How the Founder of Reebok Built a Global Brand with Joe Foster

0:01Boom! Shake the room, Fire Nation! JLD here and welcome to Entrepreneurs on Fire! Brought to you by the HubSpot Podcast Network, the audio destination for business professionals with great shows like My First Million. Today, we'll be breaking down how the founder of Reebok built a global brand. To drop these value bombs, I have brought Joe Foster into EO Fire Studios. Joe is the founder of Reebok and is a renowned figure in the athletic footwear industry. With his innovative spirit, he established Reebok in 1958, pioneering athletic performance and style. His commitment to quality and design reshaped the world of sports and fashion, leaving a lasting legacy.

0:41He is also the author of Shoemaker, the untold story of the British family firm that became a global brand. And today, Fire Nation, we will talk about how everything changed when it came to Reebok. We'll talk about going from 9 million to billions very fast. We're going to talk about surviving and thriving and so much more. And a big thank you for sponsoring today's episode goes to Joe and our sponsors. Sales Evangelist, hosted by my friend, Donald Kelly, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Each week, Donald interviews the world's best sales experts, successful sellers, sales leaders, and entrepreneurs who share their strategies to succeed in sales right now.

1:25A recent episode you should definitely check out is the five ways to do daily outbound with LinkedIn. Listen to Sales Evangelist wherever you get your podcasts. Hostinger is among the top web hosting and website creation brands in the world. See for yourself. Head to hostinger.com slash onfire and use code onfire for an exclusive 10 % discount. That's hostinger.com slash onfire and the code onfire. Joe, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. People do ask me, can I become an entrepreneur? Can anybody become an entrepreneur?

2:06And I disagree. They can't become an entrepreneur. And people don't like that. You have to be born an optimist. If you're not an optimist, it will be difficult to become an entrepreneur. Can you make an entrepreneur? Out of an optimist, yes, but not everybody will be an entrepreneur. Not everybody is able to take that risk. And Fire Nation, I can tell you, I've been talking with Joe for just a few minutes here, and this guy is an optimist. And you're about to hear a lot more about why as we go through how the founder of Reebok built a global brand. And Joe, your founding story of starting Reebok is simply fantastic.

2:48I would love to hear more about that now. Most people start up in order to build a business and to make a lot of money, but that didn't happen with Reebok. My grandfather started his company, J. W. Foster, in 1895, and he died in 1933. I wasn't born until 1935, but I was born on his birthday, so I have his name. However, his sons took over the business and that was okay for a while. But as Jeff and I, my brother, as we sort of grew up from being kids into teenagers, we had to do national service. We came back from national service and we came back to a family business which was failing. The business that my grandfather built was great.

3:33He must have been one of the first entrepreneurs he knew all about influencing. But his sons just didn't. they just fell out they just fought each other like adi dassler rudy dassler but the dassler company added us well rudy left the company because he couldn't get on with adi and set up puma with the fosters they just kept feuding and fighting and jeff and myself we just took this up with my father and said look you know either either you get on with uh our uncle and we grow this business or we're going to have to leave. And eventually, my father wouldn't do anything, so we left. We left the business, and why did we leave?

4:14Well, we needed to earn money. It was just as simple as that in those early days. We just had to have something to go to. The business was going to fail, and then we would be in a real position of what do you do next? So we took the step before we had to, and we set up Mercury Sports Footwear. And Mercury Sports Footwear, 18 months later, became Reebok. And there's a whole story in my book, Shoemaker, how that happened. But that could take us some while to tell that story. Yeah, well, I really love you sharing that part because I think a lot of people think that the beginning part of starting a successful business is just this smooth sailing, this great idea comes and you have no difficulty, no challenges.

5:00You just kind of jump into it and boom, there you are. But it actually took you, Joe, 19 years to get to$9 million in sales, which is not a lot, Fire Nation. $9 million sounds like a lot, but that's not in 19 years in that business. But going back to what you talked about at the beginning of the episode, you are an optimistic man. You never gave up. What happened in 1979 that changed everything? In order to scale our business, we either had to increase the categories that we were in, but unfortunately, Adidas had taken over soccer. So going into soccer at that time would have been too expensive, too difficult for us.

5:41So it was a matter of increasing the territory. We were doing well in the UK, but running was a very small market. But in America, massive market, 350 million Americans, and they were just starting to go out training, running. So training shoes or sneakers were becoming popular. So in 1968, I started off in America going to the NSGA show in Chicago. The guys loved my shoes, but they wouldn't import from the UK. That was too difficult, so we had to find distribution. and I had six failed attempts during those nine, well, during the 11 years I was going to America, I had six failed attempts at getting a distributor.

6:28However, what happened in 1979? Runner's world was growing big with the running boom and at that point, Bob Anderson, who was the editor of the magazine, he thought he could tell everybody which was the best shoe to buy. So we told them Nike, that's the best shoe to buy. Unfortunately, Phil Knight is importing those shoes from Japan and Asia. And the demand that being told this is the number one shoe, the demand in America must have been millions. But could he grow his business that much? Could he scale up that? No. So 12 months later, it was a failure for the retail. It was a failure really for Nike.

7:12Bob Anderson, he changed that one. And he said, oh, no, not now. I think New Balance or somebody else who puts number one. Again, same problem. However, 1979, Bob Anderson had learned a lot. And instead of saying who's number one, he changed to star ratings. So a five-star shoe, those would be at the top. And you could get three or four, maybe five, five-star shoes. Well, in 1979, I went to the NSGA show. And that was in February. The shoe edition doesn't come out until August. so a lot of people are anxious to say, will you get a five-star shoe? Kmart thought we were a good bet. They wanted to buy 25 ,000 pairs of me, but I met up with a guy called Paul Feynman, and Paul Feynman, he had a company called Boston Camping, a family business, but he was really fed up with that, and he said, Joe, you can get a five-star shoe.

8:05I'll be your distributor. Well, end of July, I phoned Paul Feynman. I'd been over to see him. we'd met and yeah, it would be a good idea but he needed a five star shoe. So I asked him to go down to the kiosk and see a runner's world the shoe edition was out. He came back in a minute later, he said, Joe Aztec, that was our training shoe. Aztec, you got five stars. Oh, that was it we had the breakthrough. Not only that our spike track shoe and our racing shoe, they also got five stars. So we had three five star shoes to get us into into America. That was the beginning. We got into America and this is when our business started to grow nicely, scale up to nine millions.

8:50But that's not what really made the difference to Reebok. Getting into there, that was all right. There were other things that would take us to the top. Fire Nation, I think a lot of us have Reebok stories. And Joe, I want to take a second and tell you my Reebok story. And it's a fun one in my mind. Okay, it's 1991. I'm 11 years old. At this point, I really, I'm not like that into shoes. Like a shoe is a shoe, a sneaker is a sneaker. Like I'm just wearing what I'm wearing. Then I'm living in Maine and our closest city to Maine is Boston. And I'm watching the dunk contest because I love basketball.

9:32And the Boston Celtic guard, D. Brown, is wearing the Reebok Pump OmniZone shoes. And this guy gets down. He's staying in half court. He bends over. He pumps up his shoe. And then he goes and he takes off from the foul line and he blocks his eyes with his elbow and he dunks it. And I looked at my dad and I said, buy me those shoes. I had never asked him to buy me a specific pair of shoes in my life. And here I am at 11 years old needing those shoes with everything that every fiber in my body. And of course, my dad relented because I was relentless. And I remember putting those shoes on for the first time, Joe.

10:17And I had this little eight foot hoop in the backyard. I could never even touch the rim on it. I pumped those shoes up. And not only did I jump and touch the rim, I grabbed the rim. Those shoes gave me the mental confidence to make me think that I could jump higher than I actually could. And it was a magical moment for that 11-year-old. So I just want to tell you, that was my Reebok story. Dee Brown, I still have such fond memories. I had that poster in my bedroom forever of him dunking that ball. And those magical moments you've made millions and millions of times to people around the world. So you've done something very special.

10:55I wanted to personally thank you for that. I know a lot of people that are listening right now are thinking of their Reebok story because we all have one that's cool like that. And Joe, before I pass it back over to you, I want to say thank you. And we have some really cool things to talk about, Fire Nation, to include Jane Fonda when we get back from thanking our sponsors. The new year is upon us, and that means new goals, more growth, and upgrading your day-to-day workflow. While most sales folk are stuck in the mud of manual scheduling, digging into data, and tracking down leads, let me share with you a better way to win.

11:26so you can crush your Q1. The new HubSpot Sales Hub is smart sales software for today's multitasking reps. It's built to help you manage every stage of your sales pipeline with ease. It's filled with easy to use and powerful tools that make closing deals and collaborating across departments a breeze. Sales Hub is an all-in-one platform for things like converting contacts into customers and accelerating sales with smarter sequences. Plus, you can supercharge your work with AI-powered apps like ChatSpot. ChatSpot combines the power of ChatGPT in your HubSpot smart CRM to give you a gen AI powered personal assistance.

11:59How's that for upgrading your workflow? Bottom line, Sales Hub is focused on helping you work smarter, not harder. So you can get after all those other New Year's goals, close more deals and get on track for your best Q1 yet. Explore the new HubSpot Sales Hub and AI tools like ChatSpot at hubspot.com slash sales. A website is something every business needs. But if you've ever gone through the process of getting a website up and running, then you know it's not easy. Lucky for us, Hostinger makes building a professional website effortless. Hostinger is among the top web hosting and website creation brands in the world with a mission to empower entrepreneurs to create their own business website or e-commerce store, and they make it possible with their user-friendly software.

12:38No coding skills or technical expertise required, and website creation has never been easier with Hostinger's AI website builder that simplifies website creation. You can even create your logo and SEO-friendly copy with the help of their AI. Best part is Hostinger plans start at less than$3 per month, and that includes a free domain name. I tried out Hostinger myself, and their AI tools made building a website such a breeze. It took me just a few minutes to personalize and set everything up, all without breaking a sweat. See for yourself. Head to Hostinger.com slash onfire and use code onfire for an exclusive 10 % discount.

13:14that's hostinger, H-O-S-T-I-N-G-E-R.com slash onfire and the code onfire. All right, Joe, we're back. And you went from 9 million to 900 million in four years. That's really fast. And I think somebody called Jane Fonda had a little something to do with that. So talk to us about that. Love your story. You know, we know that story so well. And it's one of the big moments in Reebok's existence. And, you know, so many tell me that story. So many love the pump. Yes. They just love it, love it, love it. However, what happened? Right. We're a$9 million running company. And we have a guy down in Los Angeles called Arnold Martinez.

13:58And he's a tech rep. So he goes into the stores, meets up with the guys, and tells them the good points of these shoes. This is what you do. That's great. Okay. Okay. So Arnold, his wife Frankie, she's coming home from doing these classes, exercise classes, and she's full of it, love it, with her friends. And Arnold says, what are you doing? And she said, well, we're doing aerobics. And of course, who's heard of aerobics? Nobody. So Arnold said, well, Frankie, what's aerobics? And she said, well, we are exercising to music, and it's absolutely fabulous. So Arnold said, look, can I come down to the next class?

14:35Of course. Right. So Arnold went to the next class and all these girls, the instructors wearing a pair of sneakers. Half the class are wearing sneakers. The other half, they're just bare feet, nothing. This was his light bulb moment. Fantastic. Wow. Why don't we make a shoe specifically for aerobics and specifically for women in women's sizes and make it with glove leather uppers? Wow. Yes, that's a good idea. He's in L.A. my guy in America Paul Fireman is in Boston so off goes Arnold up to Boston and he starts confronting Paul, Paul we've got to get into this, it's going to be fabulous and of course Paul says Arnold, slow down, slow down we're a running company why should we be making dancing shoes for girls oh, and the conversation went on a bit but Arnold didn't come out satisfied.

15:34So he went round to the back door. He went to see a guy called Steve Liggett who was in charge of production. Persuaded Steve, better than he persuaded Paul, persuaded Steve to get 200 pairs of samples. Which he did eventually. He got these samples, gave them to the girls, gave them to the instructors, and all of a sudden, the women had something just for women. They were on a woman's last, in women's sizes, fabulous. And it just took off. We had a problem. it was made of glove leather and at the time I didn't know that but it was made of glove leather and of course I'm a shoemaker. Arnold brilliant man, brilliant marketeer and I said you can't make them.

16:16You know you can rip glove leather just like paper. However having had conversations they lined it with nylon to strengthen it and I said well your problem with nylon is that it stops the leather from breathing and And that's why you use leather, so it's nice and cool and breathes. So what did they do? They punched holes in the front, a nice pattern of holes to allow it to breathe again. We did get over the problem, and we used something more like a garment leather. And the sales started to come in. Then Jane Fonda went out and bought a pair of Reebok to use in her videos, her exercise videos on TV.

16:57and all of a sudden the whole thing went crazy. It went viral. We couldn't keep up with sales. And as you said, we went from that$9 million running company to a$900 million woman's company in four years. And that caused us a lot of problems to get there, but it was different. We didn't have to go out and sell anything. Our biggest problem was how do we keep up with the demand? because the demand was absolutely incredible. And of course, once the men started seeing women in these nice, soft, beautiful shoes, they wanted to get in. But we didn't have space. We were growing so fast, we just did not have space.

17:43And the thing is, of course, you would say, well, when you start to grow so quickly, how do you finance that? Fortunately, we'd answered that a little earlier in the running time to get into running. So we're okay on financing. But our biggest problem, how do you get the production? You know, I referred to Runners World and giving Nike a number one shoe and they couldn't get the production. Well, how do we get production? Well, we were lucky because it coincided in a time when Nike found themselves with too much inventory. And they had to pull out of two or three factories and we moved straight in.

18:23And if we hadn't had that availability of production, we would have starved our market and probably lost the business. But now we've moved from being a running company to being a woman's company. And we overtook Adidas. We overtook Nike in sales, and we became number one sports shoe company in the world. Joe, you have countless amazing stories. And of course, in our short conversations today, we can only scratch the surface of what's been happening. I mean, you are 88 years old. You are as busy as ever. And we were talking in the pre-chat. You're in Fort Lauderdale. You're going up to New York.

19:02You're going back over to UK. Listen, brother, you're twice as old as me. And you're also twice as active as me. Like, I'm so impressed by what you're doing. It's something for me to look up to. I want to just say, Fire Nation, there's so much more. and I know that you can get all this great content, strategies, knowledge, experience that Joe has over the years in his book, Shoemaker. Now, Joe, as we end here, share with us why you decided to write this book and why Fire Nation, my audience, needs to read it. During most of my career with Reebok, we didn't have computers, we didn't have cell phones.

19:41Everything was done by traveling. But now I've stepped back and I'm taking it much more easy and I'm in Tenerife enjoying the sunshine. And now we have computers. Now we have cell phones. And now we have Google and we have Wikipedia. And they're telling me, they're telling me how Reebok started. And there's even a photograph of Joe Foster, founder of Reebok. He may have been called Joe Foster. It certainly wasn't me. and certainly all these stories they had about how Reebok started, they were wrong. If not fully wrong, they were mostly wrong. So lying back there, I thought, why don't I write the book?

20:23Put the story straight. Then we don't get all these different variations. So that's why I sat down and wrote the book. And it was just to put things straight. But what happened is I'm getting calls from universities, from different people all over and said, this is a business book, look at all the lessons that you've got in this book. You had to change your name. You had to change your silhouette. You've got all these problems you had to overcome. This is what people want to hear about and read about. And so that is what's happening now with why we're traveling and Shoemaker. And we're traveling around the world.

21:02Even this year, we've been to Australia, India, Dubai, Singapore. We've been to America twice or maybe even three times already. We've been into Canada. And so we've really traveled the world talking about Reebok and talking about the experiences. And those experiences, well, you have to have one thing, fun. Well, Fire Nation, I can tell you I have had a lot of fun hanging out with Joe today. I hope that you've been having fun listening. make sure that you pick up the book, Shoemaker, at wherever books are sold. This book is going over the life experience of Joe, and it's been quite a life. So Joe, in just one sentence, maybe two, what's one key takeaway that you want to give my audience?

21:57You want to make sure that they understand from our conversation today. Being an entrepreneur, you have to have patience, you have to have stamina, and you have to enjoy what you're doing. And people ask me one of the three most important things. I say, well, first of all, you've got to have fun. And secondly, you've got to have a lot more fun. And thirdly, it's got to be a hoot. You've really got to enjoy it. So those are the things. Enjoy what you're doing, know what you're doing, be involved in what you're doing, and you will be a success. Fire Nation, you're the average of the five people you spend the most time with.

22:31And hello, you're hanging out with the founder of Reebok and JLD today. So keep up the heat. And for links to everything we talked about, visit eofire.com, type Joe in the search bar. The show notes page will pop right up. And Joe, thank you for sharing your truth, your knowledge, your value with Fire Nation. For that, we salute you and we'll catch you on the flip side. It's been a pleasure, John. An absolute pleasure. Hey, Fire Nation, a huge thank you to our sponsors and Joe for sponsoring today's episode. And Fire Nation, are you ready to rock your very own podcast? Check out our free podcasting course where I will teach you how to create and launch your podcast for free, freepodcastcourse.com.

23:12I'll catch you there or on the flip side. Sales Evangelist, hosted by my friend Donald Kelly, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Each week, Donald interviews the world's best sales experts, successful sellers, sales leaders, and entrepreneurs who share their strategies to succeed in sales right now. A recent episode you should definitely check out is the five ways to do daily outbound with LinkedIn. Listen to Sales Evangelist wherever you get your podcasts. Hostinger is among the top web hosting and website creation brands in the world.

23:46See for yourself. Head to hostinger.com slash onfire and use code onfire for an exclusive 10 % discount. That's hostinger.com slash onfire and the code onfire.