Advice Line with Curt Richardson of OtterBox

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2:10Hello and welcome to the advice line on how I built this lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show who will help me try to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Leave us a one-minute message that tells us about your business and the issues or questions that you'd like help with. All right, let's get to it. Joining me this week is OtterBox founder Kurt Richardson.

2:43Kurt was first on the show back in 2019. And if you missed that episode and you want to go back and listen, we will drop a link to it in our episode show notes. Kurt grew up in a tiny mountain town in southern Colorado. And when he was just 21, Kurt bought his own small plastics company. And for years, he had a really rough time of it until he came across a book called The E-Myth, which helped him understand what truly matters at the core. And this insight eventually led Kurt to build Otter Products, which started out as small, waterproof boxes for outdoor enthusiasts. And when the iPhone exploded in popularity, OtterBox was in place to become the dominant phone case brand in the U.S., growing the company from$5 to$575 million in just five years.

3:32Fast forward to today, Kurt is no longer the CEO, but he's now the company's chief visionary officer, and we are so happy to have him back on the show. Kurt, welcome back to How I Built This. Thank you for having me. I remember when we met in Denver. It was a great time. We did. We did a live show today. It was super fun. When you were on that show back in 2019, what did you think the next sort of five years would look like? And, of course, what eventually actually happened? I was out or getting out of running day-to-day by then, which was something I desired. I think any entrepreneur many times hits a size of a business where it's like, okay, this is beyond my skills.

4:14I'm great at startup, but this has turned in operational. Yeah. So I went through a number of CEOs in the meantime, learned some hard lessons there. And we've got a great CEO and great executive team now in place at Otter and seeing some great benefits from it. Initially, OtterBox was known as the protective case. Like if you dropped a phone from a building, you knew it was going to be fine. Now, you know, you've got a whole range of products out there. I mean, when you are sort of the top brand, what does growth look like? Like, how do you innovate? How do you get bigger? Or is that even, does it even matter?

4:53Well, we've been around 30 years. So for us, it really is listening to the customer, watching the market. A lot of things have changed and continue to evolve in the marketplace, although we've really become a commodity. So, you know, when we grew, we went clear up to$1.1 billion in revenue. And the market has shrunk. People don't buy phones as often. So as far as overall revenue, we've dropped. But as far as overall profit, we've come up. So for Otter, it was all about getting better at what we do and how we sell the product, whether it's D2C, whether it's distribution. You don't always have to be first to be there, but when you get there, you need to be very present.

5:42Yeah. Yeah. Kurt, I remember we spoke about this a little bit, but one of the other things that you're focused on is this sort of other business that you started called Blue Ocean Enterprises, really focusing on investing in businesses that are designed to stimulate the economy and engage the community. You know, I hear from a lot of startup founders who are trying to build the next sort of interesting or cool consumer brand or consumer product. And often I'll say, you know, the businesses that are consistently successful in at least in the U.S. are the ones you don't hear about, the sort of the boring.

6:18I hate to use that word, but the sort of the boring businesses, right, that actually provide goods and services that many industries need, right? Right. And really Otterbox kind of started out that way. You weren't making, you know, it evolved into what it is today. If you were starting Otterbox today, right, with no brand and no distribution and no capital, really, could you still build it in the same way or would you have to do it differently, do you think? I don't know that I would have to do it differently. Would I do it differently? Well, sure, I'd love to have the kind of capital to really just hit it hard.

6:57But you know what? There's a lot to be learned from bootstrapping it. There's a lot to be learned from having to do stuff the hard way. I think it makes you a better business person. It also makes you looking like, how do I do this differently? You know, the innovation isn't always in the product. The innovation is very much so in the business. How do I do this business right in the right way? And I think that's a huge question that a lot of people never ask. They're always looking for the next new product, and we've done that. We did coolers. We did clothing, you know, all of which we don't do anymore.

7:34Focus is so important. We focus on phone cases and mobile accessories. Yeah. Well, Kurt, we asked you to come onto the show to help us do what – one of the things that you really love doing, which is mentoring. And we've got some callers waiting for advice with some questions. You ready to take our first call? Sure. All right, let's bring on our first caller. Welcome to the advice line. You're on with Kurt Richardson, founder of OtterBox. Tell us your name, where you're calling from, and just a little bit about your business, please. Hello, Guy. Hello, Kurt. This is Andy Jeremiah in Sarasota, Florida.

8:06My wife, Tracy, and I founded Mr. Game Show Florida in 2020. We conduct live game show events in the many gated communities in the area. Our mission is to have everybody play a game at least once a week. So we offer free print and play games and game night ideas on our website as well. All right. Thanks for calling in, Andy. Okay, so Mr. Game Show. So tell me, you convene game nights. Tell me specifically what you do. So our primary business is putting on live game show events. So communities here are always looking for something to put on their calendar. So we offer music bingo, a twist on Family Feud, a twist on the Wheel of Fortune.

8:43And the unique part about our games is that we're very scalable from 12 to 200 people. And we just make sure everybody has a ton of fun. And these are retirement communities, I'm assuming, right? Mainly? Yeah. I mean, most of them are definitely 50 plus. But yeah, there are some family communities now in this area as well. Got it. Okay, cool. And how long have you been doing this? We started in 2020. Out of COVID, our community was looking for games. And we just started doing music bingo in the parking lot. It went so well, I started offering it to other nearby communities, and things took off from there.

9:16Wow. And tell me, how many events do you do a year, roughly? We average about 10 events a month as a side hustle. We did just over$50K last year, all through word of mouth, no advertising, no social media. Okay. And what does an event cost? We start at$350K for a 90-minute event, and it'll go a little bit more if we have to travel farther than the little radius that we like to stay in. Okay, so pretty, you know, relatively affordable, even for an events budget at a community center. Okay. Exactly. Before we dive in further, what's your question for us? So we'd like to scale Mr. Game Show nationwide by providing our content to others who want to start their own local game show business.

9:57It's relatively low cost to start. We have great, unique content. We have a twist on a lot of, you know, popular, familiar games. We just want to get that material out to more folks. And we're just looking for a good pathway to get there. All right. Kurt Richardson, I want to bring you in here. Andy's got this business. They're hosting games, trying to figure out how to scale this, how to make this a bigger brand or bigger business. Yeah, scalability. Big question. And a tough one when it's so dependent on you. There's a lot of different ways to go here. Maybe it's an app kind of thing that they can buy into and you're giving them new content all the time.

10:36Maybe it's a video play. It's a training tool. It's a kit somebody buys. Maybe it's a subscription-based deal. That could be one way to go about it. And to me, it seems like you've got to create a lot of content. So I guess, are you technical enough to be able to do that on your own? Can you and your wife put together that where that's sellable? We have, I mean, I was a former corporate trainer, so I'm great at developing documentation. And so we have a lot of, for example, our trivia game, we have over 26 sets, unique sets. you're ready to go, which I think are easy for other folks to kind of grab and promote themselves in their local market.

11:22Andy, I have a question for you. If I say to you, hey, what's your product? What are you selling? What's your answer? Fun. We're selling fun. Fun. Okay. I would argue, and I can tell by just talking to you here, and I haven't been there, I would argue that you are the product, that you and Tracy are the product, because it's not just music bingo. It's what you're bringing to it, the charisma and the excitement, probably the way you host, probably the way you write questions or jokes, making sure that people have a great experience. And so the challenge is, is how do you scale Andy and Tracy, right?

12:03We had a question about similar to this in a recent advice line episode from somebody who had a training business and was trying to figure out how to scale that. And my advice to them is the same I would give to you, which is you may want to start with an experiment. So where in Florida are you? Sarasota area. Sarasota, okay. So you're not too far from Tampa, is that right? Okay, so maybe find somebody in Tampa that you can train, that you can give them your materials and let them run a few events and maybe show up and take notes and see what happens. See if customers are just as happy. And that's where you start to get the answer.

12:45Can this scale? Can I create material that I can license and build actually a business that is a Mr. Game Show branded or certified host down the line? Anyway, that's my initial thought. Kurt, sorry. Back to you. No, I did. That was great. because I was kind of, honestly, I'm kind of stumped by this just because I'm such a product guy and this is a product and you're right. And he's the product. Yeah. Um, can he duplicate himself? Can he sell that? I mean, that's, that's the question. And that's a great experiment. I think that's a, one of probably a couple of different ways for you to go. Yeah, this is doable or maybe not.

13:27Okay. You know, maybe it's just, maybe I'm just going to keep doing this and make my$50 ,000 to$75 ,000 a year and be good with it. Now, you did say something interesting about your background, Andy. You said you were in corporate training at some point? Correct. Yes. Okay, that's great. So you know what it means to build scripts and to build content and a playbook and rules and all of the systems. So knowing that if you can find compelling, exciting people, theoretically, this could work. You know, this is the whole Zumba model. In Zumba, you pay a license fee to be a Zumba instructor. Anybody could kind of replicate a Zumba-like class, but to actually be a Zumba certified instructor to get that, you know, on your title when you're trying to advertise a course, you've got to pay a license fee.

14:23That's the value. So maybe, you know, you start to build this out thinking, all right, can we make Mr. Game Show that thing? You know, oh, it's a Mr. Game Show host. We want this person in our retirement community. But I think I would start with identifying somebody who's interested in doing this, who you think you could train and see what happens. Great advice. I really enjoyed this conversation. Thanks for the many words of wisdom. And, Guy, thank you for all the inspiration you give entrepreneurs. Thank you. And Kurt, thank you for the great role model that you've been to entrepreneurs as well.

14:56Thank you. You bet. You are, Kurt. In fact, all the work that you've done in building a sustainable company and also building a community of employees who really benefit from what you've done and what you've been doing. So thank you. I echo that. Thank you. Thanks, Andy. Thanks, Andy. We're going to take a quick break. But when we come back, another caller, another question and another round of advice. I'm Guy Raz, and we're answering your questions right here on the advice line on how I built this lab.

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19:38Welcome back to The Device Line on How I Built This Lab. I'm Guy Raz, and my guest today is Kurt Richardson. He's the founder of Otterbox and Blue Ocean, and we are taking your calls. And let's bring in our next caller. All right. I'm excited to talk. Please tell us your name, where you're calling from, and a little bit about your business. Hey, I'm Marissa Valenzuela. I'm calling from Tampa, Florida. and I am the founder and lead fairy godmother of Gilded Coach Tees, where we create enchanted teas inspired by fairy tales from all around the world. Awesome. Welcome to the show, Marissa. So Gilded Coach Tees, you sell loose leaf teas in bags?

20:19They're in like canisters. I have two sizes. So I have canisters, like a three ounce size and a one and a half ounce bag. And these are cardboard canisters? The canisters, yes. Okay, cool. And tell me, I love tea. I'm a big tea drinker. I've lately gotten into this really intense Chinese black tea that is, man, it gives me a big hit of caffeine in the morning. Because I switched from coffee. I gave up coffee at the beginning of this year. I love it. But tea, it's really my jam now. So tell me about your teas. Like if I was like, all right, Marissa, why should I buy your teas? Well, you should buy our teas if you are someone who happens to enjoy magic and nostalgia.

21:02So we have blends inspired by Cinderella. In fact, the first blend I ever came up with was called Once Upon a Time. And it is a hazelnut black tea with French vanilla creme as well. It's hazelnut because in the original Grin's fairy tale, there's no fairy godmother. There's a hazel tree that Cinderella sort of cries to and grants her wishes. So I like to go back to the original fairy tale and base each blend off of that. Wow. I'm looking at your website and this makes sense now. I'm on the fairest of them all. I'm assuming this is from Snow White. Yeah, of course. You've got herbal tea with candied apple that you would steep.

21:45Oh, that's so cool. Because she, of course, has the poisonous apple. Yes. So you are like a real fairy tale scholar. Thank you so much. I haven't gotten a fairy tale scholar. That is, I'm going to steal that. Thank you. So you're blending these teas and selling them on your website. And tell me a little bit about how long has the business been around? And yeah. So we've been around since October 2020. And we've developed a couple blends, shelved a couple. We're in two stores at the moment locally. And give me a sense of your sales. How are you doing roughly? So that kind of leads into my question.

22:28Okay. Our sales were doing really, really great for a while where they were projected to go up and up and up and up, if you will. But I sort of took like a one-year hiatus when I had my first baby, personally. And ever since then, I felt that we've lost momentum. And I want to know what I can do to sort of regain that momentum and recapture those sales. All right. Regain momentum and recapture sales. And you feel like you're starting from scratch. Okay. Kurt Richardson, I'll bring you on. Any thoughts, any advice on how to regain momentum? Well, I guess right away you've got to treat it like you're starting all over.

23:07Because you are in some ways. But the nice thing is you've got product. And I love your story. Thank you. I think story is huge. Yeah. You've got lots of opportunity with social media with this brand. I mean, this just reeks social media, good stuff. and I would really pour my attention into getting my story out. So people come to my website and direct to consumer. I mean, this has it written all over it and that's where I would go. You can play with some stores and stuff, but man, if you can go DTC, you're going to make so much more money for your efforts. I just, I love DTC. Yeah, I agree. I love the story.

23:50I mean, all these teas are inspired by fairy tales. And then you start to see it when you look at the ingredients. The ingredients are awesome. And they sound delicious. I mean, looking at Little Sea Princess, obviously inspired by the Little Mermaid. It's got, I didn't even know what this is, Danish bilberry and sweet honeysuckle and a white tea blend. That sounds delicious. Bilberry is like the Danish version of a blueberry. Okay. And that's, of course, a Danish story, right? Yes. Yeah. And what's this dust? Oh, pixie dust. So it's our edible glitter that we call pixie dust. And we say you need a fairy's handful and just the tiniest amount in your cup.

24:30And it makes everything sparkly and magical and enchanted. We used to put it in the tea itself and then shake it up. So that way when you scooped your tea out and steeped it, it was already covered for you. We've since stopped doing that because I don't own my commercial kitchen. And, you know, people don't like it when they get glitter on their tools. I think there is so much. I mean, I and I'm going to tread carefully here because I know that all kinds of kids love fairy tales. And but I've been to Disney World and Disneyland and I've got two boys and I can tell you right now, they did not run to the princesses, even though that is the biggest.

25:10I think it's the biggest part of what Disney sell. Like, I think it's the it's just massive. Right. Right. So I can imagine birthday parties for girls, little girls. And it's just so many cool things. Here's what I would say. Right. Because your question is, how do I jumpstart this? How do I regain the momentum? First of all, taking a year out again because you had a baby is awesome. And I think that's just amazing to give yourself that time with your kid. Thank you. I would not put that kind of pressure on yourself because that's exhausting. Maybe I think the question is like, what can I start to do consistently each week for three, for six months?

25:54The other thing is I imagine because you did have – you did reach sales that you were happy with, you probably still have the context of those people who bought your teas. So many businesses – and Kurt, you know this. So many businesses are focusing on customer acquisition and costs are through the roof now. I mean, what used to be shooting fish in a barrel, you're now spending$80,$90,$100 more on customer acquisition costs. I don't think enough businesses focus on customer retention. That's really where a lot of times that's where the sweet spot is because that doesn't cost that much at all. You've already got the customers and the contacts.