Today’s remarkable guest is Jim Weber. Jim is the CEO of Brooks Running Company. He joined as CEO in 2001 and was the struggling brand’s fourth CEO in two years. He is responsible for the company’s remarkable turnaround.
I cannot claim to be a runner, but I do know marketing, and if your brand catches the attention of Warren Buffet, you’re doing something right.
Brooks was a subsidiary of Berkshire Hathaway when it caught the attention of Warren Buffett. He elevated Brooks to an independent Berkshire Hathaway subsidiary in 2011.
In September 2015, Runner’s World magazine named Jim one of the nine most influential innovators in the running industry. He also earned a spot for more than 10 consecutive years on the Footwear News “Power 100” list.
Who should listen to this episode? Anyone interested in creating a challenger brand–as in challenging the likes of Nike–by owning a segment of the market. Cancer patients and bedwetters will find it interesting too.
Weber received his bachelor’s degree from the University of Minnesota’s Carlson School of Management, and his MBA with high distinction from The Tuck School of Business at Dartmouth College, where he is currently on the board of directors.
Jim is the author of the new book, Running with Purpose: How Brooks Outpaced Goliath Competitors to Lead the Pack.
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Transcript of Guy Kawasaki’s Remarkable People podcast with Jim Weber:
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Hi, I'm Guy Kawasaki. This is the Remarkable People Podcast.
I'm on a mission to make you remarkable. And today helping me is Jim Weber.
Jim is the CEO of Brooks Running Company. He joined as CEO in 2001, and was the struggling brand's fourth CEO in two years.
He is responsible for the company's remarkable turnaround. I cannot claim to be a runner, but I do know marketing. And if your brand catches the attention of Warren Buffet, you are doing something right.
Brooks was a subsidiary of a subsidiary of Buffet's Berkshire Hathaway. It caught the attention of Buffet, and he elevated Brooks to the status of an independent Berkshire Hathaway subsidiary in 2011.
In 2015, Runners World Magazine named Jim one of the nine most influential innovators in the running industry. He also earned in a spot for more than ten consecutive years on Footwear News Power 100 list.
Who should listen to this episode? Anyone interested in creating a challenger brand. As in challenging the likes of Nike.
Spoiler alert, it's all about owning a segment of the market.
And by the way, cancer patients and bed wetters will also find this episode interesting.
Weber received his bachelor's degree from the University of Minnesota's Carlson School of Management, and his MBA with high distinction from the Tuck School of Business at Dartmouth College.
Jim is the author of a new book. That's why he came on the podcast. The book is called Running with Purpose: How Brooks Outpaced Goliath Competitors to Lead the Pack.
I'm Guy Kawasaki. This is Remarkable People. And now here's the remarkable Jim Weber.
In the category of TMI, I too was a bed wetter. So, when I read that, I said, “I can relate to this guy.” I remember I was going to a YMCA camp out and my mother was telling me, "If you wet the bed, just don't tell anybody. Stuff everything in a plastic bag. And just pretend like nothing happened."
Almost every day. I was a stressed out kid anyway. And so that was just another element that I knew I was different on. And wow, I think it went away in third or fourth grade, and I felt like a new person.
Anyway. So bed wetters can win.
Exactly. You can prevail.
It's not the end of the world.
Second piece of commonality is I love hockey. I started playing hockey at forty-four because my kids started playing. And my wife told me, "I don't want you to be one of these Silicon Valley types on the sideline with your Blackberry just looking up every once in a while. I want you involved with their lives.
So you take up hockey too." And I'll tell you, first of all, I didn't even know you had to sharpen your skates. So the first time I stepped on the ice with sharpen skates, it was like, oh my God, this is the world's greatest sport.
It's so fun to play. It has everything, Guy. And I obviously grew up skating. I just love to skate, the fluidity of it anyway. It's an incredible sport to play. And it's fun to watch, but it's even more fun to play. And I have three boys, and one of my sons got really into it as well. So it was fun to share that with him.
One of my boys kept playing it, and he played semi-pro hockey for the Sydney Bears in Sydney, Australia. And about, oh, it must have been ten years ago, I played in the Lake Nokomis Pond Hockey Tournament. And oh my God. What's wrong with you people in Minnesota? My God.
What a scene that is, right, Guy?
Just rinks as far as you can see. Everybody's out there in their hats and caps and sticks. Oh, good for you.
Twenty below. Twenty below. I am still recovering. I'm still recovering from that experience.
I never got used, truthfully, to below zero weather. It's always just brutally cold. And I don't miss it, I have to say.
So my podcast is called Remarkable People. And you know how your purpose is inspire to run, my purpose is inspire people to be remarkable. So that's what I do.
Awesome. I love the purpose. It's wonderful.
You may be just the world's greatest expert on this, is what does it take to turn a company around?
The first three businesses I ran were turnarounds. And I thought, to a degree, I was well prepared for it because I love strategy. I was at Pillsbury. I was a commercial investment banker for a while.
And seeing businesses succeed or struggle, solving the puzzle for their strategy, how they competed in their category and their industry. I just loved it. It was this amazing puzzle to solve. And of course, business education, MBA, you're just tuned to be an analyst and a strategists and an investment oriented student of what made a business tick.
So when I finally got the keys to a wheel to a company, I was so excited. And they were all turnarounds. They were all repositioning.
In so many ways, if you're coming in from the outside and you get hired as a CEO, oftentimes it's because things aren't really right. They're really not working that well.
And so I came into trial by fire. And the first business I ran, literally could have gone away. There was almost a padlock at the door. It hadn't made money. It wasn't that well positioned.
It was broken in many ways. And a lot of turnarounds are. It's often not one simple thing. If it was that simple, they would've done it.
So I think the key for me was a real hardnosed assessment of the realities of what was there. And then I also wanted to find the opportunity, the white space, right? Get the whiteboard out. Where could we play? Where could we fit?
And so I've come to be a sort of a challenger brand person because I've come into these underdeveloped or troubled brands and businesses that didn't have a successful game plan. They didn't have a roadmap.
And I don't think there's a simple answer, but I love to solve the puzzle of how to succeed, how to compete, where could we go? Where was the white space? What customer groups? How do you do that? And then really look at the business from every aspect.
And sometimes there was too many resources or costs in certain areas. Other times, there wasn't a capability in key area that wasn't good enough. I love product. I love brands.
And I feel so fortunate because obviously my fourth business that I ran in my career was Brooks. And I have the best job in the world. This is how I feel. I feel so fortunate. We're still having fun. I'm having fun at twenty years in. Because we're building a brand, we've got a fun team to do it.
But the turnaround, I would say it's also a repositioning opportunity, that every one of them are. In most cases, in the ones that I've experienced, they had to be repositioned and refocused because maybe they're focused on too many things. Maybe they just weren't executing against the biggest opportunity and focus that they had.
But I think it's such a combination of those things, but they're almost always, in my experience in the consumer side, repositionings.
I don't think I'm stretching this too far from the truth, but I worked for Apple. And Apple, in my humble opinion, had a superior computer, but it was getting killed by IBM and the clones. And yet after much tribulation, it grabbed the profitable slice, and the rest is history.
So I think that, in a sense, Apple and IBM is like you and Nike. And you have grabbed an area.
Guy, thank you for that analogy, Guy. I became early in my life of fan of great brands that were great companies and how they got there. And Apple, boy, just wrote the script on how to do that product driven, consumer driven... Anyway, but that analogy is powerful.
Because at the time in the nineties, you were there, and from everything I've read, it was a troubled business, but they did have an niche. They had a niche in the computer area with Mac, and all of the areas around that. And obviously it got very focused back to some core products.
That's exactly what we did at Brooks. We weren't going to play good, better, best. We weren't going to play a broad across the field of athletic and court shoes, basketball, obviously running, and cross training and all that, we were going to do one thing, and we were going to try to do it better than anybody else. In that sense, we've had similar success in our space of defining customer trust and affinity in that space.
In your book, you discuss using VisiCalc, and one, two, three and Symphony, which implies that you are a PC user. So have you seen the light yet?
Oh, I've seen the light. I have so many Apple products. I am so deep into the Apple ecosystem, and I love it. I just love Apple products. But you meant mention VisiCalc. I got the first PC that was at the largest bank in Minneapolis at the time, Norwest, which is now Wells Fargo.
The two PCs came into the bank with VisiCalc on it. And I got one of them. And oh, did I have fun? You could spread the numbers across a column or sheet, change one, and read the drill. It changed our world. What a tool for a business analyst. Fabulous. Yeah. Early adopter.
So now Mr. Challenger Brand, what's the gist of how you compete with a larger brand, or maybe specifically, how do you compete with a Nike?
I think it's a great question. And one of the reasons I wrote this book is there are a lot more challenger brands than there are the leading dominant franchise platform in your industry. And almost every industry has those players.
I love the challenge of how do you find space to create affinity with a customer, that if you take care of it, you can nurture it. And I don't believe can own the customer, but you can hold on and create loyalty, and you're going to be their brand. You're going to create affinity and connection.
And I've been in sports for a long time. We both played a little bit of hockey, but I started running in my twenties when I quit playing competitive hockey. I loved running. And running is a unique sport because it transcends the sport.
It's one of maybe the original sports of all time, and track and field, cross country, the Olympic level road racing trail, ultra, et cetera.
But for millions of people, it's more than just a sport. It's an investment in yourself. It's health, wellness, and fitness.
So we looked at the athletic footwear and apparel category, which Brooks had competed in for ninety years at every price point, and good, better, best. So the truth of the matter is an athletic, most of the product never goes for a run. It's family footwear, it's casual footwear, it's lifestyle footwear.
We're in the footwear and apparel business. And it's personal expression for you and who you are.
But at the core on the sports side, you want it to work at mile five and mile two and mile twenty-five.
And so we decided that we were going to build equipment. We're going to build gear. And if we could do that, the frequent runner, the runner that bought two to three pairs a year, because they were running twenty, thirty miles or more a week, that runner knew twenty miles into the shoe, whether they'd ever buy it again. And so we just decided that running was big enough that we could survive.
We knew it was about survival at that point. We were just trying to carve out enough customers and get some loyalty going with good products at good margins that they valued so that we could survive. But I think that's where it began.
And to this day, as we talk about our strengths and what makes us tick versus all the great brands in our industry with Nike… Nike was one of the greatest brands ever built. I don't mind saying that in public. Because everybody that's ever played a sport, gets it.
Epic athletic achievement, and breaking the tape, and standing on the podium, the gold. And so we all get that.
But there's a whole layer from the podium on down to your first run out your back door when you're trying to get back into shape.
And we're celebrating everybody's run. We're celebrating Josh Kerr who just won the bronze medal in Tokyo at the Olympics in the 1,500 meter. We're celebrating him, and we're celebrating everybody that's running their first Five-K.
So that positioning, twenty years ago, that was very different, especially from the market leader, Nike. And so we just felt that if we could celebrate everybody's run with performance gear with the right people, we can build the best training shoes in the world for runners.
Because that's all we do. And we're engineering materials at the molecular level that are perfect for just what a running shoe needs. Not a basketball shoe, not a court shoe.
But I think all of that led to the first big choice we made was the customer focus. And that's why I think about so many brands, we've gone to retailers who say, "Well, you're going to have to go down channel to grow because your investors and everybody's going to want you to be bigger and grow. And the retailers want more. If you're being successful here, give us these price points and these price points. And you could do more. Why don't you guys do basketball? Why don't you do all these other shoes?"
We get those questions all the time, but we're still not number one in running, Guy. We're now, we believe, the number two brand in the US. Nike's still number one with runners, but we're on their heels. And that we've achieved over twenty years with intensity of customer focus.
So I think the key to us is we picked a big category. So we've had twenty years of fun focusing on this customer, and we still have a long way to go. So I think that customer choice has been the key to us.
And I'm rambling a bit, Guy, but we saw it in the pandemic, because in March 2020, when all the stores closed, all the demand signals went away. And inventory is big in apparel and footwear, right? We all had millions of dollars of product coming into the marketplace, and none of the stores were open.
So no one had consumer signals. But eight weeks into the pandemic, we could see people running. We could see shoe demand on digital. We turned our supply chain all back on. Because of that singular focus on runners, I think we moved quicker.
Anyway, I think biggest choice you make as a brand, as a business is who you're focused on in terms of your customer. And that's the one we've never looked back on.
Now on a real tactical basis, I think there are basically two philosophies when it comes to your competition.
So one is to pay attention to them, but never say the N-word. So in your internal meetings, you don't say, "Nike did this and this is how we got to be." The other is to lay it all out there. This is what they own. This is what we own.
So do you mention Nike, do you juxtapose against Nike? Do you discuss what you're not or what you are, I guess is-
I love that question because I'm a true believer that success as, not only a business, a brand, but a person, you're going to have more fun to be more successful if you spend all your time on what you're for and being on the offense, so to speak. I just believe in that, especially as a niche brand, as a challenger brand.
So here's what's happened in our industry. I absolutely am convinced that you need to understand your competitors. Because your customer has those products as a choice. And I think it's so important to understand what your customer is looking at, what they're buying, what they're reacting to. Because if they're buying somebody else, they're not buying you. So you better understand why that is.
And then the key, the absolute key, is not to emulate them. The customer already has those choices. We're trying to be Brooks. We're not trying to be anybody else.
And so I firmly believe that you need to understand your competitors very, very, very well, and how they present themselves and what they stand for, and how they want to present to the customer, and then how the customer receives them. But for us, the key is you don't beat your competition. You win the customer.
And I think so many people in our industry have made the mistake of getting fixated on bettering themselves versus their competitors. The customer is truly in charge. It's such a cliche, Guy. But the customer is so in charge, and it's about winning the customer.
So at our best, I think day in, day out, what we've achieved in our culture is we have a focus on the runner. And we talk about the runner the moment we wake up, all the way through every day. That's our focus.
And we talk about the competitors in the context of we don't have 100 percent market share. So they're buying these other products. Why are they buying them? What are they excited about? What are the trends? Is there some innovation we need to pay attention to?
But we have an innovation and a product plan that goes out five years. In some cases more on materials. We're not watching competitors in the here and now. I've always believed that in brands and consumer driven product categories in the consumer space is that if you're following your competitor, you'll never get credit for anything from the customer because you're just another option.
When I first started running brands, I used to get all of the marketing materials from my competitors and obviously review all their products. And I would map where I thought they sat in the marketplace on these various grids in front of the customer. Because I was looking for that white space, and what we could own.
And that's where I'm so proud of Brooks because we're this unique brand that is incredibly committed to performance product. But we have this run happy, celebrate your run energy. That's a high five after your run. No matter if it's your first Five-K or your fifteenth marathon. That's the energy our brand has. And it's pretty unique in our space, but we think it's more than on trend. It's a center of the sport of running.
What if you did a mapping, and honestly you discovered there is no white space? Then do you develop a strategy to kick somebody out?
What's interesting, Guy, I think that I used to joke often over the last two decades with Brooks is if running ever goes south and ceases to exist, we are in deep trouble.
So the way I would describe it, yeah, I'm old enough to remember rollerblading. And coming from hockey, when the roller blade thing hit, I completely got it. It was an opportunity to skate all year long on this sidewalks and streets.
But we all know now in the late eighties and early nineties, roller blading boomed, and then it just busted. And so I watched those businesses just go from being on the top of the heap and the shiny thing that everyone was looking at with huge valuations. We see this all the time.
And then literally, all of the businesses were in trouble three years later, and many of them ceased to exist. So that's a lesson.
I think what I feel so excited about is we're anchored in the lifestyle run. Now what happens is innovation and preferences change and evolve. Some things are timeless.
We found out that cushioning is timeless. But there was a whole barefoot phenomenon that came through our category, and it created a lot of great discussion. There was not a lot of science around it. It, I think, put all of us literally back on our heels, and we went back into the labs.
But out of that came a lot of innovation. Some of it stuck. And three years later, the customer was still appreciating and rebuying. Some of it didn't like the pure barefoot shoes for most people, were painful. And the truth is cushioning is timeless, Guy.
So I think if you'd put all your focus on a barefoot inspired minimalist shoe in 2010 to ride that wave, you'd be out of business three years later.
So there are cycles that come through. And I think that's why the focus on the customer in these latent needs and just unspoken needs and really understanding their experience, some of it that's hard for them to articulate and what they're looking for and what they appreciate, helps you to innovate three years down the road.
Because you'll never get it from a focus group. They're never going to design your product for you. But if you're that ingrained in why and how they run, and the reasons for, you can stay with them. But it isn't a given. But it isn't a given.
I would say that your "moat" is your focus on performance shoes.
Would you say that now with the success you have that the serious runner is part of the moat? That they're part of your defense against brands that are not focused on performance running?
Yeah, here's how I would describe it is I talk about in my book that I literally had always dreamed about being in a large platform business with network effects and monthly subscription revenue. But I haven't been.
So when I got to Brooks, I immediately saw that the hardest customer to get was the frequent runner that had always run. If they have their way, they're always going to run. And they're putting twenty plus miles in a week. And their worst day is when they get injured and they can't run. And those people were buying 2.6 pairs of shoes a year.
So from day one, we challenged ourselves as that's the runner. We have to win them. And if we can win them, we can win the casual runner, the occasional runner, the walker. We're going to halo our entire brand's credibility and authenticity off of winning that frequent runner in their trust and loyalty.
So that trust, and loyalty, and affinity becomes a strength that's part of your moat. We have two of the best-selling trainers in the world now. A stability shoe called the Adrenaline GTS and a neutral shoe called the Ghost.
And they're both selling over three million pairs. And they have huge loyal bases of runners that, they'll try different shoes, but they'll come back to these shoes as well. And they'll buy them again and again and again.
So we can lose that if we don't continue to innovate and keep the fit, feel, and ride of these shoes where the runner trusts them, they'll go somewhere else. But that loyalty in that core running market is absolutely, I would call it proof, that we somewhat of a moat. They aren't the moat, because I don't take them for granted. I think you have to earn them every shoe.
And if you ask a female runner, would they rather run barefoot or without a bra, they'd choose the bra. So if sports bra or run bra is a piece of equipment for women. So that's where we begin from head to toe. Jackets, the same thing. We know we have to earn that frequent runner, and that's credibility. They're the ultimate key influencer in running.
So if that credibility can halo for our brand elsewhere. So in a way you're right, performance product is a huge part of our moat, but it's that trust and loyalty that we build around it with runners that really is the proof of it.
How are you threading direct to consumer e-commerce, your own retail stores, I think you still have them, and your resellers? Aren't they cannibalistic?
This is a great topic that, boy, have we lived it with the entry of Amazon and its power and cloud in every category. And we thought really deeply about it. And first and foremost, we're selling premium products and gear. And the right shoe for me isn't necessarily the right shoe for you.
So it's really about the runner finding the right shoe for them. That's why we exist because people are different. And we've done a lot of research on the mechanics of human motion. And everyone has natural habitual joint motion, the way your body wants to run. And so keeping you in that motion pattern is critical, and shoes matter. So long story short, it's about the right shoe.
So if that's the case, retail presentation and digital storytelling and helping people find the right shoe is critical for us. And we're at premium prices. Our shoes really start around $100, and our best sellers are in the $130, $140.
And we go all the way up to $160 to $200. But of the major brands, we have the highest average price by far because we don't do mid and low price shoes. So when you put all that together, we're a premium brand. And so we want to present it in a premium way.
So between a very disciplined retail strategy, we've had the same retail strategy for literally almost twenty years, sporting goods and especially running shops, and quality digital sellers from Zappos. And we have to approach which Amazon through Marketplace because Amazon isn't brand driven.
They're consumer driven and they're price driven. So to be presented as a brand, we go into Amazon through Marketplace partners of our best retailers. And we have about twenty of them set up.
So what all that means is we have one face to the consumer with all of our products, consistent storytelling, and we're selling at full price. We're a full price brand. We're not a discount brand. And to be able to innovate and create the experiences and service levels, that's critical.
But what I love is that I think the closed ecosystem brands and controlling that whole relationship at direct to consumer, it's powerful. And there's so many fabulous brands, even in our space, that have closed ecosystems and are direct to consumers.
But we believe that running is so big, it's so diverse, and there's so many different types of customers that you need to be where the runner is. There's fifty million people that run for fitness in the United States. 150 million people globally. And there's another forty or fifty million walkers. It's a huge category.
So we don't think you can be number one with runners by being a closed ecosystem consumer direct only brand. We think you have to be multi-channel.
So here's what we've done. We're really good at both. And I'm so proud of that. We're a really good wholesale partner for retailers, maybe the best. We partner with the best retailers in run, from sporting goods on down through specialty run.
That's everyone from Fleet Feet, and Super Jock 'n Jill here in Seattle, to Dick's Sporting Goods nationally, and the big footprint, Zappos. And everybody that can sell a premium performance running product, we're partnered with. And in most cases, we're their number one brand now. Plus we have to have a direct conversation with the runner.
So we've created a digital direct capability that's as sophisticated as anybody. And guess what, because we only talk to runners, we've got scale in our reach now and frequency in the conversations that we're having in the digital outreach that we're having.
So we've got both bookends here. And I think as we're watching, what's going on in streaming and controlling your pipes and content versus distribution and all that, we're a content company. There's an no question about it, Guy. We're a content company proudly for runners.
And I think as long as we can bring the best content, the best products and solutions with credibility and authenticity and trust, and we can have discipline in all of our distribution pipes and channels and our digital communications, we think we're going to win with more runners than we could ever do with a closed ecosystem.
So I love those business models. They're powerful. But we're trying to execute against a big market. And multi-channel, I believe, is the only way to win there.
If Big Five called you up and asked to be a reseller, would you turn it down?
Yeah, because we don't have products that are really in their sweet spot. They're a good retailer. We used to do business with them when I first started at Brooks. But they're really doing that mid to low price of the whole athletic category. They've got all the brands, but it's really from about twenty dollars, thirty dollars, up to sixty dollars. We don't make a sixty-dollar shoe. We don't have products there anymore.
And I think that's the focus that we made. When we had that full line of product, we were unprofitable in those products. So we exited that, and we used to call them barbecue shoes or lawnmower shoes because that's what you did in them.
Most people that are running and looking for a running shoe are not buying those products. They're investing more and spending more for a performance product. Cause the materials are completely different.
A $130 shoe is not the same as an eighty-dollar shoe as a thirty-dollar shoe. The materials in the design and engineering in those materials is completely different.
Is Big Five that different from REI, or Foot Locker, and Dick's, where you are selling?
Yeah, because I think all of the latter have had great success at selling $100, $130, $160 shoes. And the customer expects to find those products there. I think there's a huge family footwear category.
When I first studied the athletic footwear and apparel category when I dove into Brooks, the biggest segments are between fifty dollars and eighty dollars.
Huge, huge part of the business. And when you look at the large brands, the average price of the next seven brands in running to us, of all the athletic brands, is sixty, seventy dollars. Our average price is over one hundred.
We have a forty-to-fifty-dollar difference in average price. And that's just the product we build, and also where it's sold. But I think that category is just huge. But it's family footwear casual, or lifestyle footwear, sometimes kids footwear and casual athletic use. But we don't believe runners shop there. And so if they did, we would want to be there. Really selling where runners are shopping for performance products.
You make a really big deal about Tuck and your MBA, but that was a while I ago. So do you still think an MBA is valuable for, in particular, entrepreneurs?
You're right. I do talk a bit about it in my book because it was such a transformational experience for me. I grew up in a family. My dad was a small business person, and he struggled. He was bitter about it. He wasn't very successful.
And I just wanted to learn from successful businesspeople and figure out how to do this and be successful in business. I wrote a paper in seventh grade. Next to a hockey player, I wanted to be president of a company.
So I kind of had a path, and I got short and slow in hockey. And so here I am.
But Tuck, I knew, and I wrote in that paper in seventh grade, I needed to get an MBA if I wanted to be a leader and run a company. And so I was tracking to that.
And so I went to Tuck having spent a couple years as a commercial banker, and I wanted to turn myself into a businessperson that could ultimately be a CEO. And so Tuck was so transformation to me. I think it is still a fantastic opportunity for someone that wants to lead in business in any way, shape, or form.
And you're coming from a path from an education or from an early work experience that you want to pivot, but you've been a banker, but you don't want to be a banker. You've been well maybe in a marketing path or an operations path, whatever. But you want to pivot to something more. That's what it was for me. Fantastic ROI for me.
But everybody's different. At age twenty-six, I wouldn't have probably been successful at starting a business. And I think my first president position of running a small business was at age thirty. I did okay.
But I did a lot better five years later, five years later. I've been learning ever since. But I think that the foundation that Tuck gave me was the analytical skills to assess a business, to understand, and all the elements of it.
And to have a windshield. It created a windshield for me from an investors and a CEO perspective on the entire business. And I didn't have any experience in running a business when I got the job.
So Tuck was just foundational experience for me to creating that windshield where what to look at and what to assess. And when you got the wheel to drive the car, at least you knew where everything was. You didn't know how to do it, but you knew where everything was.
So I'm a big fan of it. But I needed it, and it was transformational for me. And the opportunities I had coming out too were dramatically better. My first position coming out into Pillsbury, and I looked at private equity and a lot of other things, but I wanted to run a company. And it worked out so well for me at Pillsbury, I would not have gotten that position in their corporate development group had I not come out of an MBA program that was on their list.
So huge, huge transformation for me.
I probably framed that question wrong because I said is an MBA necessary for an entrepreneur? But that is different for being a leader or a CEO. I mean, it's completely different. So that's my framing error.
I would say this for an entrepreneur, look, there's so many ways to be successful in business. There just is, right? There's not one answer. If you're trying to create a sustained independent company, I think an MBA is fantastic.
If you're trying to create an asset or an entity that has value to an acquire, and you're going to sell in three, five, ten years, you don't have to build out the whole picture.
I'm running an independent company now, and I love it. And I think that enterprise leadership mindset that I think is required to do that for all of your stakeholders and constituents to satisfy investors, customers, employees, to build culture, the MBA was just so foundational for me.
And there's other ways to get that perspective and training. I learned so much from everyone I've worked with, including Jerry Levin at Pillsbury. And sometimes you learn from leaders that maybe you don't want to emulate, and just lessons learned. But I've worked with so many fantastic people, and I've drawn from all of them.
But I think the Tuck experience gave me the playbook of business. It just gave me a great playbook for business.
And one of the analogies I use in a turnaround, especially, it's like moving a wall of bricks forward, 1,000 bricks.
And they all have to go forward. If some fall too far behind, you're going to struggle and possibly fail. There's lots of ways to fail is the truth of it.
So if you're trying to build a long-term entity and enterprise built to last, so to speak, again, I think that MBA framework and perspective and the toolkit they give you, it's been super valuable for me.
So speaking of lessons learned and MBAs, what are the most valuable lessons you learned from the Oracle of Omaha?
Oh boy, Warren Buffet. The first lesson I earned was twenty years before I met him. And I was assistant to the CFO in a summer internship in a media company, had to be Cowles Media. They owned the Minneapolis Star Tribune, a Buffalo newspaper, a bunch of newspapers, and maybe even some radio stations.
Anyway, long story short, they had closed the Buffalo, New York newspaper because they were in a fight to the death with the other newspaper in town that was owned by Warren Buffet.
And what I learned from him then is, man, he's single. Those were winner take all businesses, network effects and one newspaper towns. Because the stronger you got, the more valuable your paper was for ads and everything else. So anyway, they won, and Cowles had exited the market with significant losses.
But Warren had signaled that he was never, ever going to quit. He was in it to win it. Despite losses, he was investing it in the newsroom and the quality of the paper.
Never, ever going to throw in the towel. And he ended up not only prevailing, he got the whole town, and became extremely profitable.
Wow. I learned about network effects, increasing returns to scale in a business. And I found that in this frequent runner, and if you can earn their trust, we've got a little flywheel in our business.
But I never forgot that. I learned that from Warren. And then just signaling, if you're going to plant your flag, tell everybody what you're doing. And they may or may not believe you. They may or may wonder if you're going to be successful at it. But if you stay on that path, you're going to get credit for it and be authentic. And you're going to build more trust.
Then later, I think with Warren in the early years, when Brooks became a part of Berkshire Hathaway, I'll never forget it. I thought our currencies are moving fast, destroying our margins. We're struggling with profitability in Europe because the dollar got so much stronger.
And Warren's brilliant at global economics. He's got the whole economy in his head. I'm going to call him and he's going to help me work through this currency situation. I want to know how he thinks about it.
So I laid it all out, and he said, "Jim, I don't have a clue what's going to happen with currency. So guess what? I don't spend any time thinking about it. Here's what I suggest. Focus on your customer, and do whatever you can to win with your customer. But the truth is you're going to make less money. The business is going to be less profitable. There's nothing you can do about it. So don't worry about it. Focus on your customer." And it's like, wow, okay.
That was huge for us because there was so much financial engineering going on with forward contracts and hedging, and what could we do, and all of that. And the truth of the matter was those were short term bets to smooth out earnings, but they weren't long-term solutions.
So that was actually foundational for us because every crisis that we've come into that was uncontrollable, outside of Brooks, affecting us, we just navigated through it without losing focus on ultimately building great gear and winning runners over.
And boy, they've come fast and furious. We had the pandemic, we had tariffs coming into China, and disrupting our whole supply chain. Now we have COVID, and all of the supply chain craziness.
But I think that focus from Warren, and it's continued at Berkshire with Greg Abel. I can't describe how powerful that is because we are absolutely managing for the long term against a customer that we're super focused on. And wow, a huge advantage for us. Huge advantage for us.
So one author to another, how did you get him to write your forward because that seems to me, that's like an act of God?
Oh, Guy, actually I didn't expect it. So the story in the book is I think Brooks is one of the best unknown challenger brand turnaround stories. It's a David and Goliath story in our industry. We've got some cases in some of the business schools that unwrap the strategy and stuff.
So I love to talk about it. We're living it. It's just so fun. And it's a great story. So I want more people to know about it.
But I started writing a manuscript on my own, probably six, seven years ago, just to unpack all the hard wiring I had. I'm still going through my midlife crisis. But it was really helpful to me to unpack why I'm wired the way I am. And so I started writing, but I put it away.
Hadn't touched it in the last four or five years. And I met with Warren two years ago, and I was talking to him about trust and leaders and organizations and institutions and the degradation of trust and all this other stuff. And of course we got caught up on Brooks, and our category, and the economy, and everything else.
And we finished the conversation. He said, "Jim, Brooks is a great story. You should write a book." And that was February of 2020. And that's what I needed. So I went at it. And I started to write, and I shared with him an update on it.
And I said, "Warren, I got to ask. If I'm going to go get a publisher on this, if I did, would you be open to writing a forward on it?" And he said, "Absolutely." So it wasn't a difficult ask. I didn't know what to expect. But he's been so supportive. So has Greg Abel. Berkshire has been just so in Brooks' corner.
And I love to tell this story, but he said, "This is a great story. And you write this book, I'm going to share it with everybody at Berkshire." So he's been so supportive from the beginning.
Well, if 270,000 employees of Berkshire buy your book, you'll have no problem.
Oh Guy, it's one of these things that I think I've been involved in a lot of organizations, in lot of conferences and speakers, and I have such a high bar. It's got to have takeaway value for the reader. And I hope it does.
There's a great running story in here. I've learned a lot about leadership. And if somebody can take away some things about leadership from that, it's great.
But the Brooks story as a competitive strategy story, as a purpose driven branding story, as a culture driven business story is fun to tell. I think we're executing at a really high level, and I'm super proud of that.
So here's the key. If there's not takeaway value, it'll be a good door stop to keep the door open on a windy day or something. Hopefully, it has value for people.
I hope you'll put a flyer or a coupon in the Brooks boxes because this is definitely a book worth reading.
Thank you. Thank you. I'm a rookie author. Some fabulous people help me tune it and shape it. I wrote all of it, but I've got a lot of help tuning and shaping and editing.
And I just have respect for people that are really good at what they do. And I don't consider myself a great writer, but I think the story and the elements in there have a lot of value. So I'm hopeful that people can not only get into it, but get through it.
I would say that books are like shoes, and it's all about the product.
So my takeaway is that the Warren Buffet story, the man is as good as the myth.
Oh my gosh, Guy. I have to tell you, this is a person, and I describe him with the backdrop of the concept that life isn't fair, he's brilliant. He's a brilliant investor. He's a brilliant business person. He's got a brain for numbers and constructs that is incredible. I've presented to him year in year out.
And he corrected me on my numbers. I say, "Yeah, we were at about 40 percent." "No, you were 34.2 percent two years ago." He's got a brain that is just wired to understand business and connect dots.
But he's an incredible people person. He's just a student of humans and human behavior and relationships and connections. He does his homework. And his empathy for people has just been stunning to me.
And so, yeah, I'm humbled by just the way he carries himself as a human being. And it's been inspiring to me. But absolutely he is all that he seems to be. That's how he operates.
So I first meeting, he invited me out. The door closed. There was not one cell phone message or phone call or interruption. I had his undivided attention for three hours, and he was like a kid in a candy store. He was so curious. He wanted to know everything about Brooks, everything about our business. What makes it tick? Why didn't we get squashed by the big brands? And he just has a curiosity and energy around learning that's absolutely inspiring.
And I think all the smartest people I've ever been around are lifelong learners and curious. And he's just been inspiring because, boy, he's now in his nineties, and he's probably still one of the most curious people I've ever met. It's pretty cool.
And he did get rid of the New Balance.
Oh, yes he did. We were trying to get him in Brooks shoes. And he sent a note back and said he had met Jim Davis at New Balance, great brand, great company. And we have a lot of respect for New Balance.
But he said, "I met Jim Davis maybe ten years ago, and he sent me some shoes. And it's just the kind of person I am. I still have them." So we got him into a pair of Brooks, and I think he's been happy in them.
Okay. Because it would not be of a good thing if he showed up at a shareholder meeting in New Balance. Your cancer experience.
Did it make you a better person? What did you learn from that experience?
I learned a lot, and I don't mind talking about it. It's been a huge part of my life for the last four years.
Long story short, I started to feel sick. And I didn't know what it was, but I had a Ten-K race. It was the worst race I'd ever run. And I just wasn't feeling good. And so doctors test, test, test. I had esophageal cancer, a tumor in my esophagus.
And so that's chemo, that's radiation, and that's a major, gnarly surgery. And weeks of recovery, et cetera, et cetera. They basically take out your esophagus. And I now have a new Frankenstein digestive system. And it also got worse for me because, in that surgery, there's lots of risks. My surgeon called it the high rent district around your heart and lungs and your chest and everything else.
And so in that first surgery, you have phrenic nerves that drive your diaphragms that drive your lungs. And so in the very first surgery, the phrenic nerve to my left diaphragm was severed. And over the next eight months, I'd find out that my left diaphragm was paralyzed and atrophied and I had one lung working. So that was as traumatic for me as the cancer.
But I think here's what I've learned, Guy. I think when times get tough for businesses, you anchor in on your purpose and your values, and what you really believe and what your focus really is all about in your business. We've found that to be the case at Brooks, and we've oriented around our purpose and our values and our strategy and runners. In me, that's exactly what happened. Cancer comes. And I did what I always do when a friend or a family member, or somebody has cancer, I go to the web and I do the research.
And I would start to learn more about it. And the first thing that comes across on cancer is the survival rates are often terrible in the statistics. And mine was 20 percent in five years.
So I found out that day that I have a one in five chance of being here in five years. And I had three kids, and now four grandkids, and my wife and I have been best friends for over forty years. We've been married for over thirty-five. And so your life flashes.
But I quickly figured out that I didn't want to be the cancer guy. I wanted to be a CEO. I wanted to be a lapsed hockey player. I wanted to be a runner. I wanted to be a husband, and a father, and a grandparent. I wanted to be a CEO. I wanted to be part of this team at Brooks.
That's what I valued. And so I had a lot to lose. But I also didn't want to change and pivot, and completely be retired, or be a golfer. And I was doing exactly what I wanted to be doing, exactly.
And so learning that, I had to take what you get. And I was going to have less. I lost running. I can't sustain a running heart rate. I'm Frankensteined from the neck down. And I have a strange digestive system, and I have lots of issues that I have to deal with.
But I take what I get. And I want to make the most of it every day. And I think that's what I've learned is that you have a lot to lose in life. And you can focus on that, and you can focus on what you don't have. But I'd seen that early in my life in my upbringing.
My dad seemed to be unhappy. And I just don't want to be unhappy. Even for one day, I really don't. So I'm always taking what I have, and that is a reality. And I have to start there and make the most of that.
So I think that's what I've learned. So many of my friends said, "Wow, you have a lot to lose." It just must be this gray cloud of grief and loss and why me, and I just didn't want to go there.
So I think everybody's different. But that's what I learned is that, even if I have six months left, I want to live those six months doing what I love to do, not thinking about what I can't do or what I lost. And that's what I've taken away from it. And that's where I am today.
And my scans are clean. So I think the cancer's gone. My life is different from where I started because of my Frankensteined digestive and cardiovascular system. So I never was all that fast, but now I'm really not that fast. But I'm in the gym. I can ride a bike. I can walk, run. I can do some intervals. And I'm doing everything I can.
So yeah, you learn a lot about yourself as you go through this. And I share that in the book. I think that'll be helpful maybe to some people, and I'm always glad to talk about it, but I haven't let cancer define me. That was a personal choice. I didn't want to be the cancer guy.
But I do have an experience that I'm pleased to share with people because of how I processed it, and everyone's different. But I don't recommend it. Don't join the cancer club, Guy. It's no fun. It's not a fun club. And I have empathy for everybody that's in it. And I'm part of it. I'm part of that club now.
So I'm willing to help and engage and give my experience to anyone that is embarking on it. And I have many times. But it's just not a fun club to be a part of.
Are you still friends with those friends who said that you have a lot to lose?
Oh yeah. No. Yeah, because they looked at me, and when I got the diagnosis, I could see the look in my wife's face. And it was just grief and sadness. And same with my boys. And right then and there, I said, “I'm going to fight this thing. I'm going to give everything I have at it because I want to be with them. And I want to be with the grandkids.”
But I think a lot of people were wondering, wow, the emotional body slam of all that you have to lose. And I respect that. I could go there. I could go there very easily.
I could go there because I've lost running. I loved my six mile runs. It's my mental therapy, meditation time. And so many things for me. I don't have that anymore.
I just don't think that, for me, I just can't live there. I can't be in that space. For me, it's negative. And it doesn't take you anywhere. So yeah. No, I respect it, but I've just decided I can't live in that space.
I would be remiss if I did not ask this question of the CEO of Brooks, which is how to buy running shoes?
How to buy running shoes?
Yeah. How should people buy running shoes?
I love this question, Guy.
So here's what I would suggest. I think if you have experience running, and you know something about your feet, a lot of people, as you go through the years, have a relationship with their feet. And they may have had pain or discomfort, or what have you.
So I think you need to pay attention to it. And if you're putting in a lot of mileage, it's a repetitive motion, mostly on asphalt. Some people run on trails, but most people run in the streets, including a treadmill.
So in a repetitive motion that you do for twenty minutes, forty minutes, two hours, mechanics matter. They just do because carpal tunnel, typing, et cetera, it's a repetitive motion.
And so that's where that natural habitual joint motion for your body's so critical. So the shoe absolutely matters. And it everybody's different. We're all unique.
So we have a shoe selector that's biomechanically based on our own website, the Brooks Shoe Selector, that'll take you through our line. And it's going to be about you. It's going to be about your foot shape and your mechanics and your balance, and the strength of your ligaments and joints. It's questions that all is around your own running condition. And so that's a start.
But the best running shops are really good at helping you find shoes that are going to meet your needs and fit your foot well. The fit profiles are so different.
If everybody had the same needs in a shoe from a fit point of view to biomechanics, there might only be one brand in this space, and it would be a big platform brand. But people are unique.
And so the best local running shoe shops are so good at helping you find the right shoe. And what they'll do is they'll bring out three different brands, and you can try each of the three on, and then you pick. But each of the three products and brands will fit your biomechanical profile and fit profiles.
So that's what I would suggest. You could do trial and error, but that's no fun sending stuff back and forth and that. But I think go to the best-selling running shoes to start with, because for most people, there's just great shoes that have become trusted.
And it's not an accident. The customer's smart. Obviously we love our products, but that's what I would do. I would do a little bit of research at your local running shoe shop and online with our fitting tool.
So I'm not a runner, so I'm going to go to a shop, and I'm going to buy a pair of Brooks in honor of this podcast, because I want to back up my talk.
I love it, Guy. Thank you. And we are the kind of brand that, every time we look down and we see it's on people's feet, when we see Brooks, it makes us happy. So thank you.
We built our brand a pair of feet at a time, and literally that's how we count it. So I appreciate that.
There you have it. You have got to love a good success story about a challenger brand.
If you think about it, there are more challenger brands than dominant brands, right?
Challenger branding, it appeals to every marketing, sales, and evangelism bone in my body.
Don't forget to pick up a copy of Jim's book, Running With Purpose.
I'm Guy Kawasaki. This is Remarkable People.
And now for the acknowledgments.
Peg Fitzpatrick, queen of social media.
Jeff Sieh and Shannon Hernandez, the sound design gods of Texas.
Alexis Nishimura, who's not only an entrepreneur, but she is a prom star.
Luis Magana, rocking it, not only in the water but also at UC Santa Cruz.
And last, but certainly not least, is Madisun Nuismer, who has dropped in on me more than anyone in all of Santa Cruz.
Until next time, Mahalo and Aloha.
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