He's Also a Client: The Saga of Sy Sperling's Hair Club

Upper Playground, YouTube
Upper Playground, YouTube

Divorced, depressed, and with his midsection growing, Sy Sperling stood in front of a mirror at his home in Long Island in the late 1960s and adjusted his hair. It wasn’t his hair, exactly, but a toupee purchased for the express purpose of obscuring his prematurely shiny crown.

Though he was only 26, Sperling had been losing his hair for years. Now that he was newly single, he felt self-conscious about his receding hairline, believing it would diminish his chances with the opposite sex. He tried combing tufts of hair from the side over to the front. He tried the toupee, which looked like a road-flattened beaver. He tried weaving, which knitted human locks to his existing strands; the first time he shampooed it, it collapsed into a ball of knotted hair.

Like many pioneering spirits before him, Sperling imagined that there had to be a better way—a solution to regaining his lost self-confidence and living the life he desired.

In the coming years, Sperling and his second wife, a hairstylist, would perfect an existing approach with irresistible marketing that provided a solution for millions of follicle-deprived individuals everywhere. And much of that success came from Sperling admitting that he was not just the president. He was also a client.

 
 

Baldness “cures” date back to the most ancient civilizations. Egyptians used hippopotamus and crocodile fat as hair growth stimulants. In Rome, burning donkey genitals and mixing the ashes with urine was believed to help grow luscious locks. Various concoctions involving poop were believed to work, too.

In more enlightened times, thinning hair could be addressed with transplantation surgery. In 1939, a Japanese dermatologist extracted hair-bearing skin and replanted it by punching a small hole on sites affected by burn injuries. This practice was mirrored by Norman Orentreich, a New York dermatologist who successfully planted hairs into a patient with male pattern baldness in the 1950s. Orentreich was the first person to observe that hairs on the sides of the head were largely resistant to shedding and would therefore remain in place when transplanted to the top or front of the head.

For decades, this was a crude surgical practice, giving rise to a number of patients who had hair sparsely transplanted and created a reputation for heads that appeared to be implanted with “plugs.” It wasn’t until the 1990s that transplants could be more densely packed, offering a convincing restoration of the hairline.

For Sperling, who was born in 1942 and in his 20s when his hair loss became apparent, invasive surgery that was still years away from being refined wasn’t an option. After his sister admonished him to “do something” about the thinning hair that was causing him such grief, he went to a hairstylist who recommended weaving. While somewhat effective, this only seemed practical if hair was remaining on top. Toupees were out, as Sperling had a particular concern over solutions that could fall off or become dislodged during more intimate moments.

"If you're dating and going to be having special moments, how do you explain, 'I got to take my hair off now?'" he asked.

Even with its drawbacks, weaving seemed like the best option. After learning the technique from his stylist, Sperling left his job in swimming pool sales and opened his own salon on New York City's Madison Avenue in 1968. Using $10,000 in capital from credit cards, he leased a vacant business that already had barber-style chairs. Soon, he and his new wife, Amy—who, it turned out, was indifferent to his hair shortage—perfected a technique in which they used a nylon mesh fitted to the scalp. The net-like fabric allowed the head to breathe and for hairs to grow out from under it. It also acted as a base for human hair strands to be woven on top and secured with a polymer adhesive. The entire “system” was secured to the client by weaving the mesh into the hair on the sides. The result was a relatively natural-looking addition that would remain in place through showering, exercising, and—key for Sperling—sexual activity.

The approach took off, enticing New Yorkers and celebrities alike. (Sperling later insisted Jimi Hendrix came in for a fitting in 1969.) Sperling’s business grew steadily throughout the 1970s, but by 1979, sales were leveling off. The problem was that even though he had happy customers, they were reticent to tell friends about their hair-replacement efforts, so word-of-mouth was not reliable. That’s when Sperling decided to advertise.

 
 

Sperling’s business, then known as the Hair Club for Men, debuted on national television in 1982. One early campaign featured testimonials from actual customers, but the response was minimal. Producers had shot a second spot featuring Sperling himself and considered it as a back-up plan in case the first approach failed. The infomercial aired late at night, when advertising time was cheapest.

Though Sperling was no trained actor or orator, he was genuine. “I’m not just the president,” he said. “I’m also a client.”

When it aired, the reaction was immediate. The Hair Club got 10,000 calls in a month. Interested parties received a brochure discussing various hair-system options and why Sperling’s approach worked. By 1991, there were 40 franchise locations, where clients paid between $2000 and $3500 for a custom mesh that used colored and textured hair to match their natural growth. A maintenance appointment every two months cost $65.

By 1993, the commercial was airing 400 times a day, costing Sperling $12 million annually in advertising expenses. But it was drawing up to $100 million annually in sales. In admitting what most men wouldn't, Sperling engendered trust—and profit.

 
 

Later, the Hair Club for Men would undergo several cosmetic alterations to its business model. Sperling moved away from strip-mall locations for his clinics and into commercial office spaces to help provide discretion. He even used initials—HCM—on signage to promote privacy.

The “For Men” was dropped as more women suffering from hair loss due to genetics or illness came looking for assistance. Sperling also provided assistance to kids with cancer diagnoses. Through it all, he sold something more than polymers and mesh: Hair Club trafficked in confidence and self-esteem. He allowed reporters to tug on his own hair as a demonstration of quality. It would barely move. "Not bad, eh?" he asked a Spy journalist in 1991. "It really is an amazing transformation."

The hair stayed in place, but Sperling didn’t. In 2000, he sold Hair Club for $45 million to a group of investors who turned around and sold it in 2005 to the Regis hair company for $210 million. Today, Hair Club still offers solutions similar to what Sperling marketed, as well as proven topical treatments like Rogaine (minoxidil), laser combs purported to stimulate growth, and transplantation surgery.

Sperling had an impressive 15-year non-compete clause for the initial sale, though he hasn’t yet announced any plans to get back into the hair-boosting business. Still, photographs of Sterling from earlier this year show that the septuagenarian still has a full head of hair.

Ad Astra: The Time Earth Almost Got a Space Billboard

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iStock

In the 1980s and well into the 1990s, everything associated with Arnold Schwarzenegger was big. Big biceps (22 inches during his bodybuilding heyday). Big box office (1991's Terminator 2: Judgment Day made $520 million worldwide, the highest-grossing movie of that year). So it was no surprise to open a newspaper in 1993 and see that Columbia Pictures was spending $500,000 to plaster the actor's name and the title of his pending summer blockbuster, Last Action Hero, on the fuselage of a NASA rocket set for launch that June. Schwarzenegger himself was scheduled to push the button that would propel the spacecraft into orbit.

The NASA project deal was being brokered for commercial advertising purposes by Space Marketing Inc., an Atlanta-based firm specializing in sponsorships and ads located outside of the atmosphere. The company's CEO, Mike Lawson, told the Los Angeles Times that he could've sold "dozens" of ads for the rocket, but that he and NASA officials didn't want it to "look like a pace car at the Indy 500."

The idea of promoting a movie in space was brazen, but not nearly as much as another, more ambitious project that Lawson was planning. If everything went according to plan, his Space Marketing would shoot a payload into space in time for the 1996 Summer Olympic Games in Atlanta. Once it was in orbit, mylar tubes would inflate with gas and spring open to support a mile-wide, quarter-mile tall reflective sheet that would be visible from Earth. Lawson called it an "inflatable platform," but the press—and critics—quickly labeled it something else: a space billboard.

If Lawson had his way, it would be able to make everything from the Olympic rings to the McDonald's logo as visible to Earthbound consumers as a full moon.

 

In Robert Heinlein's 1950 novella The Man Who Sold the Moon, a lunar entrepreneur hustles to sell advertising space on the moon as part of his attempt to make colonization a profitable venture. Lawson—a onetime director of marketing for his father's publishing company in Atlanta and a fan of science fiction—read the story. In 1988, he founded Space Marketing as a way to defictionalize the concept.

As fantastic as it sounded, the idea wasn't without precedent. In 1981, telecommunications mogul Robert Lorsch made a presentation to Congress that outlined a strategy for allowing corporations to "sponsor" space travel by letting them buy plaques that would go onboard spacecraft. In the same way they endorsed the Olympics, Lorsch said, corporate America could help subsidize space travel.

A McDonald's logo is visible from space
iStock Collage

The plan was a response to then-president Ronald Reagan's plea to have the private sector assist in helping the government overcome their financial burdens. While Lorsch's proposal was prescient—it anticipated the rise of privatized space exploration—the idea of having commercial sponsors for NASA didn't make it through the Byzantine maze of Washington bureaucracy.

Lawson thought the idea could be taken further, and not necessarily with the cooperation of government. Partnering with scientists at the Lawrence Livermore National Library and the University of Colorado, Lawson developed a plan to allow instruments developed by these institutions to go into orbit and collect information about the ozone layer. To underwrite the project, he would solicit commercial advertisers for the mile-long mylar sheet that would exit the atmosphere rolled up and then expand to full size once it reached orbit. The aluminized lettering would reflect the sun's rays, making whatever graphic it displayed visible for 10 minutes at a time at any given point on Earth. After roughly 20 days, it would disintegrate, leaving the sensors behind to continue collecting data for researchers.

'We could actually fly [the] Golden Arches in space," Lawson said in May 1993, referring to the ubiquitous McDonald's logo. With an estimated launch cost of $15 to $30 million, companies buying ads would cover expenses as well as contribute to a profit for Space Marketing—perhaps paying as much as $1 million for every day it was visible.

A few months later, the city of Atlanta began investigating Space Marketing's concept as a possible advertising vessel for the 1996 Olympics. "Special" glasses given away at point-of-purchase displays with cooperating sponsors would allow people to see the Olympic rings in orbit.

That last point appeared to be a concession to a growing chorus of concern over the idea of using space as a commercial entity. While proponents of the idea argued it was similar to blimps sailing overhead and displaying corporate propaganda messages, a coalition of scientists argued otherwise. Carl Sagan called it an "abomination," insisting that astronomy could soon become a practice of exploring the stars wedged between mile-wide ads for fast food and automobiles.

Consumer advocate Ralph Nader led a group calling for an orbital billboard ban, labeling it a practice of "defacing the heavens." Other groups decried it as commercial pollution of space and vowed to boycott any companies involved. Supporters of Nader's Public Interest Research Group picketed Space Marketing's Atlanta headquarters.

Lawson tried to parry the attacks in media, saying that the phrase "space billboard" was the source of the controversy. He preferred the term "environmental billboard" and said that the whole objective was to have a global company foot the bill for scientific research.

 

Conceptually, the idea of a floating Arby's logo the perceived size of the moon was too dystopian for lawmakers to handle. In 1993, Congress submitted legislation that would prohibit the Transportation Department from issuing a launch license to any company prepared to shoot a corporate image into space. (The bill was eventually signed into law by Bill Clinton in 2000.)

None of this publicity was particularly helpful to Space Marketing, which saw its Olympic plans wilt in the face of both legislative opposition and the probability of massive pushback from space advocacy groups. They turned their attention to Russia, which had no ethical objections to space endorsements, and facilitated a 1999 project that saw Pizza Hut attach its logo to the Proton rocket that carried supplies to the International Space Station. (The chain previously considered projecting its logo with lasers on the surface of the moon but abandoned the idea when they realized it would cost hundreds of millions of dollars.)

A rocket is propelled into space
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Space Marketing's investors moved on to the blimp industry and the firm was dissolved by 2007, when Lawson became CEO of airship manufacturer Techsphere Systems. As for the Last Action Hero stunt: It dissolved when Columbia learned Lorsch was threatening legal action, claiming he owned a copyright on the idea of commercial space advertising. The movie itself also failed to launch, becoming a notorious summer bomb when it was pitted against Jurassic Park.

While space has largely been off-limits to such "obtrusive" advertising by law, not everyone agrees that's for the best. Earlier this month, it was reported that NASA is looking into selling off the naming right to its shuttles as a way to recoup some of the organization's costs. When Lorsch testified before a Senate subcommittee in 2004 to review his 1981 proposal, he said that his sponsorship program might have earned NASA $5 billion in revenue if it had been implemented.

Antisocial Media: The Rise and Fall of Friendster

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iStock

When software engineer Jonathan Abrams arrived in Silicon Valley in 1996, the internet was known for three things: vast amounts of information, pornography, and anonymity. If users weren't investigating the first two, they were exploiting the third to argue about movies or politics, their unfiltered opinions unencumbered by concerns over embarrassment. People were known only by their screen handles.

Abrams, who came to California to program for the web browser Netscape, had an idea. What if people could use their real names, faces, and locations online? Instead of having an avatar, they'd simply upload their existing personality in the form of photos, profiles, and interests. They could socialize with others in a transparent fashion, mingling within their existing circles to find new friends or even dates. Strangers would be introduced through a mutual contact. If executed properly, the network would have real-world implications on relationships, something the internet rarely facilitated at that time.

Abrams called his concept Friendster. Launched in March 2003, it quickly grew to host millions of users. Google began talks of a lucrative buyout. Abrams showed up on Jimmy Kimmel Live, anticipating the dot-com-engineer-as-rock-star template. His investors believed Friendster could generate billions.

Instead, Friendster's momentum stalled. Myspace became the dominant social platform, with Facebook quickly gaining ground. Abrams, who once appeared poised to collect a fortune from his creation, watched as copycat sites poached his user base and his influence waned. What should've been a case study of internet success became one of the highest profile casualties of the web's unrestricted growth. It became too big not to fail.

 

Many businesses rely on a creation myth, the idea that a single inciting incident provides the spark of inspiration that turns a company from a small concern into a revenue-generating powerhouse. For publicity purposes, these stories are just that—fictions devised to excite the press and charm consumers. Pierre Omidyar, who programmed AuctionWeb and later renamed it eBay, was said to have conceived of the project to help his wife, Pamela, find Pez dispensers for her collection. In fact, there were no Pez dispensers. It was a fable concocted by an eBay marketing employee who wanted to romanticize the site's origins.

In early press coverage of Friendster, there was little mention of Abrams looking to monetize the burgeoning opportunities available online. Instead, he was portrayed as a single man with a recently broken heart who wanted to make dating easier. Abrams later said there was no truth to this origin story, though he did derive inspiration from Match.com, a successful dating site launched in 1995. Abrams's idea was to develop something like Match.com, only with the ability to meet people through friends. Instead of messaging someone out of the blue, you could connect via a social referral.

Human-shaped icons represent the concept of social networking
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Following stints at Netscape and an aggregation site called HotLinks, Abrams wrote and developed Friendster for a spring 2003 launch. He sent invites to 20 friends and family members in the hopes interest would multiply. It did, and quickly. By June, Friendster had 835,000 users. By fall, there were 3 million. Facebook's launch in February 2004 was months away, and so low-key that Abrams met with Mark Zuckerberg to see if he'd consider selling. If an internet user wanted to socialize in a transparent manner, Friendster was the go-to destination.

When users signed up for the site, they were only allowed to message people who were within six degrees of separation or less. To help endorse unfamiliar faces, Friendster also permitted users to leave "testimonials" on profiles that could extol a person's virtues and possibly persuade a connection to meet up in the real world.

Naturally, not all mutual connections were necessarily good friends: They might have been acquaintances at best, and the resulting casual atmosphere was more of a precursor to Tinder than Facebook. One user told New York Magazine that Friendster was less a singles mixer and more "six degrees of how I got Chlamydia."

Still, it worked. The site's immediate success did not go unnoticed by venture capitalists, who had been circling popular platforms—America Online, Yahoo!, and, later, YouTube—and injecting start-ups with millions in operating funds. At the time, the promise of savvy business minds flipping URLs for hundreds of millions or even billions was a tangible concept, and one that Abrams kept in mind as he fielded an offer from Google in 2003 to buy Friendster for $30 million. It would be a windfall.

Abrams declined.

 

Investors—including future PayPal co-founder Peter Thiel and Google investor K. Ram Shriram—advised Abrams that there was too much money to leave on the table in return for short-term gain. Abrams opted to accept $13 million toward building out the site. He sat on the board of directors and watched as backers began to strategize the best path forward.

Quickly, Abrams noticed a paradigm shift taking place. As a programmer, Abrams solved problems, and Friendster was facing a big one. Buoyed by press attention (including the Kimmel appearance where Abrams handed out condoms to audience members, presumably in anticipation of all the relationships Friendster could help facilitate), the site was slowing down, unable to absorb all of the incoming traffic. Servers struggled to generate customized networks for each user, all of which were dependent on who they were already connected to. A page sometimes took 40 seconds to load.

The investors considered lag time a mundane concern. Adding new features was even less attractive, as that might slow the pages down further. They wanted to focus on partnerships and on positioning Friendster as a behemoth that could attract a nine- or 10-figure purchase price. This is what venture capitalists did, scooping up 10 or 20 opportunities and hoping a handful might explode into something enormous.

But for business owners and entrepreneurs like Abrams, they didn’t have a portfolio to deal with. They were concerned only with their creation. Its failure was all-encompassing; there weren't 19 other venues to turn to if things didn't work out.

Two word balloons represent the concept of social networking
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Abrams saw the need for a site reconfiguration. The board was indifferent. Eventually he was removed and assigned a role as chairman, an empty title that was taken away from him in 2005. As the board squabbled over macro issues, Abrams watched as micro issues—specifically, the site itself—deteriorated. Frustrated with wait times, users began migrating to Myspace, which offered more customizable features and let voyeurs browse profiles without "friending" others. Myspace attracted 22.1 million unique users monthly in 2005. Friendster was getting just 1.1 million.

 

By 2006, Friendster was mired in software kinks and something less tangible: a loss of cachet among users who were gravitating toward other social platforms. Though Abrams was out, investors continued to pour money into Friendster in the hopes that they could recoup costs. In 2009, they sold to MOL Global for $40 million, which would later convert the site into a social gaming destination. But it was too late. Though the site still had an immense number of users—115 million, with 75 million coming from Asia—they were passive, barely interacting with other users. By 2011, user data—photos, profiles, messages—was being purged.

In ignoring the quality of the end-user experience, the decision-makers at Friendster had effectively buried the promise of Abrams's concept. They sold off his patents to Facebook in 2010 for $40 million. Coupled with the MOL sale, it may have been a tidy sum, but one that paled in comparison to Friendster's potential. A 2006 article in The New York Times reported with some degree of morbid fascination that if Abrams had accepted the Google offer of $30 million in 2003 in the form of stock, it would've quickly been worth $1 billion.

In the years since, Abrams has tinkered with other sites—including an evite platform called Socialzr and a news monitoring app called Nuzzel, which is still in operation—and tends to Founders Den, a club and work space in San Francisco. He's normally reticent to discuss Friendster, believing there's little point in dwelling on a missed opportunity.

The site did, ultimately, became a case study for Harvard Business School—though perhaps not in the way investors had intended. Friendster was taught as a cautionary tale, an example that not every good idea will find its way to success.

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