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

Ben Gilbert 0:00 So have you, uh, gone running yet in your custom acquired Ghost 14s?

David Rosenthal 0:04 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.

Ben Gilbert 0:20 But David, those shoes are only for active runners. You're, you're misusing the point of the Ghosts. [chuckles]

David Rosenthal 0:26 Well, with a baby, I mean, I'm literally wearing a baby-

Ben Gilbert 0:29 [laughing]

David Rosenthal 0:29 -walking the hills of San Francisco. I'm burning more calories than I did when I was running every day.

Ben Gilbert 0:34 It's true. It's just a slow run at the end of the day-

David Rosenthal 0:36 Yeah

Ben Gilbert 0:36 ... that's all, that's all you're doing.

Speaker 0:38 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?

Ben Gilbert 0:55 Welcome to season ten, episode eight, The Arena Show, presented by-

David Rosenthal 1:00 Ooh

Ben Gilbert 1:00 ... 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.

David Rosenthal 1:14 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]

Ben Gilbert 1:24 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,

Ben Gilbert 2:25 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?

Speaker 2:46 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.

Ben Gilbert 4:12 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.

David Rosenthal 4:28 Whoo! Thank you, Vanta.

Ben Gilbert 4:30 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-

David Rosenthal 5:02 Whoo. [audience cheering]

Ben Gilbert 5:06 [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]

Jim Weber 6:50 Hey, guys! It's great to be here, Ben.

Ben Gilbert 6:52 Thank you so much.

David Rosenthal 6:52 Ah, Jim.

Jim Weber 6:53 Here we go.

David Rosenthal 6:54 [chuckles]

Jim Weber 6:54 This is great. What a show.

David Rosenthal 6:56 [chuckles] So, um, Jim, we, we figure you have a lot of footwear already. [laughing]

Jim Weber 7:00 I've got some shoes-

Ben Gilbert 7:02 [laughing]

Jim Weber 7:02 - and I sold six more pairs tonight.

David Rosenthal 7:04 Ooh! [laughing]

Jim Weber 7:05 Awesome. [laughing]

David Rosenthal 7:06 And this morning. Thank you for hosting the run.

Jim Weber 7:08 It was fun.

David Rosenthal 7:09 So we have-

Jim Weber 7:10 Ah

David Rosenthal 7:10 ... an Acquired hat for you.

Jim Weber 7:12 Awesome. Love it.

David Rosenthal 7:13 And Acquired bag with some more goodies in it-

Jim Weber 7:15 Very nice

David Rosenthal 7:16 ... from the Acquired family.

Jim Weber 7:17 Very nice.

David Rosenthal 7:17 So-

Jim Weber 7:17 Best Jim bag at the company, for sure. [laughing]

Ben Gilbert 7:20 [laughing]

Jim Weber 7:20 Thank you.

David Rosenthal 7:20 We, we hope to see this in the Trailhead store, starting in 2023. [chuckles]

Jim Weber 7:24 I love the gold.

Ben Gilbert 7:25 [laughing]

Jim Weber 7:25 That's the first gold trim we've got on a, on an accessories bag, so... [laughing]

David Rosenthal 7:30 [laughing]

Jim Weber 7:30 It's great to be here.

David Rosenthal 7:32 Ah.

Ben Gilbert 7:32 Well, my, my first question and the way that I wanna just tee this off, I mentioned it's an untold story until now. I hear you just launched a book, so congratulations on that.

Jim Weber 7:42 Thank you. Thank you. [audience clapping]

Ben Gilbert 7:49 Could you just tell us a little bit about that? What is the book?

Jim Weber 7:51 So the book is Running with Purpose, and Brooks has been a fabulous journey, and I'm, I'm a person that believes in life, uh, the journey is to be, you know, just cherished and, and enjoyed, because the finish lines are fleeting, and we all want goals, we all want finish lines, but you gotta enjoy the journey along the way, and I think we're all creatures of our journey. So Brooks has been through a lot. [chuckles]

David Rosenthal 8:13 [chuckles] We're gonna talk about that.

Jim Weber 8:13 And it's a David and Goliath story. It's a turnaround story. It's a purpose-driven, culture-driven brand story. It's a focus, um, niche, challenger brand story in an industry, like so many, that's dominated by platforms, one really, really fabulous platform. And so we've navigated that. We built- we're building a really cool brand with lots of runway yet for growth, and, uh, and it's a great business, too. And, and so I wanted to tell that story because if you're not a runner, we haven't marketed to you. [laughing]

David Rosenthal 8:48 [chuckles]

Jim Weber 8:48 I mean, we are so focused. Every nickel has gone to people that are putting one foot in front of another, but the story continues, and, and I wanted to tell it.

Ben Gilbert 8:57 It's great.

David Rosenthal 8:57 That's great.

Ben Gilbert 8:57 Well, David and I got to read an advanced copy of it, uh, and then I actually just re-listened to the audiobook when, when it dropped earlier this week, uh, actually, that you narrated-

Jim Weber 9:06 Great

Ben Gilbert 9:06 ... which was very fun to hear your voice while I was running on the Burke by your office, listening to your voice. It was a very, [chuckles] very surreal experience. I wanna go all the way back. I'm gonna play David's role in this one. Let's go all the way back to when y- you first encountered Brooks in 1998. Talk to us about how you came to the company and where the company was at at that point.

Jim Weber 9:31 Yeah, so I, I've had, I had a really fun career. I became a consumer products person after some banking. Pillsbury, M&A, corporate development, strategy, got to run a brand. I've always wanted to run a business, and I ended up following an exec to the Coleman Company, so I sort of became an outdoor sporting goods guy. [audience laughing] And-

David Rosenthal 9:49 This is Coleman, like, camping, like-

Jim Weber 9:50 Coleman Camping, but they owned a whole bunch of different businesses. And, and I so badly wanted to run a business. A little division, uh, they had down in Phoenix hit the wall, you know, just almost fraud, um, in the accounting and everything else, and I came back from a SWAT team, and, and I told my boss: "I wanna go run that."

David Rosenthal 10:08 Put me in, coach. [laughing]

Ben Gilbert 10:09 [laughing]

Jim Weber 10:09 Put me in. Ran that, turned it around, sold it. Went up here to another Coleman division, O'Brien Watersports. It's in our backyard here in Redmond, Washington, a brand, and, and I ran that for several years, turned it around, got profitable. They sold it. There's a pattern here.

David Rosenthal 10:24 [laughing]

Ben Gilbert 10:24 [chuckles]

Jim Weber 10:25 And then, you know, I went on to Sims Sports, a snowboard company, and, and, you know, we, we turned that around, and, and it ended up changing hands, and so, [ts] um, there I was, and I joined the board at Brooks. I joined the board at Nautilus, which was formerly Bowflex.

David Rosenthal 10:39 Oh, yeah.

Jim Weber 10:40 And I did some banking work, middle market, M&A, um, marketing companies to investors. But on the board at Brooks, I had an inside view of what was happening there. And a good friend of mine, Helen Rocchi, had run it successfully in the '90s, but she left. It was owned by J. Whitney Capital, really a top-notch, for my money, middle-market M&A firm, uh, or, uh, uh, private equity firm, and they bought it, but the partners had left. Helen, the CEO, had left Brooks, and it started to go sideways. New partners at Whitney, all new management, they went through three CEOs, and, and so-

David Rosenthal 11:16 And you were on the board the whole time.

Jim Weber 11:17 I was on the board, so I had a look inside, and, and it was a crisis. Weekly... You guys have experienced this, uh, weekly board calls on Fridays. The bank is not gonna fund. They want more capital. It was, it was a- it was exciting-

David Rosenthal 11:30 [laughing]

Ben Gilbert 11:30 [laughing]

Jim Weber 11:30 - as they say. [audience laughing] So, um, after a couple of months, we did a lot of work. I saw an opportunity, um, and I jumped in. And, uh, I love running businesses. I love solving the puzzles. But by that time, and I sort of tell it in the book, I really wanted to play the long game. I wanted to build a brand. And, you know, the TAM, I l- I love your industry-

David Rosenthal 11:54 [laughing]

Ben Gilbert 11:55 [laughing]

Jim Weber 11:55 The market in running, it's the biggest category in all of sporting goods. It's the biggest category in athletic footwear. It always has been.

David Rosenthal 12:01 Yeah.

Jim Weber 12:01 It's about a thirty billion dollar category globally, apparel and footwear. So all we had to do is get a, you know... And we could survive, and we've just kept at it, um, by design, because I just decided I want to play the long game and build a brand, build value, and, and so that's why I'm still there. I'm a weird duck. [laughing]

David Rosenthal 12:23 [laughing]

Ben Gilbert 12:23 [laughing]

Jim Weber 12:23 But I've, I've got- I've had four owners, and I've played through each one.... mm-hmm, um, and kept that opportunity out there for the next owner, and there we went.

David Rosenthal 12:32 So at, at that moment, though, I mean, Ben mentioned you did a little this, a little that. It's like, uh, that line in Wayne's World about, like, "Oh, I've got a collection of hair nets and name tags." [laughing] Like, I mean, you were making football cleats. Like, what, what was Brooks at that point in time?

Jim Weber 12:45 So every brand in athletic footwear and apparel plays the whole, you know, athletic director's purview, right?

David Rosenthal 12:53 Right.

Jim Weber 12:53 You're in every sport. And, and what no one understood, that I found out later, is that the mindset in our industry literally came from owning a factory.

David Rosenthal 13:02 Mm.

Jim Weber 13:02 When you had a shoe factory, you had to keep it busy all year long and, and keep the people employed. So you went from baseball cleats to wrestling shoes-

David Rosenthal 13:10 Mm.

Jim Weber 13:10 -to bowling shoes-

David Rosenthal 13:11 Ah.

Jim Weber 13:11 -to running shoes, to foot... You know, every-- you had to make everything, and the business developed that way. They all-

David Rosenthal 13:17 And, and you had to view it as, like, the product you made was, like, a factory that made shoes.

Jim Weber 13:22 Right.

David Rosenthal 13:22 And so-

Jim Weber 13:23 And so most of it, we were losing money on.

David Rosenthal 13:25 Mm.

Jim Weber 13:26 And that was the secret, right? So we had good, better, best: thirty dollar shoes, eighty dollar shoes-

David Rosenthal 13:30 Mm

Jim Weber 13:30 ... and then performance running shoes that really started at, at that point about a hundred dollars. And then we had court shoes and family footwear. We called them barbecue shoes and lawnmower shoes 'cause that's what you did in them. [laughing]

David Rosenthal 13:41 [laughing]

Ben Gilbert 13:41 [laughing]

Jim Weber 13:42 And, uh, and all of it was very low margin. All of it was tying up inventory and cash.

Ben Gilbert 13:48 Yep.

Jim Weber 13:48 And, um, the, the retailers were ambivalent about it 'cause we were number eight or nine at everything. Our brand was, was not strong. And so, but when we made the decision to burn the boats on everything but performance running, the industry had never seen that before, and, and most people thought we were crazy, that we wouldn't survive.

Ben Gilbert 14:06 And so you came in as CEO, I think, in two thousand and two, maybe late two thousand and one, but-

Jim Weber 14:11 April two thousand and one.

Ben Gilbert 14:12 Okay. Was Whitney looking for you to do the thing that you had done several times in your career before, which was just get the business to profitability? Or did they have a notion that you had an inkling that you could build a big, powerful brand here and actually build a tremendous growth business?

Jim Weber 14:30 Yep. Yep. By this time, you know, I understood what they needed, and, and I talk about it a little bit in my book. I, I'd run three, and I, I was a little bit smarter, fortunately. They had to liquefy. There was no question about it. They were gonna sell, and the employees knew that I was just coming in there to sell this thing. They had a pool on how long I'd last, but I wrote on my board one of my favorite quotes from Benjamin Disraeli: "The secret to success is constancy of purpose." I wanted to, I wanted to create value.

Ben Gilbert 14:58 Mm-hmm.

Jim Weber 14:59 I wanted to build a brand. So I decided when I walked in, I was gonna play through Whitney. I was gonna get them a good outcome, but I was gonna stay and play through it, and I thought we'd get another private equity player. We didn't, but... So the Whitney partners, um, Peter Cassam and Paul Pagano, I'll never forget the meetings. They said, "This thing is, it's kind of a mess. We didn't know what we bought. You have to pick a pla- path and go. It might take you five years, but you got to do it." And in Brooks' darkest hour, they wrote a check and recapitalized it. [audience clapping]

Ben Gilbert 15:27 Seven million dollars?

Jim Weber 15:28 A little bit of a cram down, but they, you know, they, they wrote a check, and that's when I came in, and so they were fantastic partners for Brooks.

Ben Gilbert 15:35 Mm.

Jim Weber 15:35 And we got them liquid. The, the pitch I made to our team, and, and it's what I believed, is that companies with issues get sold, companies with opportunity attract investors. And I said: "We're gonna have to park cars in the parking lot. We're gonna attract some of you." [laughing]

David Rosenthal 15:49 [laughing]

Jim Weber 15:49 And, but that's, that's the mindset we had. We were gonna sell the future, not just sell the, the current, right?

Ben Gilbert 15:56 Yeah.

Jim Weber 15:57 Yeah.

Ben Gilbert 15:58 And so if I'm remembering right, Whitney put in seven million dollars.

Jim Weber 16:03 To recapitalize it.

Ben Gilbert 16:04 I think that's the last time Brooks has taken outside capital.

Jim Weber 16:09 Absolutely. So we, we saw a higher margin business.

Ben Gilbert 16:13 Yeah.

Jim Weber 16:13 Um, um, and we benchmarked against all the public companies. We're asset light. It's really an inventory and receivables business, um, and there's a reason we only have one store at our headquarters. Uh, and we think it's, it's an advantage for us right now in the development of our brand. But, um, if you have high margins and good flow through operating profits in the teens, um, and you're ir- incremental, obviously, capital, you can, you can flow cash growing twenty, thirty, forty percent. We haven't needed a dollar of capital since two thousand and one.

Ben Gilbert 16:47 Wow! [laughing]

David Rosenthal 16:48 And that's incredible. Uh... [audience clapping]

Jim Weber 16:50 That's why, um, that's why Warren Buffett likes us. [laughing]

Ben Gilbert 16:54 [laughing] Right, you send-

David Rosenthal 16:56 [laughing]

Ben Gilbert 16:56 ... you send cash to Omaha, not the other way around. [laughing]

Jim Weber 16:58 Our, our return on tangible net assets has been over fifty percent for the last fifteen years.

David Rosenthal 17:02 Wow! Wow, fifty percent annually?

Jim Weber 17:04 Yeah.

David Rosenthal 17:05 Wow.

Jim Weber 17:05 Yeah. On average, net tangible assets.

David Rosenthal 17:08 What can, can- [laughing]

Jim Weber 17:11 Huh? [laughing]

David Rosenthal 17:11 I'd say that's a good business. Uh, can, can you just walk us through, like, what is... How do the economics of Brooks work?

Jim Weber 17:19 You know, I... Here, here was the insight that we saw, and, um, man, I... You know, monopolies are great, network effects are great, plat- you know, all those things are great, and what I saw in Brooks, there was a book that was, uh, meaningful to me when I was at Pillsbury, The PIMS Principles, and one of the highest ROI businesses were lower price point consumable items. If you're buying a Boeing jet or a six-hundred-dollar wake board that never wears out or an eight-hundred-dollar golf driver, you're-- that's a discerning purchase, and the margins on equipment tend to be lower. But the Titleist golf ball is a consumable, for me, anyway. [laughing]

Ben Gilbert 17:58 [laughing]

David Rosenthal 17:58 [laughing]

Jim Weber 17:58 And, and running shoes-

Ben Gilbert 17:59 You've made that joke before

Jim Weber 18:00 ... for a frequent runner, a frequent runner will, will put twenty to thirty miles a week. They'll go through two point six pairs of shoes a year.

Ben Gilbert 18:08 Wow.

Jim Weber 18:08 So there's the stickiness, right? If you can earn a frequent runner that the shoe is really important, it's a piece of equipment for them, you can-- you don't have to resell them every time. You, you've got some stickiness there, and you start to build customer, um, customer loyalty, right?

David Rosenthal 18:24 And your, your average selling price for a pair of shoes today is hundred and fifty-

Jim Weber 18:28 Hundred and thirty bucks.

David Rosenthal 18:28 Hundred and thirty-

Jim Weber 18:29 Yeah.

David Rosenthal 18:29 Times two point six-

Jim Weber 18:30 Yep

David Rosenthal 18:31 ... per year, and a loyal Brooks customer stays with you for-

Jim Weber 18:36 Maybe... You know, we had to earn them. You know, there's no guarantee. They're curious, there's lots of new innovation, and they'll try some different things. But when you're training for a marathon, the, uh... One of my favorite stats for our brand is shoe count at marathons-

Ben Gilbert 18:49 [laughing]

Jim Weber 18:49 -because it's a piece of equipment.... and if, and if, uh, you don't wanna be injured, you wanna have a good experience. So we sponsor, Boston just happened, incredible race. We're always the number one or two on shoe on course. That's the punchline.

David Rosenthal 19:01 And, and do you have people at the big marathons counting? [laughing]

Jim Weber 19:04 It's so good.

David Rosenthal 19:04 [laughing]

Jim Weber 19:04 They have high-speed cameras. [laughing]

Ben Gilbert 19:06 [laughing]

Jim Weber 19:07 High sp-- no, high-speed cameras, AI, they link it to the bib. They can... They know exactly what shoe 20,000 people are running on.

David Rosenthal 19:16 Oh.

Jim Weber 19:16 The model. It's so cool. So Houston Marathon, eight thou- 6,000 marathoners, 12,000 halves. Um, number one shoe in the half, Brooks. Number two shoe in the full, there was a little brand down in, um, Portland, Oregon.

Ben Gilbert 19:31 [laughing]

David Rosenthal 19:31 Oh.

Jim Weber 19:31 They were number one. [laughing]

David Rosenthal 19:32 Oh, no, no. [laughing]

Jim Weber 19:34 But we are on their heel. But that shoe count is a true test because that's, that's the frequent runner, and it's a piece of gear in that. So that, that's the leading edge for us, is to earn that-

David Rosenthal 19:45 Mm

Jim Weber 19:45 ... customer and, and have their confidence.

Ben Gilbert 19:48 All right, David's doing the thing that I normally do, and jump ahead, and try and, like, unpack the business as it is today. Let's go back to the story. So-

David Rosenthal 19:55 [laughing]

Ben Gilbert 19:55 ... it's 2002 through '06. Let's talk about this era. You've made this bet where you're gonna shed every other product that you sell-

Jim Weber 20:07 Yep

Ben Gilbert 20:07 ... and you're kinda gonna piss off a lot of your channel because, you know, what sells really well at these big box stores, those are your barbecue shoes. So can you take us to, like, one or two of the key moments of the hard part of the decision to drop product lines that weren't about frequent runners?

Jim Weber 20:28 Yeah, I think the, the key to Brooks is that we knew we are gonna have to build the brand at the runner level, literally a pair of feet at a time. And the retailers, so many retailers told me, "Jim, we are not gonna build your brand. We'll try it. We'll test it." We were tested at Dick's Sporting Goods, and I'm not kidding, for 10 years. 20 stores, 80 stores, 20 stores, 80 stores, 20... So, so you have to build the flywheel in these franchise products. That's how running works. The, the best-selling running shoes continue to be the best-selling running shoes year after year for as long as they sustain it all around the world.

Ben Gilbert 21:05 Mm.

Jim Weber 21:05 We have two of the best-selling shoes now in the United States, the Ghost and the Adrenaline. Um, they're the two top shoes in the performance running category. So, so when we go to retail, uh, biggest customer is Big 5. It's a fine, you know, sort of mid-priced sporting goods retailer on the West Coast. We were doing 10 million of 60 million of revenue with them at $30 shoes.

David Rosenthal 21:26 Wow.

Jim Weber 21:26 My first meeting with them is, "We love Brooks. We see a great future for you." But we-

Ben Gilbert 21:30 So one sixth of all your revenue is coming from-

Jim Weber 21:32 Yeah

Ben Gilbert 21:32 ... their stores.

Jim Weber 21:32 But they, they saw our opportunity at $19.99. I was losing money at 30 bucks.

David Rosenthal 21:37 That's correct.

Jim Weber 21:37 I couldn't run fast enough from that meeting because we left, and we generated 5 million of cash by getting the inventory out of it. So that... Those were easy decisions to leave those retailers, and then we had to build it in the specialty run community, pre-internet, pre-e-commerce. Um, huge part of our business now-

Ben Gilbert 21:55 And so they didn't-

Jim Weber 21:56 And then it was sporting goods.

Ben Gilbert 21:56 They didn't wanna sell your $100 shoes. They wanted to sell-

Jim Weber 21:59 They, they couldn't

Ben Gilbert 21:59 ... $20 to $30.

Jim Weber 22:00 They didn't have that customer. They didn't have the runner.

Ben Gilbert 22:01 I see.

Jim Weber 22:02 They had, they had family athletic footwear-

David Rosenthal 22:05 W- where was-

Jim Weber 22:05 ... and price points

David Rosenthal 22:06 ... at, at this moment in time, where was this in the r- running as a sport? Mar- like, marathons, Bikila-

Jim Weber 22:14 Yeah.

David Rosenthal 22:14 Were they what they are today?

Jim Weber 22:15 Yeah.

David Rosenthal 22:15 Were they on that journey, like?

Jim Weber 22:17 They were on that journey, and this was, this was what we did at Brooks. I think we were the first one to identify that the real business was in trainers. It wasn't in racing shoes, it wasn't in spikes, it wasn't in marathon racing shoes. The business is in the trainers. We don't sponsor college programs. They're kinda owned and wrapped up. A lot of the college athletes that race in the big brands train in Brooks- [laughing]

Ben Gilbert 22:40 [laughing]

Jim Weber 22:40 ... every day. The business is trainers. So when we came in, you know, I think Brooks had, had... You know, we were, we were humble, and we were getting the business that we could, and we had shoes that were really more back-of-the-pack people. They weren't the fast people. They were support shoes and motion control shoes, people that needed functional footwear. Um, and we've moved ourselves to the middle and the front. We're trying to serve every runner. The insight was this: the sport is the soul of running, right? Track and field, cross-country, road racing, the Olympics, now trail and ultra, but the business is people that are investing in themselves: fitness and health and wellness. There's no other sport that has that dynamic, where, where there's, there... It, it, it goes from a sport to, you know, a pursuit of, of investing in yourself.

Ben Gilbert 23:29 Mm-hmm.

Jim Weber 23:29 And we've always positioned right in the middle of that. We're basically about you and your run. We're not about the podium. We're not about the tape. You know, in our sport, unlike basketball, everybody knows, all the kids especially, know what Steph Curry plays in. Most people don't remember who won the Olympic marathon and, and even moreover, what shoe they were wearing.

David Rosenthal 23:50 Mm-hmm.

Jim Weber 23:50 And the truth of the matter is, you know, everybody's unique, the shoe really matters, and you all know if it's comfortable, if it's working or it's not, and frequent runners really do. So that's the insight. I think we're the, we're the only brand that has consistently executed against that. Every product we make starts with your biomechanics, and your habitual joint motion, and what your needs are, and we're all essentially different. We're the only brand that begins there.

Ben Gilbert 24:14 Mm.

David Rosenthal 24:14 Well, it's a-

Jim Weber 24:15 And we've done that for 20 years now.

David Rosenthal 24:16 I mean, you mentioned, um, that other company in, in Oregon. [laughing]

Jim Weber 24:20 I try not to say competitors' names, right? [laughing]

Ben Gilbert 24:23 [laughing]

Jim Weber 24:23 It's, it just ends badly if you say a competitor's name.

David Rosenthal 24:26 [laughing] Which is an amazing company down there, um-

Jim Weber 24:28 It's a great company

David Rosenthal 24:30 ... but literally their name is, is the Greek word for victory.

Jim Weber 24:33 Yep.

David Rosenthal 24:34 And what you're talking about here is incredibly counter-positioned to that in a way that victory really can't mean just investing in yourself, regardless of where you finish.

Jim Weber 24:44 One person breaks the tape.

David Rosenthal 24:46 Yeah.

Jim Weber 24:47 40,000 people run New York Marathon. We'll take the 39,999- [laughing]

Ben Gilbert 24:54 [laughing]

David Rosenthal 24:54 [laughing]

Jim Weber 24:54 ... that wanna have their best day. [laughing]

Ben Gilbert 24:58 [laughing]

Jim Weber 24:58 ... They're, you know, they're investing in themselves. They wanna have their-- We're, we are, we are celebrating every one of those people. First 5K, run around the block. Man, that's, that's your run, right? That's what we do.

Ben Gilbert 25:09 It was really clarifying reading your book and understanding that Brooks' brand is about performance, but it is not serious. And I think th- that was an interesting clarification for me because I run, and I take my performance seriously, and I've selected a very specific motion control Brooks shoe to do that. Um, but I don't need it to be a very serious, sort of like, uh, s- uh, victory-oriented brand 'cause I've never once thought, "Oh, maybe I will win the Seattle Rock 'n' Roll Marathon." [chuckles] Like, that has never occurred to me. [laughing]

Jim Weber 25:48 There's still hope, Ben. There's still hope. You know, I think, I think it... Really, what it relates to, and this is, I think, what Brooks got before any other brand, is you-- we have-- we are sweating product. I think we invest more in, in R&D in a focused running metrics manner than any other company, and we don't have m- as much money as many of them still. But it's so focused in the clinical work we do and the materials work we do. We engineer materials just for the motion of running and, and all the, all the engineering that it would have to do and, and, and respond in between gaits and all of that. So that's the key. But I think our brand positioning, um, I didn't create it. It was sort of there when I came in, but it's brilliant for this reason: it's approachable. You know, the unseriousness is basically trying to take the pretension and, and the, you know, the "I'm not worthy, I'm not a runner," out of our sport, and so many of our, our retail running shops have done a fantastic job of that. First of all, I'm old enough to remember Title IX in the '70s, equalized college sport funding for men and women. If you, if you weren't addressing women in the last forty years in sporting goods, you're gone. I mean, we doubled the business, and women have driven this sport, um, since the mid-'90s. So approachability, I think, was super key, and, and Brooks is a very inclusive brand. It's you and your run, and all are worthy. But the product... Here's the other thing that's so interesting about our sport is, you know, maybe in some sports, the pinnacle equipment absolutely needs to be, uh, available to the pinnacle athlete. You know, maybe that's in golf, and, and certainly for a two-hour marathon, everything has to be clicking. But what's interesting in our, in our sport, the person that really needs the best footwear and the best run bra and all of that are the people that are just beginning.

Ben Gilbert 27:44 Mm-hmm.

Jim Weber 27:44 Because the injury, uh, potential for those people is really high, and that's where the right shoe... So there's, that's another element of our, our category that's pretty unique. So I would, I would say that the unseriousness of our, of our brand is, is all about in welcoming and including everyone, no matter if you're just starting or your twentieth marathon.

David Rosenthal 28:06 All right. For our second sponsor of this episode and all of season ten, huge thank you to our friends who were in the building for this show and then hosted the amazing after-party afterwards, Vouch, the insurance of tech. Today, in our Insurance 101 that we've been doing all season with Vouch, we are talking about cyber insurance. So this is the final, like, big, big coverage you're going to need at some point. We don't need to tell you why cyberattacks are a big deal or the damages and losses they can cause. You probably know that, and it stands to reason that startups are probably more vulnerable than, like, a Microsoft or a Google, who's had decades to get their security teams all ramped up. [chuckles] Uh, but when they happen, cyber incidents, even for startups, are, are really [chuckles] expensive. Like, really expensive. All in, the breach for even a very early-stage startup is typically around four hundred thousand dollars. That's, like, where it starts. As your company scales and, and the company grows, the average overall cost for a cyber incident for a company of any size is about four million dollars. And because the money we're talking about here is truly [chuckles] an existential threat to your company, you probably should get this coverage. Vouch recommends starting at Series A, and if you're a fintech or a health tech company, even earlier, after you raise your seed round. So you have coverage, you get hit with a cyberattack, what happens? The first priority is always deal with the breach itself, and time is for sure [chuckles] of the essence here. A great cyber insurance provider like Vouch has the playbooks, they see this all the time, to help initiate and pay for a whole suite of remediations that can reduce the likelihood of a major claim or a class action lawsuit against you, which, yes, can happen to startups, too. This part of the insurance is called first-party coverage, and it's about paying the cost of getting your business back on track, your system secure, taking care of the impacted parties, et cetera. Unfortunately, though, sometimes that's not enough to stop a lawsuit or a class action lawsuit or a regulatory action against you. If that happens, cyber insurance can cover your defense costs, settlements, fines, judgments, all of that. That part of it is third-party coverage, and that's what protects you from claims of damage from customers, partners, regulators, et cetera. It is super important if you are getting cyber coverage to get both first and third-party coverage. You do not only want one, and coverage from a high-quality insurer like Vouch always will come with both. Head on over to vouch.us/acquired, where Acquired listeners, if you use that link, you will get an extra five percent off your cyber and all of your other insurance coverages that we've been talking about all season. Man, once again, thank you, Vouch, for doing this Insurance 101 with us. This has been such a blast this season. You guys are the best. We love you. Thank you, Vouch.

Ben Gilbert 31:01 Thanks, Vouch.... Okay, so going back to our story again, you just lost the Big Five business intentionally, so you walk away from one-sixth of your revenue.

Jim Weber 31:10 Yeah.

Ben Gilbert 31:10 I think you walk away from more than that. It's not like it went-

Jim Weber 31:12 Yeah

Ben Gilbert 31:12 -from sixty to fifty.

Jim Weber 31:13 No, we did.

Ben Gilbert 31:13 It went, like, significantly lower.

Jim Weber 31:15 Foot Locker, we were doing sixty dollar SMUs. They'd order eighty thousand, they'd change the product twice, they'd get it down to sixty thousand, and then they'd cancel it, and we'd end twenty thousand inventory. That was a quick decision, too. We just quit doing all that, that make-up business that was retailer driven.

Ben Gilbert 31:31 Hmm. So revenue's going like this, intentionally. You're the fourth CEO, so at this point, is the team... How do you get the team on board-

Jim Weber 31:43 Yeah

Ben Gilbert 31:43 -with these crazy decisions you're making when they're like, "Three other people came in here and tried to turn this thing around and didn't"?

Jim Weber 31:50 You know, I think from a leadership standpoint, um, the real puzzle in that first year was gaining trust from everybody that mattered. Um, B of A was our bank, kind of a lost cause. We had to replace them. [laughing]

David Rosenthal 32:04 [laughing]

Jim Weber 32:04 They, they just weren't gonna buy it. But Whitney invested, that was key, and we kept them with us all the way through. The leadership team took time, you know, and it was-- you had to, you had to deliver sort of on outcomes. But here's what we did. Six weeks in, we redid the plan, took profits down. Uh, the plan was millions of dollars. They didn't have a prayer to hit that. We took profit down, but it was a profit plan. They hadn't made a bonus in four years.

David Rosenthal 32:28 Oof.

Jim Weber 32:28 And, uh, we went after cash flow, and that was shrinking the mix. We hit our plan that year, and people got a bonus.

Ben Gilbert 32:35 Hmm.

Jim Weber 32:35 And, and we hit the plan that we'd sent nine months earlier. I spent really eight weeks intensively looking at it, but I think we knew what we were seeing, and we generated ten million of cash that first nine months. That's how much we shrunk the balance sheet with focus. And here was the key, though: you have to, you have to do horizon one, horizon two, horizon three, right? You've gotta, you've gotta solve it all. So I had ten things to do. The board said, "Oh, my God, you're crazy. Pick four." "No, you don't understand." We, we had to get the Adrenaline right, um, because that shoe was critical for us, and we had to, we had to refine that shoe in two thousand and one for two thousand and two, and, and we got it right. The fourth Adrenaline was an incredibly balanced shoe, had a multi-density, um, stability, technology in it, super balanced, and ASICS started to not deliver, and we ran, man. We air freighted one color, eighteen-month cycles, saved the company. But we had to do... We had to finish that shoe in, in '01 to deliver on '02, which-

Ben Gilbert 33:35 Yeah.

David Rosenthal 33:36 You guys are like a semiconductor company. [laughing]

Jim Weber 33:38 You have to, you have-

David Rosenthal 33:38 You've got to design the- [laughing]

Jim Weber 33:39 ... Yeah, it's like, I think, you know, some of these, Brooks, everything's complicated, everything's competitive, but it's like moving a wall of bricks forward. And you gotta get, you know, as a, uh, I think as a CEO, you gotta move it all forward. So when some things are falling behind, you gotta get those up, and you, you have to deliver the whole business model, and you have to do it sequentially over seasons in our business. Because if you come to market with, with a ho-hum product line, uh, you're gonna shrink that year. And so you gotta, uh... The lead times in footwear, it's not the car business, but it's more like the car business than the T-shirt business. There's every-- There's tooling on everything, twelve sizes men's, twelve sizes women's, widths, colors. It's... Scaling these things in the factory, there's a lot of tooling. It's-

Ben Gilbert 34:22 Hmm

Jim Weber 34:22 ... It's a, it, it, it, there's a lot of, um, takes a half a million to a million bucks to bring one style to market.

David Rosenthal 34:30 Wow!

Jim Weber 34:30 It's a lot of tooling and inventory.

Ben Gilbert 34:32 Yeah. It's a lot different than the software business. [laughing]

David Rosenthal 34:37 [laughing]

Jim Weber 34:37 Don't ask me about my tech stack at my website. [laughing]

Ben Gilbert 34:41 [laughing]

David Rosenthal 34:41 [laughing]

Jim Weber 34:41 My board does that every now and then, and it doesn't go well. [laughing]

David Rosenthal 34:45 The website is actually pretty great.

Ben Gilbert 34:47 It's a good work, yeah.

David Rosenthal 34:47 It's a really-

Jim Weber 34:48 We're, uh, we're competing with digital engagement in our industry, and, and we're doing really well with it. We've taught ourselves that in runner focus, but we-- I think we're executing on the digital side with runners as well as anybody is right now.

Ben Gilbert 35:01 You're also in a pretty good town to be able to recruit digital talent.

Jim Weber 35:05 It's a good town. There's a lot of talent here, and, and they have a lot of opportunities now, too, so.

Ben Gilbert 35:09 Okay, so let's fast-forward a couple of years. So you nail it with the Adrenaline four. You're starting... You're profitable now.

Jim Weber 35:18 Yeah.

Ben Gilbert 35:19 Um, the business is looking better. You get the liquidity event that you're looking for, and you're sold to Russell Athletic. What was it like communicating to the team, "We're joining Russell?"

Jim Weber 35:33 So you guys are in this business, and, and I've been bought and sold a few times, bought things too. We, um, we, we knew we were gonna have to sell, so we were prepared. And we thought for sure it was gonna be another private equity firm, we're gonna get another kick at the can. And that's what I was s- absolutely mentally prepared for. So the bankers come in, we do the management presentation. We're gonna practice on a strategic. There weren't many there.

David Rosenthal 35:56 [laughing]

Jim Weber 35:56 We're gonna practice on Russell Athletic. [laughing]

Ben Gilbert 35:58 [laughing] Oh, everyone does a warm-up fundraising pitch?

Jim Weber 36:00 Oh, my God, and they completely fell in love with it.

David Rosenthal 36:02 [laughing]

Jim Weber 36:03 So there we are.

Ben Gilbert 36:03 If only you had the, you know, YC's growth program that you could then go practice and- [laughing]

Jim Weber 36:08 And they ended up... We negotiated our independence. I pitched us, we're the crazy uncle out in Seattle, we're really different, just leave us alone, which they did. Um, but yeah, you know, so for them, we had negotiated our independence because we knew where we were going, we saw the opportunity, we were, we had great-- we had a flywheel going. We really did. And, and, uh, and at that point, we were continuing to pursue growth. So they, they would have been crazy not to just let us keep going, and, and I would do that then with the next owner as well.

Ben Gilbert 36:39 So two more years pass, business continues to grow, Russell gets bought by Fruit of the Loom-

Jim Weber 36:46 Mm-hmm

Ben Gilbert 36:47 ... and Fruit was already owned by Berkshire, right?

Jim Weber 36:49 Correct. That's right.

Ben Gilbert 36:51 So what's it like now being a subsidiary of a subsidiary, o-of Berkshire Hathaway, but two levels down?

Jim Weber 36:57 Yeah. I mean, I, i-it was really interesting. I... In one sense, you know, I'd gone to school on Warren through his letters, and, and I had an internship in the '80s that, uh, he had put, uh, a business out-... out of its misery, uh, in a competitive battle. In a two-newspaper town, it went to one.

Ben Gilbert 37:16 [laughing]

David Rosenthal 37:16 Buffalo Evening News.

Jim Weber 37:17 And there was a bl- yeah, the Buffalo Evening News, and there was a black hole in Cowles Media's balance sheet. And I j-- what, what happened there? And Warren, oh, my gosh, plays to win, signals he will never, ever, ever, ever quit. Five million dollars of losses, investing in the newsroom, investing in quality, goes to the morning, fight to the death. Don't do that with Warren Buffett-

Ben Gilbert 37:43 [laughing]

Jim Weber 37:43 - 'cause he never quits!

Ben Gilbert 37:45 [laughing]

Jim Weber 37:46 So they made a rational decision, and they closed it down. His profits went from negative five to ten million every year since. And I was just, "Wow! Who is this guy?" Right? That-

Ben Gilbert 37:54 And that was, uh, that was before Salomon Brothers, right?

Jim Weber 37:57 Yeah, yeah, yeah.

Ben Gilbert 37:57 That was like the, that was like the prelude to Salomon.

Jim Weber 37:59 That was... Yeah, that was in his early days.

Ben Gilbert 38:00 Yeah.

Jim Weber 38:00 And he, he was just-- the way he talked about brands and, uh, and, and the moat around a brand, I hadn't, I hadn't seen that before. Competitive strategy, right? I loved it. So I'd gone to school on him. So once we got part of Fruit, I thought, "Okay, this is good because Charlie and Warren are gonna understand what we're doing at Brooks. We're small." And so we started to get some letters, and your numbers are good, and we got notes from the board. But Fruit of the Loom, uh, and, and Brooks, w- were just completely different companies. Six packs of men's briefs at Walmart.

David Rosenthal 38:32 Yeah. [chuckles]

Ben Gilbert 38:33 [chuckles] That's not the-

Jim Weber 38:34 For a hundred years

Ben Gilbert 38:34 ... performance, right? [chuckles]

David Rosenthal 38:35 A little bit different than, like, a local running store-

Jim Weber 38:37 Yeah

David Rosenthal 38:37 ... distribution strategy.

Jim Weber 38:38 And innovation was, uh, Mighty Morphin Power Rangers or something. [laughing]

Ben Gilbert 38:43 [laughing] I may have had those.

David Rosenthal 38:44 [laughing]

Jim Weber 38:45 Uh, anyway, but they're, they're, you know, uh, longtime company, they bought it for Russell Athletic Apparel. They bought it for, you know, the Walmart business, and, and they're good at that. So again, they left us alone. We had to negotiate that. It wasn't a given. They, they actually, on, on paper, they were gonna move us to Bowling Green, and it would have killed Brooks.

Ben Gilbert 39:04 Hmm.

Jim Weber 39:04 And I was pinging, you know, 'cause they-- we were possibly gonna get sold. So I actually, you know, talked to some super smart people, some in this town, and, and, uh, you know, Warren basically said, "I'm not gonna get involved. Um, it's up to Fruit." And, and I, I thought there was a good chance they'd sell it, 'cause I would have loved to have led an independent play there. But we waited it out. Um, they-- we took them, you know, sort of right to the edge of saying, "You gotta commit to Brooks. We've got to commit, you've got to commit." And they did, um, and then two years later, Warren plucked us out. So but we, we had to negotiate our independence from them. And I, again, you know, I could have left. I had opportunities to leave. I didn't want to leave. We saw great opportunities. '08, '09, just as that was going on, you know, obviously, Great Recession, we tripled the business from two thousand and nine to twenty fourteen. And I, I knew we, we had some good things going, so... But that was a, that was a really critical moment because they might have moved it to Bowling Green, which they did to everything else, and, uh, many of those brands wilted. Um, and I would have lost a lot of talent and, you know, I wouldn't have, I wouldn't have run it in their business model.

Ben Gilbert 40:16 So-

Jim Weber 40:16 It wouldn't have worked.

Ben Gilbert 40:17 You get to retain your independence there, but you're not really independent. You're still within Russell, with this, within Fruit. At some point, y- you get the cone-- the phone call from Warren. Can you talk us through that?

Jim Weber 40:31 Yeah, so we had put in... You know, we had good incentive programs, um, and we tried to s- keep people there and, and put some stickiness in with some long-term, uh, um, programs to just get people focused on building that triple. So, um, Fruit was, you know, sort of consolidating all their stuff, and they had, they had bought Russell for about a billion dollars with internal capital, and they were about to go and restructure that. So, you know, Warren had-- We had started to sell shoes at the annual meeting, Omaha. [laughing]

Ben Gilbert 41:03 [laughing]

Jim Weber 41:03 This is, like, Charlie and Warren, you know, fifty years ago.

Ben Gilbert 41:06 [chuckles]

Jim Weber 41:07 I love this event. Now, their arena was full, but that'll be the case for you guys- [laughing]

Ben Gilbert 41:11 [laughing]

Jim Weber 41:11 -in another year.

Ben Gilbert 41:11 They've had fifty years to compound, so-

Jim Weber 41:13 It's gonna be huge!

David Rosenthal 41:13 That arena is way smaller. [chuckles]

Jim Weber 41:14 It's gonna be huge.

David Rosenthal 41:15 [chuckles]

Jim Weber 41:15 But, you know, we were selling shoes there, and I sent Warren a note, and, "Great, next year, we'll sell more. Good job. You know, hearing great things. You guys are doing well. And by the way, if you're ever in Omaha, come by, we'll go have a steak." Well, son of a gun. [laughing]

Ben Gilbert 41:29 [laughing] You don't say no to that.

David Rosenthal 41:30 [laughing]

Jim Weber 41:30 I just happened to be in Omaha about three weeks later. [laughing]

Ben Gilbert 41:33 Imagine that!

Jim Weber 41:34 And I knew he would love, uh, what we're building. It's unique, it's distinctive. We're not trying to be that brand, that brand. We're ch- you know, we're really developing something with focus. He couldn't figure out why the big guys weren't squashing us. And, uh, we spent three hours, not one phone call. Door was closed. We had, we had a meal. But you just get his undivided attention. His brain is just so focused. He loves business. And, and, uh, I did most of the talking 'cause I thought, "He's gonna fall in love with this business." And six months later, um, he, I-- So the, here, here's the start of the story is, it was the f- December when Mark Zuckerberg was preparing to take Facebook public. And there was a Wall Street Journal article for the new, I don't know if he was twenty-two or twenty-three, the, a young CEO of a public company. And one of the lines in there, he was gonna trade in his Adidas slides for a pair of Brooks Adrenaline. I don't know why it was in there, but Warren saw it, circled it, and said, "Jim, this is great. We just need a couple million more." [laughing]

Ben Gilbert 42:31 [laughing]

Jim Weber 42:31 So two weeks later-

Ben Gilbert 42:33 Wait, did, did you send Zuck a pair?

Jim Weber 42:36 Oh, yes. [laughing]

Ben Gilbert 42:37 [laughing]

David Rosenthal 42:37 [chuckles]

Jim Weber 42:37 Yeah. And he was in, uh, he was in Brooks for a while.

Ben Gilbert 42:40 Right. [chuckles]

Jim Weber 42:40 So but two weeks later, I'm with my family down in the desert, and, uh, you know, I, I think I was out of BlackBerry, but it's two thousand and eleven. I didn't have my, my voicemails coming into my phone. So I was checking email every day, but I wasn't, I didn't check voicemail.

David Rosenthal 42:56 Yeah.

Jim Weber 42:57 So I get back at my d- my office, January second. I'm in early. I like to start the new year, especially, early. It's seven AM, and the red light on the phone is blinking. Ah, pick it up, uh, answer it. "Jim, this is Warren. I got an idea. Give me a call." It was five days old.

Ben Gilbert 43:12 Oh, my gosh. [laughing]

Jim Weber 43:12 What's going on? [laughing]

David Rosenthal 43:13 [laughing]

Ben Gilbert 43:13 This is like, you know, uh, you know the story of Warren during the financial crisis-

Jim Weber 43:17 Yeah

Ben Gilbert 43:17 ... about Lehman, that he could, he missed the voicemail? [chuckles]

Jim Weber 43:19 Yeah, he missed the voicemail completely.

Ben Gilbert 43:21 [chuckles]

Jim Weber 43:21 He found it, like, a year or two later. So anyway, I pick up the phone, dial the number. "Hello?" He answers his own phone. It's incredible.... Jim, uh, this is Jim. Sorry, Warren, I was at blah, blah, blah, blah, blah." He said, "Well, here's the idea. You know, you guys are doing well. You're focused on shoes. Your premium f- Fruit really has to focus on apparel. I'm thinking about spinning you out and setting you up as a standalone subsidiary, and, and, you know, you guys will just keep doing what you're doing, and, and I just think that makes sense." And I said: "You know, Warren, I think that's a good idea." [laughing]

Ben Gilbert 43:51 [laughing]

Jim Weber 43:51 "I think we ought to do that." [laughing] And, uh, and I gave him an update on our previous year. We had a great year, and he said, "That's great, because from here on out, I'm gonna take all the credit for your success."

Ben Gilbert 44:00 [laughing]

Jim Weber 44:01 And, uh... [laughing] But it's a, it's a-- you know, as a platform to do what we wanna do and build our brand, you know, they're, they so know that revenue growth and profitability, you know, selling at margin, double-digit growth, is all about building brand. And that's really what we've been doing and really wanted to do. So, um, we just have a sync on, on the opportunity that we have with this brand, and, and now it's been twelve years. And that's the true reason I'm still there. Because, you know, we're, we're competing, uh, in a really, really big, competitive category, and, uh, the margins, I think, on success are, are not fat, they're thin. And so executing, uh, against that with confidence and support, being able to work through, you know, a lot of the uncontrollables in our category, it's a huge advantage for us.

Ben Gilbert 44:52 So I'm gonna keep us going through the story, and like I've done on many previous episodes, I like earmarking sort of a number along the way to track. So I think around this point, you're doing one sixty, one seventy million in revenue.

Jim Weber 45:03 Yeah.

Ben Gilbert 45:03 Business has grown nicely, you're profitable. Um, there's a fun story from twenty twelve that I'd like you to tell. Uh, you've always been somewhat of a scrappy company, uh, doing more with less than anyone else. Can you share the story of when you personally got kicked out of the US Track and Field Olympic trials? [laughing]

David Rosenthal 45:21 [laughing]

Jim Weber 45:22 So I think in, in real life, digital is digital, but in real-life marketing, um, we activate, right? A lot of the running shops do runs out of their stores, and they're involved with the five Ks, and, you know, we're bringing energy and, and positivity to that, really trying to make it fun for other people, and many that are running for the first time. And then there's the sport, which is so fun, um, to be at, whether it's the Olympic trials for the marathon or the Olympic trials, which is often at, at Hayward Field down in Eugene. Um, and the challenge there for all the brands is we rent a house, we bring in all of our partners and VIPs, we run, uh, group runs out of the house every morning, we bring in a chef, and we watch these incredibly athletes, athletes compete for Team USA. It always happens in June. Olympics are, you know, July, August. And, and it's just a fabulous event. Um, and then the backdrop is the largest brand in our space, Nike, uh, signs a twenty-seven-year marketing agreement with the governing body of our sport, USA Track and Field. Who does a twenty-seven-year deal?

Ben Gilbert 46:30 [laughing]

David Rosenthal 46:31 [laughing]

Jim Weber 46:31 I mean, come on! It, it's a twenty-seven-year deal. And then, of course, you know, University of Oregon is a, is a Nike university in more ways than one, and so they wrap it up, right? The whole thing has got swoosh wrap around everything. I, I think, I think the yellow lines on the highway are swooshes.

Ben Gilbert 46:51 [laughing]

David Rosenthal 46:51 [laughing]

Jim Weber 46:51 So we, we wanted to celebrate the athletes. We really-- We have athletes in there. We invest in the sport, and, you know, we don't invest like they do, but we invest in athletes, and they're inspiring and so on and so forth. All the brands do. So, you know, what can you do? You can't do a lot. Um, but we decided, uh... We did-- We checked with the FAA. The air rights are open.

Ben Gilbert 47:12 [laughing]

Jim Weber 47:12 Nobody said you can't fly a plane. And we put a Run Happy banner on an airplane, and we just flew it around that stadium-

Ben Gilbert 47:20 [laughing]

David Rosenthal 47:21 [laughing] [clapping]

Jim Weber 47:21 -all day on Friday. [clapping] They got mad, and we did it again on Saturday, and they started to tell us, "You gotta take that plane down." "Why?" "Well, because you can't do guerrilla marketing." "Yeah, but we checked. It's all-- You know, the FAA is fine. It's all good. It's the sky."

Ben Gilbert 47:38 [laughing]

David Rosenthal 47:39 [laughing]

Jim Weber 47:39 "And we're cheering on the athletes." "You can't. You gotta take that thing down. Get that thing out of the sky!" And, and so overnight, coming into Sunday, the final day, we had-- we checked with some of the, uh, track and field officials, and they basically said: "Screw 'em, you should just fly it."

Ben Gilbert 47:53 [laughing]

Jim Weber 47:54 And we checked again with the FAA, and so we flew it, and they came up... We bought tickets for all of our guests. We had about eighty people there. We didn't get them free and comped. We had some of those, but we bought all these. And they said, "All right, you guys all have to leave." And we, "What?" "No, y'all have to leave." So we left our, our guests, and three of us, um, went down to talk about it, and they... "Why are you asking us to leave? You, you didn't do the-- You know, you, you didn't take it down. We asked you to take it down," and Nike was all sitting right behind him. So, well, there's nothing against doing that. We don't-- We, we checked with everyone. "Well, read the back of your ticket. This ticket is a license that can be revoked at any time." "So you're just kicking us out?" "Yeah, we're just kicking you out.

David Rosenthal 48:35 [laughing]

Jim Weber 48:35 Get out." And it was all... It was a huge mistake for them because this story has lived on in the industry forever, and we had some of the best running shop people in, in the country there with us. They were our guests, and so everybody knew about it. They kicked me out, our head of marketing, and our head of, uh, sports marketing. It was, it was interesting. Anyway-

Ben Gilbert 48:57 [laughing]

David Rosenthal 48:59 That's awesome. [clapping]

Jim Weber 49:00 We, uh... [clapping] We were at the bar, we had beers, and we watched it on TV. [laughing]

Ben Gilbert 49:09 Well, uh, if, if we were- if David and I were on Zoom with you, w-we would be getting ready to enter, like, hour number two and try and talk about every year all the way through.

Jim Weber 49:21 Yeah.

Ben Gilbert 49:22 Uh, I... Tonight, I wanna focus on how you came through the pandemic and some of the unique ways that-... you early realized running actually was going to be something that people started focusing more time on, and you were able to-

Jim Weber 49:38 Yeah

Ben Gilbert 49:38 - kind of lean into this new behavior. Talk to us about March twenty twenty, and how you paid attention to what was changing.

Jim Weber 49:47 Yeah, a couple of big advantages. First was literally an obsession on runners. Participation, you know, links to unit sales and volume, right? So no other brand has that clarity because most of the products in the athletic footwear industry don't ever go for a run or play basketball or really even go to the gym. It's, it's casual family lifestyle footwear. Um, there's nothing wrong with that. Those- some of those businesses are great, but we, we had an advantage because ninety percent of our products went through a retailer. That's a problem. Europe retail shut down in one week, and then all of retail rolled through North America, and, and, and by the end of March, not a store was really open. And that's a problem. Cash cycle froze. Oh, my God, nobody knew what was happening, right? We didn't know how lethal this virus was, how transmissible, and so on and so forth. And so it was white-knuckle time, and we were there with everybody else. Everybody could write a book on that. But here's what we did, is we saw phases, 'cause we'd seen during the recession, running is a bit recession-resistant. We saw that in the great recession.

Host 50:49 I was thinking about that. It's kind of like-

Jim Weber 50:51 It, it, it is 'cause it's cheap and it's convenient. All you need is, right, a pair of shoes.

Host 50:54 It's like the healthy alcohol during recessions. [laughing]

Jim Weber 50:55 In the Great Recession-- Thank you.

Ben Gilbert 50:58 [laughing]

Jim Weber 50:59 But we were not an essential business, and, and marijuana and alcohol were-

Host 51:03 [laughing]

Jim Weber 51:03 - so figure that out. [laughing] Um, so, but during the Great Recession, fifty percent unemployment in Italy and Spain under the age of thirty, running took off. Double-digit growth after the Great Recession. So we, we see- we'd seen that before, and it turned out to be COVID-friendly, right? You, you, you now know the story. It was, it was, you know, social distancing friendly, outdoors, walking, hiking, running, all made the cut. But nobody knew that. We had a hypothesis. We created this frame on, on how we thought running would recover, and so here's what we did. First of all, Strava data magic, right?

Host 51:38 Mm.

Jim Weber 51:39 Every day after the, the quarantine shutdowns, Strava activity was growing, and they were sharing that. Then, you know, what we did, we have forty, in the US alone, forty-five field marketing people. We put them in parks, high-traffic running parks, at four PM every afternoon, and they counted runners, and guess what? It was growing every day. And then we watched digital sales, and we have visibility on eighty-five percent of our retail sell-through. And so digital went from thirty percent of all of our products going through a website of somebody's, ours or another partner's, it went to eighty percent by the f- by the end of April, and in May, we sold more in May twenty twenty, almost all through digital, than we did in May nineteen.

Host 52:25 In all channels.

Jim Weber 52:26 Running made the cut. We grew twenty-seven percent in twenty twenty, in that, that COVID year, but we saw it. This was the key because of our customer obsession and our ability to, you know, work multi-channel was a big advantage in that time 'cause we could move inventory around and, and make it happen. Inventory, if it isn't there, you can't sell it. So but, but multi-channel was a big advantage. The other, uh, was our, our focus on the runner. Um, we turned our supply chain on at least six to twelve weeks before anybody else did. 'Cause if you were, if you were a broad-based retailer, there was no clarity on when the customer was coming back, and for a lifestyle product, nobody, you know, nobody went outside for a year. So-

Ben Gilbert 53:07 Oh, so it was the fact that you exclusively made performance running gear that gave you the confidence to flip it back on. 'Cause if you're making all kinds of stuff in your factory-

Jim Weber 53:16 Yeah

Ben Gilbert 53:16 - and you're pushing all kinds of stuff through retail channels-

Jim Weber 53:19 Yeah

Ben Gilbert 53:19 ... most of it is not going to sell, so you can't actually open.

Jim Weber 53:23 That's right. In apparel and footwear, inventory is life and death. You've got to manage inventory well because if you have too much, you, you ruin the next cycle of, of inline product. So inventory is, is really critical, but we, we managed and, and played that cycle really well. We grew twenty-seven percent in twenty twenty. We grew thirty-one percent in twenty-one.

Ben Gilbert 53:45 Yep.

Host 53:46 Wow.

Jim Weber 53:46 Um, and we would have been up forty if not for supply chain.

Ben Gilbert 53:49 Wow! So what'd you do in revenue last year?

Jim Weber 53:51 Sorry?

Ben Gilbert 53:51 What'd you end up doing in revenue last year?

Jim Weber 53:52 One point one three billion.

Host 53:55 Um...

Jim Weber 53:55 One billion and one thirty, yeah.

Host 53:56 Wow.

Jim Weber 53:57 Great year! [laughing]

Ben Gilbert 53:57 [laughing]

Jim Weber 53:58 We cracked a billion. [clapping] Our industry, our industry, uh, the billion-dollar club is actually, you know, a, a rarefied club. There's probably maybe two hand, uh, maybe two dozen global-

Ben Gilbert 54:10 Yeah

Jim Weber 54:10 ... Chinese, uh, Chinese brands are there now, but, uh, it's a great club to be in. And what makes us unique is it's all premium, full price, full margin product. Most of the other brands have good, better, best, and, and those are retail-driven merchandising strategies.

Host 54:26 Yeah.

Jim Weber 54:26 They're not really consumer-driven strategies.

Ben Gilbert 54:29 So normally, we talk about seven powers, as we drift into analysis here. You're a Berkshire business, so we're gonna talk about moats.

Jim Weber 54:37 Okay.

Ben Gilbert 54:40 W- what is Brooks' moat, and how do you think about defending the castle now that you have what you've built?

Jim Weber 54:48 You know, we think a lot about it, and I, I think there's also, uh, something I'd add to that. Part of the moat can be business model, right? Business models can be really powerful, and one of the things you can do, uh, as a company, um, to create, uh, defensive, you know, m- moat structures [chuckles] is, is business model execution at scale. So we now are executing retail partnerships with the best retailers for running gear to runners at Super Jack and Jill in Seattle, um, Fleet Feet Running down in, I think, Menlo Park. Um, obviously, you know, some of the better sporting goods players in outdoor, from REI to Dick's Sporting Goods, we're their number one brand.... We've earned that over twenty years, and we have deep, broad partnership programs with them. Digital marketing, consumer journey, you know, runners are digitally savvy. They're, they're, they're obviously all over the web. They start their shopping experience there. Um, we're-- we reach them in active evaluation mode. Once you start looking at shoes, if you don't see our ad, you know, I don't know how we missed you. We've-- we're spending a lot of money at runners now, and maybe, maybe more money at run-- at people who run in active evaluation for running shoes than any other brand. Very focused. That's not easy to do in our industry at scale. And then, but I, I would say this is our moat, you know. I think, I think run ability, fit, feel, and ride, there's a lot of good shoes out there. It's actually not easy to make a great shoe. And Anthony Fauci made a joke about shoes: "Vaccines are tough, they're complicated. It's not like making shoes." [laughing]

David Rosenthal 56:26 [laughing]

Jim Weber 56:26 We get a lot of that.

David Rosenthal 56:28 [laughing]

Jim Weber 56:28 But, um, you know, the refinement that goes into mile, in making mile twenty-six, you know, acceptable, you know, the-- these are-- i- is, is really big. So, so, you know, I think great product is not as common as it, as you might think, and, uh, the people on the inside, the frequent runners, know. So I think product, you've always got to lead with product. That's the first brand experience is a product experience. So, so I think we do some hard things. We, we build great product consistently, year in, year out. It fits and it rides well. Um, and then what we do on the retail side in partnering and activating in real life, running and, and, and selling shoes in real life, events and all the like, we do that better than anybody else. Service them, deliver on time, complete. And then the digital piece, we're excited about it. I mean, we're, you know, we're still just getting started there, but, um, we're really focused on it.

David Rosenthal 57:22 Yeah, I'm, I'm curious. I mean, you mentioned... I hadn't even thought about Strava-

Jim Weber 57:25 Yeah

David Rosenthal 57:25 ... and the amount of data that you're able-

Jim Weber 57:27 Yeah

David Rosenthal 57:27 ... to see from that. What is-- what does the digital side of running in the future look like for-

Jim Weber 57:33 Yeah

David Rosenthal 57:33 ... for Brooks and for the industry?

Jim Weber 57:34 I, I think, um, it's interesting because quantified self and those tools have been ubiquitous, and, and, and they're out there, and, and the Apple Watch is a, is a damn great product, right? So, you know, what's interesting about that is both Under Armour and ASICS have spent hundreds of millions of dollars on digital apps.

David Rosenthal 57:53 Yep.

Jim Weber 57:54 Um, and I, I think they've really struggled to monetize.

David Rosenthal 57:56 There's, uh, um-

Jim Weber 57:58 MapMyRun.

David Rosenthal 57:58 Runkeeper and MapMyRun, both.

Jim Weber 57:59 And Runkeeper.

David Rosenthal 58:00 Yeah.

Jim Weber 58:00 Exactly. So I wanted to buy every one of those-

David Rosenthal 58:03 [chuckles]

Jim Weber 58:03 - and Warren wanted me to do the multiple on EBITDA, [laughing] and there was no EBITDA.

David Rosenthal 58:08 [laughing]

Jim Weber 58:09 So let's just say it's hard to do acquisitions.

David Rosenthal 58:11 One, at least one of them was a completely free product, I think, right?

Jim Weber 58:14 Oh, man, they don't make money.

David Rosenthal 58:15 Yeah. [chuckles]

Jim Weber 58:16 So... And, and Under Armour is trying to sort through that now, right? They've-- they're starting to shrink. So is Adidas. So those tools are really powerful for data, but how do you monetize it? And so we haven't gone there yet, but we're building, we're building a Brooks Run Club. Finally, we've, we've launched. It's not a loyalty program, but it's a zeal-- We want to engage our zealots. We want to engage our, our true believers, and the data piece of that is gonna be key. We wanna come up the kinetic chain and, and find a sensor system and a, and a, a data capture system that can get to your biomechanics as you're running because what happens is, if you run a marathon, your gait in the last five to ten miles really degrades- [chuckles]

David Rosenthal 58:56 [chuckles]

Jim Weber 58:56 - and that's where injuries happen.

David Rosenthal 58:58 Yes.

Jim Weber 58:58 So, so we-- we're doing a lot of... We have a lot of partnerships, and we're really trying to figure out how we get good runner data in real life, um, not just in the lab. In the lab, we can test everything, but we want to get out in the wild.

David Rosenthal 59:10 Do you think you need to do what the other folks in Oregon have done and build, you know, the whole consumer experience yourself, or is, is it a partnership?

Jim Weber 59:20 I-- We're gonna build it, and we're gonna partner, too. So we're, we're, you know-- I-- Look, Nike+ is a fantastic ecosystem. It just is. I'd love to have an ecosystem like that, but we're still, you know, we're still selling more runners than they are. We keep- We became the number one running shoe brand in the United States, uh, in the last twelve months, last month.

David Rosenthal 59:39 Wow.

Jim Weber 59:39 Twenty-one and a half percent share-

David Rosenthal 59:41 Ooh! [clapping]

Jim Weber 59:41 - in performance running. So, um, so we know, we know where the battles are, and, and I, I think one of those, uh, powers is we make money on that. So the digital space, there's a lot of, um, carcasses there. [laughing]

David Rosenthal 59:56 Mm-hmm. [chuckles]

Jim Weber 59:58 But we'd love to have it, and we're gonna work on it.

Ben Gilbert 1:00:01 All right, listeners, back in the home studio here, we have one more friend of the show to thank, that is the SoftBank Latin America Fund. Now, as folks know, their thesis has always been that the region was overflowing with innovative founders and great opportunities, which we've enumerated time and time again on this show, but has always been short on the one essential ingredient of capital, which, [chuckles] we look at what SoftBank Latin America has done, deploying eight billion dollars into seventy-plus companies, there's a lot of capital flowing into the region right now. And SoftBank's takeaway from all of this is that technology in Latin America really isn't about disruption, but inclusion. A great example of this is a portfolio company of theirs, Banco Inter, and we actually talked with Banco Inter's CEO, João Menin, uh, on the show last season. Is that right, David?

David Rosenthal 1:00:50 Last season. Ah, he's so cool.

Ben Gilbert 1:00:52 Truly. I mean, and, and Banco Inter is a fascinating story 'cause they're accelerating this shift of online financial solutions, expanding access to banking and investing services in a region where insanely, over half of people over the age of fifteen don't even have a bank account. They're just lowering the historically very expensive cost of doing banking, which that's just good for everyone. It is an inarguable good in a society. So that's just one example of how SoftBank is pairing with local founders in Latin America to bring them the capital and expertise they need. So to learn more, you can click the link in the show notes or go to latinamericafund.com. I have two more areas I want to ask you about. Um, the first is grading, and then the last is a, is a, is a personal topic. So-... Can you paint for me what the A-plus case looks like for Brooks five years from now? And I'm sure you do lots of three-year and your five, five-year plannings-

Jim Weber 1:01:46 Yep.

Ben Gilbert 1:01:46 -so think about this. And then I wanna know, rather than just saying, "What's the failure case?" I, I think a more interesting question is: what is the riskiest part of your business right now, where if that thing goes wrong, everything else can crumble?

Jim Weber 1:02:03 Two questions. So the first one, the A case, we just created a, you know, a, a North Star ten-year vision for Brooks. It's global for sure. People are running all around the world. As the middle class grows, people invest in their fitness, and running is always making the cut there. So it's booming in Asia. You know, we're growing now really rapidly in, in, um, Europe. So we wanna build a global, global brand, um, and that's work to do in the next ten years. So we see an opportunity for sixty million customers, sixty million uniques, up from maybe fifteen million today, four-bagger, and four billion in revenue. That's the big opportunity we see right now, and it's still a premium brand, positioned to the enthusiast, really uniquely positioned against all the big platforms. The A-plus case in five years is twenty to thirty percent growth every year, annually, and that's what we've been doing the last two, three years. Um, and a lot of that's gonna have to come internationally, but, um, but, but if we get a B and grow fifteen percent, we're actually fine with that, too, because we're not rushing for the exit. So we're excited. We think we see it. Um, we're gonna have to compete for it, but we have a, we have a complete playbook right now-

Ben Gilbert 1:03:14 Yeah

Jim Weber 1:03:14 ... in our view. So what keeps us, um, what keeps us from being successful? I've experienced it. Single points of failure, right? We launched a DC, which we had to do to get in the middle of the country.

Ben Gilbert 1:03:26 D- distribution center.

Jim Weber 1:03:27 Distribution center, and, uh, you know, despite all the experts-

Ben Gilbert 1:03:31 In twenty sixteen.

Jim Weber 1:03:31 Sorry?

Ben Gilbert 1:03:32 Twenty sixteen?

Jim Weber 1:03:33 Twenty nineteen.

Ben Gilbert 1:03:33 Twenty nineteen.

Jim Weber 1:03:34 And it didn't work. And so we just, we just disappointed customers for three to six months. It was awful, and we never have done that. We execute well. And now in Vietnam, the whole industry on performance is really focused there, principally.

Ben Gilbert 1:03:48 Yep.

Jim Weber 1:03:48 I think, um, the big guy has sixty percent of their footwear coming out of Vietnam. The South was shut down last Q3, uh, July, August, September. Forty-five percent of my factories didn't make a shoe for three months.

Ben Gilbert 1:04:03 Oof.

Jim Weber 1:04:03 So I-- we grew twenty, uh, thir- thirty-one percent last year. We were up forty-three percent coming into that, that, that, you know, product issue, and, and now we're experiencing it now. Now we believe we're getting back on the curve, but what we've learned is, you know, what does resilience and agility look like in supply chain? Um, you gotta diversify risk.

Ben Gilbert 1:04:22 Hmm.

Jim Weber 1:04:22 You know-

Ben Gilbert 1:04:22 Mm-hmm.

Jim Weber 1:04:22 -now we're seeing at our size that we're at, operationally, there's, there's real risk there. So, you know, we're thinking long and hard about that. We're working hard at it. But those are the things that are disrupting us right now. COVID's still alive.

Ben Gilbert 1:04:35 Yep.

David Rosenthal 1:04:36 Yeah.

Ben Gilbert 1:04:37 All right, one closing topic: You battled and survived and beat cancer while building this incredible business. How has that changed your perspective on leading, on the way you spend your days, and on life broadly?

Jim Weber 1:04:56 Let's close it on a light note- [laughing]

David Rosenthal 1:04:57 [laughing]

Jim Weber 1:04:57 -with some cancer.

Ben Gilbert 1:04:58 [laughing]

Jim Weber 1:04:59 Let's talk about cancer.

David Rosenthal 1:05:01 [laughing]

Jim Weber 1:05:02 That's the takeaway for these wonderful people. So, you know, it... I didn't expect it, came out of nowhere, unlucky, no, you know, "How did this happen?" Esophageal cancer, I just felt awful, and I, w- my running, worst running experience as I've ever had, and I got the diagnosis. Chemo, radiation, surgery, complications in the surgery, another surgery, um, and but I-- but the good news is I'm cancer-free. I think it's gone. I think it's out of my body. [clapping] Um, the bad news is I'm, I'm even slower, and, and I'm kind of a Frankenstein in my systems, but it works. Everything works.

Ben Gilbert 1:05:42 [laughing]

Jim Weber 1:05:43 Um, so I think what I learned from that, though, um, is that, you know, you're-- y- you go to the web... I go, every time I have a friend or a family member gets cancer, I go to the web, and you look at it and understand it and what the treatments are, and they always give you a five-year survival rate. My five-year survival rate was twenty percent, one in five, and my five years is this November, so I'm gonna kick its butt. [laughing]

David Rosenthal 1:06:06 [laughing] Woo!

Jim Weber 1:06:07 But, but I think what, what I quickly figured out, and I talked it through, you know, with my family and, and obviously with, uh, with Warren, frankly, is that, you know, I decided that I was doing exactly what I wanted to be doing. I love what I'm doing. I, I've got family, I've got active lifestyle, I've got this fabulous brand and company that I'm a part of and a team. I just love it. I don't, I don't know what else I'd do, which is a problem, but... So I decided I didn't wanna live, I didn't wanna live in fear, I didn't wanna live every day thinking about what I had to lose. I had a lot to lose. Um, and I didn't wanna be bitter about, "Why me?" You know, I just decided I wanna soak in everything I can on any given day. I wanna be a CEO, I wanna be a dad, I wanna be a husband, I wanna, you know, I wanna be a, a papa. I've got four grandkids. So, so that was it, and I think for me, that was really powerful because, um, I, I don't wanna be that cancer guy, and they brought it up.

Ben Gilbert 1:07:05 [laughing]

Jim Weber 1:07:06 They brought it up. [laughing] But I, that's just not my thing. I, I wanna, I wanna, I wanna s-- I, I'm glad to talk about it. I don't hide it, and I, and I've learned a lot, but, um, you know, I wanna, I wanna enjoy the things in life I really enjoy. So that's what I learned, but I think it's, you know, it, everybody's different, and you do find out, companies, when you hit challenges, you learn what you're really all about, and I think it's the same for people, of course. And, and so I feel really lucky 'cause I'm doing what I wanna do, and, uh, cancer's in the rearview mirror. So... [clapping]

David Rosenthal 1:07:38 Well...

Jim Weber 1:07:39 It's good.

David Rosenthal 1:07:42 ... [audience applauding] So great.

Ben Gilbert 1:07:44 Well, I know Jim did not, uh, want us to end on that note, but I think that's what we're gonna leave it on. [chuckles]

David Rosenthal 1:07:48 I think that's a perfect spot to end. [laughing] Ah, Jim.

1:07:52 Let's go for a run! [laughing]

1:07:54 [chuckles] Thank you so much.

1:07:56 Thanks, guys.

1:07:56 This has been so wonderful. Thank you for making this whole day a great-

Ben Gilbert 1:08:00 So special

David Rosenthal 1:08:01 ... experience and special for us.

1:08:02 It's great to be a part of it.

Ben Gilbert 1:08:03 Thanks for all of you who came on the run this morning. That was super fun.

David Rosenthal 1:08:05 Yeah. [audience applauding] [chuckles] All right.

Ben Gilbert 1:08:09 All right, Jim.

David Rosenthal 1:08:10 All right.

Ben Gilbert 1:08:10 Thank you so much.

David Rosenthal 1:08:11 Thanks, guys. Appreciate it.

Ben Gilbert 1:08:12 Thank you.

David Rosenthal 1:08:13 Thank you.

1:08:13 Take care.

1:08:13 Here, ooh, c- can't forget the Acquired badge.

1:08:15 Oh! [laughing]

Ben Gilbert 1:08:17 [audience applauding]

Ben Gilbert 1:08:24 Well, listeners, that was our Arena show. We're so pumped to get to share it with you for all those of you who can't travel to Seattle, and that was on reasonably short notice. I think it was a month or so. But, boy, did the folks at, uh, at PitchBook, and Vouch, and Vanta, and everyone else who helped us make this happen, Brooks Running with the run the morning before the show.

David Rosenthal 1:08:44 Packy, Mario, Anu, Shu, Y Combinator. I just... There was, God, so much love. So many of our past guests just came in to come to the show. It was so, so cool.

Ben Gilbert 1:08:57 Yeah, that was great, hanging with Chenyi and John Bathgate and... So, listeners, hopefully we'll be able to do something like this in the future and, and have you there.

David Rosenthal 1:09:04 I think we gotta do the Chase Center next. We gotta bring this to San Francisco.

Ben Gilbert 1:09:08 That's really the only option. [chuckles]

David Rosenthal 1:09:10 Where do we go from here, right? That's the only logical place.

Ben Gilbert 1:09:13 It felt like Berkshire weekend for Acquired podcast nerds, and we would never, you know, profess that we're at the same scale, but it, it definitely felt like it had an energy of, uh, to quote crypto, of "we're all gonna make it." I don't know. I got all the warm and fuzzies from getting to hang out with everyone.

David Rosenthal 1:09:29 You all are just the best.

Ben Gilbert 1:09:31 I also think, David, of the, like, thousand people in that arena, I think you and I personally got to talk with about 500. Like, we were on a mission to make sure to meet as many people as possible.

David Rosenthal 1:09:42 Before the show, after the show, at the after-party. That was so cool. Oh, man, it was so much fun.

Ben Gilbert 1:09:49 And everybody who came is getting an NFT, a custom Acquired proof of attendance NFT, thanks to Acquired's Head of Special Projects, Sunny Kim, and the Solana Foundation. So for those of you who came, show it off when you get your cool, animating... Well, I won't give away too much, but, yes, your proof of attendance NFT.

David Rosenthal 1:10:10 Yes, so fun.

Ben Gilbert 1:10:12 Well, with that, we wanna thank, of course, the folks at PitchBook for doing this with us, uh, to Vanta, Vouch, and the SoftBank Latin America Fund. We would love if you wanna come and, uh, chat with us, acquired.fm/slack. You can find your next job at acquired.fm/jobs. I think that's all we have to say. Listeners, we'll see you next time.

David Rosenthal 1:10:34 We'll see you next time.

Speaker 1:10:36 Who got the truth? Is it you? Is it you? Is it you? Who got the truth now? Huh! [upbeat music]