Starting your own business or any project entails confronting the unknown. Taking risks is one thing and knowing what action to take to prevent slip-ups is another. You can’t blindly rush and lead the organization without thorough planning. In this conversation with Jen Du Plessis, Brian Smith, founder of UGG Holdings and author of The Birth of a Brand, shares a wealth of business strategies and the highs and lows of growing a company from scratch. Listen in as he shares his proven insights of risk-taking and strategized planning of controlling decisions.
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The Rewards Of Taking Risks With Brian Smith
I am delighted to introduce you to our guest, Mr. Brian Smith, the Founder of UGG boots and a philanthropist, speaker, giver. That’s how I see you, Brian. Thanks for joining us.
The pleasure is mine. It’s great.
It’s good to see you. We haven’t seen each other in person for a while. You are the Founder of UGG boots. You’ve got a great story that we’re going to talk about. You’re doing all kinds of things. You’re on stage speaking and sharing your stories of inspiration, motivation, trials and tribulations as they go along. Take us back if you don’t mind and tell us a little bit about what it was like living in Australia. What was your life like and your childhood like?
I was blessed. I had a great childhood. My dad was a contractor. We never had any cash or money lying around the house, but we got to do lots of cool things. I lived in a city called Canberra. In my school, there are 1,000 kids and 5 of us had parents who had a house at the coast. Every long weekend, every holiday, we were at the coast. I had an upbringing partly in the city in Canberra but mostly in the country on the coast. I grew up surfing. Looking back, it’s an easy childhood.
Thankfully, you had that easy childhood because it allowed you to decide to explore coming to the United States. What brought you here? What was the auspice for bringing you to the US?
I’d been an accountant. I was studying part-time and working full-time. It took me ten years to graduate. I quit the day I graduated because I hated accounting. I had this personality that doesn’t want to give up. I was sitting around and trying to figure out what I would do, where am I at. I had the brand-new album, The Dark Side of the Moon by Pink Floyd. In the second song, the words went, “Tired of lying in the sunshine, staying home to watch the rain. You are young and life is long and there is time to kill today.” I felt like, “They’re describing me.” “And then one day you find ten years have got behind you. No one told you when to run, you missed the starting gun.” As soon as I heard those words, I got goosebumps. All my friends are tracking off to partnerships in the accounting world and other guys who had quit high school started their own businesses. Here I am, ten years later, nowhere, quitting a job that I didn’t like.
Back then, I discovered yoga. I was sitting down and meditating one morning and I got these goosebumps again and I thought, “All the big trends are coming out of California, like Levi’s jeans and water beds.” All these things were coming out of California. I said, “I’m going to go to California, find the next big thing and bring it back to Australia and make my own new business.” I arrived in LAX and I had my surfboard in my house in Santa Monica. The first thing I did was go straight to Malibu to surf. It has always been a dream of mine to surf in Malibu.
I was surfing up there for a month or so and I didn’t find the next big thing. Another month went by and it got to be October and the water was getting cold and the wind was chilly. I remember finishing up a surf there. I was putting on my sheepskin boots that I brought from Australia. I got goosebumps again. I took my buddy, Doug, with me and I said, “We’ve got to get in a business. We’re going to be instant millionaires.” One in two people in Australia owned some sheepskin footwear and there was nothing in America. It seems logical that I’d make a fast fortune.
[bctt tweet=”You’ll never start if you’re waiting for perfection.” via=”no”]
As I’ve heard you say before, here you were trying to tout sheepskin boots to surfing shops.
Doug was going to be the salesman. He went around to all the shoe stores. We got some samples from a manufacturer. He came back with 150 business cards and no orders. As a good entrepreneur, when you hit the wall, you have to pivot and figure out a way around things. It struck me that many of them had been down to Australia on their surf trips and they bought half a dozen pairs of boots back for their buddies. Within the surf market, it was pretty well-known.
Doug and I had no option. We went after the surf shops. Doug did one section of LA. I did the coastal side. I walked in with my bag of samples and the shop owner goes, “The UGG boots, what are you doing with those?” I said, “I’m thinking of importing them into America.” He goes, “You’re going to make a fortune. That’s the best thing in the world. All my friends have got them.” I went to the next surf shop, “That’s great. You’re going to make a killing.”
After 2 or 3 days of this, Doug and I met back and I was thinking, “We’re going to be instant millionaires.” It never occurred to us that we didn’t ask for an order. We didn’t have any inventory so what was the point? It was enough to get us started. We got an investment of $20,000, which is about $80,000 now. We sent an order down to Australia for 500 pairs of boots that’s worth $15,000. They finally arrived and Doug and I picked all the stuff up from the airport and we put it in my third bedroom in Santa Monica.
The next Monday, we filled our cars full of product. We had all the pads and everything. We both went back to the surf shops. I remember going back to Con Surfboards, which was the first guy I’d spoken to earlier and I go, “I’ve got this huge duffel bag full of product. How many do you want?” He goes, “Brian, well done. We couldn’t sell them in our store. We sell surfboards, trunks and wetsuits. Don’t worry, go to the shoe stores.” I started remembering, “Crap.” I went to the next store, “Brian, it’s fabulous, but we couldn’t sell them here. We sell surfboards, trunks, bikinis, wetsuits and board shorts. Don’t worry, you’re going to kill it in the shoe stores.” By the time we finished our road trip and visiting every surf shop that said we were going to make a fortune, Doug and I counted up the sales for the year and it was 28 pairs. We were disappointed.
That’s adversity. That is a ceiling because now what do you do?
Doug went and got another job. I couldn’t give up because I had $20,000 of investors’ money and 480 pairs in the third bedroom. I started going to swap meets and street fairs. The best thing I had going was I used to open up the back of my van in Malibu and I had a full set of inventory in the van. The rest of that year went to about $5,000. I got a summer job. I was scraping boats at Marina Del Rey. The next season, I said, “I’m going to advertise.” I got some models and put them on the beach at Windansea down in La Jolla and ran those ads. They had the perfect hair and the perfect clothing and the boots were the major part of the ad. The sales went to $10,000. I couldn’t figure that out because it should have been way more. I got another summer job and that one was construction work in Bel Air.
The next season I said, “I’m going to get better-looking models and a more expensive photographer.” We pose them on the beach with perfect hair and the sales went to $20,000. I couldn’t figure it out. That next summer, I was working as a golf course greenskeeper and I decided that I’m going to go out of business. When the first storm hit the coast in October, my answering machine lit up with about 30 messages from every single retailer screaming to get more product. I couldn’t get out of business.
Were these retailers the surf shops because it was cold?
All the surf shop retailers. I remember having a beer with one of the surf shop owners and I was saying, “A part of me wants to give up. I’m doing all this advertising and it’s not going anywhere.” He said, “Shut up, Brian.” He calls out to the back of the shop and all these 12, 13-year-old grumetes come out and he says, “What do you guys think of UGG boots?” Every one of them went, “Those UGGs, they’re fake. Have you seen those ads? Those models can’t surf.” Instantly, I realized I was sending the wrong message to my target market.
I pivoted again and I called a buddy who is running a Scholastic Surf Association up in Orange County and I said, “Have you got any young kids who are going to turn pro soon? I’ve got no money.” He gave me two names, Mike Parsons and Ted Robinson. I met them and we went surfing to Black’s Beach in La Jolla, and Trestles up in San Onofre. They’re remarkable because the walk is about a mile to get to the beach and a fantastic surf at the end.
I took my little Canon Sure Shot and started photographing us walking to the beach. When I ran those ads using those photographs in the September and October issue of the SURFER Magazine, the sales went to $200,000 that season purely because I’d figured out how to get the readers looking at an ad that they desperately wanted to be. I can imagine every little surf kid in America wanting to be walking down that path with Mike Parsons and Ted Robinson. It paid off. That was the beginning of UGG. It took four and a half years to get started, but that was the beginning of UGG as a brand and as a powerful movement. We had these dedicated fans who died for UGG boots.
They still do.
I parlayed that into snowboarding and skiing. In the Midwest, I had to try and figure out what they’re doing in winter-time for sport. They all played ice hockey. I went after the youth in the ice hockey market and all the ice hockey moms. I was able to duplicate that all across. That’s what made UGG become such a phenomenally loyal brand for customers. The product was always fantastic. That was what kept the longevity of the brand going.
Where does UGG come from? I know that the first boot was not the boot that we all see now.
No way. Nobody knows who made the UGG name up. There are a few old guys in Australia who claimed they did but nobody knows. It’s been descriptive of sheepskin boots. There are hundreds of little factories all around Australia that make sheepskin seat covers and sheepskin bed underlays and then they make UGG boots. They spell it UG or UGG or UGH. Nobody registered the trademark down there for the longest time. It became unenforceable down there. Luckily, because I knew I was the first one to bring them into America, I applied for the trademark rights here and got them. That was what I built the brand around was that trademark listing.
Tell us about the first pair.
They were horrible. They had glue all over the top to the front. It was two pieces of sheepskin stitched together in this shape. It was glued to a piece of linoleum, that was the sole. That was the state of the art of UGG boots in Australia. That’s what we took to our first trade shows. We got to clean the product up so it didn’t have glue all over it. That basic style was what we started the business with. That’s a good point you bring up because too many people want to start their own business, but it’s not perfect enough yet. “This is going to make a fortune, but why haven’t you done it?” “It’s not finished yet. It’s not perfect.” You’ll never start if you’re waiting for perfection. Take what you’ve got. I’ve got many stories about companies like that.
When you look back on that, to tidy up loose ends on UGG, what do you think was your biggest mistake that you made in making UGG to what it became? I know you sold it. What do you think was your biggest life lesson that you learned from a mistake part? I’m sure you had some great life lessons. You can share those too on what you did right and how that created who you are now.
In our standards, I should have done my due diligence. If I hadn’t done that, you wouldn’t have heard of UGG now. If I knew how hard it was going to be, I would never have started.
That might be a blessing.
[bctt tweet=”Go all in with your full passion. Let your dream be bigger than the obstacles. You will make it through.” via=”no”]
That’s the beauty of entrepreneurship. One of the requirements to be a good entrepreneur is some level of ignorance. If you knew how hard it was going to be and all of the things you’re going to face up to, you would go, “Let’s not work for it.” If you go in with your full passion, the dream is bigger than the obstacles, you’ll make it through. There’s a way to break through every obstacle. I’ve never yet had an obstacle that didn’t turn into something good.
I wrote a book called The Birth of a Brand. What I speak about on stage is from this book. One of my favorite pieces of philosophy is that your most disappointing disappointments will become your greatest blessings. I ask from the stage, put your hands up if a year ago something disastrous happened in your business and you thought it was horrific. You look back and you think, “That’s the best thing that ever happened because look where I am.” I would say that 80% of the people put their hand up.
I’ve been in that crowd and answered that. It’s funny because I’ve been able to answer it year after year. In 2020, we were starting COVID. I thought, “This is not going to be good for my business.” As a speaker, you’re one too, I was on the road all the time speaking. What am I going to do now? No one could tell me that I couldn’t do it. I persevered and I’m in a much better position than I ever was in 2020.
It’s amazing how that happens. It’s common.
Tell us what you’re doing these days. You sold UGG several years ago. I know that you still love talking about it. We’ve had some fun times up in New York in the middle of the night in a UGG store. What are you doing now? What’s your passion now?
I’ve been mentoring a girl here in San Diego. She has a lamb leather sash bag, it’s a cross-shoulder bag. It’s got all these different compartments and everything. It’s made out of lamb leather but no fleece. The bag is good. How I met her is I had spoken on the stage and one of her investors heard me and said, “Nichole, you’ve got to meet Brian Smith. You’ve got to listen to some of his stories.” I met with Nichole and her friend. The minute I touched the lamb leather, it took me back several years when I was UGG and I went, “This is beautiful stuff.” We talked a bit about her business.
After about half an hour, I couldn’t stop thinking, “She’s in chapter five of my book.” You do not want to be in chapters 6, 7, 8, 9 because it’s tough. I agreed to mentor her. I’ve been working with her. She’s now multi-millions in sales. The market has changed so much. It used to be all retail for me. Now, the market is pretty much all electronic. It’s good. There are a lot of good parts about it and a lot of bad parts about that as well. We’re in the process of doing a fundraising and this is unique. You’re familiar with Kickstarter campaigns? You put your product in and you have all these benefits for $500 or $1,000. There’s a new program or a new platform out there called Wefunder. It’s like a Kickstarter, but you don’t sell a product, you sell stock in the company.
I bought some from a new company.
We’re a few weeks from going out with our Wefunder campaign. It’s going to be fantastic because we know we got such a hot product. The biggest problem in that business is that our manufacturer, because of his banking situation in India, has to have full money before he ships product. That’s okay when you’re doing 100 pairs. When you’re doing 5,000, 10,000 pairs in a month, that becomes prohibitive financially. We’ve not been able to get as much product in as we can sell. We’re always back-ordering, “We promise we’ll have it in a month or two months.” We’ve got to break that cycle. This Wefunder campaign is to build up to $1 million, $2 million worth of equity that we can then put in place for ordering in India and have a continuous flow of product. I’m psyched about this. It’s like being in the UGG business all over again.
Except you’re wiser. In one of the mastermind calls that we’re on, you told us about it. I remember going to the website and looking at it. What is the name of it again so we can share it with everybody?
The bag company is called TheSashBag.com. The other reason I decided to mentor Nichole is she’s clever. She and her assistant are both smart girls. I saw her after a year or two. She had about 120 bags that had blemishes or the zipper was sticking out or defective. We couldn’t sell them as perfect bags. She decided to go on Facebook Live. She numbered all the bags, 1 through 120. They were all $99 or usually $160 or something.
She started talking about this bag. She’d put it down and then she’d spend another minute talking about the next bag. She wasn’t realizing that the minute she held it up, it was sold. At about bag fifteen, she realizes, “The minute I hold it up, it’s gone.” She flew through the 100 bags. It took 45 minutes. You would think that would be a huge success, but then came the problem of, who bought it? Where’s their email address? How do I get an invoice to them? It took nearly months to get those 120 bags shipped out and the money in. That’s when Nichole thought, “There’s got to be a platform for live selling on Facebook.” There wasn’t. We checked with the inner circle of Facebook and they weren’t interested at that time.
We built a live-action shopping platform and we use those letters for LASH. It’s LASH.live. What we do is on Thursday at 4:00 in San Diego time, Nichole will go live on our platform and will have invited thousands of people to come in at 4:00 and watch the sale. They all come in. They register. They put their credit card numbers, which were never used unless they buy something. We get 300 or 400 people watching. Whatever she wants to sell that day, she starts selling.
It’s not sophisticated. There’s a buy button. It’s like Home Shopping Network. You hit buy and you’re instantly in there. You don’t have to leave the site, go to their website, fill in the application and fill in the shipping. All that is already done. It’s like being live there in the studio where they’re selling. There’s a chat function on the side. These ladies are talking to each other. After all these years, they’ve got a whole rapport going. It’s been successful that Nichole did a Sash Sisters dinner. It’s going to be in San Diego. Would you believe that 350 ladies from all over the country flew in at their own cost to be in a dinner for LASH, Sash and to meet at the bar? It shows you how powerful Nichole’s social media work is. She’s brilliant in creating communities.
It’s great for you to be around her and be that mentor because her success is accelerated. She’s able to crash through ceilings faster than ever before.
She’s teaching me a lot too. When I saw Doug, we thought to put computers on everybody’s desk. The internet hadn’t started. I’m learning a whole new range of skills myself.
I’m glad that you’re involved in that moving forward. I have a couple of different questions I have for you. What’s on your bucket list?
I haven’t seen nearly as much of the planet as I would like to. When we were back on the road speaking, I got one in Istanbul. I made a deal with them, “I’ll come and speak, but I want four days in the front and four days in the back. Would you pay the hotel bill and I’ll cut my fee? That’s how I was starting to travel. I’ve been to the Bahamas, Australia. I was going to go to the Philippines, but that got cut by COVID. I don’t want to stop working because it’s not work for me. I love helping entrepreneurs. I have several that I deal with besides Nichole. I love being part of the business community. She’s doing $4 million in sales, that’s healthy. A lot of them are smaller than that. It’s a matter of me wanting to travel and see the world.
While chasing your passion at the same time.
The other thing is more esoteric. I’ve always had this mantra that I want to leave the planet better off than I found it. That’s nebulous. I try every day to meet one more person and make a friend. Bit by bit, I’m spreading goodness around the world in my own little way.
I talked to someone and he said his life’s goal is to leave an impact on the hearts of those that he has met, to lead that on to perpetuity. I thought that was good because that’s the impact that he wanted to make in the hearts of people as well. That’s part of making our world better. I wanted to ask you this, is there something that no one knows about you? Is there something that you’ve not told anybody before that you’d like to share with us? Do you have a story that you didn’t tell that someone doesn’t know about you? What is something unique about you that we can’t read in Forbes or we can’t read online?
[bctt tweet=”Your most disappointing disappointments will become your greatest blessings.” via=”no”]
I’m going to answer that by saying that I live my life in little sections. Nobody in America knows that my name in Australia is Butch. I even got invited to a wedding for some good friends. The invitation said, “Butch and friend,” because they didn’t know my real name. That’s one bit of information. If I went back to Australia and saw all of my buddies, they’re like, “Butch, what have you been up to? What do you mean you’ve been in America for many years? That’s crazy. I thought you’re still here.”
Is your middle name Brian? You went with Brian. How did that come about?
My nickname was Butch.
Where’d that come from? Who gave that to you?
When I was about 7 or 8 years old, I went to the hairdresser and I told him to shave my head bald. Back then, in the Donald Duck comics, there was a convict who was bald and his name was Butch. That name stuck with me.
People close to you call you Butch.
Nobody in America would know.
I like your name because it’s the same as my husband’s.
I’ve always loved that name.
He was named after sister O’Brian in the church. That’s where it came from. That’s a small thing. I know that you’re wanting to get back out and speaking. Now that COVID is lifting a little bit, we’ve got some opportunities. What is the best way for someone to get in touch with you if they’d like to have you come and speak about entrepreneurship in their virtual or in-person live events?
My website is UGGFounder.com or you can also get there with BrianSmithSpeaker.com. There’s a whole speaking page on there, which shows how you can get in touch with me, loads of testimonials. If you own a company or you work within a company that has speakers come in for motivation and inspiration, those audiences are what I love. I’ve spoken on big stages like Inc. 5000 with 2,000 or 3,000 people there. I like the more intimate company events where there are 200 or 300 people. I get to know everybody a little bit better.
That’s how we met. We were small and intimate. I came running up to you. We got a little picture, which I still have. I don’t like me in it, but I like you in it. You’re going to be at a mastermind for Secret Knock at Greg’s place.
Yes, I am.
I’m going to be there too. I can’t wait to spend more time with you and get to know you and pick your brain. Maybe you’ll want to pick my brain for something too. We’ll see how that goes. Hopefully, it will. Brian, it’s been an absolute pleasure. From the bottom of my heart, thank you so much for taking the time to spend with me and share with our community the trials and tribulations that you’ve been through. The impact that you’re making in the world, other people are delightful to see. I wish you the best in the world. I can’t wait to see you soon.
Thank you so much. Remember the Wefunder campaign for the Sash Bag. Hopefully, a bunch of your readers will become Sash Bag owners. That would be cool.
I’m going to probably go get one myself and tout it. Hopefully, everyone will want to buy it as well. I can’t wait. Thank you again, Brian. Everybody, thank you so much for taking time out of your day to read our stories that make success and impact in the world. We’ll talk to you next time.
- The Birth of a Brand
About Brian Smith
At 29, Brian decided that a life in Public Accounting was not for him! He quit his job and went to California to look for a new business idea and to surf all the legendary breaks such as Rincon, Malibu, Dana Point and Windansea. He soon noticed that there were no sheepskin boots in California, so he and a friend brought six pairs from Australia to test and so, “UGG” was born and over the next seventeen years Brian built it into a national brand and solidified himself as a business expert.
The business grew too big for Brian to finance, so he sold it to Deckers Outdoor Corporation. The new team built upon the “casual comfort” theme and through style development, merchandising and great marketing, established UGG as an International fashion brand, with sales exceeding one billion dollars for each of the past five years.
In 2000, he founded Prefast, a company that provided pre-cast concrete walls in a two-story configuration for California schools. He sold this business, and the company continues to build California schools to this day.
In 2003, he then Patented a new type of pre-cast wall panel incorporating lightweight concrete and steel studs. A breakthrough technology, over 100 structures were built prior to the economic recession in 2008. The 3-year halt in construction set in play those events that would lead to the eventual demise of the company.
As Napoleon Hill says in his book “Outwitting The Devil”: “Experiences of adversity were among the most fortunate and profitable of all my experiences”….., Brian found that his lessons learned would be valuable to share.”
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