Ep. #1223 - The Startup Santa
Today’s episode of Startup Hustle features Andrew Morgans and Brad Pedersen, Founder and Chairman of Lomi. They uncover the transformative insights in Pedersen’s book, The Startup Santa. Explore stories of resilience, being fired, bankruptcy, the law of reciprocity, and valuable lessons on forging a lasting entrepreneurial impact.
Covered In This Episode
Most people, particularly startup founders, fear failure. Lomi’s Brad Pedersen shares how his fall from height taught him some valuable lessons.
Listen to Brad recount his journey as a top toy distributor to Andrew before running into financial difficulties and eventually bankruptcy. Brad describes the experience as falling forward, helping him realize that success was like a hot car: it didn’t make him happy. However, Brad went through another startup that started well, only to get fired as a co-founder.
Despite his track record with startups, Brad was not discouraged. He founded two more companies, Pela and Lomi, and started writing his book, The Startup Santa.
Andrew and Brad discussed the importance of sharing knowledge and making a lasting impact. They agree that the Law of Reciprocity is universal, meaning that if you want more, you must give more.
Failure is nothing to fear if you have the right attitude. Discover how to fall forward in this Startup Hustle episode now.
- Brad’s story (1:20)
- Failing forward (8:07)
- The hot car paradox (18:36)
- Starting again after bankruptcy (19:47)
- Tech for Kids, a merger, and getting fired as a co-founder (26:24)
- Founding Pela and Lomi (31:36)
- Writing Startup Santa (36:45)
- Sharing knowledge and making a lasting impact (40:59)
- The Law of Reciprocity (45:52)
Life is about failing and failing forward; fail fast, fail often, fail cheap, is what we hear. But if you get knocked down and fail, it’s your choice, whether you stay down and become a failure, you know, what is the purpose of your pain? There’s gonna be a better version of you on the other side of that.– Brad Pedersen
I’ve come to learn that whenever there’s recession and uncertainty, that is a great time to build a business because it’s wide open. And I’m telling you, there’s never been a better time to actually lean in and actually make meaningful progress in your business right now. Because when things are good, it’s good for everyone. And it’s very frothy and choppy and lots of people making lots of noise.– Brad Pedersen
The best gifts come wrapped in ugly paper.– Brad Pedersen
For me, whatever the thing is that I’m holding on to or obsessing about, or hurting about, or whatever, I try to ease that pain somewhere else. If I can for somebody else. And in doing so, sometimes I find my answers.– Andrew Morgans
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Following is an auto-generated text transcript of this episode. Apologies for any errors!
Andrew Morgans 0:00
What’s up Hustlers? Welcome back. This is Andrew Morgans, founder of Marknology. Here as today’s host of Startup Hustle. Today, we’re going to be talking about the Startup Santa. That is our title, but we are going to go into a lot more of that, and I’ll share exactly what that means today’s episode of Startup Hustle is powered by Full Scale.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. Today’s guest, Brad Pedersen, is visiting us from Boca, Florida. Is that correct?
Brad Pedersen 0:34
Near Boca? Yeah, not that. Not that. That’s where I usually hang my hat. But that’s where I am today. Yeah,
Andrew Morgans 0:39
British Columbia is typically home. But we accept you here in the US as well. So love that you’re calling in in the warmer, sunny state of Florida. I’ll be there next week, a little bit before my Columbia trip. So I’m jealous, and I already kind of feel a little bit on vacation right now. But thanks for taking the time to get on the show. I think you have an amazing history that we need to get into a little bit and share with our guests. I love to start the show just getting to know each other a little bit. And, you know, sharing who Brad is with our audience? You know, I don’t think this is your first venture or your first startup. Where does your story begin?
Brad Pedersen 1:20
Well, it’s a long story. And I don’t want to be too long in that. But look, I was just discussing with another colleague whether entrepreneurs are born. Are they made? You know, is it nature? Is it nurture? And as I reflect back on my life, I actually default to I think it’s more nurture than nature, although I think, you know, there can be arguments for both. I don’t think it’s definitive one way or another. But, you know, I grew up in a family of entrepreneurs, self-employed folks, people who are really free-thinking. And so that’s really the way that I knew how to be. You know, my father, you know, he wasn’t an entrepreneur directly. He was a chiropractor. And he did that because his father and mother were chiropractors. And my great-grandfather was the first chiropractor in Denmark. And so he became a chiropractor because that’s what Pedersens were supposed to do. But he always had businesses on the side, he always had hustles, he had things that he was working on and doing. I just watched that, and it was marvelous. I was always impressed by the fact that he was constantly pushing the possibilities for doing that. So, you know, at an early age, there were a couple of those. Yeah, so we owned a stereo shop before the Best Buy’s of the world came in. There were these specialty stereo stores that had like high-end, you know, like Harman Kardon, and the time pioneer was making these, you know, that was a first flat-screen TV, three grand each, you know, so things that were like high-end audio. And then he got involved in a bunch of network marketing opportunities as well. I think, as you know, chiropractor, he was, you know, looking at, you know, vitamins and supplements and opportunities with that. So, he always had some kind of hustle going on. And again, I was just inspired by how he lived his life and was exposed to it at a really early age.
Andrew Morgans 3:04
You didn’t have to just choose one thing. I think that’s something that you know, I have a lot of curiosities, a lot of passions, across different things, I do feel like you need to become an expert or really good at something. But what’s to say you can be really good at a lot of things are pretty good at other things, and still be successful. I love that. I think a lot of times you hear just like, pick that thing and go in on that everything else is a distraction. I tend to disagree. My dad was somewhat the same. I like look, there’s some times where I need patience and the best way for me to be patient is to go work on something else. Versus just you know, sitting in waiting so you know, we need something else needs to needs to bake a little bit or you’re waiting on something to happen in that business guy Steady as she goes or I’m frustrated. I hit a roadblock. I love those. I love those sight if you call them side hustles or serial entrepreneur or whatever you want to be. Okay, so we talked about Dad? Yeah, keep going.
Brad Pedersen 4:01
Okay, so, you know, I was, again at early age, I was a bit of a mischievous kid got into trouble. I remember getting the strap three times in grade school. I mean, that’s when they did that thing. And it wasn’t kind of bad trouble was just like I was pushing the boundaries and possibilities and you know, usually getting myself into a place where they felt like they need to punish me for that. I can’t remember how many lines I’ve actually written on the chalkboard but it would be very very many if I had to catalog them all so but part of that was just constantly looking about what else is out there and how far can I push things and so I found that I started to do entrepreneurial things like I would sneak into golf courses after hours with my snorkeling gear and dive into the ponds and get all the golf balls are playing at the bottom I remember just seeing all these like little bumps everywhere. And then I pack them into egg cartons and selling for five bucks and you know it was like you know Cost of Goods zero just your time and agency. I started wood cutting business. You know my dad had to like truck a chainsaw splitting Mall. We lived a Something we have called Crown land, which is you know, access to force that are basically no one owns it, the government owns it, you can go and harvest the wood if you need it. So I was cutting down trees bucking up the logs, splitting them and then matching people’s prices, but offering to stock it so that little extra value add, which was really sweat equity for me just you know, had me super busy and I would hire my buddies from school. And, you know, this is how I funded most of my mentors. So I was showing all these things kind of through my teen years. And then I did go to school to be a chiropractor. And you know, while I was in school, I read an article about a kid who had invented a toy. It was kind of this rags to riches story. And it was a flying toy. And I was very intrigued and fascinated with flight. So I ended up buying some getting shipped to me in Canada. I played with them. And I was like, Wow, this thing is super cool. And then of course, you know, entrepreneurs, what they do they think, Well, how could I potentially sell this? How could it turn this into an opportunity. And so I contacted them. And fortunately for me, they were as naive about Canada as I was toys, it was kind of like the perfect marriage of ignorance. And now suddenly, I was in the toy business as a distributor, and started off kind of as a carny selling these things at festivals and you know, events and parks and you know, like the slam slam shop guy or Slap Chop or whatever ShamWow guy
Andrew Morgans 6:14
with a toy
Brad Pedersen 6:16
Yeah, it was it was a cylinder it was called Xylo is a cylinder you throw like a football. And it goes like 600 feet. It’s like so incredible this day. It’s like if you take it out and throw it around, people are like wow, it’s just it looks like it’s defying, you know, physics by how far flies?
Andrew Morgans 6:30
I could remember those footballs that kind of had like the lottery, you know, at the the tail and then yeah, has no Mahinda could just fly.
Brad Pedersen 6:39
Yeah, the vortex football also a really cool toy. See, and this is what’s cool about toys is we all remember those iconic toys that we were playing with as kids and like, it’s like, oh, that, you know, brought back memories. You can even remember the smells over going on that that morning, you got it for Christmas. And it’s super cool. So that got me going into toy distribution, which eventually I scaled that into becoming the largest toy distributor of its kind in Canada. And, you know, we were winning awards, and we became kind of the go to solution for the Canadian market. There’s something in Canada called the Profit 100, which are the fastest growing companies in Canada. And we were on that list for like five years in a row. And I was nominated for Ernst and Young Entrepreneur of the Year. And I just thought, Oh, this is amazing. I’m in my 20s and life is great.
Andrew Morgans 7:23
I was going to ask like what, you know, how old were you at that time? And did you finish chiropractor like did you finish? You know, being a chiropractor like what happened with that? Was it just like you found success? And so you put that on pause?
Brad Pedersen 7:35
Yeah, look, I I took a year to try this out. And it was primarily driven by the fact that my wife wasn’t my wife at the time, I’d met this beautiful young lady in university. And she had one more year of education and I was done my pre carpark. I was supposed to go to school and finish it up. But she was like, I don’t want to do a long distance relationship. So I decided to wait for a year and do some something on my own. So that’s what kind of opened up the possibility here. There was suddenly some capacity in that. Right. So I
Andrew Morgans 8:04
you know, it’d being a generational thing. Like
Brad Pedersen 8:06
I well, I think they all thought, you know, he’ll just get over it like, you know, and let him go. Yeah, exactly. It’ll get over he’ll come back into senses. So yeah, didn’t did not happen. But you know, so I was in my mid 20s, when all this success was happening. And you know, I was labeled as a wonder kid. And it was life was great. And then I went on a vacation in Mexico. It was 2006 when vacation Mexico, just finished a record year, got back, got a call from my CFO who was my business partner at a time and he said we got a problem. I said, Okay, let’s hear about it. He says that ERP that we implemented this past year has been giving us junk data. And we thought we had profits, but actually we have losses, and the losses are not just bad, they’re real bad. And, you know, so I went from all of a sudden, this company that was so much of my identity, and you know, because we as entrepreneurs, we it’s what we don’t do is what we birthed into the world, which is really not true. It’s a broken, you know, sort of narrative about our value. But needless to say, I was shattered that suddenly my business went from being at the top to being in special loans. And we wrestled to try and fix that company over two years putting it through a restructuring, which is a fancy word for bankruptcy. And then ultimately bankrupted that company two years later, because the underlying foundation was was broken. And you know, even though we found new capital investors, it was, it was a bridge too far. And all I can say is that at that time, my life I had an incredible amount of shame. Because I had over a million dollars of friends and family money in that business. And you know, Christmas was awkward. And yeah, it it was a real, real trying time. But now as I reflect back on it at the time, it’s suck but as I reflect back, I now talk about it my being my inconvenient blessing because it it was a forcing function of me to stop And with that I could have like, you know, my, my father used to say, you know, life is about failing and failing forward, fail fast fail often fail cheap is what we hear. But if you get knocked down and fail, it’s your choice, whether you stay down and become a failure, you know, what is the purpose of your pain, there’s gonna be a better version of you on the other side of that. And so, you know, that inflection point in my life forced me to stop, recalculate, and actually get clear on not what I wanted. But what I didn’t want anymore. Like, what are the things I didn’t want anymore, and the way my business had been, and using that sort of
Andrew Morgans 10:34
revert, I’m right there. But I want to stop right there. Because you just you just shared a lot. Number one, number one, I think, you know, we talked about failing forward, maybe that’s cliche, like, you know, fail forward, fail often. But like, I honestly, as someone that’s failed a lot, myself, and this episode is not about me, it’s I’m not sure that much, but I have failed a lot, from divorce to business things to all types of things. And I honestly get a little excited. When I hear other people talking about their low, I see them going through a low, especially if I feel like it’s someone that I know, has the potential to bounce back, you know, they might not see it, but I do. Because I feel like there is a ton of growth. If you get back up on the other side of that you just like a man that’s built himself back up after failure is a man that like shouldn’t be messed with, in my opinion, because his confidence is now not perfection. It’s not built on perfection, it’s built on. His tenacity is his resilience, his ability to get back up. And that’s not anything you can learn from a book, sign anything you can learn from someone telling you like that. It’s something you gotta just kind of, you just gotta do it. You know, and I think, you know, in the pandemic, I’m in E commerce, and we were busy, busy, busy, busy, busy trying to, you know, help brands stay alive succeed. But there was a big part of me that was like, well, businesses aren’t signing up with us, this isn’t my turn that I can’t help from businesses, like, you know, closing up, or they’re getting rid of contractors or agencies first, before they get rid of people closing their stores, even if I’m crushing it, there’s a chance that like, you know, I fail at this thing. And, and I’ve been doing it now nine years, so maybe six years at the time of the pandemic. And it was a big, like, I don’t want my day to be tied to this, I think it’s a lot of things that entrepreneurs really deal with is like, this might be the first like, real successful thing that I’ve done that the world can see and be proud of. And if it’s gone, am I gonna be this is what has like, shaped me as a person in the growth in this, I just want to create a couple of notes on those things that I think every founder, every entrepreneur listening to the podcast Can, can kind of relate to is, is that you talked about shame. And enough people don’t talk about shame is almost feels like it’s more of a biblical word. And, or a mental health word than anything that’s talked about in business or entrepreneurship, but it’s crippling, it can be crippling, and especially when it involves, you know, friends and family, I can’t imagine and I was thinking about just five years running of, you know, being one of the top 100 companies to wasn’t just like, you’re running, you know, running under the radar. It was, you know, front and center. And I know, whatever you’re going to share next is going to be big, because I just know, I can feel a moment when I feel a moment, you know, and I’m like, that is just, you know, is really big. So okay, so Christmas is is awkward, you’re like, you know, you’ve bankrupted the company. Are you married at that time? Where are you at?
Brad Pedersen 13:33
Yeah, yeah, I am married. But first of all, I just want to thank you for sharing, I appreciate the vulnerability. Because again, that is something that we’re not really good at as humans, we tend to, like want to show that, you know, our biggest problem is that we compare ourselves. And we always compare ourselves up, you know, we’re always comparing our backstage with other people’s front of stage. And that’s really debilitating, because everybody has a backstage as messy as well, right? When you look on social media, you’re just seeing the very shiny, polished surface level stuff Beneath that is a bunch of crap. And everybody is suffering, as Buddha says, at some level, and you know, your sufferings different than mine, but I think it’s it’s important to point out that failing is a part of succeeding. In fact, we should rejoice in our failing and our suffering and our pain. We just have to have purpose to it. So the point is, is that we’re all going to experience pain, we’re all gonna experienced some sort of struggles. And in fact, I would say to you, that’s a necessary part of our humanity is a few things that we need as humans we need you know, we need to sleep eat water, shelter, companionship, but add to it struggling, because without struggles, we actually don’t discover our possibilities. We don’t push through it. Unfortunately, success is a sucky teacher. You don’t learn from the easy things the good things like they that’s not a great stopping and reflection moment in time. Typically, it’s when you get punched in the nose. And you say what just happened? And how did I end up in the situation, then it’s taking accountability for what you actually how you co created the situation, and unpack the learnings and then choose again, and choose take those learnings to apply it to a better future for yourself. And that kind of just ties into what I chose to do I, you know, I go bankrupt. My identity is all attached to the business, which by the way, I think, again, is broken. You know, like, one things I want to stress on is this is that so much of who I was, I’ll speak from my own personal experience was based on what I did, the way my father showed love to me was, is if I did hard things, and I did him with excellence, that’s how I got his approval. Like, if it was, if it wasn’t hard, it didn’t count. In fact, that was just kind of like, rated early age baked into my ethos. And so I know, you know, my coach says to me all the time, you know, the skilled hunter knows how to hunt, the master Hunter knows how he’s hunted. And so I know, I’m hunted by the fact that I default to that belief system, that if I’m not actually, you know, working hard to achieve excellence, it’s actually not doesn’t even count. And so my, my journey, got me to this point where my identity was based on I did something really hard, I built this toy company from a place that was obscure in the middle of rural Canada to becoming the largest of its kind, and then not was all How was validated. And then the other thing we validate ourselves is what we have. So it’s not just what we do, but what we have. So we see, you know, the Instagram reels and people with their jets and their fancy cars and homes and all that, and that’s trying to impress, and those things on the own are not bad. But they should be a byproduct and not the focus. In other words, what we should be focusing on is who do we become? Who do we need to become? How do we continue to develop the beingness. We’re human beings, not human doings, or human havings. It’s who we need to become, if we do that, to the best of our ability, the doing and having will be byproducts, but not the focus, because chasing the other two is like chasing rainbows and butterflies, you’ll never achieve it, you’ll get just far enough along to realize that you need more and more and more, and then you eventually just, you know, well, you go to your grave unhappy.
Andrew Morgans 17:15
It’s so true. And I’ve got some some mentors, I really look up to in the E-commerce space, I’ve been doing this like going on 13 years in the Amazon space. So there’s some OGs that I’ve met that are just I mean, these are a couple 100 million dollar a year type of guys. And, you know, something I’ve learned from them the last few years, just by being around them observing them is, you know, I see them. I asked them what they care about most what they’re most passionate about what they’re doing, why they’re there, you know, they come to these ecommerce, different ecommerce events, they don’t need to be there for business like, they’re they’re volunteering, they don’t call it volunteering, right. But they kind of are right, and they do these meetups and these groups, and they just share passions and support others. And I’m not saying every 200 million a year person is that. But there’s some that I’ve seen that seem to be doing it right. And maybe they’re driving a Buick or you’ve always wondered why you see those, like wealthy people driving normal cars, as you know, they’re just not they want to prove to themselves probably over and over again, as much as they want to be saved from this and that and people picking on them for their wealth or whatever, right? There’s this, this element that I’m like, you know, me at 36, I want to learn before I get there. You know, that it’s about being and not not doing or having and how can I figure that out? Before I’m 60? You know, or whatever it is?
Brad Pedersen 18:36
Yeah, there’s, there’s a, we can go down this rabbit hole real deep. But there’s this thing called the hot car paradox. So we all want to get these really hot cars. And, you know, in fact, I had McLaren for a while and you know, I thought it would make me happy. I found that it didn’t make me happy. And the irony of it is that when I’m driving around, if people are impressed. They’re impressed because they can imagine themselves driving that hot car. It’s not because you’re driving that hot car. So you’re trying to impress them with quavering, they’re not even thinking about you. They’re thinking about themselves driving that car, and they’re in the same trap of thinking that’s going to make them happy, which they’ll find it actually doesn’t make them happy.
Andrew Morgans 19:14
Yeah, and anyone that’s impressed by that kind of a little bit of a red flag to and who you want to be around or you know, if you’re trying to find a wife, is that really the one you want? You know, right? One is looking for the McLaren because someone else is gonna have to McLaren’s you know, it’s it whatever. Okay, so back on track because I want to get while this is good, I want to get I want to get to your story and really talk about your book and what you’re doing certain. So you kind of fell flat. You know, and and you’re pulling yourself out of that. What did that look like?
Brad Pedersen 19:47
Yeah, look, it was a time you know, the best of times the worst of times, because company was about to go into bankruptcy. I knew that I couldn’t save it. I It, again, I use the anti goals like what is it I didn’t want anymore. And using that it became the basis of a new future that I could design. And I really encourage people, because you’ve asked people what they want, it’s hard, it’s just too much whitespace, it gets easier to clear on what you don’t want. And from that, you can actually create a new business thesis in my experience. So basically, what I didn’t want anymore is I didn’t want to be just focused on Canada. I didn’t want to be distributing other people’s products, I didn’t want to have to carry a whole bunch of inventory in a warehouse. You know, I didn’t want to have to try and build brands from scratch, running a lot of media, I wanted to, you know, be able to use smarter ways to market. So all of those things became the formative foundation of a new company that I launched in 2009, called Tech for Kids. And that that business plan, I put forward to the same investor group, by the way, who lost 4 million bucks, my first venture, and I said, Hey, I need a million bucks. And I presented the plan, they were more motivated by recovering their initial investment, which is kind of strange because usually good money doesn’t follow bad. Like they typically once they’ve lost their out, but these guys said, we really want the 4 million back. So they gave me a million dollars more at 24% interest with a one year term. So it was like, oh, personal guarantees on top of that, so you want to talk about laying in a cold sweat in bed at night. That was my life for a while for sure. And, and then all that funded. And then two weeks later, the great recession happened. So literally, it was like the world fell off a cliff. So it was the best of times because everybody in my industry stopped. And actually I’ve come to learn that whenever there’s recession and uncertainty, that is a great time to build a business. Because it’s it’s wide open. Like right now there’s a moment of like a lot of uncertainty out there. And I’m telling you, there’s never been a better time to actually lean in and actually make meaningful progress in your business right now. Because when things are good, it’s good for everyone. And it’s very frothy and choppy and lots of people making lots of noise. And you know, I think that I think Warren Buffett says that any Turkey can fly in a tornado. Right? It’s when things are tough that you find out if you’re actually a really skilled sailor or not. And so launch this company
Andrew Morgans 22:06
I want to add to that is because I believe that and I am definitely I’m ever defied all the odds in regards to like, being successful with my family legacy, you know, I’m the first good college degree not that that matters. But just like, I’m an exception across the board. As an entrepreneur, and I’m blessed, you know, I’m very nice. So I, but when you look at the stats, like shouldn’t shouldn’t be successful. But one thing I’ve always done is I think it’s I think it’s a little wire in our heads, Brad that is the do hard shit. Wire, like March shit, and it will matter. You know, when stuff gets like scary and hard. Well, I’ve already been through a lot of shit. Like I grew up in the DRC. Like, I don’t know if you know much about Congo, but a tough place to be. Wow thought toughness as a kid, you know, just observing it and being like, wow, I’m blessed to be here. So I’m like, I’ve seen tough, been through tough, I pick myself up off the ground. Statistically, like I would defy the odds already. So what’s another, you know, what’s another, you know, speed bumps, so to speak, or hill to climb? And looking at those opportunities, if you are someone that’s the underdog, if you are someone that’s like, you know, I’m not as big as these other agencies, I don’t have as much marketing budget, I don’t have this. I don’t have that. Times like these were in 20 and 2020 23 or 2008, two comparable years to ecommerce growth, by the way, both this year and 2008 were the same ecommerce growth specifically on Amazon 5%. I think this is when you can leapfrog a competition. Yeah. You know, I have the same courage I’ve had my whole life. So it doesn’t really change in the hard times. It’s like, I didn’t really have that cushion to be afraid of losing time, either. So it’s like, you know, these really are times where if you’re like, man, I’ve been looking for that opportunity. When things get hard. That is the opportunity that’s going to come and you can leapfrog quite a bit of competition. And if you end up on the other side, wow. You know, I think all the big money knows that. But to the other entrepreneurs, it’s a big deal. So you had just got funded in 2008. happens you like Well, I’m funded.
Brad Pedersen 24:09
Yeah. Yeah. Plus, I had one year timeline, I had to repay the money with interest, right. So there was like, some serious pressure. And, you know, as I think back on it, because the world came to a halt, and we had no choice like we were, you know, we’d burn the boats, like, again, I had personal guarantees, there was all kinds of motivators. I had to perform. And a year later, we repaid that million dollars with interest. And we had launched Tech for Kids. And, you know, we did everything we talked about, we went international, we focused on licensing. We sold stuff, FOB direct from Asia, instead of having a warehouse we just we did all the things that we said were anti goals, we actually built a business model around that and it became ultimately an infinitely better opportunity than my original distribution company had been. And, you know, the point is, is that if I had been successful in the distribution company and I hadn’t faced that bankruptcy, I never would have been forced to figure this thing out. So that’s why I call it my inconvenient blessing, I would have been stuck in that thing and in an inferior life that I had with that opportunity. And but
Andrew Morgans 25:15
You’ve made so many one liners, I don’t know if you’ve prepared all of these, but they’re just like, amazing clips. I hope the I hope the content team cuts some of these up because you’ve just really been delivering some heat. But But Brad, my 12, your Amazon journey is very, very, very similar. Amazon started with distribution. It was distributors putting products online, and then went to private label and then went to Amazon FBA versus warehouses and drop ship, or going straight from China to the warehouses, all the things that you didn’t want is like what a successful business ROI it looks like Amazon these days. And, and you haven’t even mentioned Amazon, I know it wasn’t part of your your thinking so. But I did that same journey in regards to being an agency that works with brands, I went through distributors to the private label to the manufacturers themselves, the brands themselves and going internationally sold in 11 countries because selling an Amazon Canada as a huge opportunity when Amazon US is super competitive. So I was there we started, you know, winning. And I just I just wanted to relate on that fact, because it is the absolute exact strategy that we’ve progressed through ourselves. So Tech for Kids, you haven’t really explained what that was.
Brad Pedersen 26:24
Yeah, we were toy manufacturer developer, we focused on licensing. The first license we actually had was back Egon and Benton, which both those brands are still around today. But we were making, we had the category of nightlights and we had some water toys and some collectibles and a few different things that we created with those products and caught them at a time when you know interesting about the toy businesses it does really well in recessions like that is shockingly, there’s a few things that happened during recessions, depressions, Campbell’s Soup, lipstick, and toys, those things all do really, really well. And it kind of makes sense because people want simple pleasures. And the toy side is while parents are suffering, and maybe not taking their kids to like Disney World and places like that they still want to be able to deliver some joy and happiness in the form of a toy. Right? So that is how come that business has been very resilient during difficult times. And yeah, we’ve Fortunately, you know, we’re able to build that business grow at kind of a key inflection point in that business is that we secured the Angry Birds license when that thing was just becoming something significant. And we wrote that it was a rocket ship, you know, took our company from, you know, doing like, think at that time 10 to 12 million in revenue to over 60 million in revenue, it was just like this massive growth curve, just writing that one license. But it’s also the great failed frailty of the toy business to you know, things that grew up fast, can also come down fast. And if you’re not finding that next hits to replace it, you know, you’re left with a with a giant hole. And if you have operation costs to cover, then it’s it’s it can be problematic. So look, we wrestled that business into what I would say something that was profitable. And in Canada, we were one of the top toy companies, I mean, not taking anything away from Spin Master, who is by far the biggest and most successful toy company that’s ever been in Canada. But relative to who we were, we were doing just fine. But I had this issue is that, you know, as an entrepreneur, when you bring in outside capital, you’ve agreed at some point in the future, you’re going to sell your company. They’re they’re looking for some sort of exit some sort of liquidity. Yeah. So they people who put the money in said, Hey, we need to see a return. So I started a process to try and sell a company. And we had a few term sheets, and we got kind of down the path. And in both cases, we went to we had a letter of intent, and we went to due diligence, we walked away from the deals because they just was not the right fit and not the right culture. But then we came to a place where hey, let’s reverse engineer this, instead of trying to sell a company, how do we do a merger with a similar company. And the combined companies will have more operational efficiency, more profitability. And we can actually do a private equity roll up play with this. So it was kind of like we engineered like, so there’s different ways to get to know comm. You don’t have to. Well, you were saying before about how you optimized your Amazon business by looking at places and being nimble to find other ways of getting into markets through not just the traditional channels. That’s kind of how we looked at this from an exit standpoint. And so anyways, we successfully merged our company with a company in Florida, which is why I now have a place in Florida. And within 90 days of that merger, I got fired. And, you know, when you co-found a company and you put it into the 30 actually, by the way, I burned Tech for Kids from not from nothing to something of significance, then I merge it, then I get fine. It’s like, okay, this just happened. And in the moment,
Andrew Morgans 29:53
Was there upside at all in the merger or, you know, I guess then firing you or like as the co-founder was there Just curious, was there like protections in place, I guess to take care of you?
Brad Pedersen 30:04
Yeah, look, and I unpack this in the book, because after years of scarcity, and I would say some PTSD over bankruptcies and not having any, like, a lot of us entrepreneurs have our net worth on paper. It doesn’t show up in the bank accounts, right, I was looking for some sort of financial security. And so when the deal was coming together, the deal itself provided freedom. So, we knew that it was going to not only get our investors recovered, it was always going to provide freedom for my family and I, and, and then ultimately, you know, I was blinded by that. I talked about in the book, how, you know, I could see that we were headed for a bit of a crash, that our cultures, there’s no such thing as merger, by the way, there’s only acquisition because one culture is going to prevail. And there was a culture clash, or working styles are different, the way that we operate, it was different way we made decisions and hired people is different. So at the end of the day,
Andrew Morgans 31:02
it’d be as simple as saying, you know, being a member of British Columbia, and a company ran out of Florida, like, you know, not the US is not the one culture across the board either. But there’s definitely a different culture in Florida than in Missouri than in Kansas and in North Dakota. So, you know, that’s probably part of it, too. Like just, you know, being from a place as rural as British Columbia, and building a culture there, and probably more community and all of those things I can just imagine, to, you know, an investor play.
Brad Pedersen 31:38
Yeah, look, at the end of the day, I get it. Now, as I’ve reflected on it, which again, is important lesson, you don’t learn from what happened when this we learned from stock and reflect on it. As the investors coming in to fund the deal, you have two leaders who are not getting along, you’re adding risk in a company. And you know that that is not healthy. And so a decision had to be made. And I don’t blame them. Looking back now at the decision. And kind of like similar to the bankruptcy, I look at it as my inconvenient blessing. And I’ve since come to learn that the best gifts come wrapped and ugly paper because that was a terrible thing in the moment. But it was a gift, it actually freed me up to the marketplace. And again, to imagine new possibilities, but this time, with new found freedom in terms of how I could design my life into the future. And so that’s ultimately how I landed doing what I’m doing today with both Lomi and Pela Case in that, you know, I had sort of three principles that I came away from that one with is that and again, this is I’m reflecting on what I didn’t want. Life plan before business plan, which I never had done before. Because quite frankly, I paid lip service to all these things that I thought were important. But if you looked at my calendar, it tells the truth, I wasn’t really paying attention to the things that truly are important. Second is my no Asshole Rule, like only awesome people, like, you know, people who are going to bring out your best and you know, I I stuck by that pretty pretty consistently, you know, focus on things that I really want to share with people that I that I like with only on things that matter. So that was the third is impact. None of what I hate less than what I tolerate, and only what I love. That was basically what impact was for me. And so I spent some time getting clear on the opportunities. And then Pela was a business launched by my co-founder, Jeremy and he had the idea but didn’t know how to tell a story map or truly who was my other co-founder. He was a great storyteller, but didn’t know how to make things. And then I came in as a maker. So it was kind of like a perfect marriage of different talents and skills. And, and that, of course, allowed us to then launch Lomi, which is the world’s first electronic kitchen composter that turns organic waste into nutrient rich dirt at the push of a button. And it’s a super cool technology that actually is the most we think the most domakr democratize way that we can positively impact climate change.
Andrew Morgans 34:03
I love that, Brad. That’s incredible. Number one, and I love you know what impact looked like for you. I think I could resonate with all those things I’ve built. Nothing’s perfect, but I definitely have lived my life by the things by defining it by the things that I don’t like right don’t want. And the only way you know that is by trying a lot of shit. You got a lot of things and know what you don’t like. And I couldn’t help but compare like, you know, you’re talking about an inconvenience. Inconvenient blessing. And it almost sounds like you know that relationship that you can’t let go that you’re in this relationship. You’ve got so much into it. You’re kind of just invested you’re just seeing that you think you’re doing the right thing. You think your calendar is invested in the right things you think you’re focusing on the right things and you know, she cheats on you or she breaks up with you when you probably wouldn’t have ever broken up. And you know, you find yourself kind of spinning or spiraling or trying to figure things out and You know, the next blessing comes along and you’re like, Wow, I can’t even believe that’s how I was living my life. You know, and now here I am in this, it was inconvenient, but now I’m feeling blessed. I like you know, business to me and relationships are kind of go hand in hand. Because when you’re an entrepreneur, this is your life. In total is all encompassing. I work with my best friends, I work with my sisters, they they left their careers comm helped me build this when I was just getting started. And I definitely we’re doing things that we love, and you know, fired a client three weeks ago, not something normal it for you no Asshole Rule, you know, I have a rule that I take very seriously in a time when we need clients. But there’s simply like, you know, there’s something in the universe that, you know, the more you have around you, the more you have that you’re tolerating it, you’re putting up with it, the easier it gets to do that again and again. And you know, life is short. So I want to spend, I’m gonna do give one more sponsor spot. And I want to spend the next 10 minutes talking about the book, if you don’t mind. Yeah, sure. Because I think I think it can help a lot of entrepreneurs just, I haven’t read it myself. But just reading kind of what you put in there in the bio seems like an amazing book, show, again, to our sponsor FullScale.io. Finding expert software developer doesn’t have to be difficult, especially when you visit FullScale.io. We can build a software team quickly and affordably. Use the Full Scale platform to define your technical needs and see what available testers, developers and leaders are ready to join your team. Visit FullScale.io to learn more. Okay, so talk to me about the book, you’ve got two companies, we don’t really have time to go into everything that you know they’re doing, we’ll have links in the notes, if people want to check those out and learn more about, you know, the waist compact or turning into dirt. I honestly feel like I need one now. You know, but let’s talk about the book kind of the purpose for it. And you know why you wrote it?
Brad Pedersen 36:54
Yeah, no, thanks. I appreciate this because, you know, it’s it’s been a labor of love over the last three years. And the truth is, I really didn’t want to write a book, kind of twofold. Number one, it seemed like a very daunting task. As an entrepreneur, I know that I’m really good at starting things, and finishing things, the messy middle is where I suck. And the idea of writing a book and having to do all that time in the middle seemed really, really scary. And secondly, I just kind of thought that the world was already pretty noisy. Why does another voice need to be put into the conversation. So kind of where I landed was this is that our brains, our minds are really good at coming up with creativity and ideas, but they’re not really good at retaining information. We have like very leaky minds. And we have a lot of recency bias, if you try and recall what happened, you know, last week or last month, it’s kind of crazy that you know, you can get to kind of the highlight reel, but it’s hard to kind of get to the depth. And so I felt like the most important thing is I needed to capture some of the 30 years of being in the toy business because I’ve had some pretty crazy things happen during my time. And, and I thought it’d be helpful to create a memoir. So I started writing the memoir, unpacking some of the the ideas and lessons. And then some of my inner circle, you know, said, Hey, do you mind sharing with me a couple of chapters, so I did. And the feedback I got is that if I didn’t release it to the wild, it would be selfish, that there was a bunch of wisdom from my wounds, that would be very helpful to other founders who are on a journey, and trying to create something from nothing examelio, which is a Latin word for that, and that there’s all kinds of benefits here. And you know, I tell people, This is not a what to do book, it’s a what not to do to do book because while I didn’t get a MBA from a university, I have a PhD in D UMB from the school of hard knocks, I have done all of these things wrong, or maybe not all of them, but a lot of the things wrong. And I’ve found out the hard way of what not to do. And, you know, kind of the unexpected, great from going through the process of writing the book was just the healing process and, and forgiveness that was mostly for myself, quite frankly, I was moments I was writing and I’d be in tears. And I’ve since come to learn that it’s it’s called Narrative Therapy. And it’s a cathartic way to like process and to close loops and connect things and ideas. So I assure you that while the book is released into the wild, and I think it will be a benefit to some people out there who want to learn much of wisdom because to voicing and learn life, knowledge, your own mistakes, wisdom from mistakes of others, so that people can benefit from that. I am the greatest benefactor because I went through an incredible amount of just resolving things and, and the structure of the book is this it’s, you know, Startup Santa: A Toy Maker’s Tale of 10 Business Lessons Learned from Timeless Toys. So as the subtitle teases out there are iconic toys, you know, like GI Joes, monopoly Jenga, edge and sketch. Play is about three things. It’s about problem Solving, it’s about social interactions. And it’s about releasing creativity. That’s what happens when you’re playing and toys are a facilitator of helping do that. So I tell what is the history of the toy? And also, what is it doing, and those three areas, and then I tell a story from my own personal journey, usually a story of where I screwed up or made a mistake or have some sort of, you know, calamity in business, like going bankrupt, and then unpack the lessons and tie it into the story. So it’s, it’s a fun way to kind of go through the journey and getting, you know, this time of the toys. And yeah, like I said, I think it’s going to be for people who are two targets. Number one is a young founder starting out who’s looking for some inspiration. Number two is a founder who’s maybe a little long in the tooth, and maybe he’s feeling a little battle weary and maybe need some inspiration, I think this is going to be helping, just pump you with hope because I believe that that’s we all need in order to bring out our best for a future that we can be our best and brightest versions itself.
Andrew Morgans 40:59
I love it. I think I wish I could remember the quote. But it just talks about, you know, with knowledge, I guess, mentorship, it’s the mentorship, quote or knowledge, quote, but it’s like, it’s definitely it’s something that if you hold on to it, right, it’s like poison, almost like your duty, when you learn and you get new knowledge is to share that with others. And I think in doing so, in the process of that, you know, it’s just, well, besides duty is just like the universe rewards that the universe really rewards that and it can seem, oh, is this ego me sharing my stories is this, you know, I just feel like I need to be understood this desire to be understood. And I think it’s, it’s different than that something I always struggled with, I think it really is. You know, it’s for others. And it’s something that we can give back with what we’ve learned what what else are we doing on this earth, not to make it better? For the people coming after us, I think that’s the point of your, your, your business that you’ve made with the organic waste, and trying to make the planet better, but then also, you know, in touching this have impact have impact in everything you’re touching. Absolutely amazing. So where can people find the book, I’m assuming it’s on Amazon.
Brad Pedersen 42:11
Yeah, they, they can go to StartupSantaBook.com. And we have links to first of all, you can download the first chapter for free, I, you’re gonna give you a flavor for the book. And also, we put some tools in there, like we have a chapter summary, some follow up videos with one of my spiritual mentors, guy named BJ, super cool guy. So I think you will get hopefully get some value from that. But look, I just want to actually riff on what you just said because I think this is something I think it’s a great metaphor for it. And it’s kind of pertaining to the moment knowing that there’s a conflict going on in Israel and Middle East right now. But there’s two bodies of water that are notable they’re Dead Sea and the Sea of Galilee. And the difference between the two is that the Dead Sea doesn’t actually give off any water. It’s a sea that is self enclosed. And as a result, there’s no life. Whereas the Sea of Galilee is teeming with fish, and life. And the difference is actually is giving its water into other bodies. And so I think it’s a great metaphor for as, as what you just said, so eloquently about the importance of, you know, having the courage to actually step into the unknown, and try and see how your small impact could potentially be the butterfly effect that can make a massive difference in someone else’s life. And look at we’re not on this planet that long, right? 25,000 farmer days is the average lifespan. That’s not a lot of time. And you’re spending, you know, a good half of that, or a third of it anyway, sleeping. So it’s it’s a brief sort of, you know, it sounds trite to say it, but it’s like a candle in the wind, it’s a flicker of time. But wouldn’t it be great to know that what you did today actually could make an impact a generation or two from now? And with Lomi and what we’re trying to do with people a case, that is our hope is that, you know, my kids are our arrows in my quiver that are being shot into a future that I never will see. And I hope that the impact we make is that for their kids, kids, which are arrows that will go way into a future, I’ll never see that they’ll notice the impact of that decision, and that there will be lasting attorney. It may or may not. I don’t know. I mean, maybe it’s hubris to even think that my hope is, is that do the work today, that that might be possible.
Andrew Morgans 44:20
No, I love that. And I think something that just popped into my head was to was this legacy that your family has of being a chiropractor, and that 100% is something that’s giving back to people and serving others, you know, and you just found a kind of different way of doing that. But I think that that’s kind of talked about anything being nature versus nurture. I think that’s kind of what was passed down. And what you do with that can, you know can be up to you and choose to do that. But for me, I actually just got off a call supporting some sellers on the other side of the pond that are just like really struggling during these times, and you know, just offer my support however, I can You know, this community, this international community, but it’s actually pretty small in the Amazon ecommerce world. And, you know, I’ve found that like, a lot of times when I don’t know what to do, or I’m struggling with something personally, like I’ve been attacked, or I’m hurting, or I’m shame, feeling shame, or any of these things, I always lean into just like the same thing that I feel like I’m needing, or I’m struggling with, I’m going to try to help somebody else. And not because I’m the most qualified, but it just feels right. For me. You know, if I’m, if I’m struggling about cash flow, or money or something, you know, finances I’m trying to get, like, I know, it might sound kind of contradictory to some people. But for me, it’s like, whatever the thing is, that I’m holding on to or obsessing about, or hurting about, or whatever, I tried to ease that pain somewhere else. If I can for somebody else. And in doing so, sometimes I find my answers.
Brad Pedersen 45:52
I love that, and good for you. And for discovering that most people don’t understand it. Like, if you want more love in your life, you first need to give love in your life. If you want more results, you first need to lean into the results. The Law of Reciprocity it’s universal. And it starts with you having the courage to lean in first. And the surprising thing is, is you know, you know, so many people these days are so governed by the way they feel. And there’s like, we live in a society of easy offense and easy feelings and all that kind of stuff that dictate the way we operate our life. And I’ve come to learn that, you know, that initial feeling you have is what it is. But you get to control ultimately what lands on you by what you do. You know, as an example, i i fitness as a part of my life, I just every day I’ve got a sweat. And I can’t think of once where I really wanted to go to the gym because I know it’s painful. But on the other side of working out, I just feel better. So I bet you on the other side of you leaning into the pain of your industry going through a challenging moment, and you’re leaning in to support and provide words of encouragement and guidance, you’re going to be the benefactor of that they benefited for sure. But you gave yourself the boost you needed. That gives you the confidence encouraged to go do more of what you need to do to become world-class or where you are focused on.
Andrew Morgans 47:17
Brilliant, we’re out of time. I feel like we could keep jamming all day. But I know this is also, I think, your third podcast of the day. So I really appreciate you bringing 100% of yourself to the show and to our listeners. It’s been awesome, Brad. I feel like we’re kindred spirits. Shout out again to our sponsor, FullScale.io. They have the people and the platform to help you build and manage a team of experts when you visit full scale.io, all you need to do is answer a few questions. And then let the platform at you have a fully vetted, highly experienced team of software engineers, testers, and leaders at Full Scale. They specialize in building long-term teams who are going for you. Learn more when you visit you go to FullScale.io. Brad, we’ll have all of your notes and links to your businesses, the book in the show notes for anybody that’s listening or tuning in so you guys can find where to find him and follow along in his journey. I’m going to pick up a copy of the book. And definitely, I’m excited to read it I lived. I traveled the world, and you know, in Africa, I grew up in Africa, and I just had GI Joe’s that was the only choice anyone brings. You can’t really buy toys there, and GI Joe’s aren’t that big. So they’re not in the collectible boxes. But they’ve been, you know, I still have them actually somewhere nice. But they’ve been around the world with me. So, I’m just excited to dig into that. Melissa and Doug, so I don’t know if you saw that. Oh, yeah. And when that happened, I think over the weekend or something but it’s a big deal. 100 and 50 million for puzzles, right? Yeah. Big business out there. That was just one I used to sell as a distributor that I saw and kind of piqued my interest, and I had to read into it a little bit, but wow, what an accident at a time like these, you know?
Brad Pedersen 48:49
Yeah. And then there’s the Barbie movie, right? There’s been a lot of influence with toys in the last minute.
Andrew Morgans 48:54
Well, do you like Barbie or not like that marketing team? Incredible. They crushed that I think I saw more pink than I’ve ever seen in my life, so.
Brad Pedersen 49:06
Well, you’ll be happy to know that GI Joe’s is chapter one. There is no Barbie in the book. I do mention it, but only to the reference actually, the GI Joe’s chapter is the only reference, I think, to Barbies. So it’s chapter one.
Andrew Morgans 49:16
Cool. Well, thank you so much, Brad. Thank you, listeners, for listening, and we’ll see you next time.