Episode 353: Growth Through Chaos with Scott Alterman (The Icebox)

Everyone says they've got a growth mindset, but Scott and Jordy and the team at the Icebox, they've got the scars to prove it. Today on the SkewCast, we're talking with Scott Alterman, one of the co-founders at the Icebox, about what it takes to lead, reinvent yourself, and continue to rise as one of the most respected creative companies in promo. Welcome to the Skewcast, the podcast for innovators and maverick thinkers in the promo space. I'm Bobby LeHew. I'm glad you're here. Scott Alterman has been building Icebox for over two decades. He's a screen printing guy who went all in on program business, a product expert who's watching retail trends catapult the merch space faster than ever, and maybe most importantly, a leader who actually knows how to build culture through chaos. We talk with Scott about how the customer landscape has shifted into a new form of fragmentation. What speed really means when your customer wants everything now, POD, and why maybe inventory still wins over print on demand, especially if you know what your customers actually need, and how to adopt new tech while staying nimble and moving fast. Today's episode is brought to you courtesy of us at Commenscue. Over 900 distributors powering $1.8 billion in network volume rely on Commenscue's connected workflow. Process more orders, connect your team, and dramatically grow your sales. To learn how, visit CommsQ.com. Now here's my chat with Scotty. Scott Alterman, I cannot believe I get to talk to you on the SkuCast today.

Yeah, I'm excited.

I am too. I am too. You spoke at one of our very first SkuCons, man. Do you remember that?

I do. It might have been the very first, if I'm not mistaken. But you would know.

I think it was like one of the second one, I think, or something like that.

It was the second one. I want to say it was the first.

It was the first, like, big one. It was like the first big one that we did. And that was great. And my gosh, that's— we're talking about a decade or several years now. Sorry.

Might've been a decade ago.

Yeah. I remember us talking at the speaker dinner that night and we were talking about kitting and fulfillment projects. And so we're going to get into all kinds of things like that. We've got all kinds of places we're going to talk with Scotty about. So hang on, strap in. He's one of my favorite people in the industry for all kinds of reasons, but you're about to discover why. First thing, I'm just going to get right out with it. One refrain I'm picking up from a lot of distributors is how customers have changed. So what's changed with you and your work with customers over the past, say, 5 years or so that's really been dramatic?

It is the customers that are driving our change. Obviously, we're constantly trying to reinvent when we need to and differentiate all the time. But I would say, yeah, the business, the landscape is just so different that people, they want everything faster. There's a lot of new offerings. For us, Specifically the last time you and I talked, we were doing heavier on the at-once side, the custom side of the business with a lot less on the programmatic side. And we've flip-flopped that. And that was really, I feel COVID, I don't wanna say forced us, but post-COVID we look a lot different really just because of how that all played out. But our company now much heavier into inventory and storefronts and contractual business and we actually miss a lot of the at-once business and we're trying to reinvigorate it, but we went all in over during the mask craze and those wild days. Yeah. And we've stayed in that realm more so, not even by our own choice sometimes, but it's just how the business shifted. Yeah.

We, you already have such a creative bent toward your business at Icebox, and so you moved to program business. Did you find that shift created that kind of functional aspect of it and it was important and that led to probably some big program business?, but you are trying to make sure you still stay, keep your creative edge with that because some, a lot of that dropship is done in that creative capacity.

Yeah. We always lead with creativity, but I will say that it was just more circumstance than anything. Like we were scared of program business, I should say. We always— inventory can kill you as we all know. And I've learned some tough lessons over the years, but it's true what they say. It's tougher business. It's stickier business. So that from that standpoint, it's nice, but It has led us to some really big brands that need that. And then obviously there's that one business that can go along with that. So it's not like we're not doing that one business, but the type of customers we were running into 10 years ago is different. Some of that by choice, some of it not. And I think on our own business development, we are a lot more targeted on who we want to go after now. So that's changed a lot for us.

Speak more about this client change because I'm hearing a lot from distributors about how complex the client is now. So even from 2 or 3 years ago, we're getting speed has amplified, customization, transparency, data. Which of those seem to matter most if you had to stack rank them yourself in terms of what's changed about the client's needs the most?

I think data is a big one for us. Like, they all want better reporting. They want to have their own dashboard, those sorts of things. It's all changed. The products are changing. The trends are changing. One big change that— you didn't bring this up, but I'll add it— is It used to be when we were in an RFP, we're vying for pretty much all of the business and to be their kind of exclusive guy, certainly on the uniform side of business. What I'm finding now is a lot of companies, the bigger ones particularly, and this we're experiencing existing clients where we're playing some defense and we're getting some opportunities to get some market share in other situations, but they're dividing it up now and you've got these power brands that might want 2 or 3 providers. And so they're going out to RFP and they may split the program or things of that nature. And I'm assuming that's heavily based on all the tariff stuff and volatility in pricing. And it has caused this flurry of RFP business that all of a sudden we got very busy trying to win new business, but possibly sharing it. And it's a little weird, but I totally get it from the customer standpoint.

I see. So instead of like you and I have been at this a while and in the day there was a big trend there for a while where corporations were consolidating the departments, consolidating their spend and going through fewer and fewer providers. What you're saying now is they've actually fragmented that RFP process. Do you find them actually choosing multiple partners in the same category, or are they still splitting these categories differently?

In some cases they're picking a couple of people doing the exact same thing as a diversification play and a hedge and a Wow. Comparison and hate it at some level, but I do get it. Like I said, it makes sense, but hope it's just a fad.

Yeah, that's hard.

Yeah, it's hard. It makes it harder.

Yeah. Do you see there's a couple of other major trends happening here with the supply chain complexity, the cost pressures, but POD, as someone who sort of screen printing has been in your roots for a long time, but at the top I shared an intro a little bit about Osbox. Give us a feel for where Icebox is at today in terms of employees, or if you're comfortable, revenue, whatever it is you're comfortable sharing for us to get an idea of the scope.

Yeah, it's interesting because the last few years, or even really since COVID we've struggled. We've had a lot of wind in our face and everyone experienced COVID, but shortly thereafter, I don't even know if you know this, Bobby, but we experienced a ransom cyber attack, not directly on us, but our third-party backend provider was attacked. And that was harder than COVID for us because COVID was happening to everyone, but this was really isolated to us. I know a lot of people go through it, but we felt helpless and locked out of our own business. And our customers were super cool for a period of time and then they were okay and couldn't really get them straight answers because the attack wasn't directly on us. So the long answer to your question is we're now today, we're through all that. We're good. We're back in growth mode, but we've had a few tough years in a row with some wind in the face and that's where you learn the most and it's tough lessons, but thankfully we had cyber insurance. So we've spent a lot of time having to deal with some of that. We've had to like reconcile a lot of things that we went manual just to service our customers and get back up and running. And we had some just phenomenal contributions by our team of just people going so above and beyond and innovative in a really scary time that you don't forget those lessons and those people and those solutions that we were able to build. That's been a brief snapshot of where we've been over the last few years. Again, this is now going a couple years back, but it took us over a year to get our head above water with that.

Okay.

It was something I wouldn't wish upon anyone, but it actually forced us to do a software transition. As you can imagine, we weren't incredibly comfortable with the future and the direction and the volatility, so we went out and Unfortunately, we had started that process and we were going slow and we had to like really expedite the process. And that's been another learning curve and some pain and some money and a lot more time than you imagine, like everybody tells you. But I'm happy to say we're fully transitioned onto a new platform and we're riding the bike now, but we don't really know how to ride it yet. So it's been, yeah, and Commenscue has been a part of that new solution for us as far as the front end. So we can talk more about that as well, but we look very different than we used to look for a lot of the reasons I've just spoken about. Yeah, we're a growth-minded company.

I've always said that.

We always have been. Yeah. If you're not growing, you're dying in my eyes, at least. And so I'm ecstatic that we're all pedal to the metal on the biz dev side. We got a lot of activity going and it feels more fun again for us.

Yeah. One of the most vibrant brands in the industry for sure. And my gosh, man, what a setback. Thanks for providing and being vulnerable to provide that feedback. How many employees now do you have?

Oh, we have 140-ish. 120. We've been flat to down the last few years for the reasons I mentioned.

Sure. So for the first time, that's the context.

Yeah. And probably we're 25 years old at this point, 2001. So next year is our 25th anniversary. Yeah.

Congrats.

And for 22 and a half of our 25 years, we've always grown. Yeah. So it feels funny. There's these plateaus where you try to get to the next evolution of maturity and economies of scale and scalability. And we're trying to grow up. We got a lot of cultural DNA that kind of is what makes the place great and special. And it's also what kind of is tough to break out of. Yeah, yeah, yeah.

I want to get to CommsCue and the front-facing side of that in a minute, but I want your take on POD in particular. So when I ask distributors today, what are some of the biggest challenges, they'll typically name 3. One is they'll name how complex the client has got from a creative standpoint. So you guys were— this was already in your warehouse, so it's not a problem with you. They're coming in with high demands on the creative side. Number 2 is, of course, just constant supply chain problems, but we've always had supply chain problems in this industry. And number 3, POD is creating an interesting world right now. As someone who had screen printing baked into their business, how do you feel about just POD in particular?

You're having to play the game reluctantly. I'm not sold that it— there's a place for it, obviously. And it is the buzzword right now. And I think everyone's historical inventory overages and just challenges with dead inventory, those are the sorts of things that obviously made it come about. And so there is a place for it, but in the world we live in, we're doing it where we have to, but we're still almost doubling down on the original model just because of our machinery and our customers and We still believe that having inventory on the shelf adds a lot of value. We're plugged into the supply chain to some of the partners that are doing it. And we're actually late to the game. We're doing a few literally like as we speak that are a little more connected and integrated with Shopify and this and that. And so I'm sure I'm not a tech guy, you probably know, but we got a lot of smart people here trying to figure out, because we've done a lot of our own version of print on demand, but there's better ways to do it now. So that's one of the silver linings of it coming about. And we're leaning into the supply chain for help there. And I hope is that we're going to find a better way to do it than we have had to. And it'll be a blessing.

Yeah, totally agree. You and I both be leaning heavy into program business. Inventory has— there's just no faster way than inventory. And when you see what Amazon has led the charge in terms of expectations from the consumer and the buyer, the consumer is the business buyer. And so they've driven expectations. Now they have expectations around same-day delivery. That's just going to keep getting faster, whether it's Walmart's testing with drones with delivery. So my point being, while the industry's having this POD conversation, we're still missing out on this inventory conversation that still can respond faster to these needs than POD.

That's our sales pitch, right? We're talking to big clients. If there's a program where it makes sense, let's talk about it. But let's also talk about the values of having it on the shelf and ready to ship. When you have thousands of locations, you're a restaurant or a corporation with offices and you need it all over the place, the time it takes to the nuances of the industry. And so there is still a good place for inventory. And you're right about Amazon. Everyone now wants free freight discussions. They don't understand that Amazon has a little heavier freight leverage than the icebox or the industry. We're having to have some of those conversations. And it's interesting. It's, it's making everybody better, but it's also making the industry tougher than ever, especially with the climate of all the other political stuff and the tariffs and the sourcing and Speed. But I will say, you asked earlier what I think I answered with data as the buzzword for us that is very commonly talked about, but speed is everyone needs it faster than ever. And that's not just the product. That's the quote that everything. And speed wins. So the more nimble you can be and the faster you can respond and the faster you can turn around, that's the big part of the game for us. And that's where I think sometimes we have to break out of our old patterns of, oh, that used to be, we could have 2 or 3 weeks or An art request could take 3 or 4 days and it's just an effect, like you said. Yeah.

Is the speed equation part of the reason why you came on board with Commscue?

Probably. I think it's more just the overall customer experience and the overall Icebox employee experience. Like everything from our own border entry and transparency and internal visibility to external Communication and visibility, consistency. We had a lot of different sales reps and it's, if a customer called in, they may get a very different experience. Our goal was to make it as similar as you can, given that their different reps are going to have different personalities. But as far as how the quote comes to you and the lead time it takes to build the quote and the look and feel of the quote, some people were sending decks and some people were going to ESP. And I think it's really helped us. Offer a more consistent deliverable to our customers and a better customer experience. And obviously we've known Mark and Catherine forever and have wanted to do business with CommonSKU just because we like doing business with good people like you and the team, but it has never made sense. And I think CommonSKU has gone through some changes over the last few years that have opened up some of the more complex distributors and an option that we can plug into our overall strategy and are excited about where it can go because we're still in like the early innings. Yeah, the possibilities. Yeah.

And speak to that a little bit because folks may not know what we're talking about, but working with Commsky, suddenly as an enterprise customer, you realized you needed something to really make this deal work. And a lot of this had to do with open access. Can you speak to that a little bit and why that was such a big linchpin for you?

Yeah. In a perfect world for us, we're trying to build for the industry without going completely custom. The best in class in the front end, the best in class in the backend, and even in some connectivity on the e-commerce side. Sometimes that takes a little bit of creativity and getting various products to play nice together. And I think we reached out to Catherine and just explained where we were. It was good timing finally, because I think again, in the past, it wasn't that we didn't want to be on Common Skew, it was, it didn't really play nice with our system at the time. And just the openness and the ability to talk about integrations. And you'll know the terminology better than I do, but my team spoke with the right team at CommonSkew. We figured we could put something together that in time can really be best in class in lots of areas. And it's been a journey.

Yeah. What's the impact so far? One of the things that you mentioned, so I want to pause for a minute and just talk about client experience because you and I have been at this a while and long enough to know that back in the day, if you did program business, you were unique. And today everybody's doing program business, everybody's doing fulfillment, pick and pack. There's a lot of people playing the game now. And if there was one differentiator in the world, it's customer experience. And you mentioned to your team that this is a better experience for just your icebox team. Can you speak to that a little bit, what you've already seen in terms of improvements with your team?

It's the ability to reuse presentations. It's the speed to do a reorder. It's, like I said, the reminders, that reporting that we can run that says, oh, don't forget about this event that we sold last year and beyond, that we— is an annual thing. Like just organizing our sales leadership and our salespeople to manage their day a little more efficiently in lots of different ways. That's what I'm seeing out of it.

Yeah. It's funny, the folks that come to Commsy are typically sales teams who go, That looks like an elegant solution to our problem. Let's try and do that. And so it's built for sales teams, which worked out great for CommsCue because as the customers became more demanding, this team model became more important to work with customers. And so CommsCue was built for this team sales model, which we're seeing a lot of complementary benefit from.

Yeah. And, and the fact that you guys and Catherine and Mark come from the industry, I've said the word nuance a couple times in the first 10 minutes of the conversation. And there's a lot of complexity, a lot of weirdness about what we all do. We all are willing to promise different things within the offering basket. And from knowing that people can relate to that, like when you talk to some of these newer folks jumping into the software side, it's— and I tell people when I hire them, I know it, you just think it's t-shirts and hats, but there's a lot to this and there's a lot of moving parts. And I think having people that understand that is a huge benefit.

Yeah, it's big. Yeah. Thank you for that, man. Let's talk a little bit about your own, like, personal journey as a leader. This is a hard thing to talk about if you're a leader, but you're leading a much bigger operation now. You've always been a bigger operation, but how has your role changed? You and Jordy have been business partners for a while. How has the role changed? One thing, you've recruited this incredible top-tier talent, your leadership team. And those are just folks that I have access to. I don't, I'm sure the rest of the team is that way too, but how has your role changed?

Yeah, it's changed a ton. And it's because we've brought in people. We've always promoted from within and not necessarily gone out and gotten specialists. And that's good and bad because it's career paths for some of our employees, but we got to learn the hard way a lot of times and that sort of thing. But the evolution of my own role is changing to today, find myself And this is a good thing because it is a credit to our people, but I dip my toe in a lot of different areas and I'm sure I annoy the heck out of a lot of our senior leadership. But at the same time, that's because I don't always know what I should be doing. And I'm really best at sales, but with the cyber attack, with the new system, someone from an ownership level had to keep an eye on some of those things, which is Jordy and I have a very similar skillset. He's much more stayed on the sales side. He's in biz dev and he's a people guy and he's internally a people person. He's shaking hands and kissing babies with customers. So we felt it best for him to stay there while I kind of shifted around and did some other things. And it's been challenging because I'm not great at it. There's people who know far more than me, but I know the business and I know the history and I know the culture. And so to have a seat at the table is nice. And I got to walk in limbo a little bit around finding the balance of trusting our people that know more than me and then trusting my own instincts to look after the direction of the business.

Yeah, that makes a lot of sense with your role. And we find this with a lot of partnerships in that they end up choosing these particular lanes and they're almost always the same thing you mentioned in terms of client focus and then ops side of things. It's so funny because you both as owners of the business are very client focused. I think that's what makes Icebox so great, right? You've always been obsessed about the customer experience. I've been in your warehouse, I've been at your facility. You've always been a legend in my mind. But what are you most proud of having built at Icebox so far?

A group of people that just grind through challenges because they're— we're entrepreneurs, we're pushing the boulder uphill and get smacked in the face with COVID and a ransom attack and supply chain challenges and it never stops. And I'm the most proud, I think, that we are continuing to just persevere through all that. Take our lessons and try to learn from them and building a business that can grow through all of those challenges and also letting go and letting other leaders take the reins. And we try to empower our people. There's times where I'm certainly accused and rightfully so of being a Monday morning quarterback. Jordie has the same tendency. We can come in on the back end and as anyone can, when you have the beauty of hindsight, but The team is so strong now to where it's nice to be able to jump in where I want to. I felt like during those, the last few years I've had to go into some areas of the business, but because now I feel like we're in a better spot, I'm a little more free to roam around and jump in where I see fit. And that's fun and challenging and a work in process for me.

Yeah, that's great, man. I keep mentioning the leadership team because we working with a lot of the leadership team at Icebox and you've built some amazing team and that takes a lot of hard work just recruiting the right folks and then empowering them to do the job. I'm laughing a little bit too, because Mark Graham is now a little bit of a chief provoker as well.

So he's— yeah, as a founder.

Yeah, for sure. What about as you look down the road at the industry, like what excites you the most about where the industry is headed and what we're doing? And I'll start because I've had a lot of time to think about this. I have never seen merch have a higher perceived value than I have now. That's driving my enthusiasm around the business. You as Icebox have always been a creative brand. Like creativity has always been a part of your DNA. It never was not a part of your DNA. But that's my excitement a little bit from the sidelines. But you're in the game and you're one of the head coaches. What are you excited about where the industry is going?

I'm excited about AI. I think it's going to change so many things. And I know, you know a lot about it. You presented on it, but we're in the early stages of our own strategy with it. And I want us to get out of the local AI world and get into the strategic corporate, all of us understanding the right tools. And that's a fast change. It's like technology. We don't even know what we don't know yet. Sometimes we can chase down some paths that lead to dead ends, but I'm very excited about AI. I'm always, I've always been a products guy, so there's some decoration stuff that we're jumping into that's super exciting. We're doing a lot of activation work for customers that's exciting. There's a lot of trends in the product itself that this NFC, some people call NFT, some people call it NFC depending on the, if it's the chip or the technology or whatever, but just being able to take a customer to a landing page, social media platform with your phone through product, a lot of those sorts of things. There are current trends. There's trends in product in every space, really the wellness space with the apparel that helps with anxiety. It's crazy. What's happened in my eyes is that We used to trail behind retail by several years and we could always just kind of be late to what's really out there and be early in our space. Now that gap is really closing and so many retail brands have jumped into the arena since we first started that we have access to, which is its own exciting deal. And all of a sudden, oh my God, now we can sell this brand or that brand and that's what people want. So between the Amazon effect and our products changing at the speed they have, and now with this AI piece. It is exciting to come to work still, and that's at a time where it's easy to get burned out after 20-plus years of selling this stuff at times.

Yeah, man, I'm so glad you brought up the product trends. I had this earlier in, in my notes to ask you about because you are a product guy, and I'm so glad you touched on some of these trends because those are really exciting. How I feel about AI, I'm very pro about AI and what can be done. And I'm like you, I actually feel this renewed energy because you have this interesting confluence of events. Like you said, you have speed, and creativity coming together at the same time. And what we can do creatively with AI is now far more important than we think. But more on that at another time. Scotty, this has been phenomenal, buddy. Thanks for taking time to visit about this. We really enjoy watching your journey. I know it's been at times a tough slog, but you guys have always been a brand that I've admired and have so much respect for you. And you know that not just because you're here on the show, but I have seen you guys, I've worked with you a little bit behind the scenes. So this is really cool to watch.

And I feel the same about you and your career and ConfidenceQ. And like I said earlier, it's about the people and the fact that we're able to do some business together now is exciting. I was a little jealous of some of the other guys in our little network that have had a longer time with y'all. And now we get to jump in and at times where both of us have big growth plans and our own brand to continue to evolve. And it's super exciting. And I love that we can catch up like this and it feels like we hadn't missed a beat.

I know, man. So good. Thanks, Scotty. Yeah, we'll talk to you again soon, I hope.

Thanks for having me. Enjoyed it.