Brian Smith - Authenticity Over Everything

Hey everyone. Welcome to the what Now Audio experience. These episodes are my way of giving you that real, raw, authentic look into business and what it actually sounds like. Some of these conversations are recorded in the studio, some are on the red carpet and some are with my friends over at dinner. So the audio may be a little rough, but what really stands out to me are some of the behind the scenes conversations that take place when the camera is turned off because they provide so much value from people who are living and breathing business every single day. That's what I wanted to do. Bring you something that represents what business actually is, not just what you see on social media. No fake gurus. And by the way, if you need more help with your business, please visit the what Now Academy at www.wharnow.academy. there you'll learn what to do now and what's coming next to build a great business. Be sure to connect with me on social media at Scott Duffy Media across all channels or visit my website@www.scottduffy.com. let's do this.

On this episode we're going to be talking to Brian Smith, the founder of Ugg Boots. Now I say we're going to be talking again because we're going to flashback to one of my favorite episodes of Business and Burgers presented by Microsoft. This is a series that I shot with Alan Taylor and oh my gosh, I just love Brian Smith. So Brian is just a super passionate innovator and serial entrepreneur who's best known for starting or founding Ugg Australia brand which today has turned into Ugg Boots. He started that company with $500 and today that is a multi billion dollar brand. Now before we get into the episode, one of the stories that I like to share that Brian has shared with me over the years is kind of what it was that created the big pivot, the big transition between Ugg being a company that was kind of sort of struggling to one that really started to hit the tipping point and take off. And it started because Brian got the idea and he was influenced by friends to do one thing and that one thing was to create a fancy ad to go and hire the best models and the best photographers and take the best pictures of people in his boots and then buy an ad in Surfer magazine. And that's what he did. And what did he expect? He expected by doing all of that sales to absolutely take off. What happened? Things seemed to go in the other direction. And so one day he was trying to figure out what went wrong and he's having beer with a Buddy that owned a surf shop. And he asked the buddy, why aren't people buying my boots? And the buddy said, well, let's go to the store and let's go ask the kids who work there. And so Brian called them grommets. The grommets all came out and the owner just said, what do you think of that Ugg brand? And the kids were like, oh man, that Ugg brand. That brand is so fake. That friend is so. Have you seen the picture in Surfer magazine? Those chicks don't surf. And wow, what a lesson in authenticity and how important it is to be authentic with your brand. Those girls don't surf. And so what did Brian do? Brian went out, he bought a cheap camera. He went and he found some like amateur surfer people. He shot them in the boots. And instantly after placing the new ad, the audience connected and that was the pivot, that was the point that led to that company beginning to take off. I hope you guys love this interview with Brian. I hope you love him as much as I do. And until next time, you guys enjoy.

I'm Alan Taylor. My buddy Scott Duffy and I are in search of the best burger in America. Each month we visit a new city to try some of the top restaurants, pubs and brewhouses while sitting down for a candid conversation with some of the top entrepreneurs, athletes, entertainers and celebrities. I don't know about you, but I love talking business over a burger. Welcome to business and burgers.

We're back at Grub Burger Bar and I'm told they'll be putting some of their house made beer battered onion rings on our burgers today. Can't wait to try it. We all know Ugg as the iconic boot seen all around America. But our guest today, Brian Smith, did not have an easy road to success when he started UGG Australia. With every hurdle he had to jump, Brian learned an invaluable business lesson. Despite his rocky path, he built UGG into the behemoth that it is today. And he came away from the experience a hardened business expert. Today he's agreed to meet with us and dig into a good old American burger and share some of his beefy business advice.

Ryan, thanks for joining us.

Hey, my pleasure, Alan, thanks for having me. Scott. Always a pleasure, buddy. Love you.

So you are, you're an icon. You are somebody that I look up to and you have an amazing story about how you started in Australia as a young guy. You came to Southern California and started a business.

Yeah, well, I was an accountant down there and I hated it. So I came to California because I thought all the big trends are coming out of California. So I was going to find the next big thing and bring it back to Australia. And when I got here, it was about two or three months, and I hadn't found the next big thing. But I realized, God, there's no sheepskin boots in America, and they're all over Australia. So I decided to stay in California and start importing birds. And I bought some samples in because everybody in Australia owned them. I thought it would be an instant millionaire. But I didn't realize that Americans don't understand sheepskin like Australians do. So it wasn't easy. We went out and talked to all the shoe stores, and they just said, we're crazy trying to sell sheepskin in California. The critical thing for an entrepreneur is you've got to be able to pick. Right. I got a shutout by all the shoe retailers. So I thought, well, wait a minute. All the guys I surf with at Malibu know about Ugg boots because they went to Australia and they brought pairs back with them. And so we switched and pivoted to surf shops. Every one of them just said, oh, my God. Sheepskin boots. Ugg boots. Those are the best, man. You're gonna make a fortune. We were just so sure we were gonna be instant millionaires that we raised 20 grand and we bought 500 pairs. Oh, no. Yeah. And we got them in, and then we went back to the same surf shops, and then they say, well, fantastic, guys. But we couldn't sell them out of our shop. We just sell surfboards and trunks and wow. And they're too expensive. And this went on every single shop, you know? And the first year's sales, guess what? The first year sales, okay, so 500.

How many boots did you buy?

500 pairs.

500 bears. How many?

Just 28 in the first year.

That is so.

And you know what's crazy about that is you started by selling your product to everyone.

Yeah.

And then what you did is you.

Basically fell into some market research. You were asking people, why isn't this selling you refined who your target market was?

Well, even that. That was an evolution, too. My theme is you can't give birth to adults. Right. Every business, someone conceives it, and then the first action's taken. Taken. Like buying samples of boots. Right. And then every business goes into this infancy, and it doesn't matter if it's a product or a service that goes into the youth. When you got orders coming in and production's great, you can have a really good, you know, $10 million business in the youth. But if it's a really cool business like Ugg, it'll hit the teenage years and it wants to be everywhere and you don't have the financing for it. And that's when most companies go out of business, you know. Cause they get out of control and then, you know, they mature. To answer the, you know, finish the question. 28 pairs that should have been trying to give up, right? But, but now I had all this inventory, I had my investors money tied up, so I started doing swap meets and I had my van full of product. And every time I'd surf at Malibu, I had a little retail store going and people.

Out of your van?

Out of my van. And then so the next year I sold like $10,000 worth. So the following year I started advertising with. I got these models and posed them on the beach with perfect hair and clothing and the boots like front and center in the ads and $15,000. So next year I got better looking models and more expensive photographers and posed them on the beach again and $20,000. And I couldn't figure out what I'm doing wrong. And so I was having a beer with one of my surf shop owners and he just said, ah, shut up. And he calls these little 12 year old grommets from the back room and he says, what do you guys think of ugg? And every one of them just came out and said, oh, those Ugg boots, man, they're so fake. Have you seen those ads? Those models, they can't surf. Wow.

There was no authenticity to it.

I just like instantly realized I'm sending the wrong image to my target market. And so again, pivoting, you know, I called up a buddy who was running the National Scholastic Surf Association. He had all these young high school kids and I said, Pete, any of these kids gonna turn pro soon? Cause I can't afford it, but I can give them boots, you know. And he gave me Mike Parsons and Ted Robinson. So instead of the expensive photographer, I just got my little Canon sure shot and we went surfing and I did shots of them going to Black's beach and trestles, you know, and these are iconic walks for any surfer. And when I started running those ads in the, you know, Surfer magazine and Action Sports magazine, that sales went to $220,000 just because I nailed the image.

Shooting from your own camera. An authentic ad with somebody who really embraces the brand.

Super cool. And that's the authenticity is critical for every single person trying to build A business.

So the birth of the brand. The book been out about a year now. This story is really great because so many people can relate to it. Starting something and struggling with it and then finally hitting that sweet spot that.

Was like the three or four years of infancy. Right. And when I finally. Now that I went into the toddling stage and then business started going.

Do you have a philosophy that you live by in your life?

There's probably two of them. One is that the most disappointing disappointment will nearly always become your greatest blessing. Another one, which is, well, actually, this is four little mantras that I've lived by. Feast upon uncertainty, fatten upon disappointment, Invigorate in the presence of difficulties, and enthuse over apparent defeat. That's the fourth one. Now, they're all addressing. They're all addressing bad things, but every one of those is a positive statement. So you look at what's happening and you turn it into a positive. Man, that's picked me up after my book is just a series of disasters. Everybody tells me it's a page turner, and I think it's because they're never sure, I'll be there next chapter.

But using those four principles, after every disaster comes a growth spin, Right?

So I was asked one time in an interview, what do I attribute my success to? And I was thinking about it. I'd have to attribute my success, whatever success I have, to my failures.

You learn a hundred times more from a failure than from any success.

So it's easier to embrace those things and go, what can I learn from this lesson?

The problem a lot of people have is that some bad thing will happen. They hang on to it. And if you can't let it go and say, well, learn from that and move on. You must live in the now, never in the future, because then that brings up fear of stuff not happening. Never live in the past because there's nothing you can do to change it.

That's right.

Just look at what's in front of you now.

Hey, gentlemen, are you ready for some grub?

Yeah. Yeah.

All right, here we go.

Man.

That's good. This is so good. That is so good.

All right, so I'd love to talk to you about relationships and the value of building relationships in your business.

When I was forced to go out and start selling the product, you know, after those three or four hard years, I would go into the stores and I would meet with the owners and I would. It didn't take just a few years. And I figured out that the profits they were making from the Product that they handled was. Was pretty substantial. It was consistent, contributing to their overheads and becoming a real source of income for them. And so I started to realize that I wasn't selling trying to get from them. I was actually selling, trying to give them more profit. Wow. And they became partners. So instead of me the salesman and them the buyer, it became friend to friend. And so we all became friends. We would surf together, we played golf together, and selling now became fun. So those relationships were so key. And later on, there were several things happening. You know, years down the road when we were doing 10, 12 million and my supplier sort of abandoned me and picked up a different distributor, and I was losing. You know, my retailers stuck with me. They could have all bought the opposition's product, but they didn't. They would rather sell less product for the year than pick up a knockoff. You know, just by me being honest and upfront with them, they were just like, so loyal and literally saved the company.

You know, a lot of people that.

Have businesses with inventory will go out and they'll win that big order. But what they don't understand is that you can literally grow yourself out of business in a business that requires inventory, because you have to pay for that inventory. And I'm wondering, is there any advice that you. You give to folks that have businesses that are growing quickly?

The biggest mistake I made wasn't a mistake. It was a lacking in me is I did not understand financing when I was broke. Let's say I just had a million dollars in sales, right? And I'm broke. I think, okay, I can fix this. I'll sell 2 million next year and then I'll have tons of money. But what I wasn't realizing that to sell 2 million, I've now got to get the funding to buy double the amount of inventory. So now I've got to deal with equity investors and all that. And then when I get the product in, I've got to have the financing to have, you know, the shipping and distribution. Then I've got to finance the retailers for two or three months, and by the time I get my money from them, I've doubled the sales. I'm still broke. The bigger I got, the bigger the problems became because I didn't understand the financing side. Looking back now, I would have brought in somebody who could have taught me that before I got into the, you know, the 10, 15 million range. Because then, you know, and let you.

Work your strengths while they came in and they focused on the money and the cash. What is the Number one lesson or piece of advice that you give to.

Entrepreneurs today if they're starting out, it's almost a requirement to have a certain level of ignorance because if you knew what you were in for, you wouldn't start. If I knew what I was in for with the seasonality, the amount of inventory, that I would never have done it. The other thing is that just have patience through that infancy because that's when 90% of entrepreneurs give up. And it's so sad.

How about listening to your family and friends when they tell you you need to give this up? Did you have any of that?

All the time.

How did you deal with that?

Emotional. My first few warehouses were in my second or third bedroom. Right. So people were always coming over the house and they're always saying, I thought.

This was supposed to be easy.

You're crazy, man. Yeah, you're crazy. Why don't you. No one's gonna buy those things. Give up. You know that happened for the first three or four years. You have to have the belief. I won't. Passion, passion is an overused word. But belief, if you believe that this really has a value and you see the end result of it, hang in there.

Every time I'm with you, I learn so much. And I just want to thank you for joining us today.

Yeah, really appreciate it. This was a hoot. Yeah, it was a great concept. I love it. Oh, look at that. What a send off, right?

Brian learned everything he knows about business the hard way through personal experience. His story left us with some great food for thought. The most disappointing disappointment will often become your greatest blessing. You will learn much more from a failure than a success. Don't, don't dwell. Learn what lessons you can and move on. Relationships are key. Loyal business partners can save a business when the going gets tough.

Hey everyone. I hope you enjoyed this episode of the what Now Audio Experience. If you need more help with your business, please be sure to visit the what NOW Academy at www.wharnow.academy. we have an incredible community of entrepreneurs and experts that are absolutely committed to seeing you win there. You'll learn what to do now and what's coming next to build a great business. Also, be sure to connect with me on social media at Scott Duffy Media across all channels or visit my website@www.scottduffy.com. again, thank you so much for joining. Have an amazing day.