December 18, 2018
If you make a deal on Shark Tank, the future of your company is all set, right…? Unfortunately not. Listen as Adam Teague, the founder of Two Guys’ Bow Ties, talks about the highs and lows of life after his big TV debut- and how his international success lead to an even more profitable company called Plank and Mill.
Adam: My first real hire for that company was a total bust.
Lauren: This week on The F Word.
Adam: We check the market, we saw demand, we checked with customer base, they showed demand. We launched the product and it just didn't move the needle like we thought it would.
Lauren: Adam Teague, the founder of Plank and Mill and Two Guys Bow Tie.
Adam: You have a choice as a business you can keep subpar underperforming stuff like that. That's just going to be a distraction. Or you can say no, "I'm going to find the home run."
Lauren: Adam Teague is best known in Tulsa for being the face of Two Guys Bow Ties. The company makes men's accessories out of wood, their most popular item being wooden bow ties which are sold around the world. Two Guys appeared on an episode of Shark Tank where they made a deal with Raymond John. They've even been featured in GQ France. All their products are made right here in Tulsa. What fewer people know is that Adam also owns an incredibly successful company called Plank and Mill. They create, peel and stick wood panels that are used primarily to put on walls and homes and offices to give a cool, industrial rustic vibe. It's really great for those wanting to update a space without breaking the bank. Adam is here today to talk about both of those companies. So thanks for coming in Adam.
Adam: No problem.
Lauren: Let's start with Two Guys.
Adam: All right let's do it.
Lauren: That's what you're known for. I want to give a backstory a little bit. You really are an entrepreneur at heart. You went to Oklahoma State University and after graduating you built a lot of different companies. In 2012 you're dabbling with your friend Tim Paslay in a wood shop and you guys ended up creating a wooden bow tie. Surely I'm sure you guys made a lot of different stuff. You're both creators. What made the bow tie stick out? What made you decide to run with that idea and turn it into an actual company?
Adam: Yeah. I've kind of always been a person who tries to watch what's the market doing, see, there's a trend and an opportunity, and then fill that opportunity. Before we'd even started the bow tie company, I had actually gotten my own shop. I didn't even have a business out of it at that point, but just with tools and things to make different things to try and find an opportunity in the marketplace. At that time, Tim and myself were both tinkering and making at the Fab Lab on Lewis and so that's kind of where we started and so we were just learning all about new equipment, lasers, CNCs, stuff like that. He came to me because we'd met for many years and talked business and said that he had this idea what if we tried to make a bow tie out of wood? And at first I laughed and he was like, "No, I'm serious." And I said, "Okay." My background at that time is in marketing, website design. I really dug into it and I looked online tried to find kind of what the market is doing in terms of men's fashion, is there a room for a piece like this? Got done with the research after a couple days and called him back and said, "Let's do it." We got our first batch done and true to a designer, we got them all finished. Tim looked at them and said they weren't good enough. We got rid of all of them and started all over.
Lauren: You didn't sell any of those first ones?
Adam: He said they weren't good enough to go to market. I had already built a whole website around them, we'd photographed them and we immediately scrapped them and started from scratch again, remade them better and launched with those which was fun because I told him if we're going to do it, we had to launch before Christmas. So that was the week before Thanksgiving that he said that they weren't good enough to go to market. We were up late nights on the Sanders doing some crazy stuff. But we got launched in time and after that, it was just kind of a wild ride.
Lauren: What was the beginning like?
Adam: The beginning was lot of problem solving. I think anybody who started something from completely scratch where it's not even like, there's another template you can follow. It was literally every single step of the way. It's how are we going to do this? Which I think one of my favorite things in business is either when I don't know how to do something, or someone says, "You can't do that." That's usually when I'm like, "That's an opportunity."
Lauren: Fuel for your fire.
Adam: Yeah, yeah. When someone says, "No, that's not possible." Which is what we got told. We would go into wood shops and say, "Hey, we need an equipment to do this. We're trying to make this type of a product." They're like, "No, you can't do that. No, you can't." So we worked at it, we solved it. We found ways to do it then the next step in the business cycle is figuring out process and system because if you're doing everything, then you're not growing the business. So real quick we were bringing people on to make while we expanded the business in our own unique marketing ways.
Lauren: I think a lot of people create cool products but they maybe have a harder time getting the word out about them. How did you first get some real traction with Two Guys?
Adam: Yeah, I would say that has a lot to do with Tim and even though I am the marketing person on the team, he's kind of our publicist and really he did a great job of getting the product in front of influencers and taste makers. We had that product on some pretty high end people really fast.
Lauren: Like who?
Adam: It's funny thinking back to it, it's been years. I'm trying to remember the order of things but we had Chris Paul we had Mike Conley, wore one to the NBA Finals and ... Sorry not finals but the playoffs. That was a big press then they talked about us on ESPN. We sent them into Shaq, Ernie all of them and they talked about them on air.
Lauren: Yeah. How did you get these to these people? Did you just mail it to them and they wore it?
Adam: That's what Tim does. Tim's amazing he is not afraid to call up and be like ... If he thinks they would like it, or if he thinks that there's something unique he can do. And he's really awesome because he does the back work of that. He doesn't just say, "I'm going to send them a bow tie." He researches their life. What do they like? What do they do? So each time he does something, it's always done uniquely geared towards the person. The first year when we did Mike Conley, we did the bow tie the next year they actually called us and said, "Hey, it's playoffs. We want another statement piece, but we want to do something different than the bow tie. That was when we came up with the fedoras because he literally was like custom making a piece for my Conley for Mike Conley.
Lauren: That's incredible. He didn't have a connection to Mike before that he just was bold enough to do his research and ship it off.
Adam: Reach out. He has this unique way of finding, he digs through emails and figures out, "Oh, this is the right person to email to ask that question too." I'll be honest, I don't have that skill set. So I don't even know that I can fully express to you how he does it. I think you probably do a lot of that with your work, publicity stuff.
Lauren: Yeah, there's relationship building for sure. So fast forward a few years to 2015 and Two Guys makes it on the ABC show Shark Tank. You went to a casting call Casey, ended up on national television, making a deal with Daymond John, what was the aftermath of that whole experience? What an opportunity, what a platform, what did that lead to for you?
Adam: So it was kind of a cool situation, when we first started the bow tie business, it grew on us really fast before we were really ready for it. And so we had kind of just gotten done taking about nine months of just letting the business be what it was going to be. Growing it but just letting it kind of operate in normal business cycles, not pushing really hard. We had just, started this new push. We had opened our retail location. We had moved to a new facility, got new equipment, changed how we produced the product in a better way. Then I literally, we were at the shop, setting up the shop to open and a buddy texts me from Oklahoma City and goes "You're going to the casting call for Shark Tank." I was like, "What?" I mean, I'd seen Shark Tank. I knew all about it but he's like, "You have to go." And I was like, "Where is it?" He's like, "It's in Oklahoma City." I was like, "Okay." So I got on my phone and sure enough the casting call is in two days. Tim was working the same time I was like, "What do you think about going to like the Shark Tank casting call?" He's like, "Let's do it." So we did it. We prepped for two straight days and in typical Tim fashion we came with a product that wows. He built this whole custom tackle box that opened and that really kind of I feel like is a big piece of why we got in the door.
Lauren: You wowed them with your presentation.
Adam: Yeah with our presentation but specifically with the way we laid the product out and showcased it, it was enough to draw their eye because you're thinking these people are seeing 500 to 1000 businesses in one day. You got to do something to stand out. And so we did then we went through the next 20 to 30 steps. It's a beat down process for anyone who's doing it. Every step of the way, every week, you're talking to producers, they're asking you questions, you're happy to send in videos, answer more questions, pass background checks, answer more questions, send in more videos. Then you go out there and they're like, "Oh, we're going to take 200 episodes, but only air 120." So you've only got a 5050 shot even once you've done all that. But we got on there and that was when it kind of just skyrocketed for us which thankfully we had kind of been scaling up already. The business we had already put in orders with planned growth based on the fact that we were already pushing the business and so it really just fell kind of perfectly for us. We actually know several other businesses who have, they've gone on Shark Tank and either tanked because they overextended and didn't sell or the reverse is true. And they didn't pre buy enough inventory and enough materials and then they lose out on all of this momentum.
Lauren: 'Cause they're out of inventory.
Adam: Yeah, because you're out of inventory. I mean, you're talking like in the five days following airing you're doing what you would normally do in six months. It's a crazy boost.
Lauren: How did you handle that aftermath? What did that look like for you?
Adam: We didn't sleep a lot. We stayed, we worked late. We had already kind of scaled our team pretty well prior to it because we thought we had a good chance of airing. What was awesome was it literally aired two months before Christmas. So we were already scaling up for Christmas, so we just doubled down on whatever we would have done we just redid and we had kind of a little gap before Christmas kicked in. It's hard to even say thinking back on it I feel like we were just treading water to make sure we didn't drop any major balls and I can say we didn't which is pretty awesome.
Lauren: You experienced massive growth because of shark tank.
Lauren: In the midst of growing and gaining more attention, trying to hustle and make it happen. Did you make any poor decisions as you were dealing with all this new fame?
Adam: I feel like we made a lot of hard decisions early on when we were small ... Early mistakes, not decisions. A lot of the mistakes we made where we were small and really I would say lucked out, not necessarily from any planning because I have now started a subsequent business that has seen pretty fast, rapid growth and I've gotten my butt kicked by that. I can say that it's not because I'm good and that's why Two Guys didn't, have a ton of big mistakes. But I think we learned a lot when we were little and we had that first spike of growth and the losses were a lot smaller. So whenever it came time for Shark Tank and all of that, I do feel like we just lucked into a lot of things. We were already prepared for growth and so it just kind of happened that it was a little bit more than we had projected.
Lauren: That's awesome. So you grew, you experienced a lot of success and probably not surprisingly, other people heard about this idea and wanted to jump on the bandwagon. Now if you go into Amazon, and you type wooden bow tie, you can find dozens of knockoffs.
Lauren: What are your thoughts on competition? And how do you stay ahead of all the copycats?
Adam: I think that's a great question. In fact my first business ever 13 years ago, is the same kind of thing. It was like we're out there being trendsetters and all of a sudden we're getting knocked off by-
Lauren: What was that business?
Adam: I hesitate to mention it. It was a photography business called Letter your Legacy. It was just one that was easy to knock off, low barrier to entry. So yeah, I watched that happen with that business and we never adapted, we never grew. I knew from that, with this business that we've got to be ready for what's next. I think that it's funny because a lot of our employees get really mad whenever people knock us off and blatantly copy what we're doing, and me and Tim kind of look at at each other like, it's just part of being in business. It doesn't really bother us because we know we're already three steps ahead on the next thing whereas they're just barely trying to figure out what we're doing. Not just that I think that we do a good job of finding unique ways to do what we do. There's a big difference between making 15 bow ties or 50 bow ties and making 25,000 bow ties. You've got to scale, and the people who are out there knocking things off most of the time are not ready to scale. However, the people you're talking about on Amazon, they're ready to scale. Those are factories in China that are just copying everything under the sun, or, the hobby lobby's of the world that are, "Oh, this is cool. Let's just knock it off from China and bring it into the states." Nothing against that, that's a business model. You can do that. So our kind of viewpoint on that is that, they're just affirming that we did the right thing, we did hit the right market's share and hopefully we're doing it in a way that's better than what they're doing and we believe we do. Does that make sense? Does that answer the question?
Lauren: Yeah. How do you stay innovative? And how do you adapt? Is it just coming up with new designs, new products? Is it trying to increase your ... Make your packaging cooler?
Lauren: What are those things that make you stand up high.
Adam: If we're talking about failure, let's talk about that. I have one for Two Guys. Now that I'm thinking about it. This is post Shark Tank. We try that. You try and innovate. Our first innovation from the bow ties was the lapel flowers. Those took off and they did great. Next innovation was the pocket squares, they did, okay. Next innovation was the fedoras. They did great like they've a pretty good chunk of our sales now. We're looking what's next? What can we do? And we thought, well look we've already got all these customers, why not see if some of them one weren't a more mainstream men's wear product. So we launched fabric bow ties and ties. Totally tanks. It's not what they're there for, that's not why they came to us. How could we have known that? I don't know. I don't know, sometimes you just have to try things. I think with innovation, one of the big things is finding ways to innovate small scale to test something out before you pivot your business completely into that. An example is we actually launched Plank and Mill out of the Two Guys, bow tie company. We had a building, it was bigger than we needed and we had this extra wood into like, let's try this. So we made product for Plank and Mill then we sold it. Then we hired a person and then we made more and then we sold it and then we stole people from two guys to work for Plank and Mill and then we sold it and then we did more. So all the sudden it was like taking everything from two guys and we're overwhelming the whole building and that's when we realized oh, this innovation that we thought was just like a little offshoot is now something so much more and so had to move it away.
Lauren: So you're just taking baby steps towards new idea.
Lauren: And not throwing all your weight behind something that you think will be brilliant.
Adam: Exactly. Yeah. An example Plank and Mill, we've launched some new products and one of them has not really performed the way that we thought it would like. We checked the market, we saw a demand, we checked with customer base, they showed demand. We launched the product and it just didn't move the needle like we thought it would. So you have a choice as a business. You can keep subpar underperforming stuff like that, that's just going to be a distraction. Or you can say, "No, I'm going to find the home run and you can let those things go." That's what we try and do is whenever something doesn't work, cut and move on.
Lauren: Do you or does anyone on your team have a hard time letting go of those things? 'Cause I feel like it'd be easy to be like, "Well, we can just keep a little bit in the back and keep it on this side. Is it hard to make that firm cut?
Adam: The first person on the team that struggles with that is me, 'cause I'm the dollars and cents guy as well as the marketing guy and so I always think, no I can find a way to market this or no I put money in this, we need to get the money out of it. But really if I've learned anything from failing with new products it's that fail fast and fail cheap, and once you realize it's done don't mess with it just stop. I had one business that I launched a little after Two Guys bow ties, and it was an offshoot I did by myself. Man, I thought the product was amazing, everyone I showed thought it was amazing and it failed. It didn't do anything. And I finally realized like, stop trying to make this work. You're just distracting from something better. So cut ties and took a loss and moved on.
Lauren: Do you have anyone in your life that will kind of push you and ask those hard questions of like, "Adam, should you keep going down this road or don't you think it's time to let this go?" What's accountability and that look like for you?
Adam: Yeah, I actually have quite a few. I've really been blessed with a lot of smart business people who for some reason are comfortable talking to me and are okay giving me advice and tell me what to do, which is awesome. I also have a business coach, which has been huge for me, especially with this new business Plank and Mill, it's just bigger than anything I've ever done. So being able to talk to someone who's been there and grown a business like this, definitely he saved me from making several mistakes that I would have made because of my instincts.
Lauren: How'd you find that business coach? How do you create that opportunity?
Adam: I looked around for a while for different people. Happen to know someone who knew this gentleman who his background kind of mirrored mine, he had started some companies and grown them and sold them or started and just a lot of similarities and he was coaching a lot of businesses similar to mine. So I just felt comfortable in the space that we were in.
Lauren: That's good. Let's talk brick and mortar for a second. You had a shop for Two Guys in Broken Arrow and then you moved to the Pearl District when it was kind of revitalizing, and then you closed that. Now you don't have a physical location at all. You're totally online for Two Guys, what were your thoughts behind that decision?
Adam: A lot of it had to do with convenience. Both Tim and myself live downtown, or Tim lives downtown and I live near downtown. So commute to Broken Arrow was kind of a killer. We were looking for an investment opportunity and so that was where the building came into play. We felt like we were able to get that building for a good price. Our idea was, hey, we're not trying to be an amazing store like an Ida Red or something like that. It's going to be like that's what everybody comes to shop at. But we were thinking, hey, this can be part of the business model. This is a place where people who are local from Tulsa want to come in and look at the product and they can. And they did good, and we got sales and revenue from it. Our problem became after we launched Plank and Mill out of that building, and then moved it to its own building, and then Plank and Mill outgrew that building within nine months, which is pretty crazy. Then we moved it into a bigger building. We were having this problem of I had half my staff at one building and half my staff at another and a lot of people worked for both companies and so they're driving back and forth and back and forth, which just didn't work well for us. So we just kind of made the decision that we could move everything under one roof, all the production, all the equipment, there was just such a synergy for that.
Lauren: Do you sell your bow ties in any stores? Have you thought about partnerships with big companies or do you want to keep it all under your control?
Adam: We do quite a bit of wholesale. Ida Red has carried our stuff, Decapolis in Tulsa has carried our stuff but then beyond that we've had distributors in France, Belgium, New Zealand, Japan, Australia. We've had major distributors that are buying large quantities and then they're selling to their wholesalers as well. I would say that the difference for me is I'm a margins guy, and your margins are better when you're selling direct to consumer and so I'm always going to go for the easier sale, which I think personally is going after direct to consumer. So we kind of always keep it as an open option but we always are looking for more opportunities doing direct to consumer.
Lauren: Let's talk about, we talked about a little bit, hinted at it. Let's talk about Plank and Mill some more. I know it was branched out to you guys as this idea. what really sparked that at the beginning of like, "Hey, what if we did this?" And what made you decide to run with that?
Adam: It's actually funny 'cause it spawned out of another failed idea. That failed is not the right word. We had another product that was using reclaimed wood and we made these cool signs and they did okay. Nothing astronomical, but the production of them was pretty onerous. So we were kind of at this weird point of, we had all this inventory to make the signs, but the signs were a lot of work to make. So I just had one of my guys, I was like, the process that we make the bow ties, mirrors the process that we make this Plank and Mill wood. There was a lot of similarities. So I had this guy and said, "Let's try this, just make this for me." So I walked him through the process, showed him how to make it. He made me a little bit of it. Then I took it, took pictures, we did our whole thing we do before we launch a product and then I launched it. I was just like, "Well, we'll see what happens. If it sells, then I can make more 'cause I know we have all the equipment to do that." It didn't sell for the first three weeks and I was like, "Okay, I guess it wasn't anything." And then all of a sudden it was all gone. And I was like, "Oh well ... " Then we sold more than we had and I was like, "Oh, shoot, we got to make it." 'Cause it was on Amazon and so we made that then we sold more, then we made that, then we sold more and it just kept spiraling.
Lauren: Did you come up with the idea? Because of the trend, I think of Fixer Upper, like Chip and Joanna Gaines that's what your product makes me think of. Is that where it sparked you were watching TV? Or where did the idea come from?
Adam: Yeah, I was actually remodeling ... We remodeled our house, a 1920s house, got it to the studs and everything. I was actually building a bunk bed for my kids. I was like, "What would be a cool covering?" That was actually one of the first places. The first product photo was on there. I realized whenever I installed it, I was like, "Oh my gosh, we're onto something, like this is really easy." Anybody can do this. You don't have to be at all handy to do this. So it was pretty, cool.
Lauren: The true DIY.
Lauren: It took off so quickly. Was that because of SEO stuff? Or was that because of Facebook ads you ran? I don't think people just all of a sudden started Googling peel and stick wood panels. So how did that become a thing for people out there that they even knew this product existed and believed they needed it in their life?
Adam: That's a good question. I kind of take a shotgun approach when it comes to marketing, which I think a lot of people would argue against and that's okay. I'm okay with people arguing against me. But my stance is that you don't usually know which avenue is going to be the best that's going to break loose for you in terms of marketing, and some of them have a four week lead time meaning, you spend an ad dollar this today for four weeks, you're not going to get a return, but then in four weeks, you're going to get $4 back. We kind of hit on all fronts right off the gate and it just happened that Amazon was the one that hit. But then additionally, one of the things that we carried over from the bow tie company is really good customer service and high attention to detail and product and quality. We don't sacrifice just because we're behind, the product will go out great and we stand behind what we do, and we have great customer service around that. So what that does, I think is when you sell one job, someone sees it and they're like, "Tell me about that." And they had a good experience because we handled every step of the way. If something did go wrong, we're going to handle that well too, to the point that we've had people who things went wrong and they're still our biggest advocates. So really making sure to handle things like that well I guess.
Lauren: So just a huge push.
Lauren: And you just lucked out.
Adam: Well, so if we're talking about failures I'll give you one. My head of operations right now she probably will not like me talking about this.
Lauren: We'll tell her just skip ahead on this.
Adam: No. We use tape for our product. It's a peel and stick adhesive. A couple of summers ago, we found that the heat paired with this specific batch of tape that we had wasn't sticking to a specific paint type. It was this weird thing. We'd never experienced it before. And all the sudden, it's not sticking to this one type of paint. We're getting customer complaints. We had to handle that and we did, we gave full refunds anytime that product was defective and that was a huge hit to cash flow and that was a big fail. The truth is, we didn't respond fast enough. We we didn't fix the problem because we didn't realize there was a problem. And so I think that that's one of the things I think if I would say that I've learned that I would hope other people could learn from, it's don't stick your head in the sand when something is going wrong and when there's a problem. Acknowledge this is a problem. But also don't be an alarmist. One of the things we do now is we have data and we keep that data and we back it up with more data and there's more data behind that. Now, if we were to have a problem like that, we would know really quickly when something is out of luck or something is out of, normal tolerances.
Lauren: That is such a buzz word, what metrics do you actually look at?
Adam: A lot. We look at inventory reduction, we look at quality production, we look at the rate of yield of the product, so we are doing a reclaimed wood. Some months the yield might be great, some months the yield might be not great. Then on the marketing side, there's just ridiculous amounts of data. What platform are they coming from? How long did they spend on the site? How many times did they come back before they buy? Just so many different things and honestly that's what's so cool about today and owning an online business for anyone who's doing it is that Google Analytics is a free tool that is more powerful than anything, any enterprise level business had 20 years ago. Nobody could do what Google Analytics can do now and it's free. You can do so freaking much with that.
Lauren: How do those things then translate into shaping your decision making? 'Cause I think you can get on Google Analytics and be overwhelmed with just all the data they give you. Can you give an example of we learned this and so we made this decision based on that?
Adam: Sure. One of the examples would be like, I think you have to just spend time in data for it to ... Gosh, my people are going to laugh at me for me saying that, 'cause I always like to joke like, "Guys, we need to be in the data." But no, you have to spend time with data to understand when something's weird. So one of the commitments that I made a while back was I'm going to look at data an hour a day, I'm just going to delve into it. I don't know why I said that. But I'm going to try and see what can I find and just mind through it. An example would be, I was digging through one day and I noticed that for some reason our mobile traffic was going up. Then I researched and dug into why and it had to do with our ads. The ads were sending more mobile traffic. But then I was noticing that our mobile traffic time on the site was way low, which is industry normal, but it was abnormally low, and kind of dug through and I realized that basically, people weren't able to navigate our mobile version of our site well. So we made some minor tweaks and then that time went up. Then now you've got confirmation that, okay, I read that data, I made a change, the data moved the other direction, so that's most likely due to the change that you made. That's why you have to be careful not to make too many changes at one time.
Lauren: Test one variable at a time. Yeah, for sure. So now, Plank and Mill only been around for a couple years and you're already making millions in revenue every year which is incredible.
Adam: Not millions in profit.
Lauren: Thank you for that honesty. That's so good. But you've clearly mastered the art of scaling a product, both with Two Guys and Plank and Mill, you have customers all over the world. How does someone go from small business ... 'Cause you could have easily for both of these just been a small Tulsa business. How do you go from that to international company?
Adam: It's a good question. I would say one of the benefits of being in a business, it's a partnership. I know everybody doesn't have that opportunity and I don't think that everyone should do a partnership. That's not what I'm saying. But there is a benefit of, you have two people who care deeply about the business, who can go in different directions and push on different fronts. So every time we have this a new idea, or a new thing, he'd goes his direction with it, marketing wise or design wise or whatever, and I go mine but we're pushing more things forward at a time. One of the things that we learned with the bow tie company is we really started it with a bootstrap mentality. I would still say I am extremely a bootstrapper at heart.
Lauren: You don't take investor money.
Adam: Not outside investors. Sometimes we will take small loans to cash flow certain situations if we really see the opportunity, most of the time we try and do that ourselves with our own capital. But when I say bootstrap what I mean is, rather than buying the $20,000 equipment, we'll buy the used $3,000 piece of equipment, and we'll spend the extra 10 hours to tune it and fix it and do it ourselves knowing that it might only last six months, but we only spent three grand on it. So that was how we started Two Guys, every step of the way, we used the lowest common denominator to test and once it got confirmed, then we would buy the nicer version or whatever. I would say that with Plank and Mill we kind of both had learned that if you want to grow quickly you need to watch out for that because that can become the constraint really quickly. So we kind of made the conscious decision for better use the word, hijack all the cash flow from Two Guys bow ties to make sure that we grew Plank and Mill right. So whenever we went for Plank and Mill instead of buying that cheap machine, we went ahead and bought the expensive machine because we're like, "No, we're scaling this, this is going to happen." Does that make sense?
Lauren: Yeah, absolutely. Imagine this a little bit but cash flow got really tight with Plank and Mill for a bit.
Lauren: You made some close calls.
Adam: We did.
Lauren: Just like the human side of that. How do you feel? How do you process that? What did you do in those moments where it's like, "Ah shit."
Adam: We had a lot of those moments. Specifically a year ago, we were growing and we were growing faster than we ever could have imagined and we realized that the building that we were in wasn't big enough and we were to the size of building that it's really hard to find someone who will let you come in and do what we needed to do and have enough space. So we made the tough decision to buy a building. We bought a building bigger than, I say bigger than we could ever need. It's 87,000 square feet.
Lauren: It's pretty big.
Adam: But my business partner Tim says that we'll definitely fill it out. But all that to say, we bought big, but then there's a lot of costs associated with getting that all set up. There was just tons of electrical and plumbing and all this stuff to get the building just ready for us to move over to. That's happening at the same time as expansion and if you've been in a business before that's scaling up really fast, what will happen is you have to start buying inventory at larger and larger volumes so that if you get a big swing one day you're not out of inventory. So we were expanding inventory, we're expanding staff, we're expanding equipment we're expanding building. Everything it's crazy 'cause I look back at it and I remember I sat down one month and I ran the numbers and I looked at it and I was like, "Oh crap, we're not going to have enough money not to make payroll. We would always have enough money for payroll but it was to build this section of the building, but we can't move without building that section of the building.
Lauren: Like a cache 22.
Adam: Yeah it's like, what do you do there? But I ran all the numbers and I looked at it and I saw we're going to be short and I was just like, well let's hope my math is wrong and we had just like this gangbusters, sales month and our business the way it operates it's cash in comes in immediately, it's not like we're waiting 30, 60, 90 days, a lot of businesses have that problem. Sales increased by more than that amount that we were short by and so we were fine. But we could have totally, very easily been in a position where it was like, "Okay, we can't move, but we need to move."
Lauren: You've done all of this, Two Guys, Plank and Mill grown a ton with a very, very lean team. I think people would be surprised how many employees you have. How many employees do you have at each company?
Adam: Actually Two Guys has zero. What we do is we actually contract all the labor out to Plank and Mill. That was one of the decisions that we made with synergies, it's just easier. Basically now Plank and Mill produces all of Two Guys products and sells it back to Two Guys, if you will.
Lauren: That's interesting.
Adam: So Two Guys have no staff Plank and Mill fluctuates depending on off season, on season but anywhere between 25 and 40 people depending on, on season.
Lauren: Which is big, but it's not massive.
Adam: It's still tiny compared to most businesses.
Lauren: Yeah, for sure. What is your method for building your teams?
Adam: What is my method for building my teams? I am figuring that out as we go. I would not feel comfortable giving advice on that because I just don't know that I know enough about that. At this point I am figuring it out as we go and trying my best to be an organization that I would want to work for, if I was working for somebody and care about the individual first. But that also has ramifications of thinking like that and doing business like that.
Lauren: Have you hired poorly?
Adam: But actually what's funny was Plank and Mill whenever we first, first started, my first real hire for that company was a total bust and I don't think at that point I don't think I had ever ... I had fired one other person before that. I've been in business for five, six years. That's not totally true. That's the first time I'd ever had to fire someone like, "You're doing a bad job. You're fired." Man, that was hard. It's not a fun feeling and didn't like it.
Lauren: How have you come back from the poor hires? How has the past shaped how you hire now, how you build your team, how much to scale your team?
Adam: Again, it depends on the position that we're hiring for. If we're hiring for someone that's going to be working the line, we're looking for a couple different factors but for the most part we're saying, "Hey, if you want to do this, if you want to try come on in. And we are hiring for that right now, but no.
Lauren: Pull the plug.
Adam: Yeah pull the plug. But no, if you want to come in and try, you can try, and you can show us what you're ... We hire everybody on a 30 day trial.
Lauren: All positions.
Adam: All positions, but primarily the career member positions but then what we've kind of learned with the other positions is go slow, take your time, this is a new thing for us. But we've started, we've even started doing a thing where we do a trial day. It's like, "Hey you tell us what your contract rate you want to be paid as an independent contractor to come and work with us for days and as long as it's not outrageous. We agree to pay that." And then they come in and they work with our team for a day. And we get to talk with them, we get to tell them what we do, they get to try a couple things and then at the end of the day, we debrief. "How was it for you?" Then I ask all of the other people who worked with them, "Hey, how was that for you? Did you like them? Did we gel? Do you think they have the skills that we need? What were your concerns?" Then if that went well, then we hire again still with the mindset of, Hey this is a trial for two weeks to four weeks but still we're going to figure it out. And usually debriefing once a week just like what's working, what's not? And it washes out pretty quick. Also we have one of the core principles of our company is what we call a sweep the floors mentality which means, it doesn't matter who you are, it doesn't matter if you own the company, or you're brand new, we can ask you to sweep the floors. I sweep the floor or do the dust collector, whatever. There's no job that is above or below anybody else. One of the things I try and make most, anybody who comes on new do is they go and work the floor for four days. It doesn't matter if you're hired for a COO or not, you're going to learn how the product is made and you're going to work the floor.
Lauren: That's so important to have that ground level experience. It's really good. How's it been building a business in Tulsa? I know over the course of your life you've lived all over the country.
Lauren: I know you came to Tulsa because your wife is from here. Do you think Tulsa is a good place to grow a business? Do you think your story would have looked differently if you were in a different city?
Adam: It's a good question. I enjoy Tulsa a lot. I think that there's a lot of advantages to starting a business in Tulsa and the fact that the cost of a lot of stuff is lower than it would be in other places, which I think gives ... It's a pretty competitive advantage really, when you think about it. If you're looking at the same startup in San Diego as opposed to here, your rent is going to be four times. Actually I started a business in Denver, let's use that. I started the exact same business, a branch in Denver and a branch here. The rent in Denver was 10 times the amount the rent was here.
Lauren: Literally 10?
Adam: Literally 10 times. Our rent here is $1,000 our rent there was $10,000. And that can make or break a business. Another thing is hiring. We had a terrible time Denver's is crazy. It's amazing for them. But unemployment is at an all time low. You could not get someone to come and work for you. It doesn't matter how much you paid. In Tulsa there's a lot more opportunity that we've seen. You think about all of those factors. I think that makes Tulsa a pretty compelling place to start a business.
Lauren: Are you ever tempted to go somewhere else? Do you have a desire to be somewhere else? Are you like, "No I have roots here…
Adam: I’m ion the KOSU studio. Am I allowed to answer that? I will be honest, I have the travel bug. My wife and I travel quite a bit. There's a book I read early, early on in my business doings, whatever you would say. It was called the E Myth. It talks about setting it up so that you own a company and not a job. If you own a company, you can do that from anywhere. I would say I have no intentions of moving any of my companies. Myself, however, I might be able to be virtual.
Lauren: Is that the goal?
Adam: Probably. I hesitate to say that, that's the goal. No, that's the goal. Yeah. I want to be able to travel freely.
Lauren: I think that would be the goal for any entrepreneur. I mean, that's the perk of owning a company, is that you're your own boss. You can have some freedom and if you've built a successful company, then you don't have to be hands on with it all day, every day.
Adam: Unless you build it wrong, which I've done and I feel like I've had to go back on a lot of that. If you build a company in which no one has any authority to make decisions, and they are always coming to you to decide things, because you've never empowered them, then you can't leave. When you do leave, everything stops. I learned that I was doing that a long time ago and I been working hard to stop doing that ever since, because your biggest bottleneck is yourself.
Lauren: So the question we always end with, if you met an entrepreneur who was in the early stages, they're finding some success, but they're working on overcoming their own hurdles, could look like yours could not. What would you say, to encourage an entrepreneur on the brink of stepping off the edge? They're just, they're looking over the edge of like, this is a big jump. Yeah, and I just have to hold my breath and do it. What would you say to encourage them as they take that step?
Adam: Yeah, I think that I would say the encouragement would be, or the question to them is, do you want to stay here for a long time? Because you can get stuck, you can stall out. If you stop pushing, but your business has already kind of that modicum of success, you can stay at that level. If you're okay with that, and you like that level, then stay there, there's nothing wrong with that. But you've got to know that to take the next step is going to take risk and there's going to be some things you're going to have to say, "All right, I'm eating ramen noodles for the next couple of months because I'm investing that money that I would have been paying myself into another piece of equipment or into advertising or into something else. But I would say if you really have seen success and you really have seen the business grow and it wasn't brute force, like the market showed you, there is a place for this product, and I think that that's an important indicator is like, "Did you force the sales? Did you sell it to your Nana and your family? Or did people, real people want to buy your product that don't know you?" If that's the case, and the market wants what you have, I say go for it. Take the risk jump off the ledge and do it and eat that ramen noodles because it's more fun even though it's maybe less money at the time whenever you're in that growth stage.
Lauren: It's so good. Well, thanks so much for coming in to share your insight and your story and, so much good wisdom to take from this.
Adam: I don't know the wisdom, but it was fun.
Lauren: Next week on The F word.
Mike: Everything was just going to absolute crap and trying to maintain keeping my head above water.
Lauren: The founder of Andolini's pizzeria, Mike Bausch talks about the hurdles he overcame to establish one of Tulsa's favorite pizza joints.
Announcer: The F word is brought to you by 36 Degrees North, Tulsa's base camp for entrepreneurs. To learn more about our workspace, community and resources visit 36n.co. The F Word season two is recorded in the KOSU studio and produced by Lauren King.