Chiclets, how boiling plant sap leads to the discovery of chewing gum. One partner runs away. The other makes millions. How not to be blinded by the pursuit of the wrong objective.
David Young:
Welcome to the Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is, well it’s us, but we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.
[Griffin Service Ad]
David Young:
Stephen Semple, when you told me that we were going to talk about the brand that we’re going to talk about today, it instantly took me back, oh my gosh, 30 years or so to spring break in Mexico, where there were these little kids that would come up to you all day long as you walk down the streets and what they had in their hands was a box of Chiclets. And they were just trying to get you to buy some Chiclets from them. I always thought that was, that was cool. Little tiny entrepreneurs.
Well, and what’s also funny about it is there’s a real Mexico tie in to this story about Chiclets.
David Young:
Oh, I believe it. I believe it.
Stephen Semple:
And this is a fun story. It covers Native Americans, the deposed Mexican President Santa Anna, a desire to make rubber, and Santa Anna wanted to return as president of Mexico. All of those things actually contributed to the creation of Chiclets gum.
David Young:
Oh, how cool is that? I can’t wait to find out more.
Stephen Semple:
So if you’re ready for the ride, Chiclets was originally founded in 1900 by Thomas Adams in New York. It’s a pretty old brand. By 1962, the company had a bottom line income. This is a net income. This is not top line sales in 1962 dollars of just under $10 million.
David Young:
Holy cow.
Stephen Semple:
And at that time it was sold to Warner Lambert for 200 million bucks. So started in 1900, 1962 sold for $200,000,000 in 1962 dollars. So the founder did well.
David Young:
That’s pretty amazing.
Stephen Semple:
The founder did well. It became a real empire just around Chiclets gum. But let’s start at the beginning. When European settlers arrived in the New World, they found Native Americans were chewing spruce tree resin. And so, this seemed like a good idea. So they adapted the idea and the newcomers joined on the fun of chewing spruce tree resin. And this was actually such a good idea that in 1840, John Curtis developed the first commercial spruce tree gum by boiling the resin, cutting it into strips, and then coating it with corn starch so it wouldn’t stick together. In the early 1850s, he constructed the first chewing gum factory in Portland, Maine. It became the first factory making chewing gum from spruces tree resin.
Stephen Semple:
But a couple problems turned out that it wasn’t actually all that great tasting and it became really brittle when chewed. So all sorts of different players tried all sorts of different things to try to solve this problem such as adding paraffin wax and things along that lines. So now comes the second player in our story. The second player in our story is the exiled Mexican President Antonio Lopez de Santa Anna. Now, Santa Anna brought with him Chiclet. Now, Chiclet is actually a plant. It’s the resin from a plant that grows in Mexico.
David Young:
So it’s not spruce.
Stephen Semple:
It’s not spruce.
David Young:
Now this isn’t the same Santa Anna from the Alamo.
Stephen Semple:
Yes, it is.
David Young:
Really?
Stephen Semple:
The same dude. He actually was President in Mexico for 11 non-consecutive terms over 22 years. He got deposed and exiled and all this other stuff, and he shows with this chicle, which is this milky latex from the sapodilla tree. Chicle is this latex from this sapodilla tree. He felt really strongly that this could be made into a substitute for natural rubber. What he wanted to do, so he was convinced that he could figure out a way to make this into a substitute for rubber and he become super wealthy and be able to basically buy his way back into being President of Mexico. That was his-
David Young:
Through his tire company.
Stephen Semple:
With this tire company. Now, Santa Anna is a bit of an interesting dude. He did not support Mexican independence from Spain, and then later supported it. He led the Mexicans in the battle at the Alamo, as you mentioned earlier, and as we talked about, he was president a whole bunch of terms, never consecutively.
Stephen Semple:
So the whole story with him is he really liked being President, but he didn’t like to govern as kind of the story behind him. And somewhere along the lines, I was not able to find out how, but somewhere along the way, he met the hero of our story, Thomas Adams. Adams begins to experiment with chicle, and guess what he discovers? He can’t make it into rubber.
David Young:
Oh, no.
Stephen Semple:
But it might work for gum.
David Young:
It might be a better gum?
Stephen Semple:
It might be a better gum. Santa Anna looks at him and says, “Screw you Adams. I wanted this for rubber. I’m out.” Abandons the project.
David Young:
Oh, no.
Stephen Semple:
He’s not interested in gum. But Adams forges on. In late 1899, he forms a company, the American Chicle Company. And Chicle was used in the gum business until the mid 1900s when it was replaced by synthetics. So it became like the primary thing in gum. And as I mentioned earlier, by 1962, Chiclets were making 10 million in profit and the company is sold for $200 million.
David Young:
That’s wild.
Stephen Semple:
And Santa Anna had walked away from this.
David Young:
Santa Anna needed to learn that you can pivot when something happens and it doesn’t go just the way you really, in your mind, thought it needed to go. You can actually get rich doing something else with maybe even the same materials at hand.
Stephen Semple:
I agree with you. In fact, to me, when I read about this, the real lesson here was that Santa Anna actually lost sight of his objective.
David Young:
Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.
[Empire Builders Program Ad]
David Young:
Let’s pick up our story where we left off and trust me, you haven’t missed a thing.
Stephen Semple:
He felt the objective was to figure out how to make rubber out of chicle. Really what his objective was to figure out how to make some money from chicle. Because if he kept that objective in his mind, when Adam said, “Hey, I think I can make gum from this,” he should have said, “All right, can we make money from making gum? Yeah, we can make money from making gum. Let’s do that.” He actually lost sight of his objective. He got so focused on the rubber angle. He actually lost sight where Adams was like, “Well, what can I do with this to make a business?” Adams was the one who actually kept his eye on the ball. Because Santa Anna-
David Young:
Unfortunately, that’s one of those less that sometimes we have to learn over and over and over.
Stephen Semple:
Right. Right. Well, look, that lesson comes from DoorDash, right? If we remember, the founders of DoorDash first had an app. They walked into the restaurants. The restaurant said, “I’m not interested in that, but I’d be interested in this over here.” And their objective was, we wanted to an app to help restaurants. They kept their eye on their objective. They were able to do that pivot. DoorDash learned that lesson. Okay, great. This is more what people can do. Here’s the pivot. Adams, here’s the pivot. Santa Anna got so focused on rubber, he lost sight of his objective.
Stephen Semple:
And what I find is that where this barrier seems to come up so often when people are pursuing a business solely for the objective of making money. I find they rarely do. If the objective is, I want to figure out how to make this into a product, or I want to figure out how to help these people, or I want to figure out this, for some reason, that’s what keeps people open to being able to do these pivots. I think the second lesson is it’s really hard for business that just sit there and say, “Hey, I want to do this for the sole goal of making money.” I think it’s very difficult for someone to do these pivots because their mind is just not open to different opportunities.
David Young:
No I agree. It makes me think of things that there are a couple of other products that come to mind that were created with something else in mind or that ended up being sort of like a failure. I remember reading about the guy that invented Post-it notes at 3M and it was like, “Well, I had this adhesive that just wasn’t very good.” It wasn’t good enough. So he was using it to put things on his own stuff.
Stephen Semple:
And all of a sudden while we wait.
David Young:
There’s good stuff for that. And then, I think the other one was silly putty. It was going to be some polymer that was probably like Santa Anna’s idea. It was going to be some new rubber that you could make tires out of, but you couldn’t make it firm. You couldn’t vulcanize it like you can with rubber. So it was just this weird putty and it’s like, well, kids like to play with it. It ended up being like Play-Doh kind of a product.
Stephen Semple:
Right. Sounds like Play-Doh. Go back on this on the Play-Doh. Play-Doh is a very similar situation where, oh my God, it’s being used for this other thing. Viagra started off as a heart medication. That was actually not a very good heart medication, but had some other interesting side effects.
David Young:
Exactly.
Stephen Semple:
So there is this whole idea of you’ve got to be open to the opportunities that are out there and be prepared to do those pivots when those opportunities presented themselves. Adams looked at it and said, “I can make gum from this.” And look, lots of people made massive fortunes in the gum business.
David Young:
No kidding.
Stephen Semple:
Look at Adams and look at Wrigleys, right?
David Young:
Pretty amazing.
Stephen Semple:
There was money to be made there and Santa Anna lost sight of the objective and was solely focused on we’re going to do this rubber thing.
David Young:
Whatever happened to Santa Anna?
Stephen Semple:
That’s really interesting. After he bailed on the rubber thing, I guess I just bailed on him.
David Young:
Yeah, exactly. Right.
Stephen Semple:
My objective was not him. My objective was the gum.
David Young:
Yeah, exactly. Exactly. Well, I think that’s sort of the point, isn’t it? All right. Great story, Stephen. Thank you.
Stephen Semple:
All right. Thanks, David.
David Young:
Thanks for listening to the podcast. Please share us. Subscribe on your favorite podcast app and leave us a big fat juicy five-star rating and review at apple podcast. And if you’d like to schedule your own 90 minute empire building session.
