David Chilton is the author of “The Wealthy Barber
Avocationist spoke to him in March 2008. The first of a three-part interview.
“One thing that helped me is that I am always open-minded.”
Take-Aways
Read the full interview:
Avocationist: Dave, I know you from your book “The Wealthy Barber” and I saw you on PBS a long time ago, but could you tell me what you are doing today? How do you make your living now?
Dave: Well, I am truly an entrepreneur and I am involved in a lot of different things. I still give a lot of speeches; that is a big part of my career and a big part of my income, but I also publish cookbooks and I do some different things on the side. I just hired two young men, university graduates who are very sharp, curious, charismatic and have high energy and I thought, “You know what? Let’s start something new.” So I brought them aboard and the three of us are looking at all kinds of different ideas with really no firm game plan right now. It is an unusual business model, but I think it is a good idea and I am having a lot of fun and it has reenergized me, so it is all positive.
“Experience has its up side, but the downside is that you tend to think in patterns once you have experienced different things.”
Avocationist: What a great opportunity for them.
Dave: I think I am benefitting more than they are in that I am completely reenergized by their youth, but the fact is that sometimes having very limited experience is a positive. You tend to think out of the box more naturally. Experience has its up side, but the downside is that you tend to think in patterns once you have experienced different things. These guys are not at that point yet, and I find a lot of the angles they take to be very refreshing. It has been a positive experience and I have been very lucky.
“I didn’t love it because I liked dealing with regular folks.”
My career has been an extremely unusual one in that I was a conventional stockbroker, dealing with the upper echelon when I was quite young. I didn’t love it because I liked dealing with regular folks -- people who were struggling to pay off their mortgage or couldn’t decide what to do with their 401(k) contribution. But of course that is not where the money is, so I knew that it wasn’t for me long-term. I caught a very lucky break, and sometimes luck does play a pivotal role in a career. I gave a speech one night to teachers on financial planning and I used a lot of humor, and I could see that the humor was cutting through the intimidation and dryness, and I used anecdotes instead of the conventional charts and graphs. I thought I was onto something. I am amazed I did this at this age, but I quit; I just walked away from being a broker.
Avocationist: How old were you then?
Dave: I was 25. I walked away and I set up a company teaching financial planning to teachers, and I settled for a much lower income. It was a very modest enterprise but I didn’t really care. Maybe six months to a year later I got the idea to work on a book, and that led to “The Wealthy Barber,” which told a story about a barber who would become wealthy. He had done the common sense things right in his financial planning approach and he was now educating younger people in their 20’s while he cut their hair.
Avocationist: How did you come up with the idea for “The Wealthy Barber”?
“I had a lead character who shared all of those fears and I think the reader could relate to him.”
Dave: I actually came up with one book idea before I stumbled onto “The Wealthy Barber” called “The Ultimate Guide to Losing Money,” and it wasn’t story-based, but it was very humorous. I think it was close, but it didn’t bring the reader in to the same extent “The Wealthy Barber” did. Then I shifted over to “The Wealthy Barber” and almost immediately it took off. I think a lot of it is just from watching people and that old thing about “Where is their pain? What aren’t they getting?” I think in financial planning a lot of the pain revolves around a lack of understanding of the common sense basics. So those are not that tough to teach if you can get past the intimidation and past the skepticism, past peoples’ lack of confidence. That is what the story format allowed me to do. I had a lead character who shared all of those fears and I think the reader could relate to him. “If this guy can learn, maybe I can learn with him,” and I think that is why the book did well.
Avocationist: So when you wrote your first book on “How To Lose Money” and it didn’t work out…
Dave: I didn’t launch it. I got about three months into writing it and -- people think I am kidding when I say this -- I watched the TV show “Cheers” one night and that is what got me onto “The Wealthy Barber.” The original title was “The Wealthy Bartender.” I thought I’d use a fictional setting and use the give and take of dialogue -- I thought that would be a more effective way to teach it. I actually got about four chapters into “The Wealthy Bartender;” the problem was the alcohol, and all of the subplots revolved around misbehaviors in bars and I wasn’t 100 percent comfortable with that, so I moved it to the barber shop. I thought it was a good idea and was very confident I was on the right track.
Avocationist: How did you develop your characters?
“I put everything I had into that book.”
Dave: I didn’t have a background in writing; I think I am a good speaker, but writing was not something I focused my energies on. My father is extremely literate and my sister is a professional editor, so I was able to harness their strengths. I got them involved early; they didn’t come in late as a conventional editor does. They helped me on an ongoing basis with character development and dialogue, and I think that is why the book turned out fairly well. Drawing down from characters and settings I was familiar with made the whole writing process easier. It took a year and a half to write that book, working full-time, all the time and my father and my sister worked almost every night on it as well. We would re-craft pages and redo them over and over and over again. I put everything I had into that book.
Avocationist: Did you enjoy the success the book received?
“I hit a point where that much time on the road was overwhelming.”
Dave: I self-published the book and my goal was to sell 10,000, and I think it is up to about 2.7 or 2.8 million now. It took on a life of its own, and I enjoyed that career immensely. At the peak of the popularity of “The Wealthy Barber,” the PBS show was airing where I gave my speech on the concepts in the book, and the speaking requests were coming fast and furious. And then I decided to go in a totally different direction. I really enjoyed it but I hit a point where that much time on the road was overwhelming. I had young children and I thought I wouldn’t mind trying something new, so I literally quit. I walked away and I retired completely from speaking and I went into publishing cookbooks and I started homeschooling my kids for three years. It was probably the best decision I ever made. I enjoyed the whole thing immensely and I don’t have any regrets whatsoever.
Avocationist: How old were you when you made that decision to step back?
“I didn’t want to get to the point where I wasn’t enjoying it at all, so I wanted to try something new.”
Dave: I think my son was in grade 5, so I was about 36 or 37. It was probably about 10 years ago now, so it was well into “The Wealthy Barber” success. Financially, “The Wealthy Barber” had been very rewarding and gave me some flexibility and freedom that others don’t have. Being financially stable, unlike I was when I first quit my broker job, did give me some courage. I was still enjoying my career, but I was not enjoying it as much. I didn’t want to get to the point where I wasn’t enjoying it at all, so I wanted to try something new. Getting involved in the publishing of cookbooks was ideal because I could take what I learned publishing “The Wealthy Barber” and I could apply it to the model, but I didn’t have to do the traveling and hit the road; the authors did. It gave me the flexibility to homeschool my children, and really, it has been a great experience.
Avocationist: How did you get into publishing cookbooks?
“When your mother tells you to publish a book, publish it!”
Dave: Two women, sisters from Ottawa, Canada called me up one day and pitched me on a cookbook. This was in 1996 and I wasn’t interested -- I didn’t know anything about cooking and didn’t want to be a publisher. I wanted to be a finance expert. They kept badgering me over a period of months and sending me e-mails, phoning me, coming to see me speak and showing me sample pages of their book. Eventually they wore me down. My mother actually cooked some recipes and said, “This food is phenomenal!” You can do all the focus groups and formal research you want, but as I often tell MBA classes, “When your mother tells you to publish a book, publish it!”
I decided to take the plunge and it has been a phenomenal experience. They have written three cookbooks and have sold almost 2 million copies total. It has been a very lucrative business because we have kept it all in-house. We controlled the entire process including distribution, so the margins have been quite good. More importantly, it has been very satisfactory in terms of the impact it has had on people.
“I have been very lucky in my career to be involved in a couple of projects that have been positively influential on others.”
I think I have been very lucky in my career to be involved in a couple of projects that have been positively influential on others. People have used “The Wealthy Barber” to get their finances in order. They have used the cookbooks to eat much more healthfully. There is great satisfaction that comes from that and it is extremely motivating.
“Make sure you love the products you are associated with.”
One of the things I have tried to teach my own kids is to make sure you love the products you are associated with and that you don’t want to sell commodity-oriented products. You want to sell things that you really believe are difference makers; things that you are proud to have your name associated with and things that can help people. When you do that, you tend to get more creative and more passionate.
Avocationist: When you started working with the cookbook sisters, were there other things going on in your life that made you think, “Hey, I could apply my business model differently than I have before?”
Dave: I would love to say yes, that I was looking for an idea and this happened to fit and I was that clever, but I really wasn’t. I was looking to do something different, and I admit that it was not in publishing. I don’t deserve much credit for the cookbook because I actually said no for a long time and didn’t recognize the potential of the books. If it weren’t for my mother, I would not have taken it on. I was a little lucky there, and I think a lot of people out there say it is not about luck, it is all about persistence and stick-to-it-iveness and skills, and I think those are key, but luck does play a role in life.
“One thing that helped me is that I am always open-minded.”
I have had the greatest parents you can have and that is lucky. I didn’t do anything to deserve that. I have had phenomenal health in my life. I think the combination of those two things alone makes me a pretty lucky guy. And then little breaks like my mother looking at the cookbook and saying, “Wait a second; I think this book is different and any one I have seen.” That really swayed me. So no, I didn’t have a master plan. It was all quite a lot of luck. But one thing that helped me is that I am always open-minded. I don’t close my mind off to something.
Avocationist: Are you selling it through a website? You said you controlled the distribution.
“I think one of the reasons they made so much money is because money is not their focus.”
Dave: Yes. We have the website Eatshrinkandbemerry.com and control the distribution there, and in Canada we sell through conventional bookstore channels. In the States we sell it through the website and through QVC. It has been a great model and the sisters have been a delight to work with. I talked earlier about how the great satisfaction in life comes form helping other people, and these two are completely motivated by helping others to eat more healthfully. I think one of the reasons they made so much money is because money is not their focus.
Next: Dave talks about leaving his speaking career to teach his kids.
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