How does one man turn a small British family firm into a billion pound company? Join Joe Foster (Co-founder of Reebok, Author of Shoe Maker) and Eric Partaker, as they share tips on how to reach the 2%, and how Reebok became the phenomenal success it is today!
KEY POINTS
Fall Down Seven Times, Stand Up Eight – Don’t give up. You can get knocked down repeatedly but if you don’t keep standing back up you’ll never succeed.
Ride The Waves Of Success – When the waves come in, don’t question it. Ride it and keep going because you never know when it’s going to stop.
Face Up To Your Problems! – Are you trying to dodge your issues? Face them! That is the only way to resolve them and inevitably move forward.
Failure Is Your Teacher Not Your Undertaker – The only way to really find your way to success is to understand that failure is a part of it. Failure will allow you to learn and grow. Embrace it and enjoy the journey.
You Are Not Born With Brilliant Ideas! – Brilliant ideas come after taking steps, and those steps are often failures. However, don’t give up because it’s one step closer to success!
Never Give up, Great Things Take Time – Adopt the attitude that you will never give up. Build a culture, a winning culture, so that the people that are riding along with you, are suffering with you, but are winners and will eventually succeed with you.
Use What You Have, Do What You Can – What resources do you have? How can you utilise the resources around you for company gain?
Open Your Eyes! – Opportunities often zip by and you don’t even notice. Always be on the lookout for new opportunities, don’t let them pass you by.
TRANSCRIPT
Joe Foster:
We’d only been in our offices about four years when a letter arrived from the lawyers of Adidas. Adidas have three stripes, we were using two stripes and a T-bar and they said that this was infringing their three stripes and if we didn’t desist, they would take action. Well, first of all you think, “Oh.” Then we started smiling, “Wow, Adidas, they already know we’re here.” I wanted America, but running was becoming big in America, really big. Everyone was out there putting their pro trainers on and going out running, and running was growing. And with it, was this magazine, Runner’s World. That was the break. A lot of luck, a lot of good timing, but I knew we could make a faster shoe.
Eric Partaker:
Hello everyone, and welcome to another episode of The Two Percent, where we have amazing conversations with peak performers in all walks of life to help decode excellence, to help give you the strategies, tips, tools, perhaps just inspirational stories to help you close that gap between your current and your best self. And I’m super excited today to be talking with Joe Foster. Joe is one of the co-founders of Reebok. We all know that brand, mega-galactic billion dollar sports brand. And Joe is with us here today. So welcome, Joe. Real pleasure to have you.
Joe Foster:
Thank you, Eric. I’m delighted to be here with you, and hopefully we can shed some light on that two percent. Who knows.
Eric Partaker:
Yeah, absolutely. And of course, Joe is referencing the name of the show and as a quick reminder, we call it The Two Percent because Abraham Maslow, the preeminent psychologist estimated in his work that only two percent of people operate at their full potential in work and life. And so the idea here is let’s come up with some tips and strategies and tools to break free from the 98% and join that two percent.
So, we’re first starting right at the top there. We’ve used words like billion dollar. We’re talking about the two percent already, maybe we can bring things back down to earth a little bit, Joe, and maybe you can share some humbler beginnings, because I know you certainly talk about that in your new book, Shoemaker, which we’ll be talking about as well. Can you tell us a bit about your beginnings and how things started?
Joe Foster:
Well, really, when we started with Reebok, we didn’t have any plans in mind. We were following a family history. My grandfather in 1895, now I’m really taking it back now to 1895.
Eric Partaker:
1895, wow!
Joe Foster:
He was just 15 years old when he made himself a pair of running shoes with spikes on the bottom. A lot of people say he invented it. I think more, he was a pioneer than an inventor. I think most of these things are picked up, because he actually picked up the idea from his grandfather. His grandfather was a cobbler, repairing … in the UK, repairing cricket boots, and cricket boots had spikes or studs on the bottom. And I’m pretty sure, because he used to visit his grandfather, I’m pretty sure he asked him why they got spikes on the bottom for these cricket boots.
And he obviously responds with, “To give them grip.” When you’re bowling, when you’re batting, when in the field, so I think he went back with this idea, being a member of his local athletics club, thought, “If I could get some spikes on the bottom of a pair of shoes, that would give me more grip and maybe that would promote me at the field,” which it did. And it promoted him up the field from being fairly average to becoming number two in the event that he wore his shoes. Of course-
Eric Partaker:
Wow.
Joe Foster:
… that caused a lot of interest. I think the question was, was he cheating wearing those shoes? Was this the start of a business? Well, it was the start of a business. Fantastic business. Well, we talk about 1895, he’s 15, by the time he’s 20, he had a business and he was selling his shoes not only locally, but throughout the UK and in some instances, throughout the what was then, the British Empire. So we’re talking Canada, Australia, South Africa.
He was selling his shoes that far and wide. And by 1904, he had three world records in his shoes by one man and that was Al Shrubs who on one event, a mile … no, a one-hour event broke three world records in Glasgow.
Eric Partaker:
Wow.
Joe Foster:
And then it goes on. We have World War 1, of course, which took away the second decade really from 1910, what, 14 to 18, it more or less went. But 1920s, that was his real Bellpop. In fact, we have a replica letterhead on which it states that he supplied all the athletes in the Antwerp Olympic Games in 1920.
Eric Partaker:
Wow. Ok, so that’s interesting. So everyone talks about influencers today, but he was doing the influencer model 100 years ago.
Joe Foster:
Absolutely. I mean, he must’ve given his shoes to Al Shrub, and he obviously gave his shoes to the Olympians and they got so many gold medals. Have you heard of the film Chariots of Fire?
Eric Partaker:
Yeah, of course. Of course.
Joe Foster:
The Chariots of Fire immortalizes three athletes, Eric Little, Harold Abrahams, and Lord Burghley. They won gold medals. I think Little and Abrahams won theirs in 1924. I think that might’ve been in America. And then I think Lord Burghley won his in 1928. But there were three Olympians who got gold medals, and they actually won the gold medals in Foster’s shoes, in my grandfather’s shoes, Joe Foster. Same name as me, of course.
Eric Partaker:
So before there was Reebok, your family is doing a … essentially it sounds like predominantly focused on running shoes, a running shoes business.
Joe Foster:
Well, not just running shoes. They supplied, I think it was about 95 teams on the same letterhead. They supplied 95 either football teams, which you may know better as soccer, but being in the UK, known as football. We talk about Man United and Man City, Oslo, every real football team in … on his letterhead, he’s supply them-
Eric Partaker:
Wow.
Joe Foster:
… with training shoes and boots. But of course, we talk about influence. In those days, the influence was to other performance athletes. Hang on street, now influencer street, big street, and it was so when Jeff and I started our company in 1958. But to finish off what grandpa … grandfather died in 1933, so a very successful 20s. Great. And then his sons took over, my father and my uncle.
And I wasn’t born until 1935. I happened to be born on his birthday, the 18th of May, so my grandmother, of course, who was quite a fir , he brought his name with him. So that’s why I’m called Joe as well. So I’m called Joe.
And of course, in 1935, we’re just four years away from World War 2. 1939 till 1945 we’re in an area where it’s war, no athletic shoes are being made, really. The Foster company are repairing army boots. They had to do something. And my father was scrubbing the mud of flounders off the boots in the yard and he used to tell that story quite often. There was more red in there … more blood than mud. And the story was quite gory, really.
But anyway, that’s it. So I’m 10 years old when suddenly the lights come on again. We had no street lights all through the war, we had no streetlight, nothing. So the lights come on. However, during the war, we had … we’d been able to look at bombs dropping on Manchester. We were slightly elevated in Bolton and it overlooked Manchester, and so you could see all the lights of the flames and whatever.
So, that was an experience, but we was young, you don’t know any difference. That’s life, as they say. That’s what happens every day or whatever. 10 years old, the lights come on again and I go to college. In fact, I do engineering college. I don’t do anything to do with athletics. But when I was 17, I did join the J.W. Foster company, one year.
And then at 18, about 17 or 18, you had to do two years of national service. So I had to go off … I served in the area and Jeff went … even though Jeff was two years older than me, he went the same time, but he went to Germany. And he saw what’s happening in Germany, Adidas, Puma. Oh, what they’re doing. Look at the improvements there they’re making on the shoes. When we come back after two years, we come back to the company. It didn’t take long to look at our company, J.W. Foster and say “This is a failing company. It’s dying-“
Eric Partaker:
And what made you think that?
Joe Foster:
Because it was still making shoes that we’re making in the 1930s. It did not move on. Life was so easy, so good, grandfather had built such a reputation that it carried on. But of course, their orders were diminishing, they were going down. We need to get sales back. We need to change. We need to get a plan. We’ve got old machine. We need to get some new machine and new ideas.
But unfortunately, my father and uncle, and I still don’t know today why, they just didn’t get on. They were feuding. In fact, they were fighting, literally. Jeff and I had to pull them apart on more than one occasion from fighting. About what? Again, I have no idea.
So we looked at this and thought, “This is an impossible situation. We can’t get them to change, so what can we do?” Set up our own company. So we went to college, night school, and we learned a lot about shoemaking. Because we knew what to do in the Foster’s shoemaking company, which was to make running shoes with spikes on the bottom. Rugby boots, we made a lot of ruby boots, but we didn’t know much about materials.
So going to college was very good for us, because we made friends. We made a lot of association with people who were either teaching or other people that were coming to the same classes. So when we left in 1958, we had no money really, just bits and pieces. So to set up a company and we set up six miles down the road in the next town called Barry, which was nearer to Rossendale Valley which was the shoemaking area of Lancashire.
When we set up there, we had to buy … you could buy cheap machinery there. Even that was better than they had at Foster’s. J.W. Foster’s had this very old machinery. And we were buying second-hand machinery for something like 25, 30 pounds a time. Not much money at all. But second-hand shoemaking machinery, who wants it? But we did, so we set up our company. And we set up our company in 1958 as Mercury Sports Footwear.
Eric Partaker:
And how did you come up with that name?
Joe Foster:
Oh, well, I think Mercury, the wing messenger, the wing messenger carries his torch on his wing. That sounded like athletics, that sounded like something good, so Mercury, of course, has this quicksilver sound to it. So that was a good name and we came up with that, and that became our name for 18 months.
Eric Partaker:
And then something promoted a change to the famous Reebok.
Joe Foster:
Well, yes. Our accountant, our accountant said, “Well, look guys, you’re doing well. You’re making some money, you’re making some nice product, but you better register your name.” “Oh, all right. Okay.” I’m 23, well, by that time I’m nearly 25. We’re young. We look at our accountant saying, “What do you mean register our name? Why?”
“Well, if someone starts making shoes and if they decide that that name Mercury sounds pretty good and just start making Mercury Shoes, you’re going to have trouble, because you’re going to have to prove it was you who started first, and that’s going to cost you a lot of money in court. Go register it.” Well, that’s when we found out that Mercury was already pre registered.
Eric Partaker:
Oh, gosh.
Joe Foster:
Lawson and Dale part of a British shoe corporation. And the annoying thing is, they weren’t using it. They had it registered for shoemaking, and of course, we were shoemaking even though it was sports shoes. They had it registered. And they offered it to us for 1000 pounds, but if somebody offered you for something for, say, half a million, you’d say, just a minute. I’ve not got that to spare at the moment. We don’t have it.
So I went along to see an agent, Peyton Dayton in Manchester. It was a very nice day, I think it was something like May, and I’m sitting in his office, the window was open and he said, “Okay, you’ve got to find a new name.” And he pointed through his window to Kodak and I said, “Okay, Kodak. I know what Kodak is.” He said, “You need a name like that. Something that means nothing. It’s made up, it belongs to them. Get me a name like that.”
I went back and Jeff and I would sit down and we had our wives, everybody started scratching at what should … come up with a new name, you got to name your company. We said some things like cougar, “Yeah, that’s good.” “How about falcon? Falcon, that’s-“
Eric Partaker:
One of the hardest things to do, isn’t it, is naming a company. It’s so hard.
Joe Foster:
And so we had this list of names, but hang on, I’m going to take you back to 1943. I’m eight years old, it’s in the middle of the war. I’m in a running race, a local race event, and I win a 60-yard sprint. I mean, I go up to collect my prize and what do I get? A dictionary. They’ve given me a dictionary. Where were all the toys, guys? Where were the things to play with? Where’s the fun?
Eric Partaker:
Exactly.
Joe Foster:
It was a Websters Dictionary. That didn’t confuse me at the time, but the Websters Dictionary is an American dictionary.
Eric Partaker:
Oh yeah, that’s right.
Joe Foster:
So why give somebody in the UK who was going to school, he learns how to spell color, C-O-L-O-U-R, and he looks in his dictionary and it’s spelt C-O-L-O-R. Oh. So this is what little changes of spelling, the word’s the same, but a lot of U’s are taken out in America spelling of anything. I didn’t know at that time, but I pick up …
We’re now going forward again to looking for names and I pick up my dictionary and I outline the letter R. I thought, “R, strong. Well, yes.” I open the dictionary at R and I’m thumbing through. It’s not long before when you get through the R-E-E-B-O-K. Reebok, what’s that? A small South African gazelle. Wow, a gazelle. That’s it. We’re fast, We’re speedy it would-
Eric Partaker:
Perfect.
Joe Foster:
Top of the list. I take this list back to our agent who said, “Look, these are all the names, but we need this one, Reebok.” We’ve got to be in love with it. It’s got to be our passion. We’ve got to really feel this. As it happened, Reebok was the only one that came clear from the registrar. But the registrar had made one little comment, and that is, we’re going to have to put you into the B section. “What’s the B section?” “It’s a register.” “No, we have the B section. Why the B section?” “Well,” he said … oh dear, his excuse was if anybody came and said we’re making shoes out of Reebok skin, I can’t stop them. And you can’t stop them. The law, they can do that.
But Jeff and I, we looked at each other and thought, “That’s going to be a rare experience. That’s never going to happen.” So we registered Reebok. 20 years later, the registrar came back and said, “Look, we’ve moved you from B section to the A section of the register.” “Oh, wow.” “Well, everybody now knows that Reebok is a shoe. It is not an animal anymore.” So that’s how we got Reebok.
Eric Partaker:
Well, that’s fascinating, because I didn’t realize that it was an animal either. I thought it was like Kodak. Well, for all I know, Kodak is a word as well, like a real word. I’ve built a few different businesses over the years and when it comes to naming a business, oh my gosh, it’s just so difficult. So many things go through your head and you get to these highs and lows and these high moments you’re like, “That’s it! That’s the name.” And then after a day or two, you’re like, “No, it’s not it.”
Joe Foster:
[crosstalk 00:17:41].
Eric Partaker:
Fantastic. So, all right, I like where we are now. So you’ve started the business, you’ve renamed the business now, and you talked about buying machinery earlier. And in your book, Shoemaker, and anybody listening or watching, you got to read it. It’s absolutely fantastic. Basically, the untold story of how the mega Reebok brand was built.
But in there, you talk about there’s this moment where because the factory floor was so weak, you had to keep the machinery on the perimeter of the floor so it wouldn’t fall through, right?
Joe Foster:
Absolutely right, yes. It was an old brewery, an old berry brewery company, and right in the middle of the brewery, there was a big well, just a big well. And this was full up by the people who rented before us, they did something with mattresses. I think they re-stuffed … so this was full of mattresses.
Okay, so the middle floor, but as a brewery, there was no windows on the ground floor. I don’t know why there was no windows on the ground floor in the brewery, no windows, so we couldn’t use that. Middle floor, great. Three floors, up on the top floor, half of that floor was really rotten because there was hardly … so many slates missing from the roof that rain was coming through and it had been coming through for years. And up there was buckets, cans, everything, just to catch the rain.
And we had to go and check this every other day, certainly when it was raining we had to go check to make sure … we had no money, we’re not going to put a new roof on this. And the people who owned the building, they weren’t going to put a new roof on it either.
So we’re in the middle floor and we’re thinking … you could feel the floor, sort of bouncy. Some of this machinery was quite heavy, so we decided, put it around on the edges. And then we had, in the middle, we had a sort of a workbench so you could actually work on it. Workbenches were okay, but the machinery had to go around the edge.
And I do remember, because after we had left Foster’s and went two years later or, a bit more, it was more than that, they closed the factory down, because eventually time caught up with them. That was it. My uncle died, in fact, about two years after we left. And my father was left with this company and he wasn’t taking it anywhere.
So, it closed down. And what he did say was, “If you want any of the machinery, of our machinery, you can have it.” I mean, it was very old in the first place. But we were still short on money and we said, “Well, he did have a press, a big press” It must’ve weighed well over a ton. Big steel press, which came down and cut out the leather for the soles of the shoes.
Well, that wouldn’t be a bad idea. So we got somebody to bring it over to our place and we offloaded this on the floor, then we had to take it up to the first floor. And this was a ton, this was a way, and we had a staircase just a bit wider than the machine.
Eric Partaker:
Wow.
Joe Foster:
How do we get this up here? So we had planks down the staircase, we levered it onto these planks, and then we had a chain and pulley to pull it up. And I remember being behind this pushing and it was only after thinking, “My god, if that had slipped, me and the other guy, we would’ve been minced meat. Boom. Flattened.”
Although, we did get it to the stop of the staircase. And then we got it onto the floor, we had to move it to the far end, because again, it was how do we make sure this machine is going through this floor, so we had some big pieces of wood that we intend to put it on that would take the weight, spread the weight. We had to take it across the floor. So … we got the crow bar, leave it underneath, and every time we tried to lift and push it, the crow bar went straight through the floor.
Eric Partaker:
Geez.
Joe Foster:
Oh. We were got it across there with rollers and … but every time, the guy who used it best, every time it came down, the floor would just go … or just bounce.
Eric Partaker:
So very humble beginnings, indeed.
Joe Foster:
Very, indeed. Exciting. You’re young, well, what can go wrong? You’re indestructible, aren’t you? We were 23 and 25 when we started. So, we’re young.
Eric Partaker:
But I think this is a fantastic message though, for the people listening and/or watching, that you weren’t given … it’s not like the company was given to you on a platter, you created it. You had to make use of used equipment, equipment that you otherwise couldn’t afford. You’re making use of factory space that is in such a state of disrepair that the machinery might even fall through the floor.
This is not extravagant, an extravagant start to the business. But I think it would be nice to hear though, so what was the first moment … what happened when the money started to come in? What was that first inflection point?
Joe Foster:
I don’t know really. I know there was times when the money didn’t come in and I know the accountant on one occasion said, “Look, guys, you’re insolvent.” Again, we’re shoemakers, we’re not accountants and we don’t have all these big words at that moment in time. It’s like entrepreneur, in those days, who’d heard of the word entrepreneur? No.
And the accountant says we’re insolvent, “What does that mean?” “Well, what it means is you owe more money than you’ve got.” “Oh, I see. So what does that mean?” “Well, if somebody wants the money and you can’t pay them, you’re going to go out of business.”
And you’re thinking, “What can we do?” All we can do is get on with it. So, the accounts went in a drawer, I shut the drawer too, and we just got on with making shoes. And if anybody came on, I would make it my personal job that I would answer the phone, and if necessary, I would even go and meet them and say, “Look, give us some time. This is our problems that we’ve got, give us some time. We’re doing okay.” And everybody, but everybody said, “Okay, Joe. We’ll give you some time.”
So the lesson to me was, don’t try and dodge around these things, face them. Face these problems. We’d only been in our business about four years when a letter arrived from the lawyers of Adidas.
Eric Partaker:
Uh-oh.
Joe Foster:
I opened it up. We were using two stripes, Adidas has three stripes. We were using two stripes and a T-bar, a T-bar, and they said that this was infringing their three stripes and if we didn’t desist, they would take action. Well, first of all you think, “Oh.” Then we started smiling, “Wow, Adidas, they already know we’re here. They know we’re here. We’re now a threat, isn’t that great?”
So what do we do? It was like changing the name, we could change our side stripe. So we ended up with what is now known as the vector, which is a nice arrow shape and then the lateral stripe which comes across, and that now is the … that became our silhouette and it is still the Reebok recognized silhouette, even from back then.
But it was like, Adidas, we can’t fight Adidas. Do we want to fight Adidas? No. Isn’t it brilliant that we got this letter? I know for quite a while, it was on the wall. We had that pinned to the wall. That’s great. Wonderful!
Eric Partaker:
It is, and it is a statement, because they wouldn’t send you a letter if they didn’t perceive you to be of no threat at all. And there you go. So it’s like, more letters, please, in a way.
Joe Foster:
More letters please, you’re right. You mentioned money. We started expanding our company and we became known as the athletic shoe company in the United Kingdom. Now, there were other shoemakers, other people made running shoes, but they seemed to be part of the manufacturing industry. They seemed to be part of footwear manufacturing. We seemed to be part of sport.
We made the shoes, but we made them for the sport that we were actually working in. We went to athletics meetings, we talked to athletes. And athletes would come. Most of those athletes would come around. And if we wanted something, do it. If it was a plumber, he would come and do some jumps for us. They came and actually did work to help us get our factory up and running.
And they’d buy the shoes as well. On occasion, we could afford to give them, but we didn’t give too many away, and these people just came. They wanted to help us, so we became part of a fraternity. So if anybody wanted running shoes or even barter style, or there were people on the high street shops, if they wanted to, as they did eventually, tried to get into produce a sports product, they came to us and we made them for them, because we were the ones … they knew if it was made by Reebok, they could always sell it. “Reebok are making this for us.”
And so we got that reputation, so we started making some money. Again, I had a very bad experience, because we’re going … a friend of mine who was a sales director of a company said …they make football boots, we didn’t. And they had a good range of football boots, although they did have three strips on them. They were getting away with that. I don’t know how they got away with it.
Maybe they bluffed. But all they were making were football boots. But running and athletics was growing as a category and the shops were looking for this, so he suggested that they act as now a sales distribution. Fantastic. Great. This worked fantastic for 18 months, maybe two years. And then, well, I know the reason, the sales manager, the sales director, he left the company. So my friend left the company and went to work for Barter.
The company didn’t realize just how important that salesman was. He made such a big difference and the sales started growing, but the worst thing is, they decided to upgrade the technology on football boot soles and they decided they were doing injection molding. They went to Germany and bought this wonderful machine and it was late arriving. They actually built a special building to put the machine in. It was too small.
And by the time they actually got this working, the season had gone. So they’d missed the selling season for football boots. They’d lost all the orders and it just sent them out of business, which meant that we were going to go down as well, because they were our distribution.
I had to hire a van. I’m going, I think, two, three thousand pairs of shoes were down there in their warehouse and bring them back because now we had no distribution. So we really put up a big front. We went round to every school. We got in touch with everybody we knew and said, “Look, we have these shoes. They’re being sold at half price,” and we sold them all. And we were getting more money. We got more money for those shoes than what we we’ve been paid by our distributor, so we made more money out of it in the end.
And then we had to lay people off. Our factory was only small. We had about 20 people. I had to … we laid them off, about 15, because we needed distribution, but half of them were saying, “Can we work for nothing? Can we stay?” They didn’t want to leave.
Eric Partaker:
Wow.
Joe Foster:
And everyone that did said, “Can we come back? Because we’re a family.” We’d grown this culture that you do this together. So, so many events like that happened in our growth, but it was difficult. But we did expand nice, steady and slowly, but I wanted to get to America, because athletics, a nice business, running clubs, but nothing like soccer. Now, football boots, football boots, that was the big business and Adidas had got that well sewn up. Difficult to get into, because I used to go to sports stores and in the old days, and they’d bring out my shoes and they’d look at me and I said, “I’m Reebok.” “Who’s Reebok?”
Oh well. Here’s the shoes. They said, “Wow, those are nice shoes. But I’ve got Adidas and I’ve got Dunlop, why do I need Reebok?” Why do I need Reebok, that struck home. They didn’t need Reebok. I had to make them need Reebok. I had to make sure they needed Reebok, and that was then a mission.
We just got loads of agents throughout, but … in athletics, there was the three As and they had branded a handbook, and in that handbook was the name and address of every secretary of every club in the country.
Eric Partaker:
That’s a good handbook.
Joe Foster:
Just a letter enter, and this is a phone number … it was a phone call. And I think we got 200 agents and they could be the agents in the club and if there was 200 club members, that was a nice … or you could pick up 15%, get 15%.
So we could run a business that way. And that was good. We got ourselves a nice new car each, we were doing okay, but I wanted America. And it so happened in 1968, the border trade, the British border trade decided that they wanted to help the sports trader export. They needed to start exporting. And the first one was to go to Chicago of all places in February when the NSGA show was on-
Eric Partaker:
You’re talking about. We were talking about Chicago earlier, that’s the-
Joe Foster:
That’s right. We talked about it being very cold.
Eric:
Very cold
Joe Foster:
In fact, that was quite an experience. Our first experience it was so cold. But their offer was okay. They would pay for the stand, they would pay our return airfare, and they would pay 50% of our hotels. Fantastic. Cheaper than staying at home.
So a friend of mine, Bob Brigham who is … Alice Brigham now, they’re doing the outdoor business. They have outdoors stores throughout the UK, Alice Brigham. Bob came with me. We were making boots for him at the time, so it was pretty good. We were good friends. And we decided … I don’t know why we were saving money for the country, but we took a ticket … the cheaper ticket was to stay there for two weeks. And the advantage of doing that is we could go into New York and have a look at some of the shops and some of the outdoor stores and the sport stores, what they were doing with athletics. So we learned a bit then before going on to Chicago.
And in Chicago, lots of people coming out and id say we sold, or Bob sold some of his boots, which was okay because we were making the boots, so that was … we didn’t sell any shoes. A lot of retailers came up and said, “Wow, love your product. This is great. Where do we get it?” I said, “England.” Because this was an English standard, but England.
“Is that New England?” “No.” They couldn’t take on onboard importation. You have to import and pay duty. They couldn’t. We ended up with them saying, “Well, look, when you got some over here, when you’ve got a stock over here, we’d love to buy it and give it a try.” Fine. This is 1968. I eventually got a distribution going in 1979, 11 years.
Eric Partaker:
Wow.
Joe Foster:
I had at least six failures. Six attempted people and I could name them all at one point, but we tried and we failed for different reasons. Lack of money, inability to supply the market in good time. There was a lot of things that we were learning.
Eric Partaker:
Six different times you tried to establish distribution to the US to open that market up properly and you failed?
Joe Foster:
We failed. Yes.
Eric Partaker:
That right there is, again, because you built what became a billion-dollar company, but to get to your key market, the US, which created a lot of that wealth, you tried six times and failed before you got in. That’s amazing. It reminds me of one of my favorite proverbs, it’s a Japanese proverb. It says, “Fall down seven times, stand up eight.” Well, you almost did it to the number.
Joe Foster:
Almost, yes. If I make a recount, I might find seven.
Eric Partaker:
Exactly.
Joe Foster:
But what was happening during the 70s, we’re now into the 70s, but running was becoming big in America, really big. Everybody was out there putting their pair of trainers on, going out running. And running was growing, and with it was this magazine, Runner’s World.
And Runner’s World started off as a single A4 piece of paper, black and white, with just results of names on it. By the mid-1970s, this was a glossy color magazine with all the photographs, all the shoes, so many races, the results would be in there. Everything was in there.
And Bob Anderson was the publisher and he became so confident of himself, maybe ego or whatever, that he would tell everybody which was the number one shoe that they should be buying, which he did. And I think it was sort of Nike tail, the Nike … what was it? Tailwind. I think Nike Tailwind was probably one of the first that was number one.
Well, I mean, here we are, Nike, and buying these things, Phil Knight is buying from Japan, the factory’s in Japan. All of a sudden, a million people want that shoe because Runner’s World had said this is number one. Where does he get a million shoes from? He doesn’t. It takes time. It takes him almost 12 months, because, we’re not producing shoes just for Phil Knight, we were producing for others there. So he had the money to get … by the time they got there, the retail trade who’d been crying out for these shoes, by the time they got them, 12 months had almost gone by, and … Bob Anderson, now there’s another number one shoe.
So retailers are left with shoes now you can’t sell, because all of a sudden a million people want this new shoe. This only happened on two seasons. The third season, somebody got up to Bob Anderson or maybe realized something was wrong. He changed from saying this is number one, this is number two, he changed to star ratings. So, five star, four star, three star, two star, one star.
Five star, that means that four shoes could be up in the … I knew we could make a five star shoe. I knew that. We did. So it was late in the 70s, and we produced Aztec. Aztec was a shoe that I knew we were going to get five stars. So in 1978, we trial these shoes. In fact, we made a range, it was called the gold range. Aztec was a trainer. Inca was a spike shoe, and Midas was a racing shoe, road racing shoe. We tried them out. Edmonton got a lot of gold medals, did really well.
By February 1979, here we are, back to Chicago, got the stand, Right, we’re ready. No. Along came Kmart, you all know Kmart, big retailers all around the country. And running was growing so much that they wanted some running shoes and they said, “Look, they liked to order 25,000 pairs.” Oh. That’s about six months work for our small factory.
Well, we knew very well that if we got a five star shoe, which is what we were looking for, we’d have to have more production, just like Phil Knight needed more production when he became the number one. He didn’t know about needing more production.
Well, my friend who’d been at the company that went out of business, he jumped to Bata and set up sports there, a sports shoe division in Bata. “Look, Joe, we’ll help you. We’ll make your shoes. We can do it and we’ve got the production facility and everything.” Fantastic. But then Kmart said, “We want a better price.” Bata could do a better price, they could shave a few bits and pieces, a few pence off of … but they couldn’t get down to the price that Kmart wanted. But again, we knew this was all happening in the far east, we had to go to South Korea. We were working with some people in South Korea already, so we had both of these things covered.
Volume would go up massively, price had to come down massively. So we’re working on this. So again, we’re there in February of ’79, and Paul Fireman, he came. Paul Fireman was from Boston, he was an outdoor wholesaler, tents, fishing lines, fishing rods, all the bits and pieces. But I could tell from his approach that he was fed up with this. He was running his company with his brother and his brother-in-law, and they’d been going around the same circle probably for 10, 15 years.
Paul wasn’t an old man, but he certainly was looking decidedly like I need to get out of this almost rat race, and he said, “I’d love to be your agent, Joe, but we’re going to need a five star shoe, really, to get that hook, because that would be the hook. If we got a five star shoe, people would want our shoes.” “We wouldn’t need to push it?” “No. There would be that million people wanting one of our shoes.” Fantastic. I said, “Come along. This, Aztec, this is a five star shoe.” He said, “How do you know?” I said, “Believe me, I know.” Paul’s like, “Fine. Fine, but I can’t commit until we’ve actually got five stars.” I said, “Okay.”
I had gone backwards and forwards from February to … was the August issue out the last week in July. I had been backwards and forwards. The last week in July, I picked the phone up and phoned Paul. It was a little early for him because the five hours different and it had only just gone midday in the UK, so I must’ve got him out of bed. I said, “Paul, why don’t you just nip down to the local kiosk, they must have the August edition out.” An hour later he came back. “Joe, Aztec, we got five stars. Oh, wow. Fantastic, that’s it. We’re in! We got the market.” He said, “But not only that, Inca and Midas in their categories, they got five stars as well.”
Eric Partaker:
Fantastic.
Joe Foster:
So here we are, we’ve just launched in America with three five-star shoes. That was the break. We got it. We found the hook and we got in there. A lot of luck, a lot of good timing, but it’s like with your luck and it’s like with anything, opportunities sometimes just zip by and you don’t even notice. Sometimes they’re gone. So we were fortunate we managed it.
The only regret I have at this point is that just as we got there, Jeff who was an athlete, always used to do too, he always trained, he always did everything and he was always sick at the end of it and he became ill and he died with stomach cancer. Jeff had just looked after the factory, that’s all he wanted. He was a bit older than me, he loved the factory. He just ran it and said, “Joe, you do everything else.” Which is what I did, everything else was mine, which was the marketing, the selling, even designing, because I did design the Aztec shoe. And he just loved being in the factory.
The timing was absolutely ridiculous, because at that time, he should’ve gone down to Bata to take the shoes and make sure they did the shoes right. He would’ve been went out to Korea, to the Koreans and made sure they did them right, but unfortunately, that wasn’t to be. And Bata got the shoes wrong.
Eric Partaker:
Oh.
Joe Foster:
Bata are shoemakers and so they would do the shoe, and ours was a very aggressive design. It was a square where the lacing is, it was square and aggressive looking. What they did is, they got the time and motion people and they made it round. And it took away that design. And Paul, when Paul got them in the mail, he said, “Joe, there’s something wrong with the shoes.” “What was it?” I said. He said, “I don’t know. I can’t tell, but they don’t look the same.”
The other big problem was that Bata was so big, they had their own rubber factory. Now, instead of it being normal rubber, we’d moved to EVA which is a plastic, but it’s much lighter. So much lighter. And everybody was moving to that, but they had their own rubber factory, so they made their own EVA. The problem is they hadn’t made or experienced enough and some of the production was under cured, which meant that when you put pressure on it, instead of it springing back, it collapsed.
Eric Partaker:
Oh no.
Joe Foster:
As it happened, Paul never paid for the 20,000 pairs they made. They made 20,000 pairs, but he said, “I’m not paying for these, because I have to replace every one that collapses, and what have you done to this design?” And in a way, that helped in a way for Paul, because he didn’t have to pay for those, so it got his business going.
But then when we had to go to the far east, the far east, they don’t give you a credit line. You need a letter of credit. You have to either have the money or your bank has to be able to say, “We’ll pay.” So somebody has to sign you’re going to pay. That gave a big problem in how do you finance this? because we were growing.
Fortunately, Stephen Rubin who is in the UK, you probably know him as JD Sports, he had a lot of … I think he’s Lacoste as well. He has a lot of little brands. But one of his interests was Asco, and Asco, they were a sourcing company. In other words, they sourced the company out in Korea and they were selling them to all the big retail shops that they could make them at a lower price than you’d get locally in the UK, so that was his job.
And he came in and he funded it. He didn’t fund it with money, he funded it with a credit line. So you’ve got 60 days, and Paul took about 90s days or something like that. So all these shoes are coming in. Stephen got a bit worried when we got about 20 million in debt, we’ve got 20 million. But then we were turning money over really big. And the running market was doing really nicely.
Again, this was just the quirk of time, what happened. Running was doing well and we had a technical rep down in Los Angeles, Linel Martines, and he was technical rep going into the stores and explaining to them that when the salesmen come in, they need to buy these shoes because they’re this, they’re this, and this is our five star product, you name it.
So he’s there in Los Angeles, and his wife, Frankie. She’s going to these aerobic classes and she’s coming back … they’re just full of it, her and her girlfriends were coming back and they’d chatter, “What’s going on here?” “Oh, we’ve just gone to this aerobic class.” “What’s that?” “Well, it’s exercise to music. Great, really love it. Fantastic.” So Linel said, “Look, I’m going to come down and have a look about what’s going on here.” Next time down, watch it, what do you find? The instructor, she was wearing a pair of trainers. Half the class were wearing trainers. The other half, bare feet. Idea, why don’t we just make these girls specifically a leather upper and a nice cushioned sole. Light, but beautiful with just a Reebok on there and the union jack, which was just that bit of color.
Off he goes off to see Paul Fireman. “Paul, Paul, something’s going on down in LA. There’s this aerobics and it’s fantastic.” Paul said, “Well, hang on. We’re doing great with running. I have a great salesman. We’re now covering the country. We’ve got reps, we’ve got sales, and it’s going nicely. We don’t want to play around with whatever these girls are doing down in LA. Let’s leave it alone for a while.”
Linel went to the backdoor and has a word with the production people and he said, “Look, guys, just make me 200 pairs.” And they did. He got his 200 pairs. He went back down to LA with his 200 pairs, gave them to the instructors, because this is growing quite big. And a lot of the lead-ins out of women that were doing it and it was in LA, so that was great.
And, wow. They loved it. However, they made it with glove leather. Glove leather you could pick up it and you just tear it. So glove leather needs a lot of support if you’re going to use it for shoes. And what happens after, what, a month, six weeks, the sides were breaking out and they were ripping out. Well, had that happened in a lot of places, that would’ve been goodnight. We would’ve been out of that business. Not in America, not in Los Angeles, California. No. They loved the shoes so much, just went out and bought another pair. That was it.
And then what happened, we got Jane Fonda in those days was doing workout videos and she brought the shoes to work doing her workout videos. It just exploded. Everybody … they didn’t know Reebok was the smallest company growing nicely in running, so only runners knew. The rest, they didn’t know. But they knew Adidas, they knew Nike. Knew Adidas and Nike, they’re male. They’re sweaty. No, that-
Eric Partaker:
So that moment then when Jane Fonda starts sporting the shoes and people see such a mainstream person using them, was that a massive inflection point for you then?
Joe Foster:
The whole thing. I mean, she wore them because all the girls in LA, they weren’t just wearing those for the aerobics, it was so comfortable. They were going to work, they were going out in these shoes. When they got to work, they’d take the freestyles off and they’d put on the heels, because they had to work with high heels, they’d put the heels on there.
But no, walking around, doing things, they wore this beautiful shoe, they wore a freestyle, Reebok, and it became a women’s company. At that moment, it became a women’s company because it exploded incredibly. We grew to a nine million dollar company over that sort of first 12, 18 months, whatever.
Once we got into the aerobics, it went from nine to 30 million within a year. From 30 million to 90 million the next year. From 90 million to 300 million. 300 million to 900 million. Fantastic. That growth, how do you keep it up? I remember sitting with Paul, and Paul said, “Look, we can’t deliver here …” He said, “I know how to stop this, but I haven’t a clue how to start it again.” So we didn’t stop it.
And finance didn’t become the problem, the thing was rolling so much, the financing wasn’t a problem. The problem was how do you grow from 300 million dollars to 900 million dollars? How do you get the product? You’re tripling the amount of product, you’re trying to do that. Factories can’t do that. They can’t.
Again, a little bit of fortune in Nike. Nike had been growing endlessly. They had just hit a wall. They had to pull out of two or three factories because the sales had just slumped. Just at the time when we needed the factories, so we went into those factories and that’s how really Reebok managed to get into that almost one billon dollar size of a company within four or five years. It was incredible.
By the time we got to just short of four billion dollars, I decided it was time for me to go, because now we had so many accountants, so many lawyers, so many people who were just running these categories that that challenge, that challenge is gone. That was no longer there, the thrill of doing it, and sometimes the agonies, but that challenge wasn’t there anymore. It was time for me to leave.
But I keep on saying this, it’s a bit like The Eagles on Hotel California, you can check out, but you can never leave.
Eric Partaker:
It’s been such a pleasure to speak to you today and so fascinating. I mean, when I’m just listening to this story and just to pull out some really special things and highlight it for people listening, watching. And by the way, again, you have to grab a copy of the book Shoemaker, because this goes … Joe’s giving us a taster here, but it goes into a lot more detail in the book.
But there’s this frugality in the beginning, just making things work with … not having anything, you just made it work. There’s this being knocked down repeatedly, for example when you’re trying to get into the US market and you said six different times trying to distribute to that market and it’s not working. There’s strategically placing your products with the right people. Influencer strategy, whether they are actual athletes or people who influence the market.
And then there’s this very clear message of sometimes when the wave comes in, you just don’t question it and you just ride it and you just keep going with it, because you never know when it’s going to stop, and you just keep going with it.
And there’s so many beautiful messages there. Probably my personal favorite from everything you’ve talked about is … because I didn’t really appreciate this, is just how hard you tried. And that those six failures, just trying to get into the US, together it was all the near insolvents or actual insolvency points, and it’s just absolutely beautiful. It’s just a testament to the fact that all the success stories out there, such as yourself, they come with so much failure as well. So much hardship as well.
Joe Foster:
I think you have to go through the failures. The only way to really find your way to success is to understand that failure’s a part of it. That’s a part of the road. It’s something you’ve got to go through because you learn so much. You learn those lessons. You’re not born with a brilliant set of idea, this is how we do it. No, you have to take those steps, and those steps are failures. Quite often, they’re failures. It’s just one step nearer to being a success.
You’ve got to have that attitude that, no, we don’t give up. We keep going. We don’t give up. No. And you also have to build a culture and it has to be a winning culture, so the people that are driving along, they’re suffering with you, but we’re winners. We keep going. It’s a long chase, a marathon. It’s a long event. And you really have to push so much harder to make sure if you want to win, you got to keep pushing.
We used to use marathons. It was quite interesting. I came up with Reebok Racing Club because we have so many athletes now, Reebok Racing Club, and marathons were on television every week, there’s a marathon. Whether it’s Brussels, New York, wherever, all these were on television. So I came up with this and athletes running in marathons didn’t run for the club, they ran for themselves. So they could wear or vest and shorts, so we gave them all these vests and shorts and said, “Look, you’re not going to win the marathon. We know you’re not.” These guys are really good. Although we did have Ron Hill who did win marathons, but most of our athletes said, “Just get to the front and stay there as long as you can.” And the shoes.
And we got so much exposure for Reebok, Reebok Racing Club. Four or five athletes right at the front there. The guys who were going to win were probably 20 meters behind still. They knew how to time the event. Well, our guys were there with Reebok. All these ideas, you just go with them, and they’re a lot of fun.
Eric Partaker:
It’s been such an honor and privilege to speak to you today, really. One of the things that I didn’t throw in, but I’ll throw in now, is the pump. I had those. And I remember, I was so proud when I got the ones because you did … you came out with a special one that was made for the asphalt court, the outdoor court, and I just remember with friends talking and debating how many pumps do you-
Joe Foster:
How many pumps [inaudible 00:57:43].
Eric Partaker:
But that shoe, that was a special one, and boy, did it take over the NBA too by storm. So fantastic. Joe, thank you so, so much. Really appreciate it. Everyone, again, watching, listening, make sure, grab a copy of Shoemaker by Joe Foster. You will learn so much about what it takes to, not just create a billion dollar business literally from scratch, but how to survive all the challenges along the way. So thank you Joe, really appreciate it once again.
Joe Foster:
It is a pleasure, Eric. It is, and the book is available through Amazon. It’s in shops as well, but depending on whether you can get to stores these days, it’s a little difficult. But on Amazon, so you can get the book no problem.
Eric Partaker:
Fantastic.
Joe Foster:
Fantastic. Thank you, Eric.
Eric Partaker:
Thanks a lot, Joe. All right, see you-
Joe Foster:
[crosstalk 00:58:36]. Okay, bye.
Eric Partaker:
All right. So thanks a lot Joe. That was really amazing. So, so awesome. I love all the … I love hardship. I love when things don’t go to plan. I love Mike Tyson’s quote, “Everyone has a plan until they get punched in the mouth,” and you certainly took a few punches along the way. So again-
Joe Foster:
Oh yes, we did.
Eric Partaker:
… super grateful. This show will probably take a week or two to produce and then what I’ll do is we’ll get back in touch and we’ll let you know when it’s available. We’re going to be promoting it on all of our channels and we’ll send you a link for it as well.
Joe Foster:
Excellent. Love that. Indeed, we do.
Eric Partaker:
All right. Thanks-
Joe Foster:
Thanks very much. Thank you.
Eric Partaker:
Thanks a lot, Joe. See you then.
