Building a Billion Dollar Business with Chip Wilson, Founder of Lululemon

Here's a little bit from today's episode of Business lunch.

I was 10 years old and I was swimming the 100 meter backstroke. I was a very mediocre swimmer, very mediocre. And so I'm about to go off the blocks and my dad came up to me and said, just try to do something like just go full out like right from the very start. Because kind of the thing of the day was probably to look good, to try to go a little bit slower at the beginning, save yourself, come roaring into the end and hit the wall and look fantastic, right? So this is kind of a change of thinking. So I did the, I did the race, went full out and I dropped my time by 9 seconds as a 10 year old's almost unheard of and I broke the Canadian record. So you can kind of see where my, my way of looking at life then started to become from almost a fear of not giving 100% right from the start. And then I kind of think I came to the point of I never want to be laying on my deathbed thinking I only gave it 98% and I failed. And God, if I just would have given it all, would I have made it? You're listening to Business Lunch with Roland Fraser. This is your seat at the table.

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This is awesome. It's so wonderful to have you here. And you got through the. You came from Canada, down from Vancouver Yeah, Through Reno. Yeah. So made it down.

Yes. Yes.

That is awesome. Well, this is super fun because I have. I have been a fan of all the stuff that you've done over all the years. And then you wrote the book, which you just recently updated and had a chance to go through that a few times and look at everything you're doing. One of the things that I know about you is that there's an interesting thing you have about the number 43. Would you share a little bit about that?

Well, something I noticed is that everyone gets glasses at 43. I don't know if you've ever, like, I mean, okay, a year before or after, but. And I think when people get glasses, they go, oh, my God, I'm getting old. You know, it's kind of the first revelation. And of course, 20, 30 years ago, a man would have gone out and bought a red Porsche, you know, and. But, you know, that's. But I think what happens is that. That couples look at each other and then. And their children are like, 14, 13, 12. The children don't need the parents anymore. And I think the parents start to see, oh, my God, you know, like, we're going to be. You know, the kids are going to be off at university soon. Who are we together? And I think people, they think about, well, who am I married to? Is that the right person? Am I living in the right city? Do I have the right job? And I think there's this whole revelation that happens. I think people should change their name at the age of 43.

What would you change your name to?

Well, I think Chip's a pretty good one. It kind of works along the way.

Right.

But you know what? I think it was one of those books, Freakonomics or something. I forget where they said that, how a name can really, like, target, you know, how old you are and what socioeconomic spectrum you're from. So I think at 43, it's the right time, especially as we start living to 120 now.

I love it. One of the things that you're very big on is personal development and goals. And I love that you put together kind of the best of some Brian Tracy things from the Psychology of Achievement, and some of the things that you got from Landmark, and you were like, I like goals, but I don't like goals. And would you share a little bit about what kind of your philosophy is on that?

Yeah, sure. I mean, most people start goals, like, I think go to the. What is it? Start or something. Anyway, a goal is achievable. By smart, smart, smart goals. So I was going to say start. I knew that was the.

Pretty much the same. Yeah, I like it.

But you know, this part about achievable. I, I kind of came to the thought that maybe goals, you should fail at 50% of your goals as part of a training program to learn how to fail in life. But I think more for goals. I found that myself when I first started them. I think I went small. And I went small because. Well, let me give you an example. I was 242 pounds. I wanted to be 220 pounds. So I set a goal to be 220 pounds by December 31st. Let's call it 2020. And then. But let's just say that I'd woken up in the hospital with amnesia and I had. And I just decided like, I want to get into better shape. I want to look at whatever I'm doing. And because I have no concept of what my weight was before or what people think I should weigh or what society thinks I should weigh, I might look up in a bunch of medical journals and then go, my optimal weight is 208 pounds. So I really got from that is that I, and I would say most people set goals that are based in the past, from past experiences that include a lot of failures and not thinking big enough. So now I come at work every day. I come at life every day as though I'm going to compete against myself or I'm going to reinvent myself every day as though I woke up in the hospital with amnesia.

That's awesome. How have you, how has your goal setting changed over the years? Because you've been doing this for like since 18, 19, right?

Well, actually, I think as a competitive swimmer, it's automatically set in because you turn an age group at from 12 to 13. So there's a record you have to beat. And, you know, there's an age. So a goal is, you know, quantifiable with a buy when date. So how have they changed over the. Over life? I, I think when I first started setting goals, it was all about me. And as I've grown older and of course, life is nearly perfect for me in every way. So in order to stimulate myself, it has to be about other people, other people winning.

But it seems like, well, certainly during the time that you were with Lululemon, it was all about the winning, which was pretty cool. So it's been fairly constant then it sounds like.

Well, no, I'd say at that time of 43.

Okay.

You know, it was like I. I moved from being about me to giving without expectation of return.

That is a good place to be.

It's a really tough bridge to, to go over when you haven't really got that much money. Yeah. And to think it's about everybody else before me. But I noticed by, by operating from that point I started. The law of attraction from Brian Tracy kicks in and I started attracting people in my life that were out for something bigger other than just themselves. And it was all by mistake. I didn't do any of this on purpose.

You mentioned being a competitive swimmer and you talk about the 100 meter backstroke. Will you share that story and what your takeaway was from that?

Yeah, it's a neat story and I wish more people had this opportunity. I was 10 years old and I was swimming the 100 meter backstroke. I was a very mediocre swimmer, very mediocre. And so I'm about to go off the blocks and my dad came up to me and said, just try to do something like just go full out like right from the very start. Because kind of the thing of the day was probably to look good, to try to go a little bit slower at the beginning, save yourself, come roaring into the end and hit the wall and look fantastic. Right. So this is kind of a change of thinking. So I did the race, went full out and I dropped my time by 9 seconds as a 10 year old's almost unheard of. And I broke the Canadian record. So you can kind of see where my, my way of looking at life then started to become from almost a fear of not giving 100% right from the start. And then I kind of think I came to the point of I never want to be laying on my deathbed thinking I only gave it 98% and I failed. And God, if I just would have given it all, would I have made it?

I think that's such a great observation because if you're giving like at the end, you're giving the hundred, but you still have energy, you're still going, then you've definitely shortchanged yourself. And what's the difference if you gave it all at the beginning and got way, way ahead, right. And then didn't have an. To me, that just makes a whole lot of sense. It was really cool that your dad saw that. Now you developed a lot of personal development stuff for the Lululemon team and I think you still have it for some of the other ventures you're doing now. Could you tell us a little bit about that? It was like a combination of kind of all the best stuff that you're learning.

Yeah, There was a period in my life when I was 19 when I, when I had the opportunity to read the top 100 books of all as just working this kind of construction job, I had that opportunity. And then when I sold my snowboard company when I was 42 or something, I had kind of the same thing a year in order to read. And it was the era when audio tapes just came out. So I listened to the top 100 business business books of all time or self development books or whatever and I came to probably the same conclusion as 90% of the people come to. And that is there's like four or five books that basically say it all about everything else and it's good to great by Collins. 7 Habits of Highly Effective People by Covey. Psychology of Achievement by Brian Tracy. And then I'd say the course, the landmark form course was radical. And so what I recognized is that I could actually have my employees at Lululemon do all that in two weeks. And by. And I noticed that after, after that two weeks of training, I could send them out to Baltimore to go open up a store, you know, like a 23 year old, you know, right out of university and they could like run it flawlessly.

Do you still have that? Do you still have people go through that system?

Yeah, definitely at my new companies that I have, you know, my real estate and my family home office, that type.

Of thing I love hold it All. What a great name for your family office.

Well, my nine year old came up with that.

It's great. It's just awesome. So one of the things you talk about is linguistic adaptation, which I think is really, really cool, as like a short, kind of a shorthand language. Would you share a little bit about that and how it works?

Yeah. As far as culture goes, I think that the term values is out now, just like I think vision is out and the word purpose is in. And instead of values, I would say linguistic abstraction as in is the word. So it's kind of like you think about two surgeons working on a knee. Well, they can't afford to be giving you the definition of every little ligament and muscle and bone or way they operate, but they can say one word and it means a whole lot. So from the four, the three books I just said and the landmark form and maybe even the E myth that I took 30 terms out of those books and that's what I run the company by. So a classic one would be conditions of satisfaction. So when I'm discussing a project with somebody. There's no finish to the communication unless there's conditions of satisfaction and a by when date it's going to get done by we would have a definition for integrity. Integrity being I do what I say I will do when I say I will do it in the expected way. And if I can't get it done, then I've got to go clean up my mess and reset new buy winds and condition satisfaction. So when you bring in 30 of these terms and definitions, then the whole I can phone up somebody in Xiamen, China and we're on the same page.

Is this something that you're using in Amer, the new things that you're doing as well?

Well, for Amer, I'm bringing it in, definitely. It's a slow process. I think we. Well, we came in knowing that they were old companies run wholesale by men in engineering and we were moving it to direct to consumer, female driven. And that required a whole different type of thinking. And so you spent a year and a half getting the right leaders in place. And then of course Covid hit and that kind of set us back a bit. But I'd say in the main company of Amer, which is arc', Teryx, that's definitely a big part of the culture.

Is this something that we could go find someplace and go through the two week program ourselves if we wanted to?

Well, of course you could read my book, which is on chipwilson.com.

I think everybody here should have a copy. It was on their chairs.

Thank you very much. Yeah, yeah.

Fantastic book.

And then I have inside of that website, of course, is the linguistic abstraction, a three page document by Michael Jensen, who was a professor at Harvard, working integrity and how it works within corporations. And the, that three pager I think is probably the best three pages ever written in business.

We mentioned Amer. What one story? Well, actually I'd love for you to tell the story because this was something that you had looked at years and years and years ago and then ultimately it worked out. Would you mind kind of sharing that? It's kind of cool.

Yeah. When I started Lululemon, across the water in Lululemon was this company called arc' Teryx and definitely the very best outerwear clothing in the world. If nobody's ever worn it, it's, you know, you know, it's far superior when you get it. But I. Lululemon was such a rocket ship and so much to do and I couldn't really take my eye off the ball and that. Well, I just don't have time to go buy it type of thing. And, and I didn't know how to buy it. I didn't know bankers, I didn't understand finance. I didn't understand any of that world. So it wasn't really there. And, and then when I sold, you know, I sold Lula private equity and then went public and all that. And I left and I started looking for other companies to get involved in. Well, then I then Wilson Sports in Chicago was available and I thought, oh, that's pretty cool. Go buy a sporting good. The name's already there. I don't have to do much to it. And so when I started looking at both these companies three years ago, I found they were both owned by Amer, which is the American tobacco company set up by the Finnish Student Union to bring in American tobacco in the time they shifted over to athletic clothing and equipment.

What appeals to you about that that caused you to go back into that after kind of moving out of the big Lululemon?

Well, I think it's the authenticity of, if you look at Nike, they are best in the world at running shoes. At Lululemon, we were best in the world at yoga clothing. You know, I think to break into the athletic market, you have to be best in the world at something. Now, interesting among these brands in Amer, which Atomic and Salomon, which I think are the two best ski brands in the world. Salomon, I think is the best at trail running. Wilson, of course, has, you know, best at balls and equipment, best basketball to.

Be stuck with on an island.

Yeah, yeah, of course, Wilson, that's right too. And, and we have peak performance, you know, out of, out of Stockholm. And then I think Arc' Teryx back, best in the world at what I'd call top of the mountain survival gear. So it's really easy to take something that has amazing authenticity, especially most of the brands and equipment, like Wilson Atomic or Salomon, and then put apparel towards them. Because what I learned is that money is all in the apparel. It's actually not in the hard goods. So when I had a skateboard, surfboard brand type of thing, I'd put all the skateboards and surfboards and snowboards up front, you know, kind of pretending to be a hard goods company. And then I'd have the apparel in the back, but that's where all the money was made.

You did something in the business that we, that a lot of people here at Traffic and Conversion do, which is you actually had a lead magnet. You had a thing that you did with yoga mats to attract people into the store to get them to buy more things by selling those at cost. We do that a lot. We teach at digital marketer. Have a thing that you either give away or whatever that gets people in, and then you have other things you can sell. Would you share a little bit about that strategy and are you using that also now in the new one?

No, not yet. Because I don't think they're sophisticated enough to understand and to do something like a loss leader, which is. I don't know. I learned it in marketing and 1970, 1912, if we called it a lead.

Magnet, we can charge a lot of money to sell information about it.

Yeah, well, for yoga mats, it was a commodity product, really easy to make. There were other people having it and doing it. They needed to make a profit. I didn't need to make a profit on it. I just needed to make. I just need to get people in the stores or online in order to then sell the clothing. And because I. Not only was I vertical because I'd eliminated the wholesale, but as more than vertical, because I owned my manufacturing.

Right. Which I don't understand. It had to have been maddening when you went through the process of. I think you said when you were getting ready to go public, they said you've got to do three things, and one of them was you had to divest out of manufacturing. But the manufacturing was. The whole. Was a very key part of the vertical retail model.

Right, right.

You had to have been just like, why?

Yeah. And I got myself into trouble already because I didn't realize I needed to figure out how to get control a public board when I actually went private equity a couple years before. So I lost control of the company. But, you know, I mean, boards of directors operate by fear. You know, the U.S. litigation system, I think quarterly analysts, they don't want any bad news about anything, you know, and consequently they become mediocre and they fail to become great.

So you were talking about authenticity. And to me, that coupled with what you were just saying dovetails into that lululemon. And all of the things that you've done have always been very, very authentic. And yet all of the advice that you get from the outside investment world is it's not be inauthentic, but they push you to be something that you're not so that you can appeal to the investment world. How do you stay authentic and find that funding and connect with that other world? Is that just like you can't or.

No, I believe that you can I just didn't know how at the time. And I really didn't understand the power that I had. I, I was a company, I didn't need the money. When I went private equity, weird Lululemon was making money hand over fist. And so. But what I did want is I had three kids under the age of two. I had two older boys. I'd missed a lot of my older boy's life and I didn't want to do that again. So I was trading in, you know, this amazing company to have to be a family man. I mean, I think Phil Knight from Nike did it very well. And now I think, because I've come out with the book, most people are figuring this out. And that is you control the board through A and B class shares. If you can control the board, then you can control the culture and you can ultimately decide who the CEO is.

Yeah. You said, going back to the authenticity that you like to be authentic about your inauthenticity.

Sure.

Would you elaborate on that a little bit?

Yeah. Authentic about it being inauthentic? I, if I take myself back to being a teenager or 20 year old and I was trying to date a girl I really liked, you know, it'd be kind of like, oh, I'm going to try to be what kind of guy that girl wants, you know, so that would have been, you know, being inauthentic about my authenticity. You know, I think it's. Let me see if I can find an example. Being authentic about. Well, just I think, pretending that I, that I'm a man of integrity. You know, I really understand integrity. I understand how it works. But still, I'm a person that continually falls out of integrity. You know, I'll be five minutes later, I'll tell a white lie, you know, like, it's better off. I just tell people, you know, oh, I'm gonna, I'll see you there at one. And then I have to, like, I walk away and then I have to call them and go, the reality of it is I'm going to be there at 1:12, I'm not going to be there at 1. I don't know who I was lying to. But, you know, and it kind of, And I think the interesting thing about that is that the more I kind of set out there how inauthentic I am about who I actually think I am, the more people trust in who I am and what I say.

So does the code that you have help kind of provide a guidance system for that integrity?

Right. So the code would have Been originally called the manifesto, which would have been on the side of the Lululemon bags and it would have had maybe 40 or 50 sayings on it. But again, I think that time goes by and so many of those things would have been so radically unacceptable to Wall street that they, that the bags that all got taken off and you know, one of them would have been in 1998, that Coke and Pepsi were the. Were the. Was the tobacco of the future. And, you know, great marketing, terrible product. And even then I could see the obesity that was occurring in America and I could see that that was probably the crux of it. But I would have had things like, even back then, like, you know, suntan lotion may not be good for you, you know, and just from the understanding that the skin is the biggest organ and we absorb so much through the skin and the chemicals and that. And it's now, I just read a month and a half ago, where they've actually banned a whole bunch of suntan lotion now because of the chemicals in it, you know, so it's all things that I think probably came out of being West Coast, a little bit of a granola cruncher, super athletic, really kind of looking at diet and way of living in life.

One of the women that you had come in as CEO for Lulu, I think, I don't remember if it was when she was or when she was coming, but came to you and said that. And I'm. I hope I remember this correctly, if I don't correct me, but said that we have to change the bag. We have to take the thing about children or the orgasm of.

Yeah, children are the orgasm of life. Yeah. Because.

Because we've got complaint and you're like, well, how many. And I think she said one.

Yeah, exactly.

Would you, knowing everything, you know now say, keep the daggone thing the way it is. Let's. Let's stand our ground on the sayings that we have on there or.

Well, first thing I would have do is fired her right off the spot. They would have told me she was the wrong CEO. Right.

Yeah.

And I just. It was my first time. I transferred out of being a CEO and got a new one. I wasn't really that great at understanding what was good and what was bad at the time, but that when you get something that's so core like the manifesto on the side of the Lululemon bag was the number one reason people were coming to Workforce. Now I had a CEO that was coming in and the first thing that she wants to do is change the very thing that 90% of the employees came to work for the company for. So in retrospect, I messed up.

So what are your thoughts on. Because you've. Are you the CEO of any of the companies now?

I don't. No, I don't think so.

Okay. Somebody will tell you if you are.

But what are your thoughts?

Investment, the investment world, the public offering world. And all they'll tell you, you got to bring in a seasoned CEO that's done this before and all that. And so they bring in professional CEOs. Do you think it's good to bring that in or keep the founder who has the heart and soul of the company and maybe get a COO or somebody like that that can do that? Because obviously you can't know all the things that you need to know if you haven't done the things most people have done. But how do you feel about that?

Yeah, I think you've hit it on the net. I think Wall street and the analysts would come in. They'd want you to get a CEO that is acceptable to Wall street as opposed to someone that can actually run the company. And I think it's true that myself as the CEO or my employees probably didn't know how to set the company up perfectly to get to the next level. But what I do, if I had to do it over again, I would hire a COO under me. I would hire a person underneath each one of my core cultural managers that knew the company and the people underneath would be more experienced, but I would pay them 40% more than the person above them. Because the problem is, if I brought in a COO who could probably do the CEO job one, you've got to take care of their ego of not being a CEO.

Right.

So then you have to pay them to compensate for the difference. But that's all it takes. I think nobody's ever really tried it. I can't say that. Have people tried it? I don't know.

Okay, there you go, checking your integrity. I like that you've seen the impact of social media and traditional media, and it has. You experienced lots of good from it helped a lot of the different companies that you had, and you had some people who did things they probably shouldn't have for their 15 minutes of fame to cast you in a different light. How do you balance that, do you think, to get the good that media has to offer without suffering the bad?

Well, I think it was. I got caught just because it was 2:13. It was just a change of time from Old school media into the new school media and nobody had ever really been subjected to the council culture before. So I think I was kind of the poster child for what happened. And that's fine. You know, like I, it's my own fault. I always thought I was a futurist, but obviously I didn't know what was happening in that social media. I don't really have a. My opinion is that sticking with authenticity and documenting inside the company website about what the stand is for, diversity, pay equity is really important what the company stands for. So for instance, I'll give you an example right now. Lululemon was. And my, my companies in general are all about 32 year old single professional and they're about, they're about providing components for people to live a longer, healthier and more fun life. Now what happens out of the left wing is. And social media is that they can make you wrong on any subject. One, we have a bell curve in life on any subject. You have one extreme side here and one extreme side here and in the middle. So you can never get away from anything bad in social media. But I think by documenting about who you are and what you stand for is really important because I know you may be getting this, but diversity is almost the very opposite than building a brand, like knowing who your customer is and more important who your customer isn't. And if you're everything to everybody, I think that really works well right now for about three years. And then because it's kind of like, oh good, that company's got everything, goody two shoes and everything. But then they, they stop meaning every. It's not like, oh, that's not my brand, that's everybody's brand. So it's not cool. So how do you become cool in diversity? I think it's cool right now for three years and then it's going to go away.

Interesting. You had a couple of cool avatars that you created for Lulu way back. We're big on avatars here. Would you tell us a little bit about who they were and what. And what they were and how you came up with them.

That's really the target market. What I really noticed growing up is that if the clothing is designed for one group of people, the store's interior design is designed for another. And then you've got a bunch of people designing a website for another one. It doesn't work. It doesn't work at all. So you can imagine if. So what I did is I decide, well, who's my core customer going to be? And so it's going to be a 32 year old single professional that owns a condo, travels, is stylish, super athletic and super healthy. Now that happened to be a woman. And then I figured out that the man was probably 37. So the woman's name was Ocean and the man's name was Duke. So these people over 20 years never grew a day older or a day younger. So when you gave the designer of the clothing or the store or the website, they knew exactly who they were designing for. Now the kind of the thing behind there I thought was neat is that if you're somebody coming out of university and you're 22 and of course I thought a lot about Lululemon and woman at the time. You looked at that 32 year old woman and you went, man, that woman's got it all, you know, like she's got the style, the clothes, the money, she took her education, developed her career, she's got that hot boyfriend, you know. And then Conversely, for the 37 year old male, where was I going with this? I've lost track.

You're probably going to tell us about.

Utopia as well, so. Oh yeah, yeah. So the younger people all look to that 32 and 37 year old. But if you're a 42 year old woman and you know, and you've got like three kids and life is crazy and you've gained 15 pounds and your body like everything gets hairy or close to the ground, Trust me, I know. Is that, is that you think back to, oh my God, when I was 32 years old and I had that boyfriend and I was in great shape and everything looked. And I had all the time in the world to sleep in on Saturday and Sunday mornings. I think people get nostalgic about that. So these ages become iconic for everyone from 22 to 70.

So you reach these people through really perfecting the concept of vertical retail. Would you talk a little bit about what vertical retail is and also what are the do's and don'ts? Like you've done it for so long.

You might have to take me back. But to give, you know, this crowd of people, like a context of it, I mean, the ultimate vertical business is that you make, let's say you make something in a factory in Vietnam and someone in Norway and Oslo, Norway orders a piece. Well, it gets shipped right from the factory, right to the person. No. So if you own, you own your factory, you own your shipping, you own the E commerce site, you own your marketing and again, you can start taking all those margins rather than contracting it out. Now there's a lot to be said for contracting out what you're not best in the world at. But so what? I was just one of the first people, I think by accident because I made a bunch of product surf shorts I couldn't sell to anybody. So I had to open up my own store. So I was manufacturing, I own the manufacturing and then I opened my own store. I was missing two middlemen and everyone kept saying how difficult the apparel business was and I was going, I can't, I'm making a fortune here. I don't know what's happening. But I never knew that I'd fallen into this thing by mistake of missing two. I was taking the double, triple the profit. Basically.

You had kind of experienced the other side using wholesalers with west beach, right?

Yes, yes. And ultimately wholesalers, as you can see happening with Amazon and Walmart right now that I mean they, they will grind a wholesaler to death. And you know.

Right, we've experienced it.

Yeah, yeah. So back in the old days, you know, like we'd be wholesaling a product and then as, as surf skate snowboarding became a commodity product when it went from three to 500 manufacturers, then the power shifts from the cool startups that got into the business to the Dick's Sporting Goods and Sports Authority. Former sports authority. And they go, well now there's so many suppliers, we can grind down the suppliers and that's what they do. So my thing, eliminate those people.

So what is the, what would you say if you were going to pick two or three big points that you think are common mistakes people make when they're trying to go through this vertical retail model?

Well, number one is the whole goal is to get to economy scale production on anything. So I think the thing is I think that you can prostitute yourself. I think you do whatever you can just to get to 2,000, you know, in clothing anyway, to build 2,000 of every style. So once you've got there then you've got to like get rid of the wholesalers. You got get rid of the E tailors, have your own brand site, have your own stores if that's what's necessary. Because we all know now that getting, I know the word when you're trying to get, when you're trying to get more customers online. It's called marketing acquisition costs. Thank you. So that's, you know that now that acquisition costs are so, so high, I'm seeing kind of the move back to retail bricks and mortar because E Commerce has killed so Much of retail, and the COVID has that. Actually, retail stores are looking relatively cheap now as a marketing device in order to have people know what brand to go on E commerce for.

You also did a couple of cool things that helped margin. Well, it certainly helped cash flow by. I think the. One of your original sewing people was Sophia.

Oh, Josephine Taleciano.

Okay. And she.

She.

You negotiated to have the cost deferred. You also did like a counter seasonal lease of a store. Would you talk about those two things and. Cause I think shifting costs so that you had more. I don't want to take it away, but I want you to share that because I think that's a big takeaway.

Yeah. Thanks. It was a matter of. I could. I had such trust with this woman, first off. And so I went to her and said, look, if you can defer me paying you anything for half a year, I can take the money I have, put it all, double the amount into fabric. Therefore, you're going to be able to make double the product, and then I can pay you double the amount in six months from now. And of course, she said yes. So we went ahead and did that. The other thing I did is it's no different than probably Airbnb or something like that. I found an unused resource. And in Canada, there's many ski stores that close down for the summertime. So I had a surf skate business. So I then contracted out those stores for the summertime. So that. I think that's what you're getting at.

Yeah. And were there any other things like that that you did to shift costs to help you be able to kind of. Because you really bootstrapped that company for the longest time.

Yeah, Well, I don't. I don't. I can't remember anything like that. But I. I think something that is important to think here, this. In bootstrapping, I had a company I started, I don't know, about six years ago called Kit Nace. It was. Yeah, it was cashmere that you could put in the washer and dryer. Brilliant. Actually, the whole thing's brilliant. But we had too much money, and my wife and I. Life is too good, you know, and we didn't really want to work. To start a company, you need to work 18 hours a day and because you got to get all the fundamentals down and. And I think we had too much money. We threw too much at it and what happened? So anyway, long. Let's park that aside. What I'm really trying to say, when you're bootstrapping something that's where the very best creative ideas in the world ever come from. So in other words, I couldn't compete with Nike or Adidas on going out and getting the Michael Jordans at that time or any of the big athletes. But what I figured out is that, hey, there's a level of athlete right under there where they're not getting anything. And so, and I noticed that they were actually the ones that were actually the heroes in their community and had the most authenticity. So because I didn't have any money to do what Nike did, I went for about one millionth of the cost. I went to these people and said, look at all, I'll give you some cool, you know, $2,000 worth of clothing a year. You're going to be our testers. You know, we're going to, you know, there's certain things that kind of came with it, but because they were in front like yoga, let's just say yoga instructors, because they were in front of these group of 40, 50 people five, six times a day, they were really the people that are cussed that the customer really saw as authentic. Let me put it differently. Part of being the 32 year old single professional woman called Ocean is she was all highly media savvy and a business and understood business. So I figured that that woman had figured out that sponsorship of an athlete was actually, you're just buying somebody and they're not really giving you the true goods. They're just being, they're getting enough money where they're just being said, go buy this product. Where actually that community person in front of the class was actually somebody who the customers looked at, listened to and it was an authentic conversation.

You had two really cool things that were kind of accidental marketing rescues. One was barbecue shorts and the other was dog walker pants.

Would you sure.

Tell those stories?

Well, my mom who's here, mom somewhere over here, she's probably San Diego girl. Well, she was a quilter. So anyway, we put these shirts together because I couldn't afford to come to Newport beach and buy flowered fabric from a factory here. I figured the only way I could make fabric crazy was to do quilting, which is what my mom did as a young kid. So in order, because it's kind of unstable quilting, I had to put a backing on it of solid fabric, solid black fabric. And then I made them reversible. So you could have black on or you could wear these kind of crazy long baggy shorts.

And you said with the reversible that people you've actually Found people divide that cost in their mind by 200%. That's pretty cool.

So, but what I figured out in Calgary, which was a, you know, very oil, you know, conservative town as far as that goes, I knew men wanted to buy these shorts and wear them. And this is in a time when there was no such thing as a long, baggy, wild short, that if I called them barbecue shorts, it's like, okay, I can wear them 100%. Gave them the excuse they needed. So that was that. And you mentioned something else, the dog walker pants. Oh, yeah. Well, that was. That was an issue where I. That was the very first quality control problem I had at Lululemon. And we made all these pants and they just pilled. It was terrible. Anyway, you know, all the problems that can happen with that. So I have a, again, a resource of a really faulty fabric and I've got them all made into pants. But something that women were always saying to me when they came in is that we're mocking my dog. But the hair gets all over. So I thought, oh, I'll just. I'll get a nylon, then a kind of a slick nylon that hair doesn't adhere to, and I'll build this pant over top of the Lululemon tight. And then I called them the dog walking pants. And.

And you saved thousands of pairs of pants. You would have to toss.

Right? Millions of dollars. Millions of dollars, yeah.

I think maybe the last thing to leave us with is you had a lot of innovations that you saw coming along because you were staying on top, like flat seams and things like that. Where do you see tech in apparel going now?

Well, I don't think it's any mistake. I bought into Ammer, which, except for Wilson, are all outdoor brands. And I think this. Well, not everyone knows that through Covid. I mean, outdoor has been a big boom. And so the. The authenticity coming from the outdoor brands and what it actually takes to be on the top of a mountain, you know, in you, I mean, things have to work. You can end up in a blizzard and you can die. Even on a beautiful day at Whistler, you know, suddenly the weather changes and that's that. So to be able to take that kind of thinking and then taking it into streetwear is a different mode than I did, maybe through triathlon or yoga, which you sweat. But it's kind of in the city, on the street, and then trying to take that to streetwear. Because streetwear ultimately is where the billion multi. Well, it's a trillion dollar market now. I would say Given the way that the COVID has almost like wiped out the fashion business in New York and the couture business in Europe, and definitely the athletic brands are there. So anyway, outdoor industry, I think is the next big movement.

Okay, is there anything that you would like to leave our audience with that we didn't talk about that you'd like to share?

I don't think you can move quick enough anymore. And you know, we're in our third revolution, from the agricultural to the industrial to the digital. I think there can be too many. You can enroll your people in your company too much. I think he can be too slow. I think we've spent 10 years now where kind of coddling our employees has been the way to go. I believe because China is moving so fast and they don't have the same governance structure that we have to do in a public company here, then they really believe in that benevolent meritocracy of running things. We can't get wrapped up in this individual rights thing or special interest groups that have been so important to the growth of America and Canada and Europe. We can, but we're going to lose. We're going to lose. I mean, because their system is like, we're going to make it best for everybody. And so all boats rise on rising waters. And between the judicial, presidential and congressional way of operating in America worked really well up until 1980. It's not working anymore. I'd say a public company that is not being run by a CEO who is a futurist and is a visionary and can see the future probably, and can actually make that happen in a company quickly probably isn't going to survive.

What can we do about that? How do we take that?

Well, I believe what happened needs to happen on an American basis is that the Republicans and the Democrats have to come together in a special committee, bipartisan, 20 people on each. And they have to change the Constitution for 20 years from now, and they have to do it for 20 years from now in order to take out all the special interests or anybody that can make money on a change right now. And it's. And that 20 years is going to kill America because China's already there, Singapore is already there. You know, it's. And so. But I think that's the only way we. That America can change the way an old way of operating other. You only have to look at Europe to see how far behind they are. Europe's getting decimated. America has been being decimated now for 15 years. And I think it's only the newspapers that try to pretend like it's not happening.

How would you say, how would you like for us to find out more or interact with you, to learn more about cool things you're doing and the way you're thinking about things and things like that?

Well, I have my website, chipwilson.com, i have social media, but I'm not answering the questions. I mean, I'll, you know, it's just, I don't need it.

I'm just being honest about it. That's not me.

Yeah, it's a life. I don't, I don't, you know, where am I? I don't need an extra dollar. I don't need another friend, quite frankly. I love people. But, you know when you're working retail and you're talking to 400 people a day, because I love to talk to people. I kind of just want to go and be with my wife. That's awesome.

I love it. Well, thank you for taking the time to come down and be with us today. I know you're going to go over, I think, to the VIP for a little bit, which is the red brick building in the. On the expo floor. Thank you so much. Let's give him a very, very big hand. Thank you.

Thank you. You've been listening to Business Lunch with Roland Fraser. If you're enjoying the show, let us know by subscribing and leaving a review. And for more information, go to businesslunchpodcast.com thank you for listening.

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