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00:02

Hello and welcome to the tattoo business show the best place for actionable advice for entrepreneurs. This is Ted, your friend and host speaking. Now you may recognize today’s guest from Shark Tank. We have my friend Steven session who is joining us to talk about zero shoes, one of the leading barefoot running footwear companies in the market today.

 

 Now Stephen is the co founder of zero shoes and his building a barefoot running empire. When Steven started spinning again at the age of 45. After a 30 year break, he found himself getting injured constantly. One day a friend suggested that he tried running barefoot and Steven never looked back. Stephen quickly put together his own pair of barefoot running sandals and dust zero shoes was born.

 

Today, Stephen is a massive all Americans printer and he’s one of the fastest men above the age of 50 in the United States. Join us Stephen shares about his journey with barefoot running, or he built a community of loyal fans at his Shark Tank story.

 

All these in more of this quick commercial break. Hey, guys is Ted, thank you so much for joining me on my show. And for all the support. If you ever found any value from the show, I would love if you could subscribe to the show, leave a review on Apple podcasts and share the show with somebody who find it useful as well.

 

All episodes Tuesday resources are available on tattooer comm so make sure you log on to tattoo.com That’s tdpo.com. And make sure you sign up for the newsletter if you want to hear updates from me directly. And now let’s dive right in. Hey, Steven, thank you so much for joining us. Today is so nice to have you here.

 

01:28

Thank you. Thank you happy to be here.

 

01:29

Now Steven, let’s have a very simple icebreaker so we can get to know you a bit better. Could you share with us? Who is Stephen session when he isn’t working?

 

01:39

He call that a simple icebreaker.

 

01:41

Shouldn’t it be?

 

01:42

Man? I don’t even I don’t even know how I would begin to answer that question. I can tell you what I’m up to now. But I can’t say anything about who Steven Sashen is.

 

01:53

That’s sure sounds good. Go for it, please.

 

01:56

So the now part I’m I’m co founder and CEO of a company called Zero shoes. It’s x er Oh shoes. And we make footwear, boots, shoes and sandals. So comfortable. So lightweight. We’ve actually had people fall asleep still wearing them, like going to bed still wearing them because they forgot to have them on.

 

Because it’s so comfortable. And yeah, we make shoes for everything from taking a walk to running 100 mile ultra marathons. And the key thing to what we do is we’re doing the opposite of what major shoe companies are doing what shoe companies have been doing for the last 50 years. So we’re making footwear that’s actually designed for human feet.

 

And what that means is a wide toe box for your toes and spread the way they’re supposed to low to the ground for balance and agility. No extra padding or cushioning thin enough so that you’re actually getting the feedback from the ground that your body is looking for. There’s a reason you have 200,000 nerve endings and your souls flexible enough. So you can actually use all the bones and joints in your feet and ankles.

 

There’s a quarter of the bones and joints of your entire body in your feet and ankles. And even more most shoe companies they say they have to you have to replace their running shoes in particular and two to 300 miles. And we have a 5000 mile sole warranty. Well, there’s a huge difference. It’s a big difference. When we when we went when we approached our rubber manufacturer and told them what the performance characteristics that we wanted for the rubber was the guy said, but that’s not how they make rubber for athletic shoes. We said yeah, no joke.

 

That’s why we’re doing it this way. So and I started this company with my wife 12 years ago, almost to the day, and we’ve happily now helped hundreds of 1000s of people around the world. Discover the fun, the comfort and the benefits of getting out of big thick padded motion control shoes and living life feet first.

 

03:33

Uh huh. Very cool. That’s a very cool slogan. No, Steven, before we dive deeper into the company, could you share with us what got you started with barefoot running the first place?

 

03:41

Oh, gosh, 14 years ago, when I was 45. I got back into sprinting after a 30 year break. And for the next two years, I was getting injured pretty much constantly. And one point at about the two year mark, a local World Champion runner suggested that I take off my shoes and run barefoot just to learn what I well just to see what I would discover, frankly. And to make a long story very short, I discovered that I had a form problem that was clearly causing my injuries. And I couldn’t feel it when I was in a regular thick padded motion control shoe.

 

 But barefoot it couldn’t have been more obvious. And more than discovering the problem. I was able to naturally correct the problem. Because when you’re running in bare feet, and I’m not suggesting people do this necessarily, but it’s a lot of fun, actually.

 

 But when you run in bare feet, doing it wrong, having the wrong form hurts and having the right form feels awesome. In fact, you can spot a barefoot runner from 100 yards away they have this weird look on their face called smiling typically. Because it’s just it’s just fun. Yeah, I mean, I’m a competitive sprinter. I run the 100 meters outdoor indoors 50 or 60 meters depending on the track. And I’d never run more than a mile of my own volition and never liked it until I took off my shoes that first barefoot run that I did.

 

I was so entranced with the experience of just Feeling the ground with different surfaces. We’re running on grass and trails and rocky surfaces and roads and everything in between. And just I kept experimenting with my gait, running faster, running slower running at the same speed and moving my legs faster or slower landing on different parts of my feet. And at the end of this, I turned to someone who had a GPS watch on.

 

And I said, How far was that. And she said, that was a little over 5k. It’s like, Sorry, what I mean is, and I could have kept going with a group. And we just decided to stop at that point. So anyway, that’s the intro.

 

But the transition was I wanted that natural movement experience as much as I could get it because it was clearly beneficial. And I made a pair of sandals the way humans started making sandals 10,000 years ago. So just something to protect my foot some rubber that I got from a shoe repair place, something to hold that on some cord that I got from Home Depot.

 

And that was it. It was that way I didn’t have to argue about whether it was legal to be barefoot in a restaurant or a grocery store, which by the way it is I made shoes for myself for my wife, a couple other runners, they told two friends and they told two friends and at about the 60 pair mark, a guy says, he says to me, I’m writing a book on barefoot running. And if you treated the sandal making hobby, like a business and had a website, I could put in the book. And so I I’ve been an internet marketer since like 1992.

 

So I rushed home, I pitched this brilliant opportunity to my wife, I built hundreds of websites, it’ll be easy for me to do this one. So how did your wife take it? She was not happy. She said this is a horrible idea won’t make any money. It’s a distraction from what we actually need to do to make a living. So do not do this. And I promised her I wouldn’t.

 

Okay. And then after she went to bed, I built a website. And here and and here we are. Well, it is sometimes what husbands tend to do. Yeah, exactly. Well, so typical husband to do. And I guess I am one Well, I would

 

06:45

say fortunately. So in this case. Now Steven, could you share with us a little bit more about the process that you underwent when you’re prototyping the shoe itself? If I understand correctly, you she had no prior experience in footwear manufacturing, was it really as easy as you describe it just now?

 

06:57

Well, it actually was easy at first because what we were selling was a do it yourself sandal making kit. So we were buying big sheets of rubber cutting them into small sheets of rubber buying long stretches of cord cutting into smaller stretches, and then selling that with instructions on how to make a sandal

 

based on this 10,000 year old design idea. When we moved into close to well, actually from there, what happened was, people would say, Hey, I love this idea of what you’re doing. But I’m not going to make my own sandals. So we had to come up with a way to do a ready to wear version of the same idea. And I I spent about $6,000 working with an engineer to develop a what’s the word I’m looking for, basically a piece of hardware to handle the lacing system that was required to hold the sandal on your foot comfortably.

 

And then after we finished making it and I tried it for the first time, it didn’t work at all. So I learned instantly that I had overlooked one fundamental concept that was screamingly obvious, but not until after the fact. So that was you know, the first lesson. And then from there, people would say, hey, that’s great. I love the sandal. But I need something for the winter for work. And so that’s when we started moving into close toed shoes.

 

 And I guess the best way I can say something about the footwear world is seven months into running the business seven or eight months in. We had met some guys who had all started at Reebok 35 years earlier. And they were sitting at our kitchen table with us. Yeah, talking about how to run the business. And they said, Look, we believe in you,

 

you Elena, and we believe in what you’re doing natural movement is hugely important. And we would help you start this business. But we’ve been in the footwear business for so long that we’re not stupid enough to try and start a shoe company.

 

08:38

And we did anyway. So it’s too late. It’s

 

08:40

well, it’s really, you know, we said, look, we’re hyper optimistic and naive. That’s the way anything ever gets done. So, but we had no idea how difficult it actually is to make footwear and to make it well and make it consistently. And to be honest, every company continues to get it wrong for their entire career,

 

if you will, the entire lifespan of the company, something always goes wrong at a certain point if you’re developing something new, and we had that happen as well. So we just learned along the way, you know, I’ll say it this way. One day Leyna came in, she was kind of upset. And she said I feel like I don’t know what I’m doing. And I said nobody knows what we’re doing because no one’s ever done it before.

 

And anyone who’s honest, as an entrepreneur doesn’t know what they’re doing on a daily basis. The job isn’t to know in advance. The job is to figure out what you don’t know and then learn it and apply it as quickly as you can. And she said oh, well I can do that. Oh, yeah, no.

 

09:32

Huh? Why sweet Steven. Now let’s take a step back. I understand that the first product you sold is actually a DIY circuit. My research is accurate. You actually sold it for about three years before you moved on to readymade sandals itself. But could you share with us what was the first three years of the company like for you?

 

09:47

We were lucky in that we were able to grow organically. One of the challenges we had early on, ironically, is that we couldn’t do any paid advertising. And the reason is that in 2000, late 2009 2010 The idea of being barefoot running and minimalist running came up got very big in part because of the popularity of a book called Born to Run by Chris McDougall.

 

And some research from Harvard’s Dr. Daniel Lieberman, showing how when you run in regular shoes, you actually send a spike of force right up through your joints, mostly into your knee. And if you take off those shoes, that spike of force goes away. That’s what causes the wear and tear. So, but we couldn’t get paid advertising because the big shoe companies were terrified, they were never going to sell another shoe again.

 

And they wanted to capture this barefoot market and convince them that you couldn’t run barefoot because if you did, you’d step on hypodermic needles or get Ebola, or your kids wouldn’t get into college or you know, your car would fall break apart. They were making things up. And clicks were going for like $3, a pop, and even more in it. Because barefoot running was getting popular internet marketers were selling courses on how to make money doing AdSense arbitrage, which I’ll explain it really quickly.

 

For people who don’t know, they were running ads on Google using AdWords, driving them to a website where they had AdSense ads, and then people would click on those ads, and they’d make money. So it’s an arbitrage play, you pay less money for the the original ad, then you’re making off the Click when people come to your website. And, and the clicks were so expensive, that we couldn’t afford to advertise, we had a $20 product, we couldn’t pay 234 dollars a click. So that was obstacle number one, obstacle number two, was just inventory. We were growing really, really fast. We were using this one particular material from the company Vibram that makes us whole material. And one day, we call them about getting a wholesale account. And they said, Well, it’s a $15,000 minimum order. And we didn’t have $15,000 at that time.

 

This, they said don’t worry about it, we just ordered 3000 sheets of this rubber from the manufacturer. And we said we’re worried because we just ordered 6000 sheets from our distributor. So we knew that we were suddenly vulnerable to someone else’s manufacturing schedule. And that’s when we decided to make our own product. And then finding a way to do that was a big challenge. And just managing the

 

growth. I mean, we were growing really fast from day one. And and I think Lina would say the biggest challenge, the biggest obstacle was when the business just took over our house. I mean, you know, we started in the corner on the floor of a corner. So two sort of days before she moved into a warehouse. Well, not even that I mean, just to get out of the house, we started on the in the corner of a floor of a

 

spare bedroom, we had a debate about in a conversation about whether we should even buy a folding table to get things off the floor. And then another debate about whether we should buy another folding table. And, and eventually, we had inventory that filled the entire garage, we had a customer service manager and our dining room table, we had fulfillment handled coming out of the living room Leyna had an office,

 

I had an office, we had more materials and every spare room in the house. It just got overwhelming. And then we moved into an office and the day we moved in, we realized it wasn’t big enough to handle the growth. And that happened repeatedly.

 

12:58

It was clear the company itself clearly had a life of its own and quickly overwhelmed. You know, Steven, one of the earlier points that you made was that you couldn’t afford paid advertisements. So how did you grow your customer base and sales back then was it purely word of mouth?

 

13:10

Well, the word of mouth was a big part of it, what we would see from day one is the person interested in barefoot running, the family would order one of our sandal kits. And then a week later, we’d see an order clearly for the rest of the family who were not runners or anything they just liked the look and feel or the fun.

 

Yeah, of making your own shoes. I call it that you develop the superpower of knowing how to make footwear, because it’s really simple. And once you we’ve had people say once I discovered I could make my own footwear, it opened my eyes to other things I could do. I started repairing things around my house as sort of building things. It just really you know, change their idea because footwear seems like such a big deal.

 

But again, some that to protect your foot something to hold the protection on your foot, maybe some insulation, that’s really all footwear is. So So Part one was just the organic part. Part Two was a friend of mine had a great line is a guy named Patrick Anderson, he said making money is easy, figure out where the money is flowing and get in the way of it. And so that usually means advertise that usually means find a way to help other companies advertise.

 

That’s an easy one. But in this case, another version of that is find out where the conversations about what you’re doing, are already happening and get involved in the conversation.

 

Now I don’t mean get involved by jumping in and trying to sell I mean, literally get into the conversation, man, it’s about contributing to the community itself as well. Right, exactly. Find the community become part of the community and offer something of value. So what I did is I made videos showing how to rip off my entire business. I showed how we were getting materials where we’re getting materials, how to make the sandals.

 

And this is this is a phrase someone came up with called moving the free line. So if you have a line where there’s below it is what you give away for free and above is what you charge, move that line higher and higher, give away what you would normally charge for. And so I literally had videos showing how to run my entire business and it didn’t Well,

 

some people then tried to copy my business, but by then it was too late. We were much bigger than they were. But the gist is, I gave, I gave it all away. And that not only gave people the ability to become experienced with what we’re doing or get introduced to what we’re doing, but of course, know like, and trust us. And

 

15:16

I see this really created a lot of trust and goodwill with the community as well correct.

 

15:19

And then they could buy the materials from us easier and less expensively than trying to do it on their own. So that was how it began. And then also, just with those videos, I was an I’ve been an SEO guy, since 1992. I was one of the first guys to figure out that in 9090 90, to 93, all you had to do for SEO is keyword stuff, words, in white text at the bottom of your page and hide it behind a white background, really simple.

 

The very early days, ah, those are the days. But so I did. So I did a lot of SEO things as well, I created. I wrote articles and had those syndicated. I took all those videos and syndicated those on every video platform there was for a period of time in 2010. If you search for barefoot running, or barefoot running sandals, or almost any keyword I cared about, I had at least 30 often more than 40 of the top 50 results for those keywords.

 

16:14

Thanks for sharing, Stephen and I can see that everything that you have done has really paid off in the long run because it’s really built a lot of goodwill and trust between you and your community itself. So guys, no matter what industry you’re in is very important that you actually decide which communities that you want to be a part of and to contribute to them just like Steven did. It’s important to build a goodwill interest because your community will become your customers and they will be your best advocates for your company and products. So Stephen after the early days of selling DIY sandal kits, you actually moved on eventually to produce ready made Sandoz. I assume that during this transition process, you needed to find a good manufacturing partner. What was the process like?

 

16:48

Well, again, we lucked out and met these guys who had all started at Reebok, we met them socially. I’m met, I met someone friend of a friend whose family had been in the footwear industry for 40 years. And so the guys who came around our kitchen table the way we met them as they were coming to Colorado to pitch a product they were developing that they wanted to license to this family friend that we met who had whose whole family’s in the footwear business.

 

And so we got introduced to them. And they introduced us to our first manufactured rubber manufacturer in Korea, the problem we ran into is that the Rubber Manufacturers, they were making outsoles, they’re making this that bottom part of the shoe that gets glued on to other parts of the shoe. And that outsole was essentially our entire product. And they didn’t care about quality control because they didn’t need to.

 

And when we asked them to pay more attention to quality, they basically kicked us out of Korea homes price. So that was problematic. And then it was really, there was a lucky thing. And a thing that I don’t even know what happened.

 

The lucky part was around the time we were getting kicked out of Korea. And I say that I’m not being hyperbolic when I say that when we when we got fired by this factory, because we asked them to have better quality control. And we started calling other factories in Korea, they would say oh, no, no, we’ve already heard about, you know, thanks. So and we were you know, it sounds

 

18:11

like to have a very tight knit industry in South Korea very, very tight and maybe a bit perfectionistic as well.

 

18:16

Well, you know, we were a small company. And we’re really demanding because we didn’t know we didn’t have the right to be at that time. So but at that time, we lucked out, there was a footwear magazine that had a feature article about an organization in New York, who helped American companies get overseas manufacturing.

 

And so we call that organization. And they interviewed us for a while I flew out to New York to meet with them. They said, Well, we’re going to do some due diligence, and we’ll get back to you. Here’s the part that I don’t know. I know that they called a lot of people in the industry, who knew who we were, we were a tiny little company, selling it, do it yourself sample kit. And somehow for some reason, all of these people vouched for us, and they said,

 

Yeah, you should work with these guys. They’re really they’re really going somewhere. They’re really, you know, they’re they have high integrity, they know what they’re doing. I mean, they said wonderful things about us, much to my surprise, and not that I disagree, but it was like, you know, we were tight. We’re kids, we were babies.

 

So anyway, we we worked with them. And we’ve been working with them ever since. And they their job was to be the interface between us and the various factories that we would need to make things happen. So we’ve been very, very lucky to work with that organization for, oh, gosh, nine years now, I think, oh, this

 

19:31

sounds like a great partnership. And I guess the goodwill and trust that you were building with the community earlier on may have actually spilled into the manufacturers as well, which is why they probably vouched for you. Now Steven, since we’re talking about the topic of manufacturing, I think a very important point to discuss a bit further would actually be the idea of quality control. Now that you’re working with this third party organization and with manufacturers that I assume are overseas, how do you actually ensure the quality of your products when you’re not physically there at all?

 

19:57

The idea that we have control is hysterically funny. To me, we don’t. So we again, this agent that we work with, it’s their job to manage the factories. And between you and me and them, they have not done a great job of it. So we’ve had, we’ve had minor problems almost with every production run we do. And then last year, during, during, and because of COVID,

 

we had some major production problems, and what we’ve, what we’ve had to do, and well, we, we hired someone in China, to help with a lot of the commercialization to help with a lot of the making sure that we knew where the components were coming from, that they weren’t being substituted for other things that they were being handled correctly.

 

But we didn’t have somebody in the factory, the days they were manufacturers, making sure correctly, we didn’t have eyes on the line. We do now. Because the problems that we had last year were so significant that we insisted, and we and the there was kind of pushback, because the agent that we work with they they need the factories to feel like the agency is in control. And there’s not they need to know the one person that they can talk to, to get a yes or know about whether they should proceed. And they didn’t want too many voices in there.

 

So we found a way to navigate that so that it’s easy and clean for everybody. No one’s stepping on people’s toes. And now we’re finally able to manage the the QC process with much greater accuracy. Stephen,

 

21:30

by no means are you the first entrepreneur who I’ve met, who has shared about the importance of having a person down the ground to eyeball the whole manufacturing process, especially when you’re manufacturing overseas, you need somebody that you can trust to represent you and your company to be there. That person needs to make sure that no corners are cut, that the right materials to use and to ultimately make sure that the product meets the standards that you paid for before the product even leaves the factory and is shipped to your doorstep.

 

21:55

Well there there are two reasons. One is that and in fact, a story that I heard that I found interesting was when Reebok when Reebok USA was manufacturing in China, the the president of Reebok USA said to the guys in charge of developing the products in manufacturing said why do we have an entire team in America doing this,

 

and then an exact mirror of that team in China. And the guys in America said, because that’s the only way you can get it, right? Because you need to make sure that you’re all speaking the same language. And I mean that metaphorically, of course. But you need someone, you need to make sure that things aren’t getting lost in translation. And more. There’s another thing. And and I want to say this, I’m trying to think of the right way to say this. This is not a criticism, what I’m about to say.

 

In fact, it’s it’s a reason that China has a tremendous advantage in business and manufacturing over America. Chinese businesses manufacturers, in particular, they view their job is one of their jobs is to find a way to save a couple of cents here and there by making little changes to things that you didn’t specify, so that they can make more money. So they can give you the price that you want. But they can get a little more margin by making little changes to things that you did not specify. And there’s always something that you did not think to specify.

 

Now again, I’m not trying to be critical. This is a very clever way of viewing the world as a manufacturer, it’s just that Americans aren’t used to that. And Americans think that everyone has a similar idea about trying to make, you know, the highest quality, whatever, which is, of course comical, because if you get things made in America, you have the same problems with quality control.

 

So it’s an it’s an illusion, the difference is that you can yell at people in America for making changes to your specs. And they’ll understand why you’re mad at them. And if you yell at people in Asia, about changing the specs, they go, W

 

hy are you mad, that’s the way you do business. So and it literally is a viable way of viewing the world as a manufacturer. And Americans think that the way the best way to view the world is the American way. And I would say that that’s not actually

 

24:00

true, Steve, and I can totally relate because it happened to me as well, I still run an E commerce business. And what happened to me was the samples that my manufacturer to produce for me, did not meet the actual product that we actually made in bulk. And for me, I found this out when I actually

 

physically went down to the factory in China. Now the idea back then was to just go down to the factory, understand the manufacturing process and meet the manufacturer to establish longer term relationships. So when I arrived, the production round was completed. And when I inspected the production person, my gosh, it was completely not what I paid for. Now there was an obvious substitution of the steel component that was used in the product itself. And they denied it right to my face. But it was very obvious to me that the product looked different, and they perform differently as well.

 

So the whole visit became an issue of confrontational negotiation if I can say that we but after the incident, they know that I actually was aware of what I was looking for and looking out for. And I think they gave me a lot more respect for that. And the issue never really repeated itself again, but I think the story itself shares the importance of having somebody down on the ground and eyeballing that manufacturing process because I think, you know, it’s sad to say that you can’t really free trust your manufacturer sometimes? Oh, absolutely. When I confronted the manufacturers in the factory itself differently said, you caught me.

 

25:07

And if you if you catch them, yeah, and they’re not really upset, they feel it’s a game, it’s like their job is to try to change it. Yes, it is. And your job is to try to find it, if you find it, they actually respect you more, because they know you’re paying attention. They know, you know what

 

25:21

you’re talking about in terms of the product you want. Exactly, exactly. So the whole process taught me a lot.

 

25:26

There’s there’s a book called poorly made in China, that talks about it’s from the manufacturing agent and talks about all these these ways that manufacturing is so different there than it is here. And you’re left realizing it’s a fascinating book, because you really start to understand how a group of people can think and see the world in a completely different way than you do. And it’s completely logically internally consistent.

 

And then you have to weigh them against each other to see which one is more valuable for what you’re doing. And by the way, when people say, Well, you should manufacture somewhere other than China, a, it’s literally not possible for what we do. And B, it wouldn’t make a difference. Because all I can tell you in the footwear world, when people leave and go to other places. First of all, all the materials still come from China, that’s where the supply chain is,

 

and, and the sophistication doesn’t exist in other places. And you get the same problems. Everywhere you go, including America, here’s a quick story. We’ve been trying to manufacture one of our products in the States, and we’ve been working with a rubber manufacturer, to get just to get the rubber manufactured correctly to get it designed correctly. They’ve done the same things, they injected components that change the material to change the quality of the material without telling us okay, I mean, they do it wrong over and over and over. And it’s

 

26:39

we literally you to catch them every single time.

 

26:41

Yeah, it took us it took us three weeks to do it the first time, when we did it in Asia, we’ve been working with this company for three years, and they haven’t been able to do it correctly. And this is one of the top Rubber Manufacturers in America. So again, you know, people like to think that if there’s a problem somewhere, you just move somewhere else in America is the best. And all I can tell you is in this world. That’s completely not the case.

 

27:01

And I think the frustrating part is that is that issue of the time is required to produce a sample and a production run itself. So every time you find an issue that has to be rectified, you have to repeat it, we

 

27:11

all have a guess why we were we were going to work with our factories and work with the agents in China for four or five times a year. It’s just to speed up that process. And the last thing when when we met with those guys from Reebok

 

at our kitchen table, they made a comment about how they had a five that they were out of the business. Mostly, they were just doing consulting, and they said they had a they had a $5,000 a month FedEx bill. And we thought that was ridiculous. Now we would kill for a $5,000 month FedEx bill.

 

27:38

Oh, man. Okay, Stephen sources, we’re on the topic of lead time, perhaps you could share some stories on the issues you had managing your lead time, and whether there’s any advice they could share with another entrepreneur and how they can manage this better. If any, you know, the advice

 

27:51

I would give is get over the idea that you’ll be able to solve that problem. I mean, it’s going to happen. If it doesn’t, it’ll, it’ll happen multiple, multiple times in your career. Even when you have things down perfectly, something’s going to happen.

 

So look, the obvious thing that happened in the last two years, or well, two, three years really, first, when the trade war kicked in, that made a big difference. And we had there was there was a lot of companies because of the trade war, accelerating their production, because they wanted to get materials in production before tariff rates went up before the import duty tax went up.

 

So we had, we were at the front of the line to get things manufactured for our fall product. And then a multi billion dollar company said to the factories, cuz they used the same factories we do. They said, No, we need to be at the front of the line,

 

so that we can get all our product before the tariffs go up. And it moved us to the back of the line. And as a result, we lost three months worth of selling because we couldn’t get product. And then COVID same basic idea. And actually, there was two parts of the problem.

 

 One was getting manufacturing done. And the other is so many people were importing, to try to get things under the tariff that the Port of Long Beach got backed up, and we couldn’t get things from the port. And then here’s a crazy one. So we’re outside of Denver, Colorado, we had we finally got things from California to Denver.

 

And and in the last year, they couldn’t find enough trucks, or actually chassis so they couldn’t find the part they put the container on to move our material. Two miles from the loading facility to our warehouse. We said, can we just come pick it up ourselves? They said no. So we just like open the container and pull things out. They said no. So we had stuff sitting miles away that we couldn’t get to for almost two months. So

 

29:38

there must have been so agonizing. Yes, one way

 

29:41

of putting it. So you know, and another thing that that will that will affect it is our problem or our cause is if we discover something at the last minute, that is problematic and we need to make a change. And that puts a wrinkle in everything as well.

 

So there’s going to be problems where you discover problem and you need to make the change. Because if you put out a product with a problem that will kill you. And so that can get in the way of getting things done in time. And then the manufacturing process itself, and just the lead time for materials and making sure the materials get made, and then getting things on a boat or on a plane, we had to fly things in this year 2021.

 

Because, again, thanks to COVID, and all the supply chain issues around the world, we had our best selling products, we were out of stock for three months, and we spent a lot of money to put things on an airplane, just so we had something to sell, we weren’t even going to make a profit on it practically. But we needed to sell something to keep it to stay in business and to keep our customer base growing. And I know there’s going to be other issues as well.

 

There are so many from from the moment you place the order to the moment you’re selling actually to the moment a customer receives the product, there are so many things that could go wrong, something inevitably will. And part of your job, our job, I guess, as people running this company and for any entrepreneur is just figuring out how to deal with that.

 

Because you’re never it’s never going to be perfect. Or if it is once you’ll be spoiled and expect that it will be again, and it will be so

 

31:15

I guess you know, all we can do is to try to expect the unexpected. Now, Steven, we are in the fourth quarter of the year and we are building up to it’s the holiday season. Is this typically a busy time for your company? Well, it’s

 

31:25

actually not for us. And the reason is twofold. One, we a big chunk of our business is sandals. And so not surprisingly, not a lot of people buy sandals in the fourth quarter.

 

So for us the the most fine we do is between April and September. And the other reason is that up until last year, we didn’t really have winter friendly products. And so last year was the first year we did. And in fact, they were so popular, we sold out of them by the middle of October.

 

So we had no idea what q4 was going to be and we’re just starting to experience that now. So we don’t the only the biggest thing we have to do to ramp up for q4 is we know we’re going to have a holiday sale just to clear out some inventory where we’re updating the product or anything that’s a slow moving style that we want to move out.

 

And when we have that sale, our email list is very, very responsive. And we get between five and 10 times the order volume that we normally get. So the biggest thing we had to do is make sure the warehouse was ready to handle that kind of volume. And with COVID.

 

That’s challenging, because we’ve had some people who’ve gotten ill and been out or people who had family members who’ve gotten ill. So it’s it’s really, it’s still evolving. Let’s say

 

32:46

my see. Now, Steven, you are in an inventory heavy business. So when you first started scaling up a business, you must have had to invest a lot of capital into the manufacturing processes. Well, now I’m actually aware that you did take a few loans to get the whole process started, including a $2.3 million loan from JP Morgan itself.

 

Could you share this process with us? What were you going through back then?

 

33:06

Well, that’d be more a question for my wife. She’s the operations finance person on the product marketing, visionary person. But I am not unfamiliar with what happened. At first, we were maxing out all my credit cards. So I had amassed a pretty large amount of credit. Wow, that’s a very dangerous game to play.

 

Yeah, very typical, a lot, a lot of credit 0%. So we use that for quite a long time. early on. We we got very, very lucky. And we met someone at a party at a friend’s birthday party who happen to have he was running a family office that most of their investments were in real estate backed cash flow business, like car washes, parking lots, lawn laundromats, etc. But at the party, we were talking about that. And they said, Well, you know, we save a little bit of money for high fliers, things that are not in that category.

 

And I said Oh, so you’re an esteemed holiday investor and Nassim Taleb wrote the book Fooled By Randomness and the Black Swan. And one of his things is, you know, take 85% of your money and keep it in something stable, and go for broke with that. 15%. And they were surprised that we knew who Nassim Taleb was. And, and that’s because Leanne and I had been day traders in the past. But so that started a conversation. They liked what we were doing.

 

They gave us a line of credit it, it was pulling teeth to get it because the other people in on their board who had to sign off on it did not understand why they would invest in us. But what started out as $100,000 line of credit over time, as we continue to demonstrate that our company was growing and we were paying them back it turned into a million and a half. So that was helpful along the way. We got a Small Business Administration loan again.

 

Luckily, because we were working with a frankly we were working with somebody at a large bank, who hoped they would get our business when and if we sold our company. And so they were trying to do us favors and they really pushed through to get us this Back small business loan. So that was that I don’t even remember how big that was not insignificant. And then as you mentioned, we eventually got this loan from JPMorgan Chase. And similarly, the bankers that we were working with really believed in us, and pushed it through hard.

 

And so that was a $2.3 million loan, which the the hardest I think I’ve ever laughed in my life was when I signed that I was agreeing to personally repay that loan if we defaulted, because that I thought that was hysterical. We didn’t own anything, we had no assets, it’s like, okay, yeah, I’m agreeing to pay this back. That’ll happen. So, so we got that money. We’ve also gotten lines of credit from like UPS was starting to do a logistics business shipping from overseas and managing the entire logistics process.

 

So to help bring in customers, they gave us a line of credit, which came in very handy. laners job, fundamentally, has been finding ways to raise money and manage the fact that we were growing so quickly and needed so much more inventory. And most lenders lend based on historical data. And we needed to find people who were who believed in what we’re going to do moving forward. And they never did. So we’ve run out of inventory every year, because we didn’t have enough money to buy enough to fuel the growth that we were experiencing.

 

And then last but not least, last December, we took on a private equity partner in a minority position. And the biggest reason we did it was because it was going to give us enough cash that we could could expand the business, we could hire people at a higher level at more market rates. We could buy more inventory, we could manage these ups and downs.

 

And it was a good thing that we did. Because right after we closed that deal is when the second wave of COVID kicked in, the porch got even more backed up, the supply chain really slowed down. And if it weren’t for their the funding that we got from them, we would not have been able to survive that.

 

36:56

Steven, you mentioned every year the battery runs out, was this a signal to the financial institutions that that is demand for the product itself?

 

37:02

No, they didn’t care. They totally didn’t care. In fact, no, they didn’t care. And because you know, they’re just checking boxes, they don’t, you know, we were lucky with the SBA loan in the original JPMorgan Chase loan is we did find people who did believe in us and kind of pushed through things a little harder in ways that they normally couldn’t. But eventually you get the the deal gets to an underwriter who’s just checking boxes.

 

And so they didn’t really care about the growth. And here’s the one that really shocked us. I guess they just wanted to be paid. Yeah. And in. So April ready for COVID happened, we had a lot of inventory that our wholesale accounts decided not to take, because they didn’t know if they were gonna stay in business. And so we decided to sell all of that product at wholesale prices, because we needed to get rid of it. Because otherwise we wouldn’t have been able to grow the way we were planning on growing. And we converted so much inventory into cash,

 

that we were saying to the banks, you have no inventory risk. If there’s a problem, we just sell everything at half price, and we will make so much more money than what this loan is. You’re totally safe. We, the banks, basically their opinion is if you go bankrupt, they don’t know how to sell your inventory. And we said it doesn’t matter if we go bankrupt, we can sell the inventory. And they just didn’t understand that they don’t they they don’t to this day, most most lenders don’t understand direct to consumer online businesses.

 

38:20

Well, I guess its financials, they don’t understand what it means to be self and they probably just don’t understand the business as well.

 

They have no idea. No, Steven zero shoes is very well known for having appeared on Shark Tank and walking away for an offer from Kevin O’Leary himself. Now, could you share with us what the process was like building up to what’s the pitch itself,

 

38:38

the first thing is applying to get on the show and funny story. So we sent in our application, which they take applications, typically starting in March or April. And we I sent them an email. They also had live events, I was preparing to go to one of the live events to pitch live as well.

 

And then the week before that live event, they called us and interviewed us about being on the show. At the end of the interview, they said hey, we like what you’ve done.

 

Can you send us a video? That a five minute video that answers these 400 questions it was impossible to do. And I said this on a Thursday, and I said no problem. We’ll have it to you on Monday. Now unbeknownst to me, my wife was planning a surprise 50th birthday party for me on Saturday. So she was panicked. And I didn’t know. So the party went off without a hitch. I was totally surprised. And then on Sunday, we record this video we sent it in.

 

They said we had to also send an application that you have to hand write all the answers to the application. It’s a giant essay, and you can’t read my writing or Elena’s writing at all. So we typed out our answers and then found someone on Craigslist that we paid to handwrite in the forums. Oh gosh.

 

39:48

That’s brilliant. So we sent that off. Then they sent us back a contract that is completely one sided and totally onerous. And you fill out the contract. You can’t debate it. You can’t argue you can’t ask them To change anything, if you do, they’ll, they will take you. So you’re giving away your life for the next few years. We we sent in the contract, they said, We want you on the show.

 

And then you work with two producers to craft the pitch that first 60 to 90 seconds. And we just went out and to talk about how you’re going to be on the show. And we that’s what we worked on for the next couple of months, there was a period of time, where I think Lina and I didn’t say a word to each other other than our pitch, just we wanted to get it down.

 

And we also when you Shark Tank is a weird thing, because you have to say how much you’re offering and what you’re asking for. At the same time. Normally, that doesn’t happen. So you need to craft your asking your offer, because you know the sharks are gonna want to negotiate down. You can’t offer them too little because then they think you’re not serious. So you know, it’s a, you got to find that right medium. And we did that by interviewing bankers, investment bankers, venture capitalists, private equity firms, people who bought shoe companies, people who sold shoe companies,

 

and we had a range of valuations, between 2 million and 10 million depending on who we talked to, and whether they valued growth or not. So that’s what we use to craft our Ask an offer, we were asking for 400,000 for 8%. So as a $5 million valuation, I was willing to get talked down to two and a half. It didn’t go that far, by coming over close. But the thing that it did that was so valuable, is that up until that point, because we taped the show two and a half years into the business.

 

And up until that point, it was still a lifestyle business. I said Elena wouldn’t be nice to have a little business that made a couple 100 grand a year and only took an hour to a day and she was less we have said yet to get I can’t stay that way, though. So it, it really helped us get clear about what we wanted to do with the business for ourselves, and understand the value that we provide to our customers.

 

And how important that was for us to try to change the world, frankly, and give more people the experience that we’ve been having. Lena says there’s enough shoe companies in the world, there’s no reason to start one other another one, unless what you’re doing changes people’s lives. And happily, that’s what people keep telling us, we’re able to do not by anything special that we’re doing other than getting out of the way, and letting people’s bodies do what’s natural.

 

So the prep was just everything about the moment we finished saying, you know, sharks, what do you think, or whatever that line is. And then we also read all the autobiographies of each of the sharks, so we understood who they were and what was going on for them. And we watched every episode, we watched every episode of Shark Tank on YouTube, we watched every episode of the Canadian version called Dragon’s Den, and the UK version called Dragon’s Den. We didn’t watch the Japanese version, because we wasn’t translated. But we just and we also rehearsed, we had entrepreneurs and people who were CEOs of other companies, and bankers grill us as if they were the sharks, and learn how to learn about the questions we didn’t know the answers to.

 

And, and there’s one last part. And we didn’t have to learn to do this, because this is just something that I do, which is you have to if you’re gonna be on the show, or if you’re frankly, if you’re just pitching to anybody, you have to learn to be non defensive. And that’s an impossible way of saying it. What you need to be able to do is when someone criticizes you, you need to be able to look inside, and find out if there’s one of two things going on either it’s just factually inaccurate.

 

And then you can just say, Oh, well, that doesn’t seem to be accurate. Or there’s some literal or metaphorical way that they’re, that it’s true. And you just, frankly, wish that it weren’t or didn’t like it. So if someone says you don’t know anything about business, you can say, Yeah, I think that too, sometimes. What do you suggest, you have to be able to meet them with the truth, without being afraid of telling the truth, and what you think it’ll make you look like,

 

because the worst thing someone’s gonna say, is probably something that you either literally or metaphorically believe now or in the past. You know, it’s like, you don’t know anything about business? Well, maybe you’re thinking you know about business. But that’s because of your last business that did well, in this one, you’re making shit up.

 

 You’re learning something new every day. And so, you know, I can go for the metaphorical version of I don’t know what if someone said to me, you know, nothing about marketing, where now I’m a really, really good marketer. I’ve been doing this for a long time. But if they said that, to me, I would say, I totally agree with you.

 

Because here’s the one thing I know, as a marketer, I have no idea if some new initiative that I’m working on is going to be successful or not. I have no clue. And that could easily be looked at as stupid. So because I’m stupid in that way, I can’t predict the future. The only thing I do is make sure I can handle the risk of being wrong.

 

44:48

I see. Now Steven, you eventually walked away from the offer from Kevin O’Leary. Was there ever a time when you thought to yourself maybe this could have been a mistake? No,

 

44:56

we know we we were very, very clear going in what our range for yes and no was. And so the moment it was done, that was it. I mean, we were, we were surprised, we were a little disappointed because we thought we knew Mark Cuban understood the minimalist world, but he actually misunderstood it. He thought it was a fad.

 

We knew that Robert was a runner, which actually wasn’t totally true. He used to be a runner. And he hadn’t done a lot of running. We were hoping he knew who we were because we had some very popular YouTube videos. At that time. We knew Damon was interested in footwear and apparel, so but our offer was too rich for him. We knew Barbara actually was the only shark at that time who worked with the company she invested in, and she’s a brilliant marketer. So we thought she’d be into it. But she hated me.

 

Because I reminded her of her ex husband, apparently. Yeah. So yeah, so it went. And we thought that Kevin would have no interest in us at all. So it was the exact opposite of what we imagined, which was surprising. And but, but No, we never looked back.

 

45:56

Now, Stephen, what advice would you give to another entrepreneur who’s going into the shark tank to make a pitch as well

 

46:00

know your numbers inside out backwards, left and right. Do not apologize for any of them. And again, if they criticize you find, you know, as quickly as you can look inside to find a way that you can agree, I’ll give you a quick story about that. I was I was consulting for someone who was going to be on the show. And he had a nutritional supplement company.

 

He was he just graduated college. And of course, the supplement, you can’t protect it because all the ingredients are just on the back of the bottle. It’s easy to reproduce. And I said, so look, they’re going to eat you alive. I mean, bottom line, you don’t know anything about business, you have sold very few products, you don’t know what you’re doing. So here’s what you do. For every criticism, you have to find some way of saying some variation of the following thing. You’re absolutely right. I’m just a guy who in his last year of college,

 

when he should have been out partying every night, instead developed a product that helps solve a problem for me, my family, and six and a half other six and a half million other people in America. And I’m here because I don’t know that and I need your help to help those people. If you just say that and make sure people know how to find your website, you’ll be a millionaire

 

47:07

man, Stephen does a very good way to actually handle the pitch itself. Thanks for the advice. Now, Steven, you have also been very vocal about the disagreements that you have with the bigger shoe companies,

 

Could I trouble you to vocalize your views here for the listeners as well. And on that note, maybe you could share with us why you think these bigger companies have not mainly entered the barefoot running space as well. Yes,

 

47:26

some of them tried and backed out because they couldn’t tell two separate stories. One is a minimalist shoe with very little protective features. And then other shoes with lots of, quote, protective features. We’ve had the CEOs of two multi billion dollar footwear brands and a senior vice president at a third say directly to a friend of ours. This whole natural moving things that zero she’s doing is legitimate, it’s real. We just can’t do it. Because if we did, it would be admitting that everything else we’ve said for the last 50 years is a lie.

 

Oh, interesting. So the easiest thing I can say, is a quote Dr. Irene Davis from Harvard, who said I was on a panel discussion with a guy from Brooks and the guy from Adidas. And she said look in the 60s, we are running in thin soled running shoes, we were playing basketball and Chuck Taylors. We weren’t seeing the number of injuries or the severity of injuries or the kind of injuries we’re seeing now.

 

So what problem were you trying to solve? And why didn’t it work? And they had no answer. And in fact, if you look in the medical literature, prior to 1970, roughly, there’s nothing about running injuries or how to treat them, because it just wasn’t happening. And then with the advent of the modern athletic shoe, in the last 50 years, every year 50% of runners and 80% of marathoners get injured every year that hasn’t changed, despite all the quote advances in technology that the shoe companies keep coming out with.

 

And so if you fund them, if you look at the design of the modern athletic shoe, there’s nothing about it that makes any sense. So often it has pointy toes, why are you squeezing your toes together? If I asked you to drop and do push ups, you don’t squeeze your fingers together, you spread them out. Same thing with your toes. That’s what makes your foot work better supporting the arch. If you support any joint, put a cast on your arm, the muscles and ligaments and tendons get weaker.

 

And research shows. If you put our support in the shoes of healthy athletes, they lose up to 17% of the muscle mass in their feet in just 12 weeks. You have a quarter of the bones and joints you have your whole body and your feet and ankles. They’re supposed to bend and flex and move. Like I said if you put them in a cast, everything gets weaker, when is weak or better than stronger. And in fact, if you want to make something stronger, you have to use it. Research shows that just walking in shoes like ours can build foot muscle strength.

 

Research shows that oh and I mentioned before you know the the force that can go into your joints. A researcher in Brazil put shoes similar to ours on the shoe on the feet of elderly women 65 years and older who had knee osteoarthritis in six months. Most of their arthritis was good

 

For some of them completely gone, because they weren’t putting force into the joints, their muscles, ligaments and tendons got stronger by using them and protected their joints, the padding on the shoe, the cushioning, research shows that cushioning doesn’t reduce impact forces. In fact, this is a weird physics thing, the cushioning spreads out the force.

 

So the force receptors in your foot don’t feel the force, but the force goes right up into your joints, you just don’t feel it at your feet, which is the first point of defense. And again, you have all these nerve endings in the soles of your feet, that’s designed to feel the ground and get feedback to go up to your spinal cord for reflexes and to your brain.

 

So your brain has had a balance and move you more effectively. And it’s harder to balance if you’re higher off the ground. And last but not least, when you elevate the heel, that changes your posture, and also puts additional force in joints that aren’t designed for that. So literally, there’s nothing in the design of the modern athletic shoe that has proven to be valuable.

 

50:58

In fact, he’s going the other way around. It sounds like he’s causing more problems than actually solving it. Yes,

 

51:03

the research actually shows that, in fact, here’s a quick story. So and I’ll mention the My name because they published this Nike developed a new shoe that they claimed reduced injuries by 52%. And it’s true. But if you look at the actual research, which they say was independent, even though they designed the study, they paid for the study, just someone independently did the study.

 

Yeah, but we know he’s never truly integrated. They’re the best selling shoe that they tested with, which was their own shoe. During the 12 week study, over 30% of the people wearing their best selling shoe got injured. In the new study, or sorry. Yeah, in the new shoe. 15% got injured. So 15% is roughly one out of seven 30%. Let’s call it two out of seven.

 

So that’s like, you know, once a week versus twice a week, which restaurant? Would you like me to buy you dinner every night this week? The one where you’ll get food poisoning twice? Or the one where you only get it once?

 

51:54

No, thanks. I think I’ll eat at home. Right?

 

51:56

So this is the best they could do is reduce the injury rate to about 15% in under 12 weeks. And and when asked what made that shoe better than the best selling shoe, they said we got rid of many of the protective features.

 

52:10

Dang, it’s very surprising because it sounds like the protective features themselves are the ones that are causing the problem.

 

52:15

It’s It’s shocking. It’s basically 50 years of propaganda and mythology and lies. Yeah, it definitely doesn’t sound very odd know what they’re really good at is do is using marketing, to fake you into believing things that are good for you that actually aren’t good for you or aren’t even true. So just there’s they use a lot of bad physics, for example, they use phrases like energy return, there’s no such thing as energy return, there’s only energy suck, you don’t get more energy back out.

 

And, and the and the energy suck depends on how much you weigh and how fast you run. Because if you don’t, if you’re not the right weight, and running at the right speed for the materials, the materials won’t perform properly. So it’s yeah, if you if you really get into the physics of footwear and running, again, there’s nothing to conclude other than modern footwear is wrong.

 

53:08

My see. Thanks for sharing, Steven. Now, Steven, we all know that entrepreneurship is never an easy process. Who would you say played a significant role in your success today, and you would like to take this opportunity to say thank you to you right now.

 

53:21

Luck, can I say thanks to Lotterer? Of course. You know, because because I do like to say that 90% of what has happened to us is because of luck. And the other 10% is probably also luck. And then there’s a whole separate 100%

 

Yeah, there’s not a separate 100% where 90% is working your butt off. And the other 10% is hopefully being smart enough to figure out how to put out the fires that started overnight, despite the fact that nothing changed since yesterday. I mean, literally, we’re not for the fact that somehow m

 

y Leyna decided to first be my friend and then my girlfriend and then my wife after avoiding me like the plague for years. We’re not for our relationship, this wouldn’t have happened. We are product developer or product designer. We we met him by accident.

 

He was walking his dog and a friend of ours is walking his dog. The two dogs started hanging out. So the two guys started talking. And this guy Dennis gave our friend his phone number. And Dennis was in barmy. Dennis was the former head of product design at crocs.

 

And so I sat on his phone number, and we had worked with you know, many, many footwear companies for the 3540 years previous. So I sat on his phone number for months, because I’m thinking why would this guy want to talk to me? And then we finally got together for lunch. And at the end of a three hour conversation. I said I’d love to work with someone like you someday but you know, a guy younger than you’re getting his feet wet.

 

He’s What about with me because I think what you’re doing is really important. And I believe in it. I said Yeah, but you were getting paid hundreds of 1000s of dollars a year. And we haven’t even made that much money in a year. He has yet but I’m retired. I said you’re hired. So he I mean, he’s been working with us now for since right before Shark Tank So for nine years, and we’re not for the his dog, knowing another dog that belonged to a friend of ours, that wouldn’t have happened. And without him, we definitely wouldn’t be where we are today.

 

And I can tell that story over and over and over about the number of incredible lucky things that happened to us that allowed us to be here.

 

55:19

So Stephen, if the listeners only remember one thing from today’s conversation, oh, you’d like it to be

 

55:24

Oh, by zero shoes, of course. But other than that, other than that, if I had to, in a way, if I had to synopsize a lot of the conversation, it’s that there is no a, there’s two parts, there’s no prerequisite to getting started, you don’t need to have a certain mindset, you don’t need to know a lot of things in advance,

 

 you just need to find a way to get started that at where you can, as quickly and cheaply as possible, prove whether your idea is good or bad, whether your business model will work or not. And mitigate risk, which is a variation on that the only thing you can control is the amount of money you can possibly lose. So that’s the thing you need to pay attention to. And there was a second point to that, that I

 

Oh, and then so you don’t need anything in advance. And then moving forward, the only thing you need to keep doing is looking at mitigating risk is looking for the ways that you can continue to grow. Pardon me, again, the ways that you can continue to grow by dealing with the innumerable things that will come up that you never could have predicted in a million years. In fact, I’ll say it this way. I,

 

I used to ask people who other people call it successful, I used to ask them, or I used to notice that people would ask them, How do you become successful? And they would always talk about how great they were?

 

And I asked them different different questions, I would ask them, how much of your success is due to luck, chance, fate, things that are out of your control. And they would have a much more interesting story about all the incredibly crazy things that happen to them. And then I would also ask them, you know, a lot of these people, their personal fortunes went up and down, they made money went bankrupt, made money went bankrupt. I said, if you were teaching a college course, on how to go broke, what would you teach?

 

Because teaching someone trying to teach someone how they were successful, is pretty much useless. Because you’re not that person. And you’re not living in that world, nor are they because that world is in the past. But the lessons about how you can go broke from making $100,000 a day or more. Those lessons are important. It’s things about leverage, and risk and exposure and competition, and market changes, and logistics, you know, there’s,

 

 there’s all of these things that you really can learn about, if you talk to someone who lost it all, and ask them if they had to teach you how to do that. What would they teach you, and then try and mitigate as much of that as you possibly can.

 

And when I say as much as you possibly can, for Lana and myself, up until the time when we brought on the private equity money. If if we went under, we went under personally, I mean, we were you know, we were fully prepared to go get jobs at Walmart if we had to, because we had we put everything into this.

 

But we did it knowingly. And we also didn’t do it blindly.

 

We were doing it because we kept seeing the business growing, growing, growing, growing, growing, helping more and more people. So we didn’t think it was going to happen because the business was a problem. We thought it could happen because of some unexpected situation. That there’s no way to protect yourself from

 

58:33

Stephen Hawking. No, this is getting in contact with you. They want to learn more about barefoot running.

 

58:38

Not surprised. Well, let me first say you don’t need to run barefoot, we use the term barefoot running, because what we’re doing is giving you the next best thing, do a barefoot feeling. And whether you run walk, hike, do yoga, CrossFit, whatever.

 

Using your feet naturally using your body naturally is the important thing. And that’s what we do just that it all started from that barefoot running Boom Back in 2009 2010. But most of our customers aren’t runners and never go barefoot. So but to find out more, go to zero shoes.com x ERO shoes.com. Or if you’re autocorrect change that to zero shoes, guess what, it’ll still get to us.

 

And you can find us on social media, either at zero shoes or slash zero shoe is wherever you happen to add or slash.

 

59:19

Now. Thanks, Steven for joining us today and sharing about your interesting stories and journey over the last 10 years of zero shoes. It’s been a real pleasure having you here.

 

59:27

Thank you, Ted. It’s been a real treat.

 

59:29

Guys, thank you so much for joining Stephen and I on today’s show. I hope Stephen story has actually inspired you to grow your business even further.

 

And of course to boot your community as well. Now before if you’ve received any value from the show, I would love for you to subscribe to the show, leave a review on Apple podcasts and to share the show with somebody who find it useful as well. All of these tools and resources and my email list available on tatio.com. That’s tdeo.com that’s all for me today. I’ll see you guys next time.

[This transcript has been automatically generated by a digital software and will therefore  contain errors and typos. Please kindly take note of this and only rely on the digital transcript for reference.]

00:02

Hello and welcome to the tattoo business show the best place for actionable advice for entrepreneurs. This is Ted, your friend and host speaking. Now you may recognize today’s guest from Shark Tank. We have my friend Steven session who is joining us to talk about zero shoes, one of the leading barefoot running footwear companies in the market today.

 

 Now Stephen is the co founder of zero shoes and his building a barefoot running empire. When Steven started spinning again at the age of 45. After a 30 year break, he found himself getting injured constantly. One day a friend suggested that he tried running barefoot and Steven never looked back. Stephen quickly put together his own pair of barefoot running sandals and dust zero shoes was born.

 

Today, Stephen is a massive all Americans printer and he’s one of the fastest men above the age of 50 in the United States. Join us Stephen shares about his journey with barefoot running, or he built a community of loyal fans at his Shark Tank story.

 

All these in more of this quick commercial break. Hey, guys is Ted, thank you so much for joining me on my show. And for all the support. If you ever found any value from the show, I would love if you could subscribe to the show, leave a review on Apple podcasts and share the show with somebody who find it useful as well.

 

All episodes Tuesday resources are available on tattooer comm so make sure you log on to tattoo.com That’s tdpo.com. And make sure you sign up for the newsletter if you want to hear updates from me directly. And now let’s dive right in. Hey, Steven, thank you so much for joining us. Today is so nice to have you here.

 

01:28

Thank you. Thank you happy to be here.

 

01:29

Now Steven, let’s have a very simple icebreaker so we can get to know you a bit better. Could you share with us? Who is Stephen session when he isn’t working?

 

01:39

He call that a simple icebreaker.

 

01:41

Shouldn’t it be?

 

01:42

Man? I don’t even I don’t even know how I would begin to answer that question. I can tell you what I’m up to now. But I can’t say anything about who Steven Sashen is.

 

01:53

That’s sure sounds good. Go for it, please.

 

01:56

So the now part I’m I’m co founder and CEO of a company called Zero shoes. It’s x er Oh shoes. And we make footwear, boots, shoes and sandals. So comfortable. So lightweight. We’ve actually had people fall asleep still wearing them, like going to bed still wearing them because they forgot to have them on.

 

Because it’s so comfortable. And yeah, we make shoes for everything from taking a walk to running 100 mile ultra marathons. And the key thing to what we do is we’re doing the opposite of what major shoe companies are doing what shoe companies have been doing for the last 50 years. So we’re making footwear that’s actually designed for human feet.

 

And what that means is a wide toe box for your toes and spread the way they’re supposed to low to the ground for balance and agility. No extra padding or cushioning thin enough so that you’re actually getting the feedback from the ground that your body is looking for. There’s a reason you have 200,000 nerve endings and your souls flexible enough. So you can actually use all the bones and joints in your feet and ankles.

 

There’s a quarter of the bones and joints of your entire body in your feet and ankles. And even more most shoe companies they say they have to you have to replace their running shoes in particular and two to 300 miles. And we have a 5000 mile sole warranty. Well, there’s a huge difference. It’s a big difference. When we when we went when we approached our rubber manufacturer and told them what the performance characteristics that we wanted for the rubber was the guy said, but that’s not how they make rubber for athletic shoes. We said yeah, no joke.

 

That’s why we’re doing it this way. So and I started this company with my wife 12 years ago, almost to the day, and we’ve happily now helped hundreds of 1000s of people around the world. Discover the fun, the comfort and the benefits of getting out of big thick padded motion control shoes and living life feet first.

 

03:33

Uh huh. Very cool. That’s a very cool slogan. No, Steven, before we dive deeper into the company, could you share with us what got you started with barefoot running the first place?

 

03:41

Oh, gosh, 14 years ago, when I was 45. I got back into sprinting after a 30 year break. And for the next two years, I was getting injured pretty much constantly. And one point at about the two year mark, a local World Champion runner suggested that I take off my shoes and run barefoot just to learn what I well just to see what I would discover, frankly. And to make a long story very short, I discovered that I had a form problem that was clearly causing my injuries. And I couldn’t feel it when I was in a regular thick padded motion control shoe.

 

 But barefoot it couldn’t have been more obvious. And more than discovering the problem. I was able to naturally correct the problem. Because when you’re running in bare feet, and I’m not suggesting people do this necessarily, but it’s a lot of fun, actually.

 

 But when you run in bare feet, doing it wrong, having the wrong form hurts and having the right form feels awesome. In fact, you can spot a barefoot runner from 100 yards away they have this weird look on their face called smiling typically. Because it’s just it’s just fun. Yeah, I mean, I’m a competitive sprinter. I run the 100 meters outdoor indoors 50 or 60 meters depending on the track. And I’d never run more than a mile of my own volition and never liked it until I took off my shoes that first barefoot run that I did.

 

I was so entranced with the experience of just Feeling the ground with different surfaces. We’re running on grass and trails and rocky surfaces and roads and everything in between. And just I kept experimenting with my gait, running faster, running slower running at the same speed and moving my legs faster or slower landing on different parts of my feet. And at the end of this, I turned to someone who had a GPS watch on.

 

And I said, How far was that. And she said, that was a little over 5k. It’s like, Sorry, what I mean is, and I could have kept going with a group. And we just decided to stop at that point. So anyway, that’s the intro.

 

But the transition was I wanted that natural movement experience as much as I could get it because it was clearly beneficial. And I made a pair of sandals the way humans started making sandals 10,000 years ago. So just something to protect my foot some rubber that I got from a shoe repair place, something to hold that on some cord that I got from Home Depot.

 

And that was it. It was that way I didn’t have to argue about whether it was legal to be barefoot in a restaurant or a grocery store, which by the way it is I made shoes for myself for my wife, a couple other runners, they told two friends and they told two friends and at about the 60 pair mark, a guy says, he says to me, I’m writing a book on barefoot running. And if you treated the sandal making hobby, like a business and had a website, I could put in the book. And so I I’ve been an internet marketer since like 1992.

 

So I rushed home, I pitched this brilliant opportunity to my wife, I built hundreds of websites, it’ll be easy for me to do this one. So how did your wife take it? She was not happy. She said this is a horrible idea won’t make any money. It’s a distraction from what we actually need to do to make a living. So do not do this. And I promised her I wouldn’t.

 

Okay. And then after she went to bed, I built a website. And here and and here we are. Well, it is sometimes what husbands tend to do. Yeah, exactly. Well, so typical husband to do. And I guess I am one Well, I would

 

06:45

say fortunately. So in this case. Now Steven, could you share with us a little bit more about the process that you underwent when you’re prototyping the shoe itself? If I understand correctly, you she had no prior experience in footwear manufacturing, was it really as easy as you describe it just now?

 

06:57

Well, it actually was easy at first because what we were selling was a do it yourself sandal making kit. So we were buying big sheets of rubber cutting them into small sheets of rubber buying long stretches of cord cutting into smaller stretches, and then selling that with instructions on how to make a sandal

 

based on this 10,000 year old design idea. When we moved into close to well, actually from there, what happened was, people would say, Hey, I love this idea of what you’re doing. But I’m not going to make my own sandals. So we had to come up with a way to do a ready to wear version of the same idea. And I I spent about $6,000 working with an engineer to develop a what’s the word I’m looking for, basically a piece of hardware to handle the lacing system that was required to hold the sandal on your foot comfortably.

 

And then after we finished making it and I tried it for the first time, it didn’t work at all. So I learned instantly that I had overlooked one fundamental concept that was screamingly obvious, but not until after the fact. So that was you know, the first lesson. And then from there, people would say, hey, that’s great. I love the sandal. But I need something for the winter for work. And so that’s when we started moving into close toed shoes.

 

 And I guess the best way I can say something about the footwear world is seven months into running the business seven or eight months in. We had met some guys who had all started at Reebok 35 years earlier. And they were sitting at our kitchen table with us. Yeah, talking about how to run the business. And they said, Look, we believe in you,

 

you Elena, and we believe in what you’re doing natural movement is hugely important. And we would help you start this business. But we’ve been in the footwear business for so long that we’re not stupid enough to try and start a shoe company.

 

08:38

And we did anyway. So it’s too late. It’s

 

08:40

well, it’s really, you know, we said, look, we’re hyper optimistic and naive. That’s the way anything ever gets done. So, but we had no idea how difficult it actually is to make footwear and to make it well and make it consistently. And to be honest, every company continues to get it wrong for their entire career,

 

if you will, the entire lifespan of the company, something always goes wrong at a certain point if you’re developing something new, and we had that happen as well. So we just learned along the way, you know, I’ll say it this way. One day Leyna came in, she was kind of upset. And she said I feel like I don’t know what I’m doing. And I said nobody knows what we’re doing because no one’s ever done it before.

 

And anyone who’s honest, as an entrepreneur doesn’t know what they’re doing on a daily basis. The job isn’t to know in advance. The job is to figure out what you don’t know and then learn it and apply it as quickly as you can. And she said oh, well I can do that. Oh, yeah, no.

 

09:32

Huh? Why sweet Steven. Now let’s take a step back. I understand that the first product you sold is actually a DIY circuit. My research is accurate. You actually sold it for about three years before you moved on to readymade sandals itself. But could you share with us what was the first three years of the company like for you?

 

09:47

We were lucky in that we were able to grow organically. One of the challenges we had early on, ironically, is that we couldn’t do any paid advertising. And the reason is that in 2000, late 2009 2010 The idea of being barefoot running and minimalist running came up got very big in part because of the popularity of a book called Born to Run by Chris McDougall.

 

And some research from Harvard’s Dr. Daniel Lieberman, showing how when you run in regular shoes, you actually send a spike of force right up through your joints, mostly into your knee. And if you take off those shoes, that spike of force goes away. That’s what causes the wear and tear. So, but we couldn’t get paid advertising because the big shoe companies were terrified, they were never going to sell another shoe again.

 

And they wanted to capture this barefoot market and convince them that you couldn’t run barefoot because if you did, you’d step on hypodermic needles or get Ebola, or your kids wouldn’t get into college or you know, your car would fall break apart. They were making things up. And clicks were going for like $3, a pop, and even more in it. Because barefoot running was getting popular internet marketers were selling courses on how to make money doing AdSense arbitrage, which I’ll explain it really quickly.

 

For people who don’t know, they were running ads on Google using AdWords, driving them to a website where they had AdSense ads, and then people would click on those ads, and they’d make money. So it’s an arbitrage play, you pay less money for the the original ad, then you’re making off the Click when people come to your website. And, and the clicks were so expensive, that we couldn’t afford to advertise, we had a $20 product, we couldn’t pay 234 dollars a click. So that was obstacle number one, obstacle number two, was just inventory. We were growing really, really fast. We were using this one particular material from the company Vibram that makes us whole material. And one day, we call them about getting a wholesale account. And they said, Well, it’s a $15,000 minimum order. And we didn’t have $15,000 at that time.

 

This, they said don’t worry about it, we just ordered 3000 sheets of this rubber from the manufacturer. And we said we’re worried because we just ordered 6000 sheets from our distributor. So we knew that we were suddenly vulnerable to someone else’s manufacturing schedule. And that’s when we decided to make our own product. And then finding a way to do that was a big challenge. And just managing the

 

growth. I mean, we were growing really fast from day one. And and I think Lina would say the biggest challenge, the biggest obstacle was when the business just took over our house. I mean, you know, we started in the corner on the floor of a corner. So two sort of days before she moved into a warehouse. Well, not even that I mean, just to get out of the house, we started on the in the corner of a floor of a

 

spare bedroom, we had a debate about in a conversation about whether we should even buy a folding table to get things off the floor. And then another debate about whether we should buy another folding table. And, and eventually, we had inventory that filled the entire garage, we had a customer service manager and our dining room table, we had fulfillment handled coming out of the living room Leyna had an office,

 

I had an office, we had more materials and every spare room in the house. It just got overwhelming. And then we moved into an office and the day we moved in, we realized it wasn’t big enough to handle the growth. And that happened repeatedly.

 

12:58

It was clear the company itself clearly had a life of its own and quickly overwhelmed. You know, Steven, one of the earlier points that you made was that you couldn’t afford paid advertisements. So how did you grow your customer base and sales back then was it purely word of mouth?

 

13:10

Well, the word of mouth was a big part of it, what we would see from day one is the person interested in barefoot running, the family would order one of our sandal kits. And then a week later, we’d see an order clearly for the rest of the family who were not runners or anything they just liked the look and feel or the fun.

 

Yeah, of making your own shoes. I call it that you develop the superpower of knowing how to make footwear, because it’s really simple. And once you we’ve had people say once I discovered I could make my own footwear, it opened my eyes to other things I could do. I started repairing things around my house as sort of building things. It just really you know, change their idea because footwear seems like such a big deal.

 

But again, some that to protect your foot something to hold the protection on your foot, maybe some insulation, that’s really all footwear is. So So Part one was just the organic part. Part Two was a friend of mine had a great line is a guy named Patrick Anderson, he said making money is easy, figure out where the money is flowing and get in the way of it. And so that usually means advertise that usually means find a way to help other companies advertise.

 

That’s an easy one. But in this case, another version of that is find out where the conversations about what you’re doing, are already happening and get involved in the conversation.

 

Now I don’t mean get involved by jumping in and trying to sell I mean, literally get into the conversation, man, it’s about contributing to the community itself as well. Right, exactly. Find the community become part of the community and offer something of value. So what I did is I made videos showing how to rip off my entire business. I showed how we were getting materials where we’re getting materials, how to make the sandals.

 

And this is this is a phrase someone came up with called moving the free line. So if you have a line where there’s below it is what you give away for free and above is what you charge, move that line higher and higher, give away what you would normally charge for. And so I literally had videos showing how to run my entire business and it didn’t Well,

 

some people then tried to copy my business, but by then it was too late. We were much bigger than they were. But the gist is, I gave, I gave it all away. And that not only gave people the ability to become experienced with what we’re doing or get introduced to what we’re doing, but of course, know like, and trust us. And

 

15:16

I see this really created a lot of trust and goodwill with the community as well correct.

 

15:19

And then they could buy the materials from us easier and less expensively than trying to do it on their own. So that was how it began. And then also, just with those videos, I was an I’ve been an SEO guy, since 1992. I was one of the first guys to figure out that in 9090 90, to 93, all you had to do for SEO is keyword stuff, words, in white text at the bottom of your page and hide it behind a white background, really simple.

 

The very early days, ah, those are the days. But so I did. So I did a lot of SEO things as well, I created. I wrote articles and had those syndicated. I took all those videos and syndicated those on every video platform there was for a period of time in 2010. If you search for barefoot running, or barefoot running sandals, or almost any keyword I cared about, I had at least 30 often more than 40 of the top 50 results for those keywords.

 

16:14

Thanks for sharing, Stephen and I can see that everything that you have done has really paid off in the long run because it’s really built a lot of goodwill and trust between you and your community itself. So guys, no matter what industry you’re in is very important that you actually decide which communities that you want to be a part of and to contribute to them just like Steven did. It’s important to build a goodwill interest because your community will become your customers and they will be your best advocates for your company and products. So Stephen after the early days of selling DIY sandal kits, you actually moved on eventually to produce ready made Sandoz. I assume that during this transition process, you needed to find a good manufacturing partner. What was the process like?

 

16:48

Well, again, we lucked out and met these guys who had all started at Reebok, we met them socially. I’m met, I met someone friend of a friend whose family had been in the footwear industry for 40 years. And so the guys who came around our kitchen table the way we met them as they were coming to Colorado to pitch a product they were developing that they wanted to license to this family friend that we met who had whose whole family’s in the footwear business.

 

And so we got introduced to them. And they introduced us to our first manufactured rubber manufacturer in Korea, the problem we ran into is that the Rubber Manufacturers, they were making outsoles, they’re making this that bottom part of the shoe that gets glued on to other parts of the shoe. And that outsole was essentially our entire product. And they didn’t care about quality control because they didn’t need to.

 

And when we asked them to pay more attention to quality, they basically kicked us out of Korea homes price. So that was problematic. And then it was really, there was a lucky thing. And a thing that I don’t even know what happened.

 

The lucky part was around the time we were getting kicked out of Korea. And I say that I’m not being hyperbolic when I say that when we when we got fired by this factory, because we asked them to have better quality control. And we started calling other factories in Korea, they would say oh, no, no, we’ve already heard about, you know, thanks. So and we were you know, it sounds

 

18:11

like to have a very tight knit industry in South Korea very, very tight and maybe a bit perfectionistic as well.

 

18:16

Well, you know, we were a small company. And we’re really demanding because we didn’t know we didn’t have the right to be at that time. So but at that time, we lucked out, there was a footwear magazine that had a feature article about an organization in New York, who helped American companies get overseas manufacturing.

 

And so we call that organization. And they interviewed us for a while I flew out to New York to meet with them. They said, Well, we’re going to do some due diligence, and we’ll get back to you. Here’s the part that I don’t know. I know that they called a lot of people in the industry, who knew who we were, we were a tiny little company, selling it, do it yourself sample kit. And somehow for some reason, all of these people vouched for us, and they said,

 

Yeah, you should work with these guys. They’re really they’re really going somewhere. They’re really, you know, they’re they have high integrity, they know what they’re doing. I mean, they said wonderful things about us, much to my surprise, and not that I disagree, but it was like, you know, we were tight. We’re kids, we were babies.

 

So anyway, we we worked with them. And we’ve been working with them ever since. And they their job was to be the interface between us and the various factories that we would need to make things happen. So we’ve been very, very lucky to work with that organization for, oh, gosh, nine years now, I think, oh, this

 

19:31

sounds like a great partnership. And I guess the goodwill and trust that you were building with the community earlier on may have actually spilled into the manufacturers as well, which is why they probably vouched for you. Now Steven, since we’re talking about the topic of manufacturing, I think a very important point to discuss a bit further would actually be the idea of quality control. Now that you’re working with this third party organization and with manufacturers that I assume are overseas, how do you actually ensure the quality of your products when you’re not physically there at all?

 

19:57

The idea that we have control is hysterically funny. To me, we don’t. So we again, this agent that we work with, it’s their job to manage the factories. And between you and me and them, they have not done a great job of it. So we’ve had, we’ve had minor problems almost with every production run we do. And then last year, during, during, and because of COVID,

 

we had some major production problems, and what we’ve, what we’ve had to do, and well, we, we hired someone in China, to help with a lot of the commercialization to help with a lot of the making sure that we knew where the components were coming from, that they weren’t being substituted for other things that they were being handled correctly.

 

But we didn’t have somebody in the factory, the days they were manufacturers, making sure correctly, we didn’t have eyes on the line. We do now. Because the problems that we had last year were so significant that we insisted, and we and the there was kind of pushback, because the agent that we work with they they need the factories to feel like the agency is in control. And there’s not they need to know the one person that they can talk to, to get a yes or know about whether they should proceed. And they didn’t want too many voices in there.

 

So we found a way to navigate that so that it’s easy and clean for everybody. No one’s stepping on people’s toes. And now we’re finally able to manage the the QC process with much greater accuracy. Stephen,

 

21:30

by no means are you the first entrepreneur who I’ve met, who has shared about the importance of having a person down the ground to eyeball the whole manufacturing process, especially when you’re manufacturing overseas, you need somebody that you can trust to represent you and your company to be there. That person needs to make sure that no corners are cut, that the right materials to use and to ultimately make sure that the product meets the standards that you paid for before the product even leaves the factory and is shipped to your doorstep.

 

21:55

Well there there are two reasons. One is that and in fact, a story that I heard that I found interesting was when Reebok when Reebok USA was manufacturing in China, the the president of Reebok USA said to the guys in charge of developing the products in manufacturing said why do we have an entire team in America doing this,

 

and then an exact mirror of that team in China. And the guys in America said, because that’s the only way you can get it, right? Because you need to make sure that you’re all speaking the same language. And I mean that metaphorically, of course. But you need someone, you need to make sure that things aren’t getting lost in translation. And more. There’s another thing. And and I want to say this, I’m trying to think of the right way to say this. This is not a criticism, what I’m about to say.

 

In fact, it’s it’s a reason that China has a tremendous advantage in business and manufacturing over America. Chinese businesses manufacturers, in particular, they view their job is one of their jobs is to find a way to save a couple of cents here and there by making little changes to things that you didn’t specify, so that they can make more money. So they can give you the price that you want. But they can get a little more margin by making little changes to things that you did not specify. And there’s always something that you did not think to specify.

 

Now again, I’m not trying to be critical. This is a very clever way of viewing the world as a manufacturer, it’s just that Americans aren’t used to that. And Americans think that everyone has a similar idea about trying to make, you know, the highest quality, whatever, which is, of course comical, because if you get things made in America, you have the same problems with quality control.

 

So it’s an it’s an illusion, the difference is that you can yell at people in America for making changes to your specs. And they’ll understand why you’re mad at them. And if you yell at people in Asia, about changing the specs, they go, W

 

hy are you mad, that’s the way you do business. So and it literally is a viable way of viewing the world as a manufacturer. And Americans think that the way the best way to view the world is the American way. And I would say that that’s not actually

 

24:00

true, Steve, and I can totally relate because it happened to me as well, I still run an E commerce business. And what happened to me was the samples that my manufacturer to produce for me, did not meet the actual product that we actually made in bulk. And for me, I found this out when I actually

 

physically went down to the factory in China. Now the idea back then was to just go down to the factory, understand the manufacturing process and meet the manufacturer to establish longer term relationships. So when I arrived, the production round was completed. And when I inspected the production person, my gosh, it was completely not what I paid for. Now there was an obvious substitution of the steel component that was used in the product itself. And they denied it right to my face. But it was very obvious to me that the product looked different, and they perform differently as well.

 

So the whole visit became an issue of confrontational negotiation if I can say that we but after the incident, they know that I actually was aware of what I was looking for and looking out for. And I think they gave me a lot more respect for that. And the issue never really repeated itself again, but I think the story itself shares the importance of having somebody down on the ground and eyeballing that manufacturing process because I think, you know, it’s sad to say that you can’t really free trust your manufacturer sometimes? Oh, absolutely. When I confronted the manufacturers in the factory itself differently said, you caught me.

 

25:07

And if you if you catch them, yeah, and they’re not really upset, they feel it’s a game, it’s like their job is to try to change it. Yes, it is. And your job is to try to find it, if you find it, they actually respect you more, because they know you’re paying attention. They know, you know what

 

25:21

you’re talking about in terms of the product you want. Exactly, exactly. So the whole process taught me a lot.

 

25:26

There’s there’s a book called poorly made in China, that talks about it’s from the manufacturing agent and talks about all these these ways that manufacturing is so different there than it is here. And you’re left realizing it’s a fascinating book, because you really start to understand how a group of people can think and see the world in a completely different way than you do. And it’s completely logically internally consistent.

 

And then you have to weigh them against each other to see which one is more valuable for what you’re doing. And by the way, when people say, Well, you should manufacture somewhere other than China, a, it’s literally not possible for what we do. And B, it wouldn’t make a difference. Because all I can tell you in the footwear world, when people leave and go to other places. First of all, all the materials still come from China, that’s where the supply chain is,

 

and, and the sophistication doesn’t exist in other places. And you get the same problems. Everywhere you go, including America, here’s a quick story. We’ve been trying to manufacture one of our products in the States, and we’ve been working with a rubber manufacturer, to get just to get the rubber manufactured correctly to get it designed correctly. They’ve done the same things, they injected components that change the material to change the quality of the material without telling us okay, I mean, they do it wrong over and over and over. And it’s

 

26:39

we literally you to catch them every single time.

 

26:41

Yeah, it took us it took us three weeks to do it the first time, when we did it in Asia, we’ve been working with this company for three years, and they haven’t been able to do it correctly. And this is one of the top Rubber Manufacturers in America. So again, you know, people like to think that if there’s a problem somewhere, you just move somewhere else in America is the best. And all I can tell you is in this world. That’s completely not the case.

 

27:01

And I think the frustrating part is that is that issue of the time is required to produce a sample and a production run itself. So every time you find an issue that has to be rectified, you have to repeat it, we

 

27:11

all have a guess why we were we were going to work with our factories and work with the agents in China for four or five times a year. It’s just to speed up that process. And the last thing when when we met with those guys from Reebok

 

at our kitchen table, they made a comment about how they had a five that they were out of the business. Mostly, they were just doing consulting, and they said they had a they had a $5,000 a month FedEx bill. And we thought that was ridiculous. Now we would kill for a $5,000 month FedEx bill.

 

27:38

Oh, man. Okay, Stephen sources, we’re on the topic of lead time, perhaps you could share some stories on the issues you had managing your lead time, and whether there’s any advice they could share with another entrepreneur and how they can manage this better. If any, you know, the advice

 

27:51

I would give is get over the idea that you’ll be able to solve that problem. I mean, it’s going to happen. If it doesn’t, it’ll, it’ll happen multiple, multiple times in your career. Even when you have things down perfectly, something’s going to happen.

 

So look, the obvious thing that happened in the last two years, or well, two, three years really, first, when the trade war kicked in, that made a big difference. And we had there was there was a lot of companies because of the trade war, accelerating their production, because they wanted to get materials in production before tariff rates went up before the import duty tax went up.

 

So we had, we were at the front of the line to get things manufactured for our fall product. And then a multi billion dollar company said to the factories, cuz they used the same factories we do. They said, No, we need to be at the front of the line,

 

so that we can get all our product before the tariffs go up. And it moved us to the back of the line. And as a result, we lost three months worth of selling because we couldn’t get product. And then COVID same basic idea. And actually, there was two parts of the problem.

 

 One was getting manufacturing done. And the other is so many people were importing, to try to get things under the tariff that the Port of Long Beach got backed up, and we couldn’t get things from the port. And then here’s a crazy one. So we’re outside of Denver, Colorado, we had we finally got things from California to Denver.

 

And and in the last year, they couldn’t find enough trucks, or actually chassis so they couldn’t find the part they put the container on to move our material. Two miles from the loading facility to our warehouse. We said, can we just come pick it up ourselves? They said no. So we just like open the container and pull things out. They said no. So we had stuff sitting miles away that we couldn’t get to for almost two months. So

 

29:38

there must have been so agonizing. Yes, one way

 

29:41

of putting it. So you know, and another thing that that will that will affect it is our problem or our cause is if we discover something at the last minute, that is problematic and we need to make a change. And that puts a wrinkle in everything as well.

 

So there’s going to be problems where you discover problem and you need to make the change. Because if you put out a product with a problem that will kill you. And so that can get in the way of getting things done in time. And then the manufacturing process itself, and just the lead time for materials and making sure the materials get made, and then getting things on a boat or on a plane, we had to fly things in this year 2021.

 

Because, again, thanks to COVID, and all the supply chain issues around the world, we had our best selling products, we were out of stock for three months, and we spent a lot of money to put things on an airplane, just so we had something to sell, we weren’t even going to make a profit on it practically. But we needed to sell something to keep it to stay in business and to keep our customer base growing. And I know there’s going to be other issues as well.

 

There are so many from from the moment you place the order to the moment you’re selling actually to the moment a customer receives the product, there are so many things that could go wrong, something inevitably will. And part of your job, our job, I guess, as people running this company and for any entrepreneur is just figuring out how to deal with that.

 

Because you’re never it’s never going to be perfect. Or if it is once you’ll be spoiled and expect that it will be again, and it will be so

 

31:15

I guess you know, all we can do is to try to expect the unexpected. Now, Steven, we are in the fourth quarter of the year and we are building up to it’s the holiday season. Is this typically a busy time for your company? Well, it’s

 

31:25

actually not for us. And the reason is twofold. One, we a big chunk of our business is sandals. And so not surprisingly, not a lot of people buy sandals in the fourth quarter.

 

So for us the the most fine we do is between April and September. And the other reason is that up until last year, we didn’t really have winter friendly products. And so last year was the first year we did. And in fact, they were so popular, we sold out of them by the middle of October.

 

So we had no idea what q4 was going to be and we’re just starting to experience that now. So we don’t the only the biggest thing we have to do to ramp up for q4 is we know we’re going to have a holiday sale just to clear out some inventory where we’re updating the product or anything that’s a slow moving style that we want to move out.

 

And when we have that sale, our email list is very, very responsive. And we get between five and 10 times the order volume that we normally get. So the biggest thing we had to do is make sure the warehouse was ready to handle that kind of volume. And with COVID.

 

That’s challenging, because we’ve had some people who’ve gotten ill and been out or people who had family members who’ve gotten ill. So it’s it’s really, it’s still evolving. Let’s say

 

32:46

my see. Now, Steven, you are in an inventory heavy business. So when you first started scaling up a business, you must have had to invest a lot of capital into the manufacturing processes. Well, now I’m actually aware that you did take a few loans to get the whole process started, including a $2.3 million loan from JP Morgan itself.

 

Could you share this process with us? What were you going through back then?

 

33:06

Well, that’d be more a question for my wife. She’s the operations finance person on the product marketing, visionary person. But I am not unfamiliar with what happened. At first, we were maxing out all my credit cards. So I had amassed a pretty large amount of credit. Wow, that’s a very dangerous game to play.

 

Yeah, very typical, a lot, a lot of credit 0%. So we use that for quite a long time. early on. We we got very, very lucky. And we met someone at a party at a friend’s birthday party who happen to have he was running a family office that most of their investments were in real estate backed cash flow business, like car washes, parking lots, lawn laundromats, etc. But at the party, we were talking about that. And they said, Well, you know, we save a little bit of money for high fliers, things that are not in that category.

 

And I said Oh, so you’re an esteemed holiday investor and Nassim Taleb wrote the book Fooled By Randomness and the Black Swan. And one of his things is, you know, take 85% of your money and keep it in something stable, and go for broke with that. 15%. And they were surprised that we knew who Nassim Taleb was. And, and that’s because Leanne and I had been day traders in the past. But so that started a conversation. They liked what we were doing.

 

They gave us a line of credit it, it was pulling teeth to get it because the other people in on their board who had to sign off on it did not understand why they would invest in us. But what started out as $100,000 line of credit over time, as we continue to demonstrate that our company was growing and we were paying them back it turned into a million and a half. So that was helpful along the way. We got a Small Business Administration loan again.

 

Luckily, because we were working with a frankly we were working with somebody at a large bank, who hoped they would get our business when and if we sold our company. And so they were trying to do us favors and they really pushed through to get us this Back small business loan. So that was that I don’t even remember how big that was not insignificant. And then as you mentioned, we eventually got this loan from JPMorgan Chase. And similarly, the bankers that we were working with really believed in us, and pushed it through hard.

 

And so that was a $2.3 million loan, which the the hardest I think I’ve ever laughed in my life was when I signed that I was agreeing to personally repay that loan if we defaulted, because that I thought that was hysterical. We didn’t own anything, we had no assets, it’s like, okay, yeah, I’m agreeing to pay this back. That’ll happen. So, so we got that money. We’ve also gotten lines of credit from like UPS was starting to do a logistics business shipping from overseas and managing the entire logistics process.

 

So to help bring in customers, they gave us a line of credit, which came in very handy. laners job, fundamentally, has been finding ways to raise money and manage the fact that we were growing so quickly and needed so much more inventory. And most lenders lend based on historical data. And we needed to find people who were who believed in what we’re going to do moving forward. And they never did. So we’ve run out of inventory every year, because we didn’t have enough money to buy enough to fuel the growth that we were experiencing.

 

And then last but not least, last December, we took on a private equity partner in a minority position. And the biggest reason we did it was because it was going to give us enough cash that we could could expand the business, we could hire people at a higher level at more market rates. We could buy more inventory, we could manage these ups and downs.

 

And it was a good thing that we did. Because right after we closed that deal is when the second wave of COVID kicked in, the porch got even more backed up, the supply chain really slowed down. And if it weren’t for their the funding that we got from them, we would not have been able to survive that.

 

36:56

Steven, you mentioned every year the battery runs out, was this a signal to the financial institutions that that is demand for the product itself?

 

37:02

No, they didn’t care. They totally didn’t care. In fact, no, they didn’t care. And because you know, they’re just checking boxes, they don’t, you know, we were lucky with the SBA loan in the original JPMorgan Chase loan is we did find people who did believe in us and kind of pushed through things a little harder in ways that they normally couldn’t. But eventually you get the the deal gets to an underwriter who’s just checking boxes.

 

And so they didn’t really care about the growth. And here’s the one that really shocked us. I guess they just wanted to be paid. Yeah. And in. So April ready for COVID happened, we had a lot of inventory that our wholesale accounts decided not to take, because they didn’t know if they were gonna stay in business. And so we decided to sell all of that product at wholesale prices, because we needed to get rid of it. Because otherwise we wouldn’t have been able to grow the way we were planning on growing. And we converted so much inventory into cash,

 

that we were saying to the banks, you have no inventory risk. If there’s a problem, we just sell everything at half price, and we will make so much more money than what this loan is. You’re totally safe. We, the banks, basically their opinion is if you go bankrupt, they don’t know how to sell your inventory. And we said it doesn’t matter if we go bankrupt, we can sell the inventory. And they just didn’t understand that they don’t they they don’t to this day, most most lenders don’t understand direct to consumer online businesses.

 

38:20

Well, I guess its financials, they don’t understand what it means to be self and they probably just don’t understand the business as well.

 

They have no idea. No, Steven zero shoes is very well known for having appeared on Shark Tank and walking away for an offer from Kevin O’Leary himself. Now, could you share with us what the process was like building up to what’s the pitch itself,

 

38:38

the first thing is applying to get on the show and funny story. So we sent in our application, which they take applications, typically starting in March or April. And we I sent them an email. They also had live events, I was preparing to go to one of the live events to pitch live as well.

 

And then the week before that live event, they called us and interviewed us about being on the show. At the end of the interview, they said hey, we like what you’ve done.

 

Can you send us a video? That a five minute video that answers these 400 questions it was impossible to do. And I said this on a Thursday, and I said no problem. We’ll have it to you on Monday. Now unbeknownst to me, my wife was planning a surprise 50th birthday party for me on Saturday. So she was panicked. And I didn’t know. So the party went off without a hitch. I was totally surprised. And then on Sunday, we record this video we sent it in.

 

They said we had to also send an application that you have to hand write all the answers to the application. It’s a giant essay, and you can’t read my writing or Elena’s writing at all. So we typed out our answers and then found someone on Craigslist that we paid to handwrite in the forums. Oh gosh.

 

39:48

That’s brilliant. So we sent that off. Then they sent us back a contract that is completely one sided and totally onerous. And you fill out the contract. You can’t debate it. You can’t argue you can’t ask them To change anything, if you do, they’ll, they will take you. So you’re giving away your life for the next few years. We we sent in the contract, they said, We want you on the show.

 

And then you work with two producers to craft the pitch that first 60 to 90 seconds. And we just went out and to talk about how you’re going to be on the show. And we that’s what we worked on for the next couple of months, there was a period of time, where I think Lina and I didn’t say a word to each other other than our pitch, just we wanted to get it down.

 

And we also when you Shark Tank is a weird thing, because you have to say how much you’re offering and what you’re asking for. At the same time. Normally, that doesn’t happen. So you need to craft your asking your offer, because you know the sharks are gonna want to negotiate down. You can’t offer them too little because then they think you’re not serious. So you know, it’s a, you got to find that right medium. And we did that by interviewing bankers, investment bankers, venture capitalists, private equity firms, people who bought shoe companies, people who sold shoe companies,

 

and we had a range of valuations, between 2 million and 10 million depending on who we talked to, and whether they valued growth or not. So that’s what we use to craft our Ask an offer, we were asking for 400,000 for 8%. So as a $5 million valuation, I was willing to get talked down to two and a half. It didn’t go that far, by coming over close. But the thing that it did that was so valuable, is that up until that point, because we taped the show two and a half years into the business.

 

And up until that point, it was still a lifestyle business. I said Elena wouldn’t be nice to have a little business that made a couple 100 grand a year and only took an hour to a day and she was less we have said yet to get I can’t stay that way, though. So it, it really helped us get clear about what we wanted to do with the business for ourselves, and understand the value that we provide to our customers.

 

And how important that was for us to try to change the world, frankly, and give more people the experience that we’ve been having. Lena says there’s enough shoe companies in the world, there’s no reason to start one other another one, unless what you’re doing changes people’s lives. And happily, that’s what people keep telling us, we’re able to do not by anything special that we’re doing other than getting out of the way, and letting people’s bodies do what’s natural.

 

So the prep was just everything about the moment we finished saying, you know, sharks, what do you think, or whatever that line is. And then we also read all the autobiographies of each of the sharks, so we understood who they were and what was going on for them. And we watched every episode, we watched every episode of Shark Tank on YouTube, we watched every episode of the Canadian version called Dragon’s Den, and the UK version called Dragon’s Den. We didn’t watch the Japanese version, because we wasn’t translated. But we just and we also rehearsed, we had entrepreneurs and people who were CEOs of other companies, and bankers grill us as if they were the sharks, and learn how to learn about the questions we didn’t know the answers to.

 

And, and there’s one last part. And we didn’t have to learn to do this, because this is just something that I do, which is you have to if you’re gonna be on the show, or if you’re frankly, if you’re just pitching to anybody, you have to learn to be non defensive. And that’s an impossible way of saying it. What you need to be able to do is when someone criticizes you, you need to be able to look inside, and find out if there’s one of two things going on either it’s just factually inaccurate.

 

And then you can just say, Oh, well, that doesn’t seem to be accurate. Or there’s some literal or metaphorical way that they’re, that it’s true. And you just, frankly, wish that it weren’t or didn’t like it. So if someone says you don’t know anything about business, you can say, Yeah, I think that too, sometimes. What do you suggest, you have to be able to meet them with the truth, without being afraid of telling the truth, and what you think it’ll make you look like,

 

because the worst thing someone’s gonna say, is probably something that you either literally or metaphorically believe now or in the past. You know, it’s like, you don’t know anything about business? Well, maybe you’re thinking you know about business. But that’s because of your last business that did well, in this one, you’re making shit up.

 

 You’re learning something new every day. And so, you know, I can go for the metaphorical version of I don’t know what if someone said to me, you know, nothing about marketing, where now I’m a really, really good marketer. I’ve been doing this for a long time. But if they said that, to me, I would say, I totally agree with you.

 

Because here’s the one thing I know, as a marketer, I have no idea if some new initiative that I’m working on is going to be successful or not. I have no clue. And that could easily be looked at as stupid. So because I’m stupid in that way, I can’t predict the future. The only thing I do is make sure I can handle the risk of being wrong.

 

44:48

I see. Now Steven, you eventually walked away from the offer from Kevin O’Leary. Was there ever a time when you thought to yourself maybe this could have been a mistake? No,

 

44:56

we know we we were very, very clear going in what our range for yes and no was. And so the moment it was done, that was it. I mean, we were, we were surprised, we were a little disappointed because we thought we knew Mark Cuban understood the minimalist world, but he actually misunderstood it. He thought it was a fad.

 

We knew that Robert was a runner, which actually wasn’t totally true. He used to be a runner. And he hadn’t done a lot of running. We were hoping he knew who we were because we had some very popular YouTube videos. At that time. We knew Damon was interested in footwear and apparel, so but our offer was too rich for him. We knew Barbara actually was the only shark at that time who worked with the company she invested in, and she’s a brilliant marketer. So we thought she’d be into it. But she hated me.

 

Because I reminded her of her ex husband, apparently. Yeah. So yeah, so it went. And we thought that Kevin would have no interest in us at all. So it was the exact opposite of what we imagined, which was surprising. And but, but No, we never looked back.

 

45:56

Now, Stephen, what advice would you give to another entrepreneur who’s going into the shark tank to make a pitch as well

 

46:00

know your numbers inside out backwards, left and right. Do not apologize for any of them. And again, if they criticize you find, you know, as quickly as you can look inside to find a way that you can agree, I’ll give you a quick story about that. I was I was consulting for someone who was going to be on the show. And he had a nutritional supplement company.

 

He was he just graduated college. And of course, the supplement, you can’t protect it because all the ingredients are just on the back of the bottle. It’s easy to reproduce. And I said, so look, they’re going to eat you alive. I mean, bottom line, you don’t know anything about business, you have sold very few products, you don’t know what you’re doing. So here’s what you do. For every criticism, you have to find some way of saying some variation of the following thing. You’re absolutely right. I’m just a guy who in his last year of college,

 

when he should have been out partying every night, instead developed a product that helps solve a problem for me, my family, and six and a half other six and a half million other people in America. And I’m here because I don’t know that and I need your help to help those people. If you just say that and make sure people know how to find your website, you’ll be a millionaire

 

47:07

man, Stephen does a very good way to actually handle the pitch itself. Thanks for the advice. Now, Steven, you have also been very vocal about the disagreements that you have with the bigger shoe companies,

 

Could I trouble you to vocalize your views here for the listeners as well. And on that note, maybe you could share with us why you think these bigger companies have not mainly entered the barefoot running space as well. Yes,

 

47:26

some of them tried and backed out because they couldn’t tell two separate stories. One is a minimalist shoe with very little protective features. And then other shoes with lots of, quote, protective features. We’ve had the CEOs of two multi billion dollar footwear brands and a senior vice president at a third say directly to a friend of ours. This whole natural moving things that zero she’s doing is legitimate, it’s real. We just can’t do it. Because if we did, it would be admitting that everything else we’ve said for the last 50 years is a lie.

 

Oh, interesting. So the easiest thing I can say, is a quote Dr. Irene Davis from Harvard, who said I was on a panel discussion with a guy from Brooks and the guy from Adidas. And she said look in the 60s, we are running in thin soled running shoes, we were playing basketball and Chuck Taylors. We weren’t seeing the number of injuries or the severity of injuries or the kind of injuries we’re seeing now.

 

So what problem were you trying to solve? And why didn’t it work? And they had no answer. And in fact, if you look in the medical literature, prior to 1970, roughly, there’s nothing about running injuries or how to treat them, because it just wasn’t happening. And then with the advent of the modern athletic shoe, in the last 50 years, every year 50% of runners and 80% of marathoners get injured every year that hasn’t changed, despite all the quote advances in technology that the shoe companies keep coming out with.

 

And so if you fund them, if you look at the design of the modern athletic shoe, there’s nothing about it that makes any sense. So often it has pointy toes, why are you squeezing your toes together? If I asked you to drop and do push ups, you don’t squeeze your fingers together, you spread them out. Same thing with your toes. That’s what makes your foot work better supporting the arch. If you support any joint, put a cast on your arm, the muscles and ligaments and tendons get weaker.

 

And research shows. If you put our support in the shoes of healthy athletes, they lose up to 17% of the muscle mass in their feet in just 12 weeks. You have a quarter of the bones and joints you have your whole body and your feet and ankles. They’re supposed to bend and flex and move. Like I said if you put them in a cast, everything gets weaker, when is weak or better than stronger. And in fact, if you want to make something stronger, you have to use it. Research shows that just walking in shoes like ours can build foot muscle strength.

 

Research shows that oh and I mentioned before you know the the force that can go into your joints. A researcher in Brazil put shoes similar to ours on the shoe on the feet of elderly women 65 years and older who had knee osteoarthritis in six months. Most of their arthritis was good

 

For some of them completely gone, because they weren’t putting force into the joints, their muscles, ligaments and tendons got stronger by using them and protected their joints, the padding on the shoe, the cushioning, research shows that cushioning doesn’t reduce impact forces. In fact, this is a weird physics thing, the cushioning spreads out the force.

 

So the force receptors in your foot don’t feel the force, but the force goes right up into your joints, you just don’t feel it at your feet, which is the first point of defense. And again, you have all these nerve endings in the soles of your feet, that’s designed to feel the ground and get feedback to go up to your spinal cord for reflexes and to your brain.

 

So your brain has had a balance and move you more effectively. And it’s harder to balance if you’re higher off the ground. And last but not least, when you elevate the heel, that changes your posture, and also puts additional force in joints that aren’t designed for that. So literally, there’s nothing in the design of the modern athletic shoe that has proven to be valuable.

 

50:58

In fact, he’s going the other way around. It sounds like he’s causing more problems than actually solving it. Yes,

 

51:03

the research actually shows that, in fact, here’s a quick story. So and I’ll mention the My name because they published this Nike developed a new shoe that they claimed reduced injuries by 52%. And it’s true. But if you look at the actual research, which they say was independent, even though they designed the study, they paid for the study, just someone independently did the study.

 

Yeah, but we know he’s never truly integrated. They’re the best selling shoe that they tested with, which was their own shoe. During the 12 week study, over 30% of the people wearing their best selling shoe got injured. In the new study, or sorry. Yeah, in the new shoe. 15% got injured. So 15% is roughly one out of seven 30%. Let’s call it two out of seven.

 

So that’s like, you know, once a week versus twice a week, which restaurant? Would you like me to buy you dinner every night this week? The one where you’ll get food poisoning twice? Or the one where you only get it once?

 

51:54

No, thanks. I think I’ll eat at home. Right?

 

51:56

So this is the best they could do is reduce the injury rate to about 15% in under 12 weeks. And and when asked what made that shoe better than the best selling shoe, they said we got rid of many of the protective features.

 

52:10

Dang, it’s very surprising because it sounds like the protective features themselves are the ones that are causing the problem.

 

52:15

It’s It’s shocking. It’s basically 50 years of propaganda and mythology and lies. Yeah, it definitely doesn’t sound very odd know what they’re really good at is do is using marketing, to fake you into believing things that are good for you that actually aren’t good for you or aren’t even true. So just there’s they use a lot of bad physics, for example, they use phrases like energy return, there’s no such thing as energy return, there’s only energy suck, you don’t get more energy back out.

 

And, and the and the energy suck depends on how much you weigh and how fast you run. Because if you don’t, if you’re not the right weight, and running at the right speed for the materials, the materials won’t perform properly. So it’s yeah, if you if you really get into the physics of footwear and running, again, there’s nothing to conclude other than modern footwear is wrong.

 

53:08

My see. Thanks for sharing, Steven. Now, Steven, we all know that entrepreneurship is never an easy process. Who would you say played a significant role in your success today, and you would like to take this opportunity to say thank you to you right now.

 

53:21

Luck, can I say thanks to Lotterer? Of course. You know, because because I do like to say that 90% of what has happened to us is because of luck. And the other 10% is probably also luck. And then there’s a whole separate 100%

 

Yeah, there’s not a separate 100% where 90% is working your butt off. And the other 10% is hopefully being smart enough to figure out how to put out the fires that started overnight, despite the fact that nothing changed since yesterday. I mean, literally, we’re not for the fact that somehow m

 

y Leyna decided to first be my friend and then my girlfriend and then my wife after avoiding me like the plague for years. We’re not for our relationship, this wouldn’t have happened. We are product developer or product designer. We we met him by accident.

 

He was walking his dog and a friend of ours is walking his dog. The two dogs started hanging out. So the two guys started talking. And this guy Dennis gave our friend his phone number. And Dennis was in barmy. Dennis was the former head of product design at crocs.

 

And so I sat on his phone number, and we had worked with you know, many, many footwear companies for the 3540 years previous. So I sat on his phone number for months, because I’m thinking why would this guy want to talk to me? And then we finally got together for lunch. And at the end of a three hour conversation. I said I’d love to work with someone like you someday but you know, a guy younger than you’re getting his feet wet.

 

He’s What about with me because I think what you’re doing is really important. And I believe in it. I said Yeah, but you were getting paid hundreds of 1000s of dollars a year. And we haven’t even made that much money in a year. He has yet but I’m retired. I said you’re hired. So he I mean, he’s been working with us now for since right before Shark Tank So for nine years, and we’re not for the his dog, knowing another dog that belonged to a friend of ours, that wouldn’t have happened. And without him, we definitely wouldn’t be where we are today.

 

And I can tell that story over and over and over about the number of incredible lucky things that happened to us that allowed us to be here.

 

55:19

So Stephen, if the listeners only remember one thing from today’s conversation, oh, you’d like it to be

 

55:24

Oh, by zero shoes, of course. But other than that, other than that, if I had to, in a way, if I had to synopsize a lot of the conversation, it’s that there is no a, there’s two parts, there’s no prerequisite to getting started, you don’t need to have a certain mindset, you don’t need to know a lot of things in advance,

 

 you just need to find a way to get started that at where you can, as quickly and cheaply as possible, prove whether your idea is good or bad, whether your business model will work or not. And mitigate risk, which is a variation on that the only thing you can control is the amount of money you can possibly lose. So that’s the thing you need to pay attention to. And there was a second point to that, that I

 

Oh, and then so you don’t need anything in advance. And then moving forward, the only thing you need to keep doing is looking at mitigating risk is looking for the ways that you can continue to grow. Pardon me, again, the ways that you can continue to grow by dealing with the innumerable things that will come up that you never could have predicted in a million years. In fact, I’ll say it this way. I,

 

I used to ask people who other people call it successful, I used to ask them, or I used to notice that people would ask them, How do you become successful? And they would always talk about how great they were?

 

And I asked them different different questions, I would ask them, how much of your success is due to luck, chance, fate, things that are out of your control. And they would have a much more interesting story about all the incredibly crazy things that happen to them. And then I would also ask them, you know, a lot of these people, their personal fortunes went up and down, they made money went bankrupt, made money went bankrupt. I said, if you were teaching a college course, on how to go broke, what would you teach?

 

Because teaching someone trying to teach someone how they were successful, is pretty much useless. Because you’re not that person. And you’re not living in that world, nor are they because that world is in the past. But the lessons about how you can go broke from making $100,000 a day or more. Those lessons are important. It’s things about leverage, and risk and exposure and competition, and market changes, and logistics, you know, there’s,

 

 there’s all of these things that you really can learn about, if you talk to someone who lost it all, and ask them if they had to teach you how to do that. What would they teach you, and then try and mitigate as much of that as you possibly can.

 

And when I say as much as you possibly can, for Lana and myself, up until the time when we brought on the private equity money. If if we went under, we went under personally, I mean, we were you know, we were fully prepared to go get jobs at Walmart if we had to, because we had we put everything into this.

 

But we did it knowingly. And we also didn’t do it blindly.

 

We were doing it because we kept seeing the business growing, growing, growing, growing, growing, helping more and more people. So we didn’t think it was going to happen because the business was a problem. We thought it could happen because of some unexpected situation. That there’s no way to protect yourself from

 

58:33

Stephen Hawking. No, this is getting in contact with you. They want to learn more about barefoot running.

 

58:38

Not surprised. Well, let me first say you don’t need to run barefoot, we use the term barefoot running, because what we’re doing is giving you the next best thing, do a barefoot feeling. And whether you run walk, hike, do yoga, CrossFit, whatever.

 

Using your feet naturally using your body naturally is the important thing. And that’s what we do just that it all started from that barefoot running Boom Back in 2009 2010. But most of our customers aren’t runners and never go barefoot. So but to find out more, go to zero shoes.com x ERO shoes.com. Or if you’re autocorrect change that to zero shoes, guess what, it’ll still get to us.

 

And you can find us on social media, either at zero shoes or slash zero shoe is wherever you happen to add or slash.

 

59:19

Now. Thanks, Steven for joining us today and sharing about your interesting stories and journey over the last 10 years of zero shoes. It’s been a real pleasure having you here.

 

59:27

Thank you, Ted. It’s been a real treat.

 

59:29

Guys, thank you so much for joining Stephen and I on today’s show. I hope Stephen story has actually inspired you to grow your business even further.

 

And of course to boot your community as well. Now before if you’ve received any value from the show, I would love for you to subscribe to the show, leave a review on Apple podcasts and to share the show with somebody who find it useful as well. All of these tools and resources and my email list available on tatio.com. That’s tdeo.com that’s all for me today. I’ll see you guys next time.