Part 1 - Why NBA Stars Are Dumping Big Brands for a $65 Million Startup

Welcome to this edition of the Million Dollar Mastermind podcast. This is where we pick the brains of high achievers from all walks of life and get their hard earned real world insights on winning. I'm your host, Larry Wydell. Hello, everybody.

We're talking with Stephen Sashin. Hello, Stephen from Denver.

Hello, Larry. Technically, in between Boulder and Denver, people around here get very uptight about that.

Now, is that. I know you were going to correct me, but is that Brooke? I didn't know exactly the name. Is that one that starts with a B? One of those B towns.

Broomfield.

Yeah, Broomfield. That's what it is. I've got. I actually have an office there, but I forget it.

Oh, well, no wonder I haven't seen you around town.

Yeah. So anyway, congratulations on your continuing success and thanks for getting back on because we had so much fun. It was, I think the summer of 2022 when you were on and you were blowing and going then, but you are blowing and exploding now, it seems like. And so I just wanted to kind of check back in with you and hear about the fun, hear about the excitement.

E. Gadd who to begin, I'll do my favorite one. So. And I'm going to do the. Let's see, I'll give you the longer version of the story. So about seven years ago, I got an email from a WNBA player and she said, I've been wearing your shoes and your sandals off the court, and my feet and ankles have become indestructible. You should make a basketball shoe. Well, it just so happened that our chief product officer used to work for Converse, and we had recently taken one of our hiking boots, which someone said, hey, that's practically a basketball shoe, and stripped down and made it more like a basketball shoe. So we sent this shoe to her. It's a woman named Temi Feg Benley. And she said, it doesn't quite fit me, so I can't play in it. But I can tell you this, I couldn't sprain my ankle in these if you paid me to.

Really.

So I kept pushing people to actually make a basketball shoe, and no one seemed to pay attention to me. And then we started getting approached by all these trainers for from NBA teams saying, we have all these guys who are wearing your shoes off the court. If you had a basketball shoe, this could be really good. And it just so happens our VP of product development has been a ballplayer for his whole life. So we fast tracked that program. And at the end of last season, Justin Holiday, when he was with the Nuggets played in a basketball shoe. We developed Tammy Feg Bentley, who's in the with the Indiana Fever. She's the center, she plays in that shoe. Isaiah Stewart with the Detroit Pistons just started in that shoe. We have more and more basketball players coming to start play in an actual basketball shoe. But even more we have all these players who are wearing our stuff off the court. So Jimmy Butler from the Miami Heat wears this one shoe we have called the Dylan off the court. Just walking around when he's in the gym, training, when he's doing a shoot around and warming up everything other than playing because he's sponsored by a bajillion dollar company. So that's been super exciting and we haven't even really started to promote that as much as we can and partly because we're getting all these additional athletes who are coming to start figuring out a way to work with us. So it's everyone's running around their hair on fire. It's been a blast.

Well, it's really great to be a part of something where you come up with an idea and it actually works.

Well more than it's even more than having something work. I've said to people when I'm like talking at Internet marketing conferences, I go, if you have something that does the following two things your golden and most people in companies have at best half of one of them. And the two things are change people's lives and tell the truth. And happily everything that we're doing that's changing people's lives is from telling the truth about how your feet are supposed to work and how regular footwear seems to get in the way of that. And what we've designed supports that.

Yeah. And the thing is that for people who don't know, didn't, don't remember from the earlier story, the thing is this is organic. I mean this is came from you solving and a problem for yourself which is put you, you know, you don't need anyone to tell you about, be authentic or things like this when it comes from your own real world experience in solving a problem you had yourself. And you might just go through that real quick just to bring people up to scale.

Well and to your point, being authentic is really important and if you can't do that, faking it is the next best thing. So the authentic story is simply this. 17 years ago I got back into sprinting after a 30 year break and I was injured pretty much constantly for the next two years. And a friend who's a world champion runner Suggested I try running barefoot to see if I learned anything. Now, I'm not suggesting people run barefoot even though it changed my life. But the gist is when you're running barefoot, good form feels good, bad form hurts. And I could feel that something was hurting that I couldn't feel through like a traditional shoe because of all that cushioning and padding. I couldn't feel that I had a form problem barefoot. I could feel it. And even more, I naturally corrected it because I just tried to find a way that didn't hurt when I was running in bare feet. And when I discovered that my injuries went away, I became faster. So I'm a masters all American sprinter from 62 years old. I still compete as a sprinter. For the last 15 years, I've been like one of the, you know, 20 of the fastest guys in the country in my age group. Anyway, I wanted that barefoot like experience. But I got tired of arguing with people in restaurants about whether it was legal to be in there in bare feet. And my wife got tired of me walking into our white carpeted house with my dirty ass bare feet. And so we started making. Well, I started with a version of a 10,000 year old sandal design. Just something to protect your foot, something to hold that on your foot. That's really all you need for footwear. And just making those for people around town. I made about 50 pairs or so. And a guy who was a barefoot running coach said, I've got that. He had a contractor write a book called Barefoot Running. And if I treated this little sandal making hobby of mine like a business, he put me in the book. So he said, you know, have you have a website I could put you in the book? Well, I've been an Internet marketer since 1992. I built like a thousand websites. So I rush home and I pitch this incredible opportunity to my wife who assures me that I'm completely insane, totally stupid, this is a waste of time, won't make any money, and insisted that I not build the website. And I told her that I wouldn't. And then she went to bed and I did. And here we are 15 years later.

Yeah. And so the story from you weren't on Shark. Had you been on Shark Tank last? By the time we talked the first, yeah. When did you go on Shark Tank?

We. That aired in the end of January 2013 and then again the beginning of June 2013. And then since in reruns every on CNBC.

That's why I'm confused. And so the thing is that you. It's one thing to get something up and get it running, but I mean, then it takes a whole new. It's a whole new game. It's hard to stay on the exciting end of new products and talking to people and hearing their stories and all that. The big guy usually gets pulled off into complex things about filling orders and financing and getting inventory in and shipments and supplies and. And so you've had a crash course in dealing with growth, growth, growth, growth, growth over the last two years. And so how about kind of give us some insights on that because hopefully, Stephen, we're going to get some people listening that are going to have success. They're going to have good ideas and plenty of people out there to prepare you for failure and disappointment, but not a whole lot of people to prepare you for success. And so what can we tell people that. That you've gone through that will help them navigate the same transition and conceptually, anyway?

Well, I think the thing that's helped me the most is I have really bad aims. When I tried to shoot myself, I kept missing because on any given day, you want to do that once or twice. You know, like once a month, sometimes twice a month, I'll call one of my best friends on a Friday afternoon and go, would you like to own a $65 million footwear brand for $9.38? Because I'm selling. So let's be clear, this shit's hard. And it frankly, people don't realize how rapid growth is probably the hardest thing to deal with for a number of reasons, most of which you just laid out. So part of what's allowed us to do this is I have somehow been married to this brilliant, wonderful woman named Lena Phoenix, who is my co founder, and she's a brilliant finance operations person, I'm a product marketing person. So we kind of. We respect each other and stay in our own lanes to the extent that we can. Although for a long time, my job was to think of cool ideas and Lena's job was to tell me that I didn't have the money to do that right? And my next job was to stop whining and being, you know, such a little whiny bitch. So I got pretty good at just going all right, and figured out a different way to do it. The, you know, part of what she's been doing all along was trying to find the capital that we need to sustain the growth that we have. And for people who don't understand what that looks like, because we were growing like 40, 50% year over year, the amount of inventory that we needed kept growing and we got to pay for that way in advance of selling it. So we used to have what we call the February problem, where we paid for product in December or actually paid for it like the beginning of January, and it didn't show up until March. And we had to cover that gap in cash flow during February. Happily, now we're doing well enough that we don't have that problem, but we still don't have the cash that we need to do all of the things, all the taking advantage of all the opportunities that are coming our way. So we're trying to see what we can do about that. So that's problem number one. Problem number two is many people refer to founder syndrome as someone who just wants to be in control of everything. And I, I have the opposite problem, really. I don't want to be in control of things. I want other people doing things. And I probably give away control too quickly and then discover too late that person can't actually do what we need them to do. And Lena and I are also bad at firing people quickly. I mean, I know that sounds horrible and. Right. But you got to cut your losses as quickly as you can and we've not been great about that. So there have been times where, let.

Me just say, let me just insert something on that. I hear that regularly fire people quick and it always grates on me a little bit. And I respect the people that have, they have experience, they have reasons, but with me, it's just too easy to quit on people.

Well, then let me clarify that a little bit. I do have a dear friend who is well known for firing people at the drop of a hat, which is tough because he worked at a haberdashery, so hats were falling all the time. But he's a serial CEO and he's like the first moment that he sees something awry year after out the door. Our issue is that we tend to lean in the same direction you do of trying to get people up to speed, trying to teach them what they need to do. The balance is how quickly can you determine whether or not they can learn that and adapt. Right. And there's a problem that goes along with that. When you're hiring, especially the more people you hire, especially the more people you hire at higher level positions, they want to come in and go ta da and bring their history with them and show how great they are from what they've done in the past before they learn what you do here, what you're doing in your ecosystem. And so the right combo in someone who will just kind of go with the flow and understand what you're doing before starting to inject their thing and what you're doing as a manager or whatever. I don't think of myself as a manager, but what we do on our end is try to craft benchmarks and KPIs, key performance indicators and other things to measure whether or not they're able to then come along for the ride. And so too quick does not mean six weeks after we hire them. Too quick can mean because, like, I'll use salespeople as an example because of the way the selling seasons work. So this is now end of October. We've already sold everything that we're going to be or sold into retail. Everything they're going to get in January and February to launch in March. We sold that stuff a while ago. We're actually already starting to show people fall of 25 and spring of 26.

Really.

So the point of that is, is that you don't know if a salesperson is good for about a year and a half because that's how long it takes to see if they can actually grow the accounts. So we have been naive. That's been a huge chunk of everything because we knew nothing about the footwear industry. We'd never run a company this big, Lena or myself. And so we. The naivete was things like bringing in a salesperson thinking that we were ready for retail when we were a good five years away from being ready for retail, and we just didn't know. And so there was that mistake. On the flip side, the person who we brought in should have been smart enough to go, I don't think you're ready for retail. So it's a balancing act. No one does it perfectly. And I will say one thing, is that in the early days, when typically when we let somebody go, they would point the finger at me and scream and yell about what an ass I am. And good thing that they're getting fired because. And they went on and on about me. And my wife was suggesting that I needed therapy, and I was saying, no, these are people who recognize that they couldn't actually do the job. And it's much easier to go, it's your fault, than to go, yeah, I failed.

Oh, yeah.

And she didn't really believe me until it happened to her. The first, actually, third. All right. The third time, she's like, oh, okay, okay.

You know, Trump says that I fired people gently. I fired them with big severance. I fired them with big transitions. I fired them abruptly. He went through the whole thing. I fired every way you can fire me. He said the end result is always the same. They hate my guts.

Well, you know, we've had a few that actually I had someone that we let go and he came up to me at an event just not long ago and he said, I just need to thank you because I've had this new job and everything that I'm doing there that's made this successful, I learned from you. So that was sweet.

Yeah. I usually find that's the exception rather than the rule, though.

It's true. It's actually interesting when I think about the people, certain people that we let go almost without exception. When I bumped into them socially, we've gotten along fine and they've sort of understood why I did what I did and they've grown from it as well. But then again, there are some that I haven't bumped into socially who I'm sure would cross the street.

We won't divert any more into this, but there is a timing issue that you, when you see it starting to head sour, you can say, and I've done this many, many times to say like, I like you, we get along great. But things, I can see the direction here and we need to cut this off in the past because I want to be a friend of yours long term. And I can see it's not going to, if we stay on this track we're going to, it's going to be an ugly end.

Well, there's another piece to that. What we've learned to do is to get their buy in for what we need to see in order for them to stick around.

Now that's why, that's, that's the wisdom right there.

So we both agree, here's the project for the next whatever. And this is really important because this determines whether or not you're going to fit for where the company is going. And this is the advantage we've had because the company has been growing so much. The idea that they may not be the right person moving forward is not news to them. So. But we agree. It's like here's the task has to get done the following way and if that doesn't work, then this isn't going to happen for us. And one of two things happen or one of three things happen, they snap to and they get it done. They do the best they can and it doesn't work or they just bail.

Yeah. And so I interrupted your, your flow on the Financing and the ordering. Where do you get your. Were these shoes made? I should know that.

But everything's made in Asia right now. Because there's literally not another way to do it at the moment when people say, well, you could if you wanted to, it's like, when did you become a footwear expert? What I can tell you is the people who are experts in this say that to bring footwear manufacturing, especially performance footwear back to the US is a $10 billion, 20 year project. And people say, well, if you really wanted to here, let's do the easy one. I would love to make things domestically, but it's literally not possible in the same way that it's literally not possible to have this conversation on domestically made devices. And I don't know why you're not complaining about your computer. So we are doing everything we can to do the right thing. The factories we work with treat their employees brilliantly. These are well paying middle and upper middle class jobs that if that. I've watched the towns that we have factories in, I started going there 12 years ago. Go from being like farming towns, I mean, not much going on other than a couple of factories to now the kind of place where I would love to live. I mean really, it's great food, great entertainment, great transportation, access to nature. I mean like amazing places. If you can handle the fact that the government knows everything that you're doing, which ironically, once you get over that, it makes life a whole lot simpler in many ways. So it's nothing's perfect anywhere. And people are a little naive, I'm going to be using that word, apparently about what it's actually like somewhere else where they're doing manufacturing, I would. I know I could tell you that if I took anybody who was complaining about what we were doing or where we were doing it to those towns, to those factories, they'd go, oh, I had no idea. This is not what I imagined.

Yeah. And the thing is that who knows, if you continue on your trajectory, there may be a point in the future where you'll be Nike size and you'll have those billions and be able to.

Import, you know, but they're not manufacturing in the US either. I know, I know it. Yeah, but. And they're moving to other countries where this is the part that people, I mean humans love simple stories. And rarely when it comes to running something, especially if something's growing, especially something big, there are very few simple stories. So people say, well, you go to Vietnam, it's like, well, you could, if you had enough money. The big companies bought out all the factory space ages ago. But also the talent isn't there. The supply chain is still coming from China, typically, and the people aren't being treated as well as they were in China. One of the reasons people moved out of China is not just because of political things, but to go to somewhere less expensive. So I heard a thing on NPR this morning about clothing manufacturing in Bangladesh. Companies move there because it's cheaper, and they're exploiting workers there in a way they couldn't exploit in China.

Yeah.

So it's just not a simple story is the best way I can say it.

And the thing is, with these are all things you had to learn. Yeah. Yeah.

I've joked with my wife. The number of things that we have learned that, given the chance, we would happily remove from our brain is very, very high. Some of it I feel really cool about. I mean, not like, hey, I'm cool. Just like, it's interesting and I'm glad I've learned these things and it makes me effective. But it's a lot of things. It's like, I cannot believe I know these things, and I can barely remember my mother's maiden name.

Yeah. Thank you for listening to this episode.

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