Episode 143

Building & Protecting Culture - The Story of Thread Wallets

Colby Bauer - Thread Wallets
December 2, 2020
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Colby Bauer has personality.  He’s a half-pipe skating, snowboarding, former collegiate athlete who turned a simple idea into a thriving eComm business.  He and his wife McKenzie started Thread Wallets with just a single product idea.  Simple, functional, minimalist wallets with personality.  That initial product took off and Thread quickly grew into a team of 22 that now boasts an expanding product line including lanyards, phone cases and more.

While there’s a lot to be impressed about with Colby and McKenzie, and their team I really wanted to key in on Thread’s culture and the unique steps they took to grow.  I think you’ll find a ton of good lessons here:

  • How the key to scale might be engaging in activities that DON’T scale
  • How financial intelligence (or lack thereof) can make or break startups
  • How to hire for culture first and is the “hire slow, fire fast” mantra really the way to go
  • How installing a half-pipe at the office lead to a fight amongst the thread founders, but lead to mental health as a focus for the company
  • A good CEO is a non-busy CEO…what does this mean and how is it the key to effectiveness

Colby Bauer - Co-Founder and CEO at Thread Wallets

Via LinkedIn

Via Facebook

Via YouTube


McKenzie Bauer - Co-Founder and CMO at Thread Wallets

Via LinkedIn


Thread Wallets - Slim Wallets with Style

Via LinkedIn

Via Facebook

Via Twitter

Via Instagram

Via YouTube

Mentioned in this episode:

Brigham Young University

Purple Mattress

George Costanza Wallet

Bonobos

Warby Parker

Gary Bencivenga

Roland Frasier

War Room Mastermind

Ryan Deiss

Peter Drucker

The Effective Executive

Jeremy Andrus

Traeger Grills

Episode Transcript:

Brett:

Hello, and welcome to another edition of the eCommerce Evolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce. Today, I am delighted that we have a very successful e-commerce merchant joining us on the show. He's going to tell a little bit of his story, how they got started, what they did well, what they maybe should have done differently, things they had done sooner. It's going to be a lot of fun. We're also going to dive into what has become one my favorite topics, and I think one of the most important topics regardless of what your business is right now, whether you're a service provider, or an e-commerce brand. That topic is culture. How do we define, shape, protect culture. We're going to dive into that in just a little bit as well.

Brett:

I am so excited to welcome to the show Mr. Colby Bauer. He's the co-founder and CEO of Thread Wallets. What's up, Colby, how are you?

Colby:

What's up, Brett? Thanks man. I appreciate it. I'm just stoked to be on the show.

Brett:

Yeah. We had great times with prepping and chatting. Of course, we were geeking out a little bit about some e-commerce tactics and.. Then we landed on your research talking about culture and I was like, "Wow." We've really invested in culture over the few years at OMG. We thought, "Man, that would be a really good topic to talk about on the show." We're going to get into that as well. First of all, where are you hailing from? You're in one of my favorite states, although I've not visited the state more than just a couple of times, but where are you physically located?

Colby:

Yeah, we're in Utah. We're just at the base of the Rockies in a town called Provo, Utah, which is home of BYU, Brigham Young University. There have been, I swear, a million different startups coming out of BYU. The entrepreneurship program at BYU just breeds entrepreneurs. Utah has become such a big playground for entrepreneurs.

Brett:

It's a great little startup community, and yeah, so many awesome brands, Purple Mattress, and I know lots of others that have come from Utah. It's a hot bed, man. Hot bed of entrepreneurial creativity, and you are part of that community as well. Let's talk a little bit... It's always fun to hear the story and the background of what your company does, how you got started. Give us the quick rundown, the quick back story and then we'll dive into some questions.

Colby:

Yeah. Thread Wallets, we're starting to now brand ourselves more as Thread, today we offer wallets, of course, and wallet accessories, so lanyards. We have just recently launched a chopstick holder, which has surprisingly done tremendously well, phone cases. We're launching few new products. I actually can't stay it right now, but just stay tuned in the next month. We just launched cross body bag, so we're getting into the bag category. But it started as this really dumb elastic wallet idea. I was out in Hawaii in 2014. I was actually playing soccer at both BYU, and BYU Hawaii. I would transfer back and forth because there are different seasons.

Brett:

I can think worse places to go to school and in Hawaii.

Colby:

Yeah, really. Oh, dude. Yeah, it was epic. I went out there the first in 2013. I had lost my wallet to the ocean because I was just an amateur of being around the ocean. I'd gone then with my wallet, I lost it.

Brett:

The ocean will grab Apple watch.

Colby:

It's relentless.

Brett:

It's relentless.

Colby:

I know. One of these days we'll drain the ocean, we'll get all of our sunglasses, and watches, and wallets back.

Brett:

heard of it, this is totally off topic, I've heard of divers... and we live in Lake region where we are but there are places to cliff dive in and the lake's around us. I've heard of there are scuba divers just going finds all kinds of stuff. And actually I mentioned an Apple watch because this Summer we went cliff jumping with some employees and I did indeed lose my Apple watch.

Colby:

No. Such a bummer.

Colby:

Every now and then the ocean will gift back though. One of my buddies, we were just sitting on the beach and a GoPro washed up shore, and it worked and everything. Every now and then you'll get it back. But anyways, after I lost my wallet, I started the search online for a new one. And the wallet I had previously was very minimalist, it was just a leather wallet, I found it at Goodwill. Started looking and typed in, "Wallets." And it just was that never ending scroll of the same wallet pretty much that George Costanza-

Brett:

George Costanza.

Colby:

... fat, bifold, or trifold, black or brown. I just started looking at the category.

Brett:

And they will back problems if you sit on this wallet.

Colby:

Exactly. I started then typing in minimalist wallets, and I actually found a few. They were brand new on Kickstarter. You had to wait for them. And I ordered one, but in the meantime, I wrapped my cards in a rubber band, and actually fell in love with the functionality of a rubber band. Just as slim as you could get it. It got me thinking I just needed a little bit more security with that rubber band. So I actually went to a fabric store called Joanne's Fabric and just sewed up with my then girlfriend, now wife, in her childhood bedroom with her childhood sewing machine, I sewed up a better rubber band for myself. It was just a white sleeve. That's it.

Colby:

Then I started thinking, if I love this thing so much, maybe other people will. I also noticed at the same time that most wallets like I mentioned, were very just boring. And my personality and my style, fashion choices, and the brands that I love are very expressive. And so I thought we could probably start to, if we could find a way to put on some really fun prints and colors I think we have a category here that just sitting there ready for innovation that we could actually start getting our foot in the door with.

Colby:

There's a local company here in Utah called Beloved. And what they did was they printed on shirts, they would have like a full... the whole shirt would look like a pepperoni pizza or a big sloth face or something crazy. And so I was so curious to how they printed because they could print any color. There was no limit on number of colors, and that was my biggest... my biggest thing was, I didn't want to feel limited on what I could put on the wallet. I actually just... I bought more of that fabric from Joanne's and I pretty much walked into the headquarters here and I seriously, unannounced, just walked in and there was one of the interns was actually... it's a heat press that allows you... It's called sublimation printing.

Colby:

He was there at the heat press printing these shirts and socks and things. And I asked him if I could try printing on this lastik. And he's like, "Sure, go ahead." I was like, "Well, before I do, I have no idea what's going to happen. Like maybe this elastic melts all over your heat press." He's like, "Dude, just go for it." And I was like -

Brett:

It's like, "I'm an intern."

Colby:

Yeah, he's like, "Dude, I'm gone in a month anyway."

Brett:

Yeah, I'm out of here. That's awesome. And so to explain this just a little bit. I've mentioned on the podcast before, I coached basketball, I'm retired now but I learned about sublimation in ordering uniforms, and shopping for uniform. So the difference is sublimation prints in the fabric. The printing goes into the material, whereas other types of lettering for uniforms or whatever just sticks on to the material. So sublimation gets into the fabric.

Colby:

Exactly, yeah. I went in without that knowledge, just wondering what was going to happen, and we pressed it and it came out perfect. I was stoked. And I used just one of their one of their prints they had. It was a one of those poop emojis, the smiling poop emoji and it was just like a repeating pattern of that. And so I was like sick. I went home, sewed that up and that was my wallet. I remember on my way back I had a business partner at the time and I called him on my way back, and I was like, "Dude, this is it. This is the solution to making the minimalist wallet fun and expressive." That's where we fit. That was where our product market fit. Was functionality, and combined with expression.

Brett:

Personality.. Do you know what happened to the intern? Is the intern still around?

Colby:

He's gone, dude. No, I don't know. I have no idea.

Brett:

Thank you, intern for-

Colby:

Yes, exactly. I should have hired him right on the spot. Anyways, yeah. So that was when I would say the doors flew open as far as like me being able to see this vision for what Thread could become. I knew that we were always going to start with wallets and that later on, we would expand that product line. But it started with that wallet, and it remained just that Wallet for two years. My wife and I did the production in house, we did the fulfillment in house. And then not until about two, two and a half years, we launched a second product, which was not a wallet, surprisingly, it was a lanyard.

Colby:

It was a complimentary product because we saw most of the females that were rocking our wallets were wearing a lanyard, but they were using one of those crappy lanyards from a convention they got. And so we wanted to make it matching and a little bit higher quality. Started selling those, and now that's our top seller. But yeah, over the past five years, that's in a nutshell. There's a lot of other micro stories there. But that's pretty much how Thread got started.

Brett:

I love it. It's a great product. And just like with all good e-commerce stores, and good marketers, I encourage everyone to go check out site, see how they're positioning products, and how they're marketing it. They really are some fantastic, functional, fun, personality driven products. Let's talk about a few things. As you look back at how you get started and what you got right? What are some things that either by dumb luck or by choice, what are some of the things that you got right? Some of the things that worked just really, really well, in terms of driving traffic, and getting sales or website designer or any of those things?

Colby:

When I was deciding on a product, I had racked my head around... I was an entrepreneurship class. I loved entrepreneurship, and so I was constantly thinking of ideas, I'd come up with multiple product ideas a day. And one of the things that I put through the filter was, is it small? Is it easy to ship? Is cost of goods low, is margin high? And can I sell this to business to business, and direct consumers? So those are the filter that I put it through. I think I lucked out on some of that, I think I'm giving myself maybe too much credit there on being so intentional with the product. But ultimately, those are the, now when we look at new product, we think those things.

Colby:

I think choosing the right product, as far as the silhouette is so important. But then also the category specifically because if you look at most 100 million dollar D2C brands, they're based around one category that has an opportunity to grow into a bigger category. Where we started was not where I envisioned it to turn into. I always wanted it to be backpacks, and duffels, and phone cases, laptop cases. I wanted to own the carry category. Carry and carry accessories. But in order to get there, you can't compete against the millions of other backpacks in the world. That's not going to happen. So you have to find your foot in the door.

Colby:

For me, that was wallets, and I think that's something we did really well. And we captured that market. I remember early on, we named it Thread Wallets. That's the actual legal name of it. One of my buddies was like, "Well, dude, why are you going wallets if that's your vision? If you want it to be something else where you're going wallets?" I thought, strategically, we need to keep wallets on there because that raises our hand above the crowd. This is what we focus on. This is our niche, we own it. And there's no ambiguity of what we do it's just very clear. "Okay, that's what they sell."

Brett:

It's your company. What is it? Yeah. I think you're spot on. If you look at other really successful direct to consumer brands, let's take Bonobos as an example, they started by perfecting men's khakis. They had similar experience to you in that most guys khakis don't fit right, and you look like an old man. Khakis don't work, and so they developed a better khaki and they did really, really well with it. And then of course that lended itself well to designing shirts and getting into women's jeans and other things, but to begin with, it was just men's khakis. I think the same thing can be said about something like Warby Parker where you're just like-

Colby:

Oh, dude, yeah.

Brett:

Direct to consumer, eyewear now that you, of course, all kinds of eyewear and other spin offs, and things like that. I think it's really smart. I like that criteria. No, that's not the only way to find a winning product, right? But some of the criteria laid out totally makes sense. Easy to ship. Lightweight, good cost, good cost of goods. So all those things really, really important. What about from a marketing standpoint? What did you guys do well? Sounds like there's a lot of grassroots stuff in the beginning, which is really fun. But what else did you do well from a marketing perspective?

Colby:

We start early on, Instagram was very new in terms of influencer marketing. And we rode that wave so hard. Before you saw a sponsored post, every freaking post, it was very far and few in between. And so people didn't realize that it was even sponsored to begin with. We rode that and I think we-

Brett:

.. your product photographs well, and you use at the beach or whatever, it fits into that aspirational lifestyle photography.

Colby:

Absolutely. Yeah, I think that it starts there. Is the content that you're putting out there. Our society became very photo heavy, very photo centric. And at the time, it didn't really matter how quality it was, but the fact that you're putting out content consistently made sense. We would outsource, basically, photographers through trade. We started just sending product to every influencer and photographer we could find, and then we started getting a ton of content. And so now we had this just a plethora of content to be posting. Our content marketing was strong, our influencer marketing was strong.

Colby:

And we started doing things that maybe aren't scalable, but it needed to happen in order to get the ball rolling. And that would be that will pop up shops at random coffee shops and other restaurants, or on campus or whatever else. We started doing those things, and really starting to build kind of more of a local community. But that community helped grow a larger community. I think we're fortunate enough, because at BYU in Utah, it's kind of a melting pot because it's a religious school. It's not like, the majority is just Utah based it actually you're getting people from all different states. And so when you build that local community immediately starts to expand out of your state. And we did some of that intentionally. We started to build that local community, but I think-

Brett:

.. very quickly, because it gives you mentioned, and I don't want this to slip away. Sometimes to scale, you have to do things that are not scalable. And sometimes activities that are not scalable, fuel things that are scalable, and that's where like that pop up shops, going to events, meeting people in person, which I know is difficult now, but.. But doing those things that don't feel scalable, they fuel things that do scale. A lot of people skip that because they just want to go... And I'm an ad guy. I love ads, and so we .. They will just want to focus on the scalable stuff, and they miss out other big opportunities.

Colby:

Yes, I would agree. And sometimes, like you mentioned, the things that you're doing that aren't scalable, aren't necessarily for scale, or even for a return on the spend, sometimes for us, what was kind of unseen was doing those things in person gave us that face to face feedback, and that interaction with our product in person to learn what people wanted, and why they wanted it. And so then we could take those learnings, we could adapt the styles, the art that we put on the design, maybe even the product itself, the way we messaged on ads. We started to learn our customer, and that is, I would say the most valuable thing you can learn before you can scale it.

Colby:

You need to understand who's buying and why they're buying it, then when you take it to say ads, digital ads, that is scalable, you can do that quicker, you can do that just more intentionally. I think that's some some of the things we did well as we started to learn who our customer was because I'm not the... I would say we're 80% female right now, I'm not that 80% female. My wife was, and is and so it became natural. Our marketing of pushing this lifestyle of like on the go, freedom chasing, fun having, surfing, skating, snowboarding, those types of outdoor activities, that's what we did, and still do, and that makes sense. It's easy. When you're trying to fake it, people can see through it. I think that's probably the key ingredient to any marketing is just understanding who, and why would they would even buy.

Brett:

Absolutely, I think one of my favorite marketing quotes and it's pretty old now, but it still applies, again in Gary Bencivenga, as someone who's a great copywriter. He said that free is no longer the most powerful word in advertising because for a long time it was like, "Hey, use the word free, that gets attention. And it's the most powerful." But the word for, F-O-R, is the most powerful. Meaning really your job as a marketer is to say, "This is for you. This was designed with you in mind, and your personality, and your needs, and everything related to who you are, this is for you." No one cares really about free, and maybe they like free, still cool, but totally lines up with knowing your prospect, delivering what they want, communicating in a way that's authentic. Really powerful.

Brett:

Let's talk about a couple of things you wish you had done sooner? We'll chat about this for a minute and we'll get into culture. But what are some things you... either mistakes made, or just things that like, "Man, if I'd known that from the get go, we could have grown quicker maybe."

Colby:

Oh, dude, that is such a good question. If I could go back in time and tell myself, "You need to get production off of your plate right now, outsource it, then I would have saved myself a lot of stomach aches, and a lot of years. I'm actually ironically sitting in the office at my in-laws house that it actually began. I'm looking over here at the the wall, I actually put a hole on the wall with one of the machinery that we were using to produce. I look at that scar and like, "Wow, we've come so far. I'm so glad I don't have to do that anymore." But that one-

Brett:

your in-law's cool with leaving -

Colby:

It's behind the door, he can't see it.

Brett:

It's awesome.

Colby:

Anyways, yeah, outsourcing production, that one seems like it's a no brainer, unfortunately, people are forced to outsource production. But that one we held on for way too long. We also held on to fulfillment for way too long. We held on to bookkeeping for way too long. I was stressed wearing hats that I didn't actually feel qualified to even wearing, and honestly, me doing the bookkeeping while we couldn't really justify affording a bookkeeper at the time. Now I'm looking back and I'm realizing I can't afford to not buying an outsourcing bookkeeper because me doing it got us into bad holes, and bad habits. And it took a lot of time to get out of that hole.

Brett:

There's a right way to run your accounting, following things like GAP, generally accepted accounting principles, and other things. Also, if you're ever thinking about keep and maximize value. There's a right way, and a wrong way to look at accounting. Even something like cash versus accrual accounting, and accrual accounting is the way to go for e-commerce in most cases. Even just having some of those things, I 100% agree. And I'm talking like I'm an accounting wizard, I'm not..

Colby:

But you know how important it is to give it to somebody who is, right?

Brett:

Yeah. Because you have a couple years of really bad books and really shaky. It takes a couple years to recover from it in some cases.

Colby:

Totally. Yeah.

Brett:

So very much worth it. Absolutely.

Colby:

Yeah, we lucked out. I didn't put savings aside for our at the end of the year. And I looked at our tax bill, and it was like we didn't even have the money in the bank to pay. We lucked out so big, we went to a holiday market, and we made within $10 of the amount that I owed. It was divine, for sure.

Brett:

Absolutely. But not everyone -

Colby:

Those are the holes that I lucked out getting out of. Sorry, go ahead. What was that, Brett?

Brett:

I'm just saying not everybody can do that. And so that just underscores so cool that you guys had that experience, and were able to recover from, but not everybody can do that. It just underscores get your financial house in order. Cool. Other things you wish you had done or learned sooner?

Colby:

Yeah. I would say one more. There's plenty, but the one big one is we hired an ad guy. We called him our ad guy, and he was working a corporate job, and he would come home at night and work on Thread for us. He in his corporate job he spent millions of dollars for a big company here in Utah called Viven. He got to learn spending millions of dollars on this account, and then apply his learnings to Thread. We structured a contract with him that incentivized him to make us money, profit. And I think that was crucial in our success because we didn't have capital, we didn't raise money. We had to be profitable.

Colby:

I think I waited a little bit too long to really get him on full time. And we gave him equity in the company. I would do that again, and again, and again. Because when you have somebody who's invested in your company long term running ads, they're spending your money as if it's their own because technically it is that their own as well. That alignment of goal for the long term play was so crucial in our success early on, I would do that again. If I could go back in time in the... I hired him, I think our third year, the beginning of our third year, I would have hired him... I mean, I didn't know him, but I would have looked for a ad guy, "ad guy" in the first year because that ads strategy in getting-

Brett:

..incentivize in the way you did where you're really focused on profitable growth.

Colby:

On profitable growth.

Brett:

They're incentivized to hit that profitable growth. Yeah, why not start sooner?

Colby:

Yeah. I think that's the one we lucked out on big time. I listened to a million podcasts and read a million articles, I'd wake up at 5:00 and do that whole thing. But I didn't know what I was getting when I got... his name is Logan. I think I just lucked out big time, which is finding the right guy who's passionate, and smart, and trustworthy. Those things that you're looking for in an ad person, or just a business partner in general, and/or agency, if you're looking at like an agency. Those are the things that you should be looking for. They should be aligned with your long term goals, and not just a short term play, and they make a quick, quick buck, you make a quick buck, that never really works.

Colby:

I think, your partner, you have to really fill it out and make sure that they're aligned, and that you guys are just on the same page. Yeah.

Brett:

100% agree. I think this is so important in every position, and especially on the marketing side, whether you have a freelancer or someone that you make a partner, or someone that you hire as an employee, or as an agency, how do you structure the deal so that everybody's incentivized towards the same goal? And if you can line that up, beautiful things happen. I think it's a great point to kind of pivot in the discussion, and let's begin on that path of talking about culture, and team, and even kind of life as a CEO. We'll see how much we have time to get into, but you have kind of a unique philosophy in terms of equity, and how you share equity with some of your executive team.

Brett:

This is one of those was really interesting topics. I'm part of the war room that Roland Frasier, and Ryan Deiss run. They talk about there's strategic ways to use equity, and some people are very much anti, non avoiding any equity. Other people see the value in partnerships. I'm more on the value partnership side of things. But how do you look at equity, and why do you think it's a good idea to consider equity for your executive team, at least?

Colby:

I've always said that you want the Forty-Niners on your team, not the football team, but the actual Forty-Niners during the Gold Rush, the Forty-Niners were the people who actually got to the gold. They were on the site the first, and they ran and they didn't look behind and they just went for it. Those people, the Forty-Niners were in essence, entrepreneurs. They didn't go through this A plus B equals C route of life. And they instead they were searching for their own goldmine. To me, I've had opportunities in the past to work at my dad's financial advisory firm, I had opportunities to play professional soccer and then I had this stupid wallet idea that for some reason I wanted to pursue, and I wanted to find walls on one hand sitting on a goldmine being able to take over my dad's firm, something about that was just not fitting with me.

Colby:

I thought I wanted to go find my own gold mine, I didn't need someone to tell me, "Here's the gold mine. Here's the shovel. Now you just got to dig." I actually liked the adventure of finding. It's not even just about the gold, it was more about the adventure to find it. I guess back to your question, you want people like that on your team, especially your founding team, or your executive team because those are the types of people who are problem solvers. They're leaving behind a traditional lifestyle for something out of passion and not just money. Giving them and rewarding them with equity, in my mind is giving them exactly what they want, and what you want. And that's somebody who's invested for the long term play. Somebody who's willing to take a lot lower of a salary for the trade of doing something they love, and that's creating something, and working together doing it.

Colby:

When I think of equity, it's less about a portion of my business, it's more about obtaining the Forty-Niners, and getting a founding team that I can trust that now it's not just my own mind, I'm not just relying on my own skill sets and mind. Now I'm being able to trust a team that's in it for the long run and for the benefit of the whole company, to make decisions and see it from all different angles. I think equity in our culture is oftentimes just looked at like a chunk of money and I think it needs to be looked at as like, a trade of getting the right people on board. And you can see really clearly when you put equity on the table, how someone responds to it, and then how they negotiate from there.

Colby:

That they're in it for the right reasons, they're in it for the wrong reasons. They're willing to make sacrifices early on, or they're not. I started early on, fortunately, I was forced, because I couldn't really pay high salaries that I had to use equity anyway. But that's my philosophy even if I had a million dollars to share amongst my founding team. I would still say, "Are you willing to take a lower salary for an exit in two, three, mean, eight years, whatever it is. And let's build this thing together?" And if they say, '"Let's do it, I'm on board." That's my team. I just use equity as more of a strategy to vet people out, and I landed on some really, really solid people that I just trust so much.

Brett:

That's awesome. I love it. I think if you look at it that way, that we're using equity as a tool to vet and find the right person also, to incentivize the right person, and to keep them with you I think that's the proper way to look at it. I think sometimes we get hung up on percentages. This business is our baby, we started it, and we get hung up on percentages. And percentages don't mean much really, it's the value of those percentages. And so if you can get the right people doing the right things and properly incentivize, you'd be way better off to have 90, 80, 70, 60% of a company that's just like a rocket ship versus something that you own 100% of and one of the things you said too, I think you have to balance these two.

Brett:

Sometimes we can get so focused on, "Okay, well, we're not hang up on percentage now, we just want to maximize value. And so I'm going to use equity, and I'm just going to try to get players that are incentivized by equity." That can be okay. But you can also run into issues. You talked about getting the right people and how fun that is. I think you have to look at it that way too. Are we attracting somebody that we want to work with, and that our values are aligned, and where this is going to be fun to stick with this person and be in the day to day grind for five, six, seven years, eight years. You have to think about it that way as well. I think that culture piece kind of helps balance just the financial piece.

Colby:

Yes, I agree. Yeah. And I think the first step to creating a good culture is, and you mentioned this before our call, Brett, was hiring smart. People say, hire slow and fire quick, I would just change the word hire slow to hire smart. And then and not fire too quick, and maybe give people just some time to get into a rhythm because if you fire a quick, you might be firing some of your best employees. In fact, I've come to find that while being somewhat patient and putting some resources to developing somebody has proven for us to watch somebody bloom and step into a position that I probably would have never been able to find someone as good for.

Colby:

You might be firing someone too quick. But hiring smart is the first step to developing a great culture. And so it our process, I could walk you through our process of hiring, it's kind of boring... it's all that tactical stuff can get boring, but ultimately, you have to be intentional with how you're going about hiring, whether that's interview process, I think you mentioned a few things too. But we do like a three month trial period where we just see how they meshed with the team and how and on a personality level and also on just the workflow level. There's rules and things you can put in during that hiring process that will ensure a good culture that instead of hiring the wrong person, which you're going to inevitably do that it's really difficult to try to fix a mistake than it is to just do it right the first time. I think that's the very first time.

Brett:

.. first place... where's the place to identify culture, and culture fit in the hiring process? We wanted to walk through the whole process because that can be hard to just listen to without seeing something visual, but what a few of the things you do to spot culture fit?

Colby:

One of the things that I do is first... I mean, we have a relatively small team or 22 people. But I interview every person that that comes into Thread, but I never look at their resume first. There's the two part interview process. One is from the department head. So whoever that is, they interview, and they can look at the resume if they want, I encourage that because there's something to say about skill sets and experience. But I don't personally Look at that. When I when I interview, I'm not looking at skill sets that should already be checked off. What I'm looking at is our core values, the number one core value, and the overarching characteristic amongst everyone on our team is humility.

Colby:

With humility comes everything else in my book. If you're humble enough, you're going to learn, you're going to put in the work to figure out. You're going to be ambitious, you're going to be a problem solver, you're going to be proactive. You're going to be apologetic, and take responsibility. And so humility is at, I would say the core of hiring. And so those are the things that I'm looking for. And you can sense humility in somebody, it's somewhat hard to fake humility. When I ask questions, I'm asking them stories about their life. I just want to hear them talk about their accomplishments, and their life, and their family, and what's important to them because that gives me a good sense of, are they humble?

Colby:

Also, like I mentioned, another characteristic is Forty-Niners or we just call entrepreneur, they're entrepreneurial. So they are ambitious, they're goal-oriented. They don't need their handheld, so they're self motivated. If they if I wasn't to micromanage, which I can't do, and nor do I want to do, they would get their crap done. And that's another, I would say, the next biggest characteristic. They're honest, that's another one of our core values. I look for honesty, and that's when I call their referral... what do you call that? The background check and their referrals.

Brett:

References.

Colby:

Yeah, the references, thank you. I the term. I call the references and just ask about is this person honest? And how did you enjoy working with them? I look at those core values before hiring. I think that's a trick that I learned from the founder of Stance, his name's Jeff Kearl, he said, "I never looked at the resume, I don't care to look at that. I'm looking to see if there are cultural fit from a personality standpoint, and a character standpoint." I think that's really important because too often I think companies are hiring solely off of experience and resume.

Colby:

In fact, I've heard companies hiring without even meeting them. And in this day and age, sometimes you have to do that virtually, but without even interviewing, they just look at the paper and they go, "Oh, cool. This person went to Harvard Business School they've worked at Microsoft, done." And they're, on board, it's like, so they have no idea about that person, you have no idea who you're hiring. I think that's the number one step in our process.

Brett:

That's awesome. I'll outline a few of the things that we do at OMG because I guess would be good to interject here, and just good for people because I don't talk about this a lot on the podcast, but we're a team of 42, 43 right now. And so we were talking before we hit record about how do you keep and maintain culture, and especially if you're growing rapidly. The tendency is for culture to shift or change, or you lose you're who you are. We do hire for culture first, but our processes... And we look for talent skill, of course.

Brett:

But we have someone thought application, of course, but also they do a personality survey using this tool that I can talk about later. It's fantastic. We also have them do an exercise. We get these exercises, whether it's Google ads, or the Amazon side of our business. Someone has to go through this fake project and tell us what they would do to grow this client, we have an exercise that we review. Then we have a team member who used to interview for the school system, and she does like the initial interview. She's just got a real sense for who's a BSer, and who's got a good attitude, who doesn't, that's the first. Past that, and everything surveyed, everything's good, then our COO interviews, and she's got a real knack.

Brett:

And if it looks good, then I interview, and then kind of the final step is we have a team. We bring in the team that's going to work with this person to interview and what's so interesting is, occasionally, and this happened recently, where someone got through all of it, even my interview, and I was talking to our COO, Sarah, after my interview with this candidate, and I said, "I think she could do the job, she's really good, but there's something about her. Just like a gut feeling, something about her." So anyway, then the interview with the team happens. I kid you not, where there's like eight people in this interview, which can be overwhelming, but I think the truth comes out of those situations.

Brett:

Someone asked her about like a previous bad experience. And she's like, "Well, I was in this last job where half my job was babysitting millennials." And then she went on this rant, and we're like, do you realize that 95% of people in the room right now are millennials? It's just one of those things where totally to your humility point. Okay, it was clear, this is not a humble person. This is a babysitter of millennials. Anyway, but that didn't come out until that team interview.

Colby:

Yeah, right.

Brett:

We could have sensed things along the way, but then it finally came out. That's why you need to outline process, and really.

Colby:

Yeah. Another part of our process really quickly is, like I said, we don't hire immediately, we just say this is a three month trial, and they're still paid and all that. But that trial, I think, lends itself to an easy layoff, or an easy hire. If it makes sense, it makes sense.

Brett:

I love that. A good friend of mine who runs another company with a development company does the same thing. And they reposition it from, "We want to make sure you're happy too. You need-"

Colby:

Exactly.

Brett:

" ... try us see if we're a good fit for you."

Colby:

Absolutely. Right.

Brett:

But it does... It create... and we don't actually take that exact approach. But I do like it. It also it creates an easy conversation. And everybody knows, at the end of 90 days, we're having this discussion to see, "Hey, is this working, or is this not working?" It's a really good setup. I like that a lot. What are some of the things you do... and we have five or 10 minutes here left. What are some of the things you do to make your culture unique? You've kind of shaped this company that really fits your personality, your style, and you're attracting people with similar values and stuff. But what are some of the unique things you do to maintain culture?

Colby:

Well, aside from work, which there's plenty of that. We, my wife, and I had a pretty gnarly argument last year about whether or not we should put a halfpipe in our office or not.

Colby:

And it was an ongoing argument.

Brett:

... and halfpipe. I think..

Colby:

Yeah.

Brett:

Gnarly.

Colby:

Yeah, it was gnarly, for sure. And it was ongoing. I couldn't figure out why I wanted it so bad, because, obviously, I think it'd be cool. There's a cool factor to it. I freaking love skating so that makes sense. But she had this argument that... and I think the reason why it pissed me off so much was because she was right. I was she was like, "It's not necessary." And I'm like-

Brett:

..lawsuit. It would be a lawsuit, yeah.

Colby:

Yeah. I'm so like, how do I work around that? She's right, it's not necessary. And it got me thinking like, "Why do I want this thing? What is it that it really... Why am I getting so pissed off? Why am I fighting for it so much?" And it got me thinking more. And I think what it comes down to is mental health. For me, I've suffered through quite a bit of a addiction runs pretty rampant in my family. My mom's now since I was born. And my dad also is just out of rehab. With that comes along a lot of like emotional roller coasters. Not to mention, when we started Thread we were newlyweds. So there's a lot of stress related there, and then you starting the company, and then now we have two little girls.

Colby:

You tack it on a lot of a burden. And so for me, my outlet is luckily not drugs or alcohol. It's skateboarding. And it's sports. And it's friends, and it's outdoor activities. For me skateboarding over the last six years has become more than just the sports become a therapy. I spend late nights, our office skateboarding with friends. There's community around the sport, there's creativity, there's this outlet that I don't have to think about work when I'm skateboarding, and that's what I need. I need that release because otherwise, as an entrepreneur, every entrepreneur knows, you're pretty much thinking about your business 24/7. Being able to have something where you don't think about your business is actually very needed in your business.

Colby:

What the halfpipe has become as a symbol of mental health because day in day out, I go on the ramp, whether it's for 10 minutes or not, I just get a reset. Step up from my desk, I go skateboard for 10 minutes, and I come back and that's what I need. And so me as a CEO sitting-

Brett:

That actually is still productive, I mean, some of the... and you're 100% right, I'm thinking about the business all the time. Sometimes you want to try not to, but sometimes the best thing you can do for your business, is to not think about your business. And it's also good, you got to prioritize mental health. I'm glad that mental health is a discussion that it's okay to have right now, that there's more talk around mental health, but it's been in the workplace as well. Really, really excited you're doing that.

Colby:

Yeah. And now it's got me thinking... one of my wife's had their arguments was, "Not everybody's skateboards, what are you going to do then?" And I'm like, "Yeah, and I'm not expecting everyone to skateboard, but this is for me, this is my mental health. And there's plenty of skateboarders in the office that will love it. And not only just in the office, but our ambassadors and our customers and things that could come in." Anyways, because I landed on mental health now we've put in... we buy ski passes for our whole team every Winter. And so wherever they... or we get them money if they don't-

Brett:

I wish we could do something like that here. That's awesome.

Colby:

Yeah. If it's a gym pass membership, then we fund that. And we put mental health as a priority because we know, first off friend a friend, we want our friends to be happy and healthy. They're more pleasant to be around. We just like to see that. But also from a business standpoint, when they come in and they're set, and they're happy. And they're taking care of themselves physically, and mentally, they perform better. We don't have office hours, nobody's required to come into the office ever. In fact, if you want to leave midday, and go mountain biking, do it, and we encourage it. When you can structure this like work life balance being so intersected, I think that's when people find mental health because they're not so compartmentalizing or segmenting their life that it's imbalanced, and you're constantly trying to find the balance of work and life.

Colby:

Instead, work in life should be so interweave. I'm just, for my own personal needs, Thread has become that. I'm grateful because I think... and I just did a survey with our team and asked them what they think of culture, and everyone minus one said 10 out of 10, the other one put nine out of 10. And it's funny because he's my brother in-law, that's why I'm laughing. But anyways, I just-

Brett:

Colby could be way better.

Colby:

Yeah, right. But I think that's so needed now. Is at least having that conversation that people are suffering from anxiety, depression, addiction, other personal issues that they don't need to be openly talked about in the office setting. But at least we need to be aware that people are going through those things and providing resources. And being sensitive to them, I think is so needed now.

Brett:

What's so cool, and we don't have a halfpipe, I am jealous of that and ski trips. But we do some similar things. And we do have office hours, we're pretty flexible. We have like... where we put a cap on PTO. And then some of the things that are kind of unique, but here's what's... Some of that stuff sounds scary, right? But here's the way this plays out. If you're hiring for culture first, and you're hiring those entrepreneurs as Forty-Niners as you talk about them, whichever like that. And then you create this environment where you're caring for them. And you've got some fun mixed in, and of course, it's challenging, e-commerce is challenging. Running an e-commerce agency is super challenging.

Brett:

Let's talk about we're a fun place to work, we're not an easy place to work. This is challenging work. But it's supportive. People really will thrive in it. The right people, the right people will say, "I love it here." I talk about this a lot where because I'm thinking about the business a lot, I'll sometimes drop into our internal Slack into a client channel and pop in an idea, or a question, or something. Sometimes that'll hit me at like 9:30, or 10 o'clock at night after we put the kids to bed, and I'll pop in a question. It's pretty frequent that somebody will answer me right away. And I've told them like, "Hey, if I put a note in here way after hours, don't feel compelled... You don't have to answer. I'm not expecting an answer." A lot of times they do. Just because they want to, because they care. I'm not going to stop you, but I am telling you.

Colby:

Yeah, right.

Brett:

Sometimes it's scary to have these kind of open, free, or freer. I know, with some companies, once you get to a certain size, you have to have certain protections and things in place. And certainly I get that, but I think giving people more freedom, for the right people usually pays off in the positive direction. We're out of time, but I want to close with a thought, there's someone mentioned to me, as we were chatting a few weeks ago, and I really like it and I've been pondering it a bit. But you said that... I don't remember if this was your quote or you read it somewhere, but the best CEO is a non-busy CEO. Do you want to talk about that just a little bit? I've got a couple thoughts there as well.

Colby:

Yeah, like I mentioned, with skateboarding, sometimes the best thing to do for your business is to just not think. But then a lot of what your business needs is for you to think because if you're not thinking then a lot of times people are so in the weeds that they can't think. What I mean by that being the best CEO is a non-busy one is a CEO needs time to think. He or she cannot be so in the weeds that they can't like really look at the problem or the future, and just let your mind think. I think that's where it roots because in the... actually still right now I'm doing things that are somewhat mundane. And I'm trying to delegate those things, because I know that there's other bigger fish to fry that I'm not getting to. I need time to just... and even though it might not look like I'm doing anything, sometimes that's all. I just need to sit down, think whiteboard, and not be so busy that I can't make the wisest decisions. Anyways, that's really what I mean by it.

Brett:

Yeah, I love it. And I just finished the book. It's a classic, written by Peter Drucker who arguably the best management thinker of our time or all time, but book called The Effective Executive. And it's a little dated in that the examples are pretty old, because the book was written in the 60s, I believe, late 50s, maybe. But it's a fantastic book. And it talks about uninterrupted think time, and blocking how you manage your time, and blocking it so that you can focus on something, the highest and best use of your time. What does the organization need, and you as the leader, as a CEO focus on the highest and best use of your time. I also love something that he says in the book that the relationship or the ratio between the top executives performance, and the rest of the team's performance is constant.

Brett:

So if you want to elevate everyone else's performance, elevate your performance, like that's the best thing you can do. I've actually been going through that, and I've been... Sometimes I get in the weeds too. Like I still love getting into some client work. And I'll never give that up fully, but I'm having to step back a little bit more. Remember, it's been a while now. But I was talking to one of the agency directors at Google, brilliant man called Reynolds Richie. We were talking about clients, he came to our office to visit with us. He said, "I'm surprised by you, Brett." He said, "You are in so many details with your clients. When do you find balcony time?"

Brett:

I said, "What? balcony." "When do you have time to just step up and observe, and think, and look?" And I'm like, "You're right. I need more balcony time." I think that's where some drivers, some Forty-Niners we incredibly full plate. But sometimes the best thing we can do is just back up a little bit, and think.

Colby:

Can I just share one more thing before we end?

Brett:

Please.

Colby:

Something I learned yesterday, a guy named Jeremy Andrus, he's the CEO of Traeger Grills.

Brett:

Yeah.

Colby:

You know Traeger grills? Yeah.

Brett:

..by Traeger Grills.

Colby:

Oh, cool. They're massive company. They're doing 700 million this year. He as a CEO, he said everything important happens before 8:30 AM. And I like that because his morning routine he set eight years ago and hasn't strayed from it at all. And that's something that I need, because like I mentioned, throughout my day, I'm doing some things that are still in the weeds. I don't really have the ability to think like I need I should. But he wakes up at 5:00, and before he does anything, he flips his phone over so that he can't see it. He doesn't want to know any of the text messages. Any of the Slacks, any of the emails or news articles that came out through the night.

Colby:

If he looks at those, he says it's game over, because the next thing he steps into is he drinks a big glass of lemon water. And he goes in prays and meditates. That time that he gives himself 30 minutes to just think and pray, that's his time. The world is slow, it's early in the morning. He's flipped over his phone. And now he's just thinking, and so he had to create time to think for himself. That was as really good for me to learn because I don't really have the greatest morning routine right now. Actually on my to do list today is to come up with what my morning routine is. And so I think, we try to justify and say we don't have the time, but in this example from Jeremy, he created time, and it's not distracted time. I love that.

Colby:

And he goes on, and he eats breakfast, he works out, takes us to the school. And then he's at work, and he goes through his work schedule. And then when he gets home, the first thing he does is he puts his phone up on a shelf, and he doesn't look at it or touch it until he puts his kids down for bed. That time with his family is also so important. So he created that time to be uninterrupted. I just thought those great examples of somebody who was so regimented, and is why he's doing so well. That's-

Brett:

Able to handle that kind of pressure. And that kind of growth, and all the things that come from running a $700 billion a year business. Yeah, I love that. I love that so much. I think one thing you mentioned, you struggle with routine, I definitely did as well, got better over the years. But I think there may be some people on the podcast, I think you and I are similar in some respects where I've got a bit of creativity in me. I'm not necessarily an artist, but I'm creative. And I used to just create variety. I had to have variety, like I couldn't even drive home the same way. I needed variety. But then I realized that in inside of schedule, and routine, you have more room to be creative.

Colby:

I love that. Yeah, it's so true.

Brett:

Yeah, put in that structure shows, "No, you can be more creative. You can think more." Get a little bit of structure. That was kind of a game changer for me. But it's a constant process. Just like looking at managing culture, it takes attention an effort. It's the same way like managing yourself, and your own time, and those things. Well, Colby, this has been a ton of fun man. I've thoroughly, thoroughly enjoyed this. For people that want to learn more, where can they find out about Thread Wallets? Are you active much on social media? How can they connect with you online?

Colby:

Yeah, for Thread, go to threadwallets.com, and Thread_Wallets, on Instagram. And then for me personally, and for my wife, who's my co-founder and CMO, we're both pretty active on LinkedIn, reach out to us there.

Brett:

Awesome. Colby, great job, man. It's been awesome.

Colby:

Thanks, Brett. I appreciate it, man. Seriously, I had so much fun.

Brett:

Yeah. Awesome. As always, we appreciate you tuning in. And hey, we'd love to hear from you. What do you what do you think about these podcasts? What are topics you want us to dive into? And if you've not left a review on iTunes yet, what are you waiting for? We would love for that as well, and helps other people discover the show, and it would make my day also. With that, until next time, thank you. All right, that's a wrap..

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