ECKO UNLTD and COMPLEX: Marc Ecko

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30:46Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1993, and Mark has officially launched Echo Unlimited with$5 ,000 in cash from his new partner, Seth Gersberg. And there's also a third partner in the mix, Mark's twin sister, Marcy. Yeah, and to Seth's credit, which he deserves a lot of credit for, as the business started to take off i renegotiated the deal and it was like 33 33 33 yeah so your sister had a third he had a third you had a third okay so he was gonna bring in the the money because he had some experience and he was just a year or two older than you yes and so okay now you had some money to start making t-shirts and you had some i mean you had already worked for the previous couple of years building relationships in the hip-hop community.

31:38What was the first step in starting a business? Did you guys get an office, the three of you? Did you stay in Lakewood, New Jersey? Did you move up to New York? Tell me about the first things you did once you were like, all right, we got a business. I went and I wrote a business plan. Okay. What was in there? I wanted to be a lifestyle brand. And I write up this story of educating change to heal and overcome. Educating change to heal and overcome. That's what ECHO stood for. It's very, I mean, it's very earnest. I'm not criticizing it. I'm not mocking you. It's very earnest, right? Well, I am painfully earnest.

32:16And there will be people listening to this totally vomiting on the earnestness. But fuck them, because that's real. That's what it was. And I think it's a part of my superpower and a part of my weakness is that earnestness, you know? And not really worried what people thought of you. You didn't care if people were like – Oh, I worried about it, but I didn't know how to process it. It was more of a betrayal of like my very dear and near friend group wanted to dissociate with me. They thought I was like corny or delusional or obsessed over the work and you only want to talk about this thing and there's no oxygen to talk about.

32:57And they weren't wrong in terms of where my focus was, right? in terms of my in our sort of socialization, I would share. I wanted their advice. I would ask for their advice. What do they think? Do they want to help? Do they want to come with me on the road? And always was a no. And so I was making friends with people that were more like me, that were entrepreneurial. And then they started to help me. I mean, you had this plan for a lifestyle brand, but initially to bring in money, you had to sell products. You had to sell the things that you made, which were shirts and jackets. And so tell me what the first thing you did.

33:39Did you buy a bunch of shirts and start to mass screen print them? It was a little bit more technical than that. I wanted to bring the elaborate aesthetic, which was if you look at those like old concert t-shirts and rock concert t-shirts, like some of these t-shirts today, the ones that are early references are worth thousands of dollars. But that was an aesthetic that was not being captured by the streetwear market. It was not being deployed because of the technical constraints, because the barrier to enter was to make the color separations was very expensive. Yeah. So I did this. I was doing these very elaborate pieces of art that I was showing.

34:23And at the time, the art that I wanted to get produced looked more like these multi-color, eight to 10 color screen prints on black. Most of what you saw in the streetwear market was printed on white. And here I was looking at my works getting creasing elaborate, increasingly high resolution. I would need, you couldn't produce it. They had to be simple. They had to be simpler designs, essentially. They had to be more elaborate designs than what the market was doing. Oh, more elaborate, okay. So you knew that you had to basically create these elaborate designs because that was what that would stand out.

35:04But I think up until this point, you weren't really selling your stuff in shops. It was like person to person, right? You had to get your shirts into stores. So how did you – tell me how you started to do that. You would take – you would get them printed and then you would go walk from store to store in New York City? Yeah, it was, we bought the first six styles on spec. When you say styles, the cuts of the shirts? Oh, I bought blanks that were available. And I had six pieces of art that I identified. And these are just like champion t-shirts or like Hanes t-shirts? Yeah, whatever they were, Anvil or whatever at the time.

35:43And there were, you know, no labels in the neck that said Echo Unlimited. They were just sort of very maverick. You would go to these boutiques, and presumably these are boutiques that are selling this kind of stuff. Yeah. And you would walk in and say, hey, can I talk to the owner or the manager or something like that? It was a mix of things. We did exactly that, where we would go hustle door to door. We'd go to Patricia Fields on Broadway. We'd go to the Extra Large store. Go to Dr. J's. We had no idea that there was a buyer. Oh, no, you have to speak to this buyer. Some of the smaller mom and pops were like, yeah, yeah, I could talk to you.

36:18The manager was the buyer. And we would just try to put them on wheels. We would sell it on consignment. Why consignment? They wouldn't, I guess you had no choice. They wouldn't just give you cash. Well, because some of the stores that we really wanted to get into that were really hot stores at the time, it wasn't that we wanted to sell it on consignment. It was because they would say no. And after a month of back and forth, them saying, we really like your stuff, but we'll only take it on consignment, we had to pick a path. And does consignment mean that you actually get paid? I mean, of course.

36:49No, of course you don't. Yeah. You don't get paid. They take it. And what do they say? They say it didn't sell or like what? You know, some of them would pay really slow, slower than you could afford. And you would convert them into a viable account. And some were just basically lecherous and just were basically taking advantage of all the young entrepreneurs hustling. I wasn't the only one not getting paid. Let's be clear. and I knew it and it did start to sell especially in Manhattan and we eventually then did a trade shows right so we started to learn about oh you should go to a trade show you should go to the the Javits Center they have a trade show and here's Action Sport Retailer in San Diego and so so okay you're doing consignment and I'm imagining that that in year one you know even if these things, these t-shirts are selling, you guys aren't like rolling in cash.

37:43No, no, but it was real. Like we were, we were getting feedback, like calls, like over the weekend, you have more stock. Like that t-shirt's blowing out for us. Some of my, some of the styles started blowing out. And people just discovered them in the shops. They'd walk in and be like, whoa, what's that? Yeah. And it was also the emergence, you know, time and place. Let's put ourselves back into space and time. In that vector of space and time, this was this emergent thing. And who were my near peers now? It's Fat Farm. It's 555 Soul. It's Echo Unlimited. It's PNB. Supreme is just coming up. Yeah.

38:21But West Coast streetwear, like Stussy, for example, I think more influenced by surf and skate culture. Yes. And you guys more influenced by literally my hip hop culture. I was like explicitly hip hop and graffiti and my art. It was like my black book. But there was a Venn diagram where those two met. Oh, for sure. One of the things that I think you did around this time in the first year or so was to introduce the Rhino, which became kind of the symbol of the Echo brand. How did that come about? It's about three years in, all of the brand was just trafficking under my art. and under the Echo Unlimited word mark.

39:03And I'm at a trade show in Vegas, and we're starting to really kind of hit a stride with international buyers. And I want to expand beyond t-shirts, right? I don't want to only do t-shirts. And if I don't evolve a logo mark, that's a non-verbal, non-written logo mark, it's going to be very hard to ID the product. So I walk the main hall and I walk by like a big timberland tree and I walk by a big Lacoste alligator and I walk by Polo. And I'm just like, all these guys have a thing in common. They have like a mascot and they're able to brand their garment in a way where they don't have to slap type on it.

39:46OK. Yeah. And I knew that if I was going to get into cut and sew, which is my ambition. And cut and sew is like just for people who don't know the industry, it means. imported more technical constructed outerwear denim yeah woven shirts beyond just printables what's the the business of printables right where you take a blank constructed garment and you embellish it with a print or a transfer of some type and you had to go beyond that if you want to go beyond that you had to have a non-verbal label it didn't it's something that just people saw it Like you see the crocodile and you're like, that's Lacoste.

40:25Yeah, because I was like, I got it. It's the rhino. You know, you could call me Ernest. But I do believe that God puts things in your path that you, if you ignore them, you could say that they are just trivial things. But outside the garage of where I airbrushed for years, my dad had a collection of sand driftwood rhinoceros statues. Like little wooden. And they were like janky little$5. Yeah. And as a kid growing up, I used to play with them with my Star Wars action figures. And I always admired the form and the shape and just the sort of ruggedness of the rhino. So I kind of had a hunch like it needed to be a rugged animal.

41:11I was like, is it going to be a Great Dane? Maybe it's a pit bull. It was not a long calculated thing. I didn't have a big narrative. like this is it i want to try this i need to have an animal yeah right you know and so i show the buyers the line and they're like what the hell is this they're like we already get that from timberland or we get that from the north face with those those that weird mountain we don't need that from you okay this looks like an outdoor brand this looks like a hunting brand i'm like exactly you know that's what i'm trying to like that's the that's my aesthetic you know Like I was, you know, Tim Boots and cargo pants.

41:54And this was the aesthetic. It took on a bunch of meaning, obviously. Like, you know, the herbivore, fierce, but gentle pack animal, survivor, only goes forward. Like I learned these things anecdotally. They become a part of the sale of why. But they weren't there from day one. And the rhino would just be, it would be a shirt with the rhino on it, or it would be, the rhino would be a small little part of the shirt or what? Well, I started to produce cut and sew. And then I tested one capsule that was like all rhino. And it was just the Echo Unlimited discreetly in stencil font, very kind of military hunting look.

42:34The buyers were very resistant and then we placed it and it blew out in sales. And once it penetrated the market, the buyers that accepted that stuff actually had good performance with it. I think by, let's say by year three, like when you introduced the Rhino, so this is like 96, 95, right? Maybe something like that. Yeah, yeah, yeah. Was it just the three of you or at this point, you know? No, we started building a team. We graduated from the office in my apartment and we graduated to South River, New Jersey to our first office that became a hub for us. Yeah. I want to sort of dive into the overall business because I know – I mean you're doing – by 1995, you're doing like let's say$15,$20 million in revenue and sales, which doesn't mean you're profitable necessarily.

43:27No, we were horribly unprofitable. Yeah, so this is the thing. Like from what I gather like from the outside, you're looking really hot, like a hot brand. Everyone's talking about you. You're making money hand over fist. but actually internally you were in trouble the company was was it was a shit show you were like bleeding cash right i mean we were the the big problem is that we were we didn't have the leverage on the on the manufacturing side so the manufacturing infrastructure was not refined yet you were making it all in china we were importing i had really bad agency production deals we were making in Taiwan, we're making in China, we were making a bunch of places.

44:08And when we started to do the cut and sew thing, it was like, it's a different kind of game. So we didn't fully understand that. And we tried it a couple of times and got burnt really bad. Like we would build something and I'd say to you, okay, it's going to come winter delivery to top of the new year and we would ship it in like spring, like heavy garments because we were late. We had no leverage with the makers. So the importing, getting enough, even to fit in a container, we didn't have enough critical mass so that the efficiencies in shipping. So those things led us to a conclusion that we need a partner in manufacturing.

44:52So we find an agency partner, which is a really bad deal, really bad deal that almost went nuclear. Okay, so you find an agency partner, and this actually makes things worse? Right. Yes. So here's how I get to the agency partner, and it's all my doing, my Frankensteining. I want to make snowboard jackets, okay? Okay. And I want to make outerwear. I want to go after Polo. I want to go after Tommy. I have the drawings. I can see it. I'm visualizing it. But I'm going to preserve this t-shirt business, preserve that foundational essence, but I need to get into the making. So I walk up at one of those Javits Center trade shows.

45:33I walk as a consumer. I start walking it now, not as competitors, but I start looking at who's making what. And I just start asking them, do you do private label? Can you make me? How did you make this? Would you make it with my label, right, if I pay you? One guy I just happened to meet, we'll call him Boris, okay, or something, for legal reasons because it ended up in a real shit show. So Boris says, yes, I can make them. There's a brand called SMP and it was a hot snowboarding brand. I wanted to make that level of product. So he says, all right, we make a deal. You do the fulfillment in the warehousing, Boris, and the making.

46:18You fund the making and we'll split 50-50 on the revenue. I'll pick up the marketing costs and we'll go season by season and we'll commit to like a three-year deal, right? But you can't mark up the freight on board pricing, the FOB pricing, right? That's the price before it leaves the country of origin. Then there's your landed price. You can't mark that up. Deal. Sign the deal. Okay, and you're going to split it 50-50. Yes. That's my recollection. This is not a court of law. It might have been 51, 49. I don't know. He's financing it, entirely financing it? Entirely financing it, but I'm financing the operation of the sales costs, the marketing costs, and the advertising.

47:04Okay, so the first season we do it, everything works. Okay, it all works. This is going good. Second season we do it, there's a speed bump. Oh my gosh, we get a fax. Edward C. Hyman, Echo Design Group, ECHO, cease and desist. season to assist what's that mean i'm echo my mother gave me that name here comes the earnestness right here's the superpower and the weakness i'm echo what do you mean edward steveheim who is he oh he's dead this is a company 75 years old they have the trademark on this brand you need to change the name of the brand they were called echo design group and this is like three years into your business and they say you cannot use that name anymore right business is going like this i have this new production deal with this agency partner.

47:55I've got goods with ECHO embroidered on them, advertising campaigns that are getting a ton of hype, ECHO on them, and funding that. If I don't ship my goods to pay all the debt for the advertising, this is how I got underwater. The name Echo you could not use anymore. You had already made clothing with ECHO in it. First of Did you have to recall that stuff? That's exactly what was going on. When I say pump the brakes, halt the production, there was stuff in pipeline. Yep. On route, about to ship in the midst of peak manufacturing. They're about to punch an embroidery and you can't undo that embroidery.

48:40Once it's punched, you can't undo it. Yeah. But you had to stop that before it happened. We had to stop it. And by the way, how much merchandise you're talking about? Two, five,$10 million worth of stuff? Oh, it was probably like, don't quote me, but it's probably about$8 million worth of stuff. $8 million just at our cost, not like the value in the market. And so you knew that you were not going to fight this. You were not going to fight this Echo design group. Oh, I tried to fight it. Okay. But? I lost the fight. So just with a name, you decide to change it to E-C-K-O. So it's still Echo. and also you changed, you legally changed your last name to ECKO.

49:21Yeah, that took about a year after that, but yes. And that was because by having your name as the name of the brand, you can't, nobody could challenge a trademark because it's your last name. It was legal advice and it was also kind of funny and confusing because I was so stubborn that in my agreement with Echo Design Group, I'm like, I will change the trademark, but I am Mark ECHO. And for like three months, I went around with, oh, Echo Unlimited, ECKO, but I'm ECHO. And it was confusing. And my sister was like, why are you doing that? I'm like, I don't know. It's so stupid. People are spelling the name wrong and they're still getting it wrong.

49:59Like, why? What am I doing? And then my lawyer says, you know, Mark, it probably will, like, let me do an analysis and a discovery on what this could mean for the Marks if you legally change your name. and if you intend to start marketing Mark, M-A-R-C-E-C-K-O, as a Mark in itself, which we hadn't contemplated. I hadn't labeled, I hadn't put my name on things yet. Yeah. So, and I'm like, oh, that's interesting. And I'm like, oh, well, Tommy Hilfiger does it and Ralph does it and Ralph was, you know, it's not Ralph, it's not Polo Ralph Lifshitz, it's Polo Ralph Lauren. Ralph Lauren, right, right, right, exactly.

50:35That's his last name. I changed it to Ralph Lauren. So, okay, so you've got, you changed the name. meantime, you've got this brewing challenge with, actually, I want to go back to this challenge with the partner in just a moment, but I want to ask you overall, from what I understand, I mean, you're still a, you know, a relatively small company, but from what I understand, you guys were spending money like crazy. What were you spending money on? Like - Advertising. Advertising. Like, but crazy, like you were spending more than you had. Oh, for sure. Where was the advertising? You were buying splashy ads and like in magazines, which was expensive.

51:11What else were you spending on? That's pretty much it. This was peak. Remember, like magazines were forces of nature. I mean, there was no YouTube. No, there was no there was no other. I couldn't get on TV. hey, print magazines, if you were in the pages of Thrasher magazine or the pages of The Source and PC Gamer, Spin, that shit costs money and they're selling full retail. And yeah, maybe I can negotiate with them and get crazy terms. I get 180 day terms to pay. And they liked us. They were rooting for us. And that's what we did. We got over our skis. And the calculus, we weren't spending too much.

51:51It was the, we were spending to plan. But the plan was to have shipped goods and then to have cash flow. So suddenly what would have been cash flow now was suddenly stuck in this legal quagmire. So you basically decided to change the name. Meantime, there's this perfect storm happening because you also have this issue with this partner that you guys partnered up with, hoping that it would create better efficiencies, you'd be able to scale and have higher margins. But turns out he was kind of skimming off the top. Turns out Boris was marking up on the FOB prices, broke the deal, breached the deal, milking both ends.

52:35So when you discovered this, right, when you found out about this, what did you do? I mean, because you had you had this partnership with this guy and you felt like did you confront him and say, hey, what are you doing? Of course. And I got more evidence on about six styles or so that were price manipulated. So then we very aggressively sue for them breaching, using those six price points as evidence. They then say, no, that's a mistake. That's not true. That's not enough evidence. So then they countersue because we're trying to get our inventory out and break the deal. And they're like, we're going to fight this out in court.

53:21And they knew they had us because we couldn't afford not to ship the goods. We needed to reconcile this shit show. I needed a completely new manufacturing infrastructure. Okay. I needed to learn everything that they were doing. I need to cut those guys out. And they were willing to go full nuclear. So you guys enter into this battle with this guy. But from what I understand, and you wrote about this in your book, there's all this merchandise that was being stored at a warehouse, I think in LA. Right? Okay. And you and Marcy, your sister and - Seth. Seth, decide to basically take it back. You decide to kind of raid this place in the middle of the night and just grab all your merchandise, which...

54:18Probably not the best form. Not the best idea. But tell me what the circumstances that led you to do this and what you did. Oh, it was just, it was, you know, righteousness versus effectiveness. We probably didn't consult our lawyers all the way. We felt— I'm sure you didn't consult them at all because they wouldn't have been like, yeah, this isn't a good idea to go to the warehouse and take your stuff. Yeah, I mean, I think we were just young and stupid and thought we were robbed. And I was very hostile. Why? I just got my feelings hurt. I got punched in the nose with the ECHO to ECKO. So I was going full cowboy.

54:57So there was this sort of posture that we were taking. It was not by force. We wouldn't show up with like goons and guns. I mean, I showed up and we showed up just saying like, OK, like here's the paperwork. You guys are stealing. Give us our shit. And then obviously that they locked it up, locked us out. I don't remember the exact, you know, when they make the movie one day, it'll be very dramatic. So you didn't you weren't you weren't able to get your stuff. Hell no. When we come back in just a moment, Echo Unlimited runs into so much debt that it has to withdraw from a big trade show. But then Mark figures out how to turn that absence into a major advantage.

55:41Stay with us. I'm Guy Raz and you're listening to How I Built This.

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58:17Hey, guy. My name is David and I'm an entrepreneur from Albuquerque, New Mexico. My favorite episode is the lip bar with Melissa Butler. From the curiosity that got her into lipstick to the way that she had her prototypes and her products overtaking her home, I believe she really represents the entrepreneur's journey. Thank you so much to you and your team for making this show. I listened to it while working on my own products, and it makes me feel like I'm in a chapter of my own story that's similar to the ones on your show. It's very inspiring, and thanks again. If you want to share your favorite episode of How I Built This, record a short voice memo on your phone telling us your name, where you're from, what your favorite episode is, and why.

58:58A lot like the voice memo you just heard. And email it to us at hibt at id.wondery.com. And we'll share your favorites right here in the ad breaks in future episodes. And thanks so much. We love you guys. You're the best. And now, back to the show.

59:23Hey, welcome back to How I Built This. I'm Guy Raz. So it's around 1997, and Mark has just attempted to raid the L.A. warehouse where a shady business partner has been keeping their merchandise. The two of them then wind up in court, and each claims the other is in breach of contract. And we knew that we could win a case, but we didn't have the funding option to go forward. You know, our lawyer pulls us aside one day in court and he's like, guys, we could fight this, but this is going to be six months and you might not be here to tell the story because you guys are going to go broke unless you settle this in some way.

1:00:04And so that's what we did. And so what did it take? How much money did you have to pay him to buy him out? It wasn't even like that. It was just like a sell-off period and we're going to play nice and we're going to slowly migrate the goods and we've renegotiated the royalty terms or the rev share split or something like that. And then the period, and it was more like we played nice and we said, okay, let's just settle. From what I understand around this time, you thought maybe a way out of this because you almost went bankrupt. I mean, this was going to, and you got pretty close to this whole thing imploding, but I think you thought maybe a way out is just selling the brand to like Levi's or Nautica or Periel, so a couple of other brands.

1:00:54And you went to some of these brands and offered it to them, right? Echo. Well, it wasn't just us wanting to sell it. It was more the market signaling that there might be an opportunity. When we started talking to more grown adults and listening to the attorneys and exploring the options, we hired a banker, to learn, okay, well, what would it mean to perhaps have a partner to kind of come in and do the back of the house ops, kind of liberate me on the design and us as a team on the sales and marketing. So we put out a live wire and there was people circling, people started circling. We did this sort of banker exploration to see what the market could offer us in the event of a sale.

1:01:41And you couldn't find anything that looked good, basically, at the time? We found things that looked good, just the terms were not fair. What was the best offer you got, do you remember, in terms of a dollar amount? Oh, goodness. Like, more than$30 million? Oh, yeah, yeah, yeah, yeah. So why wouldn't you take it? Well, Levi's tried to cut my sister and my partner Seth out. After we were, like, the two-yard line doing a deal, You have to understand, they were basically going to be purchasing it. It probably wasn't that much. It was because you have to remember, I had so much debt at the time. So they were basically going to purchase the debt, and you guys would walk away with almost nothing.

1:02:20We would walk away with something and an earn out and to be incented to stick around. But that wasn't enticing to you? Not especially after the 11th hour of the deal. They call me in to see me one-on-one. And I don't want to disparage. all the people that were a party to that deal are no longer there. But there was one gentleman who worked in their international business and one of their finance people pulled me in. I thought that he wanted to just talk about whatever kind of little buttoned up details with me. And I knew that I was sort of the galvanizing force, but my partners, my road dogs was my sister and my partner Seth.

1:03:03It was my brother. And when they not so subtly alluded to the fact that like, we really don't need them for that long. Maybe we'll just keep them on for like a year. And we said, peace out. And our friends at Nautica, we got to know the CEO at the time. He loved us. He thought we were great. And then as we get to the one yard line to do the deal, he's like, my board won't approve it. It's a mission creep for us. We can't afford to do this right now. You know, we just knew the public. He got scared and pulled the deal. Okay. So now you are, this is around 97, 98, you are in pretty bad financial situation.

1:03:46You've got a lot of debt, like tens of millions of dollars in debt from what I understand. And you needed, you needed a creditor. You needed somebody to help bail you out. And I guess Seth had a connection to some guy named Alan Finkelman. And Alan was a guy who said, sure, I will give you a loan and help you pay your debt. But I need to own a portion of your business as collateral. Something like that. What was the offer? Yeah, the exact terms were, it was more like a debt deal. And it was a very much an angel, good guy deal. There was nothing about taking a piece of the mark. He was that generous.

1:04:28He had some protections in place. We knew that we got our hand slapped. We learned to be on better behavior in terms of our marketing planning and be more fiscally responsible and maybe not be as cavalier with the advertising. And we said if we just put our head down and focus, we could do this. And if we could use our weakness at the time, which was the being underwater financially as some sort of Tai Chi strength, maybe there's a way to sort of harness that reality of not being able to afford to be at a trade show, having to be low key and basically do this whole thing called Where's Echo. and Magic Trade Show, we could spend hundreds of thousands of dollars there creating the spectacle, couldn't afford to do that.

1:05:18So we - This is in 97 you're talking about. You could not afford to go to this show, which is a really major show. Yeah, at the time it was like blowing up. We paid for the booth to hold the space and we couldn't get the money back, but we didn't have money to produce the booth itself, to ship people, to build the booth construction, the union, all that stuff. So we just put a sign in the middle of an empty booth, where's Echo? Where's Echo? That's what it said. Yeah, where's Echo? That was your campaign. That was your strategy to say, let's just end. That was that. And what about outside the convention center?

1:05:55Oh, stickers everywhere. Giant stickers. Stickers. And the stickers said, where's Echo? With the brand logo on it? Yeah, we got fined till, you know, it took a couple of years to settle with the city of Vegas, but full proper, like 11 by 17 full page, like paper, glossy stickers that were like impossible to take off. Did that actually gain attention for you? In some good ways and some bad. Yeah. Yeah. Did it result in sales at the trade show? Huge sales. Huge sales. Not the trade show in our office. Because people set people what? They were just like, wow, these guys are clever. They just were rooting for us.

1:06:34And we started to build the muscle of properly building production and manufacturing infrastructure. We put our heads down. Marcy became a world-class operator. I became a much more focused merchant, right? In understanding how to build in a line that was not as ad hoc. getting really good at color separations on the t-shirts, like crushing it on new innovations in screen printing, pushing my screen printers to the limits to do things that no one was doing at the time in terms of colors, high density ink, gloss, all sorts of techniques that were very novel at the time that have since become wildly mainstream.

1:07:20If you looked at the market, your eye wouldn't see it, but at the time were a big differentiator. And who were your customers? I mean, was it young men mainly? At the consumer level, yes, it was young men's. We managed to break into Macy's and the business started to really, it started to become durable. They got the bugs out of the system and we grew up. And what was the biggest seller? Was it t-shirts? No, the core competency was fleece hoodies. Fleece. and people started to associate that Rhino logo with all like the coolest events that we would sponsor and the advertising that we had took and took forever to pay for, it's still the composite brand awareness was out punching, you know, there was more demand.

1:08:09There's just pent up demand in the market. So in some odd way, all of the unintended consequences of shipping late or off cycle in some weird ways just created more of a vacuum for demand. I want to shift to this completely, not completely, but this other part of you, this other side of you that many people may know even better than Echo, which is complex. Because while you're running Echo, you decide to pursue this idea of creating a print magazine, a streetwear hip hop print magazine, The idea was that this would extend the brand, the Echo brand? Oh, there was no doubt. Looking at what was, I don't know, our business was probably$150 million in business, right?

1:09:05Something like that. It was north of$100 million. So we're looking at a$12 to$15 million marketing budget of paid media that I was using for paid media. and I found it very frustrating as I started to become like a darling amongst the publishers who all were very gracious and GQ and details I said hey it's not enough just for the publishers to be nice like why aren't these peer near peer editors in chief they're my same age or sometimes older than me or the stylists why weren't they taking the the brand into their shoots especially at the men's fashion magazines. And I found that offensive, you know, and I had this thing like from the, from the media side, they were like, you're too black for GQ and you're too black for the skateboard magazines, but you're too white for the source magazine.

1:10:02And it was all that same narrative over and over. I just was like, let's take three and a half million for a year for the next couple of years and let's incubate a magazine. Right. And like, cause the marketplace is showing us this, that they're not getting convergence culture. I had this thesis around convergence and that cool doesn't discriminate or live within these silos, uh, in the way that the media industries, these sort of design constraints of the past. And I, I was looking at just the multicultural reality, looking inwardly at my company, looking at my staff, looking at my own family and saying, this is not where the puck is headed.

1:10:48Someone needs to answer that. Let's go for it. And to my partner's credit, Marcy and Seth, they bought into the vision. And how are you going to, I mean, this is a magazine with an editorial team and writers and all this stuff. Like, what did you know about running a magazine? Well, some people are just that good, I guess. No, I'm kidding. No. I mean, did you hire an editorial team? Did you hire a... Of course I did. I didn't know how to run a magazine. Yeah. I start to hire consultants. Someone, a newsstand consultant, help me structure the org. You need to hire a publisher, an editor-in-chief.

1:11:29And we were sunsetting a showroom that I still had. I I wanted to move to a bigger showroom in Manhattan, but I had two. So I was opening two showrooms and we converted one to complex and we just went for it. And so the idea was you would have your essentially your own publication. You wanted this to be a culture lifestyle magazine. I wanted to earnestly build the most culturally relevant media platform for my generation. And it would focus on things like sneakers and food and pop culture and music and sports, like all these things. Convergence culture. That's what I would label it as. Okay. And meantime, I guess around the time you founded Complex, you started working on Complex, you made a conscious decision that you wanted to build up you as a brand because I guess you felt or the feeling was that not enough people knew who Mark Echo was and that could be helpful for the Echo apparel side.

1:12:27Is that about right? Well, yeah. It was a bunch of things that were happening. It was just the sort of professionalization and maturation of the business. We started to license Echo Unlimited successfully. I launched Echo Red, which was a women's wear division. I was having a lot of growth. The mousetrap, if you will, of our infrastructure was becoming quite serious. What was once a company underwater. Now we had very sophisticated lines of credit, you know, with big banks. So I started acquiring businesses. I acquired Zoo York. It was just a part of us looking forward. OK, what is the picture?

1:13:11What are we building for here? I mean, as part of she had these these the head complex, which is growing as a magazine. But within a few years, the print version of complex was struggling. It was really hard because it's expensive to run that. It was really hard. Why? Because they were all online. So why would you pay for the print if you could just get it for free online? Right. And I guess there were also challenges or some issues with Mark Echo Enterprise. You guys had some racked up some debt and then you're in the middle of a financial crisis. You had a lot of real estate, you know, because you had showrooms, you had stores.

1:13:56Yeah, we rolled out retail quite aggressively. So you had like those 2006 leases in 2008. And I think at your peak, you had like 110 stores. That's right. So it wasn't so much that Complex was in trouble, but we were. Yeah. And we were the only funder. So, you know, they were just breaking even. So even though the – and was the Mark Eco brand – I mean even if it was the clothing we're selling, the clothes and the apparel was selling, you guys were over leveraged, right? Basically you had too many stores, too much real estate. Is that about right? Totally over our skis. How did that happen again?

1:14:32You were so experienced by that point. You were such a smart operator. You'd brought the business back to$100 million. How did you get to this point again in 2008? Oh, my goodness. You know, I guess not that smart of an operator. You know, the common killer in our industry is inventory. Yes. And it's why we have, you know, there were macro things going on in the market. You were at the peak of the real estate industry, right? It was right. The real estate was cratering, right? It was about to. Amazon was this incredibly powerful but corrosive force in affecting the way consumer behavior was going to be, direct-to-consumer online.

1:15:19And so, you know, partially macro, partially our own doing. my partner um seth was a cowboy and to his credit that kind of wild aggressive stretch planning uh which had proven so reliable for five years was now going to be tested again in a way that hadn't been and banks were uh um collapsing all around us this also i'm assuming really starts to strain your relationship with Seth. I know because there was a falling out. Yeah. Your sister, Marcy, had already left a couple years earlier. She was bought out, and I think she left on good terms, at least your sister. Yes. But you and Seth start to have more disagreements about the future of the business.

1:16:08Tell me about what was going on with your relationship as business partners. Oh, my goodness. It was incredible. I could only, you know, I've been very lucky in life to have a beautiful wife, my wife, Allison, in a long marriage and healthy family, thank God. But I think I experienced a divorce. It was effectively what you see within any sort of divorce where just two parties grow apart and there's divergent sort of point of view on the path forward. And I was becoming increasingly conservative and wanting to lean more into re-energizing the brand and sort of doubling down on quality rather than quantity.

1:16:59And he was trying to feed the machine, this beast that we had built. And he would say to me, Mark, we've been through this. We've had ups and downs. This is not the first time. I'm telling you, you could push through it. And I just felt like, no, this time is different, mate. And we can't push through this. And I don't want to because I feel like it could be corrosive to the brands. We're just doing too much. You know, we're running a full retail business. We're running an outlet business. It was too much. We needed to focus. And Seth was like, no, this is cycles. We'll get through it. We could get through.

1:17:35And he was more gung-ho. And I said, I don't agree. Yeah, I'm curious because this is happening in the middle of a financial crisis. And you guys had to resolve this in some way. And I'm going to kind of oversimplify what happened. But basically, you decided that you would sell your stake in Mark Echo Unlimited to an outside partner called Iconics. And I guess they bought about 51 % for$109 million, according to reports at the time. And then Seth would still get to keep a 49 % stake, and you would essentially kind of leave the day-to-day. You wouldn't be involved in the day-to-day as much with the clothing company.

1:18:18But just to get back to this, I mean,$109 million for a 51 % stake in the company in the middle of a financial crisis, I mean, that seems like a really great outcome. I mean, so was it? I mean, it seems like you guys did pretty – you know, you did okay. hey, you did pretty well. We did do okay. I landed the plane with the wings on fire. I sold my equity interests to make room for Iconics to buy my position. There was a payout for me and I would keep complex and I would get a royalty on the gross sales of the business for forever. Got it. So from what I gather, initially this was great. You walked away with a nice chunk of cash.

1:19:06Oh, it wasn't great. I mean, as a maker, as that empathetic, maybe saccharinely earnest kid who loves design, it was like suddenly having phantom pains of the hand that was once attached to your body gone. So that divorce came with a lot of trauma. And my job was to now be that puppet, like that caricature, that mascot. I see. And it was not my skills. And it wasn't also aligned to my real authentic personality. So, okay. So was this the first time in your life, this is around 2009, where you actually, I mean, you had a salary, you were able, you were making money, but was this the first time in your life where you actually had significant money?

1:19:59Yes. so wasn't that a win in a sense you mentioned you had a young family no this is this is the wild thing it was the point in my life where i had the worst i i think i had my first proper breakdown i had so much ptsd of the world collapsing the weight of landing that plane to get on the other side of that iconics deal which was not a pretty picture and there were of such hostility with those banks that were, it was like a love affair with those banks. I was in a CIT ad for goodness sakes, you know, back in the heyday when I had a, I still have a plaque around here for whatever, you know,$500 million line of credit that I had, whatever like absurd line of credit, which was, you know, you don't do business that way anymore.

1:20:48And those same banks were now like breathing down your neck. Hostile, like hostile. Like, you can't run Complex and Echo at the same time. Shut Complex down. These are creditors. These are the creditors. These are creditors, yeah. They were coming after you because of the financial crisis. And they were upside down. And they were doing their jobs. It wasn't personal. So you felt this PTSD from the process of unwinding this, even though financially you were successful, and people from the outside are like, oh, my God, high five, Mark. Look, you sold it. You're good. But internally, you're like...

1:21:23I felt like a loser. Wow. I felt like a total loser. And I was depressed. I started getting psychotherapy and try to figure out my new vocation. And I got addicted to working out. And I was the most fit I ever was, too. It was a wild thing, really. It's like here I was more fit, more from an outside perception, more affirmation, but internally hollow. So those sort of, okay, you did good, kid. Here's your trophy was never my measure. I'm that kid that was airbrushing t-shirts and sweatshirts. I want to make stuff. I'm a creator. I'm a maker. Do you understand? I have to use my hands to make something.

1:22:13And suddenly the sort of mousetrap of, okay, I ideate once every week, that cycle of I You draw something and then you get the prototype in and then you're gluing and taping the prototype. And you're the manipulatives of like that sort of autodidactic learning the craft of the trade, which I was becoming good at, was gone. How about your relationship with Seth? What happened to it? Oh, it was very icy. And we've since totally reconciled our relationship. And I love him very dearly. How long did it take before you guys? Oh, years. So it was years of not speaking. Yeah. Yeah. It took a solid, I'd say, five, six years.

1:22:57So he stays on with Mark Echo. He was the 49%. Yes. And you focus all of your attention now to complex media, which was also having some financial challenges. Well, I mean, well, the business was break even. but now we had a and this i give all the credit to my my good partner excellent operator rich antonello who became the ceo of complex but i hired him uh and he was doing a great job i mean to his credit you know to land the plane uh with investment uh with venture investment in the the crisis years which was crazy if you think about it you think it was crazy to sell the company as i did, which was also a blessing.

1:23:40You're right. I should be grateful that it landed in the way that it did. And in my heart, I'm grateful, right? But it didn't come without some brokenness, right? Okay, let's talk about Complex, because I know now you're out of the Mark Echo Enterprises, and Complex is your main work. Did you, I mean, you say that you were sort of depressed at this time when you left Mark Echo, but did it also, did you throw all of your energy into Complex? I started to, and then Rich knew my professional woes. The way I'm talking to you is how I've talked to him in earnest, and I explained the things that were bothering me creatively, professionally.

1:24:21And he was like, let's get involved in the operation, dude. Come manifest the brand. So I started operating back into Complex. You really kind of shift. You shift towards video, digital video, and one of the, I think, turning points was this first we feast, this like complex really becomes known for it's sort of like at the time i mean vice was starting you know was really kind of coming into its own and complex they were the darling right yeah and but you guys were also making videos and content that was really starting to turn around i mean complex started to become profitable or started to make money started to make a a lot of money And it started to become a business that also had a better multiple than a apparel business.

1:25:09So it was an interesting thing. And then here I have a different relationship with inventory, right? You know, it's like inventory is vapor. You know, it's what's on the hard drive. It's production costs. It's a much different business. And I was thrown into the deep end. And there I was on the road with big buyers and doing, you know, upfronts and running production and being like sort of the little, the sort of more maverick version of Vice. And as ever committed to convergence culture as I ever was, you know, doing the one thing I knew I was good at. You got acquired in 2016. You got out of that business at the right time because it's a tough business.

1:25:53and as we've seen with Vice and other and BuzzFeed and Complex and others. But tell me about – I know that it was acquired by Verizon and Hearst. I mean it turned out to be a prescient move because, of course, the whole industry would go on to crater in some ways. And we know the story about Vice and BuzzFeed and Buzz – we've told that story on this show. I mean there have been enormous challenges even in the print industry as well Conde Nast and, you know. Oh, yeah. It's in another phase of reinvention right now. But when they acquired it, you did stay on with Complex, right? You stand for some time.

1:26:36I stayed on. It's just like I stayed on at Echo, just in a much more sort of advisory, consulting. Yeah, well, in the nature of in the Echo business, I get a royalty. So my sort of feedback it just i don't have to be in it operationally in a deep way we're gonna sort of jump ahead to where we are now because of course complex and mark echo two brands that had pretty significant impact on culture in the united states you when you first of all when you see i know in the last year or so you have actually collaborated with the echo brand again yes um on some designs when you go to the website for that brand today and you look at it do you recognize it does it resemble the ethos and the spirit of what you what you did create at the beginning or does it feel like uh this is not really totally my brand today oh i think you know that feeling of it's not totally your brand came before I sold the company.

1:27:44Okay. When you start to develop, when you develop IP at that level of international distribution, this sort of hyper-localization starts to happen that starts to really create some dissonance as like the sort of chief creative officer or the creative director, because there are certain functional things, be it climate, be it color palette, fabrication, fit, that start to Frankenstein the business in a way that it's very hard to explain to a layperson. So when I would travel the world and see my brand on people's backs, it had this sort of multiple personality thing that was going on anyways, that was emerging.

1:28:37Things were happening, pockets that weren't all the way tuned to my Bluetooth, right? It wasn't like my creative Bluetooth. But to answer the question, when I see the brand today, is it the portrait of what I would make it if I was fully steering it? No. But that is the nature of this business. I think you could say, you know, for me, it was the 30-year anniversary. And the fact that some of my old peers and colleagues that worked for me were still there, call me nostalgic, call me earnest. I wanted to work with them again. It just felt good. And it was like no strings attached. And it was like, do what you want.

1:29:21Mark, when you think about where, you know, what you've created and the ups and downs of it, but also the amazing success that you've had, you know, as an entrepreneur and failures too, as we've outlined, which is part of the journey. But how much of where you got to now do you attribute to timing and luck? And how much do you think has to do with the work and the grind that you put in and just the sheer effort? I think that the luck is a incredibly real thing. the first bout of luck was being a twin and having a twin sister. So if you took that out of the equation, I probably would not be speaking to you right now.

1:30:04I've been lucky in marriage. I've been lucky in having my partner, Seth, even though we had a professional divorce and we eventually totally reconciled and I love him. I learned things that was going to the university, the super smart. I've been lucky to grow up in Lakewood and have the diversity that was around me. So yeah, luck was a big part of it, but it was also, I believe, talent and skill and a relentless belief in yourself, which at times probably sounds irritating to the listener because there's probably moments that are somewhat cringeworthy, like this guy sounds like an arrogant prick or he's not listening or he sounds so earnest.

1:30:51There is a little bit of this sort of mania that you need. And I think the thing that I attribute most of it to, and this is a completely, it's not this podcast, but maybe a different one, is God. There have been moments where the grace of God has given me the opportunity, and I do not discount that. And I know that, you know, it's a different conversation, but I do think that it's an important part of the calculus. us. That's Mark Echo, co-founder of Echo Unlimited and Complex Networks. Last year, to celebrate Echo Unlimited's 30th anniversary, Mark came back briefly to design a limited edition collection with some of his most iconic designs.

1:31:39He said he thought of it as a love letter to 1993. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And as always, it's free. And don't forget to sign up for my free newsletter at GuyRoz.com. It's full of insights and ideas from some of the world's greatest entrepreneurs. This episode was researched and produced by Catherine Seifer with music composed by Ramtin Ereblui. It was edited by Neva Grant with audio engineering help from Gilly Moon and Kweisi Lee. Our production staff also includes Casey Herman, JC Howard, Alex Chung, John Isabella, Elaine Coates, Carrie Thompson, Chris Messini, Carla Estevez, and Sam Paulson.

1:32:26I'm Guy Raz, and you've been listening to How I Built This.

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