Ep. #1175 - Keeping All Your Hats in Order
Today’s episode of Startup Hustle features Andrew Morgans and Garth Watrous, Chairman of American Hat Makers. They discuss how to keep all your hats in order and how Garth overcame his challenges. Garth describes finding the perfect partner to help American Hat Makers shift from simply manufacturing to marketing and e-commerce success. Also, Andrew and Garth share insights on building a team, hiring up, and business as the ultimate competition.
Covered In This Episode
Hat manufacturing is not the first thing that comes to mind when illustrating business success. However, the story of American Hat Makers provides an excellent example for startup founders in all industries.
Listen to Andrew and Garth’s conversation on having a vision to create something incredible. Garth tells his story about starting at the bottom, side-hustling real estate, and working with his wife. He also recounts his life in San Diego, playing golf, getting sober, and getting all the hats in order. Andrew and Garth segue into understanding conversion and going all in with organic marketing.
Join us for a session on organizing for growth and success. Tune in to this Startup Hustle episode now.
- Garth’s story (2:42)
- Having a vision for something can create something (8:45)
- San Diego, golf, and getting sober (14:01)
- Business is the ultimate competition (17:25)
- Starting at the bottom and side-hustling real estate (20:38)
- Working with his wife and becoming a “we” (28:10)
- Getting all the hats in order (33:02)
- Becoming a marketing company from a manufacturing company (38:15)
- Building an organization (41:04)
- Understanding conversion and going all-in in organic marketing (46:36)
- Garth’s business and personal plans (48:21)
Business is the ultimate competition for me, especially, like, entrepreneurship, because entrepreneurship and business are not exactly the same. But entrepreneurship around, having to level yourself up to continue to compete at the highest level with the best and be the best is something that’s never-ending. It’s like it’s constantly there.– Andrew Morgans
I’m not suggesting working with your wife, either. That’s not an easy proposition. But I think for us, specifically, we wanted more than a relationship. And we were willing to, like, put through, kind of, put in not only the effort but accept the pain of the discomfort of working together and not agreeing. Because, let’s be honest, working with your wives in most cases is not easy. But I’ll tell you it is worth all of it because the connection we have is amazing.– Garth Watrous
I just hired a president, man. I went all in. [Like] one of my mentors said, you’d better higher up. If you really want to, like, change your company. If you really want to grow. You need to hire somebody above you. What does that mean? Right? How uncomfortable you willing to get, like, and I’ll tell you, I just did it, man. It was my first hire that was literally straight above me. And just incredible, man.– Garth Watrous
Nobody’s good at hiring. So, learn how to fire, and I don’t give a shit about who you are. Maybe there are some HR people that would disagree with me, I don’t know, but I’m not that good at it. [Fit] matters to me. And mediocrity matters to me that if the person, the individual, isn’t right, do them a favor and ask them to leave politely. And you will have a culture, and you will have an organization that will literally climb mountains for you.– Garth Watrous
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Following is an auto-generated text transcript of this episode. Apologies for any errors!
Andrew Morgans 00:01
What’s up Hustlers? Welcome back. This is Andrew Morgans, founder of Marknology, here as today’s host of Startup Hustle, covering all things ecommerce, startup lives, founder life, Amazon marketplaces, you name it. Today we’re going to be talking about keeping all your hats in order. And there’s, there’s a little pun behind that one. And before I introduce today’s guys, shout out to our sponsor FullScale.io. Today’s episode of Startup Hustle is powered by FullScale.io. Hiring software developers is difficult, Full Scale can help you build a software team quickly and affordably and has the platform to help you manage that team. Visit FullScale.io to learn more. Garth, welcome to the show.
Garth Watrous 00:39
Thank you, buddy. Glad you’re here, man.
Andrew Morgans 00:42
Thank you, I was really just thinking about, you know, some guests this year for the summer. And I really just wanted to go through some people that I know. People I’m working with, people we’re working with, and get a chance to shine a little light on some of the stories, some of the brands we’re working with as much as we can talk about American Hat Makers. You know, I think the the podcast is a lot about people that run it, people that founded it, people that have built it. So I would love to just get into your story a little bit, and then talk about American Hat Makers and why we’re here. So first of all, where are you located in?
Garth Watrous 01:22
Northern California, up in Monterey Bay in between Santa Cruz and Monterey and a little town called Watsonville.
Andrew Morgans 01:28
Okay, Watsonville. I’ve never been there. But I’ve just started getting to California a few times. So I’ll have to
Garth Watrous 01:34
It’s where are your artichokes and garlic and strawberries and things of that nature come from. So you probably eat food coming from our area, but it’s very much agriculture, obviously. Monterey Bay with the coastline is gorgeous. So it’s more Pebble Beach and such is known for so.
Andrew Morgans 01:56
Well, for anyone that can’t it’s not watching the visual or the video. Garth is set up. He has a dope office. He’s got a big American flag behind him. He’s wearing an American hat. And he’s got hats on on the back wall on these displays. Just a really cool company. We’ve been working with American Hat Makers a couple of years. And often I honestly don’t get that many guests on the show that I get to work with. So it’s kind of fun to just highlight, you know, one of the brands that we’re that we’re working with, Garth talked to me. But before we get into America Hat Makers, talk to me about Garth thumb. You know, in the early days, Did you always know you wanted to be an entrepreneur or a business owner? Did you go to school for business? Where’s your story start?
Garth Watrous 02:42
Yeah, I think from day one, I was I don’t want to say I was unemployable. But I definitely challenged authority. Um, you know, one of my caught early endeavors. I spent a lot of time on the golf course. And I was collecting golf balls long before I was really even playing. There was a course up in Santa Cruz up in the mountains in Santa Cruz and had a lot of ravines on it. And we would go up on the weekends and collect golf balls, and then literally sell them right there on the golf course. And I just knew, like, I didn’t really understand what an entrepreneur was. At that point. Obviously, I was, you know, I don’t know 9, 10, 11. But I clearly knew that I was at home. And that process felt right. And so you know, fast forward, I was a shitty student, let’s be honest, like sitting in a chair. You know, being tucked out for eight hours a day. Didn’t really work for me. Now. I was blessed early on with the gift of gab and being able to communicate verbally that I was able to kind of skirt the rules and more or less do anything I want, you know, somewhat entitled or at least I felt I was and were you in school in Northern California, northern California, Santa Cruz County, SoCal. I, I, I missed a lot of days. I think most kids in theory probably would have been expelled. But you know, I had I had a saying, you know, I don’t know if I’m proud of it today, but it was sure accurate that like, you put a polo shirt on, and like you can kind of get away with anything. And like at the end of the day, it was kind of my life and like so I would wake up at like eight or nine, maybe 10 I would roll into school. High school we’re talking now and walk on campus. Meet up with a couple buddies walk off campus smoke a big doobie, literally walk back on campus, go to one class, and then I was off to the golf course to hang out and play golf for the rest of day.
Andrew Morgans 04:49
So it wasn’t surfing it was golf. That was your
Garth Watrous 04:52
Surfing was a little earlier on was like in middle school. But I kind of figured out pretty pretty early on that like the bum surf life wasn’t that attractive for me I like liked a little bit more, you know a great story. I was walking to the golf course at 14 and one of the guys they played golf with rolls up in one of those red Magnum PI Ferraris if he if you know the show, and he pulls over and he picks me up, and he drives me the golf course as I think I was 14 and I just went, Oh, I’m into this.
Andrew Morgans 05:31
I want this.
Garth Watrous 05:32
Yeah, I want this right, this this makes sense. Again, this is like how I see myself obviously at 14 I had no concept of really what that meant or what it would take. But I could connect with that journey. And so golf resonated, it’s going to be you know, throughout this podcast and throughout my life. There’s golf intertwined in it, it made sense from a business from a competitive I got to drink about on the golf course in gamble, a shit ton right? Hang out with people that were making millions and millions of dollars at a very, very early age. And they love to gamble and and to be honest, I was better than a lot of them at 1516 years old. So financially, I could compete with them. And I didn’t really have a lot of fear around money. So we would bet hundreds of dollars with these silicone, you know, Northern California so these guys were all silicon entrepreneurs over the hill and driving their seven series beamers or Ferraris in that case, and and we got to get down and I got to listen to their business conversations, but I also got to like, talk, talk trash in and compete against them. Mono
Andrew Morgans 06:42
What’s the big deal? Like if I definitely didn’t have that growing up? Like, you know, I have a different story myself. But I wasn’t really surrounded by business men or women. In that regard, you know, I was around educators I was around different things like that. But it was I do believe that like having a vision for that can can really create something and just osmosis. Like you know, you’re around them, you’re hearing them talk you hear and what drives them. You’re like you looking up to them, maybe respecting them and being like, this is the things they’re talking about and doing. Okay, so from 1415 You know, I graduated 17 Because I was just Africa and he I don’t know my timelines are off was in regards to normal grade school, but high school comes and goes and where do you go from there?
Garth Watrous 07:27
Yeah, so right on par. I think I just turned 18 Like maybe two weeks before I graduated. You know, more or less, I was a fuckup. Like I you know, I wasn’t getting in any real school really had no real. I knew I wanted to play golf. I wanted to go scholarship. That was clearly my goal that I barely got through high school. I went to community college, but really kind of made some strategic decisions of like, so no alcohol, no marijuana, like really focused for four months, played golf, took 19 units, and gotten myself noticed and ended up going to San Diego State on a golf scholarship, you said took 19 units 19 units. Yeah, community college got 3.3, which mind you, I graduated high school and a 2.1. And really just made a decision that I wanted to get out of here. Get down to Southern California, or just get somewhere that I can into a much more metropolitan location. I always saw myself in New York. But the reality was, San Diego was cool and get down there and play some golf was a dream.
Andrew Morgans 08:38
Again, what was your dream? Like you I don’t think you’ve laid this out. Like what were your parents? Were they into business? Were they entrepreneurs?
Garth Watrous 08:45
So just to back up a little bit on the story of American Hat Makers. My father started this company in 1972. So he’s actually the founder, not me. I been blessed with with not only his genes, but but a great role model and my father Gary, to ultimately evolve and take this company to the next level. What my father and my mother were both entrepreneurs, self-employed, and very, very, in a way small-minded in the mindset of how to keep a company alive and thriving, but never really excelling. And I think that the small business mindset allows you to really prosper in your own little domain but really also inhibits you from growth. Major growth, right and you know it cuz you’re in that conversation, I’m sure daily, I’m in it now at the highest level of like, how do I work on the company, not in the company. So I watched my parents really thrive in their little element, but also really get hindered by how to move to the next level, how to hire the right people, how to delegate, how to not micromanage, how to manage cash differently, how to look at profit, not cash flow because that’s it huge different conversation. But anyway, so my roots I watched my dad full on work 70 hours a week, for 40 years let’s say he’s still here today he’s in the office next door you know he’s he’s active you he loves the entrepreneurship the business side of things. He’s he’s actually more techy than I am, helps with finances and such but but now he’s free to kind of come and go as he pleases. The responsibilities don’t fall on him as much at least. But yeah, really kind of born in that, but I always saw myself from a really early age, like, I was gonna be a billionaire.
Andrew Morgans 10:41
And so, like, Dad, dad had this business or mom and dad had this business, but they were working hard seven weeks like they weren’t driving the you know, the, the cars, right? They weren’t golfing in our driveway. Yeah, no one’s golfing in the middle of the day on a Tuesday. You know, it’s work work, work, work work. Yes. So maybe like work for myself, maybe business but like, didn’t see it happened this way, in that way. And at that time.
Garth Watrous 11:08
Great. Yeah. Great call out. And I think that like all we saw more or less so bigger business. Oh, you know what I mean? So So I think for me, didn’t again, like, so funny because you look back and you have no idea like what this actually means or what this is going to entail to get there and the work I’m going to need to do. But at the end of the day, I always saw bigger goals. I you know, always kind of almost in a in a weird way. Just saw myself there, even though I didn’t have a pot to piss in. But still, like put on the polo shirt and show up in the golf course. You know, you know, for all you golfers out there, like I’m sure you’ve heard the story about chichi Rodriguez like playing $100 Nassau eyes with 20 bucks in his pocket. Like some while that was kind of my life where, you know, I mean, I’m just I’m part of, and I feel like I belong even though the truth is, I was probably some sort of fraud or pretender, but the reality in my mind, I had arrived and, and, but arrived and now I think I’m arriving because I don’t know that you ever actually arrived. Today just a shit ton of hard work and dedication to my craft and ultimately getting to prosper and some of my hard work but nowhere near ultimate gold even today. But I think coming up on 50 Really trying to and then we can get into some theory. theological discussions is where I’m at today, I’m going to be 50 here next couple years is like, this is what I’m working on, we get a little deep on this, Andrew, this is the drive for success has been completely counterintuitive for fulfillment. And so as I’ve driven for success and monetary gain, it’s taken me farther and farther away from fulfillment and purpose. And I think coming up on 50 now and watching people dying of cancer and all this shit, right? That you start to go, oh, wait a sec, what’s this all about? Right? Like, another 100 grand in the bank or nothing another good customer? Is there really is changing my life today. And like, that’s debatable. So I’ve gotten a new son and starting to contemplate what fulfillment what purpose looks like. And then ultimately giving a little bit of less effort for success and more effort for fulfillment.
Andrew Morgans 13:34
Which can, in my opinion, if you get that recipe right can can dry both. Like as I chase more the things that actually fulfill me, then I’m a better version of myself, which allows me to do better work. Right in my mind, like it gets brings out the best in me the best in me does the best work and less amount of time and that way, you know, but I think we jumped around a little bit and I want to go back to when you were pushing the move to San Diego.
Garth Watrous 14:00
Yes. solution. So basically, 19, got out of community college went San Diego State became a full-time golfer, you know, did some classes on the side. You know, I was a grinder has never been the most talented, but I was definitely the hardest. For the most part, I was the guy that wanted to win at all cost. And so I was able to compete even with a lot less talent than some. And that’s, again, kind of my life story like just figured out how to win, you know, wanted everything I ever did. And, you know, the you know, we don’t talk a lot about this, I think as a society but as an NCAA athlete like you have four years of eligibility. And when that eligibility is up, regardless of your through school or not like you’re kind of done right mentally, you’re done. Now you got to motivate I had another year, year and a half of credits needed to graduate didn’t have any momentum or any any sort of real desire to continue school. I found myself kind of confused and the alcohol thing came back up and found myself ended up bartending downtown San Diego and the gas lamp and found myself kind of lost in the journey. Everything had kind of come easy now I had no purpose again back to that purpose, conversation and ended up becoming really a professional drunk for a good five years and leaned into it. At the highest level, I was again, great at it. Not a lot of consequences. And that was about 28. And it was becoming really, really evident that that wasn’t going to work for me. And if I wanted to live and prosper and have a nice life, I was going to have to give up the the alcohol and the the ultimate substance abuse and asked for some help. It’s probably my first time at 28 where I reached my hand up and and asked for a little help. I really didn’t know what that meant, again, where was where was it going with that? Or what kind of help I was going to get? But I’ll tell you, I’ve never had a drink since. Just celebrated 19 years the other day.
Andrew Morgans 15:23
Garth Watrous 16:16
Thanks, buddy. Just huge really like, again, like beautiful wife, beautiful kids. You know, I had the white picket fence and I sold that because the truth was that came with a lot of work. So like I you not I mean, I’ve done it doing it did it like but that’s all recovery. That’s that’s sobriety. That’s given me the ability to make these choices today. But San Diego was beautiful, I think like one of the most amazing cities on earth. So I really a special time for me, I think overall. But I think of also very, like, you know, chasing this beach life and this laid back and just not me. Yeah. So really, like I’m driven. I love that the art of competing and and so finding that, what does that mean to me? How do I compete differently today? You know, I play very, very little golf today. I’m still fairly good, but I just don’t play a lot with my grind with the work and the family. But I think at the end of the day, like, having that golf history and knowing that I can compete at the highest level, and basically anything I do, and now trying to apply those same principles to business is really the challenge today.
Andrew Morgans 17:25
I think business is the ultimate competition. And I’m someone that’s, that’s won that most things that I’ve ever done. I, I’ve failed it in marriage, you know, at 25. I hit my love and probably reached out for help somewhere around there, 25, 26. You know, just looking for purpose. And you know, Marknology is something that came out of that, almost 11 years ago, my neurology, you know, I’ve been doing this for 12 years now. So I can relate to that. And, for me, even in business, even when I’ve hit success hasn’t even been failures. But even when I’ve hit success metrics, like, that purpose thing, or that goal, or that focus can be gone, you’ve accomplished it, you checked off the box, you did the thing. And, you know, it can even be winning, it’s not even doesn’t have to be that you’re losing. But if you lose sight of that, if you haven’t changed your goal, or goals aren’t high enough that you haven’t moved it or adjusted it, or those are been some of my lowest moments in businesses, honestly, when I’ve accomplished something I was working hard toward accomplishing, and then I accomplish it. And then I’m, like, well, now what? You know, and so something something very relatable there. And I was chasing music for a long time. So for me it was, wasn’t the beach life. I’m here in the Midwest. But I grew up in Africa and started college in Hawaii and these things like that. And it was music, I was all in on music. I traveled for four and a half years touring, just got tired of being broke and the lifestyle around it, the people you’re around kind of it’s tough, it’s really tough to just be positive and take care of anybody else and be like, you know, have financial security and financial freedom. And so I shifted, and I had been in school for a computer science degree for six, took me six years, I think, to get a four year degree because I was just taking my time and touring and stuff.
Garth Watrous 19:09
It only took me 10. So don’t feel bad, Andrew.
Andrew Morgans 19:12
Okay, so there we go. So you know, and then I went to networking and security use my degree didn’t love networking and security. I was good at it. Got a couple of promotions at my first company and just said if this is like it, I’m out. And so made a big move into E commerce and I will spend the rest of the time on my story but yeah, it was this evolution of you know what’s for me what’s for me what makes me feel fulfilled? Well, I can tell you getting paid really well to sit on my butt for 12 hours and look at a screen is not what fulfills me, you know? So I learned that pretty quick. And so you know, working with brands helping people tell their story, being good at it getting profitable. I think business too, just to bring it back full circle like to me as someone that’s I love board games basketball. I’m in league volleyball leagues. I love all this stuff. Business is the ultimate competition for me, especially like entrepreneurship because entrepreneurship and business are not exactly the same. But entrepreneurship around, having to level yourself up to continue to compete at the highest level with the best and be the best is something that’s never ending. It’s like it’s constantly there. Okay, so back to your story. You talked about, you know, being in San Diego, looking back at that time, you know, finding sobriety during that time. And when did like, you know, when does American Hat come into the picture? Is there something before that? Like, at what point?
Garth Watrous 20:38
Yeah, so when I was 15, wow, I mean, I can back up even more like 8, 9, 10. I started going on the road with dad, you know, I’d go do the shows with him. Mind you, I’d kind of run around in the parks. And we did a lot of festivals we did 100 plus festivals a year for decades and decades. And so I’ve kind of run around loose and do whatever. And you know, obviously, my dad moved to to Santa Cruz because he was a hippie and free spirit. like, so that’s how we were raised somewhat. And I have a very loose parenting. I think great genes, but the reality is I didn’t have a lot of supervision. And kind of I had an older brother and we were up to no good a lot of days. So I got I got to grow up fast. Let’s be honest. So when I was 15, I did my first show. First festival by myself and I paid my brother to drive me. Turns out the guy is pretty worthless. At at least doing shows he’s he’s an engineer. He’s making chip for NASA and shit now but at doing festivals and selling hats, the guy sucked. Let’s be straight. And so I fired him shortly after it became 16 got a driver’s license and I was off and running man. I loved it. I got to travel the country I was you know, shit. It was, you know, telling people these stories now because they nobody believes it. Because now nowadays, I don’t know we let our kids run loose like this. But I was 16 years old, driving 10 hours to Vegas one-way to set up a show for three days. Stay in a casino now mind you back then they didn’t really card. So I’m playing poker, drinking Coronas at 16 years old in Vegas, right? It’s hard to fathom that today. But that was like my lifestyle. And I didn’t know any different like that was just what I did. And so I very much got a nice run, there was about a three year run of selling hats there from 16 and 19. Hats slowed down three times in our life. You most of us know this 1980, big, big cowboy movie. In the 90s Garth Brooks was Entertainer of the Year, I think, two years in a row, big big hat movement. And then of course, Yellowstone in the last 12, 18 months, just boom. So there’s kind of these three events in the 80s 90s and now 2020s but. So that three year run from 16 to 19 really kind of slowed. That was when I ended up in San Diego played golf kind of took a hiatus did a couple of shows here and there but really focused on school, golf. Fast forward, now I’m 30 years old, completely sober. Again, don’t really have a pot to piss in. I got my polo shirt. I got my baseball card collection, my CD collection. I still own a car, but that’s about it. And I came back as dad, right, if I can move in. Mind you, I’m 30 years old. I got a bunch of debt. True story. I filed bankruptcy at 30. I’ve got 50k in student loans. I’m sleeping on my parent’s futon in their guest office. And really at the end of the day, this really didn’t have a lot going but I was in such a good mental space. And I was ready to rock. Yeah. And my dad gave me a broom. And I think it was a 10 bucks an hour. 30 years old college degree and I’m like, I started at the bottom and again, like, couldn’t complain either man felt a little bit of gratitude, to be honest, man, first time in my life, a little little gratitude and a little humility. Probably at 30 I still didn’t really know what those words meant. But I had some of that. And slowly but surely, you know, I started to put in the work still was trying to make the golf career at work. But you hit it on the head, man, I don’t want to be a broke golfer. Like no, thank you. You know, I liked the finer things of life and I wanted a family and some of these other stuff. And so I finally gave that up and maybe 31, 32 and really focused on my career and putting in the time at that company. And at that point, you know, really needing to grow the Hat company to basically feed two families. It became pretty evident my father, like, made some comments, like, if you want more, you gotta go get it. And I was like, whoa, what does that mean? Like, he was like, well, what do you want me to do give you mine? And like, I worked for 40 years, this is mine. And I was like, okay, game on, right, like, lets go. And, and just became more and more active of I’ve been blessed with an opportunity to to buy a bunch of the shares here at the company and become majority owner. But I was the kind of guy that always would have two or three side hustles go in as well. And one of one of the best ones that performed I had a real estate, passion for real estate. And we, my wife and I, I think we’re on 11 or 12 homes and 12 years and amazing and, and that was the weekend hustle, man. The rehabs and the and the flips and rentals and really just grinded out a secondary income, which probably in fairness, looking back made more money than the primary income. But really being able to subsidize our, you know, because at the end of the day, hats, small margin American made, there was tough, it was a grind. It wasn’t some big payday, there wasn’t some huge windfall. But the real estate supplement, it’s so much about the income that enabled me to, like, give focus 100% on that on that company. So I’m mid 30s, really just dedicated to my craft.
Andrew Morgans 26:25
So like, were you talking about your wife now? Yeah. When, when did she come into the picture?
Garth Watrous 26:32
So God so so be we’ve been together about 18. Shortly after I got sober, met her in the program, like, true story, like, we met at a 12-step dance. And hit it off. Yeah, we similar, similar kind of mindset, like, we wanted a better life. We clearly knew we didn’t want to get loaded. We clearly knew that like there was more to provide, you know, you know, she was I love this, pulling her covers a little bit. Don’t tell anyone I pulled her covers, but she was, like, full Jesus thumping at the point. Like it was great. And I had nothing against Jesus. It was it was awesome to see the passion and the connection she had, she was very spiritual. I clearly needed some spirit in my life because I was I was a little little lost, let’s say. And she had two beautiful daughters at that time. She, she, I knew I wanted to give but it was in no hurry. So again, you know, hit it off, took us about five years to get married. I don’t know how long this podcast is. But
Andrew Morgans 27:48
I’m just I’m just thinking about, you know, you guys have done 12, 12 houses in 12 years or 12 renter rentals or investment properties and 12 years or 12 flips. You know, that’s a lot of work as a team, like, you know, it doesn’t get done by itself. And just curious, like, I what point it became a we instead of like, you know, you trying to figure that out? And you know,
Garth Watrous 28:10
Well, I was tough. I mean, I kind of said to her, like, why we didn’t get married earlier was I was, like, there’s no free rides, like you’re not coming on this journey hanging out. I don’t need some what are the comp trophy, trophy wife and all that bullshit, like, you got to put up and do the work with me. And so that was one of my biggest and she wanted that she maybe didn’t quite know what that look like or what that meant, I think early on. You know, and she could tell her you know, her story in some ways, probably better than even mine. But she you know, she was at a crossroad in her own life of, like, there was some subsidies happening and you know, to two kids, single mom, it was it was tough. And then I said that’s a great story. Don’t give a shit. Like, let’s go if you want to come on this journey, I want to do some shit alive. And that implies that you, you come with me and do the work with me and thank God, I pick the right one that she was able to like step up and do that, you know, but but I was very adamant that it was a mandatory we because I didn’t want, you know, I mean a very much, like, always dated and then ultimately married my best friend that, like, I want my partner to be connected and on the journey. I’m not really like don’t really want to go home at 10 o’clock at night because I just worked a 14 just to tell her what I did today. Like I know for all you men out there you guys know that at eight o’clock at night like I don’t want to process shit. I want to flip on the TV. And if that’s the only time I’m going to see my wife how healthy how healthy is that marriage is going to be? And so we’ve been able to find connection throughout the day. She handles a lot of the marketing and branding here at the company. Now I’m not suggesting work with your wife either. That’s not an easy the proposition. But I think for us, specifically, we wanted more than a relationship. And we were willing to like put through put, kind of put in not only the effort but but accept the pain of the discomfort of working together and not agreeing, because let’s be honest, working with your wives in most cases is not easy. But I’ll tell you is worth all of it. Because the connection we have is amazing.
Andrew Morgans 30:26
Yeah. And I feel like I can relate in a way in regards to just like, my family has been my purpose, and focus and why. And, you know, I built this company with my family. And there are some cons to working with family. But I think that the pros way outweigh that, you know, and just regards to, like, we’re have the same, we’re on the same mission trying to do the same thing for each other. So why not do it in the same building, you know, versus like all three of us doing it in our own ways. Like, let’s combine efforts. And I know that I don’t believe that people that were nonfamily would have stuck with me through some of the hard times in the business, like you know, versus when they’re there with you doing it, you also have a lot of respect for them versus like, Hey, I gave you a position of my company here work, do the branding. That’s not the same thing, you know, or do the marketing, it’s not the same thing as, like, going through the journey together, I think. So no, that’s cool. I just wanted to kind of know where that fit. And I know that someone that’s like, whenever you’re okay, you’re back at home, you know, at 30, you’re on the futon, you’re like, you know, sweeping using a broom, we worked your way up, but your dad’s company, you know, at one point, you’re doing sales at 16. So it kind of seems like definitely a step back. And we’re gonna run at festivals to that. And then, you know, if you’re 50 Now that’s 20 years right at the company. And just like the mental for me, the mental fortitude to just like go in, day in and day out and stay focused on what that is, like, to the point where I said, I achieved some things and then I would be lost again and having to figure that out. How, like, for very competitive people that maybe have ADHD, that like, you know, like to win a lot of different things, I do. I like, you know, I’m gonna go fishing, I’m gonna be the best fisherman that I can be. If I’m gonna go play ball and be the best baller I can. That’s just how I do almost everything. In business it can be it’s a whole different thing. And I want to talk a little bit about, like, you know, the title is called keeping your house in order, right? And for you, since we’ve talked about just like, you know, the details behind your story up till up till 30, 32. How did you stay focused, like, you know, at the company, was it continuing like your dad’s like, hey, I need you to carve out your own your own space here? Was it, like, into the business aspects? Like, was it increasing wholesale? Was it, like, the start of E-commerce? Was it, like, doing less festivals? You guys were already doing a lot seemed, like, you know, for a long time. Yeah. What was kind of your avenue to that?
Garth Watrous 33:02
Well, I think for me personally, like you described it, I got ADHD, I like to win. I love to be challenged. And most of all, I love change. And I think early on in my career, I would change to change because that was my personality. I felt comfortable in change. Today, I tried to change methodically because it is taxing on your team. Yes. And so like I’ve really had to figure out that I wear my team out when just to change. So you know today I’m like very much more analytical or like, Oh, you want to change like I you know, the department heads if it’s, you know, usually it’s the tech side, my guy my my boy or he’s in the next office. Man like I wore that dude out for a couple years and we in him we just would change. Like we were changing your undies, and on the tech in the e-com side and today we’re like way more methodical. We were just looking at a filter and search app for Shopify store deep into negotiation and to be honest, we just had this like kind of epiphany this morning of, like, do we even need it? All the metrics say we don’t and sign up for another $1,000 a month SaaS fee when the truth is the metrics don’t even tell us we need it was just a fascinating, like, again what are we doing so anyway that’s real life today. You know for all for all you guys run an econ out there like you know that SaaS is a bitch that fucking like it never stops, right? Everybody wants to raise their prices. They’re all now going off sessions bullshit. Anyway, oh, rant out a little bit of right now on SaaS fees, because God damn it bleeds the company dry. But anyway, that’s just where we’re at this today, literally this discussion but let me back up. So COVID happened. Let’s just talk a little bit about COVID. So, you know, I killed all the festivals. I got the company off the road and basically said Dad, kind of retired, uncle retired from the road I basically said, Look, I’m not gonna be able to run this company and take to the next level if I’m on the road, so let’s just get off the road. That was tough because that created a shit ton of cash flow, not a lot of profit. But again, I touched earlier on in this this podcast, really understanding cash flow. And separating from profit is huge. And I think if you want to make it from a small business, to an actual standalone business, you’re gonna have to separate those two things. 100%. And that was the real, you know, my mentors were very much like analyze the company from the P&L, not from the bank account. And I can tell anybody, you want to take your company to next level, you’re going to have to separate your bank account for the way you run your company. I’m not saying is that important, I’m not suggesting you take an absentee mindset of cash flow. But if you make your decision off your profit of your bank account, you’re probably not going to be very profitable. So that being said, I transitioned literally love the finances, love the metrics, love the analytics, right? I’m I’m surely not the best. But I’m very gut oriented. I’ve been in this business so long, I can make the analytics makes sense. So COVID came, we’ve been basically we’re off the road. So thank God, that wasn’t an issue. But the phone stopped. To-sell stopped, like we were dead in the water, we had a basically a run rate of about six weeks. And we were going to be through the line and empty every bank account, if we continued to leave it wide open. So we had to make a decision. We’re going to run it wide open for six weeks and close the door. We’re going to like pull the ripcord here really, really quickly. This was long before PPP, or ERC and all that bullshit that that was coming down the pipe that none of us knew. And we had an executive meeting in here my office on a Saturday, and proceeded to lay off 29 out of 30 people and held onto our cash as tight as we could there. Some people volunteered, I talked to guys still work for free. And we lift this thing along. You know, I didn’t take any days off. And we just kept our head down, PPP popped, and all of a sudden got some money. And in that conversation in that six week time before the PPP got there, we kind of decided, do we want to lean into E-commerce. And we, my dad built a website back in the 90s. So it wasn’t that we weren’t in E -commerce. It was that we didn’t do internet marketing. And I think like for a lot of the startup kind of concepts, I didn’t truly understand the difference. There’s a distinct difference. This isn’t, you know, Field of Dreams. If they build it, they will come well, that’s a bunch of bullshit. So if you’ve got that business model, amen. But that didn’t really grow our economy. Now, we did enough shows. And we were in enough accounts, that somewhere between 16 and 18% of our gross revenue was from our website with zero internet marketing. So I’m not suggest that you can’t do some internet business without internet marketing.
Andrew Morgans 38:07
Yeah, you’re just capturing sales, though, you’re not actually going out there and hunting, so to speak, or bringing people in or running signs or.
Garth Watrous 38:14
And so the real decision we had to make was is at 18% of our business and wholesale being more or less turned off and the phone stopped ringing, we weren’t going to be able to keep our company alive, right 18% of our revenue wasn’t going to be able to fund this overhead. And so basically, I had to kind of like, what are we going to do? Well, we decided really, pretty quickly, it wasn’t a very hard decision, like let’s lean into internet marketing, again, didn’t know what that meant, didn’t really understand what a marketing company was. Because that’s what the decision I actually made that day was to become a marketing company, not a hat company, not a manufacturing company, but a marketing company. And I think that it’s taken me now three years to start wrapping my head around that and building out a marketing department. Because they’re all marketing departments to people. Yeah, but you want to do 20 and $30 million in IE, a marketing company, you’re gonna need more than two people in that department. And so I learned internet marketing that I had spent the last Tuesday while now three years of my life learning internet marketing, and really understanding metrics, human behavior, I won’t even say I’m good at it. I said put three years in, I don’t know I’m at my 10,000 hours, I’ll tell you that. But ain’t even good at it. Right? I’m holding down the fort. I learned, you know, triple well saved my life. Just shout out to triple well, like, you know, I shit we’re spending 100 a month on on Facebook. You know, we spent, I don’t know 18k a month now. Like, it’s life saving, you know, couldn’t figure out where all the money went? Well, fuck it was in Facebook’s pocket. Right? So, you know, like that old saying that that 50% of marketing is working. You just didn’t know what 50% Well, I found out it wasn’t Facebook. So customer acquisition and is a real thing got to learn what that is. And you better know what that costs you to acquire customers and be very hard to be profitable in E commerce. But long story short, e-com became 80% of our business in two years up for me 16, 18. And now it’s going to end up at 60, I think this year for probably 50 for what’s
Andrew Morgans 40:25
Wholesales coming back.
Garth Watrous 40:26
yeah, wholesales coming back. And, and that was kind of shame on me wholesale could have come back a lot quicker. I fell asleep on it, I focused on e-com, small team lost focus on wholesale. I think wholesale popped back a lot quicker than I really was aware of, or
Andrew Morgans 40:42
You might not be where you are in e-com or e-com if you hadn’t spent three years focused on that if you knew 50, or whatever you might not be where you’re at. So I don’t know if I would say like, shame on you for that. And you know, like, let wholesale get his legs back. You know, I deal with businesses trying to figure out both all the time, and it’s not the easiest thing to do.
Garth Watrous 41:04
And the third prong is Amazon, right. And you know, and thank God for you guys. And Amazon’s brutal right there the elephant in the room and, you know, the abuse you and then abuse you some more. I mean, it is fascinating the amount of abuse we’ll accept. Right. So, you know, that’s the three headed monster is Shopify, Amazon and wholesale. And, you know, we’re, you know, and we’re a manufacturer and a sorcerer, you know, so, you know, I think, you know, I don’t know how long we got here, but I’ll talk a little bit about team because I think that, wrap it all back together, that the biggest passion, and I know you’re in on this, because I had these conversations with you early on, when I talked about bringing you on as a partner, are you bringing me on as a partner, but we, what is your team? And I think that what does culture mean to you? And ultimately, how are you building an organization from the inside out? You know, do they want to be here? Do they like being here? How do they treat your customers? How do they treat your vendors, like your team is you and I think that, you know, when my father said, I needed to go get mine and ultimately create more if I wanted mine, the kind of that the team concept started then. Again, I didn’t know what I was doing then. And I put some people in place that clearly weren’t leaders, I think one of the biggest mistakes I’ve made is I’ve taken my best worker, and I’ve made them the leader. And I’ll tell you that that is horrible. I also didn’t understand how fast I needed to fire. That was another really, really big lesson that I need a fire fast 30 to 60 days fire, like, you know, in your gut, if they’re good or not fire them. Do them a favor, and do yourself a favor and all your team a favor and fire them. Like that was another huge, huge lessons that I had to learn. But today, like we have an amazing culture, I think as you do, like we hire. Well, let me let me rephrase that. My mentor said so beautifully. Nobody’s good at hiring. So learn how to fire and I don’t give a shit who you are. Maybe there’s some HR people that would disagree with me, I don’t know, but I’m not that good at it. And I, you know, fit matters to me. And mediocrity matters to me that if the person the individual isn’t right, do them a favor and ask them to leave politely. And you will have a culture and you have an organization that will literally like climb mountains for you.
Andrew Morgans 43:31
And the team will respect that. Yes, you know, when when, when you’re, they think that you’re dialed in, and you’re paying enough attention to notice who’s doing great work and who’s not, and who’s, you know, accepting mediocrity and who’s not. Because, you know, those people are not, they’re not gonna snitch, they don’t say things like that, in my opinion, like, you’re not going to be the ones that just throw them under the bus. But if you have the ability to notice that and call it out and remove that from the team, I’ve been going through a period of that a little bit. Just sometimes life, sometimes people getting poached, sometimes us letting people go a little mixture of all three. But it is about getting the team right, you know, and better to do it with you know, not having 50 that are half in. I’d rather have 10 that are all in Yeah, you know and see what you can get done.
Garth Watrous 43:31
And you know, I touched on that a little bit yesterday, I just hired a president, man. I went all in. I tell you, like, one of my mentors said, like, you better higher up. If you really want to, like, change your company. If you really want to grow. You need to hire somebody above you. What does that mean? Right? How uncomfortable you willing to get, like, and I’ll tell you I just did it, man. It was my first hire that was literally straight above me. And just incredible, man, and, like, he’s third weekend and like, I’m stoked, right? I’m not I’m not measuring how much it costs and measuring like how much he will contribute and maybe I’m in a comfortable place today. Maybe I’m just tired. I don’t know. Have you like, I am stoked during any of these a level of people to be able to have these conversations with. We’re not talking about adding 1000s of dollars of revenue, we’re not talking about adding millions of dollars with revenue, the conversations just change when you start leveling up. But it all starts with your hiring, are you willing to get uncomfortable and higher up? So
Andrew Morgans 45:21
I love that. And just to add to it, like one thing I’ve been doing because I wouldn’t say I’ve got a CEO ahead of me, or even some of my other C suite team. But we have very much gone in heavy on coaches. And, you know, I’ve got three, I think, you know, my sisters have to between them. So five, the leadership has five coaches right now in different areas where we’re just bringing in people that know more than us to essentially like help us get there. And whether that’s a permanent spot or fractional spot, I don’t think so matters, it matters as much as just getting the right people in the right spot I can, I can help you there. We’re running out on time. And, you know, before we get before we get to the end, I would love I’d like to end the show with just a couple of questions like one what’s, you know, and you might have already mentioned this, but what’s one thing you’re doing in your business? You know, we’re in July, we got another six months of the year, I guess five now, right? But like, you know, what’s one thing you’re working on the business that you’re excited about something new, and then something in your personal life that you’re doing this year? Or coming up? You’re excited about? One from the business one from yourself, that’d be helpful.
Garth Watrous 46:36
Well, I think the business aim and I just kind of alluded to that is building a team and really like evolving this facility and organization to be the leader and we we call crazy man. Like I you know, we touched on this in so many different ways. But I went into COVID doing basically almost little to no internet marketing. I’m the leader in the whole industry now. Like I’m the guy right, and I don’t even I didn’t even know it right? I’m like, God just kept my head down. But now I look around love Semrush and href and like, I’m deep into these numbers now, knowing that like, the only one above us is Stetson, and the reality is, is that, you know, half of their terms are branded. So you know, outside of that, like we are crushing but you know, not really knowing it just putting my head down and doing the work. Like we haven’t you know, Director of SEO like I’m all in on ultimately, long-term organic, just a shout out to organic, it’s the non sexy part of marketing. But I’ll tell you, if you want to be profitable, man, you better get organic, paid is only getting more expensive, customer acquisition is only getting more expensive. So really, just I think honing in customer journey. And then ultimately conversion. I think we spent the first two years acquiring eyeballs, but not really focused on conversion. And I think if you want to be profitable in the e-com game, you got to understand conversion in and middle littlest tweaks, you know, hundreds of a point to tenths of a point, start to matter.
Andrew Morgans 48:10
I can tell you 100% as a case on Amazon, you know, it just volume game in regards that you make 1% difference across 100,000, whatever, it’s a big difference.
Garth Watrous 48:21
Staggering. And I think that you know, and a lot of emerging guys jump on with their calculators and talk about hundreds of millions of dollars if you just do this. Well, that’s cool, but that’s not actually doing it right. And so understanding conversion, and having some players you know, I really run our organization and our marketing team from a democracy standpoint, which allows probably a little bit more noise than needed. But it also allows some really, really good conversations around it. Like, everyone has a little different opinion. And so, so that’s the, but really growth, we’re adding a lot of import stuff. I’m actually this is another great ecom conversation, I’m consciously driving my average order value down, then that is 100% on purpose, my conversion is skyrocketing, right? So I’m, I’m playing with average order value, and everybody wants to say AD AD AD and make it higher. The problem with that theory is you start living in your market, if you’re a premium product, I need to be in to the masses, right? And so you know, part of, you know, shout out to you. I’ve been connected with you. I’ve got some ideas for Amazon in our partnership because the reality is, you don’t have the tools needed to perform for me on Amazon because I haven’t giving you a price point that you can go out and win. Again, you can’t win with our current premium product line. So but anyway, long story short, we’ll get into that down the road. I got some ideas going into next summer. So that’s business. The The last thing I’ll say is, we want to take the same tech stack that we’ve done direct to consumer and apply it to B2B. That’s where that’s our next like endeavor that we’re starting. We’re trying to launch that by January, okay, that’s like next level, nobody’s doing that and use everything from attentive to Clay VO to Shopify, but only B2B driven and basically set up the same funnels, the same interactions. The same campaigns, like, it’s all the same in so many ways, it’s the same content, right price has changed, you got to buy more. But other than that, it’s the same story, it’s the same content, we just get to duplicate it if we had the same platform for running for B2B and B2C. So that’s a big one, overall, and then trying to figure out the last one, of course, I got a million of them. But the last one would be trying to get our logistics to the center of the country. You know, we’re at Monterey Bay. And that’s not exactly a shipping hub. If if you don’t know where that is, look on the map. We’re not exactly centrally located. And hats are dimensional. And so we’re shipping dimensional product all the way across the country. No offence, it’s kind of stupid. And I can raise my hand, we didn’t know any better. But you know, we’re going to spend, I don’t know, 1.2 on on shipping this year. And you know, you start again, like, conversion, you start talking about a point or two, it pays for itself pretty quick. So we’re looking at places out in Dallas and possibly Louisville or somewhere to get out, buy some some shipping hubs. So that’s on the table going into 2024. So and then personally, my wife and I are building a house in Puerto Rico. For all you tax buffs out there, something called Act 60. You know, I’m not an accountant. And I didn’t sleep at a Holiday Inn. But I will tell you, if you’re unaware on familiar look up Act 60 in Puerto Rico, but you should be sitting down because you might shoot yourself. It’s it’s impressive. It’s It’s almost unbelievable. And but you got to move. And if you’re willing to move, like, we are, my wife and I are moving to Puerto Rico, and we’re going to take advantage of the Act 60 and run corporate through Puerto Rico. We’re really excited on that.
Andrew Morgans 52:16
Yeah, so smart, it’s gonna be a fun change. You’ve been in California a long time. You know, I think that’d be fun. I’ve got a lot of e-com guys in Puerto Rico. So you’ll have to let me know when you make that move. Maybe I can make some, just some cool guys. Families, too, that are out there, whether it’s the software’s we’re using, or just a lot of Amazon guys, you know, for the same reason, Act 60. So I was there I spoke on a cruise in February on ecommerce cruise in Puerto Rico was one of the stops. Yeah, so I got to spend the day kind of hanging out with all of them was a good time. Yeah. But no, those are, those are some fun moves. And I would love to keep picking your brain on the marketing side just to dig into some of this for our listeners. But we might have to do a part two here. But a lot of what you share, there’s just so much meat there. Like, I have a fulfillment center here in Kansas City and middle the country for that exact reason. You know, you’re getting everything in a completely different zone when it comes to shipping and where you’re shipping them to and who’s buying your hats, you know. So, you know, Midwest, not saying that that’s where everyone’s buying them. But you know, when you really understand what your customers are like, that’s, that’s a difference in the game. And I wanted to be able to control that as we continue to build brands. But all the way down the AOV and conversion rate, you know, you have to be much better at selling a premium item when it comes to marketing in and they’re pushing up the AO V on items commonly because they’re using paid media to get those acquisitions. So there they need to or to be 200 bucks if they’re spending 50 to get the customer for that kind of thinking, right? So if you’re doing organic, and you’re doing SEO, and you’re winning on all these terms, well conversion rates gonna go up if you have a lower price point hat as well. So I love that strategy and wanted to just add my two cents that I gotta run us out, because we’re up on the hour, but it’s been awesome chatting with you, Garth. I think you have a lot more to share with the Startup Hustle community. So I’m gonna have to have you back. And I just want to talk about kind of what those three years have looked like for you, the good, the bad, and the ugly. Perhaps of like, you know, where you guys started and what your focus was then and then kind of what it’s evolved to. So maybe people can kind of take note, as they’re on their own journey, I think, you know, I go through this journey a lot with brands and manufacturers that are they’re attacking Amazon. But DTC, B2B through Shopify, these are all you know, things I know of, but I’m less holding the hands and I know that they’re difficult in a lot of ways, and it’s just a lot of tactics. That’s why I said it’s the ultimate competition for me. I think it’s just, it’s a lot of fun. You know, and to your point, you’ve become an internet marketer, not just a hat seller. You could take a lot of these skills and and do it for another company, do it for another company, do it for another company because it’s a lot of the same principles, right? It’s just understanding exactly the stuff behind it. So it’s been awesome having you on the show. Hustlers, thank you for tuning in. To our sponsor Full Scale.io. Let Full Scale help if you need to hire software engineers, testers and leaders, they have the people in the platform to help you build and manage a team of experts. When you visit FullScale.io. All you need to do is answer a few questions, let the platform match you up with fully vetted, highly experienced team. At Full Scale, they specialize in building long term teams that work only for you learn more when you visit FullScale.io. That’s a mouthful. But I’m telling you to our listeners, to Garth, if you guys check out FullScale.io, the system that they’ve built there, it’s my mentors company, the system they’ve built there for their team and picking a team to join your team. Whether you’re looking for developers or not, it’s worth checking out the site. It’s actually really really cool, something they build custom-made. So without them, we wouldn’t have this free show. We won’t be able to get it out to everybody. We just hit 5 million downloads as a podcast. FullScale.io is a lot to thank for that. Garth, thanks for sharing your knowledge with us and your story and we’ll see you again soon.
Andrew Morgans 52:31
Thanks, buddy. Love to come back, man. Keep up the good work.
Andrew Morgans 56:13
Thank you Hustlers.