Belkin International: Chet Pipkin

Chet Pipkin was the kind of kid who loved to take things apart and put them back together. As a young man in the early 1980s, he started hanging out in mom-and-pop computer shops, where he realized he could meet a growing need by selling the cables that connect computers to printers. That simple idea became the main ingredient in Chet's secret sauce: instead of making his own computers, he would make the accessories needed to make them work. Belkin International eventually grew into a massive manufacturer of electronic goods — last year, it sold to a subsidiary of Foxconn for more than $800 million. PLUS in our postscript "How You Built That," how Clay McCabe decided to rebrand his dad's zipper repair business into Zipper Rescue, a repair kit that helps people fix their broken zippers at home. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

  So before we start the show, I just want to let you know that we've just released a bunch more tickets for our live show in Portland on Thursday, May 16. I'll be joined live on stage by Seth Tibbet, the creator of Tofurkey. So if you haven't gotten tickets, there is still a chance to grab some. Our live show with Seth is supported by American Express. And to get tickets, go to nprpresents.org. And I hope to see you in Portland.

• 0:28Speaker 01

  There were days when I thought nothing could stop us, that this is going to work and this is going to be the most brilliant thing ever. And there were other days that were really, really dark. And I just would hold my head in my hands and say, wow, this is never going to work.

• 0:52Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 1:06Guy Raz?

  I'm Guy Raz, and on today's show, how a kid in California watched the PC revolution unfold in front of him and saw the chance to make his fortune with computer cables.

• 1:23Guy Raz?

  So if you're a regular listener, you know how much I love the gold rush story because there's a simple elegance to it. All those people going to mine for gold needed tents and jeans and pickaxes and shovels. They needed food supplies and lodging and transportation. Entire industries were built around the rush. And people who had nothing to do with gold made a lot of money, which can sometimes be the smartest way to think about a business, especially if you're Chet Pipkin. Now, I'm going to guess you've never heard of Chet Pipkin. He doesn't do a whole lot of interviews, and he generally keeps a low profile. But there is a good chance that you've heard of the company he founded.

• 2:07Guy Raz?

  It's called Belkin. And if you own a computer, or a smartphone, or a tablet, you very likely use a Belkin product. Because Belkin makes all of the accessories you need to make your tech devices work. Things like cables, and surge protectors, keyboards, and mice, networking devices, you know, that kind of stuff. It's a company that was built around the PC boom, and then later, the smartphone boom. Now, if you think of launching a business as a marathon, where the starting line is the idea, and the finish line is a successful company, I think we can all agree that not everyone starts that race in the same position. I mean, some of the founders we've talked to, they clearly start out with certain advantages.

• 2:51Guy Raz?

  Maybe they've got money in the bank, or they know people who have lots of money because they went to a top business school, or they just start with a valuable experience in a certain industry. But in Chet Pipkin's case? Chet launched Belkin when he was just 21 years old. He didn't have any money. He had dropped out of college, and he certainly didn't have a clear idea of how business even worked. But he did have one really important advantage: a good childhood and a stable family life. His parents were both blue collar workers who moved to Hawthorne, California, from the farms in the Midwest.

• 3:29Speaker 01

  The Second World War brought them both west. My mom doing work in support of the war effort. My dad also. And then eventually, he was drafted in to the Army Air Corps. And then they both settled in Southern California after that.

• 3:47Guy Raz?

  Were your parents educated beyond high school?

• 3:50Speaker 01

  Very little formal education. So I think my dad made it... A little bit past the eighth grade, and the same was true for my mom. I think partially because my mom didn't have the benefit of a lot of formal education. It was really key to her. She was definitely a lifelong learner. She's the best speller that I've ever met in my whole life. How she got there with that limited education, I don't know. My dad was a machinist. He worked on a lot of defense and aerospace work. What he could create out of metal with his hands was really inspiring.

• 4:35Speaker 01

  But yeah, they both had very, very little formal education.

• 4:40Guy Raz?

  Now, besides having a great family, the other advantage Chet had was the time and the place he grew up. Time, because he finished high school in the late 1970s, when personal computers were just starting to become a thing. And the place, because Hawthorne was a hub for aerospace and defense contracting, so there were lots of engineers in town. Anyway, after high school, Chet started classes at UCLA. He was still living with his parents and working a few different jobs for money. But he didn't even make it through a year of college, because instead, he was spending all of his time just hanging out at all these different computer shops close to his house.

• 5:23Speaker 01

  A lot of these engineers had set up these shops. They were kind of hobby shops or small mom-and-pop-style stores, selling these early models of PCs and printers and modems. And yeah, more of them than not were on Hawthorne Boulevard. So it was a very rich place to be able to go from shop to shop and just kind of walk in, ask a bunch of questions, observe, and that's precisely what I did.

• 5:56Guy Raz?

  But were you into computers? Was that, I mean, were you like trying to program computers and take them apart? Or was it something different?

• 6:04Speaker 01

  I was definitely interested in how things work. So part of what I did as a kid was I took things apart, just to kind of see how they worked. And every so often, I was able to successfully put them back together. And I had a lot of ideas about how to make things better. I imagined creating a different kind of showerhead that would maintain a constant temperature. I thought about putting little metal strips in the road to be able to allow cars to kind of drive themselves down the road and different kinds of things. So I didn't know anything about computers, per se, but it looked like it was going to

• 6:46Speaker 01

  be this next huge generation of transformational change for how people might live, and I wanted to learn as much as I could.

• 6:58Guy Raz?

  So you are a student at UCLA, hanging out around these like early PC kind of, I don't know, enthusiast shops. Did you eventually like try to get a job at one of these places?

• 7:14Speaker 01

  So there was a bunch of things going on for me all at once. I was working at the YMCA as a day camp counselor. Most of these kids were kids that had had negative encounters with society or people of the law or something. I was also working for an electronic components manufacturer. I remember I was counting some of these things and I asked someone, I go, what do they do? And the person says, it doesn't matter what they do, you just count them. And so I just sort of smiled and got a catalog and figured out what it is they did do. And yeah, I was going to class, I should have been doing my homework, and I was learning as much as I could about PCs.

• 7:59Speaker 01

  So instead of spending time on my studies and my homework, I finally just said, why don't I just give it a go? And then it's either going to work, or I'll get it out of my system and then I will take it from there. But this is just something that I had to go do.

• 8:15Guy Raz?

  And what was it? I mean, what was, I mean, did you have an idea what that thing was going to be? Or you just thought, I'm going to do something in computers?

• 8:25Speaker 01

  Yeah, so the early thought was, I'm gonna understand this, and it's going to be inevitable that there are gonna be gaps, that there are gonna be things that people want to do that other people are not thinking about. So I didn't know exactly what that was, but I knew the kinds of things that I was looking for. And then as I began to hang out in these stores, and most of the folks seemed to enjoy having me around, I just watched. And one of the things that was an impossible situation to miss almost from day one was these folks would buy this PC and a printer,

• 9:08Speaker 01

  and then they would say, "How do I make this work?" "Well, you just plug it in." "Okay, well, can I have the thing to plug it in with?" And because these computers were being made by all these different manufacturers, they had different connectors on them. And the printers had different connectors on them. And it's not like the way that it works today, that there's a relatively small number of interfaces to get things to work together. It was almost unlimited in that day and age. It was an absolute nightmare for folks who were just trying to get this stuff to work for them.

• 9:45Guy Raz?

  This sounds like the early days of the railroad, like they had different gauges on the rail line. So like when one railroad would try to connect with another one, they wouldn't connect because they were different sizes.

• 9:55Speaker 01

  Yeah, yeah, that's exactly right. And there was no reason for things to work across these platforms until there was. And, um, yeah.

• 10:05Guy Raz?

  It reminds me of trying to sync my Google Calendar with my Outlook calendar. Impossible.

• 10:10Speaker 01

  Yeah, yeah. In some ways, things have really evolved and gotten better. And in other ways, we're in exactly the same spot, aren't we?

• 10:20Guy Raz?

  So take me into one of these PC shops in 1981, right? Or 82. What does it look like inside? Is it like shelves stocked with all kinds of different accessories and, you know, different kinds of computers? Or was it more like a Soviet supermarket in 1985?

• 10:40Speaker 01

  So they all looked very, very similar. The proprietor was almost always doing it on a part-time basis. It would be people walking in saying, "Hey, I've heard that I can do word processing, that I do not need to use my typewriter anymore. Can you help me with that?" So this was unbelievably explosive. It was so exciting. It was so much fun because this was transformational change. And of course, it was changing so, so quickly. So walking into these places and talking to folks was one of the primary ways that people were able to learn and to be aware of things.

• 11:25Guy Raz?

  All right. So you are this young guy and you're watching this explosion of all these different small companies trying to get into this PC thing because they clearly see where this is heading. It might be word processing and, you know, some spreadsheet stuff now, but it's going to be something much, much bigger. What I wonder is, why at that point didn't you think, "Hey, I want to be a PC maker. I want to get into the PC thing and start making personal computers." Did you even think about that?

• 11:56Speaker 01

  It definitely crossed my mind, but it was pretty quickly dismissed. The amount of capital that it would have taken to do that in any meaningful way would have been more than I could have imagined being able to kind of muster and do. And secondly, there seemed to be a lot of people going after that space. And the void I saw looked even more compelling and more exciting to me than making the other hardware.

• 12:27Guy Raz?

  And that would the void that you saw was the cables to connect these things?

• 12:32Speaker 01

  Yeah, I mean, there is no, no missing it that, wow, the big void here is providing this elegant tool to a folks to make this stuff work together the way that it should be able to. So the path we took, yeah, was just overwhelmingly obvious to me.

• 12:54Guy Raz?

  So it sounds like you saw the PC revolution happening. That was the gold rush. That was where all the people were rushing into. And you're thinking, I'm going to sell pickaxes and shovels.

• 13:06Speaker 01

  Yeah, I think that that's a really good way to phrase it. We didn't have the capital to do the stake in the, in the mine itself, but there were definitely things that people needed that was a perfect fit for us.

• 13:20Guy Raz?

  Okay, so here's what I'm trying, I'm trying to figure this out. You're like 20, 21. You realize that the connectors, the cables, that was an opportunity. Like, where do you get the wires? Where do you get the, the plastic to cover the cables? Where do you get the, the pin connector thingies?

• 13:37Speaker 01

  So I'd been taking the stuff apart and putting it back together. I'd been wiring up things on my own, kind of like cannibalizing some of the things for other things. So I had hands-on experience from tinkering and, and building. And yeah, just kind of dive in and do it. So I went off and, and bought some cable and bought the wires and bought the connectors. And then I started putting them all together.

• 14:05Guy Raz?

  I think you are still living with your parents at this point, right?

• 14:09Speaker 01

  That is right. And I had, I'd been in the same house my entire life. So this first started to happen on my parents' dining room tables, where I was building the stuff at night. And after a couple of days, my mom goes, Chet, I love you very, very much. You're, you're going to get this stuff off of this table. So our first big move was from there to the Garage and we were there until we moved again. So yeah.

• 14:41Guy Raz?

  When you say we, was it, was there a we or was it just you?

• 14:44Speaker 01

  Yeah, it was just me.

• 14:46Guy Raz?

  Yeah, it was you. It was you at that point, right? There was no we.

• 14:49Speaker 01

  Yeah, yeah. But it's just really hard for me to use an I or a me.

• 14:55Guy Raz?

  And so I'm trying to picture this. You had like a, like a soldering iron and you know, what's that metal that you used for soldering? I can't remember. I used to do when I was a kid.

• 15:03Speaker 01

  Solder, yeah, which is

• 15:04Guy Raz?

  Solder, right. Yes, thank you.

• 15:05Speaker 01

  Like tin and lead? Yep. Uh huh. The very first things that I made, I used my dad's tools. And then he was very curious. He was very supportive. He was never in my hair, but he wasn't far away. And he would watch me work. And then he would actually machine other little tools and things saying, "Hey, do you want to give this a try? I think that this might be helpful." And he didn't understand anything about the electronics, but boy, that guy was really good at making stuff.

• 15:40Guy Raz?

  Yeah. So I'm trying to imagine like you were, you know, it wasn't that expensive. You were buying some wires, some cables and then the different connectors and then just soldering them together. Did they look like homespun, like Frankenstein wires? Did they actually look professional? Like they were made in a factory?

• 15:58Speaker 01

  The first stuff we made was really bad. So it was really Frankenstein stuff and it functioned. Yeah.

• 16:06Guy Raz?

  And you would just walk into these computer shops where you'd been kind of hanging out and then do the owners probably. Do you just say, "Hey, I'm making these cables. Do you want to sell them to your customers?" Like, was that your pitch?

• 16:18Speaker 01

  That is exactly right. I said, "Hey, I can build these for you. Would you like for me to do that?" And the answer was almost always yes. And then the next question from them would be, "How much do you want for them?" And I said, "Boy, I don't know. What do you usually pay?" And then in those early days, the cost that I was paying for the components wasn't competitive. Some of the times I was buying it at a place like a Radio Shack or an electronics store or something. But my labor was, you know, free. And there was no doubt in my mind that I didn't have to worry about that. I just started to make it work and just get a little bit of scale. And then I'd figure out how to get the cost right later.

• 17:02Guy Raz?

  All right. So you started to make these cables, Frankensteining these cables. This is like, what, 82, around then? And did you think, this is it. This is my business. This is what I'm gonna do. I'm gonna incorporate a business and make a go of it?

• 17:18Speaker 01

  Yeah. So I first started getting going, probably would have been around 1980-ish or so. And then in October of 1982, it was either go back to school, get another job, or dive into Belkin on a full-time basis. And I chose the latter.

• 17:38Guy Raz?

  All right. Your name is Chet Pipkin. And the company is called Belkin. So I think the Ken comes from the Pipkin. But why isn't it called Pipkin? What's the story?

• 17:47Speaker 01

  Yeah. So I didn't want to use Pipkin because I didn't want people to see that, hey, I'm Chet Pipkin and the name of the company is Pipkin. It just seemed too small. And again, at this time in my life, there's a lot going on. And a friend of mine, he and I were gonna start a different business, not Belkin, but something else. And because he and I were gonna do that, I had bought letterhead and business cards that had said Belkin, his last name again with B E L. And so then when we went to begin Belkin, I called him up. He was doing other stuff then. I said, hey, do you care if I use this letterhead

• 18:30Speaker 01

  and business cards that say Belkin? And he said, no, go right ahead. And yeah, that's how we got our start.

• 18:37Guy Raz?

  That was the name. So, all right, and was it still just you in 1982?

• 18:43Speaker 01

  Yeah, so I drafted my brother, who was working for me for free. My dad was helping out, like making the tools and being able to make things easier. My friends would just kind of come by to see me because I didn't have a lot of time for any kind of social time then.

• 19:03Guy Raz?

  Yeah.

• 19:04Speaker 01

  So they would come, hang out with me, make things with me while they were there, and then they would leave. They would go off and do other things. And then hired the first person on a full-time basis, and then hired the second and hired the third, and we all worked around this big table I had built. It was a four-by-eight piece of plywood that I put a piece of laminate on.

• 19:31Guy Raz?

  You'd sit around the table and make cables, the three of you?

• 19:34Speaker 01

  Correct, yeah. Yeah, and then I would go out and sell it. So then I got our own separate phone line that we put up in the garage.

• 19:42Guy Raz?

  You're still in the garage? You're still in your parents' garage?

• 19:45Speaker 01

  Still in the garage, yeah. Yeah, and we had cables, long, long lengths of cable, literally going up and down the sidewalk. Neighbors would come out and say, "What are you guys doing?" We would explain it, and they'd chuckle or shrug or something. And then, as more and more was taking place there, you know, bigger and bigger trucks were coming out, delivering goods, and there was simply just too much going on for the garage to hold us. So then we moved to our first building over the holiday, 1982, and we've always called our official start date January 1 of 1983, but the actual work started a couple of years prior.

• 20:27Guy Raz?

  So what I'm trying to figure is, how were you growing? I mean, presumably you started out by just selling these to these shops on Hawthorne Boulevard. Were you driving all over L.A. and going to different shops? Or were different shops finding out about the cables just through the grapevine?

• 20:44Speaker 01

  Yeah, in the earliest days, it was all outbound. And almost immediately, our constraint was our ability to make the stuff quickly enough. So, we actually didn't have any trouble getting orders. We had trouble keeping up. And then, as we increased our capacity, then I would hit a couple more places. And then, I think, we ran our first ad in Computer Dealer Magazine. And we got an order for 100 pieces. It was one of our biggest orders ever, for cables that went from the parallel port from an IBM PC to an Epson printer. And they bought 100 of these things.

• 21:28Speaker 01

  It was the student store from Carnegie Mellon University.

• 21:32Guy Raz?

  Oh, wow. So, why wouldn't a computer company, like IBM or Apple at the time, have just made their own cables to connect to their own products or another product? And just said, "You can't make these. We are going to patent this technology, and nobody else can do this."

• 21:51Speaker 01

  Yeah, so I think that there were a lot of reasons that it didn't. One was IBM had their hands full just making enough PCs. And it feels like it was probably years. There were just not enough of them getting built. And they had no idea what printer any given small business or consumer was going to choose. And most of those printers had different connectors on them, so they wouldn't even know which one thing to make. There really wouldn't be such a thing. So, I think, a little bit too small and too much work for them. And for us, perfect size and just the right amount of work.

• 22:35Guy Raz?

  So, I think in year one, official year one, which was 1983, you hit $180,000 in sales that year. Was it just like four or five people making every cable?

• 22:48Speaker 01

  Yeah, let me think about the number of people. So, at the end of 1983, we probably...

• 22:55Speaker 01

  We must have been like in the 25 range or something. Yeah.

• 23:01Guy Raz?

  Chat, in 1983, if I have my math right, you were 23 years old. You got 25 employees. You're doing $180,000 in sales. You are running a business. I mean, that must have been like, how did you know what to pay people? How did you know how to manage people, how to do the accounting? Like, did you eat, were you overwhelmed with all those things?

• 23:22Speaker 01

  Yeah. So that's a really good question. I remember saying to my dad, as this was just scaling up at the house, I go, Dad, I don't know anything about accounting. I don't know anything about like being able to run a, run a business.

• 23:40Guy Raz?

  Business licenses, all that stuff.

• 23:42Speaker 01

  Exactly. And he looked at me straight in the eye. And he said, you don't worry about that one bit. You're going to figure all that stuff out. You just stay focused on creating things that people want. And if you get that part right, the rest of it's all going to work. But there's a lot of funny, funny things happened along the way from me not knowing. And then there were moments when, when things happened.

• 24:14Guy Raz?

  Like what?

• 24:15Speaker 01

  There's a bunch of those. So, so in October of 82, I was actually 21. I was almost 22 years old. So I was 21 when I, I embarked onto this. So I knew very, very little. When we moved into that building, I didn't realize we had to turn the electricity on. So it had power, but then the guy came to turn the power off because it was from the old tenant. And so we were literally in there working. This guy shows up from Southern California Edison. He walks to the back of the building and, and he turns our power off. Right? And so I look out the back door and I go, are you going to turn the power back?

• 24:55Speaker 01

  And he basically says, hey, you idiot, you have to call in and actually establish service. And then somebody came from the city and said, hey, do you have a business license? And I go, what is that? How do you get one? And so, you know, there must have been 50 of these moments where I just did not know.

• 25:19Speaker 01

  And somebody eventually asked or came calling and then, you know, we just took care of it then. But, you know, I didn't know how to do the books.

• 25:28Guy Raz?

  Yeah. How were you like collecting, you know, billing people and accounts receivable and payable? Like, did you just have papers all over the place, just a jumble?

• 25:37Speaker 01

  Yeah. So, you know, we created a purchase order form to kind of buy things off of, but it didn't have like purchase order numbers. We just went like one, two, three, you know? Really, really crude stuff. We didn't have a lot of money always. The cash flow was very, very tight. So if it was a bill, I often just stuck it in a desk drawer and just said, you know, I'll deal with it later. My girlfriend at the time, she's now my wife, Jan, worked in a family business in Northern California and she knew how to do all this stuff. And so then she would come down for the weekend and she would dig out all of these old bills and get them taken care of and kind of show me how to do the books.

• 26:21Speaker 01

  And it took a little while for me to get that concept, but she was a really, really big help.

• 26:26Guy Raz?

  So she actually saved your butt in the early days?

• 26:29Speaker 01

  She did. Yeah. And then after we got married, she came to work at Belkin. And I remember I got a call from a guy. He worked at a place called Computer Stop, one of our bigger accounts. He said, hey, this new collections person you have is an absolute, and I won't use the word, but it was not a very polite word. And I said, oh, you've met my wife, Jan. And, yeah, so everything, everything worked much, much better. And she was unbelievably brilliant and awesome. So the quality went up, the production efficiency

• 27:13Speaker 01

  went up, our receivables went down. I was not always really pleasant to work with. She was very, very patient with me, though.

• 27:22Guy Raz?

  But, I mean, did you feel any stress about all of those, those things? I mean, the incoming and the mail and the letters from the IRS or whatever it might be, did it ever stress you out?

• 27:33Speaker 01

  Oh, it was a nightmare. There were days when I thought nothing could stop us, that this is going to work and this is going to be the most brilliant thing ever. And there were other days that were really, really dark. And I just would hold my head in my hands and say, wow, this is never going to work. We had a customer file for Chapter 11, and we didn't have the money to uncover the money that we weren't going to get from them. And I went to my dad to borrow money. And my mom and dad didn't have a lot of money. And he took a loan out on the house, the very house that Belkin had gotten its-

• 28:17Guy Raz?

  Start?

• 28:18Speaker 01

  Beginning days in, yep.

• 28:20Guy Raz?

  How much money did he take out?

• 28:22Speaker 01

  I think I first got $7,000-ish, and then I think it was 20-some-odd-thousand-ish.

• 28:27Guy Raz?

  Wow.

• 28:28Speaker 01

  Yeah, that was a lot of money for them. And I remember my mom looking really, really scared and saying, you know, what if you don't pay me back? And I said, Mom, I will.

• 28:43Guy Raz?

  When we come back in just a moment, how Chet paid back that loan to his parents, and how Belkin grew into a company worth hundreds of millions of dollars. Stay with us. I'm Guy Raz, and you're listening to How I Built This from NPR.

• 29:15Guy Raz?

  Hey, welcome back to How I Built This from NPR. So the early days of Belkin were up and down financially, especially because the entire operation was self-financed. But after a few years in business, by 1985, things were looking pretty good. Chet had moved the company into a bigger building, and at this point, there were about 50 employees, and they were still making all of their own products. But Chet started to realize that if they wanted to scale up, they would have to start doing things a little differently.

• 29:48Speaker 01

  There was a moment, I think around 1985, when the person who was working in reception came and said, hey, there's somebody here to see you. And the person was coming to see us from a manufacturing company in Taiwan. And it was the first product we saw that was being built in Asia. And it looked pretty good.

• 30:14Guy Raz?

  What was it? What was the product?

• 30:16Speaker 01

  It was a parallel printer cable to go from the IBM PC to a parallel printer. And I asked him what it would cost to buy. And the price he quoted was less expensive than what it cost us to build that same item ourselves. So that moment was a pretty scary moment.

• 30:38Guy Raz?

  Scary because you thought, wait a minute, these people can crush us?

• 30:42Speaker 01

  That is exactly right. And it appeared to me just instantly in that moment that we were going to have to start thinking more globally about how we would manufacture things. And I didn't know if I had permission to do that. So I'd grown up in this household that had appreciated things being made in the US. And so I went to see my dad. I brought this cable to sort of explain to him what we just talked about. And I just kind of paused. And he said, yeah, you need to explore it. And if it makes sense, you've got to do it.

• 31:20Guy Raz?

  Why did you think you needed his permission? It sounds like, was it that you needed his sort of approval that you were going to make it outside the US? Because it's permission. I mean, it was your company.

• 31:31Speaker 01

  Yeah, yeah. So it would be an emotional or spiritual permission that I wasn't violating anything that my mom or he had stood for and that it was just going to be OK with them.

• 31:48Guy Raz?

  You needed his stamp of approval to say it's OK?

• 31:50Speaker 01

  I did. I did. I certainly wanted it. It was certainly easier with it.

• 31:55Guy Raz?

  You know, I remember this as a kid. It's hard to believe now, but like "Made in Taiwan" meant, used to mean that it was cheap. And now, of course, Taiwan, Japan, Korea, you know, you think of very, very high quality. And now, of course, that's happening with China and Vietnam and other countries in Asia. So, did you, like, did you fly to Taiwan and find a factory to work with there?

• 32:16Speaker 01

  Yeah, so I think the phenomenon you speak of happened, you know, very, very rapidly, at least from a US perspective. I mean, all that is part of what we were living in real time. And, yeah, I did exactly what it is you said. I just hopped on a plane. So, I went to three places to explore what might be taking place in the developing world. So, I went to Taiwan, I went to China, and I went to India.

• 32:46Guy Raz?

  And what did you settle on?

• 32:49Speaker 01

  So, we were still manufacturing most of our things in the US. It was very critical to us that we maintain all of our innovation, our invention, our design. So, the bulk of what it is we do is still done in the US. But we began to learn about extending some of our global manufacturing in China. And, yeah, I, I literally, physically helped to set up some of our initial manufacturing lines there.

• 33:24Guy Raz?

  So, what did that mean for, I mean, did that decision result in, like, explosive growth for Belkin?

• 33:33Speaker 01

  It put us in a really enviable place. By that point, we were still doing the bulk of the manufacturing in the US, and that gave us very rapid turnaround. But now, we could also do high-volume things at as low a cost as anyone else was doing anywhere. So, because we, we were a little bit early there, it was an advantage that everybody else didn't have. And, yeah, those were very, very good growth years for us.

• 34:05Guy Raz?

  So, by 1991, you move Belkin headquarters to Compton, California. This is at sort of the, kind of the height of the gang wars. Compton was, of course, popularized in hip-hop and rap and...

• 34:22Guy Raz?

  A year later, you've got the LA riots in South Central, mainly in South Central LA. Tell me why you had decided in 91 to move the headquarters to Compton?

• 34:34Speaker 01

  Yeah, there were a few motivating factors. One was we were moving to bigger and bigger buildings and there simply weren't that many of them available. Two, real estate was less expensive. I had spent and continued to spend a lot of time doing community service work and that was mostly with youth and it was mostly with at-risk youth. So I was very comfortable in these communities and in addition to being comfortable, felt a reward from being able to invest in these areas. And yeah, it worked out very, very well for us.

• 35:16Guy Raz?

  When you had the upheavals and the anger connected to the verdict over Rodney King and it resulted in a lot of anger and obviously violence, what do you remember about that time? Were you at work that day? Were you in Compton?

• 35:35Speaker 01

  Yeah, I have so many memories of that day. I remember as the civil unrest started to accelerate, I was at work and on the drive home from the freeway, we could see the fires across South LA. And then the next day, there was a little bit of thought and discussion about whether or not we should be open and go to work and we chose to be open. We're in very close contact with the Compton Police Department saying, hey, we think it's important for us to be here and just promote normalcy.

• 36:18Speaker 01

  And we'd call into the police department every hour and now we could start to see fires out the back door of Belkin. And first, the feedback was, hey, it's all fine. You don't have anything to worry about. Hey, it's getting pretty active around here to, hey, you guys should think about what you're doing to the last call we made. I think the quote from the Compton police official picked up the phone was, get the hell out of Dodge. And I think that was probably about two in the afternoon or something like that. So we worked with all of our people on safest ways to get home. And that night, I'm at home, I'm watching the news and more and more buildings are burning.

• 37:01Speaker 01

  And I feel this overwhelming desire to go to work to make sure that things are okay. My wife convinced me that that was probably not a smart thing to do. So, yeah, you know, it was a really scary time. I had a lot of mixed emotions. I could really feel for people that felt that they were being marginalized and didn't feel a part of the system and not being heard. And the very next day or the day after that, I was at one of the branches of the LA YMCA. And I'm very active with the Y, both as a volunteer staff person and a board member.

• 37:44Speaker 01

  And right in the heart of that community at Weingart, we just immediately started leaning in and reinvesting and doing everything we could to start building bridges again.

• 38:01Guy Raz?

  Did you ever have any problems like convincing people to come and work with you at Belkin? Because, you know, because Compton kind of had a reputation as a sort of a tough place, a dangerous place.

• 38:15Speaker 01

  So I was always super comfortable there. Anybody that was working there, I think, was comfortable there, too. I started to get an increasing amount of feedback from the organization that when we are recruiting people, some of the people have got some concern about will they be able to get to and from work safely and are the amenities around there safe? And my early attitude was, you know, all of this works. The more that we're completely integrated in every way that we can imagine, the better off all of us are going to be. We did eventually choose to move. We're in a very established tech hub at the western end of town.

• 38:58Speaker 01

  The LA mayor at the time there also was a part of getting us to move. He was just trying to get us into LA. But... There's a big, big piece of me that misses being there in Compton.

• 39:11Guy Raz?

  I think you guys moved out of Compton in 2010, so you were there for quite a while.

• 39:15Speaker 01

  We were.

• 39:15Guy Raz?

  So just backing up then a bit, I really think that the first time Belkin took outside financing was like 2002. And up until that point, it was entirely self-financed. I mean, you had started it in the garage and, you know, you never took any money except for the loan from your mom and dad when you almost went under. Why did you take outside financing at that point? I mean, did you need it to grow and to scale?

• 39:43Speaker 01

  Yeah, so we were beginning to see around that time that while at that time, we were extremely well-capitalized, our balance sheet was great, we could start to see a time in the future to get to a bigger scale that we would absolutely need outside capital. So we made a conscious choice on that day because we didn't need it, but we figured that the day would come that we would need it and that that would be a great time to kind of, kind of start to learn.

• 40:16Guy Raz?

  At this point, like by the time we hit the turn of the millennium, Belkin, you know, you guys start to move, of course, you've moved out of just cables, you move into a huge product line of mouses, keyboards, laptop cases, surge protectors, power supplies, all kinds of USB products. You go on your website today and there's tons and tons and tons of things you make. How, how are you able to kind of stay ahead of competitors? Because I can go on Amazon today and buy the same cable made by Amazon, or, you know, there's 100 different companies that are offering very similar cables. How are you guys able to stay ahead of those competitors?

• 41:00Speaker 01

  Yeah, so we're really fortunate in that our reason for being, just as we were first imagining what this organization and this brand could be, is almost exactly the same as our reason for being now. So it's doing the hard, complicated innovation and engineering work that allows these interfaces to have worked together with one another. For thirty some odd years, more often than not, we've been able to do that in a little bit better or more elegant way than other folks.

• 41:41Speaker 01

  And as long as we're able to keep doing it, we're going to do OK. But we are only as good as how well we are doing things this morning. So there's a lot of positive pressure on us because the moment we are not best is the day that we will be at greater risk.

• 42:00Guy Raz?

  So I guess in the past year, in 2018, Belkin sold to a subsidiary of Foxconn, a company called FIT, for reportedly more than $800 million. At that point, I think you were the primary owner and shareholder of Belkin. But I don't know, was a part of you reluctant to do that? Because I have to assume that that would mean the end of your time at Belkin, which was your entire identity. By the way, do you have a role in the company today?

• 42:33Speaker 01

  Yeah, so I'm still running Belkin. And the folks at FIT have been kind and gracious enough to allow me to have an expanded role inside of FIT. Combination of FIT and Belkin has created a company doing $4.5 billion of revenue a year. So this is nothing about ending any kind of chapter, but rather, as all of our chapters has been, what are the actions we take? What do we do to put us in the best possible place to do our best work going forward? That is what this is all about. This is an enabler.

• 43:18Guy Raz?

  You know, I remember a conversation I had with Hyam Saban a couple of years ago, and I asked him about wealth. And I said, was it important to you early on to become wealthy? And his answer was interesting. He said, it was, but not because of the actual money, but the money was a marker of success for me. So I wanted to make more because to me, that was a marker of success. He grew up very poor. Was earning money, a lot of money, important to you as a marker in that way, especially given how you grew up?

• 43:54Speaker 01

  Yeah, I can really relate to that. So definitely, an important thing that what it is we're doing matters. But another measurement of success is how many people want this. And so, yeah, financial results out of an organization is one way to sort of measure whether or not you're being successful. I think also, for me, as a kid, I had this experience with my parents that I wasn't sure if they had a lot kind of set aside to give them a little bit of wiggle room when things got a little leaner. So I think I did set out to make sure that

• 44:34Speaker 01

  that was less likely to be the case for me. But that particular issue probably got solved a little while ago.

• 44:42Guy Raz?

  Your mom and dad lived, they're no longer alive, I think. Is that correct, right?

• 44:47Speaker 01

  Right. Yes, both of them have passed.

• 44:49Guy Raz?

  They did live long enough to see you become quite successful, very successful, in fact. Obviously, you paid their loan back. What did they make of it? Did they ever talk to you about it or reflect on it with you?

• 45:04Speaker 01

  They really felt, I think, a lot of ownership because they were able to participate in various ways. In those early days, my mom was making breakfast, lunch, or dinner for everybody that was working there. They lent money to the business. My dad helped to build so much of the tooling, he hung out there. And so, yeah, I think that they felt a lot of pride. But they always worried.

• 45:35Speaker 01

  So I would hear feedback from my friends and people that worked at Belkin, where both my mom and my dad would pull people off to the side and say, hey, is Chet doing OK? And they'd say, yeah, yeah, I think he's doing OK. So they felt a lot of pride, a lot of re-award. But I think they are always worried, and maybe that's just a little bit of what mom and dads do.

• 46:02Guy Raz?

  Chet, how much of your success do you attribute to luck? And how much do you attribute to your intelligence and skill and hard work?

• 46:11Speaker 01

  I attribute it mostly other people. There's nothing that I could have accomplished with the amount of a bunch of other people making great things happen. If it wasn't for my teachers, I wouldn't be here. If it wasn't for my mom and dad, I wouldn't be here. My brother and my wife, I don't think I'd be here. A thousand people at Belkin, thousands of people inside of FIT. It's each and every one of them, you know, making things happen every day. And, you know, more than anything else, it's because of the work of other people that I have been able to do what little that I've done.

• 46:52Guy Raz?

  That's Chet Pipkin, founder of Belkin. The official name of the company is Belkin International Incorporated. And it also sells networking products under the Linksys brand, which Belkin acquired in 2013. By the way, we did get into this during our interview, but the first really successful product Chet had back in 1983 was a connector called the Belkin Hamlet. It was for connecting the Apple 2C computer to different types of printers. And the name Hamlet, it actually came from a bad Shakespeare joke about the cable. 2C or not 2C?

• 47:49Guy Raz?

  Hey, thanks for sticking around because it's time now for How You Built That. And this is a story about something we almost never think about until it breaks: the common, everyday zipper.

• 48:02Speaker 02

  The moment of, oh, my god, my backpack just split open on me and I'm on a trip in Central America.

• 48:09Guy Raz?

  This is Clay McKay, and he's kind of an expert on broken zippers because he's got hundreds of stories.

• 48:16Speaker 02

  I had a musician that was getting ready for a show and his zipper had blown out on his pants, you know, and he was-- I mean, who wants to go play a show in front of thousands of people with your pants unzipped?

• 48:28Guy Raz?

  And when those zippers break, lots of people just throw the item away in the trash, even if it's your favorite pair of jeans or the backpack that's been everywhere with you. But this is not the way Clay was raised. When he was a kid in McCall, Idaho, his dad had a repair shop and he would fix everything.

• 48:47Speaker 02

  Every day, there was somebody who'd come into the shop and have a broken zipper, and he'd fix it in about five minutes.

• 48:55Guy Raz?

  And eventually, Clay's dad built a spinoff business. He made a kit for people so they could repair their zippers at home.

• 49:02Speaker 02

  So it was just kind of a full do-it-yourself kit that had a handful of different sliders in them, which are-- that's the little metal piece that you grab on to.

• 49:12Guy Raz?

  And the slider is the thing that can break or fall off a zipper. So this repair kit was like a little bag that had a bunch of different types of these sliders. And it also had these little staply things for attaching the slider back to the zipper's teeth. Anyway, all this is happening back in the early 1990s. Clay's dad put the repair kits on a very basic website and started to sell them in a few chain stores.

• 49:36Speaker 02

  So that was kind of like supporting our whole family, pretty much. You know, it was a meager living, but it was enough to get us by.

• 49:44Guy Raz?

  But things got harder after Clay's dad died. His mom took over the business, but she had a hard time keeping it up. So about five years ago, Clay decided to take it over.

• 49:55Speaker 02

  Because it didn't feel finished to me. You know, it felt like there was a lot more potential in what he had started than what was currently there.

• 50:02Guy Raz?

  But in order to tap into that potential, Clay decided the whole look and feel of the business had to change.

• 50:09Speaker 02

  I mean, the old website was like, it was straight out of the 90s. And it hadn't been changed since. You know, it almost got to the point where it was like so retro, it was cool again.

• 50:18Guy Raz?

  So Clay did a complete rebranding of his dad's zipper rescue kit. He updated the website, designed a new logo, and then he started to, you know, go out and shake the trees a little.

• 50:29Speaker 02

  You know, things started happening immediately. It was like, OK, I landed us a new account here and started to kind of get a handle on what was going on with Amazon and how, you know, how it all worked.

• 50:40Guy Raz?

  And actually, once he got the kit on Amazon, Clay had to deal with a wave of knockoffs. But he says one thing he offers that the other guys don't is customer service. In fact, he takes a lot of the calls himself. And helping other people repair their own zippers, it's become one of his favorite parts of the job.

• 50:58Speaker 02

  It becomes so meaningful when you're helping somebody fix something that's just literally irreplaceable. You know, it kind of gets me through my days. Like, if I'm having a hard day and I get that call of some cute old lady. You know, I've had a southern lady be like, you walk on water. And, you know, she, they're just so happy to have this little thing working again in their lives.

• 51:18Guy Raz?

  Meanwhile, Clay is pretty happy that the money side of the business is looking good, too.

• 51:23Speaker 02

  You know, I'm getting to the point where like a six-figure profit margin is like in sight, which is, you know, it's pretty exciting.

• 51:32Guy Raz?

  That's Clay McCabe of Portland, Oregon. His company is called Zipper Rescue. If you want to find out more about Clay or hear previous episodes, head to our podcast page, howibuiltthis.npr.org. And of course, if you want to tell us your story, go to build.npr.org. And thanks so much for listening to the show this week. You can subscribe wherever you get your podcasts, and while you are there, please do give us a review. You can also write to us at [email protected]. And if you want to send a tweet, it's at howibuiltthis. Our show was produced this week by Casey Herman with music composed by Ramtin Arablouei. Thanks also to Candice Lim, Julia Carney, Noor Kutsi, Neva Grant, Sanaz Meshkhanpour, and Jeff Rogers.

• 52:15Guy Raz?

  I'm Guy Raz, and you've been listening to How I Built This.