Gregg Kaplan chuckles at the memory of himself at age 19 enthusiastically reading the Socratic dialogue (in the original Greek version) by his favorite philosopher, Plato.
Though academic advisors probably aren't recommending a philosophy degree as the best route to a business career, Kaplan stands as an exception — or at least proof that it need not hurt you.
Kaplan majored in philosophy at the University of Michigan. Today, at age 39, he is a key player at Coinstar, the change-sorting company that now owns kiosk DVD-rental company redbox.
And he is one of three 2009 inductees into the Self-Service & Kiosk Association Hall of Fame.
Kaplan moved to New York after college graduation to work in investment banking. The next three years, he said, revealed a few important things: He could, if necessary, handle 80- to 100-hour workweeks; he could manuever through the Wall Street and business world culture; and he learned that investment banking was not for him.
He moved on and earned an MBA from Harvard Business School and then worked for a startup that became the online grocery Streamline.com, which he described as a "fabulous forming experience" and the source of many "what-to-do and what-not-to-do" lessons.
He then joined redbox, lured not necessarily by the notion of a long-term career under the glow of the Golden Arches, but by the rare chance to start something new within a juggernaut brand.
Coinstar acquired the rest of redbox in February, and Kaplan's title changed from redbox CEO to president and chief operating officer of Coinstar, reporting directly to Coinstar CEO Paul Davis.
Speaking by telephone from redbox's Oakbrook Terrace, Ill., headquarters, Kaplan said he's excited by the new configuration and believes both companies are poised to continue strong growth. Coinstar, with about 18,000 kiosks, saw combined revenue grow 42 percent in the first quarter, hitting $271.2 million, when compared with the same period a year earlier.
The company's DVD business, which includes redbox and DVDXpress, grew 156 percent over Q1 2008 to $154.7 million, and Coinstar expects to have 20,000 DVD kiosks installed by year's end. Second quarter results will be announced this week.
Kaplan freely admits the idea of renting DVDs from kiosks was unoriginal. But no one had successfully scaled it until McDonald's got involved, he said, and the brand's reach was a tremendous asset, giving the kiosks a certain ubiquity.
Today redbox has four times the locations of its closest competitor, Blockbuster, and Kaplan says redbox can significantly increase its share of the rental DVD market. Responding to competition, redbox has begun exploring how to include video games and Blu-Ray high-definition DVDs in its rentals.
Kaplan is flattered by the Hall-of-Fame honor, as well as joining the ranks of a small and impressive group of leaders who are changing and advancing the self-service and kiosk business.
He learned early in his career that it's important to build trust with everyone he works with, internally and externally.
"The only way to do that is to be transparent in your communication," Kaplan said. "You have to do what you say you're going to do and be open and honest."
Brian Rady, redbox treasurer and vice president of finance, who worked with Kaplan before they both joined redbox, said Kaplan walks the talk at work.
"He is very open in his communication, not just with the leadership team but throughout the company," Rady said.
He adds that Kaplan sometimes reveals "more information than I as a conservative financial guy would be comfortable with."
Kaplan buys into Jim Collins' "Good to Great," particularly the part about the importance of a rigorous awareness of shortcomings.
"You have to be realistic and honest about your warts," Kaplan said, "and also have the confidence to get past it."
Rady said Kaplan also modeled that principle by insisting that redbox management visit the field quarterly and have candid conversations with employees who stock the kiosks.
"I'd ask them to tell me what sucks about redbox," Kaplan said, telling them, "I can't help you solve it if you don't."
When a manager gets angry about bad news, he says, "You violate a principle. When you shoot the messenger, you make a huge withdrawal."
Rady also praised Kaplan for helping maintain a sense of company unity as redbox grew.
"It's a lot easier when it's five or eight guys and gals," he said. "When it's more than 1,000 in 48 states, it gets a lot trickier to keep esprit de corps. He does a great job of keeping everyone revved up. He's kind of reserved, but there's a confidence, and people believe in him. It comes through that he cares. He's not just a detached guy barking out orders."
Kaplan has been married 15 years, and he and his wife have three children, ages 11, 8 and 6. When he's not working, the family keeps him busy — which means he doesn't get to watch many movies on his own these days.
Luckily, no one's counting on him to pick the titles at redbox.
