taylor would note, “Many large consumer products companies get caught up in structure, research and justification. They’re always trying to do a thorough job of risk analysis. When they get all the facts together, though, they find they can’t do away with all risks and they often end up either doing nothing or moving very slowly.”
And so it was that he came up with an ingenious, and rather ballsy, two stage plan. First, launch SoftSoap and, essentially, leverage every dime he could come up with to advertise it, investing a whopping $7 million (about $21 million today) on a country-wide ad campaign for his new product to try to get his brand to be the one everyone associated with liquid hand soap. To put this in perspective, this was almost as much money as the largest soap manufacturer of the day, Dial, spent on advertising all their product combined. To further put this in perspective, Taylor’s entire company at this point only had a net worth of about $8 million.
Now to step-two, which if it wasn’t successful would have just seen him essentially spend every dime he could come up with to establish a new soap market for his competitors.
Before launching SoftSoap, Taylor had made a crucial observation- there were only few companies in the United States at the time that actually made the kind of pumps needed. Of these companies, only one produced enough pumps suitable for mass-production on the scale envisioned here. And since there also wasn’t much in the way of a suitable international company that would be able to provide what was needed here quickly and at a competitive price, in effect, this left only a single choice for anyone wanting to sell liquid soap en masse using such a pump system. Thus, Taylor’s idea was quite simple – buy literally every pump the company had available for the foreseeable future. How many would he need to buy? It turns out about 100 million to keep the company (Calmar) busy at full capacity for about a year.
The problem was he didn’t have the required $12 million (about $37 million today) to place such an order. So he had to wait until after the product was launched and hope that it was a massive hit to give him the money he needed before his competitors decided to make their own copy-cat product.
Of course, when the time came, he also had no way of knowing whether Calmar would agree to the contract. If Calmar didn’t, there was a very real risk that one of the bigger companies would eventually sign a contract with them that would do to Taylor what he was attempting to do to everyone else- stop them from getting the needed pumps for a little while.
And while you might think agreeing to a massive contract that would see them working at full capacity for the foreseeable future would be a no brainer for Calmar, consider that this would force them to get rid of all their other business contracts to service one, relatively small, company.
When the time came, however, Calmar agreed. Naturally, this sequence of events has gone down in history as one of the most ballsy “bet-the-company moves” ever.
And, just as Taylor had planned, when the larger companies tried to release their own take on SoftSoap, they quickly realised that they couldn’t at first because some mysterious, freshly smelling, large penis owning individual had called dibs on almost every suitable pump in the United States set to be produced for the next year.
With literally no competition to speak of during that period, SoftSoap quickly cornered the market seeing Minnetonka bringing in excess of $25 million (about $77 million today) within six months of the product launch, about double their former total sales across all their product lines during the previous six months. Within two years of the launch, sales for the company had risen to over $100 million (about $270 million today) and saw the stock price of the company multiple an incredible 15 fold.
Minnetonka estimated that when competitors finally caught up, they’d still retain about 50% of the emerging total liquid soap market, which they tentatively valued at being worth $400 million long term. Although the liquid soap market did prove to be as profitable as Minnetonka predicted, after their monopoly on pumps ended, their market share ultimately shrank to less the 30% when some 100+ competing products launched. But this is Robert Taylor we’re talking about. Through a variety of marketing stunts, such as putting 1.5 ounces less soap in the bottle to allow him to lower his price compared to those using the then standard 9 ounce bottles, SoftSoap slowly managed to claw its way back to number one in its market. Finally, only a bout 7 years after its launch, he sold SoftSoap to Colgate-Palmolive for $61 million (about $136 million today).
Two years later, in 1989, he sold off much of the rest of his company for $376 million (about $770 million today) to Unilever who really just wanted Taylor’s extremely lucrative Calvin Klein fragrance line of products he’d manage to buy for $1 million just 9 years previous when it was floundering, then promptly made it wildly successful. He did this by starting with Obsession and once again implementing a “bet the farm” strategy in that product. Although, in this case, Taylor simply humbly noted, “Sometimes it’s better to be lucky than smart… even a blind squirrel finds a nut.”
As for Taylor, after selling off the company he’d started with a mere $3000 for a combined almost a billion dollars when adjusted for inflation today, he retired for, to quote him “2 minutes”, starting other extremely successful companies after, including a high end salon products company, Graham Webb International, and the Monterey Bay Clothing Co.
Father time catches up to all men, however, and his business adventures finally ended with his death from cancer at the age of 77 on August 29, 2013.
On his climb from nothing to literally a member of the Entrepreneurship Hall of Fame, Taylor would sum up the adventure that is starting companies, “Each one gets easier, but it’s never easy.” He also sagely noted, “Ten percent of the success of a new consumer product is the idea… Ninety percent is the execution. That means positioning the product, marketing strategy and creativity.” And as for making such a plan work, he notes, “success is a matter of attitude.”
So next time you’re pumping away at that hand soap by your bathroom sink, take a moment to thank Robert R. Taylor and his cartoonishly simple pump-based ploy for not having to mess with bar soap.
- The History of Soap
- Does the UK Really Experience Massive Power Surges When Soap Operas Finish from People Making Tea?
- The Truth About the Origin of Floating Soap
- From Scouring Soap to Chewing Gum- William Wrigley Jr. and His Freebies
- How Soap Works
- Robert R Taylor: Businessman who put soap into bottles
- MINNETONKA’S STRUGGLE TO STAY ONE STEP AHEAD
- Remembering Robert R. Taylor, Founder of Minnetonka Corp
- Fortune The Greatest Business Decisions of All Time
- Robert Taylor, Who Put Hand Soap in a Bottle, Dies at 77
- Marketing Innovators Cal Worthington, Robert R. Taylor
- Robert R. Taylor dies at 77; entrepreneur created Softsoap
- HandSoap in a Bottle
- Entrepreneur Dies
- The History of Soap
- Soap Dispenser
- The History of Liquid Soap
- Liquid Soap Dispenser Patent
- Liquid Soap Patent
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