One Copy at a Time: Kinko’s Takes Off

Orfalea had been a student at USC when he noticed a copy machine in the school library. He realized that few people had access to the new technology and decided to do something about it. With a $5,000 loan from the bank, Orfalea rented out a 100-square-foot garage behind a hamburger stand near his campus. In addition to selling school supplies, Orfalea bought a copier and began charging 2.5-cent copies. The store was so small that the copier had to be used out on the sidewalk in front. He called his business “Kinko’s” after his childhood nickname.

Orfalea might have been making $1,000 a day from his business, but he was still having trouble in school. As such, he made it a priority to surround himself with other smart people. “I thought that anybody who worked for me could do the job better,” he says. “I wanted to make sure my employees were happy and that they would continue working for me.”

His idea caught on and by 1975, Kinko’s had expanded to over 24 locations throughout California. Orfalea found success in sending his salespeople into the dorms to sell notebooks and pens directly to students. University professors even began calling on Kinko’s to make and sell copies of articles they wanted their students to read. But that is where they ran into a problem. Several academic publishers launched a lawsuit against Kinko’s for this practice. Orfalea lost his case, and in the process, lost a large chunk of revenue.

In response, Orfalea decided to restructure his business model. Instead of focusing on campuses, he turned his attention to business customers. He provided them with 24-hour document and media services, without forcing them to buy all the costly technology themselves. Soon, by sharing ownership with local investors across the U.S., Kinko’s had grown to include over 80 outlets.

Orfalea might not have been able to read very well, but his success with Kinko’s was proving that he had what it takes to run a business. “Of all the people on earth to be in that business,” says Orfalea. “You’d think I must love term papers – but I just told people to Xerox them. I just collected the money.”

Over the next few years, Kinko’s operations would continue to expand. It offered recycled paper, public videoconferencing rooms, digital colour copiers and printers, and high-speed Internet and email access.

Thanks to Orfalea, Kinko’s grew to become a network of 1,500 outlets in 11 different countries, including Canada, South Korea, the Netherlands, and Kuwait. In 2004, Orfalea stepped aside from the company he had founded as it was acquired by FedEx Corp. and rebranded FedEx Kinko’s Office and Print Services.

Today, Orfalea keeps busy as a philanthropist and a visiting professor at the University of California, Santa Barbara and the University of Southern California Marshall School of Business. He also recently founded West Coast Asset Management, an investment advisory firm. Meanwhile, Kinko’s continues to enjoy success, with revenues in excess of $2 billion.

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