Today on The Fastest Growing Companies podcast, we're talking to the CEO of Xero Shoes, Steven Sashen.
Today on The Fastest Growing Companies podcast, we're talking to the CEO of Xero Shoes, Steven Sashen.
Today on The Fastest Growing Companies podcast, we're talking to the CEO of Xero Shoes, Steven Sashen.
Chris Ronzio (01:02):
Hey everyone. Welcome back. I'm Chris Ronzio. And today we're here with Steven Sashen. He is the CEO of Xero Shoes. Hey Steven.
Steve Sashen (01:11):
Chris Ronzio (01:13):
Welcome to the show.
Steve Sashen (01:14):
Thank you very much.
Chris Ronzio (01:16):
All right. So Steven, you've had an amazing story going from you and your wife to now a team of 52 over at Xero Shoes. Tell us about Xero. What it is, what do you guys do?
Steve Sashen (01:27):
Oh gosh. Um, we're not doing much just, you know, changing world one foot at a time. My wife likes to say there's enough shoe companies in the world. There's no reason to have another, unless what you're doing, changes people's lives and happily, that's what we hear from people all day, every day. And all we're doing is something really simple. We're making shoes the way that feet are supposed to work. So you have a quarter of the bones and joints of your entire body in your feet and ankles. You have more nerve endings in the soles of your feet than anywhere, but your fingertips in your lips. And I would suggest that that means you're supposed to use those things at the bottom of your legs. And what they're made for is bending, moving flexing, which is about mobility and agility and balance and feeling, which is about all of those things as well.
And if you don't let your feet do their job, all that function, all those jobs, try unsuccessfully to move into your ankle, your knee or hip and your back, which causes all sorts of problems. So we just get out of the way, so your feet can do their jobs, so the rest of their body can do its job. So we make shoes with a wider foot shape, toe box. So your toes don't get squeezed together. We don't do things like elevate your heel and I'm going to show one, you don't elevate your heel because that messes with your gait. We don't have a thing called toe spring that messes with your gate as well. Um, actually the healed stuff messed with your posture badly. Everything we do is really flexible to go with those, you know, flexible feet that I mentioned, and really lightweight. People have fallen asleep still wearing our shoes cause they forgot they had them on, not because they were passed out drunk, although I'm sure that happened too. And then we also make them more durable. So our souls have a 5,000 mile sole warranty where most performance shoes say you would need to replace them every couple of hundred miles. So last but not least, we have a complete line of casual and performance boots, shoes, and sandals that people use for everything from taking a walk to running a hundred mile ultra marathons.
Chris Ronzio (03:04):
Wow. All right. So true story. I had a podiatrist appointment yesterday where he was telling me I had to go to a running store, somebody that specialized in this get, you know, the insoles all these things because I've been running longer and longer distances. And so I'm going to become a customer and I can see all of that.
Steve Sashen (03:23):
Here's the thing that's really interesting to me. The research could not be more clear that if you, I'll give you an analogy. You break your arm, you put it in a cast. Eight weeks later, does it come out stronger or weaker?
Chris Ronzio (03:36):
Steve Sashen (03:38):
When is weaker ever better than stronger? Never. So if you immobilize any joint, it makes it weaker. The research is very clear. You immobilize your foot. It gets weaker. There's a, where they took healthy athletes, put art support in their shoes. And within 12 weeks they had lost up to 17% of the muscle mass in their feet. Tell me how that's good. Conversely, there's research that shows if you just walk in shoes like ours, it builds foot muscle strength. As if you're doing an actual, the same amount as if you were doing an actual foot strengthening exercise program.
So again, this industry, the footwear industry has been built up around these ideas. Like you need protection, you need our support. You need cushioning. The research on cushioning shows, the more cushioning you have, the more force you're putting through your body, because your brain can't tell what the hell is going on. And it's trying to feel something. And you end up landing in a way where you're trying to use the cushioning of the of the shoe, but that's never as good as the muscles ligaments and tendons in your body can do. And so the cushioning of the shoe means you're sending force right up into your joints instead of letting your body work naturally. So most of what you hear people, oh, sorry, last one. I'll rant about. And I know I sound like I'm ranting cause I am. So you go to a running shoe store and they throw you on a treadmill and say, well, this is the kind of shoe you need.
Well, the army did a massive study to see if that actually, if the recommendations that come from that kind of thing, uh, improve performance and reduce injury. And the answer is, no it doesn't. So the whole idea of we're going to match a shoe to your unique snowflakey personality, complete marketing. It's been around for years because it sounds good. I'm a unique little snowflake and you know, some 23 year old kid just told me, that's the shoe I need. How could he be wrong? So, you know, one of the reasons I'm in this business is because I get almost personally offended when people lie to consumers in order to make money. And that's what the footwear industry has been for the last 50 years. And I find it completely repugnant.
Chris Ronzio (05:30):
Well with a lot of people, I have to really pull the passion out of them. But I think, I think it's, you're really passionate about this. So, so why this 11 years ago, you said you started this business. How did you get into this?
Steve Sashen (05:43):
Um, I, 13 years ago, I got back into sprinting after a 30 year break and I was getting injured pretty much constantly for the first couple of years. And a friend of mine who is a world champion cross-country runner, which admittedly in Boulder is just like saying my neighbor cause they're everywhere. This one particular one, a good friend of mine suggested I try running barefoot to see if I learned anything about why I was getting injured. And in short, I learned that I had a gait problem. That was obvious when I was barefoot, but invisible when I was in shoes. By changing my gate, which is easy because in bare feet doing it wrong, hurt and doing it right, it felt good. And by making that change, my injuries went away. I became faster. I'm a masters All-American sprinter. So for men over the age of 55, I'm one of the fastest guys in the country.
I wanted that natural movement feeling that benefit I was getting from being barefoot, but I got sick of arguing with people about whether I could get into their restaurant or their store. And so I made a pair of sandals based on this, you know, 10,000 year old design. That's essentially just something to protect your foot and something to hold that protection on your foot. And that's really all footwear is. Uh, and then people kept, um, asking me to make sandals for them. And I made some for them and they told two friends and they told two friends. And one day a guy says, I've got a contract to write a book about barefoot running. And if you shoot a sandal making hobby like a business and had a website, I could put you in my book. And so I rushed home and I pitched this incredible opportunity to my wife who tells me I'm a complete idiot and it won't make any money and we shouldn't do it. And it's just another ADD distraction. And, you know, just don't. I said, all right. All right. And so after she went to bed, I built a website.
Chris Ronzio (07:22):
Steve Sashen (07:23):
When I showed it to her, she kind of growled at me and I said, look, the people who are ranking for the keywords that I care about, they're there by accident. So I think I'm going to own this and you know, few months, and it only took us about six weeks. And when Elena realized this was a real thing, she said, look, if we're going to do this, you know, you need to let me run operations. And I said, yeah, and here we are.
Chris Ronzio (07:45):
Wow. So, building something like a footwear company, especially when, like you have that has, you know, casual shoes, athletic shoes, walking shoes, everyone has feet, almost everyone has feet. So this is a massive market. When you set out to do this, did you want it to be a huge business? Was it a lifestyle company? Did you think you'd have 52 people 10 years later?
Steve Sashen (08:06):
No. Uh, we thought it was going to be a lifestyle thing that we'd be able to flip in a couple of years for like $5 million. And then it became clear that wasn't going to happen around the time that things started growing in ways that we never imagined because of people that we met, who we never thought we would meet, who, you know, we accidentally bumped into or friends of friends. I mean, we have our chief product officer. We have him, he formerly was the head of global product design at Crocs. He worked for Converse and Wilson, and he co-founded Avia way back when.
We met him because he was walking the dog, his dogs one day instead of his wife. And he bumped into a guy who was walking his dogs instead of his wife. The dogs knew each other, so the guys had to talk. And our friend said, "what do you do?" Oh, I developed shoes. Hey, you need to meet my friends, Steven and Elena, here's my phone number. And I'm thinking, why would this guy want to talk to us? We were selling a, do it yourself, sandal making kit at that time. And so I finally gave him a call. We got together for lunch. I said, I'd love to have someone like you working for me someday. He goes, what about me now? It's like, what? I can't afford you. He goes, I'm, I'm retired. And I believe in what you're doing. And so we've been working with Denis now for eight years or eight or nine years. Uh, and I mean, if it weren't for the dogs, knowing each other that would have never happened.
Chris Ronzio (09:20):
Wow. So the whole thing goes back to those two dogs. So if you're listening and you don't have a dog, you should probably get one and you should probably live in an area concentration of talented people. If people are not that lucky though, there have to have been some, some pretty important milestones or moments along the way where you really hit a growth trajectory, you know, getting some kind of distribution, getting some sort of a customer, an introduction. Were there other things along the way that just made you take off?
Steve Sashen (09:49):
Um, no and yes. I mean, it's actually been pretty steady with this one bump that happened in 2013 when we appeared on Shark Tank. And so we did about three months worth of sales in the first month or the first week after the show. So that gave us a bump, but actually the year after Shark Tank, we made slightly less money than the year we were on Shark Tank. And so that was a little bit of a dip, but then after that it's been pretty consistent. Um, I mean, this is public information. We went from, I don't remember how we, like, we went from, you know, 600 grand to 800 grand to 750 to 1.4 to 2.8 to 5.5 to 8.8 to 12 point something to 23. I mean, you know, it's been pretty much like that. People keep telling us, well, you know, you can't keep growing at 50 to 80% a year. I go, yeah, of course we can. So we have some, some things that are in the works now where I can imagine things growing significantly faster. There's a lot of room to grow in footwear. As you said, almost everybody has at least one foot. And, uh, not that we sell to everyone, we're not, that's not the silly statement I would make, but suffice it to say there's a lot we can do where we can accelerate our growth in ways that most people think is not possible.
Chris Ronzio (10:59):
So out of the gates, you had you and your wife, you added a footwear designer a couple of years in, um, how did you remove yourself from the small business mentality of wanting to do everything? What were the few crucial hires you'd say you made at the beginning?
Steve Sashen (11:15):
Um, well, the first thing we brought on someone for customer service, because I shouldn't talk to human beings cause I get, when, if any, whenever someone has a problem, I take it kind of personally and I want to alleviate my stress as quickly as possible, which means I'm not necessarily the most patient person when I'm on the phone with, you know, dealing with customer issues. So we knew instantly we had to get me off the phone. The second thing was we brought in someone to handle all the shipping and fulfillment. And so this was when everything took over our house before we moved into an office and then we just kept doubling up. So additional customer service people, additional shipping and fulfillment people.
That was sort of the first thing, but I'm a marketing guy from way back when I've been an internet marketer since 1992. And I'm still extricating myself from a lot of day-to-day stuff. Partly, let me say it slightly differently. What allowed both Elena and I to bring on additional people to do things that we were doing is that we just don't have the time. I mean, there's too much to get done. And so we knew we had to offload as much as we can. For me, it's been for both of us, it's actually, it's been challenging because we're really good at what we do. And it's hard to find really good people, especially when we were a tiny little company where we can't pay market rates for the kind of talent that we needed. That's been an ongoing challenge is finding the right people at the right stage of their life and our, that matches with the right stage of our company or the current state of our company.
Chris Ronzio (12:52):
How do you screen for that? Because it seems like you've got a culture and you've got a type of person that would be great for the company. So what tricks do you use to find out if someone's going to be a good fit.
Steve Sashen (13:02):
Oh, that's so sweet and innocent that you think that's possible.
Chris Ronzio (13:09):
Sometimes these are set up questions, sometimes they're trick questions, but I'm curious.
Steve Sashen (13:13):
That was not a trick question. That just, that's just dumb. So, what I mean is, you know, anyone in business has the idea that certain kinds of problems are solvable and they're just not. So the one that's not solvable is finding the perfect person for filling in the blank, because you're gonna hire someone. And let's say they are the perfect person. What happens when they have a death in the family, or they get ill, or they get a better offer from someone else or whatever, but think about the relationships you've been in, where it starts out good, and then you find out that one of you is crazy. And it's usually the other one until you realize that it's actually probably you. So one of my lines is, all companies rise to the level of neuroses of their founder.
And so you're ideally kind of looking for someone who does fit culturally, they match your neurosis while also not matching your neuroses, so they can do the stuff that needs to get done, that you don't have the brain space to do. Like, I have a director of digital now, and one of the things that's so great about him is that he's really organized and really meticulous and keeps lists and charts. And I just don't do that. I keep it all in my head. It's stupid, but that's just the way my brain works. We've had more than our share of people who walked in the door and they were great and walk out the door, uh, not so great. And there's, you know, one of the things that happens is as the business grows, people start seeing dollar signs. And when they start seeing dollar signs in their eyes, that changes the way they think and feel and behave. We had one person who said to us, um, "I think I deserve equity in the company." Elena and I said, "that's cool. We're personally guaranteeing $5 million in debt right now. How much of that would you like?"
Chris Ronzio (14:55):
Yeah, it's it not everyone understands what it takes to be an owner. If you see the bright side of it and you don't see the hard parts.
Steve Sashen (15:03):
I had a previous company, it was a software company. I've found a programmer recently to redevelop the code. And we got into a conversation about compensation. And he said he wanted 30% of a royalty of 30% of gross sales. I said, I can't run a business on that. And he goes, "we'll figure out a way." I went, "no you don't understand. It's literally not possible to run a business on 7 cents out of every 10 cents." It won't work.
Chris Ronzio (15:30):
Steve Sashen (15:32):
Yeah. Out of every dollar that we make 50 cents of that is coming from marketing or 30 to 50 cents of that's coming from marketing. Now you're leaving me 20 cents to run the rest of the business. I can't afford rent with that. And he didn't understand and just quit. It's like, all right, well, you know, I was spared.
Chris Ronzio (15:50):
Yeah. Lucky you. So, as you grew, and as you brought on people where there areas that you think you held on to things too long, and to the point where it was so burdensome that you dropped the ball anywhere, anything come to mind there?
Steve Sashen (16:03):
Uh, yes and no. The yes is everyone's always dropping the ball. Again, it's an illusion that everything will be caught handled, thrown to the right base, etc. So balls are always dropped. That's just the way of it. Um, and the other part is, how do I describe this? I think there's definitely a lot of things that I did because I'm good enough at them and fast enough at them, where it would have been better if I had found someone, if I had spent the time to find someone to take on that task. That's still going on. I mean, I built our first website. It took a while till I found a developer, which again, happened by accident. Someone that they just met to brunch, and that guy is now one of our lead developers.
It's easy to look back and try to play Monday morning quarterback. But again, part of the challenge is we were growing at a rate where people... we needed a special person. We needed someone who really believed in what we were doing and had the skillset, and didn't have overly burdensome financial requirements, personal financial requirements. And that's a really hard combination to find and finding someone really good, put all that together. That's a quadruple threat. That's pretty hard to find. And we were lucky and we found some, but there was also times where we haven't and still haven't.
Chris Ronzio (17:24):
Hmm. So as you continue to grow 50 to 80% a year, like you said, how do you assess the things to fix in the company? You know, your operations keep getting bigger and bigger. How do you take inventory of what needs to be done and make these strategic objectives?
Steve Sashen (17:40):
Uh, it's pretty easy. It's when you start seeing the things that are falling through the cracks and figuring out, do we have someone on board who should have known been able to take care of that or not? If they had someone who should have been, and they're probably not the right one. And if we don't have someone at all, then we either need to grow them or harvest one from somewhere.
Chris Ronzio (18:01):
Well, hopefully, as you move forward, it sounds like fewer and fewer things fall through the cracks because you guys are blazing a path. It sounds like.
Steve Sashen (18:10):
I think you're right. We're at a point now where we are starting to fill the team out with those things where there were cracks. Um, so, but, uh, but again, all I can say, somebody asked me once, what's your company going to look like at a hundred million? I said, I have no idea. I've never run a a hundred million dollar company before. Why are you asking me that question? So there's the company. I was at an event with a bunch of CEOs of multi-billion dollar brands. And at one point I was wondering why I was invited to this thing. And I was introduced as the only founder. And then all these CEOs came up to me afterwards and said, you know, we're so proud of you and impressed with what you're doing. Cause we couldn't do it. It was like, oh right.
Steve Sashen (18:49):
Once a company gets to a certain size, just the requirements for different positions emerge and are completely different than anything that happens at whatever that previous stage was. So we're just starting to move. You know, we're kind of in the awkward teenage phase right now and becoming adults, there's a level of talent and role that shows up that it didn't exist. As we move into doing more retail. There's certain kinds of people that we need on the team that we haven't needed before. So all of it's really just dictated by looking as far on, out on the horizon as we can. And it's just screamingly obvious. But then the question is, can we get them at the right time? Cause you don't want to hire someone too early because then they're sitting around doing nothing and you don't want to do it too late. Cause that's a pain, but again, no one ever gets this right. Certainly not all the time.
Chris Ronzio (19:39):
Well, and it sounds like your role keeps changing too. I mean, at the beginning you were doing the website, you were doing the R and D, running around barefoot packaging kits together, marketing. What's your, day-to-day like now, what do you focus on today with the 52 people?
Steve Sashen (19:56):
Uh, you know, it really hasn't changed for me. One of the greatest satisfactions I've found in my life is the fact that I'm working with my wife. So she is just a brilliant financial and operations person. So I've always been on the product marketing side. She's always been on the finance and ops side. So the only thing that's changing for me is how much I can offload to people, but it's still, you know, it all lands in my, still in my lap. The thing that has changed is I'm doing less hands-on things, a little more delegating and more meetings to just oversee how things are going. I can see things in the numbers really well. All the marketing people that I work with, I have enough ideas to move, help, move them forward. What I'm best at is thinking of, new versions of things or clever new ways of doing something or on the product side, we had a product that we were developing that just looked too much like all of our other products.
And I came up with a way of changing that. So I know nothing about footwear per se, or I'm not a footwear designer, but when you look on the wall behind me, there's a bunch of things that I've got patents on and a bunch of things that I thought of that no one else had thought of because I knew nothing about footwear. So the only thing that's changed is, um, just how much of the hundred percent of the stuff that I would normally get. What percentage am I doing now? But my fundamental role is still really the same.
Chris Ronzio (21:18):
I love that you still get to experiment and put your special, your secret sauce in all these different areas of the business. It seems like you're having fun. So thinking back, I guess the last thing here is if you could have put something in place that you have now 10 or 20 employees ago, is there something that you'd recommend to a company that's growing into your phase?
Steve Sashen (21:40):
Oh my, um, that's going to be different for every company just based on who you are and what your skill set is. So I can't recommend anything for anybody else, uh, because there's not, this is another thing that human beings love to do. We like to think that there's a way to do it. You know, first, we look forward and we imagine I'll be happy in the following imaginary scenario. And then when we look backward and say, what have people done to get to that life that I think will make me happy and then we try to reverse engineer it. But that is a recipe for failure because, if you ask the people who did what you think they did to get to what you think you want. If you ask them how much of what you did was luck and chance and fate and things that were out of your control or circumstantial, or just because you have some weird personality trait versus something that's reproducible.
Steve Sashen (22:31):
What do you think? And that first batch is much, much bigger. Um, because so much of it is just dependent on all these crazy factors that align or disalign one day to allow you to do you know what happened? One of the surest signs of a business that might fail is that it's being run by someone whose previous business was a big success, because they're often going to think that it was them who are the delimiting factor in the success and that they're having, you know, the feeling they're having now is just like the feeling they had when they started that last one. And that's the surest sign of, you know, that you're on a path to destruction.
Chris Ronzio (23:06):
Well, I love that you called that out. You know, we often say that, hopefully these interviews are useful for people because they can borrow just a page from your playbook as they build their own, because everybody's story is different. Everyone's personality is different. Everyone's business is going to be different. Um, but hopefully everybody that's listening. You've heard some incredible tips from Steven. I mean, what a cool story to go from from you and your wife and a website that she told you not to create, to the dogs that introduced your product designer, to the sharks that got you the television fame. What a ride you've been on from just you two to 52. So thanks for being here today.
Steve Sashen (23:44):
My pleasure, thank you.
Chris Ronzio (23:45):
If people want to connect with you, where can they find you and Xero?
Steve Sashen (23:49):
You're asking how they can stalk me. Is that what I just heard?
Chris Ronzio (23:51):
Steve Sashen (23:51):
Yeah, it's really easy. Xero Shoes. xeroshoes.com. But if your computer autocorrects to Z E R O shoes, that'll still get to us. And otherwise you can find us at, @xeroshoes or /xeroshoes at whatever social media you at or slash at.
Chris Ronzio (24:05):
Amazing. All right. Like I just mentioned everyone. Hopefully you can take a page from Steven's playbook and put it in yours. Thanks again, Steven.
Steve Sashen (24:13):