How I Built This with Guy Raz

Spinbrush: John Osher. The Electric Toothbrush That Sold for $475M

February 16, 2026

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  • Pricing strategy should be determined by what the market will pay, not solely by the cost of the product, as demonstrated by John Osher's $4.99 earrings that cost him $0.19. 
  • Overcoming 'entrepreneurial terror' requires immediate, decisive action, as John Osher did by creating a to-do list after facing the near-collapse of Cap Toys. 
  • The acquisition formula favors the seller when the buyer actively desires the product, exemplified by John Osher using a licensing pitch as a ruse to make Procter & Gamble want to buy Spinbrush outright. 

Segments

Early Pricing Lesson
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(00:07:04)
  • Key Takeaway: Optimal pricing is set by market demand, not product cost.
  • Summary: John Osher sold 19-cent earrings for $4.99, succeeding where a competitor selling the same item for $0.39 failed. This established a lifelong business principle: price based on what the market will bear, not on cost markup. This strategy allowed him to achieve wealth within the context of his early life as a student.
Commune Life and Skills
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(00:11:58)
  • Key Takeaway: Life in a commune provided essential, unexpected trade skills like plumbing and carpentry.
  • Summary: Osher spent six years in a commune studying Gurdjieff’s philosophy, which required the residents to earn a living through trades. He learned plumbing and carpentry, skills he previously believed he lacked as a doctor’s son. This period instilled confidence and provided a practical skill stack independent of traditional business paths.
Pivoting to Baby Products
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(00:17:17)
  • Key Takeaway: A personal need (protecting a crawling baby) sparked the invention of the portable, configurable ‘Crawlspace’ playpen.
  • Summary: After his energy conservation business slowed, Osher developed the ‘Crawlspace,’ a portable, eight-sided playpen that folded easily and had rubber feet to prevent sliding. This product, along with the ‘Rainbow Toy Bar’ (an arch over a baby with hanging toys), led to his first major exit with Gerber. The Rainbow Toy Bar addressed the problem of babies dropping rattles they were too young to hold.
Overcoming Entrepreneurial Terror
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(00:22:09)
  • Key Takeaway: Facing total failure requires immediate, structured action to move past paralyzing fear.
  • Summary: When Toys R Us canceled a major order for Cap Toys’ products, Osher experienced ’entrepreneurial terror’ and wanted to hide for three days. He overcame this by writing down necessary actions, including securing a new bank and dealing with the buyer. A kind buyer at Toys R Us provided a second chance, allowing him to secure a new order that saved the company.
Spinning Lollipop Success
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(00:26:59)
  • Key Takeaway: Acquiring the rights to a battery-powered spinning lollipop created an instant, massive product category success.
  • Summary: Osher acquired the rights to a spinning lollipop, viewing it as a necessary ‘category’ for a future sale to a major toy company like Hasbro. The resulting ‘Spin Pop’ sold 100 million units in the first three years, generating $50 million in candy revenue. This success led to Cap Toys being sold to Hasbro for over $160 million in 1997.
Spinbrush Concept and Design
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(00:31:25)
  • Key Takeaway: Leveraging expertise from high-volume battery/motor production informed the creation of a $5 electric toothbrush.
  • Summary: Having mastered small motors and batteries from the lollipop business, Osher aimed to create an electric toothbrush for under $5, competing against $3 manual brushes rather than $80 electric models. The key design breakthrough was combining fixed bristles with oscillating bristles, allowing users to brush normally while gaining mechanical cleaning action.
Packaging and Retail Strategy
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(00:38:45)
  • Key Takeaway: Borrowing from toy marketing, the ‘Try Me’ button packaging was critical for establishing credibility for the low-cost electric toothbrush.
  • Summary: The ‘Try Me’ feature, learned from the toy industry, allowed consumers to press a button in-store to see the bristles oscillate, overcoming skepticism about a $4.89 electric brush. This packaging strategy helped secure end-cap displays at retailers like Walmart, where the product sold seven units per store daily, vastly outperforming manual brushes.
Scrapping Defective Inventory
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(00:42:05)
  • Key Takeaway: Scrapping 400,000 defective units and investing more capital was necessary to fix a critical product flaw and ensure long-term viability.
  • Summary: The first 100,000 shipped Spinbrushes were defective because water ingress caused them to break within a month. Osher convinced his partners to scrap 400,000 units in the warehouse and invest another half-million dollars to redesign the product to be waterproof. This difficult decision prevented the product’s immediate failure.
Procter & Gamble Acquisition Strategy
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(00:47:34)
  • Key Takeaway: To maximize sale value, Osher engineered a situation where Procter & Gamble actively wanted to buy Spinbrush rather than pitching it for sale.
  • Summary: Osher used a licensing pitch for the Crest name as a deliberate ruse to get Procter & Gamble’s attention and demonstrate product success. When P&G offered to license the name, Osher claimed his board required a full sale, prompting P&G to offer an acquisition, which ultimately valued the company at $475 million.
Earnout Problem and Settlement
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(00:53:41)
  • Key Takeaway: Exceeding projected sales targets in an earnout agreement can force the acquirer to renegotiate the deal to avoid financial ruin.
  • Summary: Spinbrush sales quickly surpassed P&G’s internal projection of $120 million, heading toward $300 million in the first year. Because the earnout was capped based on the lower projection, P&G executives wanted to stop advertising to control costs. Osher negotiated a settlement 21 months early, resulting in a total payout of $475 million.