when the Crocs co-founder first saw a prototype of the shoes back in 2002 the only words out of his mouth were those are ugly somehow though those ugly shoes created a multi-billion dollar publicly traded company and have been worn by celebrities and even on the runways of Paris fashion week so how are three founders with zero experience in Footwear able to build such a wildly successful shoe company this is the surprising Untold Truth of Crocs [Music] in 2002 Lyndon Hansen had hit a low point he was sleeping on a friend's couch after separating from his
wife around that same time he also lost his job in computer hardware marketing and his mother passed away from cancer his troubles seemed endless George bodecker and Scott Siemens were longtime Friends of Linden and could see he desperately needed some cheering up so they set up a sailing trip together around the Caribbean to try and clear Linden's head now Scott was a quietly successful inventor and had made a good living developing and patenting products and at the time of this trip was already semi-retired at 48. however whilst they were on this sailing trip together Scott
asked Linden and George to try on a pair of rubber-like clogs he'd been developing after discovering something similar on a business trip to Canada an early version of the shoe was created by a manufacturing company called foam Creations Incorporated out of Quebec and the shoes weren't rubber or plastic in fact they were actually a special resin that was odor and water resistant slip resistant on a boat deck and molded nicely to her foot the only issue Scott saw in the design was that there was no backstrap so he'd added one himself and had high hopes
that after finding investors he could distribute this new version of the clogs in the US he excitedly introduced his two friends to this new creation of his however despite Scott's confidence that these shoes would sell his friends George and Linden were skeptical the shoes were just so ugly however after some times been actually wearing the shoes which proved to be remarkably light and remarkably comfortable they completely came around to them so much so they decided to go into business together they named the company Crocs since crocodiles like these shoes can thrive in both land and
water now George was also an accomplished man in his own rights he'd had a rough childhood but started his own lawn mowing business at 10 years old went on to be a star student athlete with a college scholarship and then went on to own more than 100 Domino's Pizza franchises and saved as an executive at the sandwich chain Quiznos so between these three friends they had a reasonable amount of business experience the only problem was none of them really knew anything about the shoe markets [Music] the first order of this new business was to create
a model for Distributing this strange Canadian shoe in America Linden led the development of this plan while Scott worked on the product and George put forward a sizeable amount of investment money to get things started they set up shop in an office in Boulder Colorado and ordered their first shipment of the product from their supplier then they began thinking how they were actually going to sell them they figured at the very least they knew that these shoes came in handy on a boat deck so they headed to a Florida boat show in 2002 as they
had a feeling that the novelty and uniqueness of the product would Intrigue buyers enough to try them on at which point they'd see how comfy and convenient they were their tactic was to literally throw the shoes at people passing by their booth and when someone would call the shoes ugly they would tell them to just try them on this worked incredibly well they reportedly sold around 200 pairs of Crocs at the boat show while the Crux co-founders didn't necessarily anticipate was the number of workers from other Industries who felt that Crocs were perfect not only
for the boat but for hospitals kitchens restaurants anywhere where workers run their feet for hours at a time at this point the cross Founders had no idea how big of a company this would become but they were beginning to get a sense they'd hit both a cultural nerve and found a consumer Niche that hadn't yet been tapped [Music] Crux continued to grow at a steady Pace despite some critics referring to it as an unfortunate fad there were plenty who believed that a shoe-like Crocs was simply a passing fashion trend doomed to eventually fail yep it
wasn't failing Croc sold 76 000 pairs of the shoes in 2003 and between 2005 and 2006 their revenue climbed 226 percent one of the really Savvy moves that the founders made was acquiring foam Creations Incorporated so they could have exclusive rights to the foam material called crosslight The Crocs were made of another Savvy move was developing a unique style of distribution and restocking that was uncommon in Footwear at the time instead of retailers having to buy Crocs in bulk and then discount the pairs they didn't sell they could buy as few as 24 and then
restock once they run out this lowered the risk for retailers and ensured that many stores of all different sizes ended up stocking their shoes even though many people didn't like Crocs the fact they stood out a lot meant May got talked about a lot and ultimately that publicity proved to be very valuable with demand for their shoes Rising rapidly in 2 2006 Crux had its IPO and they raised 239 million dollars which placed it as the highest initial public offering for Footwear ever this put his market value at a little over a billion dollars whilst
all of this rapid growth brought in millions for the Crux Founders and their early investors it also proved challenging to keep up with the demands of seemingly endless expansion Lyndon commented how the Breakneck pace of expansion took a toll on all of the founders as they worked around the clock to keep growing the business however it seems that it was harder on some Founders than others as later in 2006 things got a little dark [Music] foreign [Music] just a few months after the company went public co-founder George bodecker the one who initially invited Linden on
the boat trip that started it all made an unusual call to his brother-in-law according to his brother-in-law's police statement George said to him and I quote I'm gonna bury you so deep that no one will ever find you I'm going to Slit your throat about 20 minutes later George apparently showed up at his brother-in-law's office threatening to fight him now why George went after his brother-in-law is not entirely clear but there are multiple reports of very erratic behavior from the Crocs co-founder around this time both in the office and out of it after a string
of controversial incidents he was removed from the Crux board of directors which only made him more Angry you see George is a complex character in The Croc's origin story the company probably wouldn't exist without him and his passion and management of the company in the early years however as one former employee was later quoted saying you don't want to mention the name George beaudeker in the office it's a bad word at Crocs now Crocs seemed to distance themselves from their co-founder as much as possible of all especially since in 2012 he was confronted by police
for allegedly driving under the influence of alcohol he reportedly insisted his girlfriend had been driving the car and that his girlfriend was pop star Taylor Swift despite the fact he was clearly not dating Taylor Swift and nobody else was even in the car with him he was just super wasted which certainly didn't make for a good look for Crocs when all the headlines popped up about this [Music] when George stepped down as the CEO of Crocs the person who took his place was actually lyndon's friend who'd let him crash on his couch back when he
was at his lowest point that was Ron Snyder and Ron is credited with leading Crocs into a new era of success as CEO during his initial years Crocs went from carrying two models of his shoe for around 250 revenue and stock values continued to climb and Crux expanded its International presence they also began to acquire adjacent companies like jibits which made charms you can attach to Crocs so that people can personalize their shoes Crux also established licensing agreements with the likes of Disney and the NBA at this point they seemed Unstoppable that was until 2007
when things began to take a turn as with many other companies the financial crisis of 2008 brought major bumps in the road for Crocs consumers weren't shopping and sales went down bringing stocks with them Crocs announced a projection of decreased revenue and over the coming years they hit employees with a number of layoffs and continued to struggle in the stock market then in the middle of these financial troubles in 2008 a company called select LLC came forward with accusations the Crux violated a 1999 pattern for a material extremely similar to crox's cross lights on top
of that manufacturers of Crux look-alikes said that Crux was actually just a look-alike of an Italian shoe that existed well before Crocs Which Scott allegedly knew about all this speculation that Croc's design had been ripped off from somewhere else just sent their stock price stumbling further and yet Crocs is still here I'm thriving right now so how did they bring the infamously ugly shoe back from the brink before we get to the next chapter I want to tell you about our video sponsor Swagbucks a great way to earn extra cash and gift cards in your
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again to Swagbucks for sponsoring this video foreign [Music] rapid growth may seem great on the surface but for Crocs it was just the tip of an unsustainable Iceberg over expansion and an excessive inventory left them largely treading water as Fast Company described it from 2008 to 2018 but then suddenly Croc stock began to bounce back it was a combination of smart marketing and capitalizing on the fact that several celebrities like actor Shia LaBeouf had been photographed wearing their shoes what's interesting is that at many points Crocs did try different designs that weren't so ugly as
to appear to a wider customer base But ultimately they realized that their power actually might be in their polarization no one is neutral on Crocs you either love them or hate them so Crocs began to push out a message of acceptance individuality and creativity the Crux CMO said that Crocs fans see themselves as bold and one of a kind they tried to position it as Crocs whereas having a kind of cool Carefree attitude of not worrying what other people think they then combine this messaging along with a number of strategic celebrity Partnerships with the likes
of Justin Bieber and post Malone there was even a collaboration with Kentucky Fried Chicken including scented Fried Chicken chew charms that really smelled like chicken Crocs became a cultural chameleon able to adapt to a wide variety of Partnerships from the sleek and high concept to the utterly Bazaar High fashion retailers and Brands like Barneys and Balenciaga also picked up on the trend creating lines of custom platform Crocs the grace the runways of Paris and sold out instantly in stores basically crocs's strategy of aggressively pursuing collaborations was very deliberate as they especially focused on collabs they
knew would generate a lot of Headlines by being surprising hearing Crocs have partnered with Cheerio cereal or being worn by high-end fashion models provides endless re-publicity another huge win for Crocs was surprisingly the pandemic whilst most apparel companies suffered in a pandemic economy Crux thrived in fact 2020 was their best year ever driven by a desire for comfort of a style sales surged to new heights and stock values Rose 300 it also helped that Crocs had already switched to priority sizing online sales and it closed down a lot of their expensive retail shops so they
could focus more on e-commerce in 2021 Crocs reported a record high revenue of 2.3 billion dollars of course as a footwear company one of Croc's biggest hurdles will always be relevant as with any sort of fashion there's a question of whether something is simply a passing Trend or a true staple of global culture but rocks have been around for about 20 years and is recognizable all over the world plus they're seemingly making more money than ever which is pretty impressive for a product that even the founders of the company thought was ugly now at this
point you might say sure they've done well but the Crux Founders already had some business experience and money to invest so why don't you tell me about a business that started from absolutely nothing and to that I would say good point you should go and watch my mini movie on Louis Vuitton how a homeless teen created the biggest fashion brand in the world if you like this video you will love this next one just click the thumbnail on screen now and I'll see you there cheers
