515: Building Yeezy with Kanye and Why He Left Adidas | Eric Liedtke

27:40If you're listening right now, chances are that you want to start a business of your own or you want to scale up your existing business. And if you've ever said, I'll start one day or maybe I need more help one day, Founder Plus was built to help you make it happen. We have a 43-step program with over 600 lessons taught by real multi-million dollar e-commerce founders to help you start and scale your own e-commerce brand. And for this week only, you can join Founder Plus for just$299 a year. It's normally$499 and you can lock in that price for life. That's$200 off every single year backed by our 90-day money-back guarantee.

28:17Picture this. With the help of Founder Plus, you could be running your own Black Friday sale this time next year or you could be smashing it out of the park, smashing all-time records. So don't miss out. This deal closes soon. Start building your business today at founder.com forward slash plus. That's P-L-U-S or click the link in the show notes. All right? Now let's jump back in the show. Yeah, look, I agree. I've done friends with business where it's worked and it hasn't worked. There's a common thread that I personally find is if you've met them in a business context versus like growing up with them through school or, you know, like that kind of relationship, it tends to work.

29:01It tends to have a higher chance of working if you've met them through business. Have you found that experience too? 100%. 100 % and I think that's a very well said as an observation that business is the key thing because they have to have a skill set that you understand and they understand your skill set. If you haven't sweat tested that and it's just been through friends of growing up playing sports or having beers or whatever, I think that's a recipe for trouble. Yeah, it's definitely more risky for the friendship to be jeopardized from my experience. Yeah. Or the business. I think the friendship and the business, they typically follow suit.

29:43Yeah. I agree. I agree. And then when money's involved and all that kind of stuff, you have to weigh that up. And I hear you. So how many co-founders do you have? I have three co-founders. There's four of us, but three additional ones. And right now we are making it work. And I think it's a question of... We also took it upon ourselves to really be paying ourselves to equity. So we had to be in a situation where we could afford to do that. And some of us have been able to do that easier than others. But I think it's always been very transparent and very objective in that regard to say, hey, listen, we can't afford to pay ourselves at this point.

30:24We will as we develop this out and we have the plan for this, but we'll be heavily compensated in equity. So we're all compensated towards creating this thing from a, you know, from a success standpoint. Yeah, makes sense. So talk to me around the, I guess, the marketing side. What was your go-to-market strategy? Talk to me about the brand, how you've conceptualized the brand and that whole piece, because that's a real strength of yours. Yeah, I think, listen, we came out of, when we came out of stealth, if you will, we said, okay, we're going to be focused on streetwear because streetwear is the tip of the spear when it comes to fashion.

31:00It's not the biggest part of fashion business, but it is the predominant trendsetter, if you will. And it trickles down very quickly if you imagine a fashion pyramid, if you will. It's the tip there. What we didn't account for is streetwear is primarily focused on existing brands or existing celebrities. So while it may be easy for Kanye West to create Yeezy and really go to billions of dollars of sales, it is not easy for Eric Lidke to do that with Unless. So we quickly found that we needed to ground ourselves in a community that was as mission aligned as we were as fixing some of the problems.

31:43And so we pivoted to skate, surf, and snow, which has been a much more receptive base because I think you've got to ground yourself. And if you're not going to be doing streetwear, you need to ground yourself in a sport, in a community that you can resonate with and build around. And so as we've started to build that out, we've seen a much more dramatic uptick in our sales and absolutely our advocacy, if you will. So to me, it's like street. Well, streetwear felt like we were always chasing that silver penny, if you will. The skate surf snow approach feels like we're building foundational blocks to accelerate going forward.

32:23So it's slightly different. It may not have the immediacy of building the next billion dollar brand. But that hasn't really been in our in our in our remit. Our remit is really to systemically change fashion and get off of petroleum based products. And to do that, we want to start with a group that plays in the environment because they're the ones that want to protect the environment the most. I'm going to ask you a question to just come to mind. It's not pre-prepared, but I'm curious. It sounds like you've had some interesting twists and turns on this journey. Has it been humbling for you coming from, you know, super successful exec at Adidas, you know, doing some crazy iconic things to the startup world?

33:08And then, you know, the difference. Has it been humbling? One thousand percent. I think you've got to swallow your pride on almost a daily basis. You know, I think I've listened to other startup people like Scott Galloway and people like that. You can't, you know, you can't, you can't be afraid to ask strangers for money. You can't be afraid to ask strangers for help. You, you must show your, you know, your, your confidence, I guess, in yourself by, by really asking and leaning on, on people to give you, um, give you help, um, based upon what you're trying to do. And I think that requires a tremendous amount of, uh, resilience and humility, uh, because when I was at Audi, you know, it was an alpha dog place.

33:56It was a sports place. It was, you know, you know, bang your chest and I am the big man in this room. And it wasn't so much like that, but you get it. It's very male-driven industry and it rewards, you know, the person that can, you know, be the biggest, be the strongest, be the loudest, if you will. And, you know, that's the sport comparison. And I think there's a lot of parallels there. I think when you get into a startup, I think it requires a whole different level of skillset, um, you know, that I found it. I think it's been really, really rich for me personally, uh, with just not just myself, but my family, um, to, you know, take that step back.

34:33And while it might be frustrating, um, it, it's definitely exploring a new, a new humbler side of, of, of who I am. And, um, and it's been, like I said, I wouldn't trade it for the world, but it's been, um, it's, I feel like I've gone through a masterclass of not a few MBA classes of, of learnings these past few years. You talked about the skillset. It's different skillset, which I agree with. Yes. I haven't come from, you know, I didn't, I didn't have a really super successful professional career and I, I actually had not a very successful professional career at all. And then I've kind of had to learn along the way.

35:11But I wish, you know, I look at some of the people that work at Founder and work with me and they're learning so much and that skill set. I'd love to hear from your perspective, what is that skill set in the early days that's required, not just for you, but just around you and your co-founders and what's required? What is the different skills? Well, I think the first skill is really taking an approach of I'm willing to do what it takes to be successful here. I think, let me back up, I think the first skill is really having a laser-like plan. I mean, do you have a clear idea of what you want to bring into the world?

35:52And what I mean by that is we didn't set out to build the next sustainable fashion brand. We set out to do a way to have zero harmful waste to end of life of our product. It's a much different brief than saying, hey, we want to be sustainable. If we want to be sustainable, there's a thousand ways to be sustainable. We said, no, no, we want to figure out what happens at the end of life of our product and make sure that all of it goes harmlessly away back into soil and dirt. And so the skill of having a really tight brief of what you want to bring into the world makes life so much easier downstream.

36:27Because once you have that upper right-hand corner of the whiteboard defined, then you have the what? Then you have, you know, that's really your why. And then you come down and say, okay, now how do I get there? Okay, now I need to, if we start at the end in mind first, now how we're going to build product and how we're going to innovate, what innovations were going to look like, how we're going to talk to different, you know, material manufacturers and what they're offering and how we're going to work with different chemists to create what we're looking for. And, you know, how are we going to make a sock?

36:55How are we going to make a shoe? How are we going to replace glue? Some of the things I talked about already. That's one thing, but really being very crystal clear on your brief, because I'm a firm believer everything starts with your brief. If you don't have the proper brief, you know what they taught me back in school a long time ago is garbage in, garbage out. If you don't have a right brief, you don't have a right solution. If you don't get good work from your agencies or from your designers, it's because you haven't asked the right question. It's not their fault, it's yours. And are you clear about what you want to bring in?

37:22That's the first skill you have to have in any company. I don't care if you're in a big ship like Adidas or you're in a small startup. And you've got to be clear about what you're trying to do. Then you've got to, you know, put on your hat and say, okay, how are we going to get there? And that's when you say, okay, I need Paul Gaudio to come in and be my creative director and head of innovation because he's brilliant. And because he's done this with me at Adidas, and he's the guy that's going to figure out how to build product that leaves zero waste behind, zero harmful waste behind. I need Tara Moss to come in and figure out our digital strategy in e-commerce because we're going to go DTC.

37:57At least that was the plan. We're going to go DTC. But then we ran into the Zuckerberg paywall. We ran into the Apple privacy. We ran into Google's third-party cookies. We're like, okay, pivoting from D to C. Now we're all about wholesale. So that was kind of like the things we ran into. But without having talented people that could know how to make that pivot or at least build up and set up that first proposition, we never would have known whether we were being successful or not to pivot away from that. And then I needed Martin Tyson to come in and help me figure out what are we doing from a product standpoint, from a creation standpoint.

38:32What does the range look like? What is the fit? What is the feel? All those different pieces. So you then put your team together once you have your destination in mind to how to get there and what you had in the back of your head. So the skill is really, you know, basically defining where you're going, understanding what it is to get there, and obviously then getting your team around you that fills the gaps and the blind spots that you have and understanding your blind spots is a big skill. and then being humble and resilient, as we talked about, to really drive that through in every imaginative way.

39:05And that means warehouse packing, shipping stuff out, carrying boxes, driving U-Hauls, you name it, just getting things done, whatever it takes. And you may think like, this is below me, but nothing's below you as a founder CEO. So you've come full circle sweeper again. Yeah. Yeah, exactly. Exactly. Very well said. I like to tell people I went from the penthouse of the board seat in Adidas to the outhouse with Unless, but I've never been happier in an outhouse. yeah you know it's funny right like i'm thinking about this journey and i really appreciate your openness honesty vulnerability of just like it is it is really fucking hard to build a business and i think i've been i've been building founder for over 10 years now a decade and we've built the brand over time and sometimes you forget and i think perhaps you maybe experience that and i think sometimes people when when they you know come into our business as as team members it looks easy right but they don't you don't actually see how long it actually takes to build something that gets cut through and traction product market fit even getting people's attention like that there is so much noise there's so many messages that people are getting to actually build something that commands attention do you think you do you think it was good did you think it was going to lot easier than it has been oh yeah i thought it was gonna be very easy in fact you know the reason why we started was tree wear because you know again going back to kanye it's like kanye and i had spoken about this before and kanye's like hey i want to buy a less and and put everything you're doing from a from a regenerative fashion standpoint into yeezy and really blow this thing up and again i was like all right done that was easy six months in and we're we're checking out and then kanye he goes to Paris and just loses his mind.

40:59And I hate to say that casually, but, you know, starts to say disparaging things that, you know, I did not recognize or could not could not partner with. So to me, all those things went away. But it was like, yeah, it seemed like coming from that, again, the privileged area I was with my background in the startup life, I was just going to like ride that right along into the into the sunset. And as I learned those things. It's like, that didn't work out. Okay. Next thing you, what I learned is if you don't have a plan B and a plan C, then you're not doing your job as a CEO. You've got to always have, what's the pivot.

41:34And it doesn't have to be a hard pivot. I know that, you know, all of the Silicon Valley talk will be, oh, you get your pivot over to, to a SAS company, you can pivot back to DDC. But no, ultimately it's not, it's not hard pivots. It's like, okay, our vision is, as I said, zero harmful ways to end a life. We started that as a DTC. We're now moving that into a wholesale. But the idea is to always have that pioneering regenerative fashion brand as a lighthouse so others can see that it's possible that we can get off of a choice. And then we were going to, then we'd build a regenerative creation model of how to actually create that product and how to bring it back to being soil.

42:12And now we use that model to partner with big incumbent brands, whether it be Uniglo or Gap or Nike or New Balance or Under Armour. But ultimately, you bring that regenerative creation model into their world. So we always had an extension of that and how we would build that in. And that's been actually really fruitful. Then the B2B business, because the amount of people out there that want to have a better solution to what they print their things on. For example, Robert Downey Jr., Iron Man, he is doing amazing things in his world from a startup. He funds a lot of climate change things through his VC called Footprint.

42:49But he also took six of his vintage cars and he converted them all into electric cars. And he's raffling those away with Downey Dream cars. We supply all the t-shirts that he gives away with that. So we're doing 200, 300, 400 t-shirts on a regular basis with him a month just to really print up his stuff. So this whole like he wants a better footprint. So he calls us. We print them up as a B2B service to him. It's not a collab or anything, but it's nice business for us because it increases our throughputs and it also allows us to make a little cash on the side. So that's been a really rich business.

43:25So it's not just stuck in a D2C brand. Now we've expanded into a partnership brand, whether it be through collabs or through B2B. And ultimately, we want to certify compostability for all of textiles. So any brand can use us as a certification if they build things the right way through our model with a stamp of approval from unless this thing is 100 % compostable. So the idea is to not just settle for, okay, we're going to go D to C solely, but to have all these optionalities that we can play up and down throughout the business plan. Yeah, I think that's really clever because you've invested so much in R &D.

44:06You've got this proprietary part of your brand now where you can unlock distribution through the big incumbents, as you said, through partnership, through your unique value proposition. And the core lesson there, and again, my unfair advantage, Nathan, it was, you know, at Adidas, I did the same thing with Parley for the Oceans. You know, in 2014, Parley for the Oceans, which is an ocean advocacy that walked in my office and said, hey, would you like to save the oceans? And I'm like, sure, but how? And they said, well, you're a big reason the oceans are dying because of all the polyester plastic products you use.

44:46And they're killing the phytoplanktons that are responsible for every second breath we take. And I'm like, oh, my God, I had no idea. And then they said, but we can collect ocean plastic with you and you can make product and sell that to the consumer. in 2015, we launched the first ocean plastic shoe. I was able to stand in front of the United Nations General Assembly and present this shoe. And that post went as far as wide as anything we ever did with Kanye or with Messi. And then I was able to walk in the boardroom and say, this is not philanthropy. This is good for business. And that kind of got my head spinning to say, well, why can't I do that with unless?

45:26Now I'm not using ocean plastic because that's just recycled plastic. Now I'm using plants. But if I can bring the storytelling, the same component and bring that to bigger companies, then ultimately we're scaling with the urgency that we need to see in the world versus scaling 1 million to 2 million to 10 million. And now you're saying, no, no, this thing's becoming systemically changing fashion very quickly. Before we move to the hot seat round, I want to ask one more question I have to ask. Just around brand building, it can seem very daunting for founders, especially in the early stage. What is your philosophy?

46:01What advice would you give to build a brand that stands out in a crowded place? I mean, I think ultimately, again, I'm a consumer brand expert. I'm not in the tech world. So I think I have to differentiate and say that to protect myself because I know a lot of tech guys that just blow my mind with unbelievable stories and stuff. And down by years, I know the guy's a culture amp really well, Didier, and he's brilliant, right? But it's like, I can't give him one word of advice. Yeah, I know him too. I just want to say, I just want to say like those guys are special and I learn, I learn from them every time I sit with them.

46:38But I would say, you know, when it comes to consumer brand, I think you have to, you have to first take a step back and say, no one needs a new X. No one needs a new pen. No one needs a new shoe. No one needs a new shirt. No one needs a new glass. Whatever you're coming out with. what they need is that you need to build as a branding organization, a object of desire. And that's so, you know, I kind of coined that Adidas like objects of desire. What is it? What makes an object of desire? Well, first of all, the product needs to be second to none. It needs to be beautiful. It needs to be crafted.

47:11It needs to be, you know, premium, or it needs to be a price point that's, you know, accessible and different, different access points. But ultimately you need to nail the product brief of why you're doing what you're doing, what's your destination. but then you need to say it's product times story times distribution that's the magic of getting right to build a powerful brand and to build powerful products and we need that brand what I mean by that is you really need to think through is what is the destination what are you trying to bring in the world that informs your product but it also informs your story and how you did how you tell different stories about it it wasn't the ocean plastic shoe that sold it was the drowning sea turtle in the gill net that sold the ocean plastic shoe.

47:53And that story is a very powerful thing that really worked for Adidas back in the day. And then distribution was, you know, you have to select, is it own distribution? Is it D to C? Is it, you know, running specialty distribution? Is it general distribution? But the different distribution plays really come into that. But I would say as a startup, really trying to brand itself powerfully, you have to look at all three components. And as I mentioned earlier, you know, the D to C race is really challenging right now. It's almost like this full circle back to wholesale in those areas, but really figuring out then within wholesale, the different segmentation of wholesalers you can work with.

48:34And, you know, from Adidas standpoint, we would tell multiple stories on a single shoe. Like we'd have our ocean plastic shoe. We'd have our Kanye West version shoe from a lifestyle standpoint, we'd have our premium running shoe. So you have this game, life, world, consistent message going through each different shoe, but it's the same shoe. It just has a different material component or different collaboration to it. Yeah. Awesome. I love how you think about that. Thank you for sharing. All right. So let's move to the hot seat round. Yeah. What's the best business advice you've ever received? I got two pieces here.

49:09So when I took the seat at Adidas, Herbert Heiner was the CEO at the time. He said to me, he looked me in the eye, he said, the brand needs to be reset. Eric, I need you to do it. I was the first American in this position. And he said, don't ask for permission, ask for my advice. I think that was really dead on. And I tried to live that each and every day. You know, I think that's the best way you can work with your teams as well. You know, I think you need to really dial into, you know, So hiring the right people and letting them run. And you guide them as a shepherd and not an authoritarian hammer.

49:47The second one would be, and it's an engineering term that I've read and I've repeated time and time again, is don't let perfect get in the way of better. Every day we got to get better. There's no such thing as perfection. That can be a theoretical destination. You'll know it when you get to. But really each and every day, just get better. What business advice do you love to share? don't let perfect get in the way better. I think I jumped on both of those, but that's, that's basically it. I mean, I give that advice nonstop. And especially when I was at Adidas, it was like every single meeting, people would repeat it before I got to it because they got so tired of me hearing it.

50:25What daily habit makes you a better founder? I think really finding your own Zen. I mean, I, I, I try to, you know, what I mean by that is you've got to take time for yourself. You've got to take time to make sure that you're complete. So I try to wake up with my wife and do yoga every morning and then find time for sport with my, you know, for myself later on in the day. But if you don't take those nutrition breaks, if you will, I don't think you're doing yourself the honor of being your fullest self. I think it releases, obviously the science is evident from your health standpoint, but the endorphins actually add to your creativity.

51:05Um, there's science behind that that would justify that in time and time again, but you feel personally, I mean, I, I'm, I know that I'll get a problem in my head. I'll go, I'll go for a run. I'll go for a workout. I'll do whatever. And I'll come back in a nine times out of 10, I'll get that problem solved. Yeah. Love it. Um, if you could have dinner with any entrepreneur dead or alive, who would it be and why? I thought a lot about this. Um, you know, cause it's, it's a struggle for me because, you know, there's Elon Musk and there's Steve Jobs, but ultimately I decided to stick closer to home.

51:38And this is somebody I never would have admitted to wanting to do this before, but because I've got some distance now from the Audi-Nike wars, it would have to be Phil Knight. I've now, I've read his book a couple times. The things he went through, the sacrifices he made, the second or third mortgages he put on his house to fulfill some of the credits that he needed to get to buy more shoes and stuff. And just his relentlessness, it speaks to me. Again, it's very close to home because not only do I live in Portland, Oregon, where he lives, but I also am in the same industry. But I never would have admitted before.

52:19In fact, I would never read his book or even do anything because I was so competitive. But now I've gotten some distance. I'm like, yeah, I think he's the guy. If I could just sit in front of him and say thanks, that would be enough. Thanks for sharing. That was a great one. Last question. What are you excited for next? For me personally, it's really scaling regenerative fashion. And I know that's going to be a little bit of a, you know, cliche because we've talked about it so much today. But I've never seen a bigger white space in the fashion industry than, you know, really scaling something that's meaningful, not just to the industry, but for the world at large.

52:56and it consumes me each and every day that, you know, are we too far ahead of where the consumer is at? Are we not, are we, are we, you know, are we, are we going to slow down? How do we catch them up? But I just, every single day I may take, you know, 10 losses and maybe get a half a victory, but that half a victory feeds and nourishes my soul to keep going and keep, keep providing the, you know, some, some resilience towards this mission, but this will be my life's work. So I would do myself a dishonor if I didn't speak to it as what I'm excited about next. And then, of course there's family things and kids growing up and all that stuff but ultimately it's got to be this this uh this mission that i'm on um it's um it's it's fully um it's it's it's fully fully consuming my uh my uh my approach to life yeah i hear you well look eric thank you so much this was a fantastic interview you're super honest super vulnerable and just yeah really open thank you like i know our community will really appreciate just hearing from someone that's built such a successful corporate career then gone full circle full circle sweeper uh and and all the things that you're building with like just regenerative fashion the brand like it's it's really cool to hear so thank you so much for sharing and uh being so happy and giving back thanks for having me on nathan i'm i'm a big fan of founder and everything you built and congrats on all that, I mean, it must feel fantastic to bring this into the world and bring these different stories to light.

54:26So I appreciate and honored by having the opportunity to be on your show. Hey guys, if you love this episode, you've got to check out my interview with Davey Fogarty on how he finds trends in undercapitalized markets and turns them into multi-million dollar businesses. I'm generally looking for trends globally. We find trends that haven't been kind of capitalized in certain markets or in certain marketing channels. Yes. And then we also obviously add our flair to it. You need to differentiate your product.