Les Mandelbaum

Written by PROFIT staff

Career highlights

€¢ Moves from Toronto to Yellow Springs, Ohio, to attend Antioch College; majors in music and sociology

€¢ In 1976, Mandelbaum returns to Toronto to launch Trans-Canada Hardware (TCH), a supplier of parts for heavy-duty, custom “road” cases and speaker cabinets used by touring musicians; today, TCH generates $23 million in annual revenue and has operations in Texas, New York and Toronto

€¢ In 1979, launches Umbra with childhood friend Paul Rowan; names the company after the pair’s first product, a paper window shade. (An “umbra” is the darkest part of a shadow cast by an opaque object)

€¢ In 1985, Mandelbaum discovers a toy-sized, plastic swing-top trash can in a children’s shop in Paris; within a year, Umbra launches a larger version that becomes its breakthrough product

€¢ In 2009, Umbra enjoyed revenue of more than $120 million, with facilities in the U.S., Canada, Europe, Hong Kong and mainland China

What do you consider to be Umbra’s breakthrough product, and how did it come to be?

Our breakthrough product was the swing-top plastic trash can. I saw a toy-sized one in a kids’ shop in Paris. I brought it back and said, “Look, this is basically just a model of the old metal push trash cans, but it swings. And if we made it a little bit bigger, I think it could be a practical trash can.”

Frankly, my team didn’t see it. They thought it was too small, and that no one would want a colourful trash can.

In the end, two things happened. First of all, the samples that I brought back disappeared. So, I said to my people, “If you really didn’t like the product, how come you took it home? Bring it back, we’ll put it in our booth at the New York gift show and see if anybody notices it.” People started gravitating to it, and that really started the business.

How do you evaluate whether a new product is going to do well in the marketplace?

That’s changed over the years. It used to be very internal. If we thought it looked great, functioned well and fit with our distribution systems, we ran with it. We weren’t motivated by what our customers thought or what was happening in the marketplace. It was a free-for-all.

Today, we’re more disciplined. We make sure we know what’s in the marketplace, what the competitors are doing, what’s in the stores and the price points for similar products. And, sometimes, we show prototypes to trusted customers.

You take a conservative approach to expanding Umbra’s product line. Have you ever had the urge to leap into a product line far removed from your core?

Yes, I’ve been motivated to do that, but maturity sets in. We know our industry. When you go into areas that you’re not that familiar with, it’s dangerous. Even though we might think we have a terrific design for, say, sporting goods or a piece of clothing, we do not necessarily have the relationships to bring them to market. So, when that has happened, we’ve occasionally found partners to license it out.

But that strategy has been hit-and-miss. First of all, ensuring your partner executes your design “on brand” is a problem. And sometimes their standards aren’t the same as yours, in terms of quality. Some companies, like Disney, are very good at licensing because they have a huge, sophisticated department that’s very careful. We’re not at that level of sophistication. So licensing is a different business. But it is a way for you to do things that you’re not an expert at.

What’s been the consumer response to your eco-friendly products, and how have you responded to any accusations of “greenwashing”?

We started feeling pressure a few years ago to create environmentally correct products. But when the recession hit, people lost interest in paying more for them. One minute, it was save the planet; the next minute, it was save your ass. Nobody actually said that, but we noticed that’s how people behaved in the marketplace. So, the green products that we had to charge 10% more for were some of the first ones to die. We did get accused of greenwashing—and, in some cases, they were right. For instance, with our biodegradable products, the company that sold us that ingredient overshot its claims on how fast it degrades and in what circumstances. So, we had to back off. You have to be very careful about green claims. A lot of people do it just to gain sales; but unless you can really substantiate it, you can get caught and embarrassed.

How have you met the the intellectual-property challenges that come with manufacturing some of Umbra’s products in China?

Just today, an ex-employee sent me from the Canton Fair [the largest trade fair in the world] 15 pictures of straight copies of very recent Umbra products. So, it’s distressing. What do we do about it? About seven years ago, China began allowing wholly owned foreign enterprises rather than just joint ventures. So, we formed our own factory and we have our own people there, about 350 workers. That’s the best security. We try to manufacture the parts at different factories, and the final assembly is done at our own place, so nobody really sees the whole picture. We also spend more than $1 million a year on patents. That doesn’t really work in China, but certainly, when we see the Chinese factories knocking us off, we warn them. It stops some of them.

How have you had to change as a manager as Umbra has grown from a startup to a global company?

I tend to micromanage too much and not delegate enough, and that’s a problem. So, one of the things I’ve had to change is, rather than just telling people what to do—which I still do too much of—I try to ask them how they would do it.

Another thing I’ve had to learn to do is control my emotions. When it was just me, my busines partner Paul [Rowan] and a couple of others, we could go around screaming at each other. After 30 years, the way Paul and I communicate is like an old married couple. But when the company gets to a certain size, it’s very inappropriate. People get offended just hearing it, even if I’m not yelling at them. So, I can’t raise my voice anymore. I can’t be accusatory. That’s my advice: you have to become more of a teacher, more mature. And you have to back off.

What’s the best business lesson you’ve learned from experience?

It’s better to get rich slow than fast. At the beginning, I thought, “Hey, this is great: we’ll put out this product, we’ll sell millions of them and we’ll be living high.” And it ended up taking 10 years before we could really pay our bills and have anything to speak of. But, looking back, I think those 10 years were the best years, even though they were a struggle. It was character-building. I mean, it’s great that we have these luxuries, that I don’t have to worry about those things now; but I think it has dulled me a little bit, too. The best thing I can share with young people and new entrepreneurs is that it’s great to get rich slow.

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