560: The College Dropout Who Built an $11 billion Toy Empire | Nick Mowbray (Best of Foundr) [VIDEO]

0:00We didn't really have a big idea or really any business plan. And we'd scraped together all the money we'd ever made. And we went to China. We started and we lived off nothing for seven years. We just worked 24-7, seven days a week. Every day we basically just scrapped and fought and kept getting knocked out and kept getting up because we were so competitive that we really wanted to work out how to win. He's one of the co-founders behind Zuru, a backyard idea turned global toy empire. Through bold innovation, industry disruption and relentless global expansion, the company was set to achieve over$3 billion in annual revenue.

0:33in 2024. You've built a multi-billion dollar year annual revenue company. Can you talk us through how that is possible? Part of our DNA is we have this mentality around 2 % improvement a week and improvement compounds and quickly you become really good at something. It's the reason I guess in a short time we can grow to the size we've had. Were there times where it was so tough, Nick, where you thought this is too hard? One of the things that you have to accept about being an entrepreneur is you're always going to have problems. You're always going to have fires. We just had like problem after problem after problem.

1:04You know, on those first two products, we got sued and we had no money. Literally, we had no money to defend ourselves in a lawsuit. And so you work out how to scrap and hustle and find a right way around it. That was the mindset always. When you don't have a choice, you've got to find a way.

1:19Hear the stories, learn the proven methods, and accelerate your growth and future through entrepreneurship. Welcome to the Founder Podcast with Nathan Chan.

1:32I want to go back to the very beginning. Like you started Zuru with$20 ,000, which you borrowed from your parents, right? 18 years ago, right? Correct. Yeah, so take us back. Yeah, I mean, so we were sort of doing this on and off through school holidays when we were kids. And then Matt went to, my brother's Matt, he went to university to study engineering. He dropped out, I think after six months. didn't tell my parents but kept kind of working coming back to making this hot air balloon and so he sort of started to to make it a little bit more professionally he set up a little uh production sort of facility on my parents farm dairy farm in a place called Tokoroa and I was a little bit younger and then and then Matt sort of moved from there up to a place in Hamilton at a slightly better factory and then I went to university for a year studying law and commerce didn't actually make it into second year.

2:28And Matt was sort of struggling to make this hot air balloon in New Zealand. And he said to me, why don't you come to China? We'll go to China and we'll see if we can manufacture the hot air balloons. And sort of through my school holidays, I was always working on it as well to keep selling these balloons. And in my summer holidays in that first year of university. And because I hadn't made second year, I was like, didn't really have too many options. And I was like, sure, let's do it. So yeah, off we went to China. we'd sort of scraped together all the money we'd ever made Matt had a little bit of money from selling some hot air balloons already and we kind of asked mom and dad for a little bit of money the bank and mom and dad and they were always pretty supportive of us so a small loan I guess and we went to China and I remember the first night we landed actually in Hong Kong and we were going to get a hotel but we realized how expensive it was in Hong Kong and so we went back into the airport and thought we'd just sleep in the airport the night but the fluoro lights were so bright we can't sleep in here we don't need any sleep so we went into the bushes outside hong kong airport and then we got attacked by mosquitoes all night but we slept in the bushes and then we went up into a little place called shantou middle of nowhere in china probably about three hours from shenzhen which most people will be familiar with and um that's where we first set up we got this little tiny apartment it was on the eighth floor no lift it was probably 30 bucks a month to rent um i remember every time we needed to get water it was like this eight floor journey to go and get some water and come back up and and that's kind of where we got our start and from from from there we realized that shanto wasn't the right place and we moved to shenzhen then we moved to a place called um hua du um a little little town outside of hua du called functioned dao dao so imagine us um and we had we set up this little tiny factory it was basically like a tin shed beside a river and functioned out out and my cousin simon um had come over as well he'd sort of been working with us a lot um early on and simon welded our first production line um literally we couldn't even really afford much we were really making every dollar stretch far and um from there we started sort of making our hot air balloons we had a couple of um chinese staff on board at that stage we had a uh you have to sort of cook for your chinese staff as well so we had this little old chinese lady who would cook in a big sort of pan sitting right beside the toilet on the ground on the concrete floor next door to the factory and she cooked like rice and a vegetable every day and we'd sort of eat the same food as everyone else it was you know i think we were budgeting like one r &b or two r &b per meal so you know 30 40 50 cents per meal and that's kind of what we lived on um yeah and i think the way to maybe maybe the best way was you know those first two or three years we were so frugal that we wouldn't even go to say mcdonald's and the equivalent of the big mac combo in china was probably three dollars australian or you know two dollars fifty us even that was a treat so i remember the first two years celebrating christmas at mcdonald's with my brother um and we always had this little trip because we're so frugal we'd like eat half our fries and then go back to the the the counter and complain that they'd only give us half price so they'd reserve us more.

5:33So we really were like to the extreme in terms of like not spending any money. What was the big idea? Like what space did you think you guys could fill in the market when you moved there? We were super naive. I think is the only way to explain it. We didn't really have a big idea or really any business plan or we hadn't really thought through the space we could fill in the market. We were just going over there to try and make our hot air balloon and we didn't even know there was such a thing as outsourcing contract that's how naive we were so we literally physically like set up a little battery over in china um and and just scrapped away and then i guess we got better and better and better at what we did and we started to learn more and more and we sort of started to shape what we wanted to do you know but it took us you know a fair few years and now i would say it's very much like a hockey stick um those first few years were very slow going and now it's very very fast um sort of fast going but we really you know scrapped it out from very very very small beginnings so the hot air balloon whatever happened there and what happened next yeah so the hot air balloon well we didn't know i mean these just listen up to listen we didn't know that the hot air balloon couldn't meet any of the toy safety standards globally so we couldn't really sell it to any mass retailers we can only sell it to sort of specialists and so we were sort of selling this hot airboy we had a few customers and we didn't really we were so naive again just to illustrate it we didn't really know what ip was or patterns were and we we'd seen sort of this night frisbee and it was this frisbee with fiber optic and leds and you can play this frisbee at night and then i saw this sort of money bank it was called a money gobbler and it was in the shape of an animal and you could put the coins in the mouth and they'd wind their way down to the stomach of this money bank and so we made these two products that we'd kind of seen and we just started making them in our factory and i went to new york toy fair it was a big expense at the time he didn't get the tickets i stayed in a hostel or big apple hostel in new york and i'd sold them to a distributor called shilling and we had him on shilling's booth and i was on the booth sort of on the first morning starting to sell like you know our money gobbler and our night frisbee but within about the first hour this guy comes screaming onto the booth of course we've breached all his patents that he has a whole company called my highs that's specialized in making these for you know a decade and and we had no idea so dave says you know you got to take the frisbee off the you know off the stand so i take it off the stand well i thought the day i thought the first guy was crazy then this lady comes screaming onto a booth and she'd be making these money banks um the same as what food basically copied for years and years and years and years and she would need them more crazy so i had to take that off the book so within the first day of our first toy show i had no products to sell and i went back to went back to china sort of tail between my legs and I said to my brother, man, so you go to this whole IP like patent thing.

8:15I think we have to really start like innovating our own products. And, you know, we had all of these lessons. So to explain just how naive we were, we were extremely, extremely naive. When did things really start to feel like you're working and how long did that take? It was slow. And then what we started to do is we're still sort of learning how to make our own products and, you know, what would work and that was taking us a while. So I was learning how to hustle and get big retailers on board i would effectively ring all the big retailers on email and hassle them every single day and i was just starting to get some you know bigger distribution channels we had a couple of products but what i was sort of doing was i was going to the us and there were a lot of companies toy companies there that were making products just for the us market but weren't taking them internationally so i was negotiating multiple deals for much better toys than we were making at the time and then taking them internationally so So we had a product called ZBs, which went really well.

9:11And we had a product called Schnucks, which was an idea out of Australia. And that started to go really well. And it was really allowing us to sort of develop all these distribution channels more internationally. And at the same time, we were starting to develop more of our own products. We developed a brand called Nightsports. And we started to get distributions of the US. It wasn't a great product line. But we were sort of paralleling it and opening up distribution that way. And then I guess Schnucks became a relatively big hit. and then after that we had our first sort of major hit probably well no we had we did a deal with David Beckham to make a Tamaguchi product which went into Walmart was which is when we made sort of our first maybe big money it was a disaster at retail but we still made quite a bit of money and then I guess our first major hit was was RoboFish and that took us to like a hundred million dollars in revenue and that was probably five or six years in and and from there we just got better and better and better and have just the momentum keeps growing.

10:08I think as of June last, as of June MPD data out of the US, we're sitting now just below Hasbro, Mattel, Lego, Pokemon, then Zuru. So, you know, it's been a pretty quick sort of hockey stick growth and that growth has really compounded quickly. What's your background around entrepreneurship and how confident were you that when you moved to China, this was the right move for both you and your brother? There was no confidence. It was maybe more competitive nature and a drive within us to build something worthwhile, mainly because we didn't want to fail. And so I always say the hungry lion runs faster.

10:46And we were really, really, really hungry. We had really no choice to succeed. So every day we basically just scrapped and fought and kicked getting knocked down and kicked getting up and scrapped and fought because we were so, I don't know, competitive that we really wanted to work out how to win. And I always say one of my favorite sayings is you either win or you learn. And I would say that we did an awful lot of learning in those first four, five, six, seven years. But we always took those insights, you know, and we always consistently worked out how we could be better every day, how we could improve.

11:18It took you about five years to like, you know, hit the big product,$100 million. Like what were other challenges leading up to that that you could share with our listeners and viewers? I think you've got to have the right mentality. so the hardest part is just starting but the next most important part is making sure you don't flatline and so part of our dna is we have this mentality around two percent improvement a week and improvement compounds and quickly you become really good at something so if you know when you go into something and you're going to continuously relentlessly work out how to improve so we have the saying that we suck now compared to where we are in the future so i want to be able to look back in one year from now and say we weren't even good today so it's this constant mindset around continuous improvement because improvement compounds so if you set standards or higher standards even for the little things you get these marginal gains and those marginal gains compound so our mindset is always always always be trying to get those insights and trying to relentlessly improve that if you get back you actually the journey is like the hockey stick You improve so quickly that you'd be surprised and suddenly you become best in the world at something.

12:30And it's almost surprising how quickly you can do that. So the power of compounding. And where did that come from, that mindset? I think it's like a burning desire within you. I always say probably the number one trait within an entrepreneur is competitiveness. If you have that drive and you really, really, really want to win, then you're going to find a way to win. And in order to win, you have to keep improving. You can't flatline. It's like a sports team. It's like anything, right? like to be really great you have to continuously continuously improve and so we just look at every little detail and say how can we be better how can we be better how can we be better and today even as a you know big business doing you know billions in revenue how do we how do we set that standard within a wider within our wider company so we have a thing called brain trust within our business.

13:18And what BrainStress does is it's basically a mechanic. And it was actually a John Lassenger, Steve Jobs mechanic, but it allows you never to flatline. And so basically a group of experts in any one area every four weeks on a regular cadence, actually judging, critique, and challenge the work in every area in our business. And so what that means is that every four weeks, we're challenging the work and trying to make it improve. So when you come back four weeks later, it has to have improved. And all those challenges have to have been met. And so oftentimes it's a debate and there's like healthy debate and tension, but it means that we can never flatline.

13:53And I would say as a percentage, most companies, most people flatline. And so flatlining is the enemy for us. We always want to continually get better. Are you hesitating to take the next step in your e-commerce journey? FounderPlus has you covered. With proven frameworks tailored to your business needs for fast results, a supportive community of over 30 ,000 like-minded entrepreneurs and weekly live mentorship sessions, Founder Plus is your key to success. Try Founder Plus today for just$1 for seven days and start building your dream business with confidence. You can visit founder.com forward slash start dollar trial or click the link in the description to claim your trial.

14:30Has there been a time where you guys ever have flatlined in this journey? We've never flatlined i can honestly say every year will get substantially and not just a little bit we improve um significantly it's the reason i guess in a short time we can grow to to to the size we've had especially given you know we've never had any outside equity or one of the banks or or or you know really borrowed money outside of that first loan from our parents and you know part of that mentality is is is that relentless uh focus on improvement i know you said that as entrepreneurs we love to compete but have you guys you and your brother always have this insane drive were you born with it is it something that was cultivated i i think we just grew up in a very competitive environment i wouldn't say how parents made us competitive but we've always just been competitive i mean we compete with each other we competed we just always been competitive and i think you're just kind of born with that like that competitive fire and i i yeah i think it's hard to manufacture that to be honest.

15:34And I just think it's the most important trait in an entrepreneur. And when you look back, like what do you think you guys got really, really right? Yeah, I think what we got really right is we were sort of disruptive in a sense, right? Because we went to China really early. It was when China was just good at manufacturing. And we've built effectively the whole organization, a lot of the organization out of Asia, out of Hong Kong and Shenzhen. And we were getting China when it was sort of moving from just being a manufacturing economy to also being really great at building stuff. And there's a lot of smart people in China that work really, really, really hard.

16:11And, you know, a lot of our automation team, engineering team, design team, merchandising team are all kind of based there. And that's been a huge advantage for us in being disruptive all the way through to how we sort of build and design automation. A lot of our competitors outsource their production and still produced or hand produced on production lines. for example our x-shot brand we produce 42 million dart blasters a year 15 million water blasters and we make them from a plastic granule to a finished product in packaging without any people that's really disruptive versus our competitors and we've only been able to do that because of what we've set up over in in asia and so i think we got that really right i also think we really really really understand how to pick trends and get on them fast if you record you know whether it was a bunch of balloons and I'm one summer toy in the world whether you look at its mini brand which is currently the number one selling toy in America or sorry last year it finished number two and number three it just got pipped by Hot Wheels at the end of the year which has been perennial and number one for you know volume and dollars but again like getting inside some trends if you look at a brand like Ray McCorns how we got on a giant mystery surprise egg trend really early how we won that we were first to pick the fidget trend so we signed fidget cube off Kickstarter which kicked off the biggest trend maybe in toy history and so i think we've been really good at at picking trends and and what's coming and and being almost super early and picking great concepts and great ideas and sort of being really relentless around constantly trying to gain insights and and action those insights and so we have an approach around sort of fast fail and fire bullets before you fire cannonballs so it's really really having a strong thesis and having a strong insight for something and then firing a bullet around it and if it works firing a cannon ball.

17:56And I think that's really been our approach in our toy business, very much in our consumer business as well. What advice would you give to founders that are looking to create a new line of product or looking for a trending product? What's your take? Running an e-commerce company, it's really important. First of all, you pick the right category of goods for e-commerce because there are lots of examples of e-commerce companies that are driving scale, but they always lose lots of money. For example, koala mattresses. Your cost of customer acquisition is so high and you're only selling them a mattress maybe once in 10 years or 20 years, and then you have to try and sell them add-ons.

18:29It's very difficult to build a profitable e-commerce business in certain categories. The category has to make sense. Maybe it's you're building brand online, but it has to have a high margin, low freight. Once you acquire a customer, they'll keep coming back. So for example, shoes make a lot of sense as an e-commerce business because you can really build the brand image and the ecosystem online and control that. Also, it's a high margin, low freight category. And once you win a customer, they might keep coming back and buying shoes from you for a long period of time. Sunglasses are another good one.

19:02So there's certain categories that make sense for e-coms, certain categories that don't. I would argue that FMCG, most companies that are in FMCG and start in FMCG, or through consumer, really, really struggle. They all lose a lot of money, whether it's Harry's or Gossier. They all end up going into retail at scale because they can't build a profitable business, direct consumer. When you've got Walmart shifting billions of products every single day, and you're trying to acquire a single customer for a single category, for a single product, take Harry's Raises, that scale that you're competing with is almost impossible to beat.

19:39And so you see them with Glossier that are now going into Sephora, or you see Harry's that went into Simon and Walmart, and now they've got scale at retail. So really, you've got to be really specific about the category first and make sure it makes sense if you're just running an e-commerce business.

19:57And if you're in a category like FMCG, then you've got to be very smart around making sure you use scale retail in order to build a profitable business. So that's probably a lot of the mistakes I see. People go into the direct and sell products and that lose a lot of money. And I see that almost every day. You guys have only ever borrowed that$20 ,000 from your parents and now you've built a multi-billion dollar year annual revenue company. That's highly unusual. Can you talk us through how that is possible, even from a cash flow perspective or even a scale perspective? You know, this whole like raising capital and raising series A, B, C, D, F, Z, to me is like a little bit archaic.

20:44I look at businesses like Oatly and all the hype around Oatly and the market cap on Oatly. For every dollar that Oatly ships, it loses$1.42. It works on 15 % gross margins. To me, FMCG is different to these tech multiples. And it just puzzles me how these companies operate like this and how they're valued so highly. Obviously, a lot of them have recreated through this period or this last six months. but to answer your question we we started and we lived literally off nothing for seven years so even when we were making tens of millions of dollars a year we still lived on like like literally dollars a week and our business structure is set up very differently we use the scale big retail Walmart Target Tesco Carrefour and we only ship in toys to this day we still ship FOB so in the early days we had our retailers paying 30 deposits to us and then they would pick up the goods from us directly at factory or at port and then they would pay the balance and so it meant that our retailers were effectively like funding a lot of the goods we were very low risk and still to this day in our toy business we'd actually don't ship and hold and pay for our own domestic inventory we run a very lean inventory model and actually in the whole toy market this was very disruptive all our competitors still ship domestically all around the world and they put it into their own dcs in country and distribute to retailers from there we don't do that still to this day and so we were able to in the early days get our first big deal where we ended up making sort of a million dollars was on the state of beckham product with walmart we came out we made a million dollars we really looked after that million dollars and that helped us fund the next level in the next building production and so it's that same as compounding improvement it's amazing how fast compounding goes amazing if you take like i think it's like 32 numbers and you compound them you know suddenly you've got a huge huge huge number and so it's the same thing here we really even when we were making lots of money we still lived off nothing we still spent nothing and we still had this cognitive approach of how do we build our business to make profit so even when we had toys that weren't really selling through at retail and we were bad at making toys we would still hustle to sell enough of them to enough countries to enough big retailers that would pay deposits and ship them FOB that would still make profit and then we'd do another product and do the same thing.

23:07So eventually when we got good at making product and we were getting reorders and we were becoming more successful, we were just becoming more and more and more profitable essentially. And that compounding effect has allowed us to grow. Even if you take our diaper business, we started that with basically nothing three years ago. This year, it will do over$200 million from a standing start three years ago. And literally to build that brand was less than a few hundred thousand dollars. Of course, we took money from Zuru to help fund production runs and to fund the order growth. But outside of that, it's very lean.

23:47You talked about in the early days, the terms. You have favorable terms where effectively retailers are funding the production and that allows you guys to be cash flow positive and not have go in the red and then get into cash flow problems. How did, and you said it was quite disruptive. How did you switch the retailers to agree to those kinds of terms? I didn't think we always like, we didn't always like flip it to be fair. like we did with a lot of distributors. Sometimes we had to hustle with our distributors because we also had some distributors in those early days and we would always make them pay a deposit and always make them pay as soon as we shipped the goods because we had to, we had no real choice.

24:31But with retail partners as well, and they weren't all in those terms, but we would often negotiate terms. But I think the main thing was, is just the shipping FOB, the fact that our retailers took ownership of the goods from us at port in China. Whereas most people buy the inventory, put it in the warehouse, ship to their retailers, they have ownership of that inventory. We didn't have any of the ownership of inventory. So, you know, that really, really helped us. And then we've kept that model to this day, which, you know, as a top 10 toy company, literally none of our competitors have that model.

25:02And so it's really a last to continue to run the lean operation. I take, for example, our UK operation. We have about, on the toy side of the business in the UK, about five people. We do about two and a half times less turnover than Mattel. Patel's number one in the market in the UK. But they have over 200 people, I believe, in that UK office, and we have five, but we're only doing some two and a half times less revenue. So we're able to run a relatively lean operation in comparison to a lot of our competitors because of how effective we are more. There's no doubt like insane growth. You guys are one of the largest toy companies in the world.

25:41What have been some unexpected challenges that you could share along the journey? Yeah, I mean, in terms of challenges, I think we just had every challenge along the way. You know, I touched on some of them earlier, right? In those early days, you know, on those first two products, we got sued by one of them and we had no money. Literally, we had no money to defend ourselves in a lawsuit. So there was a Boulder Colorado company and I was going to Colorado, going around all these law firms saying, how do we defend ourselves? And every sort of lawyer firm was saying, well it probably cost you a minimum of a million dollars to defend this and so you work out how to scrap and hustle and find a right way around it and i and i remember i found this lawyer his name was chad get his last name but i said you know i've kind of pitched chad and sold him on the fact we're going to win this case and that you know he could help us and share in it and and i'll do most of the work and we just had to you know have him sort of look over and put his name to it and we found a way to do it really really cheaply and that was the mindset always we didn't when you don't have a choice you've got to find a way effectively and so we just had like problem after problem after problem like um you know going through and you know what still to this day one of the things that you have to accept about being an entrepreneur is you're always going to have problems you're always going to have fires it's how you solve those problems and i'll tell you early on i used to get really stressed about them and today they're almost like a given right so it's like calmly how do we like work through this to to solve this issue you have this relentless mindset Obviously, your brother's the same.

27:11Have you ever thought about giving up? Were there times where it was so tough, Nick, where you thought this is too hard? You know what? Honestly, there were so many hard times in China, but it never seemed like an option. There was nothing in me that was like, can I give up? And we had all sorts of experiences in those early days in China. I had some pretty diacy experiences. I was 18 in China, and my mum was desperate to get me home. in fact the person one of the people i first went over there with like you know lasted about three or four months and and went home it was tough you know i was going a little bit crazy like we me and that were like literally the only westerners in the place we were in so we didn't see any other sort of people that spoke our native language you know um for for like two years um and so we're going a little bit crazy so there were you know lots of tough times i remember my brother once we'd moved departments at the stage and we we were in this apartment we were on probably the 20th floor i think we were going a little crazy and i had a desk kind of near the door into the apartment that i was working on and i called out to my brother and like there was no answer so i looked around the apartment i was like he hasn't come out the door past me so i'm looking around the apartment for him nowhere nowhere nowhere he's climbed out the window to the floor one floor down and he's just lying on the windowsill you know 20 20 stories up reading his book so he's climbed down one floor and lying on the neighbor's windowsill just reading his book so i think we're starting to go a little bit um a little bit crazy at that point but like that's kind of like an illustration i guess of you know we were just we were just like at that point strapping and kind of like trying to keep our head above water i guess a lot of people when they were 18 they're not going to China to try and launch businesses.

28:57I mean, I still like had probably not in those early years, didn't have so much of my share of fun. But again, we just didn't have any money. So I'd still like go and do things. I remember I was, you know, I'd eventually be spending a lot of time in Hong Kong and I was living in my little showroom. My showroom was probably three meters long and I had a table in my showroom and I had some old shelves that I found from another old showroom and I used to live under the table. So I'm one, my macro. with the table. That was the only spot that had enough room to sort of lie down and sleep and live in my showrooms.

29:28We literally, like we were living still off like no money. I'd wash them in the public bathrooms. And I remember going out to a bar with some of the rugby guys. I was sort of playing a little bit of rugby in Hong Kong. And I had this budget to live on per month. And I believe it was HK$800 a month, which is about you know 120 130 us dollars and i'd made the mistake of sort of going to a bar with rugby guys and they'd like put the round on me and it was literally half my monthly budget at a hong kong bar it was like 400 hong kong dollars so i had to spend like literally half my budget on on this one round of beers um and but that's how like we just had nothing right i mean i remember like being broken for for the next few weeks thinking i'd spend most of my budget um on this one round of beers so i don't know that kind of gives you an example so those first few years there wasn't a lot of there wasn't a lot of partner going out or doing the things that most 10 year olds do it was we just worked 24 7 7 days a week love to talk about leadership we've got a team of you know 5 000 worldwide uh how how do you even stay on top of that number and what's your approach to to leadership and has it changed as you've scaled big time so our core team kind of outside of factories.

30:44Most of our factories are automated, but some of them aren't, but our core team is about 1 ,500 globally across our offices. And I guess my approach to leadership has definitely changed over that time. I would say I've learned a lot and I'm still definitely learning because I'm more of an entrepreneur. I'm not necessarily great at the process and the structural side of stuff. But what I would say at a top line and part of our DNA is leadership is super, super important. Having that big vision and really motivating people. I will see that a big part of what I do is focusing on talent and what we call talent density.

31:26So really getting the best people on the bus and putting them in the right seats. The bus will drive in the right direction. There's another Jim Collins one for you. But that part is really, really, really important. I also strongly believe in meritocracy. I think it's very hard to manage a lot of people that they're not hungry to succeed and they're not aligned, that their individual success is not aligned with the company's success. And within any company, there's a certain amount of people, I'd say 10 % of people that really, really, really, truly shift the beetle. So aligning those people's interests to the company's interests and making them really strong leaders, that filters down and filters down to growing more teams.

32:01So we actually say that in every position now in our company, we want to hyper-specialize people so only the best can become generalists. So if you're not the best, the hyper-specialized in an area. And we also believe in experts, leading experts. So we don't believe in managers or management. The best should always be on the tools and leading the team. They know how to pick the best talent in that area because of the best at what they do. And that's really served us well. So we really have like a very flat structure. We're completely unbureaucratic as a company. We want to move fast. We want to action insights really quickly.

32:36We want to have a fast fail kind of approach to what we do. we want our leaders to be you know on the dance floor not on the balcony we always believe they should be in the weeds um at all times because that's where you get the most insights um no one is above anyone else you want to be you know getting your hands dirty um all the time as well and so i think this sort of dna for us has developed um over time and we want our leaders leaders to demonstrate i guess all of these these qualities and i guess our leaders as well their job is to set really strong frameworks for people to work within and then really push that relentless pursuit of improvement and marginal gains i think you know setting those being being really they um drive the cadence of our brains trust meetings and drive improvement as a big part of sort of leadership um within within our company and i think you know part of my role and part of how that's sort of changed as a leader within our business.

33:36As you get bigger and bigger, what ends up happening naturally is that you become more and more complex as a business. It just naturally gets more complex. So my job is to make sure that we simplify our business, that we streamline our business, that we're rationalizing what we're doing and we're keeping everyone on the same page within those sort of strong frameworks that we set and within the vision that we set. And so that's often really hard because complexity is actually quite easy to do, but simplicity is often quite difficult. So my job is challenging the team. Say we're going into a new category and they want to develop seven SKUs.

34:11And I'm like, okay, with seven SKUs, how many more dollars in sales would that give us than four SKUs? And they might say maybe 20 % more revenue. And they will put all the current data, the tooling time, putting it into production of those three extra SKUs. Could we use that resource somewhere else? Could we get a better return on investment, return on time using that resource elsewhere? Will that streamline our sales team to only selling those four SKUs rather than selling one or two SKUs to all different buyers globally, which gives us less economies of scale on the manufacturing side? Does that align our marketing team?

34:42So the marketing team are getting behind less SKUs and doing a really good job rather than being fragmented in their marketing and messaging. And so my job is always putting those challenges forward to really rationalize the team to make sure we're getting the best return on investment for that resource and the best return on individuals' time. And so I'm always challenging everyone within our team. I'm saying like, make waves, not splashes. If it doesn't shift the needle, don't do it. And so my job is like really sort of driving that as well. And I would also say one of the big things I've learned about leadership is when you're an entrepreneur, you're always doing, you're always on the tools, always on the tools.

35:19And I'm still always tools. The reason I'm here in Minneapolis right now is because it's where I learn the most. I'm always with retail. I'm always asking questions. but one of the big things that you know that that as a leader is i think this question and this was something that was you know actually i learned relatively recently and this question of asking everyone whether it's a customer whether it's people in your team you know whether it's other stakeholders what does success look like for you what does success look like and it's a really powerful question what does success look like and then how do i support you to create that success and I think that was, you know, as a leader, that's a question now I use all the time in lots of situations.