Season 1 Episode 10
Mike Beckham, co-founder of Simple ModernAn accidental entrepreneur shares how generosity is key to culture, creativity is key to growth and knowing your customer is key to standing out in a saturated market.
After nearly a decade in the non-profit sector, Mike Beckham switched gears to the for-profit world. But the lessons he learned in the former would shape his success in the latter more than he realized.
Tune in to learn more about his journey from raising his own salary to bootstrapping a startup to running a booming business with a culture that radiates generosity.
Mike Beckham didn’t dream of a career in drinkware.
His company didn’t start as a passion project. There was no lightbulb moment or decade-long daydream. Instead, Simple Modern is the result of a strategic, calculated search for a defensible, sustainable, high-quality product that fit a market need.
It was a risk: The stainless steel drinkware market was already crowded. But he proved that with the right strategy, team and values, there is no market too competitive for a new product.
Mike was kind enough to join us in The Entrepreneur’s Studio and share not only the keys to his business’ success, but how he has built a company culture centered around generosity and humility.
Chris: Hey Mike, we’re super grateful to have you here. It’s really awesome to see people who are on the podcast circuit and have something different to say every single time. So welcome to the studio, super glad to have you here.
Mike: Well, thanks for having me, Chris. And I love doing podcasts, primarily, because one of the things that I see as my calling and kind of the season of life is, as much as I can, sharing what I’ve learned from the process. I feel like I’ve been really privileged to be in a lot of situations where I was able to learn firsthand some things. And so if I can be a part of demystifying the entrepreneurial experience for people, if I can be a part of sharing some of the things I’ve learned and hopefully helping people learn from some of the mistakes I’ve made where they don’t have to make them, then I love doing it.
Chris: Yeah. Which is amazing. When you just say the entrepreneurial experience, the themes that show up in the conversations that we have, it’s amazing how similar these themes are, these things that people go through at the different stages that they’re in. And it’s like, that’s why this sort of entire platform of The Entrepreneur’s Studio exists, is to unpack those themes and to have really credible people share things that can kind of unlock these challenges and these things along the way. So I’m super glad that you’re here.
“The world needs more entrepreneurs”
Chris: We’re going to talk about how you’ve grown such a meaningful business. But I want to start a little bit at the beginning, and sort of, what was the thing that — what were your entrepreneurial roots?
Mike: So, I actually do not feel like a person that was that entrepreneurial when I was younger, I actually felt like my brother was more entrepreneurial than I was. In fact, if you had asked me at 28 or 32, “Do you view yourself as an entrepreneur?” I probably would’ve said no. It’s kind of been an interesting experience in my thirties of realizing, oh, I’m kind of the definition of what people think about when they think about an entrepreneur, but I haven’t even thought about myself that way for a while. And so, one encouragement I’d offer to anybody is that, I think everybody’s actually entrepreneurial. If you think about the entrepreneurial process, it’s really about kind of creating a theory about something that could work and then experimenting and testing and iterating on that. And it turns out we actually do this all the time in our daily lives.
Mike: Like dating is entrepreneurship.
Mike: We don’t think about it that way, but so there’s the way that we dress, there’s all these things that we actually use the entrepreneurial process, but then we get really tense when you try to take that process and apply it to business.
Chris: Because money’s on the line now.
Mike: Yeah, exactly. And all of a sudden, we feel like there’s some kind of different, magical way of doing things. So, one of the most encouraging things I can offer to people is, I didn’t view myself as an entrepreneur for a long time. What helped give me confidence was working with my brother and the feedback of some other people. And I think that anyone has the capability of being an entrepreneur and most people are already using the skills that being a successful entrepreneur requires in their everyday life. They just don’t think about it that way.
Mike: So it’s really just helping people and saying, “Hey, the things that you already do well, it’s mapping that to this different situation.” And certainly that takes some time to figure out how to do that, but I think there’s a lot of people that are capable. The world needs more entrepreneurs and so I love being a voice of encouragement to other people like, “Hey, you can do this.” Because there was a point in my life where I really needed that voice.
Recognizing a problem and leading through it
Chris: Well, we’ve got Simple Modern, this isn’t just for you. We use these all the time. And when it was like, “Hey Mike would want to come and have a conversation with us,” I was like, OK, well, great, we drink out of all their stuff.
Mike: I love it.
Chris: But before you did this, did you have other businesses that you’d done or were there, maybe, other interests that you had earlier in your career?
Mike: Sure. So I’ll share my career arc, which is I would say, no entrepreneur has a typical career arc, but I certainly don’t have a typical career arc. I went to OU [The University of Oklahoma], I was a finance guy. And when I discovered finance, it came more naturally than anything I’d ever done. I’d always gotten decent grades, but finance just clicked. And the moment that I started taking finance classes, I thought, this is what I’m going to do.
And college was a period, I think, of really...the other significant things that happened in college — I met my wife and I really had kind of a spiritual worldview level. I think I had a major shaping process where I really took a hard look at, hey, what do I think the point in my life is, what do I want to be doing? So college was really deeply formative. So I thought, when I graduated, hey, I’m going to go, and I’m going to work in finance. I got married to my wife a week after I graduated. She was doing a bachelor’s and master’s, combined, in accounting. And she’s amazingly talented.
Chris: That’s a smart family, right? Accounting and finance, here we go.
Mike: There you go. And ironically neither of us ended up using that, which is so funny. So she had another year left in her degree and we were newly married. And so I was trying to figure out like, hey, what does it look like? What am I going to do right after college? And this opportunity arose to do a nonprofit ministry job, at the college campus for a year. And I thought, oh, this is perfect, I’ll still be around campus. My wife’s going to be finishing up her degree. And then both of us will go work obviously, again, accounting and finance.
Chris: There was a whole plan.
Mike: There was a whole plan. In fact, the summer after we got married, we both had internships. She had an internship with Ernst & Young, I had an internship with Chesapeake and it was like, oh, this is what it’s going to look like. There’s just going to be this interlude. And I loved it. I unexpectedly just loved my entire work week being about investing in other people.
Chris: Oh, wow!
Mike: And I don’t know that I’d ever done that before. And it’s probably two things, Chris, and one was, you have your own self doubt of, does it make any difference? Am I able to make any kind of a difference in other people’s lives? But then also, there was a self realization that, wow, this actually brings out parts of me that I like better. Different jobs bring out different parts of our personality and our skill sets, and there were certainly things that kind of awakened in me that I really enjoyed. And so, one year turned into two. My wife went and worked for Chesapeake for a year. And then after that second year, I thought I want to keep doing this. So one year turned into two, turned into basically 10. I spent my entire twenties in the nonprofit world.
Mike: So, I raised my salary. My first year it was $18,000. I struggled to raise all $18,000, and yet it was a fantastic experience. So the foundation of my entire career was basically this nonprofit work and not having a lot of money, learning a bunch of new skill sets, but loving the fact that I was getting to make an impact in people’s lives.
Chris: You developed sales skills right there, how you raised that.
Mike: It’s so funny because if you’d asked me at 30, “Could you be good at sales?” I’d be like, “I have no sales experience.”
Chris: Yeah. None at all, but I had to raise my salary, raise it myself.
Mike: Yeah. And even whether it’s ministry or any other type of nonprofit work, what you realize is, what you’re doing is casting vision about, here’s how the world is, here’s how it could be. And there’s this gap, and here’s how we can move towards the world that we all want to live in. And that’s actually a persuasion sales function as well.
Chris: So, it’s also the essence of entrepreneurship. It’s like recognizing a problem and leading a way through it.
Mike: So anyway, I got to 30, I was leading this in this ministry context and my younger brother, he’s about two and a half years younger than me. He had started a one-person internet marketing company and had done really well, but he wanted to start a bigger company. He wanted to really go for it. And so he approached me, there was this idea of an auction website that the company that we looked at was only in Europe and he said, basically, “Hey, would you be willing to help me do this?” And so for me, even when I was in the nonprofit world, I still loved paying attention to the stock market.
Mike: And I still had that itch that I wanted to scratch a little bit. So I said, sure, I’d love to – nights and weekends – help you with this. I helped him recruit some other guys as the starting team. And we started this business in October 2009. And like I said, it’s totally like a part-time thing for me.
So over the next 13 months, it goes from founding to its first million dollar revenue day. And the process was as crazy as you can imagine. When we start something you’re hoping maybe it’ll be successful.
Chris: Yeah, It’ll do something.
Mike: Yeah, maybe. And for me, even, I was just like, hey, it’s interesting. So even if it is just as a side project, I wasn’t expecting a lot. And instead we had this company that just grew like crazy, like a weed. And so, one of the things I tell people, I was the oldest person at the company at this point, I was 30. It was kind of the inmates running the asylum kind of situation. Like none of us knew what we were doing.
Chris: It’s class.
Mike: Honestly, we were so naive that we weren’t even able to really fully appreciate the level of success the company was having, because we just didn’t even understand.
Chris: Yeah, you had no context.
Mike: Yeah, you just don’t have a frame of reference.
Chris: You just look like a lot of dollars coming in.
Mike: That’s right, you don’t have a frame of reference. And so around that same time, my wife and I got pregnant with our first – my son Carter. And there was this point where I’m kind of probably working 80 hour weeks at this point, because I’m trying to run a major function at this startup that’s growing like crazy. I’m trying to also lead in the nonprofit world with this organization that’s growing really quickly. And I just realized I am not going to be able to be the kind of husband and father I want to be, if I’m trying to do all of this in my career.
Mike: So I need to make a choice, and after a lot of thought and deliberation, my wife and I felt like the call for me was into the business world. And that was still actually a really difficult transition for us because we had so much community and we were so invested in the work that we’d been doing in the nonprofit world. Moved over full time to the for-profit world, worked with my brother for several years, and during that time we launched several additional businesses that kind of ranged from colossal failures to fairly successful. But in the process of doing those things, we continued to learn a lot.
And so by the time you got to about 2015, we had just done about as much ecommerce as anyone that’s name wasn’t Amazon. I mean, it is really random, right? It’s this company and a few people in the middle of Oklahoma that had just this tremendous amount of ecommerce experience. We’d shipped, I don’t even know, 20 million packages, 30 million packages. We had transacted over a billion dollars in revenue at that point. So we had learned a lot, but I felt a restlessness of, I would really like to either go back into the nonprofit world or I’d like to start some kind of a for-profit company that just worked differently, that was a different take. When I originally moved into the business world, I told my brother when I did it, I’m going to be here for five years, and then I’m going back to the nonprofit world.
That’s not actually what ended up happening. What ended up happening was, when I got to that decision point, there were a few guys that I had worked with that had approached me and said, “Hey, would you be interested in doing something with us? It’s just kind of a side project.”
From side project to significant scale
Mike: I was open to it because I just really respected and enjoyed those guys and had enjoyed working with them. And really all we knew was that, we wanted to do something in really high-quality products, we wanted to sell online. We really felt like we could do well selling on Amazon as our first channel. And we wanted the company culture to have this kind of thread of generosity. And I think that’s about — anything else is revisionist history. People will ask you all the time, and you’re familiar with this idea of survivorship bias?
Chris: Oh yeah.
Mike: So survivorship bias is basically just like, history kind of gets written by the winners. And sometimes when you read those stories, it doesn’t actually work to go backwards and apply those principles, because it’s not so much those principles that made them successful as that ended up being the story of the person who was successful. So I try to avoid that. People love to ask the question of, “Hey, how did you get the idea? And what was the lightbulb moment when the apple hit you in the head and you knew...” And it just usually isn’t like that.
Chris: It’s a discovery process.
Mike: It’s always a process. And so we started with just a few pillars and the pillars were the relationships that I had with the other co-founders. That we wanted to make excellent products, we wanted to use our ecommerce background, we wanted to have a spirit of generosity, that was it. Everything else came along the way.
Chris: So, did you think that those were requirements or were those sort of core values?
Mike: I think that they became, for me, they were requirements and they’ve kind of morphed into what our company core values are. I haven’t said it yet, but obviously that’s the start of Simple Modern.
And the process of actually getting to making stainless steel, insulated drinkware was still actually a little bit of a winding process. It wasn’t the first product that we sold. It took us a few months to really settle on that. There’s a list out there that I have…we did a big brainstorming session, and some of the ideas are just terrible. Like Chris, I would just — my life would be terrible. It was like pet gates and compost bins.
Chris: Yeah, I can guess.
Mike: I have nothing against people who make pet gates or compost bins, but like there were some ideas on there that would not have been as promising.
Chris: You guys are just shopping on Alibaba.
Mike: Yeah we’re looking at the Amazon marketplace and we’re asking questions like, “Hey, where could we maybe be successful?” And it’s interesting, I don’t share this story very often, but I’ll share it here. What I was looking at is, I was looking at the Amazon kind of marketplace, because that’s where we wanted to start. I was looking for, what could we sell that is defensible? That you have some chance? Because once you come up with something, even if you come up with something new, there’s going to be a lot of competition from all over the world that’s going to try and come and compete with you. So, as I was looking at things, one thing in particular grabbed my attention. There was somebody in the United States who was selling personalized pet tags, like where you can get your phone number and the dog or cat or whatever, the name engraved on it. And I thought, man, that’s really interesting, because anybody can – with an international manufacturer or whatever – source these pet tags. But they’re adding this layer of value, where they’re engraving it. That makes it really hard to disrupt them.
And it took me down this path of, well, what are the product categories where that’s possible, where you’re adding value. You’re not just putting something on a ship in China or somewhere and bringing it over and saying, this is our product, but were you really adding value to the process? And so that was one of the many things that started to push me down a particular way of thinking about product and eventually how we’ve thought about drinkware, which is a totally different conversation. So that’s the start of Simple Modern. Started in 2015, sold our first drinkware bottle in March of 2016. So we’re six and a half years in right now. And at this point selling probably about 10 million bottles this year. So at pretty significant scale.
Chris: And different channels than Amazon — lots of different channels.
Mike: Yes, not just Amazon. You can’t get to that number without basically selling in all of the biggest retailers in the world. And we’ve been really fortunate.
Nonprofit lessons in a for-profit world
Chris: So I just want to break this up real quick. So you’re sort of in the first stage where you’re in the nonprofit world and you’re learning about people. And what I want to do is break these down and say, what was the lesson that you were able to carry into Simple Modern? And so nonprofit and then bootstrapped early stage ecommerce startup, multiple businesses, but in kind of that same ecosystem, what are lessons or a key lesson from each of those that you brought into the Simple Modern?
Mike: So I think from the nonprofit world, here’s a few of the things that I took away. Number one, I took away that the most important thing is people. And there’s so many people that get into business that think business is about strategy and it’s about product and it’s about pricing. And to be sure, those things are a big part of it. But ultimately business is about cooperating with, organizing, recruiting, motivating people. And the best entrepreneurs, the best businesses are great with people. And it is exceptionally hard to build a good business if you discount the importance of people. And I think in the process of being in the nonprofit world... the nonprofit world, my first team that I led, everyone had raised their salary. So they’re even a step beyond the kind of at-will employee, it’s like they have really had to sacrifice to get there.
Chris: Yeah, they’re all in.
Mike: Yeah, exactly. I mean, it takes a tremendous level of commitment, and the entire job was about how do I cast vision? How do I motivate in a way that is separate from money? And using money to get people to do things is the basest way of doing it.
Chris: It’s true.
Mike: When I was in college, I was a fraternity president, which is another great example. It’s like, you’ve got to learn how to motivate people when you can’t just say do this because I said so, or you can’t use money to get people to do what you want them to do, but instead you have to really intrinsically motivate them. And so I got these opportunities to really learn how to do that. And it is. It’s casting a compelling vision. “Hey, wouldn’t it be awesome if this was the future? Let’s go there together. Here’s what it can look like. And here’s how we can get there. Will you come with me?”
Chris: And here’s where you fit.
Mike: Absolutely. And here’s how there’s an important role for you to play in that. I mean, everybody wants that. Everybody wants to be called into a bigger story, and everybody wants the story of their life to be one of meaning and purpose. As a leader, when you’re able to actually communicate that to people, here is how you can fit into a significant story. Here’s how you can be a part of making a difference. Then, people unsurprisingly want to be a part of that.
Chris: And I think that has a lot to do with connection. They’re connecting with something, they’re bonded to it. They’re like, “I’m connected, I catch the vision. I see where I fit.” And they’re distinctly connected. It isn’t connected via a transaction of a paycheck.
Mike: That’s right? And this is where, I’m sure you’ll want to ask about this later, but I’ll give a little bit of a side about values and mission. There’s this interesting thing right now. And I think in our country, we’re really wrestling with what are the roles of values and what are the roles of diversity within organizations, and how should this look? And I would say that I don’t have this figured out, but I’ve learned one principle, which is if you try to build a company for everyone and for every customer, you end up building it for no one. This is actually a startup principle that they teach at Y Combinator and a bunch of others. It’s way better to have 10 super fans than a hundred people that kind of like your product. And I think the same is true inside of companies.
We need to have diverse perspectives and opinions, but also you need to build a monoculture around values. That diversity in values is actually really profoundly unhelpful because it’s so difficult to motivate and excite a group of people when you don’t have some kind of a north star that you’re pushing towards. So that’s the way that I communicate it is, you really do have to have an idea of what are we about and why should people care? And we are going to recruit around that and we are going to message that to customers. And this is going to drive everything that we do because when you do that, there will be people that are like, I am passionate about helping make that a possibility.
Chris: Make it real.
Mike: And there’ll be other people that are like, that’s not for me. And it’s like, that’s great. That’s fine. What I need as a team where everybody is excited and finds a lot of meaning in helping pursue these values and this mission. And sure enough, there’ll be customers that are extremely excited about buying from a company that is pursuing those things. But as a leader, values can’t be one of those things where you send out a SurveyMonkey and you say, hey everybody, what should our values be? I think, especially as a founder, there is this unique role that a founder plays and one of the unique facets of that is that they are able to speak with authority about what the values and the direction of the organization is.
Chris: And conviction. Absolutely.
Mike: Absolutely. And I think this is one of the reasons why founder-led businesses, they just outperform. There are lots of studies on this, whether it’s public companies, private companies. When there’s a founder, there’s a clearer north star of why the company exists. When there’s not a clear direction, it is very easy for the company to become much more transactional. This is a company that exists to make money. I’m here to get this paycheck. You trade me money for my time. And that’s fine, but that’s not motivating. That’s not compelling. And certainly not on a heart level, like what we’re looking for as people. And when we get drawn into an organization that is offering a bigger scope and a bigger vision, it’s really compelling. So that’s one of the things I really took away from being in the nonprofit world.
Chris: Yeah, that’s really good. And I think one of the things that’s really interesting is – you’re talking about values and you’re talking about mission. Values is a really great way to screen people and talent, and mission is a really great way to screen deals and opportunities and selling. And I totally agree and have seen the same sort of piece where if there is a leader that has the conviction, that sort of bringing the values to life, and giving people an opportunity to live in them and recruiting people that identify with them and they have a clear vision and a mission, that really is a great recipe for at least the first part of success. And then there’s the acumen side. Is that really one of the things you learned in the early stage? It’s just the fundamentals of just running an ecommerce business?
Mike: Yeah, absolutely. I mean, when I went into the business world full time, I was extremely raw. I had done OK in school and I had this finance background, but that was literally eight or nine years earlier. And so, although I think at a leadership level and strategy level I might have been fine. Just tactically, I just was not strong for my age. A really simple example of this is that I spent a lot of time in spreadsheets in that company. I was basically in charge of all of the economics and running this auction website, the entire economy of it. And I’m still using the mouse to move around a bunch and I’m pretty slow. My spreadsheets were decent quality, but I was just really slow. I just didn’t have the practice of the hours in. And so it’s a simple thing, but it’s like, I needed to learn the hot keys in Excel. And now if you watch me in Excel, I’m really fast at Excel.
Chris: Are you the kind that there is no mouse?
Mike: Yeah, there’s no mouse and it’s all hot keys and stuff like that. But at one point I had to say, I’m going to get good at this. And every time I’m doing something in a spreadsheet, I’m going to – instead of using my mouse – I’m going to look up the hot key, and I’m going to use the hot key, and I’m going to drill it in my head. And you do that for a couple hundred hours. And all of a sudden you’ve developed this skill.
Chris: You have a capability, yeah.
Mike: And that’s really, to some extent, what you have to do as an entrepreneur is you have to understand at the beginning it is going to be me or maybe me and a couple of other people. And I am going to have to be willing to do all the blocking and tackling. I’m going to have to be willing to wear all the hats. And I am going to have to be willing to commit to learning to do those things with excellence because before I can hire other people, before anything else can happen. And even one of the things that’s interesting is that, let’s say you’re successful. You start something and then you do start hiring people. Who’s going to train them? Well, it has to be you.
Chris: While you’re doing the other things.
Mike: That’s exactly right. And if you want excellence in the organization, you have to go first and you have to put in the work. And so in a multitude of ways, whether that’s learning hotkeys in Excel or the basics of a financial statement and how that leads to decision making, or the thing about ecommerce –. this is a joke, actually, among people that are in ecommerce – is that to be good at ecommerce, you have to be good at 50 things. You have to understand conversion rate optimization and digital marketing and sourcing and fulfillment and –
Chris: Inventory management.
Mike: – and finances and forecasting.
Chris: And pricing and discounting.
Mike: It’s just amazing how many. So one of the ways that I’ll say it to people is that I feel like it was getting an MBA on crack. I mean, I just felt bombarded. We’ve all had that experience where it felt like we were just drinking out of a fire hose. And for sure, the first couple of years for me felt that way, but they were foundational basically for the rest of my career because I was building the skill sets that I would need to be successful and also to hopefully be able to manage people well, as companies I was leading were growing.
Building a defensible, sustainable brand in a competitive marketplace
Chris: So stage one is about values and people. Then stage two in ecommerce is the value of skills and really understanding the market. And you show up with three requirements into Simple Modern, and you show up in a place that happens to be super freaking crowded.
Chris: So you’re taking these things. What were some of the early struggles that you’re like, we got these three requirements, they morph into values and we’re in a crowded space. What are the things you guys picked up on early?
Mike: OK so there’s so many different ways I can take this answer. And I’ll just give you a couple of the thought processes that are going on in my mind. One of them is, even at the very beginning, I’m thinking about how do I create a defensible business? Countless entrepreneurs have the story of, “I started this thing and I had some success and then I couldn’t sustain it. And it was kind of a discouraging experience.” And so I was thinking about, “What do moats look like? What does sustainability look like?” very early on. One of the very first things we did is, I noticed, hey, I don’t think anybody’s doing licensed drinkware – like university, NFL licensed drinkware – as well as they could. And I started pursuing that because I thought, hey, if we could do that really well, that feels like something that we could and turns out that is something that we’ve grown into.
And we do really well. I think we do it as well or better than anybody in the world. So that’s one thing I was thinking about. I was looking at the industry as a whole and saying lots of competition, obviously. So I’m hyper aware of, how do I build something that’s defensible. Another thing that was going on is we were looking at the industry. The industry was growing really fast. I mean, YETI was just exploding, Hydro Flask is exploding. There’s a lot of new people entering the market. And we were asking some questions about, hey, where is this going? And there was a little bit of a lightbulb or “aha” moment where we realized these are like shoes. These are like handbags. These are like a watch. They are a functional thing — we use it to drink water and to keep water cold or coffee or whatever. But also there’s a real fashion element here. There is a real expression element.
And once we saw that, number one, I started to become a lot more confident about our long term prospects, because everybody doesn’t want the same black water bottle. And we started to say, man, at this point YETI, everything they were selling was just stainless steel. The actual product was so exceptional that there was kind of this slowness of some of our competitors to really lean into ornamentation and differentiation because they were just being so successful with just the actual product itself. So we started to lean into that really heavily early on. Differentiation. We also kind of looked at the marketplace. And what we noticed was a lot of the established competitors were killing it in physical retail, but had not prioritized digital at the level that they could have. And also that some of our competitors had pricing structures that they needed to have for physical retail, but made them less competitive online. And this is kind of a larger principle that maybe we can come back to it a little bit later. When you look at a market and you see a lot of competition or you see a really great competitor — we use YETI in this case. YETI’s a several billion company. I admire the work they do with their brand. I think they’re really well run. When you look at YETI and the way that they’ve run their business, it’s easy to focus on all the things they do well, and you should be aware. And there are certain demographics that we do not have a very good chance at competing against YETI. In these demographics it just wouldn’t go well for us. But there’s also counter weaknesses that come with the strengths.
The stronger that a company is, or a competitor is in one particular area, there’s a flip side of that coin which means that they will be weaker in another way, or they will not focus, they will not compete with you well in another area. So, we’ll use YETI as an example. Because of their pricing structure and because of the brand equity they’ve built, they’re just not going to compete in several areas of the marketplace and in several price points because that’s not what they want to do. And they’re not going to compete for certain demographics as hard because that’s not their brand identity. And so when you look at a competitive marketplace, it’s good to take stock of, hey, what are all the things that these firms that are having success, what are they doing well? But it’s also good to say, where are the gaps?
Where is the white space? Where are the things that they’re not trying to do well? And sure enough, you’ll almost always see, hey, there’s room. There’s room for someone else that’s coming in and running a competent business to address some of these areas. So for us, we saw that with ecommerce. Both in pricing and ecommerce. What it kind of came together as is like, we’re going to be digital first. We’re going to have a lot of different choices. We’re going to have premium quality at really affordable pricing. And that’s going to be our thrust. And as we leaned into that, we had almost immediate product market fit. And the process was kind of like, I buy a thousand water bottles, we get them in, we sell through them in a month, I have to put another order in. It’s like, well, man, I got to go bigger. OK, I’m buying 5,000 this time. And then at the last second, I’m like, no, I’m buying 7,000. And then that night you wake up in a cold sweat.
Chris: What have I done?
Mike: Yeah. Why have you bought 7,000? You’ve only sold a thousand. What are you thinking? The 7,000 water bottles get in, they’re gone in a month. It’s like, man, I should have bought bigger and rinse and repeat. There was that process over and over and over again. Because we were bootstrapped. This is another thing that’s distinctive about our company is that we’re competing with these companies that have literally hundreds of millions in funding. And we’re bootstrapped with a couple hundred thousand dollars of my money. And I will say this, being able to even invest a couple hundred thousand dollars shows a lot of privilege that I was even able to do that. But we were definitely in the grind of, hey, we have to be profitable. We have to have every investment decision make sense because we just don’t have the resources to absorb making bad decisions.
Chris: Critical errors.
Mike: That’s right.
Chris: No margins.
Mike: So what’s interesting is, and I’ll talk about this principle sometimes, the thing about scarcity is scarcity can be a superpower. Usually we think, not having enough of what I want is bad. It’s just inherently bad. And I would make the argument that that’s actually not always true. Even at a biological level. Fasting is good for our body. Our body not always having food is good for our body. It helps our body to function better. In a business context, scarcity, what it does is it creates focus. It helps to prevent us becoming lazy or taking unnecessary risks in our decision making because we have more finite resources that we have to allocate. And so you’ll hear these stories about companies that raise hundreds of millions or billions of dollars and somehow go bankrupt. And you’re like, how’s that possible? That doesn’t even seem possible.
And the reason is, when you just feel like you have unlimited funds, you can lose the discipline of decision making and investing and being a good steward. But when you have finite resources and I’m sure the people listening to this podcast – based on what you’ve told me is kind of the listener – they’re dealing with this every day that you feel that scarcity, you feel this sense of man, do I buy the inventory I need? Or what does payroll look like next week? Or whatever. And what it does is, although it’s stressful, it really helps create a very clear hierarchy in your head of what are the best investments and where does the money need to go and helps you to become a better operator.
The entrepreneurial process starts with curiosity
Chris: I mean, one of the things that’s really awesome about talking about scarcity is talking about entering a market. Because I’d really like to understand the data and the discovery and the insights of what gave you – because that’s a strategy, it’s a strategic choice, everything you just said and to get to product market fit – one of the things I think is really interesting to talk about is when someone’s thinking about competition, they typically go first from their experience and what they understand: where they shop, where they buy, where their friends buy and what they like and all those kind of stuff. And they’re in geographies, they’re a certain demographic themselves. And so it’s sort of like people will opt out of great opportunities or interesting opportunities that may be great ideas because it’s like, oh, there’s not enough space for me. And at the same time it’s in ecommerce you’re like, man, let’s just say, you’re going to focus on just the US, not even global. And you’re like, man, I see these ads for all these other people. And there’s this myopic sort of closed-minded thing that happens. And that’s the scarcity. Where it creates a bit of fear saying, “I don’t know if I can step in that direction because my experience is telling me that it might not be good,” or “People’s experience surrounding me are telling me it might not be a great idea.” So what did you guys do to get some of the discovery and the data and the insights to codify that strategy?
Mike: Absolutely. So if I could deconstruct the process that goes on in my head, I would say there’s a couple of just truisms about the way that I see the world that have been exceptionally helpful and anybody can do this. The first is, I’m just curious. I’m curious and I really enjoy learning and that has propelled me to try to become better and better and better at designing experiments that helped me to learn more. And as I’ve done more and more experiments, I’ve gotten better and better at how do you experiment inexpensively? So the way the process basically works is I am just constantly wanting to understand more about how things work and why they work that way.
And I’m constantly finding little ways to test these theories I have and say, how do I test that and learn that? How do I pay the least tuition necessary to get to that next level of understanding? Great entrepreneurs, business in general, when you approach it as if I learn enough about this market and the customer, there’s going to be a way for me to provide a living. There’s going to be a financial possibility in any industry. We could look at this table and be like, I don’t know anything about the table industry. I’m sure the table industry is quite competitive, but I’m also sure that if I dedicated myself to learning everything I could about the table industry, I would find that there are some opportunities there. There are some ways that my skill set map to making great tables for people and serving a particular type of the market.
So I think there is this confidence that, hey, no matter the business vertical, if you take the attitude of a learner and this attitude of curiosity, and you’re constantly trying to understand what people want, what they need, what are the pain points they’re experiencing that inevitably you get that idea, that insight of like, oh wow, there’s an opportunity here. And that’s what’s kind of happened not just through my career, but especially with Simple Modern is that I feel like, I mean, today I will learn more about our customer and it no longer leads to these massive pivots and perspectives. But I would say I have micro pivots in my perspective every single day.
And I would say, if you’re not having micro pivots, if you don’t feel like you ended the day understanding more about your customer or your business than you did yesterday, then that’s a red flag. And if you go a few weeks like that, that’s really a red flag because there’s always more that we can learn and we can understand about people. And what business really is, Chris, is it’s serving people. We don’t use that terminology because of the money involved, but it’s like my job is to serve our customers. And there’s no way I can serve our customers unless I’m constantly learning more about the products that we make and their needs and how to best serve them. And when I take that mentality, it’s easy to release products that people want to buy because I’m listening to their feedback – the entire Simple Modern team is – and then we’re building around that. So this is, I think, the entrepreneurial process at the most basic level is, it starts with curiosity. It starts with learning. It starts with how do I constantly test and gather information and then use what I’ve learned to test some more and learn some more.
Chris: That’s good. So are you using tools like Google Insights, AnswerThePublic, all the search volume just to try and understand the problem?
Mike: Every data source I can get my hands on. That’s my attitude.
Chris: That’s awesome. What are some of your favorites?
Mike: Well, one of the things at the very beginning when we were like, we’re going to sell on Amazon is we realized — well, the question we asked was, what are people buying? We’re going to go where people are already trying to buy things. That’s a lot easier than trying to create a market — what are people already buying? And so how do you figure that out? And we had this, I think it was actually my brother. We had this great insight that the way you find out what people are buying the most – there’s some best seller list that can be helpful – but also was the review system..
We realized that reviews happen X percent of the time. We didn’t know at this point what percent, but we knew there’s some kind of a percent. And so if we’re just looking at review quantity, and then we also built this little scraper where we were looking at review density in recent weeks, like how quickly are they coming in, where you could get an idea for velocity. We realized, oh, wow.
Chris: So you had a scraper that was going through each page of Amazon, scraping data, grabbing.
Mike: That’s right, we started just saying, hey, it’s all right there. All the information is right there. Let’s go look at it. And not only could we find what products were selling, we would learn things about color preferences. And we’re like, oh, wow. There’s a lot to learn here. You mentioned it, but this is the paradigm shift of the internet. Now, just about any piece of information you could ever want to know is out there somewhere. And you can probably get it for free. So to some extent it’s about desire.
Chris: And that curiosity. It’s baked in.
Mike: OU [The University of Oklahoma] had a recruiting event last spring that they had me come and speak to. It was their big recruiting for prospective student services. And I’m trying to think through what do I want to say? Because there’s a lot of things about the university model that have been disrupted and costs have been going up, and so my job is to get up there and talk about why going to OU is a good idea.
And as I was thinking about it, what I realized and what I came to was, if you think about the university model a hundred years ago, it was we are the place that has the information and if you want the information you need to pay us the money and you need to come and listen to the experts and get it from them. Well, that’s not the case anymore. Even people listening to this podcast, you can listen to podcasts of far smarter people than me for free that have been more successful than me. There’s just an abundance of information where we can get from the very best experts in the world on any subject, we can get information for free.
Chris: A hundred percent.
Mike: OK, so what’s the point of universities? Why is a university worth $50,000? And what I shared with the families that were there was it’s a great investment if your time in college makes you love learning and cultivates a love of learning, because that’s the skill. In a world that’s awash with information, where it’s all right there, it’s about developing the love and the hunger for learning and the discipline of becoming a self-feeder. That’s actually the superpower. Once you develop that, there’s really no stopping you.
And it’s one of the things that’s fantastic about the world that we live in is that it used to be 50, 75, a hundred years ago, it was a little bit of a geographic lottery. If you’re born in California, you win. If you’re born in Bangladesh, you lose. And that’s it. And now we’re living in this world where if you have an internet connection, and that’s pretty much everybody at this point, you’re in the game. And now it’s about do you love learning? Are you willing to push yourself? Do you have a growth mindset? And if you do have those things, then there’s a lot you’re capable of.
Chris: It’s true. And I think another thing that’s great about school is this idea of communities you’re connected to and the people resources available to you. And the networks available to you. One of the guys that mentored me was an HBS grad and his network went from 10 to a 100.
Mike: Yeah. Order of magnitude.
Chris: Just being a part of that ecosystem. So I think it’s really powerful.
The journey to licensing
Chris: Well, being digital first, it’s clear. You guys are in spreadsheet land, in other big query land. We’re scraping stuff, we’re using Screaming Frog or whatever scraper that you built to try and aggregate all this data. And you guys are getting insights and you’re making certain choices and you land on drinkware. But the thing that I think is really powerful is you get this kind of initial sort of boost of sales that you were just talking about a couple minutes ago, but how did you get from sort of the initial product market fit to kind of moving into scale? What are some of the things that started to happen in the business? What are some of the things that maybe even value centric that started to show up?
Mike: Sure. Well, the biggest thing that happened for us, we got a massive tailwind from licensing. So I’d had this insight or perspective that I shared earlier of, man, I think we could do licensed insulated drinkware better than anyone. And I had this idea of what if you did something around universities? I still live in Norman, I’m in a college town. I think that there could be a good market here. You could have filled the Grand Canyon with everything I did not know about licensing at the time. It was literally like I get on Google –
Chris: It is a complex world.
Mike: I know nothing. I have no contacts. I’m on Google and I’m just “how do you get licensed?” And I start the process of learning. And pretty much what I learned, I’ll share the story, I pretty much learned you don’t get licensed. That’s the answer. The answer is it’s an oligopoly basically, and you don’t get in and unless you have a brand new product or a brand new market, they generally don’t license you. But I was naive and probably a little bit stupid, and to some extent maybe entrepreneurship requires...
Chris: A test or two.
Mike: Yeah, exactly. Like in Star Wars where Han Solo says “never tell me the odds.” That kind of has to be, at least a little bit. If you spend too much time as an entrepreneur thinking about all the ways it won’t go well, then you’ll never do it. And if I’d known what the percentage chances were that this was going to be successful, I probably wouldn’t have gone after it. And fortunately I didn’t. So we worked with this manufacturer that was making our other bottles to make some samples for OU. That was it. It was seven tumblers. And I remember getting them in the mail and thinking, we’ve got something here.
And the process to getting licensed, the first thing you had to do, was get what was called a local license. If you lived within a certain number of miles of a university campus, you could get a local license. And I’m like, hey, I’m an OU alum. I teach there. Surely this will be easy. Wrong. Even getting the local license was not easy. They wouldn’t call me back. The way that I’ll describe the licensing community is it’s almost like there’s this castle that you want to get in, and the drawbridge is up and they’re shooting flaming arrows at you and there’s like alligators in the moat. Nobody wants to talk to you because there’s all these people that have this idea of, oh, it’d be cool if I slapped an OU on it, people would buy it. And there’s a hundred of those for every five serious people. So, anyway, I finally get a meeting with – I’ll share this story because it’s one of the funnier ones – I finally get a meeting with the licensing director at OU — a woman named Candace who became a huge advocate for us in time.
But I walk in there and I’m like, man, how do I create a sense of “we’re going places”? And so we had a website, a Shopify website, and if you’ve ever had a Shopify website, when you make a sale it gives this push notification. It’s like “cha-ching, cha-ching.” So I turned marketing up to a 10 and then I turned the volume on my phone on before I go in this meeting. And so as I’m giving this presentation, my push notifications are going off. Cha-ching, cha-ching, cha-ching. And after like seven, I’m like, “Oh, I’m so sorry. That’s just our website.” And I turn it off, but I’m pulling out all the stops of how do I make it look like we’re going somewhere?
I’m able to convince her to give us a local license. And then after I got this local license, again, I don’t have any idea how stupid what I’m doing is. I call a friend and I’m like, how do I get this in front of Walmart or Sam’s Club? And they’re like, well, OK, let me make a connection. So they connect me to one of the agencies that represents brands to those organizations. Somehow they get a meeting with a buyer at Sam’s Club who it just so happened was literally looking for exactly what we were doing. And in the initial meeting, this buyer is like, “I’d like to buy $7 million worth.” And I’m like, “That is awesome. That’s fantastic. I can’t sell any of it to you.” I don’t actually have any of these licenses, but I’m going to go get them. And so armed with this buyer intent of a lot of money, I was able to go through the process of somehow convincing all these universities to jump on board. In the licensing world, that became a domino that led to the NFL and Disney, a bunch of other things.
But the number one thing that that did was it gave me at least a little bit of visibility of, OK, I know that I have a decent amount of cash coming from this program next year. And I was able to accelerate the hiring process a little bit, and we went from four people to 10 people. And not only was I able to hire people, but I was able to hire people that I thought could be executives. I was able to hire people and say, hey, you’re going to be doing the blocking and tackling. You are going to be in the muck with us. But someday I think you can lead and really be leading a larger company.
Recruiting for a better quality of life
Mike: So I was able to kind of recruit over my head. The story behind the people that we hired: When I first decided that we were going to do Simple Modern, my wife and I had a date night and I told her I really want to do this. And so she said, that’s great. I support you. Let’s make sure that we hire the very best people. And we literally just brainstormed who would be the 15 people, the first 15 people, we could hire that if we could hire them we would. And we literally made a list. And so when we started to get the traction and we got this commitment from Sam’s Club, I just literally started calling down the list of like, “Hey, I’ve got an opportunity and I’d like to talk to you about it.” And so that helped propel us because we were able to build it.
Now, to go all the way back to a principle we talked about before, there’s still a lot of sales involved in convincing very talented people to join your team. Every single person that joined our team took a pay cut. I couldn’t offer their market value. Eventually they became co-owners and there was equity, but what’s that equity worth when you’re tiny? It’s not really worth anything yet. And so mostly it was giving vision for, hey, let’s build something different together. And I would love to do this with you, and here’s what we’re going to be about. And I think we have always recruited with our values as our lead foot and this vision of building something different. And that fortunately resonated with that group and so we were able to go from four of us — we literally didn’t have an office. We literally would meet in the upstairs room of my house or Panera Bread. And then we find that we had an office and we had 10 people and it was like, OK, we’ve got a legitimate company.
Chris: We have a foothold.
Mike: Yeah. We’ve got something to work off of. So it was kind of a big break. But if we hadn’t gotten that break, it would’ve looked different, But we would’ve figured it out. But it’s a fun part of our story.
Chris: It’s a big deal. There’s typically some sort of anchor that you get initial traction on. Microsoft, it’s that first IBM deal. For you guys, it’s Sam’s Club. There’s this “I got a contract and I’m not a hundred percent sure how to do that.” You get an order like that, it’s kind of like, man, this could sort of make us or break us. And then one of the things that I think is really interesting is this idea of the selling that you talked about to recruit these people. There was a placeholder between your “I’ve got a little bit of initial traction and I’m selling on values and I have to convince them.” There’s a space between the money that motivates them and something that was a carrot that was hanging out that was like, “I want to do this because.” That sort of brings people together. And that’s some initial traction for growth right there. What was sort of the secret sauce or the thing that you started to kind of catch on when you realized what you learned early was that people matter, and you got this sort of nexus of people and initial traction with the business — how did that start to sort of foster at scale growth?
Mike: I think I’m answering your question, what I’d start with is, what’s quality of life? What everybody’s after is quality of life.
Chris: That’s good.
Mike: Everybody’s after that. And I think the way that this plays out is that we think, “if I had more money, I could convert that into quality of life.” And to be sure, you can do that. What I’ve learned, and this is one of the secrets of when you become more wealthy, is actually the conversion rate is not guaranteed and it’s not so good for a lot of people. It’s not so easy to convert more wealth into higher quality of life. And then you say, well, what are all the things that drive quality of life? Because money in and of itself doesn’t drive quality of life.
You think money will drive quality of life because money can help you get to the things that do. The things that drive quality of life are that, I feel like my life matters and it’s a part of something that matters. That I have relationships that are meaningful, that I feel like I have real connection with other people. I have coworkers that I know. I have coworkers that I enjoy, that I feel connected with, not transactional with. That I have, in my personal life, my relationships are fostered and they are thriving. That can be my spouse. That can be my immediate family or my kids. That can be my friendships. We’ve all had experiences where we were working so much where those things suffered and we felt our quality of life decline. That can be learning that I’m in an environment where I feel challenged and I feel like I’m growing and I’m developing new skills.
There’s this whole list of them. These are not my words — there’s lots of research on this that’s shown what these things are. And I think what you can do as a leader is be really strategic about what are the ways that I can build an environment where people get really high quality of life? And that paying people well, certainly, that is a part of it. But a lot of times –
Chris: It’s just a piece.
Mike: It’s just a piece. And it’s not the biggest piece. The research will say this all the time. People don’t leave jobs, they leave bosses. People don’t leave jobs usually because of money. Money provides an excuse to do something that they already want to do, but very rarely do people and the type of people that leave jobs for money, a lot of times it’s because there’s a kind of a different value set and that’s fine, but we’ve tried to really build a team around a value set of relationships really matter. Generosity and the impact that we’re able to have by being generous in the lives of other people, that really matters. The ability to learn and to grow, it really matters. The ability to do work that’s our best, that’s excellent, that really matters. So if you went down kind of our value list, it’s like excellence, generosity, growth, mindset, humility, collaboration — you can take all of those and say, those actually all point to a quality of life factor that matters. And so we recruit around them. Some people that’s not going to necessarily feel like the most compelling set, although I don’t think people are that different. I think most people are like, yeah, I want the people I work with, everything being equal, I’m going to have higher quality of life if I feel connected with them.
Chris: Yeah. So true.
Mike: Everything being equal. I want to be able to say what I spent my week doing made the world better in some way. And I can see that. I can draw a straight line from how I invested my hours and this is making a positive impact in the life of other people. So the years in the nonprofit world where I just did not have finances as a lever were fantastic because I was really able to see for me and for other people, what are all those other things that really drive quality of life? And really build a company around focusing on those. And it turns out that that’s really compelling. So at this point we hire very atypically. It’s almost exclusively off of internal referrals. We want people that someone in the company has some kind of a reference on, and we lead with values.
Mike: This is what we’re about. And the people that apply at this point, not only do we usually have an internal reference, but they’re people who are like, I’m coming for the values. That’s why I’m here. And so it’s turned into this culture where, at the end of the day, we all need to make car payments and we pay the bills and stuff like that, but the money piece of it isn’t what’s compelling about the company. And it’s all the other things. And you can even make decisions to invest money in ways that accentuate your values. A good example for us is fairly early on I was like, we are going to buy all the meals for the company. When we’re at the office, the company is buying lunch. And even with some of my other owners, it was “Hey, is this the best investment?”
And I was pretty adamant of yes. Because what this does is this really will foster relationships and connectedness. And now if you ask people at our company “what’s the best part of your week? What do you love about the culture?” They’ll always talk about the meals. Because it is normative at our company that when it gets to be 12 and the food is there, everybody goes, there’s a big area, and they go and they sit and they talk and there’s real connection. People don’t go off campus for lunch. You can. It’s not like you have to stay. But it’s become a highlight of people’s days. And who doesn’t want that? Who doesn’t want part of their day where it’s like, oh, I felt like I really connected with somebody over lunch today.
Chris: That’s meaningful.
Mike: Yeah, exactly. And what’s funny is I can provide a lot more quality of life by buying $600 in Chick-fil-A than I can by giving $6,000 of raises. And so this is another thing as an entrepreneur, a skill you can develop is there’s a lot of different ways to invest resources and they provide different returns. And some of becoming a skilled entrepreneur is looking at the returns of things and understanding the quantitative and non-quantitative impacts and being able to evaluate investments. That’s really what stewardship is — being able to make wise decisions there. And this is where the leadership side of leading and the business skill side of leading, they kind of come together and there’s this kind of mixture that I think powers the most effective companies.
Generosity is more than checks to charities
Chris: Yeah. The thing that’s interesting as well is just that sort of pillar of generosity. Buying lunch for everybody, that’s generosity. But I wonder if some of the generosity that you’re talking about is alternative investments. The generosity is, I can map generosity to just investments in people. What are some of the other sorts of things that you’re saying are normative for you, and for Simple Modern, what are some other sort of generous things that you’re like, I am so proud we are able to do this?
Mike: Yeah. Some other examples of tradeoffs, on Tuesday mornings, we will have an all hands meeting where myself or one of the other leaders in the company will just speak about company values or something that’s more developmental. Jeremie Kubicek from GiANT has come in and done several leadership development times. We’ll break out into small groups to discuss a leadership principle or how we’re trying to grow in a particular area. And so it’s like, well, OK, that’s an hour out of the work week or an hour and a half out of the work week for everybody. And we do it every single week, but what we’re really doing is we’re investing in them. Another good example is what are your expectations around work hours? And this is one of those things, and I want to be really clear about this, the way that we do it at Simple Modern’s not the right way. It’s a way. I don’t think there is a right way.
Chris: Yeah. There’s wise and there’s foolish. There’s not a right way.
Mike: And there’s trade offs. What I really push people to do is and I push people in our organization to make their own decisions. I don’t want to make decisions for them, but I push them to have well thought through thought processes about the tradeoffs of why they’re doing it. Another example is how many hours is normative for people to work in your company? This is an area where some companies it’s 35, 38, some companies it’s 60, 70. The mileage can really vary. And so an example of how you think about generosity is the more that you’re willing to hire to reduce workload on your team, that’s a form of generosity. If your expectation is 40 hours instead of 48, or 45 instead of 55, because the company is willing to hire another person and have less profitability to have a more distributed workload, that’s a form of generosity.
And so I try to think about it holistically like that. There are a lot of different ways that we can invest resources to try and make the experience of the people that work at the company better. So when we think about generosity, Chris, the way that we describe it is, it’s holistic. It’s everything you have. You have open hands with, and you say I want to use the things that I have for the benefit of everybody. Not just one particular group, but everybody. So I want our team to experience generosity. That’s the free lunches, that’s being poured into. That’s an environment where their development and their growth as a leader is important.
And a whole host of other things. But I want to be generous with our customers. How do we charge the most affordable prices we can? That’s a form of generosity. We could charge a heck of a lot more for our stuff than we do. One of the reasons we’ve grown so fast is because people are a little bit like, “OK, how in the world are you selling this at half the price of somebody else? This is as good or better. What are you doing?” Well, that’s a form of generosity. And it’s a form that a lot of people have responded to. They’re like, “OK, yeah. I want to buy from you.” You can be generous with your community. One of our pillars is we give 10% of profits away within the company.
There’s a lot of giving that happens from the owners and outside of the company. But inside of the company, we give 10% away. We have quite a few nonprofit partners both locally. And then also we have a pool of money that’s equally distributed among all the employees and given away. So it’s like, OK, that’s generosity with your community. We have a lot of partners. We have manufacturing partners. We have partners that help us to sell into mass retail. We have partners that help us with fulfillment. There’s a lot of people involved in running our organization that don’t have Simple Modern on their W2. And there are opportunities all the time to be generous with them.
We had a situation with our primary manufacturer where a valve in one of our straw lids, something got changed and it made it where you couldn’t drink well out of it, which is kind of a problem if it’s a straw lid. My water bottle’s not as helpful if I can’t drink it. And there were a lot of different ways that we could have approached that situation. There was certainly a spectrum. And what we really tried to do was find a relational and partnership oriented mentality. And listen, it required generosity. It certainly cost us money. And it certainly cost the organization a lot of time, but it was another example of how our relationship with that manufacturer, and the partnership is actually stronger as a result of demonstrating generosity. So the way that I sum it up for people is, generosity is not as simple as writing checks to charities. Now it should include that. But if you take a narrow view of generosity, that’s not really what we’re aiming for here.
Chris: It’s a big deal about how you’re doing it.
Mike: Yeah. Exactly. And how comprehensive the view. So even this, I filed this under generosity. It’s the middle of the day, there’s things I could be doing. Why am I here talking on this podcast? Well, because I can give away some of the things that I’ve learned and some of these perspectives, and hopefully there’s people listening to this where it’s like, “oh, that was helpful for me.” And that helps me to be more effective. That’s a form of generosity. It’s why I do the adjunct teaching at OU. It’s not the paycheck. It’s not a lucrative profession to be an adjunct professor, but it’s that I love being able to give away the experiences and the information that I’ve learned. And so I’m constantly asking in all of the different kinds of areas of my life and areas of the business what does it look like? Not surprisingly when we have that business, what does it look like? Not surprisingly, when we have that mentality, people tend to want to reciprocate that. When people experience generosity from you they’re, “Hey, how can I help you?” And so it’s a virtuous cycle.
To get feedback, you have to want feedback
Chris: One of the things, a theme, that I’ve picked up on with you is that continuous improvement is a big part of your life.
Chris: So I want to ask you two questions. The first one is about being an entrepreneur and the second one is about being a leader.
Chris: And the first question —really you’ve overcome a lot, you’ve learned a lot, the continuous improvement, these themes, the pillars that it seems there’s so much that you’ve conquered. And I know that sounds pretty weird and you’re like, “Please, conquered?”
But this idea of continuous improvement, I think it’d be really helpful to say as an entrepreneur, what is something you’re currently working on that you’re, “You know what? I don’t have this yet, but I want to improve here.” And how are you thinking about doing that? Because I think there’s a lot of people, as entrepreneurs, that they’re facing an issue and they haven’t conquered it yet and there’s learning lessons, but then there’s also, “You know what? Mike has conquered a lot of stuff, but he’s still trying to improve. He’s still trying to figure something out.” How are you approaching an improvement area? Both as an entrepreneur and then I can ask, as a leader.
Mike: Well, I think there’s a ton of areas, because the reality is, I can get better in literally every single area of my life. And so there’s not an area where I’m like, “I’m good, I’m done.” And I think that’s health. Health is saying, we’re never there in any area. Not in a discouraging way, but just saying, hey, there’s always room. One area that’s really obvious to me is managing my own emotions is so much of the game. You think business is about strategy, it’s less about that than people. You think it’s about managing people, it turns out it’s less about that than managing yourself. That starts with, do I have the ability to manage my own emotions and my own thought processes?
So much of being successful, it comes from compounding. It comes from, like you’re saying, making little improvements over time, staying the course, people wanting to work with you. And so much of that comes from steadiness. Are you a volatile person? Are you an angry person? Are you putting too much stress on yourself? Or can you manage the internal tempests in a way that, not only with making decisions on your business, or how you treat the people that you work with, or how you treat your family, or how you’re treating yourself physically, that it is sustainable for an extended period of time?
I know a lot of business leaders that are thinking about the exit. What does the exit look like? How close am I to the exit? How do I get there? And the sense I get from a lot of them is, “I’m really tired and I’m just really looking for the opportunity to tag out.” And it’s always been hard for me to relate because I’m, “Man, I feel great. I could go for 25 more years.”
And I think most of it is because my day-to-day experience is a positive one. I’m not carrying massive amounts of stress. I enjoy what I’m doing. I’m enjoying learning. I feel like I’m growing. And so sustainability, it really comes from managing myself. Listen, there are times when I want to get angry. There have been some situations in the last few months where a partner has not treated us fairly, or a situation hasn’t been handled well. A good example – this is a funny story – we’ve been trying to get better at managing our inventory. And I woke up one morning and we had oversold a unit by a couple 100 units. So a bunch of people thought they bought their kids this princess backpack, and they’re not going to have their princess backpack. And that’s frustrating to me because of what our customers are experiencing. So I’m dealing with this on my phone. I’m texting people, “How do we manage this situation?”
And as I’m doing that, we have a whole team who does customization. And my wife is the PTA President at Roosevelt in Norman, Oklahoma, and so she bought, I think, 100 water bottles that are customized to sell at this back-to-school night. So as I’m on the phone and I’m dealing with this issue with our inventory, my wife realizes that one of the boxes from her orders on the front porch, she brings it in, she opens it up and it looked like trash. If you’ve ever seen the movie Ace Ventura, and the thing with the UPS, where he’s a UPS delivery guy and he’s just destroying this package intentionally. That had to be what the delivery process looked like. And I’m looking at this I’m, how is this even possible? And you just feel the cortisol, you feel the stress levels rising. And it’s in that moment, you’ve got to manage yourself, because what you want to do is you want to fire off an email to somebody, you want to get on the phone and you want to raise your voice. Internally, you feel all this tension and it’s like the discipline of, “How do I manage this positively?” Turned out that UPS had damaged our box and they’d just taken it and dumped everything into another box.
And it’s, I don’t know why UPS did that. And even now it’s, I could be really frustrated about that, but it’s a discipline to not be. It’s, no, UPS is a partner of ours. I’m sure that most people that work there would not have wanted that to happen. We need to work through it. We need to deal with it.
Business is about solving problems. So the problems don’t go away, it doesn’t matter how successful the company is. You might get a little bit better problem set when your company’s successful, but the problems are always there. How do you respond to those problems? So that would be one example for me. But like I said, you could fairly point out any area of my life and I’d probably say, “Man, I’ve got work to do.”
Chris: That’s powerful.
Mike: Let me add one point to that. Here is how you get better. Tactically, is that you get a lot of input, you get a lot of feedback. And so to get a lot of feedback, you have to want feedback and you have to seek it, and you have to be willing to receive it from more than a few sources. So are you the type of person that is asking other people for feedback? Are you the type of person, when people offer feedback, that it’s received with humility? And validated or invalidated? And this is how a lot of leaders stop growing. Is that it starts to be like, well, I have my perspective and even if I say I’m open to feedback, when people bring me feedback, I’ve got a list of reasons why they’re wrong or why they misunderstood me. And so people stop offering you feedback and then the growth slows down.
So for me, anybody can offer me feedback. My son can offer me – he’s 10 years old – but sometimes he can offer me feedback that I need to hear. And just the fact that he’s 10 and he’s my son doesn’t mean that his point of view is invalid. Sometimes I lose my temper and I should apologize. And it doesn’t matter who it’s coming from. And I think creating an egalitarian perspective toward people giving you feedback, it’s valid, no matter where it comes from. And it’s helpful, if you’ll view it that way.
Chris: Yeah. I think that is key. And the thing what you just called out was the difference between a fixed mindset and a growth mindset.
Chris: And that right there, if you can’t take feedback, are you listening to customer feedback? Are you listening to personal feedback? Can you do those things? And if you’re not listening to them, you’ve made a choice and you it’s likely a choice to not grow. And I think that there are other roadblocks that people, entrepreneurs and operators, go through. What are some of the roadblocks that maybe you have either given feedback to others about or that you recognize in yourself that are growth roadblocks?
Mike: Yeah, absolutely. Well, there are so many, I’m parsing through in my head.
Chris: Yeah. There’s a filing cabinet somewhere with all of these, I have them in my head.
Mike: Roadblocks to growth are selfishness, they are fixed mindset...man, this is such a good question. You guys will have to cut a minute out while I gather my thoughts.
Chris: Gather your thoughts, that’s the reality.
Mike: It’s so good. So would you rather hear about tactical things or personal-
Chris: No, mindset things. What are some of the mindset things that slow people down that are roadblocks to them getting to the next step?
Mike: Yeah, absolutely. So I think that some of the different roadblocks I call out, one is it’s very easy to see the world as it is today and to just project that out into the future. And growth always requires you to have a vision of the future that’s materially different than today, and creating a plan of how you get there. Pessimism sounds smart, optimism is usually what happens.
If you’re an investor, there have been so many points over the last 70 years where it would sound super smart to be pessimistic and say, “You shouldn’t invest in stocks.” But the reality is investing in stocks has been a good decision, pretty much all the way through.
Chris: For a really long time.
Mike: And I think if you take that perspective in general, that it is good to have a healthy dose of questioning things and having rigor, but you do have to approach things with some level of optimism or I don’t know how you produce growth, because growth is fundamentally a different future than today and you can always find reasons why that growth can’t happen or won’t happen.
Mike: So that’s probably the first, is that you have to be able to envision it and you have to be able to adopt the mindset that it’s achievable and communicate to other people, “Hey, this is achievable.”
Growing as a leader: From player to coach to commissioner
I think another thing is — listen, my job has changed a ton over six years. Early on, I’m literally the one clicking the mouse, and now my job is very different. I’m a spokesperson, I’m doing a lot more speaking, I’m still involved in the strategy and occasionally I’ll do something tactical in the business, but there’s a lot less tactical. You have to continue to grow as a leader, the way that your business is growing.
Mike: So a couple ways this shows up with me. I cannot expect my business to continue to grow and succeed at a faster rate than my character’s growing. Or that my ability as a leader is growing, because I will become the bottleneck. And when it comes to leadership, you can’t impart what you don’t possess. So if you’ve got a growing organization that’s looking to you for leadership and guidance that you don’t possess, that’s going to be the bottleneck. That at some point the bottleneck really can become, we can’t bring on more people because we don’t have the leadership structure.
What typically happens to people is they get into a situation where they don’t make the transition from tactical to strategic. There’s this model that’s extremely helpful, of the early days, it’s a sports model. That there’s these different stages of a leader and it’s player, player/coach, coach and then commissioner or something like that. Early on, when you’re an entrepreneur, you’re a player. If you’re not throwing touchdown passes, they’re not getting thrown. If you’re not doing the blocking and tackling, it’s not happening. This is ground zero. If you’re successful, the business starts to grow. There starts to be more work and it’s, “We got to hire people.” And you hire people, and now you’re a player/coach. You’re still needing to throw touchdown passes, you’re still needing to be on the field.
Chris: Oh, yeah.
Mike: But at the same time, you’re also providing guidance to the other players on the field. “Hey, you need to be in that hole. Hey, I need you to do this.” So it’s coaching while doing it with people. So at the first stage where you’re the player, the tension is, “Man, if I just had some help. I’m doing everything. I’m wearing 15 hats here.” Then at the player/coach level, there’s this different tension that’s like, “Gosh, I don’t have any time to think, Between all the things that I’m having to do and trying to coach all these people, if I just had some time to think I’d be so much more effective.”
The next stage after that we’ll call “coach,” which is, you’re not on the field anymore. The pads are off, and your job is to just coach the players on the field. And what happens – is super interesting, Chris – what happens is you do finally have the time to think and your ability to lead other people can grow, but this is where your own personal weakness can sabotage you. All of a sudden it’s like, what am I even doing? I didn’t accomplish anything today. I didn’t cross anything off my to-do list. I just had six conversations. I don’t feel like I did anything.
And you can revert back over tactical work because it’s what you know and because it feels like you’re accomplishing something, when the real important work is developing the leaders who can lead on the field. And then there’s even another one where it’s, hey, you jumped from coach to commissioner, or something like that or whatever. And you can keep abstracting it all the way. And every time you make one of those transitions, it’s really challenging. And the leader not making that transition, can totally stunt the growth of the organization.
Chris: That’s powerful, well said. It begs the question – where that’s an incredible lesson that comes from experience, not just from observation – and I just wonder, what would be maybe the number one thing that you would say to, not Mike in the nonprofit world, but first startup, first leadership role Mike: What would be the one thing that you’d be like, “the most important thing you need to know,” or “the most important thing you need to think about,” or what is the number one thing that you’d say back to that guy?
Mike: Yeah, I think I would say you need more humility and you need more growth mindset. And I think I would go back and give myself that feedback at just about any step in my career. That I would’ve benefited from more humility and I would’ve benefited from having an even deeper desire to grow and develop. And going all the way back even into college, I was famous for, I had a couple classes, I literally only showed up on test day and I didn’t open the book except for the night before the test and I got an A.
And I wore it like a badge of honor, and now I look back and I just think, “What stupidity. What a waste.” The person I cheated was myself. The fact that I had the ability to learn where I could do that and then I just squandered it for years, just skating. And I see that going all the way back into high school and college of like, man, I could have learned so much more. The humility piece is just, developing leaders are really difficult, because they’re so excited about the future.
And because they’re so excited about the future and they’re so excited about leading, they can be very critical of whatever leadership they’re under. And I tried not to be, but I think there were certainly times along the way where I’ve been under other people’s leadership, that I’ve been overly critical because in my own mind, I would’ve done it better, and that’s not a helpful perspective at all.
And so I think as I’ve grown, as we grow in humility, it makes us better leaders, it makes us more relatable. We are people that others want to be around. A really simple principle here is, “How much do I say I vs. how much do I say we?” And continue to be on that path and continue to have days where it’s like, man, I want to continue to grow in this area. So there’s a lot of areas I’ve mentioned, but those would be the first two.
Chris: Oh, that’s powerful.
What fills Mike’s cup
Chris: We’ve learned a lot about the company. We’ve learned some about you and how you think. I want to ask you some rapid fire questions here to learn a little bit more about you.
Mike: Let’s go.
Chris: All right. What would I find inside Mike Beckham’s tumbler?
Mike: Tumbler, you’d find smoothies in my tumbler, you’d find water in my water bottle.
Chris: Oh, That’s great. What about inside your cocktail shaker?
Mike: Unless I was on a trip to China, you probably wouldn’t find anything in my cocktail shaker. I literally have one at my house, we have this great cocktail shaker and I don’t think it’s been used a single time.
Chris: Why China?
Mike: Well, we have manufacturers that we’ve worked with in China and one of our manufacturers, he’s really into very nice wine. And I’m just not a drinker in general. And then I go on these business trips and he’s bringing out all this nice wine and I’m just, “No more wine.” So anyway, not a big cocktail guy.
Chris: That’s like a visit to Napa, you’re, “I don’t want to anymore.”
Mike: Yeah, I’m done.
Chris: How many Simple Modern cups do you think you have in your house?
Mike: Too many. It’s funny, when we first started the company, it was, “These things are awesome.” And I’m hoarding them and now it’s almost like a biblical plague of insulated drinkware. It’s just everywhere I look. Probably 150.
Chris: All right. OK, there you go. Well, which holiday, other than Christmastime, do you see the biggest spike in sales?
Mike: It depends on the product. We do really well in back-to-school, which isn’t actually a holiday, but we’ve done exceptionally well with kids’ items. And then we do really well Valentine’s Day, Mother’s Day, stuff like that.
Chris: All right. Super cool. Speaking of feedback, what’s the most unusual product suggestion you’ve ever received?
Mike: Oh my, I don’t know. I’d have to think about that. I get a lot of inbound stuff that is interesting and questionable. The ideas abound. I think once people see that you can make something, they’ll bring ideas to you that are not necessarily relevant.
It’s funny...OK, so this is actually when you work with manufacturers in other countries, they’re making products for you, but they don’t really understand the market the same way that you do. And so I remember one time I was having a conversation with someone that owned a pretty big business overseas, manufacturing stuff. And I’m having, what I think, is a very serious strategic conversation with him. And there’s a little bit of the language thing, but I’m feeling like we’re really connecting and he’s saying, “Yeah, I understand.” And then he’s like, “I want to show you something.” I’m like this is going to be profound. I don’t know what he’s about to show me on his phone, but it’s profound. And he literally pulls out his phone and it’s a water bottle with a fidget spinner on the side. And I’m like, I don’t think, actually, we’re having the same conversation right now.
Chris: That is the best, fidget spinner on the side. Very trendy, very trendy.
Chris: So you’re an OU grad and repping the colors today. Who’s the best OU quarterback of all time?
Mike: Oh gosh. I think most people would say that attitude, they’d go with Baker. But I think Bradford, for me, is probably the best. I remember I was so into OU football during that period, I re-watched every game one summer or something, from that ‘08 season. And I counted seven bad passes that he threw the entire season. It was just amazing. It was an amazing season. He was so accurate, and he is a PC North Panther.
Mike: That’s where I went to high school, so representing the high school.
Chris: All right. Well, when you’re not out on the podcast circuit, where might we run into you, any given weekend?
Mike: Yeah, absolutely. So you’re either going to see me out and around with my family. I try to be really active in my kids’ lives. Or you might bump into me on campus, or you might catch me at a Thunder game — we just announced a partnership with Thunder.
Chris: Oh, that’s great.
Mike: I’m pretty fired up about the era of Thunder basketball, I’m a Thunder fan and an OU football fan.
Chris: Yeah, definitely. Well, which entrepreneur inspires you most?
Mike: Man. That’s great. I really feel like I can learn from so many different entrepreneurs and then I shy away from the full throated hero worship, if any. These are just people. And this is one of the things, I am just a guy. I feel like I’ve learned some things and I feel like I’m happy to share that. But I’m just a guy, and Elon Musk is just a guy. Bill Gates is just a guy and these are people that have their own flaws. But I do try to learn from the aspects of what other people have done. But what’s interesting – and this goes back to the feedback idea – there’s this culture right now of, “Oh, we got to look at the five richest people and learn from them.” It’s like, “Man, if that is the way you’re thinking about growth, that is so limited.”
Forget the survivorship mindset, it’s just so limited. They’re not situated like me at all. I want to be able to learn from my wife. I want to be able to learn from the newest customer support hire at our company. I want to be able to learn from the guy that follows me on LinkedIn and gives a point of feedback — that’s what I want to learn from. So I think that I have an inherent admiration for anyone that is going through the entrepreneurial process, that is putting themselves out there and is actually going through the process. And I feel, not only do I admire that, but I feel like I can learn from anyone that’s going through the process.
Chris: That’s powerful. It’s like the man in the arena.
Mike: Yeah, absolutely. I love that quote. Yeah. Absolutely.
Chris: It’s so good. Well, what’s next for you or maybe Simple Modern?
Mike: So the big project right now is we are, literally, as we speak, we are starting to make the first units domestically for Simple Modern. So we’ve invested about $6 million. We’re going to be able to make plastic water bottles domestically. We have a program we’re delivering for Sam’s Club here in a month and a half, and it’s really exciting. Everybody on the team is going to work at least a day shift on the production line. So it’s a really fun project to bring to fruition that we’re bringing jobs and manufacturing here, and also going to make better products and be able to give a better value proposition to customers, so excited about that.
And continuing to lead a really quickly growing company. I thought that maybe we would start to grow it a little bit more of a – I don’t know – a slower rate? But next year looks like it’s going to be a really massive growth year. We think that the company might grow 50% next year. And so continuing to manage that. And like I mentioned earlier, continuing to ask the question of, OK, how do I have to grow? What does the next phase look like for me? There’s obviously a lot more of this public figure stuff, which still feels a little bit weird to me, but I’m trying to get accustomed to the new role of spokesperson that I need to play.
Chris: Yeah. It means something to share and I really appreciate you coming. Well done.
Mike: Yeah. Absolutely. Thanks for having me, this was a great conversation.
Chris: You bet. Thanks for coming.