Arena Show Part II: Brooks Running (with CEO Jim Weber)

1. BGBen Gilbert0:00

   So have you, uh, gone running yet in your custom acquired Ghost 14s?

2. DRDavid Rosenthal0:04

   Dude, the Ghosts are amazing. They are the best sneaker I have ever known, bar none, hands down. I used to have Adrenelines. Adrenelines are also great, but I literally wear them, like, all day, every day.

3. BGBen Gilbert0:20

   But David, those shoes are only for active runners. You're, you're misusing the point of the Ghosts. [chuckles]

4. DRDavid Rosenthal0:26

   Well, with a baby, I mean, I'm literally wearing a baby-

5. BGBen Gilbert0:29

   [laughing]

6. DRDavid Rosenthal0:29

   -walking the hills of San Francisco. I'm burning more calories than I did when I was running every day.

7. BGBen Gilbert0:34

   It's true. It's just a slow run at the end of the day-

8. DRDavid Rosenthal0:36

   Yeah

9. BGBen Gilbert0:36

   ... that's all, that's all you're doing.

10. SPSpeaker0:38

    Who got the truth? [upbeat music] Is it you? Is it you? Is it you? Who got the truth now? Is it you? Is it you? Is it you? Sit me down, say it straight. Another story on the way. Who got the truth?

11. BGBen Gilbert0:55

    Welcome to season ten, episode eight, The Arena Show, presented by-

12. DRDavid Rosenthal1:00

    Ooh

13. BGBen Gilbert1:00

    ... PitchBook, of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert, and I'm the co-founder and managing director of Seattle-based Pioneer Square Labs, and our venture fund, PSL Ventures.

14. DRDavid Rosenthal1:14

    And I'm David Rosenthal, and I'm an angel investor today, back home in San Francisco. But man, what a special day that was in Seattle. [chuckles]

15. BGBen Gilbert1:24

    That it was, and we are your hosts. We're gonna go right here into the on-stage introduction of Jim and the Brooks story, so I don't wanna give too much exposition here, except to say that if you've been sort of thinking Brooks is this like shoe brand, and what can tech people possibly learn from a hundred-year-old shoe company? Prepare to have your mind blown. Jim's one of the most dynamic guests that we've ever had on Acquired, and I just got so many comments leaving the arena, just absolutely floored with all the great takeaways, and lessons, and quotes that people wrote down from Jim, so make sure you enjoy that. Now, before we dive into that, we have a fun little Q&A with our presenting sponsor, Vanta, the leader in automated security and compliance. Now, as you know from hearing from Matt Spitz live in the arena, the head of engineering at Vanta, we are huge fans of Vanta and their approach to the whole security and compliance process, SOC 2, HIPAA, GDPR, and more. And today we've got CEO and co-founder Christina Cacioppo back with us to chat about Vanta. Um, okay, so Christina, we've been talking about your product all season. What else is unique about Vanta, the company? Do you personally have any strong beliefs about how to run a company, culture, how, how to be successful in this ecosystem?

16. SPSpeaker2:46

    One strong belief I've developed, uh, about the two parts of a company, go-to-market, and, you know, end product and design, is that I think a lot of folks, right, somewhat naturally run the engineering side in particular, like, as if it were engineering, industrial engineering. I actually think that side is much more like art than science. You know, like what is product development? Again, there's metrics you can put around it, but especially at the early stages, like it's a lot of, you know, when you see it, and you can go through processes, but you can't really prescribe outcomes. I think in contrast, the go-to-market side, like marketing, sales, you know, customer success, especially for a SMB business or mid-market business, should be like run industrial engineering-wise, right? You just have processes, you have like inputs, you have transformations, you have, you know, conversions, you have outputs. The spreadsheet map there is actually really helpful, and that can be a lot more predictable. Whereas again, I think on the, especially new product development side, that if you try to, you know, go full industrial engineering on it, you will just not do anything interesting. So I think part of the magic at Vanta is we've been [chuckles] able to bring those two sides together and cross-pollinate across teams, and so give folks on the engineering team opportunities to, you know, see into how we sell, and vice versa. And that's one of the things that I'm most proud of over the last few years at Vanta, and I think has contributed to some of the early success we've had.

17. BGBen Gilbert4:12

    Our thanks to Vanta, the leader in automated security and compliance software. If you are looking to join Vanta's two thousand-plus customers to get compliance certified in weeks instead of months, you can click the link in the show notes or go to vanta.com/acquired for a ten percent discount.

18. DRDavid Rosenthal4:28

    Whoo! Thank you, Vanta.

19. BGBen Gilbert4:30

    Thank you, Vanta. All right, listeners, please note that this is not investment advice. It definitely wasn't investment advice last episode. And, uh, without further ado, on to our conversation with Jim Weber, the CEO of Brooks Running. All right, now, for our final act of the evening, we have a very fun local story that we've been dying to tell: Brooks Running. I, I mean-

20. DRDavid Rosenthal5:02

    Whoo. [audience cheering]

21. BGBen Gilbert5:06

    [chuckles] So I think a lot of people are probably familiar with this brand, especially in Seattle, especially if you are a runner, but the story of this business is absolutely unbelievable and extremely undertold until now. So when the CEO, Jim Weber, took the helm in 2002, the company was losing five million dollars a year. It was thirty million dollars in debt. It was a week away from missing payroll, and the board was, like, having weekly meetings to figure out how to make payroll. It was a business of pretty modest size. It was a sixty million dollar revenue business, and when we talk about this revenue number, you know, it's not SaaS numbers. Like, there's extremely real costs in making shoes, so you can imagine not making a ton of money, well, actually losing five million dollars a year. So that business had been around for, like, ninety years, and it sold all sorts of products at every price point to, frankly, a pretty random set of consumers in every category, not just running. So enter Jim.... Jim came in and bet the company exclusively on serving active runners as a segment, and he cut all other business lines. Over the last twenty years, he's grown the business to over a billion dollars in revenue, billion with a B, uh, and well over a billion, and is thriving, and thrived even through the pandemic. So along the way, Brooks was acquired by Berkshire Hathaway, and Warren Buffett personally elevated Brooks and Jim to make the company a direct report to him. Jim is a leader, a visionary, and a fighter, not only growing the business over the last twenty years, but personally fighting and beating cancer. Please welcome Jim Weber. [audience cheering]

22. JWJim Weber6:50

    Hey, guys! It's great to be here, Ben.

23. BGBen Gilbert6:52

    Thank you so much.

24. DRDavid Rosenthal6:52

    Ah, Jim.

25. JWJim Weber6:53

    Here we go.

26. DRDavid Rosenthal6:54

    [chuckles]

27. JWJim Weber6:54

    This is great. What a show.

28. DRDavid Rosenthal6:56

    [chuckles] So, um, Jim, we, we figure you have a lot of footwear already. [laughing]

29. JWJim Weber7:00

    I've got some shoes-

30. BGBen Gilbert7:02

    [laughing]

Episode duration: 1:10:55