It seems like it was an insane decision to go to China with no money no plan no relationships no language skills slept in a bush and literally build your own Factory that was a disaster when I say we were naive I feel like that is even an understatement but to be fair success is a bad teach and in our business now I'm a huge believer in firing bullets and failing fast and then the bullet works it's a cannonball and we invest And we build the recipe around that how big is the the Empire Today little
over two out of a billion US and in Revenue and it's public or it's not a not a public company are you are you ready are you ready are you ready let's [Music] go so here's what's fascinating to me so I I have like a love language when it comes to business and my love language is self-made dropped out of college family business multi-billion dollar Company with no outside Capital like you hit all of the things on my little bingo card there which is what got me interested I want to start with the the origin
story so here's the bullet points grew up on a dairy farm um started selling door-to-door hot air balloons was in law school then quit because he didn't like walking up a big hill every day and then made a crazy rash decision moved to China with no money no plan no relationships no Language skills slept in a bush somehow turned that into a billion dollar company so that's the that's the the bullet points can you unpack that a little bit that's quite accurate that's quite a good way to summarize it quite quickly if I was to
frame up our probably first 10 years it's that famous saying that success is going from failure to failure with no loss of enthusiasm I think that actually really does sum us up grew up more or less on a Farm and then we moved North for our schooling and my brother won the New Zealand science fair with a model hot earb and then we decided or he decided he was 12 that we should make these kit set balloons and sell them door to door on the festivals when we're at school and I'm slightly younger than him
so he kind of hired me as the when I say hire I was the free labor to help make the hot ear bores and yeah we used to make these Model for the air balloons and sell them door to door I used to when I was quite young get my friends together and backpack around New Zealand and sell daugh door and I can tell you that learning how to sell daugh door is a great life lesson because you never know who's behind that door and you never know what response we're getting and on top of
that selling a flying burning plastic bag is particularly hard to sell so it really HS your skills early on What was the uh what was your Technique so knock knock yeah I used to be like we're just a small company trying to get off the ground wink wink like no pun intended we were young kids so that always helped and uh you know we' often like would sort of build thesises around which neighborhoods were more likely to buy it was usually not the the richest neighborhoods they were all maybe a little too smart and so
it was sort of somewhere in between would always looked For you know signs of children in the backyards um of houses and I always remember that one of my good friends still one of my very good friends today Fraser he us to always out sell me I don't think there was a day where I outsold him and I always thought I was a much B salesperson than him when the door opened but he just did not care about being rejected he'd go from each house he'd get yelled and shouted at and sweared at And he'd
come out laughing and it'd be knocking on the next door within seconds and I always had to build myself up after getting rejected which was most of the time to to knock on another door and it it it just kind of taught me um I guess the power of just persistence right and you kind of keep going and if you keep going and have that level of of grit and perseverance then your chances are winning or your chances of success are much higher so I was certainly Learning that at a very I guess young age
all right my friends so a lot of you guys who listen to the show you listen because you want to start a company but you're not sure what idea to choose or you may not even have an idea and you like our podcast my first million because we've done a lot of the work for you on researching all these business ideas well my friends we've made life a lot easier for you because HubSpot they just put together an entire list of all The resources that you can use to find a market opport opportunity to validate
for your next business idea so if you're looking for a market size calculator or tools to identify market trends or a huge list of ideas to get started so if you're interested there's a link below click it and you can have access to the whole thing it's completely free now back to the show yeah from there we we we kind of Matt Matt went to University as well and Then he dropped that after a year to set up and make or develop this hot balloon through to a little bit more of a professional level and
Matt say why don't we start why don't we explore going to India or China to try and manufacture our hot blue and given I was making them I thought that was a great idea and so Matt actually went off to India and China did a little scaling trip came Back and he said China let's go to China and by let's go to China he said you go to China so I tapped up didn't go in my second year law found the most entrepreneurial guy from my first year at University a guy called Joe dragged Joe
to China and we had no money really no contacts we went to a little place called shanto was the middle of nowhere there were no other westerners and we had an apartment I think it was like probably the Equivalent of $8 a month to rent it was the eight floor no lift so whenever you were thirsty had to get water you had to like walk down eight flights of stairs to go and get water and come back up and that's where we started but we we ended up getting ourselves into all sorts of trouble and
strife and there's a lot of funny stories the story I had heard was you guys like first night you like slept in a Bush what happened there and but basically what was the plan were you just going to kind of go try to find a manufacturer walk around like what were you thinking of doing we were so naive and on reflection I look back on it's almost like we built a toy company from first principles cuz we did everything different to everyone else without even knowing it so we didn't know that you could go and
contract manufacture your product we were planning on setting up Our own little Factory and that's essentially what we did but me and Joe got into some trouble and Joe had to fly home to New Zealand so my brother came over we ended up trying to see if we could get a hotel but everything was way too expensive so we decided just to sleep in the bushes at Hong Kong airport I remember just getting completely attacked by mosquitoes all night and we didn't want to sleep in the airport cuz the floor of Lights were so bright
and so yeah we ended up sleeping in the bushes and getting attacked by mosquitoes all night it was not fun and then we fit it up to China and we set up a little Factory on the side of a river it was a small kind of shed more or less in China and my cousin Simon came up at that time as well he was an engineer to help us and he welded a production line and we bought we pretty much spent all of the money we had on an injection molding Machine we employed a few
people um on the production line we had a little old lady who used to cook for us every day I think the budget was 2 R&B per meal which was about 30 cents and and we started making our first product and then we started making our second product out of there as well which was a night frisbee which we got sued on and we had no money to defend ourselves so so stupid question but like why not like it seems like it was an insane decision Just to go to China and literally like build your
own Factory like literally like create a structure on the side of a river and like weld it yourself together why' you feel like you needed to be in China instead of just doing it where you were well we understood that most of the toys in the world were made in China but when I say we were naive I feel like that is even an understatement like we were trying to make our hot ear balloon but we didn't even realize that we Couldn't sell it to any toy chains or large retailers around the world because of
course didn't meet any of the regot Tre standards I mean it had a burning can under it so we were super naive so then we started looking up products that we could maybe make in our little Factory and we saw this company in America making uh light up of Frisbee with LEDs and it could be thrown at night we thought oh that's cool so we made this night at Frisbee in our Factory and I started hustling to try and sell this thing as in like I would email every buyer in the world of every major
retailer in every country I possibly could and I remember I sold it to a distributor called Schilling in the US and we spent what was a lot of money at the time and I went to New York toy fair and we made this m crispy and we also made this other product or copied this other product called a money gobler which was A money Bank in the shape of an animal and you'd feed the coins into its mouth it would go down the throat into the stomach so we started making these two products Matt decided
he wanted to set up a wooden wooding toy factory for this money God blow we had our production loan for making this frisbee so I sold them to this company called Shilling I so I go to New York toy fair to to be on their birth to start selling these two products and I start selling these Products and this guy comes flying onto the booth and starts yelling out a distributor so he's obviously got when that we made a product that's identical to his and he had multiple patents for how the LED connected to the
fiber optic and how this all worked and of course we again we were naive we didn't even really know what IP was so he comes and so Dave comes up to me off the booth the the owner of the Distributors te we need to pull that frisbee off the booth this Is probably an hour into New York Toy Show starting so I'm pretty disappointed because it's one of our products is gone but I'm like that's okay I'll I'll sell the money but gobl if I thought the first guy was crazy about 3 hours later this
lady she has a whole business she's built over 25 years building these money animal Banks and she has this big booth on the ground floor of jits and she comes up and she screams onto the booth and she's yelling and screaming and Swearing at bve and Dave sort of I can see this from where I am and Dave sort of wanders over to me sheep and says that you need to take the money Goblin off the booth as well so within the first morning of New York Toy Fair both our products have been taken off
the booth of the distributor I flew back to China I said to my brother I said have you ever heard of this whole you know IP thing this whole patent thing I think we need to start innovating and coming out Without own ideas and then we ended up getting into a lawsuit on the night F they sued us we had no money to defend ourselves I remember going to Colorado cuz that's where they sued us to try and find a law firm to defend us and I was going to all these firms and I was
saying well that'll be a million or $2 million we had like maybe a few thous between us at that stage I was saying how are we going to defend ourselves I ended up actually hiring a lawyer Convincing him his name was Chad he later get got disbarred that we would write the whole suit he just had to put his name to it and and Chad did the whole case for us but didn't really do it we did it ourselves we learned how to become War so we did it incredibly cheaply but he did he ended
up getting disbarred um later on but that was our only way because again we had no money and I was so enthusiastic we had no other choice that we had to sell this Prodct and I remember selling the night frisbee to the department store chain in the US Kohl's with the K I know we have Kohl's down here in Australia with a c never forget the buyer's name I actually still work with her today this is you know 19 years ago name was Jin s she was The Bu in Coal's and I would email her
every single day and one day I got an email reply from her it was all in capitals it said Nick I do not have time for your daily email communication Please stop emailing me every single day and I always wrote back oh so sorry Jim but you know I just think our product is really great and at this stage we knew we were in a little legal trouble but we had to sell something to survive so I I was like pushing and pushing and then eventually I get this email back from her it was just
two words something El and said send the sample so we send the sample to her and she ends up ordering a full container I think it was 20,000 Units of this night frisbee so we're we're pretty happy at this stage it was a big celebration we never had a full container order of any product and so we ship this full container of night frisbees uh and of course uh she gets enjoined in the lawsuit as well um at koh's and didn't speak to me again for a long time the irony is today she's the director
of Family Dollar stores in the us and we're their second biggest toy supplier after B so that's the funny Thing tra bonded correct but we have so many of these stories that is one of many many many in those early days so we really were just scrapping every day to try and survive and sell something and just like live somehow but we were living on less than a dollar a day okay I have two things one let's do a detour to the dollar day thing because U my guy Diego who helps me with research he
goes you got to ask as him About the MC MC broke diet and the MC broke diet I said what's that he goes he goes apparently they were just eating off the dollar menu at McDonald's in China every day and he had some trick about the french fries to get free French fries so what what is the MC broke diet as far as it was we didn't eat McDonald's McDonald's was a treat so me and that were in China and for Christmas of course I think my brother didn't come back to New Zealand for 8
Years he lived in a factory for 10 years he had a tiny little room at a factory for 10 years which is is crazy in itself um but for Christmas we would celebrate by going to McDonald's and probably the equivalent of a combo is probably $250 in China at that time so that's how Frugal we were we wouldn't even go to McDonald's so but we'd go and we' celebrate Christmas and I always remember going Merry Christmas Brad to me Merry Christmas Broan you know Finally eat some good food I look like you know I was
so skinny at this point but I'd always play a trick in order to get extra fries is I always eat half of them and then i' take them up to the counter and say hey you only filled my fries you know half full and then give me another one so I could get more for free but we were so we were like even you know when we'd go on the train we'd use a concessionary or children's pass and hope we wouldn't get caught CU it Was half the price but I looked back on it it
was like you know a fear would only be 12 R&B or a couple dollars and we'd be saving a dollar so about getting a concessionary fear and we did that for years so what what was driving this because like you lived in New Zealand New Zealand's a beautiful place I assume you could have just had like a normal life that was like com more comfortable and I love like I'm a Founder I've been a Founder but I didn't do what you did I Didn't sleep in the factory on like a mat on the floor for
8 10 years I didn't live off of the less than dollar a day like were you guys just like was it you're having so much fun or you just felt there was no other choice or what was the what was the mindset that kept you going because it was like mult like many many years just scrapping I reflect back on us and it's it is a little bit hard to understand in all honesty when you Reflect back on it but I think when you're in it together you kind of hold each other accountable and you
push each other because you don't want to fail and I would say me and my brother are equally as competitive and so I don't think you want to let the other person uh down in a sense and so you just keep fighting because if one of you gave up you're kind of admitting defeat and so in a sense you hold each other accountable to Continue to to fight and push forward and as well as that I think we didn't really have another option we didn't understand like back then that there was even such a thing
as going and raising money to build a company or you know again I look back at the extreme naivity I used to write emails to my mom from China and she was beside s that you know I was up there I was so young 18 and I read these emails and to understand how little we understood even About the world but just about business and how things worked it's quite scary and so I just think we didn't know any better we just thought we'll just keep fighting and try and get these little wins and little
wins and little wins and you know we started to get you know a little win after little win and then we started to get a little bit more momentum and then you started to learn but one of my favorite sayings is you win or you learn you never lose you Never fail so and so connect the dots so now you're you've painted the picture beautifully of the extreme naive approach the scrapping and then somehow you know fast forward the tape and the movie and you end up with this super successful toy company I think you
know the third most profitable toy company in the world doing over a billion dollars a year of Sales Plus like forget the other stuff you've even done after that but I'm just saying just the toy part so Connect the dots where did you start to really get the momentum or what were the breakthroughs the epiphanies the key key breaks that got you to to actually getting to that success well there are a few stories along the way and I remember just sitting there every day harassing and thinking really big early so thinking just got to
get Walmart I've just got to get kman at that time or I've just got to get these big retailers and you know one story I Remember ringing Walmart every single day and because of the time zones it was late at night and to month after month after month after month and I always remember all the early names because I just see it in my memory and I remember one night my brother was basically telling me to give up he was like you're not going to get warmups and eventually the buyer Ryan hord answered and I
was on the phone to the warm up buyer from China and again I Was up with this young company we're just in chanted we're trying to get off the ground we got these products and he said do you have a showroom in Hong Kong and I said didn't I didn't know what a showroom in Hong Kong was but of course I said yes I'll get back to you at the address we started to Le learned that the toy industry at the time revolved around these showrooms in a place called Tim Chui in Hong Kong all
B companies Had showrooms there and all the buyers from around the world congregated in Hong Kong twice a year to come to these showrooms so I got on a train the next day to Hong Kong and had research where these toy companies were and start of knocking on toy company doors and trying to do a deal with them I said I'll bring the warm up buyer and if you just give me some space to use and your address and then you know hopefully you could sell Your products to them as well and every company denied
me and denied me and denied me so I thought okay we need to rent a showroom and at the time it was a lot of money but we found these little glass cubicles in a place called South SE centa and they were just a few meters by a few meters like tiny little cubicals but I think they would have been like I don't know or $3,000 a month to rent because H home was so expensive and so at the time we didn't have that Money it was we were so poor but I thought we don't
have an option we've got this chance to get the warm up byy coming in and so we we we we just said we have to do it so we rent this little tiny cubicle and it kind of had cursons on the inside of it and we I I found some shelving that someone was throwing out from another showroom so I put this little shelving in there we bought like a table and then I had a little roll up mattress and I sleep in the showroom Under the table each night cuz there's no other room to
sleep so I'd unroll the mattress under the table sleep in that and then I'd wash in the little bathroom in the in saly Center in the morning but I had the showroom and I start kind of realizing that the buyers come to Hong Kong in January and October every year so that was good cuz now I have this kind of like base to like invite people to so I get you know I get Walmart to come in I actually got a guy called Frank Deo who is from Walmart Canada and I'll never forget because he
came in and I think he was so shocked that he given me a meeting when he saw this 2 m x 2 me showroom and he came with this two merchandizes I went to shake his head didn't shake my hand he didn't even sit down and he just yelled at me he goes quotes across the table and I'd filled the quotes for two or three products at the stage he kind reads the quotes and I'd filled something out wrong and he Just throws the quotes down on the table and just walks out at Lees two
Hong Kong merchandises standing there staring at me I think that was my second ever meeting and I'm just like in shock I'm like wow where it's going to be and he just storms out and then I contacted his boss and said hey I had this really like bad experience guy Frank and I genuinely think he was really rude and like I didn't and as boss Madam meet me again in their procurement in Walmart's Procurement Center in chins in so I was like screw this I'm going to go up and meet him again me him for
a second time and he ended up ordering and at the stage we had a night ball along with that night of Frisby but I think he ordered about $70,000 of this this night Ball but it was another good example of of of persistence and then I remember one day I had a in came out of Australia but I was sleeping under my table and the door is only about a meter from my Head cuz this is such a little small showroom and the buyer came an hour early and I was still asleep under the table
and she was knocking on the door and I'm sort of like there like looking her feet under the door thinking [ __ ] I'm still in beard under my table so I had to wait for her to go away and then mess her afterwards and say hey you didn't sh up about 10:00 minut she say Oh I thought it was 9:00 a.m. and so I had all sorts of experiences but I used To Crash by as hotels they used to post samples under their you know under their hotel roof doors but really we did what
it what it would take and then I'd say the first break we got is and this was a crazy story is there was a I was in the UK at a company called Recreation and they were selling our night Sports balls at the time so we developed this other product it was instead of our night frisbee we made a Night Football a little up at night and a night at soccer Ball so it sold for this company called Recreation I met a guy called sha on their booth and he developed a soccer tamaguchi and so
it was it was kind of like a tamaguchi but you trained your player and then through infrared you could play against each other and he had like the Manchester United license and it was selling reasonably okay in the UK but he was having troubles with manufacturing and I was like can make that for you like no problem and he was Like great great great you guys can help me make it cuz we were really you know in a was sort of wink at the time we were trying to find a way to win anywhere so
we're like Sean we can make this and then we started talking maybe you know David bickham he's moving to the US to play in the US what we get the David Beckham license and we can try and sell this in the US and he thought this was a great idea so we went and pitched at the time I think it was Simon uh Simon Fuller who started American Idol had the David bickham um writers at the time and I'm like a I'm a super young kid right and they said well we'll give you the day
bam license but it'll cost you a million half dollars because we don't have a million half but then we go to Walmart and Walmart the buyer her name Danielle prel never forget it she loved David bickham and he was moving to the US and she was just obsessed by David bickham and we probably blew a few Bubbles but anyway as it turned out Walmart turned around and ordered 2.2 million units of this David tamaguchi which I think they were like 14 bucks 50 or something it was almost $3 million so keep in mind we probably
never had an order more than $70,000 at this point and our total revenue is like in the hundreds of thousands suddenly we get this order for almost 30 million us and then we're like holy [ __ ] we thought we were going to make a lot of money CU We had huge margin we were making this thing for $3 and we were going to make this thing for $3 or $320 or whatever it was and sell it for $1450 so we were sort of count our pennies and super excited we didn't even understand that sell
through was a big thing but then we were like oh no we have to look out how to make this product like you know we've got our tiny little Factory with you know 20 people in it there's no chance we can make 2.2 million units so when I'd first gone to China i' been on a tour of with he's one of the wealthiest guys in Hong Kong like Francis Choy owns Bly light International they the contract manufacturer for Hasbro and mattal and all the toy companies one of the first factories I ever toured I somehow
got in touch with his 2 I guy called Wilson and he' taken me on a tour as an 18-year-old of their Factory and you could imagine me coming from New Zealand and then going to these Factories with hundreds of thousands of people and just being like H what this is like insane so I still had this contact with Wilson from early light so I got a meeting with Wilson I said hey we've got this huge order 2.2 million pieces can you help us make it he said yep and then I said oh and by the
way can you also pay for as well he said let me check with Francis come back to came back to me said yeah if you transfer the little of credit to us You know will help you pay for it as well great so we start making this product 2.2 million ic's 2.2 million LCD screens to so they all the components and then Walmart turns around and cancels uh they cancel it from 2.2 million pieces down to eight no 1.2 million pieces and I was like no no no no they can't do that we've got a
little of credit they've made it all and then I'm flying back and forth at this point shm's kind of like In the background on this like I don't know 20 year old and I'm thinking there's no way but I was thinking well it's still fine 1.2 million pieces we' got so much margin in this we we can still make like good money out of it but then they turned around and canceled it all the way down to 300,000 pieces yet Francis was making all of this product and I was just like or I'm going back
and forward it reads like some kind of soap op because Danielle got fired Obviously part of this was part of it and with Francis I was like there's no way I can tell Francis that you know that they've cancelled this many pieces and he's paying for it all so I'm going back and forth to Walmart and I calculated that if I get the order back to 800,000 pieces we could still pay Francis off because we had so much margin and still make like a million and a half dollars and eventually I commit Walmart to to
get the order back to $800,000 that's $800,000 or 900,000 pieces whatever it was and we shipped this prolite and it was a disaster like it hit the shelf and it was culate on the Shelf like no one would buy it I think they tablet at $30 they discounted it to 25 then 20 then 15 no one would still buy it then $10 no one bought it then $5 no one bought it and then they eventually sold it to the dollar in discount channels for like 50 cents on it like 50 cents a piece and then
of Course Walmart came back to us and said you have to fund all the markdown money from $30 to you know 50 and we were like what's markdown money and we were determined to keep our little bit of margin and refus to give them any money back and so we had to S like no but you cancel these pieces and like this huge thing anyway we got black ball from Walmart for like 5 years we never did business with Walmart after that and it was not to years later that I met Danielle's boss at New
York toy for dear Laura Phillips and I wrote this big long email of everything that happened and like and we started to work together again but that was sort of our as crazy as it was that crazy story was our first break to actually make a little bit of money and then from there I started Ed doing deals with us companies that only sold product in the US but didn't sell internationally so I started doing deals with them because we were really bad at Designing in vcon toys is terrible in fact so we needed good
product so I could open up these channels so I do these deals with American companies like Zing or zard to deal with a Australian company called Yoho to take their products and sell them internationally and that kind of and I tell a big story that I could get their products in everywhere that I have to go out and hustle so we had a product called zies which became really successful and Product called schnooks which was out of Australia that became really successful so we started kind of taking other people's products how did you figure out
that model because you know did you see somebody else doing that and you're like oh that's much simpler than what we're trying to do or did you fall into it like it seems like you didn't use a lot of like mentors you did a lot of running around with the fork sticking it into Outlets trying to figure out you know Where the where which ones are working that is that is a great analogy that's exactly what we did we just to be honest we were making these products and our the second product line we made
with these night balls but the product was so bad Matt had would no Factory by this stage and the engineering of them was so bad that they had these sort of foam Eva Pates glued into this Frame but the production I I actually was getting quite a few orders I was Hustling around and getting orders but Matt couldn't produce them because the production was so hard to do and I get so mad at him that at one point I said I'm coming back from home Hall I was living in my showroom and then from there
I upgraded I was living in a dorm room with 18 people over place with Tung mansions in Hong Kong so I wasn't exactly living the life in Hong Kong I was getting these orders my brother could produce them so I was like I'm Coming back to like to China to take over the factory and I learned two words of Chinese one was timeon too slow and one was qu let's go faster and we ended up like prod I was like on the production line pushing to get these balls out the door and I remember they
were coming off the end of the production line Half mangled and I was just like ship them just ship them ship the balls we've got ship them but I remember years later like you'd see These things on sh and all the ear had gone out of them all Eva patches had peel off them and now these Shri up little prunes and it come to your health I love that you're honest about it because there's so many people because it's a very sexy thing to be like you know all all that mattered was product and we
really just built a great product and then everything worked because we built a great product and like I know I know I've been there it's like dude the First version of all my products sucked in fact the 10th version still kind of sucked and I I love you're kind of unabashed and honest about like look we weren't super Innovative we saw [ __ ] working and then we were like cool we could do lights on a frisbee lights on a ball like that okay let's copy what works and that your product kind of sucked and
you were just like basically you just kept doing door to-door sales even like at a global level you just Started doing Glo like door sales and you literally it sounds like it was like distribution and salesmanship and marketing that was keeping you afloat at the time yeah well we would sell I would sell a product to someone and and we we wouldn't get a reorder we didn't know what a reorder was because the product would sell through and then we just sell a new product to a new customer and we wouldn't get and I just
held another customer and we didn't know for probably Seven or eight years what a reorder was like when a product actually sold off the shelf and the customer came back to buy more of them but we could like continually hustle to all these different customers but we did crazy things like we like I little back on it and it was kind of nuts like we sold this product the night ball we got a distributor in the us called Spin Master they one of the biggest toy companies in the world now very similar story to our
Own free Canadians built uh this this this this toy company very similar to us and Spin Master had agreed to take our night Sports Falls for distribution in the US and I'd kind of hustled a few retailers and so it was this it was this should we sell the r to retail should we use Spin Master they'll really put lots of TV marketing on TV marketing at the time was the thing and they said we what we'll run this test in Cincinnati so we'll put your night balls into all the Walmarts in cincin and we'll
run media in that in that City and then we'll decide whether to roll this thing out and whether or not it was dishonest I think it was more desperation at the time but of course I flew to where the test was I got to New York and I couldn't get a fight to Cincinnati well I could but it was too expensive it was summer holidays I went down to the bus station I remember the bus station in New York at the start of Summer holidays it's like nothing I've ever seen it was absolutely chaos but
I got a Greyhound Cincinnati I think took like 30 hours and broke down stopped different places Go Greyhound to Cincinnati stayed in this absolute like horrific place but every day and yes this is a little bit dishonest but we were desperate back then I would bus I'd get the bus schedule I'd bus to each Walmart I'd give people cash to go buy a ball I'd go on and buy them on different Credit cards myself I was so paranoid that we' get caught just to help our test sales go up a little bit and I would
buy all these night Sports balls but it was a long day because the Walmarts were all so far apart and I was taking this bus schedule to get to each one I stayed there for a month and I almost got killed in a place called over the r if you look it up it was the most dangerous neighborhood in America at the time over the r it's like wild it was Over these railway tracks and I managed to walk down there in the middle of the day and it was the scariest thing in my life
and I had a guy come up to me and he said what the [ __ ] are you doing here white boy and and I was like I'm just a tourist and I hadn't realized I was in this like area and then I managed to somehow like Weeks Later walk into it I was walking back from downtown there's no such thing as Uber back there on Taxi so I was trying to walk back to where I Was staying which was very close to over the rine and I walked in the wrong direction I walked in
there in the middle of the night and I got chased um and had to hide it was very funny but um yeah we were doing this to to get our test results up which we had a good test and then Spin Master rolled the product out of course it wasn't it wasn't a great product in terms of its construction it was the same thing but my god do we have to hustle we had to Strap and fight so hard to to like literally just to survive but we got to a point where we were we
were selling enough to each new customer of each new product and we weren't getting reorders but we were profitable and it was actually funny because after the David bickin thing we made like that million and a half dollars or whatever it was we got a little bit fat and happy and we had a month where we lost $200,000 and I Remember sitting we sat down and we were like oh my God we lost money this month and we were like from this day on we will never have a day a month a week a year
will we lose money like if we're losing money in a month we will sit down we will like eat nothing or we will like get rid of people or we will like live on nothing just to ensure that we're like profitable cuz people wonder how do we get to you know a few billion re in in a few billion dollars a year in sales Now and we've built it completely organically and the truth is we just cuz we like were so Frugal and we start building our business got more and more and more profitable just
every year for 20 years so it was almost this cognitive process to how do we remain profitable and then that's just compounded over 20 years and we've just got more and more and more profitable to the point where um percentage wise by far the most profitable company in the world where we Run it like 40% net profits which is unheard of in any industry in the world the Product Industry in the world let alone in software companies so so we just built a very very different model that's why I reflect on it now was almost
like we built something from first principles the way we set up factories the way now we automate all of our production the way we don't do domestic uh shipping we do all fob the way we centralize all of our content and Data Systems on marketing globally we've almost built this company from a first principal's approach cuz it's so different to how everyone else does it but we did that more through navity then through planning so you're starting this kind of like 18 years old when you go to China do you remember how many years it
took you to get to your first you where you made 100 Grand or when you made a million dollars like how many years was that well it was probably a couple of Years where we started to make money but we still lived the same way because we needed that money to fund out growth effectively you can't grow to billions of dollars a year in sales organically without borrowing money or going to a bank unless you're super profitable to continue funding that growth and so we started to make money but we never SP it we still
lived the same way I still lived in a dorm room in Hong Hong and so for years for Probably eight years and as I said Matt had as we slowly moved and built bigger factories Matt would always have a tiny little room like a tiny little room in the factory and that's where he lived in China with no other like no interaction really with anyone else and we were going crazy in those first years in China like I'm I looked def at it I'm like we had some serious problems and so you um you take
it all the way at some point you start figuring out toys that Are new novel good products like I've bought your a bunch of balloon products where you fill up I don't know if it's like a 100 or 500 now like 100 water balloons at once you can fill up and like takes like 15 seconds to fill them all up so you eventually start making good products how did that happen so it was s on a parallel path we were taking other people's poies and that was helping us really open up distribution I would hustle
and get them into all big Retailers across all the countries there's an email that I've sent internally that I had from like 20 years ago and it kind of lists every country in the world and all the retailers and Distributors I was working with at the time trying to sell the products to so we're really like pushing out to everyone and at the same time we were starting to learn how to make better products ourselves we're sort of building a team in China and engineers And like some designers and we're starting to sort of parallel
path building our own products as well but I think our a big break after zbi came when we did Robo Fish and Robo Fish is still we still sell about 8 million of them a year today and this was a Chinese and we ended up getting suit for this as well we're a 5year lawsuit but a Chinese and called xia ping and I met a guy in Hong Kong a french guy he had a factory in China was running a factory in China And he was doing some brokering so some for some inventions and he
showed me this Rob F I actually didn't I thought that's cool didn't think too much of it then he showed my brother and my brother loved it like we've got to make this Rober fish promite and part of the deal was we had to make it in their Factory if we licensed it from from them so we licensed this fish and it was like it's got little carbon sinks it's very very clever design has electromed coil in it So it touches water it's all micro it swims and looks like a like a real fish swims
in all directions and it's water activated so we start making this fish and then the guy who was the inventor had worked in a US company before and he had tried to sell as a mention to them that said no he decided a release on the invention saying no problem you can go sell it to anyone else of course roou blew up came one of the best selling toys in the world and then he decided That actually the inventor had designed some schematics or diagrams why who was underemployment and he would sue us because they
were still on his computer systems and so we're were in this long long warsuit but even worse we finally had like this Massa pet it was like the number one selling in lots of countries around the world it was it took us to I think we did like1 million so this was like a big break for us but unfortunately there's always a curveball The factory that we were bound to make it with we bankrupt in the middle of production but we had to design so much specialist production not just the tools but all of these
fish were tested underwater for precious they didn't leak and there was just a ton of like specialized equipment that had been built to produce a robo fish that were all slightly that weights had to be perfect so this whole Factory gets shut down and of course the wars in China Mean that the factory workers are the first creditors essentially so they send the Army in to like stop anything or any assets being taken from this Factory so we're like Peak robber Fish Production Peak demand finally we've got price that are selling and everyone's scrambling there
were retailers that wouldn't talk to me for like seven years actually one of my good friends today it's one of the biggest independent retail chers in the in the UK called the Entertainer and the Of the owner Stu one of my closest close friends today he wouldn't even he didn't even talk to me for 8 years like I couldn't even get an appointment with him but suddenly when Robo Fish took off suddenly all these buyers were coming to us and hey like yeah like that Robo Fish so you got to imagine we finally had this
momentum and then this tab to the factory and we lied we were like [ __ ] and it was crazy we could not get into the factory so my brother we had to do And this again there's so many of these stories but we were like we have no other option we have to get our tooling we have to get all our equipment we have to get everything out of that factory relocate it to another Factory but the Army was there everyone was there he couldn't get in so in the middle of the night my
brother got like eight trucks got all of our team from one of our little factories filled these trucks with people and at like 2: 3:00 a.m. in The morning when there were less people like camped out at the factory pulled up to the factory paid a bunch of bribes to go in took all the trucks into the factory all our people went in picked up all of the tooling and all the equipment loaded up all the trucks in the middle of the night left and we went and relocated to a new Factory so we could
continue production so it was uh it was crazy but that was like a game like nothing ever happens without a hiccup Right like it was sort of like we finally felt like we had momentum and then this happened so how how old are you now 39 okay you're 39 do you still go as hard or like are you still as nuts as the early version of you like do you still have the same drive or are you human and you're like you know yeah I used to really be super you know super driven super resilient
going going really really balls to the wall and now I'm you Know tired and whatever you know I'm I'm an old guy now like do you still have it I we still have it I think we still are just as motivated today if not more motivated than we have ever been we see a pretty pretty cool road map ahead of where we want to get to the next Contin years particular Z take and building houses or production lines and Z so let's talk about that so can you just summarize how big is the how big
is the The Empire today so little over two out of a billion US in in Revenue but uh we're drawing in about 25 to 30% year on year so that's compounding but I think the thing with us is is our revenue is one thing it's just how profitable with built the business and it's public or it's not a not a public company not public no okay so privately held super profitable company that's like a billion dollars a year of profit basically out of the toy business but Then you have this diaper company it's you started
you started buying other companies right not so much buying I I actually got chromes so I got sick in China and Hong Kong and I had to have my bow my large intestine removed this probably has something to do with living in China for all those years eating incredibly poorly I'm not sure but I had to move home to New Zealand to get surgery um about 6 years ago and it ended up being a great thing so I was in Hong Kong I I came home for the surgery I was meant to rest for a
while and I was sitting at home and I was getting restless trying to rest as I had my bow my large bowel moved and I had a friend who had started a small D business and he was doing like 50 Grand a year at DDC in New Zealand so really really small who' be met me away it for 3 years and I thought well I might as well help with this but I'd always thought like toys is this Industry where there really is a sealing the size of the business you can grow just because of
the the you know the addressable Market the size of the market also you've got Brands like Hot Wheels which are super hard to disrupt and I was looking at fmcg and I started to realize that there's like nine companies that dominate 80% of it globally and when you build a toy business you work in every material form you work at speed like speed of Innovation is your DNA you build this muscle for Speed and work fast and innovating because you reinvent 40 50% of your entire product life every single year but because you havent so
much from your product line every year it becomes really hard to keep growing right CU to reinvent to to catch up every year and so I sted to form this thesis about 6 years ago I thought man we're so good at automating and we we sort of I would classify zuru today as more an Automation company than anything else like the pr is almost secondary we build incredbly sophisticated automation we had a huge automation team so whether that's building a house on production lines with robots or a Dart Blaster with robots it's um you know
a big part of what we do so you know I was like we we've built this automation muscle and the speed of innovation muscle and I feel like these big fcg companies they one they don't innovate two they have a Lot of duopolies so if you look at pet food it's Mars and nay if you look at baby it's K clar and Brer and gamble if you look at beauty of person here it's La Royale and B and gamble little so there's a lot of if you look at laundry it's pretty much just B and
gble T so all these duopolies and monopolies across the board and through that they were delivering much margin to their Retail Partners they really held the the power and I mapped I remember mathing Out Walmart's revenue and I mapped it against the top eight fmcg companies in the world so Walmart did more Revenue than all of them combined but then what's that what's that acronym you're you're saying what MCG what is that or fmcg fast moving consumer goods so fmcg cpg consumer package Goods so so if I looked at prop gamble nesle Mars all the
biggest fmcg companies collectively their revenue is less than Walmart who does 611 billion but then Walmart makes Only a fraction of the profit they're all public companies and the big fmcg companies make the Lion Share 75% of the profits so I thought is there a world on which we can be disruptive in fmcg fast moving consumer goods can we deliver more margin to our Retail Partners can we innovate faster bring our speed of innovation mindset to to these categories and can we reach customer in a far more efficient way way and can we move at
the speed of culture and Obviously at the time digital and data driven advertising was you know starting to become a bigger thing and you know targeted advertising and I was still looking at baby I was thinking well you've really got a m a mom who's an incredibly targeted audience or parent who's incredibly targeted audience how can we serve them in ad every single day in a targeted way rather than just like waking media so that's super efficient way to reach our Customer what if we build a better product deliverable margin and position it at a
better price and that was kind of my overall thesis can we do this and can we run our same kind of first principal toy model like fob so we don't hold products to Bine large advertising dollar spent but in a really centralized um controll way and I thought okay I can do this so I worked with my with my friend and I said okay let's launch this diaper brand in New Zealand as a test market and within one year I think we're taking 40% market share in New Zealand launching a diaper and I remember meeting
Greg foren who was CEO of Walmart at the time and he's a New Zealander and I met him in of and I was like Greg you know toys is great and it's been this it's this incredible University for us cuz it really allows us to you know it's you would build skill sets that is very hard to build in any other industry and I said we're Going to take on diether and he turned to me and he said nit ever heard of Coke and Pepsi like you were saying that it was going to be that
hard to crack like Pampers and Huggies are going to be that hard to go disrupt and I said I get you but I think we can do this I'm going to give it a go so we launched in New Zealand the second biggest brand in in New Zealand was Treasures Huggies was number one Treasures was a local brand their Shar just plummeted they ended up Going out of business and having to sell the brand for for the Pennies on the dollar and you're spending a ton on Facebook ads or what are you doing to Facebook
and then it progressed to Instagram now it's progressed to Tik Tok like it's sort of always progresses right like so you've got to move at the speed of platforms but you've also got to move at the speed of culture so how do you move at the speed of Trends to build content to move at the speed of Culture was that a new newish skill set for you because it seems like the toy company was retail driven yeah well YouTube was kind of thing that it was mainly TV advertising for toys at that time so it
was still TV was predominant and then it kind of switched to to to to YouTube so today we don't speak any money on TV and toys it's all YouTube it's all Tik Tok it's all YouTube shorts so it really like the platforms change and how you reach people but so I had This thesis but we just quickly took all this market share in New Zealand and I was like holy [ __ ] we can make an incredible fight but to be fair success is a bad teacher like we just got the success out the gate
RS just we launched SP it just took off and so I packaged up that case study went to Australia went to Kohl's and I said hey look at what we've achieved in New Zealand look at all the margin we're delivering look at the category share were driven we helped Food stuffs reverse their category sheare decline like they were getting hammered by the competitor ww worth here we inverted that we took them the other way with him one year so Kohl's was like love it launch with Kohl's same thing we won Kohl's non food supplier of
the Year award in the first year and just help them like take heaps of category Shear so I was like wow this really works took that model went to the US went to Walmart was like Hey Walmart we could Help you disrupt you know your two big suppliers here and they gave us a Dallas test same thing we became actually last year Walmart's fastest growing brand total ball all categories with Rascals which to Target did the same thing with our brand Milly Moon Milly Moon actually just over to private label and Huggies a second biggest
sub brand in Target in under or about three and a half years which is incredible so it was sort of this like wake up moment that wow and I Think last year we produced 2 billion diapers and this is all in under this is all in about 5 and a half years we would would build this business so well over a billion dollars of retail sales last year in diapers in you know five years so from St to to to go a billion dollars a year should I say and growing incredibly fast like this year
let them grow 30% um game so this was sort of an eye for me and I thought wow we can do this in all FMC categories so I started Testing in New Zealand and losing like we tested infant formula didn't work we tried F care failed we tried like oat milk fail I did all these old things I started fa and I was like oh but my partner of the time Jamie had a background of luxury PR and and and beauty and was huge beauty of this here so I said hey don't do that let's
start a beauty brand and we started Monday here here and which is the little pink bottle Forbes called it last year the Most famous shampoo and conditioner bottle in the world but we launched that PE Co and that was the second one it just took off we I think in Australia um we won product launch of the year and we had five of the top 10 in total hair care we over took pen in sales what what do you think is the difference between the ones that worked and the ones that didn't is it category
some categories were just more ripe was it you nailed the packaging and the positioning and That's actually the thing that matters most is it luck diapers was is driven by price and performance and we were the first one in the world to take a China diaper to the world and China is making the best diapers in the world so in China there's like a thousand domestic Brands all competing to the technology and nonwovens and substrates and sap and machine technology has just gone like that because of all domestic competition so we took the best product
in the world To Market at the this price and category which is price and performance driven so it's either you got to be price and performance driven in a performance driven category or you've got to be Innovation driven so we launched dummy yum which is super Innovative to pictur product like really Innovative and that was just pure Innovation that made that like takeoff so Innovation or it's got to be design and creative so Monday was you know still a bottle of shampoo but Incredible design and creative and then we just owned Tik Tok as in
it is the number one here care brand in the world on Tik Tok and by a long way um and it was just the right design creative positioning branding marketing and it just took off and I think last year in the US it was second only in total growth in hereare to proor and Gamble's total hereare portfolio just the Monday brand and so then I started to learned kind of which categories Would work for us and we've gone super deep in those categories and we' applied our same model so building all the factories and diapers
we built a factory I think took us 9 months to reduce and we're doubling the size of it right now so we have 4 billion diaper capacity by next year in Beauty we built the whole Factory Everything Under One Roof ejection Ming rotor mulling filling mixing all of that we built all the lab and shangai we got L'Oreal formulation Specialist over un Le formulation specialist so as soon as we found something that was working so was outpour sourcing to begin with then we do the zuru thing which is go super deep automate everything we possibly
can put all AGS in so every little part of it we want to like autate as much as possible and then pet food I started at the same time I bought a young guy who won M on High School entrepreneurial program out a guy called Alistar he's incredible I Said let's start a pet food business together actually we were at the supermarket and we said let's do pet food and so now we're getting huge momentum there um one of our Brands I think Bonkers was drove 30% of all cat treat growth in America last year
and then we experimented in supplements which has been a little bit hard I built a brand with the Kardashians called dosen Co we ended up selling that last year it just it work everywhere house in The world it failed in the US and so as soon as we don't have to scale the US that sort of let's exit it um and supplements we're sort of struggling with our brand habit which is s of ticking away and then very much um home care we're building a bunch of Brands as well so sort of and convi so
we've built this what I call our five vertical strategy um and we're going very very deep within all of these um verticals and I think all of them individually can Be bigger than our toy company within you know two or three years and what's what's the dream like so why why go so hard why do so many right like you could just off the toy company you could be sitting on a boat you own looking at an island you own with a you know a beautiful drink in your hand is that just you you love
the game you have some dream you want to be a 100 billionaire what's the what's driving doing more more and more I think we love it number One love having a thesis love competing for me it's it's sport right like it is Sport having a thesis going into something working it out and as we build these things you know toys business The Edge business fmcg business you know as you become more successful you think how can I solve bigger problems and the same person G for and always said you got to wrap your business in
a bigger purpose as well and I thought we thought how do we solve bigger problems because we're almost in a privileged position now right how do we go on and actually solve bigger problems which is why we've studied building zuru tick over the last what it's actually been eight or nine years can can you explain what that is so it's a crazy moonshot idea I think you have you either have or are building the largest Factory in the world period um what do you what is the what is that Idea what is zurch so zuru
the thesis really was if you look at the construction industry it's been done the same for hundreds of years it's also the biggest segment or Market in the world construction property development and the idea was how do we build the first factory in the world that has a customized input so the design of a building and a fully automated output so how do we build buildings for small fraction of the cost Of what you build a building for today and and we're now we we started off so we built our software which is called dreamcatcher
which is built on Unreal Engine it has an incredibly simple UI sort of user interface but the logic layer or the coding layer below that is incredibly incredibly complex we've cataloged every building code in the world so you can drop a pin on any location in the world it Maps the terrain it does the building code and Then you can design your house or building or whatever building you want in our dream catcher software we've also built our own AI assistant or on our own large language model um called quira which is basically training it's
training our model on all the great Architects so you can talk to your building and it builds it in front of you you can put a 2d plan in you can decide on this room I want it to be Stockholm style and furniture and it Maps all the furniture and does it for you so it's incredibly intuitive software but basically a 10-year-old can design on dream catcher and then it does all the structural side it does all the me the mechanical the electrical the plumbing it does it all in a super intelligent way wherever you've
dropped the pin where you're building the building it works out the orientation of the building for the sun it works out how many HVAC units you need it works Out how many solar panels you need so basically then the software translates every part into our Factory our Factory builds every single part and it's completely automated and the factory is designed from start to finish so originally we built a 1th scale Factory so that's to test the software with the hardware and how that all integrates together so it builds these mini houses that 1/ in every
Dimension and then we once we had got that working we built a It's about a three hectare Factory and it's a test production line and that right now is producing that's we're testing the software at full scale with full scale houses and we're building a house about every 2 weeks right now which is test and then we have like 100 little changes and we go and software changing here and then we bought bought a factory or or a building that's 25 acres in size which is our first commercial Factory for producing Commercial houses and in
phase four will be building um one of the biggest factories in in in the world I think 60 to Boeing is is the plan so that's all um planned out now but we are building a house for $500 a square meter and it's the best quality in the world irated concrete ceramic tile but we've innovated every single part of the process so we have the wall module the tile module the window module the lighting module the smart home module And every single team I think is the best in the world of what they're doing so
it is a huge project it is a massive undertaking I think we have about 700 software and Hardware Engineers working on it are you self-funding this or did you raise money for this correct yeah no we self fund it and so we're getting very close now to a final product we think we're five test houses away from getting it very close to to perfect and then it should be um transformational in In terms of how the world builds and anyone can use dream tach the software so you could go on to dreamcatcher and there might
be a million different two-bedroom houses that have been designed by people on the platform and you can look through them you can put a price on selling your own design you can go through them in real time you can stage Furniture we'll have a Marketplace Ikea could digitally scan all of their Furniture into our Marketplace artists Could digitally stand all their AR in so you can put it in your house you can go around in real time and see it and so the software is really uh the software is really incredible um you know what
what what what we've built so super exciting that we're we're so close out and the the houses that we're producing um each couple of weeks are are really incredible I mean this is a insanely cool idea uh just to basically it's like like if you go to the website it looks Like you're looking at the Sims the video game like like you can just kind of like Zoom around the house you can like move things whatever but you're saying there's a button where you just basically click print and then the house gets built in an
automated Factory which is just a a kind of mind-blowing idea how much are you going to put into this funding wise like you must be push this must be in like you must be putting hundreds of millions of dollars is that Is that right or am I overestimating it's any a lot for sure so the software so we have three offices in India on the software side pun kakata and underband and we have two in Italy Milan and mon the reason in Italy is we actually acquired years ago the software part of it it was
two guys Martin Aliso the PB Architects that decided that architectural software was built on incredibly old um software stacks and so they were like well gaming Engines are like going like this and so they decided to build software or architectural software on Unreal Engine and so we acquired them and that's sort of the reason I think we have about 160 160 or so people sitting in Italy on the on the software side and then they work with India on the software side and then in China we built all the hardware side out so we have
three sites where we're doing all of the hardware and automation um development but we kind of parallel Our automation team is sort of growing a parallel we you know they automate for example we produce 57 million D and water blasters a year but we produce a d Blaster from a plastic granal through the finish product with no people our competitors like Hasbro they outsourced factories who still produce with drills on production lines we're now building out automation 2.0 where we're using vision and machine learning so we can actually change out any model of blaster On
the same production line it can see the mold and it can see the shape and where all the screw holes are and it adapts completely so we've kind of paralleled like paralleled our automation with building in a housing project but also taking all our expertise and building across our Zoo Edge and and Toys business which makes us um so uh so disruptive but the big difference is is when we automated product in fmcg or toys you're making The same product over and over and over again with robots this is incredibly complex cuz you're building a
tailored product for every building site in the world and every building code of the world and it's different every time and so having that fully automated output with a fully customized input is never really been or has never been done before in the world dude you're a Madman um do you even like who are your peers like who do You relate to um do you just read like an Elon Musk biography and you're like oh that's the only other guy in the world who I I have something in common with like is that somebody you
admire what what we have a huge admiration for Elon with the big Tesla backis and fans for a very long time in fact I'm say you know uh I had a chance to meet him and then I had to fight home for an emergency and so actually don't know him um but my brother my brother was very Similar to Y so my brother was sort of the the driver behind zuru and our building project he's very similar in his way of of thinking I think likeon calls it the idiot index for example right and the
idiot index is when you look at the cost of a rocket well he looked at the cost of what a rocket used to cost to build and then he looked at the cost of the materials and it's like you know hundreds of times the cost of materials to build a rocket and he's Like well then he takes a first principles approach he breaks it down and he works out effectively you know how to build a rocket at a price that makes sense based on the cost of the raw materials I mean we're having a similar
approach to how we build a building whether it's one story or 100 stories it's look at the cost of materials out of the ground and look at the final host of the building the Ida index is really high and so same or similar type of Thinking so how do you go back your first principal approach and do it from the ground up in a completely different way did you see um the other day I think yesterday or two days ago boom supersonic did their first supersonic flight I don't know if you followed this startup it
did yeah he he kind of had a similar story where he worked at Groupon basically and he's like you know a product manager at Groupon selling coupons on the Internet and then you Know for fun was basically having a you know a hobby of flying and then gave himself a year to from a first principal's point of view you uh understand how planes work and figure out if there was some business he could build in the pl you know around planes cuz he just loved planes and while he was building his spreadsheet he was just
like I don't get it there's no reason we shouldn't be flying supersonic speeds right now and then he took it to like Professors and others he's like where where is the error in my calculations cuz this is telling me we should be doing Supersonic and they were like no there's no theoretical errors uh just no one's doing it like there's no courage is the limit not like there's not a materials problem a courage problem there's a entrepreneurship problem and seeing that go you know yesterday to doing their first supersonic flight was super inspiring incredible So
you you're Doing all this stuff do you like have hobbies do you do stuff outside of this what's like what is fun for your is this is like my cup is full with this sport definitely sport we love just love competing really so anything that has a competition element is something that I get a lot of enjoyment out of so yeah certainly uh tennis golf just sport in general is is is something that enjoy doing but um yeah as you get older like obviously we don't I used to think you Wake up every day with
that pit in your stomach cuz you're wondering what's going to go wrong today and what do we have to solve today so you know obviously we don't have that that issue any longer and and definitely get to spend more time with family I finally had my first child last year so that's uh congrats a big change it definitely changes your despective on things I think which is which has been really good I always sort of Kick the Can Delayed it as long as possible think would slow me doubt but it's definitely been one of the
best things so do you um when you start these new companies cuz I always I always find this interesting whenever you have like a Serial entrepreneur uh people have different approaches so some people they you know they have their main thing and they leave and they say I'm going to go on a sabatical basically for a year figure out my next thing other people they take Some percentage of their time they're devoting it to new ideas and they go they roll up their sleeves and they're super like on the ground figuring out the new idea
other people they recruit a operator and they just give the operator kind of like the idea maybe a little bit of a plan and then let the operator run and they kind of are there as more of a chairman or a board member from afar when you did like the diaper brand and these other ones were you like boots on The ground like every day figuring it out or did you do the operator model what what did you do definitely boots on the ground what I would say is in our business there's a through line
through it all right we're essentially making a product where there was a house of bow shampoo a laundry pod or a Dart Blaster I mean it's essentially still making product building factories selling it into to retail so we've built such a big flywheel like if you look at our chins In office we have 3 and a half thousand people L right and it's such a big flywheel that it just becomes easier and easier to plug into that flywheel regardless of you know what category in yes they're all different Industries but we're still effectively trying to
make the best product in the world at the best price we set ourselves the goal of making a product to $0 I know that's impossible but that's our goal how do we make to product to and how we make it The best in the world so there's a through line through it all so very much boots on the ground I believe you know leadership has to be on the dance FL have to have your hands dirty that's where you get most insights and in our business now I'm you know I'm a huge believer in firing
bullets and failing fast so I always say get an actionable Insight where's an Insight find an Insight somewhere in the world and an Insight forms a bullet and a bullet is a Minimal viable investment into testing something and then if the bullet works it's a cannonball and we invest and we build the recip around that and once the recipe is working you can pull a lot more things into that recipe and build that recipe out so our mindset around fast fail we actually have what we call fast Starts Now in fmcg so we're trying to
build minimal viable products to test quickly as fast as possible and so we can really speed like speed of Innovation is is probably the biggest thing for us and we're trying to test more things in these categories faster and learn what works and what doesn't cuz in my experience things either just like hit the ground and start working or they don't don't and then we have a mindset around continuous Improvement so we call it 2% Improvement a week the power of compounding I know 2% Improvement a week is nothing you can measure but that's the
mindset that's What we put into our DNA and we always say to the team we suck now compared to where we'll be in the future so we have this Relentless mindset and being able to look back on ourselves a year ago and be like we weren't even good then and I think that compounding Improvement is such a a big part of of what we do and then from you know when I look at team members I'm trying to people say they're try and build Talent density in their business yes we try and build Talent Density
but for us we're trying to build like grit density and I say when we hire we're looking for grp smarts and someone with a B action like real doers right people that just like we fast fail we go in we do it we are the winner we learn if it doesn't work we're getting Hicks of insights out of that on how to improve next time so our mindset or our DNA in the business Works across any of those verticals or categories or we have the same mindset and the same approach And the same DNA as
to how we approach them if you were interviewing me how would you figure out if I have any grip I I think actually like looking back at your history is is kind like we often find like people at really great competitive Sports people and they really love to win and we're highly competitive like I want to understand how competitive you are how much you really want something and to be honest it came me really hard like we've Built this Loop process in our business similar to the Amazon Loop so where you know half we're hiring
and looking at you know whether you fit and can do the actual job but the other half is really do you aligned to our DNA and so we have a loop we have you know eight people you know half of those people will interview on questions around you know our DNA and really trying to go deep on understanding if that person fits our DNA and so we're really trying to build Our you know not our talent density but our grit density but certainly it's something that I find is really important all our best people have
just incredible grit and incredible bias for Action sure that's smart but they just get [ __ ] done and you know we decide something going a meeting and they're already kind of actioning it in that very moment and that's kind of our our our culture well it's that it's kind of that saying as well right that lazy People work a little bit and expect to be winning whereas winners work as hard as they possibly can and worry that they're being too lazy and I feel like that's super true right like people that like work hard
they're always worrying that they're not doing enough or they're being too lazy and it's kind of those people that's kind of the mindset we're we're we're looking for yeah I think Elon has a good question he uses in interviews he says uh uh tell me about He just start sits down he just says tell me about the hardest problem you solved and how you did it and you know you could get so much from one question because what what's the hardest problem they solved you know it will show you the the scope and the trust
they had in Prior roles like were they just nibbling on tiny little issues or were they actually like biting into really meaty things yeah and like yeah can they talk about the details the paths that didn't Work the paths that did work because that's the person who was actually doing the work there's so much like resume lying where somebody says oh yeah we did this like cool tell me how you did it they don't know because they weren't the one doing those parts of it correct correct Nick this was awesome man I really appreciate you
coming on you don't do a lot of podcast but your story is is honestly incredible I think as much as you're building in the factories I think you can you doing it a podcast like this can build 10,000 new entrepreneurs with more grit with more resilience just by sharing the story because you're showing you know what's possible you're showing what you did how it all turned out and how you approached it and so I think you know a simple hour like this can do a lot for a lot of people so I really thank you
for doing it it was a lot of fun and yeah I don't often share our story let of But yeah I totally agree if it can help inspire people and I always say it right it it's not really how capable you are it's how willing you are and I think it's the Willing people that stick at it for a long consistent period of time and continually improve that actually are the most successful it's not necessarily about how smart you are it really is just grit and perseverance and and you end up getting there so I
think that's the big lesson for any entrepreneurs out There really right on all right thank you so much that's a wrap [Music]
