UGG's Secret Weapon: The Power of Listening to Your Market with Brian Smith

Episode 48 Brian Smith
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[00:00:00] Introduction to Lean Marketing Podcast
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[00:00:00] Brian: the rule was you do never ever try and sell UGG boots to a customer until they've tried them on. And once that started the sales just, you know, from three to six to nine just, just straight up in millions. It was just incredible. So the simplest things. Can be your biggest obstacles. And it's a matter of having the smarts to especially to get with the customers and find out what's the objection.

[00:00:28] Brian: 'cause it really isn't the money, it's really not the product. It's, they don't get it. So if you can, you know, and that comes back to marketing again. What makes your customer wanna be in that picture?

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[00:00:46] Allan: Um, Welcome to the Lean Marketing Podcast.

[00:00:49] Allan: I'm your host, Allan Dib. Today I've got a special guest with me, Brian Smith. He's a very colorful character. He's an incredible entrepreneur. He's sometimes a [00:01:00] bit of a controversial figure in some quarters. So, Brian founded essentially UGG boots in the United States, or he brought UGG boots from Australia to the United States.

[00:01:10] Allan: Popularized them, made them a billion dollar brand. And um, exited. So, Brian welcome to the show. How are you?

[00:01:19] Brian: Thanks, Allan. I'm great. Thanks. Great to be on your show.

[00:01:22] Allan: good to have you.

[00:01:23] Brian Smith's Journey with UGG Boots
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[00:01:36] Allan: So, uh, you and I had the pleasure of spending a good amount of time in San Diego earlier this year, so I had a good time and you were a very gracious host, showed me around the city and all the highlights and things like that. But it was such a pleasure getting to know you and your story.

[00:01:39] Allan: Very, Very inspirational because. Often I'll interview an entrepreneur and it's Hey, I was broke. and then suddenly some little thing happened and then boom, the business exploded, whereas, your story is a little bit of a slower burn, right? So you strUGGle for quite a long time before you had success with UGG boots.

[00:01:57] Allan: It wasn't an instant success was it?[00:02:00]

[00:02:00] Brian: very much so. Yeah. And ironically I, I outlined it all. I, I wrote this book, the Birth of a Brand,

[00:02:06] Brian: It's an

[00:02:06] Brian: and the theme of it is that you can't give birth to adults, right? Because, 'cause I'm sick of hearing all these instant riches stories 'cause it never, never happens that way. if you look at the Wall Street Journal, list of companies, every one of them started out really small with, so someone had the AHA idea and then they took action and that was the birth.

[00:02:29] Brian: And then it went into this horrible infancy and that's usually when, entrepreneurs give up 'cause they think their big idea isn't working, but an infant can't get up and go to college. But if you can keep nurturing it, it'll hit the youth and grow into the teenage years and become a really good company.

[00:02:45] Brian: But man, it takes time. Time I hear of an instant success story. I just don't believe it.

[00:02:52] Allan: Well, maybe take us back a little bit so how did UGG boots come about? How did you bring them to the United States? How did [00:03:00] it all happen?

[00:03:00] Brian: Sure it wasn't rocket science. I had quit being an accountant after studying for 10 years. And I quit the day I graduated, and I knew that there was something bigger out there. And so I was meditating one day in Perth, in Western Australia. And I had this goosebump moment when I thought, oh my God, all the big trends are coming outta California, like Levi jeans and waterbeds and everything.

[00:03:24] Brian: And so I thought, I'm gonna go to California and find the next big thing that hasn't been here yet, and I'm gonna bring it back and I'm gonna start you know, make my fortune. And so I, within a couple of weeks I arrived in LA and I had rented a little house in Santa Monica and a dodge van and, I had my surfboard and I, first thing I did was went to Malibu, you know, surfing.

[00:03:44] Brian: 'cause I'd grown up as a kid, you know, on the south coast of New South Wales. Right. Just loving surfing and, and I was there for like 3, 4, 5 months. Didn't find the next big thing. And it got to be December, late November and the [00:04:00] first storm hit the coast of California and, I was surfing out and in the cold water and the wind and everything, I got out of the water and I was pulling on my UGG boots that I'd brought from Australia and I had another goose boat moment and I thought, oh my God, there are no UGG boots in America.

[00:04:18] Brian: And I think at that time, one in two Australians had some sort of sheepskin footwear. So, that was my big AHA moment. I'm gonna be an instant millionaire, you know? my buddy I was surfing with said, man, we gotta go into business, you know?

[00:04:32] The Struggles and Breakthroughs
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[00:04:35] Brian: And so we ended up importing about six pairs and Doug went on the road to every shoe store in Southern Cal. And he came back with about 150 business cards and not a single order. And he said that they think we are crazy trying to sell sheep skin in California, right? But the climate here is identical to Australia,

[00:04:53] Brian: so that wasn't the reason. And then I started thinking laterally, which, you know, if you're an entrepreneur and you hit the wall, you gotta [00:05:00] figure out a way around it. And I thought, well, how come all my mates up at Malibu think this is the best idea in the world? And realized, oh my god, they so many had been to Australia on their surf trips and they brought half a dozen pairs back for all their buddies.

[00:05:16] Brian: So in the surf community in Southern Cal, it was pretty well known. And so we switched gears and went to all the surf shops. And there was about, there was about 60 or 70 shops, so it was a pretty big market for us. And I remember the very first store I walked into had my little bag of samples and I was terrified of selling.

[00:05:34] Brian: 'cause I thought Doug was gonna be the salesman, but he made sure I got into it. And I walked in just terrified. And the guy, when I opened up my little sample bag, he goes, oh, I boots, man. They're great. What are you doing with those? And I said, well, you know, we are thinking of importing 'em into America.

[00:05:52] Brian: Oh my God, what a great idea. You're gonna make a fortune. All my friends love them, And so I walked outta there going, oh shit, this [00:06:00] sales isn't so bad. You know? And I went to the next store and, oh, our boots. Yeah, I'm wearing 'em right now. They're the best thing. You're gonna make a fortune. And so this happened in all, every surf shop I went into.

[00:06:11] Brian: And Doug and I, you know, we regrouped at the end of the week and we were just on fire with how rich we were gonna be. But we never stopped to think that we didn't ask for any orders. ' cause I mean, we didn't have any inventory but now we knew we needed inventory, right? So by a pure fluke, my roommate overheard us talking and he had some friends at his office that were investing in new companies.

[00:06:34] Brian: So, we raised 20 grand, which was equivalent to about 80,000 today, and I sent 15 down to Australia to the factory and ordered 500 pairs. And you know, they arrived a couple of weeks later and just before Christmas and Doug and I loaded up our cars. Now, you know, I had a van and I had this huge

[00:06:54] Brian: inventory of boots in it. And I went back down to the very first surf shop that I started with and I go, [00:07:00] okay, Jim, how many do you want? And he just stopped me there. He goes, oh, Brian, well done man. But we couldn't sell 'em in our store. We just sell surfboards and trunks and flip flops and you know, you're gonna do great in the shoe stores. And I just went, oh shit. You know, and I went to the next store. Oh man, well done Brian, but we just saw surfboards and bikinis and swimsuits and you know, they'll never work here, but they'll be great in the shoe stores. And, And this happened all the way down the coast, all the way down to Mexico. And when we tallied up the orders for delivery for that Christmas, turned out to be 28 pairs.

[00:07:38] Brian: And that was the beginning of me learning that you can't give birth to adults, you know, and that, set up the next five years of, I'd love to have got out of it right then. I wish I could have given up several times on the way, but this one time was like, well, I can't give up.

[00:07:53] Brian: I got, you know, 480 pairs left in the third bedroom and, and 20 grand of my investors [00:08:00] money. So I. I ended up having to stick around, you know,

[00:08:03] Allan: Wow. And so, you've got early indications, that the market wants this, then you go to market and market's like, no, thank you. Great idea, but we don't wanna give you any money. What next?

[00:08:16] Brian: So for two or three years I, started advertised models on the beach, you know, with the perfect hair and clothes and, you know, totally fake models on, you know, and the bug UGG boots were like the main part of the ad.

[00:08:30] Brian: And you know, the sales that next year went to about 20,000 and the following year with better looking models and everything went to about 30 grand. And that summer, I just decided it is too hard. I'm gonna get out of it. I'm just gonna quit the inventory and get out.

[00:08:44] Brian: And what happened though is that I'd opened up maybe 30 or 40 surf shops who had put little tiny bits of inventory in. And it wasn't really rocking yet, but it was October again, that big storm hit [00:09:00] California and, and I got home from the golf course where I was working, you know, soaking wet and my answering machine had like, like

[00:09:07] Brian: 25 messages and they're all the same going Brian, I've had a hundred people in the store today wanting UGG boots and I've run out, can I get some more? And you know, I'm thinking, oh God, I can't even go out of business. And I ordered, you know, another couple of thousand boots from Australia and stayed in the business.

[00:09:24] Marketing Lessons and Expansion
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[00:09:24] Brian: but this time I realized, I'm doing something wrong with my advertising. it should be way, way more effective than it is. And by a pure fluke, I was having a beer with one of my surf shop owners and I was explaining this dilemma and he said, oh, shut up Brian. And he calls out back to, you know, half a dozen of these little 12, 13-year-old grima who store their boards in the shop, you know, and he said, what do you guys think are UGG boots?

[00:09:50] Brian: And Allan, every single one of them just, oh, those UGGs, man, they're so fake. Have you seen those [00:10:00] ads, those models, they can't surf. And like instantly I realize I'm sending the wrong message to my target market. Right? And I, when I saw my ads through their eyes, it was like so embarrassing. They were so fake, and so I was stuck with another dilemma, right?

[00:10:19] Brian: How do I get around this? And luckily, I called up a guy, Pete Townend, who was a, an Aussie guy. He was living up in Orange County running the scholastic surf team. And I said, Pete, you got any young kids who are gonna go pro soon? 'cause I can't really afford, you know, expensive pros.

[00:10:36] Brian: And he gave me these two guys, Mike Parsons and Ted Robinson. And instead of, you know, posing 'em on the beach. I just thought, how can I get the most impact? And I said, let's go surfing at Blacks Beach and Trestles and 'cause these surf spots, there's a mile walk to the beach and it's fantastic surf at the end.

[00:10:54] Brian: And I thought that every kid who reached surfer or Surfing Magazine would recognize these [00:11:00] walks, right? From different issues. And so I just took shots with my little, my own camera and. And I selected a couple of those walking to and from the beach. And I ran those ads in October, November, December, that next season.

[00:11:14] Brian: And the sales went from like 30 grand to 220.

[00:11:18] Brian: Right. And that was when I had this AHA moment about advertising and marketing. And that is that you never advertise your product, per se. Right. You try and advertise the feeling, the emotions, what the consumer's gonna get out of it, and the, more successful you are at dragging 'em into that photograph.

[00:11:40] Brian: And it can be like, in our case it was, you know, paper, it was like magazines. But today's medium, it's your website, all of your social media marketing. If you can get the consumer to wanna be in that photo, that's the success that you're gonna have if you just put your product out there, [00:12:00] it's gonna be a drag.

[00:12:02] Brian: so that was probably the most key thing I learned in marketing. But the secret then was to translate that into other mediums. So we were, snowboarding had just started, right? The ski market was crashing. The snowboarding was like all these young. Colored hair, guys with earrings and shit. And it was like everybody hated them, but I knew that was gonna be the next thing.

[00:12:27] Brian: So I started advertising with these young kids who were, you know, snowboarders and we really rocked it in the snowboard market. And each time I did this, it became so cool to have a pair of UGG boots, like in the surf on the beach areas. If at Malibu high or you know, Carlsbad High or you know, San Diego High.

[00:12:48] Brian: If you didn't have a pair of UGGs, you were not the cool kids, right? So I developed this really cool following, and then when it went to snowboarding, it just increased that, you [00:13:00] know? And then I had a problem trying to get back east into, you know, Chicago, back to New York. And I finally was asking a guy who owned a sports store there, and what do the kids do in the winter?

[00:13:12] Brian: And he goes, you know, duh, they play hockey. And you know, being an Aussie, I had no idea what ice hockey was all about, right? I knew it existed, but I did not know it was twice as big as the surf market right. And so I started advertising in Minneapolis, in this kids' hockey magazine. And that just took the East coast. And so now it took about, you know, three to four years after I had that AHA moment.

[00:13:38] Brian: But it took that much to saturate the whole country at the youth level. Still pretty small 'cause it was still youth, but it was huge. You know, for me it was now turning into the. Millions and, you know, four or $5 million in sales. So it is really big. When I finally discovered that.

[00:13:58] Allan: Wow, so some of the key lessons I [00:14:00] take from that is and this is very much the case now with social media and a lot of these platforms is if your content is too polished, if it looks too professionally done, it just often falls flat. You know, it fails the believability test. People can't relate to it.

[00:14:17] Allan: So that's one thing. The other thing I think is the power of demonstration. You know, you took photos of people actually using the product in the wild, so it's not just like a beautiful photo on a white background of the product, it's actually people using it and visualizing themselves in it. I think that's an important.

[00:14:35] Brian: And, in a bizarre way, we were using influencers 50 years ago, you know, 45 years ago. So it was, yeah, it was pretty interesting.

[00:14:43] Allan: Way ahead of the curve. And I think that the third trend as you mentioned, so not just using influences, but hooking onto trends that are sort of starting to uplift. So, a rising tide. So you saw snowboarding coming in, so you attach yourself to some of that, because a lot of times [00:15:00] your product can be excellent, but the market is maybe flat or even declining. And so you are, you're fighting a losing game. Whereas, if you can attach yourself to something that's kind of, uh, in an upward trend, then that can be a massive

[00:15:13] Brian: That is very key. Yeah. Yeah.

[00:15:15] Allan: Brian, okay, so now you've hit the east coast.

[00:15:17] Allan: You're doing really well businesses is going well. What was your next frontier or what was your next challenge? Did you start manufacturing them or did you just keep importing them and what,

[00:15:27] Brian: yeah, we kept importing them. The next challenge was the fact that. Americans don't understand sheep skin like Australians do, right? Aussies know you cannot rip a sheep skin. They're that tough. You can get 'em wet and they'll still insulate right? With even when they're wet. You can wash them.

[00:15:47] Brian: You know, they're not hot. You can, you know, when they're dry, they breathe. So your foot just stays afoot temperature. It never gets overheated. You know, Americans didn't have a clue about that. It was, oh, it's too delicate. It's, we have mud and slush [00:16:00] where we are. You know, it was too prickly and oh, they'll, you know, and what if I, what happens if I get them stained?

[00:16:07] Brian: All that sort of shit. So, I think one of the biggest breakthroughs there, there were two, I'll give you the first one was I was in a surf shop and they'd been selling for three or four years and doing okay. But this girl walked in and she went over to the sheep skin section and she was feeling the boots and touching them.

[00:16:27] Brian: And she said to this, you know, the, this, the guy on the floor, you know, what are these like? He says, well, I don't, don't really know, you know? She said, well, you know, they, they're expensive. Oh yeah, they're really expensive. He says, you know, can you wear 'em, you know, they look very hot. Yeah. I guess you're right.

[00:16:43] Brian: You know, and I sort of put them back and she walked out.

[00:16:47] Brian: Right. And right then I saw there's a problem,

[00:16:52] Brian: right? So I came up with what was the cheapest marketing campaign I ever did in 20 years of owning UGG, [00:17:00] right? I came up with a six pair stocking plan was, which was that if you put six pairs of these boots in your store, I'll give a free pair to the manager.

[00:17:11] Allan: Nice.

[00:17:12] Brian: And as soon as I did that, you know, a different time I was in a different store and some guy walks in, he was doing the same thing. God, these look, you know, what are these like? And the salesman, the world David is God. They're the best things in the world, man. I'm wearing them right now. He says, what?

[00:17:27] Brian: That's not even cold. He said, doesn't matter. Your feet never get warm. You know, and well, they're expensive. No, they're not expensive shit. I wear 'em every single day. They're the best value, you know? And so, I started to create a salesman and the other salesman would pick up on this 'cause they were commissioned and they'd start saying the same thing, you know, to make money.

[00:17:48] Brian: And so that was one of the biggest turning events in the company. And the other one is similar story, but I we were at a ski show in [00:18:00] probably early eighties, 83, 84, 85, and we had done no business for like four days. And the fifth day was the last day. And this woman came around and I knew that she owned about 12.

[00:18:13] Brian: Big ski stores in the back, in the New England area, you know, around New York. And she was talking to my, you know, my salesman on the floor. And same story. Oh, they look hot, you know, oh, they know we have mud slush, we need rubber, we need rals, you know, and and I just like snapped. And I calmly walked down.

[00:18:33] Brian: I said, excuse me, man. Would you mind taking your shoe and sock off? She was wearing Reebok right with socks. Oh no, I don't need to do that. I know these are so please man, would you just do me a favor? So she sat down and she took her shoes off and she pulled her UGG boot on and she said, what?

[00:18:49] Brian: I've heard a million times, right? Oh my god, these are so comfortable. I could sell these in the after ski department. You know? [00:19:00] And just like that, she ordered like 24 pairs by, for 10, store 240, that, that was like the biggest order we'd ever had, just because she tried them on, right? And so from then on there, we had this mantra in the company, you know, for all my, 'cause by now I had about 30 salesmen all across the country.

[00:19:19] Brian: And the rule was you do never ever try and sell UGG boots to a customer until they've tried them on. And once that started the sales just, you know, from three to six to nine just straight up in millions. It was just incredible. So the simplest things can be your biggest obstacles. And it's a matter of having the smarts to especially to get with the customers and find out what's the objection.

[00:19:48] Brian: 'cause it really isn't the money, it's really not the product. It's, they don't get it. So if you can, you know, and that comes back to marketing again. What makes your customer [00:20:00] wanna be in that picture?

[00:20:01] Allan: That is absolutely the biggest challenge in marketing is the mismatch between what you think the customer thinks and what the customer actually thinks,

[00:20:10] Brian: it's it's amazing.

[00:20:12] Allan: is absolutely the biggest issue. And you know, you, because I mean, no, you are always looking at your product through your own eyes. You know how good it is.

[00:20:21] Allan: You know how, you know, they consider your product for seven seconds if that, and then make a decision. So yeah, absolutely. Getting them to try before they buy very smart strategy. Something that, that you must do, especially if you've got an experiential type of product

[00:20:37] Brian: that's that's correct.

[00:20:38] Allan: yeah.

[00:20:39] Allan: Yeah.

[00:20:40] Trademark Controversy and UGG Boots
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[00:20:40] Allan: Hey, Alan here. Wanna dive deeper into today's episode, head to lean marketing.com/podcast for links to all the resources we mentioned, plus some exclusive ones. Just for podcast listeners, you can also subscribe to get notified when new episodes drop and receive my latest marketing and business tips right in your inbox.

[00:20:59] Allan: [00:21:00] That's lean marketing.com/podcast. Now back to the show.

[00:21:05] Allan: So, Brian I wanna switch gears for for a minute. I've seen UGG boots mentioned on social media a few times, and a lot of people are upset that they're an Australian product and in Australia they're not the word UGG boots is not trademarkable, right. And whereas, you trademarked the successfully UGG boots in America, and so no one other than yourself could sell could use the words UGG boots. Right? And a lot of people felt that you know, that was you know, taken from Australia, all of that sort of thing. What are your thoughts to that and how have you gone about thinking about?

[00:21:38] Brian: Sure. Well, ironically, it was never my problem. Right, because I sold the company in 1995, which was the year the internet started, right? So I never had a problem. I I had lots of competitors coming in from Australia to the trade shows, but they all realized, well, listen, I trademarked here.

[00:21:58] Brian: So they would call them [00:22:00] different names, different types of sheep, skin boots, and I actually went outta my way to help all these guys. Grow their businesses. 'cause there were a lot of retailers that I did not wanna deal with, the lower end ones, but they really wanted to have sheep skin boots. So I would steer them to all my competitors.

[00:22:16] Brian: Right? So it wasn't an adversarial thing in America and when it began. But the big problem came about when the internet came online and Australians were selling internationally.

[00:22:30] Brian: By now, you know, I'd bought the trademark for England and Japan and when I sold the company in 95, they went and registered everywhere.

[00:22:38] Brian: I didn't have the money. I, and I didn't have the inclination to, but they went and registered everywhere. So the difference between Australia and the rest of the world is that in Australia, if you are the first guy in with your 10 bucks and you fill out the form, you own the trademark.

[00:22:56] Allan: Yeah.

[00:22:58] Brian: The rest of the world. If you can [00:23:00] establish first use and continuous use, then you own the trademark. Even if you didn't file or register, you can prove that. You then prove you own the trademark. So I did when I first got, you know, come up with the idea I wanted to use a but I had the lawyers do a search of the world to see where in the world had UGG come up.

[00:23:23] Brian: And it had not come up in America. It had not come up in a lot of countries. And so I just registered the American one because I was the first and could prove first use and continuous use. Right? So that internationally is the standard. And that's been challenged, believe it or not, over 45 years. About, I think it was last year, it might have been the year before I had to testify in the US Supreme Court.

[00:23:49] Brian: About the day I registered the mark 45 years previously. Right. And it's been all the way up to that level of court and it came back. Yeah. You own the [00:24:00] mark. So, so I don't wanna get any more legal than that, but again it really wasn't my problem. But I do understand now this is a little known fact, my cousin is Dick Smith, right. And he brought out Aussie mite, right? He didn't try and take the world on with Vegemite saying it's an Australian brand and you gotta, we are gonna do it anyway. Right? He was logical, did his research. The lawyers advised him, you, you'll never own it. So he came up with Aussie mite and that's what I wish more Australians would do is come up with a new really cool brand and put 'em out there.

[00:24:36] Brian: You know, something sheepskin boots, something. Sheepskin boots. They would all, they would compete just as easily with that without having to, you know, do the counter feeding prob, you know,

[00:24:47] Allan: Yeah, Yeah, and Dick Smith is probably one of the most legendary entrepreneurs in Australia. So he started obviously Dick Smith Electronics and some food companies and he's in aviation and all sorts

[00:24:58] Brian: yeah. I never, that's the first [00:25:00] time I've ever thrown his name out but it was just, I've never been asked that question so pointedly before, so it just sort of fit in, you know.

[00:25:07] Allan: That's we've gotta get to the root of the issue because, yeah, I mean, I've seen tons of tiktoks especially where people are like, oh, you know, these are the real UGG boots. They're really from Australia, and this company just owns the trademark and things like that. But having said that, I mean, I know the importance and power of trademarks.

[00:25:24] Allan: I mean, I have someone on my team who's their part-time job is just getting people who are ripping off our trademark or ripping off what

[00:25:32] Brian: It's, it's

[00:25:32] Brian: a big problem.

[00:25:33] Allan: a huge problem. It's a huge problem. And you know, sometimes you've gotta fight trademark trolls and things like that. And so, securing trademarks for what you're doing, especially if it's core to what you do.

[00:25:44] Allan: I think it's incredibly smart and incredibly important. And so, I think what you did created so much value, especially for the company that bought you out and of course for yourself as well when you were growing the business. So very important.

[00:25:57] Brian: And not to mention the fact that the, [00:26:00] you know, UGGs were just a trash product when I started. I mean, the quality was so shitty. It was, the designs were primitive and because of what I did, and I, I sort of refined it and got it, you know, the styles and the patterns more aligned with American, you know, quality standards, you know, by doing that in 19 early eighties, you know, I've been responsible for billions and billions of dollars of sheepskin exports.

[00:26:28] Brian: You know, that would never have ever happened had I not gone out there and, you know. Started that business. So, you know, the people complaining Australians, oh, they ripped off the trademark. Well, I also provided billions of dollars worth of exports, you know, so it's hard to sort of put the valuation on that.

[00:26:46] Allan: There's always gonna be someone who complains about something you do. So, a lot of armchair experts out there who,

[00:26:52] Brian: right.

[00:26:54] Allan: so, who haven't done anything. I, I, I recently read a quote, which I really resonated. It [00:27:00] said people from below. So no one, rich is going to talk down to you for trying to make money.

[00:27:05] Allan: No one who's very fit is gonna be down on you for trying to get fit, you know? And so, it's usually people who are, you know, coming from below that will be down on you for trying to do something or achieve something or whatever. So, I think I'm with you on this one.

[00:27:22] Brian: Yeah. Yeah, it's very emotional and you know, it is what it is.

[00:27:28] Challenges of Growing a Business
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[00:27:28] Allan: And so, um, you ended up selling UGG boots to a, you ended up exiting. What was your thought process around that? Why didn't you just ke keep the operation going? Why did you exit and what were your thoughts?

[00:27:39] Brian: Okay. There, there's a couple of reasons. One is that even though I was a chartered accountant. I knew nothing about finance. My accounting mentality was like, oh, we just sold a million bucks worth of product this year. And we're broke.

[00:27:57] Brian: What? What's the answer? Oh shit, I'll [00:28:00] sell 2 million next year and then I'll have tons of money.

[00:28:03] Brian: Right? And next year I'd sell 2 million. I'm twice as broke 'cause I had a bigger warehouse. More stuff, more overheads. Cost of product was double, you know, so, so that was never the answer. And so, when I was, you know, doing 200,000 a year, I could sort of get credit, you know, but when it got up to 2 million and 4 million and 8 million, it became a real problem trying to finance the company.

[00:28:29] Brian: And I had to keep getting bigger and bigger investors in. And around about 92, 9, 91, 92, I got up into the 12 to 15 million, or 12, let's say the $12 million range, and it was growing to the point where I just really couldn't finance the production needed to satisfy the demand that I'd created because I was really good at marketing and sales.

[00:28:58] Brian: Right. [00:29:00] So, it got to be, it was 95. At the be January, February, like, did we ship in September, October, November, right. And finish year in December, January. That in 95, the all the preseason trade shows were on and everything.

[00:29:17] The Decision to Sell UGG
---

[00:29:17] Brian: And the orders coming in was so big that it looked like we were gonna do $25 million in sales.

[00:29:25] Brian: And the last season was 15. Right. And so I realized, my God, there's no way I know how to finance that. And I, I was if I had a tried to hang on and do it myself, I knew I would just fail, right? That the company would implode. And I was going to a trade show in Atlanta and I ran into a buddy of mine who started out, he had a company called Deckers, and they had, he had this product, triple Decker sandals. They were pink, yellow, and pink neoprene. They're [00:30:00] just like, we call 'em thongs in Australia. Right. And he had

[00:30:04] Brian: built that

[00:30:05] Allan: Flip flops with their Americans,

[00:30:06] Brian: Flip flops yeah. In America. Yeah. Yeah. Thongs a totally different thing over here.

[00:30:11] Allan: Sure.

[00:30:11] Brian: And uh, so, he licensed different products, you know, Quicksilver, not Quicksilver, lightning Bolt and other, you know, wetsuit brands. But he finally ended up licensing a sandal called tva, TEVA, and that was a, when the outdoor market over here took off, they went with a, and he built his company up to about 60, $70 million and then took it public, right?

[00:30:35] Brian: And I was going to this trade show in Atlanta with with a potential problem of 20 million in sales. And and I saw Doug up at the other end of the baggage claim at the airport and I just got goosebumps again and I thought, oh my God, I know he's sitting on about $28 million in cash 'cause of the IPO and we're about to go broke.

[00:30:59] Brian: [00:31:00] And he dies every winter. Our company dies like every summer. So by putting these two together, we got a 12 month sales force, 12 months warehouse, 12 months admin. Everything was so right. So I walked up to him and I said, Hey Doug, you know, if ever we're gonna do this? 'cause we'd seen each other in surf shops for 20 years, right?

[00:31:22] Brian: And I said, if ever we're gonna get this going mate, now's the time. And so that afternoon we had the accountants back in California talking to each other. About, you know, some sort of acquisition or financing. And we ended up closing in October that year. And they bought the UGG brand.

[00:31:40] Allan: Wow. And now it's a global multi-billion dollar, multi-billion dollar

[00:31:45] Brian: it's been three, three years, over 2 billion and about three or four years before that at 1 billion. Yeah. It's been just an amazing brand.

[00:31:55] Allan: How incredible, and I mean all from just a sheep skin [00:32:00] shoe from the rural Australia. Isn't that funny?

[00:32:04] Brian: Yeah. And when you know, I'm a keynote speaker and when I have on stage I've got a photograph of the very first boot sample that we tried and it had glue all over the top of it and it had no binding and no, it, no, it was just horrible. But that was the beginning of a billion dollar corporation.

[00:32:23] Brian: Yeah.

[00:32:24] Lessons for Entrepreneurs
---

[00:32:34] Brian: Yeah, so you know, if you're an entrepreneur out there, do not wait for your product to be perfect. Just get it out there and the feedback you get from consumers will make you accelerate your product development. And just don't wait. Go for it.

[00:32:40] Allan: I think that's amazing advice because so many times people just have this perfectionism. They try to get it perfect and you'll never get it perfect because you're looking at it for it from your eyes, not from the eyes of your

[00:32:49] Brian: Exactly. We talked about that earlier. You gotta figure out what's in their brains. Yeah.

[00:32:55] Allan: So, Brian you are, I mean, I came to visit you in San Diego.

[00:32:59] Allan: You're living [00:33:00] the dream now. You're a surfer. You're you're doing all of this other stuff. What else are you up to these days?

[00:33:05] Brian: Well, career wise I am really enjoying speaking to entrepreneurs to business people. You know, I get a lot of sales I've got a lot of philosophies, you know, that I have. I'll just show my book again if you don't mind

[00:33:18] Allan: The is the Birth of a Brand.

[00:33:20] Brian: Yeah. And it's not like, oh, and then I made these millions and then I did this million then it's none of that. It's all of the shit that you go through when you're building a business. Right. It's the hard times and you know, I've got lots of philosophy.

[00:33:35] Brian: Like you nearly always, your most disappointing disappointments will become your greatest blessings. And I give examples of how I thought, this is the end. I'm never over gonna overcome this. And then, you know, six months later I'm flying along again. You know, the, there's lots of wisdom 'cause it's like a roadmap for entrepreneurs and you know, the quickest way for a tad pole to become a frog [00:34:00] is is live every day, happily as a tadpole, which means just be in the now, do what you can today. You know, and you look back, you know, a year later and you look, oh shit, I'm a frog. You know, there, there's all this philosophy and you know, there, there is you know, lots of pain points. In fact, one of the biggest, and one, one of the most important lessons in the book is right near the end.

[00:34:24] Brian: And I meant to, you asked me what, what happened when I sold it, right? The very last financing I did was with another Australian guy. He had been very big in the hotel business here in America. And, and I used to go to him, say, Allan, I've got so many orders, I can't finance it. You know? And he'd say to me, Brian, I love you man, but if I gave you money, I wouldn't see you again till you needed more.

[00:34:50] Brian: Right. And he was sort of right. 'cause I was like. You know, a bull in a China shop in ways. But finally he said, look, I've got this other [00:35:00] accountant guy I know and if he can come in and look over your shoulder, then I'll finance the last, you know, the next round. And so I did not like this guy, but I went ahead 'cause I needed the money for the business so desperately.

[00:35:13] Brian: And this guy turned out to, I, I didn't know at the time, but you know, six months later, I found out that he'd just bankrupted an $80 million accounting firm. And he was a narcissistic sociopath, you know, and. Ever since he came into the company, I started seeing the closed doors and I started seeing factions fighting against each other.

[00:35:34] Brian: And he didn't care about the sales, he just wanted to get himself up the channel until he was president and got rid of me. You know? And that I talk for, there's a whole section, the last couple of chapters about that, and it's really important to entrepreneurs who are in that five to 10 million 'cause they're starting to think about, how do I get out of this?

[00:35:56] Brian: And they're already being burned by different financing. [00:36:00] They've been burned by employees. and so it's a really good roadmap of how I was able to handle it mentally. Because I mean, you didn't sleep for months at times and physically how I, I I made myself get up and exercise 'cause that's the only way I could keep my sanity.

[00:36:19] Brian: And there's lots and lots of little tricks that I used to guide me through that one, you know, one or two year period at the end. And that's what you don't usually see. In other business books, you know, they don't wanna talk about their failures. Well, that was one of my biggest failures was, you know, sucking up to this guy just to get the money in.

[00:36:40] Brian: Right. And the cost of that, to me, personally, was quite great. And when I saw my buddy Doug in the Atlanta airport, one of the rules I made with my investor was that we never let this guy. Get involved in this negotiation or it'll go to hell. So as long as we keep him out of it.

[00:36:59] Brian: It'll work. [00:37:00] And it did. We kept him out of it for eight months and you know, he still made a lot of money, made millions for, you know, for adding very little value to the company, but just having him there enabled the company to grow. You know, there, there's all these trade offs and, and and that's what my book's really good for is looking at just how devious and how circuitous things are.

[00:37:23] Brian: But if you have the right mindset, you'll overcome it all and, and luckily I came out as a winner, so I was very thankful for that.

[00:37:32] Allan: Yeah. Well, you did. You did. Well, I mean, every time I've ignored my gut feel about a person in business, I've lived to regret it later. You know, sometimes I'll know like, you know, this is not really a super ethical person or whatever, and if I've ignored my gut feel and I, whether it was an employee I was hiring or whether it was a partner I was taking on or whatever, I've always regretted it.

[00:37:53] Allan: So,

[00:37:54] Brian: I'm getting goosebumps thinking of you, because my wife was infallible. [00:38:00] She picked every dickhead, right? And I overrode her so many times. Oh no, you, Lori, you don't see this. Oh no, he's got this. And no. And six months later she was absolutely right, man. She was infallible

[00:38:12] Allan: The wives have usually got the vibe, so, I can tell you that's for sure. So, yeah, many times I overrode my gut feel just because I thought someone could bring something to the business, was a good sales person, was a good investor, was a good whatever, and I. It's been a big mistake. So, now I only ever do business or hire people that I would love to hang out with.

[00:38:34] Allan: Right.

[00:38:34] Brian: yeah. I,

[00:38:35] Brian: I found

[00:38:35] Brian: the.

[00:38:36] Allan: are, yeah. Yeah. It's just not worth it. Just not worth the headache. my view is that's no, there's no room for drama in a business. A good business is usually gonna be a pretty boring business.

[00:38:47] Allan: You're going

[00:38:47] Allan: to, you

[00:38:47] Brian: with that. Yeah. And the another way of saying what you just said is that it's impossible to do the right thing the wrong way.

[00:38:56] Allan: Yeah.

[00:38:57] Brian: Right. The right thing is I get money in [00:39:00] the company the wrong way is, look what comes with it, the baggage, you know, you gotta be strong enough to withstand the negative part.

[00:39:08] Allan: And I mean, the other thing is, why did we start a business? Why did we go through all the pain and risk and all of that? You know, a lot of times it's for fun, for freedom, for fulfillment, for flexibility, all of those sorts of things. And then if you're now working with people that you don't wanna work with and things like that, then well, you might as well be working for someone else.

[00:39:26] Allan: And. Not have all of the risk and the downside and headaches and things like that. So, yeah.

[00:39:33] Brian: Yeah. The greatest thing I try and tell people from the stage is how to live a good, healthy life. Not a business, but how to live a really good, healthy life. And business is just a way to pay the rent, you know, and hopefully set you up with some assets later on. But, you know, if you sacrifice your daily living, 'cause you got to do this business, it's, you got it backwards, you know.

[00:39:58] Allan: I totally agree with that. Well, Brian, [00:40:00] you've certainly done that. Thank you so much. I appreciate your time and I appreciate how gracious you've been both now and earlier in the year when we got to hang out for a bit. So, is there anything I, didn't ask you that I should have asked you?

[00:40:12] Brian: No, I think I could go on for hours and hours, especially on advertising and marketing. But it's all in the book. The book is really like a roadmap and you know, you get it on Amazon and, I'd like to uh, just get out in front of as many people as I can from the stage.

[00:40:28] Brian: And yeah, I love people. I love traveling. I love new places. Love to get a tour back in Australia going sometime, you know, just that'd be a treat.

[00:40:38] Allan: That'd be cool. Well, we'll see if we can make it happen. So, I'll see you either in Australia or in the US again, and thank you so much for being on. I really appreciate it.

[00:40:46] Brian: Hey, great. Great talking Allan. Thanks so much.

[00:40:49] Allan: Thanks for tuning in to the Lean Marketing Podcast. This podcast is sponsored by the Lean Marketing Accelerator. Wanna take control of your marketing and see real [00:41:00] results with the accelerator. You get proven strategies, tools, and personalized support to scale your business. Visit lean marketing.com/accelerator to learn how we can help you get bigger results with less marketing.

[00:41:13] Allan: And if you enjoyed this episode, please leave a review or share it with someone who would find it helpful. See you next time.

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