How I Built This with Guy Raz - inov-8: Wayne Edy

Episode Date: September 13, 2021

After more than 20 years working in the shoe business, Wayne Edy decided to strike out on his own, risking most of his savings to launch his own brand. Knowing he was entering a crowded field, he focused on a niche sport—trail running—and developed a lightweight shoe with a rubber-cleat sole, well-suited to the terrain near his home in England's Lake District. The unusual design raised eyebrows at first, but after inov-8's launch in 2003, the shoe quickly grew a following among elite trail-runners, which raised its profile and helped the brand expand into CrossFit and hiking. After selling inov-8 and then buying it back, Wayne still leads a multi-million dollar business that's headquartered in a tiny English town, while outfitting athletes from around the world. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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Airbnb.c.a slash host. Hey, everyone, a quick thing before we start the show. How I Built this is doing its annual survey to better understand our listeners and how you use podcasts. So please, please, please, help us out by completing a short anonymous survey at npr.org slash built survey. That's all one word, NPR.org slash built survey. We'd really appreciate your feedback. We really do need it. So again, npr.org slash built survey. And thanks. The big thing that surprised us and caught me out was the 2008 crash, market crash, and it just put so much pressure on me. And I managed to secure another loan through a U.S. bank. But I had to sign personal guarantees with this. And I can remember the bank manager saying to me, he said, Wayne, just to let you know, he said, you sign this document.

He says, if you drop this ball, he says, everything that you own is gone. From NPR, it's how I built this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, how Wayne Eadie broke into a crowded market by focusing on a niche sport, trail running, and built innovate into a job. top shoe brand for elite athletes around the world. Trying to break into any product category is hard, especially when that category is dominated by a handful of big players,

companies with massive marketing budgets and wide distribution. And we've told dozens of stories on this show about the different approaches different founders have taken to get attention. One of those approaches is making something that, at least at the beginning, appeals to a niche audience. An audience of consumers who will appreciate the product so much, they'll start to evangelize to others. Think RX bars, for example.

Lots of big companies were making energy bars by 2013, but no one was making those bars for people who did CrossFit and ate a strictly paleo diet. But by targeting that subculture, Peter Rahal was able to build a breakout break. that eventually sold to Kellogg's for hundreds of millions of dollars. And our guest today, Wayne Eadie, he took a similar approach with his brand of running and trail shoes, innovate. Wayne lives near the wet, grassy, muddy, and hilly terrain of Northern England and Wales,

a place that attracts a particular type of passionate outdoor runner. So Wayne designed shoes to serve this particular running community. They needed to be lightweight, water-resistant, have a strong, non-slip tread, and hold up under the harshest weather conditions. And as you will hear, Wayne's early customers turned into his earliest fans and ambassadors. And eventually, what started out as a niche brand became beloved by athletes around the world. Today, Innovate is based in a small village within the boundaries of England's Lake District National Park. but Wayne actually grew up in Zimbabwe, which when he was a kid, was known as Rhodesia. It was a great place to grow up because I had a good group of friends.

I spent a lot of time outdoor. Every weekend we were out at the lakes. My parents had a small cottage at one of the lakes, so we used to spend time there. During the holidays, we would sometimes go out there for a week. We would cycle out sometimes, or my father would take us out. and this would be with my brothers and some friends and get us all set up and then he would leave us there and if it was, say, for a week, then he would come out on say a Tuesday or a Wednesday to give us more supplies and just make sure everything was all right. Those days there were no mobile

phones so there was no way of contacting us otherwise. And that's how we spent our time. So we're just exploring the mountains around the lake and spending time. on the lake. Wow. How would you describe yourself as a kid or as a teenager? Were you a good student in high school? Well, I was very easy going, but I would say I was more interested in the practical sides of school.

I was also very engineering-minded. So at 12 years old, I bought my first motorcycle and completely rebuilt it. So when I left school, I wanted to become an engineer. and do that through a apprenticeship scheme, which I was fortunate because I got selected with a footway company called Barter, which is an international footway company. And that gave me a very good grounding in footwear because part of their development was that you would spend three months in each of the divisions, which has certainly helped me in my career. Wayne's career in the shoe industry started with that apprenticeship. The year was 1978, and he was just 16 years old. And initially, he learned about all the machines and techniques that went into making different kinds of shoes.

But pretty soon, Wayne got exposure to things like marketing and branding and sales. And in his mid-20s, he learned about retail management when Bata launched a shoe store chain called Athletes World, and they picked Wayne to run it. Eventually, he got married and moved to the UK, where he worked for an outdoor apparel company called Berghaus for a while. And then he started his own shoe consulting firm around 1999. And at that point, 20 plus years after his start as an apprentice, Wayne began looking for a chance to use all of this experience

to build his own brand. He was just waiting to find the right opportunity. When you launch a brand, you've always got to find a small niche. And if you think of my background, so I've got experience in making sports shoes. I had a lot of outdoor experience that I'd gained through doing Burkhouse and Bratia or their development and sourcing and marketing of the Footwear Rangers. So I thought, right, well, why don't I blend the mixture of those two and came up with this concept of a mountain athletic brand.

And then that was the start of the concept for innovate. You thought nobody's making like a sports shoe or like a running shoe, but for mountains, for hills. Yes. And there's something that is kind of, it's not entirely unique to Northern England, but it's kind of a style of running. I guess it's called fell running because the hills are the fells, right?

They're called fells. That's correct. So that's how they describe them. And that terrain can vary. If you go for a race or just a run, you can go through lots of different types of terrain, but it can be very wet and boggy in the winter and the rainy season. And it can be quite dry in the summer if we don't have rain. And it has a real following.

They call themselves fell runners. In the rest of the world, they tend to call it either trail running or mountain running. In fell running, we tend to have smaller, sharp. are cleats that are deeper in depth so that you can get maximum penetration into that terrain, whether it's mud or grass, that gives you optimum grip. And I felt I could bring something new, some real new innovation to it and just take it on to that next level. So you are starting to think about building this kind of shoe.

And my question is, because a lot of people listening are like, well, I have an idea, but it's too niche or I don't know if it's going to sell. And it feels to me like at that point, this was still very niche, right? You're focused on a very small subset of runners with a very particular and unique set of circumstances. So presumably you had to ask yourself, is this going to be sustainable business? Yes. So I knew that there were about five or six thousand fell runners in the UK. So it's quite a small market, but quite easy to market to because they, you know, subscribe to the same magazines and they go to the similar races and it's a community. So I thought that that was a good place to start. Right. And we could work out from there. So whenever you launch a brand,

you've got to find, well, what's our differentiator? And where's the niche or gap in the market that we're going to go for. And that's when I decided to launch it for the Fallen Mountain Runners. But I was very specific not to call it just Fell Running. And we didn't, whilst we started and our home was in fell running, I always had that vision. We need to be a broader brand and we need to have international appeal. Right. So it was going to start with, and we should describe it, because the early prototypes of which we're building were like, and you still make shoes that look like this, they had claws, right? They were like cleats almost, like sports,

like cleats that you would use in an American baseball, for example. Not as sharp as a cleat that the Americans know, so they were all made of rubber, but you want to make them so that they are well enough spaced out so that they don't collect and retain mud. And they need to be sharp enough and deep enough that you can get the right sort of penetration to give you the optimum grip.

Yeah. But you also get it through the compound of the rubber that we use, and we spent a lot of time developing two specific compounds for Innovate, and we very quickly became known in the marketplace as having this rubber that had an amazing grip. I think another thing you all became known for was how lightweight the shoes were, right? I mean, I think I read that, like, you wanted the foot to control the shoe, not have the shoe control the foot. Yes, I think our whole philosophy as a brand is about allowing the runner to be in tune with the terrain that they're running on and not altering the natural biomechanics of the foot or the lower limbs or the body.

And part of that is that if you exercise with more minimal footwear, you actually utilize a fuller range of motion of your lower limbs. They all work in harmony with the body. We don't try and alter the natural biomechanics of the body. You know, I want to emphasize an important point here because you were doing all of this after you'd had something like 20 years. experience in the shoe business. And a lot of people have the misconception that founders of startups are in their 20s or super young. I mean, you were in your 40s when you founded your first business. Actually, the average age in the United States is 41, I believe, for a first-time founder. And generally, the outcomes are better, the older you are when you start a business. So you were already in your 40s, early 40s when you launched this. And, you know, you had some savings that you

had saved over the over 20 plus years as a in a career. Do you remember how much money you had to put in to start this? Was it was it more than a hundred thousand dollars? It was more than a hundred thousand yes. And that was everything you had. That was all your savings. All my savings and all the profit that I'd retained within the consultancy business went into that. So you were basically cashing in your retirement. Yes. Weren't you nervous about that? I mean, because that's all your money. Well, I was nervous, but I am a bit of a risk taker, and I felt I had enough personal experience at developing and sourcing product,

running businesses. So it was my time. All right. So you decide, I think around 2003, you launched this brand, and it's called Innovate. And I guess you made your first hire, which was a guy in Graham Jordison, who became your designer. That's correct. And I mean, you had to make the designs.

Obviously, you didn't have to hire an engineer because you knew how to engineer this stuff. You knew how to physically make it. But you still had to have a factory manufacturer. Presumably you had good connections. So was your first big major expense just like making the shoes? Yes, it was. So I had a small share portfolio that I'd built up over the years.

So I cashed that all. and invested in the moulds. So just to give you an idea, the mould costs are about sort of $30,000 to $40,000. A mold for the actual... Sorry, that's for a series of the moulds. So that's for a size range. So to do one shoe, you've got to invest that sort of money, and that's only to make the moulds.

Then, of course, you've got to pay for the shoes. Yeah. And so, you know, we went through that development, and then I decided I'm going to order a container of them once we had signed it off. Wow. And you order a container from China, like a manufacturer in China? That's correct. So I had contacts in Italy and Portugal and in Asia. But for the type of footwear that we do, it's best made in Asia because that's where there's the most development and they have the best machinery

and processes and materials to make sports footwear. I just committed to it, ordered a container, said, that's it. We launched you in the brand. And then went straight into doing all the other side whilst the shoes were being manufactured. Because you have quite a long lead time. So it's normally three to four months. So during that time was when I started preparing the sort of brand name, the website. The logo.

The business side. Yes. Did your, if it's too personal, just let me know. and I won't ask it, but I think it's important because it's part of a business. You had a family. I think you had four kids by then. Did your wife at the time, was she worried? Well, yes, of course, she was cautious about it.

But we had sort of ring-fenced a certain amount of our savings for the family. And then this was sort of through the consultancy business where I knew I needed to take a certain amount of risk. And whilst Joanne was a lot more cautious, she did support it because she knew that that's what I really wanted to do. But yes, it's a huge risk and you just never know. So whilst you try and do as much research and testing as possible, there's no guarantee with these things and you could lose it all. But you, this is the beginning. You're optimistic, you're excited, you're charged and energized. So you get the container. If you're first container of shoes. You had connections in the industry because you put 20 years of work into it.

So I have to imagine it wasn't that hard for you to get your shoes into retailers, that first container, a shipping container of shoes. Well, whilst I did have a lot of connections, I had to pioneer a lot of the running shops. And basically all I did was I built a database of them. and we basically did a mail shot to all the retailers and put one shoe in with the mail shot and then I gave them a sort of a week and then started calling and it really paid off

the first retailer that I saw is one of the top specialist sort of off-road and fell running retailers in the UK his name is Pete Blant so that business was run by himself and his son Matt I drove across to the Lake District and met with him and we had breakfast in the cafe across the road from his shop. And I showed him the shoe and talked it through.

And he was a little bit critical, actually, about some of the things on the shoe. But he liked what I was trying to do. And he really loved the passion. We've talked about it afterwards. He said, I just loved your passion. And you had a really clear vision on what you wanted to do with your brand. And so he basically said, yes, I'll support you and gave me one of our first orders. And I think that that shoe was called the Mudrock 290, which I read that the 290 refers to the weight of the shoes, 290 grams.

Is that right? Yes. So that's our naming system. Our naming system is a sole name or shoe name, and then the number is the weight of an average size shoe. Wayne, I'm curious. I mean, when I was researching about, reading about the company or innovate, it reminded me so much of Gary Erickson and Cliff Bar, the energy bar, because the way Gary got that bar, you know, out into the world was through cyclists. He started with cyclists. He knew cyclist. He was a cyclist. And he would go to these cycling events and pass out cliff bars. And that's really how it started. And I guess you and Graham, you did something similar, right? You would pack up your car with shoes and just go to like mud races or running race i don't know like these trail races around the uk and just like have your shoes there for people to to see when we launched the product and

had it all available but we had a four-wheel drive pickup and we filled the back with shoes and and i actually used to go to races and the first weekend when we launched the brand when we had the product available. It was at a large mountain marathon where Pete Brand was retailing and we were selling the shoes there. So I was there myself and telling the story, talking about the technical aspects and the benefits of our shoes and started selling them. And I had a couple of people come to me the next morning because this is the night before the race and it was actually a two-day race. and they were saying to me, well, can I wear this for the race? And I said, well, I wouldn't recommend wearing a new shoe for a two-day mountain marathon.

I said, really, you want to get used to the shoe and break it in, yeah. And then the next morning I was having a coffee with Pete and Matt, and three of the runners came up and looked at me and gave me the thumbs up and pointed at their feet and they were wearing the shoes for the start. And I thought, wow, he has me launching a new brand and a new shoe. And these guys are going to run a two-day mountain marathon in it. And they've never run in it before. So I thought, this is make or break.

You know, I'm going to, I just hope it works out. And it was great, actually, because on the Sunday after the event, people started coming to me saying, the shoes were fantastic. And other people would come and say, oh, a friend of mine ran in your shoe and said it was brilliant. Can I buy a pair? And then the following weekend, I went to a race called the Snowden race, which is... That's a famous mountain, right? Mountain Snowden, right? Is that in Wales, right? That's correct. So it's in North Wales, and it's the largest mountain in Wales, in Wales. And there's a race, which is an international race there every year. So I went to that. I was

fortunate. I had made contact with a farmer that farmed near Snowden. His name was Tim David. and I made contact with him and sent him a pair of shoes. And he came up to me before the race and he was wearing my shoe and he said, I'm going to wear your shoe today. He said, and Tim, even though he was local, he had never won Snowden. I think he had come second and third before, but he had never won it. And he won the first international race only two weeks after launching the brand, wearing this new shoe of mine

and he was so pleased because this is his local race his local mountain and of course that was great for me because I just had so many people coming to me after the race wanting to know about the shoes and wanting to buy the shoes

and that started part of my sponsorship where I was giving some product to some top athletes I gave some product to some Italian athletes and I sold some product to some other UK athletes, and that's where it all started from there to get international word out on the brand. You know, there's a famous design ad, I say guru, I hate that word guru, but named Seth Godin in the U.S. and he's given many TED talks. And one of the things he talks about is, if your product

is remarkable, if it's unusual, that often is how you can kickstart it. And if I'm not mistaken, the first shoe you made and you make shoes that still look like it, was it just looked different than other kinds of shoes. It was like when I first saw your shoes, I was like, God, this is what the Wolverine would wear, you know? Am I right about that? Was it because it looked like a completely, like kind of weird, right? It did, but that was where we took quite a purist design approach.

So the soul was quite aggressive because it was targeted for fail runners. And we had quite a low back on the shoe also, so it wouldn't put pressure on the Achilles tendon. And it had quite a high, front and lace-up so that you could get a good lace-up. And when you're running downhill at speed, your foot doesn't bash forward and damage your toes or toenails. So that was part of the look. And yes, you're right. It was very distinctive. And we had a met cradle, which gives you a very good hold around the foot. And still to today, all our shoes carry certain DNA all the way

through their design. This is a thing, because at the beginning, you've got to get people interested and I've seen this happen. Like, I'll go to a farmer's market and somebody's selling something just weird or different and I always stop and check it out and want to know more about it and oftentimes I'll buy it, you know.

But then the product has to be good. It has to be solid. And if I'm not mistaken, you had a great product, but it had a major flaw, right? Because I think what you were trying to do is to have this like low heel, right, that would eliminate pressure

on the Achilles 10, but it was actually like cutting people's heels up, right? Like people were wearing these shoes and their heels are getting like bloody and bruised, right? You're right. And it was fine for some runners, but with some people that had quite a Achilles tendon that came quite low on the heel. This was in the early version of the shoe. Yes, that gave them.

They had some pressure points and some of them would rub. So yeah, that was a concern. But we very quickly rectified that and we softened the whole heel area down with the second production. Of course, which I ordered within, I think within a month of launching the brand, I ordered the second container. Because I knew that it would take six months to get that in and you had to plan for that. And I'm pleased I did order that second container because we were really building some momentum and the word was getting out there. So you made a slight change in the design to adjust for the flaw. And this is another thing I think is important, which is you started relatively small and in a niche market.

So there was going to be some forgiveness. Like, I mean, that could have destroyed another brand. Like if Nike releases a new shoe and it starts chewing up people's heels, that's it. It's done. Nobody's going to, I mean, but because you were small and you were working with a small group of runners, sounds like they were okay with that. They were like, you know, right? I mean, that they were forgiving.

So that's the nice thing about working with a small community like that. They saw that we were really serious about trying to make the best product for them. They accepted that it wasn't perfect for everyone and that they were prepared to give us another chance. So that's very good about the community. And, you know, today if you go to a fell race, there's probably 75% plus people are wearing innovate shoes at these races. which is fantastic to see.

One, this is a story I read about, something that also happened in that first year, 2003, there's a famous race, and it was happening in Alaska that year, the World Mountain Running Championships. And there was a contestant there named Melissa Moon. She was actually, I think, sponsored by Adidas going into that race. But she did not wear Adidas shoes running that race. What happened? What was the story?

So it's a great story. and that was probably only a month and a half, two months into the brand lifetime. And I got a phone call on a Friday evening from one of the English junior runners. And she said to me, I've heard you've got this new shoe. I'm going to the World Mountain Running Championships in Alaska. Any chance you could arrange a pair of shoes for me? And I said, yes, no problem at all. So I said, when are you going?

and she said tomorrow. So I arranged for her to collect a pair from Pete Bland on the way to the airport. And the night before the woman's final, there was a dump of about three or five inches of snow. And Melissa Moon, who was a New Zealander, only had racing flats. So she had, I think, as you say, she was sponsored by Adidas and she had some Adidas racing flats. So she woke up in the morning and there was all the snow And she only had these road running flats

So she frantically went around asking if anyone had some shoes And that very pair of shoes that I arranged for that junior runner She loaned them to Melissa And they fit her Yes, they fit her Yeah And she went for only a very short run in them And then decided I'm going to run

you know, the world mountain running championships in these shoes because she didn't really have another option. So she ran the race and it was a very close finish and she ended up winning that race in our shoes. Yeah. And then did she, did people notice, did she say anything about the shoes? Absolutely. Well, afterwards she was interviewed by the press and they were taking photos and she actually took the shoes off and held them up and said, these shoes helped me win today. Wow. And you can't, you can't pay for that sort of advertising. When we come back in just a moment, more early wins for innovate, but also some tough financial choices,

and one choice in particular that forces Wayne to lose control of his own company. Stay with us. I'm Guy Raz, and you're listening to How I Built This from NPR. Welcome back to how I built this. I'm Guy Raz. So it's 2004, just about a year after launch, and Innovate is building a name for itself within the small niche community of European trail runners. And already, Wayne is hoping to expand into the lucrative American market. And he's looking for someone in the U.S. to help him do it. So I was very fortunate.

I had a ultra runner named Thomas M. And he contacted me because he had read about the shoes and said, you know, any chance he could buy them. I said, well, we're not selling them in North America as yet, but I sent him two pairs. And I said, why don't you try them and give me some feedback on them? And he absolutely loved the shoes. And so him and I started talking and I said I was looking for some partners to set the business up in the USA and run that. And I ended up agreeing a partnership with them. And his wife, Lisa Mickelson, ran that business from then when we set it up until probably about 2009 or 2010.

It was a great partnership. And we started marketing to Crossfitters. And it was the early days of CrossFit. And we got some real traction. And that helped fuel the growth of Innovate. But the shoes you started to market to the CrossFit community, to be clear, that, I mean, that was a totally different model of shoe, right? Like, I'm assuming a shoe better suited to their needs. Yes, I think I was just talking to Graham and I said, I've got this idea, why don't we create a sort of mountain flat running shoe, but creating a sort of a hybrid mountain flat, more suited for the alpine type running.

So not the same kind of grip, like not the. the same knobbly grip on the, like not the same traction on the bottom, like a flatter traction. That's correct. So less aggressive cleats and slightly different design. And we called that the F-light. And I remember I came up with the idea and got a sample made. And I had the sample made in my size. And I was wearing it. And I can remember very clearly I had dinner with Thomas and Lisa in the hotel near Boston where our office was. He's the Mickelsons. And yes, that's right.

And I showed them the shoe. And Thomas was so excited about it. And he was the same size as me. And I remember giving him the shoes and saying, Thomas, why don't you go and run in these tomorrow? And I walked back to my room just in my socks. I had a few people laughing at me walking out of the restaurant in my socks. But the next day, Thomas said, what a fantastic shoe.

He said, I've been out first thing in the morning, had a fantastic run. And he said, it's a brilliant shoe. That became the shoe that the CrossFit community really adopted. I have to imagine in those first few years, you were not profitable. It doesn't mean you weren't successful, but you were not profitable. So how are you funding that? I mean, you had a small pool of money. you were selling shoes, but how are you financing the innovation of innovate?

How are you financing new shoes? I mean, how are you doing that? So all profits went back into the business. Yeah. And of course, I was taking only a salary that I needed to live on at that time. And we would just be very careful with our development costs. And we were adding more shoes. So we've got three main categories, and that is trail and off road running.

and then fast and light, which is our outdoor category, and then fitness, which is focused primarily on the CrossFit market. But at that point, you had no loans and no investors, right? No investors. No investors. I managed to get a secure a loan with one of the UK banks for quarter of a million pounds, which was a very good scheme. It was government-backed. There were a lot of hurdles that I needed to go through

to get the scheme and demonstrate that, you know, we were not a high, high risk. And eventually, I managed to convince the bank manager. And we got sign off on that quarter of a million. And that really helped us in those early days. When did innovate become profitable? When did it go from red to black? So it would have been two years in, so 2005. And that's when I managed to negotiate.

the bank facility for that quarter of a million pounds. But probably it was barely profitable at that point. It was a small profit, but it was enough for them to support the loan. And that was very important for me to take the brand to that next level. All right. So it's 2008. You're getting a lot of attention, but you've got a lot of pressure on you personally. And this has got to be a difficult time in many ways. you're on the road all the time and trying to run a business with a tiny team and trying to

be everywhere and to promote the brand. Meantime, on a personal front, your personal life is kind of, and again, I'm trying to be really sensitive here, but I think it's important to acknowledge. I think it's kind of falling apart, right? Well, it's always, it's always difficult when you're juggling so many balls and you've taken that risk and you're sort of committed and you can't. pull back because you've got enough momentum, you've got to follow it through. But the big thing that surprised us and caught me out was the 2008 crash, market crash. The factory that we were

working with changed our terms to when we actually placed the orders, which was a huge change to the terms that we were on. And it just put so much pressure on me. And I managed to secure another loan through a US bank, but I had to sign personal guarantees with this. And I can remember the bank manager saying to me, he said, Wayne, just to let you know, he said, you sign this document. He says, if you drop this ball, he says, the whole company's gone. He said, everything that you own is gone. And that put a lot of pressure on my personal relationship with my wife, because she was less prone to taking risk and she was much more cautious. So actually, unfortunately, we ended up getting divorced and I went on my own way and

put more effort into innovate and in a lot of ways I had so much pressure on me. I had to make it work and I took it as far as I could up until 2012 and then I felt at that stage I had no option. So I went to the marketplace and we went through a process and I raised some capital through a private equity deal. You had no options because you knew that to grow, you needed more cash and if you didn't grow, you might not make it. Yes, because if you're too small, there's that vulnerability and that's what I was afraid of. And as you grow the brand, you know, the brand becomes, you know, it's bigger than any, you know, I'm only the founder of the brand. So I see as I'm the caretaker of the brand.

And I was worried that if there was another financial crash or big hiccup in the financial markets, that we wouldn't make it through. So I took that decision. And it's a difficult decision because you're bringing in partners into the business. We went with private equity. And they have a different agenda. Oh, yeah. because they work on their cycles.

But I'm wondering when you made that decision, which you had to do, it sounds like you had to do, they then owned a significant amount of the company, right, because they're putting money in. Did that allow you, because up until that point, you're now, what, I don't know, nine years into the brand, and you weren't taking much of a salary because he didn't have much money, did that allow you to then take some money off the table and at least have that? Yes. So it allowed me to de-risk to a degree.

I was still the major shareholder of the business. So they took 42%. And by de-risking, that took a lot of pressure off of me. I was in a position to relax a bit more. So you sold almost half of the company to private equity. And when that happened, I read that you kind of stepped aside to CEO. And your C-O took over. and I guess your kind of day-to-day responsibilities were scaled back a lot.

So why did you make the choice or the decision to turn over running the company? To be honest, I needed that break at that time. I'd been traveling at the peak for I was away out the country for anything from six to seven months of the year. I was in the USA, Asia, visiting distributors, going to races and promoting. the brand all over the world. I think I got a bit of burnout because I just done too much for too long and the pressure of everything. And so did you, did you kind of really wind back? I did yes. And I was fortunate that in 2010 I met Maria. Who's now your wife? That's right. We're now married and she was great because she loves being outdoors. I actually met her at one of the races that we put on as

innovate and she then went off and to New Zealand and rode the length of New Zealand and ran across the width of New Zealand. She loves doing so of those long ultra stuff. And we then started living together. So that was very good for me. But there's that fine line because it's quite difficult to actually hand over to someone else that will then start taking all the key decisions on this brand that you founded when you see some of the stuff are perhaps decisions that you wouldn't agree with. And there were certain board meetings where I didn't agree on certain things, but I was outnumbered on the board and overruled on some of those decisions. But that's part of business and that's part of that journey. So I still stayed close enough to the

business, but I wasn't involved on a day-to-day basis. So this private equity group. I mean, private equity has certain interests because they've got investors who want them to make a return. And so they need short-term returns. I mean, they're less equipped to deal with a long-term business. Now, it's not the case without private equity, but I think in general, their time horizons are not 20 years. They're more like three to five. Did the private equity firm do a good job, an efficient job, at running, at bringing, you know, bring the company to profitability or, or no? No, I wouldn't say so, actually. I think the business was probably more profitable when I was CEO and in ownership of the

business because it, you know, I always looked at the longer term best for the brand, but I was very careful with the money because that was all self-funded by just myself. And I couldn't afford to drop that pool. All right, so you are clearly, I think, I'm channeling you here, Wayne. You're getting frustrated. There's not much you can do, but you still have a controlling interest in Innovate. But in 2015, 80% of Innovate was sold off to a company called Desaunt, a Japanese sporting goods company, right? Yes, so Descent bought 80% of the whole company.

Right. they bought out all private equity shares and they were very keen for me to retain 20% because the president of Desaunt at the time, he was very passionate about the brand and he wanted me to stay as a shareholder in the brand. He wanted you involved? Yes, he did, but not on the financial side. They made it very clear that they only wanted me to be involved on innovation. of course, I then became a real minority shareholder with only 20%.

So I have to accept that this brand that I founded and have nurtured, and it's gone through that sort of bumpy patch 2012 to 15, I would then let it go and I'd just own 20%. And I would dilute down from there. So over five years, they wanted me to dilute down to zero. This is interesting because this is your brand. and we've had this conversation on the show before with founders, you're basically saying goodbye to it.

I'm just wondering emotionally, was that tough at all? I mean, I would have a hard time personally with that because your brand, your product becomes part of your identity and you're essentially selling it and you have to eventually walk away from it. It's very difficult and, you know, I've been through that cycle, particularly when you see it's not tracking

as well as you would hope it would or that your vision is for the brand. And when some of the decisions that are taken are not ideal, so there we were part of this large Japanese group. So, I mean, they're a billion dollar group. They have a number of brands in Northern Asia, which they're very strong. I chose them as a partner because they understand technical brands,

and they also are very good at clothing. So what they got from the deal was footwear expertise and knowledge from us, and we got clothing from them. But it has its challenges. You know, they're Japanese corporate, very respectful, very considerate, but they are slow on the decision-making process, and everything has to go back to Japan to take decisions. And here was a company that I had built on the whole philosophy of being nimble. and a real challenger brand. And suddenly I'm sitting as a 20% minority shareholder

with only a small amount of influence. And we were only a small part of their big group. I didn't want to be seen as the founder that didn't want to let go and I was trying to hang on to everything. So I think I did hand over correctly and keep the right balance on my involvement in the business. But it is very difficult.

When we come back in just a moment, how Wayne walked away from Innovate completely and how eventually he got the company back. Stay with us. I'm Guy Raz and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz. So it's around 2015 and even though on paper Wayne still holds 20% of Innovate, in reality, he's moved on. His head is elsewhere. In fact, he decides to launch an entirely new venture. So, being the entrepreneur I am, I started a tactical business in the USA. Tactical. Doing tactical footwear, yeah. For use for special forces. Oh, military tactical footwear. Okay. Yeah. Yeah. Oh, my God. And this was like, okay,

this is not a non, this is, there's no like non-compete things that you, I guess it was not competitive, right? This is like military boots and stuff. That's correct, yeah. So Desaunt was aware of it. I had started the company in 2014, actually. So before I... What was it called? It was called Tactical 8.

Okay. And we developed a boot with an Italian brand called Garmont, and we were very successful that. So from 2015 to 2019, team built that to be upwards of a $12 million brand. Wow. And you were selling the shoes to militaries or to civilians? So to a combination of military and civilians,

majority were to military but special forces. And they would buy that with their own money. So it wasn't through the tender process. Right, right. They would buy them from specialist military retailers. These were like green berets who'd go out and buy these shoes, but it was designed for them. Yes.

So this is all not. another niche kind of subculture. That's correct. So actually, I ended up taking a shareholding in Garmont, and I was actually the second biggest shareholder of Garmont International. And I held that until 2020 when I sold that shareholding, and I've exited that business. All right.

So you are doing that, and something happens. So you're kind of out of the picture, really, with Innovate for a few years. years, right? Is that fair to say? Yes, I think about 20% of my time was spent with Innovate. The rest was spent with family and working on that other project. Okay, I'm imagining, because something happened in 2020 in the middle of the pandemic, very quietly, and imagining it has a connection with your decision to sell your shares in garment, which is you bought Innovate back, from Descent, the Japanese company, quietly last year.

You bought the brand you built and sold, and then you bought it back from them. That's correct. Tell me the story of why. I mean, you got money, you're kind of semi-retired. I know you got a couple of young kids. Why'd you do that?

So in 2019, there was a major change in Descent's board and the president who was very pro-innovate, he left the business and they brought in a new president and a new board. And I met the new president and he talked me through the strategy in 2019 and said that Desaunt were going to move away from an international growth strategy to refocus in their core markets of Northern Asia.

So I then thought about it and decided that I would have to be able to. approached the new president and I flew out there in October 2019 and negotiated with him and said, well, I don't see where innovate fits in your new strategy. Why don't you look to sell the business back to me? He negotiated hard and I reciprocated and we ended up agreeing a value that we shook hands on. And in 2020, I bought back the business and actually signed. all the paperwork. Wow. At one of the most difficult times because COVID had just hit Asia and was spreading across.

Kind of crazy. It was. And many people say to me, what a risk you've taken at that time. And actually, when we were due to sign the deal, which was in January 2020, I had to push back the deal because it was just too risky. the team and I were worried about the situation and COVID and the impact of that being in Asia. We hadn't really considered the huge impact that it would have in sort of Europe and North America and South America. But then in March, I had no option I had to decide it to sign or to abort the deal. So I went ahead with the deal.

It's so crazy. I mean, you start something. You build it up. someone else buys. It's like a, it's like a big fish eating, a little fish, a bigger fish, and then another fish, and then you come back, the little fish. From the beginning, it's not the best analogy, but how weird is it to buy something that you started back, and you've got to pay a lot of money for it? Well, I have, and, but my reasons for doing it were that I just felt that the brand was better off going through a epidemic like,

we were facing with me at the helm. Despite me having taken on that risk with my own funds, it was better that I was in control of the decisions because, you know, who knows what would have happened based on the decisions being taken by a Japanese corporate. They're also been hit with COVID and the impact of that on their core business. So it just felt it was the right thing to do. I also feel a huge sense of responsibility for the team. You know, we've got a fantastic team at Innovate.

They're very passionate. Most of them are committed athletes, so they're out using the product. They love wearing the product. They give us feedback on a daily basis. And so my commitment is to them, and I feel this responsibility I have for the brand. I love this so much because you're, I think you've got a team of about, what, 50 people, around 50 people who work for Innovate? Well, we're 62 direct employees. And then we have a lot of subcontractors that have thousands of employees.

And your headquarters, this has to be one of the few companies in the world, international companies is headquartered in Stavely in the Lake District, imagining a tiny village with a great pub and some old guys talking about World War II in there. Yeah, so it's in Stavely in the Lake District and it's right next to a mountain range. it's actually there's an outdoor hub there so there's a number of brands that operate out there outdoor brands so we decided to set up our headquarters there it's awesome and it's been a fantastic base for us because it's a good place to recruit talent too and you know I said that most of the team go out running well at lunchtime a lot of them are out there running because we've got great runs just from the office and now they're running testing product and come back, we've put showers in, they all shower and back to work.

So, all right, you are now, once again, the owner of this business, and you're in a slightly different position than you were in when you were doing, like, loan guarantees and begging banks to give you money, and now you've got a pretty well-financed business. You own it. You call the shots. Tell me your plans. What do you want to do?

The big plan is to grow the brand to its full. potential and to be able to transition back to chairman of the business. As a brand, you know, people believe the brand is bigger than it. It really is, which is good because we're projecting ourselves very well as a brand. Our marketing is very good. We've got some of the most technical product available in the marketplace. And just in the short time, I've taken back ownership and control of the business. It's in really good shape.

done a lot of good things. We've taken good decisions and the team, despite them working from home during COVID, have responded very well and pulled together very well. The business is in a lot better shape now than it was when I took over the business, which is good, good to say. I wonder, I mean, I know innovate because I'm super into hiking and shoes and the initial strategy was to start as a niche brand and then expand. It's well known. You know, among a certain kind of set of folks. But do you feel like you have achieved that? Or do you feel like you've a ways to go to make innovate more of a well-known brand?

I think we've got a long way to go, actually, because we're well-known in the small niche markets, but actually they're not big enough to grow the brand to its full potential. So one of the big challenges and part of our strategy is now how do we actually get more awareness out there. Because once people try our product, it's amazing with the letters, the emails that we get coming in, people saying, the product's fantastic. It's changed my running. So brand awareness is the big thing now to take us to the next level. And we're working on that. Do you have a, do you have a bunch of, like, how many pairs of shoes do you have?

Oh, Maria's always complaining. She says she doesn't know anyone that has as many pairs of shoes as me. But in all fairness, I do own a sports shoe company. So I've probably got currently about 40 pairs of shoes. I do like to wear. It's just a shoe closet. That's like one closet for shoes. I've got some in the garage, some in the coach house. And yeah, I like to test every single shoe.

So that's important to me that I've had them on my feet. When you think about, when you think about your. journey, and I just think it's amazing, how much of your, of what you've managed to do and the success do you attribute to how hard you worked and how much do you think has to do with just how lucky you got? I think it is a combination of them both because you've got to have a certain amount of luck along the way, but I do take a certain amount of risk. And I've always done, you know, that's in my nature. I'm a bit of a risk taker. But I love. But I love, like to think that I managed that in a balanced and considered way. One of my parents' good friends,

John Whitehead, when I growing up, he was a businessman and I always saw him as a real mentor and I used to love spending time with him talking about business and going to some of his businesses and just learning from what he was doing. And he gave me a great bit of advice once. He said to me, with all these things he says get as much information as you can but then go with your gut instinct because he said to me he said you've got a good instinct he said go with it and i've always drawn back on that and it served me well that's wayne edie he's the founder and now once again the CEO and owner of innovate the company doesn't share financial information publicly but Wayne says that these days, Innovate sells tens of millions of dollars worth of athletic shoes and apparel every year.

And by the way, back in 2013, Wayne took some time off to work on a more personal kind of engineering project. He helped his wife Maria design a recumbent bicycle for traveling across Antarctica to the South Pole. We actually ended up developing what she calls the polar cycle, which was a three-wheeled like trike so that it would be a lot more stable when you got into high side winds. Wow. And we developed it. She put the project together. She did a great job, spent days and days training.

You know, she used to train for two or three hours a day. And she achieved it in, so she's the first person to cycle to the South Pole. Unbelievable. And she did it in a human speed record as well. well, which still stands today. Thanks so much for listening to the show this week. If you're not yet a subscriber, please do subscribe wherever you get your podcasts. If you want to write to us, our email address is hibt at npr.org.

And if you want to follow us on Twitter or at Guy Raz or at How I Built This. You can also find us on Instagram. That's at How I Built This NPR or my personal account at guy.org. This episode was produced by Casey Herman with music composed by Ramtin Arablui. It was edited by Neva Grant with research help from Claire Morashima. Our production staff includes J.C. Howard, James Delahousie, Rachel Falkner, Liz Metzger, Julia Carney, Farah Safari, Elaine Coates, Annalise Ober, and Harrison, BJ Choi. Jeff Rogers is our executive producer. I'm Guy Raz, and you've been listening to How I Built This.

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