Fanatics: Michael Rubin

Transcript from https://podmenti.com/t/36b9a0b8c181c0a9

Look, this is no secret. We went through a
You know.
Tough experience earlier this year in our partnership with Major League Baseball.
And with Nike wear
you know, Nike redesigned the jersey.
uh that we've been making for eight years.
And you know, there was there was a really negative reaction to it. And with main league baseball for the uniforms.
And players complained about it. Players complained, fans complained relentlessly. They could see through it and all this stuff. Yeah, and and and
For us.
That was actually an incredible moment.

We embraced the ass whip and we said, we need to be a lot better, you know what?
We gotta speak up louder, we gotta be strong, we can't you know, you can't just go along for the ride. So like
That's why I'm so excited about this business, because I get to learn every day.
It's
You know.
If you like action.
This is the job for y'all.
Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements.
They built.
Guy Raz and on the show today.
How Michael Rubin started his first business at age eight.
made his first million in his teens, and then built Fanatics into a massive one-stop shop.
For sports.
We've had hundreds of brilliant entrepreneurs on this show over the past several years, and in each case, I've learned a lot from their experiences, and I imagine many of you have as well.
But every once in a while we tell the story of a founder who is a true entrepreneurial savant, a prodigy of Michael Rubin.
Michael Rubin was not a good student.
barely finished and only attended college for a single semester. So it's safe to say that as far as academics go, he was close to being a failure.
But when it came to business, he was a superstar already at age twelve.
That's when he opened his own ski tuning shop.
By fifteen?
He had a brick and mortar ski shop on the outskirts of Philadelphia.
Before he graduated high school, he had five of these ski shops, and before he turned twenty,
Michael was making hundreds of thousands of dollars a year buy and selling excess sporting goods and footwear from big brands.
As you'll hear in this conversation, what Michael lacked in academic prowess
He more than made up for an instincts and street smarts.
He figured out how to take
Big buttons.
calculated risks, risks that would eventually lead him to the business he's probably best known for today.
Fanatics.
If you're a sports fan and bought an officially licensed hat or jersey or collectible, or even bet on a game,
You have likely spent money on a Fanatics product.
Today, the brand is worth roughly$25.
billion dollars, and it's still privately owned, though there are rumors it could go public in 2025.
As for Michael
He's become something of a brand himself, but
More than a million people follow him on Instagram, where he posts videos and photos about his life and his business.
For the past several years, he's hosted an annual celebrity filled party, the White Party in the Hamptons. A party, by the way, not to be confused with another white party, the infamous one hosted by the now disgraced rap mogul Diddy.
And Michael's net worth?
It's estimated at around$10 billion.
Now, not surprisingly, to fuel all that success, Michael has a restless, driven nature and a confidence so powerful that it can feel like a physical force. A force I certainly felt when I met him in the studio in San Francisco.
And by the way, if you're listening with kids, Michael is
Pretty liberal with his salty language, so just a heads up.
But unlike some founders I've spoken to who prefer to remain stoic about their struggles,
Michael is
pretty generous when talking about his personal challenges, his anxieties, and the sacrifices he's made over the years to build his businesses, and we'll hear about all of that a little later on.
For now, what you need to know is that Michael grew up in a Philadelphia suburb in the 70s and 80s.
And back then, he had trouble doing the things that came naturally to other kids.
Like reading.
People don't believe me when I say this. The last book that I've read.
was the book called The Swoosh.
The unauthorized story of Nike. I read it.
Um, I think when I was in
Eighth or ninth grade, so probably came out in the in the in in nineteen eighty six, nineteen eighty seven.
concentrate on the page. Yeah, I I read a page and I have to I read two lines, then I g have to go read it. I I reread it. Yeah.
Today.
You know, I again'cause I haven't read a book since ninth grade.
Um, you know, my reading comes in very sh short s you know.

Like kinda pieces. If someone sends me an email that's
You have three or four paragraphs.
I'm 99% not reading it.
Hm.
Certainly forty years ago was a lot less common than it is today. Yeah. To tell you about all the learning the disabilities. But when you have a mother who's a psychiatrist. Yes.
Father's veterinarian.
Both go up very education oriented.
And you have a kid who's just not kinda
Doing well in school.
Um, you know, they they worry and figure out like how do we help them? What do we do?
Did you get in trouble at school?
I was not a good student. I was not a good
Kid in school. I wasn't like a
Bad kid it was more like
I just didn't connect with school, so
Did I get in trouble?
Yes, absolutely. Was I still well liked by everybody at school, including all the teachers and everything? Absolutely.
Yeah.
So it sounds like
Y you you didn't feel like you were
Or did you did you feel like God I'm failing my parents and do you remember feeling bad?
Question.
I don't think
You know, I grew up in a family where they told you what you couldn't do.
And then that just provided motivation to me of what I could do. Yeah. I had great two incredible parents. They just you know, it was kinda like they told you they told you all the things you couldn't do, all the things you couldn't accomplish and to me it's like
Fuck that. Like I can do anything I set my mind to.
Mm.
But
As bad as a student as I was, and as much as I struggled in school and
Even though it wasn't diagnosed at that point, real A D D issues.
Um
I think I was equally bad as an athlete.
Okay. So I wasn't just failing in school. You the boy was failing in sports. And and that meant socially Yeah. What that meant was I was always
Last to be picked.
on a sports team. You you're gonna pick, you know, ten people on each team. I'm ten.
You know, what that I believe what that makes you do is you figure out, well, what are you good at? Where can you win?
And to me
Business.
And
Working was a place I always excelled. I loved doing it. It's a place where I could be number one. I could be the best that there was. How did you how did you figure that out?
What was the what was the moment the first t time you thought, God, this is really fun. I'm good at this? I think I was born with it.
But what ha tell me,'cause I you know already at like age eight, you started sell I mean, a lot of kids do lemonade stands, a lot of kids do
You know, car washing things.
What was the thing that you you started doing?
Eight years old when it would snow.
I would go around door to door.
sell the snow shoveling and then hire, you know, six kids to at you know, five bucks an hour to to shove all the driveways. I'd go door to door, you'd say, Hey, we'll I'll shovel your the would you like your driver shoveled as twenty bucks. And then you'd go find the kids to do the work. I had them following me around and I was, you know, paying'em five bucks an hour. Did you
Do you remember how you even thought about doing that? No, but I do I'll tell you one story that I do remember when I was twelve.
I really learned how to tune skis and uh
A friend of mine said to me, like, hey
You love skiing.
Do you love
Business.
Why don't you start a ski tuning shop?
And that's a great idea and you know, like an hour later I had the Mike's ski tuning flyers made with the prices of, you know,
You know, all the different things you could do for for ski tuning. So all right, so age twelve.
You start a ski tuning shop, I guess you learned how to tune skis at like a ski camp you went to. Yeah. And so
You're in Philadelphia, or outside Philadelphia, and you opened you open a ski tuning service
But I guess uh after your bar mitzvah you made a little bit of cash and you were able to use that cash to actually
Open a
A storefront? Like a location? Um they had the ski swap every year where all the ski retailers in the
Philadelphia area would bring their excess inventory to a ski swap. And I worked that swap the whole weekend, you know, just trying to help out the other ski shop owners. And then I said to one of the guys, this guy Brett Ballman, who owned a uh something called Ballman Ski Shop, I said, Hey
You know, I live forty five minutes from you, so there's no competition. Why don't you lend me some of your excess equipment and I'll pay you for it as I sell it.
And he did exactly that and that year at thirteen years old, I did twenty five thousand dollars in revenue. Selling it from where? From my basement of my parents' house. How did you get the word out? You would just tell people I'm selling skis and Yeah, f school, flyers.
You know, I actually I remember
It's a great story. I don't think I've ever told this before. There was a ski shop called Ray Panella Ski Shop.
The Plymouth Meeting Mall. Um
I buy these flowers I put on all the cars, thousands of cars in the parking lot.
And I get home and
My dad says, you know, hey Michael, I need to speak to you.
He says I said like Dad, what's up? He says, Well
Ray Pinella, who owns Ray Pinella Ski Shop's called
To say that you were trespassing.
And that um he was gonna call the police and have you arrested for trespassing.
because you were putting flyers out in the mall's parking line and he has a ski shop in the mall and he thought that you were unfairly competing.
I said, Well would you tell him?
I told my son was thirteen, if you need to worry about competing as a thirteen year old, you've got bigger problems. Wow.
So
You basically take out a lease on a
Location.
I know.
Brick and mortar store.
In your town.
Is it was it Lafayette Hill?
Ridge and Butler Pikes, Lafayette Hill, Pennsylvania. Okay.
So meant that your dad had to co sign that.
Right, and you get t take a lease out.
First of all, how did you operate that business? I mean, you were a fourteen, fifteen year old kid, like you had to go to school during the day. So how did that work? Did you
How did you manage that business and and also
Go to school.
Yeah, so that school thing definitely got in the way.
And I definitely f focused on business. You know, I actually
had a they had a co op program in my school you could get out at eleven o'clock.
If you had a car program in twelfth grade, somehow I talked our school into allowing me to do that in eleventh grade. Getting credit for having like working on the landlord.
Just had to so I just had to pay the run on time that he gave me an A?
for my co op program and that was like half of my curriculum.
Michael, how are you first of all at fifteen were you
Um
Like were you fully grown or were you still growing? Like w w were you
Were you short, were you tall?
'Cause fifteen is young, man. Like I how did you have
How d how are you able to get people to take you seriously?
Because I didn't have fear.
And I just went for it.
And I think
You know so many people.
have ideas and they talk about what they want to do but they don't do it.
I was just always more of a person, I'm gonna I'm gonna go out and fucking do it and if it works out great and if it doesn't
You know, all all good. So so I mean you could go back to nineteen eighty six, nineteen eighty eight.
You know
I remember
After coming uh
You ski in the summertime.
I said, Well why don't I build a a ski mountain in the middle of the summertime?
And I went out and I bought forty thousand pounds of ice cubes.
Set up in a ski slope.
At fifteen years old. Where did you set that up? So I had a ski shop.
Yeah.
In Kajak in Pennsylvania.
Um Ridge and Butler Pikes. And you set up an I remember I came back I remember waking my mom and dad up at like
Two o'clock in the morning, I'm like, I got the greatest idea on the planet though, like what?
Well, I'm like, sorry I'm gonna set up a ski mountain in the middle of the summertime like
Go back to bed. What are you talking about? Sure enough, a month later I went out. It was like 2500 bucks.
About forty thousand pounds of ice cubes cubes. Brandy wine ice company. I don't know how I remember this.
I set these up.
And every news outlet covered
That
This fifty year old entrepreneur.
Had set up a ski mountain outside of a ski shop, and that was my market.
With hay on both sides.
Hay on each side, hay at the bottom. How do you ski down?
You just ski on ice. Yeah, amazing. Wow, so h how how was business? I mean, w were you making money?
So the first ride the ski shop.
We did great, we did like$125,000 in business. I made about twenty five thousand dollars profit.
Second year.
Very good.
About five hundred thousand dollars in business.
and maybe made a hundred grand. You know, get'em fifteen years old, this is pretty spectacular. All right, think about this, this is also going back.
Thirty seven years ago. Yeah. So half a million dollars in business, hundred thousand dollars in profit when you're fifteen, thirty seven years ago.
Kind of insane.
Well the next year.
Um
We had a little bit of an issue. It didn't snow.
If you're in the ski business, it doesn't snow.
That's not like an ingredient for like really killing it.
But I also made a mistake, I got a little bit cocky, okay? And I was I was now 15, turning 16, but I went out and I bought a Porsche.
That I went 50-50 with a neighbor, I wasn't old enough to drive the push yet.
But I bought it and kept that kept it down the street for my parents.
So now the season ends and I have two hundred thousand dollars of bills
Eighty thousand dollars of inventory.
And half of a push.
And um
By February.
All the ski vendors that had shipped me inventory, shipped me skis on open credit.
Wanted to get paid.
But I didn't have the money to pay him.
And I start getting sued.
I'd say
The spring of the year that I was sixteen, I probably got sued a hundred times.
The sheriff became my friend. She'd come before I went to school.
And she drop off each day's lawsuits to me.
And um I thought I was a complete failure. It was over.
I'm never gonna be able to be successful in business. Wow.
You know, I prepared to go bankrupt.
And so
I
Um hired a bankruptcy lawyer.
And and
They say, hey, let's have a meeting with the creditors. All the people you owe money to all these people came around and one of the creditors is, hey, you know, Mr. Rubin, how old are you today?
I guess I just looked older than my age and you know, it's at at this point everyone assumes you're older.
I said I'm sixteen.
And the room went dead silent.
I didn't know you know you weren't allowing her debt.
legally until you're eighteen.
Yeah. I I think I think you were eventually able uh to settle your debts. Uh partly because you made a deal with your parents, I guess, where they they agreed to lend you some some of the money if you agreed to to go to college. Uh and you kept up your end of the deal. You w you started at Villanova
Uh but you barely lasted a semester, right?
That's right.
The reason I went

was because I gave my mom and dad my word.
That I would go to college and it was important. My mom's like, look, I'm a psychiatrist. I know what's best for you. You're not a normal kid. You need to be a normal kid. Go to school.
Play sports, have friends.
Why are you obsessed with this business thing?
But I never got out of business. Like, you know.
Never shut the shops down.
And then I basically became
very big at buying and selling excess
Footwear
Sporting goods inventory.
Skip.
buying and selling excess inventory, you know, primarily footwear and and close-ups. So by the time I got into college, the biggest memory would say, what do I remember about college?
I remember cell phones at this point, so you're talking about nineteen ninety.
Cell phones were gigantic.
And I remember always sitting in the parking lot of Villanova.
On this giant cell phone.
buying and selling things always like
knowing that I had to get to class, but having no interest in getting to class'cause I was making deals and
You know.
I can remember time as I was making hundreds of thousands of dollars in a trade.
You know, in the parking lot.
A Villanova.
you know, before I go to school. So th that was very difficult. Finally after
You know, kinda part of semester.
I'm just like
I'm done.
This is it. College isn't for me.
What do you when you started
doing these things, right, and succeeding and selling stuff.
What is it that you
Feel
That you had.
I mean
Was it
Because it wasn't like, you know
This you know.
m this accounting ability or you know, or or
you know, this mathematical knowledge, but but there was something that you had.
That clearly worked.
What what do you think it was?
Common sense.
Street smart.
Work ethic.
I would always work harder than I would always outwork my competition.
And um
The ability to really build authentic and strong relationships.
Huh.
And like nothing insults me.
You could say anything to me.
You know, y look.
You can't
Being sensitive.
You know, and by the way, you would
You know, a lot of people in my family would disagree with this. They would say what?
They would say like
You know, it's okay to be sensitive, I'd say, like that's bullsh.
Yeah.
Now, for some people and y you know an interesting thing about managing people and leading people's
what works for different people. You may go
In a sports team.
to one person and you can beat the shit out of them and that makes them play better.
You may take that same approach with somebody else and they're gonna be dejected in the corner of the locker room. I was the person you could beat on that would do better.
through the beatings and it didn't bother me. Well other people I think get dejected by that.
Uh I actually think in in the
hundreds of interviews I've done on this show with founders.
I think a superpower of many founders is
They
They don't
get offended, that they also don't hold grudges.
There's like they're desensitized.
Yeah, I think I I think that's
Accurate of a lot of good
Liders and entrepreneurs much easier for a founder.
than if we're higher CEO.
Now grudges are different.
Because
There could be somebody I may not like.
Yeah. Somebody who's done me dirty.
I may have no problem working with them.
But I'll always remember. Yeah. Okay. But you'll still work with them if if you know that there's a value.
A hundred percent work with them.
But
I got a long memory for people who've done me wrong.
And that that I think that makes me smarter, that makes me better, and that makes sure I don't, you know.
Get screwed multiple times.
Yeah.
All right, l let's get b back into the story here,'cause we're we're uh sort of in around nineteen ninety, so it's it's this is still pre internet and and at at this point you're you're sort of you're buying sports equipment and clothes and sneakers and then reselling it.
Uh so so first of all, how did you even get connected with the people who had this stuff to sell?
So I remember doing my first
Big deal.
My first big deal was I owned
I when I was graduating high school I had five ski shops at this point.
I remember going to one of the ski shops.
They were selling these umbro sneakers.
For they were like
Socleats. Yeah.
And they were like sixty five bucks, they were on sale.
For twenty nine ninety nine.
I said to the manager of the store, I said, Oh
You know these not selling well they said, No, we bought them as closeouts.
I said, Oh, how much did you buy him for?
They say eleven fifty a pair.
I said, wow, so we're selling for twenty nine nine.
At half off.
You bought them for 1150 a pair.
Can you find out how many pair they have? So they called the person umber and they said they had 12,000 pair.
So I just got on the phone with the person, right then I said, hey, you have 12,000 pair.
Um
How much can I buy them for the lake?
You know, you can buy them all for$8.50. I said, how about I give you four bucks?
They said, How about six?
And so can we agree at five?
I bought the twelve thousand pair.
For um sixty thousand dollars that day.
Okay.
That was the first time I got in the shoe business buying and selling shoe clothes. And you were gonna sell the shoes at the ski shops? No.
I went to the yellow pages because that's how we found people then.
I found this company called Boskov's Department Stores.
I just cold caught him.
And I get this meeting with this guy, Albert Boscops, who owns Bosco's department stores.
And he said, Michael, how much do you want for these?
I said fifteen bucks a pair.
So I'll take them off for eleven fifty.
I I hadn't even got them in yet, and I made
650 pair on 12,000 pair of shoes, so now I'm 18, it's like 70 or 80,000 dollars.
But I haven't even paid for the shoes I bought yet.
I got him resolved to somebody else.
So it was just it was that instinct to hustle.
That instinct to keep asking to never have fear that worked for me.
Yeah, that was my first
Big bulk deal.
was buying all the shoes.
At five bucks a parent selling them for eleven fifty to Boscoff's department.
It was.
For me
Who sucked in sports.
Who sucked in school.
To know hey, on one day I could see these shoes.
In a ski shop that I owned.
Find out that there were a close out and make seven or eighty thousand dollars.
You know
Overnight without ever touching the shoes.
That was pretty spectacular.
And that's it.
And that's the beginning. Okay, so now you've got
this this shoe experience. But again, this is like pre internet, right? It's all yellow pages and relationships and
Big b block cell phone, right? How are you going to the next? How are you getting the next connection? How are you finding the next place to buy bulk stuff? It wasn't even
Big black cell phones all the time.
It was still payphones.
Okay.'Cause I remember one other quick story I'll tell you that's a great story and and I bet you this guy's still alive.
I remember
Being at something called the Super Show. It was a big show in the sporting goods business where all the big retailers went to the show. It was in New York? It was in Atlanta. Okay. Called the Super Show.
And ex I think it was Xavier McDaniel.
He was a basketball player. Seattle Seahawks. Yeah. He he so he had a shoe called X Man Shoes. Yeah.
They didn't sell very well.
So I bought
Three hundred thousand pair.
I would have been eighteen or nineteen.
Well three hundred thousand pair.
for nine bucks a pair, so two point seven million dollars.
Okay.
I remember
Go into the payphone.
I call this guy Dennis Wazeluski.
Okay, he was the banker from Continental Bank, my banker.
I said, Hey from the payphone, like you know
I said, hey Dennis, I got great news.
I just made like a million and a half, two million dollars. Like what are you talking about?
Said, yeah, I just bought
Іно
Two hundred thousand pair of X Mate shoes for for nine bucks a pair.
And I've got'em I'm gonna s you know, get'em all sold to Modell's and T J Max and Marshall's and Raw stores and and we get like fifteen bucks a pair, so we're gonna make like six bucks a pair on, you know, three hundred thousand pair, I'm gonna make like a million eight.
She says, Well that's great. Why are you calling me? I'm like, Well how the fuck do you think I'm getting the money? You're a bank, I need the money.
Yeah, I gotta pay for the shoes. He's like
So you bought the shoes.
Without me agreeing to lend you the money?
I said, yeah, but you're gonna lend me the money because I'm gonna make this much money and pay you back and be a great customer of yours. And sure enough, Dennis lent me the money.
This was a different day. This was like this was when banking was done on like honor back. This is back in the day. This is totally. They lent me the money, I sold all the shoes and probably made a million eight.
Wow.
Eighteen years old, maybe nineteen.
But then you're talking about places like TJ Maxx, you're talking about other uh other other retailers, uh Marshall.
I mean these are today at least are huge retailers and I think they were pr pretty big in nineteen ninety.
How did you even get into those places as a eighteen, nineteen year old?
Just calling and
And asking for a buyer like
How did you even get into those places?
Sometimes you'd know somebody that could introduce you.
Sometimes you just cold call and get the person on the phone.
Sometimes you meet them at a different trade show.
And that's what you did. If y if if you hesitate, if you don't take your shot, how do you take get a chance to win?
Did w did you grow up a s a crazy sports fan?
Medium.
Bish. Phil a Philly sports fan. Yeah.
But it wasn't like you lived and died. I did not. Yeah.
It but it was business that you lived and died by. Yes.
So your business really I mean when you essentially realize college is not for you.
You are in the business of buying
Overstocked goods.
And you could do this.
Uh pr presumably in a pretty short period of time you had the cash to to back up these purchases. Or or were you was it this kind of arrangement where you would I had a bank. Yeah. I mean by the time I was
twenty one.
I bet you I owe the bank fifty million dollars.
Well.
Because I
had a business that was doing
A hundred and twenty million bucks.
Buying and selling closeouts, I always have to finance the inventory and finance the accounts receivable. That's kinda crazy.
Yeah.
And it was because you had this relationship. They knew you and and they had seen what you done before.
Yeah. So there were times I would need to go in. I remember there's a guy
A Bob Dennis.
Who was like
I think he was the CEO of Continental Bank.
When I needed a lot of money.
I go to see him.
To explain like hey
I've got this deal. I'm gonna buy this. I'm gonna sell this to Y. Here are some of the purchase orders from some of the customers so I can show you what I'm doing.
I need this.
Okay, great. Deal. Let's go.
Um
And by the way, there are times when I got in trouble with the bank. When I got, you know
Over leveraged.
Too much debt. I go and see that same person and like
Hey, I'm gonna come through and you know.
We got you, Michael. And then you know, I came through. So, you know
Relationships are important in good times.
But they don't really matter.
In bad times.
Relationships with everything.
How um
How are you
Staffing your
You're growing business. By nineteen ninety three you're doing
Yeah.
A million or more in revenue. Yes.
And the crazy thing is I have an assistant today, so we have a
you know, group of incredible assistants.
One of my assistants, Michelle Reardon.
He's been with me thirty three years. Wow.
She started with you way that me in the Adminton Ski Shop called the Ski and Sport Emporium.
And then came to my first office that I had.
Uh where KPR Sports was, by the way, named after my mom and dad, Ken and Paulette Rubin.
Yeah.
Alright, so you got this office and it's just growing.
Very, very quickly.
Um and I guess at a certain point uh from what I from my research
I guess it was around ninety five.
you buy a big ch share of a women's
Shoe brand called Rika.
And I don't remember this brand, but what what did they I mean, was it athletic shoes, running shoes, uh fashion like an issue.
My issue was
I built this incredible business buying and selling closeouts. Yeah.
Nine figure business, right? Over a hundred million dollars.
I'm out twenty one.
And was it profitable?
Very profitable.
But I didn't like it because I felt like I was living off of other people's mistakes.
That's why I decided to get in the brand of footwear business and I want to make your own style. Or to make my own shoes and and build my own brands and
You know, I I I ended up with three footwork companies.
That got me to about$180 million in revenue, call call it like we maybe added another sixty or eighty million dollars of revenue to the closeout business.
And that's what the business was in nineteen ninety eight. By the way, we were a public company.
You were you were running a publicly traded company, I think you were like twenty three. Twenty. I think I was the youngest person to ever run a public company at that point, I think, in the world. And you had
Designers
Everything on the three.
And then we had the Brandon Football.
And and how did the brand and footwear business I mean the close app business to me seems like a great business because you know you're buying low, you're gonna sell high, you've already got the people who have committed to it. But but making and selling your own brand is a different beast.
Yeah, you know it's uh
Twenty three year old.
Competing against Nike.
And rebuck.
Converse.
That was not till battle.
But
I did what I want to do and
Yeah.
When I was building my own footwear brand.
The number one thing I like to do, I would just walk around and look at people's feet.
Like it was crazy. I would literally go out for it for
For for hours at a time you just look at what people are wearing so I can learn.
By way, I still walk around sometimes and just look at people's feet because that's the way I was programmed as a
Is uh
You know, early twenties kid.
Um in the footwear business.
How much was money a motivator for you? I mean you were already making a lot of money, ten, fifteen, million dollars a year at such a young age.
Were you looking at that and saying okay.
I'm gonna go we're gonna get we're gonna make more and more and more. Some people will believe this, some people won't.
I didn't give a fuck.
Like it never ever

And say like
I wanna be rich.
He was never a motivator.
It was that
I was a bad student.
I was a bad athlete and I can play my game here and win and I wanna win. I wanna keep putting up a lot of points each day and win against my competition. That's my love, because that's how I got my satisfaction was by winning.
When we come back in just a moment.
How Michael moves into e commerce and
Why one of his investors actually tells him
But he's not losing enough money.
Stay with us, I'm Guy Raz, and you're listening to how I built this.
Hey, welcome back to how I built this.
I'm Guy Raz. So it's around 1998, and Michael is running a successful business buying and selling other people's brands.
Thinking of starting his own.
And then one day
A market analyst calls him up to ask.
About the internet.
It says hey
What do you do about this internet thing?
I literally said to him.
Fucked internet.
Fuck all these young kids.
They're all nerds, they just lose a lot of money. I don't want to hear any of this.
I hang up on'em.
Okay.
He calls me back an hour later, he's like
Michael.
I really think you should think about this internet thing.
I'm like, what do you mean? I didn't even know, like, I couldn't at this point.
I couldn't work email, it was just starting, you know, I was not a technology person.
But I did what any entrepreneur would do.
I have to put my head I went, I called.
The CEO of the sports authority.
The CO takes sporting goods.
And the CEO of Sports LA. Hey, what are you doing about this internet thing?
And everyone said the same thing to me.
They said, you know.
We get a lot of pressure from our boards to figure out how to handle this.
But if you have any great ideas, call me.
And literally I went away.
That
Holida break of 1998, I wrote the plan for GSI Commerce.
What was the plan that you wrote? The plan was to go out and get all the sporting goods retailers?
To give me all the rights to run their internet business.
I'd buy one inventory and leverage it across all the sporting goods retailers because they all sold essentially very similar merchandise.
And you'd go to Dick Sporting Goods and Sports Authority and whoever.
Yeah, and say give me your internet rights.
And I'll I'll operate your your e commerce business.
And before I even started I was able to get the sports authority.
Sports LA.
Tell him sports.
And M C sports.
To give me all the internet rights and then within the next year or two I got
Dick sporting goods and s and um and and and several others.
That was the original business running the sporting goods e commerce business of
the biggest sporting goods retailers in the country. Right, but by the way, by two thousand and one when we were own so we did it from ninety nine when we launched till two thousand one? I think we did
hundred, two hundred million dollars in online sales of sporting goods.
Twenty two years ago. And then the bubble bursts, the dot com bubble bursts in two thousand one.
What kind of impact did that have on
on the business.'Cause from what I've read
There were many years where it was operating at a loss.
Yeah.
I loved
those periods of time. Cause to me
Every period of
Controversy.
Every period of tough times.
That's a big opportunity.
So for me what did I do in two thousand so
You know, when the bubble burst in two thousand and one, what did I do?
I

At much lower prices.
I focused on really locking into how we ran our business.
You know, we our best years came from that first that was my first
kinda big implosion that happened around me and
You know, s while our stock price went from
thirty dollars to three dollars a share, we just focus on the business and we build a much better business during that period of time.
So all right.
Let's let's kind of drill drill down on this for a moment.
I mean, you were a really young CEO.
for the first time, right, when you're like twenty three.
Which
You know, requires leadership.
abilities and some people have them.
And some people develop them.
Yes.
How do you ha h what do you remember about
Just being a manager of people and no and like
Just knowing how to organize and
interact with people, did it come easily to you or was it hard?
I think
A lot of it.
Was somewhat natural for me.
'Cause I was fortunate that where I I I wasn't able to
Read
Speak so well.
Um
Focus.
I had some natural leadership skills.
And I had a nice way about me. And so I think it generally worked well.
And what about operationally? Did you I was always a shitty operator. So what did you do?
How did you how did you found great people to support me.
Yeah. Like I was never
Like I could never add value and I still couldn't today like, hey, here's how to make our platform better, or here's how to like it just I wasn't I wasn't strong in that area. So I'd say
I was always like good at developing the idea, the vision, the strategy, and then leading to get the people around me.
I was always less good at like hey
You know, how do we make the trains run on time that wasn't what my strength was.
Yeah, it's amazing to me because
Uh

You know, when you look back on this period of time, right, like now
I think most people say, Wow, that was a really smart
way to think about
how to run your business, acquire other companies at lower prices.
build up the portfolio, but like you guys lost like a hundred and fifty million dollars in the f four year period, like
But still you d you
Fr from from the way you remember that time, it wasn't
D you you felt like
It was gonna be fine.
I remember
Having
The founder of Softbank.
Masio's son.
Tell me.
in two thousand.
That we weren't losing enough money.
Well.
That we weren't being aggressive enough.
We weren't moving quickly enough.'Cause you'd raise like eighty million from them and eighty the first time, but then we raised more and
You know, we I mean we raised hundreds of millions of dollars in in in total.
And so for us, when you look at the 150 million dollars that you mentioned during those four year period of time.
That's nothing relative to what
You know, we had peers that were losing a billion dollars, billions of dollars, so I'd say we were
probably the most entrepreneurial of that group of competitors.
Hm.
All right, so uh I I guess sort of th through the early two thousands, you guys uh continue to expand, right? You do all these these different partnerships, and then um you also acquire
the the e commerce rights for the major professional sports leagues, right? Which uh
What's massive. What what did that mean?
Yeah. So we we kinda
Ran
The e commerce businesses for the NFL. Right.
The NBA.
Major League Baseball.
And the NHL. You were doing all the backend. You were doing the buying and the selling. We were doing everything. We we were kind of the licensee that ran that business.
of the e commerce business of
The four leagues that we would pay them or road to we'd license those rights from the league. But you weren't making the products. Not at that point, we were not.
Got it. Okay.
Um so so now I'm let's focus on one thing that
That
m we most know you for today, right, which is Fanatics and
Um and Fanatics was found was actually founded by two brothers.
Is it was a brick and mortar store in
In Jacksonville, Florida.
Yeah.
Uh and then it grew into an e commerce
uh business I think es especially f mainly for college sports initially.
Um, anyway, you uh you G S I Commerce, you wound up acquiring them for about uh two hundred and seventy seven million dollars, right?
Yeah, so our strength was in pro sports.
And Fanatic Strength was in college sports and we thought it would be great to put the two businesses together.
So you b uh the the the purchase goes through in two thousand eleven.
But later that year
GSI sells to eBay.
Yeah.
All of the brands everything goes to eBay.
Two point four billion dollars.
Yeah, well what happened was eBay came to said, look.
We wanna acquire
G S I Commerce.
They had two businesses, the eBay marketplace.
And PayPal.
They said we wanna have a third business.
This basically runs the
E commerce operations for big retailers, big brands that will also allow us to get these brands
into the eBay marketplace.
So really what they want to do is buy GSI to get in business with all the big brands.
And retailers that we worked with.
But eBay, as everyone knows, doesn't own inventory. So they had no interest in in owning the Fanatics business, which was the only business that that GSI owned.
that owned inventory. So they said, Hey, Michael, we like to buy GSI overall, but we'd love, you know, you to buy this back if you wanted to. That would help facilitate the deal. Yeah.
And so um
We brought back fanatics, including
The license business that GSI had for three hundred thirty million bucks. You basically buy this back from eBay.
And
What was the vision that you had at that point? I mien this is two thousand eleven.
Yeah.
What
What did you think you were gonna do with it?
So when I bought it back, I said, I'm gonna lock in on this business. It's the only thing I'm really gonna do.
And then we're gonna be great at this. And what it what was it gonna be? It was going to be Well, you gotta realize when you think back to Fanac when I bought it.
back from eBay in 2011.
It was a completely undifferentiated
retailer of licensed sports merchandise. And so it was a small business. They were just getting and they weren't it was not vertically integrated. They were they were just like outsourcing their designs
Right. They bought merchandise from many third party vendors, whether it was a New Era or 47 brands, a Majestic, uh Mitchell Ness, wherever it was they bought from lots of other brands.
And you wanted to do something different.
Well I think I recognized that
Sport had a ton of secular growth behind it. Like just
Is sports gonna grow?
Yes.
Is Phantom gonna grow? Yes.
At the same time.
I had watched
Amazon and Alibaba disrupt retail in such a such a meaningful way that I knew if we didn't really differentiate the business, then it wouldn't exist long term. And so
We had a vision for really
working very closely with

to come up with a business model that was better for them, that would let them build their direct to consumer business, build how they communicate directly with fans.
You know, that was kind of the beginning of of really growing the fanatics business.
Essentially w if if I'm hearing you correctly, what you're saying is if all we did was just sell
license shirts or, you know, hats.
And it was also available on Amazon. We're we're cooked. We can't compete. Yeah, if if we're selling merchandise that that's right if readily available
you know, at other places, I I don't think what what may what makes it special. What we said is we wanted to do is we wanted to do something that would be special. We wanted to have a broader assortment of merchandise.
Um
I think we want to do is create a better model with the sports properties.

they benefited from the growth of the business. When we first started, really all of that licensed sports merchant was sold through traditional brick and mortar retailers.
What the leagues want to do is no differently than what any brand wanted to do, no differently than what a Apple would want to do is to build more of a direct to consumer business themselves. And we really, by working with the leagues, gave them the ability to drive a much bigger percentage of business through their own direct to consumer business. So
Put in perspective when we started, it might have been one or two percent of business would go through the NFL or Major League Baseball, MBA's direct to consumer business. About a third would go through their own direct to consumer business. How did you get the leagues
to
Agree to work with I mean to to sort of

in twenty twelve when there were already other brands out there. There were already other p they were doing licensing deals with other
I I think the leagues
recognized that
Tenme
Most of their money from media, from selling the media rights.
And that they want to find other places to further monetize in this consumer products area where where taking care of the fan is so important.
that they realize that
If they could get a new model here, a better model that they could they could
You know.
take better care of the fans and make more money as a sports property.
So I guess from from what I understand, one of the differentiating factors was also this ability to respond and react quickly. Yeah right to to to ch to like the stories in sports.
Well think about what's going on right now in sports. You just had Otani.
That goes to the Dodgers.
And everyone's so excited he gets to the Dodgers.
Okay, everyone wants his products.
Then he does something nobody else had done he he hits fifty home runs and
Fifty solar bases. We make so many products around that in real time.
And then my God, they win the World Series.
And so
The ability for us to
Respond and handle that consumer demand we'll probably service
Just in it in North America.
Just
This month?
Between now and then of the year.
they will s probably service a million different
Dodger fans.
Online.
We've been able to capitalize on that in a way for fans.
Yeah.
That said, the thing that's scary when you hear the in and I listen to myself talk.
I'm like
The biggest thing I've been thinking there, this whole conversation myself.
is man, I've been doing this stuff.
Sure.
Forty plus years?
I feel like we're just getting started. I'm gonna leave here. I'm gonna go spend
the afternoon and evening with the CEO of Finex Commerce, which is our entire fan gear business. We're talking about all the things that we're not doing well and what are the things we need to do better. And even though the business grown from two hundred and fifty million dollars when I bought it back from
eBay
to this year that division's like a$6.7 billion business.
Okay.
We're not thinking about what we're doing well. We're thinking about what we're not doing well. Where can we be better? What do we need to, you know, keep enhancing? What do we what what do we need to fix? And by the way, there's a lot we need to do. And that's what's gets me so excited is like I've been at this for a long time.
I still feel like a startup.
When we come back in just a moment.
Michael talks about the sacrifices he's made to always be in startup mode and
How he's finally forcing himself.
to sleep.
Stay with us.
I'm Guy Raz and you're listening to how I built this.
Hey, welcome back to how I built this. I'm Guy Raz. So when we last left off, Michael was saying that even though he's been running Fanatics for 15 years.
he still feels like he's building a brand new company.
Yeah, I mean look, we're
We have three businesses today.
Our first business is the one you've been asking me questions about tax commerce.
That includes
You know, today
We have we run the e commerce businesses of the NFL.
The NBA, Major League Baseball.
NHL, we have about nine hundred.
individual team sites that we operate.
We operate the
Flagship Fanatics website, which is the single big site that we operate.
We own lids.
Which has fourteen hundred.
Headworth stores.
We operate the college bookstores for the apparel.
Uh we own Mitchell Ness, the Perl brand.
You know, we make
Of the Nike.
licensed sports merchandise in NFL, college, major leageball.
So that's the business people think of us for?
But when you really look at that business
Even though it's grown from a
Two hundred fifty million dollar business.
And
Two thousand and ten, the year before we bought it to
This year we put it all together, it's about a six point seven billion dollar business.
Wow.
Look, I think we've become a
a decent sized company, we haven't become beloved. I want to be beloved by sports fans and we need to be better to be beloved by sports fans. So there's so much to do there.
Um
I think in our newest business, collectibles, where we own tops and we have, you know, the um official trading card rights to you know many of the biggest sports properties in the world.
That business we bought it.
And then we just got into this with the sports betting business where everyone's betting against us. And I love that. I love being under DraftKings has been the dominant flip. Stand on DraftKings are the dominant two companies.
And for me, people are like, Oh, you're the leader in
Fan gear.
Why are you getting into that?
You know
You're the underdog here. Guess what?
If you want to ask me what gets me most turned on.
Being the frickin' underdog, man, that is fun. To have everyone betting against you say you can't do this.
Great. You know the same way my mom told me I couldn't do something, and my dad told me I couldn't do something. I was told as a little kid, you can't do this.
Let's see how it plays out.
Where do you I mean.
Presumably.
B the the sort of the the the the sporting.
market is a massive, massive growth opportunity, right? I mean you when you say we're just getting started, I mean is that sort of where your head goes to to in particular to that
No my head goes to we're just getting started in all of the businesses.
Financed commerce.
Six point seven billion in revenue this year.
Yeah.
So
Right now, we are so focused.
Like
We had
Look, this is no secret. We went through a
You know.
Tough experience earlier this year in our partnership with Major League Baseball.
And with Nike where
You know, Nike redesigned a jersey uh that we've been making for eight years.
And yeah, there was there was a really negative reaction to it. And with Major League Baseball for the uniforms. And players complained about it. Players complained, fans complained relentlessly.
Like say a little bit. They said a loud spoke loudly. Yeah, and and and
For us.
That was actually an incredible moment.
Because we could sit there and say, Hey
But we've made lots of mistakes. This is one thing where
You know, we didn't lead it. You know, we kinda got, you know
Stuck in the situation, or you could say, you know what?
How do we use this to make our company better? And we actually came up with a brand purpose that said we're gonna relentlessly enhance the fan experience in everything we do, and if we're not
We're not gonna do it.
We embraced the ass whip and we said, We need to be a lot better, you know what?
Even if we're not designing the jersey if if are we people inside of Fanac that were saying, Hey
You know.
People may not l like the smaller letters, they may not like this, they may not like that. Well, you know what?
We gotta speak up louder, we gotta be strong and we can't you know, you can't just go along for the ride. So like
That's why I'm so excited about this business, because I get to learn every day.
Аке б член же.
Yeah.
It's a you know
If you like action.
This is the job for you.
So all right.
if you think about it, it's just twelve years ago, right? Where you essentially about twelve years ago, where you really kind of
Fanatics really kinda has its rebirth and it becomes what it what we know about today.
And and that's not that long ago, right? And yet
The business of sports and sports apparel is just
exploded even more and while so many other
Content and media businesses have
had challenging times, and we we we're s we're sort of starting to see this kind of
over saturation with content.
Sports just it just
It's just moving in a in this like hockey stick direction.
Look, I think
It's obvious to know that there's secular growth behind sports.
I think we've helped to accelerate the growth.
Of
This category.
But it doesn't mean you don't look at yourself and say
Not what have we done well, but what are all the things we haven't done well?
What are all the things that you know we didn't get right because that's the way we think. If you sit here and you're satisfied
You're dead.
Mm.
So you so I mean I I hesitate to ask you this question because I think I know the answer, but like
You don't see you see yourself involved with this for the long haul. Like you are.
Forever.
Forever.
I'm never selling this.
You're you are gonna be at the helm of this thing. Till I die. Till you die.
Yeah.
You know, one of the I mean, you know this, that there are a lot of sacrifices that a person makes. And and one of the things that I do on the show is
emphasize that entrepreneurship is not hustle culture. It's not a hustle culture show it's not get rich quick scheme show.
It's it's a it's a takes a long time.
It's a lot of work.
And there are a lot of things you have to give up.
Yeah.
You've
benefited tremendously from it. Obviously you're you you're you know, have massive wealth.
But I but there are also things that that you've sacrificed and again, I don't know if people are gonna you know, they're not gonna play a violin for you necessarily, but like just being young.
Just being a young kid.
hanging out and doing stuff like you were working.
You didn't have like a teenage college experience, you weren't in your twenties hanging out.
But hang out with friends, do it like you were working.
Look.
I
agree that there's lots of sacrifices that I've made and will continue to make, but they don't feel like sacrifices to me'cause I I'm doing what I love.
I mean
You know, if you ask Tom Brady
Did he make sacrifices to win seven Super Bowls?
I don't think he's taking anything back because he won seven Super Bowls.
And by the way.
The only thing he's mad about is that he lost to the Giants twice and
You didn't win more.
So
You know, that's my mentality.
What about as a
Parrot.
Did you have to sacri presumably have to sacrifice time with your kids?
I have and I do.
But what I try to be there is for the things that really matter and no, I'm not
Like, you know, look I've
You know, two young kids now as well. And
You know, I think
You know.
When
Camille and I had
You know, when we had Romy and then Gemma are our our our the the two young ones.
You know, she knew that like I'd be there when it mattered but I like that I'm gonna like she knew
that I work seventeen hours at most days, so you know, this morning when I woke up and the kids were up a you know
Five o'clock in the morning, I went down and played with the kids for ten minutes.
Then I went to work at five AM in the morning and
You know, tonight they'll be in bed when I get home, but tomorrow morning I'll go see'em for ten minutes and you know, but I'm I'm there when it matters, and I'd say m with my older daughter
Yeah, yeah.
And and we have our relationship spectacular. If I go and get my phone right now.
She will have caught uh.
You know, it's like we just we w we make it work. You kinda figure out what you gotta do and you kinda make it all work and
You know, it's you know, nothing simple and I but look.
Are there much better parents than me? Absolutely.
And yes.
You know, does Camille want to kill me sometimes'cause I'm just not mentally available.
Sure.
But like I'm doing what the what's best for me and I love doing what I'm doing.
Ha given that your mom
Was a psychiatrist.
I imagine that
That
She encouraged you to talk about things on your mind.
Did you have you ever benefited from therapy?
Um
I have
gone to therapy off and on.
Over the over my
Entire life.
You know, as a kid, hey, you're broke and g so I may I probably
Sent to a therapist.
From the age.
Did you hate it when you were a kid?
Hated it.
Then
Dislike it. I hated it.
But I'd say I've never really been
Great.

But what I am really good at is talking through my
Issues with people that I'm very close to.
Do you ever remember feeling
Anxiety.
Or depression?
Not depression, but anxiety, yes. Anxiet about what I need to get done.
Pressures that could be on me. Yes. Never p depression. Anxiety that would like cause sleepless nights.
Well I have one of the worst I mean, so
Look, there's something in my in my um
Like a two of my
Chest. Yeah. Where
It keeps enlarged every year it's enlarging over the past
Um
Five years has enlarged about
For
Uh about forty bips and they said if it goes another
50 pips, you have to get open heart surgery. And they said the only way to fix it is sleep.
Okay.
And I used to think I was so tough to sleep to to sleep as little as I could be. My sleep if you look if you if you average the last twenty years
It's probably
four and a half hours a night. And now I got the swoop on my wrist.
I'm trying to figure out how to sleep seven hours a day.
By the way.
is really, really hard.
'Cause I wake up
Every one to two hours throughout the night.
With a dry mouth.
Thinking about work.
You grab your phone?
Always.
And I know I shouldn't.
I can't see it.
Yeah, well
I thank you, Mr. Office.
Hm.
Um so have I had sleepless nights more than you'd ever know.
Have I
Stand up thinking about what do I need to do.
How do I, you know, compete better? How do I do better for our fans?
All the time.
You know, you m you mentioned that that the last book you read was when you were ninth grade, and I think that's p in part'cause it's just hard. And so some people can listen to books, some people just
Talk about something really weird about my brain.
Okay.
This is gonna sound crazy. I don't know the alphabet.
I get stuck.
Around MNP?
And I've never and I've kind of decided that I'm not gonna
We learn it.
Because I kinda like
that I could not be able to do the alphabet legitimately.
So
You know, I kind of accept my brain is like my brain's it's weird, but like it you know
Um
pretty good at certain things are pretty shitty at other things I just focus on what I'm good at.
Yeah.
So all right.
How much of of
Of this
of all this do you attribute to just the grind? And how much do you think has to do with
Getting lucky.
Well
Anyone who says that you don't need luck.
To be successful in business.
is full of shit but doesn't understand.
You definitely need some luck to go with you. You need luck and time are a very important ingredient.
That said, I attribute a hundred percent of it to the grind.
Not ninety nine percent.
I am
A top grinder.
I'll out work, I'll out hustle.
Anybody.
It's fun for me.
Like I don't look at it as grinding, I look at it as like if you asked
Any athlete.
in the world.
if they could have their career go on forever in perpetuity.
At the top of their game.
Who wouldn't wish for that?
And I can do that in business.
Think.
So like why would I why would I ever give that up?
That's Michael Rubin of Fanatics.
By the way, in case you missed it, back in September, Major League Baseball announced that it was getting rid of those embarrassing see-through uniforms and returning to the old ones.
And one more thing?
Michael recently announced that he's no longer gonna throw his annual white party, the
Big bash at his Hamptons estate.
Where celebrities would dress up in white and pose for paparazzi.
Michael felt like given the notoriety around another famous white party, the one that used to be thrown by Diddy,
that the whole concept has kind of been tarnished, so
He's decided to focus more on charitable events in the coming years.
Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, please sign up for my newsletter at gyros.com or on Substack.
This episode was produced by Devin Schwartz with music composed by Ramteen Arabli.
It was edited by Neva Grant with research help from Chris Massini.
Our engineers were Robert Rodriguez and Gilly Moon.
And our production staff also includes Alex Chung, JC Howard, Carla Esteves, Sam Paulson, Katherine Seifer, Carrie Thompson.
John Isabella and Elaine Coates.
I'm Guy Raz, and you've been listening.
to how I built this.