How he moved to China with nothing and is now selling $2B+ a year of toys

Shaan Puri

It seems like it was an insane decision to go to china with no money no plan no relationships no language skills slept in a bush and literally build your own factory

Nick Mowbray

that was a disaster when I say we were naive I feel like that is even an understatement but to be fair success is a bad teacher and in our business now I'm a huge believer in firing bullets and failing fast and then if the bullet works it's a cannonball and we invest and we build the recipe around that

Shaan Puri

how big is the the empire today

Nick Mowbray

a little over 2 out of a billion us in

Shaan Puri

in revenue and it's public or it's not a not a public company

Nick Mowbray

are you ready are you ready

Shaan Puri

are you ready

Nick Mowbray

are you ready wow

Shaan Puri

so here's what's fascinating to me so I I have like a love language when it comes to business and my love language is self made dropped out of college family business multibillion dollar company with no outside capital like you hit all of the things on my little bingo card there which is what got me interested I wanna start with the the origin story so here's the bullet points grew up on a dairy farm started selling door to door hot air balloons was in law school then quit because he didn't like walking up a big hill every day and then made a crazy rash decision moved to china with no money no plan no relationships no language skills slept in a bush somehow turned that into a billion dollar company so that's the that's the the bullet points can you unpack that a little bit

Nick Mowbray

that's quite accurate that's quite a good way to summarize it quite quickly if I was to frame up our probably first ten years it's that famous saying that success is going from failure to failure with no loss of enthusiasm I think that actually really does sum us up grew up more or less on a farm and then we moved north for our schooling and my brother won the new zealand science fair with a model hot air balloon and then we decided or he decided he was 12 that we should make these kit set balloons and sell them door to door at festivals when we're at school and and I'm slightly younger than him so he kind of hired me as the when I say hire I was the free labor to help make the hot air balloons and yeah we used to make these model for the air balloons and and sell them door to door I used to when I was quite young get my friends together and backpack around new zealand and sell door to door and I can tell you that learning how to sell door to door is a great life lesson because you never know who's behind that door and you never know what response you're getting and on top of that selling a flying burning plastic bag is particularly hard to sell so it really hones your skills early on so what

Shaan Puri

was the what was your technique so knock knock

Nick Mowbray

I used to be like we're just a small company trying to get off the ground wink wink like no pun intended we were young kids so that always helped and you know we'd often like we'd sort of build theses around which neighborhoods were more likely to buy it was usually not the richest neighborhoods they were all maybe a little too smart and so it was sort of somewhere in between we'd always look for signs of children in the backyards of houses and I always remember that one of my good friends still one of my very good friends today frazer he used to always outsold me I don't think there was a day where I outsold him and I always thought I was a much better salesperson than him when the door opened but he just did not care about being rejected he'd go from each house he'd get yelled and shouted at and sweared at and he'd come out laughing and he'd be knocking on the next door within seconds and I always had to build myself up after getting rejected which was most of the time to knock on another door and it it it just kinda taught me I guess the power of just persistence right and you you kind of keep going and if you keep going and have that level of of grit and perseverance then your chances of winning or your chances of success are much higher so I was certainly learning that at a very I guess young age

Sam Parr

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Nick Mowbray

yeah from there we we we cut a matt went to university as well and then he dropped out after a year to set up and make or develop this hot air balloon through to a little bit more of a professional level and matt said why don't we start why don't we explore going to india or china to try and manufacture our hot air balloon and given I was making them I thought that was a great idea and so matt actually went off to india and china did a little scouring trip came back and he said china let's go to china and my let's go to china he said you go to china so I tapped up didn't go my second year law found the most entrepreneurial guy from my first year at university a guy called joe drag joe to china and see we had no money really no contacts we went to a little place called shantou it was the middle of nowhere there were no other westerners and we had an apartment I think it was like probably the equivalent of $8 a month to rent it was the eighth floor no lift so whenever you were thirsty you had to get water you had to like walk down eight flights of stairs to go and get water and come back up and that's where we started but we ordered we ended up getting ourselves into all sorts of trouble and strife and there's a lot of funny stories

Shaan Puri

the story I had heard was you guys like first night you like slept in a bush what what what happened there and but basically what was the plan were you just gonna kind of go try to find a manufacturer walk around like what what were you thinking of doing

Nick Mowbray

we were so naive and on reflection I look back and it's almost like we built a toy company from first principles because we did everything different than everyone else without even knowing it so we didn't know that you could go and contract manufacture your product we were planning on setting up our own little factory and that's essentially what we did but me and joe got into some trouble and joe had to fly home to new zealand so my brother came over we ended up trying to see if we could get a hotel but everything was way too expensive so we decided just to sleep in the bushes at hong kong airport and I remember just getting completely attacked by mosquitoes all night and we didn't want to sleep in the airport because the fluoro lights were so bright and so yeah we ended up sleeping in the bushes and getting attacked by mosquitoes all night it was not fun and then we fitted up to china and we set up a little factory on the side of a river it was a small kind of shed more or less in china and my cousin simon came up at that time as well he was an engineer to help us and he welded a production line and we bought we pretty much spent all of the money we had on an injection molding machine we employed a few people on the production line we had a little old lady who used to cook for us every day I think the budget was 2 rmb per meal which is about 30¢ and we started making our first product and then we started making our second product out of there as well which was a night frisbee which we got sued on and we had no money to defend ourselves so so

Shaan Puri

it's a stupid question but like why not like it seems like it was an insane decision just to go to china and literally like build your own factory like literally like create a structure on the side of a river and like weld it yourself together why'd you feel like you needed to be in china instead of just doing it where you were

Nick Mowbray

well we understood that most of the toys in the world were made in china but when I say we weren't that naive I feel like that is even an understatement like we were trying to make our hot air balloon but we didn't even realize that we couldn't sell it to any toy chains or large retailers around the world because of course it didn't meet any of the regulatory standards I mean it had a burning can under it so we were super naive so then we started looking up products that we could maybe make in our little factory and we saw this company in america making light up a frisbee with leds and it could be thrown at night and we thought oh that's cool so we made this night frisbee in our factory and I started hustling to try and sell this thing as in like I would email every buyer in the world of every major retailer in every country I possibly could and I remember I sold it to a distributor called shilling in the us and we spent what was a lot of money at the time and I went to new york toy fair and we'd made this night frisbee and we'd also made this other pollock copied this other pollock called a money gobbler which was a money bank in the shape of an animal and you'd feed the coins into its mouth it would go down the throat into the stomach so we started making these two pollocks matt decided we wanted to set up a wooden toy factory for this money godblower we had our production line for making this frisbee so I sold them to this company called schilling so I go to new york toy fair to be on their booth to start selling these two products and I start selling these products and this guy comes flying onto the booth and starts yelling at our distributor so he's obviously got wind that we've made a product that's identical to his and he had multiple patents for how the led connected to the fiber optics and how this all worked and of course we again we didn't even really know what ip was so he comes and so dave comes up to me off the booth the owner of the distributor says hey matt we need to pull that frisbee off the booth this is probably an hour into new york toy show starting so I'm pretty disappointed because one of our products is gone but I'm like that's okay I'll sell the money gobblah well if I thought the first guy was crazy about three hours later this lady she has a whole business she's built over twenty five years building these money animal banks and she has this big booth on the ground floor of javits and she comes up and she screams onto the booth and she's yelling and screaming and swearing at dave and dave sort of I can see this from where I am but dave sort of wanders over to me sheepishly and says nick you need to take the money gobbler off the booth as well so within the first morning of new york toy fair both our products had been taken off the booth of the distributor I flew back to china I said to my brother I said have you ever heard of this whole you know ip thing this whole patent thing I think we need to start innovating and coming up with our own ideas and then we ended up getting into a lawsuit on the nightfly flyer they sued us we had no money to defend ourselves I remember going to colorado because that's where they sued us to try and find a law firm to defend us and I was going to a lease firm and they were saying well that'll be a million or $2,000,000 we had like maybe a few thousand dollars between us at that stage I was thinking how are we going to defend ourselves I ended up actually hiring a lawyer convincing him his name was chad he later got disbarred that we would write the whole suit he just had to put his name to it and chad did the whole case for us but didn't really do it we did it ourselves we learned how to become lawyers so we did it incredibly cheaply but he did he ended up being disbarred later on but that was our only way because of gaming he had no money and I was so enthusiastic we had no other choice that we had to sell this product and I remember selling the night frisbee to the department store chain in the us coles with the k I know we have coles down here in australia with a c I'll never forget the buyer's name I actually still work with her today this is you know nineteen years ago her name was jen sarah she was the buyer at coles and I would email her every single day and one day I got an email reply from her it was all in capitals it said nick I do not have time for your daily email communication please stop emailing me every single day and then I always write back oh I'm so sorry jen but you know I just think our product is really great and at this stage we knew we were in a little legal trouble but we had to sell something to survive so I was like pushing and pushing and then eventually I get this email back from her it was just two words nothing else it said send the sample so we send the sample to her and she ends up ordering a full container I think it was 20,000 units of this night frisbee so we're pretty happy at this stage it was a big celebration we never had a full container order of any product and so we ship this full container of night frisbees and of course she gets enjoined in the lawsuit as well at kohl's and didn't speak to me again for a long time the irony is today she's the director of family dollar stores in the us and we're their second biggest toy supplier after mattel so that's the funny thing you're like

Shaan Puri

trauma bonded

Nick Mowbray

correct but we have so many of these stories that is one of many many many in those early days so we really were just scrapping every day to try and survive and sell something and just like live somehow but we were living on less than a dollar a day

Shaan Puri

okay I have two things one let's do a detour to the dollar a day thing because my guy diego who helps me with research he goes you gotta ask him about the mc mcbroke diet and the mcbroke diet I said what's that and he goes he goes apparently they were just eating off the dollar menu at mcdonald's in china every day and he had some trick about the french fries to get free french fries so what what is the mcbrogue diet as far as the typical call

Nick Mowbray

it was it was we didn't eat mcdonald's mcdonald's was a treat so me and nat were in china and for christmas of course I think my brother didn't come back to new zealand for eight years he lived in a factory for ten years he had a tiny little room in a factory for ten years which is crazy in itself but for christmas we would celebrate by going to mcdonald's and probably the equivalent of a combo is probably $2.5 in china at that time so that's how frugal we were we wouldn't even go to mcdonald's so but we'd go and we'd celebrate christmas I always remember going merry christmas friday we'd be merry christmas bro and you know finally eat some good food I looked like you know I was so skinny at this. But I'd always play a trick in order to get extra fries is I'd always eat half of them and then I'd take them up to the counter and say hey you only filled my fries you know half full and and they'd give me another one so I could get more for free but we were so free we were like even you know when we'd go on the train we'd use a concessionary or children's pass and hope we wouldn't get cork because it was half the price but I looked back on it it was like you know a fee would only be 12 rmb or a couple dollars and we'd be saving a dollar so by getting a concessionary fear and we did that for years

Shaan Puri

so what what was driving this because like you lived in new zealand new zealand's a beautiful place I assume you could have just had like a normal life that was like comfortable more comfortable and I love like I'm a founder I've been a founder but I didn't do what you did I didn't sleep in the factory on like a mat on the floor for eight ten years I didn't live off of the less than dollar a day like were you guys just like was it you're having so much fun or you just felt there was no other choice or what was the what was the mindset that kept you going because it was like like many many years just scrapping

Nick Mowbray

I reflect back on it and it's it is a little bit hard to understand in all honesty when you reflect back on it but I think when you're in it together you kind of hold each other accountable and you push each other because you don't want to fail and I would say me and my brother are equally as competitive and so I don't think you want to let the other person down in a sense and so you just keep fighting because if one of you gave up you're kind of admitting defeat and so in a sense you hold each other accountable to continue to fight and push forward and as well as that I think we didn't really have another option we didn't understand like back then that there was even such a thing as going and raising money to build a company or you know again I look back at the extreme naivety I used to write emails to my mum from china and she was beside herself that you know I was up there I was so young 18 and I read these emails and to understand how little we understood even about the world but just about business and how things worked is quite scary and so I just think we didn't know any better we just thought we'll just keep fighting and try and get these little wins and little wins and little wins and you know we started to get you know a little win after little win and then we started to get a little bit more momentum and then you started to learn one of my favorite sayings is you win or you learn you never lose you never fail so

Shaan Puri

and so connect the dots so now you're you've painted the picture beautifully of the the extreme naive approach the scrapping and then somehow you know fast forward the tape and the movie and you end up with this super successful toy company I think you know the third most profitable toy company in the world doing over a billion dollars a year sales + like forget the other stuff you've even done after that but I'm just saying just the toy part so connect the dots where did you start to really get the momentum what were the breakthroughs the epiphanies the key key breaks that got you to to actually getting to that success

Nick Mowbray

well there are a few stories along the way and I I remember just sitting there every day harassing and thinking really big early so thinking I've just got to get walmart or I've just got to get kmart at that time or I've just got to get these big retailers and you know one story I remember ringing walmart every single day and because of the time zones it was late at night and to month after month after month after month and I always remember all the early names because I just see it in my memory and I remember one night my brother was basically telling me to give up he was like you're not gonna get walmart and eventually the buyer ryan halford answered and I was on the phone to the warm up buyer from china and again I was like we're this young company we're just in china we're trying to get off the ground we've got these products and he said do you have a showroom in hong kong and I said I didn't know what a showroom in hong kong was but of course I said yes I'll get back to you at the address we started to learn that the toy industry at the time revolved around these showrooms at a place called timshasui in hong kong all the the companies had showrooms there and all the buyers from around the world congregated in hong kong twice a year to come to these showrooms so I got on a train the next day to hong kong and I had researched where these toy companies were and so knocking on toy company doors and and trying to do a deal with them I said I'll bring the warm up buyer and if you just give me some space to use and your address and then you know hopefully you could sell some of your products to them as well and every company denied me and denied me and denied me so I thought okay we need to rent a showroom and at the time it was a lot of money but we found these little glass cubicles in a place called south sea center and they were just a few meters by a few meters like tiny little cubicles but I think they would have been like I don't know two or three thousand us dollars a month to rent because hong kong was so expensive and so at the time we didn't have that money it was we were so poor but I thought we don't have an option we've got this chance to get the walmart buy coming in and so we we we just did we have to do it so we rent this little tiny cubicle and it kind of had curtains on the inside of it and we I I found some shelving that someone was throwing out from the other showroom so I put this little shelving in there we bought like a table and then I had a little roll up mattress and I would sleep in the showroom under the table each night because there's no other room to sleep so I'd unroll the mattress under the table sleep in that and then I'd wash in the little bathroom in the in south sea center in the morning but I had the showroom and I start kind of realizing that the buyers come to hong kong in january and october every year so that was good because now I have this kind of like base to like invite people to so I get you know I get walmart to come in I actually got a guy called frank d'amico who was from walmart canada and I'll never forget because he came in and I think he was so shocked that he'd given me a meeting when he saw this two meter by two meter showroom and he came with these two merchandisers I went to shake his hand didn't shake my hand he didn't even sit down and he just yelled at me and goes quotes across the table and I'd filled out the quotes for around two or three products at the stage he kinda reads the quotes and I'd filled something out wrong and he just throws the quotes down on the table and just walks out and releases two hong kong merch and I was just standing there staring at me I think that was my second ever meeting and I'm just like in shock I'm like wow where it's gonna be and he just storms out and then I contacted his boss and said hey I had this really bad experience with this guy frank I genuinely think he was really rude and like I didn't and his boss made him meet me again in their procurement in walmart's procurement center in shenzhen so I was like screw this I'm gonna go up and meet him again I met him for a second time and he ended up ordering and at this stage we had a night ball along with our night of frisbee but I think he ordered about $70,000 of this night ball it was another good example of persistence and then I remember one day I had a meeting that came out australia but I was sleeping under my table and the door is only about a meter from my head because this is such a little small showroom and the buyer came an hour early and I was still asleep under the table and she was knocking on the door and I was sort of like there like looking at her feet under the door thinking shit I'm still in bed under my table so I had to wait for her to go away and then message her afterwards and say hey you didn't shut up at 10:00 meeting she says oh I thought it was 9am they had all sorts of experiences but I used to crash buyers' hotels they used to post samples under their you know under their hotel room doors but really we did what it would take and then I'd say the first break we got is and this was a crazy story is there was a I was in the uk at a company called recreation and they were selling night sports balls at the time so we developed this other product it was instead of our night frisbee we made a night football lit up at night and a night soccer ball so so it's sold for this company called recreation I met a guy called sean on their booth and he developed a soccer tamaguchi and so it was it was kind of like a tamaguchi but you trained your player and then through infrared you could play against each other he had like the manchester united license and it was selling reasonably okay in the uk but he was having troubles with manufacturing and I was like well we can make that for you like no problem and he was like great great great you guys can help me make it because we were really you know anything was sort of wink at the time we were trying to find a way to win anywhere so we're like sure we can make this and then we started talking well maybe you know david beckham he's moving to the us to play in the us what if we could get the david beckham license and we could try and sell this in the us and he thought this was a great idea so we went and pitched at the time I think it was simon fuller who started american idol had the david beckham rights at the time and I'm like a super young kid right and they said well we'll give you the beckham license but it'll cost you a million and a half dollars of course we don't have a million and a half dollars but then we go to walmart and walmart the buyer her name danielle pribbenow I'll never forget it she loved david beckham and he was moving to the us and she was just obsessed by david beckham and we probably blew a few bubbles but anyway as it turned out walmart turned around and ordered 2,200,000 units of this david beckham tamaguchi which I think they were like $14 50 or something it was almost 30,000,000 us dollars so keep in mind we've probably never had an order more than $70,000 at this.

Nick Mowbray

And our total revenue is like in the hundreds of thousands suddenly we get this order for almost 30,000,000 us dollars and then we're like holy shit we thought we were going to make a lot of money because we had huge margin we were making this thing for $3 and we were going to make this thing for $30 or $3.2 or whatever it was sell it for $14.5 so we were sort of counting our pennies and super excited we didn't even understand that sell through was a big thing but then we were like oh no we have to figure out how to make this product like you know we've got our tiny little factory with you know 20 people in it there's no chance we can make 2,200,000 units so when I'd first gone to china I'd been on a tour with he's one of the wealthiest guys in hong kong like francis choi he owns early light international they're the contract manufacturer for hasbro and mattel and all the toy companies one of the first factories I ever toured I somehow got in touch with his tour ic guy called wilson and he'd take me on a tour as an 18 year old with their factory and you can imagine me coming from new zealand and then going to these factories with hundreds of thousands of people and just being like like oh what this is like insane so I still had this contact with wilson from early light so I got a meeting with wilson and I said hey we've got this huge order 2.2 a million pieces can you help us make it and he said yep and then I said oh and by the way can you also pay for it as well he said let me check with francis came back to me and said yeah if you transfer the letter of credit to us you know we'll help you pay for it as well great so we start making this product 2,200,000 ics 2,200,000 lcd screens so they all the components and then walmart turns around they cancels they cancel it from two.

Nick Mowbray

Two million pieces down to eight no 1,200,000 pieces and I was like no no no no they can't do that we've got a letter of credit they've made it all and then I'm flying back and forth at this. Sean's kind of like in the background on this like I don't know 20 year old and I'm thinking there's no way but I was thinking well it's still fine 1,200,000 pieces we've got so much margin in this we can still make like good money out of it but then they turned around and canceled it all the way down to 300,000 pieces yet francis was making all of this pollock and I was just like oh I'm pissed or I'm going back and forth it reads like some kind of soap opera because danielle got fired obviously part of this was part of it and with francis I was like there's no way I can tell francis that you know that they've canceled this many pieces and he's paying for it all so I'm going back and forward to walmart and I calculated that if I get the order back to 800,000 pieces we could still pay francis off because we had so much margin and still make like a million and a half dollars and eventually I convinced walmart to get the order back to $800,000 I'd say 800,000 or 900,000 pieces whatever it was and we shipped this prolite and it was a disaster like it hit the shelf and it was concrete on the shelf like no one would buy it I think they retailed it $30 they discounted it to $25 then $20 in $15 no one would still buy it then $10 no one bought it then $5 no one bought it and then they eventually sold it to the dollar and discount channels for like 50¢ on it like 50¢ a piece

Shaan Puri

and then

Nick Mowbray

of course walmart came back to us and said you have to fund all the markdown money from $30 to you know 50¢ and we were like what's markdown money and we were determined to keep our little bit of margin and refused to give them any money back and so we had this we were like no but you cancel these pieces and like this huge thing anyway we got blackballed from walmart for like five years we never did business with walmart after that and it was not two years later that I met danielle's boss at new york toy fair dear laura phillips and I wrote this big long email of everything that happened and like and we started to work together again that was sort of our as crazy as it was that crazy story was our first break to actually make a little bit of money and then from there I started doing deals with us companies that only sold product in the us but didn't sell internationally so I started doing deals with them because we were really bad at designing and the vulcan toy is terrible in fact so we need a good product so I could open up these channels so I'd do these deals with american companies like xyng or zocca I did deal with the australian company called yoho to take their products and sell them internationally and that kind of and I'd tell a big story that I could get their products in everywhere they don't have to go out and hustle so we had a product called zeezy's which became really successful and a product called schnucks which was out of australia that became really successful so we started kinda taking other people's products

Shaan Puri

how did you figure out that model because you know did you see somebody else doing that and you're like that's much simpler than what we're trying to do or did you fall into it like it seems like you didn't use a lot of like mentors you did a lot of running around with a fork sticking it into outlets trying to figure out you know which ones are working

Nick Mowbray

that is a great analogy that's exactly what we did we just to be honest we were making these products and the second product line we made were these night balls but the product was so bad matt had moved a factory by this stage and the engineering of them was so bad that they had these sort of foam eva patches glued into this frame but the production I actually was getting quite a few orders I was hustling around and getting orders but matt couldn't produce them because the production was so hard to do and I get so mad at him that at one. I said I'm coming back from hong kong I was living in my showroom and then from there I was living in a dorm room with 18 people at a place with puncture mansions in hong kong so I wasn't exactly living the life in hong kong I was getting these orders and my brother could produce them so I was like I'm coming back to like to china to take over the factory and I learned two words of chinese one was too slow and one was let's go faster and we ended up like I was like on the production line pushing to get these balls out the door and I remember they were coming off the end of the production line half mangled and I was just like ship them just ship them ship the balls we've got to ship them but I remember years later like you'd see these things on shelves and all the air had gone out of them all the eva patches had peeled off them and there were just these shriveled up little prunes that he called them to shelf

Shaan Puri

I love that you're honest about it because there's so many people because it's a very sexy thing to be like you know all that mattered was product and we really just built a great product and then everything worked because we built a great product and like I know I know I've been there it's like dude the first version of all my products sucked in fact the tenth version still kinda sucked and I I love that you're kind of unabashed and honest about like look we weren't super innovative we saw shit working and then we were like cool we could do lights on a frisbee lights on a ball like that right okay let's copy what works and that your product kinda sucked and you were just like basically you just kept doing door to door sales even like at a global level you just started doing global like door to door sales and you literally it sounds like it was like distribution and salesmanship and marketing that was keeping you afloat at the time

Nick Mowbray

yeah well we would sell I would sell a product to someone and then we wouldn't get a reorder we didn't know what a reorder was because the product wouldn't sell through and then we just sell a new product to a new customer and we wouldn't get and I would just help another customer and we didn't know for probably seven or eight years what a reel there was like we had a product actually sold off the shelf and the customer came back to buy more of them but we could like continually hustle to all these different customers but we did crazy things like we like I had a little background on it and it was kind of nuts like we sold this product the nightball we got a distributor in the us called spin master they're one of the biggest toy companies in the world a very similar story to our own three canadians built this toy company very similar to us and spin master had agreed to take our night sports falls for distribution in the us and I'd kind of hustled a few retailers and so it was this should we sell direct to retail should we use spin master they'll really put lots of tv marketing on tv marketing at the time was the thing and they said well we'll run this test in cincinnati so we'll put your night balls into all the walmarts in cincinnati and we'll run media in that city and then we'll decide whether to roll this thing out and whether or not it was dishonest I think it was more desperation at the time but of course I flew to where the test was I got to new york and I couldn't get a flight to cincinnati well I could but it was too expensive it was summer holidays I went down to the bus station I remember the bus station in new york at the start of summer holidays just like nothing I've ever seen it was chaos but I got a greyhound to cincinnati I think it took like thirty hours it broke down stopped different places got a greyhound to cincinnati stayed in this absolute like horrific place but every day and yes this is a little bit dishonest but we were desperate back then I would bus I'd get the bus schedule I'd bus to each walmart I'd give people cash to go buy a ball I'd go out and buy them on different credit cards myself I was so paranoid that we'd get caught just to help our test sales go up a little bit and I'd buy all these night sports balls but it was a long day because the walmarts were all so far apart and I was taking this bus schedule to get to each one I stayed there for a month and I almost got killed in a place called over the rhine if you look it up it was the most dangerous neighborhood in america at the time over the rhine it's like wild it was over these railway tracks and I managed to walk down there in the middle of the day and it was the scariest thing in my life and I had a guy come up to me and he said what the fuck are you doing here white boy and I was like I'm just a tourist and I hadn't realized I was in this like area and then I managed to somehow like weeks later walk into it I was walking back from downtown there's no such thing as uber back then or taxis so I was trying to walk back to where I was staying which was very close to over the rhine and I walked in the wrong direction I walked in there in the middle of the night and I got chased and had to hide so it was very funny but but yeah we were doing this to get our test results up which we had a good test and then spin master rolled the product out of course it wasn't it wasn't a great product in terms of its construction it was the same thing but my god did we have to hustle we had to strap and fight so hard to like literally just to survive but we got to a.

Nick Mowbray

Where we were selling enough to each new customer of each new product and we weren't getting reorders but we were profitable and it was actually funny because after the david beckham thing we made like that million and a half dollars or whatever it was we got a little bit fat and happy and we had a month where we lost $200,000 and I remember sitting we sat down and we're like oh my god we've lost money this month and we were like from this day on we will never have a day a month a week a year where we lose money like if we're losing money in a month we will like sit down and we will like eat nothing or we will like get rid of people or we will like live on nothing just to ensure that we're like profitable because people wonder how do we get to you know a few billion dollars a year in sales now and we've built it completely organically and the truth is we just because we like we're so frugal and we start building our business got more and more and more profitable just every year for twenty years so it was almost this cognitive process to how do we remain profitable and then that's just compounded over twenty years and we've just got more and more and more profitable to the.

Nick Mowbray

Where percentage wise by far the most profitable. Company in the world where we run at like 40% net profits which is unheard of in any wow industry in the world in the product industry in the world let alone in software companies so so we just built a very very different model that's why I reflect on it now it's almost like we built something from first principles the way we set up factories the way now we automate all of our production the way we don't do domestic shipping we do all fob the way we centralize all of our content and data systems run marketing globally we've almost built this company from a first principles approach because it's so different to how everyone else does it but we did that more through naivety than through planning

Shaan Puri

so you're starting this kind of like 18 years old when you go to china do you remember how many years it took you to get to your first you where you made a hundred grand or when you made a million dollars like how many years was that

Nick Mowbray

well it was probably a couple of years where we started to make money but we still lived the same way because we needed that money to fund our growth effectively you can't grow to billions of dollars a year in sales organically without borrowing money or going to a bank unless you're super profitable to continue funding that growth and so we started to make money but we never spent it we still lived the same way I still lived in a dorm room in hong kong and so for years for probably eight years and as I said matt had as we slowly moved and built bigger factories matt would always have a tiny little room like a tiny little room in the factory and that's where he lived in china with no other like no interaction really with anyone else and we were going crazy in those first years in china like I looked after that and like we had some serious problems

Shaan Puri

and so you you take it all the way at some. You start figuring out toys that are new novel good products

Nick Mowbray

mhmm

Shaan Puri

like I bought your bunch of balloon products where you fill up I don't know if it's like a hundred or 500 now like a hundred water balloons at once you can fill up in like takes like fifteen seconds to fill them all up so you eventually start making good products how did that happen

Nick Mowbray

so we we sit on a parallel path we were taking other people's products and that was helping us really open up distribution I would hustle and get them into all the retailers across all the countries there's an email that I sent internally that I had from twenty years ago and it kind of lists every country in the world and all the retailers and distributors I was working with at the time trying to sell our products to so we're really like pushing out to everyone and at the same time we were starting to learn how to make better products ourselves we were sort of building a team in china and engineers and like some designers and we're starting to sort of parallel path building our own products as well but I think our big break after zeebies came when we did robofish and robofish is still we still sell about 8,000,000 of them a year today and this was a chinese inventor we ended up getting sued for this as well we were at a five year lawsuit but a chinese inventor called xiaoping and I met a guy in hong kong a french guy who had a factory in china was running a factory in china and he was doing some brokering for some inventions and he showed me this robofish I actually didn't I thought yeah that's cool didn't think too much of it then he showed my brother and my brother loved it he was like we've got to make this robofish pomite and part of the deal was we had to make it in their factory if we licensed it from them so we licensed this fish and it was like it's got little carbon sensors very very clever design it has an electromagnetic coil in it so when it touches water it's all micro it swims and looks like a real fish swims in all directions and it's water activated so we start making this fish and then the guy who was the inventor had worked in a us company before and he had tried to sell the invention to them and said no he had signed a release on the invention saying no problem you can go sell it to anyone else of course robofish blew up came up with best selling toys in the world and then he decided that actually the inventor had designed some schematics or diagrams why he was under employment and he would sue us because they were still on his computer systems and so we were in this long long lawsuit but even worse we finally had like this massive pit it was like the number one selling tool in lots of countries around the world it took us to I think we did like 100,000,000 us dollars so this was like a big break for us but unfortunately there's always a curveball the factory that we were bound to make it with went bankrupt in the middle of production but we had to design so much specialist production not just the tools but all of these fish were tested underwater for pressures they didn't leak and there was just a ton of like specialized equipment that had been built to produce a robofish they were all slightly the weights had to be perfect so this whole factory gets shut down and of course the wars in china mean that the factory workers are the first creditors essentially so they send the army in to like stop anything or any assets being taken from this factory so we're like peak robofish production peak demand finally we've got products that are selling and everyone's scrambling there were retailers that wouldn't talk to me for like seven years actually one of my good friends today one of the biggest independent retail chains in the uk called the entertainer and the son of the owner stu one of my closest close friends today he wouldn't even even talk to me for eight years like I couldn't even get an appointment with him but suddenly when robofish took off suddenly all these buyers were coming to us saying hey like like that robofish so you've got to imagine we finally had this momentum and then this happens to the factory and we're like we're like shit and it was crazy we could not get into the factory so my brother we had to do and there's again there's so many of these stories but we were like we have no other option we have to get our tool and we have to get all our equipment we have to get everything out of that factory and relocate it to another factory but the army was there everyone was there he couldn't get in so in the middle of the night my brother got like eight trucks got all of our team from one of our little factories filled these trucks with people and at like two three a m in the morning when there were less people like camped out at the factory pulled up to the factory paid a bunch of bribes to go in took all the trucks into the factory all our people went in picked up all of the tooling and all of the equipment loaded up all the trucks in the middle of the night left and we went and relocated to a new factory so we we continued production so it was it was crazy but that was like again like nothing ever happens without a hiccup right like it was sort of like we finally felt like we had momentum and then this happened so

Shaan Puri

how how old are you now

Nick Mowbray

39

Shaan Puri

okay you're 39 do you still go as hard or like are you still as nuts as the early version of you like do you still have the same drive or are you human and you're like you know yeah I used to really be super you know super driven super resilient going going really really balls to the wall and now I'm you know tired and whatever you know I'm I'm an old guy now like do you still have it

Nick Mowbray

I can we still have it I think we're still just as motivated today if not more motivated than we have ever been we see a pretty pretty cool road map ahead of where we wanna get to over the next ten years particularly zurich and building houses on production lines and zurich

Shaan Puri

so let's talk about that so could you just summarize how big is the how big is the the empire today

Nick Mowbray

so we're over 2 out of a billion us in in revenue but we're growing at about 25 to 30% year on year so that's compelling but I think the thing with us is is our revenue is one thing it's just how profitable we've built the business

Shaan Puri

and it's public or it's not a not a public company not public nope okay so privately held super profitable company that's like a billion dollars a year of profit basically out of the toy business but then you have this diaper company you started buying other companies right

Nick Mowbray

not so much buying I actually got crohn's so I got sick in china and hong kong and I had to have my bowel my large intestine removed this probably has something to do with living in china for all those years eating incredibly poorly I'm not sure but I had to move home to new zealand to get surgery about six years ago and it ended up being a great thing so I was in hong kong I came home for the surgery I was meant to rest for a while and I was sitting at home and I was getting restless trying to rest as I had my bowel my large bowel removed and I had a friend who had started a small bathroom business and he was doing like $50 a year d2c in new zealand so really really small he'd been mapping away at it for three years and I thought wow I might as well help with this but I'd always thought like toys is this industry where there really is a ceiling to the size of the business you can grow just because of the addressable market the size of the market also you've got brands like hot wheels which are super hard to disrupt and I I was looking at fmcg and I started to realize that there's like nine companies that dominate 80% of it globally and when you build a toy business you work in every material form you work at speed like speed of innovation is your dna you build this muscle for speed and working fast and innovating because you reinvent 50% of your entire product line every single year but because you invent so much of your product line every year it becomes really hard to keep growing right because you have to reinvent to catch up every year and so I started to form this thesis about six years ago I thought man we're so good at automating and we sort of I would classify zuru today as more an automation company than anything else like the product is almost secondary we build incredibly sophisticated automation we had a huge automation team so whether that's building a house on production lines with robots or a dart blaster with robots it's you know a big part of what we do so you know I was like we've built this automation muscle and the speed of innovation muscle and I feel like these big companies they one they don't innovate two they have a lot of duopolies so if you look at pet food it's mars and nestle if you look at baby it's kimberly clark and procter and gamble if you look at beauty and personal care it's l'oreal and gamble unilever so there's a lot of if you look at laundry it's pretty much just procter and gamble or toyota unilever so all these duopolies and monopolies across the board and through that they were delivering much margin to their retail partners they really held the power and I met I remember mapping out walmart's revenue and I met that against the top eight fmcg companies in the world so walmart did more revenue than all of them combined

Shaan Puri

but then you what's that what's that acronym you're you're saying what mcg what is that

Nick Mowbray

fmcg fast moving consumer goods so okay fmcg cpg consumer packaged goods so so if I looked at procter and gamble nestle mars all the biggest fmcg companies collectively their revenue is less than walmart who does $611,000,000,000 but then walmart makes only a fraction of the profit they're all public companies and the big fmcg companies make the lion's share 75% of the profits so I thought is there a world in which we can be disruptive in fmcg fast moving consumer goods can we deliver more margin to our retail partners can we innovate faster bring our speed of innovation mindset to these categories and can we reach customer in a far more efficient way and can we move at the speed of culture and obviously at the time digital and data driven advertising was you know starting to become a bigger thing and you know targeted advertising and I was still looking at baby and I was thinking well you've really got a mum a mum who's an incredibly targeted audience or a parent who's incredibly targeted audience how can we serve them and add every single day in a targeted way rather than just like blanket media so that's a super efficient way to reach our customer what if we build a better product deliver more margin and position at a better price and that was kind of my overall thesis can we do this and can we run our same kind of first principles toy model like fob so we don't hold products super lean large advertising dollars spent but in a really centralized controlled way and I thought okay I can do this so I worked with my friend and I said okay let's launch this diaper brand in new zealand as a test market and within one year I think we'd taken 40% market share in new zealand launching a diaper and I remember meeting greg foran who was ceo of walmart at the time and he's a new zealander and I met him in new york and I was like greg you know toys is great and it's been this incredible university for us because it really allows us to you know he would build skill sets that is very hard to build in any other industry and I said we're going to take on difers and he turned to me and he said nick ever heard of coke and pepsi like he was saying that it was going to be that hard to crack like pampers and huggies are going to be that hard to go and disrupt and I said I get you but I think we can do this I'm going to give it a go so we launched in new zealand the second biggest brand in new zealand was treasures huggies was number one treasures was a local brand their share just plummeted they ended up going out of business and having to sell the brand for pennies on the dollar

Shaan Puri

and you're spending a ton on facebook ads or what are you doing to go

Nick Mowbray

time facebook and then it progressed to instagram now it's progressed to tiktok like it sort of always progresses right like so you've gotta move at the speed of platforms but you've also gotta move at the speed of cultures how do you move at the speed of trends to build content to move at the speed of culture

Shaan Puri

and was that a new new ish skill set for you because it seems like the toy company was retail driven

Nick Mowbray

yeah well youtube was starting to kind of thing but it was mainly tv advertising for toys at that time so it was still tv was predominant and then it kind of switched to to to to youtube so today we don't spend any money on tv and toys it's all youtube it's all tiktok it's all youtube shorts so it really like the platforms change in how you reach people but so I had this thesis but we just quickly took all this market share in new zealand and I was like holy shit we can make an incredible volite but to be fair success is a bad teacher like we just got the success out the gate rascals just we watched the ride it just took off and so I packaged up that case study went to australia went to coles and I said hey look at what we've achieved in new zealand look at all the margin we're delivering look at the category share we're driven we helped foodstuffs reverse their category share decline like they were getting hammered by the competitor woolworths here we inverted that we took them the other way within one year so coles was like love it launch with coles same thing we won coles non food supplier of the year award in the first year and just helped them like take heaps of category share so I was like wow this really works took that model went to the us went to walmart was like hey walmart we could help you disrupt you know your two big suppliers here and they gave us a dallas test same thing we became actually last year walmart's fastest growing brand total boss all categories with rascals went to target did the same thing with our brand milli moon milli moon actually just over to private label and huggies the second biggest sub brand in target in under or about three and a half years which is incredible so it was sort of this like wake up moment that wow and I think last year we produced 2,000,000,000 diapers and this is all in under this is all in about five and a half years we've built this business so well over a billion dollars of retail sales last year and diapers in you know five years so from start to to to go a billion dollars a year should I say and growing incredibly fast like this year we can grow 30% again so this was sort of an eye opener for me and I thought wow we can do this in all fmcu categories so I started testing in new zealand and losing like we tested infant formula didn't work we tried femcare fails we tried like oat milk fail I did all these little things and I started failing and I was like oh but my partner at the time jamie had a background in luxury pr and beauty and was a huge beauty enthusiast so I said hey don't do that let's start a beauty brand and we started monday here kia and which is the little pink bottle forbes called it last year the most famous shampoo and conditioner bottle in the world but we launched that peak covid and that was the second one it just took off we I think in australia we won product launch of the year and we had five of the top 10 in total haircare we overtook pantene in sales

Shaan Puri

what do you think is the difference between the ones that worked and the ones that didn't is it category some categories were just more ripe was it you nailed the packaging and the positioning and that's actually the thing that matters most is it luck

Nick Mowbray

diapers was is driven by price and performance and we were the first one in the world to take a china diaper to the world and china's making the best diapers in the world so in china there's like a thousand domestic brands all competing so the technology and nonwovens and substrates and sap and machine technology has just gone like that cause of all domestic competition so we took the best product in the world to market at the best price in a category which is price and performance driven so it's either you've got to be price and performance driven in a performance driven category or you've got to be innovation driven so we launched dummy yum which is super innovative depicure product like really innovative and that was just pure innovation that made that like take off so innovation or it's got to be design and creative so monday was you know still a bottle of shampoo but incredible design and creative and then we just owned tiktok as in it is the number one hair care brand in the world on tiktok and by a long way and it was just the right design creative positioning branding marfaning and it just took off and I think last year in the us it was second only in total growth in hair care to procter and gamble's total hair care portfolio just the monday brand and so then I started to learn kind of which categories would work for us and we've gone super deep in those categories and we've applied our same model so building all the factories and diapers we built a factory I think twenty nine months to produce and we're doubling the size of it right now so we'll have 4,000,000,000 diaper capacity by next year in beauty we built the whole factory everything under one roof injection molding rotor molding filling mixing all of it we built all the lab in shanghai we put l'oreal formulation specialists over unilever formulation specialists so as soon as we found something that was working so I was out outsourcing to begin with then we do the zuru thing which is go super deep automate everything we possibly can put all agbs in so every little part of it we wanna like automate as much as possible and then pet food I started at the same time I brought a young guy who won new zealand's high school entrepreneurial program out a guy called alastair he's incredible I said let's start a pet food business together actually we were at the supermarket and we said let's do pet food and so now we're getting huge momentum there one of our brands I think bulqers drove 30% of all cat treat growth in america last year and then we experimented in supplements which has been a little bit hard I built a brand with the kardashians called dose and co we ended up selling that last year it just it worked everywhere else in the world it failed in the us and so as soon as we don't have the scale of the us it sort of lets exit it and supplements we're sort of struggling with our brand habit which is sort of ticking away and then very much home care we're building a bunch of brands as well so sort of and confectionery so we've built this what I call our five vertical strategy and we're going very very deep within all of these verticals and I think all of them individually can be bigger than our toy company within you know two or three years

Shaan Puri

and what's what's the dream like so why why go so hard why do so many right like you could just off the toy company you could be sitting on a boat you own looking at an island you own with a you know a beautiful drink in your hand is that just you you love the game you have some dream you wanna be a hundred billionaire what's the what's driving doing more and more and more

Nick Mowbray

I think we love it number one love having a thesis love competing for me it's it's sport right like it is sport having a thesis going into something working it out and as we build these things you know toys business the edge business fmcg business you know as you become more successful you think how can I solve bigger problems and the same person greg fornell I said you've got to wrap your business in a bigger purpose as well and I thought well we thought how do we solve bigger problems because we're almost in a privileged position now right how do we go on and actually solve bigger problems which is why we've started building zurutech over the last well it's actually been eight or nine years

Shaan Puri

can you explain what that is so it's a crazy moonshot idea I think you have you either have or are building the largest factory in the world? What is that idea what is zurutech

Nick Mowbray

so zurutech the thesis really was if you look at the construction industry it's been done the same for hundreds of years it's also the biggest segment or market in the world construction and property development and the idea was how do we build the first factory in the world that has a customized input so the design of a building and a fully automated output so how do we build buildings for a small fraction of the cost of what you build a building for today and and we're now we started off so we built our software which is called dreamcatcher which is built on unreal engine and it has an incredibly simple ui sort of user interface but the logic layer or the coding layer below that is incredibly incredibly complex we've cataloged every building code in the world so you can drop a pin on any location in the world that maps the terrain it does the building code and then you can design your house or building or whatever building you want in our dreamcatcher software we've also built our own ai assistant or on our own large language model called queera which is basically training it's training our model on all the great architects so you can talk to your building and it builds it in front of you you can put a two d plan in you can decide on this room I want it to be stockholm style and furniture and it maps all furniture and does it for you so it's incredibly intuitive software basically a 10 year old can design on dreamcatcher and then it does all the structural side it does all the mep the mechanical the electrical the plumbing it does it all in a super intelligent way wherever you drop the pin where you're building the building it works out the orientation of the building for the sun it works out how many hvac units you need it works out how many solar panels you need at least so basically then the software translates every part into our factory our factory builds every single part and it's completely automated and the factory is designed from start to finish so originally we built a one fifth scale factory so that's to test the software with the hardware and how that all integrates together so it builds these mini houses that are one fifth in every dimension and then once we had got that working we built it's about a three hectare factory and it's a test production line and that right now is producing that's we're testing the software at full scale with full scale houses and we're building a house about every two weeks right now which is test and then we have like 100 little changes and we go in software and changing it and then we bought a factory or a building that's 25 acres in size which is our first commercial factory for producing commercial houses and in phase four we'll be building one of the biggest factories in the world I think second only to boeing is the plan so that's all planned out now but we are building a house for $500 a square meter and it's the best quality in the world aerated concrete ceramic tile but we have innovated every single part of the process so we have the wall module the tile module the window module the lighting module the smart home module and every single team I think is the best in the world at what they're doing so it is a huge project it's a massive undertaking I think we have about 700 software and hardware engineers working on it

Shaan Puri

are you self funding this or did you raise money for this

Nick Mowbray

correct you know we self fund it so we're getting very close now to a final product we think we're five test houses away from getting it very close to to perfect and then it should be transformational in in in terms of how the world builds and anyone can use dreamcatcher the software so you could go on to dreamcatcher and there might be a million different two bedroom houses that have been designed by people on the platform and you can look through them you can put a price on selling your own design you can go through them in real time you can stage furniture we'll have a marketplace ikea could digitally scan all of their furniture into our marketplace artists could digitally scan all their artisans so you can put it in your house so you can go around in real time and see it and so the software is really the software is really incredible you know what we've built so super exciting that we're getting so close now and the houses that we're producing each couple of weeks are really incredible

Shaan Puri

I mean this is a insanely cool idea just to basic it's like like if you go to the website it looks like you're looking at the sims the video game like it's like you could just kinda like zoom around a house you can like move things whatever but you're saying there's a button where you just basically click print and then the house gets built in an automated factory which is just a a kind of mind blowing idea how much are you gonna put into this funding wise like you must be push this must be like you must be putting hundreds of millions of dollars is that is that right or am I overestimating

Nick Mowbray

it spending a lot for sure so the software so we have three offices in india on the software side pune karkata and underban and we have two in italy milan and modena the reason in italy is we actually acquired years ago the software part of it it was two guys martin alesio they're peers both architects that decided that architectural software was built on incredibly old software stacks and so they were like well gaming engines are like going like this and so they decided to build software or architectural software on unreal engine and so we acquired them and that's sort of the reason I think we have about 160 one hundred and 60 or so people sitting in italy on the software side then they work with india on the software side and then in china we build all the hardware side out so we have three sites where we're doing all the hardware and automation development but we kind of parallel that our automation team has sort of grown in parallel we you know they automate for example we produce 57,000,000 dark and water blasters a year but we produce a dark blaster from a plastic granule through to finish product with no people our competitors like hasbro they're outsourced to factories they're still produced with drills on production lines we're now building our automation two.

Nick Mowbray

Zero where we're using vision and machine learning so we can actually change out any model of blaster on the same production line it can see the mold and it can see the shape and where all the screw holes are and it adapts completely so we've kind of paralleled like paralleled our automation with building a housing project but also taking all our expertise and building across our xero edge and toys business which makes us so so disruptive but the big difference is when we automate a product in fmcg or toys you're making the same product over and over and over again with robots this is incredibly complex because you're building a tailored product for every building site in the world and every building code in the world and it's different every time and so having that fully automated output with a fully customized input has never really been or has never been done before in the world

Shaan Puri

dude you're a madman do you even like who are your peers like who do you relate to do you just read like an elon musk biography and you're like oh this is the only other guy in the world who I I have something in common with like is that somebody you admire what what

Nick Mowbray

we have a huge admiration for elon we've been big tesla backers and fans for a very long time in fact I would say do you have any elon's I had a chance to meet him and then I had to fly home for an emergency and so I actually don't know him but my brother my brother was very similar to elon so my brother was sort of the driver behind xurutech and our building project he's very similar in his way of thinking I think like elon calls it the idiot index for example right and the idiot index is when you look at the cost of a rocket well he looked at the cost of what a rocket used to cost to build and then he looked at the cost of the materials and it's like you know hundreds of times the cost of materials to build a rocket and he's like well then he takes a first principles approach he breaks it out and he works out effectively you know how to build a rocket at a price that makes sense based on the cost of the raw materials I mean we're having a similar approach to how we build a building whether it's one story or 100 stories it's look at the cost of materials out of the ground and look at the final cost of the building the idiot index is really high and it's not the same or similar type of thinking so how do you go back to a first principles approach and do it from the ground up in a completely different way

Shaan Puri

did you see the other day I think yesterday or two days ago boom supersonic did their first supersonic flight I don't know if you followed this startup

Nick Mowbray

I did yeah

Shaan Puri

he he kind of had a similar story where he worked at groupon basically and he's like you know a product manager at groupon selling coupons on the internet and then you know for fun was basically having a you know a hobby of flying and then gave himself a year to from a first principal's. Of view understand how planes work and figure out if there was some business he could build in the you know around planes because he just loved planes and while he was building his spreadsheet he was just like I don't get it there's no reason we shouldn't be flying supersonic speeds right now and then he took it to like professors and others he's like where where is the error in my calculations because this is telling me we should be doing supersonic and they were like no there's no theoretical errors just no one's doing it like there's no courage is the limit not like there's not a materials problem there's a courage problem there's a entrepreneurship problem and seeing that go you know yesterday to doing their first supersonic flight was super inspiring

Nick Mowbray

incredible

Shaan Puri

so you you're doing all this stuff do you like have hobbies do you do stuff outside of this what's like what is fun for yours this is like my cup is full with this

Nick Mowbray

sports definitely sport we loved just loved competing really so anything that has a competition element is something that I get a lot of enjoyment out of so yes certainly tennis golf just sport in general is something that I enjoy doing but yeah as you get older like obviously we don't I used to think you wake up every day with that pit in your stomach because you're wondering what's going to go wrong today and what do we have to solve today so you know obviously we don't have that that issue any longer and and definitely get to spend more time with family I finally had my first child last year so that's been a big change it definitely changes your perspective on things I think which is which has been really good I always sort of kicked the can delayed it as long as possible I think it would slow me down but it's definitely been one of the best things

Shaan Puri

so do you when you start these new companies because I always I always find this interesting whenever you have like a serial entrepreneur people have different approaches so some people they you know they have their main thing and they leave and they say I'm gonna go on a sabbatical basically for a year figure out my next thing other people they take some percentage of their time they're devoting it to new ideas and they go they roll up their sleeves and they're super like on the ground figuring out the new idea other people they recruit a operator and they just give the operator kind of like the idea maybe a little bit of a plan and then let the operator run and they kind of are there as more of a chairman or a board member from afar when you did like the diaper brand and these other ones were you like boots on the ground like every day figuring it out or did you do the operator model what what did you do

Nick Mowbray

definitely boots on the ground what I would say is in our business there's a through line through it all right we're essentially making a product whether it was a house a bowl of shampoo a laundry pot or a dart blaster I mean it's essentially still making product building factories selling it into to retail so we've built such a big flywheel like if you look at our shenzhen office we have three and a half thousand people there right and it's such a big flywheel that it just becomes easier and easier to plug into that flywheel regardless of you know what category in yes they're all different industries but we're still effectively trying to make the best product in the world at the best price we set ourselves the goal of making a product to $0 I know that's impossible but that's our goal how do we make this profit $0 and how do we make it the best in the world so there's a through line through it all so very much to boots on the ground I believe you know leadership has to be on the dance floor have to have your hands dirty that's where you get most insights and in our business now I'm you know I'm a huge believer in firing bullets and failing fast so I always say get an actionable insight where's an insight find an insight somewhere in the world and an insight forms a bullet and a bullet is a minimal viable investment into testing something and then if the bullet works it's a cannonball and we invest and we build the recipe around that and once the recipe is working you can pull a lot more things into that recipe and build that recipe out so our mindset around fast fail we actually have what we call fast starts now in fmcg so we're trying to build a minimal viable product to test quickly as fast as possible and so we can really speed like speed of innovation is is probably the biggest thing for us and we're trying to test more things in these categories faster and learn what works and what doesn't because in my experience things either just like hit the ground and start working or they don't and then we have a mindset around continuous improvement so we call it 2% improvement a week the power of compounding I know 2% improvement a week is nothing you can measure but that's the mindset that's what we put into our dna and we always say to the team we suck now compared to where we'll be in the future so we had this relentless mindset of being able to look back on ourselves a year ago and be like we weren't even good then and I think that compounding improvement is such a big part of what we do and then from you know when I look at team members I'm trying to people say they try and build talent density in their business yes we try and build talent density but for us we're trying to build like grit density and I say when we hire we're looking for grit smarts and someone with a bias to action like real doers right people that just like we fast fail we go in we do it we are the winner we learn if it doesn't work we're getting heaps of insights out of that on how to improve next time so our mindset or our dna in the business works across any of those verticals or categories that we're in we have the same mindset and the same approach and the same dna as to how we approach them

Shaan Puri

if you were interviewing me how would you figure out if I have any

Nick Mowbray

grit I think actually like looking back at your history is it's kind of like we often find like people that are really great competitive sports people and they really love to win and were highly competitive like I want to understand how competitive you are how much you really want something and to be honest it can be really hard like we've built this loop process in our business similar to the amazon loop so we're you know half we're hiring and looking at you know whether you fit and can do the actual job but the other half is really do you align to our dna and so we have a loop we have you know eight people you know half of those people will interview or questions around you know our dna and really trying to go deep on understanding if that person fits our dna and so we're really trying to build out you know not only our talent density but our grit density but certainly it's something that I find is really important all our best people have just incredible grit and incredible bias for action sure they're smart but they just get shit done and you know we decide someone's got a meeting and they're already kind of actioning it in that very moment and that's kind of our culture it's kind of that saying as well right that lazy people work a little bit and expect to be winning whereas winners work as hard as they possibly can and worry that they're being too lazy and I feel like that's super true right like people that like work hard they're always worrying they're not doing enough or they're being too lazy and it's kind of those people that's kind of like the mindset we're we're we're looking for

Shaan Puri

yeah yeah I think elon has a good question he uses in interviews he says tell me about he just starts sits down he just says tell me about the hardest problems you solved and how you did it and you know you could get so much from one question because what's the hardest problem they solved you know it it'll show you the the scope and the trust they had in prior roles like were they just nibbling on tiny little issues or were they actually like biting into really meaty things yeah and like can they talk about the details the paths that didn't work the paths that did work because that's the person who was actually doing the work there's so much like resume lying where somebody says oh yeah we did this like cool tell me how you did it they don't know because they weren't the ones doing those parts of it correct correct nick this was awesome man I really appreciate you coming on I know you don't do a lot of podcasts but your story is honestly incredible I think as much as you're building in the factories I think you can you doing a podcast like this can build 10,000 new entrepreneurs with more grit with more resilience just by sharing the story because you're showing you know what's possible you're showing what you did how it all turned out and how you approached it and so I think you know a simple hour like this can do a lot for a lot of people so I really thank you for doing it

Nick Mowbray

it was a lot of fun and yeah I don't often share our story all that often but yeah I totally agree if it can help inspire people and I always say it right it's not really how capable you are it's how willing you are and I think it's the willing people that stick at it for a long consistent. Of time and continually improve that actually are the most successful it's not necessarily about how smart you are it really is just grit and perseverance and you end up getting there so I think that's the big lesson for any entrepreneurs out there really

Shaan Puri

right on alright thank you so much that's a wrap