In this Episode
- [00:39]Stephan introduces Brian Smith, the UGG founder who’s now one of the most sought-after speakers and business leaders in the country.
- [02:20]The inspiring story behind the humble beginnings of the brand, UGG boots.
- [08:06]Stephan shares the concept of going from resiliency to antifragility to help you thrive through tough situations.
- [13:21]Brian shares the most important lesson he’s learned in marketing and advertising from doing various strategies in running his business.
- [19:25]Sometimes, one’s most disappointing disappointment turns out to be one of their greatest blessings.
- [25:16]Stephan talks about Ana Bekoach. A morning prayer that’s about connecting to the tree of life and not the tree of knowledge of good and evil.
- [30:33]Brian explains the meaning behind a significant quote of his during his coaching, “The quickest way for a tadpole to become a frog is to live every day happily as a tadpole”.
- [36:39]Brian shares how he dealt with people who were filing lawsuits and ripping him off in the business.
- [44:34]Brian tells the story of how he sold his business and how he’s lucky selling it to the right person.
- [48:45]Visit Brian Smith’s website www.briansmithspeaker.com to check out his inspiring book, The Birth of a Brand, and other resources.
Brian, it’s so great to have you on the show.
Hey, Stephan, thanks for having me. I appreciate it.
First of all, let’s address the elephant in the room here, people are in the process of hunkering down and making cuts to their businesses, or perhaps they’ve gotten laid off, or they’re just finding ways to make cuts and to weather this storm. Who knows how long and it’s really hard to get creative and excited about things, build new businesses, inject new, exciting opportunities into an existing business, or just be innovative in your role at a company when we’re going through a time like this. What do you tell people that will help them to get their minds right and step out of this quagmire and see a bigger picture?
I don’t have any easy answer, but I can tell you, at my age, I’ve been through several of these cycles, and I’ve learned a lot from each one. The bottom line is that nearly always your most disappointing disappointments will end up being your greatest blessings. I’ve seen this happen over and over and over again. When I’m on stage, I ask people to put up their hands if they can remember something that’s happened in the last 12 months that at the time you thought was a huge disaster, and now you look back and go, “Oh, my God. That’s the best thing that ever happened.”
I would say 80% of the audience always puts their hands up. I don’t lose sleep at the moment. I am embracing this to see what will come out of this big change. Everybody is going to have to find a new way of coping with this. Nobody’s going to die of starvation, because we’re all very inventive, and I’d say that the best place for everyone to go is deep inside right now.Nearly always, your biggest disappointments become your biggest blessings. Click To Tweet
Don’t get anxious and think you have to act faster, harder, work, or think more. It’s exactly the opposite. This is a time for everybody to go inside and connect with that sphere or that fragment of God that’s in us because it has an intelligence of its own. If we can relax and learn to listen to that, which I’ve been practicing for many years, that’s where the change will come. It can come radically in the form of an idea like Anaha, or it can come gradually, where you just get a feeling of well-being heading off in a new direction.
To be quite honest, I look back. I spent 10 years trying to graduate as an accountant. I hated that. I got out of it and then that led me to America where I discovered there were no sheepskin boots. That was two 10 years there because I ran that for nearly 20 years. Then, I got into a brilliant construction products business. I invented a lightweight concrete, and I got into that for 10 years, but I hated contractors and contracting.
The recession of 2009 hit that, wiped me out again, but out of that, I decided to write the book called The Birth of a Brand, and it’s the story of building the UGG boot business, and that led me to stay at the stage which I absolutely loved. I’ve been doing that for 10 years, so I’m just figuring out, it looks like I’m going to change again. I’m pretty curious to see what I’m going to get into now. I’ll still try to keep the speaking going, but I’m not going to focus on it like a business as I have been for the last 10 years.
That makes sense. You’re at a time of reinvention but you’ve done this multiple times. You’re not afraid. You’re seeing this as an opportunity for promotion and re-invention. What are some of the tools that you use that help you to get that perspective and to connect with that God fragment inside of you, to your intuition, and make more thoughtful inspired choices and decisions?
The tools are simply for me, is that I get up and the very first thing I do is I meditate. It can take a lot of forms. It can be reading spiritual books, it can be listening to tapes, it can be just listening, putting on some quiet music, and just relaxing. Each morning, I try to start off—before I even open any emails—with just centering and trying to figure out how I fit in the universe.
In one sense, I’m just this speck in the whole totality of existence, but at the same time, I know how important that spec is and how I’m critical to the overall completion of that universe. I have a very strong sense of worthiness and well-being that comes out of that meditation. I’m not going to lie. Quite often, I don’t really get anything out of it, but overall, I’d say 80% of the time, it really centers me for the day, and then no matter what comes up during the day, I’m able to cope with it because your real life is your peace, happiness, family, friends, children, grandchildren, all that stuff.
That’s the real world. All the other stuff is making a living to keep alive—pay the rent, eat food—and it’s really not that important because you can do anything to stay alive. In this society, even if you’re totally broke and you’re out on the street, someone’s going to pick you up and stick you in the hospital and you get better again. It’s pretty hard to die of circumstances like this.
Now, that could be taken—now we have a virus—so I’d haven’t thought of it in those terms. That’s totally different. I’m not talking about the virus or people who might die from that. What I’m talking about is, when that scare is gone, we’re all going to still be up in the air, not knowing what the hell we’re doing, and that’s where I talk about, you’re not going to kill yourself by not having a job. There will be avenues for us to take.
That’s something that I feel very confident about myself that I can pick myself up off the ground, dust myself off and do whatever it takes, even if the business fails, even if we lost our home or whatever. It’s not defining me and I feel a sense of resilience, even antifragility to circumstances.
That’s really healthy.
That’s an important concept that I haven’t shared very often on the show, going from resiliency to antifragility has been a really big aha for me.
I heard that term. It’s a good one.
Nicholas Taleb. He wrote the book, Black Swan, and another one is Antifragile, and that book talks about how economic systems, immune systems, and so forth are not just resilient; they’re antifragile. They actually grow and thrive from the stressors in the system.
Okay, now I get it. I never heard that.
Imagine if Mother Nature were only resilient, it wouldn’t exist, it wouldn’t have survived. If our immune systems were merely resilient, we would all be dead. We need to embrace this new identity of being antifragile. He didn’t in the book talk about people being antifragile in terms of their mindset. At least I didn’t see that in the book, but I think of it that way that if you can adopt that kind of a mindset, that’s going to help you to not just weather the storm but really thrive through it. My wife has this expression, that it’s all a gift, but sometimes the bow is on the bottom.
That sounds interesting.
If we don’t just look for the silver lining but see this in a bigger picture that maybe there’s something that was an incredible gift that was given to us, we just don’t see it yet. That opens you up to more possibilities.
Yeah, and funny things happen during crises like this. I noticed that the tone of everything on social media has mellowed a lot from where it was two months ago. Remember how busy it was with the impeachments and all the fake news or just all the things that were going around, thrown by both sides. Most of that disappeared and we’re looking more at our fellow humans, the number of care messages, the “I want to help” messages, and the focus groups coming together like my business, mentor groups are all now having these seminars, “Hey, come together and let’s talk about how we can help each other out through this.”
That’s a beautiful sign for the planet. Let’s hope it’s happening in every country all over the planet, where people are actually looking at the human side of this loss and chaos, and if we can come out, loving each other a little bit more through this process. That’s a huge plus for the planet.
Yeah, and it’s also giving Gaia (the planet) a chance to breathe. From what I hear—although I can’t see it, I’m in LA—in the valley, apparently, there’s no smog in downtown LA.
It would be nice to see but I’m really happy about that, that there’s a chance for birds to come out, the pollution gets cleared away and stuff. That’s a bit of silver lining right there.
I saw an article with all the planes grounded, that the skies are much purer than they have been for 20–30 years.
Maybe this is an opportunity for us to rethink, change tack as a species and not just continue down mindlessly on this road of the eventual collapse of Mother Nature.
And society because there are so many countries heading in a really bad political direction. Let’s hope that’s all cut off in the past, you know?
Yeah. Now, for those of us who are listening, thinking, “Yeah, that’s all nice and good to say that, but I’m having trouble paying my bills now. My business is out-of-business now or almost out-of-business. It’s on life support at the moment. I’m just waiting for my SBA loan to come in or whatever,” what do you tell people who are thinking that because you’ve had some hard times yourself where you got very close to getting out-of-business? I remember you telling a story about a situation like that, where you were on the cusp and brought you to tears. What the community did for you to help bring you from the brink? Could you share some of those stories for us?
It all comes back to coping with disappointment. When I first realized there were no sheepskin boots in America, I thought I was going to be an instant millionaire because one in two Australians are in some sheepskin footwear. So, when I was in Malibu after surfing and put on my boots, I realized this is going to be a brilliant idea. I imported 500 pairs. I imported six pairs to start as samples, and I went out to all the shoe stores and just got shut out completely because they didn’t get sheepskin, but I knew all my friends up at Malibu knew all about UGGs and they thought it was a great idea because they’d been to Australia and they’d bought five or six pairs back to their buddies.
I started going out selling at the surf shops and I just did a test run with my samples and all the surf shop owners went, “Oh, my God. That’s fantastic. You’re going to make a fortune.” Every surf shop I went from Malibu down to the Mexican border was the same, so that emboldened me to raise $20,000 in capital and I bought 500 pairs of boots. I went back to all those same retailers with a full inventory, then on an order pad I said, “Okay, how many do you want?”
The first one goes, “Oh my god, Brian, well done, but we couldn’t sell them in our store. We just sell surfboards, trunks, and flip-flops. Don’t worry, you’re going to do great at the shoe stores.” That happened all the way down the coast and my total first-year sales of UGG turned out to be 28 pairs out of 500. That was the first major disappointment.
I couldn’t really go out of business because I had 480 pairs left in my third bedroom and all my investors’ money tied up there. I just started going to swap meets and street fairs. The best retail outlet I have is the back of my van at Malibu, because I had full inventory there and I was a retail shop, people would come up, one or two an hour and buy boots from me, but it probably took that season to finish up at $5000.
The next year, I decided to advertise and I got these models and put them on the beach, perfect hair, clothing, and everything, and sales went to $10,000. Another summer job and the next year, I advertise with better-looking models and more expensive photographers. The same thing, post them on the beach with the perfect clothing and hair, and the boots were a major part of the ads. Sales like $20,000 and serve in another summer job. The next year before I ran the advertising, I was considering giving the business and just getting out of it, but I had a beer with one of my surf shop owners. He called out the back, he told these little 12-, 13-year-old grommets and he said, “You guys, what do you think of UGGs?”
Every one of them just went, “Oh, my God. Those UGGs are so fake. Have you seen those ads? Those models can’t surf.” As soon as I heard that, I realized, “Oh, my God. I’m sending the wrong message to my target market.” Pivoting like every entrepreneur has to, I call-up a buddy in Orange County who is running a scholastic surfer association. I said, “Pete, do you have any young kids going to turn pro soon because I got no money, but I need some kids to promote.”
He gave me two guys, Mike Parsons and Ted Robinson, and instead of getting an expensive photographer, I just went to Trestles and Black’s Beach, which are both these mile-long walks to get to the water, and there’s fantastic surf at the end, and I just shot photos of Mike and Ted walk into the beach and back.
I ran those ads in October of the fourth year, and the sales were $220,000. Why, because I’ve matched the image of what I wanted the kids to see. I wanted the kids to be so into these photos like, “Oh, my God. I’d give anything to be walking to Trestles with Mike Parsons.” That was the turning point for me in marketing and advertising, I learned a huge lesson then that you never advertise your product per se, you have to advertise the features, and the benefits, and the more emotional you can make the image, whether it’s a Facebook ad or magazine image like I had to work with, or whether it’s a TV, it doesn’t matter what it is.You never advertise the product. What needs promoting is the emotion and the experience people are looking for. Click To Tweet
The more you can get your intended audience into that emotionally, the more successful your business will be. That took 4½–5 years for me to finally figure out the element that would make it click, and then it was so easy to duplicate that into the skiing and snowboarding markets. Back East, I stymied for a long time but I figured out all the kids play hockey in the winter, in the rinks, and that was perfect because all the moms have to go to the rinks and sit there in freezing 40-degree temperature. The moms started buying them and then they bought it for their daughters. It was amazing, but all that process took 8–10 years before I got into what I would call a national distribution.
But then you started having competition and some of these competitors were knocking off your product and confusing the marketplace. That caused some real strife in your business, right?
It did. There was a period where I changed investors by buying the old ones out and getting bigger ones in, and I had these three guys in Anaheim who bankrolled the business. The deal with that one was that we were going to own the business 25% each, and I didn’t get my stock, though, until I finished this little trademark lawsuit, but I knew I’d win that.
With my new partners, we moved everything up to Anaheim, and the deal was I was going to be the full-time salesman on the road. They were going to handle all of the operations, which I loved. I went on the road on the first day, and I think I was hunting the surfing spot I walked in and the guy says, “Hey, Brian. I heard you sold the business.” I went, “What?” He says, “Yeah, I called an order and they said you don’t own the business anymore.” I said, “Are you kidding me? They said that?”
I couldn’t wait to get out of there and I called up Anaheim. I said, “Neil, what are you telling people?” He says, “What do you mean?” I said, “You’re telling them I don’t own the company.” He said, “Well, you don’t.” I said, “Yes, I do. You’re my three new partners.” He goes, “No, you don’t get your stock certificate.” So, I hung up and I drove back to San Diego. I pulled out the contract, I read it, I reread it, and went, “Oh, I don’t own the company.”
I went into this immediate depression. For three days I didn’t go outside. I didn’t talk to anybody except my wife. I couldn’t get a rational thought together. I remember about the third or fourth night I was lying on my back on the living room floor and my wife was on the couch. I remember clicking the TV off when the show finished, I rolled over on my stomach, got up on my hands and knees, and started crawling to the bedroom.
My wife, Laura, just looked at me and said, “You get up now and walk to bed like a man.” She scared the crap out of me. When I came up off the floor, it was like coming out of a fog and I realized there’s so much more to life than this crappy little sheepskin business. That next day I was meditating, trying to figure out what to do. Ultimately, it came to me with goosebumps. It’s like massive goosebumps, and I thought I’ve really come to love sales.
Now, what can I sell? I thought about UGGs. I love UGG boots. I had humble pie and I went back up to Anaheim and I told the guys, “Look, I may never own the company, but I’m going to do my best to get a pair of UGG boots on every single person in America.” That set me up and back on the road. The first month I got back and Neil handed me an envelope. It’s $5000. “That’s your commissions.” I went out on the road, came back the next month, and $10,000. The next month, another $10,000.
That was a perfect example of that statement I made earlier, your most disappointing disappointments will always turn out to be the greatest blessings. That thing happened over and over and over through the UGG boot business. That’s where I got the wisdom. Wisdom only comes from experience, and that’s where I got the wisdom to be able to weather what’s going on now, like who cares? Can I backtrack on those goosebumps?
Yeah. I was going to ask you about that because that’s something for me personally, I know that I’m connected to my intuition, I’m connected to the creator, to my higher power, and it’s giving me a bit of a nudge to go in a certain direction.
Good. You totally get it then because I got goosebumps today. I was in Australia thinking about what to do with my life. This aha came through that, all the big trends are coming out of California. That got me to California to look for an item to bring back to Australia, but in fact, I found that I could bring something to America. That was a huge goosebump moment.
Another one was when we were trying to think of getting inventory. We needed investors and this saying that once you start out on a path the universe conspires to work with you, my neighbor and my roommate had some people at work who were looking for investments. When he told me about that, I got goosebumps. Here’s another direction.
Even the day I was sitting at Malibu, pulling on my sheepskin boots, that was the biggest dose of goosebumps. That was my spirit telling me, huge opportunity. I’ve just come to believe that God isn’t way out there at the end of the universe somewhere. God is pervasive. It’s all throughout the world. It’s in every single one of us. There’s a fragment or spark of God in every one of us, and it has perfect intelligence, just like God. I think it has a mission for where it wants us to go in our lives—it’s dwelling us for that very purpose—and the more we can slow down and tune in to that guidance—you do and you get those goosebumps—that’s like that spot talking to us. It can’t come through the eardrums and it’s not in our mind. It hits us in this electrochemical vehicle that we’re walking around in.
I would challenge every listener. Next time you get the goosebumps, just stop and pause for a second because I’ll bet you it will be something rather momentous or life-changing for you or your partners. There’ll be some intrinsic value that’s telling you you’re on the right path.
I get goosebumps every day, well, almost every day. It’s pretty predictable when it happens. I do morning connection, a morning prayer. It’s called the Ana Bekoach prayer. It’s one of the most powerful prayers in Kabbalah. It’s scanning the first line of the prayer and that one is about connecting to the tree of life, and not the tree of knowledge of good and evil because I used to be so fixated—I’m still somewhat, but a lot less—on knowing everything, learning everything. I’m a seminar junkie and all that. That is not as helpful to me and as enlightening or as powerful in terms of evolving my consciousness as just sitting and meditating, connecting to God, or just being more intentional.
Remembering that it’s the tree of life that I need to connect to, not so much the tree of knowledge of good and evil is what helps around me and I usually get great news goosebumps on that first line before.
That’s definitely your spirit opening up. That’s giving you direction.There's a fragment of a higher spiritual being in every one of us. The more we can slow down and tune in to that guidance, the more we can stay on the right path. Click To Tweet
I’m curious. What would be one of the latest goosebumps moments for you?
Believe it or not, as much as I love speaking, I love helping entrepreneurs, and I love the feedback I get coming off stage, I’m always in a state of goosebumps with the gratitude that I get from people telling me that really helped them along, but when this whole speaking thing screwed up, I started thinking not immediately and it wasn’t on a specific day but after a week or two, just relaxing and putting it out there, that maybe it’s time for a change. What can I do?
I invested in a business a couple of years ago. The best way I can sum it up is live-action shopping. It’s a site that we’ve built, combining home shopping networks and eBay. We have people come onto the platform, put all the stuff they want to sell in, and then they send a message out to all of their followers. It’s all done on the laptop in a Facebook Live-type scenario. You hold your product up and you talk about it and you sell it. Upon the corner is a Buy button that people can click. It’s like a home shopping network.
In the last two years, we’ve done nearly half a million dollars in sales each year with three vendors coming on once a week. It’s ridiculous how good it’s been but because it’s the stepchild, none of us have been concentrating on it. I finally had the goosebumps a week ago. “Brian, it’s almost abuse that you’re not looking after this shopping business. Let’s switch gears and go for that.” That was a definite goosebump moment.
The timing is so perfect for it because everybody’s online and they want the community aspect of shopping. They want to be able to see that people are lining up around the corner in a virtual way.
That’s right. There’s a huge chat component going on and there’s the competition to be the first one to hit the Buy button because it gets really competitive and you get all the comments, “Oh, damn, I missed the bag. What else have you got like that?” It’s a fantastic community.
I’ve got a feeling that because so many of these small business people who’ve got storefronts, brick and mortar stores, that the traffic stops dead, their mortgages are going to be hard to catch up on the rent, I feel a lot of them are going to be going out of business and they’re gonna have inventory that they got to get rid of.
Our platform may just be the perfect way for them to get rid of the inventory, quit the overhead. We don’t need to pay rent on brick and mortar anymore. We can just put our product on this shopping platform and we go on live five days a week if you want. We don’t care when you go on and sell. It’s all up to you. It’s a brilliant system where the money goes straight to them. When there’s a sale live, they instantly get the money, less commission for us for putting the platform together, and then they take care of all the shipping. We sent them a list of all the people who bought it.
Maybe I’m going on too long about this, but you can see how I enjoyed and inspired myself. I am just on fire, and yet two weeks ago, I was in the depths of depression because I just lost a whole year’s worth of speaking fees. If you’re open to it and you relax into it, it will come a lot quicker.
What’s the name of that platform again?
It’s called Live Action Shopping, Lash.Live.
Oh, very cool. I’ll put a link in the show notes to that. What was the name of your book again?
It’s called The Birth of a Brand. I’ll hold it up so you can see that.
Very cool. What’s your favorite lesson from that book that you haven’t already spoken about?
It comes back to living in the now. My book is full of spirituality and philosophy. We talked a little bit about both today. My favorite one is the one that I talked about from the stage. A year later, it’s the only thing people remember. It’s a little quote that says, “The quickest way for a tadpole to become a frog is to live every day happily as a tadpole,” with the accent on happily because some of you cannot make a flower open before it’s ready to open. You can’t make a butterfly come out of a cocoon by squeezing it. You have to wait for nature and time to just mature. When I tell that to people, they laugh and giggle but I say that’s the only thing you got to remember in a year’s time. Believe it, people come up to me and go, “Oh, the tadpole guy.” It’s a very powerful piece of philosophy.
How would you apply that in marketing, in sales, or in finance?
I can give you a slew of examples. The fact that it took me three or four years to figure out the marketing angle for UGG, that was a tadpole situation, the adoption of new styles. I remember we brought in a desert boot. I was in love with it but everybody is like, they wouldn’t work. The first year, it didn’t do very well but we kept it in the line. The second year, it did okay. In the third year, it was one of our best sellers. That’s a tadpole story. We were huge in surfing, skiing, snowboarding, and hockey, but we didn’t have any big overarching image for the product.
I was on a plane looking at this girl next to me. She was reading Us magazine and People magazine. I’m looking at all these photos of celebrities walking around Hollywood, wondering how I do that. I ended up talking to a buddy of mine. He said, “You should go to the stylists.” I go, “What the hell is a stylist?” He goes, “They’re the people in Hollywood. They do the makeup, the hairdos, and the wardrobe.”
I found a mailing list of stylists—about 800 of them—and I sent a letter out. I said, “Hey, do you want a free pair of UGG boots? Give me a call.” About 80 people did. I just sent them out, not really expecting anything but hoping that they would end up on the feet of stars.
The first year, it was slow. It was sitcoms with Brooke Shields or different people. The next year, we were in Eyes Wide Shut. Tom Cruise is sitting there with his feet up on the table with the UGG boots for 10 seconds. The third year, it was discovered by all these stars. Madonna even said—this is the story I heard—that she sent her private assistant down to Australia on a private jet to buy a pair of pink UGGs because she couldn’t find any in America. It just got to epidemic proportions, but it all started out three or four years ago with a mailing list. That’s why we have this intention to do an action and expect it to immediately work and it really doesn’t. It’s got to be a tadpole.
The overall arching theme of my book is that you can’t give birth to adults, which is the same way of saying the tadpole thing. You can conceive it, give birth with the action like buying six pairs of UGGs with the birth of UGG, and then it just lies there. There’s no amount of feeding and screaming at it or jiggling the cradle. An infant can’t get up and go to college. It just has an infant and then it starts toddling and goes to youth and teenage.
If people can just settle into the fact that as long as I’m taking the right actions, I’ve got to let go of the result being immediate because as long as you do the right actions, the universe works on a perfect balance between cause and effect. As you do the cause, at some point, the effect is going to show up but a lot of us do the cause and then start getting anxious because we don’t see the result. It’s just not being a good tadpole.
You got to have faith that it’s coming. Patience and perseverance.
That’s right. They’re all the same thing.
I’m curious. How did you come up with the brand name UGG?
I didn’t. There were a couple of really old guys in Australia who claim they invented that name, but it’s been around since the 40s and 50s. It just got to be descriptive of sheepskin boots in Australia. You could go into any little town and there’d be a sheepskin craftsman. We have car seat covers, bed underlays, dusters, UGG boots. UGG was spelled U-G, U-G-G, U-G-H, or U-G-H-S. Nobody ever trademarked it down there until 20 years after the name was descriptive. When I came to America, I did a bit of research and realized nobody had ever done it in America before. That left me over to register the trademark here and then that went on to buying trademarks everywhere I shipped products. I didn’t invent it but I did trade on that name.The quickest way for a tadpole to become a frog is to live every day happily as a tadpole. Click To Tweet
You said that you had a trademark dispute or lawsuit that you had to settle before you could get your shareholding.
There was a company called UGHS and this is a woman who came into Oregon and set up a little factory there making boots for the people in Coos Bay. She threatened me with a federal trademark lawsuit. It came back to, first of all, thinking, okay, I’ll just change the name. I was sponsoring these young kids who were riding for the surf team under the UGG surf team. I said, “Hey, guys. We’re going to change the name.” They go, “No way, man. We want to ride for UGG.” That made me realize the power of the UGG brand within a few quick years. So, I ended up going to court. I was able to prove that I’d imported boots before she did. In America, if you can prove first use and continual use, then you can own the trademark.
That’s awesome and the rest is history. Now, you had competitors who tried to rip you off over the years and create inferior products not just in Oregon. Not that her product was inferior or anything but there was somebody. I remember you shared a story about the one you’re talking about.
I think I know what you’re talking about. It happened to those Anaheim guys. Over the three or four years, Neil had bought the other two out, so he owned 100% of it. He said, “Come on in and we’re going to issue you a 25% stock.” We got company cars and we did life insurance policies on each other. He said, “Come in next Wednesday.”
Over the weekend, my wife called me. She was crying and she goes, “Brian, Neil had just died.” Apparently, he had a heart attack in a motocross race and he never recovered when they went to the hospital. That threw the whole UGG business up in the air because his wife had never been inside the business. She’d never stepped foot inside the warehouse so she didn’t have a clue what was going on.
For a year, I promised her to try to keep the season alive because that happened in January and we had to start shipping in October. From January to October, I kept trying to make it alive. My supplier in Australia who we’d been with for nearly 10 or 12 years, he didn’t think I was going to be able to pull it together. Unbeknownst to me, he had started dealing with another guy in America that was in the windsurfing industry and was shipping boots to him. It didn’t happen immediately. I kept trying all year to try and raise money but the banks kept telling me it’s a fad. It won’t be around.
I finally got a guy in Melbourne who had a tannery that I thought was going to bankroll me, but he pulled out at the last minute because he thought it was too risky. We had to go to this trade show and I didn’t have any supplier. I knew we were gonna write a quarter of a million dollars’ worth of business, but I didn’t want to let people know I was out of business so we went and showed up at the trade show.
I knew this company that was trying to sell UGGs or sheepskin boots that was called Thunderwear. I looked up at the trade director that would probably be at the trade show. I found them in the back corner, walked across to them, and I just stopped dead. There was all my product from country leather and my supplier but it had different labels on the back that were called THUGGs (which I thought was rather appropriate). Right then, that’s when I knew I’m out of business if I got no suppliers.
I didn’t tell anybody at the trade show. I didn’t tell my staff or anybody that we’re out of business, but I told my wife, on Monday, we’ll start calling all their best customers and tell them to go by the THUGGs because it’s our product. We finished up the trade show. I went back to San Diego. The last call I made was to the tannery. I said, “Gordon, I know we tried to pull it off, but this is what happened with my supplier.” He called me back two hours later, two in the morning, and he said, “Brian, you screw that guy. I’ll get you all the products you need.”
Within a couple of weeks, he cranked his tannery up to full production. I sent the patterns down to get duplicated and went out to four or five manufacturers. We ended up getting 4000 or 5000 pairs a weekend for the end of October, November, and December. We threw away millions of dollars’ worth of orders but I didn’t care because we were still in business. We still had products out there with the UGG brand label on them. That was a close call.
People that you talked to who were buying the product from you like the surf shops and all that, they were loyal to you and they bought UGG instead of THUGGs.
I was surprised that I never saw THUGGs anywhere out in the shops, but between Christmas and New Year, these two weird things happen. One is a life insurance policy paid out and it was enough money for me to buy the business 100% from his widow and she got full value for all the assets plus the year’s profit. She was in heaven because she got out from under this horrible situation. The other weird thing is that the customs broker screwed up and shipped 2000 pairs of THUGGs to me and 1000 pairs of UGG boots up to their warehouse in San Clemente.
I called the guy up, we drove up, and I swapped them all out. As I’m driving back to San Diego, I’m thinking how come we couldn’t keep boots in our warehouse for 24 hours where every Friday we get 5000 pairs in and we were empty Saturday lunchtime because all the surf shop owners would drive to our warehouse to pick up whatever they could get. For seven or eight weeks, we were empty every Saturday. I thought the THUGGs warehouse, which was bigger than our warehouse, was absolutely floor to ceiling full of sheepskin THUGGs. I got goosebumps again because I thought my customers, my retailers, were so loyal that they threw away probably $2 million worth of orders because they couldn’t get the product, but they refused to buy the THUGGs.
That was an amazing testimony to the customer service that I’d been doing for 15 years in their stores looking out for their inventory. Every time they had a problem, I was in there to fix it. This was happening all across the country. I had loyal retailers nationwide that refused to buy THUGGs. That was just totally a goosebump moment there.
That’s beautiful. It’s not just about customer service. You gave your all and they felt the sense of deep loyalty, connectedness, and relatedness to you.
They totally knew. I’m forever in their debt.
Amazing. When did you sell the business?
The late 90s, end of 1995. The time was right. I just came off about a $15 million season. The pre-season orders looked like it was going to be a $20–$25 million season. I had no way to finance that growth. This is a cute story. Remember when I had my van at Malibu where I was selling out of the back of the van?You can't force a flower to bloom or a butterfly out of its cocoon. You need to wait for nature to mature. Click To Tweet
Two or three spaces up was this guy, Doug Otto. He was selling these Triple Decker Neoprene Sandals, pink-yellow-pink straps. His company was called Deckers because of the Triple Decker Sandals. Over the years, we’d crisscross on the road all the time in the surf shops and everything. We’d always joke, “Hey, you should buy me out. You can afford it.” It’s all that stuff. Over the years, he took on a license for a company called Teva and started distributing Teva sandals. When the outdoor market took off in the late 80s, early 90s, he went public with his company on Teva sandals. They did up about $60 million in sales.
Fast forward, I went to a trade show in Atlanta and I didn’t know how we were going to get products for the season. I looked up the other end of the baggage claim area in Atlanta and there was Doug. I got goosebumps again because I thought, “Oh, my God. It’s perfect.” He’s sitting on $25–$30 million in cash from the IPO. His business dies every winter. My business dies every summer. I thought we put them together. I walked up, we high fived, and I said, “Doug, if ever we’re going to do it, now is the time.” The accountants were talking to each other that afternoon. We just said, “Let’s go for it.” Nine months later, the whole deal closed. I walked out of it with cash, which was like going public without having to go public.
The other good part about it was I’d run it for 18 years and I was burned out. It got so big that the business is becoming really corporate. I am more of an entrepreneur. I love the chaos and the uncertainty of startups but when it comes down to, “What color are we gonna have?” “Oh, we better have a meeting.” You get 10 people in there and I walk in. I’ve got raspberry, forest green, and all these cool colors. We end up walking out of there with gray because it’s the safest bet. When it got to that point, I just lost interest in the business.
To be truthful, I was not the right person. It’s been in the billions for six years. It’s been $2 billion each year for two years. I was not the right person to do that. That’s a different type of brand-building. I built the brand to where it was national in America, but to take it full-on fashion image, it required somebody with the New York shoe industry’s knowledge to take that. Luckily, they hired the right person and it took off that way. It turned out good for everybody.
I remember hearing some wisdom, I don’t remember from whom, but the kind of person that can grow a business from zero to a million is probably not the right fit to grow it from a million to $10 million, and the person who can do that is probably not the right fit to go from $10 million to $100 million.
You’re absolutely right.
I don’t have the skills to run a $100 million business.
I don’t want the work anymore. If I was in my 40s again, I’d jump at it. Although the last one I owned, I’m on fire about it. I really charged to get that one going again.
I can sense your enthusiasm. It’s coming through the Internet waves. Now, if folks wanted to read your book, they wanted to hire you for a speaking gig once things are back to having conferences and all that, where do they reach you and how do they get your book?
My website is uggfounder.com. The book is available through my website but it’s also available on Amazon. I’ve done the audio version. I spoke the audio version that came out really well. People seem to love it. If you’re not a reader, you can listen to it. The stories you and I have talked about in the last hour, there’s 20 times more than that in this book. Each one has a little lesson of what I learned from the incredible hardships. Plus, there are a lot of good times, too, which I talked about which we haven’t had time for today. There’s that.
Just keep your eye on Lash.Live. It’s worth going online and joining the app. Just keep in touch because over the next year, we’re going to see a lot of really cool vendors giving products away at really good deals.
The Birth of a Brand. Thank you so much, Brian. I really appreciate it. Listeners, please do something inspiring to help the world, your family, your friends, loved ones, whoever. Get out there and do something. Get those goosebumps moments because there’s a lot of magic out there in the world. Even in times of trouble, you can be a beacon of light for folks. We’ll catch you on the next episode of Get Yourself Optimized.
Checklist of Actionable Takeaways
Don’t resist. Instead, embrace the change. Running a business will have its own handful of ups and downs. The best thing I can do is enjoy the ride.
Find a new way of coping when situations take a downturn. Remember the reason I started my business and let that fuel my drive. I must have faith, patience, and perseverance in my brainchild.
Be inventive and resourceful when things get scarce. It’s never too late to start over. Sometimes life’s detours lead us in the right direction.
Meditate to develop a strong sense of self-awareness. When life seems uncertain, the answers often lie within. Look inside to connect with my innermost being.
Be more conscious of my environment and Mother Nature. Humans are merely visitors on this beautiful planet. We must protect and preserve every living thing around us.
Establish a strong sense of community with the people around me. Great relationships are every one’s best investment. When life gets tough, there will always be someone willing to lend a helping hand.
Make sure that I send out the right message about my business. If I want the right kind of people to support me, I should be able to speak the way they speak.
Be more intentional in everything I do. Always have the purpose of brightening someone’s day or helping someone else.
Don’t expect things to immediately work. Projects are like babies. They don’t become successful adults right away. One must nurture them every step of the way until they succeed.
Grab a copy of Brian Smith’s book, The Birth of a Brand to learn about the inspiring history of UGG Boots and how it’s become a global success today.
About Brian Smith
UGG Founder Brian Smith has become one of the most sought after speakers and business leaders in the country. His inspirational talks and media appearances on his breakthrough business strategies are widely attended by business people of all ages from a diverse array of market sectors. Team building, company culture, growth challenges, are all presented through a lens of vast experience, combined with a vision of a spiritual approach towards the future of business today.
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