Kinko's - The Free-Agent Home Office

There were also problems with the core business: increasing competition, shrinking margins, copyright-infringement lawsuits brought by textbook companies. By the mid-1980s, Orfalea says, "We realized we would have to be more than just a campus copy center. And we knew there had to be lots of other people who needed our services." What Kinko's didn't know was who those people were or how it could attract them to its stores.

Until, that is, they started showing up. Just as Kinko's began searching for new customers, corporate America began shedding millions of its employees: downsizing them into unemployment, outsourcing them into self-employed consultants, "virtualizing" them into full-time telecommuters. Suddenly unemployed middle managers needed well-crafted resumes and portfolios. Suddenly self-employed designers needed access to scanners, color printers, and other hardware that they couldn't buy on their own. Suddenly at-home sales reps needed help with brochures and marketing collateral. Everyone needed a place to send and receive faxes and to burn the midnight oil.

Indeed, across the country, stressed-out refugees from big companies many trying to piece together new careers while holding down temporary jobs begged the Kinko's staff to let them stay late so they could keep working. So in 1985 a Kinko's in Chicago made a startling announcement: it would stay open 24 hours a day, 7 days a week. Other stores copied the idea. "I'd like to say we invented our strategic approach from scratch," jokes Karen Sophiea, 43, vice president of marketing, who arrived at Kinko's in 1989. "But we just built on what our early-adopter customers were already doing. Customers told us what they wanted. We had the good sense to listen."

And to look around. As Kinko's explored the free-agent movement more deeply, it discovered a gold mine of unmet needs. Hundreds of thousands of self-employed professionals were equipping their home offices with personal computers but not with high-speed fax machines or high-quality printers. Tens of thousands of entrepreneurs were starting small companies with complex document-management challenges but without the resources to buy industrial-strength copy machines. A new breed of Road Warriors (like the always-in-motion Orfalea) needed administrative support wherever they traveled.

These customers had different problems and priorities. But they all shared a common outlook. They wanted to do in their new lives what corporate America had done to them to outsource activities best left to others and to concentrate on work that creates real value. Wendell Wilson, 50, vice president of operations and product management, says the company realized its job was to "let these people act like CEOs, delegating everything they didn't want to do to someone else." Namely, to Kinko's.

In 1992 Kinko's formally signaled its new focus on free agents with a marketing campaign called "Your Branch Office." In 1996 it announced the $214-million investment by Clayton, Dubilier & Rice. This "roll-up" transaction transformed Kinko's from a decentralized confederation into a unified global enterprise. The transaction "was a hard decision, but the right decision," says Krause, whose 50% stake in a regional operation became a 5% stake in the new Kinko's. "Lots of partners closed up shop on every holiday they could think of. But we were an international business; our customers were demanding that we stay open on holidays. A lot of partners and coworkers were not thrilled."

The company's transformation was stunning. Gone was the regional hodgepodge of store decor and marketing themes. In its place, customers found uniform and attractive environments rife with entrepreneurial possibility. Today the typical Kinko's outlet is huge about 7,000 square feet and stuffed with cutting-edge technology. A store can take digital text files and graphics in virtually any form, and transform them into presentations, full-color brochures, posters, transparencies even books. Road Warriors can rent computers, check email, and make last-minute alterations to business materials. Or they can skip travel altogether, since 140 outlets now offer real-time videoconferencing. There are lots of how-to pamphlets on the little tasks that make a big difference to free agents (from designing a resume to paying taxes) and nice touches that make customers feel more at home: scissors and paste, tables and telephones. (In some stores, phone use is free.)

Lloyd Greif, a Los Angeles investment banker who tracks the company, still marvels at the transformation. "The bottom line," he says, "is that Kinko's gives the small operator access to facilities that used to be available only to huge conglomerates. It is saying, 'You, a self-employed professional, can go toe-to-toe with the big guys.'"

What Do Free Agents Want?