Sell Your By-productswith Jason Fried and Richard Keeso
Welcome to the first episode of Rework! This podcast is based on Jason Fried and David Heinemeier Hansson’s 2010 best-selling business book, which was itself based on years of blogging. So what better way to kick off this show than talking about byproducts? In this episode, Jason explains how Basecamp’s ideas have been packaged as blog posts, workshops, and books. We also visit a 145-year-old sawmill in Ontario, Canada to see how this family-owned business sells its physical byproducts.
- Rework the book - 00:26
- Mary's Hide and Sleep - 00:37
- Kingsford Charcoal - 00:41
- Jason Fried - 1:09
- Signal v. Noise blog - 1:26
- History of Basecamp - 2:46
- Getting Real - 9:06
- Ta-da List - 12:05
- Breeze - 12:16
- Basecamp Way to Work Workshop - 13:00
- The Calm Company - 16:36
- Remote - 17:42
- 37signals manifesto - 18:00
- J.H. Keeso & Sons Ltd. - 18:34
- Boom, Bust & Echo by David Foot and Daniel Stoffman - 22:14
- Jack: Straight from the Gut by Jack Welch - 27:22
The Full Transcript:
Jason: [00:00:00] We never measured things when we started the blog, we just did it because we wanted to. And measuring can kill so many things, especially early on because you have no traction to begin with.
[00:00:09] Broken By Design by Clip Art plays.
Wailin: [00:00:11] Welcome to Rework, a podcast by Basecamp about the better way to work and run your business. I’m Wailin Wong.
Shaun: [00:00:17] And I’m Shaun Hildner.
Wailin: [00:00:18] Welcome to our very first episode. We wanted to do a show around the themes and ideas in the best-selling business book Rework, which continues to be meaningful and maybe a little provocative.
Shaun: [00:00:29] So, we’re starting with this idea of selling your by-products. No matter what you do or what you make, everything has by-products. A futon store in California hosts comedy shows after hours. Henry Ford burned scraps from manufacturing the model T to make Kingsford charcoal. Rework itself is a by-product of years of blogging. The trick is to spot those by-products and see opportunities.
Wailin: [00:00:50] So, in this episode, you’ll hear from Basecamp CEO Jason Fried about how the company blog evolved into a traditionally published book. And in the second half, I head up to Ontario to talk to a business that mastered selling its by-products over a hundred years ago.
Wailin: [00:01:09] I don’t know if you consider sell your by-products maybe one of the first lessons that informed the actual production of the book.
Jason: [00:01:17] Yeah. Kind of. I mean, we basically wrote the book without knowing we were writing the book because we had been writing these blog posts for five, six, seven years, something like that.
Wailin: [00:01:30] It had been that long?
Jason: [00:01:31] I think so. I think these topics have been sort of bubbling up as blog posts and just conference talks, stuff like that. And at some point, we realized, hey, there’s enough material here to put this together into sort of a unit. Because, you know, why some people were reading the blog posts, we knew that no one was going to read all of them, but they kind of made sense together as a common theme. So we just kind of put them together and did more than that. We rewrote a bunch and tightened some up and whatnot and edited them in a way that made sense with a unified voice. But, fundamentally, the book had written itself over a period of many years without us actually knowing.
Wailin: [00:02:06] Can we go all the way back to how you started even writing blog posts? Because I feel like nowadays it’s a given that if you have a company of course you carve out a space on your company website for a blog and people are expected to contribute to said blog, or maybe you hire someone. There’s a whole cottage industry now, around that kind of writing. But when you started blogging, and even that sounds like a very old fashioned, quaint thing to say. When you started blogging—
Jason: [00:02:32] Right.
Wailin: [00:02:32] —the landscape was very different.
Jason: [00:02:37] When we started writing, the word blog wasn’t around at the time. This is back in ’99-ish, 2000, something like that, when we started the company. We were—so, we had a small office. There were three of us in the space. And we were just kind of talking all day about the industry and just our points of view on things, and opinions about whatever. And we were like, we’re doing this already. We’re talking out loud about the stuff, sometimes we were emailing each other these things. Probably, like, there’s probably someone else out there who cares about this stuff because we think there’s a lot of fire in it and it’s interesting. You know, the topics are cool. So, let’s, I don’t know, let’s just write it up.
[00:03:14] We started from the beginning thinking that what made us different were ideas and not just our work. Everyone’s work’s about the same. It’s pretty good. I think you can get great work from a lot of people. So we were trying to say, like, what about our ideas? It was just basically we were writing it anyway. We were saying it anyway, but it was just internal. So let’s just flip it and share it externally and see who else is out there who agrees with us or disagrees or whatever.
[00:03:41] The idea actually traces its way back to—this is a weird dot to connect—but, back when I was in high school, I made this project called Audiofile, which was a music collection database thing. And I built it because I needed it, and I realized eventually that other people would need it, too, so I put it out there. I made it for myself and if no one else ever used it, fine, didn’t matter to me. But I figured, hey, if I need it, certainly someone else will.
[00:04:06] And that’s, I think, how we’ve always treated blogging, which is like, we have these ideas, and we’re going to share them anyway and if someone else wants to read them, great. If they don’t, that’s fine, too. We’re still gonna put them out there because writing them down helps us think them through and to come up with a clear idea and to communicate internally, even. We’re going to do something anyway, so why not just share it, basically. Why not get it out there. And so I think that’s—it’s all the same concept.
Wailin: [00:04:28] What was some early feedback and communication you got from people who discovered your writing?
Jason: [00:04:34] Well, God, it’s so long ago, it’s hard to remember. Our ideas for the most part have been polarizing, kind of. Some of them not, but many of them are. And so, you hear from all sorts of people. A lot of strong disagreements. I think, what I’m remembering now, the early blog didn’t have comments turned on because I don’t think that was even a thing yet, or something like that. But when you turn comments on, then you get like, these regulars who would come by. And some people just, everything you wrote, they hated on it. Other people were anything you wrote they defended you on it. And it created this really cool sense of community.
[00:05:07] I think any time you say something that’s a bit polarizing, of course, you’re going to hear from both sides. And it sort of kept us excited, actually. I think it was good. And something I’ve written about recently—I think I wrote about it recently—this idea of zero being a very intimidating thing these days. So, if you start a blog today on Medium, or if you just start on Twitter, or wherever you start writing things. You basically start with zero and it says it right in front of your face. Like, no one read—no one liked this article. I have no followers. Zero. And it’s really intimidating, I imagine, to start today.
[00:05:42] Back when we started, we didn’t know—we didn’t even know who was reading our stuff because we didn’t have analytics and if we did, it was like so early that they were totally unreliable and didn’t mean anything. So, you just kinda wrote for the joy of it, and then when someone would chime in as a comment, it was just wonderful that someone was chiming in. It didn’t matter if they loved it or hated it. It was just like, oh my God, somebody’s out there.
[00:06:01] And so, I think that’s—it was probably a more—well, more encouraging time, I think, to start way back when, when it kind of didn’t matter if there was an audience or not because you never expected there to be one. Today, you sort of expect there’s going to be an audience. Not only do you expect there’s going to be an audience, but it’s always right in your face and it starts with zero, and it’s really intimidating.
Wailin: [00:06:18] Yeah, and I feel like, now, if you start something, like a company blog, there’s all this baggage attached to it from day one. Where, there’s gonna be like, stuff that’s being measured. And there’s gonna be a strategy, like the results from it have to be captured. It has to kind of—you have to attach numbers to it. It seems much more complicated now.
Jason: [00:06:40] Yes, like what’s the ROI, how many people are reading this. It’s like, I remembered there was a point where we did a little bit of that. We fell into that trap. I remember we did this when we switched over to Medium from our home-grown blogging platform called Blog Cabin, by the way. Where we’re like, oh, we’re going to switch away from our own things, we’re going to go to someone else’s thing now. Are these articles still drawing traffic the same way? It’s like, we kind of looked at that for a while, and at some point we have to be like, it doesn’t really—we don’t care. Like, we’re going to put stuff out that we believe in anyway. And if people hear about it, they’re going to know who we are and they’ll find out about it and they’ll check us out, just all the same, basically. Because I think once you begin measuring—like, we never measured things when we started the blog, we just did it because we wanted to.
[00:07:24] Measuring can kill so many things, especially early on because you have no traction to begin with. So, if you’re measuring, like, people think like they start a company blog and no one’s reading it, so it dies. Well, of course no one’s reading it. It’s gonna take time to build an audience so you have to have some—there has to be some buffer, some time, some time to wander around a little bit to get somewhere. To get a little bit of traction, because it’s not just going to happen. You don’t just put articles up and things start to happen. So, it’s probably good not to measure stuff for a while just to get in a groove of writing and see if you even enjoy it. Because if you don’t enjoy it, what’s the point anyway, basically, is the—
Wailin: [00:07:59] Then it just becomes, like, homework.
Jason: [00:08:00] Yeah.
Wailin: [00:08:00] Or like, another thing to do.
Jason: [00:08:02] Like, we have to get two articles up a week. And I know people who work at companies where they have content strategists or whatever, and let the record show your facial reaction when I said that. No, but there’s content strategists and all these people. It’s like, you need to do two articles a week and they need to go up on Tuesday and Thursday at this time because this is when the readership’s the highest. It’s like, just take all the fun out of it, wouldn’t you? Just wring it all out and get rid of it all.
[00:08:26] That just doesn’t—it wouldn’t make it worth my time to have to follow guidelines like that. If I’m going to write it’s because I have something to say, not because it’s Tuesday at nine. That’s kind of how I do it.
Wailin: [00:08:38] So then, the blog, before it turned into Rework the book. If I remember correctly, it went from blog to a workshop series, is that right?
Jason: [00:08:44] Yes. So, we did this thing called The Building of Basecamp, which was like an eight-hour day. We’ll take you through how we built the product and our philosophies. So, we had like, programming philosophies, design philosophies, product decisions and how we deal with bugs and new features and customer requests and the whole thing. From that actually came Rework—no, Getting Real, first. Which was the first book we did, which is self-published.
Wailin: [00:09:10] That was like, PDF, ebook form, right?
Jason: [00:09:10] Yeah. PDF. 19 bucks. With the PDF, we had to figure out how to give it—how to get it out there but have people pay for it. And so we basically, whenever you bought it, your name would be printed at the bottom of every page. Just like, this PDF was prepared for William Johnson or whatever, at—
Wailin: [00:09:29] Almost like a watermark.
Jason: [00:09:30] Yeah, like a watermark. And the whole point was like, if you give yours out, your name is going to be on it. So, it was a little bit of that social pressure, anyway. Back to the point, so we did these workshops, which then turned into Getting Real, which was our first book about the way we work. And then, from that, more and more, we became more sophisticated in some ways. We hired more people. We did more stuff. We did like, four or five different products and we learned a bunch more stuff by the time we published Rework. But over that period of four or five years, we’d been publishing more stuff, learning more stuff. Holding more workshops, and just kind of getting to know ourselves and our methods a bit more. So, Rework, I think, is a more mature version of Getting Real. Although I still think Getting Real is our best book, actually.
Wailin: [00:10:15] Really?
Jason: [00:10:15] Yeah, it’s the purest and the simplest and the most straight-forward. I’d say it’s more philosophical than the other books we’ve written and I like that about it. While it tells you what to do, in many ways it’s very open-ended and you get to figure it out for yourself. Which is kind of what I think most books should be. I’m not really big into the prescriptive side of things, even though we do some of that.
Wailin: [00:10:35] Did it feel like a big change mentally to go from writing and putting your stuff online for free to now attaching a price-tag to the packaging of those ideas in workshop form and then in PDF form when you did Getting Real?
Jason: [00:10:52] For me, no. I like things having prices on them, just because—it’s not even about the money, it’s just like, it gives you a very quick answer, which is, is this worth it to anybody. And sometimes when you write articles and you put them out there for free and people read them and they like them and they whatever them, but do they value them? It’s hard to know. And when you put a price tag on something, people have to trade their hard-earned money for what you’re doing. And so, I think that’s a nice, just, it’s a nice little bit of a hump to make sure that people think this is valuable enough when you’re presenting it in a way that they get value out of it.
[00:11:29] So, I like putting price tags on things. I think the other thing we did, which was fun, with Getting Real, we did, like, a pack. You could buy five for 50 bucks or something like that, so we kind of did some group licensing explorations. We just kind of played around. And I’ve always been a big fan of experimenting with business models. So, it was kind of just another fun product to try and sell and see what happens.
Wailin: [00:11:50] And then, kind of, over the years, there’s a lot of other stuff that has come out of Basecamp, right? Do you think of that stuff as by-products as well, or do they fall into different categories for you?
Jason: [00:12:00] Some of them are definitely by-products. So, like, our first product we launched after Basecamp was something called Ta-Da List. And Ta-Da List was basically, took Basecamp’s to-dos and pulled them out and made them they’re on stand-alone thing. So, that was that. We actually did some other tools which you may not even be aware of. Something called Breeze. A lot of customers were using Basecamp simply as a mailing list, as an emailing list. Like, they’d post a message, it’d automatically go out to everybody, and that was a lot of the value for them. So, we decided to pull that feature out and create a very small group email service called Breeze. It didn’t really take off. Primarily because we priced it, which was good, because we put a price on it. And there’s Google Groups and there’s other alternatives and stuff, and so, anyway. But that was a by-product, I think, of—it wasn’t like Basecamp the product necessarily, but it was an idea that people were using Basecamp for, and Basecamp was overkill for just that one thing. So, we kind of spun that off and did its own thing.
[00:12:53] So, there’s been a series of these things over the years, I think, that have been by-products. And even today we do Basecamp: Way to Work workshop, which is how we work and we sell 30 seats or so every eight weeks or something for a thousand bucks a pop, and people show up and we talk about how we work again. So, it’s very much like the old days where it was Building of Basecamp but now it’s a different set of things we’ve learned.
Wailin: [00:13:16] Were you thinking about Building Basecamp when you re-introduced the workshops?
Jason: [00:13:20] Yeah. It was kind of a model for it, which was people are curious about how we work and how we do things. So, originally Building of Basecamp was eight hours, and I remember it just being really taxing. Like, I was burned out after that. So, we kind of cut it in half. It’s like, not quite, but five hours. And then we really go in depth into how we work. Even more realistically with this workshop than Building—Building of Basecamp was slide-based. We’d show slides. And this one is essentially spontaneous, where we actually put our Basecamp account up on the screen and just show people how we do things.
[00:13:56] So, if someone’s like, how do you disagree about something, how do you pitch something? The answer is always, let me show you. So, everything we know here, we try to share with everybody. In some ways it’s a blog post, in some ways it’s a book. Some ways, it’s really hands on. There’s different versions of this, but it’s all kind of the same information. So, the by-products are feeding one another in a sense, and it’s very hard to figure out where the source material is, except for the fact that like, what we do every day is I guess the source material. But everything else influences everything else.
Wailin: [00:14:19] So, you had mentioned that the original workshops were very taxing because they were eight hours. But, I’ve sat through the ones that we do now, and they’re still pretty taxing, I think, for you. You’re on your feet, talking for hours and hours. So, my questions is: how do you decide how much energy you want to devote to a by-product? How do you know when this is too much time to be devoting to what is a by-product and not the core product?
Jason: [00:14:46] It depends. So, like, books, you can kind of go all in on them for a while. You write them, you hit them over to the publisher, and you’re done. With the workshops, they’re not on a set schedule, so Ryan and I do them together and we just kind of have a feel, like, let’s do another one. We do one, and we’re like, let’s not do that again for a while. And then, I mean, it’s wonderful, but it’s a lot of work. That kind of wears off, and then we’re like, hey, are you free August 10th? He’s like, yeah. I’m like, okay, let’s do another workshop.
[00:15:16] So, that’s kind of how we do that. It’s more about feel. We’ve done maybe, I don’t know, six or seven, or whatever. They’ve all sold out. They’ve been selling out faster, we’ve been increasing the price as well. So, it’s kind of a cool business model experiment for me as well. It’s kind of like, where is the limit? How much can we charge? How fast is it going to sell? I’m just curious about those tests, essentially.
[00:15:33] If we get bored of it, then we won’t do it again for a while until we are excited about it again.
Wailin: [00:15:37] It seems like flexibility, not pinning yourself in or committing to a really strict schedule is important. Like, it’s important in terms of the writing, it’s important in terms of this, as well? Right?
Jason: [00:15:49] My life is built around avoiding hassles, truly. And my wife’s not thrilled with that sometimes, I just—because we have family events we have to go to, and for me sometimes, I’m like, uh, I’d rather not. But—just being honest—she knows this. Anyway.
[00:16:06] I try to basically not commit myself to something that I know is going to bug me when it comes due. Saying yes about something far in the future, almost always regret it at some level. And I shouldn’t, because there’s nothing wrong with the event. It’s the fact that I’ve scheduled so far in advance that it’s out of my mind, and then I see it on my schedule coming up, and I’m like, ah, I’d rather be doing something else right now.
[00:16:06] So, it’s not that this wasn’t good, it’s that it sort of snuck up on me later on. So, yeah, with the book, I mean, we originally said we’re going to get the book out this year. We’re not going to.
Wailin: [00:16:36] This is the new book, just to clarify?
Jason: [00:16:37] The new book, yeah, The Calm Company. It won’t be out ‘til next year. We didn’t get it done in time, which is fine. It’s no big deal. So, we’ll get it out next year. The next workshop is whenever we feel like doing it. I tried to play to my own strengths and not sort of push myself into things that I’m uncomfortable with.
Wailin: [00:16:52] Like, you’re speaking is probably one of your biggest by-products.
Jason: [00:16:55] In fact, what’s interesting about speaking is that, and even doing interviews like this, is that this will always spark a new idea in my mind and lead to more writing. So, someone will ask a question, oh, God, I hadn’t thought about that for a while. Or, this is a different take, or something else came out of me that was different than I’d normally say. And I’ll just go, ah! There’s an article there.
[00:17:13] So, I like speaking and I like doing these interviews because it spawns other ideas. While it’s not a verbatim transcript of what I talked about, the idea’s set and then I can go in a new direction with it. I do that all the time, actually.
[00:17:25] Broken By Design by Clip Art plays.
Wailin: [00:17:27] You can find Getting Real as a free PDF now at GettingReal.37Signals.com Rework, the book and Jason and David’s follow-up book about remote working, Remote, are available wherever books are sold. So, check with your local indie bookstore. The company blog is called Signal v. Noise and it’s at m.SignalvNoise.com. And we’ll put links to all of these things in the show notes, along with the link to this original manifesto that Jason and his co-founders wrote back in the day. We’ll put that up there, too.
Shaun: [00:18:06] So, as a software company, I think we’re mostly talking about intellectual by-products. The books, workshops, this podcast. But for companies that make physical stuff, it’s unavoidable. Their process generates stuff that isn’t their core product.
Wailin: [00:18:20] Yeah, every manufacturing company is going to have waste, so I traveled to a place called Listowel, in Ontario, about a two-hour drive from Toronto.
Richard: [00:18:32] My name is Richard Keeso. I’m the president of J.H. Keeso & Sons Ltd. We are in Listowel, Ontario. We are a hardwood—what’s considered a green hardwood sawmill.
Wailin: [00:18:44] Who started it, originally?
Richard: [00:18:46] My great-great grandfather did in 1872. He was just a teenager. He had purchased a steam locomotive and he used to go to area farms and do custom threshing at harvest. In the off-season, then, when harvest was over, he felt that there was sufficient timber resource here, and there was, to use that same steam locomotive to power a saw. And so, he would go to those same farms and set up at the back of the farm where the timber was and saw lumber right there.
Wailin: [00:19:21] Richard was kind enough to give me a tour of the sawmill. We started outside in the yard on kind of a drizzly day.
Richard: [00:19:27] We’re by all standards a very small outfit. And because we can make ourselves profitable on volume, we cater to our customers’ needs more, so. Get on the phone, ask them, what works for them. We try not to make a product that’s considered generic. In fact, a number of our customers will say they always call us first to see if there’s something we can do for them with a specific thing they need because they know we’re fairly nimble and we’ll at least take a run at it.
Wailin: [00:20:05] Yeah, so when you say you’re considered small. How is that measured in your industry?
Richard: [00:20:09] Generally in the footage that you produce every day. This sawmill can produce about 16 to 18,000 feet per day. I would say an average sawmill is about 45,000 feet per day.
Wailin: [00:20:23] Oh, okay.
Richard: [00:20:23] Some 60, and some even more. Size like that handcuffs you. It’s not easy for you to make changes on the fly. There’s only a dozen of us here, including me and I’ve worked in the mill every single day. I start the shift at 5:45 in the saw cabin. A couple of us start producing lumber for the other fellows when they come in at six.
Wailin: [00:20:49] As we walked through the building, Richard pointed out all the extra bits of wood that come off a log when it’s sawed into lumber.
Richard: [00:20:55] That waste, what I showed you, that was on its way to the chipper? We used to cut it all into short lengths for firewood. As the years went by, I’m trying to think, it was probably in the ‘80s that natural gas lines started to run down secondary roads not just on the main roads. More and more people had access to natural gas and switched from a wood-burning fireplace to a gas fireplace. And when that happened and our sales their began to fall off somewhat, it was about that time we started to work on efficiencies. And, as I said, our equipment’s all designed to maximize usable lumber in a log, minimize waste. And that firewood was our waste. So, with everything we would do in the mill to become better, our waste product was smaller and smaller. So, people then, getting those pieces of wood were getting smaller and smaller pieces. And they started to call it go-fer wood. Burn some and go for more.
[00:21:57] And you know, that never did sit very well with us. And it was a dead end because we knew that as time went by and our efficiencies improved that that product would become poorer and poorer. We decided that we needed to make a change and I read a book called Boom, Bust & Echo. And it was about Canadian demographics, written in the late ‘90s, indicating that baby boomers were trying to move over to an easier way of life and hobbies—other activities, one of those was going to be camping.
[00:22:30] We looked at the bagged wood business and actually, I looked at some of the product and to be honest with you, boy, if we can’t do a better job than that, there’s something wrong with it. The bags would only be half-full or have scrappy wood in them. And sometimes have poor quality wood in them. Soft, chunky stuff. All of our firewood we bag now is hardwood, good, burning hardwoods. All seasoned and we actually put a fire starter in every bag. A number of campers have a tendency to have a few beers before they get into having a fire and might have trouble getting one started, so one of these fire starters will start dead green wood, wet wood.
Wailin: [00:23:13] Richard was talking about one of their most important by-products, which is this bagged firewood that they sell to campgrounds. That’s waste wood they can’t sell as high-quality lumber to customers.
[00:23:24] Another big by-product is bark, which is the first thing taken off the log. And that’s ground up into mulch.
[00:23:30] Who are your customers for the bark mulch, actually?
Richard: [00:23:31] They can be somebody in town that wants some mulch for their flower bed. We sell it in large volumes, 150 cubic yards at a crack. Those companies are what we call landscape wholesalers. They’ll take that material and dump it in a yard and leave it there. It’ll start to compost. In fact, it starts to ferment and develop sufficient heat it’s hard to hold your hand inside the pile. But when it does that, it decomposes and it darkens and a lot of people now are happy to have darker mulch because it looks like dirt. It’s better at retaining moisture in the ground.
Wailin: [00:24:16] When did the mulch from the bark start becoming a significant by-product for you?
Richard: [00:24:21] With climate change. Along with rainfall events, there’s equal periods almost, of drought, and there’s a need to retain moisture in the ground. And so, that’s when bark mulch became more popular, but those companies I mentioned that buy it in 150 cubic yard loads. They will take it and mix it with soils. Science has provided them with a lot of information where different mixes will make growth more conducive for different plants. So, with all that science now, they’re able to make mixtures from wood by-products with soil and create better growing conditions and they’ll take that and they’ll put in a small pot and get quite a bit of money for it. They do very, very well.
Wailin: [00:25:08] So, a log comes into a sawmill. First, the bark gets stripped off and turned into mulch, which you just heard about. Then they saw off as much high-quality lumber from the log as they can. They can get down to thousandths of an inch in accuracy. So, there really isn’t that much waste wood at least compared to years ago. The larger pieces of waste wood that are generated in this process get turned into the bagged firewood that Richard sells to campgrounds. The rest is sold as smaller wood chips for things like playground surfaces. And all this, of course, creates massive amounts of sawdust.
[00:25:42] Is saw just sheds and sheds of sawdust that you could sled down out there, and what happens to that sawdust?
Richard: [00:25:46] The sawdust is the finest chip we take out of the log and because it’s so fine, it dries very quickly and the moisture leaves it, which means it’s able to take on more moisture. So, farmers buy it from us to bed their livestock. It’s scattered in the stalls, and when it’s served its purpose, the farmers bring it back out either with a skid steer, with a stable cleaner, they clean out the barn. It’s mixed with the rest of the manure, loaded into manure spreaders and put back on the land where it further decomposes and creates some humus in the ground.
Shaun: [00:26:24] Creates a what?
Wailin: [00:26:24] Humus. H-U-M-U-S. I looked it up because I don’t know anything about ecology. It’s basically organic matter found in soil.
[00:26:35] Can you talk a little bit about how hard you work to find customers for your by-products? Because it seems like it’s such a big part of the business and yet you have your core customers for the actual lumber, right? And then by-products by definition are things that you probably shouldn’t spend as much energy on because they’re by-products, right? And yet, it probably affects the economics of your business quite a bit if you can’t find customers for those by-products.
[00:27:05] So, as those markets for your by-products change, how do you, this might be a hard question to answer, how do you figure out how much energy you should devote toward selling your by-products versus selling your core product?
Richard: [00:27:20] That’s a good question, because, you know, I read Jack Welch’s book called Jack, and about being number one and being number two. That’s kind of, in some cases, what life’s about. It’s being at the top of the heap. And some people are okay not to be there but that’s the spot we like to hold in everything we do. Because of that, we do spend a lot of time on our by-products. We just put a second screen where you saw the chips coming out of the chipper and they went on a big screen that was shaking? We just added a second screen in that machine that nobody else has ever done. In fact, the manufacturer told us not to do it because it would mess up the machine. But that is making, for us, a better and a higher quality chip that is more usable and there’s such a thing as playground mulch. You put a child on a swing and if he falls off that, you want him to land on something that’s forgiving. If you make chips that can get a by a screen and they turn into a barb and that barb is pointing upward, you don’t want your child landing on that. So, we’ve tried to refine our chips so they’re more like a wafer and they’ll lay flat. And if we wouldn’t have paid attention to that by-product, we wouldn’t have had a chance in making a playground mulch which is actually another by-product. A superior chip to what our chips normally are. So, we’re still working on that.
[00:28:42] We do different things like trying to keep solid wood out of our sawdust. That manure spreader I talked about? A chunk of solid wood will go down to the fins at the back of the machine and jam in there and take off sheer bolts and so on. So, we work hard at that, at keeping it screened out. We don’t like any Styrofoam cups around here, for sure. Plastic candy wrappers, anything like that. The only thing that should go out in our wood by-products should be wood. So we watch that very stringently, and here we’re very lucky that we’re small and we can stay in touch every day with what matters more to people.
[00:29:19] Broken By Design by Clip Art plays.
Wailin: [00:29:23] That’s it for the first episode of Rework. If you liked what you heard, please leave us a rating and a review on Apple Podcasts. As a brand-new podcast nothing helps us reach new listeners more and we need new listeners.
Shaun: [00:29:35] Our website is Rework.fm, where you’ll find show notes for this episode and all the episodes to come. If you have a question for Jason or David, you can leave us a message at (708) 628-7850. They’ll be answering listener questions in a future episode. You can also tweet your questions at @Reworkpodcast or email us at email@example.com.
Wailin: [00:30:00] The Rework Podcast is produced by Shaun Hildner and me, Wailin Wong. Our theme song is Broken By Design by Clip Art. See you back here in two weeks.
Richard: [00:30:22] Right today we’re sawing white ash. The emerald ash, borer, incidentally, you being from Chicago, you were at the origin of the emerald ash borer landing in North America. It came in packaging. Wood crating.
Wailin: [00:30:40] I remember reading about this.
Richard: [00:30:42] And now, the ash in the state of Michigan is pretty much all dead.
Wailin: [00:30:47] Really?
Richard: [00:30:49] We’re lucky though, in that it isn’t here yet. There’s evidence of the emerald ash borer but because of that a lot of ash is being cut now before it dies. It’s more like a salvage operation than a harvesting operation.
Wailin: [00:31:01] Oh, interesting.