Hap Klopp, CEO and Founder of The North Face
Facing the The North Face – A Look Into the Mind of an Entrepreneurial Legend, Hap Klopp
It isn’t often that we get an opportunity to talk to someone who built a company before the internet. The story of Hap Klopp’s journey as an entrepreneur is full of timeless wisdom and lessons that only come from decades in the trenches.
In 1968 when Hap Klopp traded-in his corporate aspirations for the life of an entrepreneur, the support network for such endeavors was not nearly what it is today. However, Hap knew that he had what it took to run a successful business…even if no one else knew it.
After the passing of his father, Hap Klopp ran the family business while finishing his undergraduate degree at Stanford. He then went on to complete his MBA while orchestrating the sale of the business. After graduation, he went out to interview for positions only to find that no one was willing to hire him to run something – they all wanted him to start at the bottom and work his way up – which sounded pretty boring.
Hap’s focus was on consumer goods, marketing, sales and branding; which landed him an interview at Proctor and Gamble. During the course of the interview, he was introduced to the corporate mores that have pushed so many of us to pursue the life of an entrepreneur. In short, P&G expected each employee to wear a white shirt and tie every day, to refrain from the use of nicknames and to dutifully mind their post until an opportunity for advancement was presented. It was settled, Hap was not cutout to work for anyone else, “I didn’t want any part of it…I didn’t fit into to it” – so he embarked on his entrepreneurial journey.
Overcoming NCAA (No Clue At All)
As we know, it’s not enough to simply want to break free from the corporate world – you must have a plan or at least a product. Hap took his passion for the great outdoors and turned it into a thriving business – The North Face was born.
To get started, Hap did a little consulting to learn about the industry. This led him to purchase existing stores that were already doing $300k in volume. These stores would become the funnel through which Hap would feed The North Face products to the public.
Creating the World’s Best Product
From the beginning, Hap knew that the differentiating factor for his product would be quality. While this presented a host of challenges, for starters the products would be more expensive than similar products on the market, the fact was non-negotiable. The goal was not to utilize recycled materials “but to have a product that never ended up in a landfill in the first place.”
Designers at the company focused on lightening the load of backpackers and hikers by applying technology to a commoditized field in what Hap calls, “turning back the arrow.” Aircraft aluminum became tent poles and pack frames; parachute materials were used to create sleeping bags, clothing and tent tops. By incorporating technology developed during the Vietnam War, The North Face reduced the load of hikers by 50% – opening the door for more people to join the sport, including women.
Building a Global Brand
“Brands are like coral; they build on a whole bunch of different points and come together in an elegant way down the road – but while you are building them it’s hard to see and their impact doesn’t really come together instantly but over time.”
The North Face branding strategy was built on keywords. Hap selected words that would touch every single employee, consumer, retailer and stakeholder in the same way and from that strategy the Lifetime Warrantee was born. Every stakeholder was impacted by this move; customers knew precisely where the brand stood, that quality was number one; retailers used it as way to sell an expensive product; manufacturers were motivated to create the best product knowing that if they failed it would be back for repair.
However, there was a side effect of this strategy; a lifetime warrantee made repeat business a challenge. So a new objective was added to the mix – bring the customer back. To do this, The North Face employed storytelling and shared parables that would trickle through their retail establishments and their customers.
Soon Hap’s approach of creating keywords, developing supporting stories and then funneling those parables through the stakeholders, consistently hitting customers, investors, retailers, employees and suppliers with a message that embodied the core principles of the brand paid off. As Hap puts it, “brands come from consistency and patience and from using novel and innovative ways to shout your message out to the marketplace.”
A Series of Linked Recoveries
“Business is a series of linked recoveries that you later elegantly describe as a plan.”
One of the first challenges Hap faced was how to sell a product that cost substantially more than what consumers were used to paying. To overcome this challenge, he purchased stores that were already selling similar products and then introduced his product to those buyers. The sale of allied products generated the cash flow he needed to produce his high-quality North Face products.
A second challenge came when, after an exhausting round of fundraising, Hap took his family skiing. Not long after arriving on the slopes he received a call that that the roof of the factory had fallen in after an unusual amount of rain. So there he was, a substantial amount of money sitting in escrow as a result of his fundraising efforts and a warehouse full of ruined or damaged product and computers.
Hap recalls that “The first thing I decided to do, which I think is a good piece of entrepreneurial advice, is to ski that day because I didn’t know when I would ski again.” When he returned to work he assembled a SWAT team to assess the damage and work on getting the company back on its feet. He recruited techies from the University of California who worked to recover data from the water-logged machines. While he hit the phone assuring customers that their orders would arrive – even if it took a couple of extra weeks to get them there – and telling investors that the factory had suffered a minor “glitch.” At night, after the fire department left, he sent his SWAT team into recover any salvageable product. In the end, The North Face was able to recover and even shipped almost all of their planned orders.
Lead Like No Other
When Hap stepped away from the reins, The North Face was a $200 million dollar company with more than 1500 employees. He recalls that it was tough to take care of that many people; especially when there were more than 14 languages being spoken on the factory floor – yet another byproduct of his uncompromising dedication to quality. He did not shy away from hiring the best talent simply because of a language barrier. When words failed him, he would draw upon his passion which “speaks even when you are not in the room.”
To keep his team motivated, he eagerly delegated authority; noting that the authority given to an employee must equal their responsibility. Make people feel good, supported and respected and they will perform at their best. Instead handing down a set of mandates, Hap shared the company’s goals so his employees would feel like a vital part of the company and not just a cog in the wheel.
Pushing both authority and responsibility to the outermost points of the company removes bureaucracy and creates an environment that supports the fastest response times to customer needs. He recalls an incident in which a customer came into the warrantee department with a competitor’s product asking The North Face team to repair it quickly so that they could make a hiking trip planned for that weekend. Instead of sending the hiker back to their competitor, the warrantee department leader had the authority to not only make the repair but to do it at no cost – generating a great story that was shared throughout the community.
Hap built The North Face on a set of core strategies supported by an unwavering dedication to quality. While many companies claim to have the best product, few actually deliver; something The North Face has always done. Hap now spends his days teaching others what he learned during his decades as an entrepreneur. He has written several books and is as dedicated to quality now as he was in 1968.
- The importance of making quality a part of your brand
- How to grow and manage a team of over a thousand employees
- How to use the power of storytelling
- How to build your brand into a globally recognized one
- How to overcome the challenges that life throws at you
Full Transcript of the Podcast with Hap Klopp
Nathan: Hello and welcome to another awesome episode of the Foundr Podcast and I have to say awesome and that is because we’ve got an amazing guest on the show today. Have any of you guys heard of the company called North Face? They are an amazing brand and I support their vests big time, their big papa vests they’re really, really warm. And they’re very, very well known in this space, they’ve been around for a very, very long time. And in this episode, we actually speak to the founder of the North Face and his name is Hap Klopp. And he’s been building businesses for the past 50 years now and we draw upon so much wisdom and gold from Hap especially around what it takes to build a household brand.
And this is something that we haven’t really tackled at Foundr especially for the podcast because it’s one thing to actually build a company, to build a startup, a successful startup but Hap’s built a brand that has stood the test of time. And that brand has gone through all sorts of pivots and turns but there’s a lot of fundamental lessons that Hap shares with us around core brand building things that we can all take away and learn from. Really, really excited about today’s guest especially because I’m such a fan of the gear [00:02:00] that North Face create and fascinating story. So that’s it from me, I hope you are enjoying these episodes, please do leave us a review if you are, it helps more than you can imagine. All right, now let’s jump into the show.
The first question I ask everybody that we interview is how did you get your job?
Hap: I got it because I couldn’t work for anybody else. I left Stanford Business School. I had some interviews with large companies because I couldn’t find anything that I could run, nobody was asking me to do that. I had run a family company after my father died when I was in college and I ran that simultaneously with going to Stanford. And I decided to sell it so I went back at my MBA and sold it while I was getting my MBA and then I was looking around for a chance to run something because I thought I had the background to do it.
I was the only one that was convinced of that, so then I had interviews and I interviewed with Procter & Gamble among others because I was focused on consumer goods and focused on marketing and sales because I kind of have a flare for that branding. And when I went there with the interview and this is one of my books ‘Conquering the North Face’ but yeah I went for the interview and the first thing was he said, “Is your name Hap or is it, Kenneth?” And I said, “Well, it could be either one, most of my friends call me Hap.” And he said, “When you work here it will be Kenneth because there’s no nicknames.” He said, “And likewise you’ll need to be wearing a white shirt and a tie.” Which kind of pissed me off because I was wearing a white shirt and a tie and I didn’t see any productivity analysis there and I’m realizing I’m in the wrong place.
And then he asks the question that all interviewers ask, so been all but pointing up to the corner of the room like he’s communicating with God. He said, “And if you’re to join our organization where do you envision that you would be in five years?” If I were to join and I’d like to underscore the word if, I would expect to be a president in five years and that means passing you in five minutes but I don’t think that’s any big deal. And of course he laughed, I mean it was a good interview even though I made fun of it later on because he was talking about the environment that exists in a large company and letting me know what it would take to be part of that. And I didn’t want any part of it, to be around and say I didn’t fit into that, so I knew I was…at that point I knew I was an entrepreneur.
And I realized that all I could do is go start my own company because I probably couldn’t work for anybody else. And so that led me to try and figure out what I knew something about, I didn’t know very much, I had that NCAA idea, which is no clue at all. But I was coming out of school so I basically decided because I knew something about the outdoors because that’s what you did in Spokane, Washington where I was raised, then I would do that. So that’s what led me to start the North Face. I actually did a consulting project in the industry while I developed the idea then acquired some stores that existed in about 300,000 in volume and commenced setting up building a brand, creating products, identity, all of that stuff.
Nathan: Yeah wow. And can you take us back to the early days because you started the North Face 30…was it 30 years ago?
Hap: Yeah, even longer, 1968.
Nathan: Yeah wow. And being an entrepreneur that was…was that even a term back then?
Hap: No, they couldn’t spell it then but over time they’ve been able to.
Nathan: So how did that start? You said you were doing some consulting in a similar type industry then you acquired a couple of stores?
Hap: That’s correct. I mean the idea that we had was we were going to make the world’s best product. And it was much more expensive than anything that existed on the market. Initially, we were focused on sleeping bags and tents and packs and such. And we knew how to make it better, what we did was use a concept which I continue to employ, I call it turning the arrow back. But what we did was apply technology to a commoditized field. And the technology we were applying at that time came from the Vietnam war and we applied it to the general camping business to lighten the load.
So aircraft aluminum became tent poles and pack frames and parachute clothe became sleeping bags, tent tops, and some funky clothing. And what we did was lighten the load that people had to carry by about 50% and suddenly instead of going 400 feet into the wilderness, people started going miles, a woman joined the freight because it wasn’t a beast of burden act any longer. And we were able to do it, but the challenge we had and we knew we were going to have is it always takes twice as long, costs three times as much when you’re going to develop a business. So we knew that it might take a while for people to understand what we’re doing and adopt that.
And so we had to figure out how we got some cash flow out and one of the ideas was to have stores. By acquiring these stores, they sold products which would sell our products which we were developing, designing and developing but also we’d sell other products that were sort of allied. So we’d have basically money to go to the grocery store on a daily basis while we’re waiting for the world to catch up with these brilliant ideas we had.
Nathan: I see, and like how did you build North Face into this massive brand that just everybody knows? Can you give us some insight around that, like obviously it’s taken a long time and it does take time to build a brand but there are some key things and I’m sure people can take away and I’m sure you mentioned a lot of these in your book, ‘Conquering the North Face’. But can we just delve a little bit into that?
Hap: Yeah, I mean first of all understand that brands are like coral. They build on a whole bunch of different points and come together in an elegant way down the road but while you’re building them it’s hard to see. And their impact doesn’t really come together instantly but over time and so we knew that. So we set about one, setting up a branding strategy where we define what the company was. We sort of defined these key words that were us and then we made sure that it touched every single customer, every single employee, every single stakeholder in the same way.
One of those words was basically quality, and what we did was we say we were going to make the best. So then we tried to figure out how do you convey that idea to the marketplace because everybody says they have the best whether they do or don’t. And so what we did was adopt a lifetime warranty for our product, that lifetime warranty worked with everybody we’re involved with, the people who were making the product realized how serious we were, that it would come back to them to be repaired and they didn’t want that. The customers that were buying it in the field knew where we stood because of something like that, either they have to be crazy or pretty dedicated to make that sort of comment. The retailers saw it as a way to sell a product that was much more expensive because they would say basically it may seem expensive but when you use it for a lifetime then over a number of uses it will be really pretty reasonable.
So by having that sort of point that we had in there, that was one way to do it. A second thing which we had was a concept and we made it into a mission statement for a while was our objective was to bring the customer back. And that’s what we defined that and so the benefit of that is to us it was great because if you have a lifetime warranty and you’re making things like tents or sleeping bags, the reality is the customer wouldn’t be coming back automatically for another because they wouldn’t necessarily need one. We didn’t believe in planned obsolesces, we believed in environment and such. In fact, we believe that the most environmental product is not using recycled materials but it was having a product that never ended up in landfill.
So we decided that to do that we were gonna have to move into apparel because people who had bought sleeping bags and tents that were happy could also buy apparel and it would also…they would also use word of mouth to tell their friends about this fabulous company that we had. So everything we did was about that and then what we would do to ensure that it stuck is we try develop stories that were consistent with this, stories that would be told as parables by people in the company and people outside the company to show how crazy we were about quality.
And one of those stories, just to give you a specific that relates to it was we had a warranty department and the warranty department would take care of defects, they repair, replace depending on what they could do if something went wrong with a product. Well in our company we delegated a lot of responsibility to the outermost points of the company because we believe that the quicker you responded to a customer’s needs or to a supplier’s needs or a vendor’s need, the happier they were gonna be and the more effective you were gonna be rather than setting up a bureaucratic chain.
So anyway, was running that department, had total authority and autonomy to do what she wanted. A couple of customers came in and they had a competitor’s product, competitor we see our designs which was across town. And they came in and they said, “Listen, we wanna go out hiking this weekend but our product’s failed and we can’t do it. And they can’t repair it for us, we were wondering if you’d repair it?” And her response was, “Sure, we’re glad to do it, we’re like you. We hike a lot and we know how important it is on the weekends or the times that you get away to enjoy it. We’ll fix it and we’ll fix it for free.” Because they made great products over there, we nailed the customer, we’re out to make people happy. Well we did and made it happen whether they were scamming us or ripping us off or whatever, it helped us because it created a great story and we knew that even if they were sort of scamming us, what they would do is tell so many people about how great our service was that it would be comparable to none.
So we tried to select key words then we tried to develop stories about them, parables if you will that could be retold again and again and again that would highlight those points. And we tried to make sure that everything we were saying would…it consistently across all the stakeholders we’re involved with that was the employees, that frankly was investors too, it was also the customers who were buying it, the suppliers we had. And we tried to be consistent because brands come from consistency and patience and brands come from using novel and innovative ways to shout your message out to the marketplace.
Nathan: That’s some serious gold. I’m curious around, it sounds like you started off with just the outdoor stuff like you said sleeping bags and hiking stuff. But then you started to move into apparel and that’s what I personally know you guys for and I have one of your vests, it’s so warm in winter. What are your thoughts on I guess around focus because sometimes I find that some entrepreneurs are just trying to do too many things and they’re trying to work on too many things, too many products, so many services and it just becomes over complicated? What is your thoughts and insight around that because it can get exciting to work on new products and tap into new industries with your brand. And how do you maintain that focus and know when to move on to the next thing?
Hap: Nathan, I’m all in accord with what you’re saying. I mean I tell people I’m not smart enough to be complex, maybe I am I don’t know, maybe I’m not. But whenever…I do consulting now after I’ve sold the North Face which is a few years back. And I’m investing and I’m involved in companies and I write books and I teach at schools, but across all of that, I use a couple of things which I recommend to people. The first one is deselect, everybody thinks more is better but more isn’t better because more is hard to execute. Business is complex, even the simplest business has too much going on. The first thing you should look at is not what you can add but what you can take out of the offering you have whether it’s a product or a service or an approach because if you get it down to its essence, that’s easily executed.
And one of the rules I tell people is, don’t confuse planning and strategy with execution, execution almost always wins. And so the execution comes from simplicity, so I try to get people to do that. The other thing which I tell people to do which is a variation on that but basically to insinuate into your offering an obtanium. And an obtanium is simply that which nobody else can provide whether with the unique secret sources that you have because everybody wants something that others can’t get. And it’s simple to do, I mean sometimes if you’re starting off and you don’t have any customers, what you can do is go to a customer too and offer them exclusivity.
If you’re talking about selling to retailers, it’s easy to offer exclusivity because nobody wants your product. But that exclusivity could have value for them because it might be something they really want. So I try to put those two things in, I try to simplify it so it can be executed well, I try to simplify it so it’s done quickly because, in today’s market, speed to market and speed to profitability is key.
Nathan: Also when it came to building the North Face, tell us about some challenges. Tell us about some stories that the audience will find interesting and could really relate to us all because building a company especially a large size company, a well-known household brand name isn’t easy.
Hap: Well it’s not and some of the stories are probably too lengthy for the time we have. But I’ll give you one as an example. I tell people when you think you’ve got everything going right, look out you’re just missing something and it’s gonna come back to haunt you, it’s a series of linked recoveries that you have in business that you elegantly describe as a plan later on. But one of the things we did was we were doing a round of financing to be able to grow because we were growing much faster than our capital would allow. And it always takes a long time and it’s a lot of agony putting it together and it happened to be during the winter and I wanted to do some skiing but the whole time I had to focus on fundraising to be able to bring it in.
Finally, I had accomplished it, the money was in an Escrow account, all we needed was the lawyers to sprinkle holy water on it, we were ready to go. So I took time then and the family and I went out to Colorado to go skiing and got there and in the morning I got a call from the people at the office and they said, “Are you sitting down?” And of course it’s never good when they say that but I said, “Yes, I am.” They said, “Well the roof fell in.” And I said, “Well you’re talking about literally or figuratively?” And they said, “No, literally.” They said what happened is the rain gutter stuffed up, there was rain here, the beams, the glulam beams shuttered, water came pouring in. The fire department won’t let us go in to get anything out of there. All of the computers are fried, we have no access to information and on top of that, here we just raised money that was in Escrow. So I was gonna have to go back and tell those people they could take their money back, we didn’t know what was on there.
Well I mean the first thing I did which I think is good entrepreneurial advice is I decided I’d continue to ski that day because I couldn’t get home anyway and didn’t know how long I’d be till I ski again and freed my mind a little bit. But then we came back and we said, “Listen, we’ll put together a SWAT team and we’ll solve this. And we don’t know how we’re gonna solve it, we know we’re gonna solve it.” We had insurance but we didn’t know how long it’d take the insurance companies to pay. We’ve got to have a solution around that, what we did was go up to the University of California and got a bunch of IT computer jerkies and had them come down to try and access information.
We had our customer service people call the customers and ask them for a copy of the orders they’d written because we didn’t know what those orders were. And tell them, “Oh, by the way, had a little glitch, might be a few weeks in delivering but we’ll get there.” So we tried to collect customer orders that way and calm them down. At the same time at night after the fire department was away, we’d send a SWAT team in with hard hats and whatever to sneak out any product that they could from in the factory, that was in process or completed and finished goods, sneaking it out, putting it in another warehouse so we could ship it.
And then I went to the investors and told them we just had a little glitch, you can take your money back if you want but the situation is the same. And all of that transpired, we were able to do it, we were able to save it, we were able to save most of the orders that happened on time. We were able to patch things together to be able to get there but in this orderly way of building a great company, you forget sometimes about all of those glitches you have along the way.
Nathan: Yeah that’s very true. I wanna talk to you about leadership because before you sold the North Face how many people did you have working for the company, are you able to talk around turnover, just the size?
Hap: Yeah, we had about 1,500 employees and were a couple of hundred million in sales worldwide. And that is a nice size company, I don’t know that I ever want that many employees again because it’s a challenge is you’re really committed to employees. If you’re committed to 10 employees you can probably take care of them in ways but when you talk about 1,500 with all sorts of diversity. I mean we spoke 14 different languages at all times in our factory and that was a bit challenging but it allowed us to hire the best people that were available as a result of it, people coming in had skills in that area.
And so part of the leadership challenge was how do you motivate people when you can’t even talk with some of them and how do you create that inspiration? And some of that’s just through sheer passion if they can sense your passion even if they don’t know your words it goes a long way. And passion speaks when you’re not in the room so that’s one of the tools I felt was leadership. And as we built that company up, what we tried to do as I said is delegate a lot of authority, that’s a good leadership tool because when people have some authority and it’s equal to the responsibility they have, they feel very comfortable and they feel like somebody’s got their back and they feel like somebody respects them. Whereas if you just tell them what to do as opposed to what the goal is, what happens over time is they feel disrespected and they feel like they’re just a cog in the wheel.
And so the idea was to vest them with authority, measure them, hold them accountable, at the same time motivate them through your passion to be able to get where you’re gonna go.
Nathan: That’s awesome and let’s talk about your new book, ‘Almost’ can you tell us about that?
Hap: Yeah, that as opposed to the first one which is all about leadership success principles, ‘Almost’ is about failure. And we wrote it, I write with a co-author when I write but we wrote it because people don’t understand a couple of things. One is failure is more common than not, if you look at Silicon Valley and this is where the company was located, most of them are VC supported investments. And the VC formula in that portfolio is make 10 investments, expect two to be home runs and you’re really successful, expect two to go outright bankrupt and then you get rid of the other six before your VC pool has to wrap up which is usually five to seven years.
And so that means a merger, a falling off, closing down or whatever so in essence about eight out of 10 investments there fail. And in other parts of the world, if you fail, what happens is this real blemish on your record, maybe you can’t get employed again. In Silicon Valley it is not a blemish, it’s considered a plus, in fact, there is some VCs won’t invest in company unless they have a few people in the management team who have failed. And the reason is that failure works out here is that it allows people to swing through the fences. If you’re afraid of failing then you don’t make huge ideas, you don’t try to look for huge change, you just do incremental.
And in Silicon Valley, it’s not a problem, if you think of the greater success in Silicon Valley it’s probably Steve Jobs and he failed as we all know. He got kicked out of Apple, they brought him back later when he learned how to play well with others and when they needed him but other people Marc Andreessen of Netscape and he now has an investment firm. Max Levchin who was in PayPal with Elon Musk and Peter Thiel, all of those people failed in their first go round. And the fact of the matter is it’s easy to get funded in Silicon Valley in Boston and a few other places if you fail because if you know what happened, you’ll never make that mistake again.
So what they look for is people who’ve learned from those mistakes. So this book was about writing about a failure, pointing out, the reality is in Silicon Valley most people don’t start a company and become a billionaire overnight. Most of them actually end up going through a series of failures or semi-failures or partial failures to go somewhere else. And so the book is about a company, ‘Almost’ the title tells you about it but it’s about 12 months actually inside a company that should have succeeded. It had employees from Stanford and Carnegie Mellon and Naval Academy, had two astronauts that were part of it, it had the head of the mechanical engineering department at Stanford as part of it. It had millions of dollars in cash to be able to develop its ideas and it got torn apart because it didn’t follow principles that are standard for making a business successful.
And it’s a story, as I said I like to put stories out in parables and whatever. It’s a story because it can be enjoyable to read, it’s probably more memorable. I don’t believe in trying to have memorization of the four Ps of marketing or the seven effective habits of highly effective people or whatever. It’s more about if you remember a story then when you face the situation somewhat different you may still remember the principle. And some of the principles that are embedded in there, the first one is you can’t have multiple cultures in a small business, you have to have one. And we had some people who wanted to create products R&D and never make two of the same, we had people in the sales department that wanted only all of the one product produced again and again and never reconciled it. There was a body of people who believed in the lifting of my own battery base because it was a heat and power based product that could be inserted into consumer goods, jackets, and other consumer goods. And there were other people who believed in fuel sales which was long run where the company was headed but the cultures were constantly clashing and so that was one of the failures.
Another failure that happened was basically the myth of overnight success, we were visited by a company in Silicon Valley, one of the big companies there and immediately the CEO and some others in the company thought we’re going to sell out and be rich overnight. Well overnight successes take years but the people who believed that then dropped doing anything that was reasonable, they dropped doing strategic planning, they dropped worrying about fiscal responsibility, they overspent the amount of cash in the company by $2 million. Some pretty interesting stories about that in the book but I had tried to save them on that, the moment I saved them they spent every dollar I fund to save them because they were so convinced, a few of them were so convinced that Big Silicon was gonna buy us by the end of the year, that it didn’t matter if we ran out of money.
Well, Big Silicon didn’t buy them and of course out of money you start ending up with kind of the third problem and as we run out of money and make bad decisions. One of the decisions there was we didn’t have enough money left to invest in manufacturing for actual market use, repeated use. And we did great R&D development and all of that but we hadn’t tested it when you use the product a thousand times. Well, when we used it a thousand times we had some failure and the failure ended up in a recall, so cheap is expensive, expensive is cheap. Where we saved money it cost is a mansion in the end run of what we were doing.
And so those sorts of stories are embedded in it, as I said it’s written to be entertaining, it’s written to be memorable, people can either read it as a page turner which people told me they’ve done without thinking about it or they can read into it. What caused this company to fail, what shouldn’t I do before? I’m a big advocate of if you can help people out, OPM is great, that’s other people’s mistakes, other people’s money. And by reading this book I hope I provide some of that so that people don’t have to replicate our mistakes. They are funny they can make on their own but they won’t have to replicate ours and ‘Almost’ is all about that.
Nathan: Sounds awesome, I can’t wait to pick up a copy. So I’m curious this company was something that you started after you sold the North Face?
Hap: No, they asked me to come in and then help them market because they were having problems and among others, they were having problem raising some more money. And I probably should have seen that as a bell weather there but they said they wanted to make product, they wanted to develop a company. So what I did was bring in marketing and sales capabilities and teams to be able to accomplish that. And the idea was you provide that and then we’ll just go ahead, unfortunately as I said, when it got hijacked by the overnight success myth, when it got hijacked by poor business practices and the guy running it was somebody who had been in the navy for a long period of time and had never worried about budgets. The government always provided more, so there was no accountability there in terms of what was happening. All of those things happened, so I kept trying to advocate for what I would consider common sense practices in business and do those things but the outside muses that were calling drew us away. And the CEO didn’t have the capabilities or the attitude or maybe the moral fiber to be able to sit down and slag it out for the long term the way most businesses do.
Nathan: Interesting. So look, we have to work towards wrapping up Hap but few last questions, you said you do a lot of education, teaching and you’re a seasoned entrepreneur, you’ve been an entrepreneur for at least 40 years, in 40, 50 years right. 40 years, so what advice do you have for our audience that are aspiring entrepreneurs they either wanna start something or just have something they might be gaining some traction now. What are things that people need to be focusing on and really, really being mindful of?
Hap: Let me give you a few of the lessons I learned in sort of in a way of something that might be useful or memorable. I mean the first one is do something. If you do nothing it’s the only indefensible decision that you have. People are paralyzed lots of time by perfection paralysis, they’re trying to make it perfect or they’re afraid of making decisions. No decision is a decision in and of itself and is indefensible. Voltaire probably said it best about perfection, he said perfect is the enemy of good and so avoid perfection paralysis.
A second thing I mentioned earlier is don’t confuse planning and strategy with execution, execution always makes a difference. You get these great reports written by the Mackenzie’s or the banks of the world and they’re fabulous and they’re fabulous in their complexity. They cannot be executed by any company on their own, it’s a fulltime employment act for them because the only people smart enough and brilliant enough to execute it are themselves. No company can do it. As I said it always takes twice as long, costs three times as much as you want so have a fallback plan of where you’re gonna get that money or time.
In my view it’s not price, it’s value the customer is looking for and today’s world is a knee-jerk reaction to make it cheaper we’ll sell more. I don’t think that that’s what the customer wants, but if you don’t have anything other than price to sell then that’s probably what they want. You have to keep your plans flexible because the only constant you’re gonna see is change and change creates opportunity if you’re open to it but if you keep fighting it, it’s not there.
I would say there is a key thing and that is you need to motivate your people and there’s a simple way to do that and that is hire motivated people. You can’t take somebody who’s not motivated and come up with some pay scheme or some pats on the back that really long term going to make them a really beneficial employee, it just doesn’t happen. Final thing I’d say is you’ve gotta differentiate in everything you do. There’s so much noise in the marketplace right now. There’s 500,000 registered brands that exist out there, people see about 700,000 ads each year on all the different media that they look at. With that being said, I mean how do you rise above it, how do you get noticed?
The simple way to do that is differentiate your offering, don’t be like anybody else. And it can be done pretty simply and it doesn’t have to be very costly. But if you don’t differentiate yourself, you’re just gonna get swamped and all your advertising dollars are just gonna be wasted.
Nathan: Look, thank you so much Hap, that was amazing. Last question, where is the best place people could find you and purchase your latest book?
Hap: Well. The book if you go to Amazon they have both of the books on there. Amazon is the biggest seller of books and I’d like it to be in more of the small books and it is but little boutique. Some of but Amazon for sure is a good place to do it. And then I’m available on LinkedIn, I’m available through those processes and I’m pretty good at getting back to people if I’m not totally swamped and people can communicate with me that way. And of course, there’s a lot of me online of things where I have spoken at various events once when I was back at North Face talking about the DNA of North Face. That’s on there so if people are interested in learning more, it is a little bit broader than the time that Nathan you and I have had together.
Nathan: Awesome we’ll look, thank you so much and look I have one dying questions I have. How did you know when to sell the company?
Hap: Because it wasn’t fun anymore. I ended up because we were growing so rapidly, I was constantly fundraising. And fundraising is a hustle, wasn’t what I got into the business for. I like product, I like motivating people, I like training people, in fact, 11 of the people that worked for me ended up running companies in the outdoor business. All that stuff was really exciting to me but going back, bringing in people the more people you bring in the more diversion of opinions you have, the more hustles you have or the more time you have to spend getting everybody on the same page. And so I found that we were growing so rapidly that every six months I was back in that cycle again. So I kind of said if I wanted to be an investment banker I should have gone in investment banking, not go into the North Face and be an investment banker.
Nathan: I see, and with that sale…sorry last question with that sale were you looking for the sale or that person that came…the company came to you?
Hap: No, we decided to look for the sale.
Nathan: Yeah, okay, awesome. Well, look, thank you so much for your time Hap. It’s been amazing speaking to you, we’ve got so much awesome goal from you. We’ll just wrap there but thank you so much.
Hap: Perfect Nathan, well thank you and I enjoyed chatting with you.
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- Conquering the North Face: An Adventure in Leadership
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