The Future of American Luxury with Tony Drockton: An EOFire Classic from 2021

0:01Boom! Shake the room, Fire Nation! JLD here and welcome to Entrepreneurs on Fire! The only daily show interviewing the world's top entrepreneurs seven days a week. Today we're pulling a classic episode from the archives and we'll be breaking down the future of American luxury. To drop these value bombs, I am brought to Tony Drockton and the EO Fire Studios. Tony is an entrepreneur at heart, spent over a decade building successful businesses in construction, real estate, and home finance before deciding to indulge in his creative passions by taking the reins of Hammett in 2008. In today's foundation, we'll talk about how success is all about relationships, is never about the money.

0:35Rock, paper, scissors should settle all disagreements and oh, so much more. And a big thank you for sponsoring today's episode goes to Tony and our sponsors. Is now the time to grow a successful business? Attend the world's highest rated business growth workshop taught personally by Clay Clark and now featuring football star Tim Tebow and President Trump's son, Eric Trump at thrivetimeshow.com slash eofire. Again, request life-changing tickets today at thrivetimeshow.com slash EO fire. Tony, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with.

1:17What's up, Fire Nation? Tony from Hammett. I'm dropping it right now. Most people believe if they just had the capital or if they had more in the middle or at the end, they could have been successful. Completely false. I believe, especially myself, being forced to be capital efficient, never having enough money allowed me to focus on building one solid relationship at a time. And that's been the success of Hammond and every business before. It's all about relationships. It's never about the money. You are dropping it, Tony. That was a mic drop. I appreciate that. And I've already given an amazing introduction of you.

1:57I've given the high points to Fire Nation, but I want you to give us a rundown of who you are and how you got to where you are today. Little boy born in Cleveland, raised in a small grocery store that my dad owned, and he was an entrepreneur in his own right. And he taught me the basics of success, which was, it's all about that customer. Take care of them, listen to them, write down what they're asking for if you don't have it, and then bring it in. Walk their groceries out to their car, know their names when they come in. And it really has led to who I am today. I mean, I'm that same guy, that 11-year-old bringing the cash register at the grocery store, dealing with one customer, one relationship at a time.

2:36And hopefully, even when the line gets long or there's nobody there, the people that have met me, they remember me and they want to come back. And I think that's the secret to building a great brand. You took the reins of Hammett back in 2008 and you were able to transform it from a best-kept hometown secret to this digital and retail phenomenon. So define Hammett for us, the brands, the company, and its mission. Hammett, we're a luxury brand focused on the handbag space in America, which by the way, has been abandoned by the American brands. So there's this massive white space between these ultra competitive Coach Michael Kors, Kate Spade handbags that you can buy anywhere, mostly on sale, and the Louis Vuitton, Gucci, and Pradas that everyone else is carrying from Europe because they stand for something.

3:21So Hammett's bringing luxury back to America. We're the next great American luxury handbag brand. And we're doing it with some really simple concepts. Absolutely unquestionable, highest quality product that functions every day. An experience with our team or with our retailing partners, 800 strong around the country. That is just, it's the best experience you'll ever have in purchasing a handbag. And then lastly, the after purchase. We make sure no matter what happens with our lifetime warranty, we call it the lifetime promise, we take care of every customer out there that touches a hammock bag.

4:00No matter where they bought it, no registration, no receipt, a true lifetime relationship. I've always believed there could be nothing more environmental than building a product once that can be passed down multiple generations and increases in value over time because it becomes a family heirloom. Now, I love how you said that the companies in Europe, they stand for something. And that's why they're sought after brands, sought after products and services, because they truly stand for something. And Fire Nation, we are a bunch of entrepreneurs who are looking to create a business, products, services that stand for something.

4:40So why don't you break down for us, what makes Hammett stand out in a crowd? Number one, we understand the difference between a relationship and a transaction, just like those brands you talked about. I mean, at Hammett, we build relationships. We never have judged our success by top line revenue. We've always looked at bottom line, the number of new relationships we've created and how long those relationships have stuck with us. And number two, we deeply focused on one specific category, not even all handbags, just high end leather handbags and not even all high end leather, really mostly cross body functional leather handbags.

5:23And we've gone so deep in that category that we've created a very strong brand. I think most people believe you go wide, you try to serve lots of customers and you try to serve lots of channels or try to serve lots of categories and that's how you'd be successful. No, we've gone super deep into that one relationship and it stood the test of time. And also, a lot of people focus on, again, the revenue, but we focus on what's called brand equity. And in the fashion space, it's really easy to measure that. You take a look at resale for handbags, for any other categories. And I truly believe the closer the resale price is to that original full price, the more brand equity you have.

6:03And Hammett is at the top of that measurement for all American handbag brands. And then lastly, with technology, Hammett has focused on a great tech stack to build since our 13 years. We're in the cloud. We're SaaS. Except we've always made it invisible to the customer. My belief is they're just looking for a frictionless transaction and a great experience. They don't want to know about your technology. So it should be invisible to them. And the last thing is distribution. I don't believe the distribution channels exist anymore. They're not siloed anyway. So people focus, I'm going to be a DTC brand or retail is dead or wholesale is too hard to build.

6:43In the end, you focus on that one ultimate customer and you allow the customer to purchase your product wherever they encounter it. And you really want to make sure that they have the exact same experience. It's going to be the same price. It's absolutely going to be the same quality, the exact same product. and you hope that the experience they have with the associates, whether it's at our own retail stores or whether it's with a wholesale partner or whether it's our concierge team online, you want it to be the exact same experience. I'll leave with this. That's the opposite of what you have when you buy an airline ticket and fly on the airline.

7:18It's a horrible experience. Everybody's paid a different price. Nobody really seems to care about the ultimate customer. They're always focused on the bottom line. That's the opposite of what Hapit has done. I love how you talked about micro niching. I mean, for you, Fire Nation, if you can really dial it in and become the number one solution to your ideal customer, you are going to win. You can tell that Tony really cares about being just that. The number one solution to his ideal customer, to Hammett's ideal customer. And you can use this in the next boardroom meeting, Tony. I'm sure they would love this.

7:52My phrase is, niche your flipping face off. you need to be willing to niche your flipping face-off. Because if you can do that and become that number one solution to a real problem in this world, you've got a chance. Now, you do pride yourself, Tony, on the tech-forward user experience that you give your customers. You mentioned briefly about it with the seamless cloud experience, but let's dive deeper. What do you mean by tech-forward user experience? It should be invisible to the customer. But from the company side, for inside of hammock we are all about tech we're all about data driven we don't just say it in-house we can move quickly and respond to changes pivoting they call it and out of house the customer continues to have a great experience no matter how fast we have scaled and what does that look like well from the customer's experience we were one of the first ones to do try before you buy i heard the founder of afterpay speak at a conference internationally and we brought it here one of the first companies to do that.

8:54We added video styling well before the pandemic came. We actually have a whole division focused on it. We did SMS text messaging in both two-way again many years ago. It's now one of our biggest lead sources, and it's also the best for bottom of funnel. And then we leaned into the digital spend about three and a half years ago, and we really use data-driven technology. As a matter of fact, we have AI-driven video production software that integrates with Facebook and Instagram. I'll give it a shout out. It's called TriPencil, P-E-N-C-I-L, especially for your listeners out there that have small businesses.

9:32Stop trying to outsmart the creative. If you can see what's working for everybody else from the piece of software and you can just put in your imagery, it'll create your headlines. It'll create your calls to action. you're going to love it. And lastly, I think having the attitude, that's the most important part in the company. We try to tell people your gut's very important at hand, and we want you to keep knowing, leaning into that, but then verify it with past successes or failures so that we can go faster with it. A lot of value bombs that Tony just dropped, Fire Nation. The one that I want to circle back to that I think is a writer downer.

10:11Stop trying to outsmart the creative. I just love that phrase. For me, it's something I'm going to come back to think about because it's really, really a great way to look at things. And we have some really impactful value bombs coming your way, Fire Nation, when we get back from thanking our sponsors. There's a lot to consider when starting your own business and protecting your identity and privacy are top concerns with Northwest registered agent, you get more privacy, more guidance, and more freedom to run your business from anywhere in just 10 clicks and 10 minutes. Northwest registered agent has been helping businesses launch and grow for nearly 30 years.

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12:50Tony, we're back. And if you could give just one piece, one piece of advice to a new business owner, what would you say to them? Rock, paper, scissors should settle all disagreements. Let me explain that. It's really simple, man. When it's small decisions and you have to move fast and two people aren't aligned, rock, paper, scissors, make it go. Now, if it's a decision, it's going to put you out of business. If it's a game changer, I would say to a new business owner, you know most people believe you have to be best at whatever you choose to do to be successful right i don't believe that i actually believe you just have to be better than the current market leader so whatever business you're in right now take a look at that leader and figure out how you can incrementally improve on their offering on their product and you will be successful if you continue to incrementally improve it each week each month 13 years later you're going to be like handbag.

13:49You're going to be the market leader in the category that we are in. We are the fastest growing handbag brand in America. We're almost doubling your revenue this year. And we more than doubled since COVID started. We're profitable and everybody wants to carry one. So there's two types of people I think that could be successful. There's that one that creates something different, something special, something that's never been done. That's not me. And there's the second, which is the majority of you out there listening, if you want to be, it's just improving on what's currently out there leading the market.

14:21Make it just a little bit better and you will be successful. Paper, rock, scissors, Fire Nation. It may sound kind of funny, but I mean, I've seen the truth of this in both business and in life. I mean, every single evening that Kate and I are home, we're watching TV. It's 8 p.m. at night. My alarm goes off and it says, turn on AC in bedroom because I live in Puerto Rico. It's very hot here. We have our own little AC up there and the perfect temperature will be awaiting us at 9 15 PM. When we go to bed, if one of us turns on the AC at 8 PM. Now, if we didn't, it'd be a sweat fest for the first hour that we're in bed.

14:57So we don't want that. So we look at each other and instead of saying it's your turn or it's your term, we make it into a fun game. It's paper, rock, scissors. We don't question it. And whoever loses has to walk up the stairs. I don't live in a small house. So it's a little, it's quite a distance to turn on the air conditioner and paper, Rock Scissors for the win has kept us very happy in life and we've used it in business as well. So I love that. No, I didn't know that. And you said that. That's amazing because I use it every day. I mean, it's like, who gets the chair? Rock, paper, scissors. On to slightly more serious topics.

15:31I want to talk about Reg A Plus fundraising and why you chose that route over the more traditional fundraising route. Well, crowdfunding to me is just obvious when you're a brand that people love. And I believe inviting our customers to become stockholders, it's like inviting them to peek behind the curtain, right? And it allows them to share financially and most importantly, emotionally with our success. I mean, if you think about crowdfunding from the founder's perspective, we went there because it releases me from focusing on those short-term metrics in order to secure the next round or even the first round.

16:10I mean, let's face it, private equity and venture capital, they need those exits. Crowdfunding allows me to invest for the long term. So it better aligns the interests of myself and my team with these retail investors over the long term. You know, and also the reason we chose Regulation A +, which is the highest level of crowdfunding, is that it really places just below being offering a full IPO. We need two years of audited financials that require us to follow quarterly updates every time. So we're really the highest quality private investment that anybody can do. In fact, that we're part of a reg A.

16:47And lastly, I found out that customers that have become crowdfunding investors and other brands through data, they're twice as engaged and they have almost double the lifetime value of all other cohorts. So I mean, if you think about it, let's say 20 years ago, would you have thought you could call a car, book a home, or join a conference from your phone? How about having something delivered in 15 minutes right on your phone? Well, now I believe investing is going the same direction. Investing in private companies is just as easy as clicking a button on your phone. Fire Nation, this is powerful stuff because now when you're looking at it the way that Tony's talking about it, you are literally recruiting an army, an army of supporters, an army who is committed to you, an army who's there, who's benefiting by being there for you, by being somebody who is going to shout your name from the rooftops.

17:40And that is such a key thing to have, this community. Unbelievable stuff. Now, pretty interested about this. And this actually may be what we have to watch tonight when we are sitting down for a little evening dinner and then having that paper rock scissors for the air conditioner is your docuseries on going public. Tell us more. You know, we're part of this first ever series. It's goingpublic.com is where you can look at it. It's going to launch January 11th. And it's really simple. Imagine if you're watching Shark Tank or The Profit, and you could buy shares in that entrepreneur in real time.

18:16That's what going public is going to do for Hammett next year. I mean, if you think about it, the content creators now rule the internet they're called influencers right this is a first of a kind series that takes content creation to the next level in crowdfunding so going public it's not a reality show i call it edutainment um you know it's no different than the profit or shark tank except again people can invest right alongside of the sharks so if you think about long-term storytelling as a brand building exercise. I mean, there's nothing better than a 10 week series on us and three other hyper growth brands where people can either fall in love or out of love with the company.

18:57And if they fall in love, they can own shares in it in real time. So there you go. Now, where can we go to find out about this? Where can we get all the details? You can watch it at goingpublic.com or through entrepreneur.com. Or you can also see it at invest.hammet.com. Tony, you've dropped a lot of value bombs here today. Give us the one key takeaway that you really want to make sure Fire Nation gets from our entire conversation today. And then any call to action you have for us, and then we'll say goodbye. If I wanted people to walk away with one thing it'd be the fact that i'm a serial entrepreneur and i've had smaller successes in construction finance and other areas and every time i lost all my money actually three times i've gone from more than a million net worth to zero in the middle of hammock i went to negative three or three to five million couch shirfed and stayed with friends for about three years and then about five years ago, I started on the way back up and I found out this.

20:00If you can't match your passion with the hard work and the commitment that will always bring you money, you're probably not going to either be happy or you're probably going to lose the money. So if you're able to align passion with hard work, commitment, integrity, relationship building, all of those things, You're going to finally be where I am in my third career, which is the happiest person in the world that also happened quite successful and financially secure well beyond the rest of my lifetime. Fire Nation, you're the average of the five people you spend the most time with. You've been hanging out with TD and JLD today, so keep up the heat.

20:41Head over to eofire.com, type Tony in the search bar. The show notes page will pop up with everything that we've talked about here today, links to everything. and hey, let's play a game of paper, rock, scissors with a loved one or somebody that's in your business today to see what kind of impact that can have in your life. And Tony, thank you for sharing your truth, your knowledge, your value with Fire Nation today. For that, we salute you and we'll catch you on the flip side. All right, rock. Hey, Fire Nation, today's value bomb content was brought to you by Tony. And Fire Nation, are you ready to rock your very own podcast?

21:14Check out our free podcasting course where I will teach you how to create and launch your podcast for free. Freepodcastcourse.com. I will catch you there or I'll catch you on the flip side. Is now the time to grow a successful business? Attend the world's highest rated business growth workshop taught personally by Clay Clark and now featuring football star Tim Tebow and President Trump's son, Eric Trump at thrivetimeshow.com slash eofire. Again, request life-changing tickets today at thrivetimeshow.com slash EO fire.