Boom, shake the room fire nation, JLD here, and welcome to Entrepreneurs on Fire. Brought to you by the HubSpot Podcast Network with great shows like Business Made Simple. Today we're pulling a timeless EO Fire episode from the archives so the giveaway may not be active, and we'll be breaking down the upside of adversity to drop these valuable items I brought to Brian Smith into EO Fire Studios. Ryan decided that life and public accounting was not for him.
He quit his job, went to California to look for a new business idea and to surf. He soon noticed that there were no sheepskin boots in California, so he and a friend bought six pairs from Australia to test, and so Ugg was born. Today, Fire Nation will talk about how you need a certain amount of ignorance to be a good entrepreneur. We'll talk about the most disappointing disappointments become your greatest blessings and so much more.
And a big thank you for sponsoring today's episode goes to Brian and our sponsors. The best podcast listening and discovery app in the world is here and is called Pudoppolo. Visit pudoppolo.com, download the app, mention John Dumis, my Pudoppolo username, when you sign up for a free account and start listening now. That's P-O-D-O-P-O-L-O.com.
The Gold Digger Podcast hosted by Jenna Kuchar is brought to you by the HubSpot Podcast Network, the audio destination for business professionals, tune in and discover your dream career with productivity tips, business hacks, and so much more. The recent episode on four questions to qualify your digital product idea is a must listen. Listen to Gold Digger, wherever you get your podcasts. Brian, say what's up to Fire Nation, and share something interesting about yourself that most people don't know.
Okay, well, high fire nation, but to be back again, it's been a few years. Yeah. One thing about you, you don't know about me. I'm taking my seven year old grandson to his first rugby practice today.
And I played rugby against England and against the New Zealand All Blacks in my prime. And then I coached San Diego State rugby team when I first got to America 40 years ago. And all the kids that I coached have now grown up had kids, and they started this incredible rugby league in North County, San Diego, and it's overtaken soccer. And it's cool to have my grandson as the third generation of kids getting on the field and enjoying themselves.
That is super cool for obvious reasons. Now I do have what could be a pretty sensitive question, but did you ever beat the All Blacks? No, we had a moral victory. They were playing on a tour across Australia.
They beat the state of Tasmania, 116 to nothing. And then they beat the state of South Australia, 124 to nothing, and we were next. And we held them 33 to three. So I mean, we lost and I kicked the field goal.
So that's about, it was almost like a victory for us. Oh, I love that. I love that. Well, Fire Nation, as I shared in the intro, we have a lot of great things to talk about with Brian.
He's obviously the founder of UGG. And he's got quite a backstory, which he told earlier on Fire Nation, on Entrepreneurs on Fire, on an episode, long, long time ago. And we're gonna be bringing some new size, some new questions, some new fire to this episode. And I can't wait to dive on him.
Cool, let's go. So Brian, your back story, your background is fascinating. So why don't you give Fire Nation, those of us that don't know the full background, the full backstory, your back story of UGG. I was an accountant in Perth 40 years ago and took 10 years to graduate.
And I quit the same day as I graduated, I hated it. And I always had a feeling in me that I wanted to do my own business. And after a lot of meditation, I realized that all the big trends were coming out of California, like Levi jeans and waterbeds and all the skate brands and surf brands and everything. And I thought, I'm gonna go to California and find the next big one and bring it back.
So I did, I arrived in Santa Monica within a couple of weeks in Los Angeles and I brought my surfboard in my suitcase and I went straight to Malibu and started surfing because it'd always been a big dream of mine. And after a couple of months up there, I still hadn't found the next big thing, but I'd made a ton of friends in the surf market. And then it was about late October, early November, I was surfing and the water was getting really chilly and the wind was cold. And I remember getting out of the surf and putting on my sheepskin boots that I'd brought from Australia with me.
And I just had this flash and thought, oh my God, there are no sheepskin boots in America. And one in two Australians had some sort of sheepskin footwear. So I looked at my buddy, Doug, and said, man, we gotta go into business, we're gonna be instant millionaires. You know what, that's like, every entrepreneur gets bitten with this dream or this flash of insight on a new product or a service.
And they think it's gonna be, oh, instant. And unfortunately, that's not really how it happens. We ended up fighting a manufacturer in Australia and ordered six pairs of samples and we went around to all the shoe stores and got shot out completely like 150 stores. I'm interested, they just said we were crazy bringing sheepskin into California, but California's climate's identical to Australia, so that wasn't the reason.
And as an entrepreneur, you have to learn to pivot when you're sort of hit a wall. And we started asking, well, how come I'm a friend's up at Malibu think this is the best idea in the world? And it struck me, well, a lot of them went down to Australia on their surf trips and bought four or five pairs of boots back for their buddies. So within the surf community, it was pretty well known.
So as another pivot, we decided to go call on the surf shops. And everyone we went to just says, oh my God, those things are great. You're going to make a fortune if you import those. And so we were so buoyed up, we raised about 20 grand, which today's money is about 70,000.
And we bought 500 pairs to handle all this demand we had from the surf shops. And when the product arrived just before Christmas, we did a big delivery run for the year or the auditing run. And we went back to the same stores and all I can remember getting was, oh my God, Brian, well done. You're going to make a fortune.
But we couldn't sell me an outdoor. We just sell surfboards and trucks and booties. And they're way too expensive, but you'll do great in the shoe stores. And so the net result of that after two or three weeks of trying to push them out on the road was by Christmas, we sold 28 pairs, which was horribly disappointing.
But the point that I got out of that ended up being the theme of the book that I wrote, the book's called The Birth of a Brand. And the theme of the book is that you can't give birth to adults. After all of the different businesses that I've started, they all follow the same pattern as you can see the idea and you take the first action, which is birth. Like the birth of Agua was buying six pairs of samples.
And then it just lies there. And it lies there. And there's no amount of feeding or yelling or jiggling the cradle of infant card, get up and go to college. It has to be an infant.
And eventually, if you nurture enough, it'll start totalling. And that's cool because first people are buying your product and magazines are writing articles about you. And that quickly goes that into the youth phase, which is a great phase. Just like the kids can put on their clothes and brush their teeth without you.
Now you've got orders happening and sales coming in. And the production's good and the accounting and shipping is great. And you can run a $20, $30 million company in that phase of youth. But if it's a really, really great product or service, you've got to hit the teenage years eventually.
And just like you want to be in every party in town as a teenager, you have this tendency to want to be in every big mass retailer and everything. So and it's so easy to outstrip your cap on and go crash and burn. And I have seen a lot of companies do that. And I almost lost control of several times during that period.
So eventually, though, it becomes a mature company. And things are sort of predictable. But Brian, as entrepreneurs, we're like always being told to prove our concept before we proceed. We're always told to make sure there's an actual real need for our idea that our idea is a solution to an actual pain point.
But you didn't have that. I mean, how were you able to build a market for a product when there wasn't this perceived need, where people were waking up in the morning and saying, oh, I wish I had these these ugly boots. What did you do to accomplish that? It was even worse than that.
It was like, no things are so ugly and sweaty and prickly and you can't get them wet. And you know, we have mud and slush where we are, you know. But it was the ignorance of the American public. You know, Americans don't understand sheeps in like Australians, because Australians know that you can't rip it.
You can get it wet and it keeps you warm, even though it's wet. You can wash it. You know, all these things that are normal to Australians. So I didn't understand how little Americans, or how much resistance I would get.
And it was purely because I knew how popular they were in Australia that kept me going. Had I not had that background, I would have given up probably in the first year or two. But the perseverance is amazing. And the other thing is, so many entrepreneurs wait till, oh, I haven't got it perfect yet, you know.
And that's a huge disaster for any entrepreneur. One of my themes in the book is that you have to have a certain amount of ignorance. To be a good entrepreneur, because if you knew all the obstacles that were out of here, you would never in a million years start a business. But it's the ignorance of, and the passion of the dream of making something happen.
That's what makes entrepreneurs so fantastic and guess these businesses eventually off the ground. But you know, so many people, I see that, oh, yeah, I'm going to do this, but I haven't got this fixed yet. I haven't got that source yet. I haven't done, you know, there's always a million reasons why they haven't started.
But if you saw the first pair of upgrades that came in, the samples, that was so horrible. You know, I should never have been able to put them in a retail, but that's all we had. So we started. So anyway, the message I'm trying to make to you and the listeners is if you have an idea, get started.
Don't wait for it to be perfect. Now, you did eventually and successfully get into mainstream stores. So maybe tell us quickly, like what is the story behind actually what was the domino that's toppled to make that happen, but also the takeaways for us entrepreneurs, you know, with our products, with our services, with our concepts and ideas. Sure.
Sure. It's quite profound. It's got me three or four years to figure out. So the first year sales were like five to the hours and the next year I decided to advertise.
So I got these really, you know, good models and put them on the beach at wind and see and use those with the ads, you know, with the boots showing, you know, major portion of the ad and sales went to 10,000 and I did the tried better looking models and extra and it was sales went to 20,000 and I knew something was wrong. And it wasn't until I was having a beer with one of my customers one Friday night and I was explaining this dilemma that I couldn't get any traction and he just shut up, right? And he calls out to these little 12, 30-year-old garments in the back of the surf shop and he says, Hey, you guys, what do you think of UGGS? And everywhere of them came out and said, Oh, those UGGS men, they're so fake.
Have you seen those ads? Those models, they can't surf. And instantly I knew what they were talking about. I looked at those ads with a new light and thought, Oh my God, they're so fake.
They're so posed. So in again pivoting, I called about your mind who was running a Scholastic Surf Association and I said, P.T. have any young kids who are going to turn pro so he gave me a couple of guys and I instead of hiring a big photographer and doing a post shoot, I just went surfing with them and took photos on the way to Black's Beach and Trassels and these are two iconic surf walks. They're about a mile long and fantastic surf at the end.
I just ran photos of them in September, October, November, December and the sales were over $200,000. Dang. And the reason was that I struck a chord with every little kid who reads surf at magazine would die to be walking down those roads with Mike Parsons and Ted Robinson, you know, the young pros. And that was the day I sort of understood and became an absolute, you know, student of marketing and advertising.
And the real, the takeaway here is you don't ever advertise your product. Like I was, you know, the first ads was all about the boots. The ads that worked, you could hardly see the boots. They were so small in the photos, but the image was such that every little kid would die in that photograph.
So extrapolating there, if you have a software product that saves time, for instance, you don't put a photograph of your software out there in your ads, you have a photo of some guy in the Caribbean drinking a rum drink with all the time he's saving from your product. So you have to capture the image of what you want your target market to feel and the more you can get emotion into the visuals or, you know, the video, if you do that, the more you can get this emotion for people to want to be in there, the more successful you will be. And finally, I think a great example of this is the dozeckis commercial, the world's most interesting man. I mean, that whole commercial, that whole thing, it was not about the beer dozeckis per se, like it was there, but I mean, it was all about the most interesting man of the world, being in the most interesting places in the world with the women and the locations and this and that, we're like, we want to be there with him.
And oh, yeah, he's holding the dozeckis. So obviously that's part of what it means to be with him and that was just kind of into the subconscious. And then of course that became a really successful campaign. So go ahead, Brian.
No, you hit it on the head. The more emotion you can get into and add, the more successful it will be. And Fire Nation, if you think Brian is done dropping value bombs, you have another thing coming and we'll be back as soon as we get back from thinking our sponsors. Ready to ditch your subpar podcast listening app and download an interactive app that has every feature you want in need with more great features being added all the time.
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So Brian, we're back and let's be honest. They are a seasonal product for that market that you are targeting at the time and that can be risky for business for obvious reasons. So how did you survive the lean times with this seasonal product? Yeah, that's a really astute observation.
Two issues. One, I had to get some of jobs. First of the year was scraping boats at Marina Del Rey. The second year was construction in Bel Air.
The third year I was working as a green keeper on a golf course. So I mean, I did anything I could to stay alive. And the biggest problem from the seasonality was financing because there was nothing happening for nine months and then there's a huge rush of deliveries in October, November, December and then it sort of dwindled down again. And so when I was going to banks trying to find money to finance the production, they would, for the first five years at least I got up, Brian, this is a fad.
It'll be dead next year. It won't be around. And I couldn't convince them that this was a long term play. And the other thing was that they saw, you know, flat line for nine months and then there's a huge spike in cash need and a cash, you know, income and that scared the heck out of them.
So, you know, going back, if I had one thing to change in that whole 20 year period that I owned, I grand, it would have been to get somebody who understood finance and who understood how to project the cash flows. Now today that's relatively easy because there's all these business programs out there in a business plan program and they all have a component for an Excel spreadsheet for forecasting. But back when I was doing it, it was all on handwritten and green bone. You had to add every column with a calculator.
It took months to do a forecast, you know. So there should be no excuse today for getting somebody in who understands how to project what your sales are going to be, what your costs are going to be, all the incidental expenses and you can pretty much figure out where you're going to need the money just by looking at the cash flow line. And I would strongly recommend anyone who's starting a business or who hasn't implemented that in their current business, absolutely get somebody who understands financing because the bigger you grow, the worse the problem gets. For years, I thought, like I remember when I did a million in sales and I was broke, I said, okay, the answer is to sell two million next year.
Well, I did sell two million actually, I was twice as broke. I had more debt because growth can kill you if you don't have the right financing in place. And I, if anyone reads my book, that's going to be the recurring theme from, from the starting out with 28 pairs all the way up to 20 million dollars. It never got easier.
It always got more difficult. The bigger the company became a critical part of your business, Fire Nation, understand finance in the cash flow side of your business. If you don't have that part under control, if you don't have somebody with their finger on the pulse of that, your business is in trouble. And I love how you share that, Brian, that growth can kill your business.
If you are not prepared, I mean, I'll tell you, it has happened on this podcast. We call it the hug of death. Sometimes companies come on, we talk about their product and their service and they're in a growth stage. And then this podcast sends all the traffic to that product, to that service and that company's not ready for it.
And that growth is like a hug of death and it literally can drive them underwater. And I hate seeing that. That's why I always try to prepare people. It's like, listen, if you come on and if you really resonate with my audience and they come at you and droves, can you handle this?
Like, are you truly an entrepreneur on fire? Is your business rock and roll? Because I don't want to be the reason that you get this hug of death if you can't handle it. So realize that we all want bigger numbers.
We all want growth, but at what cost? You have to do it the right way. And Brian, we touched on this earlier, but I want to dive a little bit deeper into this is that so many people do seem to just be afraid to start because they don't know exactly how to start. Now, there wasn't really a roadmap for you to follow when you started.
So what the heck kept you going? And what would you recommend to those listeners who are potentially going down this same path? Sure. Let me try and explain it this way.
So many people are waiting for all the conditions to be just perfect. You know, the perfect development of the product or service, the perfect advertising campaign. It doesn't work that way. There's a saying that's thousands and thousands of years old that is once you start out on a path, the universe will conspire to work with you.
And how I explain that is that the universe, the world we live in has everything that you could possibly ever dream of or want. It already exists somewhere. And John, when's the last time you saw an advertisement for a refrigerator? Been a little while.
But if you needed one this Saturday, you would start seeing evidence of refrigerators everywhere. That's a good point. Looking in windows and be refrigerators. You'd be at Starbucks and the classified newspaper is open and there's ads of refrigerators all over it.
You'd be flicking through TV channels or whatever and you'll see it. They've always been there. They've never gone away, but you never saw them because your focus wasn't on refrigerators. But the minute you start to focus in on a refrigerator, it's everywhere.
Now extrapolate that into starting a business. I've never seen it done before. I don't know what to do. This is scary.
But the minute you start out and take the first action, something will happen that will come into your awareness and go, oh my God, that fits with what I'm doing. And the next day I'll be, oh my God, look at this magazine. I could use that in my business. And suddenly all this information that's always been there begins to focus itself into your vision and your direction.
So the bottom line is get started. You'll never get this information if you're sitting on a couch waiting and wishing. The whole universe conspiring around us, Fire Nation is so true. And the one that always hits me on the head, Brian, is when we go out and we buy this new car and we're like, oh my God, I have this new car that nobody else has because I never see this car around.
And then literally you see this car every single stop like you're at because you just never saw the car before. It was always there, but it wasn't like in your universe. Now that you own that car, you see it every single place you go because now it's in your universe. So Fire Nation, get going, make your universe conspire for you, not against you.
There's no identical roadmap that we can follow. Brian didn't have a roadmap. I didn't have a roadmap. We just took that next step.
And in fact, I love that Martin Luther King quotes. You don't have to see the whole staircase to take the next step. You just take the next step and then the following step will be revealed for you. And Brian, you wrote the book, The Birth of a Brand.
Tell us why you wrote this book and who is it for? Well, it's a roadmap for entrepreneurs. I don't ask me why, but even in the early days of AUG, I would have some article or some advertisement I did or something would happen in the business. I'd say, well, that'd be great in a book one day.
And I've had this little three ring binder about an inch deep, you know. And I would just throw these, didn't even punch holes. I'd just throw them in this binder. And after 20 years, this binder was like a three inch thick ring binder.
And then I sold the company and got invested in a bunch of other companies. But when the recession hit, things slowed down. And I thought, you know, I'm going to find that file. I'm going to write a book about this.
And so I had records of every meaningful thing that had happened from the time I started to the 18 to 19 years that I owned a company. And it turned out to be, I wrote it chronologically. So it's really the story of me having that aha moment at Malibu and importing the first books all the way through to the sale of the company. And it's got lots of little successful things in there.
But by far, the most important part is all the disasters that I created. And I swear, it was just because the product was so damn good. It sort of hung in there while I made all these horrible decisions around it, but still survived because every time I made a blunder or something didn't happen the way I thought it would, I stuck in there and I adjusted. And one of the big, there's a lot of philosophy and spirituality in the book, which I've developed over the years.
And one of the greatest statements in the book is that nearly always your most disappointing disappointments will become your greatest blessing. And when I talk from the stage, which is what I love to do most, I always ask, you know, how many of you had something happened in the last 12 months that at the time you thought it was the greatest disaster. And now you look back and think, thank God that happened because by doing so much better. And I swear two thirds to three quarters of the audience put their hand up every single thing.
Wow. Wow. So it's an infallible piece of philosophy. Where would you like Fire Nation to find out more about this book?
You can find it on Amazon. It's called the Birth of a Brand. And I did the audio just like a few months ago. So it's like a brand new thing on Amazon.
And I read the whole thing. And it's funny, in four years, I always thought, well, if I ever do the audio, I'm going to just completely revamp the thing. I ended up not changing a single word. I was staggered that the information there is so timeless.
Wow. And, you know, surely got social media, I mean, electronics and instant clicks and everything now. But the principles of marketing and advertising and selling and business building, the principles haven't changed one bit. It's just that the methodology we use now is so much faster and quicker and you have so much more information about your fingertips.
But the book itself is pretty much timeless as far as how it takes to build a business and the emotional strength that you have to have to hang in there. Fire Nation, we're going to end with this. Success leaves clues. And you are hearing the voice right now of a top 1% of the top 1% of all entrepreneurs who have walked on this earth.
So you need to make sure that you are listening because success leaves clues in our guest today. Brian has had massive, massive success. So go check out the Birth of a Brand. You love audio Fire Nation.
So check out the audio book. You're going to hear Brian's actual voice as he reads this book as he breaks down his knowledge on this. And you're the average of the five people you spend the most time with. You've been hanging out with Brian and JLD today.
So keep up the heat. And as always head over to eofire.com type Brian in the search bar. So all the links for the show notes will come up in that show notes page. And of course you can go back and hear the episode Brian and I did a few years back because a lot has changed since then and we dropped some heat back then as well.
So Brian, thank you for sharing your knowledge with my audience today. For that, we salute you and we'll catch you on the flip side. Thanks, John. Go Fire Nation.
Hey, Fire Nation. Today's value bomb content was brought to you by Brian and Fire Nation. I know that you understand how podcasts can ignite your business. But let's be honest, the planning, the creating, the collaborating with guests, the producing and distributing, it takes time.
It takes time and it can be intense. That's why I am fired up for you to check out Oxbus. Oxbus has an end to end podcast creation platform for entrepreneurs just like you. Visit Oxbus.com slash JLD today.
That's a U S B U S dot com slash JLD. Oxbus dot com slash JLD to try for free. I'll catch you there. Fire Nation or I'll catch you on the flip side.
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When you start a free account and start listening now, that's P O D O L O dot com. The gold digger podcast hosted by Jenicoucher is brought to you by the HubSpot Podcast Network, the audio destination for business professionals, tune in and discover your dream career with productivity tips, business hacks and so much more. Jenna's recent episode on four questions to qualify your digital product idea is a must listen. Listen to goal digger wherever you get your podcasts.