How I Built This with Guy Raz - Live Episode! OtterBox: Curt Richardson

Episode Date: December 2, 2019

In the 1980s and 90s, Curt Richardson started making simple plastic boxes in his garage in Fort Collins, Colorado. They were originally designed to keep small items dry while you're fishing or skiing, and Curt and his wife Nancy called them "Otter Boxes." But after the launch of the Blackberry and the iPod, Curt started tailoring the boxes to fit and protect the breakable devices – and OtterBox evolved from an outdoor goods supplier into a company tightly adhered to the tech industry. With the rise of smartphones, Otter Products grew by more than 1000% in just five years. Today, it controls a massive share of the phone case market and sells more than $1 billion in cases each year. This interview was recorded live at the Paramount Theatre in Denver, Colorado. 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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tall windows, beautiful old details, and plenty of space for all of us. And being in that home on Airbnb, right in the middle of Vienna, walking distance from so much of the city made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. Your place with a place with a all of its personal touches and its amazing location could make someone else's vacation even better. Your home might be worth more than you think. Find out how much at Airbnb.ca slash host. This is a great story. So I remember being at CES and... In Las Vegas. In Vegas. And Michael Cowan, who was the head guy for stuff at AT&T, came by and showed him

the case and he said well how much is it? I said well retail's for 4995. He's like you're crazy 4985. Crazy. Crazy. To buy a case for it. All the cases were like five bucks. It's nuts. Yeah. So he said but we'll do a test. So they did a test and they were going to do a three month test. Well, I think they did a three day test because they all sold out. Wow. They sold like crazy. I mean it was like that UPS commercial. You know, or it's like tick, tick, tick, tick, did and we're going, oh crap. 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 Kurt Richardson went from Apprentice at a plastic molding workshop to building Otterbox, a company that today sells more than a billion dollars worth of mobile phone cases each year. So in a gold rush, as you've probably heard, it's better to sell pick-out. axes and shovels than to mine for the actual gold. That's why you know the name Levi Strauss or Giridelli or Wells Fargo. These are the companies that made lots of money by offering clothing and chocolate and banking services to the people who came out to California to mine for gold in 1849. And today, some of the most successful companies are doing more or less the same thing around tech. Toby Ludke saw lots of people starting e-commerce businesses in the mid-2000s.

So he developed software to make it easy to launch an online store and called it Shopify. Chet Pipkin created Belkin in the 1980s because as personal computers and printers started to get more popular, he realized people needed cables to connect all their equipment. And Kurt Richardson watched the rise of expensive personal handheld devices, and he realized that people might want to protect them. That insight was what turned Otterbox from a company that literally made, waterproof boxes for people on fishing trips into a brand that now dominates the market for smartphone cases. Not only that, but the company is still privately owned by Kurt himself,

a company now valued at more than a billion dollars. But getting to this point involved a few bankruptcies, several lean years of almost no revenue, and almost two decades of tinkering with plastic to figure out that phone cases were going to be big. But before all of that happened, Kurt was mainly just making plastic parts for other companies, mostly in his garage in Fort Collins, Colorado. Last month, I sat down with Kurt at the Paramount Theater in Denver in front of a live audience to hear how he built Otterbox. A lot of otters here tonight, Kurt.

There's a couple, yeah. It feels like a company meeting. Oh, my gosh. Thank you for being here. You bet. Tell me a little about where you grew up. and in your childhood, because you grew up, like, on the southern border, right, of Colorado? Right.

I grew up in a small town called Bon Carbo, Colorado, down by Trinidad, Colorado. So, anybody here from Bon Carbo? Yeah. Yeah, right. Yeah, maybe up there. I think there was two people in that town. Yeah, that was it. And what was life like as a kid?

I mean, were you outdoors a lot? Were you up in mountains? Were you... Yeah, we lived in the mountains. We lived at the base of the Spanish peaks on the south side of the Spanish peaks. So we were in Upper Borough Canyon. My dad's a minister,

and we moved up there to the middle of nowhere, and he started a church there. So given that you were the minister's son, does that mean you were pretty well-behaved, pretty good student, good listener? No. No, I was probably the problem child. I was definitely a C-S student,

bordering on a D. Huh. Yeah. And, I mean, I'm trying to figure out, like, what, I mean, did your parents sort of expect you, for example, to go to college and, and sort of pursue that kind of professional life? Oh, they wanted me to. I know my mom did, you know, I know she wanted me to be an engineer. And, but I really had no desire to go to college.

It was all about work, working with my, hands and that really was formed from high school experiences. You got really into like metal working I read, right? Like you'd go to the metal shop in high school? Yeah, our school had a vocational program and you got exposed to four different classes and the one that struck me right away was machine shop. So I walked into machine shop, I knew what I wanted to do. I wanted to own my shop, my own shop.

And so you finished high school and you go right into this line of work like you look for a job Right. I had heard about a program in Fort Collins, Woodward Governor, had an academy there where they taught you machining, and eventually you could get your engineering degree. That didn't happen because only lasted three months there, so. Yeah. And Woodward, Woodward Governor, which was a program in Fort Collins, and you were doing what? You were working on plastics at the time or metals? I was just pulling a handle. I was a robot. Right. Yeah, and that pretty much turned me off from that experience right away.

And so what did you do? I mean, you're like 18, 19 years old. You don't have any formal education beyond high school. And I have to assume you weren't technically probably great as a metal worker or plastic worker. No, no, I wasn't there yet. So I heard about a small company in Fort Collins, technical molded products, and they had a opening for an apprentice. and a guy luckily hired me on.

What did they make? Plastic products, just for about anything, whether it was garden tools. They were making a lot of parts for coors at the time. So, plastic parts. And so you were an apprentice and you were kind of learning how to do this, how to...

It's a tool maker. I was learning how to be a tool and die maker. Just for people who don't really understand how this works, right? Injection molding is basically that, right? You injecting. Right, right. Injection.

I built the injection. mold so the large and even the first business I bought was that just building injection mold steel injection mold so they're like imagine like a steel brick almost right and and you inject the plastic in that brick for maybe a little part that would appear in a camera right or a medical device right just to give you an idea you know a cup like this that mold might make four of those every 45 seconds but that mold probably weighs close to a ton wow all right so you you do this for a couple of years. You're still super young. And I guess, like,

in the early 80s, you decide that you want to go off on your own. You want your own plastics company. And you actually bought a small little company called Jeannie Plastic Tooling. It sounds like a big deal. You bought your own business. I mean, wow. It wasn't that big a deal. The guy that bought it from had been kicked in the head by a horse.

So he financed it for me. You know? Great guy. Who knew that a horse kick in the head was going to change history? It changed everybody's trajectory. So you take over this business, and what kind of products was Jeannie Plastic Tooling making? Again, they were making custom parts for just about anybody that was out there. And you were in like your mid-20s at this point.

21. 21. And was it just you? Was the business just Kerr Richardson? Just me, yeah. Were you making a decent amount of money? No. No, right, okay.

Yeah, I mean, I was, I bought a job, okay? I mean, really, that's what I did. I was making a decent living, but I wasn't making, I probably in the end of the day wasn't making any more than if I was working for somebody else. Right. So you do this and, I mean, you were manufacturing the dyes or you were tooling them, right?

And then you were trying to cobble business from local folks in Fort Collins. And then how long? did that go? Did that continue? Well, it continued off and on for years. I was always building injection molds. Business was always up and down. You know, it went up, it went down, but I was always in the plastics part of business, whether I was importing molds or building molds. It was all around injection molds. Yeah. And I guess, like, around this, you know, in your 20s, you also would meet, in your early 20s, you'd also meet your future wife, who was still your wife to this day, Nancy. Yes, yes, she's here. I don't know where she is, but she's got that.

She put up with a lot. Yeah. You get married and pretty soon have a couple of kids, and you were running this plastic tooling company, and then you kind of were sort of around this time creating other businesses around plastics and molding and tools. What was your plan? What was the idea of what you thought you would do? Plan? Yeah, I didn't have a plan.

That was part of the problem. The plan was just do the next thing. I mean, that's how many of us entrepreneurs are in the early days, I believe, and then we'd grow up. So a big part of it was really as the business grew and matured to a certain point, it would fail. and you'd go back and go back. Wait, what do you mean it would fail? Like, you had this business. Sounds like it was pretty stable.

You'd make these pretty complex parts for plastic injections. Not a lot of people could do that. How would it fail? It would scale so far as a business as far as revenue, as far as employees, and then for whatever reason, it would collapse. Like orders wouldn't come through? Or something would happen within the economy. me and the business was so frail that it wouldn't survive it and I had to back up and start over.

When did you have, when did you experience your first bankruptcy? I didn't go bankrupt. I just went back to the garage. You go back into the, you move back into the garage when a business wasn't working or you weren't. Well, it didn't scale. So it's go, okay, I'm going to back up. I'm going to go back to just me or me and one other guy and build it up again. Try something a little different, little different slant on the business. Yeah, was, I mean, and we're talking about the 80s here and into the 90s. Was money ever tight?

Money was always tight. Yeah, it was payroll was always an issue, and cash flow is what kept me awake, if anything, get me awake. And so it was, you had to get scrappy. We were very scrappy in those days. I'm curious because most of what you were making in the early days were like a little component part, right? Right.

something that would be inside of a device or a tool that you would never even know. How did you start to think about, you know, maybe we should make like something else, like what, I guess boxes, waterproof boxes. Well, what drove that way of thinking early on was the fact that I was making things for other people and I was counting on their ability to run a business and be successful with their products. So my success very much depended on their success. part of a supply chain. I was, yeah, I was just part of their cycle, really. I was part of the beginning of it and then the production of it, and the hope was that they would sell millions of these

things. Well, they didn't. And millions of these things could be a... Could be a small component, could be a small case for a duck call. I mean, one of our products, this was a good one, was the Lucy Goosey toilet paper holder. You see that a lot today, don't you? This was something you were making a component part for somebody else. I made the whole thing. So the guy came to me with the idea. We drew it up. We tooled it.

You know, it hangs on your tree while you're at the camping site. Keeps your toilet paper dry. Oh, this is a toilet paper roll for when you're camping? Yeah. It wouldn't have done well on QVC even. Why do you need a toilet paper roll when you're camping?

I mean, couldn't you just get the toilet paper? I don't know. It was his idea. What my idea? So he comes to you. And these are the kinds of things that people would kind of come to you and say, hey, I got this idea. Do you remember anything else?

Oh, yeah, I remember the oil cans before you twisted off the top? Sure. You had to open them with a can opener. Well, that's how old I am. You know, so it was basically a spout. You stuck into the top of the oil can. It was plastic on the top, had a metal stamped piece. And it punctured the oil can, and you pull your oil out.

It worked great, but he didn't sell any. Nobody bought it. Yeah. But again, we spent a lot of time and energy. developing the tooling, you know, getting, we had the machines to produce these. We did one run. It's a one run wonder, you know. We had a lot of those. But that sort of limitation started to prompt you to think, how do I take control over this instead of being dependent on someone's product taking off? You were like, what can I make and bring

to market? Is that what you start to think? Very much so. And I had a partner at the time that was going, finally said, why don't you do your idea? Which was what? Which was, which was, which was a waterproof box. How did that idea even start? You know, I'm an outdoors guy. I like gadgets. So, you know, there was Pelican products out there that made the big boxes.

But nobody had small boxes. It's like I don't need a box this big. So. For like a wallet? For a wallet, for a pack of cigarettes, your cigars. Because you need to keep your cigarettes and cigars dry. Right, right. And you're going down the river.

In the 80s, in the 80s and 90s. these. Yeah, yeah, yeah, whatever, your car keys, you know. Right, right. So, yeah. And, and, and, and was this like, the idea was that people would bring this on rafting trips and fishing trips? Right. It was an outdoor products. And, and I always love the outdoors. So for me, I always had a passion for that, still due today. And so we started with just a very small 1,000 series box, and it grew from there. And how did you even get the word out? This is like pre-e-commerce, pre-internet. You were just selling it locally at first? Well, we started with a dial. the dive world and we went to trade shows.

We went to trade shows with our boxes and peddled them, tried to get dealers. We also had a phone bank of guys who we called it dialing for dollars. They'd get on there and they'd call all the different scuba shops. And yeah, we had about six or seven different sizes with way too many bad colors. Yeah. And did you think, I mean, did you think that this was going to be the business? Like this thing, all you needed was for a big story. to carry a bigger distribution that this was like,

when you say we're going to trade shows, that's a big commitment. It's a lot of travel. You've got two kids. You're married. It's a grind. It's traveling on planes. It's staying at bad hotels.

You're probably trying to save money. I mean, did you think if only we can just get this in front of the right people? This can really take off. Well, I don't think I ever really thought the box itself would take off. But we started to get people, I call it progressive revelation. Okay, so people would come to the trade show booth and go, I've got a PDA, but I really want to use this PDA through the box. The Palm Pilot. Palm Pilot. Typically, it was a Palm Pilot, an I-PAC, handspring, those different devices.

Mid-90s. Yeah, yeah. Good times, bad clothes. So. Because this is because people were coming up at trade shows and saying, do you have anything for PDAs? Yeah, that I can use through the box. And that was really what sort of sparked this idea. Yeah, maybe it can come up or something.

Yeah. So it came up with a way to do that. worked on that and we did it for all these different PDAs and then it grew into some different tablets for medical things like that. Where they wanted waterproof as well or waterproof or clean proof. And were the cases rigid and hard like the boxes? The boxes, yeah. We just took our standard box, basically cut a hole in the front and put a membrane on it.

So it was nothing pretty about it. It was a brick. It was like a hard plastic shell around the PDA. Some of them fit the palm pilots and some of them fit the headsprings. We had different membranes for different devices. And how did people find out about them? Well, the Internet was just starting. I can always remember the first.

We were in Florida and we just had put our first PDA cases online and we started selling one, two, three. And man, we're doing $5,000 a month online. We thought we're killing it. Yeah. Yeah. And just to get back to your home life for a moment, I mean, what was the conversation you were having with your wife? Was she ever saying, hey, you know, tell me what's going on with this, this body?

Yeah, which time? No, we talked about the business a lot. I mean, it was part of our lives, whether it was in the garage or it was growing somewhere. It was a big part of our lives. I mean, the kids, when it was in the garage, the kids would pick plastic parts in front of TV. The machines would screw up the TV because they'd make sense. static all over the TV. And there was always metal chips in the carpet. So yeah, it didn't go over good. Did you have an ambition to be a huge manufacturer of a product? Were you thinking,

one day I want to be this, I want to make this huge significant thing. Like, was that even part of your thought process? No, it really wasn't. I never discounted it, but I never, I didn't throw it out there like that was what was going to happen until later on. Now, I did do that later on. I mean, in your mind, were you constantly searching for, for new ideas and new products? Because it sounds like you went from the waterproof boxes to the PDA cases, and those were doing okay. Well, that was part of the problem early on

was I had too many ideas. So we had way too many products. So, all right, so this is in the mid to late 90s. So, I mean, how are you thinking about business? It sounds like, you know, by this point, you're almost 40. You've got almost 20 years of experience running a small business or small businesses,

some that failed and some that we're doing okay and we're semi-sustainable. Yeah, I was still what I call a firefighter. I mean, I got all of my kudos out of putting out the fire of the day. And a lot of people do. I mean, if there's a bunch of small business people in here, you realize that there is a fire a day. Some days it's bigger than others. And so that's what I did.

I put out fires. But I soon realized I was the problem. You put up fires because that was interesting to you. It was fun. So some crisis or something not working right. I got to solve the problem, fix it. I'm the hero, rah-rah. When did you discover that this was not actually the way to run a business?

When I had to keep doing it, I got pretty old. I got pretty tired of doing it. It wasn't paying the bills anymore. And I was getting tired of doing it. And I was getting to the point where, where's this going? I mean, I'm just doing the same thing over and over. It's insanity. I guess you came across a book that became extremely influential.

to you called EMeth. What was the story? What was going on in your personal, in your business life that kind of led you to read this book? At that time, we were making otter boxes and I was flying back and forth to China, building tools, bringing the molds back, manufacturing the parts here in the U.S. And it was just a struggle. It just felt like I was running in mud. And somebody gave me the book, E-Mith. I didn't read it on the way to China, but I read it all on the way back. You know, that's about a 15-hour flight. I got off the plane. I went to the pay phone.

And I called E-Mith and said, I need help. It was, whatever, you got a 12-step program for entrepreneurs. I need to sign up. And I did. I got a business coach, and her name was Donna E-Zellick with E-Mith. And I'll start crying here because she made such a difference in that. business. I mean, she changed the whole way I think. The whole way, I went about doing business. By the way, this was not face-to-face. She was assigned to me. So they gave me, they gave me

Donna. And you paid the fee or whatever it was. Oh, yeah, it was an expensive education. Yeah. It was a, it was a, I think it was 500 bucks an hour. What was the, what was the basic? Wow, I mean, that's a huge investment to make. Well, yeah, when you're really, somebody has no money. That's a lot. Yeah. Kind of crazy. There must have been something about this book that just like resonated with you. What was it? You read this book and you were like,

I've got to change something. What was it? Well, if any of you have read that book, it's a story about a lady that makes pies, you know. And so it was her hobby. She loved making pies. She went into business and making pies. Like I went into business making molds.

And it kind of turned into a nightmare. Well, my life had kind of turned into a nightmare. And so it resonated with me that, that I had to do something different. And what struck me in the book was one of the things that he said is that systems run the business and people run the systems. Now, what does that mean? It doesn't mean you turn people into robots. Right.

Okay. But it does mean that people don't recreate their job every day. And that allows them to be more creative and more fulfilled. and I wasn't doing that. I mean, everybody that worked to me had to recreate their job every day, and I was just, it was Newton's law everywhere, and it wasn't always a good reaction. So you decide to get a coach to help you out really expensive at the time,

still in today is expensive, $500 an hour, is like a lawyer, and what? They're more than that. They're more than that. That's a cheap lawyer. You're right. A cheap lawyer. That's a cheap lawyer. My God.

That's right out of school. I'm in public radio. Yeah. So you start this process of talking to a person by phone, and what could they possibly, how could they possibly help you? What was she telling you? Well, I think the first revelation to me with E-Meth was one of the first things you had to do that they forced you to do, and I talk about this all the time,

is to really figure out what you want. So before you can create a vision, before you can create a vision, before you can create a company, you really have to get to the heart of who you are. And that was really, I mean, that was not an easy process for me. That really, it took me about a month. I mean, she called BS on me a lot of times, you know, just trying to figure out what that really is. And it all comes up with kind of fluffy things. But to get to the heart of the matter, to get to the heart of what really matters to you deep inside who you are, that's critical.

That's really critical. It sounds like a, almost like therapy. Well, yeah, it was therapy. Yeah, there was a lot of times it was big time therapy. Yeah, that's all she was doing. I would talk to her every week. Okay. And so it was two grand a month.

But they had a whole program of books that you went through. So you were actually getting an MBA in your business while you're working in your business. I mean, it's interesting because you had considerable experience by this time, like at least 15 years, maybe almost 20 years, running small businesses and just, you know, failing and succeeding with experience but you you really I guess at the age of 40 kind of must have come to the conclusion that like I don't know what I'm doing well absolutely it's kind of amazing no it was it was a rude awakening I mean I knew how to do it but I didn't know how to really do it and that was that was

the problem I was the problem and that was a that was tough to come to that realization but I had to come to that realization and based go okay I got to start over. So it was a big do-over. I was always reading books. I mean my idea of a vacation was seven books on a beach, you know, so it was reading business books, trying to figure out what are the best ways to connect the dots. Even today I would say there's so many people that influenced my life and the people's lives at Otter that we took their ideas and put them together to really create that business. Now, Otter really began as a kind of a spin-off, a side project of another, one of these other kind of plastic injection businesses that you were running.

And it was a partnership initially, right? Yeah, I had a partnership at that time. And you decide that, I guess, around 2001, because you're manufacturing all of your boxes and your PDA cases in Fort Collins, and you decide this was not an efficient way to run your business. What did you do? Well, it wasn't, first of all, it wasn't scalable. You couldn't really grow. If all your time is spent out on the manufacturing floor, you're not designing new products, you're not out marketing your products, you're not building a brand.

You don't have time to do any of that. So I started looking through Emyth, where's my time being spent? Right. That was just part of the process. And there was so much of my time consumed there that I had to say, I got to quit everything I know how to do and do something different. And that's, that was a huge turning point. And you said, we're going to focus on design and, and marketing here. And we will have it made overseas.

Overseas, yeah. And at that time, that's what we did. We did mold some in the United States as much as we could, yeah. So 2002, you have a partner. You buy your partner out. It costs you, I've read $350,000. Right. I bought him out for $350.

And I still owed the bank about a half million bucks. So you had half a million dollars in bank loans that you took out to buy equipment? Well, yeah, that was left over debt because right then, you know, dot com had gone down the toilet. And a lot of molders along the front range went out of business. I have to imagine 2002, Otterbox, ooh, 350 to buy your partner. I mean, that's a lot of money. I can't imagine that Otterbox valuation was proportionate to $350.5 million. Yeah, I didn't even try to get a valuation.

There was no value. It was all gut at that point that... You wanted to buy your partner out because you wanted this to be your own business. Right. Why? I didn't want to have... I wanted to either sink or swim on my own.

And I think Nancy felt the same way that we needed to do this on our own and give it that kind of shot. How did you come up with the money? Well, there was a lot of local people that I knew and met and word spread. I mean, Otter was getting a reputation in Fort Cross.

Collins and people were interested in it and there was people that were not making that much interest on their money and I said, well, I'll give you 15% every month. If you give me a loan. That was a loan. So you were taking 15, you're taking a lawn shop deal. Yeah, I was learning. I mean, what a, they were the pawn shop. I was the pawn. What an incredibly, incredibly prescient decision you made at the time, but like you would go to people say, look, I'll give you 15% interest. I need $10,000. $20,000 here and there. I had a minimum of like $100 grand. So, I mean, we borrowed up to $3.5 to $4 million, I think, somewhere in that.

And we were paying that much interest. But we needed that to build the tooling, to build the products, to go to the shows, to build the brand. We had a plan. So between 2000 and, let's say, 2005, when you were going to people and borrowing money, if somebody had said to at the time, hey, Kurt, I'll give you $100,000, but I want $5,000. but I want 5% of Otterbox. What would you've said? No.

No, I wouldn't have done it. Even though you needed that money to make this work. Yeah, I felt that strong. I think at that point, just based on experience over the years with partnerships and people. Not that they're, none of them were bad. They were friends, but it just was, I was not ready for that. I didn't feel like leadership could happen very well through a partnership. Leadership really needed to come from one person.

So you start to raise the money through loans to buy the equipment that you need to create the... To buy the tooling. Trade shows to be able to do it. But why would somebody... I'm just curious, what was the argument you would make a trade show sort of people when they'd say, well, why do I need a case for my iPod? Well, if you're going to swim with it. If you're going to swim with it, you want a waterproof airtight case.

So that was really... Or even, I mean, I can remember a Blackberry skiing with a Blackberry and sweating on it and it croaked. You know, so it didn't take much to kill a Blackberry or any of those phones back in the day. So, but that was pretty much your business. It was like any device that came out, iPods, any MP3 players, whatever... We were trying to cover it. Did you do the Microsoft Zune? Did you make cases for that?

Yeah, we did. Wow. Who has a Zoom? Yeah. Woo, Zoon. sell it on eBay. That's the person who bought the Zoom. All right.

So you, you know, you're making these cases. Sounds like by 2005, 2006, pre-Iphone, you've got a pretty good business going. Yeah, well, the BlackBerry really was. I mean, that was... The BlackBerry was the game changer. I remember getting our first million-dollar PO from AT&T for the BlackBerry. This is a great story. So I remember being at CES and...

In Las Vegas. In Vegas. And Michael Cowan, who was the head guy for stuff at AT&T, came by and showed him the case. And he said, well, how much is it? They said, well, it retails for $49.95. He's like, you're crazy. $49.95. Crazy.

To buy a case for it. All the cases were like $5. It's nuts. Right, yeah. So he said, but we'll do a test. So they did a test, and they were going to do a three-month test. Well, I think they did a three-day test because they all sold out. Wow.

They sold like crazy. I mean, it was like that UPS commercial, you know, or it's like, tick, tick, tick, tick, and we're going, oh, crap. And we come back in just a moment. How Kurt navigated those early days of cell phone cases, while just around the corner, there was something that would change everything, the iPhone. Stay with us, I'm Guy Raz, and you're listening to How I Built This from NPR.

Hey, really quick before we get back to the show, If you know of a kid between the ages of, say, 4 and 12, who is curious about the world and the world of science, you have to check out my kids' podcast, Wow in the World. Me and my co-host, Mindy Thomas, travel around the world, backwards and forwards in time, inside the human body and deep into interstellar space for a show that will take you and the kids you know on an incredible journey. All new episodes begin December 2nd, so check out Wow in the World wherever you get your. podcasts. Hey, welcome back to How I Built This. I'm Guy Raz. So it's the mid-2000s, and Otterbox is still a young brand, making bulky waterproof cases for devices like Palm Pilots and Blackberries. But things were starting to grow, and suddenly, Kurt was in charge of a much larger company than he had ever managed before. By the way, how did you get the name Otterbox?

It's a cool name. Obviously, now, you know, everyone knows it, but how did that... Nancy. Nancy came up with it. Yeah. Nancy came up with it. Hope she got paid for that. Oh, yeah. She's doing really well.

Okay. So what was the story? I mean, because you had all these, like, I think originally, like, your companies were called, like, Richardson die-cast, Richardson Tools, Richardson Injection. Ever name a business after yourself. That is, yeah.

Don't do that. Like, would anybody buy a Richardson smartphone case today? No. I wouldn't. No. So Otterbox is a cool name. And how did that happen? So we were looking for names.

And I mean, Pelican was the big animal in the room. And they still make great products. But we were looking for a name. We had a walrus, you know, seal cases. And we were driving to Denver. I remember this specifically. And the answer is like, well, how about otter? Otter.

It's playful. It's fun. It's around the water. Otter box. It had a great ring. That was it. Actually, the guy who designed our logo was a t-shirt manufacturer just down the way from the logo of the

yeah the old the otterbox logo is still the original logo from day one yeah yeah all right so you've got the name you've got this you know you're making these cool products um you know but but i I mean this is still pre-iphone

right 2007 iPhone comes out now this is I think I think it's not controversial to say probably the most transformational consumer electronics product no absolutely in the last 20 years, maybe 40 years. It would be hugely important influential.

When it came out, I mean, there are some people who say, I knew it right away. When I saw Steve Jobs at the Cow Palace in San Francisco with his turtleneck, I knew right away that product was going to change the world. I mean, did you just see that as another thing to make a case for? Pretty much. Yeah, it was just another guy trying to make a phone, you know? But I will remind you that Blackberry was really our testing ground.

growing ground with that. I give you another story when we did the first Home Depot came to us and said, hey, we need a case to protect our Blackberries. I don't even remember what model. These are Home Depot. Home Depot. For their employees. They're out on the floor.

The associates are out on the floor and they're dropping these things and they're breaking them. Management said, can you make us a case? So we designed a case. Well, this case was, you know, it was like a little kid in a snow suit. You know, you kind of walks out in the yard and falls in the snow. So it was a big fat case. It worked, but it didn't really work. So management loved it.

They thought, oh, great, we're never going to break another Blackberry. And then we'd give it to the guy on the floor. He goes, I'm not using this damn thing. This is huge. This thing is a piece of junk, you know. He was right. And so we said, but it's waterproof. He says, I'm in a store.

I don't need a waterproof case. Yeah. Because up until that point, most of what you were making was waterproof. So, ah, I need to listen to the customer. there's a big aha, big moment. That was a big aha moment. I'm going to listen to the customer. Not everybody needs a waterproof case.

Right. So out of that came the Defender case. The Defender was really what launched Otter, and that was the first case for the iPhone as well. So we had figured out at the time that it didn't need to be a waterproof case. So you say that when the iPhone came out to you, it was just another device to make a case for it. It wasn't going to be this.

You weren't looking at this. thinking this is going to transform my business? No. No. I knew we were getting traction with the Blackberry and other devices. So I knew we were growing and we were growing at a significant pace at the time. But we didn't, I mean, the iPhone 3 was, you know, we were on the launch pad. That's when it took off.

But it was also, I mean, growth can be just as tough as no money. Yeah. You got higher. You've got more people. You got systems. So I thought supply chain, I didn't know what supply chain was. I mean, today I would say Otter probably does supply chain better than just about any business the United States.

But I didn't even know what supply chain was back then. I mean, it was one lady in a closet ordering parts. I mean, that was it. I mean, you didn't not go to business school. You didn't go to college. Yeah, I was building the airplane in flight pretty much. And that was what it felt like, yeah. Wow.

Now, I'm curious because when the iPhone came out, apparently Steve Jobs did not like cases. His iPhone was perfect and beautiful, and he wanted you to look at this beautiful, perfect product. He didn't want to be encumbered by some obnoxious protective case. Right, right. The beauty was, he built it out of glass. So it looked really good for a while.

And where were people buying? I mean, was Otterbox by that point, by 2007, when the iPhone came out, 2008? was it um did it did you have like a pretty good market like right we were in all the carriers so people knew your brand by that point or was yeah it was becoming pretty well known and i mean how do you remember how long it took you from the time that first iPhone came out to the time you were able to deliver those to stores for yeah from the the first one or the it probably took us 12 14 weeks right that's how long it took us to get to the stores from the time we got the first phone in our hands. We would literally had people waiting in line to go buy the phone and we'd buy 12 phones and

start dropping them. Did the iPhone, I mean, did the iPhone, could you see the iPhone dramatically and radically changing your business? It absolutely did. That product. That product did. And how long do you think it took before you started to notice that? Pretty quick when the orders started coming in. Wow. Yeah. I mean, we wore out our molds. We had to build a whole new set of molds because the molds wore out. That's how many we made. Now I'm really interesting this idea because as as you know, some of you may know, Chet Pipkin has been on the show. He founded Belkin. And Belkin's a really interesting product. There are a lot of parallels with what you do, obviously, because they began with peripherals. So Apple, back in the 80s, if you had an Epson computer,

you couldn't connect to another printer. You know, you could only connect to the Epson printer because of the peripherals that they sent you. So he started soldering. them, right? And really the story of Belkin is they saw this gold rush into PCs and they figured out a sort of a side door entry, sort of like Levi Strauss, selling canvas and jeans to

gold miners, right? This is a similar story. I mean, you see this, right? Steve Jobs predicted that smartphones and tablets were going to replace desktop computers, and he's right. That's what that's what you sort of built.

I mean, you kind of... Yeah, we always, I always compare ourselves to the little fish that's on the side of the shark, you know. And I don't care which shark or how big the shark is, but we're going to be that fish on that shark. We're going to, we're going to ride that shark as long as we need to ride that shark. And that's really, it doesn't matter who's building the phone or what device. If that device is popular, if it's a hit, we want to be there with it. Now, we cover a lot of devices. today we cover just about every model almost globally.

I mean, one of the things about Apple that I would just be so stressed out about, you know, so freaked out about is they release products on their terms when they, and does that stress you out every time a new thing comes out? Oh, yeah. Came out. You had to like get this thing made and you didn't even have access to it until maybe that day came out. It was a fire drill.

It was a fire drill. What was the thing that worried you? Were you worried that your competitive? would get in there faster and people would go to like a competitor's case? You know, I never worried too much about competitors. I'm always, I want to know what they're doing. I think competition makes you better. I like competition.

I mean, today, Otter owns 40% of the case market in the United States. It's insane. So, you know, I think if you focus on the competition, you're focusing on the wrong thing. But everybody's focused a little bit about on that, right? You want to know what they're doing. If a competitor got in there faster and people like that case, you know... Well, I better do it faster next time then. I'm curious, and maybe you don't have the answer to this.

I'm just curious about your thoughts on this. Why do you think Apple and Samsung and all these other companies, why do you think they kind of embraced the cases? I mean, you could imagine a world where Apple's like, wait a minute, this could be a big revenue generator for us. Let's make the cases and package them with. the iPhones and just raise the price and then people don't have to buy the outer box or Samsung could do that or why do you think they they didn't try to like block you at every step

of the way or did they no they never did they never they never really objected i mean we're out in the market people are buying our cases um i mean apple makes cases samsung make case but different kinds of cases right but they really that's not their core competency and i think they realize that and that is ours. iPads come out, I think, around 2010. And instantly, again, you're thinking, here's the next device. Right. Yeah.

And so for you, it's like, you're agnostic. You don't care which, what the product is. You just want to go for it. Right. I want them to be successful, because if they're successful, we're successful. Because we would attach to those new devices. You know, we've always got a percentage of sales based on their revenue. So if their device flopped, we'd.

didn't sell nearly the amount of cases. So take me into your process a little bit. You know, they announced a new product. It's all over the internet. What's going on in Fort Collins? Like, are people freaking out like, let's go? Well, we get as much information as anybody else would get. We still were waiting in line with everybody else back in the day.

And we would make tools at risk. We would make parts at risk. You would basically make molds that you thought might fit the new, In the early days, definitely we did that. And you would actually manufacture the case. We manufactured some parts. I remember there was other competition that even made the iPhone mini mini. It was like this big.

It's like, I don't know how that got on the internet, but they made molds for it. Oh, they thought there was going to be an iPhone mini mini. They thought there was going to be a miniature iPhone. So you were following the rumors just like everybody else's falling in. Yeah, that's only all you could do. Which probably meant that you were throwing away a lot of cases in those early days because you would make a... We made a lot of changes. I mean, the tools, some tools got scrapped, some parts got scrapped.

So we were manufacturing at risk to try to get to market as quick as we could. So here's what's interesting to me about this product, right? You're manufacturing it in different plants around the world. You have to be really careful with your IP. And we did a story, we did an episode on TRX with Randy Hedrick, the TRX straps and gyms. And he spent years and years fighting against counterfeiters. I know that you had a counterfeiting, you had counterfeiters pretty much early on, which can take up a lot of bandwidth, right? Oh, yeah. We have a whole, I have a whole building full of lawyers.

Yeah, yeah. We have, we have a whole brand control group. And actually, it's funny, we, we've worked with border and with the border security and, and, and all the customs and help train them on showing what's, fraudulent otterbox and actually we'd get they they pull over containers full of Gucci coach and otterboxes but but but it must be a whackamol right like yeah you must still do this all the time you must still kind of quash counterfeit oh yeah we go out we go still today we go after them all the time and but you have such a huge market share that it probably doesn't really make much of a difference now well you know where it makes a difference is it makes a difference with our customers and our consumers I mean we if they're driving the price down with counterfeit product, it's going to reflect on us. So we have to, we get very aggressive.

All right. So here, here's the, to me this is crazy. And it's probably not going to be crazy the otters in this crowd, but I think it's going to be crazy to other people here and people listening. You start this, I mean, 2002, you struggle, you're getting on bank loans, you're struggling to like buy out, you know, payback loans. 2012, you're doing almost half a billion dollars in revenue selling plastic cases. Yeah. I mean I mean did you think that was Did you even have time to stop?

Did I dream that that was going to happen? No, it happened so fast. I mean, it literally was a rocket ride. I mean, we grew 1,100% in five years. We went from 5 million to 575 million in five years in revenue. And that's just crazy. 2012, that same year you hit almost or more than half a billion revenue, you decide to step down.

Right. Companies doing great. You step down and you move on to kind of do other things. Why? I mean, was it just, it was on autopilot? What was it decision? I got bored. I got bored.

Yeah. So, in the early days, I'm doing everything, right? I mean, I'm supply chain, I'm finance. I'm design. I'm involved in everything. Well, when you hit half million, on your way to a billion, believe it or not, you get rat hold. And I got, I'm like, you got rat hold.

I got rat hold. It's like, well, here's what you do. Oh, rat hold. Rat hold. So I'm like, I'm a rat in a hole. I'm a rat in a hole, you know, and that's what I felt like, a rat in a hole. You know, I was, I was bored. You know, I wanted to go create.

So for me, I needed to go and create. And it didn't go very well with my wife because I didn't really tell her that I was going to quit. Yeah. And I still hear about that. But that was a whole other learning for me too. That was another one where I didn't pass the baton very well. I mean, a lot of the, I don't want to ever knock anybody because a lot of people had a lot of good things to do with otter and growing otter.

And there was a lot of people that aren't with us today that I give them credit for helping us build that company. You know, they were. Yeah. But a lot of times a company outgrows people as well, and in some ways it outgrew me. So you step away, I think, for about four years. Otter grows a lot in those four years. You're still the owner of the company, but you kind of step aside. I mean, there was even talk at a certain point in I think 2014, 2015, that you were going to sell the company.

And you actually were looking to sell it for somebody to acquire it. And I have to assume you had a lot of potential suitor. which could have given you and your family a windfall. I think there are many arguments to be made that, you know, you should do it. You should cash in. And why? Why didn't you sell? I got to tell you, that was not a fun experience looking to sell something you love so much.

But, and even going through the process was very disruptive. And, you know, we worked with Goldman. And we worked with the, I still remember talking to an old guy at Bain Capital. And his name was Josh. So Josh, if you're listening, he said, well, I don't know where case will be in five years. Well, it's five years, Josh. So you feel fortunate that you didn't sell it. Yeah, I'm very glad we didn't sell. I think for us and our family, it would fundamentally change things in Port Collins. Otter is one of the top four employers in Fort Collins

and it's part of the culture you know it's part of the fabric of Fort Collins now you know if if Jeff Bezos calls me tomorrow I'll take the call but I don't I don't you know I don't know that we'd get a deal we'd talk

we'd talk Jeff You come back to the company and take an active role in 2016. There's some turnover in leadership. And why? I mean, from what I've read, you were hearing that the company, that employees were not happy. There was discontent. Is that why you decide to come back? Yeah, absolutely.

I had a lot of otters come to me and my boys come to me because a lot of their friends worked at all. They're going, dad, you need to. You need to go figure out what's going on over there. And I had a lot of people that were really upset. They were upset. Why? Because it had been destroyed from culturally. Culturally, the place had completely changed.

And that was a huge issue. I mean, they were really upset with just how people were being treated, how the business was running. And again, I don't want to rip on leadership back then. They were just doing what they brought from. where they came from. And it wasn't, it wasn't what my intention and my philosophy on, on how to run a business was. And did you feel like you, because you had stepped aside, um, you let them down? Oh yeah. Yeah, I definitely. I had. I definitely had. And that you had to return to restore that? I had to get clarity on what was going on. And once I got clarity on what was going on, I knew I had to

go back. Now, I knew I wasn't going to go back as the CEO. I did not want to do that. But I had some other great people. Our CEO today, Jim Park, is basically, I can remember he was running one of our other companies and we were in a meeting trying to figure out what to do and we started writing on the board, who's going to do what? And they put my name as CEO. I went up there and erased it and put Jim's name. And he was a little shocked. it's interesting because there are parallels right like Howard Schultz left Starbucks for eight years he felt like the company lost his way

he came back to restore the culture Gary Erickson Gary and his wife Kit Crawford came back to Cliff Bar they left and come back and sounds like you had to you felt compelled to restore a culture that you now I'm not there every day anymore

I'm not I mean Jim and we have an amazing executive team, but we have an amazing leadership team there. And I think with any business and any business we have today, the biggest thing is leadership, whether it's our distillery or one of our other businesses. We're going to put great leadership there. And without that, the business is not going to flourish. And it has to carry out the vision. My job is that of a visionary.

But even today, that's not my primary role. When I say the word culture, what does that mean? Does that mean, what does that mean in terms of, you know? It's how we're going to relate to each other here. It's how we're going to treat each other. It's how we're going to do business. That's the culture. You know, for us, the golden rule is number one.

You violate that at Otter. You're in trouble. You know, we're going to treat each other as we'd want to be treated, as you'd want to be treated. And to me, that, I mean, that, you do that. it makes a lot of wrong things right. Kurt, you, and I think it's a very valid parallel. I mean, you came to Fort Collins, like, as a kid, you know, no one would have taken you seriously.

I mean, seriously a little bit, but nobody would have, like, looked at you maybe when you were 18, you know, as an apprentice and thought, this guy is going to be like Levi Strauss. Like, you got to Fort Collins, and you own a company that if you sold it, will make you. you one of the richest people in the United States. I mean, that's a, that's a, kind of a crazy story. I mean, do you, do you, I mean, what, what,

did you ever imagine that when you got there at 18, that you would, you would be that person? Nope. No, I really, I really didn't. And even today, it's like, I really don't think that way. Yeah, it's not,

it's not about the money. I mean, Otter's mission. is we grow to give. So it really is about giving back. I mean, if we make more money, we can give more money away. We can make a difference in community.

We can make difference in people's lives. And that's what Otter's really about. Okay. I want to push you on that a little bit because, as you know, I interview a lot of really rich people because they start big companies. I mean, with that kind of wealth

comes responsibility, right? I don't want to sound like a Marvel character. I mean, we've always been, Nancy, always say to him, much is given, much is expected. Now, we didn't say that, you know, a guy named Jesus came up with that. So, you know, it's pretty good, yeah. So, I mean, we really try to live by that, and we've really tried to instill that in our culture. Your, when you think about your legacy, and maybe it may not matter to you, maybe you don't care if people remember you in 100 years. You know, in San Francisco, there's Levi Strauss Square, and maybe you don't care.

No, I'll be dead. you'd be dead. But you're going to leave behind, your family's going to leave behind a lot of money. More money than you will ever need or many generations after you. What do you want to happen to that money? I would like to see it, bottom line change people's lives, make a difference in people's lives, be able to educate youth, to be able to make a difference in the world. If we can, if we can help young people start to understand giving to become part of their fabric, much like recycling has become part of much of people's lives today. It was ingrained in them very young.

We feel like if we can influence them to be entrepreneurs and philanthropists now, that becomes part of their DNA. And think how that multiplies. Think what a difference that makes in the world if we create a bunch of people, people that want to give back, not just money, but because not everybody's going to make a ton of money, but they have talents, they have experiences they can share, they can mentor kids. If that becomes part of their fabric, and that's what we've tried to do at Otter, is really install a heart of giving. I mean, for one day a year, we shut down the whole company and everybody

goes out and volunteers. I mean, that's one thing. We give away 24 hours of, we pay them 24 hours of time to go out and give back in the community, to give to the nonprofit of their choice, to spend, but what we're really trying to put in their heart is to give back. One of the things that is really interesting to me is you actually encourage people who come to you,

employees who come to you and say, hey, you know, I have this idea, I want to leave. I think I want to leave, and here's my business idea. You actually have given loans. Like you don't always, I think most of the time you don't take equity in their companies. You give them loans. Give them loans.

Get them to start and fly the coop. And then they pay you back and that's it. Right, right. Now, one thing we do for every otter that's been at otterbox or any of our other companies, we give them a life plan after a year. So much like a stradop, they get to spend two days with a life planner and really discover what they want. After a year of work, they get set up with a life planner, and the life planner says, So what do you want to do with your life?

Some of them quit. someone quit. Yeah. I don't want to be an honor. And that's okay. Yeah. Because that's, for me, for me, my primary aim is really to be able to help people understand their talents that God has given them and help them be the best they can be and really discover

that and go out and do that. I want them to do what they want to do. I want people to discover that. I mean, how many people in life get to 50, 60 and go, my job really sucks? A lot. A lot. Well, why don't we, why aren't we teaching people to ask that question early on? What do I really want? What do I want to do? What's in my heart? So even if the most valuable employees you have say, you know, Kurt, I want to move on to my own thing. You say, I'm going to cheer you want. Go do it. Go do it. Go do it. Absolutely.

When you think about your story, because I think it's totally implausible. I mean, high school, get their machine tooling to a company that is, who knows, who knows, how much is worth billions of dollars. I mean, in the revenue is over a billion dollars. How much of this story or journey do you think has to do with your hard work and intelligence and skill and how much, just because you got lucky? A lot had to be with being in the right place at the right time. So there's definitely some luck there. I think there's also, did it take some skill? It took some skill, but it took a lot of failure. And it took a lot of learning from that failure. We call it failing forward. It wasn't just me that built, you know, it says, how did you

build it? I don't want to say I built it. I want to say we built it. And so is it luck? Yeah, some of it's, thank you, Steve Jobs. You know, really? I mean, man, the guy hit it out of the park. I just followed the ball over the wall, you know? You know, so a lot of it is luck, But it is learning from those mistakes. It's the EMIF. It's the strata process. It's all those systems, and it's all those people that came into a culture that have come together to create something special. Kurt, for all the people building something, I'm curious, like, if you were sitting in this audience, you know, when you were, let's say, when you really, when you were, you know, in your early 20s and you really had this ambition to be an entrepreneur, which clearly you didn't.

It just happened. But if you were sitting in this audience back in the early days, what do you wish you knew then that you know now that has helped you? A lot. Yeah, I think I touched on it, right, guys? I mean, I talked about really understanding what you want. Now, whether you're an entrepreneur or whether you have a job, I would hope for every one of you that you really discover inside who I'm

am and what I want and what's my purpose and when I breathe my last breath will it be good will you go that was great I lived a great life but you got to ask yourself that question now you're going to do it now it's not like a savings account you can't start saving when you're 70 you know the most important thing is to discover what you want because then you can build a business you You can build a life on that. I mean, it's something you can share with your family. It's something you can build those bonds with. You can build a culture on that.

Kurt Richardson, founder of Otterbox. I spoke with Kurt Richardson at the Paramount Theater in Denver last month. By the way, the company's best-selling case is still the defender. And Kurt says this year, Otterbox will make 39 million cases in total, or more than 100,000 every single day. Hey, thanks so much for listening to this live episode of How I Built This. Our show was produced this week by Rachel Faulkner with music composed by Ramtinara Blui. Our live events team includes Jessica Goldstein, Ali Prescott, Al-Manyan, Ellen Jorgensen, Joshua Newell, and Marcia Caldwell.

Thanks also to Julia Carney, Sanaz Meshkampoor, Neva Grant, and Jeff Rogers. Our intern is Sequoia Carrillo. I'm Guy Raz, and you've been listening to How I Build This.