June 5, 2026 – Elephant in the Family Room Rene Sonneveld and Greatest Hits Brian Smith

Intro 1 0:04
Broadcasting from AM and FM stations around the country. Welcome to the Small Business Administration Award-winning School for Startups Radio, where we talk all things small business and entrepreneurship. Now here is your host, the guy that believes anyone can be a successful entrepreneur, because entrepreneurship is not about creativity, risk, or passion. Jim Beach.

Jim Beach 0:26
Hello, everyone. Welcome to another exciting edition of School for Startups Radio. I hope you’re having a great day out there, a great week taking over the world, however you do it. You know, there are so many great guests on this show. If you follow one of the systems we talk about, you’re going to figure out a great life for yourself. There are just so many fantastic ideas, models, different ways to get rich that we’ve presented on the show. Some will not make any sense to you, and some will, hey, that makes sense. I’m using one of the systems right now, myself, and I’m excited for it, and starting to make some money, and you can too. We’ve just presented a mosaic of all of the pieces of entrepreneurship, so that no matter what you need to learn, we have someone here who has talked about it today. We have fantastic guests, we have Renee Sonnenfeld, he is a coach for a specific niche, the very high wealth transferring generational family type situation, and he is based out of Uruguay, which is just an amazing example of how you can live anywhere you want to in the world, and Uruguay is one of the most beautiful places I have ever been. Yes, I actually have been there, and I tell the story during the interview. It’s one of my favorite stories, and I, so anyway, I share that with Renee and you. Then, after that, we have a greatest hits, Brian Smith, the founder of Ugg Shoe Wear. Those boots with all the fluffy stuff, you know, this looks so comfortable and casual. He is with us as part of our greatest hits. You may not know, but we lost a server, they went out of business, and so we had to take all of those files and put them up somewhere else, and we thought, well, we might as well run them as part of the show, so that you can get the benefit of that older episode. And so we are doing that, and have Brian Smith with us in the second part of the show. After that, I just want to respond to not after that, right now I want to respond to something I said last week that’s just gotten so many emails, and it reflects the weird bias, the weird things that people believe. I claimed last week that we are eventually pretty soon going to have our population, global population, going down, that most of the countries, including Africa, are having a decreasing birth rate, and boy, is that set people off. This Malthusian, you know, Malthus was a, I guess, a thought leader of his time, and was one of the first to talk about that technology would not be able to feed the growing population. Well, it turned out that he was wrong. And we are going to have this. Is also part of the oil. We’re never going to run out of oil, we’re never going to run out of gasoline, and we’re never going to run out of food. We might distribute it poorly, but we are not going to have a population that hits 10 billion. As a matter of fact, the problem is we’re going in the other direction. We’re going to have countries with negative growth rates. What happens if your real estate’s not valuable because all of a sudden the population’s in half anyway? Great show. We’ll be right back.

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Jim Beach 4:10
We are back, and again, thank you so very much for being with us. I am very excited to introduce my first guest today. Please welcome Renee Sonnenfeld to the show. He is leading a really interesting life and career. He began as an international tax lawyer, working in the Netherlands, Hong Kong, and Curacao. You don’t get any more exciting places to travel and visit than those. He then moved on to senior level executive roles with CEO, managing director, and chairman of Global Fortune 500 titles, and was always focusing on marketing. He had cool gigs, like growing a German brewery across Latin America, and directing wealth strategies for ultra high net worth families who worked with him at UB. S. Deutsch and Citibank. He is an ICF master certified coach and has taught at multiple universities and is author of a new book called The Elephant in the Family Room. And here’s where this listen to this is amazing. He lives in Uruguay, where he is the honorary counsel general of the Netherlands, Renee. Welcome. How are you doing?

Rene Sonneveld 5:24
Thank you very much. I always have to love this when I hear this, Jim. So you gave me good laugh of listening you talking about me.

Jim Beach 5:35
Let me tell you my Uruguay story. I was in Uruguay one day, went to Montevideo on the hovercraft from Buenos Aires, and had an amazing time looking around Montevideo. I got back, and I had an alert from my Visa credit card, and they wanted me to call, so I called, and they had put a safety stop on my credit card, and I was like, is it because I was in Uruguay? That’s unusual, and they were like, no, no, it’s because you’ve been buying clothes. So my alert was set off, not by traveling to Uruguay, which I thought would set off alerts, but by buying clothes, because I never buy clothes. So

Rene Sonneveld 6:17
actually, you know, Uruguay, just a few fun facts. It’s the by far the safest country of Latin America. It has the lowest level of corruption measured by whatever United Nations of all the America’s continents, including United States and Canada. It’s the 14th most democratic country in the world, and few people know about Uruguay, but it’s an amazing country to live.

Jim Beach 6:49
It is a beautiful, beautiful place. Let’s start off with the book, The Elephant in the Family Room. Talk about who’s the elephant.

Rene Sonneveld 6:59
The elephant is the unspoken emotions that you know when you’re in a room with a family, they’re the stuff people simply don’t want to talk about, because it’s so hard, and the less we talk about those things that are hard but are necessary to talk about, the bigger the elephant gets. So everybody knows there’s an elephant standing in the room, but nobody wants to address it, and that’s the metaphor I use of the the elephant, you know, for, for, for those situations where the psychological dynamics are just, just too hard to bring them up, because people have been evading them the whole life.

Jim Beach 7:39
I can’t wait for Daddy to die, so I get his money.

Rene Sonneveld 7:44
Well, that’s that, you know. People do not.. well, people might be thinking like that. I can’t wait till I can get my hands on the on the bank account. Definitely, that could be one, but there are many others. There is also Daddy, who doesn’t want to, let’s say, transfer his company, the operation of his company, to his kids, because they’re not ready yet, or basically he is, he’s fearful that if he does that, he has no purpose in life anymore. It’s like imputing his, his legs in his arms. Know what I’m going to do with the rest of my life, and there’s so many different jealousies, egos, entitlements, there’s so many dynamics going on in these family systems, and it doesn’t matter if this is a small startup or it’s a, you know, a huge global corporation, same people, same emotions.

Jim Beach 8:37
Here in Atlanta, there is a famous billionaire family, they own quite a few companies that you may have heard of, and the children, all in their 50s, sued their daddy, who was 90 at the time, demanding all of their money now.

Rene Sonneveld 8:57
Yeah,

Jim Beach 8:58
what do you think situations like that.

Rene Sonneveld 9:02
Well, I mean, you have to understand the context. I mean, I think if you ask me by itself, is it a good thing that kids sue their parents because they want their inheritance now? No, that’s that’s not a good thing, but there are many cases where, let’s say, Daddy was 85 years old, he married a whatever 35 year old woman, and that’s where the 55 year old kids, they get concerned, and and there are many of those, those situations, and the same could be a matriarch, a mother, a woman that, that you know, is owning the fortune, and she marries a 35 year old, good looking handsome man, right. So there are those situations where there’s consternation in the family because, or the situations where the father or mother get mental problems, like, you know, they become senility. Am, you know, their brain is not working right well anymore. Those situations, yes, and they happen actually more frequently than the public knows.

Jim Beach 10:11
All right, I was also at a 25th birthday party where my friend turned 25 and got $75 million for his birthday, and since then he has been a ski lift operator, a ski instructor, a Pilates instructor, a fireman, and a real estate agent.

Rene Sonneveld 10:39
I love that.

Jim Beach 10:41
What about

Rene Sonneveld 10:43
I love it in the sense of if that $75 million doesn’t change your purpose the way you like to live your life as a key instructor. I know

Jim Beach 10:55
that’s the problem, he has too much money to have a purpose.

Rene Sonneveld 10:58
Okay, well, if it’s just kind of he is spinning his wheels because he doesn’t know what to do in his life, that obviously is a big problem, and it creates a lot of unhappiness. So, the wealth creates unhappiness, but there are people, they are sitting on this type of money, and you know what they love to do in their life is to play the guitar or make paintings, and they’re really passionate about doing that, or I know a family where you know one of the ladies in the family, she’s very rich, and she lost a ski, and she’s a ski instructor, and it makes her totally happy, and she lives a simple life, although she could live, you know, like a queen, so there are so many different parts of it, but obviously young kids with too much money in general ends badly. Full stop.

Jim Beach 11:49
Yes, I would agree with that. All right, what do we do if we have an elephant in our living room? How do we handle this situation? What do I do?

Rene Sonneveld 11:58
Well, and it’s really hard when an elephant. The thing is, you need to understand what is really happening in the room, and, and in general, families – any family, they’re very good. I call it, I call them escape artists, right? So, somebody brings something up, which is kind of hard to talk about, and people might enter into the conversation, but then quickly they deviate, they start talking about the balance sheets, or what they’re going to do in the next vacation, whatever, in or the next trip they’re going to do, so people try always to cut off the edges of hard conversations, and the only thing, the only way of, if there’s an elephant, is to address it, and at least addressed a little bit, so the energy the elephant deflates, the energy goes out of it, and then it becomes easier to talk about it, but you have to sit in discomfort, there’s no other way, and people do not like to sit in discomfort, and that’s the problem,

Jim Beach 13:02
that’s so very true. Are you better off handling handling this with a professional, or is it a good idea just to do this with just the family member, or just the two people that are having a problem? What dynamic produces the best results?

Rene Sonneveld 13:18
Yeah, well, I mean, ideally people know how to talk with each other. They don’t need to, especially

Jim Beach 13:23
they’re rich.

Rene Sonneveld 13:24
They don’t, but you know, sometimes it’s, it’s, it’s so hard that it’s necessary. You know, I worked with a family where some of the kids, they couldn’t stand to stay in the same room, they, you know, they had some problems, and, and they, and they couldn’t be in the same room together. That means also that the families that were used to go on vacation all together, they couldn’t be whole as a family, because always one of the persons in the family had an excuse not to come on vacation. I cannot be. I have to be in Dubai or Switzerland, or wherever. And so the parents were super unhappy, because they had, you know, they had worked very hard the whole life. They had created a lot of wealth, and now you know what you do when you have all this money, but your family is not whole, and, and sometimes these problems are that big that it’s you know you need to have a to call in a person like for example what I’m doing to deal with that or you know when there’s a big misalignment in the transition of a company where the parents you know, our elder, and they don’t really want, or they don’t really know how to transfer the company to the next generation, and those kind of conversations, it is, it is useful to, to bring in what I am, an enterprise family coach to, to help them. Have to find a safe space to talk about this, about these issues.

Jim Beach 15:06
Where do you start with that kind of conversation? How do you bring it up?

Rene Sonneveld 15:10
Well, the first thing you know, I get typically I get a call from someone, a member of the family, ‘Hey, Renee, we have a problem, do you have some time to talk about it? Sure, so I listen to the problem, what it is, they asked me if I can help them, and I say, ‘Look, you know, before even thinking about if I can help you, I need to talk with all the stakeholders in the family, and this is how I start, because I am, I have to be very careful that when there is already discordial discord in a family that I am considered as being weaponized by one part of the family. Oh, Renee is coming here to solve the problem of Peter, right? Peter doesn’t know how to solve the problem, so he hires Renee to deal with his problems with the family, and so I am very careful to not be considered as weaponized. So I need to talk with everybody for them to feel that you know that they can trust me and that I am a person that that is there as a neutral person and not as a person that is only looking at the perspective of one part of the family, so it always starts with this. It starts with long conversations before I even make an offer, a proposal. I first want to talk with everybody who you know holds some type of power in that family system.

Jim Beach 16:28
Okay, but now you’re on someone’s side, right? Just like they said, you’re biased. Well, it’s me. You’re here to take care of me. Damn you. I mean, you’re tired. Put me in a box, take away all my money, and let me not have any fun anymore.

Rene Sonneveld 16:44
Yeah, so Jim calls me, and Jim says, ‘Hey, you know, I have a problem with, with my, my cousins, or whatever. Renee, can you, can you help me? I say, ‘Look, you know, I can help you and your family, your cousins, but I, before we even further this conversation. I want to talk with your cousins, because I want to explain them my process. I also want to explain them that I’m, you know, I’m not working for Jim. This is the most important thing. The other family members, they need to understand that I’m not weaponized by Jim to whatever to deal with Jim’s agenda, so once I have the consensus of all the family members, yes, this is a good thing to work on this. This is where the real work starts, you know. But I need that all people in the family, or let’s say the vast majority, they accept that they want to work with me. If not, I’m not going to do it, because it doesn’t make sense, because there will always be suspicion that I am, you know, working for Jim and not for the family.

Jim Beach 17:51
Yes. Well, how do you dispel that notion? Just talking to them, is that going to make them believe it? I mean, I’m really talking about my. I promise, I promise,

Rene Sonneveld 17:59
trust me. Yes, so you know, how do you build trust? You build trust through communication and connecting with people, and I’m pretty good at doing that. Obviously, I have a lot of experience, and a lot of cases that I worked on, that you know, without mentioning any names, I can tell people about, you know, how other families dealt with these type of issues, and so on. You know, I’ve – I say this humbly, I have expertise in this field, so people in general, they feel pretty comfortable once they start talking with me. So I have these long conversations with them, and that’s how we start, and once we establish, kind of, okay, you know, we want to work with Renee, then I have another round of very, very large conversations with each individual member to really understand what’s their purpose, what’s their fears, what is it, you know, they, they, they want to achieve in life, what they expect from their family members, what do they consider being a legacy in this family? What’s their social strength of the social network and the reputation? And I have all those wild questions, and, and these are confidential interviews I have with the several family members, and based on that, I built an assessment report, and, and that’s where I meet actually the whole family for the first time in an off site where we talk about my findings without finger pointing, just the findings in general, right, and and that’s where the conversation, the real conversation starts, but people need to feel safe, if they don’t feel safe, it’s not going to work, and so we create a lot of, we spend a lot of time in creating that safety within the family members, and how are we going to communicate with each other? Are we allowed to interrupt each other? Do we hear people out, and so on. Some people, they actually forgot how to communicate well, and how to listen to others, they jump to. Illusions, and that can be very toxic.

Jim Beach 20:03
What percent of people are able to change and actually accept these sort of situations? It seems like if you gave me a billion dollars, I’m going to do whatever the hell I want. I really going to be very likely just to ignore you in your thoughts.

Rene Sonneveld 20:19
Yeah, you know, if you are sitting on a billion dollars, and the only thing you want to do is looking at your own navel, and don’t care about the rest of your family, and the happiness of your kids, and your spouse, and whatever your brothers and sisters, sure, you know, do what you want. I mean, there might be people being that, but most people there are more conscious than that, and and they want more from life than than just a billion dollars, and flying on jets, and you know, drinking expensive whiskeys in beautiful tropical islands, you know, people they care about, about their future, about their family members, about their, about their children, that they’re happy, and, and so on. So, but of course, this is not for everybody. If you know, if somebody is thinking very egocentric, and the only the world turns around him or her. Yeah, okay, good for them. If that makes them happy, I’m not to tell them to change their life. It’s up to them to do that, but if they’re a little bit more sensitive to the environment, to the people around them, definitely they, you know, they like to improve and change things around.

Jim Beach 21:41
What is an honorary consul general, and is it like a diplomat? Are you allowed to kill people in foreign countries and get away with

Rene Sonneveld 21:51
it? Yeah, it’s a very elegant way of saying that I’m a spy, but no, I’m just kidding. There’s some great books about that, by the way, from Graham Greene and others about honorary consuls in the old days, but no, basically we do, the Netherlands doesn’t have an embassy in Uruguay, so when they closed the embassy 15 years ago, they asked me if I wanted to be the, let’s say, the representative in this country for the Netherlands, and what I do is one of the things I visit prisoners when they are prisoners here, Dutch prisoners. I take care of certain social documents, proof of lives that people need when they handle business business missions coming here or trade missions to Uruguay. I accompanied them. It was a big conference on the LGBTI, was sponsored by the Netherlands, where I, you know, supported the organization, and those kind of stuff. Anything that that has to do with some type of interaction between the Netherlands and Uruguay, that’s where I support, and sometimes people, they lose their passport, so I can issue them some kind of emergency documentation for them to travel back to the Netherlands. That’s basically it.

Jim Beach 23:16
All right, and do you get special privileges with that, or why would you do it? Do you get paid to do that, or is it just purely honorary? And just,

Rene Sonneveld 23:25
it is, yeah, it, you know, look, I’ve been my whole life in business and executive world, and this is honorary, but you know what, I have those cool stamps, I can stamp some documents, I always wanted in my life, you know, to feel how it is, you know, so I stamped some documents for people as a proof of life, and I’ve been doing it. I also, you know, get to, to, to meet the King of the Netherlands, and before that, his mother, the Queen of the Netherlands, once every so many years, so that’s kind of cool stuff, stuff that, and even the experience of visiting prisoners, you know, I never been before to, to jail, to Jill House, and, and you know, just helping them overcoming the, just giving them a few hours of comfort by talking with them, and, and, and bringing some stuff. It’s quite.. I’m quite grateful for, for the possibilities that, and the eyes that it opened to me, being the honorary consul. So, yeah, it’s.. but it’s honorary.

Jim Beach 24:39
Sure, I had a friend who was the honorary Consul General of Curacao, I think, for many years, and he had a lot of fun with it. It was a big joke, especially when he walked into a new bar. So,

Rene Sonneveld 24:54
what it does? Yes, I have a little carton, so in airports I go quicker suited. Check in, check in lines and security controls. That’s, that’s a big one. Yeah, that’s cool. Yeah,

Jim Beach 25:05
that’s very cool. And what about living in Uruguay? Couldn’t find a more remote place on earth, like you’re missing the Netherlands, and do you just feel isolated there?

Rene Sonneveld 25:23
Not at all. First of all, you know, today with this, you know, in my work as a coach, I, in the morning, I start with talking with people in Hong Kong, Singapore, through Dubai, I go to travel to Europe, and I finish my day out in the West Coast of the United States, so isolation today with all the possibilities that internet gives us, I don’t feel it, and you know what, the visualization I have, I rather live here in a place where you know there’s not too much government control, your freedom, pure nature, no contamination, no kind of big social or religious problems, or racial issues, or whatever discrimination. I rather live here, and then I visit Europe or the United States than, you know, living in a big city in Europe, and, and then coming here on vacation. I live in a permanent vacation, and that’s also how I consider my work. I’m on a voyage, I’m not working, I’m voyaging in life.

Jim Beach 26:32
That is very cool. What city do you live in? Is there a huge city there? Montevideo, the only place I’ve been with

Rene Sonneveld 26:38
Montevideo. Yeah, it’s a 1 million people city fun fact. Also, the Netherlands is five times smaller than Uruguay, with five times more inhabitants. So that’s why the Netherlands population is considered the tallest population in average in the world, and because you know you don’t have enough space, you have to go up right. So that’s what’s happening in the Netherlands and Uruguay. It’s empty, three and a half million people in country, maybe the size of half of California.

Jim Beach 27:14
The predominant England or language there is Spanish.

Rene Sonneveld 27:17
Spanish,

Jim Beach 27:20
yes, yeah. Boy, it looks like a great place to live.

Rene Sonneveld 27:23
It’s a great place, lots of technology. It’s the largest software exporter in Latin America. All kids, they get computers from the government if they cannot afford one themselves. Everybody has fiber optics connections at home, so you also have a democracy of learning and a democracy of information. Everybody has the same access. 5% of the people live below poverty, that’s 5% too much, but that’s a very, very low number, compared, for example, to Argentina, neighboring country, where it’s around 50% or Brazil, I don’t know exactly the numbers, but it’s, it’s much higher, so yeah, it’s it’s a good place to live, great country, and great people, and great food, if you like meat and wine, this is perfect.

Jim Beach 28:14
Yes, I did love the meat in Buenos Aires, it was amazing to eat dinner there every day, yeah, very interesting Renee, you live a fascinating life. And thank you for being with us and helping all those damn rich people with all their damn rich people problems.

Rene Sonneveld 28:31
Absolutely. Yes.

Jim Beach 28:33
How do we get in touch with you? Find out more. Get a copy of the book.

Rene Sonneveld 28:37
You know, the easiest way is to go to my website, it’s www Renee sonnefeld.com so my name without any dots in between, or you can find me LinkedIn and send me a message, and I will bounce you back.

Jim Beach 28:53
Fantastic, Renee. Thank you so very much for being with us, and I will see you soon on vacation, and I will love you know, come, come, no, no, you come here on vacation, I’ll make you big asado. What is it, asado?

Rene Sonneveld 29:08
That’s the Argentine barbecue.

Jim Beach 29:10
Ah, sounds good.

Rene Sonneveld 29:10
Call this Asado,

Jim Beach 29:12
Renee. Thank you for being with us. And we will be right back.

Rene Sonneveld 29:16
All right, you

Intro 2 29:31
Well, that’s a, that’s a, that’s a wonderful question. Actually, oh my gosh, I love the opportunity to do this. Thank you, Jim. Wow, that’s, that’s all, that’s a great one. You know, that is a phenomenal question, that’s a great question, and I don’t have a great answer. That’s a great question. Oh, that is such a loaded question, and that’s actually a really good question. School for Startups Radio,

Jim Beach 29:54
and welcome back to School for Startups Radio again. Thank you so much for being with us today. I am incredibly honored and excited to introduce you to my first guest. His name is Brian Smith, and he is the genius behind Ugg boots, which you see all of the girls wearing. He’s from Australia, was a chartered accountant, and then came to UCLA Graduate School of Management to study, and with only $500 he started the Ugg import company to bring the sheepskin footwear to America. He has a new book out, just last Jan, I’m sorry, last December, called The Birth of a Brand, which you can find on Amazon. It is incredibly well reviewed, and it is also selling tremendously well. Brian, it’s an honor to speak with you. How are you doing today?

Brian Smith 30:47
Hey, I’m doing great, Jim. Thanks for having me on the show. Oh, it is

Jim Beach 30:51
my honor. I can’t tell you how cool my 15 year old daughter thinks I am now that the fact that I got to talk to you, she thinks Daddy is the coolest guy on earth. Just the fact that you and I got to speak, so

Brian Smith 31:06
it is my pleasure. That’s great.

Jim Beach 31:09
Can you tell us the beginning of the story? How you decided to start this business while you were at UCLA?

Brian Smith 31:18
Yeah, well, it started earlier process started earlier. I was an accountant, as you mentioned. I hated it, and it took me 10 years to graduate, and the day I graduated is the day I quit, and I was trying to figure out what to do with my life, and I realized that all the cool trends were coming out of California, like water beds and Levi jeans and all the surf brands, and so I thought my best bet was to go to California and find the next big thing that I could bring back to Australia, and while I was in Santa Monica, in California, one month, two months, three months, still hadn’t found it, and my buddy was over to go surfing, and he brought the latest issue of Surfer magazine, and I opened it up, and I just froze on one page. I got goosebumps, and it was this ad spot. There’s a couple pairs of legs in front of a fireplace wearing sheepskin boots, and I went, “Oh my god, there’s no sheepskin footwear in America, and so instead of taking something back to Australia, I, I borrowed 500 bucks with nobody, and we sent the money down to samples to bring you to America and test, and that was like the genius behind how we, how we started that brand,

Jim Beach 32:40
and why did you think it would be so successful? I mean, if no one is wearing sheepskin boots, especially, especially in hot southern California, why did you think it would be a big hit?

Brian Smith 32:53
It’s crazy, but one in two Australians have some sort of sheep left there, and what I didn’t count on, and this is a very, very important entrepreneur lesson: you have to have a certain amount of ignorance, be a good entrepreneur, because if you did all the research and knew what was ahead, you would never start, and my ignorance was that everyone in Australia is born with steep skin knowledge, they know it breathes, sweat in it, it’s insulating, you can get it wet, you can, you know, it’s rugged, but in California and America in general, it’s, oh, it’s hot, it’s prickly, it’s sweaty, you can’t get it wet, we have mud and slush and snow, it’ll never work here, and so that difference in my perception of what the product was could have been enough to make me not go into the business, but because I was blind and ignorant, and in a sense innocent, I just forged ahead anyway, ultimately became a billion dollar brand, but it could never have started without, with I didn’t have that ignorance.

Jim Beach 34:07
Well, I started my first business also totally stupidly. I didn’t even know what the word entrepreneur was, and so I really agree with you. If I had known, I would not have done it. What was your first success, how did you start? You know, actually getting some traction and start finding stores to sell the product.

Brian Smith 34:27
Yeah, well,

Speaker 2 34:30
it took three years, like my first, you know, road trips were in late December, and we started, you know, we had bought, you know, 500 pairs of boots in, because we raised 20 grand in capital, and we bought 500 pairs of boots in, and we sold 28 pairs the first season with exactly $1,000 but there’s no billion dollar company out there that didn’t start with $1,000 Surf that was a good thing to look back on, but we tried to surf shops first, and that they were easy, because all the California surfers had been to Australia, had bought some back, and they knew about them, but we were advertising with these models on the on the rocks at Wind and Sea Beach, and the sales of $30,000 and for the next year we advertised with better looking models and more expensive photographers, you know, the models on the beach at Wind and Sea, and sales of $30,000 and I felt like such a failure because we couldn’t get in the mall store, and I was back in Chicago at Montgomery Woods buying office and give my best sales presentation ever, and the buyer just looked at me and says, “Brian, why are you here? And I sort of stammered, “Well, I want to get an order for the California stores. And he says, “Hey, Brian, don’t you get it? We’re the elephant. We don’t move till the mics are running around under our feet. And I instantly knew what he meant, that if I didn’t get all the specialty stores just scrambling for it, then the molds were never going to touch it. So I got back to California, and I was having a beer with one of my 30th shop owners, customers, and I was explaining the problem. He just called out to the back of the room, “Hey, you kids, come out here, and all these little grommets come out. What do you guys think of Uggs? They went, “Oh, those Uggs, man, they’re so fake. Have you seen their ads? Those models, they can’t stir. And then I got goosebumps again, because I realized, “Oh my god, I’m sending the wrong image, my target market. And within a couple of days, I called up a buddy of mine who ran a scholastic surfing program. I said, “Any of these kids going to go pro soon? And he gave me a couple of guys, one was my partner, and I started photographing these guys walking to the surf breaks and started running those ads in the magazines, and the sales instantly went to $400,000 that season. So the huge lesson I learned was that, that you had a product, you got it, and you know your market looks like people want to be in the, in the photos, and that was a huge marketing lesson for me that I turned out to be, is that a really good marketer.

Jim Beach 37:28
What is the name? I’m sorry, what is the name come from Brian? What, what is Ugg? Is that a word you just made up?

Brian Smith 37:37
No, it’s been around Australia forever. There are several old people in Australia who claim they invented it, but nobody really knows. It’s sort of descriptive about descriptive of sheepskin boots now, and it’s in the dictionary down there. It means sheepskin boots, but you know, when I came to America, there were no sheepskin boots here, and no one had heard of Ugg, so I registered it, and that really became the fulcrum of the whole business. I built the brand around the Ugg logo, and I made it stand for quality, and I made it stand for comfort, and I made it stand for reliability, you know, and all the customer service that I did was what went into building that into being a brilliant brand.

Jim Beach 38:29
And how did you deal with the seasonal nature of the product? Is this a winter boot? I mean, if people are wearing it surfing, it sounds like a summertime product. What are your thoughts on the seasonality of

Brian Smith 38:43
it? Okay, there’s two ways of looking at it, three ways of looking at it. Firstly, the product itself, because it breathes, you can never sweat in it, so the using season is pretty much 12 months. I mean, as I see people in the summertime wearing them here with shorts, you know, in the early mornings. The second way of answering that is that the buying patterns of the retail industry will be they’ll only buy winter products in September, October, November, and they usually do that at the trade shows in six months previous, and so there’s a very narrow shipping window and a narrow window to collect receivable, and the third part of answering that is that it’s a very, very difficult proposition to run a business that is so that is one seasonal, because if you’ve got a product that’s selling every month of the year, well, when you collect from one shipment, you use the money to pay for buying the next product. Well, when you get to a seasonal product that’s one time a year for only a couple of months, and it’s okay when it’s small, but when it gets up to be 510, 15 million. And the amount of money and capital you need to buy products for that rest of that season just becomes prohibitive and ultimately is why I had to tell it I was so successful that I couldn’t bankroll the inventory ramp up every year,

Jim Beach 40:16
so you sold, I know money has been an issue several times, and you’ve had to reach out to raise capital several times. I want to ask about that, but before that, was the reason you sold then just for inventory management that the buyer, Decker, could afford to grow the brand more quickly than you?

Brian Smith 40:39
Well, two things: one was that I was looking at a $20 million season, up from like 12, and that was a huge amount of capital to raise, and back then, you know, the investment bankers were thinking, “Oh, you’re lucky, but it’s a fad, it’ll never be around next year, right? And every year, for like 10 years, I got that same argument, and didn’t matter, even though I was doubling every year, they still thought it was a fad, and Deckers, I had known the owner of Decker back when I was selling boots out of the back of the van in Malibu Beach, he was a couple of bands up selling his triple decker sandals as the back of his van, so we, we knew each other for the 17 years that we were in, or I was in business with Doug, and and he had taken his company public with a brand called Shiva, when the outdoor market took off, and so I was facing this, this, you know, dilemma of how do I get 20 million bucks worth of product, and we were going to the super show in Atlanta, and I saw Doug at the other end of the baggage claim at the terminal, and I got goosebumps again, and I thought, oh my god, it’s perfect, you know. His business dies every winter, our business dies every summer. And so we walked up and high fived each other, and we had the accountants talking to each other that afternoon. It just made so much sense.

Jim Beach 42:15
Oh, that’s a great story. I got goosebumps hearing it. How do you keep the brand fresh? So you mentioned that the investors said, ‘Oh, it’s a fad, it won’t be there next year. How did you fight back with that and keep it fresh each and every year?

Brian Smith 42:31
We, I had a mantra that should also buy into, especially if you have a product that isn’t detectable, or you know, both tap and stuff, and it’s pretty simple. It’s get out front first, and then run faster. And every year, when the competitors were knocking off all the styles and colors that I had the previous year, I would come out with new stuff, and every year they’d be trying to catch up, and, but, but they never could, because they didn’t have the creativity, all they had was the ability to copy, but I had the ability to think of new styles, think of new colors, of new ways of marketing, and so it was, it was always a case of being out front first and running faster.

Jim Beach 43:25
I love it. And how.. how did you.. let’s go back to the financial question prior to that year, where you needed 20 million. Was fundraising a perpetual yearly problem for you? And how did you solve

Brian Smith 43:40
it? Well, it was a problem, because if you, if any business grows more than 20% now this may have changed with the internet, where you don’t handle your own product, but generally the rule was, if you grow more than 20% a year, you have to get more capital in to finance the growth, and we were doubling every year, so it was like always facing bigger investors, buying out old ones, bringing in new ones, and then that’d be good enough for a couple of seasons, and then they wouldn’t have the ability to take it to the next level, so we have to buy them out and bring in new ones, so it was a perpetual cycle, now in retrospect, I wish I had brought in a really good financial person into the company who could have projected three to five years out and then gone to the proper banks and got the proper level of financing commitment, but that was only after I learned what I’d done wrong, and that’s like every entrepreneur, you know, you never know how to do it up front, you just learn it as you go, and that was looking back, that’s one of the things that I wish I had have done,

Jim Beach 44:53
and what about luck, Brian? Is I don’t hear any luck in this. Story at all. I only hear incredible hard work and some really smart marketing decisions. Was luck part of your story?

Brian Smith 45:08
Well, well, I don’t believe the word luck lies, but karma, right, which is like, you know, everything has its opposite, you know, yin and yang, black and white, positive, negative, plus minus, you know, ones and zeros, that’s all the computers are, and the universe works that way. So, in respect to luck, if you put the effort out and you’re continually putting the effort out, look, things will fall in your place, and that’s the universe balancing itself out, so I call it more karmic than luck, but yeah, we had, you know, for instance, there was a girl that we’d been shipping to in England called Trudy for five or six seasons every year, she’d call us up in November, December, want 2030 pairs to be shipped to her friends in London, pain in the butt, really, but but we always did it, and, and you know, after the fifth year, you know, I got a call from Trudy, and he goes, “Oh my god, Brian, I’ve just been to a conference, it’s changed my world, and I want you to get the most perfect pair of size, whatever, you know, tall sand bugs, and send them to this address, and she said, “Do you have a pencil? I went, “Yep. He goes, “Oprah, care of Oprah Winfrey, and Trudy was Trudy Styler, who was sting fly, right? So, so those are things that you would say, “Why? That was so lucky, but it really wasn’t. We put the effort into to make that happen, and you know there were other issues where we were in trying to get PR USA Today, and when I made the appointment with the girl, you know, I arrived five minutes early, and she came running out and goes, “Oh my god, Brian, I’m so sorry, I’ve only got five minutes, I’ll have to be on a conference call, and you know I had the perfect presentation ready, would have taken an hour, and so I just reached into my briefcase, I pulled out a folder that had all these old photos of all these people I just ripped out of magazines, and there was Tom Kenny and Neil Young and Sting, and you know, Heather Locklear, and all these things, and and one of them was Pamela Anderson on in a swimsuit on the beach, and she just grabbed that. Who’s give me that? And she wrote down the photographer’s name, and the tabloid newspaper came from and said, Sorry, I gotta go, you know. And then it was like four minutes, and I thought I totally blew it in the airport next day in Chicago on the way home to San Diego, I bought coffee in USA Today, and I stick it open to the lifestyle section, and there’s this like front page little article on Ark and the Pamela Anderson photo, and another page behind that with, and by the time I got back home, I found out that the phones hadn’t stopped from retailers all over the country calling up asking how they can stock the boots, and consumers wanting to know where to buy them, you know. So those two issues could have been luck, but put the work in, you know, right. And one of my rules is, if long as you’re moving, as long as you’re taking equipment steps, universe will always try to work with you. That’s that’s an ancient saying. It’s not mine. It’s been around 1000s of years.

Jim Beach 48:31
Why in the world did you ever advertise on the Rush Limbaugh show?

Brian Smith 48:37
Well, I did not want it personally, but I had a couple of partners, and they brought the money in, and they were rabid Rush Limbaugh fans, and they just wanted to be part of his show, because that was in the heyday of the Clinton era, where Lindborg was at his peak, and you know, I knew he would sell products for us, but I didn’t think he’d be good for the brand that I was trying to create, which was casual comfort. He was more such skirts and eyes and not a great casual image, but the bottom line is the day he opened up these folks. We have a new sponsor tomorrow. The phones shut down immediately because all the stock brokers in the country were calling us, asking whether they could buy stock in our company, and all of our retailers couldn’t get through to replace their orders, or the, you know, the reorders, a bit of a nightmare. So all we did was swap our regular customers for Rush Limbaugh customers, you know, but and you want to know something. Many of the stores that we sold to were stoked because they were Rush Limbaugh fans as well, so it didn’t really, you know, take us backwards, but it just didn’t seem. Start the brand.

Jim Beach 50:02
We only have a couple of minutes left. Brian, what inspires and motivates you today?

Brian Smith 50:09
I’m out talking a lot and speaking from the stage, you know, universities and small business groups, and I love it, and I like to get the theme across to every entrepreneur, which is, which is part of my book. It is the core of my book, that is, you can’t give birth to adults. Every business starts someone conceiving the idea, and then the first action is the birth. In my case, I, you know, sent that 500 bucks to Australia and bought six pairs of boots for samples. That was the birth of Ark in America. And then it just lies there, and there’s no amount of feeding it, or jiggling it, or playing with this infant. It cannot get up and go to college. Has to be an infant, and that’s the three years I went through where I was $30,000 $30,000 $30,000 $30,000 but eventually it’ll start toddling, and that’s when customers are interested, and then it goes on through to the years, which is great. Period. And ultimately it’s a teenage phase, where any good business is going to hit the teenage phase, which is really dangerous, because it wants to be everywhere at once, but then ultimately the administrators come in and put the all the controls in, and it becomes a mature company. So, if I could get one message across to every entrepreneur that they will be in one of those stages, and if you’re in the infancy, hang in there, just believe. If you’re in the coddling stage, go for it. If you’re in the youth, that’s the best part of your business. Try and stay there as long as possible, you know. But that’s the prime message of my book, and it’s got about 51 different business tips that I’ve come up with through the course of the Ugg business, and it’s just a real, real good textbook for any entrepreneur, as partly what not to do, as partly what to

Jim Beach 52:13
do. How can we get a copy of the book and become part of your tribe, Brian?

Brian Smith 52:18
Great. Well, it’s on Amazon, called The Birth of a Brand, but you can also go through my website, which is Brian Smith speaker.com that’s B R I A N Brian Smith speaker.com You can order the book there, and you can also sign up to download, you know, those 51 video, or those 51 tips I mentioned, I started doing little two minute videos of them all, and so you can sign on to get the Fridays, you know, Brian’s Boots on the Ground business tip, you know, and that’s pretty cool, and but for sure, if you’re in the business of in the first few years of your business, this is such a great inspirational roadmap for any entrepreneur, so just birth of the brand at Amazon.

Jim Beach 53:08
Fantastic, Brian Smith, the founder of Ugg Footwear. Thank you so much for being with us today. Great story, and we love your product at our house.

Brian Smith 53:19
Way to go, Jim. That’s I love it. I love hearing that.

Jim Beach 53:22
Well, I think you should name part of your house after us for all the financial support we’ve given

Brian Smith 53:29
your company.

Brian Smith 53:29
Yep, that’s great, Jim. I really appreciate the call. Thanks.

Jim Beach 53:35
Thank you. And we are out of time, but back tomorrow. Be safe, take care, and go make a million dollars. Bye now.