James Gamble settled in Cincinnati accidentally. He was 16 years old when his parents were travelling by boat to settle in Illinois. But James fell ill during the journey. And so, the family deboarded before reaching their destination. And before they knew it, they were settled in Cincinnati. James’ father started a nursery that did well in the growing town. And James himself decided to apprentice under a soap maker when he recovered his health. 4 years later, when he graduated to start his own business, he married Elizabeth Norris.
A few years after that, William Procter was going westward from New York. When tragedy struck. His wife passed away in Cincinnati. William felt no desire to continue his journey anymore and settled in Cincinnati. His candle making business found clients in Cincinnati. And he remarried again to Olivia Norris.
Cincinnati was a growing town in the 1830s. The river helped transport goods and so small scale industries popped around. But in a town of merely 35,000 people, there were a lot of soap and candle makers. 16 to be exact.
Seeing his two son-in-laws struggle, Alexander Norris suggested to James and William to become partners. It was a great idea because both of them needed the same raw material for making their products: animal tallow. And both of them had the same client base as both soap and candle were essential household items.
By joining forces, they could bargain collectively and get better rates for their raw material. And maybe their sales could be streamlined as well. And so, in 1837, James Gamble and William Procter got together and invested $3,596.47 each to start a company. P&G.
Managing uneven growth
P&G started growing immediately. Especially because the two brothers in law started running newspaper ads. But it didn’t grow evenly. The candle making business grew three times faster than the soap making!
Most partnerships would have failed with such an uneven growth. If William Procter would have asked James Gamble to take a step back and take just 1/3rd the profits, P&G would have failed too.
But Procter never pressed on the point. Never asked for a bigger share of the profits. As long as he saw that Gamble was not slacking in effort, he was satisfied.
Both Procter and Gamble were sticklers for maintaining the quality of their products. As a result, during the American civil war, they got the Union army’s contract for soap and candles.
P&G kept on growing. Sales exceeded over a million dollars for the first time after they both were together in business for 22 whole years! And the growth continued after the civil war as soldiers went back home and wanted the same high quality products at their home too.
But it was another accident that made P&G a household brand.
The soap with air
42 years after P&G had started, a factory worker made a mistake. He left the soap making machine running during his lunch break. The soap mixture was whipped for a much longer duration than usual. Which meant that more air had seeped into it.
The soap still looked the same and lathered well, so it was still cut into batches and shipped. And surprisingly, the customers loved the new soap. Not because the soap lathered better. But because the soap floated in the water. It was easier to find it in bathtubs and basins.
P&G capitalised on this mistake. And changed processes to make lighter soaps. They then ran an ad campaign for “ivory soap” that took America by storm. For the first time ever, soap sold better than candles for the company!
- Life is ruled by randomness. Lucky and unlucky events will occur. So don’t reward the results. Reward the effort.