Episode 85: What 1,500 Skydives Can Teach You About Business with Stephen Holden, Holden Brands

Welcome to Skucast, the podcast for entrepreneurs in the promotional products industry. Skucast shines a light on our industry's best work, features maverick personalities, and discusses what's really involved in running a modern promotional products business. Skucast is the official podcast of Common Skew.

I do a lot of skydiving. That's been one of my biggest passions and hobbies that I, you know, I started— actually, I started in 2007, right before I joined the family business. And there's a metaphor for you.

With almost 1,500 skydives under his belt, Stephen Holden with Holden Brands knows a lot about risk. In 2001, with one year of college under his belt, Stephen, along with a group of friends, started a security software company in a two-bedroom apartment department in South Austin. By 2005, when they sold the company to Symantec, it had grown to over 100 employees. Stephen then managed the research analysis team at Symantec. Stephen's team consisted of about 20 people who were tasked with analyzing the behaviors of computer viruses in order to coordinate with the company's software developers to build the world's first behavioral-based detection engine. Despite his success at Symantec, Stephen's entrepreneurial spirit remained ever-present, and in 2007, it led him to leave Symantec in order to join his family's business. By December of 2007, Stephen, along with his sister Lizzie, began transitioning to form a second-generation family business. At Holden, Stephen's primary responsibility is new business development, including trend spotting and driving traffic to the company's websites. And in today's episode, we sit down with Stephen to talk about risk, running a second-generation family business, and the legacy sales and e-commerce sales that comprise the two halves of their operation. This episode is brought to you by our friends at SanMar, a proud founding sponsor of SKUCon and SKU Camp for the open exchange of ideas that advance our industry. And speaking of, SKUCON will be held in Las Vegas on January 13th. To give you an example of what you can expect, one of the sessions is a multi-talented panel of creative agency professionals including Lee Fine from Juice Marketing, Yvonne Lingus-Ziemann from Monarch and Company, and Lauren Borelli Fitzgerald from Canary. And the panel will be led by Pierre Martichaud of Chameleonlike. The panel is called Inside the Mind of Creative Entrepreneur. These are distributors whose go-to-market strategy reflects an agency focus, and their clients value their ingenuity, their imaginative campaigns, and their sophisticated and respectful approach to the promotional Products medium. You can learn more about this session and others at skucon.com. And now my conversation with the adventurous and daring Stephen Holden.

Stephen, let's talk a little bit about your journey with your software startup. You sold your company to Symantec. What led to that startup and subsequent sale? What was that experience like?

I lived in Colorado, in Steamboat Springs, Colorado, right when I got out of high school, went to college there. We basically just snowboard all day. It was super cool, but I had some friends out in Austin that were kind of enjoying the, the scene out there. So I decided to move to Austin and I was going to St. Edwards at the time. Some friends of mine were talking about starting a software company. Well, actually it began as a consulting type company. The name of it was Hole Security. It was W-H-O-L-E Security. And the idea behind it was we were going to do penetration testing. So We would contact large financial institutions and different types of businesses and say, hey, look, if we can break into your system, will you pay us to fix the holes? And so it was a real generic startup company just trying to make a place in Austin. And it was really, if anything, it was an opportunity just for us to get together and just work and get out of college. So I saw them doing that. It looked really exciting. And I joined Hole Security. And what I was responsible for was doing graphics design. I didn't— I was going to school for it, but I didn't know really what I was doing. I just wanted to get out of college and have fun with the guys. You know, they were all having a good time. So I got out of St. Edwards, dropped out of college. You know, my parents were not super supportive of it, but, you know, at the same time, they were kind of like, well, if you're going to get out of school, we're going to cut you off and you're going to have to figure out how to survive on your own. And so, yeah, I joined the company as a graphics design artist trying to build a website. I didn't know anything about web design or coding or, you know, I didn't know the difference between raster and vector art and, or any of that kind of stuff. And yeah, I joined. And one of the things that we determined was that one of the vulnerabilities that we kept running into that a lot of the companies were trying to get business from was the idea of backdoors and Trojan horses. So when we saw that, we saw it as an opportunity to actually create a software company. So we hired a handful of developers. We brought it— we came in and started working on raising venture capital money to build the first behavioral-based detection engine against a certain type of virus, which is the Trojan horse. So my role shifted in that business, and I got out of the graphics design, and what I was responsible for was collecting computer viruses to and then archiving them, creating some type of archive system so that we could— I could work directly with the developers so they could build technology to defend people against them. And so I, I do see it, how it transitions into how I got into where I'm at now and in this industry, because, you know, going out there, it's extremely difficult to go out there and collect computer viruses. It's not like you can go, hey, will you give me your viruses? So, you know, I had to create this underground community. I posed as a hacker. My hacker name was Naked Fool at This is, you know, years ago, and the website was nakedcrew.net. It's no longer available, although I still refuse to get rid of the domain. Emotional attachment. Yeah, emotional attachment. Exactly. I created this, this community. It was this kind of this, this place that, you know, you had to get accepted, and we would share ideas on how to, with all these other people all around the world, on how to beat the traditional antivirus type software and how to get these Trojan horses to beat the, what we call, signature-based detection engines. And so, you know, I spent quite a few years doing that and I was collecting some really cool computer viruses. Well, they were cool to us because we saw how difficult it is to identify them running on a Windows-based machine and the things that they could do. So when we did that, we started developing this software. We raised our first round, we raised about $10 million from the Venrock and NEA family out of New York. And then we raised another $10 million over the course of maybe 3 or 4 years. That's when we were really on. We moved into a really cool office building right off of Lake Austin, you know, overlooking the lake. And it was a really cool experience. You know, we were all under the age of 25 at the time, you know, so we didn't really know what we were doing. I mean, we did, but we didn't know anything about culture, building a business. All we knew is just how to have fun. And that was really the motivating factor. Working there, and we were onto something. So that was a fast experience.

It was a fast growth.

It really was. We had about 100 people at the time. So we raised our money in 2001, and we ended up selling. And then of course 9/11 happened right, right after we raised our first round. That propelled the security— the whole security industry was blowing up. So that event was, was a game changer for us. Microsoft was really interested in, in getting into the security space. Symantec was really huge. I mean, they were there. They were the, you know, 800-pound gorilla at the time. And when Symantec found out that Microsoft was looking at us, they went in and they made an offer, and we ended up selling in 2005. So we essentially, starting in— I think it was October, November of 2005— we became Symantec. We got a little taste of what we thought quote-unquote corporate was like, and, you know, we started having to do— fill out PTO and timesheets and request time off, and now we had managers and stuff. You know, I felt like at that point our time was done, or my time was done anyways, and I was ready to move on. I felt like we had done everything that we could. So the closest thing was the family business that my father had started about 30 years ago at the time.

Now, this was about 2007, so you transitioned into the family business, and your sister, was she already involved in the business or she transitioned later?

So my sister was already involved. She had been there for about 10 years, direct, straight out of college. And I came in, you know, it was an interesting time for our family business because just prior that year, prior to that, to me coming into the business, the business was in a, in a really interesting position in that it was 100% independent sales contractors. There was a company in Austin that, the way my dad uses it, poached a lot of our salespeople. And so we went essentially from a $14 million company to $7 million company within, within less than a year. That was, that just happened prior to me moving to Dallas. But my goal was to bring technology to the family business and use some of the things that I learned from my previous experience, get our business, the family business, up to speed.

I want to get into that in a minute. I'm curious, you know, you grew up then around the business your whole life in some way, right? What did you think of the business before you got into it versus what you think of it now? And were you reluctant to join the family business? Did you have— I mean, how familiar were you with it then?

It's an interesting question because growing up in the family business and, you know, it never leaves the conversation. When we're at dinner, we're talking about it. When we're on vacation, we're talking about business. It's always— and I know it's not healthy. It's one of the things that we've tried to change as a family, but it's always around us. So coming into the business, my perception towards the industry was that it was a little antiquated. Technology was, was a word that really hadn't entered the industry yet. I didn't feel like it was. It was behind times. So you kind of saw that as an opportunity? Yeah, I saw it as an opportunity for sure. But when I came into the business, you know, I understood a little bit about it, but I didn't— you know, you always think you know more than you do. And so one of the employees here at Holden was— that she had been with our company for a really long time— she said, you know, you can come into the business, but just, it's going to take about a year or two to really understand what's going on. And so I was like, yeah, yeah, yeah. Well, I do believe that that's true, right? There's a lot— it's a very comp— it's a very interesting industry, and it's not something I feel like they pick up right away. So I spent the first year and a half, 2 years just learning about all the different facets of the, of the company and the industry.

And probably your respect for the business as well as your dad and his work that he's done probably grew as you— as the more you, you experience that.

Absolutely, absolutely. I, you know, for our business, yeah, I felt very fortunate to be— that the business was where it was. It was a great opportunity, like you said, a great foundation to start building on.

What were some of those initial initiatives for you, and what have you transitioned to now in terms of your role?

My father had— he has Parkinson's, and he, uh, was diagnosed with non-Hodgkin's lymphoma. And that, that was like, okay, kind of a wake-up call. Let's— well, we wanted to keep the business in the family, and so my goal was to not only to introduce technology and bring it to the business but also to learn how to run and yeah, that was the main goal. But right now his everything is, is in remission. He's in good health. It's all good, you know. But that was— we— you just don't know. So that's good to hear.

So, uh, what is Holden's unique place in the market? What do you like? What type of clients do you serve? And your, your particular UVP? And have you gone through transitions to where you're a different company today than you were when you first joined?

Yeah, so when I, when I first joined the company, Holden was 100% relational type business. You know, we all have different names for it. We call it legacy sales. So it's the, it's the relationship side. The salespeople hold the relationship. We had a couple of customer service reps that helped put together presentations, and then our salespeople were 50/50 split commission. That's what it was then. Now we're a completely different company. The culture is different. The revenue channels are different. It's a, it's a totally different business, and the art— and it's changing along with the industry. I feel like the industry is changing, right?

Yeah, it is. Do you have a particular type of client you focus on?

No specific type of client. You know, from our legacy side, it's all relationships. So it's really just who can establish a relationship with the buyer. And the industry of the businesses that we work with are all over the board, anywhere from small mom-and-pop to big technology companies. It's all over the place.

You mentioned a legacy business as a contrast to something. Is there a different type of business or service or setup under your roof?

We also have online sales.

Is this like a 4imprint style or are you talking company stores or both?

No, we tried to enter the company stores and we have a couple of them. It's just not part of our model. It's not part of our— and it's tough because a lot of our clients come in and they say, "Hey, you know, we're interested in having a company store," and it just makes us cringe because We haven't been able to figure out how to turn that into an actual profit center. Usually it's one of those necessary tools, right, to retain their business so that we can get the, you know, the peripheral outside of the store, the online sales. It's— we— so one of the things that we did a couple years ago is one of the guys that I worked with, he's also a childhood friend from when we were in the 5th grade, but he was part of Whole Security. We brought him on to be a software developer and we Essentially, we designed and architected and developed our own in-house e-commerce platform that we wanted to compete with the 4 imprints because that's where we saw the industry going. And so that's what we wanted to compete. That's the space we wanted to go into and compete. And we saw an opportunity that wasn't really— the way the online sales through like the 4 imprints and the 4 All Promos and, you know, they're all very similar, and we wanted to change that up a little bit and implement our own online model. And that's been the fastest growing and the biggest part of our business today is what we put into developing. It took us about a year and a half to develop it, and I just remember it was so exciting the very first day that we launched it and we saw the first order come through. We were just like, oh, high five! And it was a really exciting moment.

Yeah. Where's your revenue at now?

We're on track to do about $10.5 million this year. Okay.

Uh, what percentage of your— now your direct online sales comprise that $10 million?

I would say online as of today, probably around 30%.

How long has the online initiative been going?

It's interesting because about 10 years ago, we— I launched my first online site. It wasn't an e-commerce site, it was just a lead generation, you know, through a couple threw a couple advertisements on Google AdWords. It actually struck right at good timing because reusable bags was a, you know, remember the Go Green move back about 10 years ago and everyone was going, go, go green, go green, Trader Joe's. Everyone wanted the Trader Joe's bag with their logo on it. And so, you know, I created a real basic website out of HTML, threw some advertising on there, and this is in 2009, and we started seeing— but it wasn't like an e-commerce, it was select the quantity that you're interested in and upload your logo here, and, or it wasn't even had was email us your logo here and then put your contact information there. And then whenever they had submitted, I'd contact them and, you know, do that. So that was 10 years ago. But I saw that as an opportunity because the growth that we were seeing from that and the client acquisition was just going through the roof. It was, it was really exciting. So we decided to launch our, our e-commerce platform, and that was about 2 and a half years ago, or 2, yeah, about 2 and a half years ago. Okay.

Is the infrastructure of your business different by business unit?

So you have the legacy sales and then you have the e-commerce sales, or Yeah, so we have our e-commerce sales, we have our legacy sales, and then we have Houston. We also have— our business was built off of 3-ring binders, and that's still probably around 20 to 25% of our company's revenue.

Okay, nice residual sales there.

Yeah, absolutely. It's really— it's, it's great. And it's not— the competitive landscape is different because it's not part of the ASI or PPA industry. So some of the suppliers are in the space, but we've been working with some of those, some other suppliers for, for 20 or 30 years that our pricing is extremely— actually, we're listed as a supplier in binders in the ASI industry. So it's a little confusing. So sometimes distributors buy from us because we can offer really great pricing on that.

Since you have joined, have there been some high watermarks or low watermarks in your history with Holden? Maybe some big failures or big successes that you're, you're proud of?

Yeah, I would say so. When When I joined the business, one of the most difficult things, I would say the biggest challenge that we have faced as a company and a family is the way my dad managed this company is he didn't really manage it. He just hired people to run his business. And while that was great, the challenges were when we wanted to take control over the business and really learn about what was going on, they're no longer here. But the people that were here, they weren't really being that transparent and they were protective. I mean, rightfully so, right? That's their security. That's how the hardest part was really understanding how this business was being run. And so the software that we were using, we had a controller that, I mean, it seemed like there was an invisible brick wall that we could not cross. And anytime we asked anything financial, anything in regards to the accounting side of things, we wouldn't get an answer. And it was extremely challenging and difficult, but Commonsku is what got us past that. I'm 100% confident and know that when we decided to change software platforms to Common Skew, that's when we lifted the veils. I mean, everything became transparent. And at that point during the transition, that's when we let go of the controller that was so controlling and we really started to see how this business was going to operate moving forward.

I know the answer to this, but I like to ask for our listeners, what was it you were able to see now? What kind of transparency did you get that you didn't have before?

The efficiency, communication between team members became easier. I mean, we were doing sticky notes and sending it to accounting, but then our accounting side, I mean, our invoicing was after a product shipped, we wouldn't get an invoice out till a week or two later. And as far as the reporting, when we restructured QuickBooks so that we could see the different profit centers and everything, the whole thing became completely transparent, not only to management but to everyone else, because now we can see who's putting in orders, who's putting Who's finishing in time, who's not, the margins or, you know, everything is that you can see from other— everyone can see the different margins that they're working on. And it's been nothing but a positive experience for us. Very liberating, right? It's extremely liberating. Right.

Prior to that, I know just from my own experience as well as talking to customers, the industry exists in little silos and everyone's got their silos and their little specialties. And then this just makes communication more difficult, particularly though the transparency just Being able to see into your pipeline at any time and as deep and as far as you need to see is one of the most liberating things.

And the collaboration with team members, I mean, it's been huge. Like we actually even just within just a couple of months ago, we changed our office space to be more aligned with how Commonsku has helped our company. So interesting.

How so?

What do you mean by that?

We just moved offices. Now we're— before we kind of use the word silos, everyone had their own individual offices. Nobody knew what everyone was doing other than whenever that you would see their name pop up on CommensQ, but there was no collaboration or interaction with our team members. We moved out of that office about 3 or 4 months ago, and now we're in a new open space. Everyone's working together. We have a gong now. You know, it's like it's, it's, it's completely changed everything.

So the software created an open office environment. You just followed that physically.

Yeah, it just, it was a natural transition. It was, it just naturally happened, and it's been nothing but, I mean, I've heard, I've had nothing but positive feedback from our team members. You know, I love going out there. I like mixing it up with them. With everyone too. We have a couple of individual offices, but I, I go out there and work with everyone too because it's, it's where all the energy and the action is. And it's changed our culture tremendously in so many different positive ways. That's fantastic.

It's fantastic. I'll switch gears just a little bit just because I'm a firm believer— I know this might seem like an odd question, but I'm a firm believer in the fact that our non-business lives, those passions we pursue outside of our work, really do inform and influence the work we do. You've got a couple of unique passions that, as people are probably listening to your voice, would not even believe or be tacked, right?

Tell us about those.

I know of two of them. There's probably a lot more, but tell me of the— tell us of the two. What do you do when you're not working?

I like to get into things that are challenging mentally and physically. So I have a funny pattern, I think, of just following— it's a little bit of an unorthodox hobby list, but I mean, you know, I, I enjoy the thrills and the highs and the lows. So I— getting out there, I do a lot of skydiving. That's been one of my biggest passions and, and hobbies that I, you know, I started actually— I started in 2007, right before I joined the family business. And well, there's a metaphor for you. And then I've been going since then, and I've accumulated almost 1,500 skydives since then. Ah, 1,500. Yeah, it's, it's, it— and it's just, it's, you know, the funny thing is I was actually able to— when I first joined, I was like, how can I incorporate skydiving and business? So I was like, you know what, and when I was talking about that, the reusable bag site I was like, I'm going to— I'm going to throw up a video and jump out of a plane with a reusable bag from American Ad Bag, and I'm going to show all my customers or the potential customers how strong and durable this bag is. And so, you know, I had a friend videotape it and threw it up on YouTube, and it actually generated sales because people are excited about seeing a totally different way of demonstrating. Oh my God.

You know, back when we were having lunch at Vegas, I remember you talking about this. And I— you must not have said 1,500 or something because I— this just floors me right now. But how do you— and this, maybe this is too esoteric of a question, but how do you think— now you're skydiving, but also let's get to the second part of this. You also motorcycle?

I get into these like hobbies. It's a, it's a, it's a different way of getting into them. But like, you know, I was watching a Netflix show about something called Fastest, and I was watching the show and I was like, wow, these guys are crazy, they're cool, they're probably really enjoying getting out there. And so after I watched that, that documentary, I was like, you know what, I want to do that. So the next day I got online and I was searching for teams, motorcycle teams to join. I went out and bought a Ducati and I track readied it out and bought all my leathers. And wow, now had you ridden before? Uh, I had ridden a little bit, never, not, not on the track, and I'd never, definitely not, never got into it competitively. Yeah, next thing I know, about 3 weeks later, I was going to New Orleans and Howlett and Oklahoma and College Station and all these different places and racing for, on the, the CMRA, which is Central Road Racing, or Central Motorcycle Road Racing Association. Crashed once or twice. And, you know, it's, it's the bikes where you're dragging the knee real low to the ground, you know. But yeah, that was another hobby of mine that I enjoyed doing.

Where does this drive to live on the edge come from?

I don't know. I think maybe from my grandfather. He was a fighter pilot in the Marine Corps. I don't— I'm not really quite sure. I always looked up to him and the things that did. He was a cool dude. He was a fighter pilot in World War II, Vietnam, Korean War. He was a POW for 18 months. Yeah, and he just really enjoyed the thrill of life. So I think maybe that's where it came from.

No, so not only you have his DNA, but you've picked up on that, uh, probably subconsciously a lot through that. Now here's the question I was going to get at that always seems a little odd, but I honestly believe this. I really believe our outside activities influence and inform our work. How do you How do you think skydiving and motorcycle riding inform your work that you're doing today?

Well, I'm a huge, huge believer, and I try to promote this within the culture of our business, but a huge believer that work-life balance is important. And that's part of the perks, I'd say, into our company is that everyone— I feel like everyone sees that. And so, for my particular passions, whether it's skydiving or, you know, I enjoy yoga as well, and that's more of the chill side or paddleboarding or whatever. It's like, I think if you can stay healthy in both areas and live a balanced life, whether it's yoga or motorcycle racing or skydiving or working out or whatever, then ultimately you will live a happier life. Being able to stay healthy in my personal life and do the things that I enjoy doing and exercise that part of my brain keeps me motivated at work as well. Yeah, absolutely.

Based on what you've learned building your business and coming into a family business, so many lessons I can see. You know, you've had these years of lessons now of all kinds of things. What would you tell a younger Stephen Holden?

Someone once told me mistakes are a sign of failure, and I heard it and I didn't believe it, but I've experienced that it's completely the opposite. And if anything, and it might sound cliché, but I see failure as an opportunity. And so, you know, while going— the old Stephen, maybe, you know, I was afraid of making mistakes and I was fearful of quote-unquote failure, but I embrace embrace it. So embrace failure, embrace change, and see it as a way to grow and an opportunity to come out a better person because of it. I don't know, this might sound cliché, but I believe strongly about that.

What do you think of the future of Holden and the future of the industry in general? How do you feel about all that?

My sister and I— my sister's been in the business. She is heavily involved in the legacy side. We could not be more polar opposites when it comes to our viewpoints on our company and the industry. Okay.

That's good though, right? It creates a power of a partnership. Oh, totally.

She's like, she's the New York, very hardcore person, very A-type. I'm more the California guy that's more laid back. And, you know, it's— we're just totally opposites. She's— and so, but she's been all— she's always been our top salesperson. She's in her office, stands up, doesn't have a chair, and she just works all day. And that's, that's the legacy, the relationship side. When I was focusing on building our online side, I was more focused on how to obtain clients, get them to interact with our e-commerce platform. I I was more interested in the first and second transaction and then moving on to the next client. I don't see the relationship side of this industry going away anytime soon. And that's something that I thought before that might be the case, but those clients are always going to exist. They're always going to need a salesperson to give them ideas, to hold their hand, to take care of them. I don't see that part of our industry going away. The online sales, while that's the fastest growing part of this industry, I see it to continue to change. I don't know if that means Amazon's going to enter this space. I know they kind of have, but haven't really had a big impact on it as of now. I'm curious to see how the online sales is going to change and continue to grow. I feel like a lot of companies our size— we do about $10 or $11 million in revenue— I feel like companies like ours and our size are either going out of business or merging and selling to other companies.

You sound more concerned about the e-commerce sales than you do the legacy sales.

Yeah, yeah, I, I do. I, and I am, I'm curious to see. It's just, I feel like that's the online sales is the fastest growing part, and it's also the— it's changing. And as generations come through and buyers become younger and younger, I feel like they are going to continue to go online. They're not so loyal to the business that they want to work with, but— or the communication on how they communicate. I mean, I'm— now we're like texting some of our clients, you know what I mean? It's like, it's crazy. So the online sales and There's a difference between those buyers and the legacy buyers.

I know we'll have a lot of listeners that wanted me to dig deeper into the e-commerce side of things, and I should have asked this a while back, but tell us a little bit about how that e-commerce experience has been. How do you stay competitive when you have someone like a 4imprint in the world? And then comparatively, how do you also just stay profitable in terms of— I know the infrastructure investment has got to be intense.

I'll go to the first question as far as how we compete with the 4imprints. I think a big word that we use or that I would associate our commerce platform is experience. We try to create a very pleasurable experience online. If you go to 4imprint, it's a little bit overwhelming. You're bombarded with a plethora of products. It's not intuitive. It's a complicated ordering process. It's not pretty. It's kind of ugly. How we compete with that that we're not the lowest price. We don't have the lowest price, and we don't claim to. But from what we've learned, people are willing to pay a little more if the experience is pleasurable. And so we wanted to create the experience that we would want ourselves. And so, you know, we have some influential sites that we've modeled against, you know, with the Amazons and Apple and even Nike's website and a few others.

So you're combating, you're combating their really with the clean simplicity of OrderUp, simpler ordering and processing.

Yes, exactly.

From the aesthetic all the way through to the experience, right? Yeah, everything.

Yeah, the aesthetics to pricing. We don't nickel and dime with setup fees. We give free shipping, you know, all these different— and it's just a bundled price that people really appreciate. What they don't know a lot of times is they're like, wow, this is great. But if they were to combine our pricing altogether and then look at 4imprints, even though 4imprints has like, say, a low price per unit, but then they throw in a $50 setup fee here and then shipping on top of that, our price would be a little bit higher, but it hasn't fazed us at all from what we've experienced. And actually, as I look, when I'm, you know, looking at our sales, our online sales, the margins are extremely higher than our legacy side. Interesting. Yeah, industry average is what, 35? 35, 38. Yeah, our online sales is close to 40. And then as far as the investment, you know, we spent a good year and a half of developing the software, but the investment wasn't really that high in the developing part. It was more of client acquisition. Google, throwing AdWords, I mean, you know, it's— we're spending $20,000, $30,000 a month on Google AdWords just to obtain these clients. Having an optimized account can take years and years to develop. I mean, an optimized campaign. Otherwise, you're just throwing money away, which we've learned from as as well.

And I'm assuming those clients are very different on the legacy side versus your e-commerce side then.

Yeah, so the legacy side, it's all relationships, whereas some of our online, yeah, we hold a relationship, but they come for us for specific products. They're not coming to idea— for ideas or for creative services or anything like that. They, they know what they want.

So it's about proper design and then proper merchandising, and of course backed up by a robust ad spend campaign. Exactly. What's on your desk right now? I ask this question a lot because you usually unearth some interesting discoveries about your daily life and work.

Yeah, this is probably one of the more exciting things we've been working on, but we found a product that's interested in entering the ASI and PPAI industry. So we're working through the negotiation process right now of not only providing them the product that they want to sell to the distributors and the imprinting process, but also utilizing our platform that we designed to sell that product through. And exclusively, this would—

did debut through you?

Yes. Yeah. And but now they don't know it's us. I mean, if distributors are buying— actually, it's kind of funny, I think Right Sleeve even came through and was con— was communicating with our customer service for the product. But, uh, it's, it's, it's been a fun thing. We've been really working on, on that and trying to figure out how we can potentially transition our business model into something a little bit more unique and different than— it's cool. Yeah, always on a daily, constantly checking the pulse of the business, looking through and just kind of seeing where the business is at and trying to figure out different opportunities. See, I feel like this industry, you have to mix it up, and I feel like you have to— you can't get comfortable and you can't get complacent. It's changing so quickly, you have to get creative. I, you know, I try not to read any of the magazines or the any of the publications that are specific because I, I like to keep an open mind and I feel like that would almost block creativity from, from coming in because it's kind of a standard way of looking at things. So I just feel like there's so many rocks that can be turned over and opportunities are just all over the place and you just have to get creative and mix it up and take risks.

Obviously, 1,500 skydives. I'm, I'm believing that you do that, man.

Yeah, it's, it's one of the more exciting things about this industry and the company is being able to, try to identify those opportunities and make them work for our business.

Regarding this e-commerce, you know, there's this belief that there's nothing but tiny orders that go through the e-commerce, and we've written about this before too, um, and have written to this point that typically those are smaller average orders, uh, when you create the online experience versus the legacy or the relationship-based experience. Have you had an experience that defies that?

A handful of years ago, it was before our actual e-commerce platform, which helped us get our platform where it is today. But there was an event, I guess we can just call it an event. There was a company, Quiznos, contacted us and they were interested in a couple million bags. They were doing some kind of go green initiative where you bring the bag back and you get a certain discount on your next order. And they contacted us through, I think it was the first version of our online website, you know, select the quantity you're interested in, put in your contact info,. And when they initially came to us, they said that they were interested in this. And as we work through it, they ended up ordering about 1.2 million reusable bags. We used a supplier in our industry, so we didn't do any direct China-to-China stuff, but we used a supplier in our industry. Because they needed the bags so quickly, the shipping was more than the product itself. They flew in 3 747 jets full of reusable bags to get them in time for their event. It was huge. I think that was like one one of the events that shifted our belief that online is where a lot of clients are going or people are going to buy these products. We didn't shake their hand. We never met them in person. Most of the communication was going through email. They paid half up front. It was almost a $2 million order.

I can see where that would get your attention.

Yeah, it got our attention and it was really exciting. I was out of town when the purchase order came through. I was kind of bummed out because I didn't get to celebrate with everyone. But I mean, that was a huge event. And after that, we're like, okay, there's something here. And so that's when we really wanted to get into—

Have you had experiences like that since?

No, we were wondering if it was going to continue to happen. That was the only one to that magnitude.

$2 million order though.

Yeah, it was huge.

There's something for us every day, right?

I mean, what they paid in freight was like— they paid like $300,000 or $400,000 just in freight. Right, maybe more than that.

I don't know, you probably ate at Quiznos a few more times than you normally did. Yeah, that's awesome, man. Now that we're talking about this, I want to go back to another experience you had with your business prior to being in the industry when you're working with the computer viruses. And that, of course, experience had to feed this desire you have for building an e-commerce platform. How did that shape your— the direction of where you're at now?

When I was at Hull Security and I was responsible for compute, uh, collecting these computer viruses, you can't just go to any other antivirus company and say, hey, give me your computer viruses. Or like, you can't go buy them. Essentially, you have to build a net and then have them come to you. So that when I created that community, that online community, and posing as a computer hacker or whatever, I had them feeding computer viruses to me. And it was, it was, it was a beautiful thing as opposed to going out and soliciting and trying to get those. But there is a little bit of a parallel there with our e-commerce, because one of the things when I joined our business was I, I didn't want to go out and try to figure out how to increase sales by knocking on people's doors, right? I wanted to create a net and have them come to us. So when I created our first platform, launched it, I was like, how can I get visitors to this website? And so Google AdWords was clearly the, the number one choice. And so as we started throwing dollars out there in advertising, people were just coming to us. And it was our legacy people were like, how are you getting all these clients? People come and knocking on your door, you know, where our legacy side was constantly going out there and trying to do it the old-school way. A light bulb went off in my head and was like, wow, you know, we can continue to throw money at Google and people are just going to be contacting us. This is beautiful. And not only that, but we have been able to convert those clients, move them over to the legacy side, and some of our biggest clients are from the ones that just contacted us for a specific product online.

Wow, okay. All right.

Yeah, that's a good—

I wondered about that too, how much of those two feed each other.

Mm-hmm. Yeah, so it is a challenge we're constantly trying to work through. Yeah, I mean, you know, we have different automated ways to go about contact these clients to see if they're interested in other products, and when they show interest, then and we immediately hand them off to one of our traditional or legacy salespeople, and then they contact them and they take it. And some of those clients have— are now still— and still our number one client.

Yeah, nice. Okay, so you develop and you capture them through the front door of the website, and then you nurture them traditionally on the legacy side. That's awesome.

Yeah.

Well, Stephen, this has been a great conversation. Thanks for taking the time to visit with me today. I enjoyed the time we had in Vegas, and I especially love your stories of getting into the business and how it changed you. Anytime I can sit by somebody that rides bikes like that and jumps out of planes 1,500 times, it's kind of interesting.

Yeah, you know, my 100th jump was naked.

That's what you need to do.

I want to—

I want Mark Graham— I want Mark Graham to come visit you, and I want you guys to go do that.

And I'll—

I'll—

yeah, I'll—

I'm the content guy. I'll write the story for you. Okay. I would love for that to happen.

You know what, I think something tells me Mark would—

he would totally do that. He would absolutely do that.

Yeah.

Stephen, thanks, man. This has been fun.

All right. Yeah, Bobby, if you need anything, let me know. I'm looking forward to seeing you in Vegas.

Yeah, same, man.

Same. Thanks so much for tuning in to this episode of SKU Cast. Be sure to keep up with our latest content by subscribing to SKU Cast on iTunes or to our blog at community.commsku.com. Until next time, friends, thanks so much for listening.