YETI: Ron and Ryan Seiders. How Two Brothers Turned a $400 Cooler Into a $2 Billion Brand

Transcript from https://podmenti.com/t/fc2555dc75c6c305


I think we come up with about 10 solid names.
And yet he got mixed reviews. You know, for some people it felt too cartoonish, for others like
gross, this hairy, smelly bigfoot possibly
And I was way more confused than I went into it. So I I I just like
Gosh, I don't know if I'm making the right decision here. But I went back to the
same group of twenty people like two weeks later.
And I had one question. I said, Hey
Out of my list of ten names.
Which ones can you remember?
In all twenty people, the one constant they all could remember was Yeti. So that was all the validation I needed. Whether they liked it or not, it struck a chord and and that's
That's marketing one oh one.

Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements.
They go.
I'm Guy Roz and on the show today have the ambition to build a tougher and colder cooler.
Led to Yeti.
A high end brand that does over two billion dollars in sales.
It's easy to assume that founders who come up with an idea for a niche market secretly have bigger ambitions.
Maybe they're making a product for elite runners or mountain climbers or surfers or snowboarders, but the dream, at least we assume.
is to eventually sell it to everybody.

The thing is, a lot of the entrepreneurs I've had on this show don't really seem to think that way.
When he started Patagonia.
Ivan Chinard wasn't trying to turn it into a global lifestyle brand.
He was a mountain climber who wanted to make better gear for climbers.
The founders of Hoka weren't trying to make shoes that you'd see people wearing at the airport.
They wanted to make a better shoe for serious runners.
And that's basically the story of Yeti.
When two brothers, Roy and Ryan Cedar, started the company.
They weren't thinking about tailgate parties or backyard barbecues or beach goers.
They were thinking about hunters and fishermen.
Roy and Ryan were serious outdoorsmen, and they were constantly frustrated by their coolers.
Most of what was available were the familiar plastic coolers made by companies like Igloo and Coleman.
And they were okay for keeping things cold.
But the brothers wanted something even tougher.
something that could take a beating, and importantly, something you could sit
Or even stand on.
So Roy and Ryan decided to make a better one.
It was thick, incredibly durable, nearly indestructible.
And it cost around four hundred dollars.
But that was okay, because they weren't trying to sell it to everybody.
They were making it for people like them.
serious outdoorsmen who were willing to spend a lot more money for something that would last.
But then something happened that they never expected.
People outside the hunting and fishing world started buying Yeti coolers.
They began showing up at tailgates and barbecues and beaches.
the cooler even became a kind of status symbol.
Today, the Yeti brand does more than two billion dollars a year in sales.
And it is so much bigger than anything the Cedars brothers imagined.
Roy and Ryan grew up in Driftwood.
A small community in the Texas Hill Country just outside of Austin.
And as kids, Roy, Ryan, and their siblings were pretty much free to roam across hundreds of acres of land.
No.
running up to Down Onion Creek, turning over rocks, catching crawlfish.
Bow hunting for deer, oftentimes before school.
Um I don't think we realized how magical that was to grow up in in nature like that. I I really at the time I felt like every kid had access to the outdoors across the street from their house.
So this is really the the late eighties is is kinda your childhood, right? When you're
You guys are are really like just
Just like
You'd leave the house and you just be home for dinner.
Yeah, that's right. It's it was kinda crazy. No cell phones and we
You know, we'd come home at dark, but we were
exploring and canoeing and doing all kinds of fun stuff and um running around barefoot.
So I know that your dad
w his career was he was a middle school shop teacher, your mom was a nurse
But I guess and this really happened when you were either
really little or right before you were born, but
Basically when you were you were little
he was a he's a f a fisherman and he came up with a solution to a problem he had which would
eventually develop into a business you would start. But tell me a little bit about
This thing that
That he
Created.
So
Basically being a shop teacher, one of the semester projects was to build fishing rods. And there was always a problem with the coating that went over the thread that held on the guides on the fishing rods.
It would just wouldn't hold up, you know, so he
came up with this idea of maybe a clear, flexible epoxy
And at the time nobody was using epoxy on fishing rods. So he you know contacted a chemist, came up with a brand name and a formula that he thought would work good, went to his first fish and tackle show, and it kinda really took off from there. He was able to
get out of teaching and and focus full time on that. At the time he had four kids or maybe three with the fourth one on the way. And he started that company in Houston. And then when we moved up to Driftwood in eighty four, he built a uh shop out behind our house there and that's where he ran the business as we grew up.
Yeah, so basically for all as long as you can remember, your dad was was
an entrepreneur. He was selling this. Black Scott was the name of the company. And still around today.
You know, it was a small business. It and it was enough to put four kids through college and we took a
Annual ski trip to Colorado.

Um
So
No, my parents they they paid for things in cash along the way. They really didn't save any money. They didn't have any debt either.
Uh you know, their biggest asset was that company.
And you know, I think growing up in that company
In seeing
both my mom and dad kind of wear all the hats of a small business
Yeah, it's is
Pretty darn educational.
Tell me about your dad, because I know that
He was a very
Present like
in your life as children, like right, I mean
He
I'm assuming Tyler Hunt had a fish.
He was very hands on, both my my dad and my mom. And I think our our dad was kind of the ultimate teacher.
Just kinda showing us the way.
And um whether it was hunting
Or fishing.
And really it
Anything that we were into
He was in too.
Like I remember we got into skateboarding as kids and
You know, it wasn't long after that that he was building us of eight foot vertical half pipe ramp.
But you know, at the same time, he also kinda gave us free range to do whatever we wanted as well.
You know, running around across the street from her house.
All right, so Ryan, you go off to Texas A and M. Yeah.
Uh and you studied wildlife management, which makes total sense. I mean, uh did you did you go into college thinking that like you want to get into land conservation and and and that kind of work?
No, I mean I basically just wanted to graduate from college. I felt like that that was kind of the minimum acceptable thing to do, you know? And so I went to A and M, not exactly sure what I was gonna do, but my entire life before that, the only thing I had done to make money was build fishing rods. I always
you know, could build fish and rods, sell them and make extra money through middle school, high school, even college, you know? So pretty quickly after I got to A M,
I realized that hey
you know, I I think I want to try to start a fishing rod company and be a customer of my dad's, you know. So I I worked with my dad for maybe two or three months to save up some money to place my first blank or of the fish rods, a graphite blank.
And then as I put those rods together and sold'em, I was able to branch out and I just kinda grew my business from there. They're called waterloo waterloo rods.
Waterloo Rods, yeah. I thought it was a cool name. I thought it looked good. It was easy to remember. Uh I wasn't super organized in the business. You know, I was getting by, but as far as being able to support a family or really I I never really uh felt like I was doing great other than
kinda getting to live the lifestyle I wanted to live at the time. I I read that you sold about a thousand to fifteen hundred rods a year. That's right. They're about a hundred and seventy five bucks. And one thing I I I read about was that like this one of your specialties of of the rods you were selling were for grass fishermen. And I went down a rabbit hole on it.
Uh,'cause this is like you need a really durable rod, right? Like this is these are fishermen who go in pretty shallow waters, they're fishing under lily pads and and plants, and so the fish can get tangled up in those plants and the rod can, and so it's gotta be really strong to reel that that bass in, right?
Yeah, the guy that kinda made that style of fish and famous, his name's Terry Oldem and
He was kind of giving me the direction of the design of that rod, which needed something lightweight, but you know, really stiff, eighty pound test braided line, and they would drop these big weighted jigs down through the grass, the lily pads, the hydrilla. So it was a real specialized style of fishing and and with Terry's help.
We had a uh sought after rod that kinda helped me get started with Waterley.
All right, um so
Meantime, Roy, you go off to Texas Tech.
Um
And tell me a little bit about what you like what you thought you would do. Did you also think like
Your brother, like your dad.
You go start something or or or or did you not even necessarily have an idea of what you want to do?
No, I I um
I knew I wanted to start my own business right after college and like Ryan, I grew up building fishing rods, but he beat me to the punch on that.
So I I didn't know exactly what I wanted to do. I just knew I wanted to start my own business. The first thing that I tried was um
I put together this little shooting bench for siding in rifles and a portable bench that you would fold up and carry. Yeah. Yeah.
And it had like a I had like a seat and a
Table, obviously connected.
It it didn't have the seat. It had just this table connected. It w and I would I'd buy the saw horse at at home depot, a a foldable in metal saw horse, and I'd make this little custom top for uh
sighting in your rifle. And I sold some to friends and family, and I sold some to a local sporting goods store in Austin called McBride's.
But I you know, I quickly realized that this
product or the market opportunity wasn't gonna be enough to support a full time business or myself. And uh quickly realized I needed to pivot. Right.
And um, you know, our dad, Roger, he was already
messing around with boats. Uh we were getting these aluminum holes built down in Florida, bringing them up to my dad's shop there in Driftwood and rigging them out.
And these boats were specialized
for the way we were fishing down. On the shallow water, right? Yeah, shallow water. Yeah.
Um, you know, the great thing about the Texas coast, there's just thousands of acres of
backcountry shallow water fishing.
And um again, I learned a lot about how specialized the boat w business is and I learned how difficult the boat business was and
Uh my dad's joke
Uh.
Well, Roy, if you don't sell too many boats, you can stay in business. Meaning I was losing money
On every boat I sold.
Yeah,'cause you would buy the hull, right, the Luna Hole.
tr you'd haul it out to back home to Texas and then you would outfit it and put in and customize it. Do you remember like how much did it cost you and how much would you sell a boat for?
Oh, I bet it cost, you know, everything with the motor cost
over ten grand.
Right. But I'd I'd put a million hours into each boat.
I mean it took a long time to assemble it and put it together.
And then you know, I'd turn around and sell it for fifteen grand or whatever it was. So
It was a losing deal.
It's interesting'cause I I mean, w from what I understand, right, while you're while you're basically rigging these boats and and and then selling'em, right, you're putting in nice
you know, motor and a nice you know
rubber floor, but you're also putting coolers in there, right? Because you need a cooler in there to uh for drinks and also to throw your fish in.
Um and that I guess was
It wasn't the first time, presumably you guys uh had exposure to coolers'cause you're f you guys are fishermen, but it was the I guess the first time that you you sort of were using coolers in a business setting, like in a you know, in in something that you were actually selling.
Yeah, so I was putting a few coolers on the boat, uh two to three coolers on each boat.
And we were using the coolers.
to keep our fish fresh and our drin cold and but we'd also use them as seats, you know in front of the center console or behind the center console.
and occasionally would put one up on the bow of the boat.
to be used as a casting platform. To stand on top of. Yeah. You stand on top of it, and you what you're doing is you're elevating yourself off the off the bow of the boat to get visibility as you're sightcasting to these red fish. You're you're in such shallow water, you can actually see where the fish is. Yeah. And you're casting right in
like right sort of in the direction that's swimming. You literally you're not casting until you see the fish.
So with these coolers that were available to me at the time really didn't match up to the rest of the quality of the boat, right? And and like you said, we grew up using coolers.
you know, for all of our outdoor pursuits, but
Putting them on the boats was really exposed me to
Kind of the
frustrations of ordinary coolers falling apart. When you uh our daily abuse
And our daily wear and tear.
The hinges would break.
The latches would snap.
And um
I think
This was kind of my light bulb moment for uh you know realizing that man these coolers are they fall apart with little or no use and and really they they'd become a seasonal product.
U use it for a season, you throw it away your place and you put it on on a new one. Got it. And meanwhile, Ryan, um I guess you have kind of a light bulb moment as well. Uh
'Cause I guess at at some point you you're in Florida.
for a trade show.
Uh and and you go into like a a hardware store or something.
and you actually see some coolers that that catch your eye.
Yeah, so basically I was out in Florida and I think we had a
It was Mark Caslow's shallow water fishing expo and me and a buddy had driven out there in my dad's van.
And we walked into that ace hardware and I turned to the left and saw this big pile of coolers.
And they were
I mean the first thing I noticed about him
was they were heavy duty and I'd never seen anything like it compared to the Igloos or the Colemans.
And that caught my eye and I was thinking, Hey, Roy needs this on his boats. It'll solve our our problem of tearing up these coolers every trip almost, you know.
Alright, so Roy you find out about these coolers. What struck you what struck you about them? Like what made them different?
Yeah.
problem with the ordinary coolers was a durability issue. You know, we we weren't real concerned with the ice retention
Our frustration was way more about
Durability.
you know, the durability around the hinges and it was rotamolded and it in thicker walls. And so everything about it was just beefier meant to last.
So
I you know, I saw it right away.
as a solution for the boat.
But uh is also I recognize
If we're frustrated with the ordinary coolers falling apart, others were too, right?
So I uh
I got a hold of the distribut that had been importing them into the US and
And I said, Hey, I think I could sell some of these coolers around Texas. Is there any chance I can get a distributor price? Like I need to be able to go out and s resell to
retailers. Yeah. And so they set me up as a a distributor for Texas.
And I just
I started knocking on doors and selling them to small mom and pop sporting goods stores and hardware stores, you know, where I sold that shooting bench, McBride's in Austin.
I walked in there and I I gave them a sales pitch around this new cooler and
No, ask for a a stocking order.
And and these were um
And the company's called I C Tech, right? Mm-hmm.
Thailand manufacture, but it was branded as a like as I C Tech. Right. And I C Tech was a US based brand or No, it's an Australian based brand.
Okay. And just to clarify, like, from what I understand,'cause you m you you mentioned um
Like ro like uh rotoming or rotational molding.'Cause I think most people can can picture what an igloo ice chest is like.
But what made this different was the plastic was
heavy duty. It's like almost like industrial strength.
Plastic that was
so strong you could stand on it and you could sit on it and it just and it was heavier.
Is that a fair description?
Yeah, it it was heavier. It's rotoming is a is a manufacturing process where you take um
polyethylene, which is a plastic pellet form resin, and you put it into a hollow mold.
And you begin to coat the walls and it really piles up in the corners and makes for a real durable part and the overall wall thickness is quite a bit larger as well.
You know, I remember in the early days and when a customer called up and said, Well, tell me about your product, what makes it durable
I'd say it's rotomold. And I said it's the same process used to make whitewater kayaks. And all of a sudden they get that imagery of a you know heavy duty single piece plastic part.
Alright, so you
Basically contact this company and you have a business outfitting boats, so
And they were probably a small company, right? I mean I can't imagine like'cause you're a young guy, but y but they were perfectly fine to give you
a distribution deal to sell these.
Yeah, I mean they were a small company. I think um
they saw an opportunity with myself and and hustling in Texas to go open up doors for them.
And that's what I did. So I um
Yeah, I started
Buying them.
a couple dozen units at a time. And then pretty soon that snowballed into where I was I was importing'em directly from
Thailand.
Where the manufacturing was happening.
Under the brand name Icy Tech? Yes.
under the brand name IC tag.
So so Roy, it sounds like the the the boat outfitting business
I at a certain point didn't make sense any longer, right?'Cause it wasn't sustainable. Like it sounds like you kind of
just bag that business and just focused on
Selling.

Yeah, I let the boat business go pretty quick.
And and just strictly focused on building the schooler business as a distributor.
And you know, I I imagine given that your dad had a relationship with probably some some mom and pop.
hunting and fishing stores'cause of his business, you had already developed some relationships, right, presumably tr trying to get people to buy your boats.
And probably that relationship that you had helped.
Well I I think maybe my dad's contacts.
maybe opened a few doors for us, but
At the end of the day we we just
knew the fishing tackle industry.
And it was more about knocking on doors and giving them a product demonstration.
Meantime
Your business, Ryan, um sounds like based on what I've read.
It was
Fine. You were selling enough to sort of
Sustain a life, but
you kinda start a feel after what
eight years into into this that
Maybe it wasn't.
gonna go anywhere.
Beyond where it was.
I I I mean I never really looked past building rods, you know, that's the only thing I'd ever really known.
and um one of my best customers at the time in two thousand five he asked if I would consider selling Waterloo. And he had the idea of a young guy to run it down there
uh closer to him and he loved these rods. He loved them. He was by far my best individual customer. And uh I thought it's interesting that he was curious about buying the company
you know, moving it down closer to the coast. Uh but I really didn't think much of it, you know, and and
I was up late one night working, I got a call from him and he said, Hey, what would you sell this company for? And
I kinda thought off the top of my head of what it would take for me to save up some money and what I thought was get ahead at the time.
So I I named a price, and as soon as I said it, he said so. And my heart just sunk because as soon as I he said sold.
I was thinking, Oh, I might have undershot this deal. So you when you sold it, I mean, you know, again, you're thirty one, thirty two, um, I from what I gather, it wasn't like gonna
set you up for life. It wasn't gonna be enough money so you'd have to work, but it was a nice
Nice check.
Take your time for I guess a year or so to figure things out, right? But we're not talking about, you know, a million dollars. It was No
But I think in the end when I closed I had just under two hundred thousand dollars.
And at the time capital gains was like fifteen percent, pay those taxes. I went out and bought a uh used Rolex for my buddy and a Beretta shotgun. I was I was on cloud nine, you know, I mean.
Let's go hunting. I love it. All right, so you got your
You got your Rolex and you have your shotgun and you're happy. You're going hunting. Okay. But you know you've got a
You gotta make a living. Yeah. You know, I had never worked for anybody else. I'd never put together a resume. I'd never had any other job that was paying me other than just helping out my dad or building fishing rods. That's it.
And so January rolls around of two thousand six, and you know, I could see Roy was getting pretty busy distributing Icy Tech.
You know, I could see he's getting stressed out, so I call him up
in January when hunting season's over for me, and I said, Hey, would you uh let me come down and help you in the warehouse? I can see you got a lot going on. He said, Yeah, come on down, I'll pay you ten dollars an hour to help out and I'm like, See you in thirty minutes, you know, I'll be there.
So Roy, your
you hire your brother'cause your basically your business at this point was selling these Icy tech coolers.
Yeah, that's correct. You know, by the time Ryan sold Waterloo
I'd been distributing I C Tech for
Just over two years now.
And I I'd built a pretty good business, you know, probably
maybe as many as a hundred retailers.
And I was out there s continuing to hustle and and pick up new accounts, going to trade shows.
So
When Ryan showed up in in January of two thousand six, it was a it was pretty good timing on man, I c I could use some help in here, whether it was answering the phone or helping me in the warehouse or helping, you know, go to these trade shows.
So I I'm curious because I I mean right now at this point
You are doing well as an IC tech.
basically is uh not working for the company, but you're getting a cut from every sale.
on these coolers um
And like roughly like w I mean, do you think at the end of the year like you were pulling in
You know, over a hundred grand.
No, probably not that much yet. You know.
Maybe fifty grand, sixty grand, something like that.
But you hired your brother.
Yeah.
Ten dollars an hour.
Okay, nice. And his awareness role eggs. Um and we continue to open up accounts and grow the business together.
But a uh maybe at the time it felt temporary until he figured out what he g he was gonna do next.
All right, here's my question. You've got two clearly ambitious guys, brothers.
You're selling a product for another brand, right? It's not your brand, it's another brand.
And
I'm thinking
Was that okay? W were you starting to think, hey
I should maybe I could do this or or not not quite.
So there's a couple of things going on. You know, that although that original Thailand Icy Tech cooler
It was a good product, but there was a lot of opportunity for improvement. As soon as you ship this cooler out into the field and you have a failure with the customer, it was a big expensive process to have the customer ship it back to you and then replace it.
And I think that's when I started losing sleep thinking about what would be the ultimate cooler
If we were gonna build a cooler for ourselves the way we used them.

Because
You are uh selling Icy Tech branded coolers, but from what I read I went d they had some
agreement, some some distribution or licensing agreement that meant that
That brand could not be sold in the US.
Starting in two thousand six.
Yeah, so the original distributor that was bringing
The I C Tech
coolers into the US market.
He
trademarked IC tech in the US. So really
As soon as he departed the business.
I can no longer use that I C Tech name.
Which which was a
Blessing in disguise.
Yeah.

Okay, so you know
Um, you guys start talking about hey, maybe
maybe we build our own. But before we we we talk about that, what was wrong? Wha what was the issue you had with the existing
Coolers.
Well, you know, there were some quality issues in whether it was
a leaking drain plug or a bowed lid, but there's also some functional issues. You know, when when you're putting these coolers on boats, you need the ability to strap them down time down to the boat. And so
Some of the design ideas I had were putting a tie down slot.
on either side of the cooler so I could run a a one inch strap through there and and lock it down to the that was already molded in the plastic. That's right. Molded as as part of the uh the cooler itself. Yeah. You know, rubber feet were important.
And you know, I started thinking about okay having rubber feet, one, it keeps it from sliding around the bed of your truck or your boat, but it also protects the fiberglass finish on your floor of your boat. Um a full frame gasket that has a better job sealing it. And and hinges that weren't were not
you know, a component that were actually molded into the to the rotomed part. So that the lid and the base of the cooler
you know, are part of the hinge system and you're running a quarter inch stainless steel rod through there.
So the design that you know I've ha had in my head
It's purely f
functional utility
and I put a texture
on the top of the lid so you could stand on it. Like a sandy, like a rough texture. Make it non slip. And
About the time Ryan showed up, I was already booking a flight to go see that Thailand factory.
So these were all ideas you had.
But you had to figure out if
you could do this. Ryan I just want to ask bring bring you in for a second, ask you like what do you remember
talking to your brother about or do you remember saying, Hey
We could do this, we could make this, we could create a
Brand or or was it not?
not quite fully formed yet.
You know, I don't think it was quite fully formed. I would say that going over to Thailand to the Icy Tech factory where the Icy Tech cooler was being produced, we were hoping that they would work with us, you know?
In an effort to not have failures once the cooler left our warehouse.
Yeah.
So when you get to Thailand, right, you go and visit this factory.
And you meet the guy
who's running it I guess or somebody there. And tell me the story of what what you guys uh the conversation you had.
So the the original intent was to work on the quality issues and um
And
try to solve for some of those problems. And
I think setting
foot on the uh factory floor we quickly
why we were having these problems. You know.
Lots of manual labor, lots of customization, lots of um imperfect uh manufacturing process. You know, one example is I kept wondering why
The bottom of our coolers had a red stain.
right, as they came into the US, you you'd flip it over and there'd be real faint red stain on the bottom. Well, they would take the the plastic cooler

And they would set it on their floor, which was this this dirt red clay floor. And and so
We were really we were dealing with the dirt floor manufacturing. So the heat the the warm cooling it would just absorb some of that clay. Yes, that's right. Yeah, they're white.
You were you didn't have a whole lot of capital.
You were ambitious, but like you didn't have min you didn't have much of a choice. Like
W I have to assume that if they were willing to work with you, you would have worked with them.
Yeah, I think so. Um but we realized that this factory wasn't capable of building a design for us from the ground up.
And they really didn't want to listen from what I remember, you know, when when Roy was talking about ideas for improving the cooler. I mean it was just kinda in one ear and out the other. And just really didn't want to talk about improvement or design change and stuff like that. You know, kinda kinda felt like we ran into a wall there talking to those guys.
But you also
You were gonna go visit another
factory, I guess. So you're going to Thailand, but then you're also gonna go somewhere else. Tell me
You know, how'd you even know about another place to go to?
So
This was the early days of searching for manufacturers online.
And I found this factory in the Philippines that was making a cooler for the Australian market.
And
I reached out to this manufacturer in advance of our Thailand trip and I said, Hey, we're gonna be over in Southeast Asia.
We sell this Icy Tech cooler, and do you mind if we come visit you?
During our trip.
So we started this conversation with this supplier in the Philippines.
And other than just
That email communication, we really had no idea what type of factory it was, who we were dealing with. But you knew what they made. Yeah. When you get just just out of curiosity, this is a like a what three hour flight I think from Bangkok to to Manila. Yeah. And who is the guy
I mean you have a contact that you're dealing with and and and who like what do you His name is his name is Ivan Brown. He was a um Australian expat living in the Philippines and and opened up this factory to make a cooler for the Australian market.
Got it, so he he picks you guys up at the airport.
Yes. And actually, in the flight from Bangkok to Manela...
was more expensive than our flight from
you know, the US to Bangkok. And and Ryan and I are second guessing ourselves here, like, do we really want to go visit this factory and spend this type of money to go over there?
And Ryan was like, well, why don't you just go without me?
And then I was like, man, I don't wanna go without you. Maybe we shouldn't go. And then ba basically we talked ourselves into going like we're already here. We're already in Thailand.
Let's just take this three hour flight and then um
We land in the Philippines.
All right, so Ryan, you guys land in the Philippines. What do you remember about your first impressions getting there?
Well
So uh you know, this was a hundred percent outside of our comfort zone, you know, growing up in Dripwood, going to these countries, you know, n we'd never had any reason to go to. But I remember
Flying in.
And you're signing your paperwork as you're on the plane, your customs paperwork in big red letters, death to drug traffickers, you know, and and it was just it felt really funny to go there. Well
We roll in having never met this guy, and you know, Ivan, he picks us up in like an azuzu trooper type vehicle.
And it was a lot of traffic, really crowded.
Well come to find out.
the it kinda like um watering your yard where you either have an even or odd um you know address on when you can water your yard during a drought, that's how they control traffic in in Manila. And so he had the wrong license plate that day to be driving around. So as we're leaving the airport
You have these kids with machine guns trying to stop us, he's trying to bribe them to let it let us go.
And we we get a little speed built up and and one of them steps out in front of us and Ivan just keeps on going. That guy steps out of the way and it was a wild experience. I didn't know if we're gonna end up in jail or what was gonna happen, but
We end up making it
to his factory that was inside the old US Clark Air Force Base, which is out of I think the name of the town there was Angeli City. And you know the first thing is we walk into his factory floor and uh
It has concrete floors.
And so that's a big improvement, right?
And he's an engineer by his background and
And started sharing some of these ideas that I had built up of my head over the years, and um
His machinery and equipment were s definitely more advanced than the um
Thailand manufacturer. So you could see right away that this was gonna be
our path to making our own cooler.
When we come back in just a moment.
Roy and Ryan head down that path to a brand new manufacturer.
And it works out great.
Until
They get a horrible piece of news.
Stay with us, I'm Guy Raj, and you're listening to how I built this.
Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2006, and after realizing that their manufacturer in Thailand doesn't want to make improvements to the IC tech, Ryan and Roy connect with a guy named Ivan, who has a factory
In the Philippines.
So on that trip
We had found our future. We had found the factory that we were gonna work with.
And he is already building a cooler for the Australian market. We essentially white labeled that.
But at the same time
We've started developing the original
Yeti that was designed from the ground up with our own ideas.
Okay, so to clarify, like initially just to get your business off the ground, you figured okay, let's just buy the off the shelf ones, we'll put our label on it, while we actually develop this
This cooler we've been dreaming about. It's gonna take us some time.
But let's just get this going with existing inventory.
That's exactly right.
The minimum would be a container load, like a twenty foot container load.
would be the minimum order. So yeah, we um
It was it was kind of a handshake deal and let's let's do it. And by this point
After visiting him up until this point, we knew we were gonna start with our own brand, but we didn't have that brand name yet.
Yeah.
I'm curious.
How much would a container load uh cost at that time?
I think if I remember correctly, around
thirty thousand dollars. And that was probably for a forty foot container and that would be
You know, roughly three hundred units, maybe three hundred and fifty units.
Coolers have different sizes.
And you guys must have been pretty confident you could sell those'cause you knew that you had sold these icy type coolers before, and so you knew how to
Bring'em in, but still thirty grand. I mean, for two guys who are worried about the cost of flying from Bangkok to Manila, that's no joke.
No, it's not but I I knew the demand was there in the US. Yeah. And we at this point
With Icy Tech, I built out a pretty good
book a business
And I knew if I could get coolers in there on the retail shelves that there'd be sell through. And the frustration that we had with the ordinary coolers falling apart.
You know, that frustration was real.
And we were providing something that
was a solution to it.
So
You guys go back to Texas.
Tell me about um how you start to think'cause you're gonna start importing these
Blank.
you know, chests, right? Coolers.
Without a brand name to it.
Um
Tell me a little bit about
that conversation you start to have.
It was
Literally on the flight home, Ryan and I were sitting side by side and we started putting together a list of potential brand names.
And I think going back to our dad's business.
and growing up in the industry, I think we had a pretty clear
idea of what made a strong name or strong brand. Now I can remember using Sage Flyrod as a as a kid, which was one of my dad's customers, and it's a very premium high-end fly rod, and I I love that name. Sage is the named after the the green stripe in a in the back of a rainbow trout.
On the other hand, you had another very premium fly rod called G Loomis, another one of my dad's customers, and it was named after the founder, Gary Loomis. And I remember thinking to myself as a kid,
uh how terrible that was to name a brand after a founder.
And um I think we had a pretty good feel for what made a strong name. And so we begin to put together that list on the on the flight home from the Philippines.
I think Sherpa made the original list, uh Tundra made the original list, and those are two names we used later.
Um you wanted names that would evoke
Like
Fishing or hunting or something else. Really coal durability, Nishurpa's a Himalayan mountain guide, the frozen tundra, and it has kind of a tough filth to it, Tundra does. But I we also felt like Toyota, you know, Tundra Truck, they kinda own that name.
And um
You know, yeti made the
original list of names and I I think right away I liked it. I liked that it had a kind of a
punchy sound. I like that um
You know, is this Himalayan ice monster this from a tough cold environment
I like that it had four letters like sage.
and um look good on a hat, you know. I felt like we probably had a winner on that list, but I get home
And I start losing sleep thinking about this name, knowing how important that decision was on on a brand name.
So I go out.
To um
Like twenty
family and friends and I start running through these 10 names and I'd get their feedback.
Which you better be careful what you ask for because you know, you start getting their feedback and
And
Yeti got mixed reviews at best.
No, for some people it felt too cartoonish, for others like
even this like gross, this hairy, smelly bigfoot, possibly
And so I got out of that informal
Polling.
And I was way more confused than I went into it. So I I I just like
Gosh, I don't know if I'm making the right decision here and but
What happened next was was the validator. I went back to the same group of twenty people like two weeks later.
And I had one question. I said, Hey
out of my list of ten names
Which ones can you remember? That's the only question I had.
And
all twenty people they could remember maybe one or two names at best, but the one constant they all could remember was Yeti. Wow. So that was the that was
all the validation I needed. Whether they liked it or not, it struck a chord and
And that's that's marketing one oh one.
Love it.
And and you could have and you probably thought about Sasquatch or Bigfoot or other names too like that.
Um okay, so Yeti. This is two thousand six, so you s you land on Yeti.
And um how did you guys you know, your brothers
How you gonna structure this business?
So uh uh up until this point
Um
Ryan was still on his ten dollar an hour salary. Uh
And but w you know, we we knew that we were gonna partner up.
And um
You know, I had a decent balance sheet from from distributing the IC tech coolers over the years.
And uh Ryan's buy in to get
forty nine point five percent of the company.
was to use his some of his proceeds from his waterloo cell
And so he bought the first three container loads.
A product that came in from the Philippines. Got it. So about a hundred Yeah, a hundred grand. About a hundred grand. Yeah. Yeah. And Ryan, you um I mean it sounds like
You're looking at this business'cause your brother was gonna be the quote unquote the CEO.
Um but it sounds like you didn't really have an it wasn't about an ego. Like you were looking at it and like well he's been in this business longer. He's got a lot of knowledge. Yeah, I know. Roy and I were had always got along well and uh you know, I was just thrilled to be a part of it. I did have you know this money that I could buy the first three container loads cost.
Eventually we we kinda got to fifty fifty and we went to a family friend that's a lawyer and he said, Hey, you don't ever want to own anything fifty fifty and so it was just automatic.
Hey, Roy, you're fifty point five, I'm forty nine point five. I was
I was
Excited as I could be, you know.
Yeah. Okay, so now you um you're gonna wait for your first
Container load.
Or the first three, I guess, to come in.
And how many how many
How many coolers would fit in it? Because see these is at this point you're just selling one size, right?
Yeah, so w we're selling multiple sizes of this
first generation cooler that was called the Yeti Sherpa. And so roughly three hundred and fifty units could fit on a container load. We started selling through that and then we got another one coming on the water. So that was over a period of a few months. And you had a warehouse already f because from the time you were working with IC Tech? Yeah.
I had a warehouse just down the street from where we grew up.
So I'm thinking that first cooler that's coming in or that first container
Is it just the two of you unloading cooler by cooler, stacking them up in the warehouse, or did you start did you bring in some people to help you or No, it was us. Like it would take us a full
No, three hours to unload a container.
It's like one by one by one. And and were they in the container, were they in like cardboard boxes or Yeah, they were already prepackaged, ready to be shipped back out in a cardboard box.
So I'm assuming you w you went back to the existing retailers that you had relationships with through Icy Tech and said, Hey, we got this uh
Yeah, it was very similar, cooler, better.
New brand.
You guys in? Is that what you you start to do?
Yes, that's exactly right. We we had the network of retailers that we'd built out over the years and we basically introduced them to a new, better product. So is a natural
way to introduce it.
And uh at that point we started phasing out the Thailand cooler.
You start phasing it so and moving entirely to the Philippines produce cooler. Did you have any
Issues with'cause a a an igloo cooler was like
thirty, fifty bucks, right?
uh or a Coleman or something like did you have any issues with some of these
store saying I don't know, like it'cause
Just help me understand, like at that time, probably just making one cooler and then shipping it.
Must have cost you at least a hundred bucks per per cooler.
Yeah, that's a pretty good, you know.
Yeah, I think by the time it landed our warehouse
A hundred dollars would be about right.
But yeah, the part of the
Чаленж воз
convincing these retailers to
resell our products and a lot of'em got it right away, but there's a lot of you know pushback based on the pricing. Like, hey my customers uh they won't spend three, four hundred dollars on a cooler. So I can't tell you, you know, how much resistance we got with this initial, you know, trying to sell these uh into these retailers with
No, uh premium product. But there was a pretty unique dynamic going on where
When I walked into
McBride's in Austin or Barings Hardware in Houston or the Tackle Box.
in San Antonio, which are small little sporting goods stores or hardware stores.
None of those guys were selling coolers.
although every single customer that was walking through their door was a cooler user. Like if you're walking into a sporting goods store,
You're a cooler user.
So we weren't replacing another product on their shelves. We were giving them a cooler to sell. And re the reason they weren't carrying coolers is because
the big guys, the Colemans and the Igloos.
They were chasing
the mass market retailer. They were chasing target. Yeah. And and and probably at one time
Those cooler companies had a decent product.
But after years and years of competing for that shelf space at Walmart and Target.
It was a cost engineering exercise.
And it was a race to the bottom.
You know, the the prices were low and the quality reflected that, which ultimately created our frustration.
But also
it created a huge void in the market because
A small sporting goods store with limited square footage, they can't make any money off of a forty dollar cooler.
It's inventory terms, you know.

And so here we are. We showed up with this
Three or four hundred dollar cooler.
And we gave
a product to sell that was actually differentiated than what was being sold at Walmart down the road, and they could put a hundred dollars in their pocket after they sold one.
In other words, you guys, it costs you about a hundred bucks to make it.
You sell it to this to the shop for I may maybe
Okay, and then they can turn around and sell it for three hundred.
That's exactly right. And knowing that every customer that walked into those doors was a potential buyer.
All you had to do was convert a small percentage of them to make it successful.
So let's talk for a moment about
divide and conquer. Like, um Roy, it sounds like you were
out there pounding the pavement.
Um try to convince
store by store. It's a lot of work, right? One retailer at a time.
Um tell me a little bit about how you guys were dividing things up, right? I mean were you I think Roy
really was more about product design and running the business.
And Roy had a family at the time, he had married and kids, and I I was not. So I could really hit the road at that time. So by the time I got there and the coolers
Started coming in.
Yeti brandy coolers, I was going to trade shows in an effort to find new retailers. Yeah, I think early on w you know, we thought that this was this company was gonna be very similar to our parents, where we could handle it, maybe hire one or two, you know, employees to help us in the warehouse or answering the phone.
And you know, we quickly realized this opportunity was gonna be bigger than what we grew up with with the How did you how did you realize that just you know the the the demand. The demand was coming. But in that you know, obviously trade shows would you get more distribution, but it sounds like really you're focusing on Austin, San Antonio, places within a few hours drive.
We were really focusing on the Gulf Coast states, you know, that's w what got us into the cooler business. Like Texas, Louisiana, Alabama. Yeah, down into Florida. And you didn't have to create a use case because
People were using them for putting fish or drinks.
Really, you're just
all you had to say was it's just better. You didn't have to say, here's how you can use it. In their outdoor pursuits. So they I think they could recognize right away that this was a different animal, that this was a better product.
And like I said, there was a frustration in the market around durability. Ice retention was kind of a secondary piece to it. And with thicker walls and a full frame gasket, people could recognize that, oh, this thing's gonna hold ice longer. And then I I we did start leaning into
Product market.
and educating the consumer on the why.
And I read that that somebody who I guess really helped out with that was this guy named Walt Larson.
uh who ran an advertising firm in Minneapolis.
And he I guess he was pretty well known in the industry, right? And and what like you guys met him at a trade show?
Yeah. I was at the ICAS trade show one summer, actually that fish and tackle manufacturers trade show.
And
Walt walked by, stop, you know, I'm running the booth.
And
Yeah, you know, at the time I didn't know who he was, but he stopped and said, Hey, Ryan, you know I've walked
the the whole trade show and your product is really the only one that gets me excited. He says I think you got a great product, but I don't think you're doing a very good job of educating the consumer of why they would pay three or four hundred dollars for a cooler.
And I came home, told Roy about'em and I think
We went on a plane up to see him the next week and you know he had a compelling case for
uh how we needed to educate the consumer. You know, when someone pays three or four hundred dollars for a cooler
They're gonna justify it to their buddies. Yeah.
And it started with a tagline that he helped us create called No Wildly Stronger, Keep I S Longer.
Right. And then we built off of that.
Yeah.
And he was real big into customer testimonials and into, you know, having
Like kind of a pro staff. At the time outdoor television was huge. You know, um the outdoor channel, the sportsman's channel, I there was one called the Outdoor Life Network, and it was kind of at its peak.
But did you guys didn't have a budget to advertise on those places, did you?
You know, we didn't have a budget, but we you know we were growing the business and we were
cash flow positive and and you know
From from year one, you were cash flow positive? Man, w we really were. We we we were living off the land outside of Yeti, right? Yeah. Kathy, my wife, was teaching school. I was driving my high school pickup truck, living in a house that my parents owned out on their property in Driftwood. And so we were taking
No money out of the business.
And like our dad's company, you know.
Our dad never went to outside funding. You know, he he built it from by bootstrapping it and that's that's just what we knew. We had to make this thing work by itself. It wasn't even on your
on your horizon the idea of oh let's go raise money like it wouldn't even have occurred to you at that time. No.
No, not at all.
We did end up working with the local bank to get a revolving line of credit to get us through seasonality, but never did we ever consider going out and raising money to bring in a an outside investor.
Okay. So it's you know, two thousand six
Great for a start. You've got full year
Two thousand seven.
m at least doubled two thousand seven in sales.
Yeah, I think we went from a half million to one point two. So we we doubled.
So you could see momentum.
And again, it's like store by store by store and
And I wonder.
Um,'cause Ryan, you were doing a lot of that that traveling and also going to trade shows.
Uh did you ever try to pitch one of the big b stores like like you know, Cabela's or uh
Bass or I mean, did you ever or or were you just too small at that point?
You know, at at the time, you know, I would hang around the trade shows in in hopes of getting a Bass Pro shop or a Cabela's type buyer to stop by.
But it really worked in our favor to uh go to these independently owned sporting goods type stores, you know, with the bigger guys. Once you get these bigger customers, they start naming their terms and and hitting you with all kinds of penalties and stuff like that. And so I felt like once
we started selling to some of these bigger accounts, we had the power to say no when they were trying to push us around because we didn't have to have'em. We had a really diverse retailer network that
We could sell all the product we could get.
and all the product that we could manufacture and had the power to not get bullied by any of the uh the bigger guys.
In meantime, Roy, you're ups still obsessed with this cooler design. So were you going like two thousand seven, are you faxing or ema maybe emailing at this point?
Design schem back and forth to Ivan in the Philippines?
No, actually I g Ryan and I end up flying back over to the Philippines
in two thousand seven.
And we're making a replica by hand with their mold makers.
And Ivan and I are hand sketching my design ideas. We're taking it down to the factory floor. And over the two week period,
We have
The cooler.
That's been kinda stuck in my head for the last
You know, a couple of years that I've been
dreaming about. We have a physical part. Integrated hinges, integrated anchors,
No rubber feet, rope handles
all these things that that kinda came together in again, it was purely functionality driven.
All right, so you guys spent a couple weeks in two thousand seven perfecting
Finally, this cool that is your design.
And
Just out of curiosity.
How did you protect it, right? It's I mean Ivan's making them
In the Philippines, you trust him, but how do you make sure that no one's gonna rip it off? Is there any way to do that at that point?
Yeah, there was definitely some opportunity to apply some
Um
Patents or intellectual property. Um
But learning from our dad once again, you know, we grew up
Understanding that
Mm-hmm.
Getting a patent is an expensive process.
But even more expensive is actually protecting it when you do have infringement. So yeah we felt like it was kind of a a a waste
of resources in a set of
playing it pre-vent, defense, it was more about being offensive minded and and putting money into the brand.
It makes
So much sense. I mean you could
Chase
copycats and it could bankrupt your business. And we've had
brands on the show that that went through that, or you could just focus on really making a brand that people associated with.
quality. And that's what we were doing. And and also I think it's important to note that we owned our mold. Like when we built these tools,
We paid for those tools so we had ownership of that mold making that created the design.
Got it. Okay.
So you've got um you've got a cooler, I think by early two thousand eight. Yeah, we're launching two thousand eight and it was the Yeti Tundra and we finally got to a place where
This is a cooler.
That we built from the ground up and we came out with probably at the time six or seven different sizes. And they ranged price from what to what. Oh uh two forty five to six or seven hundred dollars. Gail, I'm just curious because
Uh we've had, you know, over the l ten years doing this show, we've had certain products and and certainly in cosmetics where the founder very deliberately priced their product at a premium tier because it signals quality. I mean it's great because the margins are are great. But you guys weren't
playing that game, like you were literally pricing it because of the cost to manufacture it, right?
Yeah, our our pricing exercise was purely driven on
What do we need to price it at to make money?
Right today.
It wasn't like hey, let's appeal to the psychology of people. No, no.
It's like if we're if we're gonna you know buy a cooler for a hundred dollars.
We're gonna have to sell it for
Three hundred dollars because a hundred dollars is going to the retailer.
And then
The a hundred dollars is going to, you know
Us.
And all of your business at this point is not direct to consumer. It's it's through
retail channels, your your wholesalers. The majority of it is through our specialty retail channels.
Now
We would sell direct to consumer if they called. Or maybe you had a website, I'm sure you had a website by that point. We had a website, but it just had our phone number on it. Okay. So if they called, we were gonna sell them.
Uh, but we weren't going on our way out of our way to sell direct to consumer.
Okay, so you guys
launch this this tundra and it really takes off. I read that that like
within a few months or maybe weeks, like
You're bringing a container a week?
Yeah, that sounds about right. You know, this is two thousand eight.
We're hiring a lot of folks to come in to to help.
Customer service to sh warehouse work to

And with Ivan in this Philippine factory, we found the perfect partner to help get Yeti off the ground.
Alright, so
Everything's going great.
Yep.
September twenty third, two thousand eight.
You tried reaching Ivan and
You can't get hold of them.
Yeah, so I um
I send Ivan an email and he didn't respond.
And which I thought was a little bit unusual, but I didn't I didn't think much of it. So I call'em that evening

And um
I get a hold of his wife and and that's when we found out that
Ivan had uh tragically passed away.
Sh on the phone she says uh he's gone.
Yeah.
Um I I don't remember a whole lot about the phone call. I just remember feeling this gut punch and um
And I just no
Telling her, you know, sorry for her loss.
And um
You know, I um
It was a pretty big shock to the system.
Um
I know this is a a tough, tough
Um
Time for you guys'cause you've a friend and
Um tragically he was he was killed um in the Philippines.
What did that mean? I mean
Aside from the just the personal loss.
I
Did I mean he was running the factory
Was it going to affect
Inventory you were you were depending on a container coming in a week.
Yeah.
So I I I remember I got off the phone call with his wife and I and I called Ryan
I shared the news with him.
And um
You know, I don't I didn't like it.
It was it was a big personal off. So first and foremost, you know, Ivan was more than a business partner. We'd travel over to the Philippines to visit the factory. He would come over to the US and attend trade shows with us. So we had
really developed a a friendshi over those
Few years that we knew him.
And um
And I don't think I slept at all that night and and um
Like I said, this two thousand eight, we're going from one million to three million in sales. I think we have
No probably.
six or seven full time employees.
And I remember Ryan and I went into the office the next morning.
And we told the small team that we had about what had happened to Ivan.
And um
I think we we told him that we're gonna make the most of it, but it doesn't look good and and there's a good chance that y'all need to go ahead and start looking for your next job opportunity. Yeah. Because we really felt like
Without Ivan's leadership, this factory was not capable of running without him.
Hm.
I'm
Connecting the dots here, you're thinking.
Our business is done.
Yeah.
We're thinking
It's done.
Why don't we come back in just a moment.
Ryan and Roy slowly piece their business back together, and how they start to market Yeti using
Bears.
Real grizzly bears.
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 the fall of 2008, and Ryan and Roy are reeling from the news that their manufacturing partner, Ivan,
Has been murdered in the Philippines. The details, but what is clear is that the brothers can no longer work with Ivan's factory.
So
They decide to do something unexpected.
The first thing we did
Was uh
We send out a price increase to our retailers.
And we h we probably had a hundred maybe 150 retailers at the time.
But we felt like
If this was gonna be our last inventory.
Where we're gonna liquidate a higher margin.
Maximize cash, perhaps slow things down a little bit. While you're trying to figure out
So the idea was let's just raise the price. It's might piss some people off, but
It'll slow down sales for now and then we will
at time.
Yeah.
And just to clarify, the reason.
why you couldn't rely on the factory in the Philippines at this point was because from what I understand
There was a dispute between some pe some folks involved in in the factory over who is you know gonna run it and so
manufacturing came to a halt. They were they were not making anything there for a while.
Mm the factory was shut down.
And all your molds were there.
That's right.
But long term, no matter what, even if the factory got back up and running, we s really had
you know, a lack of confidence that the factory could continue to operate without Ivan's leadership.
So as
As we

Try to
get the lay of the land and try to figure out next steps. We send out that price increase.
And it was a meaningful price increase, maybe
fifteen percent where it took a cooler that retailed for two ninety five.
and pushed up to three fifty, which was a meaningful barrier to when you jump that three hundred dollar barrier and go to three fifty, like Yeti was already had a reputation of
They're durable, they're well insulated, but damn, they're expensive. And so I was spracing myself.
Sending out that email.
And just like, okay, here comes Ryan. Let's let's get ready for all the negative feedback from our retailers.
And really
It was it was crickets. None of the retailers called up. We blame that price increase on a cost of raw materials increase.
Which was total bullshit but we had to tell him something.
And um
What was happening with our retailers is
The demand
continued to come in their doors and people were continued to buy coolers and they were selling coolers maybe one or two a week.
Which was
really good numbers for, you know, a small retailer like that. And their margin dollar expanded, you know, with that price increase.
They were making more money.
But meantime, how how were you trying to frantically get your molds back from the Philippines?
No, we were trying to get them to open back up and and and like you said, there was a dispute going on. Yeah. But we also the second thing we
did that same week is
We started identifying
potential rotomolders that could build our product for us. And this time we're going to focus on the US. Okay. And you know, there's a big industry, especially in the Midwest with rotomolding. For auto manufacturing for parts. Yeah, it's it's farm equipment, it's it's water tanks.
There's very little consumer products other than maybe kayaks, but um
We started booking flights to go see them, and we wanted to focus on the US because
One you know, I think it's not a
I've been getting killed.
was a really big scare for us and the last thing we wanted to go do is go back over to Asia.
And then two
We'd be shedding that overseas.
freight expense from the shipping containers, which was on a large cubic footprint like a cooler was a pretty meaningful piece of the cost of the goods. And then we'd be decreasing our turn times and lead times, which would help with our cash cycle. So we we had a feeling that the US could be competitive, although that
we'd definitely be paying a premium for labor. Um and Ryan and I show up to this factory in Iowa
And the first thing they asked us, well
Can you share us your CAD files with us?
Well, I think at the time I didn't even know what a CAD file was. You know, it um we were we were making these molds on paper.
Yes. And then you and then you were and you you didn't have a computer model of it. No, no. We were making these replicas by hand the old school way.
So I began to work with one of their engineers to start
Putting this tundra in
into a digital format for the first time.
So it wasn't long before
That Iowa factory
we had this kind of this next generation design.
And then they also introduced us to these really high end Italian made molds.
And the fit and finish of the product was just superior to these sand cast molds that we were making in the Philippines.
Meanwhile, back over in the Philippines.
That factory got up and running again. It's back online. It's back online. And we took everything we learned in the US.
And we took that
Technology
And we brought it to the Philippines.
We started gaining more and more confidence that this Philippine factory could
run without Ivan's leadership. And it wasn't long before
The
Philippine factory.
What's making this next generation design as well.
So
No.
As tragic and like oh shit moment.
as this was, we we came out the under other end of it eighteen months later just like
a much stronger
Dual sourced.
Better product.
Financially healthier because of that price increase.
Nightmare of a eighteen month period. Oh, it was a nightmare.
Okay, so
One of the things that I'm curious about is um
is marketing and we talked a little bit about this with Walter Larson who came aboard.
Um and I saw that in
you know, already in two thousand nine, early two thousand nine, you you create a YouTube channel, which is this is early YouTube. I mean this is not you know, this is still pretty early days on YouTube when uh people still thought of it as cats, you know, cats on skateboards.
But you put out a YouTube do you do you remember what the the thinking was behind that because
Again, you know, you're still you're growing, but you don't have a massive budget for advertising and
What did you think
you were gonna do with YouTube at that time.
Well, I you know
I felt like we could create some really short videos.
Talking about the value proposition of of Yeti
And I had a high school buddy that owned a camera and some audio equipment, and uh then we started getting into some
you know, funer videos of
my friend, the same guy that owned the camera, found this bouncer down on on Sixth Street here in Austin.
and hired him to come do this video.
Where
It's talking about the difference between a an
Igloo.
Cooler and a Yeti. Yeah. And it's this, you know, 500 pound man versus you know a Yeti. It shows him tearing up an igloo, right? Slamming on the ground, stepping on it, hinges breaking, lid caving in. And then he tries to do the same thing to a Yeti Tundra, and he's thoning it off cliffs, he's jumping up.
and down on it and just there's no better way to share durability stories than that kind of funny content. The one that I think anyone who knows about your YouTube channel um may know is a ver one that I think probably just transformed this whole strategy, which was you had a video of a bear
trying to open a Yeti cooler that was packed with peanut butter and fish. Fresh fish. Yeah. And it's amazing video, anybody listening can find it because
Spoiler alert, the bear cannot open it. They cannot open the Yeti cooler.
Which is I mean, man, what a great way to explain how good this thing is. Yeah, if I remember right, there was a interagency grizzly bear committee and they actually contacted us and said, Hey, if p we think that your cooler might
be able to get certified as a bear resistant container. So all these places that require bear resistant containers for camping
You have to have this certification on the container where you're storing your food. And so we sent out uh our smallest cooler out there, and then they throw it in there with the grizzly bears
that they have at this grizzly bear and wolf research center. And if it can stay out there for two hours without the bear being able to get into it, they'll give you the certification. And it just spoke to the durability of the cooler. I mean It's so cool because you open it up. I mean even today it says certified bear resistant. When you and you
Even if you're not gonna be anywhere near a bear, it's just you know that it's It's like Oh, I I got a cooler that that is that can withstand a bear attack. Amazing.
But even at this point, you're not yet on the radar of the big guys, right? You're still too small because I I kept thinking like
Where are the where are the copycats? When are they gonna come in, right? I kept looking over my shoulder, thinking, Man, someone's gonna figure us out.
You know, I felt like
someone that was better capitalized, more s resources, engineers, whatever, we're gonna come in
and outdo us, out you know, figure out something that was better than us.
So I yeah, w I think we were
You know, running as fast as we could.
to fill that shelf space at the specialty retailers because that's where the void was in the market.
And I think in two thousand
Nine and ten is when we really
There was a tipping point.
And that is when
We started getting phone calls.
From
No, Pennsylvania and Oregon and Montana.
And and these were retailers calling us up and saying, Hey
I've had three customers over the last two weeks come in and ask for your product.
I guess I need to start reselling them. So we were literally answering the phone.
And setting up retailers ten a day.
You know, one of the things that I I mean I guess of the
mid two thousand ten's there was so called cooler wars as you had a bunch of different
clones and and other brands trying to get into this space, but
I guess uh around
Two thousand ten, eleven you start to see
Some brands.
Uh
Explore this.
Space. Coleman have got into it. Pelican which makes cases for cameras starting to make
kind of
Yeti style.
Coolers.
What do you remember starting to see?
Uh because it's both a validation, but it's also scary, right?'Cause you're like, uh oh.
Oh, I think there was some concern. I think we joked about someone coming out with the Yeti killer, you know, uh if I remember right.
As you know.
every healthy, you know, you need some type of competitive landscape.
And I think
Everyone that came into the market that it seemed like all at one time they were all fighting it out for second place. Yeah. And we felt like we had nailed the product and it that w that it was gonna be hard to improve on it.
Which it was.
Yeah.
So all right, so
I imagine now that you know once you had twenty million dollars in sales in a year, you're starting to get attention, capture some interest.
from investors and at this point you had not taken in on any money. This was self financed.
And indeed, by the middle of twenty twelve,
You guys agreed to sell some of your shares to a private equity group. And that would enable you guys to.
Take some money off the table, retain some ownership,
Um
If it was me in your situation, I would have done the same thing because I would have thought, okay, we've been on this journey for six years.
There are a lot of big players coming into this space.
we're not as well capitalized, like we do need some institutional backing if we're gonna compete. So maybe I'll sell
you know, a chunk of my ownership or most of it, and take some money off now and
Work with this.
Better capitalized group to build it out.
Our business.
Was that your thinking at the time?
So yeah, in many ways that's exactly right. I think
We looked up in 2011.
And Ryan and I
had not taken a dime out of the company or very little minimal amount to live off of. So we had zero wealth to speak of outside of Yeti.
You know, again, I was driving my high school pickup truck, living in you know, a house that my parents owned out on their property, and we had some meaningful scares along the way.
including the loss of Ivan. Yeah. And we had, you know, competition coming.
Yeah, I I think I've probably lost more sleep thinking about what what if, what if, you know, what if there's a product liability lawsuit? What if there's a you know volcano that goes off in the Philippines, which is a real thing. And so having all your eggs in one basket.
And bootstrapping this from day one.
You know, it was time to diversify ourselves personally.
So mid two thousand eleven
We start running a process.
uh taking Yeti to market, which I had we had no idea what that looked like.

But as we kind of narrowed it down to
A handful of potential buyers
We were really just looking for
a liquidity event to take some chips off the table, but also a partner.
that could help us navigate
the next stage of growth.
Yeah, at this point I think it's b it was the reported amount uh was like
Close to seventy million dollars.
for about a two third stake. I don't know if that's exactly accurate, but that's that's what's been reported. But if that is accurate, it's pretty good. You know, you guys
uh are gonna walk away with uh a a nice amount of money which will
enable both of you to feel financially secure for life, but you still get to keep
Uh
uh significant percent of the business, I think but roughly ten percent each, right. Is that is that about right?
Yeah, that's about right. The you know I can't remember the exact, you know, after tax take home, but that's you know
I in the end, it was a
A life changing event.
When those wires crossed
Into our bank account.
I think I probably slept better that night than I had in the last
Six years.
I mean, Ryan, this is better than the than the Beretta shotgun the
Three grand three thousand dollar Rolex that you got for the Yeah, no, it was a lot better. And and uh it w it was a fun that was a fun process to be a part of to go to market to the private equity and have the interest that we did. And pretty soon you're right back in it and you're excited about the the future of Yeti, you know?
Did you I mean so it i up until this point, you were a cooler brand, right? You're making you're known for coolers, but now
You've got Core Tech behind you and um the product line is gonna expand, I think, within the first
few years you bring you introduced the soft
Yeah.
And then the drinkware.
Which
From what I read initially, um
Some people on the board thought that might be a distraction.

And getting into the insulated cups.
uh coffee cups and whatever was that's not was not
the business for you guys to get into.
Yeah.
To kind of set the stage.
Yeti grew
To a hundred million in cells just on hard coolers alone. Wow.
Yeah, that's right.
And up until that point, there was still runway in the in the hardcore market, but kind of the the big knock on us during the sales process is that we were a one product company. And
The the obvious extension to us
With soft coolers.
Now when I walked into Target
the same dynamic existed in soft coolers as it did with hard coolers. They've been commoditized, they would leak, they would fall apart. And so you could see the market opportunity was big.
And you know, by that time
We had built out a good team of engineers and designers.
And then
Ryan came over to my desk one day.
And he put a vacuum insulated bottle on my desk, and he said,
We need to do something in this space and I think it was a clean canteen. Yeah, Ryan, what was your what's your what do you remember about that? Oh basically I had a one of our dealers that was real successful with the hard coolers. He was a gear guy like me and he
He sent me a a vacuum insulated bottle and I just took it home.
put ice in it, drank water out of it, and uh the next day there were still ice and I'm like, this thing's amazing. And and vacuum insulation had been around forever with a bunch of different brands. But I took that bottle in and threw it on Roy's desk and said, Hey, we need to look at this.
And then a month later, Roy shows up at one of our monthly operations meetings with a thirty ounce cup and a twenty ounce cup, he called it a Yeti Rambler. And so I I didn't have a vision to turn it into a
drinking cup, but I just thought that the the vacuum insulation was cool and I'd let Roy take it from there.
After getting Cortex Blessing, it was a real short putt on getting it to market and standing up the supply chain. It wasn't long after that that we introduced these two sizes. The 20 ounce.
and the 30 ounce, no color waste, just stainless steel with a clear plastic lid.
And like we caught lightning in a bottle. And for the first time, Yeti had a product that had mass appeal. It wasn't just our hardcore.
outdoorsmen that were users. We were selling them to soccer moms. And it was it was this affordable luxury.
No that's
Although not everyone can afford a three or four hundred dollar cooler.
they could afford a$30 cup.
And you had already
That double walled
water bottle market was out there, Hydro Flask, Clean Canteen, but nobody was thinking about
A coffee mug or a a a a cop a uh
A tumbler.
Yeah.
Just so happens a real simple cup design that
Market opportunity is
so much bigger than than bottles. Right. And soft coolers came into the market at about that same time.
Yeah, I think they were about a month apart.
But
It was drink wear that really changed the trajectory of Yeti.
And
And we went from a hundred million.
to four hundred million in a matter of eighteen months.
Eighteen. In eighteen months. And that was
high, highly supply constrained. We could not keep up with demand and we couldn't even keep up with the cooler demand because the brand awareness we're selling so many cups.
Brain awareness was exploding. So
Drink where
turned into our half of our business basically overnight.
But it was elevating the h the entire brand into all of our products.
I mean it's an amazing story because it's a it's a completely new product line. Um I know that
By two thousand fifteen.
right now that's almost n it's about nine years in
You step down.
um as CEO and Ryan you step down as president
I imagine um
You know,
Both of you guys now
Well you know, we've
have had founders in the show.
who had private equity come in, got bought out, and are still with the business twenty years later,'cause they just lived and breathed it.
But it sounds like both of you guys had

Time.
You want to move on. Tell me tell me that your thinking behind that first, Ryan.
Why did you want to step down?
I felt like we had worked, uh, put in a lot of time, um, you know
during the years of two thousand six to two thousand twelve and and I didn't really want to be pushed anymore. Roy was good at pushing me, getting me to work harder and and and really kind of seized this opportunity up
And you know, once we had some financial security, I was ready to do more hunting and fishing and family things. It wasn't like you weren't like, I'm gonna start my next business and I'm gonna No, not at all. I love that. You were like I wanna do more hunting, fishing, and hang out with my family.
Yeah, and and I still wanted to be involved in Yeti, but more at my own pace. Yeah, and Roy and I are still employees of Yeti today.
Uh, but I, you know, I haven't been into the office in years.
And you had a young family, I think you had gotten married
Around w around two thousand
Twelve.
Uh eleven. Eleven, okay. And then two thousand twelve had our first kid and and so I was, you know, looking for a break and looking to you know, I wouldn't
w didn't want to come into the office and grind it out.
And Roy, you had already had had you had kids by the time you guys launched Yeti in two thousand six, so your kids had only really known you working and grinding at Yeti. Was it similar for you or
that you wanted more time with your kids and to just hang and or or be a dad full time or did you were you already thinking, All right, I'm gonna launch my next business and start all over again?
No, I so
The irony of of things was um
The outdoors is what brought us to Yeti in the first place.
But it uh in many ways it took us away from the outdoors as well, because we didn't have time for it. You know, we we didn't have time to go spend time on the water or you know, annual elk hunt or tarpon fishing trip. And I might be home with the family, but
I wasn't
being a good dad. I wasn't present. You know, my mind was on Yeti.
And you know
What we were doing was not sustainable and I think we recognize that and you know, today uh I get to
come in and have fun when I want to. Yeah. And and have it's a creative outlet.
Um
When you guys think about this journey you took, right, you know
I mean even just falling into this cooler
business in a sense, Roy, because
Of of outfitting boats, right? And then that it could have been rubber mats on the boats that became the thing.
Right. It could have been ropes, it could have been the the the engines.
Yeah.
Um
It was the coolers.
How much of
of of where you got to and and how this journey kinda went.
Went.
Do you attribute to the
the work that you put in the grind, which is a lot, and how much do you think had to do with luck and fortune and just
The stars aligning.
Man, the the stars definitely aligned and and in and you can see these stepping stones growing up in the outdoors with our parents and growing up in our dad's business and kind of getting, you know, the playbook of a small business and then finding the right people and and whether it was Walt
Or in in even a door closing on us, like the loss of Ivan.
But a another door would open.
No, so timing was everything.
I would also say
we were willing to kind of put ourselves out there and show up in the in the Philippines when we were, you know, in our twenties and
We put ourselves in a position to kind of
Have this luck.
Right.
And even the luck uh being born in the United States of America and it's a real
Privilege to be able to kinda
choose your own path and do whatever you want and compared to what I've seen in other places I've been, you know.
Gil, it's interesting because I mean your dad obviously was a model, right? With with
with the flex coat and um
It sounds like when you guys started Yeti, like that was sort of your vision. Like it was gonna be a nice
lifestyle business and

grand plan to turn this into an international brand.
Uh no, I I would say where we got lucky was picking an industry
or picking a product category that could spill outside of the fish and tackle industry.
Yeah, I think we thought we were doing something like our parents, right? And that's that was the goal. To to live the lifestyle of
of you know what our parents had and and like I said, our parents put four kids to college. They
they got to do things a as they wanted to do'em. And then, you know, Yeti began to take on a life of its own and never ever in my wildest dreams did I we ever think it would do what it did.
Um
And it it's been a an amazing ride.
That's Roy and Ryan Cedars, co-founders of Yeti.
By the way, the brothers still see a lot of each other. In fact, they live right across the street from one another.
Meanwhile, their dad, Roger Cedars, recently turned eighty and finally sold his own business.
Flex code.
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. And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, please do sign up for my newsletter at guyaz.com or on Substack.
This episode was researched and produced by Carla Esteves with music composed by Ramptina Bluey.
It was edited by Niva Grant, and our engineer was Jimmy Keeley.
Our production staff also includes Casey Herman, JC Howard, Alex Chung, Carrie Thompson, Chris Massini, Catherine Cypher, Sam Paulson, John Isabella, and Elaine Coates.
I'm Guy Roz and you've been listening to How I Built This.