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Compaq Computers: Rod Canion

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Support for this podcast and the following message come from Amazon web services, whether it's searching for life on other planets or helping enterprises reinvented. Their industries AWS helps technology scale to meet the challenge. More at AWS is how dot com slash podcast so back in the nineteen eighties. Rod canyon left Texas Instruments with one vision to create a better, portable computer. He had no idea his twenty eight pound invention would not only compete, but also be out computing, giant IBM. We I ran this episode in may of twenty seventeen and there is a lot of great stuff in here. Enjoy. Well, it's that if I b m Anderson market they take over and push everybody out in February of nineteen Eighty-four IBM introduces their own portable into the market. Ardor stopped because before it actually was introduced they were showing it to dealers and customers, and they just stopped ordering ours. That was that was a very very life threatening situation. We had this factory running full speed and no place to go. From NPR. It's how I built this show that innovators entrepreneurs idealists and stories behind the movements. They built. I'm guy Rosin today show Haradh canyons personal computer startup Compaq too on the biggest computer company in the world. And what? If you have a PC at home or at work, and you buy some software like word or turbo tax. It doesn't really matter. If you've Adele or a HP or Toshiba because if it's a piece of it will run PC's after and that makes perfect sense. Right. But believe it or not in the nineteen eighty s in the early days of personal computers. That is not how it worked. If your computer was say in IBM. Well, you needed software written for an IBM. An IBM was the biggest player by far. In fact, some people thought that IBM would eventually crush all the competition and become the only PC maker. But all that changed when rod Kenyon started Compaq now rot wasn't your typical. Restless entrepreneurial guy. In fact, he had a good stable job at Texas Instruments as an electrical engineer, and he was pretty happy there. But one day in nineteen. One. He's managers assigned him to work on a new project, and it was something that rod believed would not work. And so he started to get frustrated basically was being told to go spend the next two years of my life being Mahindra of all and end up in failure. So at that moment rod started to talk to to close colleagues at Texas Instruments, Jim Harris and Bill Mirko, and basically said Paik, maybe we should leave we met and talked about how we were going to go start a company, and there were a lot of startup companies in California and Silicon Valley one of the first things we realized is g these guys are having fun. They're making a ton of money, and you know, they're not any smarter than we are. They just they're just out doing it themselves. There was also this awareness that something really big is going on in the personal computer market when I beam entered the market in August of nineteen eighty one we realized that that market was going to explode. And then what happened is fall Comdex came along. We went out to the conference and saw all of the companies and all of the things going on. It was just that. Did we went back to Houston and talked about we're going to miss this. If we don't get going, so. Jim Harrison, I turned into resignation right away. Bill Myrtle waited because his wife was about to deliver their first child, and you had a family to write how many kids did you have three. Were you nervous at all about just quitting without any income coming in. I mean, were you worried at all about doing that? You know, I don't remember being worried about it. The three of us. None of us had any money to invest. So what we did was we saved up money. And the idea was we'll give ourselves a runway length of six months to come up with an idea and go get funding. You know, I think this was an adventure. Let's go see what we can do. So so when do the three view serve land on the idea that that eventually turned into Compaq? Well, the the idea came to me actually one morning. It was strange how you remember those pivotal points in your life. But I was thinking about the idea for a portable computer. There are a number of them that existed at the time probably, you know, just guess fifteen or twenty and what we're what we're a portable computers like at the time. Well, most people remember the Osborne, it was made out of cheap molding, and sort of strung together it had a five inch diameter screen and it had to. Floppies, but you could immediately see some ways to make it a lot better. You know, we we decided we could do a nine inch screen in about the same size box. And while that seems small turns out it's about the same size. As what the original ipad screen is. And we could make it rugged. So that when you carried it it was not damaged, but not worth really spending the time on unless we could get some software that already existed because I had learned that the key software like spreadsheets and were processors and others. Every different brand of computer had to have its own version of the popular software programs. So said, well, what if we could make this great portable run software that already existed and a new the IBM PC was relatively unprotected. It would be a challenge, but it could be reverse engineered legally, and we could make our computer run the same software. And that was the idea that Senate chill must buy while what's wrong with this idea. There has got to be something wrong with it. It's too good to be just hanging around here. And so at what point did you say, okay, we have an idea. Let's go look for money. So I called up Jim Harris. And then later got Bill Myrtle involve, and we thought about it and talked about it and decided you know, that that would be a great product if we can do that. Let's put together the business plan. And so that was the next thing. We did. I mean, it was very quick from the ninth of January two when the idea came up to the twenty second of January when we. Met with the venture capitalist. We basically put together a very short four page business plan and prepare to meet and discuss it with them. And and what did they say? When when they saw it. Well, they were coming into town for another meeting, and we put this business plan in front of them and begin to describe it. And then they started talking to each other. You know, one of them said, yeah, I had this idea, you know, like three months ago, and I said, well, if you think it's such a good idea warrant, you more excited about it. And they said, well, look we like the idea we like you guys, but we're new in this industry. So what you need to do is we need to send you out to Silicon Valley and go meet with Kleiner Perkins in if they'll invest, then we will. So we we basically flew out to. To Silicon Valley, and we went into meet with John door, and we spent a good morning probably three or four hours being questioned. And sure enough about a week later. We got a call that they were willing to invest in. So it was ago. Okay. So it's nine hundred eighty two I guess in and you've gotten your investors in in. What you do get to work building a prototype. Well, first thing we do is begin hiring people because at three of us were sort of the head of each area. But we need engineers mainly to go figure out how to reverse engineer, and how to design the thanks how so we hire three engineers and presumably they basically had to build something pretty similar to to IBM PC except pretty similar didn't cut it. And you had to be exactly the same in order to run the software from an internal standpoint. And so they they came to workforce right away and begin I reverse. Engineering the product and then designing our own. But were you convinced that you guys were going to succeed? You know, it never crossed my mind that we wouldn't succeed. And as I look back now, I think while that was such a long shot. Yeah. Our our expectations were very low. What is succeeding it? Didn't mean become the industry leader. It didn't even mean become one of the leading companies it meant build a company that doesn't go out of business that has a product that solves a a real need. And you don't lose money on. We felt like we knew how to do that. How long did it take for you from that point in against the first or know the early part of nineteen eighty-two until you had a working prototype. So we started the company February the sixteenth and from March until early June. We had our first prototype ready. The deadline was determined by the national computer conference, which just happened to be held in Houston that year. The only time I think it was ever in Houston to show to potential dealers potential computer store owners who would sell it to magazine writers who would write about it when it came out to get feedback and others basically to find out what people thought about this product say you come up with this prototype, and at that point where you even manufacturing these these computers. We built factory inside. A leased building north Houston. We heard manufacturing people. They put a production Lionheart, people trained them on how to build it and began to build the product, and we had a plan that basically allowed us to build probably going to say twenty twenty-five thousand computers by the end of Eighty-three. We didn't begin actually turning out finish units until January of eighty three just to be clear. I mean when you talk about a portable computer in one thousand nine hundred three you're talking about a a machine that weighed what are the way twenty eight pounds? When thi this is not even hand luggage on an airplane. Well, we did use it as hand luggage. But there was some skepticism about that not only that you had to plug it in. It was people began to call them transportable computers, which was more accurate. It was also very rugged one of our key engineering talents was to build it. So that it when you dropped it. It would survive. And of course, your portable would run any software written for the for the IBM, and none of the competition. Did that right? That's right. And basically late in eighty two as we had our first prototypes Bill Murray to-, and then I joined him because there were a lot of computer stores around the country. We would go out and make an appointment and go in and show, the computer store owner our product and showed him the computer. They liked the way it looked. And when we showed them how it worked. It was very nice. The screen was nice. But when we told them, okay, just pick a any of the IBM software off the shelf jenness rink rat box. And put it in the computer and see if it runs in when they did that, and it ran their eyes lit up. They got excited they thought about it a minute. And they wanted to order some right then. They would say something like, okay, I need five of these next week. Are I've got a give you an order for twenty five if you can ship them in the next month. Bill, and I got back to Houston, and compared notes it was like, wait a minute. Every one of these dealers said the same thing what we just stumbled onto is this pent up demand for a portable version of the IBM PC. Now, it seems subtle, but we'd never thought of our product that way. This is a portable computer fits a niche, and you have software because it runs all the software. But if you just step back and turn that over and say everybody out there has an IBM PC in their office. And what they need every one of them needs one or more of is a portable version of it. And we happen to have that product people were wanting to take these things home for the weekend or even overnight to to finish their work. They wanted to take them out to customers to show them their work. And so it was a much bigger market than anybody anticipated. Once we had all the ingredients together, we weren't weren't you worried in one thousand nine hundred eighty two when you were going to dealers and showing them your product that and saying, hey, you know, this is. Basically, this can do everything in IBM can do except it's portable worse. You you guys worry that IBM would come after you know, because we hadn't broken any laws. You know, we had reverse engineered the wrong following advice from top notch intellectual property lawyer. So we were very careful around that their product was not protected by patents in any other way. They had followed more or less the general industry direction. And so building a computer that was similar or close to. It was not a problem at all the fact that we took the time to figure out exactly how there's made the software work and made ours. Do the same thing. It was not illegal. But it sounds like you guys really launched this in a stealth way that IBM probably didn't even care about. You thought you were just probably just a flyspeck of a company that was making this product. And when you launched it in one thousand nine hundred three I don't know today. Even did even know who you were. Oh, no, no. They had no idea, and nor did they care. Yeah. I mean, even after we began to sort of get some positive results in getting into stores. Remember, we reportable they didn't have a portable so initially. It was very easy for them to ignore us because we were truly a a fly. In that first year nineteen eighty three out of the company. Do we sold one hundred and eleven million dollars worth of Compaq computers. Wow. How did you had? You must have been expanding. Like crazy. I mean, I'm assuming at the beginning of that year. You just had like a few hundred maybe like less than one hundred people working there. We had about about one hundred people at the end of the first year that's about right at about six hundred by the end of eighty three. So you can imagine how much hurrying we were doing and expanding. And now this was not a one thing at a time. This is a multitasking bringing on very competent people in every area. So they could here's what needs to be done and go get it done. How how much were you selling that? I portable computer for it was listed for twenty nine ninety five for a single floppy. Unbelievable. And who your customers was at businesses was it individuals. It was mostly. Businesses. But a surprising number of individuals could see the value in it. And if they're company wasn't buying it for them than they would. They would buy it for themselves. Okay. So so three thousand bucks for this computer and increase or selling tens of thousands of these. I have Masumi that at this point. I m is starting to notice. Oh, absolutely. They absolutely. They, you know, in February of nineteen Eighty-four IBM introduces their own portable into the market now are order stopped. Because before it actually was introduced they were showing it to dealers and customers they just stopped ordering ours. Let's assume that if I beam Intersil market they take over and push everybody out. So we had this factory running full speed and no place to go that was that was a very very life threatening situation. So you guys are freaking out. We're freaking out the industry's thinking out is like there goes Compaq. You know, they're they're they've had a good run. But it's over. When we come back at rod canyon made sure that it wasn't get over stay with us. I'm guy Roz, and you're listening to how I built this from NPR. Thanks to two of our sponsors who helped make this podcast possible, including two thousand nineteen leave sponsor of how I built this his cocks his Cox business insurance. Experts Taylor intelligent insurance solutions to each businesses very specific needs which may explain their ninety seven percent of customer service rating, get a quote or purchase a policy at Hiscox dot com. His Cox, encourage courage. Thanks, also to e-trade you wanna invest your money. But there's one problem you're not sure where to begin. Luckily, there's e-trade betrayed simplifies investing without the financial jargon. Plus, they're easy to use platform keeps you in the know about your money at all times. And if you need a hand at any point e-trade investment professionals are standing by to help for more information. Visit e-trade dot com slash NPR. Each rates curies LLC, member FINRA sl. Life kid is like that friend negoti with your toughest parenting moments. So my answer was do you believe Lucas? So Socratic wife kit for parents and audio guide from NPR and the experts at sesame workshop check it out in apple podcasts at NPR dot org slash life kit. Hey, welcome back to how I built this from NPR guy-roger, so nineteen Eighty-three was really good first year of sales for rod canyon. And compact, but to put it in perspective Compaq sold about fifty three thousand computers and that same year IBM they sold seven hundred and fifty thousand computers and so in nineteen Eighty-four when IBM decided to compete with Compaq head to head. Everyone knew it was a major threat. So rod called together the management team for an emergency meeting. You know, what do we think we ought to do? Well, the manufacturing people said we got a lot of temporary people we were hiring so fast. They came on his temporaries initially, and then we can lay all them off mmediately, and we can really cut back production cutback our cost, and it was it was after say a very Dr tone to the meeting. Everybody was like, you know, it's all over. Took all that. And and and it all up and realize, you know, if we're gonna come out of this with the happy ending, there's only one way that's going to occur. And that is let's assume for a minute that IBM's product is not better than ours. That maybe it's limited supply and the dealers once they see it begin to order our product. Again, we need to have product available to fill those orders. Yeah. So here's what we're gonna do. We're going to keep building these sayings. We're gonna store them. And wait for the orders to come at the orders. Never come. Yeah. We're in deep trouble. But you know, what we're in deep trouble. Anyway, if the orders, don't come. So that was the plan. I'm not sure everybody was you know, on board with it. But that's what we went off. And did we ended up storing these things in the in the trailers tractor trailers eighteen wheelers back gal and parking them at our parking lot. When that filled up we borrowed space in France parking lots around the town and by mid February. We we had about twenty of these trailers full of computer sitting around Houston. So what happened? How did you survive that? Well, what happened is IBM introduce the product the kick the tires. It's announced that it is in limited supply for a while. It was not a better product wouldn't a bad product. Did just wasn't better. And so just as we had hoped. Most the best possible situation is the orders came in. And we had the computers to fill them. It's like they had been holding them back. And so not only were they ordering normal. Right. They were sending all the orders that they had been holding everything fell into place just at the right time. And we took advantage of it. So what explains what explains the fact that that they didn't crush you? I mean, it sounds to me like it was one of two things it was either total luck. Or it was the IBM portable computer. Wasn't that good or maybe both? Well, anyway, you look at it was luck. I mean, there was a lot of luck involved. But what had happened is we had had a year to build great relationships with dealers the dealers actually liked having somebody other than B M because I B M was the, you know, the five hundred pound gorilla, and they knew it in any case we continued to sell like crazy and outsold the IBM portable throughout the year. By the end of the year. We were out selling it seven or eight to one end of eighty four by the end of eighty four and we tripled to three hundred twenty nine million in our second year. So by your second year, you're tripled sales. What was the first time? You remember Compaq becoming part of like a the mainstream conversation in America. Well, it depends on how big the mainstream is I think by the end of Eighty-three everybody in the industry knew about Compaq, and was sort of more willing it what was going on here. You know, this idea that people could use all the same for all the same things that were designed and built to run in BNP, see, whether it was software hardware would work on our computer IBM may be underestimated as they didn't really study what it made our product successful. They could've easily put us out of business if they had come out with a a real comparable product. Yeah. And once you guys showed that you could build an IBM clone. A lot of other companies realize that it was possible to do the same thing. Right. That's right. And the fact that we took off and set sales records main everybody else did it, including by the way, the the big guys HP TI deck, all finally followed suit. But by then we had really establish ourselves in the market. And you know, the thing that took us from six hundred million in eighty. Six to one point two billion in sales in eighty seven. We came out with our own desktop, which was essentially three times faster than IBM's desktop for about the same price and began to establish ourselves is not only the portable company, but also the half performance company. IBM trying to like kill off all the clones. When when they released the PS two in nineteen eighty seven which was this computer that was designed. So it could not be cloned, right? Yeah. That's right. That was an attempt to take this thing that gotten out of control mainly due to Compaq and bring it back under IBM's control. So I mean, I'm comes out with their new architecture and claims that this is the way to go that old architecture has run. Its course it's gonna run out of gas very soon. And so you don't wanna follow it to the end you wanna get on this new horse. And I b m has it. And so let's go, and that's where I b m marketing strategy got them in trouble. Because this thing not only didn't run all the software. It didn't run any of the software. We staffers I knew computer did not run IBM's own software didn't now they came out with new IBM software. So if you wanted to buy this new product, you could buy all new peripherals in all new software, and they would claim that it would outperform anything else in the market. So that time though, right? And you're saying that presumably companies many companies already had PC's and software IBM was saying by this new PS two. Oh, and you're also going to have to invest in new software. You make it sound crazy to them. It was normal. That's the way the industry had always worked, and they they still hadn't bought into this industry. Standard idea people believing that and understanding that it was important to be able to run your all software on a new computer. It never happened before Compaq pioneered. And then they wanted to get rid of it as quick as they could. Was there a moment where you were worried that that actually would succeed? Oh, yeah. No. There was never a question it they had good chance to succeed. Now, what kept us going and what I guess gave us. Confidence that we had a pretty good chance. Was we outperformed IBM's best products every step of the way. And so there was you know, significant part of the industry that looked at IBM's claims, you know, the magazines aren't afraid to write Compaq outperforms the IBM by fifty to one hundred percent. So it's spite of it being a VM. We've we're holding onto pretty solid position in the market because ours was always higher performing. I mean, it it seems like at any juncture in your first several years IBM had they just done something a little bit smarter strategically could have crushed you. There's no doubt I beam could have crushed us a number of different ways. And at that point in time. Okay. Right. So it's it's a five years from the time you launch to to the time you're doing a billion dollars in revenue, right? That's right. How did your life your own personal life change? Because all of a sudden you like, I'm assuming you're you become a rich guy. Yeah. You know, certainly compared to where I had been I was rich. But then again, we we knew that that was a fragile part of it. Did get a divorce in nineteen eighty seven. You know, it was just a sad part of of what happens in in that era. But I'm sure it had something to do with the stress associated with all the work. The time spent at work. So in nineteen eighty-seven, you're going through divorce and even simple divorces hard. And then IBM comes out with his new computer designed to basically put you guys out of business. So how did you deal with? How did you cope with all that happening? Looking back on it. I would say probably denial pretty effective tool. You know, not letting things impact you as much as they might in sort of other situations is something you have to do there. I felt like I was learning as I went and I was doing a good job. There was personal turmoil. If you wanna throw another layer on top of that radio shack tried to buy us in late eighty six and early eighty seven and so that was going on same time. All this was happening. So you were just here's your personal life. You were just kind of you compartmentalize that you were you just had to put that in a box and focus on the stuff and not let that depress you. Yeah. Now. Got three kids and they're getting to be teenagers and there's little league. And there's all of that. And and I'm trying very hard to get away at the right time. Go see a school play. That's where most of the stress came from trying to do at all if you could just cut off part of it and say, I'm not going to worry about that. It would be one thing. But trying to do it all and not drop any balls. That was pretty stressful or going home Leone, eating takeout Chinese food. I mean, what's what was happening? Once you've done with your day. Crashing usually. Yeah. No. I see pictures now of media carrying a fast food, a McDonald's bag or a Wendy's bag you just eight when you could that was sort of secondary getting everybody taking care of getting the meetings done getting decisions may. You look at my role as making decisions I wasn't making all the decisions. But all of the key ones. I had to be involved in so how and there were always a lot. I guess about like what ten years after you guys launched Compaq? You drafted the board of directors. They fire. You almost exactly ten years later in the Trump why what was going on. Well, there's several levels of looking at the dynamics there on the surface. It's a better of disagreement over how fast to move into the lower cost arena like like lower species. Yes. The chairman of the company been Rosen thought we ought to move very quickly and so quickly. That would fact we ought to go buy product from a Taiwanese or Japanese or Korean supplier and Margate was looked. It's not what it seems. We can get to market as fast as anybody with our own design. And I think at the board meeting the board decided to replace me with the number two guy with Eckerd Pfeiffer headed you. How'd you get that? News. Well, we had a board meeting were been proposed that idea, and I left the room and they deliberated for quite a while. And then made the decision to make the change. But it was clear that was the direction they were going. I knew that's what it was going to be. I was also somewhat burnt out. And I was of a strange mindset, you know, I kind of wanted to get out of that that pressure. It was it took me a while to really look back and understand that I was a big part of the problem of why it ended up going down that path. And and I regret that. But it is what happened, and I guess under the stress I was under and kind of gotten into this frame of mind where a need to get away the disagreement over the low cost speed to market was just the catalyst that that allowed it to happen almost guided it to the point where I was going to be far. So when you were at I mean, this is the company that you founded that you built. Yes. And then you were REM. Moved from that company. I think a lot of people hearing that would say God that sounds like fiction injustice because it's your idea you created it was your sweat, and then it was taken away from you. But but it sounds like from your perspective that was fine. You you were kind of your time was was over there. Let's be clear we're a fortune five hundred corporation. You know, we're a leader in a big industry. And just because you started the company doesn't give you any right to continue to run the company needs to be run by somebody that can make good decisions and can manage that complex and operation, which I think I was doing okay, or maybe even very well up to that point in time. So that's I don't see that. As the reason that I needed to leave. I think it had more to do with my frame of mind, and sort of burned out situation you were in your mid forties at that point. So still pretty pretty young guy. Accomplish a lot did you walk out of the company with, you know, financially secure where you set for life at that point? Yes. Absolutely. And of course, continue my life, actually, the home life became much less stressful. And then I got involved. Investing in and some startups and early stage companies and tried to help them succeed. Not all of them did. But then finally volved were really just like helping entrepreneurs start their company and try to help them avoid a lot of the mistakes new companies make he think about Compaq it was such a powerhouse in the eighties. A fortune five hundred company does billion dollars in revenue within five years. And then you think about all of the companies that that it was associated with that we competed against, you know, Apple IBM, Dow, Microsoft, Texas, Instruments, all of those companies still exists and compact doesn't exist anymore was folded into HP, and that brand is no longer here. In in a way, is is that a cautionary tale for some of these power houses, we see today like, Snapchat or Uber or Facebook companies. We can't even imagine not existing. You know, it really is. That's certainly something. Didn't envision when I left. I guess I just wasn't thinking that for down the road. And I of course, you never know the future in let the decision to merge with HP was a financial decision. But the end result of the way it happened. Is that Compaq no longer exists? And that is sad because it's got such a great history and played such a key role in actually forming the way the world works today. And yet most people you run into on the street. I've never heard of Compaq. It's crazy, isn't it? It is crazy. It's sad. But it's also life. You know, that's that's a, you know, we we started out to build a company that would last, and I think that's the case for the, you know, if you look at Dell or Microsoft or apple the leaders of those companies maintained enough control to make sure that it never got into the hands of somebody that looked at it just purely from a financial standpoint. If I had been there if I had been leading the company, we would never have sold. We would have figured out a way to to solve the problem. How much of your of your success at Compaq was because of just your hard work, and smarts and the hard work of Jim and Bill or a how much of it was it was like. If you'd asked me that in the eighties say the late eighties. I would probably have said it was ninety percent intelligence and insight and work and ten percent, look, but to tell you how perspective changes with time. I would say today it was the other way around. We did a lot of good things we came up with a good idea. But if you look back at any of the things that could have gone wrong and would have either slowed down or stopped us. I mean, there's endless list of those. So the fact that, you know, okay, we dealt with those issues as they came along. But the fact that was a successful path. Even bailable is pretty pretty doggone lucky. Canyon. He founded Compaq computers with Bill Mirko and Jim Harris in nineteen eighty two. Rod still lives in Houston, where he mainly invests in other people's startups, by the way, the story of compacts David and Goliath struggle against IBM was the subject of a very cool documentary. It's called silicon Cowboys kind of computer dis today. I'll use a MAC book air and pro go phone you started the PC revolution. Your Napa common Africa? And please do stick around. Because in just a moment. We're going to hear from you about the things your building. But first a quick message from one of our sponsors American Express, you want to build your business. They can help build your business with financing solutions. Eligible business customers the powerful backing of American Express don't do business without it. Terms apply. Visit American Express dot com slash business. Hey, thanks so much for sticking around. Because it's time now for how you built that. And today we're updating a story we ran about a year ago. Many MS danika Lauzi at live in Germantown Wisconsin and about sixteen years ago when danika was in college she loved to knit scarves for her friends to the point where at least started to say enough danika. No more scarves. So she thought. Okay. Hope branch out I'll you know, knit a hat. I made it and I finished it. I thought and looked at it. And there is a big weird hole in it. And I thought I made a mistake tested on the ground really disappointed. But it's a good thing that when she did that her dad happened to be in the room, my dad saw lane there, and he said, we'll put your nest through that. Yeah. Her nest that was her family's nickname for the curly massive hair on top of Denic is head. So just for fun. She put her hair through the whole in the hat. I don't know who that it. But. Member kind of a collaborative ly- the room looked lake. That's looks good to danika started to wear the hat with her point Taylor funds to out of it and wherever she went on campus or traveling around the country. People would say the same thing had like your head. So without realizing it danika had solved a problem for people with long hair because if you've got a ponytail it's uncomfortable to pull a knit hat over it. And it can look kind of silly to this weird bulge top of your head. So after danika got out of college. And after she got a fulltime job in the chemical industry. She continued to knit hats with the strategically placed holes in them, and then she would sell them online. And that's where I thought that it might stay where I would keep my job forever. And I was actually kinda clean going back and getting a PHD in chemistry. But that's not what happened like I'd get to work. I think I could maybe be making just about you know, what I making here if I made more hat and right around this time danika started to notice there was competition. Other people were making hats for ponytails. So she innovated she made multiple openings to accommodate different hairdos, and she even figured out how to hide those openings. So you could wear the hat like any other hat when you wanted to an all the knitting took a lot of time. So danika started to get some help. I third getting a lot of emails from any factors in China had found my website, saying, hey, we can make these for you. I thought all right. I don't have a lot of options here. I'm gonna try that. So okay. She found a few people in China who could hand knit the hats. They are actually a lot of times made by people in their homes, but they were all turned out to be different sizes and a little bit different shape. And some of that was was just the nature of made. But. It couldn't go on danika realized she couldn't grow her business by knitting the hats by hand. So after asking a lot of different engineers, she found one guy in New Jersey to design her knitting machine that would put holes into hats. It can make a hat every eighteen minutes, and I have to stop the oil it about every six to seven hours. And so I can get about sixty Pat and a day. Company is called peekaboo ponytail hats since we last spoke with her danika has been thinking about marketing peekaboo hats in countries like New Zealand in Australia where it's winter from June to August. So she can keep selling her heads around and she's working on five new designs. If you want to find out more about danika Lasi or here. Previous episodes head to our podcast page. How I built this NPR dot org. Of course, if you wanna tell us your story, go to build NPR dot org, and thanks so much for listening to the show this week. You can subscribe wherever you get your podcasts. And while you're there, please do give us review you can also write to us at H NPR dot org. And if you want to tweet is at how I built this show was produced this week by Casey Herman with music composed by routine era Bluey. Thanks, also to Juliet Carney JC Howard, nor Cousy. Neva grant, Melissa great Santa's Michigan poor and Jeff Rodgers. Our intern is Kansas limb, I'm guy Roz, and you've been listening to how I built this. This is NPR.

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