In 1975, Tim Leatherman and his wife bought a used Fiat 600D in Amsterdam for $300 and drove it to Tehran and back. The cheap hotels along the way had plumbing that needed fixing. His pocket knife could start the job but not finish it, so he wrote a note on a scrap of paper and kept it in his shirt pocket: add pliers to pocket knife.
That note became the Leatherman tool. Today the company employs more than 500 people in Portland, Oregon, runs over 200,000 square feet of manufacturing space, and sells into more than 70 countries. On this episode of the Strategy & Leadership Podcast, Tim walks through how it happened and what he would tell leaders building something now.
Eight years before the first customer
The tool did not arrive on the trip. Tim spent eight years in his garage developing it and looking for a buyer. By 1983 he and his partner Steve had run out of options except starting their own company, and they refused to do that without an order big enough to justify it.
Cabela's ordered 500 tools for $12,000, for delivery that December. A second catalog ordered 250. When those shipped late, the catalog had already sold them and ordered 500 more. A week later it was 750. Two weeks after that, 1,000. Tim says he had no idea it would take off. At one point he would have been content making tools by hand half the year and selling them the other half.
His advice from that stretch is simple: learn what you need to know as you go.
Customers write the product roadmap
Leatherman collects "Tool Tales," stories customers send about how they used the tool. They run from saving a step to saving a life. Many end the same way: the tool is 99% perfect, but if only it had a corkscrew. Then scissors. Then a saw. Those requests became new models.
The Tool Tales also travel. Tim tells the story of a cyclist who stopped on a country road to cut a fawn free from a fence while the doe watched. He also recalls a doctor working deep in the Brazilian rainforest who asked for a custom tool that could carry his scalpel and machete.
A warranty that pays for itself
When Tim and Steve set the warranty, the back pages of magazines were full of cheap goods promising lifetime coverage. They chose 25 years instead, because they wanted a number that meant something.
Most tools that come back were pushed past what they were built for, and the owner usually admits it and asks what the repair will cost. Leatherman has never charged. Tim treats warranty as a profit center: a happy customer tells others, and every broken tool shows the design team where the next model needs to be stronger.
The best ideas come from one person's need
Tim does not put much stock in market surveys for new products. Nobody asked for a pocket tool because nobody knew the category existed. Pocket knife buyers and hand tool buyers saw the Leatherman and recognized it immediately.
His message to leaders: when someone walks in with a crude prototype, look past what is there and look for the product inside it.
What matters most to him now
Asked what he finds most rewarding after 43 years, Tim points to the jobs. Because the Leatherman created a new category, those jobs added to the economy instead of pulling from somewhere else. He intends to keep them in Portland.
Tim also wrote a book on the Leatherman story, covering the origin and four decades of business, mistakes included. Find Tim and the tools at leatherman.com.
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Connect with Anthony
Anthony Taylor works with leadership teams in two ways. He facilitates strategic planning and alignment sessions with executive teams at mid-market organizations. He also speaks at conferences and events as a keynote speaker, trainer and working-session facilitator on strategy and leadership.
To talk about a planning session or an event, get in touch or connect on LinkedIn.