How To Walk Your Way To Success with Steve Sashen of Xero Shoes

Russell Miller: Okay. Hey everybody. Welcome, welcome to Heroes of Ecommerce. I'm your host, Russell Miller. And I am just super, super excited with our guest today. Steve Sashen, did I pronounce it right?

Steven Sashen: Yeah, that'll work for me. And, you know, it's, if you're super excited now that, that's a lot of pressure. I don't,

Russell Miller: That's a lot of pressure. I'm I'm slightly interested.

Steven Sashen: Oh, I can clear that bar. That's easy.

Russell Miller: You know, I had a choice today between interviewing Steve and going to the dentist and I was, well, Steve won out.

Steven Sashen: Well, you know, my dad was a dentist, so you can kinda get too basic, kinda get over there.
Depends on what kinda dentist too.

Russell Miller: Depends on what kinda dentist. So for our our listeners, I think it's better if I kinda give the razzle dazzle. Steve is like an internet entrepreneur from way, way back with major props, and I want to dig into that. And his latest venture is Xero Shoes and he's grown this from, you know, zero to millions of dollars.

Steven Sashen: Oh, let's not be coy. Last year we did 33.6 million.

Russell Miller: 33.6 million. Also well known for knowing its numbers inside and out. And so our listeners are, you know, also e-commerce entrepreneurs. And so this is like, I'm, you know, this is, this to me is like a get because I, I think it's really, they want to talk to people who have, you know, walked the walk. So to speak. And to me it's really interesting because I just read Shoe Dog,

Steven Sashen: oh, my, oh my,

Russell Miller: and I'm assuming you did too. So that'll be an interesting, I don't know, compare and contrast. Yeah.

Steven Sashen: No, actually I didn't read it. My wife did, but I haven't yet. Okay. In part because I just know a lot of people who are involved in that story, and for people who don't know, it's the Nike story effectively.
But what I can tell you, fyi, if you like that book, there's another one called Swoosh. Okay. And the reason to we, the reason to read swoosh, and that is not easy to say, is it's a little more behind the scenes and a little less curated. And what I mean by that is the footwear industry in the seventies and eighties it was a little collegial esque.
And they don't talk about that in Shoe Dog. And there's a lot of, you know, sort of things are a little dirtier in Swoosh and in every possible connotation of that word. The footwear industry is a fascinating industry, and that's about as euphemistic as I can be.

Russell Miller: Okay. Excellent. All right, well, noted. Okay. So, you know, the way I like, like to start off all of cause it's called Heroes of Ecommerce and no hero is complete without an origin story. So I wanted to dig into your origin story, and I heard it was something like, you've been doing internet entrepreneurship forever, so, you know, take us back.

Steven Sashen: Yeah. I'm one of the OGs. So let's see origin story. Okay. When a mommy loves his daddy very much sometimes that's a long story. I, boy, oh boy, the first thing I started doing in terms of the internet marketing world was in 1992. I think I'm one of the first guys to figure out seo, but back then it was pretty simple keyword stuff. A bunch of white text on a white background, submit an article to the three article directories, and away you go.
Right? But there, there wasn't anyone doing that. I mean, there was a time in, there was a time in 92, 93 where I outranked anybody who had an infomercial. Tony Robbins. Yeah. What's his name? What's the first name? Leprie. I blanked his first name. Anyway, these guys were selling all this stuff online, right?
Via infomercials. I outranked them for their own names, just because, I mean, there was no way to make money on that. At the time. There was no such thing as e-commerce, right? You couldn't actually take a credit card. You could have someone submit a form where they submitted a credit card, but there was no way to actually take, do real time processing.
So I and I was just goofing around really. And then I started a software company way back when in 1992, late 92 I invented the industry standard word processing software for film television writers. It was called Scriptware. And as part of just making that work, I figured out how to do internet marketing, but my favorite kind of OG story.
Yeah. One of the other guys from way back when is a guy named Jonathan Mizel. And I was living in Boulder, Colorado. And unbeknownst to me Mizel was right up the street. He put together the first internet marketing course and he noticed one day that he, when his assistant had to mail the package to me, she had to walk by my office to then take the package to FedEx.
And I noticed the same thing that the return address was five blocks away. And so I called him, he called me, I don't know, someone calls someone. And we got together and there was just a small group of people doing internet marketing back then. There was actually, I gotta give you a funny story. Mizel and two other guys, Declan Dunn and Marlon Sanders were part of a a little group that was going around selling geo cities to people.
And the whole idea, this is pre aol, this is like in a, I mean Comper Prodigy days, but geo cities, their whole pitch was, you know, basically getting a piece of internet landscape or internet real estate. And my favorite thing, I went to one of the pitches. Yeah. And they were saying, you know, look, there's so many ways you can make money online.
There's a woman in New York named Stacy Horn. Stacy runs a computer bulletin board system. She has a computer in her living room, and people log in and they do all these things on there and they chat with each other. And she's making $25,000 a year with this computer in her bedroom. Who wouldn't want that?
And I, or actually I think they said who would want that? And everyone raised their hand, but me, because I knew Stacy Horn, that bulletin board system was, I think called Echo. If you were on the West coast. There was something similar called the Well. And I knew that it was cost. Oh, she ran Echo. Oh wow. Ran Echo.
nd I knew it was costing her like 50 grand to run, to make that 20 .

Russell Miller: Oh my God. We're. Wow, this is like somewhere,

Steven Sashen: Were you an echo guy way back when?

Russell Miller: No, I was yeah, so for our listeners, you can just pause because nothing relevant for another 10, 15 minutes . But I was, I think I came in like right after Compuserve, I started on Prodigy and dial up bulletin boards. Oh yeah. And so, which were interesting because it was a, you know, a self-hosted unregulated internet. Yeah. But things like echo were the closest thing we got to like a. Like an AOL before, you know, before

Steven Sashen: It was pre aol. The thing that was interesting about Echo was that we had these face to face meetings every, I don't remember how often, and it was just, these were people who were building the internet before there was even an internet.
And it was a lot of really smart people doing a lot of very clever and very funny things. I mean, for a while Stacy told me one of the things that she used as an example for what you could do on this bulletin board system was a thread that I started, people who met my cat wanted her to have kittens.
So I posted a what's the word? A personal ad from my cat. So as sgf, single gray feline looking for. And I did this whole thing, you know, someone else on echo, they had two male cats and so we, you know, they had a little bit got together and that was the thing. So, but the whole thread of everyone posting as their cats and vying for the attention of my cat was just utterly hysterical.
And it's one of those things that's just lost to the ether unfortunately, cuz it was a brilliant little thread that said a lot about what it was like way back when.

Russell Miller: And for our younger audiences, these were the first NFTs.

Steven Sashen: Yeah, absolutely. .

Russell Miller: So you had, you know, by the, you, what were some of your sort of early eCommerce ventures or early kind of internet ventures?

Steven Sashen: You know, it's a long time ago that 1992, so it's hard for me to remember much. I'll tell you one, well, here, I'll do this. So what got me into developing software, I ended up with a master's degree in film from Columbia University, and the software for writing screenplays was really awkward and silly and stupid.
Didn't work the way it made sense in my brain. I have a, my background was cognitive, well, was cognitive psychology from at Duke University and I was basically one of the first ui ux guys before there was a thing.

Russell Miller: Sorry another sidebar. Did you work with JB Ryan?

Steven Sashen: I did. Not with him directly. I worked with his kids. So, so the Ryan Institute.

Russell Miller: Tell the listeners.. Sorry. This is also irrelevant but funny. Who is Dr. Ryan?

Steven Sashen: So, JB Ryan was one of the first guys who decided that researching psychic phenomenon was a valid course of study. Most people disagreed with him. And when I got to Duke, they were right off campus.
They weren't literally part of the, of Duke University, but they were right off the east campus of Duke. And when I got there as a freshman I went over there and I don't know, I volunteered or I did something, or I demonstrated something. They wanted to test me. So I was involved in just a whole bunch of research.
And at one point I sat down with them and I said, you know, the problem that you have is that you are treating this like it's science science instead of social science. This is a, if anything, this is a social science phenomenon, not a hard science phenomenon. And the way you're constructing studies is not really good for that.
That did not go over very well, obviously, but I was really in, I've always been intrigued simply by finding what's actually true underneath the mythology of something. So I had a lot of fun hanging out with them, but I just didn't feel like they were conducting their research in a way that was gonna reveal anything pro or con in a really meaningful way. Now since then,

Russell Miller: So this is bad science. Yeah.

Steven Sashen: It was, let's call it not good science to be kind right? Which is, it's very easy to do not good science. It's very hard to do good science. And the line between the two is is a little tricky. So I did some stuff with them for my, during my freshman year, and then I went, eh, this is not my thing.
If for no other reason, then I didn't seem like they were ever gonna be able to prove anything, and at some point sooner thereafter, I realized most likely, because there is no thing there to prove.

Russell Miller: That was gonna be my second question. Thank you,

Steven Sashen: Anyway so, but so I literally can barely remember what I was doing or how I was trying to figure out how to sell things.
I can tell you back in 92, my best friend at the time who a year or two later start, or maybe 91, somewhere right in there, he started co-founded a company called agency.com, the first internet marketing and web development agency that he, when they went public, he was a billionaire for a day. And I said to him, we're still best friends.
And I said to him a while ago, you know, being your best friend cost me hundreds of millions of dollars. And he said, why's that? I said, I didn't have the short, the didn't have the short, didn't have the heart to short your stock. So, you know, that was a thing. He called me before they started agency.com.
This is back like nine, maybe 1990. He was working at a, at an ad agency that had gotten the first copy of Photoshop and a like washer, dryer size, photo realistic printer and some, you know, giant scanner as well. And he said, take a look at this. And he scanned some image in, put it into this beta version of Photoshop.
Did a step and repeat on some, like a, I don't know, some item in that image, like a rubber duck or something. And then printed it out and it looked photorealistic. And my first response was, oh, we are all screwed. No one's gonna know the difference between reality and fiction within a very short time. And it of course has only gotten worse since then.
So, so oh, the other thing I did when I was trying to, when I was getting my degree in screenwriting, there was one piece of software that existed that was a post-processing text formatter. You wrote in whatever word processor you had ran the script through this other post-processing thing, and then it did all the pagination and some of the formatting that's required for television to film screenplays, which is this really archaic set of rules that make no sense whatsoever.
But had been around for over a hundred years. And I couldn't afford the $300 for the software. So I found five guys to split it with and I cracked their copy protection knowing nothing about code, but I'm good about pattern recognition. So I looked at the hex code and I figured out that all looks random way.
That looks like a pattern. What happens if I change that little piece of hex code to something else? And I realized that's where they were storing my name and address and all these other things. So, my first little foray into internet marketing was hacking a piece of code and then splitting it with some friends who were professional writers on sitcoms and soap operas and things.
And then I ended up figuring out a better way to do that thing. What I, what script wear was just for the fun of it, and this is not worth diving into too far. It's a rules based, object oriented, context sensitive database that acts like a word processor, so it does all the super complicated formatting and pagination in real time. WYSIWYG with no macros, no keystrokes, no nothing. All you know, totally ready to print the moment you're done typing. And to this day, no one's been able to replicate what I've done. There's been dozens and dozens of screenwriting software programs that have come out all trying to copy what I came up with in 92 and was unable to patent because there was no such thing as there was no precedent for the kind of thing that I had done.
And in fact, just the simple dialogue boxes for opening a file and saving a file, I did these things in DOS with high ASCII characters to make things look like graphics. But the functionality that of that dial, those dialogue boxes you would recognize cuz they look pretty modern. But when I came up with it in 92, no one did anything even close to it till maybe 97, 98.
And I had a number of IP judges say to me, yeah, you basically invented a user experience that everyone else copied or figured out years later on their own. But there was no way to protect it. If there were, you would be the richest man in the world because every piece of software would've been using your IP and would've had to pay you a penny a pop.
And that would've been a whole thing. So, and this is gonna be a bit of a theme if we find themes, but and I say this, not patting myself on the back, but literally, this is a problem. I have been a little ahead of my time a couple times, and being the first one to do something is usually not the way to make the most money.
Being the guy who rips off the first one usually is.

Russell Miller: That's the, yeah. The and I'm gonna skip around too because I tend to have as I'm realizing as I've been talking, that I would I would gladly go off into some really fun tangents, but I wanna make sure that the, so our target is like, You know, a guy, a gal or a husband and wife team that has a small e-commerce business and they're trying to get it from like a lifestyle business into a, you know what you've done business into a real business.
Yeah. And so what was the first one where you thought maybe one of the smaller ones where it actually, you know, I wanna kind of take them through this journey, kind of the hero's journey of eCommerce.

Steven Sashen: It the journey. There's literally too many. So, so I got good at SEO, I was doing SEO consulting, I did some copywriting.
One, one of the things that I did boy, maybe 94 ish, I can't remember, don't hold me to dates cuz I don't do time very well. But it was after I moved to Colorado, which was in 93 and I purchased some products, some health and nutritional supplements from some network marketing sales person and loved the products and noticed they didn't have a website.
So I built my own website for those products and did really well. Then I ended up consulting for the, I just realized, this is funny. I ended up consulting for that company. I'm now in the building they were in. Totally coincidentally. But I did. So I, and then I ended up writing a bit of a syop, not a synopsis treatment or a first draft of a book about internet marketing from all the things that I did and all the things that I learned that I hadn't done.
And in that process, the potential publisher asked me if I had done everything in the book, and I said no. And they introduced me to someone who had done some of the things I hadn't done. And that led to, you know, meeting a handful of other people. And we reinvented how to do lead generation for network marketing on the internet.
We were really the first company to do that. And. In the process sold a lot of product, did something very interesting in that I didn't pitch any, I didn't pitch the business opportunity. I only was selling the products. That's what I was doing. And I was only selling the products if I believed in them and I could tell the truth about them, right?
So there was no hyperbole. Like I did an ad for one of the first SIE products and I basically said, if anyone tells you this is gonna change your life, run the other way cuz they're lying to you. This is basically an antioxidant. If you believe in antioxidants and here's the reason why you might, then you might wanna try this one cuz that's what it is and it tastes great and it's got a money back guarantee.
But everything was just like telling the truth, which was just so much simpler than doing anything else, frankly. And we also, because we had gotten really good at doing lead gen, suddenly there was this international market that didn't exist before. And so we needed to find a company that we could work with that was international. So the first thing we did is we moved to Herbalife and I'm really good at figuring out systems and loopholes. Yeah. And so I got everyone in our organization to immediately jump to the highest compensation level possible, on the first day they were part of the company. And it took Herbalife six months to figure out what we did cuz no one had ever figured it out before.
And then it turned out that they couldn't handle what we were doing cuz we were so more, so much more sophisticated about lead gen and the internet and taking advantage of their compensation plan that we, that what happened is one of our partners started his own network marketing company. Part of that.
So, and it was all based on, did predominantly digital, well, digital products and some physical products to take advantage of the internet. So anyway, there was all that going on simultaneous with my running script wear, my screenwriting software company. Yeah. You know, I had an extra, I was a single guy.
I had an extra hour in the evening to do all those things. I got really good at buying and selling leads of auditing people who I was buying leads from who said that these were all American visitors who were coming to the website, finding out they were all from Bangladesh and just, you know, diving in.
But to your point, backing up to your comment about people who are currently running lifestyle businesses who want it to be more, yeah. Let me just address that. Yeah. So with Xero Shoes, we never intended it to be a real business. Oh, interesting. Okay. What happened, and I'll do the shortest version of this.
When I was 45, I got back into sprinting after a 30 year break. I was getting injured pretty much constantly for the next two years. And a world champion runner that I know suggested that I try running barefoot to see what I learned. Really quick, I'm not gonna suggest people run barefoot, even though it changed my life, and there's lots of reason to do it, but that's not important.
It changed my life because I realized, I discovered that my injuries were coming from a form problem that I had, that I couldn't feel in regular shoes because of the thickness of the soul and other aspects of running shoes that get in the way of actually running properly. Running barefoot, basically doing it wrong hurts, doing it right, feels good, and doing it right and feeling good got rid of my injuries, I became faster. I'm a master's All American Sprinter, so that time for men over 45. And then for men over 50, 55 now 60. I'm one of the fastest guys in the country at the hundred meters outdoors, 60 meters indoors. And that barefoot experience was so profound. I wanted to have it as much as I could have it, but I was sick of getting arguing with people about getting into restaurants, about whether it was legal to be barefoot in a restaurant.
By the way, it almost always is. My wife was getting tired of me walking in on our white carpet with my dirty feet. So I made a pair of sandals based on a 10,000 year old design. And people kept asking me to make some for them, and they told two friends and they told two friends. And finally a guy says that he had a contractor write a book about barefoot running.
And if I treated this little sand making hobby like a business, he'd put me in the book. Well, by that point, I'd built Jesus, probably 500, 600 websites. Some for some clever SEO things that maybe we can talk about. And I rushed home, pitched this incredible opportunity to my wife who told me I was a complete idiot and it won't make any money. It was a waste of time. And don't do this. And I said, all right. Yeah.

Russell Miller: Now sidebar to wives. Usually that's the right advice. Like 95, 96.

Steven Sashen: Absolutely. Yeah. And yeah, definitely the right advice. And so I said I wouldn't do it. And then she went to bed and I built a website. Yeah. And cause that's what we do.
And she kinda growled at me and I said, look, the keywords that I care about, I'll probably be able to own them all within about three months. It'll be a good case study for search engine marketing business we're starting. And I was completely wrong. It only took me six weeks. And for the first maybe year, every keyword that I cared about, I had between 30 and 40 of the top 50 search results.

Russell Miller: Wow. What year was this? Just to level?

Steven Sashen: So this was 2009 end of 2009.

Russell Miller: Okay. So no longer white text and white background. What did you have to do?

Steven Sashen: A lot of video and a lot of syndication and just a, as much content as you could possibly create in as many different platforms as possible.

Russell Miller: And were you creating the content or did you kind of like systemize it?

Steven Sashen: Basically what I did is I gave away the entire business. So this, what we were selling was a do it yourself sandal making kit. And so I made three videos cuz you had a limit of 10 minutes per video on YouTube. Yeah. I made three videos of how to make sandals and then I made a few others and I basically just gave away the farm.

Russell Miller: Why.

Steven Sashen: There's a whole line, I don't remember who came up with the phrase, moving the free line. Anything that you were gonna normally sell, give it away. It builds trust and awareness and it just has value. You'll always be able to find a way to capitalize on something else that's gonna be more valuable than the thing that you're giving away.
And so...

Russell Miller: This is like the marketing version of open source.

Steven Sashen: Kind of, yeah, I mean, I met people. My favorite thing is I've met people who started companies that were completely ripping me off, and their origin story was, well, we were looking for something and couldn't find it, so we started our own thing. It's like, dude, that's my product. You've practically used my.

Russell Miller: Oh geez. Yeah, but you still won, I mean, interesting.

Steven Sashen: Yeah, no, it's fine with me. It's totally cool. And look, I wasn't even the first one doing this. There was a guy selling similar materials to what we started selling and he was admitting almost proudly that if you ordered from him, it might take him three or four weeks to get something to you cuz he wasn't really running this like a business. And so I emailed him on day one after I, when I built the website and I said, I just want you to know what we're doing. And he said, I don't know if I should be happy or cry. I said, oh, you should be ecstatic cause I'm such a better marketer than you. It's gonna rise, raise the tide for both of us. And years later, cutting into the chase, I met him at a trade show and I said was I right? He goes yeah. I mean, I made him more money than he ever thought was possible with his business because I helped bring awareness to the whole thing. And then he got a little more serious as well.
So the. But in those early year and a half we were running this thing out of our house. It started out on the floor of a corner of a spare bedroom, then expanded into a, an extra bedroom that was my wife's office. And the basement became my office, and the living room became shipment and fulfillment.
And the dining room was our customer service. We hired a guy to come in and help do customer service and all the all the inventory was in our garage and every square inch that we had. And at one point I turned to my wife and I said wouldn't it be nice to have a little internet based business? Make a couple hundred grand a year, took a couple hours a day to run. She goes, that's what we have. I said, yeah, but it can't stay that way. We're too vulnerable. And I didn't really have much more beyond that. But at the two year mark, we, people kept telling us that we should be on Shark Tank, and we didn't know what they were talking about.
And so we looked up the show, watched every previous episode, watched all the previous episodes from the Canadian Dragons den, from the year, from the British Dragons den. And again, to shorten the story tremendously, we applied to be on the show and they said they were interested. And in the time that it took, from the time they said, you know, we want you on the show to the time we got on the show, it just forced us to get really clear about what we wanted personally.
And it also made us realize that what we had done by accident is something that I highly recommend and that, well, I'll say it this way. My wife has a line. She goes, there's enough shoe companies in the world. You don't need another shoe company unless your shoes change people's lives. And from the day we started the business, that's what we are hearing from people. That getting out of big, thick, padded, motion control arch supporting stiff shoes. And letting your feet do what's natural was literally changing people's lives. Whether it was just finding something comfortable or aligning their posture better, or helping them walk in a way that's more natural and uses their feet and ankles and hips and knees better and their muscles, ligaments, and tendons better.
So we realized this was gonna be an opportunity where A, we're on the entrepreneurial retirement program. I was how old? I'm 50 now. I'm 60 now. So, you know, this was whatever 10, 10, 11 years ago. And we're doing this thing that's already helping people change their lives. Let's go all in.
And by that time, back to you mentioning Shoe Dog, I had also discovered that the footwear industry is a bunch of and pardon me, I'm gonna get technical when I say this. Mostly lying sacks of shit. And what I mean by that because I've, and I say that because I've decided that I'm not interested in making friends anymore. Yeah. Because it's important to do the right thing. And I can tell you that in the years that we've been doing this, the number of people who are at the highest levels of multi-billion dollar footwear brands who have said directly to us, or directly to one person that we know, that they know that what we're doing about natural movement is legitimate, but that they can't do it cuz they otherwise would be admitting that they've been lying to people for 50 years.

Russell Miller: Well, you know, I understand where they're coming from because it's very hard to change course. Yeah. When you have, when you're, and actually this is interesting because I was reading the Innovators Dilemma which has a very really, you know, basically the same lesson from like, IBM who had gone all in on mainframes, right?
And then when mini computers come out, like their own engineers were like, yeah, no, this is the way to go.

Steven Sashen: But there's a difference. Here's the difference. The difference is prior to 1972, all footwear looked more like ours. If you look at the original Nike Waffle trainer, it was basically flat with just a tiny bit of cushioning.
It wasn't. Decent, minimal issue. If you look, the other part is during the intervening, you know, years since I've been doing this, the amount of research that's come out to back up everything that we've been saying about natural movement, which is kind of stupid. I call it the dumbest science ever, cuz we're basically proving use it or lose it.
You know, using your feet is better than not using your feet. Moving something that's supposed to move is better than immoblizing it. But Dr. Irene Davis, when she was at Harvard, used to say, if you looked in the history of the literature about running injuries and their cause and prevention and cure, you won't find any of that literature prior to about 1972, 74.
Because it just wasn't happening cuz people weren't wearing shoes that engendered movement patterns that are causative for injuries. The reason that the modern running shoe looks the way it does is because some orthopedic podiatrists told Bill Bowerman that he needed to put a wedge of foam in the shoes so that people's Achilles that had been shortened from wearing higher heel dress shoes could accommodate running.
30 years later, one of those doctors was at a track meet with a friend of mine, a guy that I've done some footwear development with, who worked directly with Bowerman. And my friend said to one of these doctors, you know, your idea has become ubiquitous. Every modern athletic shoe has this wedge of foam in it. What do you think?
And the guy said, biggest mistake we ever made. Wow. We had no reason to suggest that we were just seeing everything with a prosthetic view. And so we came up with a prosthetic solution to Bowerman's problem about people having Achilles problems, but we had no evidence for it. And it's caused nothing but problems.
So we are not the intervention. We're not getting, you know, the intervention is the modern athletic shoe that in the last 50 years. I had an argument, I have arguments with people about this all the time, where they go, well, these shoe companies, you know, must know what they're doing. They have, you know, millions of dollars they're spending on R&D.
I go, yeah. Then how come in the last 50 years, the injury rate for runners have not changed despite all their quote R&D and advances.

Russell Miller: Okay, so let me breaking cause I don't wanna get too far down that line. Yeah. But let me summarize it by saying is like, you had a strong conviction about why your product was better, you know, than

Steven Sashen: I wanna clarify.
It wasn't a conviction. It's not an opinion. Yeah. The research is unequivocal. The research is undeniable. The experience of human beings, I mean, anecdotes does not equal data, but a preponderance of anecdotal information is a data point, right? And over the years, we keep getting more and more and more people saying, you know, I'm, I mean, I'm not allowed to make medical claims, but saying that they've been helped in myriad ways.
This is not the same as opining. And when there's the amount of research, when we started in 2009, was somewhat small, but there was still a bunch there suggesting very clearly that again, using your feet, naturally letting them bend and flex and move and feel the ground, you have a more nerve endings in the souls of your feet than anywhere in your fingertips in your lips.
That's not an accident. That's to tell your brain what you're stepping on or in, so it knows how to move your body well. You know, you're not supposed to squeeze your toes together, which all modern athletic shoes, pretty much, they squeeze your toes together. In fact, almost all shoes, they squeeze your toes.
You don't do pushups with your finger squeeze together, cuz that's banned for balance of strength.

Russell Miller: Yeah. Well, so you, you had a, you had a fact based

Steven Sashen: Yes, I was lucky enough. I was lucky enough that we stumbled into a business where we knew what the truth was. Right. And knowing the truth makes you imperturbable and unstoppable and it's hard.

Russell Miller: Well, let's put that into practice. So, If we look at like before Shark Tank, it looks like your growth was from seo....

Steven Sashen: Yeah. Well no, it was two things.. It was SEO and word of mouth. Word of mouth has continued to be a huge thing. So, but I want to I want to kind of finish this one thought really quickly. We started a few times and I keep getting diverted cause I do. Preparing to be on Shark Tank is what gave us everything that you can think of to say, all right, we're going all in. I mean, in fact Lena literally walked in at like the, you know, year mark and did the appropriate poker hand gesture and said, okay, I'm all in. In fact,

Russell Miller: what does that mean?

Steven Sashen: Well for one, she very early on realized if this is gonna be serious, I was gonna be the marketing product person and she was gonna be the operations and finance person cuz she's a brilliant operations finance person and I'm a marketing guy.
A product guy. It just so happens I have a, I had a natural tendency or natural something predilection to understand footwear and feet and biomechanics. And so that was my world. That was her world. And we were gonna commit to everything that we had to making this work. This was gonna be our, a) way of trying to change the world and b), turning into something where we can retire from this at some point, assuming we ever wanna retire.
Right, right. And it was just it was just a statement that this is not something we're gonna, you know, do casually, we're serious about this. And everything that entails. So to take a business from lifestyle to serious business, part of it is just, you know, do you really want to do this personally?
Cause I got, here's the other part about being all in. We took our first kind of vacation in 13 years, last month. And I still checked email, you know, and did things online for two hours a day. Cuz I still had to get stuff done. We haven't had a real vacation in 13 years. I haven't worked less than 60 hours a week in 10 years, maybe 11 years.
And we, in part because when we're grow, when you grow as quickly as we are even if you bring in people to take on things you do, then you have to manage them and get them up to speed. And in our situation, what we're doing is so different than what anyone else has done. And I'll say more about that specifically when it comes to advertising, in fact.
Yeah. We can, and let them just do what they've done in the past. They have to learn a whole new way of being and thinking to work with us on our company. And so. So it's not just a personal thing of do I want to commit my, a good chunk of my life to this? Yeah. But it's also, do I wanna be committed and connected to that product and how do I wanna do it?
When I started this, I didn't wanna be the face of the company. I wanted it to be sort of anonymous. So if we ever sold it, you know, I wasn't attached to it. Right. Humans relate to other humans, right. And suddenly, I mean like those first videos I made, you see my face for five seconds saying, Hey, I'm Steven Sashen and now I'm gonna show you how to make a sandal.
And then it's 10 minutes of looking at my feet, which led to a whole other set of emails and comments that I would get that involved, hey, can we get more video on your feet? There was a lot of that. So, and I said, no. But you know, there's lots of kinds of commitment, your personal commitment to the product and to the business.
And frankly, we also thought that we'd be in and out faster than we have been. We thought maybe after a few years we could sell this thing for like 5 million and we never have to work again. But no one wanted us when we could have been sold for 5 million. No one wanted us when we could have been sold for 10 or 15.

Russell Miller: Really? Nope. They, well, interesting.

Steven Sashen: In some comp, some businesses, some industries you can do that. But in ours, basically in the footwear world, they don't think you're for real until you're over 30, 40 million. And we kept tell, I talked to one company who could have bought us, and I said, now would be a great time.
They said, we only look at companies over 40 million in revenue. And I said, why? They said, well, they're safer. There's just less risk. And it takes the same amount of time to deal with the $2 million or $40 million company. But Harvard Business Review has looked at that. That's not true. There's no difference in the risk profile.
You can buy a company for that's doing a hundred million and still could go under and you could buy a company for $10 and it could, you know, go through the roof. Well, you know, even still, and I said, look, if you wait till we're 40 million, it's gonna cost you 20 times as much to buy us. Right? And they looked at me like I was a little crazy and I went, oh, right, you're a $4 billion brand.
If you bought us for 20 times what we're asking for now, it's still a rounding error. It's still your catering bill.

Russell Miller: So, yeah, that's the thing. Boy, that, that gets into a farce. Nevermind, I'm not gonna, I'm gonna not make a comment.

Steven Sashen: So anyway the end of the whole thing about, you know, going from lifestyle to serious business.
And you know what's really funny? I just remembered this. There was a lot of this going on after Tim Ferris's book, Four Hour Work Week came out. Yeah, I was gonna mention that. Yeah. There's all these people who thought, you know, hey, just to try to lather, rinse, and repeat what he did. Ignoring the fact that, by the way, I, I reviewed that book for the Dutch publisher before it got published.
And she said, what'd you think? I said, well, you're gonna sell a million copies off the title alone. And she goes, yeah, that's why we bought it. I said, but, it's predominantly irreproducible what he said. Chapter two of that book is, you know, if I could do it, you can too. But if you read it carefully, it's very clear that Tim Ferris is and was a freak and was in this, you know, rather unusual and I mean that in a kind way, but he's a rare bird in a rare situation with a rare product and a rare set of skills that was not reproducible.
I said, the moment this book comes out, he'll never have a four hour work week in his life.

Russell Miller: Yeah. He's a compulsively working autodidact. Right. With a genius level intellect. Yeah. So yeah, if you can do that, sure. But even he was working like 80 hours a week, so.

Steven Sashen: But there was all these people who then created these little things where they found some product or maybe they were outsourcing it or you know, and they had these little lifestyle businesses making 30 to 50 grand a year.
And I said to all of them back then, if you're gonna try and make this real and maybe something you could sell and retire on, you're gonna have to get serious. And I watched maybe 8 outta 10 of those guys bail. Or stick to something that wasn't a good idea and only, you know, literally two outta 10.
And I'm thinking literally only two people did whatever it took to then turn what they were doing into a real business. And so, you know, that's part number one is like, just take a serious look at what you're selling, what you're doing, the lifestyle that it's gonna require, the commitment it's gonna require, and cross your fingers because it's possible.
You could whatever you think is gonna happen isn't in both good and bad ways. It may be that you sell it after a year, it may, that it takes you 20 years and you gotta, and don't be, we're all entrepreneurs, we're optimistic, but don't get hyper optimistic and go yeah, I hear what he's saying, but my idea is so good.
I know someone's definitely gonna buy it. And there's gonna be someone who proves me quote wrong, even though I'm not making a specific statement, but demonstrates that they, you know, started something and sold it two days later for $10 billion. But there's gonna be more people where you're gonna be really working harder than you ever imagined.

Russell Miller: Yeah. Let's deflate our listeners' expectations a little bit. How long was it from Shark Tank to, like, how many years from Shark Tank to where you are today?

Steven Sashen: We taped the show in July of 2012. It aired originally the end of January, 2013, and then again the beginning of June of 2013. So here we are nine years later.

Russell Miller: Yeah. So an overnight success and only 9 years.

Steven Sashen: Well, you know, yes. And, but here's what's even crazier. Yeah. So when we were on Shark Tank, and by the way, CNBC just republished our episode under a new thing they're calling Shark Tank misses. So at the they cut. Yeah, it was great. Well, they cut out the beginning where it's the home package where they're showing us around the house, et cetera.
Right, right. And they just show the pitch and at the end it says, you know, Xero Shoes turned down a $400,000 offer from Kevin for 50% of the company. Last year they did 33.6 million. And, but when we were on the show, we were selling a do it yourself sandal making kit. And that's all we had for our first three and a half years of business.
We didn't have a closed toe shoe until the end of 2016, and then another one in 17, and then another one by the end of 17. And now there's 30 different styles of casual and performance boot shoes and sandals. So it's a whole different world.

Russell Miller: Let's talk. So I read all of the articles beforehand as my prep and that you had written on or done on starter story. And I found those super like valuable to learn. There were a number of kind of inflection points, like things you sort of did differently. Did it get to the next stage? Yeah. Can you tell our listeners about a couple of the key ones? Like you're like, it was going okay and then we had to change something to get to the next level.

Steven Sashen: Well, let me say this. Yeah. These things only make sense in retrospect. Sure. In real time. You're just doing whatever you need to do. Now, we never had to pivot. We never realized that. I mean, actually I take it back. This was not a pivot, but our original business model, in fact, the first original business model was that we were going to make these foot scanning kiosks.
So you could walk into a store, scan your feet, we would get that scan. We would make a custom made version of one of these sandals based on this 10,000 year old design idea and overnight it to you. And we were gonna give away the kiosks and make everyone who had a kiosk an affiliate. So it was like, here's a free thing.
Put it in your shoe store, put it in your wherever store, it'll generate money. It was a great idea, except that we couldn't find the what's the word I'm looking for? The machinery to actually do the cutting part properly on with rubber. Cause rubber's a very tricky material to work with, but more importantly, the kiosks were gonna cost about 10 grand a piece and there was just no way that was gonna work.
Got it. So that was part one. But then what happened was people would be wearing our sandals and they'd say, you know, I love these sandals, but what do I do when it's cold out? Or what do I do if I have to go to work? Right. I can't wear my normal shoes anymore. So that's when we were got inspired to make shoes, but but we didn't have the ability to do this.
I like to say that 90% of what got us from the beginning to where we are today is luck. And the other 10% is it's also luck , and then there's a separate hundred percent that 90% is working your butt off. And the other 10% is hopefully being smart enough to figure out how to put out the fires that started overnight despite the fact that nothing changed since yesterday.
So one of the big lucky things was that. We, a friend of ours while walking his dog, which he normally didn't do, his wife did, met a guy who was walking his dog, which he normally didn't do, his wife did. The two guys started talking and our friend says, what do you do? And this guy, Dennis Driscoll says, I'm the Chief Product Officer at Crocs.
Our friend said, Hey, my friend Steve and Lena have a shoe company, which we didn't. We had a company selling sheets of rubber string and instructions for making a 10,000 year old sandal. And so Dennis gave the guy his phone number, passed it on to me. I sat on it for months thinking, why would this guy want to talk to me?
And then we got together for lunch. I called him up. And at the end of what was supposed to be a half an hour lunch, turned into a four hour meeting. And I said, I would love to work with someone like you someday, but I mean, my God, you know, you've been making hundreds of thousands of dollars for the last 40 years.
He said, yeah, but I tried your sandals and they changed my life, and I'm retired now, so how can I help. You know, if that hadn't happened, we definitely wouldn't be here. If my wife hadn't gone from avoiding me like the plague to becoming my friend, to becoming my girlfriend, to becoming my fiance, to becoming my wife, we wouldn't be here.
And that's a whole story. So, so the first inflection point was, I mean the littlest one ones, again, just the SEO stuff we did at the beginning, which got us to having a decent little business that we could have lived on if we wanted to keep it small. To then Shark Tank. Dennis came, Dennis joined us just a couple weeks after we taped Shark Tank.
So he's been here now 10 years. And then just we started listening to our customers. Again, what do I do when it's cold? What do I do if I need something else? We started making those products. We listened to them and did what they basically told us to do. And one, one of, here's another inflection point.
We, we originally met, at the seven month mark, we were introduced to some people who had been in the footwear business for 35 years, who said This natural movement idea that you're capitalizing on is the most important thing in footwear and no one's doing it anymore. So how can we help? And they gave us a ton of help, including introducing us to manufacturing in Korea.
And we, we got kicked outta Korea because we were asking people to demand, we were demanding a level of quality that they had no interest in producing because we were a tiny little company and it was changing their whole production methodology, which was not gonna happen. Right. So we got kicked outta Korea.
When we were doing our do it yourself sandals, what normally is an outsole for a shoe, the bottom part that touches the ground, that's our whole product.
So the upper, the quality of the upper was important because that's the part that was on people's feet. That's the part they were seeing. Right. And but when you're making an outsole for a shoe, you don't care about the upper or the top of it because that's just get glued onto another layer. Right. And you don't care if the weight is a little bit off because no one's gonna ever notice.
Cuz the shoe is so much heavier than just that product, just the outsole part. But that was our whole product.

Russell Miller: I'm sorry let's pause for a minute. Okay. So you realized that the upper was super important cuz that's what people saw, the upper soul.

Steven Sashen: Yeah. I mean, you know what normally was a piece that got glued onto a bunch of other things was our whole product.
Yeah. So the whole thing needed to paid attention to. Like the left, the left one had to weigh the same as the right one. The bigger one should weigh more than the smaller ones. Stuff that seems really obvious, right? And we complained about this. They said, well, how much did it cost you to deal with this?
And I said, very righteously, indignant. Like five or $6,000. And they said, well, to fix it would cost you $50,000. Oh wow. Oh. So when we asked them to make changes, because we are, I mean, we are a tiny little company, we didn't realize how this worked. They fired us, that factory, and then when we tried to find other factories in and around Korea they all heard about us already and heard that we were stupid and demanding.
So we lost all that. Coincidentally, at that time, there was a footwear industry magazine that on the cover, featured a guy who had been based in New York manufacturing in Asia since the early seventies. And I, we called him to see if he'd be willing to help. He, I flew to New York. We met with their team.
He, I found out years later, he did a bunch of due diligence and called a bunch of people in the industry who, for reasons that to this day, I can't understand why, they said all these wonderful things about Lena and my wife and I, and so these guys decided to help us with manufacturing. And so that was a huge and important deal.
Now I, anyway, I could say something silly about them, but making stuff is hard, making shoes is super hard, is the simplest thing I can say. But, so that, so

Russell Miller: Why do you think they, or why did they say they wanted to work with you?

Steven Sashen: I literally don't know. I think. You know, I've talked to some of the people that they talked to when they were vetting us, who believed in us since day one, and I honestly don't know why. We were doing this weird little thing, making these goofy ass sandals.
And I'd have to ask them. I mean, suffice to say, Lane and I are both smart people. We had a good vision for what we were doing. We had a reason for doing it. We had people saying, this is changing my life, which I keep harping on. So, but honestly, I have no idea. I will find some of them in the next few months and ask them, and maybe we'll have an answer.
But the fact that they did say nice things about us and helped us, I mean, there were people who were running companies that were five, $600 million. Who, when we met them and showed them what we were doing, literally just said, how can we help? Wow. And that happened over and over. And to be totally, sort of strangely candid and something it only occurred to me again, in retrospect how unusual that was.
At the time it seemed like, well, of course they would wanna help look what we're doing. That was just a little naive on my part. And in fact, the guys that we met at that seven month mark who were helping us out, they said to us, we believe in what you're doing and we believe in you. And we would run this business with you.
We would start this with you. We would invest with you except that we've been in footwear so long that we're not stupid enough to try and start a shoe company. And my wife and I both looked at them and said, well, the only way anything ever gets started is by being hyper optimistic and naive. So we're in, and here we are.
And we still feel somewhat that way even though we've learned a lot in the last 13 years. They're still.

Russell Miller: And those guys helped. Those guys came in like around what year and then helped you with Manu, like became your manufacturing partner.

Steven Sashen: They came in at the seven month mark. We met them at the four, four or five month mark.
Then they came and sat down at our dining room table, sorry for IRS tax purposes, our conference room table. And they helped with finding us manufacturing. They helped with some design and logo things. They helped with, they helped us understand some of the financials. I'll never forget when they,

Russell Miller: Fairy godmother. Yeah. That's crazy.

Steven Sashen: Yeah. Yeah. I'll never forget when they said that they were spending $5,000 a month on, on FedEx just to send stuff back and forth. And we thought that was an insane amount of money. And I would love to have a $5,000 monthly FedEx bill these days. That would be awesome. We're way past that.
So. It's sort of like years ago I did a lecture at the small business administration for budding entrepreneurs and I said, how many of you heard when you're coming up with your, you know, first projections about your income and your expenses, that you should double the expenses in half the income? Cuz that's gonna be more realistic.
And everyone raised their hand. I said, yeah, don't even do that. Cause whatever number you write down, you'll make half as much of that. And whatever number you write down for the cost, it'll cost you twice that. Doesn't matter what you're write, it won't be what you think. You will never imagine that you're gonna have a hundred thousand dollars legal bill and if you're in business long enough, that's gonna seem cheap at some point.
So, you know, these things are unfathomable at the beginning of your entrepreneurial venture. So they helped us with just everything you could think of. They introduced us to people. They took us to trade shows that we didn't know existed for footwear materials. They showed us that the footwear industry is just a bunch of copycats and thieves.
Which is very, cuz there's nothing to hide in a shoe. It's all right there. All the IP, right?

Russell Miller: Yeah. It's literally right there. Yeah.

Steven Sashen: So, you know, like, just fascinating stuff. So back to inflection points. So that was one, meeting them, Shark Tank was two. Getting Dennis Driscoll on our team was number three.
Moving, just moving into an office was one. Opening a warehouse was another. I literally can't even think of all of them because there's just so many things that happen on almost weekly basis, if not more quickly that our, there's always a big deal. Getting into REI, which took us a huge, that was a huge, yeah.
Really big one. We've got, and we've got something that we're negotiating literally as we speak. Our VP of sales is talking with a retail account that if they do what they say they wanna do will be the biggest life changing thing that's ever happened for our business. And I can't say more than that unfortunately, but hopefully people will know about that by the spring.
So, I mean,

Russell Miller: So there's a number of inflection points and kind of looking at it.

Steven Sashen: Oh wait, I got one more. Sorry. I've got one more. This is a big one. We'd been, so Lena's job when she was our CFO, was constantly looking for money. So we found a local family office that invested on us.
They gave us some debt that was very expensive. It was like 14%, but we couldn't find money any other way. And they, for some reason believed in us and we were very good clients for them cuz we always paid them their commit, their interest on time. And they're huge fans. We ended up getting an SBA loan, which was, there was literally a two foot high stack of papers that we had to go through.
It was insane in the membrane. And then in 2017 we did a reggae plus equity crowd funding raise and raised about $1.1 million from about 1100 people, but more, there were four states that were holding out and wouldn't let their citizens invest directly in companies. And we had someone on our team who showed them that was violating their own constitution and they changed their laws.
So we basically made it possible for the entire equity crowd funding industry to raise money from all 50 states cuz we cracked the code on that. So that was a big one as well. Again, big, not because of the money we raised, but big because of the 1100 people who said, when we polled them afterwards, the biggest reason they invested with us was to support us and make sure we could thrive.
Not because they were expecting to make millions of dollars off their hundred dollar investment.

Russell Miller: That is very inspiring.

Steven Sashen: It was really, this whole thing is just one humbling moment after another. I mean, one of our one of our employees who works at our warehouse emailed us recently to thank us because we know that everybody and every part of our business is equally important for the success of our business.
If the warehouse isn't working well, that's a problem. If customer service isn't working well, that's a problem. If the product team isn't working well, I mean, everybody's important. So we have a profit sharing inspired quarterly bonus plan. We take any profit we have in a quarter, and we split a chunk of that evenly among everybody.
I try not to take mine, but my wife insists. I don't know where that money goes. And but this woman in our warehouse said I've been working in warehouses all this time. I've never been treated the way you guys treat us, and it allowed me to go buy my first home and, I mean, holy moly. Or the first time one of our employees referred to working here as his career, you know, that was heart wrenchingly wonderful.
And so, you know, we are just constantly so grateful for everyone who's doing this. Like our customers, our employees, our vendors. I mean everybody. It's really. It, sometimes when you, when we take a moment to step back and look at it all, it's just it's hard to breathe.

Russell Miller: You, you do, you are privileged enough every so often that you can kind of see the impact your work has on other people. And maybe you didn't even realize it.

Steven Sashen: There's just nothing better. You know, a friend of mine who's a psychologist who's made a lot of money writing books and various other things said, making millions of dollars is easy. Find a way to improve people's lives a little bit and then ask them for a little money in return.

Russell Miller: That's a, I love that. So, I want to end with some kind of like down in the weeds tactical stuff because I try to give, you know, people some actionable stuff. And I was impressed by two things. I want see if you can comment on 'em. One was that the challenges you guys faced were never the same.
And so, it, it seems like it was less important about a particular challenge and about your kind of framework of like how to be adaptive and how to learn. So how did you and your wife kind of approach that?

Steven Sashen: Well, we had no choice. So it was not, in fact, early on Lena was upset one day. She said, I don't feel like I know what I'm doing.
I said, well, no one knows what we're doing. No one's ever done what we are doing before. And so our job is not to know in advance. Our job is to figure out what we need to learn today and then learn it as quickly as we can, whatever we need to do. And I mean, that's, and she went, oh, I could do that. I went, yeah, I know.
So. You were valedictorian. I just helped our valedictorian cheat on my physics test so he could become valedictorian. And it's I mean, that's it's really, someone asked me a variation on that question. They say, you know, what motivates you? I said, we've got 72 employees and we're responsible for the health and wellness of hundreds of thousands, if not millions of people around the world. What's their, I mean, what motivation do I need? Yeah. So I don't need to do something to get psyched up. I don't need to, it's like I got shit to do. I'm trying to,

Russell Miller: Right. So you just, like, you, there's a clear and obvious need and you just have to go out and fill it. Yeah. And so you just kind of really focused on sort of, learning and being adaptive.
And I wanted to dive into one thing as a case study. How did you think about you know, for user acquisition besides like word of mouth, when you had sort of reached like a decent size, like maybe you're doing like 500, a million, how did you think about, okay, we need to scale up? And I saw you started to get like real in depth in like advertising. You would agree that most people don't really think about. Yeah.

Steven Sashen: So yeah, so there are a couple things. There are a couple things. Because we were at best debt financed and we didn't, we took on private equity money in December of 2020, but that didn't really change anything about what we do. So there are a couple things that I think about.
And we couldn't do any paid advertising for the first few years because when the whole barefoot running natural movement thing took off, the big companies, there's two things happening. The big companies were buying clicks for like three to four bucks a pop. Sure. And we were selling a $20 product.
There was no way 20, you know, three bucks a click. Right. The other thing that happened is, you know you're in a dangerous market when annoying internet marketers are selling courses on how to game some system and they use your market as the thing in the game. So there was a bunch of, you know, people teaching how to do like AdSense or AdWords arbitrage, and the keywords they were wanting to go after were our keywords.
Oh. So, cause clicks were really expensive. So they were making a little, you know, little bit on the on the spread. And we had a guy, one of our customers was the VP of AdWords, and he took a look at our account and said yeah, you can't make any money by buying traffic right now. It's just too expensive.
So once that changed, again, there was, there's two things that happened at that time. The most.

Russell Miller: When was this approximately?

Steven Sashen: 2000. Boy, oh boy. I gotta do this. Maybe five years in. So like 2014 maybe. Got it. Yep. Maybe 2015. What you're always looking for is leverage, right? So that either means you're looking for someone who's already talking to the people that you care about, and you can engage with that person. Or some place where you can just engage with a lot of people.
So, for example, TikTok, you know, if you get on and do a TikTok video that people respond to, that's leverage. Advertising is leverage. You're running an ad in a particular place and it's going to all these people. But the thing that I have been super, super focused on from day one is making sure I knew all of my numbers inside out, backwards left and right.
What does it really cost for me to make a product, bring it to our place, get it out the door, deal with returns and exchanges, keep the lights on in the building, pay my employees. And so therefore I demanded from day one that. A, we made a positive return on our ad spend, our return on ad spend. ROAZ was always gonna be positive.
The thing I then did though, is I broke that down into branded, aka literally people searching for our name, right? Non-branded people searching for anything else that's related, top of funnel, people who've never heard of us. Bottom of funnel, things like retargeting where, you know, you can advertise to people who are hip to what you do.
And I have different ROAZ requirements for each one of those. So the top of funnel stuff for top of funnel, non-branded. Someone who's never heard of us, don't know what we do. They're not necessarily even looking for shoes. They're just, you know, people who have feet, preferably two, but not required.
I wanna see. Originally I was looking for a three times return on my ad spend. If I spend a dollar, I need to make $3. Cause otherwise I'm not making money. And we needed to make money in order to have enough cash to buy the inventory the next year. Cuz we were growing like 50% plus year over year every year.

Russell Miller: And was three X break even or was that like positive?

Steven Sashen: Three X was a little positive. Okay, got it. Now I will cut to the chase and say, as the business continued to grow and as we had more products and more people buying more products, I mean the majority of our customers own more than three pairs of our shoes.
Not in the location bar of their browser, but in the search bar. So they're searching for us accidentally cause they don't know any different. And then they see a paid ad for us because we wanna have the paid ad and the organic ad to make sure one of our competitors can't. Yeah. Well for that I want my return on ad spend to be about 15 x.

Russell Miller: Right. Because they already know you.

Steven Sashen: I already paid to get them to begin with.

Russell Miller: Right, right. Okay, so that's something, you know, for our listeners to think, to really think hard about when you're advertising. You know your brand name versus, you know,

Steven Sashen: yes. And you wanna pay to advertise your brand name too.
Google used to have a report that they would show showing the benefits of having the paid listing and the organic listing. Yes. You just don't wanna pay as much for the paid listing. But there's one other, oh, you remind. Oh. But there's one other really important thing that I do on the ad side, and this is something that I say at least a half a dozen times a day to somebody.
They're pitching me on some thing that they think is gonna make me a bunch of money, and I say to them, I don't care what you think it's gonna make. The only thing I can be in control of is what I'm gonna lose if you're wrong. So how quickly and cheaply can I find out if you have your head up your butt.

Russell Miller: So this is like a value investing perspective. A margin of, yeah, a margin of safety perspective to like a advertising and marketing.

Steven Sashen: You want, you know, look it's like going to Vegas. You wanna walk into the casino knowing that once you're done with that a hundred dollars in your pocket, you're walking out the door.
And if I, you know, when people say to me, I'm confident that this thing's gonna make you money, my response is, I don't care how you feel. Right. I wanna know what it's gonna take me to find out if you're right or wrong. If you're wrong, I don't wanna lose a bunch of money. I don't want you to say wow,

Russell Miller: What's the minimum amount you can spend to like, figure, figure it out.

Steven Sashen: Yeah. And there's sometimes where they'll say, well, I can figure it out for you for, you know, a dollar. Sometimes they say $20,000. It's like, yeah, I'm not at the point where I'm gonna risk 20 grand to see if something works. Right. Now granted I've lost 20 grand testing something, but I didn't plan to.
So managing your risk is the most important part. Ideally, you wanna find people who can, will do things on a performance basis to prove that they know what they're doing. You will have a hard time finding them. Cuz most people don't know their business well enough to do that. If they knew it really well, they, there's someone who's trying to charge us to do an audit of some aspect of our business and we said no.
Because after the audit is done, if we're the right kind of client for you, you're gonna make hundreds of thousands of dollars a year off of us. So that audit should be free. And if you're not offering it for free, then we don't trust that you know how to do the rest of your business. So, no. So, know how much you're willing to risk.
The day that Lena said to me, any experiment you wanna do for a thousand dollars less, you don't need my permission. I literally started crying cuz I mean I was counting pennies. Now, you know, we're a much bigger company, but that number hasn't gone up a lot. There, as you get bigger, you can spend more money on things that could have a bigger impact, that do cost more to test.
But I'm still super, super conservative and demand that we get the return on ad spend that we're looking for. And if we don't get it, I want someone to, you know, pay up. I want them to have some skin in the game. Cause otherwise we're

Russell Miller: And then because you know, we're an email company, what is your, what has been your approach to email marketing?

Steven Sashen: We are very I don't wanna say aggressive. We are very, we have a very robust campaign. So, or a number of campaigns we have nine different campaigns. So I'm not gonna get them all off the top of my brain. We have our prospecting campaign. People opt in for something. Yeah. And we're I'm gonna do these some very broad strokes.
Yeah. We have a post sale campaign. Yeah. So once they're buying, what do we do for the next whatever period of time? We have various follow up campaigns based on what people have or haven't done. If they haven't bought in a while. We have campaigns to get them to come back. If they have bought in a while.
[01:05:47] Steven Sashen: We are very I don't wanna say aggressive. We are very, we have a very robust campaign. So, or a number of campaigns we have nine different campaigns. So I'm not gonna get them all off the top of my brain. We have our prospecting campaign. People opt in for something. Yeah. And we're I'm gonna do these some very broad strokes.Yeah. We have a post sale campaign. Yeah. So once they're buying, what do we do for the next whatever period of time? We have various follow up campaigns based on what people have or haven't done. If they haven't bought in a while. We have campaigns to get them to come back. If they have bought in a while.
We have campaigns to thank them and get them to come back. I will give this one away. One of the best emails that we have, and we don't, we do almost no initial discounting. I think giving a discount just to someone joins your list or because of they, you know, spun a wheel. I think initial discounting is the cause of the end of the universe as we know it.
It just makes people race to the bottom for price. Yep. And so, so we don't do that. But I have one email that goes out to people who've spent more than, I think it's $500 with us. And I say, you know, because you've just bought your fifth product or whatever it is, you're now one of our VIP customers.
Oh, sorry. The subject line is I may be a moron. And it's, you know, because you've just proven you're one our best customers... you know, most marketers will say, it would be really stupid for me to offer you a discount on your next order because you've already demonstrated or willing to buy things at full price.
Right? Yeah. So I may be a moron, but if you wanna use this 20% off coupon for your next order as my thank you, feel free. And if you think I'm an idiot for offering it, you can buy things at full price. And by the way, here's my direct phone number. Gimme a call. I'd really would just like to say thanks. And once a week I get a phone call that usually goes like this.
Hi, this is Steven. Oh my God, it's really you. So you know why not? Huh. It's a blast. So that one does really well. Back to testing, just as a, an aside for an email. Yeah. We did a test with some white hat, deep fakes. Basically, I spent hours recording a thank you video and they made it so that my mouth moved to match the name of the person who was getting the email.
And they're going, oh, this is gonna crush it. Because that personalized thing, people love that they're gonna buy more. Did nothing for us, really, absolutely nothing. Again this is another point about advertising. People will tell you, here's best practices, test everything, split test everything because what works for somebody else may not work for you. And I'm like the king of proving that best practices are not best for us.

Russell Miller: And then how often do you do like mass emails to your customers?

Steven Sashen: Once a week. Once a week. So once a week we have a newsletter. We're continually playing with that to make it more and more interesting, entertaining, and valuable. But that's and we, and I'll say this.
I was doing something kind of catch as catch can for years. Like when it occurred to me, I'd put out something, I'd send it out. And someone said just start sending something once a week. And I was nervous. I was scared that everyone was gonna opt out. People would hate it. We did the first time, we did it over the first couple weeks, no unsubscribes, no opt outs.
And it was very clear that I had thrown away half a million dollars by not having done it sooner.

Russell Miller: Okay. And then cuz you know your numbers backwards and forward. How much, like what percentage of your sales now comes from email? Cause this is something I always try to tell to other people, is email can actually drive a lot more of your sales than you think.

Steven Sashen: Absolutely.
Well, here's the thing. I can't answer that question and I'll tell you why. Yeah. When we were looking for investors and we get approached by these private equity companies, they would always ask, what are your customer acquisition costs? Yeah. And I would say, has anyone ever given you a numerical answer to that question?
And they would say, well, yeah. And I said, oh, so can I lie to you the same way they lied to you? Huh? Like, what? What are you talking about? I said, all right, well, explain to me how I'm supposed to track the following. We run an ad on Facebook, someone clicks on it, I pay for that. They come to our website, they opt in, I send them an email, I pay for that.
They don't know how to click on the link in the email. So they do a search in Google and they click on the link that comes up and I pay for that. And then they end up buying on Amazon where I get no data and don't know who they are. How do I track that? And they go, well, you know, you could make some assumptions.
I go, oh no. I don't make assumptions that doesn't help me in any way. And then I would say, I know that our customer acquisition costs are good. And they would say, well, how do you know? I said, cause we're profitable. And they're like, oh yeah. Okay. So unfortunately I can't answer your question because there's so many little touch points between here and there.
And every little tool you're using, they wanna claim a hundred percent of the credit. Right? So if I look in Klayvio, my email service provider, and I love them dearly, they only have one feature that I wish they had that they don't currently have. They'll claim credit because that was the last click before someone ordered, right?
So, you know, I don't know. What I will say is the day that we send out an email, we will see our revenue lift by anywhere between 20 and 40% on that day compared to other days.

Russell Miller: I wanna underline that for the listeners out there. Something to think about. Something to think about. Also, you can email your users a lot more than maybe you think you can.

Steven Sashen: Yeah, and you know, the only reason we're not doing twice a week or daily is I just, we just haven't been able to think of a way of creating enough valuable content to justify doing that.

Russell Miller: It's the, that's kind of the limiting. And then I'll also say everything else that Steven is talking about all the different sequences, like, welcome post-purchase, win back.
These are all like the absolute minimum, like minimum best practices you should do. And I'm assuming when you implemented those, you saw a big lift.

Steven Sashen: Yeah. The couple things that made a big difference, that was one. We put an exit pop. So when people try to leave the site, there's a full screen takeover.
That's an that is a register to win a hundred dollars xeroshoes.com gift certificate. Like the day we did that, the amount of the number we went from, I don't know how many leads we were getting per day, per week, per month. It as small, but it suddenly jumped to like 3000 a month. And it was very clear to me that I had, again, lost millions of dollars by not having done that sooner.
And every internet marketer and every marketer has stories of, you know, the thing I knew I should have done that I never got around to or forgot to do, or eventually did and realize that I lost a lot of money from not doing it. It's the way it is. But but that was a real biggie and we're, I'll tell you one we're starting to do now that I'm very, I was gonna say excited about, but that's not really true because again, I don't know if it'll work or not.
But let's assume that it does work. If it does, I'm really excited. Yeah. We're getting people to we have a shoe finder quiz on our website. It's like say some things about what you're looking for. We tell you what shoes are right for you. Now we know some things about you. We're building out sequences based on that to talk directly to you about what you are looking for.
Now we're still gonna mention the other things cuz there are people who like buy a running shoe from us who don't know we make casual sandals or casual shoes or snowshoes. Right. All the other things. So we wanna, we don't wanna pigeonhole them too much, but we wanna talk to them more directly. And if we can do that well, that's gonna be super, super interesting.

Russell Miller: And who do you use for the quiz provider?

Steven Sashen: There's a company called Cartful.

Russell Miller: Cartful. Okay. So I'm really intrigued by that. There's two. So for, from an email point of view, you know, that gets into like creating segments. Yeah. And then had you guys done a lot with segmentation before that?

Steven Sashen: Yeah. Yes and no. We've done a lot of segmentation, but we never did anything that we could apply to email or we never did anything that we could apply really to personalization on the website. So, since the, since day one of the internet, I mean literally day one the conversation was, now we can do one to one marketing. We'll know about you and be able to market just to you.
Right? It will never happen. What you're gonna be doing at best is one, you being you, the entrepreneur, being one to a bunch of people who are as close to each other as possible marketing. But even then you gotta be really careful. Like in, in our world, if someone buys a men's shoe, that doesn't mean it's a man..

Russell Miller: Right, of course. Yeah.

Steven Sashen: You know, you gotta be careful about things like that.

Russell Miller: So, so maybe like really light segmentation, but now you're kind of experimenting.

Steven Sashen: Well, again, on the prospecting side. Yeah. Where we do segmentation is on the advertising side where we know enough about our customers, we can break things down into how much they've spent, how many times they ordered, the kind of products they ordered, where they live.
A whole bunch of different things. And we use that to do, find lookalikes for those people in say, Facebook and the Google platform.

Russell Miller: But in the email retention side, you're not really splitting it out.

Steven Sashen: We are splitting it out so that we can send certain messages to people based on whether or not they've purchased over x amount of time or not purchased over X amount of time and how much they've purchased over time.
So we do wanna acknowledge people as they're sort of staying with us in various ways and do things to make sure they know what's going on. Give them ways to get just the information they want and nothing else. If people only want to hear about when we're launching new products or having a holiday sale, we want them to be able to get that.
If they wanna get the newsletter, we want them to get that. If they want, if they wanna get information via SMS instead of email, we want them to be able to do that. So we're doing that kind of segmentation and that applies both for prospecting and for existing customers.

Russell Miller: So that's a really, letting them choose their sort of communications preferences. How often they want to hear from you, what they want to hear about. Giving them more control.

Steven Sashen: Yeah. And every now and then I will violate that because there'll be some important thing that I need to get their thoughts, opinions about, et cetera. Some big thing that happens. But by and large, you know, we kinda stick to it.
But every now and then we do a mailing, like to the entire list because something important has to be told to everybody.

Russell Miller: Okay, cool. And the second thing I heard was that something about the quizzes, there seems to be a commitment effect. A commitment bias Yeah. Of like people investing their time instead of money.

Steven Sashen: Well, it's doing, it's a couple things. There's a whole theory about micro commitments. So for example, if you want someone to opt in for something, instead of showing, the first thing they see giving them a place to put in their email and click submit is just have a button that says, you know, get the thing that I'm giving away.
And then it pops up a thing asking for their email. So, because they've made that little commitment of clicking they are more qualified than if put in what could be a fake email address because they're expecting to get whatever it is immediately, right? Yes. Ways of playing with that. But so there's the micro commitment part, but the other part is simply that we've just helped them with something that they didn't know how to do, which is pick the right product.
So over 70% of the people who go through that quiz end up buying. That doesn't mean that we just need to put more people in the quiz because there's a reason they click to get help. And so they've already sort of self selected. So it's not like, you know, the quiz becomes our landing page, for example.
But but the people who go through that are very highly qualified and usually purchase in that same session. And if they don't purchase in that same session, now we know how to market to them, again, with things that are appropriate for them. I mean, here, look, here's the other thing about advertising, just kind of backing up a little bit.
What we are creating. I refer to it as a 4D chess board. Because there's different levels of awareness that people could be in. Most people talk about aware or like problem aware, then solution aware, then brand aware, then product aware, then they become customers. Then you're whatever. You know, for us, I mentioned before, we have a level of the funnel above problem aware.
It's again, people who aren't even thinking about shoes or footwear or their feet, we can bring their attention to shoes and footwear and their feet in a way that makes them go, huh? Like, you know, when I hold up a traditional running shoe with a pointy toe box and go, is this the shape of your foot? Cuz guess what?
If it is, It's not supposed to be. And that could be causing a bunch of problems. And it makes people go, yeah, why am I shoving my foot into that thing that's not shaped like my foot. So at each level of the funnel, at each level of that awareness, you're trying to find as many different ways of getting content to them that they're gonna respond to, to move them down to the next level.
And if they don't move down there, what are you gonna show them to encourage them to do it? And if they do, what's the thing after that? And what happens if they interact by just watching a video but they don't come to your website? What happens if they watch the video and then they then come to your website?
Then there's a different thing you wanna do. It gets super, super complicated in all the ways that you wanna pay attention to user behavior. And frankly, it's not even important until you get to a certain size where there's enough, the effort that it takes to do that could possibly pay off. But at a certain point, those little things make a big difference.
I mean, again, at 33.6 last year, if we did something that made a 1% difference, that's a lot of money. And if we do something that makes a 10% difference, that's a very large amount of money. And so we're always looking, that's another thing about leverage, is we're always trying to analyze a thing that we wanna do.
How long is it gonna take, how much is it gonna cost? And what's the potential upside? What's the potential downside? And we rank those to figure out what to do next. And that gets just as complicated as my four dimensional, you know, email, chess board.

Russell Miller: And when you were much earlier, like at Shark Tank phase, and you were just putting out this content, it wasn't with like maybe an explicit funnel, but just more, you're like, okay, just make content for all different parts of the funnel. They'll figure it out.

Steven Sashen: Yeah. Yeah. That was pretty much it.

Russell Miller: And then, but as you got bigger, then it got more important to know.

Steven Sashen: Well, you know, a little bit because there's some ads that I've done where we walk people down the entire funnel in five minutes. We start with, you know, I'll ask a question.
I go, here's a dumb question. Do your feet feel better at the end of the day than they did at the beginning of the day? If your answer's no, you're not alone. And it's not because of what big shoe has been telling you. It's not because you need arch support or motion control or cushioning or padding, or your pronator, your supinator, your kids haven't gone to the right college. It's because the shoes aren't letting your feet do what's natural, and that's making other joints in your body try to take over that foot function. And they can't do that. And then I show a regular, you know, a "normal" shoe against our shoe, and they're, I mean, I get two kinds of comments when I do videos like that.
They're either, oh my God, I've never watched an entire YouTube ad before. I just watched yours. I watched it again, and then I bought your shoes. And the other comments are, Hey, moron. And they think that I, they don't know that I'm like, you know, one of the five leading experts on the planet about this stuff.
And I'm really just synopsizing hundreds of pieces of research. In fact today, a guy said, well, we need arch support and we need cushioning. It's not rocket science, it's just science. And I said, I think you don't know what science means because here's 300 studies backing up everything I said. And arguing with what you just said.
And that's actual science. So I was not quite so obnoxious when I wrote it cuz I have to edit a lot to take the obnoxious out of it when I'm responding to things like this. But it's like, no you're not quite sure who you're talking to. And so, so we can walk people all the way down the funnel in one conversation, but there's sometimes where you just want to get 'em in to raise their hand and then get 'em with the next message and the next message and the next message.
But you wanna be leading them somewhere. You don't wanna just say the same thing over and over. I, someone sent me an email the other day, it was an amazing email cuz it was a great story that was very encouraging and there was no call to action at the end. There was nothing like, you know, if this makes sense, just click here to find out more, or click here and get a free whatever, or go buy the, I mean, there was nothing.
And it's like, why did you bother doing that? You know, you're, it's not, you're not being. This is gonna sound really weird because this can sound like you're trying to be manipulative and to be candid, you are. But if you're doing it because you're offering something that's really valuable, why would you not want to encourage people to take a next step that has the ability to be life changing and make it so that if it isn't life changing, it's not gonna be a problem for them?
You know, like, again, that nutritional supplement thing that I mentioned, try it. If you believe in antioxidants, it's a great thing. If you don't like it, just get your money back. What's the big deal?

Russell Miller: So give them a kind of a minimal next step and let them know that it's low stakes enough that they can back out if it doesn't work out.

Steven Sashen: Yeah. And one next step could be, if you don't know what to do, call our customer happiness team. They're here to help. And I recommend using the phone app on your phone to do that, because that'll get you a better answer faster than if you try to email or post a question on Facebook without tagging us, where we'll have no way of seeing it.

Russell Miller: Okay. I think this will be a good place to kinda wrap it up. I think I've imposed on you long enough. And hopefully our listeners have gotten a ton of like, useful tips. If you are,

Steven Sashen: Can I get, I'm gonna give one. I have to give one more. I just want, cuz I just wanna highlight this.
When I made those videos at the very beginning and gave away the whole business, this is sort of like the one thing that people seem to forget, which is the more you can offer something of value to people, the better. I met people who said, you know, I watched your videos and I never bought anything from you, but I made my own sandals based on what you did.
Or, I made my own shoes based on what you did. Great. I'm not trying to win everybody. I'm just trying to be helpful and that's gonna work out well for everybody at some point, whether they buy from me or buy from somebody else or make their own thing or do whatever else. So the question that I'm continually asking myself and never come up with enough answers that I can deploy fast enough is what can I do that's gonna be valuable for people and how can I get that to as many people as possible?
So, quick example, people who, there, there's there are a lot of people who believe the modern running shoe is good for them, despite the fact that 50% of runners and almost 80% of marathoners get injured every year. And that hasn't changed, right? I can't tell them to try my shoes cuz they think what we're doing is wrong.
That's okay. I have an ebook coming out where I'm gonna be able to advertise it with an ad that'll say, do not run in these shoes. Because there's a study that came out showing that if you just do a foot strengthening exercise program and run in regular shoes, your risk of injury is reduced by 250%. And there's another study that shows if you just walk in shoes like ours, it builds foot strength as much as doing that foot exercise program.
So there isn't a study showing if you just walk in our shoes and run in regular shoes, you're have that lower injury risk, but kind of do the math. That's the same exercise program in the middle of the equation. So don't run in these shoes, run in whatever you like. Wear these when you're done for active recovery and building strength that could help you in the future.
This is, people don't know this. This is really valuable information for people who may never otherwise think of ever buying anything from us. And all I'm trying to do is give them the information to be helpful. Because why not.

Russell Miller: And just figuring out new ways to kind of create value for other people and that will sort of, you know, come back to you.

Steven Sashen: I've never seen that not happen.

Russell Miller: That is, I think that's a, that is a fantastic lesson. Okay, well we will, we'll wrap it there. And oh, so let me say so if you wanna learn more about Steven and his amazing xeroshoes.com X E R O shoes, he's on Twitter, Facebook, all the social medias.
You can find some great articles about him on Starter Story. Any other things I left off?

Steven Sashen: That'll pretty much cover it. We're also in the EU. xeroshoes.eu. If you go to zero shoes, guess what? That'll get to us too. That's the whole story behind that. That's pretty entertaining. And yeah, everywhere you would at or slash, you can add or slash Xero Shoes.

Russell Miller: Just old school. Awesome. Okay. Thank you so much.

Steven Sashen: Pleasure.