Advice Line with Randy Hetrick of TRX

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27:33Welcome back to the advice line on how I built this lab. I'm Guy Raz and my guest today is TRX founder Randy Hetrick. And Randy is with me to take your calls. And hello, let's bring our next caller. Hi, Randy. Hi, Guy. Thank you so much for having me. My name is Kerry Jones, and I live in the ski resort town of Whistler, British Columbia in Canada. I'm the president and co-founder of Peaked Pies. We're an Australian bakery cafe group. And at Peaked Pies, we make from scratch five-inch individual Australian savory meat pies. Awesome. Thanks for calling in, Kerry. I've had them. They're not yours in particular because I have to go to Whistler, but meat pies are delicious.

28:14They're basically, I mean, every culture makes a version of these Cornish pasties or, you know, some kind of calzone or something, right? Some bread or pastry stuffed with meat or cheese or saviors. So tell me a bit about the business. Yeah. So we are a, so meat pies in Australia are very iconic. They're kind of called the traditional like national dish. Yeah. And when I moved to Whistler in 2009 for a ski season, like Whistler is basically run and overrun with Australians and there was no meat pie shops here, which I thought was really strange. And I then, that's when I met my now husband and co-founder.

28:56He's amazing in the kitchen and he's heard me talk about, oh, I miss the Australian meat pies. And he then heard everyone else saying it. So he started making them at home. He's Canadian. and then friends started coming over and then we joked, oh, we should open a pie shop. And that was 2013. We opened a pie shop. So they are hot grab-and-go. So you come into our little cafe. It's quick service. The display case is right in front of you. It's a custom-made just exactly like you would find in Australia. So they're hot, ready to go. We bake all throughout the day and we just top up this heated display case.

29:31So someone walks in, they say, I'll have a steak, bacon and cheese pie. We have a little twist on it. So we say, do you want to get that peaked? And then they add mashed potatoes, mushy peas and gravy. We put it in a box and out they go. They literally have a homemade hot dish within like a minute and a half. Wow. All right. So, and how many cafes do you have? So we have three corporate owned stores that are peaked pies. We have built a 3 ,000 square foot production facility now. And we are in the process of building our first franchise location. Nice. Okay. So you're starting to think about, and you have a franchisee already?

30:11We do. Yes. Yes. It's our very first one. Yep. Amazing. Okay. Lots to talk about before we do tell us what your question is. Yeah. So I've been listening to How I Built This for a long time and I've noticed like a common theme from some of your entrepreneurs, which have credited their growth to bringing on the right strategic investor. My husband and I have bootstrapped Peaked Pies. It's just been us. We don't come from money. We've put a lot into this over the years and we're definitely at a point now where we're looking to bring on a strategic investor. And I'm a confident person. I'm happy to reach out and talk to people, but it's getting then once we're in those meetings, what would you say are some smart questions for us to ask a potential strategic investor?

30:55What information do you think we can request from them to help us evaluate if they're truly the right fit for us? All right. This is a great question for you, Randy, because you have dealt with this in good and bad ways, I know. So first of all, thoughts or questions or answers for Kerry? Well, I mean, I love the franchise model for what you're doing here. And interestingly, Kerry, we're at the same position. it's kind of roughly the same place with our franchises, right? In terms of rollout. So while I'm not going to position myself as a deep expert in franchising, I am an empathetic early stage franchisor with you.

31:37And to Guy's point, yes, I have had both good and not so good experiences with capital partners. And that I've thought an awful lot about. And so I think, one, this seems to me at first glance, I pulled up your site, which is really beautiful, by the way. Thank you. It seems to me to lend itself very well to a franchise model because in general, I think the things that make the best franchises are the simplest concepts. Right? The more complicated the concept, the less well a franchise structure works because all of that complication has to be trained into your franchisees. or the whole thing falls on its face.

32:25So this one looks to be a great fit for that. And obviously a franchise is a great way for you to scale rapidly in a relatively capital light way. My first kind of question to you just as a general pushback was, okay, but since you're doing this as a franchise and franchises can grow as fast or as slow as you want them to, since you are the franchisor selecting how many you take on, are you sure that you that you really need and want external capital it's not it it is the capital yes but it is the strategic part of it as well it's my husband and i like we it is just us we didn't go to college we didn't we don't have university degrees in this we have you know as a lot of founders don't have really and uh so it's now that growth of like someone who's experienced in really the operation side of things, the franchise development, and with that, the capital as well.

33:31So marketing and so forth, we're really looking for someone who can partner with us to really booster this. Well, I think that's a great answer. And self-awareness in an operator, in an entrepreneur is a very valuable thing. As Clint Eastwood said, right, a man's got to know his limitations. So that's all great stuff. I would say that my initial impression, and then I'll pass the mic back to Guy, is just to make sure that what you described was a lack of domain expertise in certain areas of this, which you can get with team members who bring that. And I would be very careful expecting too much from your investor unless, and we can talk about this in a second, unless you really get the right one, which is easy to say you're going to do.

34:28It turns out to be hard to do. And so that's just kind of a pathway that you can choose between the right path and the left path. Do we build it ourselves by getting some money and then hiring team members with expertise? Or do we bring in that strategic investor early and have that person help us do it all? Yeah, I think, Randy, what you're saying is, and Carrie, I think is really great advice, is you can bring in an investor, but that investor ultimately may talk a big talk about how they can help you strategically. But they're investing in 20 other things, and they're focused on – unless it's an investor operator, somebody who says, you know what, I'm going to put money in, and I'm going to be your CFO or the operations chief.

35:14I think there's an argument to be made here that you can do one of three things, maybe even more than that. You can bring on an investor who might just be a silent partner or not a great investor, or you can bring on – I try to identify really great operators, people who have experiences, particularly in sort of small to medium-sized franchise operations, building them out, who are sort of semi-retired. They come in for some equity, and that is one option. or you do a third option, which is you bring those people in and you raise money in addition to that. Because having folks with operational experience like that is very attractive to strategic investors as well.

35:53They're going to want to see that you've got somebody who worked for a Panera or a Dave's Hot Chicken or whatever. I'm just throwing names out there. Whatever other businesses that have a franchise model that know the playbook. This is a really interesting idea. It's a really interesting product. I could see something like this having strong appeal, particularly in Canada where you've got a huge sort of Anglo expat population. People are already familiar with this kind of food. And I would really spend time – I mean you can troll LinkedIn and just do searches on LinkedIn and find people who have experience in building franchises, who are semi-retired.

36:38I mean, I think Randy's – Randy, your suggestion here, if I'm getting it right, which I think I am, is find the right operators. Yes. Yeah, I'd be very careful about going toward a financial investor who has been involved in franchises before because you have to find out at what stage because that makes a huge difference, right? Were they involved and do they have an operator on their team who was successfully involved in an early stage franchise, which is where you guys are? A very, very, very different game, right? Where we are now than where a 10-year-old franchisor is with 1 ,000 units or more.

37:26And I like the idea that Guy is recommending a lot of finding a successful retired or kind of quasi-retired operator who did really well. and is now out there bouncing around interested in cool projects and would get involved with you as an advisor for a little bit of equity and who may say, you know what, I'd like to do this for a couple of years and come out of retirement because that's the kind of like perfect early stage investor that you may find. And you also might just find people who love the concept, who want to put up some cash, which then allow you to pair a good advisor with some new hires and get yourself another, you know, two, three, four years down the road.

38:21And then look at, because, you know, things change fast, right? In an early stage business and a couple of years can, you know, make all the difference. Yeah. And Randy, you'd said that you had been brought on an investor and then you were able to buy them back out. Was there any signs or would you say, are there any red flags that potentially, I think that's what I'd be worried about is bringing on someone as a strategic investor and them not being as strategic as they claim. I would say that's more common than not, right? Yes. Investors who claim to be bringing, the famous word is synergies to what you're doing.

39:04and experience because they will show you that they were involved in some successful brand that you like. But then if you really scratched, you'd find out that the involvement was pretty shallow. And so I'd be careful of that. I'd really look for somebody who had deep expertise in a pretty narrow field of business, right? Franchising, food franchising. Yeah, I agree. And that's really where you can do your diligence, you know, where you identify somebody who has had experience as an executive or an operator in some capacity with a franchise model that you can now start to call people up and really dig into this person's background.

39:50Somebody who's, you know, again, semi-retired, might be interested in getting some equity. I would also, by the way, just reach out to some of these people who've been on our shows. Cold, you know, contact them on Instagram or LinkedIn, see if they'll get back to you. You can't promise it. But I think that's really the best strategy for you right now is to find somebody who's willing to take a risk, who's interested, who loves this brand, this product, and is willing to, you know, take a risk for some equity because it may not work, obviously. But of course, the hope is, is that it will. Right.

40:24Okay. And even if somebody passes, by the way, like, ask them, get something from them. Find out because it's easy to be like, ah, the person just doesn't get it. And I know, believe me. But try not to do that. Try to ask, like, wait a minute, what is it that you don't like? Don't just let them go. Get something out of them because you're going to come away from that conversation with some really useful intel. And also ask them if they don't like it, hey, is there somebody you know of or you can think of who this might be more interesting to? That's also worth asking. Amazing. No, I really, really appreciate that.

41:00That's been some really good thoughts. Awesome. Kerry Jones, the company's called Peaked Pies. Good luck. Congrats. Keep us posted. Thank you. All right. We're going to take another quick break, but we'll be right back with another caller. Stay with us. I'm Guy Raz, and you're listening to The Advice Line right here on How I Built This Lab.

41:37Welcome back to The Advice Line on How I Built This Lab. I'm Guy Raz, and today I'm taking your calls with Randy Hetrick of TRX. Randy, you ready to take the next call? Absolutely. All right, let's bring in our final caller. Welcome to The Advice Line. You are on with Randy Hetrick, founder of TRX. Welcome to the show. Tell us your name, where you're calling from, and just a little line or two about your business, please. Hi, guys. Thank you so much for having me here. I'm Catherine Perry, and I am the co-founder and VP of Adapt Apparel. We're a modern, adaptive clothing brand. Adapt creates stylish, easy-to-use clothing designed for people with disabilities, aging loved ones, and anyone recovering from surgery or managing medical conditions.

42:19And I'm calling in from Williamstown, Ontario. Awesome. Thank you so much for calling in and congrats. Adapt Apparel. So this is comfortable clothing that is designed for people, if I got this right, with mobility issues or maybe who had surgery. So what does that mean? There's like a bunch of ways to put it on and take it off. And like, give me a description of what an outfit would be like. Absolutely. So it's easy and accessible clothing. So, for example, if you have had a knee or a hip replacement and you're post-op and you're recovering with your chirocraf on your knee, we have our signature and patent pending zipper that comes all the way down that you can rehab in.

43:07Or maybe you're going through cancer treatment, infusion dialysis, right? it is clothing that you can use for those uses. I get you. So how did you come up with this idea? Yeah. Okay, so I was a special education teacher and a phys ed teacher for 21 years. I retired and I have my own health and wellness business to this day. During that time, I was called upon to be a primary caregiver for both my parents who have Alzheimer's and mobility issues. When my father was dying, the nurses said to me, Catherine, your father really needs a dap of clothing. And I said, like most of us, I have no idea what you're talking about.

43:52Yeah. But direct me in the direction. I did a quick deep dive and I was like, no, that's institutional looking. Where's the dignity in this? I'm not putting my father in this clothing. And that's how we started. I said, we're going to do better and we must do better. And that's, we launched in October of 24. So they're like, I'm looking at the website, this like comfortable sort of like sweatsuit type kind of athleisure wear, but really with zippers down the sides of the legs and down the sides of the arms and like easy buttons that you just, snaps that you just like break away that you can open easily.

44:27So it's really designed and clearly inspired by your own experience with your parents. And it doesn't scream, I have a mobility issue or perhaps I have a cognitive issue because of, you know, Alzheimer's. Let's give an example. My mom wears it all the time. She feels good and she looks good. That's awesome. And tell me a little bit about how you're doing in terms of sales, right? You're selling entirely through your website? Yeah. So we started with, you know, direct-to-consumer market. And we now are, I would say, 40 % on direct-to-consumer. And 60 % is, you know, selling. We're with long-term care homes.

45:05We're with medical distribution centers. Physio clinics, hospitals. So we're really a hybrid of a model right now. And I think we can serve the masses with that type of model. Cool. And tell us your question. So my question is, so Adapt Apparel, it was born from a personal mission. It was to create dignified functional clothing for people with mobility challenges. We've seen a strong interest from the long-term care, rehab, infusion clinics. But as we grow, we wonder, are we spreading ourselves too thin? Should we narrow our focus to scale? Or are we actually serving the sectors? It's giving us a competitive edge.

45:52It's a really, really cool idea. I love the idea. Randy Hetrick, I want to bring you in on this. Clothing for people with, you know, coming out of the hospital or aging or mobility issues. I mean, it just seems like a no-brainer to me. Well, I mean, first of all, I love Catherine's kind of combination of deep domain expertise and then the passion, right, from having worked with her own parents. And that, you put those two things together and you've got really a pretty special recipe just to start with, that deep domain expertise and passion, right? And you're going to need both, obviously, as you go forward.

46:30I love, you know, when you think about the fashion space or the apparel space, fashion apparel is notoriously fickle and, you know, read that as risky. Functional apparel is starting to kind of have its day. And I don't think that it's necessarily, I mean, we're seeing this in the fitness space too, like functional apparel beginning to pop up. And I think it's very interesting at this point, maybe niche-y still, but I think there's a huge potential audience if you can break through. As to your question, I mean, you're asking kind of that great question of, hey, how early do I focus, which is a non-trivial question.

47:23I mean, you've got to stay nimble enough to find the vein, but then focus as you begin to scale. That's what we said, too, Randy. For the first year, you're collecting your data, your analytics and everything, right? And don't be afraid to pivot. And as we navigate the murky waters, we're in the muddy water system right now. Do we branch or do we stay within where the story started? I mean, I think it's a little bit of both, but I think it's about timeframes, right? You're only a year into this thing. And you've got a really innovative idea and product. And Randy, to your point, I mean, at leisure wear – and you could call anything functional, right?

48:07I mean, Viore shorts are functional. It's a billion-dollar business, right? Huge business. Lululemons of the world. This is really specific for – and I think a lot of people, not just elderly people, but anyone who's been in a hospital can identify with the need for something like this. And I think right now, in my view, you're best teed up to really work with hospitals, care facilities, rehab facilities, infusion clinics, and really try and make inroads with those institutions because that's where you're going to obviously find your initial customers. I really, one just sort of observation here is you've got a really interesting logo, which I think is a thumbprint or a fingerprint.

48:53Yes. I'm so glad you asked. Our logo is my mother's thumbprint. I love it. It's a really cool logo. It looks distinctive. It looks like something you can really build out as a recognizable brand. But I think for now, you really want to make you want to get traction with those places where people are, you know, are in need of this. Right. You're not necessarily going to have an easy time with these hanging up at, you know, Dick's Sporting Goods right now, maybe in five years. But right now you want these where your potential customers are. Yeah, it's a great point because, you know, we've had interest from retailers and we, you know, our team will sit around and discuss that, you know, is this something that we really want to?

49:43Does it align with our core values? And that's really important to us. I'm going to follow right where Guy was heading us too. You guys are brand spanking new. I know it probably doesn't feel that way to you, right? Because it's like everybody talks about. Yeah. Yeah. So, but to the rest of us, right, to the rest of the world, you're brand new. And I think that it's really, really important to find your advocacy early from, you know, wherever it is. Find that advocacy that people really get it and care and want to pick up your banner and help carry it forward. because when you think about retail, it's pretty easy really to sell in.

50:31But what you really got to focus on with retail is sell through, right? And that's where a lot of early brands that their buyers are out there in retail looking for things to buy. They're under pressure to bring in some new things. And so they'll find you maybe, bring you in. But if you don't have some momentum, if you don't have some advocacy out there, it could be the worst decision you ever made because you can finance a buy-in, put it in there, and then nobody buys it. And then the retail rejects you. And for maybe ever, but certainly for a long time, that retailer's burned. And so I wouldn't rush too fast to worry about retail or broadening your target.

51:14I'd actually try to find the real spot where you're hitting the target and evidenced by feedback from those early customers, and then focus on that, right? Learn from them. Make some mistakes in a forgiving environment. I appreciate that so much. Awesome. I think it's a great product. It's a great idea. Catherine Perry, Adapt Apparel, congrats. Thanks so much for calling in. Thanks, guys. Best of luck. Thank you. Thanks. So, Randy, entrepreneurship alive and well in North America, clearly. So I get so excited by listening to these folks' concepts, Guy, and I could listen to even more of this. Yeah.

51:56You know, I am reminded every day with what I do, how much innovation. I mean, and look, this isn't like, you know, a laser AI product, but it's a really innovative product. And we're talking about something that people need. It's just a reminder of how much cool stuff people are creating all the time. You know, without fail in my life experience, forget just my business experience, the things that always do the best are the things that start by solving a problem, right? And then the broader held that problem is, the faster the adoption and the more meteoric the rise of the product. But if you can solve a problem and it does seem like she's solving one, my parents are aging and my dad just passed away and spending a lot of time in hospitals.

52:55I haven't seen anything like this. So it definitely seems like if she can learn early and get it right, there's a great early mover advantage. For sure. Sure. Randy, a question I ask all of our returning guests, which I want to ask you, is that when you look back at your time building TRX, and we, I mean, again, you guys have got to hear this episode. I'm going to say this again and again. It's so good. And there's so much we didn't even talk about about that episode on this show, including how you took on all the copycats. But if you were going back in time when you were really getting this off the ground, knowing what you know now, all the experience you have now, what do you think would have been helpful for you to know?

53:39What advice would you give your younger self? Coming out of Stanford Business School when I did, I think it was crippled a little bit by the false sense that if you can't get your business to be worth$100 million in three years, then it's not worth doing. right because you know i graduated from stanford in 03 it was kind of on the back of the first dot-com bubble burst but there was an awful lot of of kind of that thinking in the valley and what i would tell myself honestly is is like be a little more patient uh do not i i really can't say it enough like get profitable as early as possible and stay profitable and make make decisions from a mindset that, you know, I want to try to maintain profitability.

54:26And even if I have to go underwater a little bit to do it, a little bit's fine. Deeply, less fine. And because, you know, honestly, when you're living in a profitable world, the clock ticks more slowly, you think more clearly. And I just, that would probably be the biggest piece of advice that I'd give myself to, answer your question is be patient, stay profitable, focus on my customers, and grow at an organic rate rather than some artificially powered nitrous oxide powered rate that may not work, may take you in the wrong direction. That's the inventor and founder of TRX, Randy Hetrick. Randy, thanks so much for being with us.

55:14Great to be with you, Guy. Thanks for having me back. And of course, if you haven't heard Randy's original How I Built This episode, please, please, please do take the time to go back and check it out. It is so good. I will put a link to it in the podcast description. And here is one of my favorite moments from that interview. The manufacturer that I had started with didn't have a depth of manufacturing experience in kind of product that I was bringing, which is this product has to be very durable. And so one of the very early large lots of inventory we ordered arrived, and we'd sold out of everything, so of course we were out of stock by the time it arrived, and desperate to ship.

55:54Well, we hooked up the first suspension trainer, leaned back, and the handles just cracked like potato chips. Hey, thanks so much for listening to the show this week. And by the way, please make sure to check out my newsletter. You can sign up for it for free at GuyRoz.com or on Substack. And of course, if you are working on a business and you'd like to be on this show, send us a one-minute message that tells us a little bit about your business and the questions or issues that you're currently facing, because we would love to try and help you solve them. You can send us a voice memo at hibt at id.wondery.com or call us at 1-800-433-1298.

56:35Leave a message there and make sure to tell us how to reach you, and we'll put all of this information in the podcast description as well. This episode was produced by Catherine Seifer with music composed by Ramti Narablui. It was edited by Andrea Bruce. Our engineers were Robert Rodriguez and Kweisi Lee. Our production staff also includes Alex Chung, Carla Estevez, Casey Herman, Carrie Thompson, Chris Messini, Ramel Wood, Sam Paulson, Neva Grant, and Elaine Coates. I'm Guy Raz, and you've been listening to How I Built This.

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