Acquisition by Deckers and Legacy

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Atrubie helps adults with ATTRCM live longer Fewer hospitalizations due to heart issues, so you can focus more on living for what you love Tell your doctor if you're pregnant plan to become pregnant or are breastfeeding and about the medications you take The most common side effects were mild and included diarrhea and abdominal pain If you have ATTRCM cardiologist about a Tuby and visit a Truby. com slash podcast that's A T T R U B Y com slash podcast to learn more It's time to get busy living to you by Bridge Bio I could see it coming so clearly. In fact, the pre season orders It looked like the company was going to be destined for you know eighteen millionars, maybe even twenty million dollars I knew I would not be able to finance an extra five, six, seven million dollars in product. And most people would be so excited about that. I saw this as a kiss of death Welcome to How I But this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements Built He Sky Rs and on the show today, how Brian Smith brought Australian sheepskin boots to America that turned UGs into a multibillion dollar brand In nineteen seventy nine, a thirty two year old Australian named Brian Smith decided to import boots from Australia and sell them in the US At the time, Brian was living in Southern California And the boots he was importing were made from wool and sheepskin In Australia, everyone called them ugs, because they were ugly, notot because it was a brand name. Lots of small factories made their own versions of these same ug boots. But when Bryan tried to sell them in the US, he could barely move inventory It would take more than a decade before he'd find any traction with consumers He made mistake after a mistake. He ran out of cash, he lost control of the company, then got it back, then nearly lost it again And finally, in nineteen ninety five, Brian managed to sell UG to the footwear brand Deckers for a modest price. Deckers would go on to turn UGs into a global phenomenon brand that generated over two and a half billion dollars in sales last year But long before celebrities wore them, long before UG became one of the most recognizable footwear brands in the world It was just Brian Smith, a van full of boots and a conviction that comfort could become culture Brian was born in Canberra, Australia right after World War twoo Growing up, his family spent lots of time at the beach Brian says he learned how to serve so young, he doesn't even remember it He never thought about starting a business, so instead he went into accounting for job security. T years in when he was starting to feel really stuck He had an epiphany, literally All thanks to an iconic Pink Floyd song One afternoon I was driving along the highway. This music came on the radio and There was a song there that was called time and the words were And then one day you find ten years have got behind you, no one told you when to run You missed the starting gun And I J th , he's talking to me. And as soon as I heard those words, my body just got C it in goose bumps and u I thought, o my God, all of my friends were tracking off to partnerships and in the accounting world and other friends who hadd started business out of high school and I I felt like I'd been running on the spot for ten years. So it was Literally it was so powerful. It was only a matter of weeks before I arrived in Los Angeles and uh I had my surfboard, so I just started going up to Malibu. I surfed that place for nearly a year. So it sounds like you were Were you a good surfer or were you just like how would you describe yourself as a surfer? I was a good surfer, but every surfer thinks they're a good surfer right. But was no, I was pretty good. So all right Now this is a different time. LA in nineteen seventy eight, much different than cheaper. So you probably had some savings and I don't think it was that expensive to rent a place in nineteen seventy eight. No, two hundred dollars a month for this little house W, But u All my friends told me it's such a bad area, Brian. donon't go there and I'm this dumb Australian thinks, Ohh they' like me. I'm an Aussie, you know But it turned out that all the houses in that area had bars on the windows and, you know, the first night I was there, I bought a Pizza and a bottle of wine and this big tall candle about, you know, fifteen inches tall and I stuck it on a shelf in the living room and lit it and then, you know drank some wine, listened to music, went to bed, and The next morning I woke up in bed and everything went black and I ducked underneath and Oh my God, the house is on fire because the candle didn't have a dish under it and I just let it burn through Um wait it was like a real fire fire in the house. the house was like Rumbling with noise, yeah on fire And I got up to the front door and I was fumbling with the lock and I couldn't get it open And The weirdest thing happened, I remember slumping to the floor and I just said, Ohh. I'm gonna die And This voice, this is going to be hard to believe, but this voice that just said very calmly You haven't done enough with your life yet, Brian And I stood up and I I worked my way all around the house, punching all the windows out with my fist and screaming out. and eventually a workman who'd been a couple of houses down came up with a crowbar and got the bars off my bedroom to get out and then You know, it was just one of those Weird, unexplainable moments sure Um All right, so you You are in LA I'm assuming you moveved to a new place. and Yeahah, Ive got a great place in Santa Monica. U I don't quite understand what that would I mean, because you quit your job. So you had to find a career and a profession. You couldn't just surf because you had to pay your bills Did you think that that maybe where you would find the thing you would do U Well, the trends all came out of California Levi Jeans, waterbeds, you know, all the surf brands and skate brands, all the vibrancy was coming out of California. You wanted to be in the place where those things were coming out of? Yes. and I was, you know, every day I'd I look at the Wall Street Journal and I'd look at billboards on the way to everywhere and I'd look at you know, shop windows and see what was And I was really literally on a search for something to take back to Australia. I had no desire to stay and live in America So wait, just to be clear, the idea was you would come to the US And I'm assuming you had saved money, right? from your job. Okay And you were going to live off that money and surf, but also just It was kind of like a reconnaissance trip. You were just looking for maybe a product or something that was cool there that you could then bring to Australia and sell That's exactly right. Yeah And it could have been anything. It could have been lollipops, it could have been, I don't know So you don't have to be a chartered accountant, basically. Exactly. Yeah. Well, I was sitting around my house in Santa Monica with my buddy Doug and I was reading Surfer magazine And there was a photograph of guy a girl in front of a fireplace with the all you could see was their legs with these white boots on their legs had The instant I saw it, I thought, oh my God You know, one in two Australians has some sort of sheepskin footwear And there's none in America So I just thought this is like the ultimate no brainer And I looked at Doug and said, M, we gott to go into business. We've got to be instant millionaires, just like that. Okay, let's just kind of break this down for a minute. These are I don't know midcalf The outer is a sheepskin leather and the inside is the sheepskin wool That's right. Okay. and this was a thing that everyone in Australia had, they just had a pair of these boots. Whether it was slippers or little booties or scuffs or whatever you can imagine Australia being a sheepskin country and every little town. There is someone with a sewing machine and they're making Ugbots and every town would spell ug a different way. U G, UG H, UGHS, UG you know So this is the You call them ug boots. Where did that come from? Like ugly or ug or what? Could be all of that. Nobody really knows. They've always been called ug boots in Australia.. descriptive term. you would call like, you know, rubber boots wellies even though they're not maybe Wellington's is a brand or maybe it's named after like the Duke of Wellington. I don't know, but in the UK, they call them Wellies. So these were just called us.'t it wasn't a brand name, It wass just the name of what they were. It was just descriptive. It was descriptive of that product Yeah So you see this and you think You know, Eureka hey, you're in Califnia. You to sayureka. It's the first official mark of Califoria I have found gold and it is in sheepskin boots that are, you know, I'm going to just minin money doing this thing because, you know, everyone in Australia has this and Okay, so Be initially your idea was Let me bring a little bit of southern California to Australia Now you're thinking, wait, let me bring Australia to Souther Calorn Yes, yes. and Doug and I we didn't have a lot of money, but we decided you know, we got to get some samples. so we pulled five hundred bucks together and called the guy who ran the advertisement And we talked to me to being distributors for the US. And I think this guy was George Bircher. I think he was the guy who owned an Australian boot company called Country Leather. He would become your main supplier eventually, right? Exactly. Yes. All right, so you call him and Yeah. so We ordered six pairs of samples and after they arrived, Doug was going to be the salesman ' I was an accountant and I was terrified of sales And u He went on the road and He visited every single shoe store in southern California. He came back with about one hundred and fifty business cards of all these retailers and not a single order Brian, tell us we're crazy trying to sell sheeps skin in California And that sounds logical, but Australia's climate is identical to California So that wasn't the real answers. And so You know, as an entrepreneur, you have to pivot when you hit a wall like that. And I thought, well Well, maybe the surf market is the way to go. We looked up, you know, the yellow pages. there are probably sixty to eighty. sururf shops. And so Doug and I change gears, And now he insisted I went on the road and I remember walking in a surfboards, which was in Santa Monica right near where I lived. I was so embarrassed to open up this bag of samples. I pulled them open and he goes, Oh my God, I boots. He says, they're great. All my friends have got them. What are you doing with those? And I said, Well, you know, we're thinking of importing them into America. Oh my Godd, you're gonna make a fortune And so this happened in all the surf shops that I went into and the same with Doug And we thought we were going to be instant millionaires, no doubt about us. Yeah So all right, so you're getting all this feedback that seems pretty great Yeah. And before we get into like actually launching this business you need money to purchase orders and you also need to purchase different sizes, right? Be that's different size feet. and So First of all You and Doug, I'm assuming, establish a business together Correct. We were going to be partners and The interesting thing about that road trip we boasted, neither of us realized that we hadn't asked for an order Now we knew we needed inventory and Pure fluke. My roommate in Santa Monica overheard us talking and So out there's some guys at my office. looking for other invest new investments. And let me take it to them and they did them We werere able to raise twenty thousand dollars from them. uh, as capital and We didn't even have a business plan. It was just the enthusiasm you know, me talking about how big it was in Australia and everything But so we raised this twenty thousand dollars And we knew we would never, ever, ever need any more money than that for the rest of the business. Right I got you okay, get we'll get there. Okay, so you raised twenty thousand dollars, but it sounds like you didn't have any orders. you just ordered what you thought you could sell or is that right? You just made up came up with a pretty simple. We had short and tall And we had brown or white. So short and tall like short would go to your ankle and tall. Short was ankle. Okay. Tall was up to the calf Yeah. Okay. and then Brown or white and then how many pairs did youer five hundred and just different sizes. fififteen thousand dollars, yes. And it takes what? six weeks, two months to get these ball. It was very quick actually. It was October and We got the boots in by the end of November. Yeah, just the beginning of December. So you get these boots in And now you're going to go presumably back to these stores that had expressed interest and you're like, hey, we're back, we got ' them. And I remember going back to conate fors and the owner goes, Oh, well, son, Brian, you are going to be so successful. We couldn't sell them out of our store. We just sell surfboards and trunks and flip flops But you're going to do great in the shoe stores. goodood luck, you know and I walked out without an order, right? And this happened to you know about sixty surf shops all the way down the coast from Wow. from Malibu down to San Diego And the total sales for the first year was twenty eight pairs which was how much money? Exactly a thousand dollars, but it wass just a fluke, but it was exactly a thousand dollars. And I'm much fast enough with the mouth. How much were you selling a pair? At retail it was probably between fifty and seventy depending on the short and the tall Okay So in nineteen seventy nine, that was not super cheap No, it's super expensive I was that was one of the worst facets of the entire ar project for twenty years was the lack of margins I had because the pressure of the retail price kept us way way down. so it was very hard to make money. So you make a thousand bucks in sales your first year. so it's not looking very good. You are now, you've got Hundreds of pairs of these things. What? just piled up in boxes for? one hundred and seventy something pairs Yeah in the third bedroom. In this house that you're renting in Santa Monica? Yeah that was the third bedroom was the warehouse, Yes, Wow You couldn't do that today. You couldn't rent a house in Santa Monica and be broke, right? I mean, just it would be impossible. Yeah. All right, so you It's nineteen eighty now We had a bunch of shoes And what are you going to do? I mean, and what does Doug do? Like you guys had started? Doug decided to go into the video business, which was just starting at that time. We knew we couldn't make a living. out of no sales. So You know I wanted to give up, but I couldn't because I got four hundred pairs in the bedroom and all my investors money is tied up. so I started doing swap meets and street fares And basically anywhere I can get a crowd And over the next, you know, January, February, March, I ended up selling about Six thousand dollars worth of product. Pretty good. And mostost of it, believe it or not, was out of the back of my van in the parking lot at Malibu. Yeah. I used to go up for a surf in the morning and afterwards I'd grab a coffee and the newspaper and I had in a van full of product and I would just sit there with the doors open I made, you know, steady money. just a point of clarification here I know that especially in California because the water is really cold Most surfers wear wetssuits because it's hard to swim in that water.razing. Yeah, unless you're in a wsuit We're surfers in Australia wearing these wool boots because warranty warm up their feet or their A they surfed? Like it just seems. Well, these questions you're asking were asked by every single surf shop owner And every consumer, what the hell what how why are they so good And the answer is that and all Australians know this is that sheepskin breathes, so you can put them on with freezing feet and they will insulate and if you've got wet feet like after surfing It wicks the moisture out towards the surface. And so within ten, fifteen minutes, your feet are dry and warm. So there was a very, very practical side to wearing them after surfing And so that's what I wanted to tap into. But you can't turn the st business just selling them out of the back of your van. You've got to You got to figure out how to get into retailers, right? And And so were there, I'm assuming all you know, there were trade shows back in the early eighties for shoes and apparel Yep. In fact, there was the market that's called the action Sports markarket just started that very same year as I started So action sports, surfing and skateboarding and all of the above. Yeahah sk. And so I did go participate, but Nobody understood what I hadard So the bottom line is, you know, in March I just, uh shut it down and my first job in the summer was scraping boats at Marina Del Ray Th then I switched over to construction from a buddy of mine owned a contracting company in Bel Air and I was working in Beverly Hills and Bll Air on construction projects And that filled up the summer See you're working doing these jobs just to pay the bills. Y. You're not giving up on the shoe thing yet. You're still committed to doing this. I had the most interesting motivator whichich was that at least one in two Australians owned some sort of sheepskin footwear So It's not the product's fault. It must be me And I've had that mantra for like ten, fifteen years. Every time I It's not working, it's not working. I would come back to that that thought that, well how come everyone in Australia owns a pair? Yeah And so That with that attitude I was able to stay in the game a lot longer than somebody who'd never seen them in Australia Fair enough. Okay, so this is now the summer or end of the summer of nineteen eighty you got to sell a bunch of shoes. Yes. And from what I gather, you started to run small ads in surf magazines. First of all, how did you do that? How wasn't that expensive to do Um Relative to how much money I had it was very expensive yes Back at that time, the surf magazines didn't want money up front. So I was able to get thirty to sixty days to pay the advertising bill. So I was totally gambling that if I ran these ads I would get enough sales to be able to pay for the ads. I got it. Okay, so you were running these small ads and it was just wereere you calling them ug boots or ugs or Yeah. I did probably the smartest thing I ever did in that business was I did a search, a trademark search that it cost me six hundred dollars at the time, which today is probably four or five thousand bucks, you know? Yeah. We did a search of the world, especially the US to see if there'd been any prior use of the trade. Name Ug. and they had not. So that opened up the gate for me to do the registration of the trademark. So you trademarked that name. Yes Ug, which was not a trademark. I mean, in Australia, it was just like It was generic down there. Yeah. Right. It would be like trademarking the word cheeseburger, right? That. It was just the thing. And you were able to trademark that as a brand name in the United, which is that's correct. Amazing that no one had thought to do that. But I guess this really wasn't a popular product in the US. Oh nobody had heard of it. Yeah All right, so you from what I've read because you've written about this in a book You actually sold about thirty thousand dollars worth of these shoes for the year nineteen eighty pretty good, but you end up with a loss because cost the boots and the expenses of trade shows and taking out ads, so you actually You're still running in the red. Yeah, still still using my own capital, yes. and still living on summer summer jobs to basically to state to stay, you know. and you were not A kid. I mean, you're now well into your thirties, right? And I imagine that maybe part of you or maybe your parents People were thinking, what's he doing with his life Yeah. he' saids in California is surfing, is trying to sell these boots. Did you get any of that feedback from your family at all Yeah, my my dad. who'd been a contractor You know, absolutely did not want to be I running my own business and I think it's probably because he had such a hard time with it That's why I got into accounting. He wanted a safe, secure job, you know work your way up to chief accountant, you know, I couldn't think of That to me was like going to prison All right, so you you' so you're still committed to this And you're now a full year in Yeah and still kind of pounding the pavement, going to these trade shows trying to get more and more interest And think you even in nineteen eighty one, you even attend a snow or ski kind of u T trade show in Los Vegles, right. Okay. And was there more interest at that snow show? The ski market was even harder than the surf market because their attitude was well, we have mud and we have slush and we need rubber. you know, we got to have srales and they couldn't see sheepskin being strong enough or waterproof enough to work in their areas. So Yeah, the ski markets were very, very difficult to get into You get a job that summer nineteen eighty one. a very unusual job that would not exist today. you had a friend who gave you an in for this job that would pay well. What was it? It was at the time when all the big mainfame computers were being replaced by desktop computers And what nobody knew is that these refrigerator size mainf frrames Every connection where one wire touched another wire or a motherboard touched plugged into another board It was gold connections And so he arrranged to buy up all of these old main frrames which most accountants were paying to get rid of them. Right? Not knowing they were full of gold And so I was given a bunch of cash and a pair of snips and hammer and I found out when I got home that I'd made three thousand dollars, which was a fortune to go on the road for a month, you know But I realized I'd shift over three hundred thousand dollars worth of gold back to San Diego., Not really knowing that I was doing it But still like on this ug thing Who was manning your phones to take orders? Well again. Nobody was calling. I mean, I was like a non entity for the first three to four years. Yeah. Every time I'd go into summer mode, I wouldn't think about Ug boots for four or five months And then it would be, you know, July, August, September I'd starting, oh, shit, I better figure out who I'm going to sell to how do I get more sales, you know? because I learned early on that trying to walk into a surf shop with sheepskin boots on a hot day was like pointless. So I learned to wait for a really shitty day when you know, the storm would hit, you know, then I'd go on the road and sales were, you know, I would open up You know, half a dozen peers in lots of different little surf shops. So Like in the off season, I was fully into making money to stay alive. And then I would have to backtrack and get the Agbot business started up again. So like October, November was when you would run U rect. I got you. Okay. so It was totally seasonal. Yeah. So you would basically focus on this in October and November and try to get, you know people to order these. you could get them in time for Christmas, presumably I mean, the unpredictability this is insane because You've got to figure out how much you should spend on ads. with the hope that it would convert and then hopefully order the right amount of shoes that you wouldn't be left with a bunch of inventory.. And okay, now just at the ads for a moment, what are they look like wereere they like was it just text or were there photographs of people wearing them? No, I thought I was doing a brilliant job, you know Um tellelling you about one of the biggest mistakes I ever made, right? Which was hiring these two models, really good looking We posed them on the beach and I'd run those things and the sales that, you know, let's say eighty one, eighty two was about thirty thousand. the sales went to thirty five thousand, like it was like My ads were doing nothing And then againgain, summer job and then come back to it and I used good looking models again. Sales went to I think it is forty five thousand that year And it was just getting nowhere and It was probably the fourth season of me being in business I really wanted to give up. I was working on a golf course in the summertime, right? Doing what? I was a greenskeeper. I was changing the holes on all the greens and I was helpeling with construction and all that. By the way, I understand the necessity of doing all that, right? You you needed to earn a living and Now, I mean, you're you're in your, you know, late thirties and you had been a certified you'd been a chartered accountant, which is a kind of a prestigious gig, right? L Yeah. And here you are, you know doing mananual labor. I mean, were you ever like, God, what am I doing? I actually love that golf that golf course job is probably the best job I've ever had in my life outside of U, you know? Yeah. Over the summer, I realized, you know productro' so expensive, it needs a huge inventory because you never know if someone's going to walk in the door their' a size seven or a size thirteen. So it was a very hard product for retailers to stock because of the cost Americans still didn't understand sheep sk. They thought it was hot and sweaty and prickly and so so I've got that against me. and I Pure Fluke was having a beer with one of my good retailers in Ocean Beach in San Diego and at his store and I was talking about how hard it was for me to get traction in the advertising and He called out to the back and he called half a dozen of these little kids, you know, the twelve to thirteen year old Gommys who store their surfboards in the shop. and he says, Hey, you guys, what do you think of Ugs And Pretty much all just said, o, there's Ugs man. They're so fake. Have you seen those ads Those models, they can't surf and Instantly, I realized that not only was my ads not working, I was actually turning people away from uugbots because of the images that I portrayed them in. So that was a huge learning thing So presumably you started to use real surfers in your ads Yeah, I had a buddy He was a former world surf champion, Pete Townnd who worked for Surfing magazine and he was running a schcholastic surf team at the time and I called him up and said, Hey, do you have any young kids who are about to turn pro And he gave me Mike Parsons and Ted Robinson as two people to check out and So I hired them for I paid them in boots, you know. And I just took my own little cannon sure shot and we went surfing at Black's Beach in La Jolla and Treresles up in Santaofre. Yeah. So when I ran those ads, the sales which had been around You know, it's thirty to fifty thousand. per year, the immediate jump was like two hundred thousand dollars. Wow. And it was because I finally connected the image Kids would want to be in the photographs, like they would be dying to walking to Back speech with Mike Parsons or to Trestles with Ted Robinson, you know And that reality really taught me everything Id learned about sales and marketing. jump from nineteen eighty two to eighty three was big. I think a couple things happened that year whichich one was you designed a logo for Ugs, right? L You designed a logo as like a Ram's head, I think. Yeah right. I don't think it's a logo today, is it? They took the Ram's head out of it. Yeah, it was too difficult to reproduce Yeah But that was the logo. Okaykay. so you had a logo, but you were basically able to just order, you know, from a manufacturered in Australia. country leather. and then they would be shipped to the US and you could sell them And then the other thing I think happened that year is you are You get you get a threatening letter, like a cease and desist letter from another company called Ugs, UG HS. It's also they also sell ug boots ' I guess Australian couple but based in Oregon they were doing the same thing you were doing, but they were actually making their boots in Oregon. In Oregon. Yeah. They send you a letter saying You're using the name Augs. We, you know, We've got a trademark on it We're going to see you Yes, that was that was a horrible period. And I tried to u find other names to use Didn't you already have a trademark on the name UGGS? Yes, I'd registered a trademark, but they claimed that like in Australia, the trademark law is if you're the first guy in with your ten dollars and you fill the form out, you own the trademark. R? The rest of the world, you have to establish first use and continuous use And I was able to do that with this woman. She came in after me. And I had advertisements, I had lots of information that showed I was in business before she even came to America So I knew I would always win a lawsuit, right I didn't want to be in one because I didn't have any money. And this was going to be, well just because we're going to come back to this. This is going to be a ten year saga, roughly. No, yeah. It was going to last a long time But I'm sure in the meantime, it was It's a competitor, right? I mean, since somebody is trying to do the same thing that you're doing One of the thing that I know happened that year is that You met somebody who gave you a line of credit. And I'm assuming because you were you were doing well that year, right? And a guy named John Boouser who I guess you had met when you were in the mainframe Yeah, he was auter guy D commommissioning business. He gave you a line of credit But he wanted half the business, basically. That's correct, yeah And you know, when I look back on my experience of Ug. the greatest weakness I had was my lack of financial knowledge Right. I was an accountant sure. Yeah Yeah. But finance is not The same as accounting right. L acccounting is what happened last year. Here's the balance sheet Finance is forecasting, what am I gonna need over the next one, two, three, five years you know, in a company that's that was growing pretty fast So I was always in a position of the sales exceeding my ability to finance the production And the more sales you get, the bigger your problems get in supply. Yeah I never really understood that. My accounting thinking was we just sold a million dollars worth of product, We're broke What's the answer? Oh sell two million next year and you think we'd have more money, but you don't, you're twice as broke It's interesting because you did have this deep experience as an accountant But as we will see you know, for a variety of reasons, you felt like you had to make decisions that would Over time chip away at your control of the business. That's correct. And you made deals that weren't necessarily in your favor basasically giving half of the business away for a line of credit. Yes I was always trying to get financing from someone who had cash. It wasn't like a well thought out business plan or anything. And always in September, October where I had these humongous orders to fill and no products. So I was in the worst negotiating position of all time. and this happened two or three times during those early years where the old investors didn't have the money to buy the new product. So I had to do a deal to get them out and bring in bigger investors. and that was a really horrible cycle. Okay, so you now have a partner, essentially, maybe a silent partner, this guy John who's giving you a line of credit. Meantime, you are you still have this kind of like potential lawsuit hanging over you. And I guess you just you start to think, well Who wants to deal with this? Maybe I'll just change the name and you thought about changing the name of Ugs. I did. I came out with the name Jackaroo, which is like a cowboy is aow it is an Australian cowboy. Australian cowboy Jack Jillaru is the The female version And uh hadad these young kids that, you know, I knew their parents and They were riding for the Ug surf teams. They they they had ug logos on their surfboards. They like all the surf all the brands had surf teams And so they wanted to be on the Ug sururf team. You sponsored a surf team? Yeah, but only with logos and and product and stuff like that. I didn't really have any money. Right. And I went to them and I said, Hey, listen guys, you know I'm going to have to give up the Ug name And we're going to call them Jackaroous, so you'll be riding for Jackaroous and No way we're never that's a dumb name. We're never You know, and I realized how passionate they were about the Ug brand and just made me forget All about changing the name and I said, Damnit, I'm just going to go to court and fight this because that name is really powerful. Let me come back in just a moment Brian's trademark fight is just the beginning of the struggles that put Ug and his ownership of it at risk Stay with us, I'm Guy Ros and you're listening to how I built this Before every interview I do, there's a mountain of material notes, transcripts, research. 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Bitcoin is often talked about as an investment But it was built to be used. With cash app, you can actually do that. seend Bitcoin instantly, pay at local square businesses that accept it, or move it to your own wallet whenever you want It works like real money and less like something locked in an account. For a limited time, new customers can get ten dollars ten added to their balance. Just use code cash app ten when you sign up. And don't forget this part, send at least five dollars to a friend in the first two weeks. Terms apply CashApp is a financial services platform, not a bank, banking services provided by CashApp's bank partners, Bitcoin services provided by Block Inc brand For additional information, see the Bitcoin disclosures at cash. app slash legal slash podcast Hey, welcome back to How I Built this. I'm Guy Ros. So it's nineteen eighty four and Brian's business is growing, but he's tied to a seasonal sales cycle without reliable financing He knows he has to grow beyond sururf shops But he can't get traction with any national retail chains. And he's feeling stuck until a trade show friend named Paul Bussman, starts opening doors for Brian to another sport, skiing He was one of the founders of the ski Industry Association, you know, what became this humongous trade show in Las Vegas and he came on as a sales rep for me in the industry. He I wasn't looking for a sales rep, but he came and convinced me that The ski market was a totally different market to the surf market And he was right. And so he had a group that was already selling gloves and socks and everything to all the ski areas and all the ski shops So he added Ug boots to the line Okay nineteen eighty four, record year, right? but not yet profitable. You had still out of losses and you have the line of credit Yes, still kind of growing and challenging and from what I understand that year, You and I should mention, you were you had been recently married. You met Laura who became your wife. And um You said to her, Hey I got to abandon this thing. This is not going to work. You realize or decide that you see no future in Nugs Yeah. partartner investor that gave me the line of credit He was used to Finding an idea and doubling his money overnight That's why he had the computer business that noobbody else ever saw, you know, stripping out the gold and He wanted to double his money, but you know, he had no concept of advertising, cost of samples, cost of communicating with the sales And you're getting stressed out and you're thinking, I don't need this. Yeah, yeah. And he just wanted his money out And I do remember that There was a period when he was putting intense pressure on me and I remember I was at home one night m with my wife, Flaura and We were watching TV. I was lying on my back on the floor and the show finished. I clicked the TV off And I rolled over in my stomach and got up on my hands and knees and I started crawling towards the bedroom You know And Laura, who is a really quiet person, she just looked at me and said, You get up now and walk to bed like a man. And she sort of shocked me And as I stood up, I just I was like coming out of a fog. It was like, oh my God, there's so much more to life than this crappy little sheepskin company And that night I started, you know How can I get out of this? You know, I literally wanted to just get out. I mean, I can understand because you're feeling a bunch of pressure. and I mean, now You are almost forty, right? And probably still struggling, really struggling financially. Ver Yeahah, Laura was wororking for an architect and she was paying the bills at the time. yeah So all right, so there's a lot of pressure and this guy wants his money back or he may want to get out of business. and You want to just throw your hands up and walk away And but like will happen again and again in this story Some intervention, call it divine, whatever you want. you call up this guy, Paul Bsman and say, Hey, I don't to get out of this thing He says, well,, I know somebody could potentially help you. His name is Neil Fearing Fearing that's his name And he is a who is he is he like a wealthy investor? His business was Yamaho Motorcycles and he was a distributor for them but he was also Hey, u opportunist and if he saw good deals in the marketplace, especially in the ski industry, he would buy a whole bunch of closeouts and figure out a way to make money out of it. So So that was who Paul Basman introduced me to And Neil came down and looked at our operation and and said, Sit I, you know, I could do this, but you know, then we have to sit down and try and figure out How were we were going to do it Okay, and your operation at the time was you had a warehouse in San Diego because you had moved to San Diego a few years earlier And it was you and How many people do you remember working with you I had a warehouse girl and someone that came in part time did accounting. Okay, and who was doing like logistics, like sending like shipping the orders. M, me the guy.. Okay, so he comes down, this guy Neil and says, yeep, I think I'd be interested in buying you out U but From what I understand, he says, you're going to lose, we're going to buy you out. You're not going to have any ownership, but you can regain twenty five percent of your ownership Once this little issue with that other company, the Ugs you HS company, once that lawsuit or that situation gets resolved, then you can you get your twenty five percent back. That's basically the deal they offered you Yeahep, that from his perspective is exactly how he saw it Okay But me being a naive, you know businessus manan I was looking at Oh, he's so lucky. I'm bringing in three new partners to my business Him, it was this guy, Neil. Paul was this guy you hadd worked with, so he'd be a partner Yeah, Paul and another guy Joe who was the close out guy. So Three of them' going to buy the company together In their minds, yes. Okaykay And I was this sort of impediment that came along with it. But they needed you because you knew you had the connections, you had to run the business. you were o. Yeah. So you would stay on And I'm not trying to second guess you or anything. I'm just trying to get in your head when you were at that time. like When they said we're going to buy the company, did they give you a check that you could then cash that was your money? No, no, no, we. We set up a new corporation. And In my mind, we were all going to own the company twenty five percent each. And what were they bringing to this? cash? They were bringing in cash, the ability to buy more product. They were We also moved the entire operation up to their warehouse in Anahheim and, uh I was not going to be involved in the day to day operations anymore. I was going to be the salesman. byy now I loved sales. I was just an incredible ug booot salesman And so I was going on the road full time and making I was I'm not on salary. I was going to make a commission on sales. Okay. And They were going to do all of the operations. So their seventy five percent was overheads and running the company Okay, so you saw this as it's almost like if you were to raise capital from an outside investor except Not only did you raise capital, they were also going to operate the side of the business you didn't really want to do. You wanted to focus on selling. Exactly. Sounds like you were also looking for some kind of certainty or more financial stability. So as a sales rep You would get commission. That's correct. But you were giving up the business, basically Well, in my mind I wasn't. In my mind, they were my new partners and nothing had changed. They're the ones that thought they just bought the business from me. And it came to a head. We spent a whole week organizing everything up in the Anahim warehouse and getting the accounting working and everything And I finally went on the road my first day as a full time sales rep, right And I drove down Beach Boulevard to Huntington sururf and sport and I walked in and the manager's name was Dave and Before I could say anything, he said, Hey, Brian, I heard you sold the company And I what He said, Yeahah, I called an order in this morning and They said you don't own the company anymore. And like I couldn't wait to get out of the store and I went to the shell gas station next door to the phone booth because this is before cell phones, right? Yeah. And I called up Neil and I said, Neil, what the hell are you telling people? And he said, What do you mean And I said, You're telling him I don't own the company. He says, Well, you don't. Yes, I do, you're my three new partners And he goes, No, you don't get your stock issued until you finish the trademark And I just hung the phone up And I drove from Huoneyton Beach straight back to San Diego. pulled out my contract And I read it and I reread it and I just went, o sh I don't own the company anymore Okay So you're frustrated, but you know that you could get twenty five percent of your ownership back Sounds like they actually did pretty well that that year that they sort of came in. I mean you guys did six hundred fifty thousand dollars in sales. so clearly on the up and up. Yeah, the weird thing was I actually loved being on the road selling and you know, after we got a we we made a deal that from then on they would not tell anybody that I'd sold the company. Okay. Right. So that that would got that out of the out of the way. I'd already committed that I don't own the company. I don't run this anymore And but I My mentor is I'm going to try and get a pair of ug boots on every single person in America. And I went back on the road to all my southern California guys and I got back to the office and Neil handed me a check for five thousand dollars I said, that's your commission wow and Would you believe that? I think that was the fifth or sixth year. that was the first money I'd ever taken out of the company And here's a question I have for you I remember you said that early on, you would cringe. It was so hard for you to go into these shops and try and sell them. You were embarrassed. you were nervous. Now it sounds like you were really excited to do it. so what changed? There was a couple of things. Being out there with the customers, it was so much easier for me to, you know get a rapport going and introduce the product by having them try the boots on. that turned out to be the biggest Do in Cosing our first orders was having the buyer try them on But while I was in the stores, I u girl walked into the shop one day. I think I was in Newport Beach somewhere And she was touching the ug boots and she obviously loved the look of them and the feel of them And she was asking the staff guy there, you know, what are these like? Well, I'm not really sure. you know, they are they hot Um, not really sure, you know, what happens if I get him dirty And the guy was useless, right? Yeah. And I saw that interaction and I came up with what I called the S pair stocking plan And if a store would open up with six pairs, I'd give a free pair to the store manager And now I was in a different surf shop, you know, a month or two later. and A guy walked in and he says, Yeahah, what are these boots like like and the sales guy says, Ohh, they're fantastic. I'm wearing them now He says, Aren't your feet hot? No, they breathe, you know, so well what happens if you get them we to? Oh, you can wash, you know, I mean, it was just like night and day. And so the guy bought a pair of ug boots because there was somebody to validate how good they were And so that cost me a pair of boots for each new store I opened That changed the trajectory of UG forever. it was probably the best marketing plan I never executed on Okay, so you are now full time selling and making commission driving all around southern California I think at a certain point you even tried to feel like a boot for the ski market, specifically for the ski market called the Zeelander. and I've seen it described as a ski boot, but I don't think it was a ski boot. What was it? No, it wasn't a technical ski boot, No, it was an after ski boot. Yeah. boot that you could wear in the snow because the original The Classic line had an EVA so. it was a flat piece of right the ethylvinyl acetate, whatever. It was super slippery on snow and ice So we created a rubber cupsle. Because it was rubber, it was much more sticky on snow and ice But yeah, that was a big, big change. made us much more credible in the snow industry. So it's nineteen eighty six and you are selling you're on the road. And The litigation or the threat of litigation or the lawsuit, it essentially gets settled, I guess and neither side really comes out the winner or loser. I guess your trademark wasn't invalidated. Hers was not invalidated. Ugs, UGHS could continue to sell in the U.S, but say made in America. That's correct. And yours, the UGG also be allowed to sell in the U.S, but had to emphasize in Australia, Yes. So this sounds like a great result. and now get twenty five percent back now officially in stock Stling that lawsuit was a bigig step and probably the best advice my lawyer ever gave me It was, okay, Brian, now you can sell Just beat her in the marketplace I didn't really push my stock right away becausecause a weird thing had happened You know, the second month I was out on the road after we made this change, you know, Neil handed me a check for ten thousand dollars and the next month, another ten thousand dollars. This is your commission. In commissions. Yeah I'm realizing, oh my God I don't have to do any ordering, I don't have to do any accounting, I don't have to do any warehousing and shipping. I just am doing the marketing and I'm on the road selling. And it wasn't even selling anymore. It was hanging out with all my buddies who own the surf shops and the ski shops and You know, we'd go fishing in Idaho, we'd go golfing in Nevada. you know, it was just a great, great lifestyle and This was a classic case of nearly always your most disappointing disappointments will become your greatest blessings, which is one of my favorite sayings Here I was like destitute with didn't own the company anymore, but suddenly I'm traveling the America and making more money than I could have ever imagined at that time And that literally went on for the next three years. From what I gather, you did not recover your twenty five percent ownership I was very, very close because In that three year period I was just talking about Neil had bought Joe and Paul out. Okay. So he owned one hundred percent of the company now But you had settled that lawsuit. so certainly surely. So he finally called me up and said, Hey, Brian, look, you've settled the trademark Come in next week. I've got the attorneys ready to issue your stock and that day he hired We had a life insurance salesman come in from Trans America and We wrote out life insurance policies on each other. So we were full steam ahead That next weekend Neil was at a motor cross race. He was a big, you know, motorcycle rider And he was not in good health and he had a massive heart attack during a race the next week after next between the time he called me to get my stock And That was the very next Sunday. he had a heart attack in this race and never recovered. Wow. And so Now his widow who'd never stepped foot inside the Ag business now owned one hundred percent of Ug. Wow. And and I was like out in the cold again, you know? So because wait because you hadn't signed the deal. We hadn't signed the contract to bring me back in as an owner. Wow. I called her up and you know, commiserated and everything and I said, Look, I'll be up tomorrow. And I'll Its working a year for the business to see if we can salvage it And that became, you know, coming off the three best years of my life. this became the hardest year of my life for sure So okay, this is nineteen eighty eight And so you're you're running the business, but apparently the accounting was a mess toal like it books were just a mess. Checks hadn't been cashed PO's hadn't, you know been paid and then you guys had outstanding bills that you had to pay. What did you discover It was what you said amiss. and u to try and reconcile everything and It ended up about eighty seven thousand dollars in the hole when I finally finished the accounting had no leads on financing for the following year. My supplier countountry Leather had just had three fabulous years working with Neil and he got his money on time all the time And when I called him up and told him the news about Neil He started to clam up and he was I knew he was thinking to when I was running the company before Neil And he, you know, I always paid him, but he never knew when or, you know, the money was coming And so he started to get very cautious And I said, George, don't worry. I'm going to do a business plan. I'm going to go out and refinance the company and I'll have plenty of money to start production R? But it didn't work out that way. You know, I wrote a business plan, but We've got nowhere with the bankers. friendriends and family we' way beyond that So you know, I really was desperate for three or four months on whoo the hell? can I approach? I mean, you were still running the business. orrders were coming in. Yeah. In fact it was the best of worlds and the worst of worlds. you know, the best was that I'd created a black and charcoal, two new colors for the line, which all the sales reps had And that was right before Neil died. So They were out in the field and Black and Chuckal were just kicking butt with all of their orders. And we were you know, getting two or three thousand pairs of orders a week and I was bundling them and sending them down to the manufacturer going, Hey, George, get ready. It's going to be a killer season. you know, I'm working on the financing. And it got to be April May, you know, and I started thinking Who would benefit from me being in business? Yeah. I thought initially I thought, all the retailers, but you know when I called my best retailers, they just laughed at me said, you know, you're one brand in a hundred brands we have in this store, Brian. Forget it, you know. Th thenen I hit upon, well, how about the Tanneries? You know their business is selling sheepskin and I'm a huge user of sheepskin. You were trying to get them to finance. Yeah. So I sent a business plan down to several of them and one guy Gordon Jackson who owned a big tanner in Melbourne He called me up and said, Brian, this looks fantastic, you know, come on down And u He was a really weird guy. He had the mantra You know, I reserve the right to change my mind and he he was a very difficult guy to work with. At first it was Come on in, how many sizes do you have? How many colors do you have? How many skins are we going to need And the next day was, o my God, this is, you know Pret pretty risky, Bran. I'm not sure we can go forward with this The next day was oh, I found a guy in Los Angeles to look in on you. and And then the next day was, oh, look, it's a family business and you know, my family don't want to go into there and Yeah, the bottom line is I spent like a week with him, but we never got a commitment to finance or build product And apparently this guy that you hadd been buying boots from. This guy George Vercher Yes. He's gone unpaid for a long time and he basically says, I'm not going to ship you anything anymore. Yes And so I mean, that's it. game over, right? I mean, you can't There's no business if your suppliers isn't selling you sending you boots prettyty much, but when I went to the trade show that September We had no new product to put on the you know displays I put all last year's product there. I didn't want anybody to know that I was out of business. Wow. And you know, I didn't tell any of my staff, I didn't tell any of the retailers that we were selling to that I wouldn't have product to ship. So when I got back to San Diego after the trade show, you know it was around about midnight I called Gordon in Australia at the Tannery And I said, Gordon, I'm just going to have to shut the business down. And he was very sad and we hung up And u went to bed and then about half an hour later the phone rang And it was Brian. Gordon here sccrew George. I'll get you all the boots you need, you know Ed. Just like that His commitment meant that we didn't have a handshake, we didn't have a contract, nothing.. He said, seend me down the patterns, which I did And he duplicated the patterns and sent them out to four or five manufacturers. And he cranked up his tennery to full production and started supplying skins to everybody. And it took us about three weeks, but then we started getting you know the first two thousand pairs in And then the next week five thousand pairs the next week it was enough to keep was ug company alive and there was product out in the marketplace with ug labels again it was so lucky. how did you regain your ownership? I mean, if his Neil's widow owns the company Did you say go to her and say, hey Let's figure this out. Maybe you don't want this business, Mbe I can buy it out. Like what did you do So what happened is that towards the end of the season, I got a call from the life insurance company Transammerica. because I made a claim where Neil died Back in February March and I'd not heard much except they rejected, I rejected. I had a lawyer who kept pressing them And they finally called us and said, lookook We got to get this off the books by december thirty first. Can you come to Los Angeles And we spent a day negotiating with them and we ended up getting two hundred thousand dollars as a settlement to walk away Even though Neil didn't even have his his, you know phhysical done. so I was Super lucky to have got that offer and In the meantime, I'd said to Della, look, I think I can pay you this amount. I don't have the cash right now, but If I can keep this season together, I'll pay you. And so I signed a promissory note with her and This two hundred thousand dollars was enough to pay her note out And then by you know, I owned the company one hundred percent again You know, who would have ever thought that that would happen again When we come back in just a moment, how Brian tackles a new problem, his boots are finally flying off the shelves, but Brian doesn't have enough money to meet the demand. Stay with us, I'm Guy Ros, and you're listening to how I built this Every business is now asking the same question How do we make AI work for us? 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Framer d. com slash built Rules and restrictions may apply Hey, welcome back to how How I built this. I'm Gy Raaz It's nineteen eighty nine, Brian is now the sole owner of UG and by the end of that year, for the first time ever, UG turns a profit, one hundred forty thousand dollars. which is great news Brian's inability to secure stable financing is still a big problem I didn't have the skill to go out and raise the money like traditionally, you know, by this time there were There were sort of business plan modules, but I didn't really get into that I was still You know, who's who's a rich person that I know There was no real structure to it And so I was always down the road until I was desperate to get financing Here's the irony. Bus didn't need that much cash to run for the season. It just needed Guarantee that the manufacturers would get paid. So that meant a letter of credit so that when they shipped their product, they were automatically paid If I just had a standby letter of credit for two, three hundred thousand dollars Each of those years, When we shipped product, we had cash pretty much immediately. We were able to pay our bills and we get more product and it was it only took a couple of hundred thousand to get that cycle running. But because I pushed it so late every year, I needed a half a million and three quarters of a million dollars and that was the hard money And so you are constantly and in this saga There are so many names of people who were involved as partners at one point or another. It sounds like your strategy was the same. It was I've just got to find somebody with money who's willing to infuse the business with cash and then you know, they'll be an owner partart owner. And you kept coming back to this this strategy, the danger is that you might have a partner that you don't like or you don't get along with. And so I had an associate Allen Greenway, who was another Australian, who'd done very well in the hotel industry and I've been in business with him in a different deal And so we trusted each other And he ' been a great investor However, he thought I was a bit of a wild canon and he said, Brian, look, I love you, but If I gave you money, I wouldn't hear from you until you needed more And he was pretty ot And so eventually I finally said, look, Ellen I'm throwing away Thousands of thousands of dollars of worth of orders every week because I don't have product. Can you please just give me a letter of credit You're getting you're having you have more demand than cann actually. Yes. so much more demand. Yeah. And so finally he said, look, Brian, I have an associate. He's a CPA If he can come into the business and look over your shoulder, I'll invest. So as much as I really disliked this person when I finally met him. My option was to keep the company alive and bring him in or refuse him and the company probably would have folded. So I opted for the you know, the devil that I knew by bringing him in. This is a guy named Chuck, I believe. Chuck Kaiser, yeah So you were constantly bringing in new partners. Switch That's going to create a lot of tension and a lot of challenges. U But keep in mind that The new money D never ever want the old money in the company. So that's why each Iteration was a new version of the business, a new entity was formed and I had to make a deal with the previous investors to pay them back. So I would do promissory notes to pay them back their capital with a little return right so that I could move forward with the bigger financier. Yeah Okay, so One question is and maybe this would just be unrealistic Did you ever entertain the idea of just building your own manufacturing facility in the United States, like the people making ugs in Oregon Because that would have solved maybe some of your problems because then you controlled the production Yes. In fact, it was around about that time that we The owner of the UGH company came to us and said, Look, we're desperate. We're not making any money. This is the company that had sued you That had sued me. Yeah. and the woman who who sued me. she'd been taken out of the business by investors. So it was the investors now I was talking to and they they just wanted desperately to get out of it. So We ended up doing a deal where we purchased the UGHS company And we maintained that factory for a couple of years. So you actually buy the factory and so was that does that become your primary supplier now? Not a primary supplier, but it did ended up making significant Dan into the production for us. ye But again, we still have to then we have to finance the factory. Sure, right And they could make the same exact boot. It looked exactly the same. Yeah. But yeah, you had to finance a factory. So that's also cash that' you got to put out there. And meantime, most of your sales are still in Boutiques shops, small businesses, or are by nineteen ninety one, ninety two, are you starting to get into bigger retailers That's the year where we started to get Traction in the stores. Yeah We were huge in the surf market. then there was the ski side where snowboarding was just starting and I picked up on that vibe very, very early. So we started advertising to the youth snowboarding thing. and ye that worked in the snowboarding industry It took a long time for me to get back east because I didn't know what the kids did sp in the winter and I was talking to a sporting good owner from I think it was Chicago And he rolled his eyes and go, d, they play hockey You know, and being Australian I had no idea of the hockey market And when I looked it up, I went, o my God, this is twice as big as surfing. You know? And so we started man, you know, making our ads for the youth hockey players which were all over you know from Chicago all the way back to Boston. and turned out to be a huge market and the big department stores now are seeing this happen? And so they started calling me to, you know come in and negotiate getting their product into the stores. All right, so this is nineteen ninety two. and I want to put this in perspective and not to sort of discount or diminish what you've done, but you know, you talk about huge markets, your total sales at you were five point eight million dollars. So you were still a very small business. mean Ug was not a nationally known brand at that time become right. And I think You know, the United States smallall Business Aministration considers anything under forty million dollars of small business in the United States. agree that. But the thing is is that you really You know, to go from a a winter boot or a surf boot to a fashion accessory That's a bigger leap. And I guess It's around this time where the guy who originally you originally joined you, Doug Jensen back in nineteen seventy eight. Yeah he's man a picture. he suggests that you actually these boots legs of celebrities, which is hard. You can't just say, hereere's a celebrity, you know, wear this. But he suggests that instead of going to the celebrities, you go to the people who style them, like the makeup artist and the people who dress them, right? Correct. And you send them pairs of the shoes for free. Yes How did you find these stylists Um I found a mailing list of stylists in Hollywood and sent a letter to them And about four hundred people responded And so I sent them all a pair of ug boots, you know, no questions asked. and It was a couple of months before I started seeing them on celebrities, but the biggest thing that came out of that was that I started looking at People magazine and us magazine, bit by bit. the ug boots started showing up over and over again in all of the celebrity magazines So I came up with the the description casual comfort And I said, I want to market Ugs as the ultimate casual comfort footwear So we had the money to hire a PR agency that I was hoping would take this to the market and make it a much more mainstream product. I'd made an appointment with the USA today Fashion editor And By the time we arrived at her office, she double booked and we only had like five minutes to make a pitch I pulled out a little folder that I had full of celebrities One of those photographs was Pamela Anderson on the set of Baywatch and she was in a red swimsuit tall white ug boots And she took the name of the photographer and the name of the the magazine and You know, the next morning on the lifestyle section there was a photograph of Pamela Anderson, You know And the whole internal next page was this exposee on sheepskin and shielding in fashion and I don't know where she got her information from overnight, but she did a tremendous job in creating this category Okay There's another parallel ad campaign that may have been even more successful at least temporarily You guys in nineteen ninety four that year you did eleven million in sales in large part because of a three month ad byy that I I believe cost half a million dollars, which is a huge amount of your budget. on Rush Limbau. Now Rush Limbagh, some young people may not remember was he was like Joe Rogan plus, you know, like the biggest Conservative talk show host. far and away the biggest national audience And he had very successfully sold Snapple. Snapple is an advertiser in a show and really had helped Snapple grow. Yes. And And this is a little controversial because some people might have said, o, it's on Rush Limbau, I don't want to buy this product because I don't agree with his politics So it's a little bit of a risk, right? But he reaches a huge audience. Yeah. I fought that initiative. You fought it. You didn't want it. He was just not a fashion icon. He was a hard right winger and very polarizing Yeah know, we'd spent years building up this image casual comfort and fashion and everything. And so I really fought it. But I was out voted at a board meeting by your partners. They wanted to be on And what was their rationale was Look, you reach just the biggest audience in America. No I think it was much more selfish than that Allen was a Rush Limbgh groupie He wanted to be in the audience in the front row with Rush Limbagh. What do you mean be in the audience? L? Well, he wanted to go to New York and be in a taping of one of the Rush Limbagh shows. So he was excited about it. That was his motivation Yeah half a million dollars. I mean that is a huge amount of your budget. That's five percent just on Rushed Limba for three months. Ridiculously big. Yeah. what happened was that Because the board voted for it, I didn't want to fight them. I said, okay, I'm on the team. right? So I'm going to go there. I'm going to introduce the Ug boots to Rush Limbgh And I said here, try this on. No I don't need to try it on And And I had a bit of a fight with him. and I said, Well, look, if you don't try arin know it's not going to do the advertising and I was bullshitting because I had to make this deal And eventually he tried the m and he goes, Oh my God These are so cutlacked silly So Fast forward, which's now November, I think came on the show Hey, folks, I got you know got some good news to tell you. todayoday we have a new sponsor And it's Ug Boots from California and that second Our switchboard shut down because every broker in the country, every stock broker was calling us saying, Are you guys public? Can we buy stock? Can we becausecause they'd seen what had happened to Snapper And Snapple had gone into the millions to the hundreds of millions and they were wanting to jump on board. so Effectively our switchboard shut down for the entire season. So we had to create new phone numbers and we sent them out the phone numbers to our best retailers and said, you're gonna have to fax the orders in. But in nineteen ninety three, you did nine million sales in nineteen ninety four, which was the Rush Limbaugh ad campaign to do eleven million does. not that much of a boost. So it's interesting because I would have thought when I read about this that it would have really supercharged your business like it did for Snapple. even though his audience was conservative, but you know, these audience is older too. Yeah. I think this was more of a younger product. Yeah. and I'll give you a good example of that. One of my best surf shops was a pretty hardcore surf shop in Homosa Beach in LA said this grandmothers drove into the shop because they had ugs on the big banner outside And she ordered eight pairs for all her grandchildren And she said she'd never heard of the brand before, but Rush Limbgh said she had to do it Right? Yeah. So so we substituted really good fashionistters who love the product for these people who'd never even heard of it Got it. All right, but it doesn't sound like it did any damage. I mean it just It just moved a sideways Yeah. It was just a huge ad spnd. So okay, so you do that you end up the year with eleven million in sales and so You know you get into nineteen ninety five. And even with all this buzz You are worried that you guys are Doomed the same mistakes too much spend I could see it coming so clearly. In fact, the pre season orders that see, you know, for the January, February, March period ed like the company was going to be destined for, you know, eighteen million doars, maybe even twenty million dollars. And most people would be so excited about that I saw this as a kiss of death because you could not finance those orders. I knew I would not be able to finance an extra you know six, five, six, seven million dollars in product. Yeah And there were no real competitors either. There were no knock offs at that point. Not really because the Ug brand was so powerful That anything else was called a fake ug. Like kids would not wear them to school if they didn't have the ug brand on them. And ugs were not cheap No, they were they' they werere up in the hundred dollars range by now, yeah. Wow Okay So you're still concerned about this. I'm just surprised because by nineteen ninety five, you would have thought, okay proven this out It's growing Did you see an end game? D you see an end point? Did you, you know, did you think, okay, we're going to go public, we're going to get acquired? Like did you even was that on your mind Well, I'm gonna open up here. I don't really talk about this so much, but I had a different pressure on me This year Chuck Kaiser had sort of turned out to be a bit of a sociopath and was a very narcissistic person. and He started to create such chaos within the company that I spent most of my time fighting him versus going out and marketing and selling the product And I didn't really want to have to deal with Chuck anymore And so This weird serendipitous thing happened. It was a goosebump moment again, right I was in the baggage claim area at Atlanta Airport. I was going to the Super Show, which was one of the biggest sporting goods shows in the country at the time And wayay up the other end of the hall. I saw a friend of mine. his name was Doug Otto. This is in nineteen ninety five. When you or to the Super Sh L at the very beginning. It was Yeah. I think the show was in January or February And I'm gonna backtrack. you remember When I was in the parking lot at Maliboo selling ug booo out of your Doug was selling sandals out of his car. round about the same time. Okay And he Pled his business into licensing different brands like sururf brands and stuff, and he eventually took on the license for Tiva Sandals. Aha In the very early nineties, the outdoor market took off and TivVa went with that you know, they went from like sixteen million doars to sixty million do. Wow. just through this. And because of that, they did an IPO. and you know, I knew that they were sitting on about twenty five to thirty million dollars in cash when I saw a duget in Atlanta, right And I walked up to him and we high fived each other and because we'd seen each other going in and out of surf shops for like ten years, right we joked about selling out to each other in the past. And I said, Doug, if ever we're going to do it, now's the time That afternoon we had the accountants back in California talking to each other and suggesting meetings to start the due diligence on selling the company. So he was interested in this idea of acquiring you. And because he had this success with TivVa. Yes. His company died every winter company died every summer. because he was selling summer Tivas for the summer. Yeah Tivas were and his company was not called TivVa, right? What was it called? was It was called Deckers Corporation. Okay. So I called up Alan and I said, Alan, we have this opportunity to sell the company. to a really good guy. He's honorable. He's not going to screw us around I'd like to start negotiation or have the accountants start negotiating on one condition Chuck Kaiser is never, ever allowed to speak to anybody in this deal And Alam went along with that Yeah. And it took us, I think from February is when we met in Atlanta. It probably took October, November fininish all the due diligence and have the actual transaction consunummated