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“Those who can’t do, teach.” If you enjoy dispelling popular myths, this episode is for you.
MBA ’64 Bob Nourse was in his element when teaching in the classroom. After completing his doctorate at Harvard, Nourse began a nine-year teaching career at Ivey. But in 1976 that world was upended when a private equity firm came knocking for his expertise to turn around some struggling companies. From airlines and soft drinks to building water slides, Nourse eventually found a New Orleans-based mail-order business called the Bombay Company, which he grew to over 400 stores across Canada and United States. In 1993, Nourse was voted Entrepreneur of the Year by Inc. Magazine, which called Bombay, “America's hottest company.”
In this episode, Nourse shares his entrepreneurial story, including the ups and downs of the company he took from obscurity to the New York Stock Exchange.
The Entrepreneur Podcast is sponsored by Connie Clerici, QS ’08, and Closing the Gap Healthcare Group, Inc.
Transcript
Eric Morse
You're listening to the Entrepreneur Podcast from Western University's Morissette Institute for Entrepreneurship, powered by Ivey. In this series, join me, Eric Morse, as we uncover the stories of our entrepreneurial legends, these Western founders have revolutionized industries, build recognizable brands, and added richness to lives across Canada and beyond. Discover their origins, their greatest moments, their deepest challenges, and what makes each of them tick. Welcome to The Legend series.
Those who can't do, teach. If you enjoy dispelling popular myths, then this episode is for you.
MBA 64 Bob Nourse was in his element when teaching in the classroom. After completing his doctorate at Harvard, Nourse began a nine-year teaching career at the ivy business school. But in 1976, that world was upended when a private equity firm came knocking for his expertise to turn around some struggling companies, from airlines and soft drinks, to building waterslides. Norse eventually found his diamond in the rough in a little New Orleans based mail-order business called the Bombay company. The rest, as they say, is history.
Bob, thanks so much for joining us. Today. We're really fortunate to have Bob Nourse with us as our guest on the legends podcast. And I'm somebody I've gotten to know are around the university. So when I first moved to Ivey, Bob was coming back and teaching a class on entrepreneurial growth. And it was great to get to know him kind of overtime and know his story. And I'm, I'm really pleased to have this chance to, to let other people know Bob's story and hear some of this. So Bob, thanks so much for being with us. (Thank You) So when you were growing up was entrepreneur something that was on your radar, had you ever thought of this kind of a career path?
Bob Nourse
Heck, no. I was raised as an Army brat and a military family. We talked a lot about things around the dinner table, but never about starting and growing businesses. Kind of a poster boy for people who don't start out thinking about being an entrepreneur, but through their experiences in life ended up becoming one.
Eric Morse
Okay, well, fantastic. And you kind of came to entrepreneurship a little bit later in life.
Bob Nourse
I did.
Eric Morse
Yeah. So you had actually gone through university and came to Ivey as a faculty member here in the marketing department.
Bob Nourse
Right, right. I was really 38 before I got into a private company and ended up running some high growth companies. I guess, before that I was on the board of that company. But really, I was in my late 30s. Before I I really got going.
Eric Morse
it's really interesting. So tell me about your teaching. You know, what was it that led you to teaching to begin with? And what did you kind of take away from that maybe when you got into the private sector?
Bob Nourse
Well, I got into teaching probably like a lot of people ... under the influence of some very persuasive professors. David Leighton and marketing and Andy Grindlay, who taught quantitative subjects, they both kind of took me under their wing and encouraged me, and I took a look at the life that they were leading. I'd actually had teaching experience before I taught electrical engineering for a year at Royal Military College. I knew I liked teaching. And it just seemed like a good thing to do. I made that decision really at the end of the MBA program, and going to Harvard for a doctorate or going anywhere for a doctorate that matter was just a matter of getting a union pass what you needed to teach on a career basis.
Eric Morse
Right? I just found something I didn't know you were recovering engineer like myself.
Bob Nourse
I am. I'm an electrical engineer. I wouldn't want to do much more than plug in a socket right now.
Eric Morse
It's been too long for me as well. I totally agree with you. Okay, so you've left academia and in 1979, you bought the rights to the Bombay company. Can you give me a little bit of the history? How did that come about? And what what was the thinking there?
Bob Nourse
Well, you really have to back up a little bit, Eric, to 1976. I had been on the board as an outside director of a company called Venturetek, it was a private equity company. And at that time, it was controlling about $200 million in venture assets. (Okay) Over eight or nine companies, two founders, one of whom was a friend of mine, were really finding themselves pretty stretched. And so they showed up in my office that Ivey one day and basically offered me a job. I would come in as a vice president and and oversee two or three of the companies. And I got three, in fact, but of course, I didn't get the cream of the crop, because I was the third guy in... about three months after joining the Venturetek, I was overseeing an Arctic Airline. Okay, the numbers didn't look quite right. And we sent in Coopers and Lybrand to do an audit. And what we found is that, in fact, they were hiding... we found a couple of $100,000, of full expenses in the backdoor of the CFO, and so forth. And I had to go in and, and fire the top floor people. And of course, they looked at me and said, "Well, who's going to run this?" And I said, Well, I'll run it till we get someone. But I ended up running an Arctic airline for a year and a half.
Eric Morse
Wow. Well, that's an education.
Bob Nourse
Yeah, that was a real education. And really, for my time in Venturetek, what I found was that, that I ended up doing a lot of that kind of thing. I was in the soft drink business. I was in a geophysical mapping, and I built waterslides in... I was in Japanese banks, two French banks, a big government agency called Canada Development Corporation. And really, my incentives were there, but they weren't very big. And I learned a lot in that time about how to grow businesses. (Yeah) Well, I started looking really in late 1978, for something I might do on my own, it took a year to find it.
Eric Morse
Okay, so the entrepreneurial bug was kind of bit you at that point as you were running.
Bob Nourse
It not only bit me, It swallowed me!
Eric Morse
Why you found a really interesting one, because you jumped in, you did it with your partner?
Bob Nourse
Yeah, I did. I did. I've known Alex, my wife for quite a long time. And she actually was living in Amsterdam. And I was in Toronto when I made the decision. But a few months after we got started, she moved out to Toronto. And while we never intended to work together, our skills were very complimentary. And it worked out perfectly. And we did it for 17 ...16-17 years.
Eric Morse
Well, that's, that's amazing. And so you bought the rights to the Bombay Company, which I think was mostly mail order, and mostly in the States at the time. And and you opened up, and it certainly the first bricks and mortar in Canada and maybe anywhere I don't recall.
Bob Nourse
Yeah. What happened basically was a classmate of mine at Ivey had invested in the mail order business out of New Orleans. (Okay) And I had had dinner with him one time and in Bermuda, and he told me about this. He said, You gotta go see this guy. So I went into New Orleans a couple of times the length of what was a long liquid lunch... in New Orleans, but 11 hours, I think... the back of a napkin, we signed an agreement where I got the Canadian rights to Bombay Company for $1 with a promise to hire his mother, if we opened a store his mother was living in, in Toronto. She was American. And we hired her, Bonnie was her name, and she was a great salesperson. Couldn't keep track of the invoices, but she did a great job. And so that's how I got a basically ended up with the rights. And yes, there was by that time, one store in suburban New Orleans Uptown Square, but it was nothing like the kind of store that we opened, which was in Eaton Centre, that store in April of 1980,
Eric Morse
April of 1980, and the Eaton Centre and that was a bit of an ordeal and it can you take me through what it was like signing that lease and getting something going in the Eaton Centre.
Bob Nourse
Well, you know, sometimes you're just lucky. I walked... they, at that time had just completed the south wing of the Eaton Centre, the one the south wing, and basically, there were one or two spots left, that was all. And I walked in a to a fellow named Ernie Booth. Ernie was the vice president leasing for Cadillac Farrago. I walked into his office and sort of said, I'm Bob Nourse, and I'd like to store as well. I know that if you if you do that today - I knew then too - You don't get anywhere. I mean... but Ernie Booth happened actually to have a soft spot and he wanted somewhere in Eaton Centre to say that he was nurturing a startup of some kind and gave us a store. (Okay) And he not only gave us a store but he did not put the blocks to us on the lease. I later got to know the people at Radio Shack and we actually had a better lease than Radio Shack. (Wow) Which was kind of interesting because he really, when when you're kind of green and the gills like that, a landlord can absolutely tie you up in knots. And he didn't do that at all. And so we were able to open that store. And it took off right away. If we had problems, it was that there was too much volume.
Eric Morse
And so the store takes off right away. I remember you telling me a little bit about it was kind of the stuff on the walls that startled people in... how did how did that happen?
Bob Nourse
Well, that was almost an accident. Initially, we had a woman named Ruth Pelley doing some accessorizing for us, because she knew all the contacts locally. And we put a few frame pieces of just framed prints around the store to give it the the if you like the the look of a home. And one day Ruth Pelley came in and she took all of those prints and put them on one wall. All of a sudden, they were masked, there was a critical mass there. And they just started selling like hotcakes. But later on when we had a lot of stores, prints and mirrors, which we call wall decor, we're making up almost 20% of our sales, and we were selling a million pieces a year. Wow, that's amazing. Just tells you there it was right under our nose. And almost by accident, we learned something about making a statement to your customer about what kind of business you're in. (Yeah) They got message we were in that business.
Eric Morse
Yeah, and you were flexible enough and obviously looking for learning, you know, often enough that you were able to capitalize on it. So but that kind of starts the growth. I mean, you've got a store in the Eaton Centre, which has got to be the best commercial space in all of Canada at the time. And your... things are really going fast. As you said, the problem may be that you have too much volume. So now you decide you're going to start opening new stores. That you know that may be the biggest risk, right? Can you take me through when you decided to grow and make this...
Bob Nourse
Well the nice thing about having a store in Eaton Centre was that everybody, all the other developers saw it. So more or less over the next year or so. We had kind of people dropping in from Sherway Gardens, from Oakville, from Bayview Village, big locations in Toronto. Our problem at that point was capital. In that day and age you even needed money to open a letter of credit and you had to open letters to credit to buy merchandise overseas, (right) over time that went away. But that was it for now it came out of your bank line. Meanwhile, in the US, I have to back up a minute here of the US operator in running the mail order business never made money. (Okay) He ended up selling out to a shell company on the American Stock Exchange called Tandy brands, with a lot of cash and not much businesses to make it run. And they invested in our company sooner than I would have liked to be honest. But us with enough incentive that, here I am living in Santa Barbara, California.
Eric Morse
Well done.
Bob Nourse
And with their money, we were able to open a group of I think five or six stores in Bayview Village was the next Sherway Gardens. Scarborough Town Centre, there was a street store in Oakville, we hadn't been able to work a deal with the landlord and we did very well with that. And over a period from then to 1983, late 83...We had 12 stores. Well, we rolled out we did not sort of spread them all over the place. So they were in Toronto then in Ottawa, then there was one in Kingston and and only toward the end did we did we open up two or three stores in Western Canada.
Eric Morse
And that that certainly helped him through with distribution and...
Bob Nourse
yes, well and supervision and everything else. It's the mistake that a lot of entrepreneurs make, you know, is this spread themselves over too much geography. They don't roll out their business in a way that makes them... lets them control their costs.
Eric Morse
So you're, you're spread across Canada at this point and things are going really well. But now we're really headed for huge growth. So take me through, how do we go from that? 100 stores or 400 Plus stores across North America?
Bob Nourse
Well, in late 1983, the people who had bought the mail or their business in the US had started opening stores, and they weren't doing a very good job of it. (Okay) We had a dozen stars, and every one of them was making money, good money. And we kind of knew Alex and I that, that we were probably going to hear from them one of these days. But we pretty well decided that, well, they're in Fort Worth, Texas, and we live in Toronto, we would never move to Fort Worth, Texas.
Eric Morse
Famous last words?
Bob Nourse
Sure as hell yeah, the phone call comes in December. They've had a lousy Christmas season. And they asked if they could come up to Toronto and talk with us. And, and suddenly, you know, we realize there's this big US market waiting to be had, we thought we knew how to do it. And the idea that it would go to someone else was just a killer. By by the first week of January, we were on our we had a guy who could take over the Canadian operation under our wing, and we both moved to Fort Worth, Texas. And the first thing I did was close about a dozen stores opened. And and in the first year there we only open three stores. (Okay) But we got the model right. And we fixed the the problems they had with inventory and with the stores that they had opened that were in the wrong places in the wrong setup.
Eric Morse
Sure. So you've got Tandy, now, as a very proximate partner, I guess, as you start to expand in the US, and things started to hit a pace in terms of growth.
Bob Nourse
Yeah. Eric, and it was actually Tandy brands, which wasn't the Radio Shack, Tandy.
Eric Morse
Oh, okay. Sorry
Bob Nourse
Make that clear. It was a sort of a separate company, rather sleepy on the American Stock Exchange. But the traded every third Wednesday, I think. Okay, but after the first store, we opened 12, the next year, we opened 35, the next year. And and we were on a roll and and every time we learn more and more, but how to open a store and how to open multiple stores. And we eventually reached the point where counting some conversions we were doing to larger stores, we had two years in a row where we opened 100 stores. (Wow) Which by the way, was too many.
Eric Morse
Yeah. So every every third day, there's a new store. And that's, that's kind of Starbucks level growth. What does that do to the business?
Bob Nourse
It does two things. It makes... we're a public company by that point in time on the New York Stock Exchange, and it makes the stock market very excited.
Eric Morse
I bet it does.
Bob Nourse
So we were carrying a 50 P E multiple, I think for at least almost a year. And and that's very hard to live up to... we were not really a tech company, we were a retail company. And that's one thing, the big problem it creates is for the people that are working for you. Retail is people intensive, hiring people at a great rate. And you almost reach the point, even though you put in training programs and everything else, you can't move quickly enough. And you find that the person you hired yesterday, is telling the person you hired today how the company runs and what to do. And that person of course, doesn't really know.
Eric Morse
That's hard on culture, isn't it?
Bob Nourse
Yeah, it's very hard on culture. And, and we grew too fast, very simply.
Eric Morse
Alright, well, before we get to that, I'm going to say 93-94 was kind of the year of Bob Nourse. You had 400 stores, you are entrepreneur of the year, you know, lots of lots to live up to in terms of growth and everything else that has to be just a little bit more pressure, I would assume.
Bob Nourse
I don't know if you feel pressure. It's not ultimately a good thing. You know? Everybody thinks you can do no wrong and quite frankly most of the time, it seems like you can't. Everything you're touching is turning to gold. (Right) But everybody's praising you and nobody's really talking to you, other than in my case, my wife, realistically about what's happening, and it is it's a great ride. There's no question about it. You're being asked by all the big brokerage houses, not only to attend their conferences and speak, but to go with them to Europe and meet with their major clients and all sorts of bells and whistles. And it's hard. It really puffs your ego and And you really shouldn't let it do that.
Eric Morse
Well, I think it's hard. Inc. said you were running America's hottest company at one point in time.
Bob Nourse
Yeah, they did.
Eric Morse
And I, you know, it's funny. But I know, you've done some work with entrepreneurs here in Canada and high growth companies. And one of the things I always laugh out when you tell them is, hey, if you ever reach a multiple 50... Time to sell.
Bob Nourse
Yeah. Yeah. I'm all for that. Big about, take some money off the table on the way, whether it's 50 are not. You know, when when the times are so good, aren't gonna last that way forever. They may not turn bad, but they're not going to be that good forever.
Eric Morse
And ultimately, as all things do, it did turn down, go down the other direction. And you parted ways with the company. When you look back, what were some of the, you know, it was a successful run, no matter how you look at it. (Yeah) It built an amazing business. Great culture. Great, really merchandising that that hadn't been seen before. You really did a lot in the industry. What are some of the major lessons maybe you took away from, from that whole ride, you know, up as high and even down down some of the lows.
Bob Nourse
We certainly learned the importance of a business model. I mean, perhaps because of my Ivey background, and teaching and everything else... from the very beginning, I kind of knew what our formula was, for making money, or the key drivers were and what expenses most needed to be controlled. And what you had to build into fixed commitments like leases, and time. And again, in working with other entrepreneurs or doing other things myself, what I've seen is that a lot of people don't have a clear idea of their business model. It's a fuzzy idea, and it doesn't really nail what drives revenue, and what drives control of your expenses. And so it's to be sure business models need to be tweaked as you grow and as circumstances change, but you have to know what your model is in the first place in order to tweak it. In throughout history, even in some very big instances, there have been people who demonstrate they don't do that. That's one of the most important things.
Eric Morse
If you don't know where what drives revenue, how do you leverage, you know, and move forward?
Bob Nourse
And some of the other things I think I probably talked about, just because they keep surfacing for me, you know, don't outgrow the ability of your people to grow. That's not... I'm not the only person who's done that. And we didn't do it disastrously so. But it was, we certainly did it. Bury your ego. You know, when you're successful, everybody tells you how good you are. Right? And you're not really that good. And take some money off the table on the way up, you'll be glad you did. We took some off, we didn't take as much with hindsight as I would have liked. But there again, it was enough to live a comfortable life and do a lot of other things in life.
Eric Morse
Great advice, Bob and I think tried and true. You know, coming through a pandemic, you've been through some tough times as well and economic cycles while you were running Bombay Company. Anything that you would share with entrepreneurs that are struggling right now to come out of the pandemic and in a positive way?
Bob Nourse
Yeah, you really just have to stick at it when I mean, we've had, I can talk about a couple of them, if you like, we had points along the way, where it wasn't clear, we were going to make it or not make it. We had points in the early days where we didn't know if we were going to make a payroll next week. (right) On three or four days notice we had to organize a warehouse sale to generate some cash to make the payroll. Later on, we had of course, in our early years, he was an agent to source for us in Asia primarily in Taiwan in the beginning. But you reach a point where that's no longer cost effective, where you pay him a percentage, but you could operate your own office much cheaper. And those transitions are classics in Asia, they usually go wrong and ours certainly was difficult too. We made that transition. All of a sudden, the agent just dropped us immediately. And we had to put a team of people on a plane to Taiwan and set up a sourcing office in an environment that we really didn't know all that well. Right now both of those are circumstances where you just do what you got to do. And if you're passionate about your business, you will probably work harder and longer than you ever thought you could. But you do what it takes! you don't get over those hurdles without that kind of an effort. And I think that I don't know many businesses that have succeeded that haven't confronted situations like that. The private equity company, I worked for Venturetek, before I ever worked there, they had invested in a lacrosse factory down in Cornwall, and they ended up with something like 20 lacrosse factory workers all carrying lacrosse sticks in their office. You know, a threatening all sorts of things. So you just, you just have to dig right in and do and you probably will. But if you haven't got the metal, if you like, to be an entrepreneur, then you've probably backed down or look for an easier solution, and it never works.
Eric Morse
I think that's such great advice for our aspiring entrepreneurs is that you know, find something you're passionate about, because things are going to go bad. And you're going to have to really dig deep to get through those times to try. Let's see what what one thing I'm gonna make you really narrow it down... What one thing do you wish you would have learned in school, perhaps that that would have helped you in your entrepreneurial career that you had to kind of learn the hard way?
Bob Nourse
Well, let me think about that. The thing I learned the hard way was the value of experience.
Eric Morse
Oh, interesting.
Bob Nourse
I came out of university into private equity. But just because of the the things you learn at Ivey, and the way you approach things, I knew how to define problems. I knew how to structure solutions for them. Conceptually, I could handle any problem. Yeah, but I was working in private equity with people who work very quickly. You know, they could see problems, move on them and act more quickly than I can, just because they had a reservoir of experience that I didn't have. It's the other side that you really have to get. The conceptual thing in its own right is important. And it served me well, because not a lot of people get that the way I got it by teaching. Same time. I really, I made some mistakes coming out. Maybe other people wouldn't have made those mistakes. I don't know. But I bought a company too, too easily without enough diligence and research. And I sort of looked at what we were being told like a case study, you know.
Eric Morse
Right, sure.
Bob Nourse
But the problem is real world case studies don't always tell you the whole story, particularly trying to sell you something.
Eric Morse
Yeah, well, you know, that's interesting. So if you were, you know, to put your teaching hat back on what maybe could we be teaching our students better than we are today?
Bob Nourse
Yeah, I don't know that one very well, Eric. I thought about I know, you might ask that question. And I don't know awfully well, what you're teaching. What I do know, is that, you know, your Quantumshift program works with real entrepreneurs, not people who are aspiring to be it, (right) You sell that thing out, plus, plus every... with a waiting list every year. So you must be doing a lot of things right.
Eric Morse
Well, thanks Bob.
Bob Nourse
That's very important. I think that that's, that's as good as I can judge that, really. But I think you're probably doing a pretty good job. And bear in mind that when I went through the MBA program, there were no courses in entrepreneurship, no program, no institute. None of these things. And so I almost had to wait quite a long time before I got exposed and sensitive to some of those things. (Yeah) I do feel that sometimes people who aspire to be entrepreneurs, are having trouble finding an idea. (Sure) And you don't find an idea in a white wall room, you know, sitting there and staring. (Yeah) And what I would say to them is, don't be discouraged. But probably, you might want to consider getting some experience in an industry or a sector of an industry somewhere. But learn how that industry works. What are the important variables? What are the unimportant things? And where there are opportunities to make the industry better. (Yeah) That will make you a lot make it a lot easier for you not only to find an idea, but to develop an idea more successfully. So if you haven't got an idea and have to go to work for a few years, somewhere else with that in the back of your mind all the time, that's not such a bad thing. It's better than starting out with some idea that you've just sort of dreamt up at night. And, and really hasn't got very big potential. Entrepreneurs should be looking for businesses that have decent potential. (Yeah) Not local laundry services.
Eric Morse
Yeah, no, I agree with you, you know, how do we change the world in a way for the better, right, and we should be thinking at that level. You know, Bob, my time here at Ivey has been wonderful. And one of the things that that that I do cherish is having the opportunity to, to watch you teach and to learn from you over the years. The way you teach business model is you kind of did in this session a little bit, you touched on it was really great. I loved sitting through watching you teach that to you know, successful entrepreneurs and having all of them go, 'wait a minute, do I really know what my levers are?' And then boy, it really made me think about how do I present that to others and do a better job of helping entrepreneurs. But you've had a great impact on me. And last question for you was, you know, was there something while you were at Ivey as a faculty member, when you your first time or when you came back, even that you remember and will take with you?
Bob Nourse
Well, I think, despite the fact that I had a wonderful time initially there in the marketing group when I first taught there, and teaching elsewhere, as well... I think my fondest moments are those that happened when I came back. (oh?) I had done 16 years of Bombay, when I'd been involved in some other startups, both myself and, and as an investor, then I could go into a classroom, and know in my heart what I thought was important, and be able to teach that and teach with confidence that I was teaching the right thing. (Sure) And find ways to express it. I will say, by the way, that when I went back to teaching, I came to understand in some ways that I never had before, why I done some of the things I did when I was actually in an entrepreneur. (Okay) You learn a lot from teaching about your students, but about yourself. That whole experience for me, and I think it was 11 or 12 years in total, counting Quantumshift, was a very rewarding experience for me, because I was kind of giving back. But at the same time I was by training a teacher, you know, and and I sometimes think that it would, it's harder for businessman to come into teaching than for teachers to go into business. Teaching is a skill set in it's own right. And and you really have to work at that. Well, Bob. Thanks... Thanks so much for today. I know there's several decades worth of students out there and certainly those that I got to know when you came back. That that benefited tremendously from from your teaching. And from your experience, as you mentioned, that's so hard to come by. So thanks so much for that and thanks for today. I was great. So nice to see you again.
Eric Morse
Nice to see you too. I hope we'll have a chance to meet in person in the near future.
Bob Nourse
Okay, then, Eric, take care and thank you very much.
Eric Morse
Thank you very much Bob. The Entrepreneur Podcast is sponsored by Quantumshift 2008 Alum Connie Clerici and Closing the Gap Healthcare Group. To ensure you never miss an episode, subscribe to the show on your favorite podcast player or visit entrepreneurship.uwo.ca/podcast Thank you so much for listening. Until next time.