Building an Authentic Brand with Brian Smith

Intro (00:09):
Welcome to innovations and breakthroughs with your host, Rich Goldstein, talking about the evolutionary, the revolutionary, the inspiration and the perspiration and those aha that change everything. And now here’s your host, Rich Goldstein.

Rich (00:33):
Rich Goldstein here, host of the innovations and breakthroughs podcasts, where I feature top leaders in the path they took to create change past guests include your polished role in Fraser and Rick Zari. This episode is brought to you by my company, gold steam patent law, where we help you to protect your ideas and products we’ve advised and obtained patents for thousands of products over the past 27 years. So if you’re a company that has software product or a design, you want protected go to gold steam patent law.com, where there are amazing free resources for about the patent process. And you could email my team at welcome Goldstein, pc.com to explore if it’s a match to work together. You could also check out the book I wrote for the American bar association that explains in plain English, how patents work it’s called the ABA consumer guide to obtaining a patent.

Rich (01:18):
I have with me here today, Brian Smith, Brian founded Ugg an Australian brand that has gone on to become a multi-billion dollar global icon. And since then, Brian has become one of the most sought after speakers and business leaders in the country. In addition to publishing books and publications throughout the media, he presents on topics such as team building, company, culture, growth challenges all through the lens of his vast experience and also the school of hard knocks that he experienced while growing up. He combines that with his spiritual approach towards creating the future of business today. And I’m very pleased to welcome here today. Brian Smith. Welcome Brian.

Brian (01:56):
Hey, thanks Rich. That’s one of the best introductions I’ve ever had.

Rich (02:00):
Awesome best success, but, uh, but well earned well deserved. And, um, and, and despite all of that, that you’ve created started out very humble, right? I mean, you started out in Australia, you noticed something you noticed, um, you noticed that, um, with regard to innovation, California was the source of many of the big things that became trends became hits. So tell, tell me more about that. Yeah.

Brian (02:26):
Yeah. Well, the, uh, I was an accountant in Australia. It took 10 years for me to graduate and I quit the same day. I graduated cuz I hated accounting, but I was, uh, I’d discovered yoga back then. And I was meditating one morning and, and you know, a couple of weeks after I quit cuz I knew I needed to get some sort of job. And I thought, you know, all the best trends are coming outta California and you know, Levi jeans and water beds and all the surf brands and everything. And I thought I’m not, I don’t wanna be an accountant or an employee. I wanna start my own business. So I decided to go to Los Angeles and look for the next big thing that was, that was, you know, brew brewing in California. And I was gonna get on it early and bring it back to Australia. Yeah. And so within like a couple of weeks, I, I arrived in, in LA and I got a little house in Santa Monica and I, I brought my surfboard so I could go surf Malibu, cuz that’d be one of my dreams all my life. And uh, and, and it’s funny

Rich (03:35):
Too, because picking California, it wasn’t that big a stretch, right? It’s like if you, if you’re gonna move from the awesome surf of, of Australia to anywhere it’s either Hawaii or California, so that’s right. It wasn’t a hardship moving to California.

Brian (03:47):
No, no, no. California always intrigued me and, but I’d never, ever thought I’d live in America, which ended up what was what happened. But, but, uh, I, I arrived and uh, just went to Malibu and spent the first month surfing, you know, and, and I was scanning newspapers and you know, different businesses that were around to see if any would be, uh, you know, good for Australia. And, and I spent nothing in the first month and then, you know, three months later I’m still looking. And then one day in about, uh, October, uh, and this is 40 years ago. So it’s, you know, a lot of people don’t think Ugg’s been around that long, but it, it, it took a long time and I was up at Malibu and the, and the surf had got really cold and the wind was chillier. You know, the storms are coming in and I remember finishing up a surf and I, I pulled on my sheep skin boots that I brought from Australia and I just got covered in goosebumps.

Brian (04:49):
And I thought, oh my God, there are no sheep skin boots in America. And one in two Australians had some sort of sheep skin footwear. And so I looked at my buddy Davy who I was with and said, Hey man, we gotta go to business. We gotta be instant millionaires. And you know, you we’ve all had those thoughts. Um, but unfortunately entrepreneurship and, and business building doesn’t work, uh, for instant millionaires, you know? Right. And so we got back home, we called up a couple of different sheet and boot manufacturers in Australia and finally got one to let us be his distributor. So we wanted six pairs of boots. And you know, when they arrived, we, we, Doug was gonna be the salesman. So he went out and, and spent a week traveling around Southern California to every shoe store and came back a week later and no orders.

Brian (05:44):
And he said, Brian, they say, we’re crazy trying to sell sheep skin in California. And at surface value, that seemed like a logical thing, but Australia’s climate, its identity got to California. So it wasn’t true. And so we started thinking laterally, you know, you know, when an entrepreneur hits a wall, you have to sort of think laterally. And I thought, well, how come everyone of Malibu thinks this is the best idea in the world? And, and it just struck us that, oh my God, all those guys who have been down to Australia on their surf trip had bought four or five pairs of boots back for their buddies, cuz it was such a big deal down there. And so EV even in the surf community had a pretty good understanding of, of a, especially in California. And so Doug and I just decided, okay, let’s go after the surf shops.

Brian (06:33):
And um, so this time I went on the road and I remember driving into, you know, the first shop concert boards in Santa Monica. And I opened up my little bag of samples and he goes, oh, art boots, man, what are you doing with those? And I said, well, I, I’m thinking of going into, you know, business importing them, oh my God, you’re gonna make a fortune. Those things are the best. I’ve gotta pair you, you know? And, and, and then I went to the next surf chef and oh my God, that’s a great idea. You know, all my friends have got them. And so, you know, I went all the way down from Malibu all the way down to the Mexican border. And Doug was doing the inland valley area and getting the same reaction. And so we met a week later and my in Santa Monica and um, just said, oh my God, this is gonna be so big.

Brian (07:24):
So it didn’t occur to us that neither of us had asked for an order because we didn’t have any inventory. So, you know, there’s no point, but now we needed inventory. So a, a friend of mine, uh, a friend of my roommate, uh, was looking to invest in a business. And we raised 20 grand, which was about in today’s money, about 80,000. And, uh, we sent 15 down to Australia and ordered 500 pairs of boots. And they finally arrived at, you know, the end of November. And we sort of stacked them mall in my third bedroom, in the house at Santa Monica. And, and we loaded up our vans and went back on the road, you know, this time with auto pads, you know, and I went, go, went back to concert. I was in Santa Monica and he, he saw me come in with this huge bag of boots and said, oh, well done, Brian.

Brian (08:17):
You know? And I said, okay, how, how many do you want? And he goes, oh, we couldn’t sell ’em in our store. We just sell surfboards and trunks and flip flops. You know, that they’re way too expensive for us. You should go to the shoe stores. And that was my first disillusion like, oh, you know, and the next store was, oh, well done, Brian, but we couldn’t sell ’em in our store. We just sell surfboards and, and bikinis and, you know, surf trunks. And bottom line is we finished our road trip. I went to every, every one of the same surf shops and, and Doug did also, and we got back into our, uh, little office in Santa Monica and tallied up the orders. And it was exactly 28 pairs so much for think the resistance

Rich (09:08):
Was, what do you think the resistance was at that point of among the surf shop?

Brian (09:12):
Well, they, they thought, you know, I like, I didn’t do any sort of, uh, canvasing of the market beforehand, which I, I now learned as something that you have to do. And the bottom line was that Americans didn’t understand sheep skin, you know, Australians know they they’re born with the knowledge that you can’t rip. It. It’s really rugged. You can wash it, you can wear them with wet for feet and they still insulate, you know, but, um, Americans, oh, it’s hot, it’s delicate. We can’t get ’em wet. We have mud where we are, you know, so nobody could take them seriously as a really, really cool, you know, form of footwear. But eventually we, we, you know, we shipped the 28 pairs out and that, you know, that, that hitting, that, that incredible wall of, of no interest was, was something that I, I was very aware of.

Brian (10:06):
And I, I carried that thought forward in, in, you know, years to come. And I watched other businesses starting and even other businesses that I started. And I came up with with the theme that you can’t give birth to adults, you know, and I, I wrote a book, I’m gonna hold it up here. It’s called the birth of a brand. And, uh, if anyone’s interested, you should, you know, it’s, it’s a, a roadmap for entrepreneurs, right. On what pretty much on what not to do entrepreneurs need that roadmap. That’s for sure. They, they absolutely do. But the theme of not giving birth to adults is that everyone, every entrepreneur who starts a business thinks, oh my God, it’s gonna be the best thing in the world. I’m gonna make this in a million dollar business and you launch it and you get almost no traction and it just lies there and it there, and, and you gotta keep feeding it and, you know, nurturing it.

Brian (11:02):
And eventually it’ll start to title just like a toddler. And, you know, the first magazines are writing articles about you and then other, you know, first true believers are taking it out, telling their friends, and that’s a really cool phase, but it goes into the youth phase where you’ve got consistent orders, you know, productions working, accounting and billing is working. And, you know, the roads, all the salesmen are working and that, that you can run a 20, 30 million business in that phase. But if it’s a really, really great product or service, you can hit the teenage years. And just like, we all wanted to be at every party in, out on a Saturday night, as teenagers in, in business, you wanna be in every big box retailer and you wanna be every major trade show. And it’s really, really dangerous. You can run, you just kill your business by growing so fast that, you know, you can’t keep the cash flow going. And, and I went close to that a couple of times, and then eventually it become a mature

Rich (11:58):
Company and like a typical teenager that you can’t tell them anything you can’t tell them true, no better. They know pass, no, we have to be in that trade show. We have to go that event, you know, that’s so true. Yeah. So, and, and then you said an eventually than, um, than the, the brand matures becomes more. Yeah,

Brian (12:17):
It, it took several years. Um, I, I remember advertising those first few years with a, you know, perfect model sitting on the perfect rock on the beach, you know, and the, the boots were like way up in the main part of the photo. And I did for three years with, and got no traction whatsoever. You know, the sales went from 5,000 next year, 10 next year 20. And it should have been way, way more than that. And, uh, I was about to give up the business cuz I just thought, you know, it’s too hard. But this fourth year I decided to, you know, have a beer. One of my surf shop owners, you know, I was explaining this problem about, you know, nobody understanding Aug boots. And he, he says, oh, shut up, Brian. And he calls out to these guys in the back of the room, you know, back of the store.

Brian (13:04):
And these 12, 13 year old kids came out and he says, Hey, what do you guys think of UUG boots? And every one of them just went, oh, those augs man they’re. So, you know, have you seen those ads, those models, they can’t surf. And like instantly I realized I’m sending the wrong message to my target market. And, uh, I, I was embarrassed by my ads really. And so I laterally thinking again, I caught up a buddy who was running a, a, a youth surf team up in orange county. I said, Hey, you know, Pete, any of these guys gonna turn pro soon? Cuz I, I really would, you know, I can’t afford big names, but anyway, he gave me Mike Parsons and Ted Robinson and, and I just went to surfing with him and I took my own little camera and did shots walking to, and back from, you know, blacks beach Andress, these are two, I iconic mile long walks to the beach where there’s always fantastic surf.

Brian (13:59):
And I ran ads just showing them walking to the beach and you could hardly see the product. The, the, the, the feet was so small and the sales went to $220,000. And I, why, because I only got authentic and it wasn’t about the boots. They didn’t give a about what the boots looked like in the ad. They just would die to be walking down those roads with Mike and Ted. And I really tuned into the, the, the, the sort of feeling and the, the emotion that’s that goes with the product. And that was the big learning lesson for me in marketing. And so, you know, advertising, and that was the beginning, you know, after five years, that was the beginning of the U business as a business.

Rich (14:48):
Right. You found the brand identity, um, that spoke to your target audience and it, yeah. Communicated the message and sales were starting to move along. Uh, and, uh, so I guess that’s where it really took traction.

Brian (15:01):
Yeah. It took five years to really get started. Yeah.

Rich (15:06):
Yeah, absolutely. Um, and, um, so just, um, steering a little bit towards IP. So I mean, Aug is a, is a, is a multi-billion dollar brand. Yes. And so clearly at the, at the present moment, um, you know, Aug has extremely valuable IP. Yeah. But what role did it play during the growth of the company?

Brian (15:28):
Well, it, it was, uh, it was, is vital that the best thing I ever did was register the trademark, right when I began. And there was an anomaly in Australia, a had been around for years, 20, 30 years, but nobody ever registered it down there. And the law in Australia is the first guy in with the 10 bucks and a form, you know, the name, but in America and the rest of the world, if you can establish first use and continual use, then you own a trademark, even if you didn’t even file for it 20 years ago. Right. So me registering the U brand was key, but I didn’t realize it at the time. And as things went on, there were tons of knockoffs, lots of people coming in from Australia going, ah, we can say U cause it, you know, you know, we don’t need to register it.

Brian (16:23):
And I had spent a lot of time in the early days fighting for that brand. Um, and I wanna be clear here. The, your brand is not the trademark registration, right? Your brand is not, um, your logo, right? Your brand is not the product. The brand is what customers think about your product and brand. And that took several years to develop. And so even though I had to bat off these small, uh, attackers in the beginning, as the brand got bigger, the credibility for Ugg really showed itself. Like I remember after about the fourth, fifth year that you, the year that took off all these other brands came into the market the next year. And they did quite a bit of sales. But the interesting thing is that they got like the kids, let me back up, the moms didn’t know where to buy ’em.

Brian (17:28):
Right. But all the kids are saying, oh, mom, everyone, all the cool kids at school have got boots. Right? So the moms started walking the malls, going to all these, you know, places that I didn’t deal with. And they bought all these knockoffs and they gave them to their children at Christmas and the kids refused to wear them because the, the whole fake U thing had already started. And they didn’t wanna be at school with a pair of fake U boots. Right. So that’s when I started to realize that was five years in where I started to realize the power of the brand, because these moms are coming to us saying, oh, we bought these other ones. Can we swap ’em over? And we’re going, no, you know, you gotta go to the stores and buy the real ones. And, and that, that’s what the brand means. It it’s what your customers think of your brand. And if your customers refuse to buy the knockoffs, because your brand is really powerful, then you really have something in your business.

Rich (18:31):
Yes, exactly. And so, and so that’s what the brand is. And the, and the trademark then helps you to keep that exclusive. Yes. It helps to stop other people from trying to copy your brand that’s right. Yeah.

Brian (18:45):
And would you believe that that that brand challenge has gone on for 40 years? In fact, the Supreme court in the us last October made their final ruling that my, a brand stands, uh, against any challenges from Australia. So it, it goes, you know, just cause you have the trademark, you know, mean doesn’t mean you, you, you gotta defend it. And, uh, yeah, that the, since I sold the, the company, uh, you know, then the trademark went with it, uh, Deckers corporations spent millions and millions and millions of dollars over the last, you know, 20 years just defending it.

Rich (19:27):
Yeah, absolutely. Well, when you have something very valuable people try to, to, uh, on it. Yep. Absolutely. And, um, so I’m gonna, I’m gonna ask you a few questions about, um, you know, about, um, some of your business lessons and I’m just gonna fire off a few things that I know that you are, uh, that you like to talk about. Uh, so what did, um, you know, what did your experience running augs tell, teach you about customer service?

Brian (19:58):
Wow. The, uh, let’s fast forward, about 10, 12 years, you know, we were doing several million in business and, uh, one of my, my financial partner died and my supply, I was really reluctant to send me any products, uh, because he, you know, had just had three or four years of really good payments. And I knew he remembered back to when I was running the business solely and he never knew when the money was coming. And I, I didn’t know what I was gonna send it. I always paid him, but he started a book. And, uh, and you know, I was sending all these orders, you know, 10,000 pairs, you know, 5,000 pairs, another 10,000 pairs. I was sending all the orders down to him and I couldn’t get a firm commitment on when he was gonna deliver. And that ran its course, you know, that started in February when my partner died and all the way through July, I didn’t get any feedback on when my product was coming in.

Brian (21:00):
And we were having a, just a killer sales season. And, and it turned out that, you know, by, by July, I, I had to start looking for other manufacturers, had a lot of visits with, especially one tannery down in Australia who, uh, said that they were gonna, you know, back me, but then it never really happened. And then it got to this trade show in, in September, which kicks off the season. And I found when we set up, you know, our birth, that there was another sheepskin boot birth, you know, that was owned by a windsurfing company. And, uh, I, you know, I was thinking, why would they even be in the show? But when I went across and I, I looked at all the product, there was all my product, you know, the new colors, the charcoal and the, the black and all my regular cars.

Brian (21:56):
And, and my supplier had found a different distributor and never told me. And so, you know, we, we ended up that show writing a huge number of orders, and I realized I’m not gonna at any product. And, uh, finally my, my tannery contact came through and said, God, Brian, you know, I’ll, I’ll supply you. And he cranked up four or five manufacturers. And, and he started sending, you know, 5,000 pairs a week to me. And I was just dribbling them out to all of my, my sales accounts. And at the end of the season on December, um, we’d sort of, we’d shift about a million and a half, but we threw away another million dollars worth of orders. Cause we just started so late. And it turns out that, that, uh, how can I put this the, between Christmas and new year, my customers broker screwed up and shipped, uh, 2000 pairs of boots to this, you know, knockoff and the company that knocked it off, used the name thugs, which cuz they, their name was underwear.

Brian (23:08):
And they used thugs as their brand and they shipped 4,000 pairs of thugs to me. So I went, I went up and, and uh, swapped them around. I, I noticed that their warehouse, which was bigger than ours was floor to ceiling full of sheep, skin boots, you know, with the thugs brands on them. And I realized then that, oh my God, you know, we couldn’t keep 5,000 pairs every Friday in the warehouse for 24 hours and their warehouse was full. And that’s when I realized that my customers, who I had a relationship with all across the country, cuz I’d, I’d flown so many miles, you know, visiting with them, they refused to buy the thugs and you know, they threw away $2 million worth of orders at retail. And that’s when I realized how powerful the brand had become, where, where all of my customers realized that my manufacturer had done it and run and they refused to buy them.

Brian (24:03):
So that was a long story to sort of answer your question, but you know, when you have customer loyalty like that, it’s unbelievable. And you know, even though today we’re in websites and clicks and Amazon and you know, instant purchasing, if you are a, a supplier in this market, you’ve got to be able to reach through the internet and make a personal connection with all of your customers. And I’ve seen other companies do it where they’re very, very successful in keeping, you know, a, a, a real constant, you know, uh, contact with all of their, their, uh, retailers.

Rich (24:43):
Yeah. Got it. And so then I think the point is that, um, it, it really taught you the value of what, what great customer service great customer relationships can provide is that a, you can have, you can have a situation safety, you can’t keep product on the shelf because yeah.

Brian (24:59):
It was, it was my lifeline that, that got me through that season. Yeah.

Rich (25:03):
Awesome. Um, and, and so you, you spent five years really getting traction with S and, and then yes. And there were times where you were ready to give up. Uh, and so kind of what got you through that? Like what, what got you through, um, the moments where it just really wasn’t, you weren’t instant millionaires. You weren’t even, you know, million after a few years,

Brian (25:28):
We were grinding after five years, five, the fifth and sixth year is when we started to get enough predictable sales, uh, where we could start bringing on good staff and doing proper marketing campaigns and stuff like that. But, uh, the, there there’s a couple of things. One is I learned through, you know, there, there was a period where I lost control of my company when I brought different investors in. And, uh, I was just a full-time salesman on the road at that point. And, you know, there was a point where I didn’t think these new guys are gonna issue my stock and everything like that, but I eventually survived that. And I, I, I came up with the philosophy, which again, is in my book, you know, I, my book’s full of philosophy, you know, from all of the lessons that I learned from all these disasters, but the best one was that, um, your most disappointing disappointments will nearly always become your greatest blessings.

Brian (26:35):
Right? And I, I learned this from just being in business and taking these hard knocks, but when I’m on stage, you know, I talk to hundreds and sometimes thousands of people in the stage. And I, I always ask the question, you raise your hand. If something happened in the last 12 months in your personal or business life, where at the time you thought it was the greatest disaster, and now you look back and think, oh my God, thank God that happened because where I am now is so much better than where I would’ve been if I had have carried on down that path. So you most disappointing disappointments will always become your greatest blessings.

Rich (27:15):
Absolutely. That is, that’s a great lesson. And, um, and, and spirituality, I know you’re a spiritual and you bring that. Yeah. So what has spirituality taught you about business? How to

Brian (27:27):
Business? Well, yeah, in my talks and all through the book, I, I talk about goosebumps, you know, all the time, I, all the times I got goosebumps. And after years of sort of noticing this, I, I realize that, well, I, this is my personal philosophy. The isn’t out the end of the universe somewhere way out there. Right. I I’ve just come to believe that there’s a, a fragment of God or a spirit or whatever you wanna call it inside every one of us. And it has, it has a plan for us in our life. And I’ve found that every time that I’ve got the goosebumps, now that I look at, I look at, I try and analyze what, what just happened. And it’s nearly always I’ll get this flash of inspiration for a new direction or a new solution out of an issue that I’m dealing with. And it, it’s almost infallible that, that those goosebumps are the, are the sort of it’s, it’s my internal way of telling me, okay, Brian, you’re on the right track. And the only way I can get to us is through this electrochemical thing we are walking around in, you know? Right. And so that that’s become very, very much my philosophy. So if any of your listeners get goosebumps, I, I, I, I just urge you to stop for a second and think, what did I just think? And I’ll bet you it’ll be something that,

Rich (28:49):
So the goosebumps are like an antenna that tell you what to pay attention to.

Brian (28:53):
Exactly. Yes. Yes.

Rich (28:55):
I love it. Uh, well, Brian, this is amazing. If, if people want to, um, learn more about you again, in contact with you, how do they go about doing so?

Brian (29:04):
Sure. Just go to mys it’s U founder.com, Ugg, founder.com. And all my contact information is at the end of the website there. And, uh, you know, my business now is, uh, cause I sold the company in the late nineties and that that’s when it tracked off into the billions, uh, because of this connection I made with Oprah, right. As I was selling the company and she and her publicity machine dragged us off into the, you know, the millions and the hundreds of millions and eventually the billions. Um, but, uh, yeah, there’s, there’s a lot of, uh, resources on my, in my website, but my, my day to day fun job right now is public speaking. I, I love traveling the, the world. I mean, I, I go all over the world talking, uh, from the stage about various parts of the book. A lot of the stuff we’ve talked about today, but, but it goes much more in depth and, and the book is even way, way more in depth than that. I’ll, I’ll hold it up one more time again. It’s called the birth of a brand and you can get that on Amazon. And, uh, yeah. If any of your listeners, uh, are looking for a really good speaker, um, for sure. Contact me through the website and I’d love to sort of see if we can make it happen.

Rich (30:21):
Yeah. I, I saw you speak a few weeks ago and, uh, and it was awesome and I took pages and pages of notes and really, that’s great, really thrilled that you, um, you took the time to, to be on my podcast to, to join me on this program here. So it’s

Brian (30:36):
A my pleasure.

Rich (30:37):
Yeah. So thanks so much, Brian, and, uh, uh, and hopeful. I’ll get to see you speaking at another event real soon.

Brian (30:44):
I, I hope so. Yeah. And good luck to all your entrepreneurs out there. Just remember you can’t give birth to adults.

Rich (30:51):
I love it. All right. Thanks everyone.

Outro (30:58):
Thanks for listening to innovations and breakthroughs with your host, Rich Goldstein. Be sure to click, subscribe, check us out on the web at innovationsandbreakthroughs.com and we’ll see you next time.