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personio.com/secret leaders. There's a link

1:00

in the show notes. I

1:04

noticed in the

1:07

process of this business failing that

1:09

I was so much shorter with

1:12

my children. You know,

1:14

so much quicker to anger. I even noticed that I was quicker

1:17

to anger with my dog and my cat.

1:21

And I remember I told

1:24

my wife one night in bed and I'm like, I don't

1:26

know why I hate this cat so much. You

1:29

know, it's like the cat has done anything

1:31

wrong, right? But it was

1:33

all just a byproduct of how I was

1:35

coping with what was

1:38

happening. And I

1:41

let it crush me. And

1:43

I had to let it crush me. I had

1:45

to be on the floor. That's

1:47

Joel Primus, a successful entrepreneur talking about

1:49

a crushing failure a few years ago.

1:52

He'd exited his previous company to great

1:54

success, but was struck by misfortune after

1:56

betting the farm on a flailing business.

2:00

happened and what did he learn from

2:02

it? Joel

2:10

actually only became an entrepreneur after an

2:13

athletic failure. In 2008 he was a

2:15

long-distance runner. He got injured so he

2:17

lost his scholarship down in the US

2:19

and his place on Canada's world team.

2:22

And a loss for where he wanted to go

2:25

in life he decided to go traveling. Whilst

2:27

in Peru he desperately needed some new

2:30

underwear which didn't perform very well when

2:32

scaling Machu Picchu. He thought he

2:34

could make something much better and found someone

2:36

to design a first version and then he

2:39

got a place on Dragon's Den. I

2:41

had this pair of underwear I reached out to CBC and

2:44

I'm getting an invite to go on this show.

2:47

So the producers of the show tell me

2:49

hey if you want this episode to air

2:51

you need to do the pitch in your underwear. So

2:54

I stripped down on

2:56

national television and

2:59

asked for some ridiculous amount of

3:01

money for some ridiculous valuation with

3:03

absolutely no understanding whatsoever about

3:06

how to raise money

3:08

or what an investor might look

3:10

for. You know this is

3:12

your very early days in being an entrepreneur

3:15

or founder. And so

3:17

I get told I'm delusional

3:19

on national television and I still

3:22

remember feeling like my whole body

3:24

was beat right there in my

3:26

underwear. Anyway the show

3:28

you know the show actually was a success

3:30

despite not getting a deal done. And

3:33

we ended up leveraging the experience

3:35

and the exposure from the show

3:37

to go on to national

3:40

television and you know

3:42

it got us into all these stores. And

3:45

so I remember this very very

3:49

tough lesson that I learned. You know

3:51

the same hubris that can

3:53

drive an entrepreneur to success

3:55

and help them show

3:57

up when nobody else will. The

4:00

guy. And. Do the things that

4:02

other people were deemed too risky. Ah,

4:04

are the same things that can sometimes trap them in

4:06

their own. you know, in their own ego and their

4:09

own. The steak and and this was a very early

4:11

lesson for me. So we're just landed. A

4:13

place in one of Canada's talk department

4:15

stores. And. They

4:18

gave us this projection of how many

4:20

units of of underwear we should order.

4:23

To I thought oh that's that, sounds

4:25

realistic and and and whatever. Know something

4:28

like twenty thousand pairs and my business

4:30

partner the times like know. You

4:32

know we. Are untested, Just

4:35

because we've got disorder, doesn't mean. You.

4:37

Know we're We're. We're. Tried and true,

4:40

we know doesn't mean that we we know

4:42

what customers can the same kids in a

4:44

when they buy it eccentric Cetera and. I'd.

4:47

Like known and known in. of course

4:49

this is gonna be huge Were you

4:51

talking about Like look, look at what

4:53

the happening Like We're ordering twenty thousand

4:55

pairs on the Ceo and you know

4:57

that? Sit right? Just a very. says.

5:00

Terrible defiant thing for me to

5:02

say. it's to my partner and

5:04

we make all the product. It. Takes

5:07

almost all the money that we've raised at this

5:09

point. To. Do So. And

5:11

we launched the product in than

5:13

this great department store and few

5:15

weeks later. Maybe. It's a month. I

5:18

get a phone call from. An

5:20

investor customer. And he

5:23

says now i know why you call the underwear naked.

5:25

I don't really mean what would he talking about and he

5:28

goes. Because. They don't stay

5:30

on when you were them. And.

5:32

I remember the ceiling like my like

5:35

nice like you're going on a roller

5:37

coaster ride and you're going on one

5:39

of those fast a sense of still

5:41

nicholas in my throat and. Sure

5:44

hinges on the way I. Was

5:47

a new designer and I'd made this

5:50

underwear that kind of sit a very

5:52

ideal at body type. But. Someone

5:54

who didn't have that body type. It's on

5:56

a shot right off, and I hadn't properly

5:58

tested it on. There was people and.

6:02

And I had twenty thousand pairs that

6:04

spend all the company's money. On

6:07

a product that I had to. Literally.

6:09

Dump House us I had the dump

6:11

all the largest an extra larges. So.

6:15

That was a tough failure to

6:17

come back from because. You.

6:19

Know that moment in time the company was effectively

6:21

insults and. And I had. A

6:25

choice to make it, you know, didn't. Am

6:27

I gonna go the long road of trying

6:29

to fix this problem? Or if I'm going

6:31

to thing in the towel so that one

6:33

still sticks with me pretty hard on all

6:35

these years later. So. What?

6:38

Did he choose? I. Got on

6:40

the phone with every single store that

6:42

we were in. A

6:44

including this main store and I let

6:47

them know the problem. And

6:49

I told them to take

6:51

the product off the shelves

6:53

and I worked very very

6:55

quickly with my factory and

6:57

some designers to try and

6:59

six the problem. And

7:01

that I took. The. New product that

7:04

we had made. the few samples

7:06

that I had and I thought

7:08

it might vary for his rap

7:10

be Chevrolet I'm. Kenny.

7:12

Remember what Cobalt? I think it was a

7:14

Chevy Cobalt. And I drove across

7:17

the country. And I visited every single

7:19

one of our stores. And I've visited every single one

7:21

of those department stores that we had had been in

7:23

every one of their locations. And

7:26

I personally. Showed.

7:29

All the staff, the six product sort of.

7:32

Incest and see him for my my

7:34

my sincere apologies for the mistake that

7:36

I had made and told them that

7:38

in in a handful of months you

7:40

know we would have the new product

7:42

ready. If they would so

7:44

take it and that the hardest part of that

7:47

ass was I had asked many of them to.

7:50

A sense slippery. Pay for the new

7:52

product in advance and order so I

7:54

could afford to produce. It is. like

7:56

I said, I'd spent all the money.

7:59

has a very humbling

8:01

experience, but I was, one

8:05

of my investors had said to

8:08

me early on, if you are

8:11

honest with people and

8:14

you show up and

8:16

you just keep showing up, people

8:18

will give you a second chance in

8:20

this business. And

8:24

that proved out to be true this time around. We

8:26

were able to get enough advanced orders from

8:28

people who had just unfortunately

8:30

been screwed over from their first order. And

8:34

that enabled us to make the product and

8:37

re-ship it out. And things went really well

8:39

from there on. We

8:41

ended up selling every major department

8:43

store, uplisting onto the NASDAQ, raising $20

8:46

million. And we eventually

8:48

divested the company to a large company

8:51

out of Australia. And

8:54

none of that would have happened if those

8:56

stores hadn't stuck with us in that first

8:59

moment of that very bad, false start out the

9:01

gates. After the

9:03

exit, he set his sights on a new business.

9:07

Coast End Travel was a travel clothing business

9:09

I started in 2018 following the sale of Naked Underwear.

9:15

And it was a moment in time in which millennials

9:18

were traveling at a rate in which had

9:20

never been seen before in human history. They

9:23

were the digital nomads. And

9:25

they were realizing that they didn't have to sit in front

9:27

of a desk to be successful, even in

9:29

their business pursuits. So thinking

9:33

about what they needed, and

9:35

usually the market kind of

9:37

dials itself towards what

9:39

are the new opportunities, right? And

9:42

what categories are being created? And at

9:44

that time, there was no one

9:47

who owned travel clothing for millennials. I

9:50

thought, oh, that's a great opportunity to

9:53

tackle. And so we did a Kickstarter. And

9:57

the Kickstarter did, we did two Kickstarters. We

9:59

did one Kickstarter. did about $100,000 in sales

10:01

in 30 days, which was top 5%. And that

10:03

was enough to show us that,

10:07

you know, beta test, okay, there is a

10:09

bit of a pulse on this market here.

10:12

The next Kickstarter we did was

10:15

for a travel dress. And we did a

10:17

million dollars in 30 days was one

10:20

of the top 10 apparel Kickstarters of all time. At

10:23

that time, you

10:25

know, we've hit the

10:27

nail on the head here. Like

10:30

that is product market fit if I've

10:32

ever seen it, right. So we were

10:34

obviously very, very excited about that. Well,

10:37

we made the product, we ship the product, and

10:40

then shortly thereafter, the pandemic

10:42

hit. And we'll shut

10:46

down, all our factories

10:49

shut down, stopped working, you

10:51

know, we'd ordered fabric, and it

10:53

was stuck at the factories and all of these different

10:55

things that all these different components

10:57

that go into making a product, we're

11:00

all essentially halted in their tracks. And

11:03

we were stuck in a very, very hard decision

11:05

of what do we do

11:07

now? Do we like do we

11:09

pause the business? Do we do we pivot

11:11

the business to PPE? Do we

11:14

do we just double down and assume that you know, travel

11:16

is going to come back. And

11:19

what was really interesting about that situation is there

11:21

was three partners and every partner had a different

11:24

viewpoint on what to do in this

11:27

moment in time. So

11:33

we ended up rolling the dice and

11:36

going into the PPE business with some of

11:38

the funds that we had left in the

11:40

bank account, but it was really quite devastating

11:43

because essentially we had a million dollars in

11:45

investment lined up. And all of

11:47

it went away. And

11:49

I don't blame any one of those people, you know,

11:51

they see a once in

11:53

a lifetime pandemic and they and you know,

11:56

they're going to protect their money a little bit then

11:58

they might otherwise. Frothy Market wrote.

12:02

And so you know we were left with this

12:04

kind of roll the dice and this pp a

12:06

thing to try and generates revenue with making some

12:08

masks and. And that

12:10

didn't work because by the time we

12:12

thought the masks on that we ordered.

12:16

His them. The market had fallen through

12:18

right? There is already it. Millions and millions

12:20

of masks and that was nothing left to

12:22

be taken Their So with that we had

12:24

nothing and and I had my partner's both

12:26

decided they were going to leave the business

12:29

that this wasn't worth it. And

12:32

I decide I was gonna bet the farm. Almost.

12:34

Literally because I to the assassin

12:37

I and and essentially put every

12:39

penny I have into keeping this

12:41

business allies. And

12:44

that became very very. Challenge

12:46

him personally or and obviously

12:49

my family and myself to

12:51

be cash flowing. This business.

12:54

Try to keep it alive in a

12:56

time of great turmoil and unpredictability. And.

13:01

The sing that was staring me and cease.

13:03

Was. Bankruptcy. And.

13:06

It was an interesting and personal

13:09

journey because I had always sought

13:11

of bankruptcy as. As

13:13

really. Such as a

13:16

failure that. One. Could not

13:18

recover from it that it was a

13:20

humiliation that it was on. A

13:22

show of your character. And. You're

13:24

in the prowess as a as an

13:26

entrepreneur. And. Know that it never

13:29

happened to me. My God, right? And

13:31

so I put it in this category

13:33

of you're not going to happen, can't

13:35

happen, shouldn't happen. And there's

13:37

this story that I've shared before at

13:39

it's from a popular children's book. Which

13:42

has to do essentially with this boy

13:45

who moon as this. Pet

13:47

Dragon. Now pet. Dragon

13:49

or address just is there in his bedroom

13:51

in the morning and he tells his parents

13:53

about this dragon. Avatar

13:55

Stumbling home. And the

13:58

dragon gets bigger and bigger. There and

14:00

bigger until it's the size of the whole house

14:02

and gets up and and in a walks watched

14:04

the house down the street or for the parents.

14:07

Believe. Him. Fate. And.

14:11

And it has to do with kind of

14:13

ignoring something. And then when the parents finally

14:15

believe him, the the dragon comes back like

14:17

kitten size. I. This. Awareness of

14:19

this drag and changes to the

14:21

perception of which we we have

14:24

and and so. I. Would

14:26

That was the same thing with bankruptcy For me

14:28

as I was I'd kind of turn this idea

14:30

bankruptcy into this big giant dragon that was are

14:32

you know I didn't believe it and the idea

14:34

of it got bigger and bigger. It consumed more

14:36

and more of me on and at which point

14:39

I had to say sit. Will.

14:41

It finally went down. The kids sick right?

14:44

And so in the end of that story,

14:46

I ended up having to. Put.

14:48

The company into insolvency. On

14:51

because I'd run out of runway to

14:53

to keep it alive. And

14:56

that one that see I

14:58

mean it stung obviously like

15:00

all failures do. And

15:03

like all failures you know, ask questions you

15:05

want to keep going. In this case the

15:08

on keeping an entrepreneur despite what happened. But

15:11

it also taught me a lesson not

15:13

to. Not to. Make.

15:15

Things so big. Make

15:18

things so scary. That.

15:21

You. You.

15:24

Know that you can't operate properly

15:26

and you can't make clear decisions.

15:29

At and instead. Turn things

15:31

into these look moot little more

15:33

kitten size problems. He learned something

15:35

big about failure from the underwear

15:37

debacle to. When. I

15:39

started naked underwear. It was like guns blazing,

15:42

right? You're You're young, you're full of energy,

15:44

and you just want the saying Now you

15:46

want you want to blow the thing up

15:48

now and over the last fifteen years. What

15:50

I've learned is that. Businesses.

15:53

Really? Like see

15:55

him succeed over the long tail.

15:58

And it's not just. that

16:00

matters so much as

16:02

how you execute throughout this.

16:05

And one of the

16:07

things that investors look

16:09

for is what is referred

16:11

to as the onion of risk, right? So

16:14

as you're growing this company, you're peeling

16:16

back layers of risk. It's not so

16:18

much how am I succeeding,

16:21

how am I advancing the business with material

16:23

success, of course that's part of it, but

16:25

how am I de-risking the business over time

16:28

and putting the business in a place

16:31

through execution, continuous

16:33

execution, where

16:35

it has the opportunity

16:37

to take advantage of

16:40

moments in time where it

16:42

can have what are called Snow White events, right?

16:44

So Snow White event refers to this

16:47

idea back from Disney where,

16:50

you know, Disney was a fledgling company and

16:52

then they had Snow White, the movie, and

16:54

it blew them up, right? And when we

16:56

look at Apple and we look at Amazon

16:58

and we look at all

17:00

of these companies, it's not the

17:02

thing that they necessarily started with that

17:05

gave them the unbelievable success

17:07

that they have today. It's being

17:10

in business long enough,

17:12

overcoming the little failures so

17:15

that you can be successful and have

17:17

the ability to take advantage of opportunities

17:19

over the long tail, right? And

17:22

so I had to really expand my

17:24

mindset from what am I accomplishing in

17:26

the short term to how am I

17:28

setting up this business to be successful

17:30

over the long term and

17:33

that means de-risking the business

17:35

little by little, right? But

17:38

also being okay

17:40

with the failures and being able to

17:42

adjust to the failures as things

17:44

go as opposed to thinking

17:46

they're, you know, apocalyptic. And one of

17:48

the mindset tricks that I had been

17:51

taught was a stoic practice of, Tim

17:53

Ferriss refers to it as fear setting,

17:55

but essentially it's just sort

17:57

of understanding the worst case scenario and

18:00

and then saying, okay, I'm

18:03

okay with that. I'm okay with

18:05

the worst case scenario. So I'm gonna

18:07

go after this, fearless, knowing that

18:10

I'm okay with whatever happens. And

18:14

the other thing is, it's another

18:16

Jeff Bezos lesson that I have

18:18

applied, which is essentially open and

18:20

closed doors, right? Where as

18:23

you're iterating your business and you're going through these

18:25

things, you have to look at, okay, can I

18:27

rebound from this decision I'm gonna make? So we

18:30

look at the 20,000 pairs. Can,

18:33

if all those 20,000 failed, could

18:37

I recover from that? Is it an open door or

18:40

is it a closed door? Is that it, if this

18:42

thing fails, we're done, right? So

18:45

really understanding the key

18:47

decisions that you're making,

18:49

not just from the standpoint of what

18:52

the opportunity is, but what the risk is,

18:54

right? Is this an open door? Can we

18:56

recover from this or is it a closed

18:59

door? And honestly,

19:01

the 20,000 pairs could have been a

19:03

closed door if some

19:06

of the underwear hadn't worked, right? So, you

19:08

know, those are just some of the things

19:10

that I've pulled from failure and thinking about

19:12

how to operate a business over time. Those

19:15

were lessons from Joel Primus. Thanks for

19:17

listening to this episode. I've been your

19:19

host, Dan Murray-Serter. We'll see you next

19:21

time. If you enjoyed

19:24

this episode and found

19:26

it useful, please

19:30

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19:42

been your host, Dan Murray-Serter and we'll

19:45

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19:47

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