Exit Rich | Steven Sashen | Xero Shoes

 

Do you ever wonder if barefoot running is right for you, but you’re worried about hurting your feet? Then check out this interview with Steven Sashen, co-founder of Xero Shoes, a company that makes footwear designed to mimic the barefoot experience. Sashen, a former professional runner himself, talks about the benefits of barefoot running and how Xero Shoes can help you transition safely. You’ll also learn about his experience on Shark Tank, including the surprising request from Kevin O’Leary (spoiler alert: it didn’t involve money!). This episode is packed with valuable insights for runners of all levels, so get ready to ditch the bulky shoes and feel the ground beneath your feet!

Watch the episode here

 

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Xero To Zeros With Steven Sashen

We have another amazing guest. Get ready, if you’re a sports enthusiast, if you love to run, if you like to do any type of sports activity whatsoever, or if you want to feel better in your feet, then I have the guest for you. I’m so excited and pumped to have Steven Sashen on the show. He is a serial entrepreneur, but he didn’t start that way. He has never had a job. He’s a former professional standup comic, award-winning screenwriter, and competitive sprinter. You are one of the fastest men over 60 in the country, maybe the fastest 60-plus in the world.

He and his wife, Lena Phoenix, are co-founders of the footwear company Xero Shoes. That’s why I’m so excited. We will talk about Xero Shoes today. They are creating a movement that has helped hundreds of thousands of people live life fast, feet first, with happy, healthy, strong feet, and comfortable footwear. Steven and Lena also appeared on the Shark Tank where they turned down an offer from Mr. Wonderful, who’s not always so Mr. Wonderful, for $400,000. Welcome to the show, Steven. I’m happy to have you here.

Thanks, Michelle. It’s a pleasure being here.

Background

Let’s talk a little bit about you because you’ve never had a job before, which is shocking to me. You are a comedian, a sprinter, a screenwriter, and everything I said. What was Steven like as a little boy?

Let’s just say they hadn’t invented Ritalin when I was a kid, or it would be a very different story.

That’s funny. You are a comedian. I hope you make me laugh. All of our guests laughed throughout this entire show.

The pressure is on, but I’ll do what I can.

You know what? My faith is in you. What were you like as a little boy?

My mother used to talk about me and say, “As Steven says, this is true.” I was quite inquisitive. I like to learn new things. I was a little hyperactive. When I was seven, my mother gave me the catalog for the Jewish Community Center activities and said, “Pick one.” I picked diving. I became a competitive diver when I was seven.

I switched to gymnastics when I was 11 or 12. I like learning stuff. This sounds crazy to say, but I became a professional magician at the age of 12. I started teaching physics to people in their 60s when I was 14 because I became a ham radio operator. I was one of the two youngest. There are different classes for ham radio operators, the highest level is called Extra. I was one of the two youngest Extra-class people in the country. The one younger than me was my best friend at the time.

My parents used to always say that if I met someone interested in something, I’d get into it while they were around and then I might go on to something else. I got into coin collecting as well. I was always athletic. I went to summer camp and did everything from archery to riflery to rocketry to soccer, you name it. I would try and find something interesting to do, whether it was physical or intellectual.

How long did you stay in gymnastics? My daughter is in gymnastics.

I did gymnastics competitively in junior high and high school. I kept training through college. I went to Duke and they didn’t have a men’s team. I worked out with a women’s team, and then I kept doing gymnastics until I was 32. One day, goofing around, I landed and twisted at the same time I heard that noise come out of my knee. I thought, “I guess I’m done.” That said, my 62nd birthday is coming up in a couple of weeks and I will do an inaugural standing-back flip as I’ve done every year for the last 40-something years.

You have to figure out a way to get you back on the show to do that backflip and sing Happy Birthday to you.

I can show you the video from last year. It was pretty good.

Inspiration For Sprinting

What inspired you to become a sprinter and to be the fastest? You’re one of the fastest over the age of 60. What inspired you?

I was one of the fastest kids in my elementary school. I was the second fastest kid in my junior high, the fastest being my best friend, who became 6 feet tall when I stayed 5 feet at that time. I got into pole vaulting and long jump while I was still doing gymnastics. I stopped sprinting probably when I was about fifteen as a result of everyone getting bigger and taller than me. Our coach didn’t know how to coach sprinters anyway.

I got back into it when I was 45 when a friend of mine came in for brunch. He had won a 5K. I said, “I love the idea of running, but I’m not a runner, I’m a sprinter.” He said, “There’s a whole master’s track and field circuit where they do all the Olympic track and field events.” I said, “I’m sorry, what?” I found a local coach and got back into it. I was extraordinarily happy, even though for those first two years, I was getting injured pretty much constantly because partly, my brain didn’t realize that I hadn’t done that in 30 years.

Did you ever compete in the Olympics?

No, when I was a gymnast, there were no post-collegiate training opportunities. I was two years in the wrong direction. It didn’t make sense to move forward with that.

You’re starting to sprint at 45 years old. Guys, get off the couch.

We’re a weird bunch. If you wonder if you’re a sprinter, you’re not. If you weren’t the fastest kid in elementary, junior high, and/or high school, you’re not. We are genetic freaks, to be candid. Put all that together and here we are.

Developing Xero Shoes

What led you and Lena to start Xero Shoes?

It was an accident combined with my getting back into sprinting when I was getting injured nonstop. After a couple of years, a world-class cross-country runner, a friend of mine said, “Why don’t you try running barefoot and see if you learn something? I’m not telling people to run barefoot, but I’ll tell you what I learned.

I learned that I had a form problem that I couldn’t feel through a traditional running shoe with a big thick sole. When I was barefoot, I could feel that form problem. Even more, because I could feel it, I could fix it. It only took me about a week, frankly. My injuries went away and I became faster. That’s when I became an All-American for the first time.

I loved that whole barefoot experience, but my wife, Lena, did not like me coming into our white carpeted house with my dirty feet. I also got tired of arguing at restaurants about whether it was legal to go into a restaurant in bare feet. It is, by the way. They can have a policy, but it is legal. I made my first sandal based on a 10,000-year-old design idea.

I got some rubber from a shoe repair place. I got some cord from Home Depot. I can’t use this design. I made a pair for myself, for Lena, and a couple of other runners. They told two friends and they told two friends. After a little while, someone said, “I’m writing a book on barefoot running. If you had a website for this sandal-making hobby of yours, I could put you in the book.” I rushed home because I had been an internet marketer since 1992. I had built hundreds of websites at that point.

That’s not in your bio. In your bio, you’re a screenwriter, a comedian, and a sprinter.

If I keep adding everything I did, it will sound fake.

A digital marketer is important and that will explain some of the story later when we get through the episode.

Yes, it does. I pitched this amazing opportunity to my wife, and she told me that it was a dumb idea, it wouldn’t make any money, and insisted that I not build the website. I told her that I wouldn’t, and then she went to bed, and I did. The next day she growled at me and I said that it would be a good case study because I had started a search engine marketing business with her a few months earlier. I said, “Maybe it’ll be a car payment. Not a big deal.”

Within a week we realized this was going to be our full-time gig. It happened by accident and that was fourteen and a half years ago when all we had was a do-it-yourself sandal-making kit. Now, we have 55-plus styles of casual and performance shoes, boots, and sandals that people use for pretty much everything.

Going On Shark Tank

I don’t want to give out too much more information. I want everybody to watch Shark Tank and how you didn’t get a deal on the Shark Tank. Let’s not say you didn’t get it. You were made an offer but you didn’t accept it.

Yes, we turned it down.

A lot of businesses that don’t get deals, a lot of times, they got a business. I want to save some of that because I want everybody to watch and be inspired. How did you get on Shark Tank? What did you do to prep before we played the episode?

The second question in particular is a good one. How do we get on? After we started the business, everyone kept saying, “You guys should be on Shark Tank.” We say, “I don’t know what you’re talking about.” We started watching the show and we’re thinking the same thing many entrepreneurs or budding entrepreneurs think, “My God, we should be on that show.”

We watched every episode that we could find on YouTube. We watched the episodes of Dragon’s Den from Canada and Dragon’s Den from the UK, which is the same show. It originally started in Japan, but we didn’t watch those because they weren’t translated. I sent in an email or did something, but I didn’t realize there’s a certain time of year when they do the casting.

Once I found that out, the moment they started casting, I sent an email to the address that they asked for. A little while later, I made a video and I sent that in as well. I was about to jump on an airplane and go to Chicago to do a live audition when we got a phone call on a Thursday afternoon saying that they were interested in us and interviewed us for about an hour or so.

That was great. “We want you to send a video that answers these 200 questions in five minutes. We need it by Monday.” I said, “It’s only Thursday. That’s not a problem.” Not knowing that my wife had been planning a surprise 50th birthday party for me that weekend. She hid how freaked out she was. The party went off without a hitch.

I was totally surprised on Saturday and then on Sunday, we spent a couple of hours recording the video. We had to fill out this long application that they want to be handwritten and you can’t read my writing or Lena’s handwriting. You would need a cryptographer to figure out what we’re writing. We had to type out our answers and then hire someone on Craigslist to write them out.

I would have to do the same. My writing is terrible.

I was a pre-med so I was practicing having shitty handwriting.

You were pre-med or something else.

When I was in college.

You went to Duke. What was your major?

I was a Cognitive Psychology major and a Business minor. Anyway, I sent in the application and the video. They called us a little while later with a contract that is quite onerous and one-sided. It turns out Mark Burnett productions who make Shark Tank also make Survivor and a bunch of other shows. The contract is something that applies to every show they make.

When we got it, we called the producers and said, “Why are we signing a contract that says we might die on set?” He said, “That was for Survivor. You’re not going to have to worry about that.” They said, “Send in the contract. That doesn’t mean we want you on the show. It’s a formality.” We FedEx them the contract and the next day they called and said, “We want you on the show,” and it’ll be in two months.

To your question about prep, we read the autobiographies of every one of the Sharks. We rewatched every one of the episodes. We understood how these things played out. We have smart business friends who did mock Shark Tank episodes with us. They pretended to be the sharks. We interviewed a lot of people because, on Shark Tank, you do a weird thing. You’re telling them how much you want and what you’re willing to offer, the amount of money you want, and the amount of stock you’re willing to offer.

That’s not the way a normal negotiation goes. We also know they like to negotiate you down. They can’t give you less money. What they can do to negotiate you down is ask for a larger percentage of equity. We had to build into the numbers, something that would allow us to negotiate. We met with bankers who had bought shoe companies, shoe companies who had been sold, people who are private equity and venture capital, and other brands who bought companies. We interviewed a lot of different people at a lot of different levels dealing with footwear businesses. They came back to us with valuations ranging between $2 million and $10 million. That’s when we picked a $5 million valuation.

That was the prep. We were doing everything we could think of and rehearsing. When you apply to be on the show and they accept you, you work with a producing team, two people, and they work on that first 60 to 90 seconds that you see. We worked on that with them. For a month before the show aired, I think Lena and I didn’t say a word to each other other than our pitch. We kept saying it over and over.

They called us and said, “We need you here next week.” I don’t know if they did that to freak us out and make us anxious or because television is always crazy. It could be a little bit of both. We flew out, taped the show, and then sat around waiting because they tape more episodes or more segments than they air. We didn’t know when or if we would ever be on the show.

That’s some great insight. All right, are you ready to play?

I have to add one other thing. The thing about preparation for the show was a life-changing event for us because up until then, we thought this was going to be a nice little lifestyle business that took a few hours a day, made a couple hundred thousand dollars a year, which it was at that point. Doing all the prep and paying attention to our customers who kept saying that what we had done had been life-changing for them, putting all that together is what made us say, “This is a much bigger deal than we thought. We’re going to commit to this all in.”

That’s a very big point that I want everybody to pay attention to because a lot of business owners are running lifestyle businesses. When you’re running a lifestyle business, it’s very hard to exit that business and exit rich, like the book I wrote called Exit Rich. It’s very hard to do that because when you’re planning a lifestyle business, you’re never building a solid foundation in which to create a scalable and sellable business that can run without you. That was a good pivoting moment that you have.

There’s another part to echo what you said. Even if you are building a real business, depending on the industry you’re in, your ability to exit is dependent on many things that have nothing to do with you. For us, people kept saying, “Call us when you’re at $2 million.” We’re like, “We’re going to be there this year.” “I don’t believe it,” then we did.

Even if you are building a real business, depending on the industry you're in, your ability to exit is dependent on many things that have nothing to do with you. Share on X

“Call us when you’re at $5 million.” I said, “We’ll be there next year.” “I don’t think so,” and then we did. “Call us when you’re at $10 million.” The goalposts kept getting moved and still have been. In the last couple of years, people were saying, “Call us when you’re at $100 million and profitable at a level that no company ever should be if they’re growing that fast.”

Are these prospective buyers you’re talking about?

We talked to some people in the past and those are the things they said. I have to say that there are a lot of people who have turned us down or denied us over the years. I’ve started sending out annual emails around the beginning of every year with the subject line. “Is it too rude to say I told you so?”

Let’s don’t give them too much away. Let’s play. Ready?

“I’m Lena Phoenix and I am the owner of Xero Shoes.

I’m Steven Sashen, I’m the CEO. We’re looking for $400,000 in exchange for 8% equity in our company.”

Right there was a $5 million valuation. With a $5 million valuation, he walked into the Tank. One of the biggest issues that the Sharks always have is they say it is inflated value.

“This can do a better job, but barefoot is not always appropriate. That’s why I developed Xero Shoes, original barefoot wear. Xero Shoes are a high-tech version of mankind’s favorite footwear since 15,000 BC.

Exit Rich | Steven Sashen | Xero Shoes

Xero Shoes: Barefooting is not always appropriate. That’s why I developed Xero Shoes. It’s a high-tech version of mankind’s favorite footwear since 15,000 BC.

 

Xero Shoes are the only footwear that has been shown in an independent university study to be biomechanically identical to barefoot, plus a layer of protection.

Xero Shoes lets you express your personality with styles that range from high performance and ultra-minimal to night on the town, fashion-forward.

They’re also super lightweight, way more comfortable than flip flops and unlike some other barefoot shoes, they never smell.

Now before you jump out of your chairs and rush the table to get your hands and feet on a pair, Lena will do her best Vanna White and deliver some.”

I think we should call her Lena White.

“Can you run in those?

Not only can you, I’m a Masters All-American sprinter. I’m one of the fastest 50-year-olds in America.

You can run in these?

That shoe that you have was designed by a guy who runs 50-mile ultra-marathons regularly. We designed our first custom-made Xero Shoe pendant. Kevin, I want to start with you to see what you think of it.

Thank you very much. That’s extremely attractive.

I had a hunch you might like it.

Yes, I do.

They’ve somehow captured the essence of an athlete.”

I love this so much. I always tell all my clients because we help clients get ready to go on Shark Tank, Steven. I don’t know if you know that.

I did not.

I always tell everybody to make sure you have a great intro and make sure you personalize it. Personalizing and having Mr. Wonderful’s face on it was a great job. Well done. You always want to create that personal experience. It brings them more into the vision and gets them more committed right off the bat.

One thing also, while you want to personalize things, you don’t want to personalize your communication. Those people don’t know who you are. Even though you feel familiar, they feel familiar to you because you’ve been watching them on TV. Again, they don’t know you. One of the biggest mistakes you can make is calling Mark Cuban “Cubes” or anything where you’re acting like these people are your friends. If you do that, you will invariably say something that you would never say to a potential investor who you didn’t think was a friend. That thing that you would say is going to mess you up.

They’ll going to eat you alive.

“Join us and you can experience it because feeling Xero Shoes is one thing, but wearing them is a whole different story.

Exit Rich | Steven Sashen | Xero Shoes

Xero Shoes: Feeling Xero Shoes is one thing; wearing them is a whole different story.

 

That’s the only runner-up here.

What I’m going to do is, on one foot, I’m going to give you our 4-millimeter connect. This is the closest thing there is to barefoot plus a layer of protection. On the other foot, I’m going to do our 6-millimeter contact, which gives you a little smoother ride for people who want a little extra.

Are they custom-made?

We sell them in two different ways. It’s either a do-it-yourself kit that you can trim down to your unique foot shape, or we can custom-make them for you.

There’s like nothing to it.”

I like that a lot because there are two options here. A lot of times, business owners will pigeonhole their selves into one way they sell something. Having that customized or do-it-yourself was a great advantage.

Before you hit play again, Robert is going to do something but you’re not going to see the one thing he did, which is he started running up the little tunnel you go in to get into the show. I went running with him and we chatted the whole way. They cut that out, which is a shame.

“It doesn’t feel like you got anything on.

You don’t need a lot of support. Putting your foot in support is like putting your feet in a cast and expecting them to get stronger. You walk across our fake world. You get to feel the world.

Wait, let me light the coals first.

The one on your left is the closest to barefoot. The one on your right gives you a little smoother ride. It’s getting a little foot massage, yes?

Robert, how do you feel?

I have to tell you, they feel great. Seriously, I know they look weird.

I don’t want to say the obvious, but you come over here with some rubber and a string you said is worth $5 million. Why do you feel that?”

Coming Up With Valuations

A lot of business owners, and entrepreneurs would get very defensive, argumentative, and combative at that moment when he says, “You came here with this rubber and a string and value it at $5 million.” Let me ask you, why did you value it at $5 million? You talked a little bit about it right before we aired the episode, but the sales, the revenues, and the EBITDA. I don’t know if everybody knows what it is, but Earnings Before Interest, Taxes, Depreciation, and Amortisation did not support a $5 million valuation.

It depends on who you ask. As I mentioned, we talked to bankers, people who bought shoe companies, people who sold shoe companies, and people who invested in shoe companies. Again, they were coming up with valuations between 2 and 10.

Even though there wasn’t very little revenue.

We were planning on doing somewhere around $650,000 that year. We were profitable and we were growing at 100% a year. There was nothing else on the market like this. We knew that they were going to try and talk us down some. I was willing to go down to about a $2.5 or $3 million valuation. We wanted to come in with something we could justify.

Also, the comps on footwear tended to be some variation of either multiple trailing 12-month revenue or multiple projected 12-month and 24-month revenue. When we put all of those together, we felt confident saying $5 million. When someone says, “You’re crazy.” Here’s the biggest thing about not being defensive. There’s nothing someone would say that we couldn’t agree with in some way.

If someone says, “That’s too high.” “I can understand why it would seem that way.” There’s a reason that I disagree, but there’s no reason to argue with it. It’s like, “Yes, I understand. It might be too much for you.” If they say, “You’re crazy.” It’s possible. As entrepreneurs, we tend to be a little crazy, but here are the things to back it up. I’m impossible to insult personally because the worst thing you could say about me, I have probably thought much worse in my head.

That’s a good solid point. We’re going to talk more about base evaluation and projections in a few minutes.

“This is two and a half years ago with a website, no advertising. Since that time, we’ve sold over $650,000 of our do-it-yourself sample kits and custom-made.

In two and a half years. In the last two months, we’ve done a little over $130,000. Things are going like this. This year, we’re on track for about $1 million to $1.2 million.

If you hit it this year in sales, what will your profits be?

We’re projecting 200 for this year. What we sell the most of is our 4-millimeter Do-it-yourself kit which retails for $24.95.

What percent is sold through retail or other distribution, and what percent is sold through your website?

Over 90% is sold through our website.”

Many business owners get stuck, meaning that they’ve got 80% or 90% of their revenue that comes from Amazon or comes from Costco or Sam’s or some other retailer. We were working with a makeup manufacturing company that had all of their revenues tied up in Costco. When COVID happened, nobody was going to Costco, nobody was buying makeup, and nobody cared about makeup because nobody was doing your makeup. Nobody was going anywhere.

They took a break from makeup for two years. The company went out of business because they had zero direct sales to their website. You guys having 90% of your revenue come directly from your website is very impressive. Now I understand why. When I first watched the show, I asked, “How did he do that?” You’re a digital marketer.

Word Of Mouth

There’s that and the biggest thing that drove sales is word of mouth. We would see from the very beginning that the barefoot runner in the family would buy one of our sandals. A week later, we’d see an order for clearly everybody else in the family, whether they were runners or not, because it was a fun, comfy thing. It was better than a flip-flop as Lena said. The internet marketing background has been a huge help.

The biggest thing that drives sales is word of mouth. Share on X

That’s amazing. You want to make sure though that you either have it all on your site or have it diversified. It’s like client concentration. You don’t want any concentration. You don’t want all of your concentration on one site that you don’t own.

An internet marketing friend of mine says that you never want to build your house on someone else’s property.

A thousand percent and that’s what you’re doing when you go out to Amazon and eBay and everybody else. I thought it was very impressive.

“Starting in retail, we’ve got nine retail locations currently. Six of them have already reordered.

To me, I open it up and it looks like a plain piece of plastic.

Like a broken sneaker.

You’re going to make $200,000 if everything goes right this year. You’re asking me to pay you 25 times that amount and value your business at 25 times profit. Here’s the other problem I’ve got.”

What I said in response to that is I said, “Kevin, you know that revenue and EBITDA are asymmetric in a highly rapidly growing company.” He replied, “Yes,” and then moved on. Yes, our EBITDA then or the profit then, that $200,000 we were projecting into that $5 million, that’s one way of looking at it, except that we also knew what that was going to turn into moving forward as EBITDA could go much higher, along with revenue going higher as well. Those things would meet a little bit much sooner than he was projecting. He agreed and then moved on to another point.

“It’s going to attract some very big competitors at some point. We’ll look down at this and say, ‘Piece of rubber, piece of string. I can do the same thing and put my distribution power behind it and crush these cockroaches.’

First of all, we do have a design patent pending on these.

But it’s a piece of rubber and string. Steve, I promise you that I can have these on the boat for 20 days.

I would challenge you for that one.

Do you want to challenge me? You cut a piece of rubber, put a string on it and you said that this is great technology, and then you say the company’s worth $5 million.

No, we say the company’s worth $5 million because of our industry.

Because of what? The Industry? I’m out.”

There are a couple of things. One, for the fun of it, that patent that I have, we’re now going after someone who has infringed upon that patent in a major way. There’s that. We have several patents actually on that.

Is it a big shoe company that’s infringing? I know you can’t say who.

It is a very large fashion/footwear brand. We had another situation where a multi-billion dollar footwear brand used a bunch of my trademarks. Unfortunately, the biggest business mistake of my life was I sent them a cease and desist letter too quickly. They had enough time to stop using my trademarks. Instead of having to pay me what would have been a $750 million lawsuit because of the way trademark infringement law works.

This one is going to be interesting. When Damon said, “I could have it on a boat in 30 days,” I said, “I dare you.” What I said to Kevin about the competition is, “Good. Rising tides lift all boats.” I have no problem. Rumor has it there’s more than one company that makes everything you’ve ever bought. That’s not an issue.

Competition is good, and the rising tide lifts all boats. Share on X

Those are some side commentaries that didn’t get aired but I will agree with them on this and I want people to know this. Your situation is completely different. You’re more of a unicorn than most of the entrepreneurs that come on the Shark Tank. I don’t want somebody to go on there and paint this false narrative that, “If it worked out for Steven, it can work out for me.”

The biggest issue is business owners go on the show and they have no idea what their numbers are. They always over-inflate their value. I’ve been doing evaluations for 24 years and selling businesses for that long as well. We don’t base valuations on projections. If we don’t fit, we consider them, but we don’t base our evaluation on them. We took them into consideration. Even if it’s over $1 million, then we go to market, we create a bidding war, and we start an auction.

If you’ve ever watched the videos of the shareholders meeting from Berkshire Hathaway, Warren Buffett, and the late Charlie Munger’s company. When somebody asks how they consider projections, Warren gives a very long answer, as he tends to do. Charlie says, “I don’t look at your projections because I know you’re lying.” It’s my job to figure out what the future of the company should look like. That’s how we do this. When we’re talking to potential investors or acquirers, which we’ve done in the past, we don’t tell them what it’s worth. My line is valuations in the eye of the beholder of the checkbook.

Valuation is in the eye of the beholder of the checkbook. Share on X

Buying Synergies

That’s like beauty is in the eye of the beholder’s valuation. What that value means to somebody else is what they’re willing to pay for it. Some buyers are willing to outbid everybody else because they’re buying synergies.

Most likely someone is buying you for a reason that is not the one that you ever thought of.

We’ve been doing this for a very long time but it’s those synergies. They’re buying location, they’re buying the brand, they’re buying clients, they’re buying celebrity endorsements, they’re buying that database. They’re buying some type of synergies that will catapult their current business to the next level and blow up their current business.

Let’s say I agree with you and I’m hoping other people realize that in our situation because whenever people are watching this, I’ll say last night, but it’s not relevant for anyone watching this not today. Last night we had an NBA player on the Denver Nuggets, Justin Holliday, playing in a shoe that we developed. We know that that’s going to get some attention and there are going to be some people who are a little worried about what we might be able to do to their business and might be interested in doing something with us. Who knows, but the fact that we got into the NBA and other players were in the wings.

Let me tell you something, that’s the synergy. As a certainty, the big companies are going to pay attention to this and be like, “Whoa, we don’t want to lose market share here. Let’s buy this company and fold it into our brand.”

Again, there are reasons that you can predict and there are reasons you can’t. Some of them are going to make an offer to you because they don’t want someone else to make that offer. The synergy is not about what you’re doing, but what someone else could do with you and they recognize that that can be problematic. It’s a triangulation.

I want people when they go on Shark Tank to be realistic when it comes to evaluation because look, I’m a parent. Are you a parent? Do you have kids?

No, we have a dog.

You probably think your dog is the best-looking in the world. Most parents think their children are the most beautiful children. Business owners do that too. They’re like, “My business is the best. It’s this and this and this.” They go in there with unrealistic valuations and you get kicked off the stage. As Steve, you’re not Xero Shoes. You haven’t been able to overcome that. You do want a realistic evaluation. You don’t want to be 25% over EBITDA.

You know that they are going to try and talk you down.

Even though they’re going to try to talk you down, still be realistic in that valuation.

My answer, I think we’re going to get to it, is simply that we came to that valuation by talking with industry experts. None of the five Sharks knew our industry.

We’re all going to get to it. Ready?

Born ready.

“Steve, were you a shoe guy?

No.

Why do you wake up one day and say, I’m going to make it?

Hold that thought. The Tarahumara Indians in Mexico did their version of this. This is a 15,000-year-old idea.

The Tarahumara Indians in Mexico are people who are known for running 50, 60, or 70 miles at a stretch, wearing nothing but sandals made out of scraps of tire and bits of leather.

Look, it’s a huge leap of faith. I believe your whole granola story and the Indians running out of the desert and all that stuff but on the other hand, it’s a crap shoot. I’ll make you an offer. I’ll give you the $400,000 for 50%. You’re worth everybody to have a grand. That’s it.

Thank you. We’ll come back to you on that. Beck, what do you think?

Do you need to come back to him on that?

It’s not an offer that I would take right off the bat. We value the equity much higher than that.

I know that, but that’s why you’re in the Shark Tank. You’re here for money. I’m a rational investor. You people are probably delusional entrepreneurs, perhaps, and somewhere in the middle is reality.”

He called you delusional. Somewhere in the middle is reality. A lot of people think that if I’m going to go take a business to a prospective buyer and say, “Look, we want 25 times,” either that or they’re going to laugh us out of the industry.

Just for the fun of it. Crocs bought a company called Hey Dude for approximately 25 times EBITDA.

What was their EBITDA?

I can do the other one because they have to do the math. They bought Hey Dude for $2.5 billion.

How much is Hey Dude doing?

I don’t know what they’re doing now. I think they’re projecting that the brand, the Hey Dude now owned by Crocs is going to do a little over $1 billion about a year and a half after the acquisition. At the time when they made that acquisition, Hey Dude had done about $560 million, trailing 12 if I remember correctly.

When you have a much higher EBITDA like that, you’re going to get a higher multiple.

25X is, and even the basically 5X they did off revenue, in the footwear industry, everyone says, “What?” Crocs had a reason for doing it that no one else could understand.

Creating A Bidding War

They had a reason for doing it, and they still had huge EBITDA. This is how multiples work. The higher the EBITDA, typically the higher the multiple. The more synergies a company has, the higher the multiple. That’s why you also want to create that bidding war because who sees more value in it? What is it worth to somebody? Usually, it’s worth more to that one specific buyer for a multitude of reasons that, as you said, you may or may not know the answer to. We know the answers ahead of time. That’s what we look for. We uncover those synergies, so we can’t get that higher multiple.

“First of all, you give me a headache, I don’t know why. You remind me of my first husband, a little shorter, but there’s a similarity. Two things are driving me crazy. One is it’s a black sole, which is hot. Secondly, it’s got a knot on the bottom. I would think it would be uncomfortable and that’s a liability. I’m not crazy about the product. I have to be honest.”

Tell me what is it knot for? Is the knot still there? Did you change your prototype at all?

The way it worked is that you would take the lace and it would go through the sole and you would either make a knot that you would then melt with the lighter, it was a nylon lace. We’ve now done a different thing where we developed technology. It’s a little tricky. We’ve replaced the knot with this little bead. It’s hard to see.

The issue is it’s between your toes and in front of the webbing of your toes. You don’t feel it. It was never a thing. When she said, first of all, they’re black, and we are pointing to the right, there were examples of other colors right in front of her face. The actual line that Barbara said, other than, “First of all, you give me a headache,” she said, “I hated you from the moment you walked out here.”

Why would she say that?

“You remind me of my ex-husband. You’re maybe a little shorter. Do you smoke a cigar?” She went on for a couple of minutes about that. She turned to Lena and started saying, “Why are you married to him? What’s wrong with you that you would be with him?” I was cracking up. What are you going to say? There’s another thing that happened that got cut out. At one point, Robert says, “What do you think about the competition like those toe shoes?” I said without missing a beat, “They’re creating a wave of awareness and we’re surfing on that wave.” He jumps out of his chair and yells at me, “You have a perfect answer for every question.”

I looked back at him somewhat incredulously and said, “It’s our business.” From Barbara’s point, Barbara thinks very quickly and I do too. They’re not used to people thinking quickly and having an answer immediately. Lena and I both did. I think that part of it, by that point, was getting frustrated because we had an answer for everything. We’re going faster than they do.

I wonder why they cut all that out.

I don’t know. When we walked out of the tank, I was convinced that was going to be the first thing that they had in the trailer for the upcoming show. “I hated you from the moment you walked in here,” cutting us like, “What?” I thought that would make great television, but it was also a little over the top. When the show aired, I texted Barbara and said, “It’s too bad you didn’t invest because I could have used some of that money for plastic surgery.”

My God. Did she respond?

No.

That was a little mean, Steven.

It was pretty entertaining.

Let’s check some more entertainment.

“I love this stuff. I’m a big runner. I’m getting old. My knees hurt. I’ve tried everything.

This would be the thing to try.

Steve, I would love to try it. She had $400,000 giving the company a $5 million value. Man, I can’t try for that price. I’m out.

Thank you.

You have an offer from somebody rational, it’s true. I don’t have a shoe company in my portfolio. I think your story, I’m listening to it, it’s got a schnick and it’s a marketing strategy. You’ve got rubber and string. I’m willing to say it’s worth $800,000. I’d give you $400,000 for 50%. It’s a clean deal.

50% is way beyond what we’re willing to do.

What’s your counter?

My counter will be 10.

You’re out of your mind.

One of the other companies that’s also in this space recently got $10 million for 25% of their company based on the multiple of their projections for the following year.

First of all, because one of your competitors got someone to put money in at a ridiculous valuation, it doesn’t make that a comp for you guys. It means you’re competing against someone who’s got stupid money behind them. Do you know what they call a bunch of investors rushing into a hot area, like you’ve mentioned with all these other investors, they call it a bubble. No one’s a bigger expert at getting out of a bubble at the right time than I am. I’m telling you, you should take Kevin’s deal because your bubble is going to pop.”

That’s very interesting. I do agree with him on some parts. I do. First and foremost, we talked about this already. We don’t base evaluations on projections. We consider it and we continue to track the progress of how those projections are panning out, and how close we’re getting to that. If we don’t have a market price, then we can continue to stay toward that higher valuation because we’re getting closer and closer to those projections. I agree with that. I also agree that because somebody invested at a crazy valuation doesn’t make it a comp as well. I do agree with that. I don’t know if there was a bubble created in your industry at that time.

Here’s the thing about both of those. The idea that it was a crazy valuation is naive because, in the footwear world, that was a normal way of valuing a company. He didn’t know that. It wasn’t a crazy valuation, so it was a comp. Be that as it may, there was a bubble going on then, but not for us. The barefoot running thing kicked in 2009 or early 2010.

We taped that in 2012. It was still going on, but the big companies who were the ones seeing the majority of the sales were starting to pull out because they couldn’t tell the story of a minimalist product and a big, thick, normal product at the same time. It looks like a bubble except that all the companies that weren’t major footwear brands already, we’re doing something similar to what we were doing other minimalist footwear brands.

We were growing 50% to 100% year over year before, during, and after this. Of course, we’ve continued to grow not at that rate, but very high rate ever since. If you look at Google Trends data, which is basically how many people search for a particular keyword, it went way up in 2009 and 2010, slowly went down, and was flat for a while. In the last four years, it’s up almost 600% and is at a worldwide all-time high. I can understand why someone would think it was a bubble, but that was a naive perception from not understanding what was going on in the market and we’ve proven that that was not true.

Exit Rich | Steven Sashen | Xero Shoes

Xero Shoes: I can understand why someone might think it was a bubble, but that was a naive perception due to a lack of market understanding. We’ve since proven otherwise.

 

I agree with that piece, but we will agree to disagree that I still think the valuation was very high.

I’m not disagreeing. I think it was high and we knew what was happening with the brand, so we didn’t care. We knew we could stick with it because it made sense for us for several reasons. We knew that we were willing to negotiate down, but not from 8% to 50%. An $800,000 valuation is valuing the company at less than what we projected the next year, which makes no sense.

When you didn’t take into consideration any IP, he was doing a straight line with $200,000.

Let’s do the simple thing. What they’re often looking for in Shark Tank is people who are either desperate or dumb. When I say that, there are people, as you said, who go on with enormous valuations when they’ve sold five of whatever they do or none of whatever they do. The joke that we had on the show was that we were all staying at a hotel together and we’d get in a van to go tape the show before companies in the van.

If you couldn’t figure out which person in the van was completely insane, it was you. On our van ride, we knew who it was. If we had to do it again, we would probably do a lower evaluation, but not a lot lower. Not enough that they would have thought that it made sense because again, we knew the industry way better than they did, and we could justify it with that information that they didn’t have.

Even in the industry, I think it would be very hard to support those comps.

It’s not. I’m telling you, people don’t understand. No, you’ve never sold a footwear company. I’m telling you the footwear industry is unusual and people don’t believe the numbers when I tell them. They are very common and low.

We both agree that 25 multiple is high.

If you think that multiples of EBITDA are relevant and in a company growing at 100% a year, we shouldn’t have had any EBITDA at that point.

100% a year, that was for one year.

No, it was not.

We were multiple years but it’s hard to be sustainable going forward.

Even at 50% a year or 30% to 40% a year, which we’ve done for many years since, the growth rate that we’re seeing organically without a bunch of money behind us is high. We had a very famous celebrity singer reach out to us. When the person who was in our company who knew this person said we’re profitable, she said, “You shouldn’t be. You’re not spending enough money on marketing.” For many companies, their plan is to spend as much on marketing as they can and worry about the profit later, but we needed the profit because we had to buy inventory for the next year.

Exit Rich | Steven Sashen | Xero Shoes

Xero Shoes: For many companies, the plan is to spend as much on marketing as they can and worry about the profit later. But we needed the profit because we had to buy inventory for the next year to support the growth.

 

I disagree with that. I do think marketing should be your highest line item and your expenses for sure but not when you’re starting. You have to make sure you have money for inventory. You and I agree about that.

If I look if we look at the actual comps for footwear, what we see very often. You can do the math in a lot of different ways. I’ll do it in two ways because we’ve heard the buyers describe how they did the math in both of these ways. A multiple of trailing 12 revenue or a multiple of projected 12 to 24 revenue. What made the difference had to do with the mix of how you were selling directly versus what you were selling into retail and had purchase orders for.

If you had a bigger retail business, they were looking at the future because they knew you were going to collect on those POs. If you had a more direct business, they were looking at the past because they didn’t know what was going to happen. If they were a company that knew you had a direct business and they didn’t and they knew what they could do if they were going to bring you into retail, the multiples were even higher, but they were never based on EBITDA. It’s a weird business, guaranteed.

Not that you’re going back on Shark Tank, but when you have a unique industry like that, it’s good to bring that supporting information, even if it’s a video or something.

We did. It didn’t matter.

Let’s check the end of this.

“There are no other sharks here.

Correct?

There’s you, me, Lena, the rubber, and the string.”

I love that.

“What are you going to do? I’m going to give you $400,000 for 50% of this company.

That’s an offer we’re not willing to take at this time.

Very well, you’re dead to me. Run out of here with your bare feet.”

That was great.

It was such a good ending. I love that.

Here’s my favorite behind-the-scenes moment. The sharks are always trying to find a way to say something that gives them more airtime. They’re competing with each other more than anything else. Kevin’s line cut off a little bit. He kept saying over and over, “I get it. It’s a bunch of Indians running around the desert naked on peyote. They cut out the peyote part.

When we left the tank, they stopped us and said, “What do you think about Kevin’s offer?” I have another story. Lena said, “If he thought we were going to give him half the company, he was the one on peyote,” which I thought was brilliant, but she also said another thing. We disagree about whether she said this. I’ll preface it with that.

We forgot that Kevin even made an offer because it was such a non-starter for us. Robert reminded us and when we turned back, Lena said, “Are you bringing anything to this offer other than money?” Kevin says, “I’m a smart businessman and I’ve got a good Rolodex.” I remember her saying, “So, nothing?” The point was we knew that the only thing that would be valuable would be someone who either understood the industry or understood marketing or understood our brand.

The only valuable people would be those who understand either the industry, marketing, or your brand. Share on X

Ironically, Kevin was the one who had the least of all those. Robert was a runner. Barbara is a brilliant marketer and was the only Shark at the time who was working with her companies. Damon knew production and manufacturing. Mark had been advertising one of the first minimalist shoes that was ever made by a big company. He knew the space a little bit. We thought there was a there for any of them, but it didn’t work. Damon kept saying, it’s very sweet, “You’re brilliant, but this is too rich for me.”

He kept saying that It was too rich for him after he said he could have these made in a day and have them shipped on a boat because it’s nothing but a rubber and a string.

Yes. It was quite sweet and when we walked out, we realized, “This show is called Shark Tank, not Steven and Lena Tank.” They’re never going to show all the answers that we gave that made them look less than what they want to look like. We had an answer so quickly. There was one that also wasn’t on the show. I think one of them said, “Wait, you said that she’s the owner, but you’re married. What’s up with that?” They always say, “I got you.” I said, “At a previous company, we were involved in a legal dispute, and we wanted to make sure that this company was protected.” They were like, “Okay.” We kept undercutting every little disagreement they had.

They kept trying to do a, “Catch you.” They get you.

That was part of Barbara leaving. We were uncatchable because we knew our we know our business inside out, backward, left, and right.

It’s imperative to prepare. Many people are on Shark Tank, and they’re not prepared.

Know Your Numbers

Most people’s biggest mistake is when the sharks are arguing with them or when they ask, “Why should we invest in you?” People like to talk about their passion. Every entrepreneur is passionate. That’s a common denominator. That means nothing. “I’ll work harder for you than anyone else.” Everyone is going to work harder for you than everyone else.

It’s like all of those things are platitudes. We all work hard. We’re all passionate. We all think we know better. It’s not about any of those things. It was amazing when I heard people say, “I studied the show.” Yet, they would still lean on, “I’m passionate, and I’ll work hard.” Haven’t you watched that when someone says that, they get eaten alive because that’s a non-answer? That was part of our studying, what works and what doesn’t work. One thing that works is to know your numbers.

Know your numbers are right and do the research, do the diligence before you go into the show, like you guys did. We’re about to run out of time. I want to talk about how after the take Xero Shoes was doing $1.2 million that year.

No, I don’t remember what we did that following year.

You’re set $150,000 and you’re going to do $1.2 million with a $200,000 profit.

That didn’t happen, but I don’t remember what did happen. We didn’t do quite that well for some actual reason, but I don’t recall. The gist is when the show aired, we had done $650,000 in the two years up until that period, which was to the middle of 2012, and last year, we were shy of $65 million.

$65 million. Wait, pause, you said that like, boom, you’re running through that. You’re sprinting through that. Point right there. You’re sprinting. Slow down. We went from $650,000 to $65 million in what timeframe? Was that about ten years?

Eleven years.

See how you sprinted through that. Business is not a sprint. It’s a marathon and it takes time to get there. They didn’t do that overnight, but if they would have gotten a deal, what do you think would have happened if you had gotten a deal and taken Kevin’s offer?

We wouldn’t have got to $65 million last year.

Did you use any of their advice, of their critiques, of their criticism? Did you use any of that to improve the business?

A lot. That information is what made us think that we’re all in on this idea and we’ve got to expand the product line based on what our customers were telling us. Everything on the wall behind me happened mostly because people would say, “I love these sandals, but I don’t want to make my own,” or “I love the sandals even if I made my own, but what about a pair of shoes for the office or for running or for hiking or for trail running,” anything you think of.

It was our customers telling us what to do that made us figure out what to do next. The real value was when the show aired, we got calls and emails from tens of thousands of people saying, “Where have you been all my life? This is what I’ve been looking for. I need something like this for the following.” These people weren’t runners, who didn’t know about the book Born to Run, who didn’t know about the Raramuri Indians in Mexico. They just loved what we were doing. When they got the product, they would email and call and tell us, “My God, these things have changed my life.” That combination is where we think, “This is a much bigger thing than we are.” We need to do the right thing for the brand, the product, and the people.

Exit Rich | Steven Sashen | Xero Shoes

Xero Shoes: When a product is changing lives, it is a much bigger thing than we are. We need to do the right thing for the brand, the product, and the people.

 

Improving The Product

You did use some of their critiques to improve the product.

Absolutely. It was invaluable and we made about three months worth of sales in the week following the show airing. That was helpful as well.

I hear that the influx of business lasts about 2 to 3 months. Is that accurate?

We got a massive hit for that first week after the show aired, which was the end of January or the beginning of February. It aired again at the beginning of June and we got a massive hit again. CNBC kept running reruns for years. They still do. We see a little bump every time. CNBC has a little series called Shark Tank Misses. We were the first miss that they featured.

You were the first miss before the Ring Doorbell, right?

No. Ring sold before us for a huge amount of money.

No, Ring was on Shark Tank and they didn’t get a deal either.

I can’t remember when the Ring was on. We were in season four.

They were on after you guys and they didn’t get a deal. You were a huge miss for them. Have you heard any feedback? Have you heard anything from them since?

No, and I’ll tell you, the one that I’m waiting to hear from is Mark because again, we got a guy in the NBA wearing our shoes for very good reasons. As that starts to spread, I’m going to call him because I know people who have his number and say, “We should have a conversation about this. I think I can make your team better.”

You’re not going to say, “You fell, buddy.”

No, I’m going to say, ”Good to talk to you.”

“You fumbled the ball.”

I wouldn’t even say that. I’m not even going to send him the, “Is it too rude to say I told you so?” I’m going to say, “We have something that can be helpful for you. Do you want to chat?” I don’t care about trying to rub his nose. That wouldn’t do me any good.

No, it doesn’t make any sense. I was joking. You have a lot of things happening. We have a $65 million company. You hear how I say, “We?” We have a $65 million. I’m going to be your exit strategist.

I like it.

What’s Next For Xero Shoes

I’m going to help you exit rich but you see, you have so many other things. What can you talk about? What can you tell us? What’s next for Zero Shoes?

I have a patent that the company owns, two of them. One of them is something that’ll solve the biggest problem that we have with buying footwear online, which is how do you pick the right size? Every option that’s out there right now is doing it incorrectly. They’re using two-dimensional measurements and telling you what your size is.

Sizing is so much about personal preference in addition to things that have nothing to do with whatever two-dimensional measurement you can capture. I can’t give away the recipe on that one, but I’ve been working with a partner out of the Netherlands who has a solution for how to match your foot to a shoe properly.

I have the solution for how to do that in a way that gives agency to the customer in a manner that will reduce complaints. Most shoe companies, when they’re selling online have a 30% or higher return and exchange rate. Ours is much lower because our shoes fit more people because they have a wider foot shape design. They’re low to the ground. They don’t have unnecessarily built-in arch support for example.

They compensate for bunions, right?

Our shoes don’t squeeze your big toe over, which can cause a bunion. That’s one thing. The other patent is on a biofeedback-based gait retraining device. We know what the common factors are of effective and safe running and even walking. The way that you learn a new movement pattern is my undergraduate research at Duke on cognitive aspects of motor skill acquisition. We know what the proper way to move is. I was on a call with Dr. Dan Lieberman from Harvard.

Now remember this guy was a screenwriter, comedian, and sprinter. He got off the phone with a doctor from Harvard. He went to Duke.

I’m a decent name in this industry. Talking to him, he said that in other countries, he spends a lot of time in Africa in particular, they train you how to run. They say, “Here’s proper form. Here’s how you do it.” You run behind a guy who’s got great form and you imitate that person. In America, we think, “Run the way you want to run.” The shoe companies encourage that. “Everyone is a unique little snowflake, and we’re making shoes for whatever snowflake you are.” It’s not true. There are specific ways of moving that are more ideal than others.

The way you learn them is by getting the right feedback at the right time in the right way. None of the current wearables do that. I’m testing some hardware right now that does it properly. It can be beneficial for runners, walkers, elderly people with balance issues, which is a lot of people, and for people who have other problems like Parkinson’s or MS, for example. There are a lot of things we can do there. Fundamentally, we’re a health and wellness company disguised as a lifestyle footwear brand.

Exit Rich | Steven Sashen | Xero Shoes

Xero Shoes: There are specific, more ideal ways to move. You learn them through receiving the right kind of feedback at the right time and in the right way, something current wearables don’t provide.

 

That’s amazing. You will be the only one creating those patents.

I’m the only one who owns those patents.

They made a huge mistake but I think you dodged a bullet by not taking the offer.

I will agree with you on that.

Know What You’re Doing

Sometimes you have to walk away. Sometimes you don’t have to accept the offer. You have to walk away but know what you’re doing. Lena had a great stage presence but they knew what they were doing. They did their due diligence. They did the research. They watched the shows over and over again. They knew their numbers. You did say that if you had to do it again, you go down a little bit lower on that evaluation. You would do that but you know what? You played your cards right. You ended up winning.

We’ve been doing okay. When you said I sprinted right past saying $65 million, it’s because I’m only focused on the gap between where we are now and what I know this can be.

Focus on the gap between where you are now and what you know your business can be. Share on X

I want to know what less can be.

We have a private equity company that invested in us. They have a minority position. When I was quoting, we were being quoted by one of the people who invested in us and who has a lot of experience in footwear. He said, “Do you see this becoming a billion-dollar brand in ten years?” I said, “God, no, 7.” He laughed and said, “I can see that too.” Now is that going to happen? I don’t know, but I can paint the picture of how it could and why it should. We’ll see.

You know what that target is. Many business owners don’t even define what that is. You’re saying, look, “I think we could do the billion and have a billion-dollar brand in seven years.” You got to figure out how, but a lot of people don’t even start with the target. You have to start with the target.

For me, it was the other way around. It was that we see as we’ve been running the business, the things that we do that help different kinds of people. Our business is weird. We don’t have a single customer avatar that we’re targeting. Pick one shoe and that same shoe is worn by an eight-year-old kid, a 108-year-old grandmother, an Olympic athlete, and everything in between. I can give you that same story for almost every shoe on the wall behind me. We’re helping so many different people with so many different things, whether it’s fashion or performance.

You never have customer concentration.

No, not really, and when I see that and I look at what happens in the industry, from there, it becomes very clear that I could paint the picture to a billion. I didn’t pull that number out and ask, “How will I get there?” We also know how other companies have gotten to a billion, and we can do it differently than they do. We have opportunities that they never had. We’ll see.

What is your slogan?

Live life feet first.

What’s the bestselling shoe behind you?

Right now, it’s called the Prio, it’s the first performance shoe we made. It’s an all-around fitness shoe for running fitness lifting casual wear and comes in a bunch of different colors. This has been out since early 2007. It’s become popular and people see it all over and then they start asking for it.

Do we still have the rubber with the string? It should have a better name for it.

It’s called the Genesis. We took the Genesis and then added a little bit of cushioning on the sole. For people who wanted something for trails or a little extra protection. This is that same sandal that we’ve now been selling for fourteen years.

Any last-minute words of wisdom and tell everybody where they can go by Xero Shoes.

The only thing you can control is your risk. Pay attention to that. Eyes on it. A dozen times a day I say to people who want money from me, “I want to know how quickly and cheaply I can find out if either one of us has our heads up our butts.” You can’t promise me it’s going to work, but you can promise me what it’s going to cost if it doesn’t. I need to know that because that’s all I can control.

Pay a lot of attention to your competition, because if you’re the first one doing something, other people will do variations where they thought of an idea that you didn’t. Maybe there’s a way that they can do better than you or you can learn from them or you can work together, who knows?

The last is if you’re getting started, find a way again as cheaply and quickly as possible to prove that people who’ve never met you will give you their hard-earned money, and then make sure there’s enough of them to justify the business that you’re trying to build. If you can get money from someone and you’re happy but it turns out that market is only three other people, who cares? If you think the market is the entire world, you’re crazy.

You’ve got to find what that is and then back to Shark Tank, know your numbers. You need to know what it’s going to cost for you to acquire a customer, to keep a customer, and then build your business around those ideas. Last but not least, realize that 99% of what you’re doing is out of your control. COVID made a lot of businesses go under and made a few businesses do better. Post-COVID made some of those businesses that did better suddenly go under because it was all COVID-driven.

99% of what you're doing is out of your control. Share on X

There are so many external factors that are out of your control that rule your entrepreneurial life. Do whatever you can to keep yourself from wanting to blow your brains out. It’s such a roller coaster. It will never be the way you expect it, good or bad. Even if it goes well, that can be as stressful as it is not. Last but not least, I’m going to say something impossible. You want to hire the best people you can as soon as you can. The reason it’s impossible is you don’t know what someone is going to be like until they’ve been with you for a while. By then, there might be problems. We’ve hired some people that we thought were great and six months in, or when it looked like the money was going to show up, they went off the rails.

Some people tried to take the company out from underneath us. The way I like to say it is if you have the opportunity, get a government job with a pension. If saying that makes you even consider that, you should get a government job with a pension, because if you’re a true entrepreneur, frankly, there’s nothing I can say that’s going to make a difference. You’re going to pursue your statistically likely-to-be stupid idea and then cross your fingers.

You went away from the Tank getting zero dollars for Xero Shoes but after the Tank, after their huge miss, you added lots of zeros. Here are the Xero Shoes. Well done. All right. Everybody go order Xero Shoes. Where do they go?

Yes, XeroShoes.com or you can find us on social media anywhere @Xero Shoes. If you’re in Europe, we’re at XeroShoes.eu. If you’re in the UK, we’re at XeroShoes.co.uk. Find our store locator because we’re about 800 to 1000 stores worldwide and that number is growing.

They used to have 6 retail stores 12 years ago and he now said that. That’s incredible.

Now and then I take a moment and ask, “How did this happen?” A lot of hard work.

It’s a great story. It is a Cinderella story. Thank you so much for being on the show. I appreciate all your words of wisdom and great job. Well done. One of the best misses I’ve ever seen if not being one. Thanks, everybody, for tuning in to this episode. I know there were a lot of golden nuggets. Make sure you go back to it because it’s like drinking from a fire hose. He gave so many good words of wisdom.

Make sure you share this content with your friends, your family, and your sphere of influencers. Get the word out, and make sure you continue to subscribe to Exit Rich. If you want to know how you can become more prepared for Shark Tank, reach out to SeilerTucker.com. Thank you so much and we’ll see you next week on another episode of Exit Rich.

 

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